Coca-Cola Company
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Coca-Cola
Coca-Cola is one of the strongest global brands in
the world. Their products are sold in over 100 countries in all continents in
the world. It is the leading soft drinking provider in the world marketing to
different market segments in the world. The company that was established in the
1900s has taken different measures to improve its brand name since it
globalized its operations from the USA. The company has had to develop
different forms of marketing to compete favorably in both the USA market and in
the international markets against local companies producing soft drinks. With
the aim of satisfying their markets across the globe, the company has adopted
various market mix strategies to appeal to their markets (Hartline & Ferrell, 2012). Coca-Cola has not used a
standardized form in its marketing. This is based on how it markets itself and
distributes its operations. Coca-Cola has a decentralized system of operations.
The local managers in different countries are allowed to do their market
research and to market the brand in the way they think will appeal to a
specific market. The headquarters monitors and supervises these activities. The
local managers have the free will to adopted different strategies, but this is
closely monitored. The brand has been able to grow and introduce new
commodities in the market as a result of such corporation.
The market strategy for Coca-Cola focuses on
handling each market different from another. The local companies act as
independent service producers, conducting their market campaigns and research.
They produce the goods they consider necessary and ensure that the company
benefits. The company uses its brand for global appeal but focuses its service
on market segmentation based on countries. In this way, the company can tackle
the market on two fronts (Hartline &
Ferrell, 2012). This has resulted in other soft drinks companies being
disadvantaged when competing against Coke. International companies such as Pepsi
are not able to match the global appeal of Coke’s products while local
companies cannot match the strength of Coke franchise.
The Coca-Cola brand is majorly based on its
products. Coca-Cola produces soft drinks that are popular across many
countries. It has diversified its products to target specific customers. Even
though the brand center on the soft drink this only servers as an identity for
the global brand. The Coca-Cola products revolve around different concepts.
Among the soft drink brand, it has several drinks such as Sprite, Fanta and
Krest. This serves the different tastes and preferences. The type of product
sold is adopted to the local market of any given country. For instance, in
America and Europe, the company has focused on producing diet coke that the
market enjoys because of its various benefits (Kotler,
et al., 2013). It is a heathy drink that conforms to the new campaigns
of living healthier lives. In the Asian market canned coke is most popular
among the people. As a result, the brand can produce the specific need for a
given community. This adaptation to given markets helps the brand to compete
favorably with local competitors. In the global sales, the direct competitor to
Coke is Pepsi. However, different countries have their soft drink brands that
compete with Coke at a local level. It is important for Coke to do research to
cater to this market. Making assumptions in regards to local market and
focusing on the global scene may result in losses for the enterprise (Payne & Frow, 2005). The local Coke
companies provide a means of coke to connect with the local brand and build a
good customer relationship. This is seen by their launch of new products in
specific markets such as fruity drinks and mineral water.
Coca-Cola has adopted two modes of promotions that
aim at strengthening the brand name and increase its sales. Coke has given
power and resources to local companies to advertise the products in the way
they see suitable. As a result, the local companies can position their product and
compete favorably. Specific market advertising helps it in targeting certain
market segments and increase its appeal. Coco-Cola has also employed a global
approach to advertising using one big unifying advertisement to market its
brand worldwide (Schultz, et al., 2015).
It has used the power of the franchise to negotiate deals that allow Coke
products to market in global events. This is evidenced by the contracts it has
with world bodies such as Fifa and with other global franchise such as
MacDonald’s. Coca-Cola is the number sponsor of FIFA, and it is marketed in
their events such as world cup and, this gives them their global appeal and
improves it brand image. People are able to associate it with games and fun.
Coke has also corporates with global brands such as MacDonald’s to include its
products on their menu. As such brands have high markets it helps coke increase
its appeal (Anon., 2013). The pricing
system of coke is varied across the globe. It does not use the same pricing
system for its products. The prices vary in different countries and depend on
the market targeted. Coke has segmented its market based on the countries and
defined its prices. The local companies play a major role in this. Coke prices
are however, low as compared to other companies. This is because they employ a
low cost leadership mode in their pricing structure. The company has a global
market and experiences economies of scale in its operations. Such positive
economies of scale is transferred to the low prices and makes the brad more
attractive. Even though their prices are low the experience more profit than
their competitors.
The product has well been received all over the
world. Each market can relate to the product. This is evident by how their
advertisement is received. When Coca-Cola branches in Africa decided to brand
their drinks with the name of the locals. The sales of their drinks multiplied.
This showed that the company was able to reach out to the market. The names
helped the consumers’ to relate to coke products, and this created a good
customer-producer relationship.
The strategy adopted by Coke is effective because it
has combined a number of mix market policies. As a global brand, it has been
able to adopt to the local needs of each market through service segmentation
and to focus on specific markets. The company has been able to use its global
strength to provide funds for aggressive advertisement at a local level. It has
made it difficult for local soft drink producers to compete against it (Schultz, et al., 2015). It has also adopted
to the needs of the different markets and produced products that are demanded
in each country. By adopting two strategies, they reduce the disadvantages of
only using one strategy in the market. They can assess the market better and produce
the goods that are demanded across different markets (Hoffmann, 2008). The two strategies have enabled the brand to
eliminate any competition and not only make it one of the biggest brands in
soft drink industry but the second biggest brand in the world. The company has
diversified its operations and set up in different locations making it easy to
carry out its activities. It sets prices based on the people of given areas. As
seen the price of coke in the USA is different from the price of coke in Africa.
This enables Coke to satisfy the economy imbalance in the different countries.
Internationalization Process Theory (IPT) that
‘best’ describes the internationalization process that Coca-Cola has
undertaken.
Internationalism involves a company increasing its
operations across the global market. Coca-Cola started its operations in
America but has since ventured into international market making it the most
known brand. Global success varies from local success. Many companies that have
been successful in local markets have failed to succeed in the international
market due to the approach they make on the international market. Approaching
the global countries using the strategies that have worked locally may result
to unsuccessful marketing because it ignores basic international marketing
concepts. Different beliefs, different competition, different market culture
all play a role I the international market. It is crucial for the business to
adopt the most efficient way of dealing with the market to register success.
Coca-Cola has been able to achieve this through innovation of its products. The
company has been able to understand the cultures of different markets in the
countries that it operates in. It has produced goods that satisfy the markets
and it has marketed its brand through local products. Coca-Cola global
development and expansion can best be described by the born global theory (Cavusgil & Knight, 2009). The theory
states that firms develop in their home country while aware of their
opportunity to venture into outside markets to increase their market share.
Coca-Cola developed its American market ensuring
that it is the number one soft drink provider in the USA. It produced superior
drinks based on the Coca-Cola formula which gave it an edge over its
competitors. Having possessed the necessary knowledge in the field in expanded
into like markets in Canada and Europe. In the beginning stages the, the brand
did not rely on profits from their international companies. 70% of their
profits originated from local sales in the USA. As the company took more risks
they concurred the nearby market and continued to expand. Coca-Cola globalized
in two successions (Cavusgil & Knight, 2009).
They ventured into new countries set up factories but allowed local managers to
develop strategies for marketing their products. The local managers had a free
hand in doing whatever they considered necessary to build their brand. This
worked because the company was able to research on different markets and their
culture and produces goods that they required. The local companies built the
brands name and competed directly with other local soft drinks providers. The
company was able to expand its services to many countries due to this free
control policy that they employed on their local managers. Having set up in
many markets the company adopted a centralized system this required that the
local companies directly report to the Coca-Cola main company in Florida USA.
This aimed at strengthening the brand by returning the power to one body. The
market research and advertising were carried out by the company as one entity (Enis & Murphy, 2011). The company
controlled the activities of the local managers and transferred the company’s
expertise to the local markets. In this way the, company was able to
standardize its operations and products creating a global outlook. The theory
of born global is seen in how the company makes its decisions and adopts
policies that favor it at particular times. The company focuses on securing the
USA market and then ventures out to maximize the global market. The company
incorporated both policies giving managers the free will to operate and
introduce new ventures while the main company controls and monitors the
aspects. The company centralized its operation while creating avenues to expand
and create it global brand. Availability of funds to venture in the market
contributes to how influential the company is. Thus, it began its globalization
on nearby nations such as Canada and Cuba. Increased to further countries in
Europe. As success continued it ventured into the Asian, African and other
available markets.
Coca-Cola began as a local USA company but developed
into the country’s primary soft drink provider. They predicted the need to
increase their market the USA market was saturated in the future. They built the finance and the resources to
globalize its operations. With the strong local profits and market the company
ventured into nearby countries but did not focus on getting high profits but
rather creating new markets for their products key to their success has been
their understanding of different markets. Adopting different strategies to
tackle issues relating to product type, product marketing and product packaging
has helped the company achieve success in different countries. People are able
to relate to the Coca-Cola brand in different ways across the global and, this
has played a major role it its success. In order for any brand to be successful
it is important that the company understands the different environments that it
is setting up. As a result they will be able to predict the outcome of their
products. Understanding the culture of foreign countries helps in determining
the perfect market mix that can assist the company to succeed.
Work Cited
Anon., 2013. Handbook of Market Segmentation: Strategic targetting of
Business. 3 ed. New York: Routledge.
Cavusgil, T. & Knight, G., 2009. Born Global Firms: A New
International Enterprise. 2 ed. Boston: Business Expert Press.
Enis, B. M. & Murphy, P. E., 2011. Marketing Strategy
Implementation. 1 ed. Chicago: Marketing Classics Press.
Hartline, M. & Ferrell, C., 2012. Marketing Strategy, Boston:
Cengage Learning Publishers.
Hoffmann, S., 2008. Are the 4 P's of International Marketing of Equal Importance
to All Firms? What Factors Might Cause Some to More Or Less Important Than
Others?. 3 ed. New York: GRIN Verlag.
Kotler, P. et al., 2013. Marketing. 9th edition ed. Australia:
Pearson Education.
Patel, R., 2012. Marketing environment. Economy & Finance, 5
December, pp. 17-26.
Payne, A. & Frow, P., 2005. A strategic framework for customer
relationship management. Journal of Marketing, 69(4), pp. 167-176.
Schultz, D. E., Barnes, B. E., Schultz, H. F. & Azzaro, M., 2015. Building
Customer-brand Relationships. 3 ed. Boston: Routledge.
Wedel, M. & Kamakura, W., 2012. Market Segmentation: Conceptual and
Methodological Foundations. 2 ed. Boston: Springer Science Business.
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