Coca-Colas Current and Potential Customers - Case Study Example

Introduction Coca-Cola is a well renowned product across the globe. Coca-Cola is a carbonated soft drink that is sold in over 200 countries. The product is produced by The Coca-Cola Company and is often referred to as Coke. Originally, the product was being produced as a patent medicine. The marketing tactics that have been adopted in the distribution of Coke has widely led to its dominance as the world leading beverage throughout the 20th century. Characteristic of current and potential customers The Coca-cola product has a wide range of customer that fall in various distribution channels. Customers may be categorized into; CNF, a distributor, retailer to a final customer which are considered to be households. The current customers continue to buy Coke because of the low price as well as its nutrition value whereas new customers are attracted by the low prices and the high nutritional value defined in coke (Buttle, P.23). Segmentation In Coca-cola, market segmentation is used to describe the way the company decides on who they are going to sell the product to. The various marketing segmentation used to market Coca-Cola are; Customer Demographic Psychographic Geographic Geo-demographic Behaviouristic Demographic segmentation Coca-cola segments its market in various ways but demographic segmentation has been a key towards obtaining the company success. Demographic segmentation Coca-Cola product with main focus on coke has largely assisted the organization in determining the target group. Through demographic segmentation, Coca-cola has been able to categorize customer needs on the basis of various demographic factors (Buttle, P.32). Factors to evaluate segments Family- due to variation of family size, coke have been packed in 500ml, 1L, 1.5L and 2L so that customers can choose a suitable pack for the family Age- this is one of the most significant factor that Coke has considered. Coke diet is for the elderly people and those suffering from diabetic. Coke is also produced for young people between the age of 10 and 35 Income- coke is packed into little packs to ensure that customers have awesome price ranging to all class of people (Buttle, P.46). Key success factors Key success factors towards establishing effectiveness in Coca-Cola operations are; Strong global presence: Coke is a carbonated soft drink sold in over 200 nations Licensed bottlers: the company bottling structure permits the organization to take advantage of the immeasurable growth opportunities across the globe High Utilization of fixed assets: the company operates on a global scale while at the same time preserving its local approach Brand image: brand image is considered as the most important aspect featuring Coke competitive. The brand image is largely recognized right through 90% of the globe (Donald, P.24). Retail and distribution network: coke provides important margin of about 15-20%. These margins are reasonable in ensuring retailers keep Coke products. Management effort and financial investment: Coke has a well structure management both intern of operation and finances thus enabling the company to remain as a market leader in the soft drink industry. Value Proposition Coke delivers a more holistic approach where by its value proposition is well defined compared to Pepsi its chief competitor. This holistic approach strives at ensuring that the customer has better experiences. The company ensures it produces unique product. Coke is a unique product whose formula famously is closely guarded as a secret The secret formula combines with an exclusive use of the coke brand implying that no one can be able to produce a coca-cola product Customer intimacy Coke creates a virtuous circle where the all distribution channels understand the company objectives, mission and value statement thus providing a more optimal solution. Therefore, the more a supplier service or product is adopted, the stronger the customer intimacy (Donald, P.43). Operational Excellency This is a philosophy of leadership, teamwork and problem solving which results to a continuous improvement throughout the company through focusing on the market needs, optimizing existing process as well as empowering Coca-Cola employee defines the company operational Excellency (Donald, P.54). Product leadership Product leadership is defined as the ability to deliver state of art defined product produced by Coca-Cola. To be ahead of competitors, product leadership is achieved by way of; innovation, development, design, market delivery and brand awareness. Steep Analysis Social and demographic Lifestyle has great influence on the use of coke products. Healthier lifestyles preferences are affecting the soft drink industry Technology Coke has to engage in updating its manufacturing techniques in line with technological advancement Economic Coke is the subject to raw material availability used to produce their commodities. Environment Being a multinational company, coke is developing logical operations, marketing plan and distribution channels that adhere to environmental forces Political Soft drinks fall within the food categories thus government plays a major role in the manufacturing operations of coke in terms of rules and regulations. SWOT Analysis Strengths Market leader in soft drinks Coke enjoys a massive appeal across the globe Coke bottling system is a greatest strength since it allow the company conduct business on a universal scale while at the same time maintaining a local approach Weaknesses Coke has negative effects on teeth Previously failed marketing strategies such as Desani and Coke Zero New emerging as well as existing competitors Opportunities Opportunity to introduce new products Brand recognition is a major factor affecting Coke competitive position Raising concern in green business as well as sustainability Threats New viable competitors in the soft drink industry Threat of substitute The change of beverage market to one which is health conscious Consumer buying power represent a great threat to coke Porters Five Analysis Entry of new competitors Coca-Cola has low or medium threat based on entry of new competitors. The company has invested in creating brand image, advertising and marketing, retail distribution minimizing the threat of new competitors (Michael, P.23). Competitive rivalry The soft drink industry is dominated by coke. Competition is comparatively low to widely result in any kind of turmoil in the industry structure. Coke and Pepsi are the key primary competitors. Substitute Product The soft drink industry is enriched with statistic of substitute such as juices, coffee, tea and water. Most of the substitute cannot substitute Coca-Cola products (Michael, P.34). Bargaining powers of customers Important customers for the soft drink industry are vending, convenience stores, fast food fountains and restaurant. Profitability of the above segment largely demonstrates bargaining powers of customers. Bargaining powers of suppliers Most of the raw materials in the soft drink industry are basic commodity such as color, caffeine and packaging. Suppliers of these commodities have no bargaining power. Market strategy For Coke, a good penetration market strategy has greatly led to large amount of sales as well as large market shares. Defined by the graph below; Market Mix (4Ps) Product The Coke packaging comes in various ways whereby some of the containers can be refilled and use for other domestic purposes. The packaging is aimed at attracting customers. Coke beverage is made from well sustainable sourced material and is produce in properly structured methods. Constant improvement of the product has greatly created the impression that the company aims at satisfying its customers (Michael, P.67). Pricing strategy Coca-Cola has a high market share in which increased competitors has forced the company to be customer sensitive especially about price. Coke is a fast moving beverage due to a well defined price strategy. For Coke, penetration pricing means setting a lower price as opposed to high prices so as to achieve potentially dominant market share (Kotler, P.35). Promotion Coke Promotion strategy is defined through; Advertising- coke has widely incorporated billboards in various cities which are viewed by millions of people across the globe. The company also advertises Coke through TV adverts and newspaper. With today technology advancement, the company is advertising coke online which target on e-users right from social networking sites to their well designed websites (Kotler, P.65). Personal selling-the company is involved in distributing coolers and vending units which are embedded with coke pictures thus spreading the massage about coke market share. Sale promotion- the company is engaged in several loyalty reward program such as credit purchases and redeeming points for rewards. Loyal customers are involved in purchasing coke to enjoy the benefits of redeeming points. Public relations- Press release is the main way in which Coca Cola engages in public relation. Press release recognizes coke engagement in achieving an eco friendly environment through reducing CO2 emission. Direct Marketing-Coca-cola engages in direct marketing since its effectiveness can be measured directly. Coke is able to see the campaign directly and respond to customer directly thus creating a strong customer relationship. Place The Coca-Cola Company has a well established distribution channel that effectively distributes coke. These distribution channels make coke an available commodity through their expert distribution channel. The company has good and very secure transport facilities, distribution equipment in their area of coverage. Work Cited Buttle, Francis. Customer Relationship Management: concepts and tools, Oxford: Elsevier Butterworth-Heinemann. 2004. Print Donald, Robert. Managing Customers as Investments: The Strategic Value of Customers in the Long Run. Upper Saddle River, NJ: Pearson Education Kotler, Philip. A framework for marketing management, New Jersey: Pearson. 2002. Print Michael, Hartline. Marketing strategy. Australia ; Mason, Ohio : South-Western Cengage Learning. 2011. Print Read More