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TRANSCRIPT
Megan Hammond, Ryan Lutz, Nate Monastra, Tasha Young
Dr. Houghton
MKTG 300 8 AM
5 December 2016
Coca-Cola: An In-Depth Marketing Analysis
Intro
Coca-Cola is one of the most globally recognized brands, known primarily for their presence
in the soft beverage industry. With over 500 products and 3500 product variations in their
product line, Coca-Cola has a strong market presence in a wide variety of beverages. Coca-Cola,
who manufactures all of their products, is the industry leader in the soft beverage industry with
42% of the market share, despite the success of competitors such as Pepsi and Dr. Pepper
Snapple (nasdaq.com). Part of Coca-Cola’s sustained success is their ability to appeal to a mass
audience while specifically targeting segmented markets. Coca-Cola has been able to capitalize
on the growing Hispanic market, making Hispanics, Latinos, and Spanish speakers Coca-Cola’s
largest target market. Additionally, Coca-Cola has the strongest appeal to younger consumers
between the ages of eighteen and twenty-four (University Reporter). Their diverse product line is
appealing to both men and women, though men are 20% more likely to drink original Coke than
women, who are more likely to drink Diet Coke. Coca-Cola’s global presence and market share,
consumer market orientation, association to “happiness” and “refreshing”, and ability to attract
people of all incomes differentiates them in the marketplace. Guided by a global vision, Coca-
Cola strives to “refresh the world, inspire moments of optimism and happiness, and to create
value and make a difference” (coca-colacompany.com).
Marketing Environment Analysis
Social Trends
Coca-Cola, although not yet named, came into existence during the American Civil War and
it didn’t take long to gain popularity. John Pemberton officially declared the name “Coca-Cola.”
The drink gained such a following that, in the early years, there were actually three different
sellers of the same drink under different names. Over the years, Coca-Cola has become such a
popular drink that a portion of America, particularly the South, refers to any soft drink as
“Coke”. By the time of its fiftieth anniversary, the drink was so popular that Coke actually
reached the status of a national icon. When the company attempted to alter the original recipe in
1985, although it scored well in taste tests, the company received backlash from American’s for
the new recipe. Today, Coca-Cola struggles with America’s shift towards a healthier lifestyle.
Coca-Cola takes heat for their highly caloric drinks, as well as the sugars and other ingredients
used (worldofcoca-cola.com).
Social Media
On Twitter, Coke has 2.4 million followers worldwide on Twitter and on average, tweets
60 times a day. The company runs a campaigns to engage its audience and generate content
accordingly. They engage with users to enhance brand experience, creating a collection of
advocates. Coca-Cola does a seamless job of balancing product placement with random images
that are meant to keep things light and fun. On Facebook, Coke has 82 Million likes to their page
and uses their page to promote the brand’s initiative and campaigns, and they typically reach a
slightly older segment of the market in comparison to their Twitter followers
(simplymeasured.com).
Demographic Trends
Although an estimated 60% of Americans are attempting to avoid soda, worldwide
consumption of Coke is actually increasing. Consumption of Coca-Cola has increased by three
percent in Latin America in recent years and is expected to exceed 17% by 2018. Key markets
for Coca-Cola include China, Brazil, Japan, and Mexico. All sales are expected to exceed $70
billion annually through 2018. Over all, middle-class teens are Coke’s core consumers around
the world and their consumption is projected to increase 50% by 2020. The Middle East shows a
massive potential for growth, providing Coca-Cola with the opportunity to expand in this region
of the world (brandongaille.com).
Half of Americans aged 18 to 29 say they drink regular soda. Nonwhites (46%) and low-
income Americans (45%) follow just behind the young in regular soda consumption. Diet soda
consumption increases with age and as income rises, with seniors and those making $75,000 or
more annually being the most likely to consume it. Americans living in the East and those with
high incomes are the most likely to shun soda altogether. Americans in general prefer regular
soda to diet -- 32% vs. 24%. But, the plurality (43%) say they don't drink soda at all. More than
half of Americans drink soda -- and regular soda edges out diet among those who consume these
beverages (gallup.com).
Legal Environment
Over the years, Coca-Cola has faced its fair share of legal problems from issues ranging from
caffeine content, plant explosions, water management, and animal testing. Coca-Cola’s scandal
in 2011 occurred when the Sinaltrainal trade union filed a suit against Coca-Cola in a Miami
district court. The union alleged that Coca-Cola bottling partners, Bebidas y Alimentos
and Panamco, assisted paramilitaries in murdering several union members. The court decided
charges would be considered against the partners but not Coca-Cola itself. On September 4,
2006, Judge Martinez dismissed the remaining claims against the two bottlers (business-
humanrights.org).
Political Environment
Being a global company, Coca-Cola strives to be on a level playing world with their
competition. When asked about corporate taxation and global policies, Coca-Cola said that “We
support tax policies that allow companies like ours to operate on a level playing field in global
competition with non-U.S. based companies” and “we actively oppose discriminatory taxes or
policies that single out certain products – non-alcoholic beverages, in our case” (coca-
colacompany.com).
Physical Environment
Coca-Cola looks to better society, and one way they do so is through their sustainability
and water conservation efforts. Additionally, they attempt to preserve natural resources and
create products that can be recycled. From time to time, legislation has been proposed in
Congress and by certain state and local governments which would prohibit the sale of soft drink
products in non-refillable bottles and cans or require a mandatory deposit as a means of
encouraging the return of such containers in an attempt to reduce solid waste and litter. The
Company is currently not impacted by this type of proposed legislation (coca-
colacompany.com).
Economic Trends
Importing goods has become more expensive, and this is having a significant impact
across the world. In addition, the high inflation rate is causing considerable problems when
adjusting the price of a product and when converting the money back to U.S. currency
(firstpost.com). Coca-Cola’s presence in India is struggling at the moment due to India’s
economy. The United States has been running consistent trade deficits since 1976 due to high
imports of oil and consumer products. In recent years, the biggest trade deficits were recorded
with China, Japan, Germany and Mexico (tradingeconomics.com).
Marketing Mix
Product
Coca-Cola categorizes their products into the following categories: soft beverage, diet
beverages, 100% fruit juice, energy drinks, tea, bottled water, enhanced water, and coffee. Some
of the most popular products include Coke, Diet Coke, Sprite, Fanta, Minute Maid juice,
PowerAde, Vitamin Water, and Dasani. However, Coca-Cola also has other products such as
Frozen Coke and Frozen Fanta, which can be found in convenience stores such as 7 Eleven and
Speedway. Additionally, certain products, like traditional Coke for example, are standardized,
while other products like Diet Coke are customized, as this product is called “Coke Light” in
other countries around the world.
All products in Coca-Cola’s line are defined as convenience products and can be found at
nearly any major retailer. Coca-Cola sells their products in bottles, both glass and plastic, as well
as aluminum cans. Typical cans hold twelve ounces of soda, and bottles are traditionally sold in
twenty ounce bottles or two liter bottles, though Coca-Cola has more recently created a one-liter
bottle too.
Coca-Cola began selling their traditional line of Coke bottles in green glass bottles, and
the caffeine in the product was supposed to help cure a person’s headache. In the past sixty years
or so, Coca-Cola has done a significant amount of market research and has created plastic bottles
to be more environmentally friendly and more convenient. They have also launched Caffeine-
free Coke and Caffeine-free Diet Coke so that consumers can still enjoy the taste of the Coke’s
original product without the effects of caffeine. These two changes, while seemingly simple,
demonstrate Coca-Cola’s market orientation and their attention to customer feedback.
Although Coca-Cola has thousands of products, they are divided into distinct product
lines. Their main line of soft beverages features Coke, Diet Coke, Cherry Coke, Caffeine-free
Coke, Diet Coke with Lime, and an array of other similar products. Minute Maid, PowerAde,
Vitamin Water, Fuze Iced Tea, and Golden Peak Coffee each have their own product lines that
include hundreds of various beverages (coca-colacompany.com).
Price
The price of Coca-Cola’s products fluctuates around the world. The price of a twelve
ounce can of Coke is cheapest in Nigeria at only $0.29 and is most expensive in Sweden, coming
in at $2.15. Other large markets for Coca-Cola include China, India, Brazil, Mexico, and the
United States. Coca-Cola is relatively inexpensive in China and Mexico, costing $0.34 and $0.44
per can respectively. A single can of Coke costs $0.48 in India, $0.65 in Brazil, and $0.89 in the
United States. The United States is a particularly interesting market for Coca-Cola because price
fluctuates in correspondence to geography. For example, Coca-Cola typically retails higher in
San Francisco, CA, compared to Salt Lake City, UT.
These prices also do not give the full picture of Coca-Cola’s market because not all
countries sell Coke in single cans. In Mexico, it is not uncommon for street vendors to sell single
cans of Coke or Coke Light (Mexico’s version of Diet Coke). However, this is much rarer in the
U.S. where Coke sells in a twelve pack, typically found in a grocery or convenience store at an
average price between $4-6 (globalbrandprices.com).
Place
Coca-Cola is sold in over two hundred countries, making it one of the most well-known
brands across the world. The only countries Coca-Cola is either not in or does not have a strong
market share include Cuba, Iran, North Korea, Burma, and Sudan as seen in Image 1(infogr.am).
Most Coca-Cola products are found in grocery stores, convenience stores, gas stations, vending
machines, and restaurants. Coca-Cola has partnered with a number of restaurants and fast-food
places and is outperforming Pepsi. According to Image 2, Coca-Cola has nearly double the
number of clients that Pepsi has. While Pepsi has well known partners such as Panera Bread,
IHOP, and Buffalo Wild Wings, Coca-Cola has a greater volume of partners, and these partners
tend to have a stronger performance. Coca-Cola has partnerships with fast food joints such as
McDonalds, Wendy’s, Five Guys, Burger King, and Chick-fil-A. However, they also have
partnerships with nicer, more upscale restaurants such as Outback Steakhouse, Cheesecake
Factory, Red Robin, and Red Lobster. This variety of clients allows Coca-Cola to dominate the
market and to attract more consumers of varying demographics (businessinsider.com).
Promotion
Coca-Cola’s industrial marketing allows them to continue to spread globally.
Commercials and advertisements during the Olympic Games allow Coca-Cola to not only reach
more people, but it allows them to reach out to a diverse audience. Besides the Olympic Games,
Coca-Cola also has a strategic partnership with Disney, where Coca-Cola products are served
within Disney parks and hotels. Beyond large partnerships such as the Olympics and Disney,
Coca-Cola’s client portfolio includes major retailers such as Kroger, Walmart, Target, CVS,
Walgreens, Publix, and more. Coca-Cola can virtually be found anywhere, which is one of the
reasons this brand is so well-known across the world.
Additionally, Coca-Cola’s advertising and promotion is known on an international level.
With celebrity endorsements from Taylor Swift, Coca-Cola is able to reach a large audience,
particularly a younger market. Coca-Cola also partners with many sporting and athletic
organizations such as NASCAR, PGA, and the Olympic Games. Commercials during these
events are crucial to Coca-Cola’s success. Many athletes endorse Coca-Cola in these
commercials, and Coca-Cola has realized this opportunity and has capitalized on it.
Coca-Cola has also found its niche by partnering with universities and other institutions.
Partnerships with universities across the United States in particular allow Coca-Cola to foster
brand loyalty. When Coca-Cola products are served in a dining hall 24/7 or athletes have
unlimited access to Powerade during and after their games, these students and athletes will be
more inclined to purchase Coca-Cola products when they graduate.
More recently, Coca-Cola has tapped into the growing Hispanic market. The “Share a
Coke” campaign was created to promote Coke on an international level. Coca-Cola’s mission is
“to refresh the world”, and this campaign aimed to do so by demonstrating the universality of
their products and the ability to share them as well. This campaign was so-well received due to
its personalization of names and phrases on Coke cans and bottles, but it was particularly
successful with the Hispanic market.
In their second and third years of the campaign, Coca-Cola, began to add Spanish phrases
and names to their products, and they also created Spanglish (Spanish and English)
advertisements, which aired in the U.S. Coca-Cola is continuing to look into new ways to target
this market, as this particular group seems to be quite interested in Coca-Cola and its products.
Over the years, Coca-Cola has had numerous slogans. Different slogans have touched on
various parts of Coca-Cola’s mission, and certain slogans are time sensitive. For example, in
1924 Coca-Cola used the slogan “Refresh yourself” to drive home the fact that Coke is a
refreshing product. This idea caught on, and today the phrase “refresh the world” is listed as part
of Coca-Cola’s mission. However, 1948’s slogan “Where There’s Hospitality” emphasized a
drastically different concept, which was Coke’s welcoming and inviting nature. More recently,
Coke used the slogan “Open Happiness” in 2009 to draw the connection between happiness and
Coke. This simple phrase is both memorable and strategic because it taps into a customer’s
emotional needs and desires.
Coca-Cola also has a strong multi-media presence. Whether it be on Twitter, Facebook,
Instagram, or YouTube, Coca-Cola continues to find new ways to connect with customers of all
ages. By utilizing these networks in different ways, Coca-Cola is able to maintain a strong brand
presence with both a younger and older market. During their “Share a Coke Campaign”, the
(hashtag) #ShareACoke was trending on Twitter. Users wanted to see other people from around
the world sharing a Coke, and many were curious to see which rare names were found on the
cans and bottles. This ability to connect to a large audience positions Coca-Cola as the soft-
beverage industry leader (marshall-johnstonmm.com).
SWOT Analysis
Strengths
Coca-Cola’s strengths lie in its global brand recognition, global distribution,
diversification of beverages, large market share, customer loyalty, and strategic partnerships and
co-ops. Coca-Cola’s marketing mix allows them to be positioned as global industry leaders.
Their brand is recognized by billions of people around the world, and part of this is due to their
excellent distribution. Coca-Cola has done extensive research that has allowed them to enter the
markets in developing and developed countries alike.
In addition to their global brand recognition and distribution, Coca-Cola offers a wide
array of beverages. This diversity has opened new markets for Coca-Cola such as the coffee and
tea industry. Due to this diversity, Coca-Cola has gained and maintained a significant market
share. Part of this success is related to strategic partnerships and co-ops with retailers such as
Kroger, Walmart, and Disney. All of these factors combined augment brand loyalty and
recognition (valueline.com).
Weaknesses
On the other hand, Coca-Cola has distinct weaknesses such as declining sales in North
America, weak foreign currency exchange rate, water management, and reaching a lower income
population. Despite the fact that sales are increasing in South America, they appear to be steadily
declining, which is a growing concern for Coca-Cola. Due to their global nature, Coca-Cola must
exchange foreign currency for the annual report. However, some countries have a currency
weaker than the dollar, and this has a negative impact as a result. Recently, Coca-Cola has been
under fire for problems of water management, particularly in developing countries. Although
Coca-Cola has infiltrated the market of developing countries, they continue to struggle to appeal
to those of lower income in America (valueline.com).
Opportunities
With the growing Hispanic market, Coca-Cola should capitalize on this unparalleled
opportunity. Other opportunities include expanding and promoting niche items, increase market
presence in the coffee and tea industry, and improve distribution in developing countries. Coca-
Cola has several products that are not well known, such as Raspberry Diet Coke. Coca-Cola has
the opportunity to craft a marketing campaign to promote these under-advertised products. Coca-
Cola has tea and coffee items in their product line, but they have the opportunity to increase
market share in these industries. Additionally, Coca-Cola has the ability to improve their global
distribution to rural areas to ultimately increase sales and brand recognition.
Threats
Despite Coca-Cola’s success, they are not immune to threats. One of Coca-Cola’s
greatest sources of competition is an indirect source—Starbucks. The popularity of Starbucks
and the rise of the coffee industry has pulled soda drinkers away from Coca-Cola’s products or
limited their intake in some way. Another dangerous threat is America’s growing concern about
health and nutrition. New studies and data seem to suggest that soda could potentially be harmful
for one’s health in the long-run, and this has some consumers changing their shopping patterns.
Besides America’s concern with the nutritional value, Coca-Cola’s market share in Monster
energy drinks is a cause for concern. Energy drinks are being scrutinized for their side effects,
and Coca-Cola’s 17% share in Monster may not be the wisest investment. As always, Coca-Cola
continues to reposition themselves in order to out-perform their competition. Pepsi is currently
appealing to more people of a low income and black/American Americans. Pepsi also has a more
diverse product line full of complimentary products. Their products such as Fritos or Lays chips
perfectly match Pepsi drinks (University Reporter).
Corporate Social Responsibility
Coca-Cola consistently engages in corporate social responsibility, and their efforts
through recyclable bottles, sustainability, and charity work demonstrate this. Their Code of
Ethics includes the following: Act with integrity, follow the law, comply with the Code, and be
accountable (coca-colacompany.com). The Code of Ethics describes and defines these five
points in greater detail. For example, Coca-Cola defines “Acting with Integrity” in a broad sense
and a specific sense. They want all of their employees across the world to act with integrity
within the company, but they also want the company as a whole to act with integrity with regards
to tax restrictions, trade restrictions, and controversial political activity. Additionally, Coca-Cola
expects their employees to demonstrate integrity through their time management, company
equipment, and other assets. Coca-Cola asks that their employees be mindful of conflicts of
interest which may include gifts, entertainment, political and economic controversies, and family
and friends. Lastly, Coca-Cola includes an addendum to investigate code violations and their
according consequences. In terms of charity work, Coca-Cola partners with various charities and
organizations around the world, but they continual support the US Military through donations.
VI. Critical Assessment and Recommendations
Based on the research, Coca-Cola should increase market share in the Middle East and
Latin America. Both of these markets present with substantial opportunities to grow, and Coca-
Cola should capitalize on this opportunity. Coca-Cola has several products that are not well
known, and they should create campaigns to cycle these niche products. Coca-Cola has the
opportunity to create demand for their products and drive sales for products like Vanilla Coke or
Diet Coke with Raspberry. Additionally, Coca-Cola should attempt to reposition themselves as a
thought leader in all beverage industries, not just the soda industry. If Coca-Cola can position
themselves as a thought leader in the water, coffee, or tea industry they will be ahead of the
curve in terms of America’s nutrition concerns. Going off of this idea, Coca-Cola should create,
acquire, and promote healthier, more nutritious options to remain an industry leader. While
Coca-Cola has maintained global success, these recommendations identify areas that Coca-Cola
can improve.
Images
Image 1
Image 2
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