Introduction & Executive summary

Giant soft drink company Coca Cola has come under intense scrutiny by investors due to its inability to effectively
carry out its marketing program. Consequently it is seeking the help of Polianitis Marketing Company Pty Ltd to
develop a professional marketing plan which will help the business achieve it’s objectives more effectively and
efficiently, and inevitably regain there iron fist reign on the soft drink industry.

When establishing a re-birthed marketing plan every aspect of the marketing plan must be critically examined and
thoroughly researched. This consists of examining market research, auditing business and current situation (situation
analysis) and carefully scrutinizing the soft drink industry and possibilities for Coca Cola in the market. Once Coca
Cola have carefully analyzed the internal and external business environment and critically examined the industry in
general the most suitable marketing strategies will be selected and these strategies will be administered by effectively
and continually monitoring external threats and opportunities and revising internal efficiency procedures.

Situation Analysis

Market Analysis:

The market analysis investigates both the internal and external business environment. It is vital that Coca cola
carefully monitor both the internal and external aspects regarding it’s business as both the internal and external
environment and their respective influences will be decisive traits in relation to Coke’s success and survival in the soft
drink industry.

Internal Business Environment

For effective control and monitoring the internal business environment, Coke must conduct continual appraisals of the
business’s operations and readily act upon any factors, which cause inefficiencies in any phase of the production and
consumer process.

External Business Environment

Fluctuations in the economy, changing customer attitudes and values, and demographic patterns heavily influence
the success of Coca Cola’s products on the market and the reception they receive from the consumers.

SWOT Analysis:

Strengths:

Coca-Cola has been a complex part of world culture for a very long time. The product's image is loaded with over-
romanticizing, and this is an image many people have taken deeply to heart. The Coca-Cola image is displayed on T-
shirts, hats, and collectible memorabilia. This extremely recognizable branding is one of Coca-Cola's greatest
strengths.
Additionally, Coca-Cola's bottling system is one of their greatest strengths. It allows them to conduct business on a
global scale while at the same time maintain a local approach. The bottling companies are locally owned and
operated by independent business people who are authorized to sell products of the Coca-Cola Company. Because
Coke does not have outright ownership of its bottling network, its main source of revenue is the sale of concentrate to
its bottlers.

Weaknesses:

Although domestic business as well as many international markets are thriving (volumes in Latin America were up
12%), Coca-Cola has recently reported some "declines in unit case volumes in Indonesia and Thailand due to
reduced consumer purchasing power." According to an article in Fortune magazine, "In Japan, unit case sales fell 3%
in the second quarter [of 1998]...scary because while Japan generates around 5% of worldwide volume, it contributes
three times as much to profits. Latin America, Southeast Asia, and Japan account for about 35% of Coke's volume
and none of these markets are performing to expectation.
Coca-Cola on the other side has effects on the teeth which is an issue for health care. It also has got sugar by which
continuous drinking of Coca-Cola may cause health problems. Being addicted to Coca-Cola also is a health problem,
because drinking of Coca-Cola daily has an effect on your body after few years.

Opportunities:

Brand recognition is the significant factor affecting Coke's competitive position. Coca-Cola's brand name is known
well throughout 94% of the world today. The primary concern over the past few years has been to get this name
brand to be even better known. Packaging changes have also affected sales and industry positioning, but in general,
the public has tended not to be affected by new products. Coca-Cola's bottling system also allows the company to
take advantage of infinite growth opportunities around the world. This strategy gives Coke the opportunity to service a
large geographic, diverse area.

Threats:

Currently, the threat of new viable competitors in the carbonated soft drink industry is not very substantial. The threat
of substitutes, however, is a very real threat. The soft drink industry is very strong, but consumers are not necessarily
married to it. Possible substitutes that continuously put pressure on both Pepsi and Coke include tea, coffee, juices,
milk, and hot chocolate. Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market, the
changing health-consciousness of the market could have a serious affect. Of course, both Coke and Pepsi have
already diversified into these markets, allowing them to have further significant market shares and offset any losses
incurred due to fluctuations in the market. Consumer buying power also represents a key threat in the industry. The
rivalry between Pepsi and Coke has produce a very slow moving industry in which management must continuously
respond to the changing attitudes and demands of their consumers or face losing market share to the competition.
Furthermore, consumers can easily switch to other beverages with little cost or consequence.

Product Life cycle:

Coca-Cola is currently in the maturity stage, which is evidenced primarily by the fact that they have a large, loyal
group of stable customers.
Furthermore, cost management, product differentiation and marketing have become more important as growth slows
and market share becomes the key determinant of profitability. In foreign markets the product life cycle is in more of a
growth trend Coke's advantage in this area is mainly due to its establishment strong branding and it is now able to
use this area of stable profitability to subsidize the domestic Cola Wars.

Marketing Objectives

The objective is the starting point of the marketing plan. Objectives should seek to answer the question 'Where do we
want to go?’

The various objectives are: -

1. Market Share Objectives:

To gain 60% of the market for soft drinks industry by September 2010.

2. Profitability Objectives:
To achieve a 20% return on capital employed by August 2010

3. Promotional Objectives
To increase awareness of the product on the market.

4. Objectives for Survival

To survive the current market war between competitors.
5. Objectives for Growth
To increase the size of the worldwide Coca Cola enterprise by 10%.

Selecting Target Market

There are four broad ways which Coca Cola can segment its market:
-> Mass marketing
-> Concentrated marketing
-> Differentiated marketing
-> Niche marketing

The most apparent method used by Coca Cola is with no doubt the differentiated marketing method as Coke satisfies
a range of different markets. Diet coke satisfies the weight consciousness, regular coke, sprite, Fanta the average
human, coffee, iced tea etc. Each group of beverages satisfies a particular group of people but majority the average
human.

Developing The Marketing Mix

The marketing mix is probably the most crucial stage of the marketing planning process. This is where the marketing
tactics for each product are determined. The marketing mix refers to the combination of the four factors (price,
promotion, product and place) that make up the core of a business’s marketing strategy. In this step of the marketing
planning process, marketing mix must be designed to satisfy the wants of target markets and achieve the marketing
objectives.

Product:

Businesses must think about products on three different levels, which are the core product, the actual product and the
augmented product. The core product is what the consumer is actually buying and the benefits it gives. Coca Cola
customers are buying a wide range of soft drinks. The actual product is the parts and features, which deliver the core
product. Consumers will buy the coke product because of the high standards and high quality of the Coca Cola
products. The augmented product is the extra consumer benefits and services provided to customers. Since soft
drinks are a consumable good, the augmented level is very limited. But Coca Cola do offer a help line and complaint
phone service for customers who are not satisfied with the product or wish to give feedback on the products.

Positioning

Coca Cola and Franklins both make soft drinks; although Franklins may try to compete they will still be seen as down
market from Coca Cola. Positioning helps customers understand what is unique about the products when compared
with the competition. Coca Cola plan to further create positions that will give their products the greatest advantage in
their target markets. Coca Cola has been positioned based on the process of positioning by direct comparison and
have positioned their products to benefit their target market. Most people create an image of a product by comparing
it to another product, thus evident through the famous battles between Coca-Cola and Pepsi products.

Branding

Over the time Coca Cola has spent millions of dollars developing and promoting their brand name, resulting in world
wide recognition. 'Coca-Cola' is the most recognized trademark, recognized by 94% of the world's population and is
the most widely recognized word after "OK". Coca Cola’s red and white colors and special writing are all examples of
world-wide trademarks.
Coca Cola utilizes the Individual brand strategy as Coca Cola’s major products are given their own brand names e.g.
Fanta, Sprite, Coca Cola etc. although they maybe presented as different lines they operate under the name of Coca
Cola.

Packaging

Coca-Cola has benefited from packaging the product with incentives and endorsements on the labeling as a
promotional strategy to increase its volume of sales and revenue.

Price:

Price is a very important part of the marketing mix as it can affect both the supply and demand for Coca Cola. The
price of Coca Cola’s products is one of the most important factors in a customer’s decision to buy.
Price strategies are important to Coca Cola because the price determines the amount of sales and profit per unit sold.
Businesses have to set a price that is attractive to their customers and provides the business with a good level of
profit. Long before a sale was ever made Coca Cola had developed a forecast of consumer demand at different
prices which inevitably determined whether or not the product came on the market, as well as the allocation of
adequate money and resources to produce, promote and distribute the product.

Pricing Strategies And Tactics

There are 5 strategies available to business: Market skimming pricing, Penetration pricing, Loss leaders, Price Points
and Discounts. Over the years Coca Cola has used Penetration Pricing as a way of grabbing a foothold in the market
and won a market share. It’s product penetrated the marketplace. Once customer loyalty is established as seen with
Coca Cola it is then able to slowly raise the price of its product. There has been a fierce pricing rivalry between Coca
Cola and Pepsi products as each company competes for customer recognition and satisfaction. Till now it appears as
if Coke has come up on top, although in order to gain long term profits Coke had to sacrifice short term profits where
in some cases it either went under of just broke even, but as seen it has been all for the best.

Pricing Methods

Pricing methods include: Cost based Pricing, Market based pricing and Competition based Pricing. Over the years
Coca has lost ground here in it’s pricing but has regained it’s strength as it employed the Competition-based pricing
method which allowed it to compete more effectively in the soft drink market. Leader follower pricing occurs when
there is one quite powerful business in the market which is thought to be the market leader. The business will tend to
have a larger market share, loyal customers and some technological edge, thus the case currently with Coke, it was
first the follower but through effective management has now become the leader of the market and is working towards
achieving the marketing objectives of the Coca Cola.

Promotion:

Coca Cola has used electronic media as the main form of promotion for extensive range of products. Although
advertising is usually very expensive, it is the most effective way of reminding and exposing potential customers to
Coca Cola Products. Coca Cola also utilizes below the line promotions such as contests, coupons, and free samples.
These activities are an effective way of getting people to give your product a go.

Place and Distribution:

One key element of the “Place/Distribution” aspect is the respective distribution channels that Coca Cola has elected
to transport and sell its product.
There are four types of distribution strategies that Coca Cola could have chosen from, these are: intensive, selective,
exclusive and direct distribution. It is apparent from the popularity of the Coca Cola’s product on the market that the
business in the past used the method of intensive distribution as the product is available at every possible outlet.
From supermarkets to service stations to your local corner shop, anywhere you go you will find the Coca Cola
products.

Physical Distribution Issues

Coca Cola needs to consider a number of issues relating to the physical distribution of its soft drink products. The five
components of physical distribution are, order processing, warehousing, materials handling, inventory control,
transportation. Coca Cola must further try to balance their operations with more efficient distribution channels.

Order Processing- Coca Cola cannot delay their processes for consumer deliveries (i.e. delivery to selling centers),
as this is inefficient business functioning and is portrays a flawed image of the product and overall business.
Warehousing and inventory control- warehousing of Coca Cola products is necessary. Inventory control is another
important aspect of distribution as inventory makes up a large percentage of businesses assets. Choosing the correct
and desired inventory measure that Jackson’s sees as most effective is vital. Jackson’s must remember though that
there are factors involved with inventory control that can hinder the products sales and customer perceptions
(hazards, distribution from storage facilities, etc…).
Materials handling- this deals with physically handling the product and using machinery such as forklifts and
conveyor belts. When holding products, then Coca Cola has benefited from purchasing or renting respective
machinery.
Transportation- transporting Coca Cola products is the one most important components of physical distribution.
Electing either to transport the sports drink by air, rail, road or water depends on the market (i.e. global or domestic?)
and depends on the associated costs. The most beneficial transportation method for Coca Cola would be ROAD if
the product were moved around from storage to the cost centers.

Implementing, Monitoring And Controlling

Financial Forecasts

Sales force composite is the most logical method in forecasting revenue. This involves estimates from individual
salespeople to sell to work out a total for the whole business. Once these costs and revenues are forecasted,
management can then decide which combination of marketing mix strategies will deliver the most sales revenue at
the lowest cost.

Implementing

For its further success, Coca Cola must impose several key changes. Production needs to be on time and meet the
quota demanded from wholesalers. It must also be efficient so as not to build inventory stocks and inventory prices.
The marketing needs to be motivated and knowledgeable about the product. The forms of promotion such as
advertising must be attracting and enticing to the target market to get the greatest amount of exposure possible for
the product. This will ensure the success of the product in the stores. Distribution of the product must be efficient.
This problem has already been taken care of with convenient transport routes to commercial areas and transport
already being arranged.

Monitoring And Controlling

Monitoring and controlling allows the business to check for variance in the budget and actual. This is important
because it allows Coca Cola to take the necessary actions to meet the marketing objectives. There are three tools
Coca Cola should use to monitor the marketing plan. They are the following:

i. Sales Analysis
The sales analysis breaks down total business sales by market segments to identify strengths and weaknesses in the
different areas of sales. Sellers of Coca Cola products vary from major retail supermarkets to small corner stores.
This gives the its products maximum exposure to customers at their convenience.
ii. Market Share Analysis
Market share analysis compares Coca Cola’s business sales performance with that of its competitors. Coca Cola
looks to increase its market share by over 60%. With the changes Coca Cola is currently undergoing, they aim to
regain an iron fist control of the market. Target market various age groups and lifestyles from high school students
too universities, and male or female.

Marketing Profitability Analysis

This analysis looks at the cost side of marketing and the profitability of products, sales territories, market segments
and sales people. There are three ratios to monitor marketing profitability; they are market research to sales,
advertising to sales and sales representatives to sales. The results of these three tools can help Coca Cola determine
any emerging trends, such as the need for a different product. Comparing these results with actual results gives the
business an idea on when to change.

Market Research
Coca Cola through its market research has addressed all three types of research to define the problem raised by
shareholders and gathered information to serve their needs.

Factors Influencing Consumer Choice

Psychological Factors: such as motivation, perception, lifestyle, personality and self concept, learning , and
attitudes influence the consumers behavior towards a product and Coca Cola has addressed this issue by introducing
Diet Coke to satisfy different lifestyles.
Sociocultural factors: such as culture, subculture, socio-economic status, family and reference groups influence the
consumer’s behavior towards a product.
Economic factors: such as Disposable income and discretionary income. Coca Cola has addressed this side of the
influence by maintaining a low price on the price of its products.
Government Factors: such as new regulations, inflation, interest rates all influence consumer spending and choice.