By: Zuber Sayyed

PGDM(RBA)

WeSchool Mumbai

The Coca-Cola Company is an American multinational founded in 1892, best known

as the producer of Coca-Cola. It is the market leader in the soft drinks industry and
one of the most renowned brands across the world. The drink industry company
also manufactures, sells, and markets other non-alcoholic beverage concentrates
and syrups, and alcoholic beverages more than 200 countries and territories. The
company's stock is listed on the NYSE and is part of the DJIA and the S&P
500 and S&P 100 indexes.

History:

Coca-Cola was established in 1886 in Atlanta by John Pemberton. At the time it was
introduced, the product contained cocaine from coca leaves and caffeine from kola
nuts which together acted as a stimulant. The coca and the kola are the source of the
product name. In 1889, the formula and brand were sold to Asa Griggs Candler, who
incorporated the Coca-Cola Company in Atlanta in 1892. The company has operated
a franchised distribution system since 1889.

Products: Coca cola, Sprite, Fanta, Minute Maid, Kinley etc….

Global Brand

94% of the world’s population recognizes the brand instantly by its red and white
Coca-Cola logo as per Business Insider. More than 10,000 soft drinks from Coca-
Cola are consumed every second of every day on average.
1)SWOT Analysis of Coca-Cola

1) Coca Cola Strengths-

1. Strong brand identity – Coca-Cola is a highly popular brand with a unique
brand identity. Its soft drinks are the most-selling drinks in history.
2. High brand valuation – Coca-Cola is undoubtedly one of the most renowned
brands with a high brand value. According to Interbrand annual report, Coca
Cola is ranked 6th best global brand in 2021 with a brand value of $57 Billion.
3. Extended global reach – It is sold in more than 200 countries with 1.9 billion
servings per day of Company products. It has introduced more than 500 new
products globally. Some of these are variations of Coca-Cola beverage, like
Coco Cola Vanilla and Cherry Coca-Cola. Its brands are known to touch every
lifestyle and demography.
4. Greatest brand association and customer loyalty – Coca-Cola is considered
one of US’s most emotionally-connected brands. This valuable brand is
associated with ‘happiness’ and has strong customer loyalty. Customers can
quickly identify their particular taste. Finding its substitutes is difficult for them.
Moreover, Coca-Cola and Fanta have a huge fan following than other beverage
names in the industry.
5. Dominant market share – Out of Coca-Cola and Pepsi, the only two largest
manufacturers of soft drinks in the beverage segment, Coca-Cola has the
largest market share. Coke, Sprite, Diet Coke, Fanta, Limca, and Maaza are the
highest growth drivers for Coca-Cola.
 6. Unparalleled distribution system – Coca-Cola has the most efficient and
most extensive distribution network in the world. The company has
nearly 225 bottling partners and about 900 bottling plants globally.
7. Acquisitions – Coca-Cola has a long list of strategic and profitable acquisitions
including Costa coffee chain, Fairlife (Milk Products), Fuze Tea, AdeS, and
many more. Through these acquisitions, Coca-Cola expanded its ready-to-drink
beverage portfolio
8. Repositioning portfolio – Coca-Cola Company has repositioned and
reduced the numbers of its global brands from 400 to 200 brands in 5 major
categories such as :
o Coca Cola
o Sparkling Flavors
o Nutrition, Juice, Dairy & Plant
o Hydration, Sports, Tea & Coffee
o Emerging

2) Coca-Cola Weaknesses –

Aggressive competition with Pepsi – Pepsi is the biggest rival of Coca-Cola. Had
it not been Pepsi, Coca-Cola would have been the clear market leader in the
beverage.
1. Product diversification – Coca-Cola has low product diversification. Where
Pepsi has launched many snacks items like Lays and Kurkure, Coca-Cola is
lagging in this segment. It gives Pepsi leverage over Coca-Cola.
2. Health concerns –Carbonated drinks are one of the major sources of sugar
intake. It results in two grave health issues – obesity and diabetes. Coca-Cola
is the biggest manufacturer of carbonated beverages. Many health experts have
prohibited the use of these soft drinks. It is a controversial issue for the
company. However, Coca-Cola hasn’t devised any health alternative or solution
for this problem yet.
3. Lawsuits – Trust is undermined whenever the company is accused of
wrongdoing. Coca Cola is facing a patent infringement lawsuit for using a
dispenser that can recognize users and customize drinks based on their
preferences.
4. Overdependence on Third-Party Technology Providers – Coca Cola’s
operations rely heavily on the technological expertise of third-parties. The
company signed another five-year deal with Microsoft to supply business
software.
5. Environmentally Destructive Packaging – In the 2020 Tear Fund report,
Coca Cola was named as one of the four world’s largest consumer brands that
 are contributing immensely to global warming and carbon emissions by using
throwaway plastic bottles.

Coca-Cola Opportunities
1. Introduce new products and reduce added sugar – Coca-Cola has the
opportunity to introduce new offerings in healthy drinks and food segments just
like Pepsi. It can contribute to their revenue, brand image and they can branch
out from carbonated drinks. According to its recent annual report, Coca-Cola
has been evolving and prioritizing the reduction of sugar in its beverages and
so far 28% of its volume sold was low or no-calorie beverage.
2. Increase presence in developing nations – Many regions with hot climate
have the highest consumption for cold drinks. Thus, increasing presence in
such emerging markets can be excellent – Middle Eastern and African
countries are a good example.
3. Bring advanced supply chain system – Coca Cola’s business is entirely
dependent upon logistics and supply chain. Transportation costs and
fuel prices are always on the rise. Thus, coming up with some advanced and
improved systems for distribution can be an opportunity.
4. Packaged drinking water – Coca-Cola owns several packaged drinking water
brands like Kinley. There is a great potential for expansion in this segment for
Coca-Cola. There is an opportunity to expand and bring more healthy drinks in
the market to avoid people’s criticism.
5. Expand through Acquisition – Although different sectors offer lucrative
opportunities for growth, quick entry into these markets can be a challenge.
Recently, Coca-Cola’s growth was driven by some of its recent acquisitions like
Costa Coffee, Aha sparkling water and it can do it again. It has the financial
resources to acquire startups or SMBs in emerging markets and exploit the
numerous opportunities they present.

3) Coca-Cola Threats
1. Water usage controversy – Coca-Cola has faced many criticisms over its water
management issue. Many social and environmental groups have claimed that the
company has a vast consumption of water in water-scarce regions. Besides, people
have alleged that Coca-Cola is polluting water and mixing pesticides in water to
clear contaminants.

2. Pollution Lawsuit – Coke and three other companies are being sued by a
California environmental group for contributing to plastic pollution. In the lawsuit,
Coca-Cola is singled out for misleading the public about the recyclability of its
single-use plastic bottles.
 Source: Statista
3. Direct and indirect competition – Although direct competition from Pepsi is
clear in the market, however, there are many other companies which are indirectly
competing with Coca-Cola. Starbucks, Costa Coffee, Tropicana, Lipton juices, and
Nescafe, are the indirect competitors of Coca-Cola, which can threaten its market
position.

4. Economic Uncertainty – The recent events have negatively affected business

operations, supply and distribution chains, and devastated revenues of many global
companies. In 2020, Coca Cola’s revenues declined drastically as restaurants,
theaters, and other venues that contribute about half of its revenue remained closed
due to the global crisis.

5. Increasing Health-Consciousness – Consumers are increasingly adopting

healthy lifestyles and avoid products with unhealthy ingredients. The increase
in health-consciousness can reduce Coca Cola’s sales and profits as customers
migrate to healthier options offered by competitors
2) Pestel Analysis

The PESTEL analysis is a significant part of company management. For any

company, it is very crucial to validate the conditions of a country before expanding
their business. They need to find if there is any external condition that can affect
their business. They have to keep these conditions in check for the operating
countries as well. These can help them to point out their opportunities and threats.
They can make strategies to cover up their potential threats. It can help them to
ensure their development.

Although Coca-Cola is a strong brand with a massive customer base, external

factors can affect its business. The PESTEL analysis of Coca-Cola can help them
get a clear view of their business conditions, which they can manage with wise
strategies.

PESTEL analysis of a company shows how the factors like politics, economy,
sociology, technology, environment, and law can accelerate or decelerate the
development of a company. Though Coca-cola is one of the biggest beverage
companies operating their business in more than 200 countries, it gets influenced by
these external factors.
Political Factors:

Political factors can directly affect the business conditions of a company. If a

country's political status is not stable, the company may suffer loss despite investing
a good amount of money and time. Hence, political scenarios can be influential to
the growth of a company. Here a few political conditions which can affect the
business of Coca Cola:

• If there are changes in taxation, labor laws, employment conditions, these

situations can affect the sales of Coca-Cola.
• There are also conditions where the government favors the business of a
company and subsidizes them. It can be common for the local brands or the
partially owned government brands. In this case, Coca-Cola may have to face
tough competition.
• The Trade relations of other countries with the US can impact the business of
Coca-Cola in that country. For example, due to the trade relation between
Burma and the US, Coca-Cola cannot sell its product in Burma.

Economic Factors:
Social Factors:

When a company does a business in a particular area, their socio-cultural condition

significantly impacts the company. They need to come to terms with the issues to
run a business smoothly. Otherwise, the company may fail to interest more
customers. Here are a few sociological scenarios that can work upon the
development of Coca Cola:

• Coca-Cola primarily deals in carbonated sugary drinks. As more consumers

are leaning towards healthy alternatives, the lack of it from the brand can
result in a fall in their revenue generation. However, the firm needs to have
more products like Coke Zero, which can target health-conscious customers.
• As Coca-Cola has expanded its business in several countries, they need to
consider the palate of those countries. They have already introduced more
than 30 different flavours in Japan. These experimental flavours can be helpful
for them to gain more consumers.
• Coca-Cola is one of the biggest brands and is the mastermind of creating
campaigns. They have concentrated on several social conditions while
branding and campaigning. Thus, gaining the chance to get more customers,
and at the same time, creating strong brand awareness.

Technological Factors:

• Though technological issues do not directly impact the growth of beverage

brands, there are certain other conditions related to technology that can
indirectly affect them. The PESTEL analysis of Coca Cola can give an idea
about how technical issues can impact the brand’s business:
 • The brands need research to develop their products. The more they can invest
in developing infrastructure, the more opportunity they get to conduct good
research.
• Technological development has also increased the number of smartphone
users. The company can use social networking sites for promotion and
marketing, which can help them to strengthen their brand recognition.
• They can also conduct online polls to do market research about new products
and customer tastes and get feedback about their services. It can decrease
their costs of research and product development.
• Ecological Factors:
• For beverage companies, ecological issues may have a brand awareness-
related impact. The PESTEL analysis of Coca Cola can show how ecological
issues impact their business:
• The company needs to consider more eco-friendly packaging options. They
can substitute their plastic bottle with other materials which are easily
recyclable.
• The company can use advanced technology for waste management which can
help the company to strengthen its brand impression. The company can raise
awareness while launching creative campaigns or donate to environmental
causes.
• The company has been using water-smart farming methods like RAIN and
CARE. It has helped them to interest people who are concerned about the
environment.

Legal Factors:

The legal issues may not have a direct impact on the brand’s business. However,
they can show some indirect influence. Here are some legal conditions that can
affect the brand’s development:

• Many countries have already issued a range for sugar usage in beverages. As
Coca-Cola has a wide area of services, they need to consider it. Failing to do
so may result in legal prosecution.
• The caffeine quantity in any beverage is fixed for most countries. Coca-Cola
has previously suffered for its excessive caffeine content and had to pay for
the lawsuits.
• The company must value the employment ethics and consider the working
conditions of the labor. If they give fewer wages to the laborers and do not
provide healthy working conditions, they may face legal issues.
3) Porter’s FIVE FORCES

Porter's Five Forces is a model that identifies and analyzes five competitive forces that
shape every industry and helps determine an industry's weaknesses and strengths.
Five Forces analysis is frequently used to identify an industry's structure to determine
corporate strategy.

Porter's model can be applied to any segment of the economy to understand the level
of competition within the industry and enhance a company's long-term profitability. The
Five Forces model is named after Harvard Business School professor Michael E.
Porter.

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:

• Large number of suppliers

• Small to moderately large size of individual suppliers.
 • Forward integration difficult for the suppliers.
• 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.

Coca-cola maintains a visible appearance on facebook and other social networking

sites such as twitter. Coca-cola harnesses the power of social networking to spread
the word concerning new product, test advertorial campaigns, etc.

The business process changing of Coca-cola is BPR, because as we all already

know coca-cola is one of the inventor that popularized soda drinks.
4) CUSTOMER SEGMENTATION

Coca-Cola is a global brand, appealing to a worldwide audience. The Coca-Cola

target consumer is both male and female, covering almost the entire socio-economic
spectrum, from average to high income earners.

The typical Coca-Cola consumer demographics are extremely broad in age, from
young through middle aged, who can relate to the well-defined Coke brand identity
that promises a vibe of youthfulness, fun, adventure and authenticity.

The Coca-Cola target market focuses on an older demographic specifically with the
popular Diet Coke product, which offers a sugar-free option for diabetics and health-
conscious consumers.

The broad target market of the Coca-Cola brand is also reflected in the range of
packaging sizes and styles that cater to families, celebrations and on-the-go
consumption of smaller bottles and cans.
Coca-Cola Target Market Segmentation

A deeper dive into the Coca-Cola target market, focusing on the demographic,
geographic, behavioral and psychographic segmentation, can provide helpful Coca-
Cola consumer insights for brands targeting a similar audience. Let’s explore each
Coca-Cola market segmentation in turn.

Coca-Cola Demographic Segmentation

Coca-Cola demographics segmentation includes a broad age range of younger to

mid-life consumers, from 10 to 40 years old. This demographic covers kids and
teens, singles, younger adults still living at home and those who live alone, newly
marrieds, married couples without kids, with young children or with kids in their teen
years.

The employment profile of the Coke audience includes students, employees and
professionals alike.

Coca-Cola Geographic Segmentation

The Coca-Cola target audience is located all over the world, and the typical Coke
consumers may live in urban centers or rural settings.

Interestingly, EMEA leads in unit sales of Coca-Cola products, with 28% share in
Europe, the Middle East and Africa, compared to 20% unit sales volume from the
US. This is despite the fact that North America accounted for the largest revenue
distribution share of the Coca-Cola company in 2021 (34.1% of all worldwide
revenue).

Coca-Cola Behavioral Segmentation

The target market enjoys Coke for several reasons, including its good taste and
refreshing feel, spending time with people, and as part of a general lifestyle habit.

The target audience of Coca-Cola consumes the product regularly, including ‘soft’
loyal users who enjoy Coke from time to time, and ‘hard’ loyal users, who drink Coke
on a more routine basis.

The Coke target market can be broadly defined as having easygoing, ambitious, and
determined personalities.

Coca-Cola Psychographic Segmentation

A Coca-Cola customer analysis from a psychographic standpoint shows a wide
socio-economic breakdown, from working class to middle and upper class. This
target audience tends to fall into the categories of ‘aspirer’, ‘explorer’ or ‘succeeder’.

The Coke targeting approach also has a strong focus on what’s known as
the “conscious progressive” personality type – consumers who value independence,
learning, personal growth and being true to oneself, and who seek out those traits
and experiences in the brands they consume.

Who are Coca-Cola’s competitors?

There can be no competitor analysis of Coca-Cola without exploring the “Cola

Wars”, the ongoing battle for market share between Coke vs Pepsi sales. The
difference between Coke and Pepsi has been hotly debated for decades,
and Pepsi’s audience is a key target market that Coca-Cola aspires to grab away
from its number one competitor.

In 2020, Coca-Cola was the top carbonated soft drink company in the US, with a
volume share of 44.9% compared to PepsiCo, which trailed in second place with just
25.9%.

Although Coke vs Pepsi products is the toughest battle among Coca-Cola

competitors, Coke also competes against other cola and soft drink brands, such as
Red Bull, Tetra Pak juice cartons, and Keurig Dr Pepper (7Up, Schweppes, Dr
Pepper, RC, Sunkist and more). Yet Coca-Cola is the clear winner, with a brand
value five times higher than the closest competitor.
Coca-Cola’s Marketing Strategy

For a company that has been operating for over a century, Coca-Cola marketing
strategy is suitably broad, well established and highly successful. Coca-Cola takes a
vast, multi channel marketing approach, focusing on TV ads, sponsorships, celebrity
endorsements, product marketing, brand marketing and much more.

Most importantly, Coca-Cola marketing focuses on selling a lifestyle promise, rather

than simply a product. This is evident in the brand’s slogans throughout the years,
such as “Coke is it”, “Taste the feeling”, “The real thing”, and the new 2021 slogan,
“Real Magic”.

The vibe of the latest slogan is portrayed in the impressive 2022 Coca-Cola ad, “The
Conductor – A Kind of Magic”, featuring a roundup of artists performing the Coke
jingle, promoting the Coke brand value of unity and feeling “in sync”:

Like rival brand Pepsi, Coca-Cola also places a strong emphasis on product
innovation. A recent example is the launch of Coca-Cola with Coffee, touted as a
hybrid mocha flavored caffeinated soft drink that falls into the ready-to-drink (RTD)
coffee category.

The product is already showing strong success, with 88% of the customers who
tried it saying they would buy it again.

When it comes to the international markets, the company invests significantly in

separate marketing campaigns. The Coca-Cola advertising strategy takes the strong
brand message of Coke and localizes it for appropriate geos and target audiences.

For example, a recent ad for Coke India explores a new way to cheer for your team
at a cricket match. Once again, the brand is focusing on themes of unity,
togetherness and fun, which always take center stage no matter how does Coca-
Cola market their products:

Innovative and engaging campaigns are a key part of the Coca-Cola marketing
strategy and brand approach, the most famous being “Share a Coke”,
the personalized Coke bottle campaign. Launched in 2011 in Australia followed by
worldwide expansion, the campaign has been a phenomenal success,
producing over 150M bottles, increasing sales in the US by 2.5%, and garnering
over a billion impressions of the #Shareacoke hashtag on social media. It also won
several prestigious Cannes Lions awards for the Coke brand.
5) CUSTOMER JOURNEY MAPPING

More and more there are a great deal of expectations from customers to their
buying’s products, while the competitive level has increased significantly. Thus,
companies need to try their best to meet their customers’ requirements.
One of the important step in this process is building up a good plan of marketing
communication. In 2019 Coca-Cola has been in the top of valuable brand name
when it gained more than 63.3 billion U.S. dollars.Coca-Cola reached the highest
point of revenue and income amount in latest 10 years in 2012.
As many other big companies, Coca-Cola has been successful in using touch-point
in many marketing communication channels. The way Coca-Cola has used
impressively which makes its competitors have to work hard to maintain their
market.
REVIEW AND FINDINGS
In simple words, marketing communication is considered as how a company
employ tools or channels for its strategies to gain its goals. The channels of
marketing communication refers to a communicating approach used to convey a
message by a firm to persuade its target customers. Whereas, the tools of it can be
advertising, social media or public relation. There is not a fixed model for all
companies in marketing communication. It can have several ways for companies
can do to enhancing awareness of customers about their brand name
In general, customers tend not to buy an item immediately, they are likely to look at
the brand name and the product few times before buying it, which is considered as
touchpoints.
With offline advertising, it seem not be easy to create the map of customer journey.
Customer journey normally has five stages including awareness, consideration,
decision, retention and advocacy
Awareness is the familiar stage with branding strategy. Coca-cola has used the
successful channel of word-of-mouth. Traditionally, most potential buyers can
observe the coca cola products on TV, event, stores and especially in social media.
All channels has worked well when bringing to the potential customers with
impression. After that they are able to remember the brand name and look at the
coca-cola products.
Turing to consideration stage, customers will think about their decision that if they
should buy this products or not? Does the product satisfy them? Dose the item can
bring more benefits than its substitutes. At this stage, coca-cola has used online
advertising as the key touch-point of it. From the internet, customers can search for
many kinds of information about coca-cola brand name, and coca-cola products. It
also is easy to compare prices and promotion of coca-cola with other substitutes to
see how benefits customers gain.
Next, it is buying decision. It is clearly that customers only want to buy a product
when they feel that this product can bring them satisfaction with cheapest price and
highest quality or service In order to work with this stage, coca-cola has showed all
necessary information which customers need in the internet. So, customers just
search for what they want to know, then making decision of purchasing the
products.
Regarding retention step, it is a very important element for every company to
develop itself. This stage will define if the company can become success or not
.Thus, all companies work hard to realize it. Coca-cola find its own path when they
try to collect data from their survey about customers requirements matching with
customer genders/ health… etc. customer has given feedback via phones, or
comments on facebook… based in the valuable information, coca-cola has
produced new products or improve old products which can satisfy big range of
customers, or for each customer group. For example, diet coke for diabetes or
overweigh people,
The last stage is advocacy. In this stage customers is not only become a loyal
buyer of the product, they also recommend their friends or family to buy the product
as well. Coca-cola has used promotion programmes for it, customers can gain
vouchers or combo with low price when coming to buy at group.
CONCLUSION
This shows the strategies of coca-cola about customer journey. It shows an
overview of how coca-cola use communication marketing strategy to improve
customer awareness, then persuade them to buy coca-cola products.
6) AIDA MODEL

The AIDA Model, which stands for Attention, Interest, Desire, and Action model,
is a 4 stage advertising effect model that identifies the stages that an individual goes
through while purchasing a product.
A stands for Attention:- You have to grab the attention by using a strong hook.
I stands for Interest:- You have to mention something exciting immediately after
catching the attention, and it should be something really unique about your product
or services.
D stands for Desire:- Here, you have to convince your audiences that they want and
desire the product or service and that it will satisfy their needs.
A stands for Action:- Now, you have to lead customers towards taking a specific and
measurable action.
Its name, AIDA, is an acronym for the four Stages proposed: Attention. Interest.
Desire. Action.
1. Attention: The First Interaction between the Customer and the Product. The first
moment the Customer sees the product.
2. Interest: The Client then gets Interested in the Product. Once the Client has
learned more about the Product.
3. Desire: Once the Client has confirmed the characteristics of the Product, he
Desires it. Interest becomes a “need”.
4. Action: Finally, the Customer Approaches the product. Tries it and, eventually,
buys it.
HOW COCA-COLA USES AIDA MODEL:
ATTENTION:- They have caught the attention of the audience from their posters.
They had run a zero original campaign consisted of posters on billboards and bus
stations. The posters were black in color, and the question was written in red color.
That campaign had attracted a massive amount of people before they know
anything about the product. i.e- they show a situation that has nothing to do with
Coca-Cola to grab attention
INTEREST:- After catching their attention, it's important to make them feel interested
in your product, and the coca-cola team had done that very well. In that campaign,
they incorporated the word "ZERO" with it, and here people started noticing that
word and were curious to know what was represented here. i.e- they develop
interest through a Story
DESIRE:- As they can develop the desire among people regarding the product, they
also focused on the fact that it doesn't contain sugar. It tastes the same as any other
beverage. This way, they have stimulated the audience to try, like how it is different.
i.e- Associating Desired values with Coca-Cola: Friendship, Happiness, etc
ACTION:- Now, this is the stage where you gain or lose the customer. The customer
has fallen into the funnel and they are ready to took the action because they have
designed the stage as per the A.I.D.A model. i.e- Way to satisfy these Desires: You
guessed it: Drink a Coca-Cola..
7) ANSOFF MATRIX
The objective of every business is to grow, be it a start-up that’s just closed its first
deal or an established market leader seeking to further increase profitability. The
Ansoff Matrix management tool offers a solution to this question by assessing the
level of risk – considering whether to seek growth through existing or new products
in existing or new markets, to deice upon the best strategy for growth

To demonstrate the robustness and legitimacy of Ansoff’s Matrix, it has been

applied to Coca-Cola, the most well-known trade name in the world and a company
today operating in over 200 countries; and a brand that has undertaken countless
growth strategies in its 100+ year history.

Market Penetration: (EXISTING Market, EXISTING Product)

This strategy involves an attempt to increase market share within existing industries,
either by selling more product to established customers or by finding new customers
within these markets – typically by adapting the ‘Promotion’ element of the
Marketing Mix. Due to the incredible strength of Coca-Cola’s brand, the company
has been able to utilise market penetration on an annual basis by creating an association between Coca-
Cola and Christmas, such as through the infamous Coca-Cola Christmas advert, which
has helped boost sales during the festive period..

Product Development: (EXISTING Market, NEW Product)

This involves developing new products for existing markets by thinking about how
new products can meet customer needs more closely and outperform competitors. A
prime example of this was the launch of Cherry Coke in 1985 – Coca-Cola’s first
extension beyond its original recipe – and a strategy prompted by small-scale
competitors who had identified a profitable opportunity to add cherry-flavoured syrup
to Coca-Cola and resell it. The company has since gone on to successfully launch
other flavoured variants including lime, lemon and vanilla.

Market Development: (NEW Market, EXISTING Product)

Thirdly, the market development strategy entails finding a new group of buyers for
an existing product. The launch of Coke Zero in 2005 was a classic example of this
– its concept being identical to Diet Coke; the great taste of Coca-Cola but with zero
sugar and low calories. Diet Coke was launched more than 30 years ago, and whilst
more females drink it every day than any other soft drink brand, it came to light that
young men shied away from it due to its consequential perception of being a
woman’s drink. With its shiny black can and polar opposite advertising campaigns,
Coke Zero has successfully generated a more ‘masculine’ appeal.

Related Diversification: (NEW Market, NEW Product)

This involves the production of a new category of goods that complements the
existing portfolio, in order to penetrate a new but related market. In 2007, Coca-Cola
spent $4.1 billion to acquire Glaceau, including its health drink brand Vitaminwater.
With a year-on-year decline in sales of carbonated soft drinks like Coca-Cola, the
brand anticipates the drinks market may be heading less-sugary future – so has
jumped on board the growing health drink sector.

Unrelated Diversification: (NEW Market, NEW Product)

Finally, unrelated diversification entails entry into a new industry that lacks important
similarities with the company’s existing markets. Coca-Cola generally avoids risky
adventures into unknown territories and can instead utilise its brand strength to
continue growing within the drinks industry. That said, Coca-Cola offers official
merchandise from pens and glasses to fridges, therefore exploiting its strong brand
advocacy through this strategy.

.
Conclusion:
What is clear with Ansoff’s Matrix is the incremental increase in risk offered by the
five strategies, due to the growing cost with each step beyond market penetration
and uncertainty of operating in new markets and industries:
8)Brand Equity Model
Keller’s Brand Equity model is also known as the Customer-Based Brand Equity
(CBBE) Model. Kevin Lane Keller developed the model and published it in his widely
used textbook, “Strategic Brand Management.”

Within a pyramid, the model highlights four key levels that you can work through to
create a successful brand. These four levels are:

1. Brand identity.
2. Brand meaning.
3. Brand responses.
4. Brand relationships.

Within these four levels are six building blocks that further help with brand
development. These six building blocks are salience, performance, imagery,
judgments, feelings, and resonance.

In the Coca Cola Cases, these are some facts of Coca Cola using emotional branding
strategy in Keller Model:
9)7S FRAMEWORK

The 7S framework courtesy of the McKinsey consulting firm will help you to do this
well. The 7S framework stands for:

1. Structure
2. Systems
3. Skills
4. Style
5. Staff
6. Superordinate goals/Shared Values
7. Strategy
Strategy (further divided to 5 types of sub-strategies):

i) Corporate Strategy:

1. Building of portfolio – acquisitions of Fruit/Veg and Asian Specialty brand in China

to establish foothold in Asia Pac.

2. Riding on HW trend – Convert health switchers towards FVJ

3. Amending of packaging to increase volume per customer

4. Asset expansion with “china-India” focused approach

5. Exploiting cost synergies across its production and bottling facilities thereby
ensuring efficiency.

ii) R&C Strategy

Human:

Weak talent management with a high staff turnover rate of 19.1%, when industry
average is about 5.7%. Will need to tighten up.

Tangible:

– strong financials:

A+ credit rating (Standard & Poor)

-Debt/ Equity ratio 43% (compare to Pepsico. 99%)

-Total cash and equivalent of $14 billion (compare to Pepsico $4 billion)

-2007-2011 revenue growth from U$ 28.8 billion to U$46.5 billion increase over 61%

-Operating income has increased from U$7 billion to U$10.5 billion from 2007-2011

Good backing of Physical assets:

-Total book value of property, plant and equipment $15 billion

-Total 102 production facilities and manufacturing plants worldwide and 183
distribution warehouses.

-TCC holds majority interest in 97 bottling plants worldwide

Intangible:

– Latest SAP systems to ensure alignment with distributors.

– top brand in the world. -COCA-COLA world’s largest beverage company. Own,
license and market more than 500 non-alcoholic beverage brands. Own and market
4 of the world’s top 5 non-alcoholic sparkling beverage brands: Coca-Cola, Diet
Coke, Fanta and Sprite. Finished beverage products bearing Coca-Cola trademarks,
sold in the United States since 1886, are now sold in more than 200 countries.

– Trademark values at U$6.4 billion

– goodwill consisting of brands, reputation and other intangible values at U$12.2b.

iii) Functional Strategy

Marketing strategy – well supported by the overarching CC brand strength, each

product-line across the 7 categories of CC.

Talent management strategy – CC may not have engaged its employees sufficiently
and thereby reducing the labour turnover rate. Will need to tighten its retention and
development policies.

Production strategy – capitalise on cost synergies by vertically integrating bottling

facilities. Supply chain management well supported by latest SAP/ERP software on
a global scale.

Distribution strategy – strong distributor relationships, proximity strategy to put a

Coke brand within reach though use of vending machines and ensuring good
distribution coverage through various means.

iv) Business Strategy

Clearly defined competitors, price-quality points. Adoption of differentiation rather
than price leadership clearly stated and critical factors of competition to be worked
at clearly indicated.

v) Operational Strategy

What are we good at doing?

– Providing the preferred beverage/drink across 7 product categories.

Advantage?

Yes, this allows for brand momentum to built which translates to revenue and
volume growth.

Who will buy it?

Our existing customers as well as new “converts”.

Structure

CC – has head office segment responsible for giving CC overall direction and
providing support to the regional structure. Key strategic decisions made by an
ExCo of 12 Company Officers. ExCo shapes the 6Ps set out earlier. Chair of the
ExCo is figurehead for CC, also the CEO. Other executives are responsible either
for the major regions or have an important business specialization e.g. the CFO.

Needs to meet local consumers’ needs – CC therefore organised into a regional

structure which combines centralisation and localisation. The Company operates 5
geographic operating segments or SBUs as well as the corporate (Head Office)
segment – Latin America, pacific, Eurasia & Africa, RU, N.America.

Each regional SBUs sub-divided into divisions. For Pacific SBU, Singapore fits into
the ASEAN business unit. This structure recognises:

– Varying tastes and psychographics, demographics (incomes and consumption

patterns)

– markets at different stages of development.

At a more local level CC management involves a number of functional specialisms.

management structure for Singapore:
CCS combines elements of centralisation and decentralisation. Divisions and
regions operate as business unit teams, with each country Director reports to the
Division President.

However, there is a matrix structure for each function e.g. the Finance Director in
the CCS Division reports to the CCS President, but also to (dotted line) the Finance
Director of Pacific Division. In addition, functions within the Company operate across
geographical boundaries to share best practice.

local decision making at a regional (local) level the various SBUs are responsible for
region-specific market research, and for developing local advertising, e.g. using the
languages of the countries in which CC operates. A major region like Asia Pac has
its own marketing structure, organised as shown on the diagram.

Key challenges in structural alignment (noting Cooperation vs Coordination

Problems)

Cooperation Problems:

Agency problems

Global Integration

Organizational Culture

Solutions (in combination):

Control mechanisms

Institute HR policies including incentivizing to encourage teamwork.

Reinforce Shared Values (Culture)

Coordination Problems:

Functional silos – given the structural setup of CC, silos may result.

Communication Channel – integration of information

Solutions (in combination)

Rules and directives.

Routinize work. Implication: mechanistic approach can result in higher staff turnover.

Reliance on ERP, SAP, and staff channels.

Systems

Directional systems: to monitor 6Ps with following objectives to align to vision 2020

Process systems: each sub-division to break these into manageable tasks and
provide milestones for initiatives to achieve the 6Ps.

Day to day management systems: at the managerial level, procedural measures to

be set in place along with frequent feedback and reports given at the subordinate
level to provide knowledge of results. Along with rewards and incentives to tie in
performance to alignment to objectives.

Style
Culture of Coke – forward looking and driven, emphasizing oneness. One Company.
One Team. One Passion.

As One Company, meaningful and accelerated learning opportunities are provided

to staff to contribute to the greater good of CC.

One Team, CC ties in relationships built to career success.

One Passion goes farther than the portfolio of brands, to sustainability, and
supporting the communities and preserving and protecting the planet.

Staff

Benchmarked attraction and retention policies against industry. Providing Career

development pathways.

Performance management systems to be better managed in order to lower the

turnover rate of 19.1%.

Given the silo nature of some staff functions, EIP practices have to be incorporated
to tap on innovation and to also engage staff. This provides recognition.
Financial rewards of stock ownership at CC. Encourages employee to build along
with the company.

Skill

Applied to all the other 6Ss.

In terms of Shared Vision, Vision 2020 requires innovative approaches in reaching

the goal, particularly to do with product content (new tastes, riding the health-
wellness trend), volume, and efficiency innovation. Targets clearly set as to what
primary actions for CC to take and what needs to be achieved for each level.

In terms of Strategy, resource commitment towards innovation in product content

(R&D centres to be set up), volume (new packaging to incorporate at least 10%
more volume), and efficiency (lighter weight packaging to encourage more take-up
rate, clearer health information).

In terms of Structure, R&D division is to be closely linked with all other geographical
divisions to incorporate feedback on tastes, packaging, etc. based on real time
information provided by the ERP and SAP systems in the backdrop.

In terms of Systems, allocation of staff and technological resources to provide

innovative ideas is required.

In terms of Staff, the recruitment and using staff to spinoff creative ideas, and to
work closely with the R&D centres.

Finally, in terms of Style, to inculcate a forward looking and driven culture of CC,
setting pace for innovation.

=====

.
10) VALUE CHAIN ANALYSIS

Value chain analysis visualizes a company's business activities to gain a competitive

advantage for more profit. Value chain analysis helps a company see what activities
add value to the input resources for more profit. The primary goal for any business is
to maximize its profit by adding value to the inputs and developing profitable
products or services. We can achieve this goal through efficient processes and
activities. Value chain analysis depicts the operations and activities to cover up any
shortcomings. Coca Cola value chain analysis is a big step towards learning about
business models. The company has a global presence with many activities covered
locally while running some operations from the headquarters.

Value chain analysis was presented in the 1980s by Michael Porter. His model
classifies the business activities into 'primary activities' and 'support activities.

.
Primary Activities in Coca Cola Value Chain Analysis

Primary activities are directly responsible for the creation and delivery of products.
According to Porter's model, there are five critical areas in primary activities.

Inbound Logistics

Operations

Outbound Logistics

Marketing and Sales

Services

Let’s discuss these activities regarding the Coca-Cola value chain analysis.

Inbound Logistics:

Inbound logistics in the Coca-Cola value chain comprise receiving, storing, and
distribution of the inputs of the products. Coca-Cola has a large supply chain. Coca-
Cola endeavors to gain a competitive advantage at this first step. It treats the
suppliers in the value chain as business partners. However, the suppliers also have
to adhere to some rules according to applicable laws and regulations. Coca-Cola
also believes in responsible environmental and workplace policies and practices.

Operations:

Coca-Cola is a global business. However, it operates through local channels. Coca-

Cola has its beverage lines along with companies with bottling partners. However, it
does not own the partners or their products. It manufactures and sells beverage
bases and syrups.

Outbound Logistics:

Coca-Cola ensures that thousands of retailers globally are consistently well stocked
with a variety of Coca-Cola products. They used a similar principle for industrial
clients. Timely delivery, secure transport, and efficient delivery are the foundation of
a smooth-running Coca-Cola value chain. This cultivates strong retailer relationships
and continued customer loyalty.
Marketing and Sales:

Coca-Cola is a globally recognized brand. Therefore, the marketing endeavors of

the company must have been phenomenal. The Coca-Cola logo is one of the most
popular and recognized logos. Coca-Cola engages digital channels, social media,
print media, and outdoor marketing to influence the customers and make an identity.

Coca Cola value chain analysis shows that it focuses on a single marketing strategy
that promotes all its brands in a unified effort.

Service:

The pre-sale and post-sale services by the Coca-Cola Company help gain customer
loyalty. Coca-Cola has a very efficient call center and online presence globally to
cater to its clients and solve their queries.

Support Activities in Coca Cola Value Chain Analysis

Support activities are aimed at assisting primary activities and help the organization
achieve its competitive advantage. There are four critical areas of support activities:

Firm Infrastructure, Human Resource Management, Technology Development

& Procurement.

Infrastructure

The firm infrastructure denotes a wide range of activities in Coca Cola value chain
analysis because of the vast business model. The activities include quality
management, legal matters, accounting, finance, planning, and strategic
management. Effective management is the key to creating maximum value for
competitive advantage. Profit is maximized by optimum usage of resources and by
reducing overhead costs.

Human Resource Management

Coca-Cola is a huge multinational company, hence a considerable number of

employees. Coca Cola value chain analysis shows that human resource
management is delegated to the local offices for a more focused approach. They
hire and develop talent and help them learn and grow in a healthy environment.
Coca-Cola focuses on motivation and company culture engagement through
remuneration packages, reward packages, and an encouraging environment.

Technology Development

Coca-Cola has developed six research and development centers around the world.
The company focuses heavily on research and development for innovative products.
Social service is another segment covered in technology development as they invest
in startups and research in the universities. Apart from products, Coca Cola value
chain also invests in innovation in packaging, equipment, manufacturing, and
marketing.

Procurement

Coca-Cola procures raw materials from various suppliers. It focuses heavily on

quality standards in every step of procurement, from buying to delivering the
product. Apart from this, Coca Cola value chain also shows that the company
procures the products internally too. So, a complex infrastructure is required for
running all these processes independently yet in harmony.

CONCLUSION:

Coca Cola value chain analysis is a complex system. The company runs the
business globally and adheres to values and culture locally. So we can say that
every local Coca-Cola setup has its value chain that connects to the global system.
Visual tools make analyzing and studying such large systems simple to
follow. EdrawMax Online is an online tool that is used for drawing and studying
value chain analysis. The templates available at Template Gallery make a solid
foundation to build complex drawings more efficiently and accurately. Also, you can
find substantial value chain templates in our template community to have a quick
start.

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