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PROJECT REPORT

MARKETING STRATEGIES
OF
COCA-COLA

SUBMITTED BY:
SANJANA DHYANI (16)
SHRUTI HEGDE (20)
INTRODUCTION

Executive Summary

 Coca-Cola was invented in May 1886 by Dr. John S. Pemberton in Atlanta, Georgia.

 The name 'Coca-Cola' was suggested by Dr. Pemberton's bookkeeper, Frank Robinson.
He kept the name Coca-Cola in the flowing script that is famous today.

 In 1891, Atlanta entrepreneur Asa G. Candler had acquired complete ownership of the
Coca-Cola business, whose marketing tactics led Coke to its dominance of the world soft
drink market throughout the 20th century. Within four years, his merchandising flair
helped expand consumption of Coca-Cola to every state and territory.
 Under Robert W. Woodruff six decades of leadership , The Coca-Cola Company took
the business to unrivaled heights of commercial success, making Coca-Cola an institution
the world over.

 The trademark "Coca-Cola" was registered with the U.S. Patent and Trademark Office in
1893, followed by "Coke" in 1945. The unique contour bottle, familiar to consumers
everywhere, was granted registration as a trademark by the U.S. Patent and Trademark
Office in 1977, an honor awarded very few packages.

Mission

 To Refresh the World... in body, mind, and spirit.


 To Inspire Moments of Optimism... through our brands and our actions.
 To Create Value and Make a Difference... everywhere we engage.

Vision
To achieve sustainable growth, we have established a vision with clear goals.
Profit: Maximizing return to shareowners while being mindful of our overall
responsibilities.
People: Being a great place to work where people are inspired to be the best they can
be.
Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and
Satisfy peoples’ desires and needs.
Partners: Nurturing a winning network of partners and building mutual loyalty.

Planet: Being a responsible global citizen that makes a difference.

PRODUCT DESCRIPTION
The Rejuvenation division offers a range of drinks designed to improve how people feel
physically and mentally. Products include ready-to-drink coffees, teas and herbal beverages.

The Health & Nutrition division produces a range of products to promote health and well being.
In the US, its products encompass Minute Maid Premium 100% juices, Hi-C fruit drinks and
Minute Maid Coolers.

Replenishment division offers a range of water products around the world. The division also
produces a range of energy drinks, such as PowerAde .

Elsewhere in the world, the company has created other products designed to meet the needs of
local consumers and communities. For example, in Chile, it developed Bibo (Kapo) because
mothers wanted a healthy, noncarbonated drink for their children.

INDIAN BEVERAGE MARKET


Market
The market growth rate, which was around 2-3% in 80s, increased to 5-6% in the early 90s and is
presently 7-8% per annum.

Consumption
Per capita consumption in India is among the lowest in the world at 6 bottles per annum
compared to 80 bottles in Thailand and 800 bottles in USA.
Delhi market has highest per capita Consumption in the country with 50 bottles per annum.

Types
Non-alcoholic soft drinks beverage market can be divided into fruit drinks and carbonated water.
o Carbonated water can also be divided into cola products and non-cola products.

o Cola Products like Pepsi, Coca Cola, Thumbs Up, and Diet Coke, Diet Pepsi etc.

o Non-Cola products based on the types of flavours available can be divided into Orange,
Cloudy Lime, Clear Lime and Mango.

Bottling plants
o The Coca-cola has manufacturing units at 18 states.
o Among the units irrespective of the location 30 of them are certified ISO 14001, and 14
units are certified OHSAS 18001 standards.
o The Coca-cola owns 22Bottling Plants and Franchisee Owned Bottling Plants are 23.
SWOT ANALYSIS
Strength
Coke has been a complex part of world culture for a very long time. The
products image is loaded with over-romanticizing and fun, this is an image many people
have taken deeply to heart. Coke are the extremely recognizable brand, which is
the greatest strength of them. Additionally there Bottling system is one of their greatest
strengths. This allows them to the conduct business on a global scale while at the same
time maintain a local approach. The bottling companies are locally owned and operated by
independent business people who are authorized to sell product of these cola giant.
and Coca cola are having the largest distribution network in the world, which is
also there one of the greatest strength.

Weakness
Weaknesses for any business need to be both minimized and monitored in order to
effectively achieve productivity and efficiency in their business activities. Although the
international sales increases but there is getting a saturation evident through the
stability in cola drink in USA market and moreover all over the world the customer
preference for cola drink is shifting towards the healthy drink is taking place. Being
addictive of cola drink is also a health problem, because drinking of carbonated soft drink
daily has an effect on your body also.

Opportunities
Brand recognition is the significant factor affecting Coke competitive position.
and Coke brand is known well throughout 94% of world today. As in developing
countries the per head consumption of cola drink is very less which evident from taking
example of India. In India per head consumption is only 6 bottles as compare to 700 bottlesin
USA and in Indian market only 5% of the beverage come under packaging. So looking at these
data we can that for these two giant a lot of potential is there in developing market which is now
also untapped.

Threats
Currently, the threat of new viable competitors in the carbonated soft drink industry is not
very substantial. The threat of Substitute, however, is a very real threat. The soft drink
industry is very strong, but consumers are not necessarily married to it. Possible substitutes that
continuously put pressure on Coke including tea, coffee, juice, milk and hot chocolate. Even
through the Coca cola control nearly 40% of the entire beverage market, the changing health
consciousness of the market could have a serious affect. Of course, coke has already diversified
into these markets, but still these Substitutes will remain threat to them. Consumer buying power
also represents a key threat to Coke.
SEGMENTATION OF MARKET

A market segment consists of a group of customers who share a similar set of needs and
wants. Rather than creating the segment the marketer’s task is to identify them and decide
which one to target. Leading soft drink companies Coca-Cola follows the similar
segmentation strategy for target marketing.

A. Mass marketing

However in some of its popular product both the companies follow the mass marketing
strategy. In this type of segmentation, companies target the whole market and not any
particular segment of the population.

B. Targeted marketing

Although the targeted group of the company is the whole population, they want to earn
more revenue from a segment than their other revenue generator sources. For this, they
recognize following bases for segmentation

1. GEOGRAPHICAL SEGMENTATION

i. Region

Both companies treat hot countries such as Asia, Middle East and African differently in
comparison to cold countries. As in tropical countries, consumption of soft drinks is 70%
in summer and 30% in winter season while in EUROPEAN countries its consumption is
almost uniform. So soft drink companies prefer different marketing strategies in Asian and
European countries. In countries like India and Pakistan, these companies invest huge
resources in the season of summers, and their target area is domestic users, restaurants,
school and college canteens and even rural chaupals. While in winter season their target is
mainly party users and high-income group consumers.

ii. Rural vs urban market

Coca-Cola Company is one of the first global majors to have spotted the potential spin offsfrom
the country’s rural market. Population of Rural sector is more conscious more abou tthe price
whereas Population of Urban sector is more conscious about the quality and brand name of the
product. so Coca cola in Year 2002 brought the 200 ml bottle at Rs.5 specifically targeted at the
rural sector so that soft drink can take place of the local drink like lemon, sugarcane juice and
Tea etc. Thus Coca-Cola has adopted different marketing strategy for rural and urban areas.
2. DEMOGRAPHIC SEGMENTATION

i. Age

India is considered to be a young country i.e. average age of Indian population is less 38
years. Thus targeting young generation can be a beneficial marketing strategy for soft drink
companies. In fact this is the case, coca cola, and thumps up, mainly target younger generation in
India. In Europe, as average population is older than Asian countries, Coca cola targeted the
older generation of the population.

ii. Gender

Gender based segmentation is very important. As taste of male and female is different.
Let’s take the example of coca cola, thumps up is promoted as masculine soft drinks while coca
cola and Fanta are having light taste and mainly targeted for loving birds, ladies, and children.
BUSINESS MODELS USED BY COCA-COLA

Hub and spoke model


Since last five years soft drink companies had started penetrating rural marketing also. For the
rural sector these companies are working on Hub and Spoke model. To reach out to rural India,
Coke started out by drawing up a hit list of high potential villages from various districts. So to
ensure full loads, large distributors (Hubs) were appointed, and they were supplied from the
company's depot in large towns and cities. Full load supplies were offered twice weekly against
payment by demand draft. On their smaller distributors (Spokes) in adjoining areas. journey
plans on a weekly basis and supplied against cash. The hired rickshaws (cycle operated vans)
that travelled to villages daily.

BENEFITS
This model has been utilized by coca cola to reach rural market. This system allows for larger
loads to travel long distances and smaller loads to travel short distances. Thus making the
mechanism cost effective.
Direct store selling

Coke adopted a model DSD that is Direct Store Distribution. In this company directly supplies
its product to the retailers which helps them to save the margin, which they give to the
wholesalers and it also ensures quick availability of the product to the retailer. Based on its
experience, Coca cola had developed various distribution models to offer its products and
services to customers in the US. Besides Direct Store Delivery (DSD they adopted other system
like Broker Warehouse Distribution (BWD) and Vending & Food service (V&FS) systems.
MARKETING STRATEGY OF COCA-COLA
o PRODUCTS
o PRICING
o POSITIONING
o PROMOTION

The various products of Coca-Cola available in India are:


 Coca-Cola: Coca-Cola is the most popular and biggest-selling soft drink in history, as
well as the best-known product in the world. Available in the following flavors: Cola,
Cola Green Tea, Cola Lemon, Cola Lemon Lime, Cola Lime, Cola Orange and Cola
Raspberry.

 Diet Coke: Diet Coke was born in 1982. Diet Coke is the drink for people who want no
calories, but plenty of taste. Known as Coca-Cola light in some countries, it's now the
No.3 soft drink in the world.
Available in the following flavors: Black Cherry Cola Vanilla, Cola, Cola Green Tea,
Cola Lemon, Cola Lemon Lime, Cola Lime, Cola Orange and Cola Raspberry

 Fanta:Fanta was introduced in the United States in 1960. Consumers around the world,
particularly teens, fondly associate Fanta with happiness and special times with friends
and family. This positive imagery is driven by the brand's fun, playful personality, which
goes hand in hand with its bright color, bold fruit taste and tingly carbonation.

 Kinley: Kinley is a carbonated water that comes in wide array of variants such as tonic,
bitter lemon, club soda and a myriad of fruit flavors. Available in the following flavors:
Apple Peach, Bitter Grapefruit, Bitter Herbal, Bitter Lemon, Bitter Water, Blueberry
Pomegranate, Club Soda, Ginger Ale, Lemon and Raspberry.

 Limca: This thirst-quenching beverage features a fresh, light lemon-lime taste and
funloving attitude. It's a homegrown, national treasure in India, that is acquired by the
Coca-Cola Company in 1993. Limca continues to build a loyal following among young
adults who love the lighthearted way it complements the best moments of their lives. This
drink is available in lemon flavor.

 Sprite: Introduced in 1961, Sprite is the world's leading lemon-lime flavored soft drink.
Sprite is sold in more than 190 countries and ranks as the No. 4 soft drink worldwide,
with a strong appeal to young people. Millions of people enjoy Sprite because of its crisp,
clean taste that really quenches your thirst. But Sprite also has an honest, straightforward
attitude that sets it apart from other soft drinks. Sprite encourages you to be true to who
you are and to obey your thirst.
 Available in the following flavors: Bitter Lemon Citrus Grapefruit, Citrus, Lemon and
Lemon Lime.

PRICING
Price is not just a number tag. Price comes in many forms and performs many functions. It
is one of the factors that affect the sales in a drastic ways.

There was a time (2002-2003) when Coca cola tried to appeal to the masses
through a 200ml bottle priced at Rs.5. It brought down the average price of its product to
Rs.5 thereby bridging the gap between soft drink and other local option like tea, milk, and
sugarcane juice or lemon water and it also make the price point of the soft drink within the
reach of high potential rural market.

Coca cola in the market place now start with the basic introductory pack, which
is a 200 ml returnable glass bottle priced at Rs.8 and is available across low income and
rural areas. The next pack size is 300 ml at Rs.10 and is focused on those willing to pay
more within the immediate consumption arena. Coca cola recently introduced an
on-the-go pack as research showed it that the next pack of 600ml (mobile) was too much to
consume on the go. The new on-the-go consumption pack is called the “express pack” and
doing well in channels such as travel, malls, so on, where people want a single serve and it
is priced at Rs.20. Can packing (250 ml) of Coca cola is Rs.15. The
company also introduced the party pack of 2 liter of the consumption in the party and is
priced at Rs.55. The average price of this packing is cheap than other packing as to
increase the consumption of soft drink in the market.

Coca cola also introduced its pulpy orange drink (Juice), Minute Maid, in India at Rs20 in the
500ml.

POSITIONING
Positioning is the act of designing the company offering and image to occupy a distinctive
place in the mind of the target market.
Coca cola try to position itself as the happiness bringing drink and drink for every
community.
Thumps up of coca-cola are targeted to the adventurous and energetic people that are interested
in adventure and love taking risk to succeed.
Minute Maid of Coca cola is specially targeted to health conscious customers and who want
health drink having natural energy in it.
Fanta, this drink is specially launched for the lady sector of the population and these drinks
are positioned in that way only.
Tab of coca cola ,initially flopped as diet cola because consumer could not tell the
difference between tab with one calorie and diet Pepsi, which then had 100, as coke was
not able to position it correctly in mind of the customer. Then coke figured out that it could
position the tab or dramatized the difference by surrounding the bathing beauty with 100
empty tab bottles. Armed with that insight, coke flooded the try screen with ads and backed
them up in stores with display, signs and samples and after that it was a tremendous
success.
So until you are not able to correctly position your product in consumer mind it is
impossible to get the success.
PROMOTION
Coca cola follows Push Strategy to advertise and sell their product in the market. Coca cola
usually giving higher discount to the retailer fills their selves space with their product and
when the consumer see only coca cola in the market they are forced to buy there product
only.

Celebrity endorsers are used to promote the product. In the year 2002, Aamir Khan was
appointed as the brand ambassador of coca-cola until now, when Imran Khan replaced him.

Coca cola try to position itself as the happiness bringing drink and drink for every
community as visible in its advertisement. As this is well judged by their
advertisement and their slogans. Their are different advertisement, which depicts that’s
coca cola, is the need for party or coca cola brings more joy and taste to the party. Coca
cola had roped in Gautam Gambir as brand ambassador for the company new “coca cola
open happiness” campaign ahead of IPL seasons. While the single ad campaign works
wonders, giving the difference in consumption patterns in the south, the coca cola majors
had customized their advertisement for the four southern states. Coca cola, on the other
hand identified the southern market as a great testing ground for its new brands, so much
so that both its pulpy orange drink, minute maid and Fanta apple were first launched,
marketed and advertised them before a pan India roll-out and a national campaign.

Throughout the years, slogans for Coca-Cola have always been memorable. Here are some
highlights:
2000 - Coca-Cola Enjoy
1993 - Always Coca-Cola
1990 - Can t Beat the Real Thing
1989 - Can t Beat the Feeling
1986 - Red, White and You
1982 - Coke Is It
1976 - Coke Adds Life
1971 - I d Like to Buy the World a Coke
1969 - It s the Real Thing
1963 - Things Go Better with Coke
1959- Be Really Refreshed
1944- Global High Sign
1942- It s the Real Thing
1936- It s the Refreshing Thing To Do
1929 - The Pause That Refreshes
BRAND LOCALISATION STRATEGY: THE TWO INDIAS

INDIA A: “LIFE HO TO AISI”


This designation Coca-Cola gave to the market segment including metropolitan areas and
large towns represented 4% of the country’s population. This segment sought social
bonding as a need and responded to aspirational messages, celebrating the benefits of their
increasing social and economic freedom.“Life ho to aisi” was the successful and relevant tagline
found in Coca-Cola’s advertising to this audience.

INDIA B: “THANDA MATLAB COCA COLA”


INDIA B included small towns and rural areas, comprising the other 96% of the nation’s
populations. This segment’s primary need was out-of-home thirst quenching and the soft
drink category was undifferentiated in the minds of rural consumers. With an average Coke
costing Rs.10 and an average day’s wage around Rs.100, Coke was perceived as a luxury
that few could afford. So when coca cola launched chota coke at Rs.5, it bought out a
commercial featuring Bollywood actor Aamir khan to communicate the message of price
cut and represents the Coke as a generic name “Thanda”
“Thanda matlab Coca cola” was also the successful and relevant tagline found in coca cola
advertisement to this audience.
INNOVATIVE PRACTICES

 The air-tight bottle concept is given by coca-cola which revolutionized the bottling and
packaging industry. The Cola giant also introduced the different size of returnable glass
bottle like 200ml, 300ml and non-returnable plastic bottle like 600 ml, 1.5 litre, 2 litre
according to the need of the targeted customer. They also pioneer in bringing Cans and
Frosted bottles in the market. Packing helps the brand to capture the desire target like
600ml packing is launched, as “express pack” so this is targeted to touring population and
this segment need non-returnable bottles.

 Coca cola is innovative in design of bottle like Fanta, Aquafina (500ml & 1 litre) having
curve shaped bottle that are easy to hold.

 Symbolically significant name: Name plays a very important part, here is an example and
innovation coca-cola did to survive in china. When it was introduced in china in the
1920, coca cola sounded like “kou-kekou-la” which means “a thirsty mouth and a mouth
of candle wax”. The company changed the phonetic translation to “ke-kou-ke-le” which
means “a joyful taste & happiness” thirsty Chinese consumers responded in drove to the
more felicitous “meaning”.

 Communication strategy: Looking the changing environment the coca cola calibrated its
communication strategy in a very innovative way.
“Imagery” work for carbonated soft drinks, while “functionality” work for other category
For instance, to entrench the “imagery” that thumps up is the brand for youthfulness and
adventure; the company introduced the taste the thunder commercial with the Akshay
Kumar’s attitude, self-belief and can-do spirit.
In contrast, minute-maid commercial needs to tell consumers the function of the product
and its benefits and natural content “pulpy orange”.

 Innovation in advertisement methods:


Investment is going into out of home advertising, point-of-sale promotion and
emerging media like radio and Internet.
o sub-minimal effect advertisement: Understanding the concept that increase in sale of
complementary good helps in increasing the sale of the product. Coca cola starts
advertising in movie- theaters and giving advertisement “drink coke and eat popcorn”.
This resulted in 2% sales increase of coca cola and 10% sales increase of popcorn. The
choice of movie theater is because in movie theaters there are very less thing to distract
mind of the person. This is know as Sub-minimal effect in which consumer does not get
the idea how advertisement is influencing them.
o personal promotion: According to a survey people in Asia are more inclined to them and
feel happy when some gives them personal recognition. So in china coca cola started
advertising through mobile phone. This advertisement strategy gives the touch of
personal feeling. The sales of coca-cola increased through this advertisement strategy.
o ambush marketing: New advertisement methods are going in todays scenario in which
company does not take the direct sponsorship but do advertisement outside the main
sponsorship area. For instance, not taking the sponsorship of a cricket match instead
going for advertisements outside the stadium. This has shown quite positive results , as
well as it is cost effective.

 Innovation in distribution system: Coca-cola launched two new distribution methods in the
initial years of the new millennium. These were the chilled DSD system and the hybrid
system.
o Chilled DSD system:The chilled DSD system was a relatively small distribution method,
created for items, which required continuous refrigeration. This was primarily created for
the fruit juices product line as they can spoil quickly if not given the required condition
and care so chilled DSD system ensures that continuous refrigeration helps in preventing
the products from spoiling.

o The hybrid system:In this system the company makes the collaboration with other
company of complementary good so that their distribution channel is also used for the
sales of its product. As taking the practical example of the collaboration of Coca cola and
McDonald. Through this collaboration the distribution channel of the Coca cola
increases, as at ever McDonald the Coca cola will be there. So increase the distribution
channel through collaboration with other company is know as hybrid system. This system
is actually benefited by the synergy created by collaboration of two companies.
FIVE FORCE ANALYSIS OF MODEL
SUGGESTIONS
 If coca cola used strong marketing it may raise barriers to entry, thus decreasing the
threat of new entrants to the industry.

 Aggressive promotion is required to promote the new launches and also for the products
already in market but not very known to people.

 Coca-cola can even introduce new flavors of soft drinks and teas, like, cranberry, mint,
cardamom, etc.
BIBLIOGRAPHY

 http://www.agriculture-industry-india.com/agricultural-commodities/soft-
drinks.html

 http://www.coca-colacompany.com/presscenter/viewpoints_india_situation.html

 http://www.coca-colaindia.com/brands/brands_home.aspx

 http://www.coca-colaindia.com/health_wellness/health_wellness_home.aspx

 http://www.coca-colaindia.com/careers/careers_life_values.aspx

 http://www.thecoca-colacompany.com/presscenter/nr
20090721corporate_second_qtr_earnings.html
FINANCIALS OF COCA-COLA
Analysis of Financial Condition and Results of Operations” and consolidated financial
statements and notes thereto contained in Financial Statements and Supplementary Data” of
this report. Year Ended December 31,
(In millions except per share data) 2009 2008 2007 2005 2004

SUMMARY OF OPERATIONS
$ 28,857 $ 24,088 $ 23,104 $ 21,742 $ 20,857
Net operating revenues
10,406 8,164 8,195 7,674 7,776
Cost of goods sold
18,451 15,924 14,909 14,068 13,081
Gross profit
10,945 9,431 8,739 7,890 7,287
Selling, general and administrative
expenses
254 185 85 480 573
Other operating charges
7,252 6,308 6,085 5,698 5,221
Operating income
236 193 235 157 176
Interest income
456 220 240 196 178
Interest expense
668 102 680 621 406
equity income—net
173 195 (93) (82) (138)
other income (loss)—net
— — 23 24 8
Gains on issuances of stock by equity
investees
7,873 6,578 6,690 6,222 5,495
Income before income taxes
1,892 1,498 1,818 1,375 1,148
Income taxes
$ 5,981 $ 5,080 $ 4,872 $ 4,847 $ 4,347
Net income
2,313 2,348 2,392 2,426 2,459
Average shares outstanding
2,331 2,350 2,393 2,429 2,462
Average shares outstanding assuming
dilution

PER SHARE DATA


$ 2.59 $ 2.16 $ 2.04 $ 2.00 $ 1.77
Basic net income
2.57 2.16 2.04 2.00 1.77
Diluted net
income
1.36 1.24 1.12 1.00 0.88
Cash dividends
61.37 48.25 40.31 41.64 50.75
Closing market
price on
December 31
$ 142,289 $ $ 95,504 $ 100,325 $ 123,908
TOTAL
111,857
MARKET
VALUE OF
COMMON
STOCK

BALANCE SHEET DATA


$ 4,308 $ 2,590 $ 4,767 $ 6,768 $ 3,482
Cash, cash
equivalents and
current
marketable
securities
8,493 6,903 5,831 6,091 6,097
Property, plant
and equipment—
net
958 763 752 715 667
Depreciation
1,648 1,407 899 755 812
Capital
expenditures
43,269 29,963 29,427 31,441 27,410
Total assets
3,277 1,314 1,154 1,157 2,517
Long-term debt
21,744 16,920 16,355 15,935 14,090
Shareowners’
equity
$ 7,150 $ 5,957 $ 6,423 $ 5,968 $ 5,456
NET CASH
PROVIDED
BY
OPERATING
ACTIVITIES