Marketing Plan Coca Cola Marketing Essay
Coca cola is an international company and the leading business in the soft drinks industry with more than 500 brands and 3,500 beverage products in 200 countries. The business started in 1986 when only 9 servings of Coca cola were sold in a day and the business has evolved to the current day when about 1.7 Billion servings are sold in a single day. The business has a mission to refresh, inspire optimism &happiness moments whose framework/vision involves addressing various elements of the business including; people, partners, profitability, productivity, brands portfolio and communities.
The company’s brands range from sparkling soft drinks to juice and beverages while its customers comprise of the general population which is segmented according to their tastes and preferences. In reference to the company’s flagship brand; Regular Coca Cola and Diet coke, segments are identified as the youthful and the mature aged consumers with geographic segmentation also being used where segmentation is done depending on regional tastes and preferences.
Competitors include PepsiCo and Dr Pepper Snapple but coca cola is positioned as the leading soft drinks seller globally with its sales in beverage ranking position 2 while its water sales rank position 3. The internal factors affecting the business operations include its workforce & skills, shareholders, finances and technology application & production system. Other factors affecting operations include potential customers & markets and suppliers while external environment factors include; economic, political & legal, social and technological factors. The businesses’ competitive environment is determined by the existing rivalry, new entrants, substitutes, suppliers and Buyers negotiating power. The report outlines the business’ strengths, weaknesses, opportunities and threats in a SWOT analysis and provides and BCG matrix and product lifecycle model analysis of the two brands; Regular Coca Cola and Diet Coke.
With the company’s goals of being the brand of choice, increasing market share and improving profitability, the objectives proposed following the SMART objectives criteria for the year 2012 includes; sales increase for both brands by 15%, profitability increase for Diet Coke by 30% and market share growth for Diet Coke by 25%. The target markets for the brands are the youthful consumers aged below 30 years for Diet Coke & the mature consumers aged above 30 years for the Regular Coca Cola.
The strategies to be implemented to achieve the objectives includes product positioning, pricing, distribution and promotion strategies with recommendations for change being to improve the four marketing mix strategies to enhance response to changing needs & tap into available opportunities. The tactical actions, projected budget and the implementation timeframe are also outlined while the monitoring and control will be done by formal control; output control, process control & marketing audit and informal control. The analysis draws the conclusion that the organization can improve its performance and maintain its market leadership by applying appropriate strategies to respond to the market changes which present opportunities and address its weaknesses while handling the possible threats.
Coca cola is an international company and the leading business in the soft drinks industry with more than 500 brands and 3,500 beverage products and sells 17 billion servings per day in 200 countries. The business has been identified for the purpose of analysis and recommendations for improvement in this marketing report. The analysis evaluates the organization’s current situation by evaluating; the business history, organization’s vision, mission & objectives as well as its products& brands, actual customers, its market segments, competitors and its current position in the market. An analysis of the internal and external environment is done which involves evaluating internal factors like; prospective & potential customers, suppliers and competitive environment as well as external environment like; economic factors, demographic factors, social & cultural factors, political & legal factors and the technological factors affecting the business operations. With reference to the businesses’ two brands; Regular coke and Diet Coke, the report establishes the products’ marketing goals & objectives, target markets and explains marketing mix strategies; product strategies, pricing strategies, distribution strategies and promotion strategies applied by the organization and makes recommendations for change in consideration of the current situation. A tactical program is identified by which the marketing program will be implemented with a budget and implementation timeframe outlined. The report finally explains the monitoring and control system that will be applied in appraising and ensuring that the set objectives are being achieved.
Organization’s Current Situation
Coca cola is the leading company in the soft drinks industry with its origin being a soda fountain in downtown Atlanta Georgia in 1986 where it was sold in a pharmacy. The Coca Cola was discovered by Dr John Pemberton at Jacobs’s pharmacy in 1986 where at least 9 drinks were sold in a day for the year. The Coca-Cola Company was incorporated in 1892 and its drinks were first sold in bottles in 1894. The company established its first operations outside United States in 1906 when it began operating in Canada, Cuba and Panama. (Coca –Cola 2011).
The Company has evolved from one product to more than 500 brands and 3,500 beverage products and sells 17 billion servings per day in 200 countries. It is growing its reach, strengthening its brand and advancing its global momentum every moment every day. To achieve this, the company is working with its global bottling partners in support of its 2020 vision which was unveiled in 2009. (The coca cola, 2010).
Vision, Mission & Objectives
In order to respond to market changes, Coca Cola has to thrive as a business over the next years and beyond by looking ahead and identifying market trends that will shape the business. In this regard the business has a vision 2020 which outlines its vision and mission.
The mission which is the Company’s roadmap states that “Enduring to refresh the world, inspire optimism and happiness moments and create value and difference” . (Coca Cola: Vision, Mission & Values 2011).
The company’s vision which represents the framework for the roadmap/mission relates to various elements of the business as follows.
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 people's desires and needs.
Partners: Nurture a winning network of customers and suppliers where together they will create 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 shareholders subject to the business overall responsibilities.
Productivity: To be a highly effective, lean and fast-moving organization. (Coca Cola: Vision, Mission & Values 2011).
Products & Brands
Coca cola has a market portfolio of more than 3,500 beverages products which includes sparkling drinks, still beverages such as Juice and Juice drinks, sports drinks and energy drinks. (Coca Cola System 2011). Sparkling beverages are non-alcoholic, carbonated drinks containing flavorings, sweeteners and other ingredients. No matter what your taste, sparkling beverages come in many forms, including regular, low-calorie, no-calorie, caffeinated and caffeine-free drinks. Some of the brands that the company’s provide include: coca-cola, diet coke, coca cola zero, sprite, Fanta, Minute maid, PowerAde, Aquirius, Dasani, Vitamin water, Georgia, Sokenbicha, novida, Simply and minute maid pulpy. (Soft drinks 2011).
Coca Cola operations are organized in such a way that the immediate customers for Coca Cola Company are the distributors who act as its bottling partners. Coca-Cola Company produces the Syrup that it sells to the bottlers who are licensed to produce and package the brands according to the brands specification. The distributor’s acts as the main connect between Coca Cola and its consumers who are the general consumers of soft drinks. This includes individuals of all age groups, income brackets and geographical regions whose different needs are met by providing different brands. (The Coca Cola 2010)
Coca Cola market segmentation is on various bases including the demographic segmentation and geographic segmentation. The Company provides drinks for all consumers but some brands are targeted at specific consumers. Example of the demographic segmentation is the provision of the Diet Coke which is targeted at the at the aged group , sports drinks like PowerAde which are targeted at the most active youthful segment which requires much energy while others like the Winnie Pooh sipper cap Juice have the children aged from 12 years to 5 years as the target. The segmentation reflects the needs in the brands contents, and influences the promotion methods used like advertising which is usually suited for the target segment. (The Coca Cola 2010).
The company also uses the geographical segmentation in which the different regions like countries whose population and consumer’s tastes are different are provided with different brands to suit their needs. This is featured by availability of some brands in some regions and absence in others in accordance with the regions tastes and preferences. (The Coca Cola 2010)
Coca Cola competitors include PepsiCo and Dr Pepper Snapple. (McWilliams 2011). PepsiCo provides a hundreds of brands in the global market with products like Pepsi, SoBe, Sierra Mist, Slice, Tropicana and Licenses production of its brands like Ocean Spring and others through partnership with brand like Starbucks and Lipton Tea. (PepsiCo 2011)
Dr Pepper Snapple Group Inc which was formerly the Cadbury Schweppes Americas Beverages is another competitor providing more than 50 brands and flavors of carbonated soft drinks, mixers, juices, water and beverages with a spanning heritage of over 200 years. (Dr Pepper Snapple 2011).
Current Position in the Market
Coca Cola is the worldwide number 1 seller of sparkling beverages and juice drinks and takes position 2 in the sale of sport drinks while its sale of bottled water is ranked position three. (Coca Cola System 2011).
Market & Industry Analysis
Internal Environment Analysis
A number of internal factors within a business control affects its operations and requires appropriate response so as to be able to achieve the business objectives. Some of the factors include; financial performance, workforce and its skills, shareholders, the business technology application and production system. (Kotler & Armstrong 2011)
Workforce: The Coca Cola staff and their skills are important factors which determine the business efficiency in delivery to its customers. The business’ high qualified and skilled staff is significant to the business response to customer needs. The change in workforce ability to deliver efficiently would affect the company’s performance.
Financial performance: The ability of the business to provide brands which are relevant to the market and venture into new markets is based on the financial strength which is mostly dependent by its financial performance. The profitability of the business has been key in enhancing its effective operations.
Stakeholders: Stakeholders like shareholders are a significant factor in determining the investment decisions that are made. The shareholders concern over their investment returns may determine the types of investments the business can make.
Technology application and production system: The business application of technology in its applications can determine its efficiency in production and service to customers. The Coca Cola unique production formula and technology applied in its production are important factors which determine its ability to respond to consumer demands and changes. (The Coca Cola 2010)
External Analysis: External Micro & Macro Factors
Prospective Customers & Potential markets
Coca Cola’s prospective customers and potential markets determine the innovativeness required to address their needs. Growing potential markets present new tastes and preferences which would even require altering the existing brand by adding more features to suit the markets or even result into introduction of new brands which are tailored to suit the new tastes. Coca cola seeks to establish lasting relationship with its suppliers and even providing funding in programs which enhance some of their operations efficiency like in donations towards citrus crop research in University of Florida foundation. (Kotler & Armstrong 2011)
Suppliers play a key role in ensuring that Coca cola has the inputs necessary for its production in order to meet the market needs. The company’s suppliers range from sweeteners and Citrus suppliers to equipment and other necessities suppliers whose efficiency can affect the business production. Quick and efficient delivery of supplies would ensure that the company is able to respond to customer needs in time while lack of efficiency would result to failure in meeting the market demand affecting the performance negatively.(The Coca Cola 2010)
Coca Cola’s competitive environment is defined by porters five forces of competition which includes; existing rivalry, new entrants, substitutes, suppliers negotiating power, Buyers negotiating power. (Porter 1991)
Existing Rivalry in the soft drinks industry is between Coca Cola PepsiCo and Dr Pepper Snapple. However, Coca Col a remains to be the market leader and has maintained the leadership through its intensive marketing campaigns, innovation in introducing brands which captures the evolving customer needs and the wider presence of its brands in many countries across the world. This combined by the significant market experience for the many years the business has been in the industry gives the Coca Cola a competitive edge over competitors.
New entrant’s new entrants: Coca cola as the leading soft drink seller in the industry has a large network which gives it economies of scale and wide presence all over the world. The economies of scale makes Coca Cola’s average cost to be too low for new entrants to be able to enter the market since they cannot afford to produce at such low cost hence the market has low entrant. The cost of entering the soft drinks industry is also high due to the much research needed for the brands development, equipment and expertise involved which also keeps away many potential entrants in the market. This gives Coca Cola a competitive edge against any potential entrants.
Substitute: The industry has a significant number of substitutes with the current growth of beverages like coffee, tea, chocolate and juices. However Coca Cola has managed to establish its brands as a part of their customers’ lives. This is achieved by the uniqueness of the brands which seeks to serve different needs for different customers worldwide. The Coca Cola innovativeness in introducing new brands which are taken to be healthier is seeking to retain customers who would have shifted to taking the substitutes due to health concerns over the drinks health effects. This has been done by introducing brands like Diet Coke and lowering the calorie content in the drinks with some even being sugar free and having Zero calories. (The Coca Cola 2010)
Suppliers negotiating power: Coca Cola’s raw materials mainly comprise of Citrus which is used to produce the Syrup formula. Thus the most significant suppliers are the Citrus suppliers to the business. Coca cola is a large producer thus has a significant demand for the raw material and it has programs which ensures that the supply is sufficient and consistent so as to have a significant negotiating power over suppliers since it can have a wide network of Suppliers. This can be demonstrated by Coca Cola’s and Cultrole Citrus Juices of Brazil’s donation of $3 million to the University of Florida foundation aimed at supporting research projects to enhance prevention of widespread diseases that affect Citrus crops. (Coca Cola & Culturole 2011)
Buyer’s negotiating power: Coca Cola’s products have a wide market and finds access even into the remote local markets by the wide coverage of its distribution network. The business has a large network of distributors who are mainly the bottlers who then distributes to local seller. The products can be accessed from various places like of shopping outlets, stores, clubs and entertainment centers thus no individual distributor can have a significant negotiating power over the organization hence the business having a competitive edge and making a significant margin for its syrup sales to its distributors. (Porter 1991).
Economic factors affecting the business operations include:
Inflation rate rise which is the general rise of the price level reduces the consumer’s purchasing power reducing demand for the business’s products while its reduction increases purchasing power increasing demand. (Kotler & Armstrong 2011)
Emerging markets are increasing business operations in international market l. This can be demonstrated by the significant performance of the company with the earnings before interest in markets outside US representing 80% of the company earnings. (McWilliams 2011).
Interest rate determines the cost of borrowing for investors in the market. Thus a rise of the rate increases the cost of investment which reduces competition in the market while a fall of the rate reduces the cost of capital increasing competition in the market.
Unemployment rise affects the amount of disposable income available to the consumers with its rise reducing the income hence reducing demand. On the contrary, an increase in employment increases the disposable income increasing demand for goods boosting the business performance. (Kotler & Armstrong 2011)
Economic growth rate and performance determines the level of income in the economy which determines the aggregate demand in the market. Thus a positive economic growth increases demand in the market while a negative growth reduces demand. (Kotler & Armstrong 2011)
Political & Legal environment
The political and legal factors that affect the business operations are:
The government policies allowing free trade in the market with the wake of globalization is increasing competition from other producers outside countries reducing the business market share. Imports from low cost countries are providing a cheaper option for consumers in absence of or with reduced regulations like tariffs and import quotas. (Kotler & Armstrong 2011)
Taxation policies determine attractiveness of an investment. High taxes in a country reduce attractiveness of investing while lower taxes increases attractiveness increasing the business prospects
Government policies allowing foreign direct investment in markets like US are opening up avenues for many producers to enter the market increasing competition. The Multinational entrance into the market eat up businesses’ market share and calls for innovativeness for the brand to be able to retain its leadership in the market. (Kotler & Armstrong 2011).
Consumer laws designed to protect consumers against unfair practices like misleading descriptions of the product is affecting the markets such that some of the businesses operations are withdrawn from certain markets from their failure to declare the products contents. (Kotler & Armstrong 2011)
Advertising regulation has been experienced like the request to the US food and drug administration to require messages on sugary drinks warning about the weight gain, obesity by the coalition of State and municipal agencies. (Mc Williams 2011).
Regulations on the products contents determine the brands that the Company can provide in different markets. An example is the continued battle by the government to fence off potential markets from soft drinks has seen policies as like in Boston where there is a plan to face out sugary drinks from the City to curb obesity. (McWilliams 2011)
Competition laws aimed at protecting small businesses against unfair competitive practices from the large businesses and ensuring that consumers are not exploited by monopolistic firms affect the business performance. (Kotler & Armstrong 2011)
Employment laws that cover redundancy, dismissal, working hours, and minimum wages aimed at protecting workers against abuse by employers also determine the types of operations the business undertakes.
Health and safety legislation meant ensuring that the workplace is safe for employees; it provides an area for training, accidents, and safety equipment. This varies the businesses cost in meeting the requirements. (Kotler & Armstrong 2011)
Social & Cultural environment
Social & Cultural factor which determines consumers preferences include:
Lifestyle change in the market changes demand for products, calling for the business to introduce products that meet the new demand while phasing out the old products with no demand; this has promoted innovation of the company in introducing relevant products like the diet brands and low or Zero calories brands. (The Coca Cola 2010)
Social organization in society is also determinining the products that different social groups would want to be identified with, and this is affecting demand for products; association with social group’s influence people’s demand for different brand hence the need for the business to respond appropriately. (Kotler & Armstrong 2011)
Aging population and population composition change and diversified products preference in the market as different age groups have different tastes and preferences, with the elderly becoming more concerned with their health hence having their demand change to healthy products reducing demand for some of the businesses products. (Kotler & Armstrong 2011)
The consumers health concern and age preferences has resulted to Carbonated drinks being much preferred by and commanding a large youthful market segment who care less about carbon health effect which has been the concern. There has also been a significant growth of healthier soft drinks due to their branding image that they are natural but the carbonated brands consumption among the children and the adults has reduced. (Mintel 2009)
The growing health concern is affecting the business like the US market where the concern over the high fructose corn syrup which is the main sweetener of Coca Cola and according to Mintel, about 50% of consumers avoid brands that list corn syrup as major ingredients. (McWilliams 2011)
Income distribution in an economy determines the types of goods people can afford; this determines where the business can set up its business as it sells expensive luxurious brand. (Kotler & Armstrong 2011)
Technological factors affecting the business operations include:
Technological advance is making the production process relatively cheaper and more efficient making the business more competitive in the market. This is the case as the new technology provides new production techniques. (Kotler & Armstrong 2011)
Technological advance is also providing new techniques which make product’s research much easier hence leading the business to introducing wide range of innovative brands to enhance performance.
Technology advance is also providing new distribution avenues for the products like the complete online order system in which the consumers and distributors can access the products, pay for them and have them delivered to their destinations.
Technology is also providing new advertising avenues with emergence of the digital media, internet and social media which is making the business reach its customers more easily improving performance and increasing market share. This comes with the emergence of specialized services companies providing customized communication on behalf of the client companies. (Kotler & Armstrong 2011)
An example of technology application has been the partnership with Assouline to release Coca Cola book and Ipad application which contains the Coca Cola brand images allowing the products’ information to be easily available. (125 Years 2011)
The time that technology takes to be obsolesce is also another factor that is affecting business performance with the short lived technology making it more expensive for the business as more investments has to be done to update to the current systems. (Kotler & Armstrong 2011)
The SWOT analysis summarizes the current situation of the business by identifying the business strengths and weaknesses which are determined by the internal environment and the opportunities and threats to the business which are determined by the external factors. Coca cola’s situation is summarized as follows. (Kotler & Armstrong 2011)
Coca Cola’s international presence as a multinational business gives it strength and economies of scale.
The recognized brand image and identity gives it an edge over other brands in the market.
Its wide and many years presence in the market gives it more knowledge and information about the market enhancing its customer’s needs response.
The business enjoys good relations with its bottlers and suppliers enhancing its operations.
The business extensive marketing campaigns give it an edge in capturing the market.
The business has good financial performance and its profitability giving it a strong financial background to implement its strategies and enter new markets. This can be demonstrated by impressive financial figures posted. (McWilliams 2011).
Loss of market share to increasing competition.
Much reliance on agricultural raw materials makes the business more vulnerable to changing weather conditions.
Duplication is a problem in Coca Cola production where almost similar brands have been produced in the market. (McWilliams 2011).
The health nature of some of its products like the carbonated drinks and the sugary brands. (Kotler & Armstrong 2011)
Technological advance is enhancing production process, distribution and promotion hence providing an opportunity to reach more customers and producing in a cost effective manner increasing competitiveness.
Growing demand for healthy drinks as the market becomes concerned over the health effects of drinks provides an opportunity to provide the market with health conscious brands.
The growing population is providing potential market to further increase sales
Emerging market present untapped markets where the business can venture and establish its operations. (Kotler & Armstrong 2011)
Existence of close substitutes like coffee, tea, chocolate and other juices in the market makes Coca Cola brand’s demand more elastic hence losing significant demand during unfavorable conditions.
Inflation increase reducing consumer’s purchasing power is reducing demand in the soft drinks market.
Unemployment rise with the challenging economic conditions reduces disposable income hence reducing tea demand.
Change in weather conditions affects demand for Coca Cola drinks as consumers shift to hot beverages.
Fluctuating foreign exchange rate which affects the value of international business earnings in foreign markets. (The Coca Cola 2010).
BCG Matrix model
The BCG matrix model classifies products by their market share and sales growth with the classifications being summarized on the matrix below indicating the positioning of the two brands; Regular Coca Cola and Diet Coke based on the two parameters.
Relative market share:
Regular Coca Cola
The Regular Coca Cola brand can be classified as a cash cow which has low growth and high market share generating high profit and cash. This can be attributed to the brands long period presence in the market as the flagship brand for Coca-Cola which has earned a significant market share but whose sales growth are low due to its maturity in the market. Due to the low growth, investments should be low and keep profits high. Diet Coke can be classified as a star in the BCG matrix with high growth and high market share. This can be attributed to its introduction into the market when the health concern over soft drinks was high and consumers needed a brand which would cater for their needs hence the high sales growth and market share. (Kotler & Armstrong 2011)
Complementing the BCG matrix analysis is the product life cycle in which the two brands falls in different stages which requires different marketing strategies with Regular coca cola being at maturity stage while Diet coke is at growth stage.
Regular Coca Cola
At maturity stage, growth of sales has started diminishing with competition of similar carbonated drinks and the primary objective should be defending the market share while maximizing profit. (Kotler & Armstrong 2011) At this stage:
Product features need to be enhanced to differentiate the product from that of competitors.
Pricing need to be lowered because of the new competition.
Distribution need to be more intensive and incentives may be used to encourage preference over competing brands.
Promotion should emphasize on product differentiation. (Kotler & Armstrong 2011)
At the growth stage, the company is seeking to build a brand preference and increase market share and the following marketing mix is the most suitable. (Kotler & Armstrong 2011)
The product quality need to be maintained and additional features and support services may be added.
Pricing is maintained as the firm enjoys increasing demand with little competition.
Distribution channels are added as demand increases and customers accept the product.
Promotion is aimed at a broader audience. (Kotler & Armstrong 2011)
Marketing Objectives & Marketing Strategies
Marketing Goals & Objectives
The business pursues a number of goals which are relevant to its vision and mission which includes sales growth, market share growth and profitability improvement. The proposed objectives for the two brands’ for the year 2012 reflect the SMART criteria of business objectives including: (Kotler & Armstrong 2011)
To maintain the market leadership in the soft drinks industry market.
To be the preferred brands of choice for both the young and the aged market segments.
To increase the brands profitability by improving their competitive advantage. (The Coca Cola 2010)
To increase the market share for Diet Coke brand by 25% in the 12 months for the year 2012.
To increase sales for both brands; Regular coca Cola and the Diet Coke by 15% in the year 2012.
To increase profitability of the Diet Coke by 30% for the 12 months of the year 2012.
To achieve customer satisfaction Coca cola brands will be targeted at different market segments. The market segmentation is mainly done on demographic basis where age and income will be the segmentation factor. (Kotler & Armstrong 2011)
The first segment is the young people aged below 30 years which have certain characteristics shaping their tastes and preferences which the Diet Coke targets to meet. (Soft drinks 2011). The group’s characteristics include:
Aged between 15 years to 30 years.
More active group hence need for nutritious drink.
Stylish hence need for packaging that fits their lifestyle.
Need for social identity which will require a brand that the group can socially identify with.
Well technologically advanced and extensive users of social media like face book and twitter. (The Coca cola 2010)
Regular Coca Cola can be classified as a volume brand targeted at the general consumers but can be mainly associated with the conservative group which forms the second target group of the mature aged whose characteristics shaping their tastes and preference include:
Aged 30 years and above.
More conservative group in style.
Healthy conscious from the ageing heath effects
Uses more traditional media like Television and radio.
Have a significant income. (Soft drinks 2011).
Product strategies involve positioning the brands as the suitable products to serve the different needs for different markets. Coca cola uses various elements of a product to suit it to the segments needs which includes; the product features & contents, and packaging. For the two brands; Regular Coca Cola and Diet Coke. Regular Coca Cola is positioned as the volume brand which for the general market and specifically for the conservative market that would opt for a brand which is not sophisticated while diet coke is positioned as a natural and nutritious product for the segments which are in need of energy and nutritious elements. (The Coca Cola 2010).
Coca cola pricing is done in consideration of the competitors pricing and value to customers. Various pricing strategies are applied like the value based pricing and psychological pricing:
Value based pricing is pricing method where the brand is priced on the bases of the value it creates for customers which is one of the most profitable pricing methods as customers are willing to pay premium prices for brands they perceive as valuable to them. (Kotler & Armstrong 2011)
Psychological pricing addresses the consumer’s perception of the brand’s price while considering things like:
Positioning where the product is identified whether it is viewed as relatively lower pri.ced than the competitor’s brands
Popular price levels where consumers are more willing to buy a product.
Fair pricing perception in which the customers perceive the price limit without regard of the value of the brand being sold. (Kotler & Armstrong 2011)
Regular Coca cola has a psychological pricing as it has had a continuous focus on its price relatively positioned. With its long history, coca cola has maintained its position as an affordable enjoyment of life. Coca Cola also has its product Diet Coke using value based pricing method where it positions itself as a premium brand for having fun in life. (Coke pricing 2010).
Distribution involves making the products available to customers which may be through direct supply by the producer or through distributers and other intermediaries like the retailers and local outlets. It involves considerations of distribution channels, market coverage, inventory management, warehousing, distribution centers, transportation, and order processing. (Kotler & Armstrong 2011). Coca Cola’s production is through its licensed bottlers who produce and bottle the brands and supply to the local outlets and retail markets which then sells to customers. (The Coca Cola 2010). The bottler’s plays critical role in the system as they produce and distribute the brands being the main connect with the customers. (Coca Cola System 2011).
Promotion mix involves communicating to the consumers with an aim of creating awareness, informing and passing information about a product and is achieved through various avenues including advertising, personal selling, public relations, direct marketing and sales promotion.
Advertising involves paid non personal presentation and promotion of goods by an identified sponsor which Coca Cola does through avenues like the Television advertising.
Personal selling is the presentation by company’s sales force with the purpose of making sale and building customer relationships.
Public relations involve building good relationships with public obtaining favorable publicity and handling unfavorable events, stories and rumors.
Direct marketing involves direct communication with carefully targeted individual consumers to obtain immediate response and enhance lasting relationship.
Sales promotion is providing of incentives to encourage buyers to purchase the product. (Kotler & Armstrong 2011).
Recommendation for changes
In order to achieve the set objectives for the two brands as specified, Coca Cola needs to improve its marketing campaigns by enhancing its marketing mix strategies as below.
Product positioning: The Regular coke which has reached the maturity stage and has the sales growth declining should have new product features introduced to enhance its sales growth. The features will be suited to fit the health concerns over carbon content and to feature a stylish brand which can be achieved by lowering the carbon measure and packaging the brand in new stylish bottles.
Pricing: The pricing can be changed to premium pricing where the new product features will reflect the value for which customers would be willing to pay for.
Distribution: Distribution expansion is key to increase market share for both brands mostly the Diet coke which is at the growth stage and a star with potential of capturing significant market share to improve profitability. This can be done by tapping into the opportunity provided by the technology advance and introduce a complete online order system in which the bottlers and distributors can be able to acce3ss the products online, pay for them and have them delivered to their destinations. This would make distribution more convenient and reflect value.
Promotion: Can be improved by seeking to use advertisement avenues which are more relevant to the target groups. This should involve increased social media advertising where the youthful segment can be easily reached. (Kotler & Armstrong 2011)
Tactical Program, Budget & Implementation
Actions programs and implementation schedule
The marketing strategies set to achieve the objectives are mainly focused on positioning and promoting awareness among the target markets. The promotion activities will be aimed at informing the market of the new product features which meets their needs at an affordable price and seek to break the perception of negative health effect of the brands.
All the company workers are required to know all the products and their attributes which are of concern to the customers. To equip the staff with the information, training programs for all production and marketing staff will be carried out to equip them with appropriate knowledge to address customer needs.
To achieve the set objectives, a team of well motivated staff is necessary to ensure that operations and customer service are of high standards and exceeds expectations. To achieve the necessary motivation, teams will be required to work together and support each other’s operations and the company will have set targets to be achieved upon which the teams will be rewarded for their effort. (Kotler & Armstrong 2011)
Tasks budget & schedule:
Product’s new features research
Consumer’s satisfaction survey
Training stores staff
Upgrading of sales system
I T Dept.
Training promotion staff
Upgrading online system
The budgeting has been done using Objective-and-task method in which the budget is allocated based on the objectives set. This is the appropriate method used where business needs have been determined, the tasks needed to accomplish these objectives identified with their estimated cost. (Kotler & Armstrong 2011)
Implementation of the marketing plan’s responsibilities will be spread broadly across various departments and a lot of coordination and cooperation will be required for an effective running. The new features research and product development activities will be handled by the research department tasked to find and develop the most appropriate product for the market with the necessary features. Marketing department will be in charge of various marketing tasks including prototype test, consumer satisfaction survey, trial pricing and advertising which will require a lot of involvement with the target market. To equip the involved staff with necessary information for rolling out the program and the product, Human resource department will be responsible for training of promotion and store staff. Ensuring effective running will also require updating of the company system to include the program and the new product features which will be done by the Information Technology (IT) department.
Timing of the program is significant in ensuring that activities involved are properly completed to introduce the improved brand with adequate market awareness and necessary systems to deliver customer satisfaction. The whole program will be implemented for the period between 1st October 2011 to 31st December 2012. To start the process will be the product’s new features research which will be done from 1st of October to 20th November 2012. The product development will then start on 21st November 2011 to 25th December 2011 after which the prototype test will be started on 26th January to 26th February 2012 running concurrently with the trial pricing. System updates for the point of sales will be done on a single day on 21st January while the online system will be done before the launching of the prototype test on 24th January. Training of staff will be done early with promotion staff being the first to be trained between the 15th January and 20th January after which the launching of advertisement campaign will take place from 20th January to 31st December 2012 point of sales staff will be trained from 20th January to 25th January 2012. The time allocated each activity is adequate for the tasks completion and also cost effective.
Monitoring & Control
Control can be mainly classified as formal and informal with the formal controls being applied by the management in overseeing that tasks are carried out to the specified standards while informal control is work related and is implemented by those working on the tasks as the operations progress without necessarily seeking managerial authorization. Thus informal controls are the most frequent relating to how workers handle themselves and the service delivery. (Jawarski, 1988)
Formal control will include process control on how the set standards are to be achieved. It will also include output control and marketing audits to establish progress levels.
Proccess control will be focused on both management and organization control. Management control will ensure there are in place all resources and commitments necessary for the objectives achievement while organizational controls will focus on internal marketing ensuring cooperation between departments for smooth operation. (Jawarski 1988)
Output control will seek to ensure that the quantifiable objectives are been achieved. This will be done by assessing information from the production departments and from independent surveys. (Jawarski 1988).
Marketing audits will be performed before the execution of the marketing programs to identify the key factors. Two methods which will be used are; SWOT analysis and PESTEL model to analyze competition, marketing mix and macro environment factors. (Jawarski 1988).
Informal control will include developing an organization culture for the business and creating a conducive working environment. (Jawarski 1988).
The analysis shows that Coca Cola is the leading seller in the soft drinks industry where operations are subject to numerous businesses environmental factors some internal determining its strengths and weaknesses and others external determining its opportunities and threats. The business strives to achieve its goals of becoming the soft drinks brand of choice and improving profitability by segmenting the market and providing the appropriate brands for the target groups coupled with a marketing mix of product positioning , pricing, distribution and promotion strategies. In light of Coca Cola’s current situation, the recommended changes in the marketing mix to achieve the set objectives for the year 2012 will be successful if the opportunities available are tapped by utilizing the business strengths while addressing the weaknesses and handling possible threats.
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