Repor

t on
“Analyzing Financial Status of 5 Cement Companies by Applying
Financial Statement Analysis (Through Ratios)”

Course Title: Financial

Management Course Code: MBA
511
Section: 01

Submitted to:
Dr. Samiul Parvez
Ahmed Associate
Professor School of
Business
Independent University, Bangladesh

Submitted by:
Group: Bean Blowers
Name ID
Kazi Fahim Hasan 19022071
Saiful Islam Khan 2023031037
Anisur Rahman Shabbir 2022904

Program: Professional MBA

Semester: Summer
2020

Date of Submission: 24.09.2020

 Letter of Transmittal

Date: 24 September, 2020

Dr. Samiul Parvez Ahmed

Associate Professor
School of Business
Independent University, Bangladesh

Subject: Submission of report on the “analysis of financial status of 5 cement companies by

applying financial statement analysis (through ratios)”.

Dear Sir

With due respect, it is to inform you that we are submitting our report on the “analysis of
financial status of 5 cement companies by applying financial statement analysis (through
ratios)” as a partial fulfillment of our MBA program.

It’s our pleasure to submit our report which is based on the cement industry and we have
discussed here about five cement companies. These are HeidelbergCement Bangladesh Ltd.,
LafargeHolcim Bangladesh Ltd., Meghna Cement Mills Ltd., Confidence Cement Ltd. and
Premier Cement Mills Ltd. All of these are DSE listed.

The job is assigned to our group to do all the ratios and measure the performance according to
the calculations. We have completed the analysis. We have to furnish a report based on our
practical experience. The report focuses mainly on a structural comparative analysis.

We will be highly appreciated if you accept our report and oblige thereby.

Thank You.
Sincerely yours,

Prince Saha (On Behalf of Group Bean Blowers)

Independent University, Bangladesh (IUB)

i
 Acknowledgement

The success of this report depends on the contribution of a number of people, especially those
who take the time to share their thoughtful guidance and suggestion to improve this report.

First of all, we would like to pay our gratitude to almighty God who has given us patience to
complete this report. Because working on this report for two weeks and then preparing a
report regarding our experience is quite tedious job.

We would like to thank Independent University, Bangladesh (IUB) for planning such a
course that gave us the chance to gather practical knowledge about what we have learned in
03 months. The knowledge we gathered throughout the course would help us to develop our
future career.

We are also grateful to our honorable course instructor, Dr. Samiul Parvez Ahmed, for his
cordial and continuous support in preparing the report.

We are also grateful to our parents and other seniors for being our mental support.

Lastly, we must be thankful to our friends for their endless inspiration and not to be hopeless
and keep working harder.
 Executive Summary

The cement industry today is one of the most lucrative industries. Further, due to increase in
income of people and era of urbanization, demand for infrastructure is increasing. Many
people have desire of their dream house. As a result, demand for cement is also increasing.
This report contains all analysis of financial status of five reputed cement companies. These
companies are HeidelbergCement Bangladesh Ltd., LafargeHolcim Bangladesh Ltd., Meghna
Cement Mills Ltd., Confidence Cement Ltd. and Premier Cement Mills Ltd. These
companies’ annual reports (2019) have been analyzed. All annual reports are collected from
the home page of DSE. By analyzing annual reports, we have explained here the current
status and issues of every company, Du-Pont system of analysis, the liquidity, profitability,
asset utilization, and debt management status of the firms. Short-term credit, long-term credit,
manager's performance, asset utilization capability, which company’s stock to buy and why-
all these issues are discussed all over the report. Here we tried to find out the company which
is performing better and the reason as well as managers' contribution behind it.
 Table of Contents

Chapter Topic Page No.

1 Introduction 1-2
1.1 Introduction 1
1.2 Objectives of the Study 1
1.3 Methodology of the Study 2
1.4 Scope of the Study 2
1.5 Limitations of the Study 2
2 Literature Review 3-4
3 Industry Analysis 5-7
4 Company Profile 8-9

5 Analysis & Findings 10-18

Ratio analysis to judge the liquidity, profitability, 10-13

asset utilization and debt management status of the
firms
To which company you would extend short-term 14-15
credit and why?
To which company you would extend long-term credit 15-16
and why?
To which company’s manager you would award 16-18
performance bonus and why?
Which company’s stock you will buy and why? 18

6 Conclusion & Recommendations 19-20

References 21
Appendix 22-24
 Chapter 1
Introduction

1.1 Introduction

Finance and its function play a very major role in determining the profitability and stability of
the business. Most of the studies in Bangladesh on business finance have laid more stress in
comparing financial results of public and private sector which varies profitability. The current
study is taken at HeidelbergCement Bangladesh Ltd., LafargeHolcim Bangladesh Ltd.,
Meghna Cement Mills Ltd., Confidence Cement Ltd. and Premier Cement Mills Ltd. to find
out and evaluate its financial performance. The purpose was also to closely the relationship
between various financial elements, which may be compared to the prescribed standard and
norms. Based on the issue, this report is a requirement of one of my course named Financial
Management in the MBA program of Independent University, Bangladesh. My supervisor,
Dr. Samiul Parvez Ahmed, Associate Professor, Independent University, Bangladesh
assigned me the report. I have tried my level best to make it an excellent one and used all the
latest data and information available.

1.2 Objectives of the study

General Objective
The prime objective of this report is to make us familiar with the financial instruments along
with ratio analysis to measure the financial situation of companies.
Specific Objectives
There are some specific objectives also:
 To determine the financial position of 5 cement companies using ratio analysis.
 To know the short term and long term solvency position of the companies.
 To analyze the efficiency of the companies.
 To determine the liquidity, profitability, asset utilization and debt management status
of the companies using ratio analysis.

1
1.3 Methodology of the Study

It is an analytical cum descriptive study of the financial statements for the period 2019 that
has been taken for the purpose of analysis. Ratio has been used as a tool of analysis evaluates,
interpret and compare the financial performance of the company.

Due to COVID-19 pandemic situation, it is not possible to use primary data. Hence, we tried
to use secondary data that we have gathered from different sources which are given below:
Secondary Sources: Secondary data are collected from the following sources:
a) Annual report (2019) of each company.
b) Published documents
c) Data available with the website of each company.

The data has been compiled, analyzed and tabulated in various forms. The tabulated financial
data has been further interpreted. These interpretations have been further used to give
conclusion and suggest recommendations.

1.4 Scope of the Study

There was a lot of scope for studying like HeidelbergCement Bangladesh Ltd.,
LafargeHolcim Bangladesh Ltd., Meghna Cement Mills Ltd., Confidence Cement Ltd. and
Premier Cement Mills Ltd.’s financial statements through ratios. Gaining knowledge and
constantly learning new things make perfect sense when it is associated with practice. Our
education helped us to compare the knowledge gathered from the MBA program with the real
world practices. The report highly focuses on the financial performance of the 5 cement
companies.

1.5 Limitations of the Study

Every matter has got some limitations. So this is also not an exception. The limitations of this
report are stated below:
a) Due to time and cost restrictions, the study is concentrated in selected areas.
Continuing study in such a vast requires a big deal of time. As a student, I had less
than one month which is not enough;
b) As per internal policies of the organizations, it has some restrictions to serve all the
real data of the companies to the general people. As a result, the study is mostly
depends on websites and annual reports;
c) Available data also could not be verified. In most cases, we simply did not have any
option but to furnish with data without verification
Mission
Coca Cola’s mission statement is “to refresh the world in mind, body, and spirit, to inspire
moments of optimism and happiness
through our brands and actions, and to
create value and make a difference.” Coca
Cola is a company that focusses on leaving a
legacy wherever it operates. The company
highly values making a difference in individuals and communities, while at the same time
letting them enjoy the great tastes of its products. The mission statement has the outlined
components:

Improving lives. Coca Cola is a company that has come to understand that the quality
of life comprises of much more, including the quality of the products and related brand
initiatives. To satisfy this component, Coca Cola maintains a trend that values health more
than the profit it makes. It does this by going for natural sweeteners and other extracts to
boost the naturalness of its brands and serve its customers with products that not only
refresh but also maintain the healthiness of their bodies.

Improving communities. While treating its customers to different flavors, Coca Cola
also goes further to put a smile on the faces of its customers and their communities through
its outreach programs. The idea of the company to use promotional programs to generate
funds for supporting developmental agendas in communities, including education,
healthcare, and infrastructure. For instance, the company has a give initiative where it
mobilizes investors and other stakeholders to donate for a good course in society. Most
importantly, Coca Cola has never neglected its corporate social responsibilities for over a
century, making it a people’s company. In fact, it has been involved in numerous
environmental reclamation and protection activities demonstrating its undying
commitment.

Exceeding expectations. There is never a shortage of what Coca Cola Corporation

has in store for its customers. The dynamism of the company has made it a darling
worldwide due to the numerous opportunities it gives people to improve their lives. For
instance, Coca Cola has always been on the front line in the promotion of talents across the
world and especially in Latin America, Africa, and Asia.

Vision
Coca Cola’s vision statement is “inspiring each other to be the best we can be by providing a
great place to work.” The purpose
of Coca Cola is reflected in this
mission statement. It reveals the
intent of the company to be an
agent of change and development
within its industry and beyond. This
is what leadership is all about. The vision statement indicates that the company strives to:

Inspire others. In this component, Coca Cola exemplifies itself as a company driven by
uplifting others. That is the reason it works with different investors and communities to
spread its benefits in ways that make a positive difference. Other than these benefits, the
company also offers its customers a wide range of offers in addition to the irresistible Coca
Cola flavors out there in the markets.

To be the best. Coca Cola continued expansion, improvement of its products, and
adaptation of its outreach programs to customer and community needs advances its
commitment to inspire, and the desire of the company to be the best. In fact, the Coca Cola
journey shows just how important it is for the company to maintain an upward growth
trend.

Providing a great place to work. The third element in Coca Cola’s vision
statement is a reflection of additional ways through which the company reveals its
uniqueness as a global brand. Creating an environment that embraces everyone irrespective
of their differences, promotes growth and togetherness has always been the primary goal of
the corporation. Surely, Coca Cola has achieved this as demonstrated by its popularity as an
ideal working place across the globe.
Brand guidelines

Simply put, the Brand Identity and Design Standards exist to provide clear, reliable and
enduring guidance on how to use the Brand Elements and how to design for the Coca-Cola
Zero Brand Identity around the world. The importance of the Brand Standards, however, is
anything but utilitarian.
They are central to our ongoing commitment to:
1. Maintain authenticity and build Brand equity;
2. Leverage the scale of our System across all markets;
3. Provide more consistency and quality; and
4. Facilitate increased System productivity.
Understanding how the Brand Standards fit into and affect all Brand touch points is a precursor to
using the Brand Standards. This chapter examines both.
PESTEL analysis

PESTLE Analysis of Coca Cola analyses the brand on its business tactics. Coca Cola PESTLE Analysis
examines the various external factors like political, economic, social, technological (PEST) which
impacts its business along with legal & environmental factors. The PESTLE Analysis highlights the
different extrinsic scenarios which impact the business of the brand.

PESTLE analysis is a framework which is imperative for companies such as Coca Cola, as it helps to
understand market dynamics & improve its business continuously. PESTLE analysis is also referred to
as PESTEL analysis.

Let us start the Coca Cola PESTLE Analysis:

Political Factors:
The political factors in the Coca Cola PESTLE Analysis can be explained as follows:
Coca Cola can have a direct impact by the laws and regulation of the government on the food
products. These laws may vary from country to country. Earlier due to some trade sanctions of US
and Burma, the sale of Coca Cola was banned in Burma. After nearly six decades the sale was started
in the year 2012 when the sanction was suspended. There are still two countries Cuba and North
Korea where Coca Cola cannot be bought or sold due to the political condition of these countries.
The recent tiff between US and China resulting in a trade war has a major impact on the prices of the
Coca Cola canned products. The company is facing cost pressure due to rise in the tariffs on steel and
aluminum.

Economic Factors:
Below are the economic factors in the PESTLE Analysis of Coca Cola:
Coca Cola dominates the market with almost 50% market share in the carbonated beverage market.
Despite all the increase in price due to the tariffs, it has reported 8% growth in the net revenue in
quarter 3 of the financial year 2019. Though the margin was unfavorably impacted by acquisition of
company like Chi Ltd. in Nigeria. The new trade agreement between US, Mexico and Canada is
supported by the company for free and fair trade between the nations. The demand of consumers
has shifted from sugary drinks to low calorie drinks. The Coca Cola company has reported 8%
increase in retail value of its products like Diet Coke and Zero Sugar. The ceo of the company said
that Coke Zero Sugar has had its best year in 2018 and grew the fastest. The demand for these
products is expected to rise in the future too as people are becoming more conscious about their
lifestyle.

Social Factors:
Following are the social factors impacting Coca Cola PESTLE Analysis:

Coca Cola has always come with some social campaigns to connect to its consumers. In 2014 it had
launched a campaign share coke which was mega successful. People were encouraged to find bottles
with the name they feel connected to and then give it to their family or friends and share the same
on the social media platform with the hashtag share a coke. The online Coca Cola store also let the
customers customize their name on the bottles. The brand connected to the consumer on the
personal level. The company revamped all its social media handles with the mission of becoming
more optimistic brand on social media. It was done on the world kindness day. It posted all of its
content with #refreshthefeed. Such Coca Cola campaigns connect more to the millennial as they
actively participate in these through social media and personalization has become their way of living.

Technological Factors:
The technological factors in the PESTLE Analysis of Coca Cola are mentioned below:

The Coca Cola company has always been experimenting in its product line. It is coming with first ever
ready to drink frozen beverage in Japan. The company has a innovation driven culture. It invites
consumers to play games online and associate with the Coca Cola products. It uses social networking
technology to stay young, fresh and current. The company provides freestyle dispenser which allows
consumers to create its own beverage in various combinations through computer like interface. It
also saves data for market research which will be further used by the company to understand the
taste and preference of the consumers. It uses online advertising to make you feel like you want the
product.
Legal Factors:
Following are the legal factors in the Coca Cola PESTLE Analysis:
Coca Cola has faced trouble due to quantity of caffeine in its products in different countries in the
past. The company was also accused of paying low wages and inappropriately treating their
employees which attracted various protests from labor unions. It has alleged suits against racial
discrimination to its employees. Mislabeling of one its products as a pomegranate and blueberry
juice in spite of apple and grape juice has led it to a serious concern. Issues regarding packaging,
water usage and air pollution has been a topic of concern for the company. It should majorly focus
on its corporate ethics. They are of primary concern to the Coca Cola company.

Environmental Factors:
In the Coca Cola PESTLE Analysis, the environmental elements affecting its business are as below:
Coca Cola has faced massive amount of backlash for the reason of draining off the ground water in
India. It has been reported as the biggest consumer of freshwater in the world. It has taken steps to
eliminate these problems and reduce its carbon footprints to near zero. It has used water smart
farming methods like RAIN and CARE which uses as less water as possible. Coca Cola company are
also turning to solar energy to make their beverages in Fiji. In their sustainability report 2018, they
said they will be working towards a world without waste and set various goals for 2020 like
percentage of improvement in water efficiency by25% which is at present 18%.
To conclude, the above Coca Cola PESTLE Analysis highlights the various elements which
impact its business performance. This understanding helps to evaluate the criticality of
external business factors for any brand.
BCG matrix

World’s leading ready-to-drink beverage company, Coca Cola company has more than 500
soft drink brands, from Fuse Tea to Oasis to Lilt to Poweradeorlds, but none of them is
anywhere close to coke brand in awareness, revenue, and profit.

CASH COWS:
Cashcows are the products that have a high market share in a market that has low growth.
Below are few products which have been the cash cow for the company for all these years:
Coke for years has been a market leader in carbonated soft drink segment and a major cash
generator for the company. Having a presence in 200+ countries, coke has been the no.1
choice for millions of consumers all these years when it comes to choosing a carbonated soft
drink.
STARS:
The products or business units that have a high market share in high growth industry are the
stars of the organization. Kinley and Dasani: Kinley and Dasani are still bottled water brands
owned by Coca-Cola and offered in different countries in markets. While Kinley is quite a
popular bottled water brand in European and Asian countries, Dasani has a quite a
stronghold in US market. Owing to the growing demand for low calorie and healthy drinks,
the bottle watered industry is currently under an evolution phase. To cater to different
customer segments and their needs, coke is looking out at launching different variants of
bottled water EG: Apart from just simple bottled water, Coke also offers Kinley and Dasani
sparkling water  (just to cater to affluent customers). That’s not it, these also come in
different flavors giving the customers a wide range of options to choose from.

 
QUESTION MARK:
There are products that formulate a part of the industry that is still in the phase of
development and the organization is trying to create a significant position in the industry.
The small market share obtained by the organization makes the future outlook for the
product uncertain, therefore investing in such domains is seen as a high-risk decision. The
products in this segment can either grow and become stars or cash cows for the company or
can turn into a bad investment. The beverage industry is at an inflection point and is
undergoing a major transformation. With an aim to cater to the changing needs of
consumers to zero calories and no sugar drinks, Coca-cola company has launched a number
of products/brands to cater the same. The company is investing a lot of capital to create
awareness about these brands. These products/brands are still in the initial/development
phase of the product lifecycle and have a huge potential to grow. Diet
Coke. Smartwater, Honest Tea, Sparkling water, Minute Maid are few brands/products
which fall under the Question Mark quadrant. Growing healthier lifestyle trends and
emerging markets have prompted the brand to invest a large amount of capital in healthier
beverages in order to differentiate itself from competitors and grow brand awareness and
market share.

DOGS:
Dogs are those products that were perceived to have the potential to grow but however
failed to create magic due to the slow market growth. Failure to deliver the expected results
makes the product a source of loss for the organization, propelling the management to
withdraw future investment in the venture. Since the product is not expected to bring in any
significant capital, future investment is seen as a wastage of company resources, which
could be invested in a Question mark or Star category instead. Coke –  Declining demand
for carbonated soft drinks due to increasing demand for low calorie and healthy beverages
and snacks is what is attributing the diminishing sales of Coke brand. Coke brand which is
currently regarded as a cash cow for the company will eventually fall in quadrant qaudrant
in the future due to all these factors.
This concludes the BCG Matrix of Coca Cola.
SWOT analysis

SWOT Analysis In a nutshell

Porter’s Five Forces Analysis of Coca Cola
Porter’s five forces model, named after its developer Michael E Porter, is a strategic analysis tool
that helps to analyse some critical forces affecting the level of competition in an industry. This model
has acquired great popularity and fame over time and is used widely across the business world for
evaluating the profitability and attractiveness of various industries. The five forces that this model
evaluates are a part of every industry and every market. Managers can form strategies based on an
analysis of these forces to increase the profitability of their business. This is a Five Forces analysis of
the soda giant Coca Cola. Coca Cola is the leading brand in beverages sector and has a global
presence. Its only major competitor is Pepsi.

Bargaining power of suppliers:

The bargaining power of suppliers of Coca Cola is weak. It is so because the number of suppliers is
high and the switching costs for Coca Cola low. While Coca Cola can easily switch from one supplier
to another, it is not possible for any supplier to switch away from Coca Cola as easily. That can lead
to losses for any of the suppliers. While there are several suppliers, the size of individual suppliers is
small or moderately large. Moreover, forward integration is a distant possibility for most of its
suppliers. Even if there are no substitutes for raw materials like sugar, the number of suppliers is still
high. So, the main factors that have come to light regarding the bargaining power of suppliers are:
1. Large number of suppliers
 2. Small to moderately large size of individual suppliers.

3. Forward integration difficult for the suppliers.

4. Switching costs for Coca Cola not so high

Bargaining power of buyers/customers:

The bargaining power of individual customers in case of Coca Cola is low. Individual customers
generally buy small volumes and they are not concentrated in specific markets either. However, the
level of differentiation between Pepsi and Coca cola is low. Mostly they sell similar flavors. Switching
costs are not high for customers and still the two brands enjoy high brand loyalty. The customers of
coca cola are not price sensitive. Backward integration is not a possibility for the customers whether
it is an individual customer or a large retailer. If a retailer acquires some bargaining power then it is
only because it buys in large volumes. Still, overall the customers’ bargaining power is weak.

Threat of new entrants:

In the beverages industry there are several factors that discourage new brands from entering.
Growing a brand overnight is impossible. There are significant investments to be made. From
operations to marketing every part requires a large investment. Some local brands may start it at
smaller scale and still marketing and hiring qualified staff requires generous investment. The level of
customer loyalty in the industry is moderate and for any brand to build customer loyalty it will take
some time. So, while new entrants can compete with brands like Coca Cola at a smaller or local level,
to build a brand as big is a mammoth task requiring both capital and skilled human resources.

Threat of substitutes:
Main substitutes of Coca Cola products are the beverages made by Pepsi, fruit juices, and other hot
and cold beverages. The number of substitutes of Coca Cola products is high. There are several
juices and other kinds of hot and cold beverages in the market. The switching costs are low for the
customers. Apart from it, the quality of the substitute products is also generally good. So, based on
these factors the threat from substitutes is strong.

Competitive Rivalry between the existing players:

There are two major players in the soda industry and they are Coca Cola and Pepsi. There is intense
rivalry between the two major players. There are a few smaller players too but they do not pose a
major competitive threat. The two main players are nearly of the same size and they have similar
products and strategies. The level of differentiation between the two brands is also low and
therefore the price competition is intense. People have already heard of the Cola wars. So, the level
of competitive rivalry between the existing firms is a strong force.

Marketing mix of Coca Cola in Bangladesh:

Product:
Coca Cola offers two different sweet and flavored cola in our country. This is normal cola and another
is dieting Cola. Coca Cola does not frequently change its taste. It has many nutritional values like
Pepsi. It serves different type of beverage like Sprite, Fanta, etc.

Price:
Coca Cola Bangladesh Limited always tries to keep a standard price. It also offers promotional
discounts, allowances, credit terms and payment period for the stores and Restaurants. Coca Cola,
furthermore, offers discounts in a family size bottle frequently. To thing consumer buying power the
coca cola company manufacture different types of can for our countries people, so that they can easily
buy it.

Place:
Coca Cola Bangladesh Limited has a strong distribution channel to distribute their Coca Cola. They
make Coca Cola easy to get and available to the customer everywhere through their expert distributors
channel. Their transport facilities, channels of distribution, coverage area, etc. are maintained very
securely.

Promotion:
Coca cola spends millions of dollars for frequently advertise products through mass media. They
choose standard banner and color to advertise. Coca Cola makes sales promotion, advertising, force
selling, public relations, direct marketing, etc. Sometimes local and international games inaugurated
by the help of coca cola Bangladesh ltd.
Chapter 3
MARKET SEGMENTATION
A Market Segment defines a group of consumers who share the same or a similar set of needs and
wants. As a company you must find out who your customers are in order to target them equitable.
Following you can see Coca-Cola’s relevant market segments.
The major segmentation variables are geographic, demographic, psychographic, and behavioral
segmentation. (Scribd Inc., 2018).

1. Geographic segmentation
Geographic segmentation calls for dividing the market into different geographical units such as
regions, cities, or neighborhood. Coca-Cola has a countrywide network of product distribution but the
company segments more in urban and suburban areas as compared to rural areas.

2. Demographic segmentation
In demographic segmentation, the market is divided into groups based on variables such as age,
family life cycle, occupation, education, religion, race, generation, nationality, and social class.
Demographic variables are the most popular base of Coca-Cola Company for distinguishing their
customer groups. The reason is that consumer wants, preferences, and usage rates are often associated
with demographic variables. Another is that demographic variables are easier for Coca-Cola to
measure because they can evaluate or conduct surveys for the demographic segmentation.

2.1. Age and Life-Cycle Stage

Coca-Cola Consumer wants and abilities change with age. Age and life cycle can be tricky variables
because there are different needs and wants as to accord to the age of a person. The main sector in
which Coca- Cola Company targets is the youth because there is a much need of refreshment and
energizers to cope up with their daily activities.

2.2. Gender
Gender is also an issue needed to be given prior by Coca-Cola. Men and women tend to have different
attitudinal and behavioral orientations based partly on genetic makeup and partly on socialization
practices. Coca Cola targets both genders with its wide variety of drinks. This market is relatively
large and is open to both genders, thereby allowing greater product diversification.

3. Psychographic segmentation
In psychographic segmentation, Coca Cola buyers are divided into different groups based on lifestyle
or personality or values. People within the same demographic group can exhibit very different
psychographic profiles, for that reason Coca Cola Company designed and made product which are
suitable for their personality.

3.1 Lifestyle
People exhibit many more lifestyles than are suggested. People differ in attitudes, interest, activities,
and these affect the goods and services they consume. Coca-Cola Company presented products which
are suitable for modern, busy lifestyle (shortage of time) and mobile generation.

3.2 Personality
Coca Cola Company is using personality variables to segment markets. They award Coca-Cola.
products with a brand personality that corresponds to a target consumer personality.

4. Behavioral segmentation
In behavioral segmentation, Coca Cola buyers are divided into groups based on their knowledge,
attitude toward, or response to a product. Many marketers believe that behavioral variables-occasions,
benefits, user status, usage rate, loyalty status, buyer-readiness stage, and attitude are the best starting
points for the construction of market segments.

4.1 Occasions
Coca Cola consumers can be distinguished according to the occasions when they develop a need,
purchase a product, or use a product. Occasion’s segmentation can help firms expand product usage.

1.What is your age?

In this survey, people from the age of 16 to 25 participated the most and most of them are
student.
 8%

5 to 15 16-25 26-35 36-47

22%

50%

Above 47 Total
12%

7%

2%

2.What is your occupation?

From the bellow Chart we can see that most of the respondent are Student.

13% 17%
Business Teacher

7%
20%
Student Service holder

Others

43%

3.What is the most important thing to you when consuming soft drinks?

People prefer taste than other factors for soft drinks.

7%

13% Health Cost

Brand image Taste

80% Others
4.Which are you most likely to consume?

Because of the taste of cocacola, most of the people like to take it.

7%
Coca-Cola
17%
Pepsi
7%
Sprite
70%
Others

TARGET MARKETS
Coca Cola branded beverage products available to consumers in more than 200 countries through the
network of Company-owned or -controlled bottling and distribution operations, independent bottling
partners, such as distributors, wholesalers and retailers as the world’s largest beverage distribution
system. (The Coca-Cola Company, 2017).
The target market for Coca cola is very wide as it satisfies the needs for many different consumers,
ranging from the healthy diet consciousness through Diet Coke to the average human through its
bestselling drink regular Coke. The primary mark market for Coca-Cola is multicultural young person
of age 13-28, which. frequently known as heavy soft drink ingestion group. This consumer group is
older sufficiency to do self-determination on purchases and most likely to follow the merchandise as
value of Coca-Cola emphasis cool and felicity which compatible with their lifestyle (WordPress,
2017).

Market Scenario
The market structure of the beverage industry in Bangladesh is oligopolistic with few firms
dominating the market. They are Coca Cola Bangladesh, Transcom Beverage Limited, Partex
Beverage Ltd, Akij Food & Beverage Ltd, Globe Soft Drinks Ltd. The beverage market Cola is
dominated by Coca Cola Bangladesh with the 56.8 % market share. Transcom Beverage Limited is
holding 8.6% and 31.50% market share is being held by MOJO (Akij Food & Beverage Ltd) as per
data obtained from Nielsen Report dated February 2017. Coca Cola, Pepsi, MOJO, RC Cola, Virgin,
Uro Cola, Coca Cola, and Pran Cola are the major producers of soft drinks in Bangladesh. The other
beverage producers are Akij Group (Mojo), Agriculture Marketing Company Limited (Pran), Partex
Beverage Limited (RC Cola,) and Globe Soft Drinks Limited (Uro Cola). The market share of the
soft drinks in Bangladesh, Coca Cola has now positioned itself as the top brand. According to a
survey carried on December 2017, Coca Cola’s market share in Bangladesh is about 56.8% while for
Pepsi it is 8.6% and for Mojo it is 31.50% (only cola). In terms of juices, Pran has already earned a
good reputation but its cola drink has yet to make its position. Mojo is another brand expanding in a
rapid rate as it is the symbol of the young people and the bottle size is appropriate to the customers
and now a day’s others are following their norm. Energy drink is a new thing in Bangladeshi market,
and they try to explore a new world of taste, flavor, and feeling and finally ensure the quality of new
drink in the market. It is new but it is very attractive and potential to the customer and that is why the
market value and market share is increasing day by day. So, it is a great opportunity for a soft drinks
marketer to enter the market and gain a lot of profit to ensure the customer satisfaction.

2015-2016 2016-2017
(July – June) (July – June)
Carbonated Beverage
SL Market
Cola Value Market Share Value
Share
(Tk in (Tk in
(Volume) (Volume)
Crore) Crore)
1 COCA-COLA 212 59.2 183 56.8
2 PEPSI 35 9.1 28 8.6
3 MOJO 111 27.1 107 31.5
4 RC-COLA 13 3.4 5 1.5
5 PRAN-MAXCOLA 0 0 2 0.4
6 OTHERS 6 1.2 4 1.2
  Total 377 100 329 100

Cola Market Share (2015-2016) Cola Market Share (2015-2016)

COCA-COLA COCA-COLA

1%
0%
2% PEPSI
3%1% PEPSI

MOJO
27%
MOJO 32%
RC-COLA
RC-COLA
57%
59%
PRAN-
9% PRAN-MAXCOLA 9% MAXCOLA

OTHERS OTHERS
 Chapter 4
Formulation of Marketing Strategy:

Marketing strategy is a long-term, forward-looking approach and an overall game plan of any
organization or any business with the fundamental goal of achieving a sustainable competitive
advantage by understanding the needs and wants of customers.
Marketing strategy mainly includes product strategy, price strategy, distribution & Promotion
strategy

New Product Development Strategy

To achieve strong sale and healthy profits company should have an explicit strategy with respect to
developing and evaluating new products. This could also help it to defend its market share. Coca
Cola is the market leader of Soft drinks in Bangladesh. To maintain the position as a market leader
Coca cola should concentrate in product development which could enhance business activities.

 Gathering new product ideas.

 Screening of ideas
 Business analysis
 Prototype development
 Market test.
Pricing Strategy:
Pricing a product is one of the most important aspects of your marketing strategy. Generally, pricing
strategies include the following five strategies.
Cost-plus pricing—simply calculating your costs and adding a mark-up.
Competition-based pricing—setting a price based on what the competition charges.
Value-based pricing—setting a price based on how much the customer believes what you’re selling
is worth.
Price skimming—setting a high price and lowering it as the market evolves.
Penetration pricing—setting a low price to enter a competitive market and raising it later.
In some cases, consumers tend to switch towards a low-priced product. Coca cola’s objective is to
target every consumer of the country. So, Coco Cola must set its prices at such a level which no one
can offer to its consumers. That is why Coca Cola charges the same prices as are being charged by its
competitors. Otherwise, consumers may go for Pepsi Cola in case of availability of Coca Cola at
relatively high price.
But Coca-Cola should actively add value to customer’s lives and ensure quality product.
Following factors Coca Cola kept in mind while determining the pricing strategy.
 Price should be set according to the product demand of public.
 Price should be that which gives the company maximum revenue.
 Price should not be too low or too high than the price competitor is charging from their
customers otherwise nobody will buy the product.
 Price must be keeping the view of the target market.

The price of Coca Cola, despite being market leader is the same as that of its competitor.
Coca Cola has intense competition with Pepsi so its pricing cannot exceed too much nor decrease
too much as compared to the price of Pepsi Cola. If price of the Coca Cola exceeds too much from
the Pepsi then people will shift to the Pepsi Cola and on the other hand if the price of Coca Cola
decreases people might get the impression that its quality is also low.
Coco Cola should offer promotional prices very frequently. Especially on some occasion Coca Cola
should reduce its rates like in Ramadan Coca Cola reduces its rates unto 5 to 10 takas on 1.5 liter.
bottle.
Targeting Strategies:
Age is the major determinants in targeting the consumers. A new craze for soft drinks among the
urban young is sweeping the country, thanks to the high-pitched publicity both in electronic and
print media. This publicity has been so successful that even the older generation is drawn to it. Coca
Cola is most preferred in the age group among 15-30. By targeting middle class and upper middle-
class people, Coca-Cola captures a huge market. Coca -Cola is a low involvement product and it is
good enough to consume by middle class and upper middle-class people. Targeting the youth
generation, Coca-Cola should make sales promotion and Marketing promotion.

Distribution Strategy:
The distribution channel plays an important role in the company’s success. Coca Cola has distributors
in all districts. Objectives and issues Pepsi is in its maturity stage. Meaning, everyone knows about
this beverage. All it has to do is remind people to consume this drink. The main objective of Coca
Cola should be to make profit by the increment in sales.
The company continues to expand its market in emerging, developing and developed regions
through the strong distribution system. It has adopted two types of product distribution strategy,
namely direct selling and indirect selling. The company supplies several products directly to retailers
which include restaurants, cinema halls, retail stores, etc. In addition, the Coca-Cola has also
adopted the indirect method of selling; it gets into partnership with distributor agencies,
wholesalers and independent bottling partners, who then make the products available to retailers
and consumers.
For the customer, the Coca-Cola company should adopt the intensive distribution. It means that the
company had better set their retail store at some dense population places, such as shopping center,
leisure center or some convenience stores. The retail store should be set on the place which is easy
to help the consumers purchase their productions.
In rural area Coca cola sales point and product availability is less. Coca cola should concentrate more
on rural area promotion and distribution.

Promotional Strategies:
It is one of the important facts of a company which it has to nourish in a very proper way to achieve
optimum outcome. Coca Cola values the importance of promotion, because it believes no matter
how high quality, good taste, , it has to be properly communicated to the customer to pursue the
final purchase.
Coca Cola’s promotional activities should be main targeted for fun loving young adults. Intensive
promotional Marketing strategy has to be taken by Coca Cola to maintain his leadership in the
market and try capture the as much market share as possible. Coca Cola should promote its branding
on different occasions like -
 Pitha Utsob.
 Pohela Baishakh.
 School -College-University Program.
 Ramdan , EID.

Advertising strategy:
Advertising campaign strategies call for heavy spending upfront in order to win long-term customers.
i. Newspaper Advertisement.
iii. Billboard Advertisement.
iii. Electronic media Advertisement.

Findings & Recommendations

Findings:
The Coca-Cola Company has covered a strong business market sale around the world. Using different
market strategies and dividing the market segments to help the company to gain more profits.
Moreover, the Identifying Market Segments and Targets for Marketing Strategy Plan of Coca-Cola
Company in corporation partnership strategy and implementation provides a brief overview of Coca-
Cola Company's operation, targeting and positioning in the drink industry. In this case, although the
company is running a good business, there are still some other internal (e.g. positioning) and
external challenges waiting for it to achieve,
for example, Pepsi is one of the closest competitors and purchases similar products.
· The carbonated beverage industry of Bangladesh is visibly a matured and declining industry.
· The existing market of carbonated beverage is seriously threatened by the emergence of other
substitute beverage products.
· Due to the narrow product line, Coca Cola is having a hard time to maintain its share in the market.
· Over the last decade, numerous numbers of new enterprises have entered the industry and
eventually have swamped the industry for its volume.
· The policy and technology of determined by Coca Cola USA; USA is not always suitable for the case
of Bangladesh.
 Chapter 6
Conclusion and Recommendations

Conclusion
Bangladesh has been experiencing an upsurge in the use of cement in recent years. From the
above contents, we can conclude that in liquidity ratios, HeidelbergCement Bangladesh Ltd.
has lower values than the others. So, they definitely have liquidity problem. In asset
management, Confidence Cement Ltd.’s position is not good. They are lagging behind from
the other companies in this industry. Their inventory turnover, fixed asset turnover and total
asset turnover are improving every year but not good enough. So, they have poor asset
management. They are inefficient in managing current and fixed assets. Meghna Cement
Mills Ltd. is using a huge debt which is a great risk of bankruptcy to the company. Their debt
ratio is higher than the other companies. Times interest earned is below the industry average
but it is improving each year. In profitability ratios, ROA is below industry average but ROE
is above industry which means they are trying to improve their asset management and
liquidity position. It would be a wise decision to extend short-term credit to Premier Cement
Mills Ltd. because they kept a balance between its current assets and current liabilities. On
the other hand, as a long-term lender, we would like to extend long-term credit to
LafargeHolcim Bangladesh Ltd. as it is the safest and profitable firm to lend money. It is
evident that Premier Cement Mills Ltd.’s manager can maximize their asset to make an
optimum return. Finally, whether to invest or lend money, LafargeHolcim Bangladesh Ltd.
should be the preferable.
 Recommendations

Being the biggest manufacturer, distributor and marketer of non-alcoholic beverage industry, the
Coca Cola Company has been running successful business with its franchising model in the world.
The company is in a good position to capture the market of any new drink categories. Coca-Cola
continues to expand their customers through investing new products, keeps innovating and pursuit
to get better results for its business in order to catch their loyal customers throughout the world.

 To introduce other well anticipated products of Coca Cola Company in local market.
 Going for some alliance with some of the major rivals or if possible, acquiring some of them.
 Coca Cola can consider a serious price cut to rule out the smaller player from the market
and gain more share.
 Coca Cola Company should try to emphasis more on providing their infrastructure in the
market to facilitate their customers.
 Coca cola company should produce their product according to the local demand.
 Marketing team should try to increase the availability of Coke in rural areas.
 The company should focus to bring some more flavors like health drinks and other low
calorie.
 offerings. Coca-Cola Bangladesh can also introduce some fruit-based drinks.
 Coca-Cola should use new attractive system of word-of-mouth advertisement to keepalive
the general awareness in the whole market.

References