coca-cola final yasin

7/30/2019 Coca-cola FINAL Yasin

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GROUP NAME:

4 STARS

GROUP MEMBERS:

1. Mohammad Yasin ( Leader )2. Muneeb Ahmed3. Adnan Malik4. Hassan Ijaz

PRESENTED TO:Mr. Nasir

Chatha


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Coca Cola Beverages Pakistan limited

ACKNOWLEDGMENTS

I would take this opportunity to thank Mr. Nasir Chatha, ourteacher for the course of Principles of Marketing at the SuperiorCollege Of Accountancy Lahore, for her valuable support andencouragement which she has offered. Her words of wisdom will

SUPERIOR COLLEGE OF ACCOUNTANCY 2


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always be remembered, and I am convinced that the knowledge ofmarketing that she has imparted would go a long way in making goodmarketers and helping us all through our professional career.This report cannot be solely attributed to my effort but it is indeed the

joint effort of many friends and well-wishers. There were times in thecourse of preparing this report when things were tough and the futureseemed dark. It could not have been possible to write it, without theimmense help of a few individuals to whom I would like to offer mygratitude.

In particular I would like to thank Mr. Frederick Gill (Regional salesManager,) of Coca Cola Corporation for his immense contributiontowards this project and Mr. Adeem Rana (Human ResourcesManager Lahore). Without their cooperation and the amount of timethey gave me, this project would not have existed.

Thanks a lot!

PRODUCT NAME

COCA-COLA

HISTORY



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John Styth Pemberton first introduced the refreshingtaste ofCOCA-COLA PHARMACIST concocted a caramel-colored syrup in a three-legged brass kettle in hisbackyard. He first "distributed" the new product bycarrying COCA-COLA in a jug down the street to JacobsPharmacy. For five cents, consumers could enjoy a glass of

COCA-COLA at the soda fountain. Whether by design oraccident, carbonated water was teamed with the newsyrup, producing a drink that was proclaimed "Deliciousand Refreshing."


The first glass ofCOCA-COLA was served in1886 to the customers of"Jacobs' Pharmacy" in

Atlanta. The drink wasn'tbottled yet, but it wasmade out of a thicksyrup, mixed withcarbonated water.


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Soft drinks just became popular that time, they were developed bychemists, who continually tried to invent new products. Besidesmedicines and other chemical products, they also experimented withsoft drinks, which were sold at a bar. In summertime, it becomes veryhot in the south of the USA. The soft drink-salesman who owned a

"soda fountain" in a pharmacy, made a good living. "Doc" Pembertonnever had an idea of the success of the syrup he made. He died in1888 after he sold his share ofCOCA-COLA.

When the syrup made by Pemberton appeared to be liked by the

customers of the local soda-fountains, he decided to produce and sellit.

Dr. Pemberton's partner and bookkeeper, Frank M. Robinson,suggested the name and penned "COCA-COLA" in the unique flowingscript that is famous worldwide today. Mr. Robinson thought "the twoC's would look well in advertising." This name and way of writing ismost likely one of the secrets for the success of this soft drink.Robinson took the two ingredients coca and kola, because he liked thealliteration, and changed the K of Kola into a C.

Then he connected the two words with a little dash. In his owngraceful handwriting he wrote down the new name. How could he everhave expected that this way he wrote down the best known trademarkin the world... From the beginning, the color red dominated the logo,supported by the colors green and yellow. The famous waving ribbonwas added in 1970 to underline COCA-COLA's image as an alwaysyoung, dynamic, popular and international drink.

In 1886, sales ofCOCA-COLA averaged nine drinks per day.That first year, Dr. Pemberton sold25 gallons of syrup, shipped in bright red wooden kegs. Red has been adistinctive color associated with the No. 1 soft drink brand ever since.For his efforts, Dr. Pemberton grossed $50 and spent $73.96 onadvertising.



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First bottler ofCOCA-COLA. In the summer of 1894, JosephBiedenharn, a 28 year-old candy merchant from Mississippi, offeredthe first bottle of " COCA-COLA." It was originally sold at just soda

fountains. The first type of bottle "Coke" came in was the Hutchinsonstopper-type glass bottle that utilized an iron stopper and rubberwasher. Joseph Biedenharn, the first bottler, originally used this type ofbottle "COCA-COLA" was usually written in script or block print in theglass front. The latest type of bottle used is known today as the"hobbleskirt" or contour bottle. The bottle was invented specifically for" COCA-COLA" by the Chapman Root Glass Company in Indiana. Theymodeled the bottle after a cocoa bean. The bottle was first patented onNovember 16, 1915, and renewed on December 25, 1923. The actualshape of the bottle was patented in 1960.

COCA-COLA and the WWII. General Eisenhower sent a telegramrequesting 10 " COCA-COLA" bottling plants for the troops overseason June 29, 1943. At the beginning of the war, Robert Woodruff,president of The COCA-COLA Company, issued an order to "see to itthat every man in uniform gets a bottle ofCOCA-COLA for five centswherever he is and whatever it costs the Company." At the outbreak ofWWII, "COCA-COLA" was bottled in 44 countries. At the close of thewar, 64 additional bottling plants had been shipped abroad to be as

close as possible to combat areas in Europe and the Pacific. Thepresence of "COCA-COLA" did more than lift the morale of the troops.In many areas, it gave local people in those countries their first taste of"Coke" and paved the way for unprecedented worldwide growth for"COCA-COLA" after the war. More than five billion bottles of "COCA-COLA " were consumed by military personnel during World War II.When WWII began, The COCA-COLA Company's use of sugar in themanufacturing of syrup for civilian consumption was restricted to 50%of its prewar average due to rationing. The rationing ended in August,1947.

Mr. COCA-COLA, Robert Woodruff...For over 60 years Robert Woodruff was the leading man at The COCA-COLA Company. Under his inspiring leadership, the sale ofCOCA-COLA increased from 6 million glasses in 1923, to 50 million glassesworldwide a day. (in 1994, The COCA-COLA Company sold 773 millionglasses of soft drink a day, Fanta, Sprite, etc. included..)



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He thought it his task to enable everyone in the world who was thirstyto enjoy a glass ofCOCA-COLA. A goal he almost completelyachieved.

INTRODUCTION

COCA-COLA originated as a soda fountain beverage in 1886selling for five cents a glass. Early growth was impressive, but it wasonly when a strong bottling system developed that COCA-COLAbecame the world-famous brand it is today.As a part of its drive to enhance the quality, availability, and image ofCOCA-COLA products, The COCA-COLA Company established a newCompany in Pakistan in 1996, by the name of COCA-COLA BeveragesPakistan Limited (CCBPL or Company).CCBPL is a part ofCOCA-COLA Iecek which is sixth largest KO bottler

in the World. It has a presence in ten countries including Turkey,Kazakhstan, Kyrgyzstan, Azerbaijan, Jordan, Iraq, Turkmenistan,Tajikistan, Syria, and Pakistan. CCI has 48% shares of CCBPL withManagement Control.

CCBPL started the process of acquiring and investing in locallyfranchised bottling operations. This process was completed in 2006and, thereafter, all manufacturing and selling rights ofCOCA-COLAproducts are now with CCBPL.

CCBPL has 6 plants and 13 warehouses throughout the countryand serves a population of more than 170 million with a productioncapacity of 111 million physical cases. CCBPL is a significant player in

the growth of Pakistans economy since it is one of the countrys topforeign direct investments in FMCG (Fast Moving Consumer Goods)business and is one of the major tax paying beverages companies ofPakistan.

OUR VISION

To become a market leader, in ready to drink segment whileadding best-in-class value to all stakeholders.

OUR MISSION

COCA-COLA Pakistan exists to refresh the consumers, inspiremoments of optimism through our brands and actions as well asbenefit all stakeholders, which we will do with highest socialresponsibility and with uncompromising commitment towards qualityof our products and integrity in our operations

OUR VALUES



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Our Core Values underlie everything we do. We live by them for

two reasons; they are good and right in themselves, worthy ofadherence even at the risk of loss of profit-making opportunities, andthey epitomize our Companys integrity, which we believe will produce

value for our stakeholders over the long term Accountability: We act with high sense of responsibility and hold

ourselves acountable. Passion: We put our hearts and mind into what we do. Integrity: We are open, honest, ethical and we trust and respect

each other

Teamwork: We collaborate for our collective success.

Leadership: The courage to shape a better future

Collaboration: Leverage collective genius.

Diversity: As inclusive as our brands.

OBJECTIVE

A firms distribution objectives will ultimately be highly relatedsome will enhance each other while others will compete. For example,as we have discussed, more exclusive and higher service distributionwill generally entail less intensity and lesser reach. Cost has to betraded off against speed of delivery and intensity (it is much moreexpensive to have a product available in convenience stores than insupermarkets).

COMPETITORS

The main competitors ofCOCA-COLA are Pepsi, thunder cola,gourmet cola, and ammar cola.

People

People are our most important asset and the source of our

competitive advantage. We operate in teams where we expect andreward responsible risk-taking.

ENVIRONMENT

The environmental factors affecting Coca Cola can be divided into:

THE GENERAL ENVIRONMENT

http://www.coca-colacompany.com/our-company/suppliers/brand-collaborationhttp://www.coca-colacompany.com/stories/diversity-education-traininghttp://www.coca-colacompany.com/brands/allhttp://www.coca-colacompany.com/stories/diversity-education-traininghttp://www.coca-colacompany.com/brands/allhttp://www.coca-colacompany.com/our-company/suppliers/brand-collaboration


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The Coca Cola Beverages Pakistan limited has a very strongpotential in the future as Pakistani population is increasing and there isa shift in the consumer perception of its conservatism and the stigma,which was attached to it as an American product, is losing its effect.

Increase in the level of inflation is a major concern for the company asthe purchasing power of the people is eroding day by day. As there isan increase in the dual career families and women has started workingin the offices with a great enthusiasm so it can be a capitalizing pointfor the company. The legal/political environment does have mucheffect on this company. As there has been a continuous change in thegovernments and the policies related to the duties and taxation so it isrelatively less immune to changes in this sectors of the environment.

THE TASK ENVIRONMENT

As Coca-Cola has acquired 6 more plants in the country fromtheir franchisees so it will increase their share as they are having moreprofessional people in their management. The consumers of CCBPL arepeople from all the cultures and all the level of incomes. It is acompany who is distributing its products to the masses. Apart from thisthey have some exclusive customers who are categorized as industrialcustomers these are: KFC, PIA, Pearl Continental, Sheraton, etc. Withthe acquisition of the new plants they have hired MBAs just to increase

the level of professionalism.Their major competitors are Pepsi, RC cola, and some local

products, which are manufactured in the cottages. Apart from thesethey consider all the thirst quenching products as their indirectcompetitors like Nestle, Haleeb, Milo etc. As for as suppliers areconcerned they import their raw materials from the parent company.

QUALITY

What we do, we do well.

PRODUCTS

Coca cola Beverages Pakistan has a very narrow product range. It hasthe following brands in Pakistan.



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Coca Cola Sprite FantaKinley Water

These products are sold in the market in different sizes of bottles.These sizes are available for all its products.

250ml250 ml (Non Returnable)300ml500ml ( water & drinks non returnable)1 liter1.5 liter pet

REASON OF CHOOSING THIS PRODUCT

Having long been overlooked by weary Western food and drinkinvestors, the notion of Africa as a consumer play has beenstrengthened by the global financial crisis. Erstwhile growth engineslike emerging Europe have been knocked down forcing investors tolook elsewhere for growth. COCA-COLA has long bucked thisembedded weariness having cracked the African consumer market in away that arguably no other FMCG brand has come closing to matching.



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Making its drinks affordable (prices rarely track inflation growth)to the masses and taking on a significant responsibility in routing itsproducts to the market (strong truck fleets and innovativedistributional and marketing techniques abound), COCA-COLA hasshown that it is possible to generate significant volume scale.

Soft drinks serve equally adeptly as affordable luxuries andessential thirst quenches. Often more affordable than bottled water(tap water is not safe) and crucially chilled, carbonated drinks arewidely established.COCA-COLA is the undisputed soft drinks leader across Africa, easilybeating out the core Pepsi Carbonate substitutes.

Per capita soft drinks consumption will continue to grow rapidlyin line with greater investment and rising incomes. According to thepresident ofCOCA-COLA's South African unit, William Elbe, Africa's

proportional contribution to group revenue is expected to double fromabout 6-7% over the next decade.The regional outlook for soft drinks could be strengthened even furtherif some governments remove excise levies on soft drinks bearing inmind how price sensitive consumers are (some countries levy exciseswhile others do not).

THE CORPORATE OBJECTIVES

COCA-COLA VISION STATEMENT

We will become the best and the biggest anchor bottler in the world

CCBPL has a very flat hierarchy, consisting of just three layers. Thus,the top management handles most of the goals setting and planningactivities.

The objectives of this company can be classified as:

STRATEGIC GOALS

The strategic goals are considered when company is thinking ofthe long-term objectives but at coca cola strategic objectives and goalsare set up for three years. These strategic goals are decide by the top



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management with consultation by the parent company head quarteredat Singapore. However, they are reviewed every year in the annualmeeting to make sure that they are in line with the changingenvironment. They are:

1. To continue to be an organization providing the quality productsto the valuable customers.2. To select and retain the professional people for the organization.3. To project an outstanding corporate image.4. To satisfy the customer through extra ordinary service and an

excellent service along with the complete tactical andoperational support.

TACTICAL GOALS

The top management of the company on an annual basis devises

these goals together with the consultation of the lower levelemployees. Then each departmental director is given these annualtasks that then subdivide it on the quarterly or monthly basis to have aproper check to ensure that these objectives are achieved, mainlythrough marketing, is the job of the director of each division. For thisyear, these goals are:

1. To increase the revenues by 20% as compared to last year.2. To increase the total retail customers by around 10%.3. To increase the market share by 5%.4. To reactivate the discontinued customers by 30%.

OPERATIONAL GOALS

Operational goals are decided by the top management inconsultation with the lower level employees. They are following theconcept of management by objectives (MBO). Each employee is

assigned its goals and is told what is expected of him and then he isevaluated on the basis of certain rules and regulations followed evenlyby the company.For example: a sales man is given following tasks, duties and certaintargets: Each salesman has to oversee around 100-125 outlets. Thefrequency of visits to each outlet depends upon the sales of thatparticular outlet. Normally, a salesman has to visit a single outlet thrice



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a week i.e. every alternate day. This means that a salesman visits atleast 20-30 outlets per day.

The salesman has three basic functions to perform.

To find new customers,To retain existing ones,To bring back the discontinued accounts.

Each salesman has to bring in at least three new accounts everymonth. These may either be new customers or the reactivation of thediscontinued accounts.Sales manager is made responsible for the performance andachievement of operational goals and is assigned to set certainmilestones for the salesman so as to give him proper feedback, whichdefinitely helps the salesman achievement of the above-mentioned

goals.

Mr. COCA-COLA, Robert Woodruff...For over 60 years Robert Woodruff was the leading man at The COCA-COLA Company. Under his inspiring leadership, the sale ofCOCA-COLA increased from 6 million glasses in 1923, to 50 million glassesworldwide a day. (in 1994, The COCA-COLA Company sold 773 millionglasses of soft drink a day, Fanta, Sprite, etc. included..)He thought it his task to enable everyone in the world who was thirstyto enjoy a glass ofCOCA-COLA. A goal he almost completely

achieved.

Executive Summary

For the past century COCA-COLA has had the distinct privilegeof operating as one of the premier organizations of the beveragesindustry. Through consistent market re-alignment, COCA-COLA hasconsistently found solutions to bridge and mitigate the gap betweenthat which consumers yearn for and those things that are readilyavailable to them. Having found a way to fill this void, COCA-COLA hasmanaged to position its brand amongst those few elite who hold aspecial impenetrable bond with their consumers. This is evidencedthrough their higher market share. Inherent in all products andservices is the concept of birth, growth, maturation and eventualdemise. However

organizations often times create and launch new products and/orservices that ensure the organizations long term viability in the



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market place, as such COCA-COLA Company has taken the decision tocreate, launch and establish a new brand known as loca lime. Thepurpose for diversification is to ensure consumer relevancy and thenever ending pursuit of achieving growth targets. Loca lime embodiesthe re-birth marketing strategy for COCA-COLA in the following ways:

To formulate and construct an image that associates loca lime with ahealthier , more positive way of life.

To use the residual benefits of loca lime (i.e. health factor,sports/athletes) to expandand broaden COCA-COLAs brand recognition.

Coca cola Company can make use of a first movers advantage bybeing the first company among its competing firms to launch a newproduct line with a special emphasis on health. The SWOT analysis of

the COCA-COLA Company and its current market situation aredescribed in detail in this report, moreover in this report the marketingstrategy required to successfully launch the new product is extensivelydiscussed. The goals of launching the new product and the issues thatthe company might face in achieving its set out targets are alsodiscussed. Additionally the exact method in which the company will goabout launching and monitoring the product is also deliberated upon.Furthermore this report includes the focus on the cost side and theside that deals with price setting as well, along with this the companysshort and long term objectives regarding the revenue generation fromthe product are also discoursed. Hence we can see a thoroughly laid

out plan in this report which will be used by the COCA-COLA Companyto market the launch of the juice Loca Lime a success

CURRENT MARKET SITUATION

COCA-COLA Enterprises was established in 1986. Each of itsfranchises has a strong heritage in the traditions ofCOCA-COLA thatis the basis for this Company. In 1986, The COCA-COLA Companymerged some of its company-owned operations with two largeownership groups that were for sale, the John T. Lupton franchises andBCI Holding Corporation's bottling holdings, to form COCA-COLA



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Enterprises Inc. In December 1991, a merger between COCA-COLAEnterprises and the Johnston COCA-COLA Bottling Group, Inc.(Johnston) created a larger, stronger company, again helpingaccelerate bottler consolidation. As part of the merger, the seniormanagement team of

Johnston assumed responsibility for managing the Company, andbegan a dramatic, successful restructuring in 1992.

The COCA-COLA Company now offers more than 400 brands innearly 312 countries. 1n1950, the Company started its operations inPakistan, and by 1996 was taking over the operations itself by settingup its first production plant in Pakistan, providing employment to morethan 6000 people. The Coca Cola Company is one of the largestmanufacturers, distributors and marketers of non-alcoholic beverage

concentrates and syrups in the world and has the brand equityof approximately 48 to 50 billion US dollars. The Coca Cola CompanyPakistan is about to enter the fruit juice marketing Pakistan mainlydominated by Nestle which holds the highest share inthe juice market.The processed food and beverages industry is considered to be one ofthe largest industrial sectors and accounts for approximately 27% oftotal production and 16% of total employment in the manufacturingsector. The total value of production is over Rs.46billion. The Companywill launch a fruit juice under the name Loca Lime which is a lemonflavoured juice. The decision to make a lemon flavoured juice wasmade after a market research that showed the preference of people for

the lemon taste.

MARKET REVIEW

Being the largest company in the soft drink industry, Coca Colaenjoys the highest market share and controls about 59% of the worldmarket. The target market for COCA-COLA is all consumersworldwide. Cokes commercials basically focus on youngergenerations, because they want to represent Coke with the youth andenergy but they also consider older people which they then take as aco-market. According to the COCA-COLA Company COCA-COLA is the

beverage that provides deep-down refreshment for the mind, body andspirit because only ice-cold COCA-COLA makes a moment morespecial by combining the unique COCA-COLA sensation with whatsreal and genuine providing a source of enjoyment in everyday life.

COCA-COLA consumers can choose between the products thatcan be divided into soft drinks, juices, sports drinks and mineral water.The market of the company is geographically vast and it is being



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controlled with enormous success. Carbonated soft drinks are thelargest growth segment within the non-alcoholic ready-to-drinkbeverage category measured by volume, which is why Coca Cola isfocusing on expanding its product portfolio because that is the key tofuture success. The financial health and success of Coca Colas bottling

partners is a critical component of Coca Colas ability to build anddeliver leading brands.

The Asian market encompasses approximately 3.2 billioncustomers, and on average they enjoy two servings of their productseach month. Through an intense focus on innovation anddiversification, COCA-COLA has achieved significant volume growth inthe past years. In addition to maintaining the popularity of the corebrands the COCA-COLA Company is building an exciting portfolio ofbeverage brands in Asia. Among the Asian countries, Japan has thehighest percentage of around42% followed closely by

Pakistan, India and Bangladesh where the average consumptionexceeds day by day. COCA-COLA has a 35% market share in Pakistanwhile its competitor Pepsi dominates with 65%

COMPETITIVE REVIEW

COCA-COLAs major competitor is Pepsi Co. that occupies 60% of thePakistani soft-drink market. In Pakistan, Pepsi started their operationsin 1970 by establishing their regional office in Lahore which monitors

all the operations carried out in South West Asia. They currently have aproduct portfolio that competes with COCA-COLA on every level. Theproducts of Pepsi sold throughout Pakistan include:

1. Pepsi2. Miranda3. 7UP4. Mountain Dew5.Aquafina between Pepsi and COCA-COLA,

The majority of the market targeted doesnt care what they are goingto have. In other words, they dont care whether its Pepsi or Coke. Sothe major difference between the market shares can be associatedmainly with the availability of the soft drinks in the market. In theabsence ofCOCA-COLA, Pepsi will be purchased more and vice versa.For this reason COCA-COLA has provided its own coolers and freezersin the market to the retailers in order to maximise their sales.Moreover, they provide infrastructure free of cost so that COCA-COLA



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can be chilled prior to purchase. Their salesmen and mechanics alsovisit regularly in order to make sure that the infrastructure is in properconditionThreats posed by Pepsi are also price-related. When the price goesbeyond a certain level it effects the consumption of the soft drinks. At

higher prices, consumers are more likely to substitute Pepsi with Cokeand vice versa. In short, it can all be traced down to customersperception. In the last two years, when Pepsi has been dominating themarket, COCA-COLA has made an aggressive comeback mainly bybrand differentiation, effective advertising and attractive brandinitiatives .Moreover, COCA-COLA is an Us brand because theybelieve in togetherness; people as well as communities, and this is thenature they target in Pakistan. Pepsi on the other hand is a Me brandas they emphasise of personal development and individual strugglewhich is clearly emphasised through their advertising. All through the1950s to date ,COCA-COLA occupied a very dominant position in the

soft-drink market, however slowly over the passage of time Pepsi hadrisen up to go into competition head-to-head by discounts in thedistribution outlets, targeting younger consumers with PepsiGeneration, motivating its bottlers and competing on package sizeand advertising.

MACRO ENVIRONMENT OF PEPSI AND COKE

DEMOGRAPHIC FORCESAge: The potential customers of Coke and Pepsi would be of age

group of 14-30 years. Income: As for the income levels, Coke and Pepsitarget customers from the middle class to the upper class.

ECONOMIC FORCES

When the economy is in recession, the real incomes fall and theexpenses are high so the consumers move towards the product thatthey can afford. During this time, the pricing strategies of Pepsi and

Coke would have a very major influence on the overall sales volume

NATURAL FORCES

During a natural disaster, like an earthquake for instance, themarket sor suppliers might encounter shortages in the supply whichwill affect the sales of soft-drinks.



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TECHNOLOGICAL FORCES

There is a huge amount of investment coming from thegovernment to develop the infrastructure and to exploit the marketopportunities to create new products in order to revive the market that

might have reached the maturity level. This will majorly affect thesales of the soft-drinks as a greater product portfolio will definitelymean a larger customer base and subsequently higher revenues.

POLITICAL AND LEGAL

Pakistan has a comparatively unstable political & legal environment,and as a result foreign investors are skeptical about investing overhere, however due to the presence of such a huge market for bothCOCA-COLA and Pepsi they have continued expanding their areaof operation in Pakistan. Moreover, the investment is crucial for the

sound health of the economy so the Pakistani government makes aregular effort to improve business and trade relations with US and Asia.

CULTURAL FORCES

Every country has a different culture. In Pakistan, due to the IslamicCultural values people prefer to use products made from Healingresidents. As a result, Coke and Pepsi have to be vigilant to use onlythe ingredients acceptable in an Islamic country in order to avoid badpublicity and controversies.

PRODUCT REVIEW

PRODUCT

The new product set for launch is essentially a refreshing, fresh lemonjuice drink under the added brand Local Lime. It is differentiatedagainst the market in that it is a non-carbonated drink. It is to bepackaged in both 250mlglass returnable bottles and 500ml, as wellas1.5litre plastic disposable bottles. This is in keeping with industrystandards.

The design of the bottle is unique and focused on the Go Greenroutine, which dictates Coca Cola manufacture and make publicpackaged bottles that are in tune with the environmentally friendlytheme. Recently, a local Japanese Coca Cola franchise had reinvented



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its operational entity through the introduction of a new brand: ILOHAS.

Following the aforementioned example, loco Lime is to be packagedin ultra-light, crushable plastic bottling mechanism that gives the

advantage of a 40% lighter bottle as compared to the industrystandard PET packaging. This added feature in loco Limes brandmanagement encourages consumers to recycle and contribute to CocaCola Companys global Environmental Sustainability Program.Additionally, the label size has been reduced so as to cost-save inmaterials. Moreover, the water is sourced from regions close to themanufacturing plant in order to further reduce CO2 emissions causedin the transportation process. It is important for loco Lime to be brandaligned with Coca Colas global initiatives, as the nature of the productis health-conscious and family-friendly. As such, loco Lime will take aconscious course of action to steer clear of labels such as processed

and synthesized. Closely interacting with Corporate SocialResponsibility services such as the a fore mention Edensors locoLimes brand positioning will be one that agrees with all ages,especially the youth.

PRICE

The basis for Coca Colas pricing strategy is pre-existing industrybenchmarks. This would entail glass bottles retailing for 20rs with thecondition of return upon use. As far as targeting of green consumers isconcerned, there would be a 10rs markup on the 500ml bottle as

production of environmentally friendly plastic bottles incurs value-added costs. As a result, 500ml bottles would retail at 45rs. Such apricing scheme is based on the very Japanese COCA-COLA franchisethat endorsed crushable and recyclable plastic bottles. Undoubtedly,inflated prices are a detriment to the overall sales volume of LocaLime however, through an intense and carefully channeled marketingmessage, the price of the juice will be compensated for due to itsadded benefits (i.e. health benefits, the drink for the athlete). For thesereasons, the element of promotion will be crucial to the success ofLoca Lime.

DISTRIBUTION

Coca-Cola Company has the distinct privilege of boasting a highlysophisticated, world-renowned supply chain system established overdecades. It is significant to note that

Coca Cola has come to achieve such an incredibly well-integratedoperations system through constant major restructuring, as well as the



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more subtle tweaks required to create an almost self-sufficientproducing machine. Whilst Coca-Colas organizational capabilities allowfor it to launch a nation-wide release of Loca Lime, it is wise toobserve some amount of sensibility and austerity. In light of this, LocaLime will initially commence distribution in the three major cities of

Pakistan; Islamabad, Lahore and Karachi. The metropolitan nature ofthese cities is an acid test in itself as far as durable goods areconcerned ationale dictates that for a product or service to catch onand create a niche for itself as a competitor for longstanding, well-established companies, it must become a trend in Lahore. Secondly,for a product or services business sense to be truly tested, it mustpass the examination that is Karachis scrutiny. Finally, a brand is onlysaid to be self-sufficient and established if it is consistently earningprofits in Islamabad. However unorthodox the logic, Coca-Colasphilosophy on the geographies of brand viability ensures that initialtest results are examined without having incurred heavy monetary

costs on the supply chain. Particular significance is given to the threemajor cities due to their diversity of demographics and the highsensitivity with which they correlate with their respectiveenvironments.

PROMOTION

Although Coca-Cola has observed certain cautiousness in terms of thescale of Loca Limes launch, the organization is committed toallocating funds in a more generous manner for the promotionalcampaign. The strategy involves three autonomous, con-currently

running promotional campaigns, all of which are to be pursued post-launch. Most significantly, Coca Cola, through celebrity endorsementssuch as Aisam-ul-Haq, will spontaneously capture video footage ofindividuals or groups of friends traveling around the city taggingbeaten down, unfinished and/or damaged neighborhoods of Pakistanwith Coca Cola themed designs. It is important to mention, for ourpurposes tagging denotes the creative expression of certainmarketing messages with the use of spray paints and worn-down,bland walls, buildings, fences, etc. Of equal importance is the factviewers would be unaware of the source of the video and as a result, ofany link with COCA-COLA Company. It is the organizations hope that

such videos would become viral on 22 the Internet through socialmedia websites such as Facebook, Twitter, Youtube, etc. The end goalis for the act of tagging to become a trend/fad for the youngergeneration and eventually have this demographic, through their ownwill and initiative; take to the streets to express themselves in theirown unique and creative way.



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Hopefully, with a bit of luck, their messages will have something to dowith Coca-Cola. The promotion is tentatively titled Paint the TownRed. Simultaneously, Loca Lime will be pushed into the forefrontwith COCA-COLAs promotional campaign Into the Limelight. Thiscampaign will feature COCA-COLA traveling and sponsoring various

competitive events in educational institutions around Pakistan.Essentially, students would be encouraged to contest in competitionsthat would require them to use Loca

Limes crushable plastic to construct plastic sculptures. The emphasisonce again is placed on the direct correlation between the youngergeneration and the need for creative expression. Finally, immediatelyfollowing the launch of the brand, Loca Lime wooden stalls(reminiscent of stands set up in neighborhoods in American culture)would be set up at all major parks, schools, stadiums and such

landmarks for the purpose of distributing free testers. It would bepossibly beneficial to identify such a campaign with a social causerelevant to the target market of concern.

DISTRIBUTION REVIEWThe COCA-COLA Company offers their product in different bottle sizeswhich include:

1. SSRB Standard size returnable bottle.

2. LRB Liter returnable bottle

3. NRB No return Bottles

4. PET 1.5 - 1.5 Litre plastic bottles

5. Cans Tin pack 330 ml COCA-COLA products are also available indifferent packing1.24 regular bottle shell 2.4

6. Bottle pack for 1.5 pets3.12 bottles in a pack for disposablebottles4.24 cans in one pack COCA-COLA indulges in two types of

selling:

1. Direct Selling

2. Indirect Selling Direct SellingIn direct selling they supply their products in the shops by using

their own transport. In this type of selling the COCA-COLA Companyhas more profit margins. Indirect Selling In indirect selling the COCA-



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COLA Company has their whole-sellers and agencies to cover theareas that they wish to target. As it is literally impossible to supply theproducts to the consumer themselves due to the sheer volume of thedemand, hence the company under stands that marketing throughsuppliers is crucial for the availability ofCOCA-COLA products.

FINANCAIL ANALYSIS

Companies 2012 3Q results are slightly positive. Overall past 5 yearsshow stable revenue and Net income growth. If comparing3Q accumulative last 12 month results (2012 9 months+20114Q) with2011Y revenue has increased from 46,5 bn.$ to 47,6 bn.$ or +2,2%.Net income has increased from 8,6 bn.$ to 8,8 bn.$ or +2,7%. Thisgrowth is quite good if taking into account overall world economygrowth slowdown. Larger Revenue and Net Income growth at Y2011

was due to CCE bottling company acquisition. 2010Y financial resultshave 4,7 bn.$ Net income exuded for unusual items to have a betterview of companies generated usual income.

COCA-COLA main income is from its original North America. Therecompany sale almost 1/2. Since US economy is recovering furthergrowth can be expected. In 2010 companies acquired bottlingsegments has 2,2 bn.$ or ~18% of total group sales. In generalcompanies results are slightly positive.

North America44.5%

Pacific15.5%

Europe10%

Latin America9.6%

Eurasia & Africa12%

Bottling18%

Companies balance sheet has issues with equity level. Which hasdropped quite a lot from good 51% at Y2008 and Y2009 to only 38%now? Another issue is Return on equity. It is stable 27%. But knowingthat Equity level has decreased quite a lot that is a bad thing. Majordecrease was in Y2010, since then equity level has not improved dueto increased level of profit sharing with companies shareholdersthrough share repurchase and dividends. If at Y2008-2009 68-69% of



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Net Income was spent on Dividends then in 2010-2011 it increased to75% and 84% so company is basically paying out everything that itearns and not leaving a lot in the company, which is not good forcompanies long term growth. At first 9 month of Y2012 this level staysat high 80%. On the other hand its not over 100% like in some other

companies. At Y2010 company has acquired major bottler CCE with itsquite large amount of debts. Although this has increased companiesdiversification but its ratios has worsened. It would be nice to seecompany accumulating more equity and deceasing debt level to returninto stable balance sheet like it was at Y2009. In general companiesbalance structure is bit risky.

0

0.1

0.2

0.3

0.4

0.5

0.6

2008 2009 2010 2011 2012Q3

Return On Equ

Equity Level

Companies share book value is ~7,4$. Current market price is ~37$which shows that market is paying ~29,7$ more, or more than 15years of Net Income, which is 8,8 bn.$. This is quite a lot taking intoconsideration that companies balance structure is a bit risky. Share

profitability (Share market price/Net income before Depreciation) isonly 5,3% which is lower than average. The only risk lowering factor isstable sector consumer good production. In general share value isvery high.

0

0.5

1

1.5

2

2008 2009 2010 2011 2012Q3

Earning Per Share

Annual Dividends



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Company at the moment pays 1,02$/share annual dividends(0,255$/quarter) before tax or 2,7% investment yield, which isaverage. Payout ratio is around 50%, which is normal and wellbalanced cash flow management. 5 year analysis show stable EPS anddividend growth, which is good. Company can be treated as long term

stable growth stock. Investment is good for portfolio diversification butto pricey for heavier investment unless it would drop below 32$ or so.

SWOT ANALYSIS OF COCA COLA

STRENGTHS

STRONG MUTINATIONAL

COCA-COLA has a brand name that holds its own prestige in theworld market. The multinational entity of the COCA-COLA Pakistangives it an edge upon other competitors. The management of thisbeverage company comprises of one of the most professional people

and the strong financial firmness guarantees it a solid backing to sellits products.

BRAND NAME EMINENT

It is rated as the worlds number one cold drink and is famed forits internationally well-known brand name COCA-COLA.

QUALITY OF PRODUCTS

The product quality has improved due to upgraded quality of

packaging and the ameliorated liquid in comparison to its competitors.My personal experience is that the product quality and taste is farbetter than any product of its kind and also the improvement inpackaging and the commencement of plastic shells has received afavorable response from the dealers and the loaders.

REGULAR SUPPLY



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The regular supply of the products is another strength of thecompany. The products are regularly supplied to the dealers throughproficient means of delivering and distribution has given COCA-COLAPakistan an added advantage. Coke trucks supply the products

regularly and always have the desired products for the dealers.

AVAILABILITY OF PRODUCTS

In the past COCA-COLA was not available in abundance but nowstiff measures has been taken to increase its availability. The increasein the procurement ofCOCA-COLA has done through new supply anddistribution measures and advertising campaigns

AGGRESSIVENESS IN THE MARKET

Its marketing strategy is very aggressive which aids it infurther and incessant production and distribution of its products.It gives trade offers to its dealers for storing more and more cokeproducts and the signage strategies and agglomeration of all themarketing strategies proves that it has a very aggressivemarketing strategy. This will help COCA-COLA Pakistan instrengthening its integrity in the market.

WEAKNESSES

DISSATISFACTION AMONG STAFF

One of the major weaknesses as in majority of companies is thelack of co-ordination between the management and the worker. Inshort there is a weak point in their Human Resource management.Workers feel that they are being exploited and are not given the

remuneration that they deserve. The management fault is that theythink that the worker is indefatigable and can work tirelessly. Thetough schedule results into limited rest for them and there are noholidays.

MOTIVATIONAL FACTORS



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The employees lack motivation simply because of the hugecommunication gap between them and the management. Thusgrievances reign high for they feel that their problems andrecommendations are not being aired the top management. Theworkers expect to be adequately satisfied in terms of their salary and

compensations

CENTRALIZED DECISION MAKING

The decision making process in the company is highly centralizedand the workers feel that there exists no proper authority existing inthe firm. The salesmen feel dissatisfied for they are totally powerlessto make any decisions themselves. In dealing with their buyers theyhave not the slightest authority to allow them any credit or discount.

LESS AVAILIBITY

The product is not available to the extent that it should be. IfCOCA-COLA wants to make an impact in the market they will have to

do more than they are doing at the present moment.

LACK OF PROMOTION

Promotional activities have been greatly neglected in manyareas. In an interview with the route officer and a few salesmen it wasclear that for areas such as Naziabad and Liaquatabad no heed hasbeen paid both to the singe and promotional activities. This indeedresults in a high degree of difficulty for coke in penetrating the market.

MANUAL PAPER WORK

The huge amount paper work takes a lot of time, which could beeffectively channeled to other important activities. The salesmen haveto do a lot of clerical work i.e. he has to fill a lot of forms (call slips,route riding forms, cash memos, clearing bills etc.) at the shops andalso after arriving back at the factory. At the same time themanagement also complains that the paper work leads to a lot of



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pilferage by the employees. All such activities cause an overall greatreduction in productivity.

LACK OF COORDINATION

In the factory there is a co-ordination lag between the activitiesof the marketing, sales and repairing departments. The salesdepartment complains that the marketing department does not payany heed to their problems. The sales department also complains thatthe repair of the visicoolers is always delayed. Until or unless COCA-COLA restructures its co-coordinating activities the availability of itsproduct would be always delayed.

OPPORTUNITIES

NEW MARKETS

We know that Coke came to Pakistan in 1996 and since it isworking hard to develop its market. We think that COCA-COLA cansecure new dealers and buyers of its product as still large part of thecountry is still devoid of its products. It can promote its products in theyounger generation by targeting the new outlets being opened due toimproved law & order situation and a growing population.

THREATS

FAKE PRODUCTS

In areas such as Liaqatabad, New Karachi, Glimmered. Fakebeverages by the name of coke are being supplied by unknown people.Such activities really hamper the companys name and its brand

originality. Above all the fake beverages supplied are almost similar tothe taste of the original Coke brand and not everyone can decipher thedifference between the original and the fake product. This is in fact agreat threat to COCA-COLA for unworthy people is taking advantageof its brand name and spoiling its good name in the market.

COMPETITORS SCHEMES



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For the purpose of promoting its product, COCA-COLAscompetitors have been doing much more than Coke itself is doing. Forexample Pepsis signage operations have been very successful. Inaddition to this Pepsi is also giving very liberal credit policies to its

dealers, which gives the dealers a greater incentive to buy Pepsi ratherthan Coke.

THE MANGO SEASON

The mango season is a great threat to COCA-COLAs operationsand also its sales. According to statistics during the mango seasonCOCA-COLAs sales are reduced by about 25-30%. This is indeed ahuge blow to COCA-COLA especially since it is a fairly new company in

the market. The greatest affect is on the revenue from the rural areaswhere mango drinks take over. However this is one factor that Cokecannot do anything about for it is not in their hands. If the mangoseason is to come then it will and nothing can be done about it.

PORTERS FIVE FORCES

Since its introduction in 1979, Michael Porters Five Forces hasbecome the de facto framework for industry analysis. The five forcesmeasure the competitiveness of the market deriving its attractiveness.The analyst uses conclusions derived from the analysis to determine

the companys risk from in its industry (current or potential). The fiveforces are:

(1) Threat of New Entrants,(2) Threat of Substitute Products or Services,(3) Bargaining Power of Buyers,(4) Bargaining Power of Suppliers,(5) Competitive Rivalry Amoung Existing Firms

The following is a Five Forces analysis of The COCA-COLACompany in relationship to its COCA-COLA brand:

THREAT OF NEW ENTRANTS/POTENTIAL COMPETITORS: (MedianPressure)

http://valuationacademy.com/threat-of-new-entrants/http://valuationacademy.com/threat-of-substitute-products-or-services/http://valuationacademy.com/bargaining-power-of-buyers/http://valuationacademy.com/bargaining-power-of-suppliers/http://valuationacademy.com/threat-of-new-entrants/http://valuationacademy.com/threat-of-new-entrants/http://valuationacademy.com/threat-of-substitute-products-or-services/http://valuationacademy.com/bargaining-power-of-buyers/http://valuationacademy.com/bargaining-power-of-suppliers/http://valuationacademy.com/threat-of-new-entrants/


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Entry barriers are relatively low for beverage industry: there is almost0 consumer switching cost and very low capital requirement. There aremore and more new brands appearing in the market with usually lowerprice than Coke productsHowever COCA-COLA is seen not only as a beverage but also as a

brand. It has a very significant market share for a long time and loyalcustomers are not very likely to try a new brand beverage.

THREAT OF SUBSTITUTE PRODUCTS: (Median to high pressure)

There are many kinds of energy drink and soda products in the market.COCA-COLA doesnt really have a special flavor. In a blind taste test,people couldnt tell the difference between COCA-COLA coke andPepsi coke.

THE BARGAINING POWER OF BUYERS: (Low pressure)

The individual buyer has little to no pressure on COCA-COLA. Themain competitor, Pepsi is priced almost the same as COCA-COLA.Consumer could buy those new and less popular beverages with lowerprice but the flavor is different and the quality is not guaranteed.Large retailers, like Wal-Mart, have bargaining power because of thelarge order quantity, but the bargaining power is lessened because ofthe end consumer brand loyalty.

There are many kinds of energy drink and soda products in themarket. COCA-COLA doesnt really have a special flavor. In a blindtaste test, people couldnt tell the difference between COCA-COLA

coke and Pepsi coke.People are getting concerns of negative effects of carbonatedbeverages. Increasing number of consumers begin to drink fruit juice,lemonade and tea instead of soda products.

THE BARGAINING POWER OF SUPPLIERS: (Low pressure)

The main ingredients for soft drink include carbonated water,phosphoric acid, sweetener, and caffeine. The suppliers are notconcentrated or differentiated.Any supplier would not want to lose a huge customer like COCA-COLA.

RIVALRY AMOUNG EXISTING FIRMS: (High Pressure)

Currently, the main competitor is Pepsi which also has a wide range ofbeverage products under its brand. Both COCA-COLA and Pepsi arethe predominant carbonated beverages and commit heavily tosponsoring outdoor festivals and activities. As COCA-COLA has a

http://valuationacademy.com/threat-of-substitute-products-or-services/http://valuationacademy.com/bargaining-power-of-buyers/http://valuationacademy.com/bargaining-power-of-suppliers/http://valuationacademy.com/threat-of-substitute-products-or-services/http://valuationacademy.com/bargaining-power-of-buyers/http://valuationacademy.com/bargaining-power-of-suppliers/


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longer history, it is advertised in a more classical approach while Pepsitried to attract younger generation by using pop stars as brandambassadors. Currently COCA-COLA slightly topped Pepsi as thepossessor of the most U.S market share.There are other soda brands in the market that become popular, like

Dr. Pepper, because of their unique flavors.

coca-cola final yasin

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