Discuss about the Marketing Report of Coca-Cola Amatil.
Marketing report provides the effective and necessary information about the entire market of a particular product of an organisation. A potential market report reveals the actual market situation of services or specific products regarding the demand, trend of market structure, price, volume of transaction and the quantity and quality of product (Wedel & Kamakura, 2012). In this, present report, the external and internal environment analysis of Coca-Cola Amatil would be thoroughly discussed for further development of the process of production and the basic quality of the ingredients. At the end of this report, there is SWOT analysis that can offer a perfect view about the strengths, weakness, opportunities and threat of Coca-Cola Amatil. Coca-Cola Amatil (CCA) sells non-alcoholic beverages in the region of Asia Pacific and six countries including New Zealand, Australia, Samoa, Papua New Guinea and Fiji. The headquarter of Coca-Cola Amatil is situated in North Sydney of Australia.
Market analysis
The current situation of Coca-Cola Amatil in Australia suggests that this beverage company has contributed a weak price since few months, which is a compelling reason to damage the brand image of Coca-Cola Amatil. The management of Coca-Cola Amatil has decided to provide discounts on MT Franklin brand in order to regain the lost situation of this company in various cities of Australia.
Coca-Cola Amatil enjoys the Oligopoly market structure as this company encounter very limited competition in the soft drink industry of Australia. Coca-Cola Amatil holds at least 67% market share in the industry in this current year. Within the end of this present year, the management has made effective strategies in order to capture minimum 70% market share after providing a tough competition to its competitor companies, such as PepsiCo and others. Coca-Cola Amatil operates in large scale in the entire market of beverage industry of Australia as this brand has already secured multi-million dollar from its position of constant growth. From the market survey and annual financial chart of Coca-Cola Amatil, it is a clear fact that the folks of Australia prefer this reputed brand only because of their quality and production process of variety of beverages rather than only carbonated drinks. The market of Coca-Cola Amatil is divided into two segments; the first segment includes the health conscious young people, aged in between 20-30 and prefers to drink energy and fruity flavoured drinks. However, the second segment consists of those customers who prefer carbonated soft drinks of Coca-Cola Amatil. No age and gender specification can be mentioned about this particular group and the market is completely divided into the soft drinks lover and non-soft drinks lover.
In order to understand the size, growth and attractiveness of non-alcoholic beverage industry of Australia, Porter’s Five Forces can provide a detailed view of the business and the position of Coca-Cola Amatil in the beverage industry.
Rivalry among existing company: Coca-Cola Amatil encounters a strong sense of competition among the existence of other enterprises in the beverage industry of Australia such as PepsiCo, Inc. Nestle Waters France and Dr. Pepper Snapple Group, Inc.
Bargaining power of customers: Tóthová et al. (2013) have suggested that as there is a huge availability of non-alcoholic beverages from various companies, therefore, the bargaining power of customers of Coca-Cola Amatil is high rather than other regions throughout the world.
Bargaining power of suppliers: The bargaining powers of suppliers are moderate for Coca-Cola Amatil in Australia because of a large number of availability of suppliers for the raw ingredients of this company.
Threat of substitute products: The energy drinks, gourmet coffee from various luxurious coffee shops are the substitute products of the carbonated drinks of Coca-Cola Amatil. The inhabitants of Australia prefer flavoured non-alcoholic drinks instead of the aerated beverages of Coca-Cola Amatil (CCA).
Threat of new Entrants: In opinion of Hattersley (2013) the potential threat arrives from small companies, which produce less expensive but tasty non-alcoholic beverages to satisfy the customers of Australia. Those companies provide energy drinks and sports drinks are a threat for Coca-Cola Amatil.
In order to retain the standing position in Australian beverages industry, Coca-Cola Amatil has adopted few effective strategies. Kotler competitor classification is an adequate tool for analysing and assessing the level of competition in a particular industry. Following this tool is thorough manner; Coca-Cola Amatil has selected at first the major competitor of it in beverage industry of Australia and has made strategies accordingly. The higher management of this company has chosen the desired goal and choose particular strategies. According to Metzger (2013), the basic aim of this tool is to provide the customers more facilities with the product in less expensive prices for satisfying them. Customer satisfaction is an important factor for any kind of organisation, which determines the level of competition in the industry.
Kotler Competitor classification helps Coca-Cola Amatil to know in a detailed manner about the intense level of competition in the non-alcoholic beverage industry of Australia. For instance, the brand image, price, quality of product play a vital role in the retention of customers, and this determines the existence of constant increasing competition in the beverage industry. The major competitors of Coca-Cola Amatil are PepsiCo Inc and Nestle, therefore, Coca-Cola Amatil thoroughly follows the strategies of these two companies in order to understand in a critical manner the reason for popularity in the commercial beverages industry (Carlon, Tran & Tran-Nam, 2013). In this continuing year, the financial report has revealed a necessary fact about the position of Coca-Cola Amatil with its competitor companies in the Australian industry of beverages. Every non-alcoholic drink producing company including, tea, coffee, sports and energy drinks followed the traditional models of competitor analysis to understand the competitive environment of the industry.
Wade (2014) has mentioned that customer’s analysis helps a company to create an efficient and proper marketing plan according to the demand of its clients. It is a critical portion for identifying the targeted customers of Coca-Cola Amatil in order to ascertain the necessary requirements of the consumers with every specification about the satisfying criteria of them (“Our Brands,” 2016). Customer analysis can be determined with a proper segmentation of users, which are very much significant with the fundamental interests, spending habits, gender and age of every customer. Customer analysis is a valuable tool to know in a thorough manner about the proper segmentation of targeted customers of Coca-Cola Amatil in Australia. Customer analysis of this company also helps to manage the suitable relationships in between the organisation and customers and the ultimate key to the opportunities that can curve the success of the enterprise. According to Andini & Simatupang (2014), customer analysis also helps to make an effective marketing plan for the further success of an organisation. Coca-Cola Amatil has engaged various potential managers to make a thorough market research about the commercial beverages industry of Australia and offer a suitable strategy to increase its standing position.
Even with the service, quality of the product through an online website can facilitate the loyalty of customers. As cost is a key factor for retaining customers for every organisation, therefore, Coca-Cola Amatil gradually restructure the price of their soft drinks in order to satisfy the customers. The availability of other companies in the commercial beverages industry of Australia are huge, therefore, there are a large scope for the customers to switch over other companies that can offer them tasty soft drinks in less expensive price rather than Coca-Cola Amatil.
PESTLE analysis of Coca-Cola Amatil is suitable enough for determining the external factors that may affect the procedures of production.
Political: Instability of the government, corruption and poor economy of Australia has a significant influence on the manufacturing process of Coca-Cola Amatil (Andreyeva et al. 2012).
Economical: The economic condition of international level, high ranges of inflation rates of the beverages industry of Australia also influence the business of Coca-Cola Amatil in an excellent manner. This company also tries to deal indirectly with the other bottle organisations of international level.
Social: Coca-Cola Amatil is solely concerned with the production of non-alcoholic beverages, which is nutritious as the demand for carbonated drink of this company is rejected, which pull down the sale revenues of Coca-Cola Amatil.
Technological: According to Foster (2012) with developed technologies, Coca-Cola Amatil creates a vast range of opportunities in order to produce an entirely new product and make improvements of the carbonated beverages.
Legal: Coca-Cola Amatil strictly follows the guidelines, rules and regulations of the government of Australia in order to produce the beverage products with proper-patented procedures.
Environmental: Coca-Cola Amatil supports the local, international and national issues that are closely related to the production of carbonated drinks. In order to save the environment, this company monitors and assess every aspect of the manufacture of products.
All these above-mentioned external factors are relevant for Coca-Cola Amatil as it directly affects the business and production of this particular company (Kotler, 2012).
The microenvironment of an organisation includes various important factors such as the availability of essential resources and the necessary impact of it upon the entire business process and every individual, who are closely associated with the organisation and it’s every operation for attaining the desired goal of the company. Hamilton (2014) has suggested that the suppliers, customers, customer markets and the marketing intermediaries are an important part of the microenvironment that firmly determines the ultimate success of an organisation. Coca-Cola Amatil always tries to improve skills in order to create perfect and healthy soft drinks for the consumers. This company provides its employees a great workplace to perform in a suitable manner. The significant concentration of the higher management of the company is to maintain the brand image of Coca-Cola Amatil as it strengthens both the position in the beverage industry in Australia and the customer loyalty. It helps to build the relationship more firmly with the consumers.
Coca-Cola Amatil enjoys stable, ethical and appropriate suppliers for the raw materials of producing the soft drinks and 24% growth in the industry with profitable sales revenue. However, some microenvironmental factors affect the standardized profit procedures of Coca-Cola Amatil in Australia (Baah & Bohaker, 2015). Obesity has become an epidemic in most of the cities of Australia, which is the primary reason that customers are switching to the cheaper alternatives such as sports drinks and energy drinks instead of carbonated drinks from Coca-Cola Amatil.
Operations
In order to attract the health conscious customers of Australia, the higher management of Coca-Cola Amatil has decided to produce some soft drinks without carbon dioxide and without sugar for producing low-calorie drinks. Diet Coke is an innovative creation of this company, which is very much popular among young people and the diet-oriented customers. In future, the management has plan to come up with something more innovative energy drinks in order to give a tough competition to its competitor companies in the commercial beverages industry of Australia. This strategy would help Coca-Cola Amatil to open up the basic range of market in the industry. The leaders of this company are creative enough to plan something completely new for catering the best to the customers. 4P’s are the best way to understand the internal operations of an organisation (Ccamatil.com, 2016).
|
Product |
· Coca-Cola Amatil produces carbonated soft drinks, Coca-Cola Zero, Coca-Cola Life and diet coke. · With the potential help of the employees, this company tries to step forward to produce flavoured drinks n future. · The present energy product of this company is mother and other non-alcoholic products are Zico and Fruity drink. |
|
Price |
AU$3.35-AU$5 |
|
Place |
In every cities of Australia, the non-alcoholic beverages of Coca-Cola Amatil are available. Coca-Cola Amatil targets the shopping malls, restaurants, food outlets and street side shops. |
|
Promotion |
Coca-Cola Amatil promotes the products mainly through social media platforms such as Facebook, Instagram, Twitter and Snap chat. However, in television and magazines, there are also advertisements for the products of this company, which helps the customers in Australia to know about the newly launched products, outlets and any received awards (Kleemann & Murphy-Bokern,2014). |
Table 1: 4P’s of Coca-Cola Amatil
(Source: Freeman et al. 2014)
Financial figures from the annual report of Coca Cola Amatil:
|
FY 2015 (in millions $) |
FY 2014 (in millions $) |
|
|
Revenue |
5093.6 |
4942.8 |
|
Gross profit |
1901.8 |
1875.4 |
|
Net profit |
403.4 |
272.8 |
|
Total cost |
(4783.5) |
(4761.2) |
|
Total current assets |
3128.0 |
2580.1 |
|
Total current liabilities |
2001.3 |
1680.8 |
|
Inventories |
733.9 |
686.1 |
|
Total assets |
6667.4 |
6057.3 |
|
Total fixed cost |
Financial ratios of Coca Cola Amatil for 2014 and 2015:
|
Financial Ratios |
2015 |
2014 |
|
Gross profit ratio |
37.33705042 |
37.94205713 |
|
Net profit ratio |
7.919742422 |
5.51913895 |
|
Current assets ratio |
1.56298406 |
1.535042837 |
|
Quick ratio |
1.196272423 |
1.12684436 |
|
Debt ratio |
0.300161982 |
0.277483367 |
|
ROI |
8.433155639 |
5.729647988 |
In the above table, the financial performance of Coca Cola Amatil can be seen for the years 2014 and 2015. If the comparison is made between the financial performance of the company for 2014 and 2015, then it can be said that as per the net profit ratio, the profitability of the company has been improved in 2015 than that if 2014. However, the gross profit ratio of the company has been decreased a bit in 2015. On the other side, the liquidity position of the company was much stable in these two financial years and in 2015, it has improved. The debt ratio of the company has also enhanced, which indicates that the cost of the company has not increased much as compared to the revenue. At the same time, the return on investment of Coca Cola Amatil has increased in 2015 than that is 2014. All of these financial figures indicating that the company has improved its financial performance in 2015, which is good for the future financial years.
Calculating the Break-Even point as per the assumptions:
Total cost in 2015 $4783.5 millions
Assuming 60% of the total cost of the company is fixed cost and rest 40% is variable cost
Therefore, total fixed cost = $2870.1 million and total variable cost = $1913.4 million
Total revenue for the year = $5093.6 million
Assuming total number of units produced = 1000 million
Therefore, contribution per unit= ($5093.6 – $1913.4) / 1000 million
= $3.180
Therefore, Break Even Point = $2870.1 / $3.180
= 902.54
The current products of Coca-Cola Amatil include the carbonated soft drinks, energy drinks and fruity flavoured drinks and specification of the product attributes help the customers to know about every product in a detailed manner before buying any drinks. Every soft drink from Coca-Cola Amatil appears with completely different colour, flavour and taste from the other. Even the quality of the products and service of it are determined by the product attributes (Powell & Gard, 2015). The present pricing of every product from Coca-Cola Amatil is not s much expensive. The higher management of this company usually decides the current price of every newly launched product only after a thorough market analyses and research about the product price of the competitor companies. Marketing plan is also created to fix a perfect pricing strategy for every product of Coca-Cola Amatil. This company is tremendously consistent with the pricing policy in order to satisfy the customers to the utmost level.
|
Strengths |
Weaknesses |
|
· The brand Coca Cola Amatil enjoys the brand value of AU$ 65,654 billion. · This company is known for largest beverage organisation in Australia. · Coca-Cola Amatil has a stable platform for advertising, marketing and promoting products (Brownell et al. 2012). |
· The major weakness of this company is to produce carbonated drinks in large number rather than energy drinks. · Coca-Cola Amatil lacks the process of diversification. · Negative publicity about the carbonated drinks of this company hampers the business. |
|
Opportunities |
Threats |
|
· The constant growth of drinking beverages is a large opportunity for Coca-Cola Amatil. · Young customers prefer fruity drinks and energy drinks of Coca-Cola Amatil. · There is a gradual increment of demand of bottled water in Australia, which becomes a potential opportunity for Coca-Cola Amatil. · The primary cost of producing the beverages are reducing and it is an important opportunity for the concerned company. |
· In the opinion of Terpstra & Verbeeten (2014), the present generation prefers energy and sports drink rather than the carbonated soft drinks, which can generate a significant level of calorie. · Coca-Cola Amatil has encountered with a heavy competition in the industry of carbonated drinks. · Local brands in Australia provide the customers’ more or less same taste of the beverages generated by Coca-Cola Amatil in less high price. · The concerned company faces an intense competition from PepsiCo in recent times in various countries of Australia. · The increased battle against the epidemic obesity in Australia is also a significant threat for Coca-Cola Amatil. |
Table 2: SWOT analysis
(Source: Hamilton, 2014)
The SWOT analysis is an appropriate platform for making a suitable marketing plan for a product. With the effective SWOT analysis, Coca-Cola Amatil can gather relevant information that can help to reach the desired target of the concerned company.
References
Andini, R. A., & Simatupang, T. M. (2014). A process simulation of inventory planning and control for Minute Maid Pulpy at Coca-Cola. International Journal of Logistics Systems and Management, 17(1), 66-82.
Andreyeva, T., Luedicke, J., Henderson, K. E., & Tripp, A. S. (2012). Grocery store beverage choices by participants in federal food assistance and nutrition programs. American journal of preventive medicine, 43(4), 411-418.
Baah, S., & Bohaker, L. (2015). The Coca-Cola Company. Culture, 16, 17.
Brownell, K. D., Farley, T., Willett, W. C., Popkin, B. M., Chaloupka, F. J., Thompson, J. W., & Ludwig, D. S. (2012). The public health and economic benefits of taxing sugar-sweetened beverages. New England journal of medicine, 361(16), 1599-1605.
Carlon, S., Tran, A., & Tran-Nam, B. (2013, September). How close are taxable income and accounting profit? An empirical study of large Australian companies. In Australian Tax Forum (Vol. 28, No. 3, pp. 641-677).
Ccamatil.com (2016) Health and Safety, Retrieved on: 10 Aug 2016, From: https://www.ccamatil.com/en/our-people-and-careers/health-safety
Foster, R. J. (2012). Cocaâ€ÂGlobalization. John Wiley & Sons, Ltd.
Freeman, B., Kelly, B., Baur, L., Chapman, K., Chapman, S., Gill, T., & King, L. (2014). Digital junk: Food and beverage marketing on Facebook.American journal of public health, 104(12), e56-e64.
Hamilton, Margaret. “Drug Policy in Australia, Our Own?.” Drug War American Style: The Internationalization of Failed Policy and Its Alternatives(2014): 97.
Hattersley, L. (2013). Agri-food system transformations and diet-related chronic disease in Australia: a nutrition-oriented value chain approach.Agriculture and human values, 30(2), 299-309.
Kleemann, L., & Murphy-Bokern, D. (2014). Reducing greenhouse gas emissions in the food sector: Effects of corporate responsibility (No. 1967). Kiel Institute for the World Economy (IfW).
Kotler, P. (2012). Kotler on marketing. Simon and Schuster.
Metzger, K. (2014). The Import of Culture? The Coca Cola Company in America and Australia.
Our Brands. (2016). Ccamatil.com. Retrieved 11 August 2016, from https://www.ccamatil.com/en/our-businesses-and-brands/our-brands
Powell, D., & Gard, M. (2015). The governmentality of childhood obesity: Coca-Cola, public health and primary schools. Discourse: Studies in the Cultural Politics of Education, 36(6), 854-867.
Terpstra, M., & Verbeeten, F. H. (2014). Customer satisfaction: cost driver or value driver? Empirical evidence from the financial services industry.European Management Journal, 32(3), 499-508.
Tóthová, Ľ., Hodosy, J., Mettenburg, K., Fábryová, H., Wagnerová, A., BábíÄÂková, J., … & Celec, P. (2013). No harmful effect of different Coca-cola beverages after 6months of intake on rat testes. Food and chemical toxicology, 62, 343-348.
Wade, G. (2014). Issues in Australian Foreign Policy January to June 2014.Australian Journal of Politics & History, 60(4), 606-620.
Wedel, M., & Kamakura, W. A. (2012). Market segmentation: Conceptual and methodological foundations (Vol. 8). Springer Science & Business Media.
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