Coca Cola Company
a. How are the firms products & services perceived
Coca Cola is an extremely recognizable company. Coca Colais knownvery well worldwide.
It's branding is obvious and easily recognized. Without a doubt,no beverage company compares to Coca Cola's social popularity status. Some people buy coke, not only because of its taste, but because it is widely accepted and they feel like they are part of something so big and unifying.
Especially, most young people look forward to a different sense which cool and self-expression. Coke is a life style that they want and need. So, they choose Coca Cola. People have almost unlimited wants but limited resources. Thus, they want to choose products that provide the most value and satisfaction for their money. When backed by buying power, wants become demands. Because the people's want and need for Coca Cola, want become demand.
The positive attitudes and beliefs keep millions of consumers buying the product over and have helped the company establish loyal consumers. It is true that eighty percent of their profit comes from 20% of their loyal customers. Many people/families are extremely loyal to Coca Cola. It would not be rare to constantly find bottles and cases of a product such as coke in a house. Customers will continually purchase these products, and will probably do so for a very long time.
Loyal brand consumers may associate it with religious days like Ramadan, holidays, parties, graduation, having a picnic, playing a sport with friends, first date, seeing a movie, etc. Furthermore, this drink seems to be always having good taste with sandwich, chips, snack... Somehow, those foods are also common buying habit in market.
Some social issues with the Coca Cola Company are mainly related with environmental and "friendly-company" aspects. For example in Turkey, every year Coca Cola donates of their profits to charity organizations like “Coca-Cola Hayata Artı Vakfı”. Apart for marketing purposes it creates a "friendly company" image.
b. What are the strengths & weaknesses relative to competition? (from the customers point of view)
Coca Cola's greatest strength currently is its brand name reputation and the loyalty encompassed to this within the consumer market. Although Coca Cola has become part of the food and beverage culture of Americans, the brand and product has been integrated into the local culture of Turkey. This means that the market recognizes the brand, logo and tasted the product. The brand reputation is also laden with sentimentality for the more mature consumer, and conjures up an image of excitement and fun to the younger market. The Coca Cola logo is consistent and adored worldwide and is displayed on t-shirts, caps and collectible memorabilia; it is simple yet powerful and highly recognizable worldwide as a symbol of quality and enjoyment helping to instill confidence and further loyalty in the consumer.
Coca Cola is a very successful company, with limited weaknesses. However they do have a variety of weaknesses that need to be addressed if they want to rise to the next level. Word of mouth is probably a strength and weakness of every company. While many people have good things to say, there are many individuals who prefer to drink Cola Turka, are against “American” Coca Cola as a company, and the products in which they produce. Word of mouth unfortunately is something that is very hard to control. While people will have their opinions, you have to try to sway their negative views. If bad comments and views are put out to people who have yet to try Coca Cola products, then that could produce a lost customer which shows why word of mouth is a weakness.
Another weakness that has been greatly publicized is the health issues that surround some of their products. It is known that a popular product like cola is not very beneficial to your body and your health. When many of consumers are reaching an older age in life, they are becoming more concern with nutrition, increasing their life longer and healthier. This new focus on weight and health could be a problem for some products. Especially, with today's constant shift to health products, some products could possibly loose customers.
c. Are there unmet needs?
While it is true that Coca Cola has introduced Coca-Cola Zero, marketed as having the same taste as the original cola but with sugar-free content, this single product innovation may not be sufficient to retain the customer pool that changed its customer preference in the direction going away from Coca Cola products. Concurrent with the recognized change in consumer preferences, substitute products are being introduced in the market such as tea, juices, coffee and Turkish coffee that all fit the consumer taste for healthy living. These products serve as threats to Coca Cola products. The company has to enhance brand equity by strengthening its non-carbonated products in order to retain its customer base and gain additional customers seeking alternative products to carbonated drinks.
Changing attitudes of consumers towards health consciousness is an unmet need that consumers are increasingly concerned with nutrition and this will continue to affect Coca Cola as a nonalcoholic beverage industry by increasing the demand overall and in the healthier beverages. While diet and lesser caffeine have done a lot to lessen the impact of changing trends and fluctuations in the market, the increasing trend to look after oneself may greatly affect products with large amounts of sugar and caffeine such as Coca-Cola Classic. Furthermore, youths love classical taste cola that because they like cool and feel well; but young girls would like to lose weight or keep stature, their choice close low calorie and low sugar beverage.
Moreover, soft drink market are becoming saturated due to there are so many brands. Besides, Pepsi is also market challenger and Cola Turka is a market follower in drink market as well. Therefore, the market seems to be saturated. Furthermore, the government may change policy in aim of protect consumers' health. For instance, they tend to limit in ingredients. These lead to they need to find out the new sources. It causes the original taste changed or increase cost of productions.
d. Are there any opportunities to improve
Coca Cola has a few opportunities in its business. It has many successful brands that it should continue to exploit and pursue. Coca Cola also has the opportunity to advertise its less popular products. With a large income it has the available money to put some of these other beverages on the market. This could be very beneficial to the company if they could start selling these other products to the same extent that they do with their main products.
Another opportunity is the ability for Coca Cola to buy out their competition. This opportunity rarely presents itself in the world of business. However, with Coca Cola's power and success, such a task is not impossible. Coca Cola has bought out a countless number of drink brands. An easy way to turn their profit into your profit is too buy out their company. Even though this may cost a vast amount of money initially, in the long run, if all goes to plan, it results in a large profit. Also, the company will no longer need to worry about their products being part of the competition.
Also, Coca Cola's bottling system allows the company to take advantage of the infinite growth and opportunities around the world. This strategy gives Cola the opportunity to service a large, diverse, geographical area according to the organizations segmentation strategy.
Lastly, innovation can be used. This may certainly give Coca Cola competitive advantage because it introduces a new product, which many people will want to try. People will like to purchase the commodity even though price is high because no substitutes are available. It may also give Coca Cola brand loyalty which means customers will stay loyal to them no matter what happens.
a. How do customers learn about the firms products & services?
Coca Cola Company concentrates on advertising in order to make customers aware of products. Extensive advertising is using on radio, television and billboards, as well as sponsorships. Coca Cola sponsors many sport activities, which gives them more awareness and popularity. For example, Coca Cola is “Offical Drink Sponsor of National Football Team”.
They also sponsor youth activities and schools. Furthermore different promotions are offered by Coca Cola in universities concentrating their market forces on the young generation. Also, Coca Cola is increasing these promotions with popular organizations as like Rock'N Coke music festival. Thus, Coca Cola image is displayed on t-shirts, caps, and collectible memorabilia.
Advertising is centred around times of year such as the distinctive Ramadan advertising. The communication of information through various media about a product in order to create, maintain or increase sales in a target market. Customers always know the latest offers in the Coca Cola market. For instance, Coca Cola is conceived a new design on Coca-Cola Zero cans and contour bottles just for the “Avatar” movie.
Besides, the sales promotion comes to customers by sample, competitions, gift coupons, trade promotions and other devices. Petrol stations, supermarkets, drinks suppliers use these extensively. Nowadays the company is making its sales promotion with giving prepaid minutes by using celebrity of Acun Ilıcalı.
b. About competitors?
Coca Cola Company's direct competitor is PepsiCo. This is not only in Turkey but worldwide. However, Cola Turka is a prominent competitor in the cola market of Turkey to try and capture the consumer's attention. This is obviously seen in the Cola Turka's promotions with “Yahşi Batı” movie of Cem Yılmaz.
Pepsi increase their promotion and awareness by advertising their products with popular celebrity to attract their fans to buy their products. Actually, Coca Cola and Pepsi have both the idea of “think global, do local”. For example, Coca Cola which is now using Acun Ilıcalı in TV advertisement, rival company of Pepsi is used the same opinion before with Seda Sayan character who is very persuasive over consumers.
Although there are some promotions by Pepsi and Cola Turka, the consumers actually buying Coca Cola products did not actually "notice" the promotion. Most of the consumers don't get influenced by the promotions offered by the soft drinks companies. This once again shows how strong brand loyalty is between consumers.
c. Whatdo they think of the firms communication materials?
Over the years, the company has made large investments in brand promotions. Consequently, Coca Cola is one of the best recognized global brands. The company's strong brand value facilitates customer recall and allows Coca Cola to penetrate new markets and consolidate existing ones. Coca Cola has a strong brand equity attached to its products. The value of its brand comes from the reputation of the company of developing a good tasting soda beverage that families and friends can share. Cola is all about tradition and stability. This was observed by the consistency and dependability of the company's approach, message and product development.
The company actually makes use of pattern advertising. The company develops advertisements containing its determined marketing communications message. The manner of advertising adheres to various specific audiences. However, despite the consistency of its advertising framework for its different markets around the world, Coca Cola also implements local adjustments. The adjustments cover the translation of words and lyrics in the local dialect of particular markets and delivered in a manner appropriate and acceptable to the local culture, basic adjustments to the advertising format such as the use of locally significant words, phrases, messages and the arrangement of these elements to deliver a cohesive promotional campaign aligned with the basic marketing communications message of the company.
d. How would you improve the firms communication activities
Due to a high level of competitor in the industry, the profits of Coca Cola have been declining. The company have been forced to spend more money on advertising campaigns and product development for the purposes of maintaining its market share. Besides, consumers are also becoming more attracted to the sport/energy drink range due to shifts in consumer trends and attitudes, therefore Coca Cola should introduce a greater product line to their Powerade and Burn brands, either by promoting an increase in nutrients/minerals to the product and/or increase variations in flavour and bottle size. Also, they have introduced vanilla coke into the American market only so far therefore there is the opportunity to improve the firm's communication materials and promote this kind of products in Turkey where analysis shows new products are relatively well received.
a. Firms distribution strategy
The availability of Coca Cola's products is second to none. Coca Cola's brands can be found almost everywhere where consumers need a drink such as in fast food companies found all over the world (e.g. McDonalds), in all supermarkets, convenience stores, public houses, restaurants, bars and night clubs, sports stadiums, airlines... simply everywhere.
Vending machines has allowed Coca Cola to offer its products where ever consumers can be found. This once again enables Coca Cola to offer a number of different brands with their respective sizes according to their consumers' demands in different places. For instance, consumers can buy it any time in the vending machines which are set up in school, or public place. It is very convenience for people who like cola.
In addition, the variable place is very important in Coca Cola marketing mix. Due to the customers' wants and needs, the products are required readily available within hands reach of desire. Coca Cola use different channels of distribution to deliver their goods to the consumer. The principal channels are: manufacturer, wholesaler, retailer, and consumer. Especially, manufacturer; retailer; consumer model is used by the large supermarket such as Kipa. An order is placed with a manufacturer to supply all of their outlets, thus bypassing the wholesaler. This allows them to cut prices which benefits the consumer.
b. Is there any conflict in the channel
All the soft drink brands are marketed in the common channels of distribution except in the exclusive retail venues that companies bid to have. In supermarkets, these brands are sold side by side in the display shelf not giving a single brand any edge relative to the buyer. Coca Cola would like to increase its sales by offering a discount on its cans. However, the retailer knows that overall soft drink sales will not go up much when Coca Cola is put on sale and consumers who bought other brands will just switch, for the most part. Therefore, the retailer might like to "pocket" any discount that Coca Cola offers. One side may accommodate the other, but may not be motivated to continue to do so in the future, or the other may try to coerce its way through threats of punishment.
The rivalry over the channels of distribution was elevated to obtaining exclusive selling contracts in restaurants, places for vending machines, recreation areas, and popular events. Such as fast food and other restaurants are channels of distribution where there may be exclusive distribution arrangements. Coca Cola has entered into an exclusive beverage distributions agreement with McDonalds and other restaurants, but Pepsi also exclusive beverage distribution agreements with Burger King, Sbarro, etc. This does not really provide Coca Cola with an advantageous distributions scheme.
c. How would you improve the channel activities
Due to the infra-structure in developing countries like Turkey, Cola distribution can be in-effective, therefore expanding vending machines into rural areas of economic growth can help to increase revenue and brand recognition, as well as aid those markets that were underperforming. Because, Coca Cola has successfully captured the urban market but there are still potential markets in rural areas. The establishment of manufacturing firms in some rural areas would mean income opportunities for rural residents drawing the entry of various businesses such as fast food and beverage firms. Coca Cola could take advantage of this opportunity by expanding its distribution channels to rural areas by aligning with fast food companies or wholesale and retail distribution channels. The company could also form retail partnerships with local restaurants and stores to provide better visibility and greater access to Coca Cola products of targeted rural market.
a. Firms pricing strategy
The pricing strategy of Coca Cola is based on the pricing dynamics relative to its competitors as well as the value of its products. In Turkey, as is true in the international market, the fiercest competitor of Coca Cola is Pepsi so that pricing is in a way influenced by the interplay of these competitors in a given market. Different taste product adopt the same price, that made customers buy new product, but do not think too much. Because Pepsi is a puissant competitor, two companies almost adopt close pricing.
In supermarkets, the price of Coca Cola is higher by 15 to 20 kuruş when compared to Pepsi. However, affordable pricing where customers appreciate that they pay extra cost against cheaper substitutes to satisfy a desire for greater quality and reliability of product. Therefore Coca Cola products are diverse and of good quality, and at competitive prices. Also, potential market segments are that they are looking at younger children with pocket money to household mothers who do the family shopping, they want families with reasonable disposable income and therefore quality at competitive pricing is comfortably afforded.
b. How do the customers perceive / react to the firms' prices?
The higher price given by Coca Cola to its products is supported by the value of the brand equity of its different soft drink products. Coca Cola was able to sell at a higher price than its competitors because of its stable market share due to its marketing communications message linked to brand equity of product stability. This makes Coca Cola a true leader in the industry due to its ability to determine the industry pricing benchmark. Despite its slightly higher pricing, it is still able to maintain a market share by establishing a high value for its products through associations with consistency and dependability.
Furthermore, the consumers actually don't spend much time in the drink section; they simply go and purchase what they are looking for. This means they are not price sensitive at all. Also, many consumers are very brand loyal to Coca Cola. Because, they simply like the taste and only buy this drink although Pepsi prices are lower than Coca Cola's products.
On the other hand, the Coca Cola production prices seem to be higher than other soft drink in market, the consumers can buy other favor drink at lower price. For example, they can buy orange juice which is healthier than Cola. To achieve product variation in a market where consumers are increasingly more health conscious Coca Cola should reduce the price of its diet or light and caffeine free products (e.g. Coca-Cola Light), therefore undercutting cheap full sugar substitutes and gaining competitive advantage against its main competition.
5. General marketing strategy
a. What else did you learn from the discussions with the customers & from your research?
The Coca Cola Company is the largest soft drink concentrates and syrups manufacturer in the world and Turkey as well. Besides, Coca-Cola is unquestionably the most famous soft drink in the market. However from the customers' point of view; there is a shift in the tastes of consumers. Especially, individuals and families in urban areas are increasingly joining the health consciousness bandwagon based on their experience and as influenced by the international campaign against obesity. If this further strengthens, this means that the consumption of Coca Cola products could be affected. Since Coca-Cola carbonated drink has sugar and caffeine contents, customers seeking to cut back on the consumption of these products could drop out of the company's customer base.
Apart from this, the association of Coca Cola carbonated products with fast food restaurants could mean that customers withdrawing from fast food consumption could also decide to lessen intake of carbonated products. Although Coca Cola has gained strength as a soft drink manufacturing company in Turkey, the increasing number of food and beverage products being introduced in the market result to a certain degree of threat to the company. If the company does not strengthen the saleability of its products in the other soft drink sectors, it could face an even bigger threat from companies offering substitute products.
b. How can the firm improve its marketing strategy? Your recommendations….
In order for the company to maintain its strong market position, Coca Cola needs to continuously strengthen its brand to maintain brand loyalty and positive responses and differentiate itself from its competitors. Especially, the rivalry between Coca Cola, Pepsi, and Cola Turka has produced a very slow moving industry, management must continuously respond to changing consumer trends and attitudes as the consumer can easily switch to other beverages with little cost or consequence. The company should consolidate the loyal buyers, encouraging heavier consumption from them. They could try to convert some brand switchers into loyal customers through sales promotion and advertising.
According to that, the most significant changes currently in consumer trends and attitudes are the changes in attitudes towards health and the increase in the age gap of carbonated beverage drinkers. In a fairly saturated slow moving industry if they could more capitalize on the water and fruit drink product lines as this market sector is growing rapidly, while at the same time having great local focus and strategies to increase the number of consumers 25 years and over buying their products, they would gain a huge market share and a great competitive advantage, that would allow for greater long-term profits.
In conclusion, Coca Cola Company has a strong competitive position in the market. It needs to use its internal strengths to develop a market penetration and market development strategy. This includes focus on water and juices products, and catering to health consciousness of people through introduction of different cola flavor and maintaining basic cola flavor. Further company should integrate with other companies, acquisition of potential competitor businesses, innovation in branding and aggressive marketing strategy can bring long term profitability.