The prototype Coca-Cola recipe was formulated at the Eagle Drug and Chemical Company, a
drugstore in Columbus, Georgia by John Pemberton, originally as a coca wine called
Pembertons French Wine Coca. He may have been inspired by the formidable success of Vin
Mariani, a European coca wine.
In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton responded
by developing Coca-Cola, essentially a non-alcoholic version of French Wine Coca. The first
sales were at Jacobs Pharmacy in Atlanta, Georgia, on May 8, 1886. It was initially sold as a
patent medicine for five cents a glass at soda fountains, which were popular in the United
States at the time due to the belief that carbonated water was good for the health. Pemberton
claimed Coca-Cola cured many diseases, including morphine addiction, dyspepsia,
neurasthenia, headache, and impotence. Pemberton ran the first advertisement for the beverage
on May 29 of the same year in the Atlanta Journal.
By 1888, three versions of Coca-Cola sold by three separate businesses were on the
market. Asa Griggs Candler acquired a stake in Pembertons company in 1887 and
incorporated it as the Coca Cola Company in 1888. The same year, Pemberton sold the rights a
second time to four more businessmen: J.C. Mayfield, A.O. Murphey, C.O. Mullahy and E.H.
Bloodworth. Meanwhile, Pembertons son Charley Pemberton began selling his own version of
the product.
John Pemberton declared that the name Coca-Cola belonged to Charley, but the other two
manufacturers could continue to use the formula. So, in the summer of 1888, Candler sold his
beverage under the names Yum Yum and Koke. After both failed to catch on, Candler set out
to establish a legal claim to Coca-Cola in late 1888, in order to force his two competitors out of
the business. Candler purchased exclusive rights to the formula from John Pemberton,
Margaret Dozier and Woolfolk Walker. However, in 1914, Dozier came forward to claim her
signature on the bill of sale had been forged, and subsequent analysis has indicated John
Pembertons signature was most likely a forgery as well.
In 1892 Candler incorporated a second company, The Coca-Cola Company (the current
corporation), and in 1910 Candler had the earliest records of the company burned, further
obscuring its legal origins. By the time of its 50th anniversary, the drink had reached the status
of a national icon in the USA. In 1935, it was certified kosher by Rabbi Tobias Geffen, after the
company made minor changes in the sourcing of some ingredients.
Coca-Cola was sold in bottles for the first time on March 12, 1894. The first outdoor wall
advertisement was painted in the same year as well in Cartersville, Georgia. Cans of Coke first
appeared in 1955. The first bottling of Coca-Cola occurred in Vicksburg, Mississippi, at the
Biedenharn Candy Company in 1891. Its proprietor was Joseph A. Biedenharn. The original
bottles were Biedenharn bottles, very different from the much later hobble-skirt design that is
now so familiar. Asa Candler was tentative about bottling the drink, but two entrepreneurs from
Chattanooga, Tennessee, Benjamin F. Thomas and Joseph B. Whitehead, proposed the idea and
were so persuasive that Candler signed a contract giving them control of the procedure for only
one dollar. Candler never collected his dollar, but in 1899 Chattanooga became the site of the
first Coca-Cola bottling company. The loosely termed contract proved to be problematic for the
company for decades to come. Legal matters were not helped by the decision of the bottlers to
subcontract to other companies, effectively becoming parent bottlers.
Coke concentrate, or Coke syrup, was and is sold separately at pharmacies in small quantities,
as an over-the-counter remedy for nausea or mildly upset stomach.
Mission:
To achieve a good position and stay with the competitors in the world market, the Coca-Cola
Company has made great mission. Their missions are to refresh the world, inspire moments of
optimism and happiness, create value and make a difference.
Vision:
Every organization has to have a vision. It helps to keep quality growth and achieve success
which is very important for any organization. It means every organization has to have a future
plan which makes easy to achieve the goal. For that reason Coca-Cola Company has also made
a vision 2020 in order to continue achieving sustainable quality growth. They divided their
vision in several parts which are following-
People: Be a great place to work where people are inspired to be the best they can be.
Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and
satisfy peoples desires and needs.
Partners: Nurture a winning network of customers and suppliers, together they creat
mutual enduring value.
Planet: Be a responsible citizen that makes a difference by helping build and support
sustainable communities.
Profit: Maximize long-term return to share owners while being mindful of their overall
responsibilities.
Values:
The organizational values reflect what the organization stands for and what it believes in and
they create an environment that influences employee behavior ethically and unethically. The
Coca-Cola Companys values are influences their employees ethically which is represents their
strong culture. Their values are
Integrity: Be real
These are the values of this company which make them different from others.
Executive summary
Giant soft drink company Coca-Cola has come under intense scrutiny by investors due to its
inability to effectively carry out its marketing program. Consequently it is seeking the help of
Polianitis Marketing Company Pty Ltd to develop a professional marketing plan which will
help the business achieve its objectives more effectively and efficiently and inevitably regain
there iron fist reign on the soft drink industry.
When establishing a re-birthed marketing plan every aspect of the marketing plan must be
critically examined and thoroughly researched. This consists of examining market research,
auditing business and current situation and carefully scrutinizing the soft drink industry and
possibilities for Coca-Cola in the market. Once Coca-Cola have carefully analyzed the internal
and external business environment and critically examined the industry in general the most
suitable marketing strategies will be selected and these strategies will be administered by
effectively and continually monitoring external threats and opportunities and revising internal
efficiency procedures.
SWOT Analysis:
SWOT stands for Strengths Weakness Opportunities Threats. SWOT analysis is a technique
much used in many general management as well as marketing scenarios. SWOT consists of
examining the current activities of the organisation- its Strengths and Weakness- and then using
this and external research data to set out the Opportunities and Threats that exist.
Strengths:
Coca-Cola has been a complex part of world culture for a very long time. The products image
is loaded with over-romanticizing, and this is an image many people have taken deeply to heart.
The Coca-Cola image is displayed on T-shirts, hats, and collectible memorabilia. This
extremely recognizable branding is one of Coca-Colas greatest strengths. Enjoyed more than
685 million times a day around the world Coca-Cola stands as a simple, yet powerful symbol of
quality and enjoyment (Allen, 1995).
Additionally, Coca-Colas bottling system is one of their greatest strengths. It allows them to
conduct business on a global scale while at the same time maintain a local approach. The
bottling companies are locally owned and operated by independent business people who are
authorized to sell products of the Coca-Cola Company. Because Coke does not have outright
ownership of its bottling network, its main source of revenue is the sale of concentrate to its
bottlers.
Weaknesses:
Weaknesses for any business need to be both minimised and monitored in order to effectively
achieve productivity and efficiency in their businesss activities, Coke is no exception.
Although domestic business as well as many international markets are thriving (volumes in
Latin America were up 12%), Coca-Cola has recently reported some declines in unit case
volumes in Indonesia and Thailand due to reduced consumer purchasing power. According to
an article in Fortune magazine, In Japan, unit case sales fell 3% in the second quarter scary
because while Japan generates around 5% of worldwide volume, it contributes three times as
much to profits. Latin America, Southeast Asia, and Japan account for about 35% of Cokes
volume and none of these markets are performing to expectation.
Coca-Cola on the other side has effects on the teeth which is an issue for health care. It also has
got sugar by which continuous drinking of Coca-Cola may cause health problems. Being
addicted to Coca-Cola also is a health problem, because drinking of Coca-Cola daily has an
effect on your body after few years.
Opportunities:
Brand recognition is the significant factor affecting Cokes competitive position. Coca-Colas
brand name is known well throughout 94% of the world today. The primary concern over the
past few years has been to get this name brand to be even better known. Packaging changes
have also affected sales and industry positioning, but in general, the public has tended not to be
affected by new products. Coca-Colas bottling system also allows the company to take
advantage of infinite growth opportunities around the world. This strategy gives Coke the
opportunity to service a large geographic, diverse area.
Threats:
Currently, the threat of new viable competitors in the carbonated soft drink industry is not very
substantial. The threat of substitutes, however, is a very real threat. The soft drink industry is
very strong, but consumers are not necessarily married to it. Possible substitutes that
continuously put pressure on both Pepsi and Coke include tea, coffee, juices, milk, and hot
chocolate. Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market,
the changing health-consciousness of the market could have a serious affect. Of course, both
Coke and Pepsi have already diversified into these markets, allowing them to have further
significant market shares and offset any losses incurred due to fluctuations in the market.
Consumer buying power also represents a key threat in the industry. The rivalry between Pepsi
and Coke has produce a very slow moving industry in which management must continuously
respond to the changing attitudes and demands of their consumers or face losing market share
to the competition. Furthermore, consumers can easily switch to other beverages with little cost
or consequence.
Market Analysis:
The market analysis investigates both the internal and external business environment. It is vital
that Coca Cola carefully monitor both the internal and external aspects regarding its business
as both the internal and external environment and their respective influences will be decisive
traits in relation to Cokes success and survival in the soft drink industry.
Marketing Objectives:
The objective is the starting point of the marketing plan. Objectives should seek to answer the
question Where do we want to go? The purposes of objectives include:
All objectives should be SMART i.e. Specific, Measurable, Achievable, Realistic, and Timed.
Specific Be precise about what you are going to achieve
Measurable Quantify you objectives
Achievable Are you attempting too much?
Realistic Do you have the resource to make the objective happen (men, money, machines,
materials and minutes)?
Timed State when you will achieve the objective (within a month? By February 2010?)
1. Market Share Objectives: To gain 60% of the market for soft drinks industry by September
2007.
2. Profitability Objectives: To achieve a 20% return on capital employed by August 2007
3. Promotional Objectives: To increase awareness of the product on the market.
4. Objectives for Survival: To survive the current market war between competitors.
5. Objectives for Growth: To increase the size of the worldwide Coca Cola enterprise by 10%.
product. This market is relatively large and is open to both genders, thereby allowing greater
product diversification.
There are four broad ways which Coca Cola can segment its market:
Mass marketing
Concentrated marketing
Differentiated marketing
Niche marketing
The most apparent method used by Coca Cola is with no doubt the differentiated marketing
method as Coke satisfys a range of different markets. Diet coke satisfys the weight
consciousness, regular coke, sprite, fanta the average human, coffee, iced tea etc. Each group of
beverages satisfy a particular group of people but majority the average human.
Product:
Many Products are physical objects that you can own and take home. But the word product
means much more than just physical goods. In marketing, product also refers to services, such
as holidays or a movie, where you enjoy the benefits without owning the result of the service.
Businesses must think about products on three different levels, which are the core product, the
actual product and the augmented product. The core product is what the consumer is actually
buying and the benefits it gives. Coca Cola customers are buying a wide range of soft drinks.
The actual product is the parts and features, which deliver the core product. Consumers will
buy the coke product because of the high standards and high quality of the Coca Cola products.
The augmented product is the extra consumer benefits and services provided to customers.
Since soft drinks are a consumable good, the augmented level is very limited. But Coca Cola
do offer a help line and complaint phone service for customers who are not satisfied with the
product or wish to give feedback on the products.
Positioning:
Once a business has decided which segments of the market it will compete in, developed a
clear picture of its target market and defined its product, the positioning strategy can be
developed. Positioning is the process of creating, the image the product holds in the mind of
consumers, relative to competing products. Coca Cola and Franklins both make soft drinks,
although Franklins may try to compete they will still be seen as down market from Coca Cola.
Positioning helps customers understand what is unique about the products when compared with
the competition. Coca Cola plan to further create positions that will give their products the
greatest advantage in their target markets. Coca Cola has been positioned based on the process
of positioning by direct comparison and have positioned their products to benefit their target
market. Most people create an image of a product by comparing it to another product, thus
evident through the famous battles between Coca-Cola and Pepsi products.
Branding :
It is often hard to say exactly why we buy one companys product over another. Companies
such as Nike and Adidas spend large amounts of money trying to win consumers away from
their competitors who make products that are very similar. The popularity of the brand is often
the deciding factor. Over the time Coca Cola has spent millions of dollars developing and
promoting their brand name, resulting in world wide recognition. Coca-Cola is the most
recognised trademark, recognised by 94% of the worlds population and is the most widely
recognised word after OK. Coca Colas red and white colours and special writing are all
examples of world-wide trademarks.
There are a number of branding strategies: Generic brand strategy, Individual brand strategy,
Family brand strategy, Manufacturers brand strategy, Private brand strategy and Hybrid brand
strategy. Coca Cola utilizes the Individual brand strategy as Coca Colas major products are
given their own brand names e.g Fanta, Sprite, Coca Cola etc although they maybe presented as
different lines they operate under the name of Coca Cola.
Packaging:
Packaging, which is not as highly perceived by businesses, is still an important factor to
examine in the marketing mix. Packaging protects the product during transportation, while it
sits in the shelf and during use by consumers; it promotes the product and distinguishes it from
the competition. Packaging can allow the business to design promotional schemes, which can
generate extra revenue and advertisements. Coca-Cola has benefited from packaging the
product with incentives and endorsements on the labelling as a promotional strategy to increase
its volume of sales and revenue.
Price:
Price is a very important part of the marketing mix as it can affect both the supply and demand
for Coca Cola. The price of Coca Colas products is one of the most important factors in a
customers decision to buy. Price will often be the difference that will push a customer to buy
our product over another, as long as most things are fairly similar. For this reason pricing
policies need to be designed with consumers and external influences in mind, in order to
effectively achieve a stable balance between sales and covering the production costs.
Price strategies are important to Coca Cola because the price determines the amount of sales
and profit per unit sold. Businesses have to set a price that is attractive to their customers and
provides the business with a good level of profit. Long before a sale was ever made Coca Cola
had developed a forecast of consumer demand at different prices which inevitably determined
whether or not the product came on the market, as well as the allocation of adequate money and
resources to produce promote and distribute the product.
the years Coca Cola has used Penetration Pricing as a way of grabbing a foothold in the market
and won a market share. Its product penetrated the marketplace. Once customer loyalty is
established as seen with Coca Cola it is then able to slowly raise the price of its product. There
has been a fierce pricing rivalry between Coca Cola and Pepsi products as each company
competes for customer recognition and satisfaction. Till now it appears as if Coke has come up
on top, although in order to gain long term profits Coke had to sacrifise short term profits
where in some cases it either went under of just broke even, but as seen it has been all for the
best.
Pricing Methods:
Good pricing decisions are based on an analysis of what target customers expect to pay, and
what they perceive as good quality. If the price is too high, consumers will spend their money
on other goods and services. If the price is too low, the firm can lose money and go out of
business.
Pricing methods include Cost based Pricing, Market based pricing and Competition based
Pricing. Over the years Coca has lost ground here in its pricing but has regained its strength as
it employed the Competition-based pricing method which allowed it to compete more
effectively in the soft drink market. Leader follower pricing occurs when there is one quite
powerful business in the market which is thought to be the market leader. The business will
tend to have a larger market share, loyal customers and some technological edge, thus the case
currently with Coke. It was first the follower but through effective management has now
become the leader of the market and is working towards achieving the marketing objectives of
the Coca Cola. Survival in the market place, own 60 % of market share by 2007, increase
further awareness of product and a return on 20% on capital employed for August 2007.
Promotion:
In todays competitive environment, having the right product at the right place in the right
place at the right time may still not be enough to be successful. Effective communication with
the target market is essential for the success of the product and business. Promotion is the p of
the marketing mix designed to inform the marketplace about who you are, how good your
product is and where they can buy it. Promotion is also used to persuade the customers to try a
Intensive,
Selective,
Exclusive and
Direct distribution.
It is apparent from the popularity of the Coca Colas product on the market that the business in
the past used the method of intensive distribution as the product is available at every possible
outlet. From supermarkets to service stations to your local corner shop, anywhere you go you
will find the Coca Cola products.
Financial Forecasts:
Financial forecasts are predictions of future events relating strictly to expected costs and
revenue costs for future years. There are five major marketing expenditures, which include
research costs, product development costs, product costs, promotion costs and distribution
costs.
Sales force composite is the most logical method in forecasting revenue. This involves
estimates from individual salespeople to sell to work out a total for the whole business. Once
these costs and revenues are forecasted, management can then decide which combination of
marketing mix strategies will deliver the most sales revenue at the lowest cost.
Implementing:
Implementation is the process of turning plans into actions, and involves all the activities that
put the marketing plan to work. Successful implementation depends on how well the business
blends its people, organisational structure and company culture into a cohesive program that
supports the marketing plan.
For its further success, Coca Cola must impose several key changes. Production needs to be on
time and meet the quota demanded from wholesalers. It must also be efficient so as not to build
inventory stocks and inventory prices. The marketing needs to be motivated and knowledgeable
about the product. The forms of promotion such as advertising must be attracting and enticing
to the target market to get the greatest amount of exposure possible for the product. This will
ensure the success of the product in the stores. Distribution of the product must be efficient.
This problem has already been taken care of with convenient transport routes to commercial
areas and transport already being arranged.
Monitoring And Controlling:
Monitoring and controlling allows the business to check for variance in the budget and actual.
This is important because it allows Coca Cola to take the necessary actions to meet the
marketing objectives. There are three tools Coca Cola should use to monitor the marketing
plan. They are the following:
i. Sales Analysis
The sales analysis breaks down total business sales by market segments to identify strengths
and weaknesses in the different areas of sales. Sellers of Coca Cola products vary from major
retail supermarkets to small corner stores. This gives the products maximum exposure to
customers at their convenience.
ii. Market Share Analysis
Market share analysis compares Coca Colas business sales performance with that of its
competitors. Coca Cola looks to increase its market share by over 60%. With the changes Coca
Cola is currently undergoing, they aim to regain an iron fist control of the market. Target
market various age groups and lifestyles from high school students too universities, and male or
female.
Marketing Profitability Analysis:
This analysis looks at the cost side of marketing and the profitability of products, sales
territories, market segments and sales people. There are three ratios to monitor marketing
profitability; they are market research to sales, advertising to sales and sales representatives to
sales. The results of these three tools can help Coca Cola determine any emerging trends, such
as the need for a different product. Comparing these results with actual results gives the
business an idea on when to change.
Market Research:
When attempting to implement a new Marketing plan a business must address its target market
and conduct the relevant information to insure the new marketing plan both differs from the old
and is better for the business. When conducting market research a business must first define the
problem and then gather the appropriate information to solve the problem. There are 3 types of
information a business can gather to solve its problems.
Exploratory Research which clarifies the problem and d searches for ways to address it.
Descriptive Research is used to measure and describe things like the market potential
for a product and characteristics of the target market.
Casual Research is used to test a hypothesis about a cause and effect relationship.
Coca Cola through its market research has addressed all three types of research to
define the problem raised by shareholders and gathered information to serve their needs.