Distribution System of Coca Cola Company

10/20/2019 Distribution System Of Coca Cola Company
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Distribution System Of Coca Cola Company

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Question:
Discuss about the Distribution System of Coca Cola Company.

Answer:
Introduction
In the recent times, simply producing products is not enough, the marketers have to ensure the fact that the
products are delivered to the right market at the right time to the right people at the right cost (Aylott and
Brindle-Wood-Williams, 2007). So this emphasizes upon the importance of distribution channels in the
modern day business operations.
Thus taking into consideration the above aspects, the report emphasizes upon analyzing the products, the
strategies and the practices of the Coca Cola Company that supplies its beverage bases and syrups to Coca-
Cola Amatil (CCA) which is one of the largest bottlers of non-alcoholic beverages in the Aiasa-Paci c region.
It is one of the world’s ve major coca-cola bottlers and is headquartered at North Sydeny, New South Wales,
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Australia (Coca-cola, 2014). The report tends to identify the gaps in the current offerings of the company and
https://myassignmenthelp.com/free-samples/distribution-system-of-coca-cola-company 1/16
provide suggestions in the context of the opportunities. It also analyzes the distribution channel and
marketing topics that include the vertical and horizontal integration. It has analyzed the problems faced by the
company in delivering its products and has provided suggestions for improvements. It also incorporates the
use of technology in the distribution channels and improvements to be made. The role of innovation in future
growth of business has been analyzed. The reports also incorporate the channel power and con ict and
improvements made over the years, the SWOT analysis and competitor analysis. It also includes conclusion
as a summary of the above ndings.
Products, Strategies And Practices Of Coca Cola

Coca-Cola was the only agship brand that was sold by the Coca Cola Company for almost 70 years.
However Since the year 1995, the company started expanding its offerings leading to the addition of a wide
variety of beverage selections and portion sizes for the consumers. This reveals the company’s commitment
towards offering an assortment of beverages for everyday lifestyle, life occasion and life stage. Thus, at
present the company offers500 beverage brands that are sold in more than 200 countries across the globe
(Coca-cola, 2014). So it leads to more than 3500 beverages in different categories like low and no-calorie
sparkling beverages, regular beverages, fruit drinks, fruit juices, bottled water, energy drinks, sports drink,
ready to drink teas and coffee.
The strategies that have been adopted by the company in order to market its presence in the market outpace
the competitors can be illustrated as follows:
Positioning Strategy
Coca-Cola operates with the philosophy of “think global, act local” and thus even though the company keeps
the same core product i.e. coke, it tries to adapt to the local needs. So it can be said the company uses
strategic positioning to maintain its same image across the globe and this has been a great success since
the brand is perceived by the consumers as a part of daily life everywhere in the world. This perception leads
to high degree of loyalty and leads automatic purchase decisions. The brand is positioned as “Live the coke
side of life” that exhibits that the company is dedicated to deliver joy and happiness (Yuvaraju, Subramanyam
and Rao, 2014). Thus with the name of coke, the rst thing that strikes the mind of the people is fun and
entertainment.
Strategies
Positioning Strategy Live the coke side of life
Differentiation Strategy Product differentiation and image differentiation

strategies.
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Promotional Strategies price strategy trade promotion, sales promotion,

purchase shelves in departmental stores to display
their products (Wang, 2015)
Distribution Strategies
direct and indirect selling (Aylott and Brindle-Wood-
Williams, 2007).

· Print Media
Advertising Strategies · TV commercial
· Holdings and billboards
· Social and digital media
Competitive Strategies Marketing, innovation and globalization strategies
Best Practices Adopted By Coca-Cola

Identify the changing consumer tastes and
Customer research
preferences
Testing To align the products with consumers’ wants
Entrepreneurship To encourage innovation and introduce new products
To make consumer feel valued (Benard, Oketch and

Consumer driven practices
Matu, 2015)
To offer enhanced value to consumers through live

Value based management
positively approach
Gaps In Current Offerings And Recommendations

In the recent times, not only the aged consumers but also the young consumers have become more health
conscious and thus are emphasizing upon consuming far less sugar. So this can be looked upon as a major
concern for Coca-Cola Company since the consumers are switching to Red Bull and other energy drinks in
order to get their caffeine boost (Pope, 2011).
So it can be recommended that the Coca-Cola Company should introduce health drinks in its product portfolio
in addition to diet coke. Moreover it can also complement its beverage business though offerings it
consumers some of its own branded snack foods.
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Distribution Channel Of Coca-Cola

The Coca-Cola Company can be looked upon as a global business that operates on a local scale and this has
been possible because of the Coca-Cola system that includes the company itself and its more 250 bottling
partners across the globe.
The Company produces and sells and the beverage bases, concentrates and the syrups to the bottling
operators and they manufactures, packages and distribute the nal beverages to the vending partners and
customers who then again sell the products to the consumers (Coca-cola, 2014).
The bottling partners work in close relation with the customers i.e. the restaurants, grocery stores, the
convenience stores, amusement parks and the movie theatres so that localized strategies that have been
developed in partnership with the company can be executed e ciently (wordpress, 2015).
Thus the points of sales the products of Coca-Cola are cauterized into:
Distributors or wholesalers
Corner stores, super markets or retailers
Cafes, night clubs and restaurants
Petrol stations
In the context of its operations in Australia, the Coca-Cola Amatil is the bottling partner pf the company and it
is the largest bottling partners in the Asia-paci c region.
The distribution system can be represented as follows:
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[Source: wordpress, 2015]
The Distribution Strategy of Company can be represented as follows:
[Source: Christopher, 2006]
Thus the Company uses both direct and indirect selling. In case of direct selling the products are supplied in
the shops through their own transport and in case of indirect selling, the company maintains whole sellers
and agencies that cover different regions.
Horizontal And Vertical Integration Of Coca-Cola

Vertical integration can be de ned as a competitive strategy that is adopted by the rms in order to take
complete control over one or more stages in the production or distribution of its products. It is generally
adopted to take full control over the supply chain.
On the other hand horizontal integration drives the rm towards the acquisition of a related business.
Thus in the context of vertical integration, Coca-Cola Company tends to own and manage a large portion of
its manufacturing. Around 20% of the products of the company is produced by Coca-Cola Enterprises and this
is the largest percentage (The Coca-Cola Company, 2014).
In the context of horizontal integration, the Coca-Cola Company tends to dominate the beverage market and
Chatthat
this is done by buying out and owning various brands Nowprovides an opportunity to the company to expand
and branch out within the market.
Thus from the above discussions it can be said that Coca-Cola Company is more horizontally integrated
rather than vertically integrated.
Issues In Delivering Products And Offerings And Suggestions

Since the ingredients of Coca-Cola is a trade secret, the company delivers the syrups and beverage bases to
the bottling plant of Australia and then the nal products are sold to the customers. Thus it can be called as a
franchising distribution method. So where this method of delivery proves to be bene cial for the company in
terms of no transportation fee, it also suffers from certain speci c issues. The issues include lack of internal
communication, high cost involved in internal distribution process and customer loyalty problems (wordpress,
2015).
Suggestions
It is suggested that the company should strive towards establishing a sophisticated distribution system that
should include key functions like inventory management, orders for shipment, order status, account selection,
electronic map and customer management. This would facilitate the company to identify and design the
shortest route to deliver the products. The system should also be characterized with the real time update
functions which would enhance its control and communication.
In order to enhance the loyalty of the customers, the company should adopt intensive distribution strategy i.e.
retail stores should be set by the company at some dense populated areas, leisure centre, convenience stores
and shopping center. Moreover the company should also adopt the pull strategy for the promotion of their
products. The company can accredit the retail stores by offering discounts and providing them free samples
and loyalty points. The company can also use red billboards in the retail stores and supermarket stores which
would appear attractive for the consumers which would stimulate the purchase activities. So the pull strategy
would be bene cial in enhancing the customer relationship and loyalty.
Use Of Technology In Distribution Channel

The beverage companies like Coca-Cola want their distributors to add product to their portfolio while keeping
the costs neutral or achieving reduced operating costs. So in this context, the company makes an effective
use of storage technology that enhances the useful life of warehouses at minimal cost. The storage
technologies used include the double deep racking, keg ow racking and mobile racking and these
technologies facilitates in e ciently handling the fast growing inventories (Landi, 2015).
Again it is also suggested that the company can use automated case handling system since it would facilitate
the distributors in increasing and managing warehouse throughput and thus enhance order accuracy.
The company can also use technologies like SmartTrak since it would enhance its visibilityin the industry pool
(Landi, 2015). The company can easily view where the demand is and then move the inventory at the right
time and at the right place and this would facilitate in enhancing the e ciency of the supply chain.
Role Of Innovation In Growth Chat Now
Innovation at present can be looked upon as a magic key to unlock the great competitive advantage and
disrupting the entire market. In this context, Coca-Cola is observed to be leading the beverage industry. Coca-
Cola even though being 129 year old mega corporation characterized with 500 brands, always strive for ways
in which innovation can be achieved in all sphere of its operation and identifying ways to do things in a
different manner (Demirel and Mazzucato, 2012). This can be illustrated with the examples like the eco-
friendly beverage containers that are made of ice and these containers simply melt ways after use, the smart
vending machines that facilitate the customers to mix and match the avors (Communications, 2016).
On the other hand the innovation has facilitated the company to come up with different brands and products
that liked by the consumers and has stimulated the growth of the company.
Channel Power And Con ict

Channel Power
In this context it is observed that some channel members require others more than others require them and
thus there arise different sources of power (Consumerpsychologist, 2016). For example, Coca Cola Company
generally strives towards adopting reward power since it is capable of reinforcing the channel member’s
performance. As for example, Coca-Cola can offer price break or pay additional fees for additional shelf
space. Moreover if a retailer meets certain goals for example sale of 50,000 cases per month is offered a
bonus.
Channel Con ict
It is the con ict between the channel members. As for example, Coca-Cola might be interested in increasing
its sales by offering certain level of discount on its cans. The retailers on the other hand, might be aware of
the fact that overall soda sales would not go up much if the coke is put on sale since the consumers who
usually prefer other brands would switch to Coca-Cola due to the discounts being offered
(Consumerpsychologist, 2016). So in such cases, the retailers tend to pocket the discounts offered by the
company.
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E-mail SWOT Analysis Of Coca Cola
Strengths
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Coca-Cola has its presence in 200 countries across the globe and this has contributed towards the
securitycode
development of a mammoth brand name (Hartogh, 2014). This has been possible due to its largest
distribution network and its franchising distribution system that facilitates in carrying out its philosophy of
Enter Security
“think global, Code
act local”.
Weaknesses
Submit
The issues like lack of internal communication, high cost involved in internal distribution process and
customer loyalty problems can be looked upon as weaknesses in the distribution channel of Coca-Cola
Company.
Opportunities
The supply chain is looked upon as major cost sink hole characterized with rising transportation costs.
Moreover the business of Coca-Cola is dependant mainly upon transportation and distribution (Hartogh,
2014). So the company can use technological advancements to reduce the operational costs.
Threats
Sourcing of the raw material i.e. water is the major threat. This is due to rising scarcity of water since sooner
or later someone might raise nger on the beverage companies and thus if water is limited or rationed then
the company would experience a major fall in capacity of distribution.
Competitor Analysis
The competitor analysis of Coca-Cola Company can be illustrated with the help of the following gure:
Hoovers, 2016
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[Source: Hoovers, 2016]
Conclusion
Thus from the above discussions, it can be inferred that even though Coca- Cola faces tough competition in
the market from competitors like PepsiCo and others, the company has been successful in maintaining its
market positioning and is continuously growing mainly because of its e cient distribution system and
innovations that it emphasizes upon to as per the changing tastes and preferences of the consumers.
References
Aylott, D. and Brindle-Wood-Williams, D. (2007). Physical distribution in industrial and consumer marketing.
2nd ed. London: Hutchinson.
Benard, K., Oketch, O. and Matu, P. (2015). Innovation in the Language of Coca Cola Television
Advertisements. MJSS.
Channel-cable order. (1979). Electronics and Power, 25(11), p.763.
Christopher, M. (2006). The strategy of distribution management. Westport, Conn.: Quorum Books.
Coca-cola. (2014). Coca-Cola Global: Soft Drinks & Beverage Products: Company and its Operations Across
the Globe. [online] Available at: https://www.coca-cola.com [Accessed 16 Aug. 2016].
Communications, E. (2016). Coca-Cola Innovation Sparks Supply Chain Revolution. [online]

Consumergoods.edgl.com. Available at: https://consumergoods.edgl.com/news/Coca-Cola-Innovation-
Sparks-Supply-Chain-Revolution82057 [Accessed 16 Aug. 2016].
Consumerpsychologist. (2016). Channel Management and Con ict: Aspects in Distribution and Supply Chain
Management. [online] Available at: https://www.consumerpsychologist.com/dist_Channel_Management.html
[Accessed 16 Aug. 2016].
Demirel, P. and Mazzucato, M. (2012). Innovation and Firm Growth: Is R&D Worth It?. Industry & Innovation,
19(1), pp.45-62.
Hartogh, M. (2014). It's Still the Real Thing: A Pro le of the Coca Cola Company. SSRN Electronic Journal.
Hoovers. (2016). Top Competitors for THE COCA-COLA COMPANY. [online] Available at:
https://www.hoovers.com/company-information/cs/competition.the_coca-
cola_company.3f8a006eaf87d773.html [Accessed 16 Aug. 2016].
Landi, H. (2015). Technology is transforming every part of the beverage business, from the plant, to the
warehouse, to the marketplace. [online] Beverageworld.com. Available at:
https://www.beverageworld.com/articles/full/17144/2015-beverage-technology-report-its-all-connected
[Accessed 16 Aug. 2016].
Pope, D. (2011). The Cola Wars: The Story of the Global Corporate Battle Between the Coca-Cola Company
and Pepsico, Inc. By J. C. Louis and Harvey Z. Yazijian. New York, Everest House, 1980. Pp. 386. $15.95.
Business History Review, 55(04), pp.588-590. Chat Now
The Coca-Cola Company. (2014). Coca-Cola Journey Homepage: Marketing and Distribution Strategies.
[online] Available at: https://www.coca-colacompany.com [Accessed 16 Aug. 2016].
Wang, M. (2015). Brief Analysis of Sports Marketing Strategy Adopted by Coca Cola Company. Asian Social
Science, 11(23).
wordpress. (2015). Problems in Coca-Cola Company’s distribution strategy and suggestion. [online] Available
at: https://mpk732t12016clusterb.wordpress.com/2016/05/16/coca-cola-companys-distribution-strategy-
and-suggestion/ [Accessed 16 Aug. 2016].
wordpress. (2015). The Coca-Cola Company’s distribution strategy. [online] Available at:
https://mpk732.wordpress.com/2015/05/17/the-coca-cola-companys-distribution-strategy/ [Accessed 16
Aug. 2016].
Yuvaraju, D., Subramanyam, D. and Rao, P. (2014). Advertising Strategy of Coca-Cola at Coca-Cola Beverages
Pvt.Ltd. IOSR Journal of Business and Management, 16(6), pp.122-131.
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Distribution System Of Coca Cola Company

Click this icon and make it bookmark in your

Products, Strategies And Practices Of Coca Cola

Positioning Strategy Live the coke side of life

Differentiation Strategy Product differentiation and image differentiation

Promotional Strategies price strategy trade promotion, sales promotion,

· Print Media

Advertising Strategies · TV commercial

· Holdings and billboards

· Social and digital media

Competitive Strategies Marketing, innovation and globalization strategies

Best Practices Adopted By Coca-Cola

Testing To align the products with consumers’ wants

Entrepreneurship To encourage innovation and introduce new products

To make consumer feel valued (Benard, Oketch and

To offer enhanced value to consumers through live

Gaps In Current Offerings And Recommendations

Distribution Channel Of Coca-Cola

The distribution system can be represented as follows:

[Source: wordpress, 2015]

The Distribution Strategy of Company can be represented as follows:

[Source: Christopher, 2006]

Horizontal And Vertical Integration Of Coca-Cola

and branch out within the market.

Issues In Delivering Products And Offerings And Suggestions

Use Of Technology In Distribution Channel

Role Of Innovation In Growth Chat Now

Channel Power And Con ict

Channel Con ict

Free Membership To World's Largest Sample Bank

Channel-cable order. (1979). Electronics and Power, 25(11), p.763.

Communications, E. (2016). Coca-Cola Innovation Sparks Supply Chain Revolution. [online]

Most Downloaded Sample Of Management

Toulin Method Of Argumentation

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Consumer Behavior Assignment

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Internet Marketing Plan For River Island

Tags: Australia Arlington Management University of New South Wales

Strategic Role Of HR In Mergers & Acquisitions

Tags: Australia Arlington Management University of New South Wales

Relationship Between Knowledge Management, Organization Learning And HRM

Tags: Australia Arlington Management University of New South Wales

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