Coca Cola Analysis Marketing Research.doc

kalia hymes, amy isom, joshua obrienbusa 308: marketing principlesprof. m. simpsontable of contentscompany description3business mission3marketing objectives.4industry analysis.5swot analysis.6target market.9marketing mix.10marketing research.17organizational structure and plans19financial projections.21summary.22sources cited.23company descriptionthe coca-cola company, founded in 1886, is ranked number 94 in the fortune 500 and number one in the beverage industry (fortune 2007). they own four of the top five soft drink brands and serve over 6 billion consumers. coca-cola is headquartered in atlanta, georgia but “approximately 74% of its products are sold outside the us” (coca-cola datamonitor, 2007). they recorded revenues of $24,088 million in 2006 and they have an employee count of approximately 71,000 (coca-cola datamonitor 2007).the coca-cola company is one of the leading manufacturers, distributors, and marketers of non alcoholic beverage concentrates and syrups. they produce non alcoholic beverage concentrates and syrups which are sold to bottling partners. the bottlers usually add carbonated water with the concentrates and sweeteners and then bottle the product and sell it to wholesalers or retailers. coca-cola owns more than 400 brands in which they market for in over 200 different countries (coca-cola datamonitor, 2007). coca-cola sells a variety of soft drinks, juices, sports drinks, teas, and water. they operate in eight segments, but most of their revenues come from three of those segments. their three major segments are north america, south asia and the pacific rim, and bottling investments. their five other segments include europe; north asia, eurasia and middle east; latin america; africa; and corporate. coca-cola also has the leading brand (coca-cola datamonitor, 2007).business missioncoca-cola is passionate about their mission, vision, and values. they run their company based on three things. their company mission includes three major things: “to refresh the world in body, mind, and spirit. to inspire moments of optimism through our brands and our actions. and also to create value and make a difference everywhere we engage” (coca-cola company, 2006). their vision is to maximize profits and returns to shareholders. coca-cola wants to have skillful workers and inspire them to do the best that they can. they want coca-cola to be an enjoyable place to work at and for employees to be motivated in coming to work. the company likes to obtain a product line of beverages that satisfy the needs and wants of consumers. coca-cola wants to build trusting relationships with their partners and suppliers along the supply chain. also coca-cola prides itself in making a difference in their community and their many contributions that work to improve the environment. the business decisions that coca-cola makes are guided by their values. their main values include: leadership, passion, integrity, accountability, collaboration, innovation, and quality (coca-cola company 2006). coca-cola has remained successful by maintaining strong values, visions, and mission.marketing objectivesfuture growth for coca-cola will emerge from their focus shift towards the global market as well as the health conscious market. they are implementing and continuing to build on their global strategy (frontpage, 2007). coca-cola would like to continue to market to countries around the world outside of the united states. they are having growth in emerging markets in latin america, the bric, and western europe (frontpage, 2007). this will be their major focus in the future, because they feel this is where their major growth opportunities lie.consumers are moving towards a healthier lifestyle, which in turn is causing coca-cola to expand their products to continue to meet their needs. they would like to focus on providing juices, sport drinks, and water lines that will aim at the more health conscious market. coca-cola has been performing trials on their minute maid heart wise orange juice to prove that it does help lower cholesterol and improve health. also they are having trials for their enviga green tea which can help boost metabolism. this new market is huge and creates a lot of growth opportunity for coca-cola (credeur, 2007). “the core of our business is healthy and its poised to capture significant growth over the coming years” (credeur, 2007). consumer behavior is changing therefore coca-cola must adjust their marketing strategies and product lines to meet the consumers needs.industry analysisthe coca-cola company falls in the beverage industry with many other developing companies. leading the beverage industry by generating revenues of $24,088 million dollars, coca-colas closest competition in this industry is coca-cola enterprises and anheuser-busch. others that fall into the industry include pepsi bottling, molson coors brewing, constellation brands, pepsi americas, and brown-forman (fortune 2007). the beverage industry is moving toward the more health conscious consumer. the market is shifting from soft drinks to juices, sport drinks, and water products. to remain competitive coca-cola must also enter into this market and follow the healthier trends. “ in many european countries, the increasing consumer trend toward a healthier lifestyle continues to grow demand for functional beverages that offer physical or mental well being, lower calories and other added values” (fuhrman, 2007). consumers value products that are going to help them live a healthy lifestyle and feel better both physically and mentally.swot analysisstrengthscoca-cola has a lot of strength in their marketing plan and business. they are the worlds leading brand name, and they have a large scale of operations, and have continuing revenue growth in all of their three segments. coca-colas three major segments are latin america; east, south asia, and pacific rim; and bottling investments. these are the segments that earn the highest revenues. each of these segments continuously grows in revenues each year. the revenues earned in these segments have helped the coca-cola company to grow and expand (coca-cola datamonitor, 2007).coca-colas brand name is valued higher than their biggest competitor, pepsi. business week valued coca-cola at $67,000 million and pepsi at only $12,690 million. the brand of coca-cola is known globally and allows the company to enter new and emerging markets. having a strong brand name also allows them to expand their company by adding products such as cherry coke and coke with lemon, and allowing them to meet different consumers needs. coca-cola owns the brand names of coca-cola, diet coke, sprite, and fanta which are four of the leading brands in soft drinks (coca-cola datamonitor, 2007).coca-cola, with large scale operations, is the leader in manufacturing, distributing, and marketing nonalcoholic beverage concentrates and syrups. selling in 200 countries, coca-cola owns 32 beverage concentrate manufacturing plants. they also own bottle water production and beverage facilities. the companys large-scale of operation allows it to feed upcoming markets with relative ease and enhances its revenue generation capacity” (coca-cola datamonitor, 2007).weaknessescoca-cola has three major weaknesses that occur internally in the company, they include: negative publicity, poor performance in north america, and decrease in cash from operations. in 2006, coca-cola was accused of selling a product with pesticide residues in india and received negative publicity. these residues contained harmful chemicals that could damage the nervous and reproductive systems and could potentially cause cancer. coca-cola was plagued with harmful publicity much like this scenario throughout the year. this type of publicity can affect their brand image and decrease demand for their products (coca-cola datamonitor, 2007).coca-cola focuses on north america as their major target market; therefore it is important for them to have a good performance for the target market. in 2006, coca-cola did not perform well and its market growth ceased in north america. the company actually got worse. if this poor performance continues, it could affect the overall companys growth in the future and could allow their competitors to surpass them (coca-cola datamonitor, 2007).coca-cola had a decrease of 7% in cash flows from operations in the year 2006. this affected the company by reducing the amount of funds available for coca-cola to reinvest in the company (coca-cola datamonitor, 2007). coca-cola must then finance their growth with debt which makes them vulnerable to interest rates. opportunitiesmajor opportunities for growth for coca-cola include acquisitions, the bottled water market, and the growing hispanic population in the united states. this growing demographic segment gives coca-cola an opportunity to try and reach new consumers and expand their product lines. some acquisitions of the coca-cola company are kerry beverages limited in 2006 which is headquartered in hong kong. by acquiring kerry beverages limited coca-cola gained control over distribution and manufacturing joint ventures in nine major chinese provinces (coca-cola datamonitor, 2007). they also acquired apollinaris in germany, which sells sparkling and mineral water. coca-cola also took over tjc holding, a bottling company located in south africa. they even acquired companies in australia and new zealand. this enabled coca-cola to have a strong hold on the global market, which as a result helped their international operations grow and get stronger. it also gives them an opportunity for growth and to enter into new markets.the increasing health conscious market is just one of the new markets that coca-cola has shown a growing interest in, like the bottled water market. “bottled water is one of the most fast-growing segments in the worlds food and beverage market owing to increasing health concerns (coca-cola datamonitor, 2007).threatseven a large and successful company like coca-cola has external threats. three of their major threats are intense competition, dependence on bottling partners, and slow growth of carbonated beverages. the nonalcoholic beverage industry is highly competitive, leaving coca-cola with many competitors in their industry. their largest ones are pepsico, nestle, cadbury schweppes, groupe danone, and kraft foods. this intense competition influences coca-cola and their strategies. key aspects that are affected are pricing, advertising, sales promotion programs, product innovation, and brand and trademark (coca-cola datamonitor, 2007).the high dependence coca-cola has on their partners and suppliers makes them vulnerable. most of the revenue that coca-cola generates comes from selling concentrates and syrups to bottlers, in which they have no ownership control. these distributors and bottling partners make their own business decisions and coca-cola has no say in the choices they make. not having control over a major aspect of their business is a major threat. (coca-cola datamonitor, 2007).target marketas coca-colas mission statement states it wants to “refresh the world” (coca-cola company, 2006). therefore the companys target markets are any and all consumers that have a thirst that demands satisfaction. however, there are some brands that target specific consumers. for example, coca-colas powerade is a sports drink that is aimed at athletic men and women, where as its diet soft drinks are targeted at consumers who are of older age (clark, 2005). this type of marketing approach is referred to as market segmentation. market segmentation is defined as “the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups” (hair, lamb, & mcdaniel, 2006, p. 212). two ways in which coca-cola segments its target market are by demographic and geographic segmentation. before 1960 the coca-cola company only had one beverage aimed at the entire soft drink market (hair, lamb, & mcdaniel, 2006, p. 212). currently coca-cola offers a wide range of products including coffee, tea, sports drinks, energy drinks, water and their well-known coca-cola soft drinks (coca-cola datamonitor, 2007). market segmentation allows the coca-cola company to market to people with different product needs and preferences. for example, in the past year the coca-cola company felt like they needed to focus on the need that their products satisfy for their consumers. they came out with a beverage portfolio based on “seventeen need states” of their consumers. some of these included relaxation, hydration, weight management, and heart health (macauthor &thompson, 2006). therefore the coca-cola companys target market strategy is to segment the entire soft drink market to better understand and design marketing mixes that specifically matched with the characteristics and desires of each segments. marketing mix: product, place, price, promotionproduct:in order for an organization to be successful it needs to have a well-defined marketing mix. the marketing mix consists of the four ps; product, place, price, promotion (hair, lamb, & mcdaniel, 2006, p. 48). product is defined as “everything, both favorable and unfavorable, that a person receives in exchange” (hair, lamb, & mcdaniel, 2006, p. 48). the coca-cola companys products consist of beverage concentrates and syrups, with the main product being the finished beverages (coca-cola datamonitor, 2007). coca-colas products can be viewed as both business and consumer products. ultimately, the main goal of the coca-cola companys is to satisfy a consumers personal want, which is the definition of consumer products (hair, lamb, & mcdaniel, 2006, p. 248). the type of consumer product the coca-cola company creates is convenience product. convenience products normally require a wide distribution in order to sell sufficient quantities to meet profit goals (hair, lamb, & mcdaniel, 2006, p. 285). in addition, the coca-cola company often pays a certain amount to retail stores to resell their product. therefore the coca-cola company products can be considered a business product.the coca-cola company has a fairly large product mix which contains about 400 brands, including diet and light beverages, waters, juice and juice drinks, teas, coffees, energy, and sports drinks (coca-cola datamonitor, 2007). the coca-cola company has increased its product mix width since 1960. this enabled the coca-cola company to spread risk across many product lines rather than depend only on one and to help generate sales and boost profits within its organization (hair, lamb, & mcdaniel, 2006, p. 287). the coca-cola company also packages its products different sizes to appeal to certain consumers (hair, lamb, & mcdaniel, 2006, p. 286). for example, diet coke is available in twelve-ounce or even six-ounce cans and various plastic containers, ranging from two liters to twenty ounces (coca-cola company, 2006). the coca-cola company has increased its product mix by product line extensions as well as creating new products. the coca-cola company has extended its product line by introducing a variety of drinks (“will new cokes”, 2006). these include vanilla coke, cherry coke, cherry vanilla coke, coke plus and many more to attempt to meet the needs of all of its consumers. the coca-cola company also increases its product mix and broadens its market by the innovation of new juice and sport drink products (marcial, 2007). this fairly large product mix enables the coca-cola company to satisfy the needs of their consumers thirst, whatever it may be. this type of product mix allows the coca-cola company to achieve its mission statement in which it states that it wants to “refresh the world” (coca-cola company, 2006).place/distribution:another crucial part of the marketing mix is place and distribution of an organizations product. place and distribution strategies are “concerned with making products available when and where customers want them” (hair, lamb, & mcdaniel, 2006, p. 48). the coca-cola company states in its mission statement that it wants to offer its products to all consumers globally (coca-cola company, 2006). the coca-cola company uses intermediaries (i.e. retailers and distributors) instead of directly selling to distribute its products worldwide (coca-cola datamonitor, 2007). the coca-cola company also uses intensive distribution strategies to make sure their products can be available everywhere. one low profile type of retailing that the coca-cola company does to increase its distribution of its product is the use of automatic vending machines. these can be found in a number of places, such as schools and concert venues (hair, lamb, & mcdaniel, 2006, p. 411). since their product is a convenience product, it requires a wide distribution in order to meet profit goals (hair, lamb, & mcdaniel, 2006, p. 285). recently the coca-cola company has focused more on their global strategy to help them increase their growth. much of this growth is coming out of latin america, the bric, and western europe (“innovation, acquisitions”, 2007). currently many europeans are beginning to be more worried about their health, which has increased coca-colas diet coke and coke zero sales (fuhrman, 2007). in addition, the coca-cola company is in many other countries including india that are in the growth stage of the product life cycle (“marketing: new products”, 2007)