Coca Cola Company Management System - Case Study Example

Case Study of Marketing System Literature Review Marketing concepts focuses on the need of a company to fulfill the needs of a customer while at the same time maximizing the organizational profits. It researches on favorable means of ensuring that the products in the market suit the customer’s needs (Deeprose, 2006, 37). Marketing is the process of creating awareness of a product to the customers and it involves planning and executing, pricing, promoting and distributing to ensure exchange of goods and services to customers needs. Marketing system refers to a network of individuals, entities or different groups either on a voluntary exchange of valuable information, idea, product or services by making it available and in response to customers’ needs. Marketing systems in an organization enables the managers to work and share information with others in the organization with the aim of collaborating with the customers on products, requirements and design. It allows marketers to analyze market data concerning the market situation, its competitors and learn the behavior of the customers towards its product. It also aids the managers in decision making process. It is usually designed to be flexible in nature and forward looking with the target of giving the business a competitive advantage over its competitors as noted by Belpoggi (2006, pp 740). Coca Cola Coke management system is managed by well trained managerial staff whose main focus is to maximize the opportunities in the market and to create high profit margins. It uses reward management criteria to serve its employees basing their reward with pay legislation which focuses on ways to be used to motivate employees towards better performance (Feinman, 2006, pp 170). According to this study, the Coca Cola Company depends on the performance of its employees to be able to reap high quality good and products. The company uses Scanlon plan of cost saving, cafeteria style benefits and profit sharing as tools to encourage an efficient marketing system in the organization as described by Deeprose (2006, pp 38). The criteria for reward management gives fair idea on the company’s internal control systems, its mission and objectives by focusing on customer satisfaction, work quality and quantity, improving problem solving techniques and working processes. Background Information on Coca Cola Coke Company The company was established in the year 1886 by Dr John Pemberton though he died without knowing the success the company has grown into (Deeprose 2006, pp 38). In the year 1991 the coca cola enterprise merged with the Johnston Coca Cola Bottling Group and worked together to form a management system that was more considerate of market situation and the needs of the customers. The success made in that period amounted to a sales of 1.4 billion and with a total revenue of $5 billion. The mission statement of the company is to “maximize share owner value over time” (Bratten and Gpld, 1999) and it created the above statement by valuing the services offered to its customers and the community at large. Its main objective ensured that there was an increase in the overall sales and volume, expanding its marketing territory of its non alcoholic drink, ensuring long term cash flows and maximizing profits. Customer Groups and Market of Coca Cola Coke Company As reported by Deeprose (2006, pp 38), the company has over 16 million customers around the world who aid in distributing the product to the consumers or directly consuming the product themselves. The company aims at providing valuable services to its customers to enable them prosper in their business by conducting researches on their preferred taste and needs. Potential consumers in the market are estimated to be over 6 million and the company puts its effort sat maintaining this figure or achieving higher than this by availing the products at the right time and place that is convenient to them. It also differentiates its customer groups by using variables that focuses on customer’s needs, preferences and usage of the product. The Coca Cola Company has covered many territories and has also built many sales offices to ensure marketing and distributions channels are easy. Consumer groups have also been segmented by the company based on gender, occupation, religion and the level of education. Basing on gender, the company has produced sugar free goods for men and women who are weight cautious. It also grouped its customers basing on their personal lifestyles and personality in that consumers needs could be met based on their different personalities. This has influenced the lives of its customers whose consumption intake of the soft drinks offered by Coca Cola Coke Company during festive seasons are high. It is always there to make the event memorable to them. It has categorized its customers basing on their consumption of the product and this includes fashionable brand customers who are always ready to embrace emergence of a new product in the market, average customers who buy the product out of their need to get refreshed or quest thirst, young generation who are highly active in their daily activities and go for affordable and readily available option in the market and lastly the coca cola addicts who continuously over the years maintain their intake of the product and strive hard to maintain the patronage. The coca cola company has divided its market basing on the geographical location and the age of the users. On the geographical aspect the coca cola company has focused on the consumption of the product in the rural sector and the urban sector .It has observed that the consumption in the urban centre is much higher than the consumption in the rural. Internal And Environmental Factors Influencing the Company’s Market System Coca Cola Company realized that the external factors affected the productivity level of the company and also influenced the decision making process (Deeprose 2006, pp 39). The external environment was also referred to as ‘macro environment’ because factors were many and widely spread. It used a PESTLE (Political, Economical, Social, Technological, Legal and Environmental forces) analysis method to describe these external factors. Coca Cola Company continuously monitored the political situations in different countries to ensure that stability in movement of goods was maintained (Kumar, 2006, pp 60). Action by its competitors due to unstable conditions created by political instability made the coca cola company focus on its abilities to gain a competitive advantage over the others. It did this by ensuring that it maintains the highest share in the global market in terms of sales. The management ensures that all the policies set by the company are observed together with its rules to be followed (Pendergrast, 2000, pp 26) Economically the coca cola company focused on the rates of inflation, depression and recession. A survey conducted by the standards and poor’s indicated that the sale of the non alcoholic beverages was highest in Brazil, Japan and Germany. Market in North America was found to be lower compared to the above three countries (Betsy, 2009). Economic instability slowed the process of decision making pertaining to pricing of the products putting customer’s capability in mind. Social factors that contributed to decision making process of the company based it study on the attitudinal and lifestyle changes in individuals consuming the product. Populations of age bracket 35-60 were observed to be more nutritious conscious and this decreased the amount of sales obtained from carbonated drinks produced by them. Development in technology influenced opportunities available in the market. Coca Cola Company ensured that it maintained an improved technology which led to introduction of new products in the market. It maintained its quality so as not to loose its trusted and faithful customers by improving the repacked containers or improving the flavor. Coca Cola Company ensured that all new developments were patented to give it security pertaining to its sales countrywide (Mc Kay, 2008, pp 63). The patented products seemed expensive but the branding did the magic for its sales level. Coca Cola management ensured that it retained highly qualified and skilled employees who were knowledgeable enough to foresee that the company’s top position in the market is forever maintained (Belpoggi, 2006, pp 742). The organization structure is open to all persons in the company so that there is flow of information and division of tasks as well and this has promoted unity among the employees. The company is also in a position to manufacture sufficient number of products to oversee the general demands of the public. It also has a large network of supplier and dealers who ensure that distribution is done fairly in all locations of the world (Decenzo and Robbins, 2004). Apart from its internal factors aiding it, it also has well engineered staffs that ensure that the process of innovation is continuously evolved everyday to meet the raising demands of customers. This study gives justifications to study questions raised during research study conducted on Coca Cola Company. One of the questions that came into the limelight was, how did the Coca Cola face challenges from its main competitor? This question was highlighted because Coca Cola Company had only one main competitor in the industry named the Pepsi Cola Company. The company produced soft drinks just like coca cola but it did not perform well in the market. The research focused on answers that justified how Coca Cola Company managed to do this yet both of them produced the same products. Coca Cola main competitor rivaled the company in terms of pricing (Deeprose 2006, pp 40). The rival company produced products of a lower quality but at a cheaper price and this served as a loophole for Coca Cola entry into the market. It offered goods of a higher quality and ensured that the pricing was considerate enough to the customers. Studies were conducted to find out the consumption level of most citizens so that price decision can be fair to all. How did marketing system influence organizational growth of Coca Cola Company? This question was considered in order to establish how market system in Coca Cola Company helped it achieve its objectives. The model considers Boston Consulting Groups Matrix (BCG Matrix) to establish a company’s growth rate and analyze products which enables the mangers to be in a better position when allocating financial resources (Deeprose, 2006, pp 38).The growth model of Coca Cola Company is illustrated below. Figure 1. (Pendergrast, 2000, pp 20) The company owns the top 4 nonalcoholic drinks in the world namely: Coca Cola, Sprite, Fanta and Diet Coke. It has distribution to over 200 countries in the world with a consumer serving of 1.5 billion per day. This illustrates the extent of which the company has grown in the market gaining an advantage over its competitors. It also offers more than 3000 products t this 200 plus countries thereby fulfilling customers needs in most of the places .The variety of products distributed by the company includes water, soft drinks, tea and coffee, sports drinks and energy drinks. The BCG matrix analysis enables the company to allocate resources equally and it aids in the strategic management of the company. How did the company motivate its employees? It was realized that the company put a lot efforts in ensuring that its employees were conducted in good working conditions but the main concern was how they did this. The company did its best to motivate its employees in order to achieve its future objectives in time to the organizational advantage. The company is continually improving on its rewarding system by seeking on better ways of motivating its employees to work more and get more of their services. The company worked so hard to maintain its good public image (Betsy, 2009). As reported by Deeprose (2006, pp 40), it retains its employees successfully by organizing training sessions for those working there, laying down the expectations of all those involved in the managerial positions, short term defining of tasks to be done, creating a conductive environmen6t to the employees by allowing interactions with the company managers and other staffs of the high positions and finally by involving the employees in the decision making process of the company and allowing ideas from them too. How did market segmentation help Coca Cola Company achieve it marketing objectives? This question was important in the market study of Coca Cola Company because the company had different ways of differentiating markets and it based its distribution on the type of market. The company grouped its customers based on their consumption level. The consumption of coca cola products was done daily by some customers, weekly, monthly while others took it one in a while. The level of consumption depended on the income of individuals’ occupation, age, social status and education. There is also a disparity in income distribution among citizens living in the urban area and this is affected by economical factors and preferred standard of living by individual there (Byars and Rue, 2000, pp 350). He observed that the imbalance of income affected the purchasing power of the individuals who work and live there. Categorizing of individuals enabled the Coca Cola Company allocate resources purposefully with the aim of maximizing profits and sales. Different customers had different tastes and preferences and it was up to the customer to decide on when to consume a certain product or not. The company however distinguished its market depending on the geographical aspect. Geographical aspect checked on whether the distribution occurred in the rural area or the urban area. Although the rural areas had potential customers, the company considered the urban area to be having more sales compared to the other side and therefore more promotional efforts were focused on the urban sides. Observations from the above questions indicate that for a business to succeed in the market it ahs to look at its market system. It is found that it influences the growth and performance of an entity especially the one facing competition in the market. A company is in apposition to prioritize it objectives and device means of achieving their objectives without interfering with its operational systems. Conclusion From the study above it can be concluded that Coca Cola Company has a good reputation from its brand name and makes the most sales in the sale of non-alcoholic drinks. It has a high profit margin compared to its other competitors, e.g. the Pepsi- and continues to improve on its market system to ensure more and more sales. Favorable market systems are being adopted by the coca cola company to ensure its brand name continues to shine in the market. It is recommended that the company should try to increase its distribution to the rural areas and it should also focus on producing products that can be consumed by the old people too. Is it worthy for the company to invest millions of its money into promotional strategies? Bibliographies Betsy M. 2009. Coke to Omit 'Classic'". The Wall Street Journal. pp 34-98 Accessed 11th Oct, 2010, from http://online.wsj.com/article/SB123332768434033495.html Belpoggi F, Soffritti M, Tibaldi E, Falcioni L, Bua L, Trabucco F. 2006. Results of long-term carcinogenicity bioassays on Coca-Cola administered to Sprague-Darley rats. Ann NY Academic Science 1076: 736-752, Accessed 11th October 2010 from http://www.ramazzini.it/fondazione/pdfUpload/Ann%20NY%20Acad%20Sci%201076%20736-752_2006.pdf Bratten .J. & Gpld, J. 1999. Human Resource Management (2nd ed.). London: MacMillan Press Ltd. Byars, L. & Rue. L. 2000. Human Resource Management (6th ed.). North America: McGraw-Hill. DeCenzo, D. and Robbins, S. 2004. Fundamental of Human Resource Management (8th ed.). US: Prentice Hall. Deeprose, D. 2006. How To recognize and reward employees (2nd ed.). US: Amacom, pp 20-130 Jay M. Feinman, 2006. Law 101: Everything You Need to Know About the American Legal System, rev. ed. New York: Oxford University Press,pp 165-168. Pendergrast .M. 2000. For God, Country and Coca-Cola. Basic Books. pp 12- 25.. Kumar, D. 2006. `Strategies to reduce "Perceptional gap” on Reward Management System’, Journal on management. pp 23-78 Lawrence M. Friedman, 2004. American Law in the 20th Century .New Haven: Yale University Press, pp, 356-357, Mc Kay .G. 2008. Consumption, Coca-colonization, cultural resistance--and Santa Claus, in Sheila Whiteley, ed. Christmas, Ideology and Popular Culture. Edinburgh University Press, pp. 50-70.Retrieved 11th October 2010 from http://usir.salford.ac.uk/2227/ Appendix Figure 2. Showing Layton’s Model of Marketing System (Pendergrast, 2000, pp 22) The above figure demonstrates how marketing systems influences economic growth. It the centre that controls the activities in the environment that contributes to improvement of quality of life Read More