Marketing Environment Of The Coca Cola Company

Submitted by vickyf on March 25, 2011

Category: Business and Economics Words: 1656 | Pages: 7 Views: 985 Report this Essay

Analyse the marketing environment of the Coca Cola Company and critically evaluate how the Coca-Cola Company is responding to its changing environment by adapting branding Word Count 1510 Introduction The Coca-Cola Company, the worlds leading manufacturer in the beverage industry, established in 1886 by the pharmacist John Pemberton in Atlanta, USA. Today the company operates globaly in more than 200 countries, with a portfolio of more than 3300 products and 1600 servings per day. Coca-Colas mission is to create best quality products that will manage to inspire moments of optimism while they target to refresh the whole world. The Coca-Cola Company uses effectively the marketing channels in cases like planning, pricing, promoting and distributing its products. The company has been operating successfully for over a century as it has carefully analyze the internal and the external business environment, in order to follow the most suitable marketing strategies that will asses effectively the external threats and opportunities. Cokes effective evaluation about its internal and external environment preserves its survival in the soft drink industry (The CocaCola Company, Heritage,2011). Assessing the Internal and External Business Environment Coca-Colas internal environment offers efficiency in the production process, by using its personnel management skills and proper communication channels. The company manages to avoid inefficiencies in any phase of the production line as it constantly monitors the internal environment. On the other hand the Cokes external business environment can affect the whole company as it is consists of powerful forces, which can bring changes that create opportunities and threats in the beverages market, such forces are fluctuations, changing in consumers habits and values, law restrictions etc. PESTEL Analysis The pestel analysis is a powerful tool for evaluating the marketing environment as it looking in Political, economic, social, technological, environmental and legal issues, like the external forces which influence the acquisition of inputs and generation of outputs (The Coca-Cola Company, Fact Sheet, 2011). Political: Unfavorable political conditions in international markets can hurt Cokes businesses, 71% of its net operating revenues derive from sales in international markets. Governmental

changes may damage consumer confidence and reduce his purchases. Economic: Changes in foreign currencies fluctuations and interest rates affect financial results, as most of Cokes revenues, expenses and liabilities are in other currencies than the US dollar. Social: Trends for healthier lifestyles affected the non-alcoholic beverage industry, as they affect the demand for healthier beverages such as bottled water and diet sodas. Technological change: New technologies like internet can be used for effective advertising. New technologys cans and plastic bottles that come to replace the prior glasses bottles make the product more attractive. Apart from all the above new technology offers best quality product. Environmental: Waters scarcity can affect the production of all of its products as water is the main ingredient, causing increasing production costs that can affect the long run profitability. Catastrophic events like major natural disasters can affect the production as they limited the supply to raw materials. Legal: Changes in laws and regulations like the legal requirements that demand ecotaxes for nonrefillable beverage containers can also create additional costs. Jurisdictions for additional warning requirements about the chemical content can affect the product demand. All the forces above are part of the macro marketing environment that affects all the organizations. Assessment of competitive forces The nonalcoholic beverage market is a highly competitive industry, where plenty of other businesses compete in multiple geographical areas. Competitive products cover a wide range of nonalcoholic beverages like water, juices, fruit drinks, energy drinks, coffees, teas and dairy based drinks. Great competitors of the company can be considered firms like PepsiCo.Inc, Nestle, Groupe Danone, Kraft Foods and Unilever (The Coca-Cola Company, Investors, 2011). Although competitive factors have major impact in Coca-Colas business can promote sales promotion, product innovation and increased efficiency in production line. Cokes competitive strengths are the wide acceptance of the consumers, devoted associates, increased marketing capabilities and great network of bottlers and distributors. The micro marketing environment The competitors mentioned above are part of the more specific forces that influence the nature of the organization such as suppliers, marketing intermediaries, buyers and publics. Suppliers: Coke preserves a stable relationship with its suppliers who provide the organization from raw materials to machinery, goods and services. Its suppliers are obliged to act in an ethical manner and to preserve the standards applied by the law (The Coca-Cola Company, Citizenship/suppliers, 2011). Marketing Intermediaries: Coca-Cola does not have the ability to sell directly to its customers in every case and for this reason it uses intermediaries in its distribution. The company knows the importance of the existence of the intermediaries dealing them as partners and not as distribution channels and for this reason every Cokes provider such as Mc Donalds is a powerful marketing support. Buyers: Buyers are the most important factor in the Cokes marketing environment as their service is the prior target of the company. A company such as the Coca-Cola can target to all the types of customer markets as it can serve individuals, business markets for further processing, resellers such as supermarkets, governments that wants to provide to their citizens with goods and international markets. Publics: Coca-Cola knows the value of the public groups that can affect the organizations ability to satisfy its target and for this reason aiming to empower 5 Million women entrepreneurs by 2020, as women entrepreneurs make a vital contribution to Coca-Cola (The Coca-Cola Company,

dynamic,2011). Branding as a response to changing marketing environment Coca-Colas managers after careful accession of the forces above respond to the new demands by enhancing their brand portfolio. Cokes wide range of products tries to cover the needs of every market that act. In some markets the trends force the consumers to seek for healthier products and as a result Coke creates diet sodas and nutritional drinks. Its portfolio of more than 3300 beverages tries to cover all these varied customers global needs (The Coca-Cola Company, Brands, 2011). Coca-Cola as a manufacturer all this years try to develop its products in a way that preserves constant quality which is the trade mark image for its brand. It spends much money in order to promote and to preserve the loyalty to its brand name and follows different marketing strategies to acquire its respective success. A strong brand name leads to a global customer recognition and simplifies customers decision reducing the purchasing risk. The rapid way by which the consumers are being informed about brands through media or mouth to mouth words, demands the establishment of a brand name. Coca-Cola through its communication channels like media advertisement, public relations and marketing strategies, delivers a complete opinion about its brands. This knowledge can be used in order to improve the communications consistency and to succeed greater sales. The high competitive market that the beverage market is, often characterized by the exceed consumer advertising and promotion and thats why the company spends about $2 billion a year on marketing campaigns. With its strong brand name, Coke markets its products globally. It has been connected with the Olympics as an official sponsor and elevated Hispanics as one of its top priorities. Furthermore it manages to transform Fanta into a global phenomenon as it is produced in 188 countries with 70 flavors. Apart from this Fanta has been established to the Latin America where flavored soft drinks are norm. The same positioning with the Latin America Coca-cola has in many countries all over the world promoting the message for good time and enjoyment. The slogans varied to the country that Coke promotes its products for USA market the slogan is the Coke side of life, while for China stands the Fanta is an antidote to everyday pressures on Chinese youth. All the heavy advertisement mentioned above enables Coke to create brand loyalty. Key elements like advertising for establishing a long-term brand image guaranteed the Coca-Colas succeeds. Coke uses efficiently its brand as name, term, design, symbol making its goods and services recognizable, its trademark is simply the word Coke and any further recommendations are superfluity. Branding is a mean that influence buyers decisions and sellers purchases. Brand loyalty is being proved by recognition preference and insistence and Cokes has made its difference to all three aspects. Cokes recognition exists as there is no single consumer in the world that he is not familiar with its products. Cokes brand preference exists by the consumers preference while brand insistence is the denial of the consumers for a substitute product. Conclusion Coca-Colas marketing environment consists of external forces that affect directly or indirectly the firms acquisition of inputs such as raw materials and generation of outputs such as goods. The companys broader forces that affecting the organizations operations and the relationship with its customers in the market consist the macro marketing environment and are political decisions in international markets, foreign currencies fluctuations and interest rates, changes to the consumers habits, promotion strategies through new technology, legal requirements like ecotaxes and

environmental changes that decrease the raw materials. The forces that derive from the Cokes internal environment consist the micro marketing environment and affect the nature of the business. Ethical mannered suppliers, intermediates like McDonalds, and faithful buyers made Coca-Cola to survive in a high competitive market, where its managers evaluate correct all the data mentioned above. Changes in the marketing environment create needs for strategic change and likely Coca-Colas managers manage till now to respond quickly to those changes as they identified the changes through the pestel analysis. After all its not random that Coca-Cola is the worlds leading manufacturer in beverage industry.