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Executive summary

Giant soft drink company Coca Cola has come under intense scrutiny by investors due toits inability to effectively carry out its marketing program. Consequently it is seeking the

help of Polianitis Marketing Company Pty Ltd to develop a professional marketing plan

which will help the business achieve it’s obectives more effectively and efficiently! andinevitably regain there iron fist reign on the soft drink industry.

"hen establishing a re#birthed marketing plan every aspect of the marketing plan must

be critically e$amined and thoroughly researched. %his consists of e$amining market

research! auditing business and current situation &situation analysis' and carefullyscrutini(ing the soft drink industry and possibilities for Coca Cola in the market. )nce

Coca Cola have carefully analy(ed the internal and e$ternal business environment and

critically e$amined the industry in general the most suitable marketing strategies will be

selected and these strategies will be administered by effectively and continuallymonitoring e$ternal threats and opportunities and revising internal efficiency procedures.

*ituation +nalysis on Coca Cola

Market Analysis -

%he market analysis investigates both the internal and e$ternal business environment. ,t is

vital that Coca cola carefully monitor both the internal and e$ternal aspects regarding it’s

business as both the internal and e$ternal environment and their respective influences will be decisive traits in relation to Coke’s success and survival in the soft drink industry.

Internal Business Environment

%he internal business environment and its influence is that which is to some e$tent within

the business’s control. %he main attributes in the internal environment include efficiency

in the production process! through management skills and effective communicationchannels. %o effectively control and monitor the internal business environment! Coke

must conduct continual appraisals of the business’s operations and readily act upon any

factors! which cause inefficiencies in any phase of the production and consumer process.

External Business Environment

%he -$ternal business environment and its influences are usually powerful forces that canaffect a whole industry and! in fact! a whole economy. Changes in the e$ternal

environment will create opportunities or threats in the market place Coca cola must be

aware off. luctuations in the economy! changing customer attitudes and values! anddemographic patterns heavily influence the success of Coca Cola’s products on the

market and the reception they receive from the consumers.

SWOT Analysis -

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*")% stands for *trengths "eakness )pportunities %hreats. *")% analysis is a

technique much used in much general management as well as marketing scenarios.

*")% consists of e$amining the current activities of the organi(ation# its *trengths and"eakness# and then using this and e$ternal research data to set out the )pportunities and

%hreats that e$ist.

Strengths

Coca-Cola has been a comple$ part of world culture for a very long time. %he product’s

image is loaded with over#romantici(ing! and this is an image many people have taken

deeply to heart. %he Coca#Cola image is displayed on %#shirts! hats! and collectiblememorabilia. %his e$tremely recogni(able branding is one of Coca#Cola’s greatest

strengths. /-noyed more than 012 million times a day around the world Coca#Cola

stands as a simple! yet powerful symbol of quality and enoyment3 &+llen! 4552'.

+dditionally! Coca#Cola’s bottling system is one of their greatest strengths. ,t allows

them to conduct business on a global scale while at the same time maintain a localapproach. %he bottling companies are locally owned and operated by independent

business people who are authori(ed to sell products of the Coca#Cola Company. 6ecauseCoke does not have outright ownership of its bottling network! its main source of revenue

is the sale of concentrate to its bottlers.

Weaknesses

"eaknesses for any business need to be both minimi(ed and monitored in order to

effectively achieve productivity and efficiency in their business’s activities! Coke is no

e$ception. +lthough domestic business as well as many international markets are thriving&volumes in Latin +merica were up 478'! Coca#Cola has recently reported some/declines in unit case volumes in ,ndonesia and %hailand due to reduced consumer

purchasing power.3 +ccording to an article in ortune maga(ine! /,n 9apan! unit case

sales fell :8 in the second quarter ;of 45518 of the world today. %he primaryconcern over the past few years has been to get this name brand to be even better known.


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Packaging changes have also affected sales and industry positioning! but in general! the

public has tended not to be affected by new products. Coca#Cola’s bottling system also

allows the company to take advantage of infinite growth opportunities around the world.%his strategy gives Coke the opportunity to service a large geographic! diverse area.

Threats

Currently! the threat of new viable competitors in the carbonated soft drink industry is notvery substantial. %he threat of substitutes! however! is a very real threat. %he soft drink

industry is very strong! but consumers are not necessarily married to it. Possible

substitutes that continuously put pressure on both Pepsi and Coke include tea! coffee! uices! milk! and hot chocolate. -ven though Coca#Cola and Pepsi control nearly >?8 of

the entire beverage market! the changing health#consciousness of the market could have a

serious affect. )f course! both Coke and Pepsi have already diversified into these

markets! allowing them to have further significant market shares and offset any losses

incurred due to fluctuations in the market. Consumer buying power also represents a keythreat in the industry. %he rivalry between Pepsi and Coke has produce a very slow

moving industry in which management must continuously respond to the changingattitudes and demands of their consumers or face losing market share to the competition.

urthermore! consumers can easily switch to other beverages with little cost or

consequence.

ro!uct "i#e cycle $

"hen referring to each and every product or service ever placed before the consumer i.e.in the long term all the e$isting products and services are dead. or e.g.@# Aeplacement of

ord Cortina & a highly successful car' by ord *ierra! the replacement of sierra by theord Mondeo and the replacement of the old Mondeo by the new Mondeo in 7??4. *o

every product is born! grows! matures and dies. *o in the commercial market place

products and services are created! launched and withdrawn in a process known as Product

Life Cycle.

%o be able to market its product properly! a business must be aware of the product life

cycle of its product. %he standard product life cycle tends to have five phases@

Bevelopment! ,ntroduction! Growth! Maturity and Becline. Coca#Cola is currently in thematurity stage! which is evidenced primarily by the fact that they have a large! loyal

group of stable customers.

urthermore! cost management! product differentiation and marketing have become more

important as growth slows and market share becomes the key determinant of profitability.

,n foreign markets the product life cycle is in more of a growth trend Coke’s advantage in


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this area is mainly due to its establishment strong branding and it is now able to use this

area of stable profitability to subsidi(e the domestic Cola "ars.

Marketing O%&ectives

%he obective is the starting point of the marketing plan. )bectives should seek to

answer the question "here do we want to goD’ %he purposes of obectives include #

#E %o enable a company to control its marketing plan.

#E %o help to motivate individuals and teams to reach a common goal.#E %o provide an agreed! consistent focus for all functions of an organi(ation.

+ll obectives should be *M+A% i.e. *pecific! Measurable! +chievable! Aealistic! and

%imed.

*pecific F 6e precise about what you are going to achieveMeasurable F uantify you obectives

+chievable F +re you attempting too muchD

Aealistic F Bo you have the resource to make the obective happen &men! money!machines! materials! and minutes'D

%imed F *tate when you will achieve the obective.

Selecting Target Market

)nce the situation analysis is complete! and the marketing obectives determined!

attention turns to the target market. %he soft drink market is very large! and the businesscannot be /all things to all people3! so it must choose which market segments have the

greatest potential. %he target market is the group of customers on whom the businessfocuses attention. %he target market is where Coca Cola focuses its marketing efforts as it

feels this is where it will be most productive and successful. %he target market for Coca

cola is very wide as it satisfies the needs for many different consumers! ranging from thehealthy diet consciousness through Biet Coke to the average human through its best

selling drink regular Coke. Most Coke products satisfy all age groups as it is proven that

most people of different age groups consume the Coca Cola product. %his market is

relatively large and is open to both genders! thereby allowing greater productdiversification.

%here are four broad ways which Coca Cola can segment its market F

#E Mass marketing

#E concentrated marketing


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#E Bifferentiated marketing

#E Hiche marketing

%he most apparent method used by Coca Cola is with no doubt the differentiated

marketing method as Coke satisfies a range of different markets. Biet coke satisfies theweight consciousness! regular coke! sprite! fanta the average human! coffee! iced tea etc.

-ach group of beverages satisfies a particular group of people but maority the averagehuman.

'eveloping the marketing Mix -

%he marketing mi$ is probably the most crucial stage of the marketing planning process.%his is where the marketing tactics for each product are determined. %he marketing mi$

refers to the combination of the four factors &price! promotion! product! and place' that

make up the core of a business’s marketing strategy. ,n this step of the marketing planning process! marketing mi$ must be designed to satisfy the wants of target markets

and achieve the marketing obectives. %he most successful businesses have continually

monitored and changed their marketing mi$ due to respective internal and e$ternal

factors and have monitored the e$ternal business environment in order to ma$imi(e their marketing mi$ components.

ro!uct(

Many Products are physical obects that you can own and take home. 6ut the word

product means much more than ust physical goods. ,n marketing! product also refers toservices! such as holidays or a movie! where you enoy the benefits without owning the

result of the service.

6usinesses must think about products on three different levels! which are the core

product! the actual product and the augmented product. %he core product is what the

consumer is actually buying and the benefits it gives. Coca Cola customers are buying awide range of soft drinks. %he actual product is the parts and features! which deliver the

core product. Consumers will buy the coke product because of the high standards and

high quality of the Coca Cola products. %he augmented product is the e$tra consumer

benefits and services provided to customers. *ince soft drinks are a consumable good! theaugmented level is very limited. 6ut Coca Cola do offer a help line and complaint phone

service for customers who are not satisfied with the product or wish to give feedback on

the products.

ositioning

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)nce a business has decided which segments of the market it will compete in! developed

a clear picture of its target market and defined its product! the positioning strategy can bedeveloped. Positioning is the process of creating! the image the product holds in the mind

of consumers! relative to competing products. Coca Cola and ranklins both make soft

drinksI although ranklins may try to compete they will still be seen as down marketfrom Coca Cola. Positioning helps customers understand what is unique about the

products when compared with the competition. Coca Cola plan to further create positions

that will give their products the greatest advantage in their target markets. Coca Cola has been positioned based on the process of positioning by direct comparison and have

positioned their products to benefit their target market. Most people create an image of a

product by comparing it to another product! thus evident through the famous battles

between Coca#Cola and Pepsi products.

Bran!ing

,t is often hard to say e$actly why we buy one company’s product over another.

Companies such as Hike and +didas spend large amounts of money trying to winconsumers away from their competitors who make products that are very similar. %he

popularity of the brand is often the deciding factor. )ver the time Coca Cola has spent

millions of dollars developing and promoting their brand name! resulting in world widerecognition. Coca#Cola’ is the most recogni(ed trademark! recogni(ed by 5>8 of the

world’s population and is the most widely recogni(ed word after /)J3. Coca Cola’s red

and white colors and special writing are all e$amples of world#wide trademarks.

%here are a number of branding strategies@ Generic brand strategy! ,ndividual brandstrategy! amily brand strategy! Manufacturer’s brand strategy! Private brand strategy and

Kybrid brand strategy. Coca Cola utili(es the ,ndividual brand strategy as Coca Cola’smaor products are given their own brand names e.g. anta! *prite! Coca Cola etcalthough they maybe presented as different lines they operate under the name of Coca

Cola.

ackaging

Packaging! which is not as highly perceived by businesses! is still an important factor to

e$amine in the marketing mi$. Packaging protects the product during transportation!

while it sits in the shelf and during use by consumersI it promotes the product and

distinguishes it from the competition. Packaging can allow the business to design promotional schemes! which can generate e$tra revenue and advertisements. Coca#Cola

has benefited from packaging the product with incentives and endorsements on the

labeling as a promotional strategy to increase its volume of sales and revenue.

rice(

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Price is a very important part of the marketing mi$ as it can affect both the supply and

demand for Coca Cola. %he price of Coca Cola’s products is one of the most importantfactors in a customer’s decision to buy. Price will often be the difference that will push a

customer to buy our product over another! as long as most things are fairly similar. or

this reason pricing policies need to be designed with consumers and e$ternal influencesin mind! in order to effectively achieve a stable balance between sales and covering the

production costs.

Price strategies are important to Coca Cola because the price determines the amount of sales and profit per unit sold. 6usinesses have to set a price that is attractive to their

customers and provides the business with a good level of profit. Long before a sale was

ever made Coca Cola had developed a forecast of consumer demand at different priceswhich inevitably determined whether or not the product came on the market! as well as

the allocation of adequate money and resources to produce promote and distribute the

product.

ricing Strategies An! Tactics

%he pricing *trategy a business will use will have to focus on achieving the marketing

plan’s obectives and support the positioning of the product! and take e$ternal factorssuch as economic conditions and competitors in to account. %here are 2 strategies

available to business@ Market skimming pricing! Penetration pricing! Loss leaders! Price

Points and Biscounts. )ver the years Coca Cola has used Penetration Pricing as a way ofgrabbing a foothold in the market and won a market share. ,ts product penetrated themarketplace. )nce customer loyalty is established as seen with Coca Cola it is then able

to slowly raise the price of its product. %here has been a fierce pricing rivalry between

Coca Cola and Pepsi products as each company competes for customer recognition andsatisfaction. %ill now it appears as if Coke has come up on top! although in order to gain

long term profits Coke had to sacrifice short term profits where in some cases it either

went under of ust broke even! but as seen it has been all for the best.

ricing Metho!s

Good pricing decisions are based on an analysis of what target customers e$pect to pay!

and what they perceive as good quality. ,f the price is too high! consumers will spend

their money on other goods and services. ,f the price is too low! the firm can lose moneyand go out of business.

Pricing methods include@ Cost based Pricing! Market based pricing and Competition


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based Pricing. )ver the years Coca has lost ground here in it’s pricing but has regained its

strength as it employed the Competition#based pricing method which allowed it to

compete more effectively in the soft drink market. Leader follower pricing occurs whenthere is one quite powerful business in the market which is thought to be the market

leader. %he business will tend to have a larger market share! loyal customers and some

technological edge! thus the case currently with CokeI it was first the follower butthrough effective management has now become the leader of the market and is working

towards achieving the marketing obectives of the Coca Cola. *urvival in the market

place! own 0? 8 of market share by 7??! increase further awareness of product and areturn on 7?8 on capital employed for +ugust 7??.

romotion(

,n today’s competitive environment! having the right product at the right place in the right

place at the right time may still not be enough to be successful. -ffective communication

with the target market is essential for the success of the product and business. Promotionis the p of the marketing mi$ designed to inform the marketplace about who you are! how

good your product is and where they can buy it. Promotion is also used to persuade thecustomers to try a new product! or buy more of an old product.

%he promotional mi$ is the combination of personal selling! advertising! sales promotion

and public relations that it uses in its marketing plan. +bove the line promotions refers tomainstream media@ +dvertising through common media such as television! radio!

transport! and billboards and in newspapers and maga(ines. 6ecause most of the target is

most likely to be e$posed to media such as television! radio and maga(ines! Coca Cola

has used this as the main form of promotion for e$tensive range of products. +lthoughadvertising is usually very e$pensive! it is the most effective way of reminding and

e$posing potential customers to Coca Cola Products. Coca Cola also utili(es below theline promotions such as contests! coupons! and free samples. %hese activities are aneffective way of getting people to give your product a go.

lace an! 'istri%ution(

%he place P of the marketing mi$ refers to distribution of the product# the ways of gettingthe product to the market. %he distribution of products starts with the producer and ends

with the consumer.

)ne key element of the /PlaceBistribution3 aspect is the respective distribution channelsthat Coca Cola has elected to transport and sells its product.

*electing the most appropriate distribution channel is important! as the choice will

determine sales levels and costs. %he choice for a distribution channel for any business

depends on numerous factors! these include F

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N Kow far away the customers areI

N %he type of product being transportedIN %he lead times requiredI andI

N %he costs associated with transportI

%here are four types of distribution strategies that Coca Cola could have chosen from!these are@ intensive! selective! e$clusive and direct distribution. ,t is apparent from the

popularity of the Coca Cola’s product on the market that the business in the past used the

method of intensive distribution as the product is available at every possible outlet. romsupermarkets to service stations to your local corner shop! anywhere you go you will find

the Coca Cola products.

hysical 'istri%ution Issues

Coca Cola needs to consider a number of issues relating to the physical distribution of its

soft drink products. %he five components of physical distribution are! order processing!

warehousing! materials handling! inventory control! transportation. Coca Cola must

further try to balance their operations with more efficient distribution channels.

)rder Processing# Coca Cola cannot delay their processes for consumer deliveries &i.e.

delivery to selling centers'! as this is inefficient business functioning and is portrays a

flawed image of the product and overall business.

"arehousing and inventory control# warehousing of Coca Cola products is necessary.,nventory control is another important aspect of distribution as inventory makes up a

large percentage of businesses assets. Choosing the correct and desired inventorymeasure that 9ackson’s sees as most effective is vital. 9ackson’s must remember though

that there are factors involved with inventory control that can hinder the products sales

and customer perceptions &ha(ards! distribution from storage facilities! etc='.

Materials handling# this deals with physically handling the product and using machinery

such as forklifts and conveyor belts. "hen holding products! then Coca Cola has

benefited from purchasing or renting respective machinery.

%ransportation# transporting Coca Cola products is the one most important components of

physical distribution. -lecting either to transport the sports drink by air! rail! road or

water depends on the market and depends on the associated costs. %he most beneficialtransportation method for Coca Cola would be A)+B if the product were moved around

from storage to the cost centers.


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Implementing) Monitoring an! Controlling

*inancial *orecasts

inancial forecasts are predictions of future events relating strictly to e$pected costs and

revenue costs for future years. %here are five maor marketing e$penditures! whichinclude research costs! product development costs! product costs! promotion costs and

distribution costs.

*ales force composite is the most logical method in forecasting revenue. %his involves

estimates from individual salespeople to sell to work out a total for the whole business.)nce these costs and revenues are forecasted! management can then decide which

combination of marketing mi$ strategies will deliver the most sales revenue at the lowest

cost.

Implementing

,mplementation is the process of turning plans into actions! and involves all the activities

that put the marketing plan to work. *uccessful implementation depends on how well the business blends its people! organi(ational structure and company culture into a cohesive

program that supports the marketing plan.

or its further success! Coca Cola must impose several key changes. Production needs to

be on time and meet the quota demanded from wholesalers. ,t must also be efficient so asnot to build inventory stocks and inventory prices. %he marketing needs to be motivated

and knowledgeable about the product. %he forms of promotion such as advertising must

be attracting and enticing to the target market to get the greatest amount of e$posure possible for the product. %his will ensure the success of the product in the stores.Bistribution of the product must be efficient. %his problem has already been taken care of

with convenient transport routes to commercial areas and transport already being

arranged.

Monitoring An! Controlling

Monitoring and controlling allows the business to check for variance in the budget and

actual. %his is important because it allows Coca Cola to take the necessary actions to

meet the marketing obectives. %here are three tools Coca Cola should use to monitor themarketing plan. %hey are the following@

Sales Analysis

%he sales analysis breaks down total business sales by market segments to identifystrengths and weaknesses in the different areas of sales. *ellers of Coca Cola products


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vary from maor retail supermarkets to small corner stores. %his gives its products

ma$imum e$posure to customers at their convenience.

Market Share Analysis

Market share analysis compares Coca Cola’s business sales performance with that of its

competitors. Coca Cola looks to increase its market share by over 0?8. "ith the changes

Coca Cola is currently undergoing! they aim to regain an iron fist control of the market.%arget market various age groups and lifestyles from high school students too

universities! and male or female.

Marketing ro#ita%ility Analysis

%his analysis looks at the cost side of marketing and the profitability of products! sales

territories! market segments and sales people. %here are three ratios to monitor marketing profitabilityI they are market research to sales! advertising to sales and sales

representatives to sales. %he results of these three tools can help Coca Cola determine anyemerging trends! such as the need for a different product. Comparing these results with

actual results gives the business an idea on when to change.

Market +esearch

"hen attempting to implement a new Marketing plan a business must address its target

market and conduct the relevant information to insure the new marketing plan both

differs from the old and is better for the business. "hen conducting market research a business must first define the problem and then gather the appropriate information tosolve the problem. %here are : types of information a business can gather to solve its

problems.

#E-$ploratory Aesearch which clarifies the problem and searches for ways to address it.

#EBescriptive Aesearch is used to measure and describe things like the market potential

for a product and characteristics of the target market.

#ECasual Aesearch is used to test a hypothesis about a cause and effect relationship.

Coca Cola through its market research has addressed all three types of research to define

the problem raised by shareholders and gathered information to serve their needs.

actors ,nfluencing Consumer Choice #


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"hen making decisions on products a business must look at factors that influence

consumer choice such as psychological factors! *ocio cultural factors! -conomic factors

and Government actors.

sychological *actors( such as motivation! perception! lifestyle! personality and self concept! learning! and attitudes influence the consumer’s behavior towards a product and

Coca Cola has addressed this issue by introducing Biet Coke to satisfy differentlifestyles.

Socio cultural #actors( such as culture! subculture! socio#economic status! family andreference groups influence the consumer’s behavior towards a product.

-conomic factors@ such as Bisposable income and discretionary income. Coca Cola has

addressed this side of the influence by maintaining a low price on the price of its

products.

,overnment *actors( such as new regulations! inflation! interest rates all influence

consumer spending and choice.

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