Table of Contents

1.0 Executive Summary

2.0 Mission statement

3.0 Internal and External Environmental Analysis of Coca-Cola

3.1 External Analysis

3.1.1 PESTLE

3.1.1.1 Political Environment

3.1.1.2 Economic Environment

3.1.1.3 Social / Cultural Environment

3.1.1.4 Technological Environment

3.1.1.5 Legal Factors

3.1.1.6 Environmental Factors

3.2 Internal Analysis

3.2.1 Customer analysis

3.2.2 Company analysis

3.2.2.1 Coca-Cola Company Background

1

3.2.2.2 Business Vision of Coca-Cola

3.2.2.3 Critical Success Factors of Coca-Cola

3.2.2.3.1 Marketing at Coca-Cola

3.2.2.3.2 Innovation at Coca-Cola

3.2.2.3.3 Globalization

3.2.2.4 Competitor analysis

3.2.2.5 Porter’s 5 forces

3.2.2.6 SWOT analysis

3.2.2.7 Marketing Objectives

4.0 Marketing Strategy

4.1 Product Strategy

4.2 Pricing

4.3 Place

4.5 Promotion

4.6 People

4.7 Processes

2

4.8 Physical Evidence

5.0 Budget

6.0 Control Mechanisms

7.0 Reference List

3

1.0 Executive Summary

This report is aimed at comprehensively developing a strategic marketing plan for the

famous cola-cola drink that is produced by the Coca-Cola Company (herein after known

as the company). This report would be focused on making a proper analysis of the

internal and external business environment of this company, making an assessment of the

key/critical success factors of this company, evaluating the strengths, weaknesses,

opportunities and threats facing this company and also the basis for the strategic thrust.

Having done this, the next step would be to develop a medium strategic options and a

marketing strategy for this product would then be recommended. The strategic marketing

mix would also be discussed and then the strategic direction taken by this company

would also be managed and directed. In essence, the strategic marketing plan that will be

developed for this product by the Coca-Cola Company would be for the development of

broad marketing objectives and strategy that is based on the current market situation and

opportunities in America. This marketing strategy normally consists of specific strategies

for target markets, marketing mix and marketing expenditure level (Kottler, et al, 2012).

For this strategic marketing plan, the product that will be the subject of the plan would be

a new Coca-Cola beverage, Nutri Coke, a non carbonated fruit juice which is highly

nutritional, low in sugar and tasty, meant for young, middle aged and old people. This

product is likely to cater to all the present changes in consumer preference towards soft

drinks and hence bring the company profitability.

2.0 Mission statement

The main mission of Coca-Cola is to accomplish the following:

1. Refreshment of the world in body, mind and spirit

2. Inspiration of moments of optimism via Coca-Cola brands and their actions

3. Creation of value and differentiation in what the company engages in

(The Coca Cola Company.com – Mission, Vision, Values, 2013)

4

3.0 Internal and External Environmental Analysis of Coca-Cola

3.1 External Analysis

3.1.1 PESTLE

3.1.1.1 Political Environment

Marketing decisions are normally affected by the developments in the political

environment and this normally consists of laws, government agencies and pressure

groups which influence and limit various organizations and individuals in a given society

(Kotler et al, 2012). The political environment is American can be described as quite

stable as the new Obama Administration has taken over much to the delight of

Americans. It is likely that this political trend of stability and security in America would

continue for some time. However, the US government has changed its stance towards

companies like Coca-Cola mainly due to health related concerns of their products.

Practically speaking, Coca-Cola soft drinks have been alleged to contain very high levels

of sugar and this could have a negative impact on the health of consumers. The

consumption of excessive amounts of sugar has been connected with the health problems

among children and adults who are at risk of type 2 diabetes. Also, the high sugar content

in Coca-Cola drinks have a bad effect on a person’s oral health, leading to decaying of

teeth. In taking all these matters into consideration, the US government has banned the

sale of Coca-Cola in school canteens across the US (Just Drinks.com – Soft Drink

Companies under Pressure, 2013). The UK is likely to follow suit also. Trends like

these would cause a dent in the profitability of the company because of decreased sales,

as a large number of consumers of Coca-Cola are children and young teenagers.

3.1.1.2 Economic Environment

The economic environment here normally comprises of factors which have an affect on

the buying power of the consumers and spending patters. Markets normally require

5

buying power and people as well and it is important for this company to be aware of the

major trends in income and the changing consumer patterns (Kotler et al, 2012). The

economic environment is American is characterized by various uncertainties as this

country pulls itself out from the financial crisis that swept across the nation not long ago.

The economic downturn is certainly not very good for a number of large American

companies such as Coca-Cola, who would find themselves concentrating on various

international markets in order to promote and sell their products.

3.1.1.3 Social / Cultural Environment

The cultural environment is normally made up of institutions and forces that affect the

society’s basic values, perceptions, preferences and behaviors. In essence, it is the people

in a particular society which shape their very basic beliefs and values. In essence, they

tend to absorb a world-view that defines their relationships between themselves and

others (Kotler et al, 2012). In the United States and other developed and developing

countries, social and cultural trends do not seem to favor Coca-Cola at all as Americans

are starting to become more health conscious. More and more Americans are starting to

regulate their calorie intake and are meticulous with the type of food they eat and type of

drink they consumer (Calorie Control Council.com – Health Conscious Trend in

America, 2013). They are starting to understand that many of these soft-drinks are bad

for their health and starting to adopt healthier drinking habits. Obesity, for instances, is a

major problem and has been linked to the excessive consumption of soft drinks and many

soft drink companies like Coca-Cola have reported slower volume growth. The

consumers are now turning to healthier foods and drinks as obesity is becoming more

commonplace (Vegan Represent.com – Countervailing Social Trends, 2013). Also,

research carried out by independent organizations have demonstrated that drinks like

Coca-Cola only serve to add to the calorie intake of a persons without bringing any other

benefit to its consumers (CNN.com – Consumer Health and Soft Drinks, 2013).

6

3.1.1.4 Technological Environment

This is the most dramatic force that shapes our destiny and this company also needs to

observe current trends in technology (Kotler et al, 2009). America is a country that is

well known for its advancements in technology and companies like Coca-Cola can

benefit from this technology because they are capable of using available technology to

improve their operations to gain cost effectiveness, to improve their products to appeal

more to consumers and to also protect the environmental technology (US Embassy .de –

Science & Technology, 2013). Technology is also advancing in the sphere of food

production and Coca-Cola is capable of capitalizing on the advancements on such

technologies to make their drinks safer and more nutritious.

3.1.1.5 Legal Factors

This normally concerns the change in legal factors that can affect the environment which

the company does business in. Legal trends that persist now towards soft drink and fast

food companies in America would likely to change and the influx of legal suits against

soft drink companies are likely to rise (Vegan Represent.com – Countervailing Social

Trends, 2013). Medical evidence unearthed from scientific research has found a link

between consumption of soft drinks and obesity and hence there is a possibility of

floodgates of litigation being opened. Furthermore the changing judicial thinking and

trends in America seem too favor the protection of consumers and Coca-Cola would

likely to be exposed to an increase in legal action brought against them by the

government in terms of no compliance with new regulations on consumer health and

safety and also by consumers that experience health problems when they consume Coca-

Cola drinks in the long term.

3.1.1.6 Environmental Factors

The US government and also governments in other parts of the world have stepped up

their effort to ensure that companies like Coca-Cola adhere to various environmental

7

protection laws and that these companies do not carry out their operations in a way that

would harm the environment. Companies that do not comply with such requirements are

likely to be penalized by the law and acquire a bad image on part of the society. Coca-

Cola is a company well known for its socially responsible practices and its sustainable

operations and hence they are likely to not have to worry about being on the wrong side

of the law.

3.2 Internal Analysis

3.2.1 Customer analysis

The customers of Coca-Cola are normally people that come from all age groups, mostly

teenagers, young adults and also older people. These customers come from all segments

of society. However, as of late, the consumer preference for Coca-Cola has been

influenced by changes in cultural trends that now see more and more consumers favoring

more healthy drinks and this would make Coca-Cola soft drinks which are high in sugar

to become unpopular. These consumers are starting to become aware of the problems

linked to consuming excessive soft drinks and would simply change their preference to

some other drink. However, this is still an emerging trend and Coca-Cola continues to

have a very large and loyal customer base all over the world (Baker, 2008).

3.2.2 Company analysis

3.2.2.1 Coca-Cola Company Background

Coca-Cola can be described as one of the largest companies in the world and it has

enjoyed a tremendous amount of successful and is very widely recognized all around the

world (Yahoo Biz.com – Coca Cola Company Profile, 2013). This company is a

dominating force within the beverage industry and its sets certain high standards for

competition. From research that has been performed in the past, it was revealed that the

Coca-Cola trademark is recognized by approximately 94% of the world’s population

8

(Wmich.edu - Coca-Cola Company Information, 2013). The company has achieved

very high profits and continues to do so even presently. For instance, in 2007, 2008 and

2009, this company had earned revenue that was worth $28,857M, $24,088M, and

$23,104M respectively. Within these years, the company's gross profit margins stood at

63.9%, 66.1%, and 64.5% respectively (Market Research.com – The Coca-Cola

Company, 2013).

The Coca-Cola Company has ownership to four of the top five soft-drink brands and

these include:

Coca-Cola

Diet Coke

Sprite

Fanta

(Yahoo Biz.com – Coca Cola Company Profile, 2013)

The other brands of Coca-Cola include “Minute Maid, Barq's, POWERade, and Dasani

water”. This company is said to manufacture or licenses approximately 400 drink

products in approximately 200 nations (Yahoo Biz.com – Coca Cola Company Profile,

2013).

3.2.2.2 Business Vision of Coca-Cola

It is understood that the mission, vision and values of Coca-Cola effectively outlines what

Coca-Cola is seeking to achieve and they method by which they intend to achieve. The

vision Coca-Cola essentially guides every aspect of their business and it does this by

describing what is required to be accomplished for the purposes of continuing to achieve

growth that is sustainable (The Coca Cola Company.com – Mission, Vision, Values,

2013). Coca-Cola has the following visions:

1. Being a place that is great to work in

9

2. Providing the world with beverage brands of very high quality which are capable

of satisfying the needs and desires of people

3. Creating a winning network between customers and suppliers

4. Responsibly constructing and supporting communities that are sustainable

5. Effectively maximizing the long-term return to Coca-Cola shareowners

(The Coca Cola Company.com – Mission, Vision, Values, 2013)

3.2.2.3 Critical Success Factors of Coca-Cola

The company has a number of success factors which normally comprise of marketing,

innovation and globalization. An overview of these success factors will now be made.

3.2.2.3.1 Marketing at Coca-Cola

Coca-Cola is pioneer of advertising techniques and styles used to capture an audience.

Via its very strong marketing campaigns, Coca-cola have developed an image that is

positively reflected in what goes through the mind of the consumer when he or she

purchases a coke drink (Wmich.edu - Coca-Cola Company Information, 2013).

3.2.2.3.2 Innovation at Coca-Cola

Coca-Cola Company has been able to survive for long periods of time because this

company normally strived towards the systematic innovation and delivering of new and

improved products (Baker, 2008). Over the years, Coca-Cola has moved from having

just one core product to becoming a total beverage company. The strategy that was

adopted by Coca-Cola was entitled “play with innovation”. By adhering to this strategy,

it has helped Coca-Cola in diversifying its offerings to up to 400 different products

(Wmich.edu - Coca-Cola Company Information, 2013).

10

3.2.2.3.3 Globalization

The third key success factor of this company is its expansion of its operations on a global

basis to serve various types of diverse markets all around the world. This company is

enjoying immense success in offering its products to well over 200 countries all around

the world (Wmich.edu - Coca-Cola Company Information, 2013).

3.2.2.4 Competitor analysis

The soft drinks industry is growing at an average pace with Coca-Cola being number one

in the industry after Pepsi (Encyclopaedia.com – Soft Drink Industry Growth, 2013).

The main competitor of Coca-Cola in America and the world is Pepsi. This is a huge

competitor and has a large market share in the American soft drinks market and

internationally also. The quality of their products is quite high and the employ the use of

sound marketing strategies to compete with Coca-Cola. Pepsi beverage brands typically

encompass Mountain Dew, Gatorade, Diet Pepsi, Tropicana Pure Premium, Aquafina

water, Mug, Sierra Mist, Tropicana juice drinks, SoBe, Propel, Tropicana Twister, Slice,

Dole, and Tropicana Season's Best (NY Job Source.com – PepsiCo, 2013). Pepsi

possess a US market share for Pepsi brands which is about 40% (Yahoo Business.com –

Pepsi Bottling Group, 2013). During year 2007, Pepsi Company had managed to

acquire revenues of $39 billion (NY Job Source.com – PepsiCo, 2013).

3.2.2.5 Porter’s 5 forces

3.2.2.5.1 Threat of New Entrants

In the soft drink industry, the threat of new entrants is low to moderate. The reasons are

that new companies in the industry would have to incur high fixed costs of production,

logistics, and marketing activities. Also, new entrants would have to build their own

bottling plants and this requires high capital. The presence of strong and well established

11

competitors like Coca-Cola and Pepsi make it hard for new entrants to competitive

effectively in the industry (Kotler et al, 2007).

3.2.2.5.2 Threat of Substitutes

This threat is high because there are many substitutes for Coca-Cola products and these

include sports drinks, bottled water, fruit juices, coffee and tea. The increasing awareness

of consumers about their health has increased the popularity of bottled water and sport

drinks. There is a large variety of teas, bottled water, coffee and sports drinks within the

market to appeal to a variety of consumers’ tastes (Baker, 2008).

3.2.2.5.3 Threat of Suppliers

The main suppliers of Coca-Cola mostly suppliers of the ingredients used to make their

carbonated and non carbonated drinks. These include colouring, flavouring, caffeine or

sugar, and other additives that are easily available. Hence, suppliers do not have much

bargaining power over large companies like Coca-Cola and Pepsi and threat of supplier

bargaining power is low (Kotler et al, 2007)

3.2.2.5.4 Bargaining Power of Buyers

The bargaining power of main Coca-Cola buyers such as large grocers, supermarkets,

convenience stores and restaurants is high because these customers buy very large

volumes and hence they can bargain to get a lower price (Baker, 2008). Also, the

decreasing demand for soft drinks because of the health effects has increased the

bargaining power of buyers also.

3.2.2.5.5 The Competitive Rivalry

The competitive pressure is very high in the industry and the challenges come mostly

come from PepsiCo who is the main competitor of Coca-Cola. Pepsi dominates the sales

12

of soft drinks in North America but Coca-Cola much higher sales within the international

market (Kotler et al, 2007)

3.2.2.6 SWOT analysis

Strengths

Very high brand awareness

Loyal customer base

Long presence in the industry

Competitive pricing

Popular commercial taste

Large international presence

Good management

Effective promotional strategy

Good research and development

Weakness

Low nutritional value of drinks

High sugar content of drinks

Brings about health problems if consumed

in excess

Lack of diversification on non carbonate

soft drink segment

Opportunities

Increasing the nutritional aspect of product

Reducing the sugar content of product

Expansion into new markets

Adding more health related drinks to its

product line

Using available technology to make drinks

safer and healthier

Threats

Competitors that produce similar products

Competitors producing products of higher

nutritional value

Legal action brought about by dissatisfied

consumers

Changing consumer preferences towards

healthier beverages

Changing government regulations that lead

to restrictions placed on Coca-Cola’s

marketing activities

Table 1: SWOT Analysis of Coca-Cola

13

3.2.2.7 Marketing Objectives

The marketing objectives of Coca-Cola in this integrated marketing plan are presented in

the table below:

Coca-Cola Marketing Objectives

To obtain an increase sales by 3% in the US by the 4th quarter of 2014

To obtain an increase in sales by 3.5% in international markets by the 4 th quarter

of 2014

To increase the company’s market share by 5.6% by the 4th quarter of 2014

To achieve an increase in profitability by 7.8% in the non carbonated drinks

segment by the 4th quarter of 2014.

To market the new product in 100 countries by the 4th quarter of 2014

Table 2: Marketing objectives of Coca-Cola

4.0 Marketing Strategy

4.1 Product Strategy

The new product comprises of a non carbonated health drink which can be described a

nutritionally enhanced fruit juice that is non-carbonated and that is nutritionally

enhanced. The main feature of this product is that it would not contain any artificial

colouring or flavouring and only contain natural additives which make this a 100%

natural health drink. Also, the product would come in different fruit flavours, such as

orange, mango, pineapple, strawberry, peach and lemon. Most importantly the sugar

constant of the product would be reduced to ensure that its consumption does not have

undesirable health effects on consumers during the long term. Using state of the art

14

technology and food processing techniques, Coca-Cola would produce a product that is

100% natural and which caters to consumers growing requirements for health based

beverages (Baker, 2008).

4.2 Pricing

Coca-Cola needs to understand that its consumers are very sensitive to prices and value

discounts and special offers tremendously (Kotler et al, 2007). However, there is an

irrational side to pricing as sometimes, the perceptions of customers are such that

customers might equate high prices with high quality and vice versa. Hence, competing

on price on a permanent basis is not a very sensible approach (Value Based

Management.com – Marketing Mix, 2013). Coca-Cola would introduce the product

using a competitive pricing strategy, which involves the company setting a price for the

product lower than similar products of its competitors (Kotler et al, 2007). It is after the

product has managed to gain sufficient popularity with consumers should Coca-Cola

change their pricing strategy to reflect a slight higher but competitive price (Baker,

2008). The increase in price is premised on the belief that consumers would not mind

paying a little extra for better quality and higher nutritional value.

4.3 Place

The product must be made available at the right place and at the right time and in right

quantities. For this product, Coca-Cola should change their distribution strategy and place

more emphasis on the use of the internet (Value Based Management.com – Marketing

Mix, 2013). In addition to having the product sold at its normal distributors, Coca-Cola

should make this product available online whereby customers would be able to purchase

this drink online and have it delivered to them. Obviously there needs to be a particular

limit on the minimum amount that can be ordered. This would be particularly useful for

persons that buy in bulk (Kotler et al, 2007).

15

4.5 Promotion

The target market for this product must be sufficiently educated about this new product

and the value it can provide the consumers. Coca-cola must promote this new product

using a very integrated and effective mix relating to advertising. This is very “P” is very

important if Coca-Cola is to achieve success from this product in that target market

(Value Based Management.com – Marketing Mix, 2013). The advertising budget is to

be increased for television advertising by 5%, radio advertising by 3%, internet

advertising by 15%, newspaper advertising by 5%, magazine advertising by 7% and

billboard advertising by 10%. The company would also launch extensive sales

promotions and implement a public relations campaign to help the product gain a strong

foothold in the market (Kotler et al, 2007).

4.6 People

The people at Coca-Cola must all be focused on this new product and to give their full

focus and resources to marketing this new product in the most effective way. The

management of Coca-Cola would implement a culture workshop whereby everyone in

the Coca-Cola organization would be required to attend and learn about how they can

help to make this new product a success by joining hands to create a new culture at Coca-

Cola which is focused on making the new product a top seller at this company (Baker,

2008).

4.7 Processes

The main process of Coca-Cola that is relevant is the marketing process and Coca-Cola

need to ensure that all of its marketing activities are streamlined and integrated across

various parts of the marketing department to ensure that proper focus in given to the

effective marketing of this product (Baker, 2008).

4.8 Physical Evidence

16

The physical appearance of the product would involve having a simple yet effective

design. The Coca-Cola logo would be prominently placed on the packaging and attractive

colours and graphics are used to attract the eye of consumers. Also, the bottle used to

contain the new drink would be made from recycled plastic. The package would also

display the nutritional value and information of the product and also the corporate social

responsibility of the company (Kotler et al, 2007).

5.0 Budget

Table 3: Proposed budget for Coca-Cola’s Nutri Coke

17

Table 4: 3 year sales forecast of Nutri Coke

6.0 Control Mechanisms

The marketing department of Coca-Cola has the responsibility to ensure that the

marketing plan is capable of achieving the business objectives discussed earlier. Every

month, the marketing goals are reviews and discussed and it is determined whether the

company is on the right path to achieving these goals (Kotler et al, 2007). The results of

every period are reviewed constantly and there is evidence to show that objectives are not

being met properly, steps must be taken by the marketing manager to ensure that the

strategic plan has not deviated and that the marketing plan is effective enough to help the

company achieve their marketing objectives (Baker, 2008). Coca-Cola must have a

contingency plan to ensure that adequate response can be taken to help cope with changes

in the plan and address problems that arise before they can compromise the ability of

Coca-Cola to achieve their desired objectives (Kotler et al, 2007).

18

7.0 Reference List

Kotler P, Brown L, Adam S, Burton S and Armstrong G, 2007 “Marketing” PEARSON -

Education Australia: 7th Ed.

Baker, M 2008 The Strategic Marketing Plan Audit Cambridge Strategy Publications

Wmich.edu - Coca-Cola Company Information, 2032: citing from an internet source:

http://homepages.wmich.edu/~s3dohert/project.htm

Accessed on: 8-12-2013

Market Research.com – The Coca-Cola Company, 2013: citing from an internet source:

http://www.marketresearch.com/product/print/default.asp?g=1&productid=2018754

Accessed on: 8-12-2013

The Coca Cola Company.com – Mission, Vision, Values, 2013: citing from an internet

source:

http://www.thecoca-colacompany.com/ourcompany/mission_vision_values.html

Accessed on: 8-12-2013

NY Job Source.com – PepsiCo, 2013: citing from an internet source:

http://www.nyjobsource.com/pepsico.html

Accessed on: 10-12-2013

Vegan Represent.com – Countervailing Social Trends, 2013: citing from an internet

source:

http://www.veganrepresent.com/forums/showthread.php?t=1644

Accessed on: 2-12-2013

US Embassy.de– Science & Technology, 2013: citing from an internet source:

19

http://usa.usembassy.de/technology-environment.htm

Accessed on: 2-12-2013

Value Based Management – Marketing Mix, 2013: citing from an internet source:

http://www.valuebasedmanagement.net/methods_marketing_mix.html

Accessed on: 6-12-2013

CNN.com – Consumer Health and Soft Drinks, 2013: citing from an internet source:

http://www.cnn.com/2007/HEALTH/diet.fitness/09/18/kd.liquid.calories/index.html

Accessed on: 8-12-2013

Calorie Control Council.com – Health Conscious Trend in America, 2013: citing from an

internet source:

http://www.caloriecontrol.org/pr12-16-05.html

Accessed on: 5-12-2013

Encyclopaedia.com – Soft Drink Industry Growth, 2013: citing from an internet source:

http://www.encyclopedia.com/doc/1G1-12721359.html

Accessed on: 1-12-2013

Yahoo Business.com – Pepsi Bottling Group, 2013: citing from an internet source:

http://biz.yahoo.com/ic/53/53831.html

Accessed on: 3-12-2013

Yahoo Biz.com – Coca Cola Company Profile, 2013: citing from an internet source:

http://biz.yahoo.com/ic/10/10359.html

Accessed on: 8-12-2013

Just Drinks.com – Soft Drink Companies under Pressure, 2013: citing from an internet

source:

https://www.just-drinks.com/article.aspx?id=85087

20

Accessed on: 12-12-2013

21