The Coca-Cola Company

Marketing 361 Phase II

Team 40:
Kayla Bright
Michael Cunningham
Madeline McLean
Tim OSullivan
Marissa Oudt
Leslie Owen

Victor J. Piscitello
October 23, 2017
Introduction

Coca-Cola is a large company that has many aspects to it. In solve major marketing issues in the

company, the root of the problem must first be discovered. This document contains a marketing

strategy that highlights Coca-Colas strengths, weaknesses, and key issues.

Industry and Company Overview

Life Cycle
In order to take a closer look into the companys growth, we have analyzed the companys life

cycle. Currently, we are seeing less drastic shifts in sales trends which suggests the company is

in the maturity phase of its company life cycle, according to Stivaros (2016).

Industry Growth Rate and Competition

The Coca-Cola Company and PepsiCo Inc. dominate 58.3% of the market, making the industry

an oligopoly. The breakdown of the other 41.7% of the market share is illustrated on Figure 1 on

the attachments page. Industry growth over the next five years is expected to decrease annually

by 1.3%, caused by the consumer focus on healthier habits, which is depicted in Figure 2.

However, this industry has low revenue volatility and annual profit of $3.7 billion.

NAICS

The Naics code that the Coca-Cola company falls under is 312111a- soft drink manufacturing in

the US. There are 273 businesses operating in this industry with annual growth of -0.9%. With

an increase in our marketing efforts as well as specifying our target markets for our different

products, we can continue to expand our company while overcoming the negative growth from

the industry as a whole.

Products and Services

The Coca-Cola Company was established in 1886. Since then, they have grown to be the largest

global provider of beverages. They have 250 bottling partners and 900 plants to produce their
massive product portfolio, which includes 500 brands and 3,900 different beverages. Coca-Cola

products are sold in 200 countries through 24 million retail customer outlets. Coca-Colas

Unique Selling Proposition is that they are the number one beverage brand in terms of sales with

more than 500 products (Marketline, 2016). This Unique Selling Proposition is a strength that

keeps Coca-Cola competitive throughout the industry.

SWOTT Analysis

Coca-Colas SWOTT Analysis identifies the factors that impact the firm and then describes vital

strengths, correct weaknesses, exploit opportunities, and avoid threats. This SWOTT analysis,

Figure 3, is located on the attachments page.

Coca-Colas strengths include their customer loyalty which contributes to their company value of

$79.2 billion. These factors have allowed Coca-Cola to maintain their large market share.

One weakness that the Coca-Cola company faces is their undiversified product portfolio; Coca-

Cola only offers products within the beverage industry. The consumer trend toward healthier

products provide an opportunity for the company to acquire and market additional subsidiaries

and market their healthier alternatives to a new market.

One threat to the company is the intense competition between other beverage distributors

(Bhasin, 2017). PepsiCo, the second largest beverage distributor, is Coca-Colas largest direct

competitor and companies like Starbucks and Dunkin Donuts are the largest indirect

competitors because of their ability to offer Coca-Cola beverages at a discounted price.

Target Markets

Young adults, nonwhites, and low-income are the three most likely groups to drink soda

according to Gallup polling. 63% of Americans ages 19-29 report drinking soda on a regular

basis. 60% of nonwhites drink soda compared to the 55% of whites that drink soda. 64% of

people earning less than $30k/year drink soda.

Young Adults

One of Coca-Colas main target markets is young adults. Millennials buy an average of 15

beverages per week, whereas older generations only buy an average of 8 beverages per week

according to Investopedia. However, this does not necessarily mean that this demographic is

always reaching for carbonated drinks. According to Investopedia, carbonated drinks are only

18% of Millennials weekly beverage purchases. Changing product positioning for this

demographic to entice them to purchase our beverages will allow for the opportunity to generate

additional revenue.

Family-oriented People

Another target market is comprised of family-oriented people. According to the US Census

Bureau, 49% of households that are married couples and 69% have children. This segment

purchases products for their entire household. According to FMIs 2016 US Grocery Shopper

Trends report, 6 out of 10 households report dividing shopping duties. Therefore, it is imperative

that Coca-Cola reach out to family decision makers.

Health-conscious Consumers

The newest segment that Coca-Cola is targeting are health-conscious consumers. Based on

marketing data from Mintel, 42% of consumers are interested in healthier options and 34% are
interested in natural options. Adjusting to this consumer trend and the steady decline of the soda

industry, Coca-Cola is offering healthier alternatives through subsidiary brands such as Dasani

and Honest Tea.

Competitive Analysis
Competitive Landscape
The Coca-Cola Company and PepsiCo have similar strengths and weaknesses. Both companies

hold substantial market share, and they are both facing criticism for adverse health and

environmental effects caused by the production and consumption of their beverages. The sugar

and artificial dyes in both Coke and Pepsi sodas has been linked to obesity and cardiovascular

disease, according to the International Journal of Obesity.

Despite these similarities, the two major industry leaders are also very different. Cokes product

mix is exclusively beverages, whereas PepsiCo derives a big share of revenue from the product

items in their mix that are non-beverage. While this is one advantage for PepsiCo, they put

themselves at a disadvantage through controversial ads. The Coca-Cola Company targets various

market segments and their beverages are enjoyed by people of many ages. Coke products are

seen by a wider range of individuals, which can allow for greater sales, but it also means higher

marketing costs.

Internal Competition

Two elements of internal competition in the soft drink industry include price level and variety of

product portfolio. Purchasing behavior depends on consumer income, but Coca-Colas strong

brand loyalty means consumers are willing to pay more for Coke products.
Modern health trends have forced soda producers to include healthier alternatives in their

product mix. The Coca-Cola Company has developed 17 new low sugar products. This

diversified product portfolio allows Coke to differentiate itself from industry competitors.

It enhances brand loyalty and also gives a producer a point of difference when it comes to

consulting with retailers.

External Competition

Producers in the soda industry face external competition with other ready to drink producers. The

growth of the bottled water and juice production industries are a direct result of consumers

seeking healthier products. Even though the Coca-Cola Company has broadened their portfolio

of healthy options, they still face obstacles stomping put their sugary reputation.

Market Challenges

The top three market challenges include changes in consumer preferences, growing awareness

about food/beverage safety, and staying relevant against their competitors. Consumers are

preferring products with less sugar and calories, consumers are becoming concerned about how

exactly the product was made and small companies can pose a threat to large producers.

In summary, Coca-Cola is a strong company but there a few challenges they must overcome. In

order to overcome the challenge with consumer preference towards healthier options we

recommend marketing Coca-Colas already existing healthier options, acquiring healthier

brands, or market Coca-Cola as a healthy brand, changing the overall narrative of the company.

In order to strengthen digital presence, we recommend more digital ads, customer interaction on

social media, and a more interactive app. Lastly, to stay relevant with competitors, we

recommend more positive ads, more community involvement, and a consumer loyalty program.
Attachments

Figure 1: Major players in the beverage industry

Figure 2: Consumer health trends

Coca-Cola SWOTT Analysis

Strengths Weaknesses
Company value $79.2 billion Undiversified product portfolio
Largest market share in beverages Absence in health beverages
Strong marketing and advertisements Negative publicity
Customer loyalty

Opportunities Threats
Increasing demand for healthy Intense direct competition (PepsiCo) and indirect competition
beverages (Starbucks)
Growth in beverage consumption Legal requirements to disclose negative information on labels
Increased bottled water demand Water scarcity
Growth through acquisitions
New emerging markets in developing
nations

Trends
Growth of health trends
Clean/ healthy packaging
Demand for sparkling water
Millennial market

Figure 3: Coca-Cola SWOTT Analysis

 References

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