Ch. 7 - Business Marketing

     Most of Coca-Cola's B2B marketing is aimed at restaurants, and other small businesses. So to learn how Coke is sold to these businesses, I went to CokeSolutions.com , Coca-Cola's website for selling to businesses.

     On there website, they promise that they will try to build a relationship with all of there partners, and that they will help make they're retailers more profitable and popular with consumers. One way they do this is through two loyalty and promotion programs. The first program offers retailers unique beverage recipes, using a variety of Coke products. Coca-Cola promises that these drinks will " Help you create high-margin menu selections designed to increase beverage incidence and sales". The second program they run is called "Brands with Meals". In this program, you can have your meals analyzed, so that they can be paired up with a specific Coca-Cola beverage, somehow enhancing the flavor of your food.

     Whats also interesting about this website, is that they offer free articles on how business owners can make their businesses more profitable. I find this to be a great idea. These articles offer valuable business tips, outside of just buying Coke beverages. These articles should keep business owners returning to the CokeSolutions website, and increase the sites stickiness, in addition to building trust in the company. They also offer full service on the machines that they sell, under the slogan "It's all taken care of".

Ch. 8 - Segmenting and Targeting Markets

     In 2001, Coca-Cola test marketed a one-to-one marketing strategy in Australia. The promotion was called "Share a Coke". In this promotion, Coca-Cola sold beverages with customized labels on them. On these labels were popular boys and girls names in Coke's target market, which for this promotion was millennials. When Coke ran the program in Australia, they saw they're sales rise up by 4%. Recently Coca-Cola decided to expand it's "Share a Coke" campaign to many European nations. However, they did not receive the same reaction these new countries. There was an outrage from the Muslim community in Norway when the company decided to put Mohammed on some of it's bottles. Coke responded and promptly took the name off of their bottles.

     Coca-Cola often psycographically segments their products. Many of Coke's advertisements will feature happy, outgoing people. Demograpically, Coca-Cola's target market is younger people aged 18-25, and family oriented individuals 35 and older. Coca-Cola offers a wide variety of products to meet the needs of these vast groups. Towards the more health conscious psycographic, Coca-Cola will market products like Diet Coke and Coke Zero, and towards older people, Coke might advertise the classic Coke that they grew up with.

 One of the biggest ways Coke advertises is through sports. They will often purchase banners on the field of soccer games, and with the winter Olympics coming up in February,  expect to see a lot more of Coca-Cola there. Fans like myself can feel a connection with Coke when they see they're favorite athletes drinking Coke, and perhaps when thinking about an event that they went to will think of Coke.

     Coca-Cola has come under fire in the past, along with many other soft drink companies, for marketing their products to kids. This summer, Coke has promised to not advertise to children under 12, and to offer low-calorie beverage alternatives in each of the over 200 countries it operates in, and to sponsor physical fitness programs. This seems to be a giant leap forward from it's past of marketing to kids as young as toddlers.

Ch. 11 - Developing and Managing Products

     Since Coca-Cola has been around for well over a century, and at times it may seem that Coke has not changed at all in recent years. However, it is quite the opposite. Coca-Cola is long into the maturity phase of it's product life cycle, and cannot maintain it's 50% soft drink market share without research and developing their products to better fit consumer needs.

     Currently, Coca-Cola is developing miniature shops called Ekocenters that they will construct in the town centers of underdeveloped countries. These shops are currently in the pilot phase and cost around $100,000 to develop and will provide vital resources, such as clean water, food, vaccines, and of course Coke products, to the communities that they serve. These services will be provided either for free, or at a low cost. Setting up these centers have numerous advantages for the Coca-Cola company. Firstly, they will increase the market share of the company in the communities they are placed in. Also, when these markets further develop, the people who got their clean water and hot food from these shops will possess a high level of brand loyalty to Coke. Lastly these shops are generating good press for Coke.

Ch. 18 -Social Media and Marketing

     Coca-Cola's Facebook page currently has over 75,000,000 likes, and over two million people follow the company on Twitter. So it's quite easy to understand why social media is such a valuable marketing tool for Coca-Cola. Just on these two websites alone Coke can reach out to 78 million people daily, reminding them what a great product Coke is, and do so at a relatively low cost compared to traditional advertising. In addition, Coca-Cola frequently responds to peoples posts on they're website, to handle their concerns with the company, and in doing so gaining valuable feedback on the product.

     One way Coca-Cola engages people through social media is by allowing Coca-Cola consumers to support causes that they care about, and connect with friends. Recently, Coca-Cola has launched a campaign called CokeREDMoves. People can participate by uploading of themselves dancing online, and for every video uploaded, Coke will donate a 60 day supply of HIV medicine to those in need of it. Also, in 2006 Coca-Cola launched a campaign in England where Soccer fans could enter codes fan on bottle caps online. Each day, Coke would choose one entry at random and donate ₤250,000 to their favorite team.

     Participating in social media allows consumers to feel closer to Coca-Cola, gives the company a better image, and helps them relate to a younger generation. As the world is increasingly participating in social media, Coke and many other companies will rely more heavily on social media marketing to attract potential customers, and to keep current ones.

Ch. 10 - Product Concepts

     Part of what makes Coca-Cola such a special product is it's extensive branding. A recent study showed that 94% of the worlds population recognized the Coca-Cola logo, and it was recognized as the worlds most valuable brand by Forbes magazine for 13 years straight, until this September when they lost the top spot to apple.

     Coca-Cola is both a convenience product and a business product. Coke sells it's syrup to bottling plants and restaurants, who then sell it to individuals. The Coca-Cola company does not have much product width. It only sells beverages, but it offers a great depth of them. The Coca-Cola company sells over 300 products, the most common ones being Coke, Diet Coke, Sprite, Minute Maid, and Dasani water. However, classic Coke far outsells any other Coca-Cola product.

     Possibly the biggest part of Coke's brand, is it's packaging. No other packaging in the world is as recognizable.  In 1977 the Coca-Cola company even received a patent on the shape of the bottle alone. However in recent years the bottle has been changing. In 1994 the company made the switch to plastic bottles, and in 2007, started selling Coke in an aluminum bottle. Also, since 1990 the company has been required by federal law to display detailed nutritional information on their bottles. While the materials used to make the bottle,  the contents of the bottle, and information on it will eventually change over time, one thing will not. It's shape. 

Ch. 17 - Personal Selling and Sales Management

     Relationship selling is a sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial relationships. Coca-Cola does not need to personally sell to it''s consumers. Coke is a low value, highly standardized, simple product. The only retail environment where it might occur would be a restaurant, and even then, it is not done by Coca-Cola employees.

     However, Coca-Cola does heavily engage in personal selling when selling it's syrup to local bottling plants. Typically, an investor will supply all the necessary capital required for running the business, and Coca-Cola will send them the syrup required for manufacturing Coke. But the relationship does not end there. Coke often provides managerial advice, to help ensure that the franchisee runs a profitable business. The advice will usually consist of marketing, quality control, and personnel training.

Ch. 16 - Advertising, Public Relations and Sales Promotion

     Coca-Cola spends more on advertising than almost any company in the world. It was reported that in 2010, they spent a whopping 2.9 billion dollars on advertising worldwide, but that's what it takes to earn 40% of the global soda market share, and over $12 billion in quarterly revenue.

     A great deal of the companies advertising budget goes toward reducing consumer cognitive dissonance, re-enforcing their consumers behavior post-purchase, and giving customers incentive to purchase Coke again. The company has had a long running customer loyalty program called "My Coke Rewards". On this website customers can redeem codes found on bottle caps for various prizes, ranging from clothing to electronics. Another way Coke did this was by launching a program in England, where soccer fans who bought Coke could redeem a code on their soda bottle, and in exchange, Coca-Cola would donate anywhere from 50p to £100,000 towards a team of their choice.

     While Coca-Cola has traditionally engaged in product advertising, it recently has had to spend much more on advocacy and institutional advertising. This is due to recent health developments about the negative health affects of Soda. Another thing they are doing to combat this bad publicity, is to heavily promote and expand they're selection of diet soft drinks. Coca-Cola also sponsors a variety of fitness events around the world, as well as community parks in an effort to combat obesity and get people active.

     Most of the companies product advertising is pioneering advertising. Coke's advertising objective is to create a high demand for the beverage through lifestyle themed advertisements, aimed at making the consumer want to feel the fun and pleasure that only drinking a Coca-Cola beverage could bring them.

Ch. 14 - Marketing Channels and Retailing

     There is not one definitive retail environment for Coca-Cola. It is sold just about everywhere in the world, and in almost every type of store. Coke can be found in vending machines, supermarkets, drugstores, restaurants, and stadiums. Almost anywhere you go that has food, will be sure to have Coca-Cola. But most often, Coke is found in convenience stores.

     So to see a typical retail environment, I went to a local independently owned convenience store in my Brooklyn neighborhood. When I walked in, the store was empty, except for the one man operating the cash register. The floors were not that clean, the place did not smell that good, and the beverages were located all the way in the back of the store. When I got the the drinks section, it was mostly alcoholic beverages, with small refrigerator for various soft drinks. The retailer did not do anything to promote any specific beverage, and not one drink stood out to me.  After I got my can of Coke, I walked over to the cashier, handed him $1, and left, never talking to any employees during my visit.

     Overall, there was nothing special about my visit to the store. For the most part, this has been my experience buying Coke products. And, while the service and atmosphere is nothing special, the end result is. A nice, cold, refreshing can of Coke.

Ch. 6 - Consumer Decision Making

What does a hot summer day, a sporting event, and an upscale restaurant all have in common?
     That Coca-Cola is enjoyed by millions of people a day in all of these venues.

     This is no coincidence. The marketers of Coca-Cola work very hard to ensure that consumers don't think much about purchasing the beverage. In fact, 70% of the companies sales are impulse purchases.

     There are two main reasons why people purchase Coke; thirst and happiness. Coca-Cola advertisements will usually show people having fun, hanging out with friends, or spending time with loved ones. Coke's goal is to paint a picture in your head, that your ideal self is a person who is fun, outgoing, and popular, and that you self-actualize by drinking Coke beverages. So it's no surprise that buying a can of Coke makes sense when your feeling sad, stressed out, or lonely.


     The information search that usually occurs when we are thirsty occurs in a retail environment. Since buying a beverage is generally a routine purchase, very little time will be spent researching alternatives. We might scan the rest of the isle in the store, internally search for our prior experiences with the soft drink, or remember what our friends said about certain soft drinks.

     After purchasing Coke, people usually are happy and experience very little cognitive dissonance. Some people will regret buying it, due to it's unhealthy contents, or to the loss of the money that they spent on it. But most people think very little of the purchase, and can relax and enjoy the beverage, and feel satisfied with their purchase, and are likely to purchase it again. These people that repeatedly buy Coke selectively retain the negative information that they hear about the product. Since buying Coke usually involves little foresight, all consumers care about is that the drink will taste good.

Ch. 5 - Developing a Global Vision

     Coca-Cola has been extremely successful in developing a global vision. 75% of Coca-Cola's revenue comes from foreign sales. Seeing that Coca-Cola receives 75% of it's income from foreign markets, a big concern for them recently has been the depreciation of the U.S. dollar, especially since the economic recession of 2008.

      Coke is sold in over 200 countries world wide, yet their formula remains the same globally. They globally standardize their products, so no matter where you are in the world, you know exactly what beverage you are getting. Coke uses the same or similar marketing mix world-wide. They're popular slogan "Coca-Cola. Enjoy" was translated into different languages and used in over 140 countries.

     Coke has gained mainly they're global market share in three ways:

1. Constructing bottling plants in foreign countries to produce a cheaper product.
2. Advertising campaigns to gain international recognition. (94% of the worlds population recognizes the Coca-Cola logo)
3. Direct investments close to their target markets.

    

Ch. 4 - The Marketing Environment

Target Market

     Coca-Cola does not have one specific target market. They market to all people, of all backgrounds, in every social class. Since Coke is relatively cheap, it is enjoyed by people of all incomes, and in a multitude of sales environments (Restaurants, grocery stores, Stadiums, Etc.).     

 Regulatory Issues

     Coca-Cola's marketing environment is becoming increasingly hostile. This is mostly due to the threat of government regulations, and to public health awareness about the product. While there are not many state regulations on the soda industry, numerous laws regulating the industry are being debated across the country, in state and local governments.

    Recently, the California state legislature has debated a soda tax, a penny-per-ounce tax on all sugary drinks. It's estimated that this would reduce sales in the state by 10 to 15 percent. Also, a law was passed in New York City last year, banning sugary beverages over 16 ounces. In response to this, coke has under numerous health initiatives, these include:

• Offering low, or no calorie beverages in all markets.
• Providing transparent nutrition information, including calories on the front of all packages.
• Supporting physical activity programs in every country where Coke does business.
• Not adverting to children under the age of 12.

Ch. 3 - Ethics & Social Responsibility

     To combat unethical practices, and to improve their global image, Coca-Cola has taken it upon themselves to give ethics training to all newly hired employees, and to all existing employees every 3 years. In addition to this, they offer online ethics training to all of they're associates, and ask that all managers certify their compliance with the Code of Business Conduct, Human Rights Statement, Workplace Rights Policy and the Company’s anti-bribery requirements

     Yet despite these efforts, Coca-Cola has faced numerous lawsuits in the past decade from Guatemala. They mostly have to deal with unethical collective bargaining practices. Numerous bottling plants owned by the company have been reported to take violent action against union leaders, and against unionized employees. The company was accused of shooting these workers, breaking into they're homes, and threatening them, along with they're families. However, when these cases were tried in court, and none of these charges were upheld. 

     Currently, Coca-Cola has not undertaken any sustainability initiatives, and is not involved in any cause  related marketing. For the most part, Coca-Cola is a very ethical corporation, and at least at the top-level management, has not been involved in any unethical practices.

Ch. 2 - Strategic Planning for Competitive Advantage

Part of  Coca-Cola's mission is to refresh the world, And to do so they plan on investing heavily in large foreign markets. Coke realizes that it needs to heavily invest in these markets, in order to gain a significant market share. Because of this, they plan to invest:

• Five billion in India by 2020
• Three billion in Russia by 2016
• Eight billion in Brazil by 2016
• And 300 million in Vietnam by 2015

SWOT Analysis

Strengths- Coca-Cola's greatest strength is brand recognition. 94% of the world can recognize the Coca-Cola label. When people buy a can of coke, they are getting a good, quality, consistent product. Also, they hold a significant portion of the global market share. Coca-Cola operates in over 200 countries around the world.

Weaknesses- The biggest threat to Coke is that they're beverages are very unhealthy. Recent studies have shown that drinking soda adds 15 pounds per year. In an increasingly health conscience society, this could be a very big problem.

Opportunities- Coca-Cola has a great opportunity to expand it's market share. It's investing heavily in foreign markets, and in healthier soft drinks. It has begun producing various non-carbonated drinks such as, Vitamin Water and Aquafina.

Threats- Health problems is the only thing holding Coke back. Recently, governments have started planning to either; ban the product in certain portions, place an additional tax on it, or both. If these plans are implemented throughout the world, it would significantly reduces Coca-Cola's sales. 

Ch. 1 - Overview of Marketing (Brief History and Mission Statement)

Mission Statement

• To refresh the world...
• To inspire moments of optimism and happiness...
• To create value and make a difference

A Brief History

     The Coca Cola beverage invented by pharmacist John Stith Pemberton in 1886. The formula and brand was bought in 1889 by Asa Candler who incorporated the Coca Cola company in 1892. In 1916, the company began manufacturing its famous bottle, which remains signature shape of Coca Cola today. In 1928, Robert Woodruff, whom were the company's president at that time, led the expansion of Coca Cola overseas when introduced the Coca Cola to the Olympic games for the first time. In the 1960s the company decided to expand with new flavors- Fanta, Sprite and Fresca, In addition it acquired the Minute Maid company, adding an entirely new line of business juices to the company. The 1980s, a time of much change and innovation at the company. The introduction of  Diet Coke, which become the top law-calorie drint in the world. The company's presence worldwide was growing rapidly and year after year Coca Cola found a home in more and more places in the world.  As for today, Coca Cola has grown to be the world's most ubiquitous brand, with more than 1.4 billion beverage servings sold each day.