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TEAM MEMBERS:
BAOTTO Yves-David
KARAMOKO Oumar
YEPIE Wilfried Emmanuel
TEACHER:
Mr. Canissuis DANHO
CONTENTS
INTRODUCTION ....................................................................................... 1
1.
2.
I-
2.
3.
4.
5.
Positioning ..................................................................................... 11
6.
Sponsoring ..................................................................................... 12
7.
8.
II-
1.
2.
RECOMMANDATION ............................................................................ 22
CONCLUSION ......................................................................................... 22
REFERENCES .......................................................................................... 24
INTRODUCTION
than soft drinks. In addition, coffee and tea are competitive substitutes because they
provide caffeine. The consumers who purchase a lot of soft drinks may substitute
coffee if they want to keep the caffeine and lose the sugar and carbonation. Specialty
blend coffees are also becoming more popular with the increasing number of
Starbucks stores that offer many different flavours to appeal to all consumer markets.
It is also very cheap for consumers to switch to these substitutes making the threat of
substitute products very strong (Datamonitor, 2005).
Suppliers for the soft drink industry do not hold much competitive pressure.
Suppliers to Coca-Cola are bottling equipment manufacturers and secondary
packaging suppliers. Although Coca-Cola does not do any bottling, the company owns
about 36% of Coca-Cola Enterprises which is the largest Coke bottler in the world
(Murray, 2006a). Since Coca-Cola owns the majority of the bottler, that particular
supplier does not hold much bargaining power. In terms of equipment manufacturers,
the suppliers are generally providing the same products. The number of equipment
suppliers is not in short supply, so it is fairly easy for a company to switch suppliers.
This takes away much of suppliers bargaining power.
The buyers of the Coca-Cola and other soft drinks are mainly large grocers,
discount stores, and restaurants. The soft drink companies distribute the beverages to
these stores, for resale to the consumer. The bargaining power of the buyers is very
evident and strong. Large grocers and discount stores buy large volumes of the soft
drinks, allowing them to buy at lower prices. Restaurants have less bargaining power
because they do not order a large volume. However, with the number of people are
drinking less soft drinks, the bargaining power of buyers could start increasing due to
decreasing buyer demand (Murray, 2006a).
Porters Five Forces Model identifies the five forces of competition for any
company. The recognition of the strength of these forces helps to see where Coca-Cola
stands in the industry. Of the five forces, rivalry within the soft drink industry,
especially from PepsiCo, is the greatest source of competition for Coca-Cola.
The story of Coca-Cola began on the afternoon of 8th May 1886 in Atlanta, a
city of USA. John Pemberton, a pharmacist, was inspired by simple curiosity. He
stirred up a fragrant, caramel-coloured liquid and, when it was done, he carried it a few
doors down to Jacobs' Pharmacy. Here, the mixture was combined with carbonated
water and sampled by customers who all agreed, this new drink was something
special. So Jacobs' Pharmacy put it on sale for five cents a glass. Pemberton's
bookkeeper, Frank Robinson, named the mixture Coca-Cola, and wrote it out in his
distinct script. To this day, Coca-Cola is written the same way. In the first year,
Pemberton sold just 9 glasses of Coca-Cola a day. Unfortunately for Pemberton, he
died in 1888, and over the next three years, Atlanta businessman Asa Griggs Candler
secured rights to the business for a total of about $2,300. Candler would become the
Company's first president, and the first to bring real vision to the business and the
brand. In 1894, a Mississippi businessman named Joseph Biedenharn became the first
to put Coca-Cola in bottles. He sent 12 of them to Candler, who responded without
enthusiasm. Five years later, two Chattanooga lawyers, Benjamin F. Thomas and
Joseph B. Whitehead, secured exclusive rights from Candler to bottle and sell the
beverage for the sum of only one dollar. In 1923, four years after his father Ernest
purchased the Company from Asa Candler, Robert Woodruff became the Company
president. He led the expansion of Coca-Cola overseas and in 1928 introduced CocaCola to the Olympic Games for the first time when Coca-Cola travelled with the U.S.
team to the 1928 Amsterdam Olympics. Woodruff pushed development and
distribution of the six-pack, the open top cooler, and many other innovations that made
it easier for people to drink Coca-Cola at home or away. During the World War II,
Woodruff ordered that "every man in uniform gets a bottle of Coca-Cola for 5 cents,
wherever he is, and whatever it costs the Company." During the war, many people
enjoyed their first taste of the beverage, and when peace finally came, the foundations
were laid for Coca-Cola to do business overseas. After 70 years of success with one
brand, Coca-Cola, the Company decided to expand with new flavours: Fanta originally
developed in the 1940s and introduced in the 1950s; Sprite followed in 1961, with
TAB in 1963 and Fresca in 1966. In 1960, The Coca-Cola Company acquired The
Minute Maid Company, adding an entirely new line of business juices to the
Company. In 1981, Roberto C. Goizueta became chairman of The Board of Directors
and CEO of The Coca-Cola Company. He led the introduction of diet Coke, the very
first extension of the Coca-Cola trademark; within two years, it had become the top
low-calorie drink in the world, second in success only to Coca-Cola. In 1985, he
released a new taste for Coca-Cola, the first change in formulation in 99 years.
However, critics called it the biggest marketing blunder ever, the Company listened,
and the original formula was returned to the market as Coca-Cola classic, and the
product began to increase its lead over the competition until this day. During, the
1990s, new beverages joined the Company's line-up, including Powerade sports drink,
Qoo children's fruit drink and Dasani bottled water. The Company's family of brands
further expanded through acquisitions, including Limca, Maaza and Thums Up in
India, Barq's root beer in the U.S., Inca Kola in Peru, and Cadbury Schweppes'
beverage brands in more than 120 countries around the world. Today, with its current
CEO and chairman Muhtar Kent, it is enjoyed in more than 200 countries worldwide.
From the early beginnings when just nine drinks a day were served, Coca-Cola has
grown to the worlds most ubiquitous brand, with more than 1.7 billion beverage
servings sold each day. When people choose to reach for one of The Coca-Cola
Company brands, the Company wants that choice to be exciting and satisfying, every
single time.
2.2.
Coca-Cola Classic
Fanta
Dasani
Coca-Cola Zero
Coca-Cola Light
Sprite
Powerade
Diet Coke
Oasis
Dr. Pepper
Youki
I-
LITTERATURE REVIEW
1. Ansoffs product-market growth matrix
Igor Ansoff was a Russian American, applied mathematician and business manager. In order
to plot generic strategies for growing a business, he put in relationship product and
market. With this relationship, he elaborated a matrix that links new and existing
product and new and existing market: its the Ansoffs matrix. This matrix allowed to
emit four growth strategies as we can see below:
2. Marketing mix
The marketing mix is often referred to as the '4 Ps', i.e. product, price, place and
promotion. To meet customers' needs a business must develop products to satisfy
them, charge the right price, get the goods to the right place, and it must make the
existence of the product known through promotion.
1.1.
Products or services
Must meet customer requirements whatever these might be. For example, an
important aspect is function - products should do what they say they can do and what
they are expected to do. For example, Audi cars are popular because of their high
performance. Appearance is also important. This is why for example, consumers are
prepared to pay premium prices for some of Gillette's razors.
2.2.
Place
2.3.
Promotion
2.4.
Price
It needs to be relevant to the product/service and the market. For example, BIC
the manufacturer of razors, pens and lighters seeks to provide the world's markets with
products at affordable prices. A firm's pricing decision is often aimed at attracting a
particular market segment. For example, if it wants to sell at the top end of the market
it will charge a high price, at the bottom a low price, and so on.
(Web page of THE TIMES 100 business case studies)
3. Pricing penetration
Penetration pricing is most commonly associated with a marketing objective of
increasing market share or sales volume. In the short term, penetration pricing is
likely to result in lower profits than would be the case if price were set higher.
However, there are some significant benefits to long-term profitability of having a
higher market share, so the pricing strategy can often be justified.
Penetration pricing is often used to support the launch of a new product, and
works best when a product enters a market with relatively little product differentiation
and where demand is price elastic so a lower price than rival products is a
competitive weapon.
Amongst the advantages claimed for penetration pricing include:
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4.1.
Market Analysis
4.2.
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4.3.
Deciding where to sell items in a product range can have a great affect on how
well these items perform in the market in terms of sales. A business must carefully
consider which methods of sale offer the greatest viability for the company's products
and which methods of sale most frequently connect the products with the target
customer base. For example, a business creating a line of low-cost tables may not
choose to sell these products with a high end furniture store because it does not place
the product range with consumers likely to purchase them.
4.4.
Profit Goals
An effective product range strategy should also include targets for profits
generated from the sale of items within the range. Expected profit numbers are created
by examining the level of sales currently existing in the market along with the success
of the predicting company's profits with other products. Often a successful company is
able to use the sales figures and popularity of other products to gauge likely sales of
new product lines. Profit goals then help the company determine the overall success of
the product range.
(Jonathan Lister, eHow.com Contributor)
5. Positioning
Positioning is the use of marketing tools to make a firm's offering stand out
from the competition. A well-positioned brand occupies a unique niche in the minds of
consumers. This niche is created and sustained by the marketing strategy, particularly
through tactical choices involving product design promotional messages, price and
distribution.
(Amy Handlin, eHow Contributor, eHow.com)
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6. Sponsoring
Corporate sponsorship can take many forms, but generally involves a company
or organization attaching its name to a charity, event, or other promotion in exchange
for providing funds or paying a sponsorship fee. Corporate sponsorship is an effective
means of advertising for many organizations, because it promotes goodwill.
Companies are more likely to spend large amounts of money sponsoring highly
publicized events due to the amount of publicity that can be generated and the
opportunity to be affiliated with a good cause or popular event.
(By Angela Stringfellow, marketing communications/corporate education and
training consultant. eHow Contributor)
7. Street marketing
Street marketing is sometimes called guerrilla marketing and marketers turn to
street marketing to differentiate a product in the marketplace or create awareness of a
product among a distinct consumer audience. There are a number of tactics of street
marketing but central to their implementation is the need for teams of field staff to
implement street promotions.
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8. Mobile marketing
Mobile marketing is marketing on or with a mobile device, such as a cell phone.
One definition comes from marketing professor Andreas Kaplan who defines mobile
marketing as "any marketing activity conducted through a ubiquitous network to
which consumers are constantly connected using a personal mobile device". Within
this definition, Kaplan uses two variables, i.e. the degree of consumer knowledge and
the trigger of communication, to differentiate between four types of mobile marketing
applications: Strangers, Victims, Groupies, and Patrons.
Mobile marketing can also be defined as the use of the mobile medium as a
means of marketing communication, the distribution of any kind of promotional or
advertising messages to customer through wireless networks. More specific definition
is the following: using interactive wireless media to provide customers with time and
location sensitive, personalized information that promotes goods, services and ideas,
thereby generating value for all...
II-
During the last 20 years sum of brands and variants were developed and
introduced on the market, such as Coca-Cola Vanilla, Coca-Cola Zero, Coca-Cola
Light, etc. Developing a new product is a team effort that goes through many stages of
development until the product is finalized and ready to be distributed to the potential
consumers. First, Coca-Cola concluded many different ideas the one that pass the
screening was the Coca-Cola zero. The new product targets young males (ages 25-35)
and has no sugar and no calories. Then, Coca-cola does thorough research of the
market, competition and the projected revenue before putting a new product on the
market, the company does not publicly display this research but it is understood that
by holding many surveys it becomes easy to project the demand for the product. CocaColas main interest when developing a prototype is the taste of their product without
losing its texture and colour, and also that the product will relate to the company and
still maintain a certain uniqueness, when coca-cola develop a prototype they supply
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samples to their projected target market in order to understand what to change and
improve in the product this is known as the test marketing stage. After passing all the
stages it is then decided to start the production, build inventories and building the
infrastructure of sales and distribution.
The result of this strategy is that Coca-Cola Zero known a great success in
USA, then France and now over the world. Some variants of the product are even
developed and introduced. About that, we can say that Coca-Cola Company used
efficiently and effectively product development from Ansoffs matrix by developing
new related product.
1.2.
Market penetration
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2. Marketing mix
2.1.
Product
2.1.1) Product range
The products of Coca-Cola are variable and diversified. They are grouped in
product range:
Fizzy drink: Coca-Cola, Fanta, sprite
Fruit juice: Minute Maid
Tea: Nestea
Sport drink: Powerade
The goal of the diversification of the product range is to satisfy the need of
customers and facing competition. A lot of companies use this strategy to maintain
their position of leader. In the years 2000 the product Coca-Cola is the leader, the
company try to find another product in order to increase the product range. So the
company launched FANTA in France. In 2000, the Fanta sales increased by 15.1%.
The sales reached 24.9% in 2003, since this year the sales are still increasing with a
stable rate.
The product Coca-Cola classic target criterion is not the age. Everybody,
whatever the age, is supposed to drink the product Coca-Cola. This make the product
unique .However some product like Fanta target the youth. So we can notice that the
advertisement of the company vary according the target of each product.
Also The Coca-Cola Company created different kind of Coca-Cola to vary the
pleasure and savour. In Order to answer to the specific need of each segment in the
target. For example Coca-Cola Light has been created for youth woman with the age
range of 15 to 35 to avoid calories.
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There is also Coca-Cola black it is made with more caffeine than the classic
one. Its made for youth adults working people.
All those creation show the will of Coca-Cola to change the Coca-Cola classic
and reach a bigger part of the population.
Positioning
When a new product gets in to a market it has to be distinct from the other.
Positioning is the process by which marketers try to create an image or identity in the
minds of their target market for its product, brand, or organization. Coca-Cola is
positioned as an universal drink with a unique taste, refreshing the body and the spirit
associated to party moment and emotion. Since its creation this is what drives the
brand . This aspect is also seen in the Coca-Cola company slogans:
1886: Drink Coca-Cola
1904 : Delicious and refreshing
1905 : Coca-Cola revives and sustains
1906 : Great National Temperance Beverage
1908 : Good To The Last Drop
1917 : Three Million a Day
1920 : Drink Coca-Cola With Soda, The hit That Saves The Day
2.2.
The price
In general the price of Coca-Cola is the market price. In this war the tools that
companies use the most is the promotion and not the pricing. But the company CocaCola use the price penetration strategy to attack some new market to increase its
market share. We can take the case of Africa and the ex-communist bloc. They try also
to make each china habitant buy 5 litres of Coca-Cola products a day and each Indian
1 litre a day.
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The Coca-Cola Company also use this strategy to make their competitor go
bankrupt. In Belgium in the years 1980 Pepsi owned 20% of the market share and
Coca-Cola 70%. So Coca-Cola owing a powerful financial force decided to broke its
price by 40%. Unable to resist Pepsi decided to close. Today Coca-Cola Company is in
a monopole situation in this country. So they raised the price in Belgium. This price is
20% more than the price in France .Coca-Cola has used this (Italia and Germany) and
got the monopole and enough financial power to compete in Spain, England and
Portugal where the fight is tighter.
2.3.
Distribution
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signifies that the distribution and the logistics of the company are so designed to meet
the large market it serves.
2.4.
Communication
2.4.1) The message
From the year 1922 to the beginning of the Second World War. After all
damages and with the problem raised by the war Coca-Cola tried to make people to
still desire to drink Coca-Cola. So they try to make Coca-Cola drink as a solution for
people problem. The slogans were:
From 1940 to 1948: familial values. The Second World War led Coca-Cola to a
redefinition of the product. The idea was that a member of a family arrives and the
family welcome him. And after difficult year of war this person recovers his family.
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Mobile Marketing
In 2000 Coca-Cola decided to communicate to its target through mobile phone.
It Consist in presenting new offers of Coca-Cola through people mobile phone.
Therefore the information is received by the customer at any moment and everywhere.
Coca-Cola is one of the first companies that use this technique. Today, 4 marketing
campaigns over 5 of Coca-Cola use mobile phone marketing as a technique of
communication.
Coca-Cola put advertisement posters in public place like bus shelter, escalators,
and distributors machine in school or some big poster with the bottle image on some
apartment block.
This strategy aims to:
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The sponsoring
Coca-Cola is the sponsor of a lot of event of the Olympic Games, FIFA World
Cup football (soccer), Rugby World Cup and the National Basketball Association.
And this last decade this sponsoring has been reinforced.
Coca-Cola is one of the top global sponsors of sport. The rationale for sponsoring
international and local sporting events is that it is "a natural fit". By matching the
brand with world standard events Coca-Cola benefits from the exposure and the
associations made between it and the event being sponsored. Equally by ensuring that
local events are sponsored the brand is exposed exclusively to a local market and will
thus be seen as a local brand. By devising innovative and tailored marketing
programmes based on local consumer insights, sales can be increased in the ready-todrink non-alcoholic beverage market. Local offices around the world ensure that the
company participates and supports local communities. Coca-Cola is aware of what is
relevant in the lives of its target market such as sport, music and fashion. Life
experiences are created around these interests. By getting involved in these daily
experiences Coca-Cola meets its sponsorship objectives:
o To connect with teens in an interesting and fun way.
o To create unforgettable teen moments linked to Coca-Cola.
o To ensure Coca-Cola is viewed as making everyday life more interesting and
fun.
o To communicate the dynamic and leading attributes of the brand.
To be seen as a national sponsor at a local level and global sponsor on an international
level.
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RECOMMENDATIONS
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CONCLUSION
All in all we can notice that coca cola company is the leader of its market . Its
growth strategy and its marketing mix allowed us to understand this success. However
there is still some effort to do have this sustain performance . It can be achieve by
increasing the brand loyality , continue product innovation and the expansion of the
brand line , and Increasing the global market share.
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REFERENCES
Wikipedia, the free encyclopedia. Soft drinks retrieved December, 13th 2012 from
http://en.wikipedia.org/wiki/Soft_drink
Wikipedia, the free encyclopedia. List of all brands owned by The Coca-Cola
Company. Retrieved December, 14th 2012 from
http://en.wikipedia.org/wiki/List_of_Coca-Cola_brands
Mind Tools. How to use the tool retrieved December, 13th 2012 from
http://www.mindtools.com/pages/article/newTMC_90.htm
Coca-Cola Blog. Chapter 11- Developing and managing products retrieved December,
14th 2012 from
http://deutch4macys.blogspot.com/2011/04/chapter-11-developing-and-managing.html
Papers4you. What is Ansoff Analysis retrieved Decemder, 15th 2012 from
http://www.coursework4you.co.uk/essays-and-dissertations/ansoff-analysis.php
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