Executive summary
Coca-Cola Company is a global beverage company. After a brief introduction of the company, Pestle, porter five forces, Lehman & Winer model, DMU, and 5W&H analysis have been conducted. These strategic tools have been undertaken by the company to derive insights regarding internal and external business environments. Every analysis contains different results, which depict the current business situation of the company. However, in the next phase of the study, the firm finds its direction by developing several marketing objectives. These marketing objectives are aligned with different alternative marketing strategies. In the end, the digital marketing mix has been suggested as a critical marketing strategy. The effectiveness of these strategies has been examined through SAF (Suitability, Accessibility, and feasibility). The firm has to take some key initiatives and tracks them with the time to make some changes and evaluate the effectiveness or workability. Coca-Cola, with years of experience, can do it to create impact.
Introduction
Coca-Cola is an American multinational company. This company produces non-alcoholic beverages for customers around the globe. The Coca-Cola brand along with this formula was introduced in 1894. The company is in the limelight due to an immense range of products. Due to the broad product portfolio, the firm has successfully targeted different customer segments in different countries. According to 1017 financial reports, the revenue of the company is US$35.410 billion. The reason behind the selection of this company is its extensive operations in different countries. It seems imperative to know how this company has sustained its brand image by executing its effective marketing strategies. The company depends on its differentiated advertisements on different traditional and social media channels to enhance the positioning and position a better in the minds of customers. Several strategic analysis tools will be used in his study to navigate the firm’s performance in the competitive beverage industry.
Where we are now
PESTLE Trends & Impact on Organization
Political
The stable political system supports the firm’s business in the United States and other developing and developed countries. Food and drug regulations are visible in the state, and the firm has to integrate with it effectively. The impact on the business or organisation is also noticeable because regulations may limit supply chain, production, and distribution process. Aligning with relevant laws is good for the company to sustain the business in the competitive landscape (Frue, 2016).
Economical
Developed economy depicts the high-income level and gross domestic product. It is suitable for the company to integrate with the buying behaviour of people and enhance sales. However, remarkably, the firm has successfully sustained business in developing countries. Even in sluggish economic conditions, people prefer this brand. In emerging economies, low-cost beverages worked for the company in the competitive market. It also ensured a high market share.
Social
People in the United States are becoming health conscious. Obesity has emerged as a critical health issue in countries. People have changed the perception of soda drinks. They prefer beverages with fewer calories. Coca-Cola has depicted remarkable cultural integration. Brand localisation is a successful strategy in both developed and developing countries (Frue, 2016).
Technological
Technology plays a vital role in the production and packaging process. Efficient supply chain and production are possible due to technology. The firm usually invests millions in the research and development process in acquiring new technologies. Technology is a driver of the timely output to meet the needs of customers.
Legal
The firm is investing in its corporate governance to be an ethical company in the beverage industry. Countries are aware of future water scarcity, and accordingly, the firm has developed several efficiency measures. Business sustainability is aligned with the legal structure of the company and country (Frue, 2016)
Environmental
Investment in water stewardship and environmental sustainability has made the company a significant player in the beverage industry. Beverage companies intend to reduce the ecological impact, and Coca-Cola seems a significant contributor.
Porter’s 5 Forces model
Power of Buyers
The bargaining power of the customer is due to brand loyalty and customer satisfaction. Despite having several substitutes, people prefer this brand. It creates a good impact on the business regarding product development, sales, and business expansion (Frue, 2016).
Power of Suppliers
The supplier’s concentration on differentiation has not been practised. The firm works with global suppliers. The wide range of suppliers keeps the pressure low on suppliers. Thus, it enables the low-cost supply chain process, which ensures competitive business in the competitive market.
Threat of Substitutes
Many competitors provide energy drinks, soda drinks, and juices in different markets. The risk to substitutes moderate to high. Due to brand loyalty and high switching cost, people do not want to change the taste. However, differentiated beverages are always important factors, and competitors are taking benefits of it.
Threats of New Entrants
The risk of new entrants is also moderate. The capital requirement is zero, but a new entrant has to work hard to create the image.
Competitive Rivalry
Dr Pepper Snapple, PepsiCo, Red Bull, Nestle, and Parle are significant competitors. The competitive rivalry is high due to a wide range of products, differentiation, and financial capability. It creates an impact on sales and business expansion of Coca-Cola Company (Bloomberg, 2016).
| Non-Alcohol Beverages |
Lehman & Winer model (Level of Competition)
One direct competitor: PepsiCo
One potential newcomer: Red Bull
One substitute: Nuun & Company
Assessment of their future strategy
The future strategy of these competitors is differentiation. These companies want to bring some key quality measures and differentiated elements to attract customers. They want to reduce the switching cost the customers, and it can create an impact on the Coca-Cola Company.
Decision-Making Unit (DMU)
Customer behaviour is to be changed in the future, and it can be justified by the decision-making Unit (DMU). DMU includes buyers, decision makers, gatekeepers, users, initiators, and influencers. Interestingly, the company will play the role of Influencer to create an impact on the buyer. Coca-Cola, being an Influencer, knows the changing trends in the beverage industry. People like to use drinks with fewer calories. Attractive design or packaging will also shape the behaviour of the customer in the future. Thus, being an Influencer, the company may depict these changes on different media channels to let buyers make the final call.
5Ws & H
Who are current and potential customers?
Current and potential customers are adolescents, teens, and young adults. Students, businesspeople, households, and athletes are also visible in the product category.
What do customs do with our product?
Coca-Cola customers enjoy products, especially in summer seasons. People use drinks for refreshments.
Where do customers purchase our product?
Customers purchase the product due to high quality, taste, brand image, and low price
Why do customers select our product?
The customer selects the product due to differentiation, brand loyalty, and satisfaction
Why do potential customers not purchase our product?
Potential customers will not purchase the product due to health consciousness.
Wang & Ahmed marketing resources model (Coca-Cola)
| Customer-Based Assets
Customer Relationship Market Domination Customer Satisfaction High-Quality Products |
Internal Support Assets
Cost leadership Strong workforce Knowledge sharing Strategic Alliances |
| Supply Chain Assets
Global Distribution Network Modern Supply Chain Technology Supplier Relationship Supply Security |
Alliance Based Assets
Market share Market access Technology share
|
Regarding the customer-based assets, the Coca-Cola Company is quite capable of meeting the needs of customers. It makes demands of customer’s major market trends and reacts accordingly. For Instance, it shuffles prices on different events to integrate with patterns. Coca-Cola is also capable of streamlining its products on traditional and digital media channels. The firm has effectively contained celebrity endorsements in potential markets to boost attraction and positioning. Internally, the firm is capable of differentiation. The product cannot be imitated in the beverage industry, and it streamlines the edge over other rivals.
Review of the dynamic marketing capabilities
Several dynamic market capabilities are absorptive capability, adaptive capability, and innovative capability. The Coca-Cola Company has an adaptive and creative capacity to get a competitive advantage over other competitors. For Instance, the management of the company or marketing team of the company knows the potential customers in the beverage market. The broad product range has enabled the firm to streamline products for different customer segments. For Instance, Diet Coke is a prominent product, but the target is a customer that is health conscious and wants to reduce his weight. Also, the firm has depicted innovative capability through its creative culture. The firm is developing new beverages for customers to be relevant to the customers along with the retained product loyalty (Medium.com, 2014).
Review of the lack of marketing assets, marketing capabilities, and dynamic marketing capabilities
The company lacks market domination due to an intense rivalry. However, in different countries, the control of the distribution is not up to the mark. The firm usually misses the exclusivity in the beverage market as PepsiCo and its major rivals are regularly changing the product line by creating a segment. Comparatively, the firm lacks absorptive capability. Coca-Coca has made delayed decisions in the market, which created an impact on the competitive advantage.
SWOT Analysis
| Strengths
Brand Equity Brand Image Global Presence Market Share Broad Product Range |
Weakness
Immense use of water Lack of healthy beverages Low product diversification |
| Opportunities
Diversification Business expansion Modern Logistics Elimination of product failure |
Threats
Raw Sourcing Indirect competition Increasing Obesity
|
Where we want to be
‘SMART’ Strategic Marketing Objectives
- The firm wants to increase 15% revenues per year in the next three years
- The firm wants to grow 10% sales in several potential markets
- The objective of the firm is to enhance customer interaction on different tough points to derive valuable feedback and make effective decisions to justify brand loyalty and customer satisfaction.
Three Alternative Marketing Strategies
The alternative marketing strategy for the company is premium price positioning, which triggers customer, strategic focus, and resource requirement. For Instance, the firm will be looking to improve the image management and quality control measures. Also, by aligning with the market sending capability, the firm will make customers less price sensitive. Now, it is the best time to hit the psychographic segment (Mohammed, 2011).
The second alternative is social media marketing, as the firm may use its existing prices and products and use social media channels to create hype (Econsultancy.Com, 2018).
The third alternative marketing strategy is the reinvention of the image. The firm may change its logo, slogan, design, and message of the marketing to reposition in the minds of customers, especially in developing countries.
Recommended Marketing Strategy
The recommended marketing strategy is to use social media and develop the digital marketing mix. The digital marketing mix is a different strategy from the simple marketing mix. Online media channels such as Facebook, Twitter, Instagram, and many others are good platforms to spread marketing content along with useful and attractive visualisation.
Rationale using the SAF assessment
| Suitability | This strategy is suitable because it is relevant to the newest marketing trends. |
| Accessibility | It is accessible because it is way cheaper than traditional marketing of the company |
| Feasibility | The switching cost of the company is quite low, and it makes this strategy feasible. |
The firm is looking to target the customer demographics, as people with or moderate income, students, teens, young adults, males and females are included in this customer segment in the social media channels.
Competitive Positioning Map
How we are going to get there
Main (Digital) Marketing Mix initiatives
The digital marketing mix is integrated with some key initiatives. For Instance, the firm must know its target audience and speak in the appropriate language. It is an essential element of the culture, and it will work in a competitive market. Another key initiative that can be taken by the company is prioritising blogging. The company can use it for lead generation. Having informed customers in the competitive market is a great move to increase sales. Conducting live events on digital or social media channels is the best initiative to promote the brand (Goldman, 2018).
Plan to Monitor and Track the Progress
The best way to monitor social media campaigns is to make social media goals. The firm may have to identify or develop social metrics to track progress. The response of people regarding sales is a success indicator. However, long-term tracking can help to make long-term digital marketing initiatives (Davis, 2012).
References
Bloomberg, 2016. Coke vs. Pepsi: The Biggest Soda Rivalry in History Is in Full Swing Again. [Online] [Accessed 4 December 2018].
Davis, J.D., 2012. The 5 Easy Steps To Measure Your Social Media Campaigns. [Online] [Accessed 4 December 2012].
Econsultancy.Com, 2018. 10 inspiring digital marketing campaigns from Coca-Cola. [Online] [Accessed 4 December 2018].
Frue, K., 2016. PESTLE Analysis of Coca Cola. [Online] [Accessed 4 December 2018].
Goldman, J., 2018. 7 Essentials for Any 2018 Digital Marketing Strategy. [Online] [Accessed 4 December 2018].
Medium.com, 2014. What is Adaptive Marketing? And Should you Start Adapting? [Online] A [Accessed 4 December 2018].
Mohammed, R., 2011. Why Coca Cola Should Raise Prices. [Online] [Accessed 4 December 2018].
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