Coca-Cola Company Marketing Dynamics

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Table of Contents

Introduction
Content of the interview with the manager of the business
Analysis and suggestion on improving the business in a marketing orientation
Conclusion
Reference List

Introduction

The efficacy in the marketing of a company’s products has largely determined the success of large and medium sized companies in terms of brand visibility, sales and the profitability in the medium and long term. In essence, the managers must understand and integrate the principles of marketing in tandem with the dynamics in the external environment if they are to achieve positive results (Pride & Ferrell, 2008, p. 5).

Taking into account the level of competition in the manufacturing and service industries, companies in the United States have started realigning their marketing strategies with the aim of increasing their market share.

In view of the competition, the managers are forced to understand the external factors thereby informing their selection of the range of products and services to be introduced in the market. Furthermore, pricing and marketing dynamics are also affected while planning to improve the overall company products and performance takes center stage (Pride & Ferrell, 2008, p. 5).

This essay addresses the contents of the interview with a manager from Coca-Cola Company in relation to marketing dynamics incorporated by the company and how they are influenced by external environmental factors. In addition, an analysis and suggestion of the best business practices to be applied in the running of the company will be discussed.

Content of the interview with the manager of the business

After conducting an interview with the general manager of the Coca Cola Company, the following information was collected with regard to the company’s marketing strategies and coping mechanisms in the face of turbulent business environment. To start with, the manager asserted that Coca Cola Company Limited is a manufacturing company with over 120 years of operation in the soft drinks business.

Since its inception in Atlanta in 1886, the company has grown to become the largest beverage manufacturer in the United States with its parent company leading in the global beverage market. The company started by selling fountain beverage in a single candy store before it achieved tremendous growth in the 20^th century resulting in the eventual spread throughout the united states.

Currently, the company is involved in manufacturing of concentrates, syrups and to a large extent the beverage bases that result in the formation of more than 3,000 products that range from sparkling drinks to less dominant still beverages. The Coca Cola Company yields its strength from the robust Coca Cola system that comprises the bottling companies and distributors who ensure timely and constant distribution of the products.

The consistency and rigorous marketing activities that ensures greater visibility of the brand in the long term has acted as the pillar over which the company has recorded tremendous growth in the overall beverage market. Its weakness was found in its extensive products that made it impossible to market all the products in a way that they receive brand presence.

The beverage business in the United States is overly a lucrative business with many actors. While coca cola is the dominant player in the market, competition has always affected its operations in several parts of the United States and the global market. The efficiency of the distribution network coupled with the economic forces affecting the spending power of the consumer has been the major environmental factors that have worked against the company.

More importantly, regulation and taxation has overly affected the pricing of the products thereby impacting on the turnover of the products. In addition, the socio cultural forces particularly the perceptions and level of satisfaction in the customers is a major external force with considerable impact in affecting sales turnover of the products (Pride & Ferrell, 2008, p.6).

Owing to the wide range of products, the manager asserted that the company target people of all walks of life. The sparkling drinks are mainly taken by the people above 10 years of age thereby making the youths and the working people their major target.

The still beverages are advertised across all ages with considerable marketing carried out in family set up, sports venues and among the elderly people. Buoyed by many years of existence and quality service to the American people, Coca Cola Company deals mainly in sparkling drinks and still beverages which include water, juices and selected energy drinks.

Consumer demand and preferences determines the introduction of new products and services with the company poised to meet the dynamic needs exemplified across its wide base of consumers. In developing the products, the company also relies on surveys and research information that also proves important in the improvement of the existing line of products.

The Coca Cola system has ensured that the company brands have a dominant presence in the local and global market. Ranging from small sized entities to large regional entities, the company brand are produced and overly distributed to the eventual consumers through various retail outlets within the globe.

Coca cola system is among the largest distribution network ever devised by any company and serves as idea behind the success of the company. The close collaboration the company develops with the bottling partners has ensured the sustainability in the growth and turnover over the years.

Coca cola brand is the most visible brand in the world due to its many years of association with major sporting activities such as the Olympics and football extravaganzas over the last several decades. While the sporting events result in wide television advertisement of the brands, the company also relies on several other of marketing such as print media. Retail store displays combined with shop branding has proven as major advertisement channels for the products.

More importantly, the brands receive high presence in the online programs, conspicuous and unique package design, and other outdoor activities such as sponsored projects. Advertising largely comprises about 5% of the sales volume with package design, public relations and sales promotion consuming 2.5 %, 2% and 3% of the turnover respectively.

The beverage market has experienced a lot of volatility owing to the wide range of forces that influence the pricing and the uptake of products. In terms of pricing, the company considers the market dynamics before setting the end user prices for the products. Taking into account the cost of production including taxation, the level of competition and to a large extent the customers spending power, the company sets the recommended retail prices through the competitive based pricing.

To further ensure the company and the bottlers has full control of the prices, plans to provide the outlets with branded fridges and direct supply is undertaken. Competitive based pricing is applied due to the lasting distinctiveness offered by the product when compared with others marketed by the competitors.

On the operations of the company, the manager explained the application of several methods in coming up with the targets owing to the unpredictable nature of the market coupled with the competitive business environment. Surveys and market tests were combined with time series analysis thereby resulting in a synergistic approach to sales forecasting. Time series analysis denoted increased consumer behavior during summer period and sports extravaganzas hence the company was able to plan in earnest before the onset of this period.

While market tests of new and existing brands provided useful information, surveys proved pivotal in the overall planning of the marketing, distribution and sales forecast. Surveys depicting increased demand and utilization of certain brands are crucial to the business since it gives the company time to refocus its strategies in anticipation of increased sales. However, the utilization of the specific methods was undertaken depending on the prevailing economic circumstances.

Analysis and suggestion on improving the business in a marketing orientation

According to the perspective given by the manager, the company focus on the whole population with greater interest being the youths and working class has enhanced its growth over the last decades. While the two groups offer growth potential, greater emphasis should be directed to the baby boomers that are nearing retirement due to the fact that they will require enormous amounts of energy and juicy drinks during their retirements.

Acquainting them with the brands would offer the company mileage and securing the potential to the affluent group of senior citizens. More importantly, use of youth friendly advertisements particularly during sports sponsorship and promotions would increase the market share hence ensuring adoption of the brands in their lives.

On the part of products offered, the company is well poised owing to the wide array intended to fulfill the tastes and preferences of each group of the customers. Products ranging from sparkling to energy drinks has wide acceptance across all age groups while the mineral water and juices has received great recognition particularly at the household and family level.

While the sparkling and energy varieties of drinks offer great potential, the company should consider downsizing the production of malted drinks owing to the low returns and sales volume occasioned by high competition from brewers and erratic consumer behavior.

Based on the survey results, the company should embark on mass production of mineral water packaged in large volume containers to cater for household and family needs. In fact, the consumer loyalty enjoyed by the company due to its superb brands would enhance its penetration of the newly repackaged product in the market.

The Coca Cola Company has built a large empire and network of distributors since its inception. Taking into account the supportive nature to its bottlers and distributors, the company has received incomparable levels of loyalty thereby improving the efficiency y of distribution of the products across the United States and the globe.

The intensive distribution of the soft drinks has enhanced the recognition and utilization of the brands. The distribution system is complemented by the utilization of a scientific inventory system which entails the adoption of software for tracking the production in relation to the orders and to a large extent the sales and deliveries in the company.

The usage of the software powered inventory system has ensured continuity in production and distribution of the products in the long term. In view of the efficiency exhibited in the distribution lines and nature of products, it is ill advisable to rush into introducing other methods since they must water down the gains made by the coca cola system (Converse, 2007, p. 65).

Coca Cola Company brands have been on the limelight in an unprecedented manner due to its application of holistic advertising and promotion mechanisms aimed at reaching all corners of the world.

In tandem with its vision, the company budgetary allocation to promotion is perceived as an investment owing to its propensity to result in massive returns. The recognition and acceptance of brands has occurred mainly through advertising and promotion, hence serving as the major selling point of the brands (Kazim & Batra, 2005, p. 54; Pride & Ferrell, 2008, p. 6).

However, increasing competition and visibility of other brands requires the company to increase its budgetary allocation for sales promotion and advertising by 30-40%. The added amount would go into branding public places and facilities and intensification of sales promotion in media channels thereby resulting in enhanced acceptance and visibility of the brands (Kazim & Batra, 2005, p. 54).

Geographic pricing of the products has ensured that the bottlers and the customers get better returns and value for their money respectively. The fact that concentrates are distributed directly to the bottlers’ by the Coca Cola Company has led to the usage of uniform delivery pricing of the soft drinks (Sodhi & Sodhi, 2007, p.76).

The company foots the extra cost occasioned by the increase in the distance between their warehouse and the various bottling companies. While the geographical pricing has gained prominence in the United States, its combination with transfer pricing has found wider application outside the country due to the variations in taxation system and distances (Sodhi & Sodhi, 2007, p.66).

Taking into account the impact of increased transport costs and transportation systems, there is need for the company to apply a holistic approach in reviewing the pricing method. A combination of the geographical and transfer pricing would provide an ideal method under which the company would avoid straining its margins and some sections of its consumer base.

In essence, pricing using countries or states as the units is highly recommended in a view to ensure sobriety of markets within certain regions in the wake of the upsurge in competition. In addition, factoring in the tax in the pricing strategy would result into adoption of a specific price for a certain state or country (Pride & Ferrell, 2008, p. 12).

Although the company has received massive growth through the application of time series analysis and surveys as the main methods of forecasting sales, there is need to utilize a wide range of forecasting methods in order to factor in the prevailing conditions in the business environment (Pride & Ferrell, 2008, p. 12).

Application of multiple methods not only seals the loopholes in forecasting but also results in efficiency in coming up with the expected figures based on the appropriate analysis of the various forces and dynamics in the market. While time series would enhance estimation of figures for the various variables across seasons, its combination with survey would enhance the forecasting of the demand at specific times within the season (Sodhi & Sodhi, 2007, p.63).

Incorporation of time series and regression analysis is imperative in ascertaining the effects of specific occurrences to the demand and supply curve (Mentzer & Moon, 2004, p. 32).

The effects of intensified sales promotion and entry of new brand by the company or their rivals and changes in the political, social and economic environment would easily be factored in the eventual forecasting of the demand and supply at certain times. In view of the combination, the company would reap the benefits of a synergistic approach that factors all the aspects of production and marketing with considerable influence to demand and supply of the beverages (Mentzer & Moon, 2004, p. 32).

Conclusion

Owing to its success culture, the company has maintained an upward momentum in its sales volumes and profit margins. Improvements on the technological capacity in production coupled with intensive sales promotion and consumer needs driven advertising has seen the company realize unprecedented development from a single candy shop to a multinational business operating in more than 200 countries in the world (Kazim & Batra, 2005, p. 54).

Furthermore, massive investment in advertisement and sponsorship combined with enhanced collaboration with the bottlers and distributors in the coca cola system has placed the company in the right path of sustainable growth and development (Coe, 2003, p. 75).

The correct pricing of the wide range of products has placed it ahead of the competitors while ensuring it enjoys a sizeable proportion of the market share of beverages. It is therefore imperative for the company to intensify advertising and sponsorship across the age groups while incorporating multiple forecasting methods and pricing modes in order for the company to continue enjoying growth.

Reference List

Coe, J. (2003). The Fundamentals of Business-to-Business Sales & Marketing. 1^stEd. New York: McGraw-Hill.

Converse, P. (2007). Essentials of Distribution. St Louis: Joseph Press.

Kazmi, S. & Batra, S. (2005). Advertising and Sales Promotions. New York: Excel Books.

Mentzer, J. & Moon, M. (2004). Sales Forecasting Management: A Demand Management Approach. 2^nd ed. Thousands oaks: Sage Publications, Inc.

Pride, W. & Ferrell, A. (2008). Marketing. 15 Ed. New York: South-Western Publishing Company.

Sodhi, N. (2007). Six Sigma Pricing: Improving Pricing Operations to Increase Profits. 1^st ed. Upper Saddle River, New Jersey: FT Press.

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