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The factor that cause the Coca-Cola Company’s actual results to differ from the expected result in their underlying company’s forward statement are: Changes in laws and regulations, including changes in accounting standards, taxation requirements, (including tax rate changes, new tax laws and revised tax law interpretations) and environmental laws in domestic Or foreign jurisdictions. Changes in the non-alcoholic business environment. These include, without limitation, competitive product and pricing pressures and their ability to gain or maintain share of sales in the global market as a result of action by competitors. Political conditions, especially in international markets, including civil unrest, government changes and restrictions on the ability to transfer capital across borders. Their ability to penetrate developing and emerging markets, which also depends on economic and political conditions, and how well they are able to acquire or form strategic business alliances with local bottlers and make necessary infrastructure enhancements to production facilities, distribution networks, sales equipment and technology.
Economic There was a global economic crisis in 2008 which was caused by some significant indicators of economic downturn worldwide. Global inflation was one of the causes. As inflation rate raises higher and higher, consumer buying rower signifies a key threat in the industry. The rivalry between Pepsi and Coca-Cola has create a very slow moving industry in which management has to constantly respond to the changing attitudes and demands of their consumers or face losing market share to the competition. Besides that, consumers can simply change to other beverages with little cost or consequence.
Non-alcoholic beverage industry has elevated sales in countries outside U. S. According to the Standard and Poor’s Industry surveys, “For major soft drink companies, there has been economic improvement in many major international markets, such as Japan, Brazil, and Germany. Thus, these markets will constantly play a main role in the success and stable growth for a majority of the non-alcoholic beverage industry. There is also a low growth in the market for carbonated drinks, especially in Coca-Cola soft drinks’ main market, North America.
The market growth recorded at only 1% in 2004 for North America. Social Social factor involves changing attitudes and personal lifestyles. The increasing number of women going out to work, for example, led to the need for time-saving products for the home. For example, U. S. Citizens are practicing healthier lifestyles has affected the non-alcoholic beverage industry. They had bottled water or diet coke instead of alcoholic drink and beer. The need for bottled water and other more convenient and healthy products are in important.
Possible substitutes that constantly pressures Coca-Cola include tea, coffee, juices, milk and hot chocolate. Increasing health consciousness among consumers, public health professionals and government agencies of the potential health problems related with obesity represents an important challenge to the Coca-Cola industry. Coca-Cola contains a lot of sugar and it can be harmful if consumed too much. Thus, this ill affect the non-alcoholic beverage industry by increasing the demand overall and in the healthier beverage. Coca Cola’s company has recognized that obesity is a public health problem.
Their promise to consumers starts with the company’s broad product line, which includes a broad selection of diet and light beverages, juices and juice drinks, sports drinks and water products. Coca-Cola can be used at any functions at anywhere and anytime. For example, during wedding dinner, coke is one of the drinks that are used to serve the guest. During birthday parties, people would also order the whole tub of coke supply for the guest. For leisure time, people would purchase coke to quench their thirst. Caucasian tends to order before ordering their main dish for dine-in.
Technological Some factors that cause company’s actual results to differ materially from the expected results are as follows: The usefulness of company’s advertising, marketing strategies and promotional programs. The new technology of internet and television which use special effects for advertising through media could increase the awareness of the product. They make some products look attractive. This helps in selling of the products. This advertising sakes the product attractive and allow consumer to know better of the product. This technology is being used in media to sell their products. Usages of cans and plastic bottles have increased sales for Coca-Cola as these are easier to carry and you can bin/recycle them once they are used. New machines have been created over time to decrease productivity time and increase the amount of the product. For example, ICE has six factories in Britain which use the most stats-of the-art drinks technology to ensure top product quality and speedy delivery. Rupee’s largest soft drinks factory was opened by ICE in Wakefield, Yorkshire in 1990. The Wakefield factory has the technology to produce cans Of Coca-Cola faster than bullets from a machine gun. The most recent technical achievements made by Coca-Cola’s company and Radars Glass was the new environmentally friendly version of the iconic ‘Coca-Cola’ Contour bottle which has won number of awards for its light weight. COMPETITIVE ENVIRONMENT Direct competitors The direct competitors of Coca-Cola include all soft drink such as pup, F&N. However, the major direct competitor of Coca-Cola is Pepsi. Pepsi often engage in price cut wars, prize scheme wars and sponsorship wars to win over each other customers. Indirect competitor Indirect competitors of Coke include beverages other than carbonated drinks, such as coffee, tea, juices.
One of the examples of the indirect competitors of Coke is processed fruit juice. One example of such fruit juice is the Fruit Trees Fresh brand. As fruit juice is always the healthier choice, consumers may be more incline to purchase fruit juice instead of Coke. Company’s current segmentation Coca cola serves its product using mass marketing and distributing technique. This falls under undifferentiated marketing, whereby Coca cola focuses on designing a product, in this case, Coke, that will appeal to the largest number f buyers and consumers.
Since Coca cola falls under the undifferentiated marketing, there is no market segmentation involved. However, there are minor factors on which we can say that Coca cola still segments its products and targets a small group of consumers. The four bases of segmentation is as follows, 1. Geographic Segmentation Country, region or state. Coca cola segments its products country and region wise. The taste and quality of Coke produced varies according to the income level of the country or region. Climate In Coca cola marketing, its product, Coke, is designed to be served and consumed cold.
Thus Coca cola targets on hot and humid countries where consumers are more likely to purchase Coke compared to cold countries. 2. Demographic Segmentation Coca cola mostly targets group based of variables such as age and income. Age Coca cola targets the younger generation rather than the Older generation. Income Coca cola offers different promotions and packaging to different income groups. Lower income group may go for promotional discounts while higher income group may buy in bulk. 3. Cryptographic Segmentation Coca cola segments to all the groups, be it social class, lifestyle, personality, within cryptographic segmentation. Behavioral Segmentation Coca cola mostly targets group based of variables such as occasions and usage rate. Occasions During different festive or non-festive occasions, consumers tend to buy Coke in bulk to cater as drinks for guest visiting and celebrating. Usage rate Major segments are mainly consumers that consume Coke regularly or on a daily basis. Company’s marketing mix Product Soft drinks satisfy the need of thirst of people even though some wants less, some wants more. Therefore Coke Company has come out different kinds of packaging for coke in various sizes.
Not only core benefit thirst is satisfied, there benefits like taste and packaging were also achieved. This product in convenient and is bought frequently and immediately by consumers with the minimum comparison and buying effort. It is eye catching for consumers as Coke comes in bright red packaging. Coke also comes in unique shape that fits onto the hands of consumers, creating a nicer and attracting look. Quality of those packaging are safe enough for consumers to hold. Caps are sealed tightly to prevent any other gas from going in. Bottles are in flexible packaging thus do no leak or crack.
Both cans and bottles are light and safe to bring around with. The product ranges from diet Coke, Coke Zero and Coke. Other countries has a wider range of coke, e. G. Coke Cherry, diet Coke Cherry. Product life cycle 1. Market introduction Coca cola places Coke into the market for consumers. It also spends a fair bit of money to do advertisements and promotions to create awareness of the product, Coke, to new consumers. 2. Market growth Consumers become aware of promotions from Coca cola and Start to make routine purchases. As consumers become aware of the product, promotions of Coke declines. . Market maturity More competitors enter the market taking some of Coca cola’s profit. . Sales decline Consumers may have moved on to competitors products, however, loyal customers of Coca cola with continue purchasing. Price Promotion The Coke Company emphasize a lot on advertising. Famous international movie stars and local celebrities are roped in to help promote Coke. Posters promoting coke can be found in places such as fusspots and Mr., where it is easily spotted by Singapore. To connect to the IT sway consumers and younger generation, social media such as F-casebook is used.
A faceable page of Coke Company group was set up. To date, 38 millions of members have joined this group. When Coke Zero was first launched, the Coke Company took to the streets and gave out free coke zero in Orchard. This is one of the marketing strategies of how Coke Zero can be known to the public. Occasionally, the Coke Company comes up with different kind of offers that help to attract customers to purchase Coke. Place Coke Company has entered the market in various ways to overseas. Most common way are direct exporting, franchising and licensing.
Beverages and syrup were distributed to overseas companies. Coke Company used manufacturer-sponsored wholesaler franchise system where the finished reduce is sold to the retailers in local market. Three primary delivery systems were operated, mainly: Bulk delivery, advanced sales deliver and Full service delivery. The key channel listings are supermarkets, convenient stores, Fast food, petroleum retailers, chain drug stores, hotels/motels and mass merchandisers. Vending machines can also be found at places like stadium, schools or more to provide more convenient service to consumers.
SOOT ANALYSIS Strength Strong Brand Reputation (World’s Leading Brands) Coca-Cola has earned itself strong brand recognition worldwide and it has rowan to become the world’s most ubiquitous brand, with more than 1. 7 billion beverage servings sold each day. Across the globe, most of the people will have heard of the brand Coca-Cola. Forbes ranked Coca-Cola number 3 as the world’s most valuable brands in 2010. Coca-Cola is also named the best global brands in 201 0 by Interbrain. In addition, Coca-Cola has a huge portfolio of more than 3,500 beverages.
This includes Coca-Cola, Coca-Cola Zero, Diet Coke and Sprite, which are the main soft drink brands across the globe. Good Promotion Strategy The Coca-Cola Company comes up with outstanding promotion strategies. It ire’s celebrities from different countries to help promote its brand. In this way, the company influences wide ranges of people from different places to buy its products. In addition, the Coca-Cola Company produces souvenirs for its customers. Most of these souvenirs may appreciate in the future, hence they are worth to be collected.
The Coca-Cola Company also uses innovative slogans to appeal to the consumers. In 201 0, the slogan is “Twist the Cap to Refreshment”. Unique Recipe Coca-Cola is produced using a unique formula that is accepted by its customers. Even though many other competitors tried to create a Coke that eave a similar taste to that of the Coca-Cola Company, all Of them have failed. Thus, consumers have a perception that only Coca-Cola is the real coke in the market. Weakness Health Issues It is known that Coca-Cola and most of the drinks produced by The Coca-Cola Company are not beneficial to body and health.
Especially the carbonated soft drinks can increase the calories of the people gravely. Therefore, in personal lifestyles, there is still a part of the people who think that Coco-Cola is an unhealthy carbonated drink and are not willing to consume the drink. Influential pressure is then added to decrease the amount of people misusing Coke. For example, parents would not allow their children to drink Cola-Cola as they think drinking carbonated soft drinks may cause obesity or other diseases to their children.
Thus, parents might forbid their children to consume Coca-Cola. As a result, sales will be affected. Negative publicity The Coca-Cola’s company obtained negative publicity in India during September 2006. The company was accused by the Center for Science and Environment (CASE) for selling products consisting pesticide residues. Coca- Cola products sold In and around Indian national capital region consist of a armful pesticide residue which included chemicals which could cause cancers, harm the nervous and reproductive systems and decrease bone mineral density.
Such negative publicity can adversely affect the company’s brand image and the demand for Cola-Cola products. This can also lead to an adverse consequence on the company’s growth prospects in international markets. Word of Mouth Word of mouth can be a strength and weakness for every company. For The Coca-Cola Company, many people have good points to say, yet there are also many people who are against the company and their products. It is very hard to control word of mouth. As many people have their own point of view, The Coca-Cola Company can try their best to sway these negative comments.
If bad comments are exposed to people who have yet to try Coca-Cola products, this could lead to a lost in customers. Most unknown and rarely seen & Result of low profile or non-existent advertising The Coca-Cola Company produces many beverages, with some of these drinks they produce being very popular such as Coke and Sprite. However, there is a lack of popularity for many of Coca-Cola’s drinks as this company has about 400 different drink types. Most of them are unknown and rarely seen in the arrest. They might not taste bad, but most probably due to the consequence of low profile or non-existent advertising.
Opportunities Growing Bottled Water Market One of the fastest growing sectors in the world’s food and beverage market is bottled water. This is due to the growing concerns for health. In Europe, US and Japan, the bottled water market is estimated to grow by a compound annual growth rate (CARR) of 5. 3% to reach $76. 4 billion by 2012. In the bottled water market, flavored water is considered the most innovative. According to research, the revenue of flavored water segment is growing by approximately $1 0 billion yearly.
Developing Healthy Drink Markets Beverages that are healthier can be developed since many people are more concerned about their health and the food they consume. The healthy drinks market will have great potential in the future. Developing New Brands or Market The Coca-Cola Company can consider branching out produce food instead of just beverages. It would be best if these food products are made healthy, such as low fat and sugar. The company can link its food to fast food restaurants, which is similar to providing Coke in McDonald’s. The rats Intense competition
There is intense competition in the nonalcoholic beverage segment. One major competitor of the Coca-Cola Company is PepsiCo. In 1976, Pepsi beat Coca-Cola to be the single largest ??selling soft drink in the American supermarkets. By the asses, Pepsi was the number one brand in take-home sales. Like the Coca-Cola Company, PepsiCo also has a huge portfolio of beverages. The main soft drink brands are Pepsi, Mountain Dew, pup and Catered. In addition, the taste of Pepsi is slightly similar to Coca-Cola. Hence, if the price of Coca-Cola goes up, consumers may choose to buy the substitute of Coca-Cola, which is Pepsi.
Slow growth of carbonated beverages Soft drinks have been in the spotlight over the last five years as there is a growing strength of evidence that links the ingredients, such as sugar, to chronic disease, such as obesity and diabetes. Nowadays, consumers are much more aware of the above negative health effects. As such, there is a trend of consuming healthier drinks. This results in a decrease in the consumption of carbonated and other sweetened beverages in the US. If the Coca-Cola Company continues to provide such soft drinks and little healthy drinks, it may affect the company’s sales. APPENDICES
The Coco-Cola Company’s website: http://v,mm. Toecap-Colombian. Com/ History of Coca-Cola On May 8, 1886, an Atlanta pharmacist, Dry. John Phenomenon invented Coca Cola and he took a jug of Coca-Cola syrup to Jacobs’ Pharmacy in downtown Atlanta, where it was combined with carbonated water and sold for five cents a glass. However, the bottling business started in 1899 when two Chattanooga (Fourth largest city in U. AS) Businessmen, Benjamin Thomas and Joseph B. Whitehead, secured the exclusive rights to bottle and sell Coca- Cola for most of the United States from The Coca-Cola Company.
Industry Information The Coca-Cola Company is headquartered in Atlanta, Georgia, employ about 139,600 associates across six operating groups Eurasia and Africa, Europe, Latin America, North America, Pacific and Bottling Investments in addition to Corporate. The Coca-Cola Company being the world’s number 1 non-alcoholic beverage company. The Coca-Cola Company licenses more than 3500 beverage products including sparkling drinks and still beverages such as water, juices and juice drinks, teas, coffee, soft drinks and energy drinks in more than 200 countries.