Coca Cola Company – Marketing Management

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Executive Summary

In the current world market, small, medium, as well as international businesses have realised the need to adopt and implement marketing management strategies. The marketing management strategies provide a number of opportunities to these companies.

The benefits include, among others, enhancing the company’s competitive advantage, increasing the market share, increasing profitability, as well as enhancing product sustainability.

Marketing management involves theories and models that cover segmentation, targeting, and position of a given product. As a result of this, an adoption of a marketing mix by a company enhances its effective exploitation of the market. The current paper revolves around these features.

Introduction

The concept of ‘marketing theory and management’ is defined from a managerial and social perspective. As a social and management concept, marketing process involves the process through which both groups and individuals obtain whatever they desire to satisfy their needs and wants. It makes them create and exchange their values with others.

Therefore, marketing strategies that are adopted and implemented by any business organisation consists of actions that help to build on desirable exchanges. On the other hand, according to managerial definition, marketing involves the processes of planning, implementing pricing strategies, distributing products, as well as promoting ideas and products.

However, before any business organisation, through its management, makes the decision to avail its products and services to the end consumers, it should take into consideration other marketing concepts. Such concepts include, among others, market segmentation, market targeting, and market positioning. The adoption and implementation of the three concepts will help in the realisation of marketing opportunities.

The main objective of this paper is to analyse the principles and practices of marketing management in the context of a multinational organisation. The organisation selected for this study is the Coca-Cola Company.

The intention of this paper is to comprehend and blend principles of marketing theory with their real life application. The need for this blending and comprehension is what motivated the writer of this paper to opt for case study techniques.

Literature Review

Market segmentation

According to Chaston (2010), market segmentation refers to:

“The processing (and) dividing up of an entire market into measurable, discrete, and identifiable group(s). The groups share similar characteristics and needs. Besides, the attitudes contained in the market (and reactions towards) messages communicated with regard to a product or a service becomes one and same” (p. 122).

Most contemporary business organisations around the world have adopted and implemented market segmentation techniques during their strategic planning and marketing processes. For the majority of international and small business organisations, market segmentation is the panacea for most of the challenges facing current global businesses.

According to Armstrong (2005), the nature of the rewards associated with this strategy (as well as the logic behind the adoption and implementation of market segmentation) lies in the literature existing in this field. The needs and wants of the customers have increased and become diverse over the years.

Adoption of this strategy requires that business organisations come up with strategies to ensure constant grouping of customers into largely similar categories. One way of grouping the customers is through the use of their buying behaviours. The process helps to give business management an improved picture concerning an appropriate segment of the market that is served by their goods and services.

Within a wider market spectrum, the interests and desires of the consumers are constantly shifting. To most of the companies producing one kind of product, it becomes difficult to satisfy the various needs of the customers.

That is the reason why such companies should engage in market segmentation to help them identify the specific market segment that they should focus on. Such an initiative, as illustrated by Simkin & Dibb (2010), leads to enhanced utilisation of scarce resources.

Processes of market segmentation

As noted by Harriso (2009), any business organisation that needs to undertake the process of market segmentation should meet three key conditions or requirements.

The three include perception of the market, a pre-requisite of any market segmentation endeavour, market targeting, and final positioning. Figure 1 in the appendices section provides a clear picture of the link between the three major processes through which market segmentation is achieved.

The main component of market segmentation is the positioning of products in the market. Positioning, in a sense, presents the marketing managers with what Haley (2008) refers to as ‘maximization edge’. It refers to the image projected by a product in the market relative to that projected by competing brands.

To a consumer, positioning of the product in the market plays a major role in making a rational decision to buy the product and not that of the competitor. One of the major challenges that business organisations face, especially in the current global market, is the ability to interpret all needs and wants associated with the targeted consumers in the market.

Bennett (2008) and Haley (2008) notes that the organisation should be able to translate the needs and wants of the consumers into ‘tangible combinations’ of promotion and distribution strategies. Customers located within particular market segments identified by the organisation are not always uniform and fixed. Because of their varying population size, market segments vary from one market to the other.

The marketing managers should take into consideration several factors when segmenting the market. For example, they should pay attention to the impacts that markets are likely to have in the larger society. In addition, the market segments should be both ‘selective and well defined’.

Strategies that companies can use to segment their markets

Demographics and benefits of the products and services are some of the major factors that companies take into consideration in segmenting their markets. As a principle, companies should be able to group their consumers. Some of the aspects that characterise markets and consumers, such as sex, personalities, and age, are also taken into consideration.

Harriso (2009) is of the view that the organisation can exploit the strategy to monitor the market and gain a competitive edge in one particular section of the market. Market segmentation may present small players in the market with the opportunity to maximise on areas that key players have ignored.

There are four major marketing options that are available to every organisation in the market. The four include market penetration, product development, market development, and product diversification. Chaston (2010) conducted a study on Mobit Company to analyse the effects of market segmentation to contemporary business organisations.

During the study, Chaston (2010) concluded that market penetration is one on of the strategies adopted by companies in efforts to increase their customer share.

The sentiments by Chaston (2010) are supported by Haley (2008), who argues that market penetration helps the organisation to increase the sales volume of its products and services. As a result, companies are able to expand their range of products and services in the market place.

Product development, which is the second factor, is a process through which business organisations present or introduce new products and services to their current market segment. Market development, which is slightly different from product development, involves selling already existing products and services in newly created markets.

Market diversification involves the decisions made by the management to sell the company’s newly developed products and services in the new markets. Market diversification, as a strategy, is also adopted by companies to increase their market share.

Once the company has identified and marked out its market segment (by grouping consumers), it becomes easy to target a specific aspect of that particular market. There are various steps taken by the company at this stage, including concentrating on one market segment with a particular brand of a given product.

Other steps taken by the organisation at this juncture include offering one brand to a wide market segment. Finally, the organisation will avail brands to every market segment identified.

According to Armstrong (2005), the strategy adopted to help in identification of market segment will diversify the market opportunities for the organisation. However, haphazard adoption and implementation of strategies will lead to failure of market segmentation. All the efforts made by the organisation will amount to nothing much in such cases.

For market segmentation strategies to be effective, the company’s management team should meet several conditions. For example, the market segment should be distinct and identifiable. In addition, the target segment should be viable, stable, controllable, and marketable (Simkin & Dibb 2010).

When developing visions to inform the marketing strategies adopted for the new segments, the management should realise that it is not possible to fix the needs of the various customers in the market. Due to the presence of various influencing factors, the needs of the customers are likely to change with regard to particular products in the market. An example of such a scenario is illustrated by Kotler (2007).

In his article, Kotler (2007) argues that the management should be aware of the change in customer preferences. He gives the example of Bata Shoe Company, where the management had to carry out a market research to determine changes in consumer preferences.

The management compared the data collected in one study with the one collected in an earlier study. From the comparison, the management realised that the market segment had changed and its dynamics were not similar to those recorded in the previous study.

Market targeting

After identification of the market segment in which the company wants to sell its products, the management must come up with strategies aimed at overcoming the challenges that may be faced in penetrating the segment. In his article, Harriso (2009) suggests that there is a need to design a marketing mix that suits the market segments selected.

Harriso (2009) and Bennett (2008) assert that it is important for the management to target the correct market segment. Such targeting helps in focusing the resources of the company in the mission and objectives envisaged for that segment.

Chapte (2000) and Kotler (2007) point out that a business organisation targeting a particular market segment may face challenges related to lack of adequately qualified human resource. The challenge will make it hard for the organisation to serve such a large market area.

There are various assessment criteria taken into consideration for a successful targeting of a particular market segment. Haley (2008) mentions five key areas that play a significant role in assisting the management design strategies for the target market. They include ‘attainability’ of the segment market, its measurability, dependability, and sustainability.

Haley (2008) illustrates various procedures that the management can adopt or implement in efforts to come up with an appropriate target market. The management team should assess the various aspects of the market segment. They include the profitability of the segment, intensity of competition within the market segment, the size of the segment, as well as the cyclical status of the entire economy in the country.

The various aspects of the segment market relate to the reasonability of the industry in which the company intends to penetrate. Kotler (2007) highlights a number of factors that should be taken into consideration when assessing the new target market. They include accessibility of the segment, its homogeneity, the nature of the networks within the segment, as well as the nature of the consumers’ needs.

Decisions taken by the management depend on the targeting strategy adopted by the company. Bennett (2008) illustrates three major targeting approaches that a company can adopt in market segmentation. The first is concentrated marketing, where there is the use of only one marketing mix for a number of market segments.

The second approach is referred to as differentiated marketing. Here, a number of marketing mixes are used in various market segments. The third is undifferentiated marketing approach. Here, the management adopts one marketing mix for the entire market.

It is important to note that the appropriateness of a given approach will depend on the type of business the organisation is engaged in, the company’s financial resources, as well as the size of business (Harriso 2009).

Market product positioning

According to Chapte (2000), the positioning of the products and services offered by the company form the third aspect of product segmentation. Haley (2008) illustrates how the concept works in the market. He states that during product positioning, the organisation continually adjusts its products and services, depending on the findings of a market research.

As a result of this, the management is able to create an appropriate image that is associated with the product or service offered. The image is created with the target market segment in mind. At this juncture, the management is trying to create a favourable brand image to address the competition posed by present and future competitors.

The positioning is also aimed at achieving brand sustainability in the target market. It is clear that Coca-Cola Company has adopted such a strategy in US and in other parts of the world. The strategy was necessitated by a change in the company’s objective of acquiring 100 subsidiaries in Africa. The company raised the number of intended subsidiaries from 100 to 500.

There are various strategies that the management can use to position the company’s products in the segment market. Simkin & Dibb (2010) point out that one of the strategies is product differentiation. Chaston (2010) outlines three procedures through which the management can achieve the appropriate product positioning in the market.

The various strategies include product differentiation, as well as the selection and prioritisation of a sustainable competitive market advantage. Other strategies include communication and delivery of the appropriate products in the market.

Armstrong (2005) reorganized the three procedures and recommended an appropriate market competitive advantage aimed at enhancing product differentiation. In conclusion, a comprehensive market segmentation, market targeting, as well as product positioning, should provide the marketing team with the ability to effectively address the needs of the target market.

Methodology

The methodology section of a research paper helps in outlining the various procedures involved in conducting the research. To present a clear picture of the concept ‘marketing management’, the writer started by providing the reader with an executive summary. The executive summary explains in general terms what marketing management is and how it affects the various products of a company.

In the second section (literature review), the author presented the reader with critical analysis of the literature available in this field. The major areas analysed in this section include, among others, market segmentation, targeting, and positioning.

In the remaining sections of this paper, the researcher provides an analysis of the Coca-Cola Company. Conclusions and recommendations are also provided. To present a clear analysis of the company, which is used as the case for the current study, the author will rely on secondary sources of data.

Some of these sources will focus on the application of relevant theories and models. The author will create a link between theories and such concepts as BCG matrix and PESTLE and their application to Coca-Cola Company.

Coca-Cola Company: An Overview

The company is a multinational organisation with headquarters in the United States of America. The company specialises in the manufacturing and marketing of different types of non-alcoholic beverages, syrups, and concentrates. For a long period now, the company has remained famous for its Coca-Cola flagship products.

The invention of the coca-cola brand is traced back to 1886. As a soft drink company, the organisation has continued to expand and increase its market share in most parts of the world. It was started by Dr. Pemberton, who was a trained pharmacist (Coca-Cola 2012). At its formative stages, the company was selling its products from soda fountains.

In the last century, the company has recorded tremendous success in the global market. The expansion and fame of the company has made it an icon in American culture. According to Datamonitor (2012), the company is not involved in the processing of its products, preferring to contract agents to do this on its behalf.

According to Coca-Cola (2012), the company has entered into partnerships with a number of bottling companies around the world. The organisation manufactures and distributes beverages, syrups, and concentrates to different bottling entities around the world. According to Datamonitor (2012), the company owns the brand, but contracts the bottling companies to reach out to the consumers on its behalf.

As of 2011, the company’s net revenue amounted to US$ 45 billion. Within the same period, the company had net earnings of US$ 20.1 Billion. The number of employees by this time stood at 139,700. The company is associated with about 500 branded products in more than 200 countries around the world. The 200 countries form the company’s target markets. The company serves over 2 billion customers every day.

Environmental Analysis

PESTLE is one of the most common assessment strategies adopted to analyse the environment of a given company. It includes the analysis of new business ventures trying to penetrate a competitive industry.

It involves the analysis of the external, as well as the internal, environments of an entity. PESTLE can be achieved through a SWOT analysis. Under this section, the author will provide an analysis of the environment within which Coca-Cola Company operates.

Political environment

Since its incorporation, Coca-Cola Company has been subjected to a number of regulations. The products manufactured by the company are classified as food meant for human consumption. Food regulations put in place by the various governments affect the operations of the company. The dynamics of the political environment within which the company is operating impact its operations.

It includes the change in government, changes in the market, civil unrests, and military takeover. All of these factors, when combined, affect the manufacture and distribution of the company’s products in the various markets.

Another aspect of the political environment affecting the operations of the company has to do with the alleged negative impacts of the company’s operations on the environment. Laws that deal with environmental protection and other regulations may have a negative impact on the operations of the company.

To address this problem, the company should embrace efficient production processes. Such processes will help the company in reducing the various wastes that pose a threat to the environment. The expansion of the company to other markets depends on the political climate in these new markets.

Economic environment

There are various economic factors that affect the operations of the company. One such factor is the recent global financial crisis, which affected the operations of the company negatively. The products of the company are not essential for human survival, meaning that they are some of the items that people will remove from their shopping list in efforts to save money in an economic crisis.

Another economic variable has to do with such macroeconomic factors as labour prices and inflation. Countries with high levels of income per capita are likely to have a positive impact on the sales of the products.

Social environment

In its efforts to expand to other markets, Coca-Cola Company is likely to face various social issues. Some of them include the unique cultures of some countries in the world. The operations of the company are likely to be affected by the eating habits of various communities around the world. In the process of manufacturing and marketing its products, the company has faced oppositions from a number of social groups in the countries.

Some of the groups claim that the company is depleting the environment and other resources. In addition, soft drinks and other beverages are considered by many health-conscious persons as unhealthy. The attitude is a threat to the operations of the company, given that it may negatively affect the sales volume.

Technology environment

Technology is one of the resources that Coca-Cola Company applies in every stage of its value chain. Technology is used in manufacturing, bottling, and storing the products. Technology affects the marketing techniques adopted by the company in various ways.

For example, such products as syrups, concentrates, and beverages require cooling before they are distributed for consumption. As such, the marketing of these products is limited to markets that can provide cold storage facilities.

The status of the machines affects the manufacturing process. Adopting new technologies will allow the company to manufacture and process its products more effectively. Technology will make it easier to store and transport the products to the various destination markets. Different types of packaging adopted by the company affect the sales volume.

The company is now embracing the use of plastic cans and bottles to package the products. Plastic packaging eases the storing and transporting of the products to various market destinations. The strength of the company is based on the effectiveness of its marketing and advertising channels. The two factors continue to influence the performance of the company’s brands.

The company uses various channels to promote its products. They include such media as television, radio, and social networks. All these factors continue to affect the way the company connects to the external market through marketing.

Customer Analysis

According to Datamonitor (2012), one way through which a company can analyse its market is by assessing the consumers. In this section, the researcher provides an analysis of how Coca-Cola connects with the consumers through marketing, design, and such other strategies. It is important to note that the company has adopted market segmentation, market targeting, and market positioning strategies.

Coca-Cola: market segmentation

As already defined by Simkin & Dibb (2010) under literature review section, market segmentation refers to the process of dividing the entire market into a number of ‘customer potential’ groups.

The marketing team takes into consideration the characteristics of the consumers, their needs and wants, as well as their consumption patterns. The main objective of doing this is to have a clear understanding of possible opportunities in the market. As a result, the management can adopt strategies aimed at enhancing the company’s competitive advantage.

In the company’s marketing management, market segmentation is carried out based on a number of factors. First, the management segments the world market based on the countries where the products are consumed. Most products of the company are consumed in such places as restaurants, cinemas, learning institutions, and railway stations.

The rest of the products are consumed in households, either during special events or in normal occasions. Secondly, the company segments its world market based on geographies. In each region, the company has a manager who is responsible for the division. The division head is expected to report to the head office at the parent plant.

The third strategy adopted by the company in segmenting its market is by taking into consideration the type of products consumed by the customers. The company divides its market into cola products and non-cola products.

According to Coca-Cola (2012), the cola products continue to generate more revenues for the company. On the other hand, the growth of the revenue generated by the non-cola products has continued to decline. The last segmentation strategy is based on demographics. It includes the age and the income of consumers.

Coca-Cola: market targeting

The company targets different market segments using different marketing techniques. The primary market segment for the products includes the young people aged between 10 and 25. The secondary market segment consists of people aged between 25 and 40.

The company’s cola products target consumers who have a need for strong flavour. On the other hand, diet non-cola products and other variants target the subgroups that are health conscious. Some products, such as Sprite, are targeted at college going groups and teenage consumers. On its part, Limca is targeted at the working class.

Coca-Cola: market positioning

According to Datamonitor (2012), the products of the company are aimed at quenching the thirst of the consumer and refreshing them.

The various brands of the company are aimed as sources of joy for the consumer. When the consumer uses the products of the company, they are expected to share the good times with family members and friends. In addition, Coca-Cola products are depicted as high quality and consistent items.

Coca-Cola: marketing mix

Companies use various strategies to introduce new products into the market. The success of the strategies depends entirely on the viability of the marketing mix. Coca Cola combines four variables in its marketing mix. The four are product, price, promotion, and place. When combined, the variables help to create an effective marketing strategy for a company.

Coca-Cola: product marketing

As already explained in this paper, Coca-Cola manufactures and distributes a number of products. The company has over 500 brands made up of syrups, concentrates, and beverages. The large number of products has made the company one of the most famous corporations in the world.

Coca-Cola: price marketing mix

Through the marketing and sales department, the company charges competitive prices for its products. It also gives the customers discounts on selected items and in special occasions. The prices of the company are either equal or less than those of the competitors. The company hopes to nurture consumer loyalty through such strategies.

Coca-Cola: promotion mix

The products of this company are promoted through three major channels. The three include publicity, personal selling, and advertising. Product advertising is in most cases conducted through radio, social media, billboards, and television. Personal selling, on the other hand, involves both specialised and highly trained personnel.

Coca-Cola: place mix marketing

The company adopts an intensive and indirect distribution strategy to supply its products in the various markets. During intensive distribution, the company products are sold on the secondary markets through such platforms as entertainment venues, school shops, restaurants, news agents, retail outlets, and sports centres.

On the other hand, indirect distribution of products occurs through intermediaries. It is aimed at avoiding direct contact between the company and the consumers.

Coca-Cola: BCG Matrix

BCG matrix is one of the strategies used by organisations to identify and evaluate a number of business firms in the industry. According to the BCG matrix shown in the appendix section, Coca-Cola Company falls under the ‘star’ category. As a result, the company controls a large market share. In addition, the company enjoys the benefits of a growing market.

Conclusion and Recommendations

In this paper, the author indicated that the marketing management process goes beyond the mere analysis of how the products reach the final consumers. The marketing managers must take into consideration a number of factors. The various factors include market segmentation, market targeting, and market positioning.

In addition, marketing mix, as a concept, plays a critical role in determining how products and services fit into the entire market. The mix is made up of four variables. The four are product, price, promotion, and place. When combined, the variables help the management to come up with a marketing strategy for the organisation.

References

Armstrong, K 2005, Marketing: an introduction, 7th edn, Prentice Hall, New York.

Bennett, PD 2008, Marketing, McGraw-Hill, New York.

Chapte, J 2000, Marketing literature review: planning intellectual property for marketing strategies in the digital context, New York Publishers, New York.

Chaston, K 2010, ‘Knowledge of marketing’, Journal of Competitive Marketing, vol. 3 no. 3, pp. 109-227.

Coca-Cola 2012, ‘Coca-Cola Enterprises, Inc. SWOT analysis’, Business Source Complete, vol. 9, p. 12.

Datamonitor 2012, ‘Coca-Cola Enterprises Inc. 2010, SWOT analysis’, Business Source Complete, vol. 4, pp. 1-9.

Haley, RI 2008, ‘Benefit segmentation: a decision-oriented research tool’, Journal of Marketing, vol.32, p. 8.

Harriso, T 2009, A hand book of advertising techniques, Togan Page, London.

Kotler, P 2007, ‘A generic concept of marketing’, Journal of Marketing, vol. 36, pp. 46-54.

Simkin, L & Dibb, S 2010, ‘Targeting, segments and positioning’, International Journal of Retail & Distribution Management, vol. 4 no. 2, pp. 40-48.

Appendices

Figure 1: Basic elements of product market segmentation

Basic elements of product market segmentation

Source: Kotler 2007

Figure 2: Coca-Cola Company BCG MATRIX position

Coca-Cola Company BCG MATRIX position

Source: Datamonitor 2012

Click Here To Order Now!