The Global Marketing Strategy Of Coca Cola

Introduction

In the 21st century, the modern market has become more complex and more competitive because of the rapid development of information science and technology and enormous changes of consumption patterns. Making effective marketing strategy is indispensable for each company as it manages to enter, occupy, consolidate and expand the market. The importance of marketing strategy is undeniable because its function focuses on improving or developing relationships between business and customers. Actually, no business can survive without cultivating ‘healthy’ relationships with customers. Therefore, this essay is going to explain what marketing strategy is, how it works in Coca-Cola and advantages of this business.

Marketing strategy is one of the most interesting, challenging and important elements in international business. Compared with art and science, marketing strategy is more about people finding ways to deliver exceptional value by fulfilling the needs and wants of customers, shareholders, business partners and society (Ferrell, O.C., & Hartline, M.D. 2011). It is inherently driven by people and is always changeable which explains why making marketing strategy is difficult and significant. Moreover, a perfect marketing strategy that is executed without any flaws can still fail. Additionally, sometimes businesses get success despite having a general strategy or execution because marketing is complicated and flexible and the nature or characteristics of marketing can make planning strategy very difficult and frustrating. Marketing strategy has been a great challenge for each enterprise. To some degree, the difficulty of making marketing strategy highlights the extraordinary success of those famous business, for instance, Coca-cola, Starbucks, Best buy, Apple, etc. To explain the effect and importance of marketing strategy, this article focuses on the global marketing strategy of Coca-Cola Company.

The Coca-Cola Company

As is known to all, The Coca-Cola Company is an American international soft drink company. It is headquartered in Atlanta, Georgia, United States. The company is famous for its flagship product Coca-Cola which was invented by pharmacist John Stith Pemberton in 1886 (Wikipedia). The Coca-Cola formula and brand was bought in 1889 by Candler who took over in the company in 1892 (Wikipedia). The Coca-Cola Company only produces syrup concentrate and then sells them to various bottlers. As a report showed, “The Company recorded revenues of $35,119 million during the financial year ended December 2010(FY2010), an increase of 13.3% over 2009. The revenue growth was primarily due to addition of more than 1 billion incremental unit cases of volume and a 5% growth in unit case volume. The operating profit of the company was $8,449 million in FY2010, an increase of 2.6% over 2009. The net profit was $11,809 million in FY2010, an increase of 73.1% over 2009″(Datamonitor, 2011).

As the largest provider of sparkling beverages, juices and juice drinks and ready-to-drink tea products and the best recognized global brands(Datamonitor,2011), the Coca-cola Company attaches great importance to marketing construction and development and has high stringency about respecting local development strategy of pragmatic. Its valid marketing strategy and practice can be worth to popularize for the other enterprises:

1. The leading market share based on strong brand portfolio.

Over the years, the company has made large investments in establishing strong brand equity. Eventually, Coca-Cola is one of the best recognized global brands.

In addition, The Company’s products are available to consumers through the largest beverage distribution system. Moreover, wide geographical foot print in diverse markets will enable the company to expand its markets and also reduce the business risk. As the effective results of its marketing strategy, Coco-Cola always have effects on other companies or businesses, like Pepsi has taken examples by Coca-Cola and these two companies have had “Cola wars” for many years. In my opinion, “Cola wars” will be beneficial for customers if it keeps competing in positive cycle.

2. The Company is adept in seizing opportunities to quicken development and reinforce its abilities of keeping the market economy well in hand.

At present, the average number of beverages that people consume each year in a given market of the company’s products is 394 units in the US and 675 units in Mexico; it is only 229 units in Brazil, 69 in Russia, 11 in India and 34 in China. Asia is expected to account for 34% of global gross domestic product (GDP) and 55% of global wealth by 2030 (Data monitor, 2011). For Coca-cola, the abroad markets provide huge potential to strengthen economies growth and achieve higher revenue. It flexibly meets consumer’s changing tastes and figures out the most popular or main stream products so that the value of company are getting higher and more significant. By owning their bottlers, Coca-Cola can enhance its operational efficiency and also have the flexibility to become more responsive to the demands of retailers and consumers.

3. Coca-Cola Company can take the corporate social responsibility.

“The one common denominator we see among the most successful and prosperous communities we serve are a strong commitment to sustainability. A commitment shared by business, government and civil society” said Muhtar Kent, Chairman and CEO, Coca-Cola Company (Madhavan, 2012:94). It run business in ethical manners and is accountable for the social and environmental impacts. That is exactly the business creates for the society. Coca-Cola put sustainability efforts first and always knows how to use own power to do the right thing. Some people argue that business profits and social responsibilities should not be connected because it is wasting money. However, more and more customers care about social or ethical responsibilities when they purchase commodities. I think each great enterprise should pay attention to the connection between its own profits and social responsibilities because profits are from customers who pay much more attention to enterprises’ responsibility.

4. Devoting to sponsorship development is one of the most effective ways to get profits. Especially in sports sponsorship, Coca-Cola has thought of it as an increased important marketing strategy. In the past few decades, overall rise in sport sponsorship spending and corporations have combined their core brands with sport properties that they effectively distribute their profits in different parts of market. The sponsorship with NFL has been carried out for many years which are the best evidence. In 2003, the Coca-Cola spent $64 million (ranking 17) in corporations within the area of sport sponsorships (Mckelvey, 2006: 115). In addition to maintaining its local NFL team sponsorships, Coca-Cola strengthened its association with the sport of football at the college, high school, and youth football levels (Mckelvey, 2006:121). In 2003, the Coca-Cola spent $64 million (ranking 17) in corporations within the area of sport sponsorships (Mckelvey, 2006: 115). Coca-Cola has been focusing on sports and sports commercials which are the key part of international business sales strategy. Giving monetary support in sport sponsorship is very essential because it is closely related to people’s daily life.

5. Actively exploring the overseas markets has become a crucial element of company’s development. For instance, India which has over one billion potential customers has become one of the latest battle grounds. Over the past five years, Coca-Cola has used popular stars as sponsors, to film “Bollywood” movies, and to protect online relationships (Yahoo! Hungama with Coca-Cola. Mckelvey, 2006:115). Overseas market usually bring profits and success for Coca-Cola if it conducts marketing strategy effectively. India has developed so fast in recent years and it could be a good choice for coca to expand. Furthermore, Coca-Cola has moved to establish itself since China opened its borders to international business, like, establish distribution, manufacturing, and bottling networks in China, enabling to counteract stationary sales of soft drink in the United States (Terhune, 2004; McKelvey, 2006:115).

China is a vast growth market for Coca-Cola which has become one of the most well-known international brands with leading role in soft drink in China. In addition, the successful and long cooporation between China and Coca-Cola creates new job opportunities for local workers and introduce new technology to foster industrial development and modernization. Moreover, Coca-Cola and its bottlers have always been active corporate citizens in China, promoting sustainable environmental projects and development of local communities through education and cooperative public-private endeavour.

Conclusion

To conclude, this article mainly describes the importance of global marketing strategy in international business by using Coco-Cola Company as a concrete example. Coca-Cola Company undoubtedly is a model of utilizing marketing strategy with its own features. Coca-Cola Company has kept working on preserving the classical taste and improving cognition of brand for hundreds years. Meanwhile, it never misses any opportunity and it positively opens out markets not only in America, overseas markets as well, like, India and China. Besides, caring about corporate social responsibility is one of reasons customers keep purchasing Coca-Cola. Moreover¼ŒCoca-Cola figures out that making products near people’s life is a valid way to increase own profits and brand reputation, for example, continually giving financial support to sports. As a well-known international business, Coca-Cola has achieved great success other businesses can not compare with. All advantages in this company demonstrate that marketing strategy is like a invisible hand to control the markets and push enterprises move forward.