Coca Cola Essay/ International
Each company own or license and market more than five hundred nonalcoholic beverage brands such as; waters, juices, ready to drink teas and coffees across the globe. This research paper will focus on how The Coca-Cola Company uses strategies in order to compete in the completive market, Coca-Cola International, Market Segmentation, the “Cola wars” and finally, discuss the “unit case volume” of the Coca-Cola Company. Purpose of Study
The purpose of this research paper is to achieve a better understanding of International Business through the basic study of a worldwide company’s strategy in order to compete with the completive market Limitations of Study One of the largest limitations of this study is finding creditable resources to support this research paper and interpreting the relevant information to the instructor’s expectations. Definition of Terms For the purpose of this paper, “Coca-Cola Company” and “Coke” will be used interchangeably; all other terms utilized in this research paper are within acknowledged meaning.
Any terms that need clarification from normal usage will be defined within the text. Review of Literature Coca-Cola Mission “Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions”. * To refresh the world… * To inspire moments of optimism and happiness… To create value and make a difference. (Thecoca-colacompany. com) Background Coca-Cola Company is the world largest non-alcoholic beverage manufacturer and distributor in the world and is no stranger to the global market.
They own more than three hundred brands in more than two hundred countries. (Thecoca-colacompany. com) Created by John Pemberton, a pharmacist in Atlanta Georgia 1886 sold Coke as fountain drink and told his customer it was a “potion for mental and physical disorders”. In 1895, Asa G. Candler, a natural salesman, converted Coca-Cola from an invention into a business. He knew there were thirsty people out there, and Candler found brilliant and innovative ways to introduce them to this exciting new refreshment.
He gave away coupons for complimentary first tastes of Coca-Cola, and outfitted distributing pharmacists with clocks, urns, calendars and apothecary scales bearing the Coca-Cola brand. (Heritage. coca-cola. com) The original logo was developed from the handwriting of the company’s book-keeper, Frank Robinson, back in 1885. The wavy line seen at the base of the logo (also known as the “dynamic curve” or “dynamic ribbon”) was designed when the company introduced cans. The first idea was to create a can in the same shape as the bottle.
When the company realized this just wasn’t possible they came up with the idea of the dynamic curve. The shape of the line was intended to represent the shape bottle (Heritage. coca-cola. com) Coca-Cola International According to Hill (2012) “Coca-Cola, the iconic American soda maker, has long been among the most international of enterprises”. During WWII, Coke supplied the United States troops with Coca-Cola wherever in the world they went. (Hill, 2012, p. 518). On The Coca-Cola Heritage Timeline; in 1923, Robert Woodruff became the Coca Cola Company president after he inherited the company from his father.
Woodruff spent more than 60 years as Company leader introducing the beverage to the world beyond. (Heritage. coca-cola. com) Woodruff was known as “marketing genius” who saw opportunities for growth everywhere. He led the expansion of Coca-Cola overseas and in “1928 introduced Coca-Cola to the Olympic Games for the first time when Coca-Cola traveled with the United States team to the 1928 Amsterdam Olympics” and has been a proud sponsor to the Olympics for 80 years In 1902, the Coca-Cola Company decided to move outside of the United States and entered Cuba.
By 1929, Coke was marketing in more than seventy-six countries. Today more than seventy percent of Coca-Cola’s case volume is in international markets (Hill, 2012, p. 518). The Company’s existence worldwide was growing rapidly, and year after year, Coca-Cola found a home in more and more places such as: Cambodia, Montserrat, Paraguay, Macau, Turkey and more. The international charm of Coca-Cola was actually brought to life by a 1971 commercial, “where a group of young people from all over the world gathered on a hilltop in Italy to sing “I’d Like to Buy the World a Coke. ” (heritage. coca-cola. om) According to Rubadiri (2012), “three Coca-Cola Bottling Companies-Kisii Bottlers, Mount Kenya Bottlers and Rift Bottlers have expressed their interest to enter into a three way reorganization of ownership”. The merger, which is the first of its kind, will bring 1. 5 billion dollars for shareholders. The Cola Wars For over a century, Coca Cola and Pepsi competed for the top brand of the world’s beverage market; the most intense battles of cola wars were fought over the $60-billion industry in the United States, where the average American consumed 53 gallons of carbonated soft drinks (CSD) per year.
The first challenge between the two companies started in 1950 when the CEO of Pepsi made his trademark “beat Coke” and encouraged bottlers on take-home sales through supermarkets . From 1975 to 1995 both Coke and Pepsi achieved average annual growth of around 10% as both U. S and worldwide consumption consistently rose. Coke and Pepsi began to experiment with new colas and non-cola flavors in the 1960’s. Coke introduced Fanta (1960), Sprite (1961), and low calorie Tab (1963). Pepsi countered with Teem (1960), Mountain Dew (1964) and Diet Pepsi (1964) (Chauhan, 2012 p 3).
The cola wars were mentioned is a song from singer Billy Joel’s “We didn’t start the fire” in 1989. Strategies used for completive market Strategy can be defined as “actions that managers take to attain the goals of a firm, the main goal is maximize the value of a firm and increase profitability” (Hill, 2012 p 418). The Coca-Cola Company is using marketing strategies to compete with companies such as; Pepsi and Schweppes, in the competitive market. As stated in an article written by Jeff Bullas (2012. ) “Coca Cola has been part of popular culture for over 100 years and has been called a “Vision Brand“.
Its marketing and communication is purposeful and connects with its audience in a way that makes it stand out from its competitors”. Also mentioned in the article that Coke is using content excellence, the purpose of content excellence is to create “Ideas” so contagious that they cannot be controlled this is what is called “liquid content”. On a social web people can easily share ideas, videos and photos on social networks such Facebook” (Bullas, 2012). In an article from Neil Davidson (2012), in 2012, “Coke launched a content market strategy called “Content 2020” which revealed an enormous shift in direction and emphasis.
It was built on recognition of the fact that the world is changing rapidly and traditional marketing methods are outdated. Also stated in the article, Davidson expressed Coke’s plan to change. He stated; Coca Cola have identified three key drivers as to why they need to change their approach. – The first of these is that they want to double to size of their business. – The second is that they have noticed the current climate within which there is a ‘distribution of creativity’ and no one has a monopoly on creativity. The third driver is the distribution of technology and the fact that consumers are empowered through their access to a range of on demand device. (2012) According to Gaudet (2012), In order to meet their 2020 target, Coca-Cola is depending primarily on growth in emerging and developing markets. During their 2020 Vision presentation, the company presented a UN projection showing that the global middle class will grow from 1. 2 billion today to 2. 2 billion by 2020, as well as historical evidence showing a strong correlation between a country’s per-capita expenses and per-capita Non Alcoholic Ready to Drink (NARTD) consumption.
Based off of this growth, Coca-Cola expects total industry annual volume to grow at a 4% annualized rate and total industry value to grow at a 5% annualized rate, from $600 billion to $1,100 billion. The 1. 2% difference could come from two sources – an improvement in product mix and market share gains (Gaudet, 2010). Stated in an article by Melodie Warner (2012), Coca-Cola announced that the company “will reorganize its operating structure around three major businesses, starting Jan. 1, 2012, in an effort to better address the changing demands of its marketplace”.
The reason behind this decision is due to “American reducing their consumption of soft drinks and pockets of economic uncertainty with Europe and China”. The company’s new structure will be composed of Coca-Cola International (Europe, Pacific and Eurasia, and Africa), Coca-Cola Americas (North America and Latin America) and Bottling Group (company owned bottling operations outside of North America). (wsj. com) Market Segmentation “Market Segmentation refers to distinct groups of consumers whose purchasing behavior differs from others in important ways” (Hill, 2012, pp. 83-584). According to Hill (2012), Tastes and preferences differ from country to country, “Coca-Cola in Japan markets Georgia, a cold coffee in a can and Aquarius, a tonic drink, which appeals to Japanese tastes” (p. 586). Georgia coffee is mainly sold in Japan. Coca-Cola over the years has appealed to many types of groups and cultures and is constantly looking for new ideas that will catch the interest in a widely diverse population. Diet cola for an example, Coke designed Coke Zero mainly to appeal to women.
Coke Classic is loved by the whole world. Some of the big name celebrities who have continued the positive brand image that associate with Coca-Cola are Bill Cosby, Michelle Kwan, and Jennifer Lopez. Michelle Kwan and Jennifer Lopez are great endorsements because they both have avoided scandal and have kept an association with their occupation; Kwan with being an Olympic ice skater, and Lopez being a singer and actress The website mentions how they think of Bill Cosby as a “friendly family man”. cocacoladvertising. com) Although over the years Coca-Cola has made a few mistakes in choosing celebrities to endorse their product A few examples that were mentioned were Kobe Bryant, Paula Abdul and Rodger Clemens, this is how Coke clarified this “there are some celebrities who might have hurt the Coca-Cola image due to controversies over their actions. Paula Abdul was said to have coached and had a sexual relationship with Corey Clark, a contestant on American Idol, a show that she was a judge on”.