Marketing Plan of Coca-Cola Part 3

Marketing Plan of Coca-Cola Consumption Rate 9% 19% 26% 18% Coke Pepsi RC-cola Others(7up, sprite, Uro-lemon,etc) Figure 1: Consumption rate of Coca-Cola & other brands No matter how hot or "cool" the flavor feud becomes this summer; Coke won't be sweating it too much. Coca-Cola up 15 Tk to 90 Tk, the world's largest beverage maker, is still comfortably perched in its slot as the local market leader, according to Beverage Digest. Currently market share of product Coca-Cola is 26%. Comparing to other beverages Coca-Cola is the market leader product brand. 23 Marketing Plan of Coca-Cola Strategies The strategy for the future of the company is very straightforward. The marketing strategy for the year 2010 is as follows:  Accelerate carbonated soft-drink growth, led by Coca-Cola.  Selectively broaden the family of beverage brands to drive profitable growth.  Grow system profitability and capability together with our bottling partners.  Serve customers with creativity and consistency to generate growth across all channels.  Direct investments to highest potential areas across markets. Drive efficiency and cost-effectiveness everywhere. Positioning Product Range: The total range of Coca Cola Intl. in Bangladesh includes: ► Coke. ► Sprite. ► Fanta. ► Diet Coke. Bottle Sizes: The company offers their products in different bottle sizes which include:  SSRB Standard Size Returnable Bottle  LRB Litter Returnable Bottle  NRB No Return Bottle or Disposable Bottle  PET 1.25 Liter Plastic Bottle  CANS Tin Pack 330 ml 24 Marketing Plan of Coca-Cola Packing: Coca cola products are available in different packaging:  24 Regular Bottle Shell.  6 Bottle Pack for 1.25 PETs.  12 Bottles in a pack for Disposable Bottle. 24 Cans in one crate. Marketing Mix The marketing mix is probably the most crucial stage of the marketing planning process. The marketing mix refers to the combination of the four factors (price, promotion, product, and place) that make up the core of a business’s marketing strategy. a) Product: 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 25 Marketing Plan of Coca-Cola help line and complaint phone service for customers who are not satisfied with the product or wish to give feedback on the products. b) Promotion: Over the time Coca Cola has spent millions of dollars developing and promoting their brand name, resulting in worldwide recognition. 'Coca-Cola' is the most recognized trademark, recognized by 94% of the world's population and is the most widely recognized word after "OK". Coca Cola’s red and white colors 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  Manufacturer’s brand strategy  Private brand strategy  Hybrid brand strategy Coca Cola utilizes the Individual brand strategy as Coca Cola’s major products are given their own brand names e.g. Fanta, Sprite, Coca Cola etc although they may be presented as different lines they operate under the name of Coca Cola. 26 Marketing Plan of Coca-Cola c) Place: The Coca Cola Company has always focused wide scale distribution. This is the reason, 94% of the world’s population knows about Coke. “Coca Cola” is the most recognized word after OK. Coca Cola sets its own distributions directly to stores. Stores include a wide variety of Supermarket, Marts, Convenience Stores, Retail Stores and Departmental Stores. The channel distribution of Coca Cola Intl is extremely large. Over time, they have produced many products and thus have increased number of warehouses for specific products. Coca Cola Intl has also improved services via setting up a national service network. 27 Marketing Plan of Coca-Cola d) Price Since Coca Cola Intl faces a major threat from its competitor Pepsi Co., so naturally the Pricing is done keeping in view the increasing rivalry with Pepsi. Pricing is basically standard for all over the world. Price changes occur seldom after a longer period of time say, a year etc. Mostly prices are devoid of governmental and/or political laws and regulations but in Bangladesh, due to an ever increasing rate of Inflation, prices have increased in a short span of time. Product Item Quantity per pack Price 175 ml. 500 ml 1250 ml. (Pet) 2250 ml 175 ml. 500 ml 1250 ml. (Pet) 2250 ml 175 ml. 500 ml. 250 ml. 500 ml 1000 ml. (Pet) 1500 ml 15.00 Tk 30.00 Tk 55.00 Tk 90.00 Tk 15.00 Tk 30.00 Tk 55.00 Tk 90.00 Tk 15.00 Tk 30.00 Tk. 15.00 Tk 30.00 Tk 50.00 Tk 55.00 Tk Pepsi 250 ml. 500 ml 1000 ml. (Pet) 2000 ml 18.00 Tk 30.00 Tk 55.00 Tk 90.00 Tk 7 up 250 ml. 500 ml 1000 ml. (Pet) 2000 ml 18.00 Tk 30.00 Tk 55.00 Tk 90.00 Tk Coca-Cola Sprite Fanta RC- cola Price Com pa riso n Ta bl e F ig: Pr 28 Marketing Plan of Coca-Cola Fi Fin anc ial Analysis This company is financially very strong. It is due to the strong finances, the company is still surviving the ups and down of the business world. The financial report of Coca Cola Company of the year 2008 and 2009 along with the percentage change is as follows. Year Ended December 31, (In millions except per share data, ratios and growth rates) 2009 2010 Δ% Net operating revenues Operating income Net income Net income per share (basic) Net income per share (diluted) Net cash provided by operating activities Business reinvestment Dividends paid Share repurchase activity Free cash flow Return on capital Return on common equity Unit case sales (in billions) International operations North America operations Worldwide 31,944 8,446 5,874 1.601 1.601 4,110 (963) (1,791) (277) 3,147 26.6% 38.5% 28857 7,252 11,089 5.06 5.06 3,585 (779) (1,685) (133) 2,806 16.2% 23.1% 1% 45% 82% 82% 82% 15% 24% 6% 108% 12% - 12.5 5.3 17.8 11.9 5.2 17.1 5% 2% 4% 2008 basic and diluted net income per share included a non-cash gain of $.02 per share after taxes, which was recognized on the issuance of stock by Coca-Cola Enterprises Inc., one of the equity investors of this company. 2009 basic and diluted net income per share includes the following charges:  $.24 per share after income taxes related to an organizational Realignment.  $.19 per share after income taxes related to the Company's portion of charges recorded by the investors of the company.  $.16 per share after income taxes related to the impairment of certain bottling, manufacturing and intangible assets.  $.05 per share after income taxes related to the settlement terms of a discrimination lawsuit. 29 Marketing Plan of Coca-Cola Sales Forecast Sales and 2010 Income Data in Millions 2011 2012 2013 2014 Net Sales $21,742 $23,104 $24,088 $28,857 $31,944 Net Income (Profits) $4,847 $4,872 $5,080 $5,981 $5,807 $20.6 $21.4 $22.7 $23.7 Unit Sold in $19.8 Billions Fig: Sales forecast of Coca-cola *Figures in billion Unit Sale in Billions 35 31.9 28.8 30 25 20 20.7 23.1 24.8 Unit sale in Billions 15 10 5 0 2010 2011 2012 2013 Fig: Sales forecast 30 2014 Marketing Plan of Coca-Cola Budgeting: HOW COKE DETERMINE THE YEARLY BUDGET Coke determines its yearly budget by the  Sales volume  Profitability  Target volume Sales Volume Coke determines its yearly budget through the sales volume. They first concentrate on the thing is “what is the condition of their sales?” if the condition is good of their sales then they definitely increase their production and sales volume. Otherwise they concentrate on their old strategies. Profitability: The second thing through which they determines budget is the “profit” .if they r getting profits with the high margin, then they definitely want to increase their profits in the next coming year. Every organization runs on the basis of getting high profits. No organization wants to face Loss in their business. To get profit is the first priority of the Coke. 31 Marketing Plan of Coca-Cola Target Volume: To run the business every industry has some targets, which they want to achieve in a specific time period. If industry achieves those goals in that period then for the coming year it increases the volume of the target. So Coke Follow the same thing it has also some goals and targets to achieve in the given time period. When they succeed to achieve that target then they increase their target volume in the next year. Implementation and Control Implementation: Currently, Coca Cola Intl. issuing the following techniques to increase shareholders wealth maximizes customer satisfaction and satisfies the market:  Value Positioning  Value Pricing  Promotional Pricing  Differentiation o Image o Product o Channel Personnel  Market Strategy o Niche Marketing o Mass Marketing 32 Marketing Plan of Coca-Cola Control: Coca Cola Intl. has controlled sales via:   Geographic Market Organization Opening plant in various countries (in Bangladesh they have 1 plants) so as to reduce taxes.  They have invested $5.6 million in their R&D facility to maintain Product Quality Control.  Their primary concern right now is penetrating into the Bangladeshi market via strong attacking techniques whereby maintaining defense strategy against Pepsi Co.  The overall strategic control is implemented in all plants and factories throughout the 200 countries which Coca Cola proudly serves. Recommendations After completing our project we have come up with following recommendations for the Coca Cola Company, which are following:     Currently there are only two flavor of Coke available, company can extend their portfolio by introducing new flavors. According to the survey conducted by an international firm, people like less sweet cola drink. So the Coca-Cola Company should think about bringing innovations in their products for example new diet flavors or maybe more juices so as to fulfill the need of local market. Marketing team should try to increase the availability of Coke in rural areas. Coca Cola Company should think about producing Coke Can locally. Because currently coke Cans are only smuggled from abroad and sold at high prices. The Coca Cola Company can capitalize on this factor. 33