Executive Summary
Coca Cola Company is basically the world wide largest marketer, manufacturer, and distributor of non-alcoholic beverages. It manufactured more than 3600 products which include water, tea, juices, coffee, energy drinks, and many more. As the competition is very strong in the soft drinks market sector, it is emergent for Coca Cola to create uniqueness to stand out. This report will demonstrate thoroughly how the Coca Cola Company sustains competitive effects by its product after the analysis of market segmentation differentiation. Besides, the target market and behavior of the customer will be revealed based on secondary and primary data. The mix product of marketing will be clearly illustrated in the third section, followed by an explanation about new launch products. Moreover, a financial review is mentioned in this report, in order to estimate the cost in the process of marketing and ensure the break point is taken into account.
Introduction
COCA COLA COMPANY is a private and individual brand. The Coca Cola products (Coca-Cola and Sprite) are the company’s own featured products. Before launching the products in the market, this report evaluates the FMCG market as well as the customer group. It uses customer purchasing behavior and competitors in its first and second data. Finally, demand and cost are highlighted from the knowledge of finance and economics.
Findings
Market Analysis
Analysis of FMCG Market
Fast Moving Consumer Goods (FMCG) include every product like food and non-food products. The price of the products is very low with high quality. The FMCG market consists of packaged food, health goods, drinks, cosmetics, all are household goods. In Australia, there is more than 80% market share of the FMCG sector. Non-alcoholic beverages are a sector of the FMCG market which was valued at $80 billion and have a share of 17% in non-alcoholic beverages in Australia. Firstly, the customer loyalty of the brand is high in the FMCG market which means it is not easier to change the brand when they buy FMCG products.
Customer Analysis
THE COCA COLA COMPANY has more than 400 brands of drinks designed in a way to satisfy the consumer. They have different drinks for all ages, sexes, races, etc. This company is able to sell all of the products worldwide and the success is unbelievable. In today’s society, people are looking forward to having healthy lives and healthy products. Coca Cola has the best in producing great taste which is low fat and low calorie like diet coke and coke zero. The most important news about Coca Cola in Australia is that 50% of people in Australia have never drunk Coca-Cola.
In addition, primary research illustrates that people drink Coca Cola two times a day which are more habitual of drinking Coca Cola and its product. People have different standards when they purchase non-alcoholic drinks because they need to consider the quality, and how much energy it contains. Respondents basically gave more importance to that product which has the best quality and lower price. In addition, the second research in Australia shows that people are very much attracted towards alcoholic drinks so this is also the reason why soft drinks are not purchased very much by the consumer.
History
Coca-Cola Amatil’s managing director is Terry Davis. And the board chairman is David Gonski. CCA has facilities all over Australia with key sites at Northmead, North Sydney, Queensland, Victoria, Kewdale. Coca Cola was established in 1986 and every franchise has a strong heritage in the traditions of Coca Cola. This company traces its beginning to 1886 when Dr. John Pemberton (an Atlanta pharmacist) began to produce syrup for Coca Cola. The bottling business began in 1899 when two Chattanooga businessmen (Benjamin F. Thomas and Joseph B. Whitehead) secured rights to bottle and sell Coca Cola in the U.S from the Coca Cola Company. Coca Cola’s bottling system continued their local business until 1980 and after that, they consolidated to begin franchises of bottling. In 1986 they merged some of their company. In 1986 the total unit sales were 880000 $. In December 1991 there was a merge between Coca Cola Enterprises and Johnston Coca Cola Bottling Group. After that, the senior management team of Johnston took responsibility for the business and there was a dramatic change in the business and the sales reached up to 1.4 billion in 1992 and total revenues were 5 billion at the end of the year. In 1992, Coca Cola Company was the largest soft drink company in the world. Every year 800,000,000 cokes were sold in the U.S alone.
Market Segmentation, Targeting, and Positioning
Coca Cola serves its product using a market mass technique. But there are some minor factors through which we can target the Coca Cola products and target the customers somehow. These factors are mentioned below:
Targeting Specific Segmentations
A) Geographic segmentation internationally:
Coca Cola segments its products country-wise and region-wise. The vital important things are taste and quality because in each and every country there is a different taste and income level of earning of people.
B) Climate:
Coca Cola mainly focuses on hot areas of the world because there is more requirement of soft drinks in hot areas. They earned almost double income in summers as compared to winters.
Consumer Expenditure
Chief executive of Coca Cola Terry Davis said that the trading environment in Australia always remains challenging although it improved some momentum in the lead to Christmas. Due to a lot of competition in the Australian market, there is a lot of pressure on Coca Cola due to several brands like Pepsi. They always give discounted offers and always organize a lot of schemes which affect a lot on the sales of Coca Cola. CCA said that it is expected to record volume and revenue (growth) for the half year of December and stuck only 4 to 5 percent growth of profit till the end of December 31 which is not a good growth rate for the company.
Positioning
Reference: By Henry Lin ‘ October 17th, 2012
The very first thing which comes to mind when we talk about the perfect substitutes for Coca Cola is only Pepsi does not matter whether the taste and cost are almost the same all over the world. However, if we compare market share in Australia then Coca Cola is more preferable as compared to Pepsi. It is estimated that Coca Cola outsells approximately three times more in Australia and New Zealand supermarkets and five to six times more in the whole cola market. These two had a depressing past, where Pepsi went bankrupt twice until being bought by LOFT INC, A CANDY MANUFACTURER. In 1922 and 1933 Coca Cola was offered the opportunity to purchase Pepsi but declined every time because Coca Cola was enjoying the monopoly and market power.
Firstly, notice that Coke is available everywhere as compared to Pepsi. Coke is available in all outlets, supermarkets, and stores while Pepsi is available in mini supermarkets foodworks. The list of places for Pepsi is very hard to find because all popular brands use Coke to sell like McDonald’s, Subway, KFC, etc. It is easy to find Pepsi in 7 Eleven, supermarkets, and petrol stations. Distance is also the main and important advantage (factor) of selling Coke because if you want to drink some soft drink and Coke you can find it easily everywhere and for Pepsi if you have to go 500 meters away from that place then you will not go and purchase Coke and drink, so this is also the main advantage which helps Coke to grow up their sales.
Comparison with Competitors (Product Differentiation/Pricing Differentiation, Sales, Incomes Statement)
Reference: HOOVERS A D&B COMPANY
Coke is the famous product of a non-alcoholic beverage company and it is one of the top world’s most recognizable brands. Coca Cola makes a business of about 16 billion dollars including soft drinks Coca Cola, Diet Coke, Fanta, and Sprite. It is the largest beverage distribution system. Coca Cola trades in more than 200 countries with its product.
These are the Five Qualities of Coca-Cola Company Which Help the Company to Maintain Its Uniqueness All Over the World to Differentiate from Its Competitors
- Coke is invented in 1886 by Atlanta pharmacist John Pemberton
There are mainly three competitors of Coca-Cola:
- PEPSICO, INC.
- NESTLE S.A.
- Dr. PEPPER SNAPPLE GROUP, INC.
New Product Development and Launch
Marketing Mix
Promotion
The aim of the promotion is to increase the sales of the product, to decrease the price of the running cost of the product which will not vary from other products. To remain in competition they should be more resistant. In addition, the manager of the company should always try to make marketing strategies because to remain consistent in the competition. Specially the main aim of the company promotion is to boost the sales of the company. Promotion helps the company to maintain the relations of the company to the customer for a long period of time. Advertising helps the company to give the whole details about the product in a very decent manner so that the customer is attracted towards it. There are a lot of things which help the company like their logo and price and availability of the product. Mass media is also a very important factor in promotion like newspapers, radio, magazines, internet, and others also.
Reference: Insights Controller, Coca-Cola Enterprises
There are some social networking sites also which help the company a lot in doing the promotion of their products and people attracted more towards them because nowadays people eat their food or not does not matter but they are very much attracted towards these social networking sites due to the best communication way in the world.
Price
Price is the only thing which affects the company’s profit and survival. Before setting the price of the product company must be aware of the customer perceived value (how much people can spend the money on that product). Like the Coke product of Coca Cola if they set the price near about $5 then automatically, the sales of the company should go down. The only reason was the company should set their price keeping in mind their competitors. The company should set the price in which the quality does not affect and sales also increase and profit also.
Place
The important thing of selling the product of the company and earning a lot of profit is place. If the company sells its product in the retail market then they can earn more profit as compared to the wholesale market. The product sold to direct customers is more profitable. Depending upon the customer behavior set the rate of the product according to the place and situation of that suburb. The best method to sell the product according to me is to create an official website and customers should go and buy the product from there easier.
People, Process and Physical Evidence
People
The company always concerns about the people both inside and outside of the company business. Firstly, for the inside people, the company should recruit and select proper people for the different departments. It is the responsibility of the company to provide a safe, working, and learning environment in the company as well as organize some training programs and motivate them for their loyalty towards the company. Now with the outside people, the company should behave properly with their suppliers, retailers, and brand-conscious customers and maintain good relations with them. The company should open customer service if any customer is having any queries then he should directly go there and clear his query.
Process
Customer service always plays a vital role in the company. The aim of customer service is to maintain a healthy relationship between the company and its customers (suppliers and retailers). It deals with customers who are having complaints. It builds long relationships with the customers and company. In addition, the stress of managing, producing, and selling is also responsible for customer service. Customer service focuses on every step of the company.
Physical Evidence
Physical evidence is those which help customers to evaluate the product before they purchase it. In short, the company does not have its headquarters and prestige offices because of less investment. However, if the company focuses on packaging, internet website, and promotion coupon, even then the company will be able to build its image in a good corporate world.
SWOT Analysis for Coca Cola
DATE 10 APRIL 2014
A) Internal Positive Strengths
- Low capital investment at the starting of the business
- Growing and emerging sector
- Huge appreciation from customers
- Dedicated R and D sector for improving standards
- Brand recognition is more at that time
- Easy to set up
- Easy to maintain
- Advertisement really raises above the acceptance level of the business
- Marketing strategy of capturing the mind of the individual works
- Mobility, Home Delivery, Transportation raise it at a very high speed
B) Internal Negative Weakness
- Dedicated R and D sector is really quite costlier
- Marketing strategy is difficult because cannot implement the conventional strategy
- Know about the taste of the individual is quite difficult
- Maintaining the standard all over the globe is really a difficult task
- Dedicated market teams followed by the business so starting is a little costlier for the company owner
- Imported goods really add a price factor on that so become expensive
- Maintaining staff salary is quite an issue so self-service is introduced
- Brand image really needs more and more to maintain it
- Campaigns, and advertisements are costlier
- Supply chain maintenance is such an issue
C) External Positive Opportunities
- Globally acceptance is really a good opportunity to spread the business at a global level
- Advertise campaigns golf sports really give opportunities to the business
- Easy to maintain
- Easy to implement and brand recognition is an opportunity for the business
- Franchise and local input make the business more mobile and easy in a loop
- Coca Cola has the famous strategies proven all over the globe
- To survive in cut throat any competition really improvement to time prove an asset to the company
- Maintenance and improvement of standards is such a thing of looking at global acceptance
- Funding
- Shareholder
- Capital raise method is really worthful
D) External Negative Threats
- Huge competitors
- High capital requirement for business expansion
- Globally diversity
- Various standards to maintain various societies
- Supply chain management
- Funding, raising of investment and capital is such a threat for the company
- Maintaining the various products with adequate standards should be appropriate
- For entering into the restoring sector the different quality check, standard and licensing is such a loophole for spreading the business
- Local locators and movers are such tough competitors to cut the consumer and associate them with their particular brand
- Maintaining social, and religious equity to make a chain at various loops is also such an issue for the company
Forecast and Financials
Source: HOOVERS A D AND B COMPANY
http://www.hoovers.com/company-information/cs/revenue-financial.The_Coca-Cola_Company.3f8a006eaf87d773.html
Sales Report of Coca-Cola
Financials
Company Name: PUBLIC- (TICKER: KO)
Headquarters:
Market Value: 168393.23 (as of 2014-04-04)
Fiscal Year-End: Dec
2013 Sales (mil): 46,854
2013 Employees: 130,600
Employee Growth Percent: -13.45%
Assets (mil): 90,055
Net Income Growth Percent: -4.82%
Sales Growth Percent: -2.42%
Financial Statement of Coca-Cola Company
Income Statement
| Income Statement | 2013 | 2012 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|
| Revenue | $46,854 | $48,017 | $46,542 | $35,119 | $30,990 |
| Gross Profit | $28,433 | $28,964 | $28,326 | $22,426 | $19,902 |
| Operating Income | $10,228 | $10,779 | $10,154 | $8,449 | $8,231 |
| Net Income | $8,584 | $9,019 | $8,572 | $11,809 | $6,824 |
| Diluted EPS | $1.9 | $1.97 | $1.85 | $2.53 | $1.47 |
Cash Flow
| Cash Flow (mil) | 2013 | 2012 | 2011 |
|---|---|---|---|
| Cash at the beginning | $8,442 | $12,803 | $8,517 |
| Net Operating Cash | $10,542 | $10,645 | $9,474 |
| Net Investing Cash | $(4,214) | $(11,404) | $(2,524) |
| Net Financing Cash | $(3,745) | $(3,347) | $(2,234) |
| Net Change in Cash | $1,972 | $(4,361) | $4,286 |
| Cash at end of the year | $10,414 | $8,442 | $12,803 |
| Capital Expenditure | $(2,550) | $(2,780) | $(2,920) |
Balance Sheet
| Assets (mil) | 2013 | 2012 | 2011 |
|---|---|---|---|
| Cash | $10,414 | $8,442 | $12,803 |
| Net Receivables | $4,873 | $4,759 | $4,920 |
| Inventories | $3,277 | $3,264 | $3,092 |
| Other Income Assets | $12,740 | $13,863 | $4,682 |
| Total Current Assets | $31,304 | $30,328 | $25,497 |
| Net Fixed Assets | $14,967 | $14,476 | $14,939 |
| Other Noncurrent Assets | $43,784 | $41,370 | $39,538 |
| Total Assets | $90,055 | $86,174 | $79,974 |
| Liabilities (mil) | 2013 | 2012 | 2011 |
|---|---|---|---|
| Accounts Payable | $1,933 | $1,969 | $2,172 |
| Short Term Debt | $17,925 | $17,874 | $14,912 |
| Other Current Liabilities | $7,953 | $7,978 | $7,199 |
| Total Current Liabilities | $27,811 | $27,821 | $24,283 |
| Long Term Debt | $19,154 | $14,736 | $13,656 |
| Other Noncurrent Liabilities | $9,917 | $10,827 | $10,400 |
| Total Liabilities | $56,882 | $53,384 | $48,339 |
| Stakeholder’s Equity (mil) | 2013 | 2012 | 2011 |
|---|---|---|---|
| Common Stock Equity | $33,173 | $32,790 | $31,635 |
| Total Equity | $33,173 | $32,790 | $31,635 |
| Shares Outstanding | 4,402 | 4,469 | 4,526 |
Credit Rating
The credit rating of Coca-Cola Company is low because the project risk of these businesses is very low and moderate to low risk of failure.
Conclusion
To add up, the report has evaluated the FMCG market, and target customers group through analyzing secondary and primary research. To sum up, customer buying behavior and competition in the market are discussed in detail. To launch new products there are some reasonable approaches in which you can find targeting marketing and marketing mix. Moreover, revenue income and financial statements are discussed in detail for the company of the last three years. Lastly, the report indicated the profit maximized by the company which is the objective of mine in this report. It should be better to increase the demand and supply of the product and reduce the cost of the product to the maximum possible extent.