Synopsis on Marketing strategies of

coca-cola

Introduction
Soft drink boon in India was attributed to the legacy of Coca Cola, which was there in INDIA till
1977. In todays market the Coca-Cola (Coke, Thumps Up, Fanta, Limca, Sprite, Vanilla Coke,
etc.) hold a 62% market share that appears to bear concentrated rush to beg a big share in the soft
drink market.
Various national & multinational firms are engaged in soft drink market due to increase in its
demand day by day. As far as INDIA soft drink market is concerned there are major companys
engaged having a big completion to capture the soft drink market are namely Coca-Cola & Pepsi.
While Campa Cola & many local colas still notice in the Indian Market.
Pepsi Cola attacked Coca-Cola before World War II. Coca Cola dominated the American soft
drink industry, Pepsi cola was a drink less to manufactures & with a less satisfactory taste then
Coke. Whereas Coca-Cola major selling point was more drink for the same price and Pepsi
emphasized on advertising.
During World War II Pepsi & Coke both enjoyed increased sale. After the war Pepsi sale was
started to fall relatively to Coke, resulting the Coca-Cola had starting to click the
At that point Alfred.N.Steeler came to the presidency of Pepsi cola with a great reputation for
merchandising. He and his staff recognized that the main hope lay transforming Pepsi from a
cheap imitator of Coke into a class on soft drink manufacturer.
By 1955 all Pepsis major weakness had been overcome, resulting sales had climbed
substantially. These actions from 1955 to 1960 led to a considerable sales growth for Pepsi.
In India another company engaged in soft drink market is Coca-Cola. It is one of the most widely
known, accepted and admired trademarks of the world. Coca-Cola was their in India till 1977,
when the Indian Government banned it due to strong resentment against multinational companys
Coca-Cola was re-launched again in India in September 1993 at HATHRAS near Agra. The
India people welcomed the comeback of their most loved Cola in the country with great
enthusiasm and vigor.

Coca-Cola marked its re-launching with acquiring five Parley drinks viz. Thumps Up, Gold
Spot, Limca, Citra, Maaza, Soda.

Soft drink industry is one of the fastest growing industries in India. The basic idea behind the
rapid growth of this industry is due to following reasons:

1.

The great corporate war between Coke & Pepsi, who left no stone unturned, for
monopolizing the India Soft Drink market.

2.

The basic ideology of these two giants is to promote soft drinks as a food item in India
hold.

3.

The long hot summers in India have increased the consumption of soft drinks.

Acquisitions:
The company has a long history of acquisitions. Coca-Cola acquired Minute Maid in 1960, the
Indian cola brand Thums Up in 1993, and Barq's in 1995. In 2001, it acquired the Odwalla brand
of fruit juices, smoothies, and bars for $181 million. In 2007, it acquired Fuze Beverage from
founder Lance Collins and Castanea Partners for an estimated $250 million. The company's 2009
bid to buy a Chinese juice maker ended when China rejected its $2.4 billion bid for the Huiyuan
Juice Group on the grounds that it would be a virtual monopoly. Nationalism was also thought to
be a reason for aborting the deal. In 1982, Coca-Cola purchased Columbia Pictures for $692
million. It sold the movie studio to Sony for $3 billion in 1989. In 2013, Coca-Cola finalized its
purchase of ZICO, a coconut water company. In 2015, the company took a minority stake
ownership in the cold pressed juice manufacturer, Suja Life LLC.

Revenue:
According to the 2005 Annual Report, the company sells beverage products in more than

200 countries. The report further states that of the more than 50 billion beverage servings of all
types consumed worldwide every day, beverages bearing the trademarks owned by or licensed to
Coca-Cola account for approximately 1.5 billion (the latest figure in 2010 shows that now they
serve 1.6 billion drinks every day). Of these, beverages bearing the trademark "Coca-Cola" or
"Coke" accounted for approximately 78% of the company's total gallon sales.
Also according to the 2007 Annual Report, Coca-Cola had gallon sales distributed as follows:

43% in the United States

37% in Mexico, India, Brazil, Japan and the People's Republic of China

20% spread throughout the rest of the world

In 2010, it was announced that Coca-Cola had become the first brand to top 1 billion in annual
UK grocery sales

Problem Identification
The non-alcoholic carbonated or non-carbonated drinks have reached the mature market; CocaCola Co. has to develop strategies in order to remain in the strong competitive market.

Need and Significance

Coca-Cola Company had difficult challenges in India and was not treated similarly to the local
businesses. Coca-Cola faults and wrongdoings are documented and approved, which obliged the
company to react according to international norms and business ethics. Coca-Colas values call
for a leadership that have the courage to shape a better future and an integrity to be real
(Our Company, 2009). Coca-Cola Company had a leadership challenge when one of its
employees filed a suit accusing Coca-Cola of inflating Burger Kings study in 2002 (Polk, 2008).
The results of the study were exaggerated to show higher profits from soft drink test. Coca-Cola
fired several executives and paid $21 million to Burger King (Polk, 2008).

Coca-Cola Company had situations in India that clearly

contradict with its mission and values. These situations require the right leadership to
acknowledge them, responsibly act to correct the wrongdoings and set up measures to prevent its
reoccurrence. The study will produce a set of recommendations to achieve the above requirement
and recommend that Coca-Cola either pay to remedy the damages or recuperate the harm done in
India.
Committed customers would forgive the seller if the mistakes or harm are minor but the same
committed customers would be increasingly dissatisfied if the level of perceived wrongdoing
increases (Ingram, Skinner, & Taylor, 2005). Regular customer would not tolerate wrongdoing
and will not forgive the sellers for mistakes although they committed with the good intention.
Customers may retaliate by boycotting the seller or organize an offensive campaign to state their
objection (Baxter, 2007). One of the best customer disobedience examples started in the 1960s
like dolphin killing by tuna fisherman, unethical treatment of animals and the anti-fur campaigns
(Baxter, 2007). Most of these campaigns are still holding strong and have large and effective
base of supporters. Ingram, Skinner and Taylor (2005) recommend that sellers like Coca-Cola

should have a contingency plan in case unintentional wrongdoing take place to recover from the
impact of the situation

Literature review
1. Marketing Plan: Coca-Cola in 2015
By-Matt Curd
Purpose:
In brief the purpose is to market a new innovative beverage packaging for Coca-Cola. The
packaging has been designed around the brief consider the creation of a new concept form of
beverage packaging container for 2015. Today, Coca-Cola is an internationally recognized soft
drinks company with ambitious plans to further grow the brand. The company owns the majority
of the soft drinks available in coolers and in vending machines in the western world. Some of
these brands include, Coca-Cola and sub brands, Dr Pepper, Fanta, Sprite, Oasis and PowerAde.
A full list of Coca-Colas affiliated brands can be found on their corporate website.
The 2005 Annual Report states the company sells beverage products in more than 312 countries
or territories. The international presence of Coca-Cola is phenomenal and its logo, advertising
and colours are among the most recognized in the world.

Conclusion:
The marketing strategy for Coca-Colas new product will come into place in 2015, based on
trends emerging now this plan has identified the carbonated drinks market has probably peeked
and likely to be overtaken by healthier drinks as the market leader in the soft drinks market.
Researching Coca-Colas product range has identified the Diet Coke range as the most likely,
with marketing pull to still succeed in the future. The diet coke range has combats health
concerns which are found in the Coca-Cola flagship product.
Coca-Cola is all about buying into a lifestyle, and the new lifestyle in 2015 will much more
health conscious. In this report I have shown reason for Coke to tie themselves up with sports
sponsorship to promote a brand image of health and fitness.
The new beverage vessel is refillable in the hope of reducing pressure on landfill and showing
coke as being a global and socially responsible company. The beverage container is styled to
appear an essential for an active, fit lifestyle.

2. Peter Drucker, 2004 stated

Coca-Cola is a non-alcoholic drink that is marketed as a joyful and refreshing drink for all age
groups. Coca-Cola Companys mission statement is to refresh the world, inspire moments of
optimism and create value (Our Company, 2009). Coca-Colas values include leadership,
collaborations, integrity and accountability but Coca-Colas practices have serious implications
that contradict its values. Prospect theory gives marketers the chance to use the customers riskaverse behavior to steer their decision toward a profitable choice for the company. Company
practices are legal and ethical because the choice was made by the customers who build it on
their internal risk-averse behavior (Novemsky & Kahneman, 2005).
Coca-Cola Company has more than 400 non-alcoholic beverages that include Coke, with
distribution and bottling operations in 200 countries (Holcomb, 2008). Coca-Cola brand strength
is supported by its worldwide distribution and availability (Peter & Donnelly, 2006). Coke is the
most famous soft drink produced by Coca-Cola Company and is consumed around the world.
Coca-Cola Company stated that their products are tested using European standards and did not
break any laws in India. However, Coke was found containing pesticides 24 times higher than
the European standard by an Indian laboratory, which Coca-Cola discredit (Burnett & Welford,
2007). The Indian bottling plants consume large quantities of water, which is much needed by the
farmers especially during seasonal droughts (Burnett & Welford, 2007).

The principle let the buyer beware is opposite to the

relationship marketing principle in which the seller seeks long-lasting relationship with the
customer. The relationship is maintained by stating the facts and giving the necessary
information to the customer. Relationship marketing takes part of the risk to prevent any risk that
the buyer may encounter from the selling and buying experience. The relationship marketing
strategies are concerned with the development and enhancement of relationships with a number
of key markets (imberov, 2007, p. 207). Marketers should not subscribe to the caveat emptor
principal because it makes the relationship between the seller and the buyer deteriorate. Inks,
Avila and Chapman (2004) found that buyers are more ethically sensitive to unethical behavior.
Buyers have stronger negative reaction to lying when this lying was from the seller; however, the
buyers were less sensitive to their deceit (lying) because they justify it with the resulting low
price.
Companies seek customers commitment by deferent means; however customer commitment can
result from satisfying the customer by offering him or her good product or service in exchange
for his or her money. Satisfaction comes from product quality and service quality, which is

supported by price fairness (Worrall, Parkes & Cooper, 2004). Polk (2008) state that managers
should be accountable for the companys innovations and the change it leads to successfully.
Managers should abandon old ideas when they become a threat to the organization but learn that
failures are opportunities to learn. Peter Drucker stated that the organizations profit is necessary
to supply capital for future innovation and expansion (Drucker, 2004).

3. Tony Proctor (2000)

In today's consumer society, a company has to have a marketing strategy effective enough to
encompass all aspects of the market and implement it effectively before it can envision success
and achieve its goal. According to Tony Proctor (2000) "A strategy is a plan that integrates an
organization's major goals, policies, decisions and sequences of action into a cohesive whole. It
can apply at all levels in an organization and pertain to any of the functional areas of
management." An organization can have various kinds of production, financial, marketing or
human resources strategies to aid it in achieving its objectives. A strategy is measured by its
effectiveness rather than its efficiency in processing the environment and designing plans to fit
between the organization, its resources and objectives within the environment it operate. More
specifically a marketing strategy is a plan to satisfy customers' wants and needs, and in the
process facilitate the achievement of organizational goals. An effective marketing strategy would
be one that finds different ways to satisfy the customers that its competitors cannot (Proctor
2000).
In today's competitive beverage industry marketing strategy is not as simple as the above
concepts since competition does not merely involve positioning products in the customer's minds
but rather how it is perceived, emotionally entangled and associated with the customers' lives. A
marketing strategy is more complex than simply inducing the customers to buy the product.
Instead for a beverage company a marketing strategy may include but not limited to
environmental factors such as:
1.
2.
3.
4.
5.

The opening and closing of strategic windows

The impact of market drivers
The nature of competition in the market place
The stage of the market or industry life cycle.
The assets and skills that a firm possesses or can readily acquire/access. (Proctor 2000)

Thus for PepsiCo, a strategic window helps it determine when its products would be accepted in
the market and when to launch it and enable it to anticipate the magnitude of its returns if it
decides to launch fruit juice products, fast food or breakfast cereal. Similarly, market drivers
such as technological change, latest social trends as well as economic status of its customers will
classify its marketing strategy to be a success or failure. With Coca-Cola being its arch rival
followed by Cadbury Schweppes, PepsiCo always need to anticipate the changing nature of
competition and the market place. The latest being emergence of health conscious consumption
trend. In this regard PepsiCo has always been ahead of its competitor in evolving and
anticipating its customer's preference on time. This has proved critical in PepsiCo's strategy and
sustained it at the top as it realizes the mature nature of it industry life cycle which does not offer

much room for the company to evolve. The only alternative is to evolve and innovate through
new products, which PepsiCo does effectively (Corporate Overview 2005)

4. Michael Porter (1980)

According to Michael Porter (1980) Developing a competitive strategy is developing a broad
formula for how a business is going to compete, what its goals should be and what points will be
needed to carry out those goals (Porter 1980, p. xvi). After having analyzed the competitive
environment and its elements, the organization must consider selection of its product market to
operate and invest which would reflect on its investment strategies. Strategies then have to be
developed and implemented as part of the business management process rather than isolated
departmental strategies (Proctor 2000).
For mature firms like PepsiCo, merely establishing a marketing strategy is not enough. Instead, it
should evolve and engage in growth strategies which would help it to expand its market as well
as diversify its products and scope. Using the Ansoff Matrix (Proctor 2000), one can increase
sales of existing products and at the same time maintain current margins on profitable sales by
expanding the nominal outlays of the marketing expenditure and getting the first time users to
buy the product. Eventually, the same consumers can be induced to increase the frequency of use
of the product by promoting new applications of the existing products. As one can see from the
diagram below the Ansoff Matrix enables marketing strategists to penetrate new markets or
expand into existing ones through market development, diversification and product development
strategies.

Objectives of study

To study the promotional policies of the beverage companies on the outlets lying at various
highways.

To study the market share of beverages companies on outlets at various highways.

Hypothesis
1. Coca cola is adopting significantly more aggressive marketing policies than other beverages
companies.
2. Visibility of various soft drinks at outlets lying at various highways suggests that coca cola is
the leader in terms of market share.

Organization of study:
Coca-Cola Enterprises Inc. (CCE) is the worlds largest marketer, distributor and producer of
products manufactured by The Coca-Cola Company. In 2006, CCE achieved total revenue of
$19.8 billion, distributing 42 billion bottles and cans, 19 percent of The Coca-Cola Companys
volume worldwide. Operating in 46 states, Canada and portions of Europe, CCE employs 74,000
people who operate 444 facilities, 55,000 vehicles and 2.4 million vending machines, beverage
dispensers and coolers.

References:
Websites Used:

www.google.com
www.wikipedia.org
www.coca-colacompany.com