MNC: Coca-Cola

As a global business, Coca-Cola has become an icon for many various aspects of society

and world issues solution provider. From workplace and human rights to health issues and

obesity, Coca-Cola Company has been involved to deliver solutions on global challenges such as

water stewardship and organization has been invested millions of dollars on global advertising

campaign to express the diversity and inclusion global citizens’ environment. The world is

changing all round us every minutes, hours and days. To continue to succeed as a business over

the next twenty years and beyond, company must look ahead and understand the trends and

forces around the world. Inside every bottle and every can of Coca-Cola Company is the work of

the global economic system. It is the people from more than 200 countries who are global

citizens make it happen, Coca-Cola Forever.

Today’s economic system is no longer just between Dallas to Houston, Illinois to

California, or North America to Europe. For example, taking apart the latest iPhone is evidence

of how widespread the system is. Apple designs the iPhone in the United States, batteries are

made in South Korea, Sony provides the high-resolution camera feature out of Japan, Taiwan

supports iPhone’s chipsets and processors, and other tech, and finally, it is assembled mostly in

China. It applies the similar process in Coca-Cola Company. Coca-Cola is a global business that

operates on a local scale and community. For example, Coca-Cola system is not a single entity

from a legal or managerial perspective, and the company does not own or control all of the

bottling partners. All local and community bottling partners work closely with customers such as

grocery stores, restaurants, other vendors, etc. while Coca-Cola still retains the soda formula.

In order to reveal Coca-Cola’s success today, we need to understand the history of the company.
Coca-Cola inventor John Pemberton was seeking a cure for his addiction and discovered that

painkillers could be served as opium-free alternatives to morphine. Pemberton did not foresee

that his syrup in 1866 would be a worldwide drink in 2017. After purchasing the formula from

Pemberton, Asa Griggs Candler, the founder of the Coca-Cola Company, changed the service of

Coca-Cola as a medicine to a beverage consumed for pleasure. Coca-Cola is viewed as the

“American Dream,” as well as a classic icon that exhibits passion, vitality, creativity and

optimism. However, if the Coca-Cola Company only encapsulated the American culture for its

business activities, the company would not be the global giant that it is today. It requires changes

in strategy and marketing to fit the target market of that era. From the 1886 “Drink Coca-Cola

and enjoy it!” to the recent 2016 “Taste The Feeling!” campaign, different slogans represent each

era’s flavor and trends in society. While India was seeing “Always the Real Thing!” on their TV

commercials, Russia had “Open Happiness!”

Despite Coca-Cola’s achievements, the company is facing several world issues such as

water stewardship and advertising issues due to culture and language differences. We are going

to look at Vietnam and Russia regarding these issues.

With the opening of regional economy and the world, Vietnam advocates and actively

participates in the process of international economic integration. Economic relations between

Vietnam and other countries are increasingly expanding. In order to take advantage of that,

Coca-Cola wanted to make inroad into Vietnamese market. Coca-Cola was first introduced in

Vietnam in 1960. However, the product left the market in 1975 when the trade embargo was

enacted. Once again, in February 1994, Coca-Cola entered Vietnamese market after the trade

embargo was retracted. Coca-Cola had actually invested at least 24.5 million US dollars in

Vietnam with the expectation of lifting the trade embargo in 1993. With the population of more
than 70 million and a summery weather, Vietnam is a promising market for international soft

drinks industry. As entering Vietnamese market, Coca-Cola faced many difficulties such as

different cultures, brand awareness, competition, etc. The marketing strategy, that Vietnam

Coca-Cola chose, created a differentiation for them from other competitors. The firm created the

difference through product innovation as well as media activities.

Everyone knows that the quality and taste of the products did not change from more than

one hundred years. One of the most important way for The Coca-Cola Company to create a

successful brand is advertising. The Coca-Cola Company is one of the few companies which

spend almost 7% in total revenue for advertising during recent years. At the end of 2014, Coca-

Cola was the biggest advertiser in the beverage market.

Despite being one of the biggest company in the world, Coca-Cola does not rest for even

a second. In Vietnam, Coca-Cola has always invested in advertising. At retail stores and in

supermarkets, their products are always displayed at eye level, in front of the stores, or at eye-

catching places. To obtain this priority, The Coca-Cola Company must pay a significant amount

of money. They also take a portion to advertise for their products through television, newspaper,

games, and activities on the streets.

Coca-Cola entered Vietnamese market early. Back in the day, the majority of Vietnamese

were unfamiliar with this kind of fizzy drinks. Most consumers had tea products since they had

grown accustomed to drinking tea for too long, in accordance with the ancient culture of

Vietnam. The Coca-Cola Company is still struggling with this problem. In order to change the

habit, The Coca-Cola Company or any companies providing carbonated beverages must change

the perceptions and habits of consumers.

Due to the specific characteristics of Vietnam, its market is very diverse. The Coca-Cola
Company should focus on the young generation with youthful and sophisticated style. In fact, the

brand does not segment the market; instead, the process of segment requires a suitable brand for

each segment to shape certain personal values of consumers. Vietnamese youth prefer novelty

and changes; they also like to show off and express themselves. The Coca-Cola should take

advantage of this and an advertising strategy with a personal aspect should be used. As a matter

of fact, Coca-Cola has an advertising campaign in which they print the consumer’s name on the

can. This stimulates the desire to express themselves of these young people. Coca-Cola should

consider to run an advertising campaign promoting creativity as well; since everybody

acknowledge the ability to think and be creative nowadays. For the older generation, they are

interested in health factor. In addition to a refreshing and delicious drink, they also pay attention

to whether it has benefit to health or not. Understand this change, the firm should take account of

this and focus advertising campaigns on health issues.

Each logo design of Coca-Cola has changed in a flexible and creative way. They are also

appropriate to appear on television, T-shirts, beach towels, etc. This is a perfect marketing

campaign for Coca-Cola. Coca-Cola often changes package designs with different eye-catching

colors and patterns. These efforts to change and improve the package and design of Coca-Cola is

to bring the novelty, uniqueness and convenient to the consumers. Promotion is also one of the

best tools to advertise the image of a company and its products. The use of it not only increases

the sale but also shows the value that the company brings to its customers. The Coca-Cola

Company should consider this kind of advertising as well.

Despite the vibrant and bubbly image that the firm brings to the consumers through

advertising, Coca-Cola is acquainted with many issues in the eyes of Vietnamese consumers.

Increasing investment for production and business activities as well as saving energy and
environmental protection are the principles that the firm proposed when first entering the market.

However, during recent years, Coca-Cola Vietnam constantly gets complaints from the people

who live around a factory in the capital of Vietnam, Hanoi.

Before that, the same issue happened to Danang, the third largest city in Vietnam, sent a

notice to Coca-Cola factory that if the firm did not strictly follow the environmental rules, the

government would shut down the plant. Specifically, Danang prohibited the factory from

discharging untreated sewage which would pollute the environment and affect the lives of people

in the area. The factory has committed to protect the environment and landscape in the region. If

Coca-Cola did not seriously implement, the government would strictly handle and suspense

operating license in accordance with regulations.

Coca-Cola estimates having 35 percent of water in their finished beverages based on

2011 production volume. Even though, in earth there is about 326 million trillion gallons of

water, less than 3 percent of this water is freshwater which makes it quite clear why water

stewardship is one of Coca-Cola’s global challenges.

The company is aware of the limited water resource available; past chair of the Global

Water Partnership, Margaret Catley-Carlson stated, “In the clamor of facts, figures and dramatic

predictions, there is a constant quiet message about water adequacy; we probably have enough

water, but not if we use it the way we do now.” Which is why Coca-Cola Company is intensely

involved in water stewardship across their system and in hundreds of communities throughout

the world.

Even though Coca-Cola already has 11 plants across Russia, with their oldest one being

established in 1994, they realized that their ability to grow depends on the availability and

quality of local water resources, which is why they invest greatly in the improvements of water
efficiency, treat and recycle wastewater, and are very involved in working in partnerships. To

improve water efficiency, the company monitors the water sources frequently, has regular risk

assessments, and minimizes the amount of water they withdraw. They have also incorporated

water saving technologies on product lines and have implemented some measures including

prevention of leakages the optimization of the production process, water reuse, replacement of

water cooling systems with air systems, and automatic water supply shutoff at downtimes. In

result of these modifications from 2002 to 2007, the company in Russia was able to reduce the

water consumption by 12% and they aim to replenish the amount of water they use in their

finished beverages.

Coca-Cola Company has as well made a great pledge to working in a growing number of

partnerships to protect local watersheds and promoting sustainable water management. In Russia,

they have created two main programs to address water related issues the living Volga program as

well as the clean Baikal lake program. In the Living Volga program, which started on November

2006, the Coca-Cola Company has partnered with the United Nations Educational, Scientific and

Cultural Organization (UNESCO) Moscow office to protect and preserve the Volga river. The

20 of May became officially declared as the ‘Volga Day’ on this day the Coca-Cola company
th

holds several environmental contests for students, journalist and photo artists. The clean Baikal

lake project started in 2009 by Coca-Cola HBC Russia and Baikal youth forum where the

community comes together to clean up the shore of Baikal.

Throughout the years that Coca-Cola has been in business they have changed their

slogans used in advertising that reflect not only the brand but also the times. The company has

made several changes through the years in advertising to promote their product in the countries

they operate in; some have increased Coca-Cola’s revenue greatly but some have even cause the
countries to consider banning Coca-Cola products. For instance, in 2008 Coca-Cola decided to

call of a promotion they called “the value of tradition” in which they placed pictures of religious

sites along with their logo on Coca-Cola refrigerators on the city streets. The orthodox

community interpreted this action as blasphemous, they mentioned that Coca-Cola is associated

to the American way of life as freestyle and was causing discrediting of the church and damaging

national pride. The biggest controversy they had was with a bottle displayed upside down they

referred to it as a syntactic satanic symbol of an inverted cross. The company did not tend to

offend anyone per Yana Guskova the campaign, “was an initiative using famous Russian

historical sites and images to try to promote Russian cultural heritage and the idea that we need

to preserve it.” Another oversight that the company committed was a recent one, all Coca-Cola

wanted was to wish Russia a happy new year to the 2017 and decided to publish a map of Russia

in social media but it did not include Crimea which caused extreme criticism towards the

company. To solve this misunderstanding Coca-Cola apologized for the oversight and published

a new map this time including Crimea.

Although Coca-Cola’s first arrival in China was in 1927, the company was forced to

leave in 1949 by China’s Communist Party because it was viewed as a symbol of U.S.

imperialism. After 30 years, however, when China launched its economic reforms and began

welcoming foreign investors, Coca-Cola was allowed to sell its product once again, although

restricted to designated outlets such as hotels and “Friendship” stores. Since the company was

limited in direct consumer selling, the staff started off advertising with small promotional

objects, like giving away Coca-Cola balloons and chopsticks with every drink product bought. In

1985, Coca-Cola was officially allowed to sell its products to the Chinese people. By the early
1990’s, Coca-Cola had established 13 bottling plants that served about 1/3 of the Chinese

population. Although this seemed like a small part of the very large population, Coke eventually

established enough bottling plants to serve about 90% of China’s population. In 2014, Coca-Cola

marked its 35th anniversary in China, and about 140 million servings were sold every day.

Coca-Cola’s recent advertising strategies in China have been very successful. In the

summer of 2013, the company implemented its “Share a Coke” campaign, notable for having

common names on the drink bottles, enticing consumers to buy one for themselves and look for

their friend’s names as well. However, since China has a culture highly influenced by social

media, they printed words like “Superstar” and “Dreamer” on their bottles to appeal to young

consumers. In 2014, the campaign included song lyrics on the bottles, and consumers could scan

the bottles with smartphones to share the song online. The most recent change to the “Share a

Coke” campaign has introduced movie and TV quotes, mostly from Chinese movies but a few

from American movies. According to Richard Cotton, Coca-Cola China's content and creative

excellence director, the idea behind these campaign twists is to buy a Coke and “share it with

your best friend, your family, or whoever, and use the Coke as a way of expressing how you

feel.”

In early 2016, just in time for Chinese New Year, Coca-Cola brought back two animated

characters from 2001 who were inspired by clay folk art. The characters emerged out of popular

folklore, and over time they came to symbolize good luck and blessing during Chinese New

Year. They were turned into emojis as well and consumers could use them when sending

messages to other people. The campaign was also successful, inducing a sales jump of 9%, even

during tough economic times.

In the summer of 2016, during the Olympics, Coca-Cola used stories from previous
Olympic games to create its message “That’s Gold”, emphasizing that gold isn’t about “winning

for winning’s sake,” but about “sharing dream or goal with friends, family, coaches and

teachers.” After years of economic growth and development in China, growth has finally

slowed, and the government has been looking to rebalance the economy to something more

sustainable. The message that Coca-Cola implemented in its 2016 campaign is a great example

of marketers tapping into the nation’s mindset towards the future.

Although Coca-Cola has seen nothing but growth in the Chinese market, there are

a few problems that it must address if the company wants to keep growing. Since the early

2000’s, Coca-Cola has been focusing more and more on water stewardship and the

environmental effects of doing business. In 2008 they set a goal that all bottling plant partners

would be required to implement water protection plans by the end of 2012 in order to improve

water efficiency system-wide by 20%. In 2010 the company set a goal that all water be

discharged at a level not only compliant with locally applicable law, but also one that supports

aquatic life. Since 2005, Coca-Cola worked on 382 water projects with organizations like the

World Wildlife Fund, USAID, Nature Conservancy, and UNDP with focus on 4 objectives:

improving access to water and sanitation, protecting watersheds, providing water for productive

use, and educating and raising awareness about water issues.