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MARKETING MIX OF COCA-COLA

Firstly, we will look at how Coca-Cola has used their


marketing mix. The marketing mix is divided up
into 4 parts;
product, price, promotions and place.
1. Product:
The product (Coca-Cola soft drink) includes not just
the
liquid inside but also the packaging. On the
productservice
continuum we see that a soft drink provides little
service, apart from the convenience. Soft drinks
satisfy
the need of thirst. However, people are always
different, some want more and others want less.
Therefore Coca-Cola has made allowances for that
by
providing many sizes. We also have particular
tastes,
and again they have provided several options. So,
although thirst is what is needed to be satisfied
and that
is the core benefit, we are receiving other benefits
in the
taste and size. Coca-Cola has developed several
different flavours and sizes as mentioned above,
but
also several brands such as Sprite, Lift, Fanta and
Diet
Coke which increase the product line length, thus
making full use of the market to maximize sales.
The product is convenient, that is - bought
frequently,
immediately, and with a minimum of comparison
and
buying effort.The appearance of the product is eye
catching with the bright red colour. It has a
uniquely
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designed bottle shape that fits in your hand better,
and
creates a nicer & more futuristic look.
The quality of the soft drink is needed to be
regularly
high. Sealed caps ensure that none of the "fizz" is
lost.
The bottles are light, with flexible packaging, so
they
won't crack or leak, and are not too heavy to
casually
walk around with. The cans are also light and safe.
The product range of Coca-Cola includes:
• Coca-Cola,
• Coca-Cola classic,
• caffeine free Coca-Cola,
• diet Coke
• caffeine free diet Coke,
• diet Coke with lemon
• Vanilla Coke,
• diet Vanilla Coke,
• Cherry Coke,
• diet Cherry Coke,
• Fanta brand soft drinks,
• Sprite,
• diet Sprite
• Sprite Remix
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Product Lifecycle of Coke:
Product life cycle has four phases
1. Introduction
2. Growth
3. Maturity
4. Decline.
The markets where Coke is a dominant player are
United
States of America, Europe and Asia, Africa. There is
a vast
difference in terms of above given phases for
example, in
U.S.A & Europe it has reached maturity stage
where it can’t
expand its market more but if we consider Asia, it
is still in
the growth phase.
Coca-Cola is currently going through the maturity
stage in
Western countires. This maturity stage lasts longer
than all
other stages. Management has to pay special
attention to
products during this stage of the product life-cycle.
During
the maturity stage, products usually go through a
slowdown
in sales growth. According to Coca-Cola's 2001
annual
report, sales have increased by 1.02% compared to
last
year. This percentage has no comparison to the
high level of
growth Coca-Cola enjoyed during its growth stage.
To add a
little variation Coca-Cola took the Coca-Cola Classic
and
added variations to it, including Cherry Coke,
Vanilla Coke
and Diet Coke. Also Coca-Cola went from 6-oz.
glass bottles
to 8-oz. cans to plastic liter bottles, all helping
increase
consumption.
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COCA-COLA
2. Price:
Like any company who has successfully endured a
century of existence, Coca- Cola has had to remain
tremendously fluent with their pricing strategy.
They
have had the privilege of a worthy competitor
constantly
driving them to be smarter, faster, and better. A
quote
from Pepsi Co's CEO "The more successful they
are,
the sharper we have to be. If the Coca-Cola
Company
didn't exist, we'd pray for someone to invent
them."
states it simply. The relationship between Coca-
Cola &
Pepsi is a healthy one that each corporation has
learned
to appreciate.
Throughout the years Coca-Cola has made many
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pricing decisions but one might say that their
ultimate
goal has always been to maximize shareholder
value.
As cola consumption has decreased in the US colas
have come to realize the untapped international
market.
In 2003 both Coke and Pepsi had a solid presence
in
India and had each introduced a 300mL bottle. In
order
to grab market share Pepsi began to drop prices
(even
with summer approaching, which was contrary to
policy
in America). Shortly thereafter, Coca-Cola decided
to
drop their prices slightly, but focused on the
reduced
price point of their 200mL container. Coca- Cola
planned to use the lower price point to penetrate
new
cities that were especially price sensitive. The
carbonated soft drink market in India is nearly 37%
of
the total beverage market there.
This low price strategy was not unfamiliar to Coca-
Cola.
Both Coke & Pepsi utilized a low price strategy in
the
early 1990s. After annihilating the low price store
brands, Coke chose to reposition itself as a
"Premium"
brand and then raise prices.
Coca-Cola products would appear, on the shelf, to
have
the most expensive range of soft drinks common to
supermarkets, at almost double the cost of no
name
brands. This can be for several reasons apart from
just
to cover the extra costs of promotions, for which
no
name brands do without. It creates consumer
perceptions and values. When people buy Coca-
Cola
they are not just buying the beverage but also the
image
that goes with it, therefore to have the price higher
reiterates the fact that the product is of a better
quality
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than the rest and that the consumer is not cheap.
This
is known as value-based pricing and is used by
many
other industries in attracting consumers.
In India, the average income of a rural worker is
Rs.500
a month. Coca Cola launched a 200 ml bottle for
just
Rs.5, an affordable amount on the pockets of the
rural
audience.
3. Place:
Coca-Cola entered foreign markets in various ways.
The
most common modes of entry are direct exporting,
licensing and franchising.
Besides beverages and their special syrups, Coca-
Cola
also directly exports its merchandise to overseas
distributors and companies. Other than exporting,
the
company markets internationally by licensing
bottlers
around the world and supplying them with the
syrup
needed to produce the product.
There are different types of franchising. The type
that is
used by Coca-Cola Company is
manufacturersponsored
wholesaler franchise system. It is very
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comparable to licensing but the only difference is
that
the finished products are sold to the retailers in
local
market.
Coca Cola has managed their company’s marketing
and
sales strategy within channels. Have you ever
considered the significance of the Coke vending
machine to the success and profitability of the
Coca
Cola company? This channel is direct to consumer
and
vending machines often have little to no
competition and
no trade or price promotions.
The Coke Company operates three primary
delivery
systems for its business channels:
• Bulk delivery for the channels of large
Supermarkets, Mass Merchandisers and Club
stores;
• For smaller channels Coke does advanced sale
delivery for convenience stores, drug stores, small
supermarkets and on-premise fountain accounts.
• Full service delivery for its full service vending
customers.
Key Channel Listing
• Supermarkets
• Convenience Stores
• Fast Food
• Petroleum Retailers
• Chain Drug Stores
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• Hotels/Motels/Resorts
• Mass Merchandisers
• U.S. DOD Military Resale retail commands:
AAFES, NAVRESSO and DECA
• Vending
In 2006, the Company began changing its delivery
method for its route delivery system. Historically,
the
Company loaded its trucks at a warehouse with
products the route delivery employee would
deliver. The
delivery employee was responsible for pulling the
required products off a side load truck at each
customer
location to fill the customer's order. Coke began
using a
new CooLift® delivery system in 2006 in a portion
of the
Company's territory which involves pre-building
orders
in the warehouse on a small pallet the delivery
employee can roll off a truck directly into the
customer's
location. The CooLift® delivery system involves the
use
of a rear loading truck rather than a conventional
side
loading truck. Coke will continue to rollout this
program
over the next several years since they expect such
significant savings and more efficient deliverys.
This is a
huge investment for Coke.
The company works through independent bottlers
of
Coke. They work in coordination with the Coke
company
which produces the 'secret formula concentrate'
and
ships to the distributors and bottlers for final
processing
and packaging prior to shipment to the stores.
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Coca-Cola floods all possible retailing stores in
satisfying the third part, place. In supermarkets
and
convenient stores, Coca-Cola products are always
easy
to identify, and usually make up the greater
proportion
of options to buy. This increases their market
exposure
through effective use of the retailers. For a FMCG it
is
important that they can be found and purchased
easily.
With many automatic Can machines located in
many
sports stadiums and shopping malls, you don't
even
need to go to a store to buy a drink. This greatly
enhances the speed of purchase.
The company produces concentrate, which is then
sold
to various licensed Coca-Cola bottlers throughout
the
world. The bottlers, who hold territorially exclusive
contracts with the company, produce finished
product in
cans and bottles from the concentrate in
combination
with filtered water and sweeteners. The bottlers
then
sell, distribute and merchandise Coca-Cola in cans
and
bottles to retail stores and vending machines. Such
bottlers include Coca-Cola Enterprises, which is the
largest single Coca-Cola bottler in North America
and
Western Europe and food service distributors.
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The Coca-Cola Company only produces a syrup
concentrate, which it sells to various bottlers
throughout
the world who hold Coca-Cola franchises for one or
more geographical areas. The bottlers produce the
final
drink by mixing the syrup with filtered water and
sugar
(or artificial sweeteners) and then carbonate it
before
filling it into cans and bottles, which the bottlers
then sell
and distribute to retail stores, vending machines,
restaurants and food service distributors.
The Coca-Cola Company owns minority shares in
some
of its largest franchises, like Coca-Cola Enterprises,
Coca-Cola Amatil, Coca-Cola Hellenic Bottling
Company (CCHBC) and Coca-Cola FEMSA, but fully
independent bottlers produce almost half of the
volume
sold in the world. Since independent bottlers add
sugar
and sweeteners, the sweetness of the drink differs
in
various parts of the world, to cater for local tastes.
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