For a business to be successful in the market, it needs a proper business plan to be able to sell out the products among the various consumer groups. The plan provides pointers on handling the clients, production process and manages the resource base of the company (Schutz, Rezg and Léger 2013). Strategic marketing planning is a process that is creative in nature and requires detailed research on the part of the individual or team who formulates it. The strategic marketing plan has to be aligned with the organizational goals that are to be achieved. The goals that are required to be achieved should be achieved by the mediums that are suggested by the strategic marketing plan. Such a plan should be revised at regular interval so that the organization stays in line with the latest feeds from the market. Reviewing the strategies in regularly makes it wiser and better for the marketing of the product in the market. The management team comes up with the plan and applies the particular formula in marketing the product to ensure stability in the business flow of the company. The formulated plan and strategy assesses the emerging trends in the market and turns it into opportunity for the organization to build on and gain higher profits and revenue. The chosen organization in this report is Coca Cola Company, which happens to be one of the leading producers of soft drinks with over 500 brands operating in as many as 200 countries around the world (The Coca-Cola Company 2018). John Pemberton invented the company and after some years it was purchased by Asa Griggs Candler, he was a marketing genius and his ideas and plans brought the company to the global front (The Coca-Cola Company 2018). The report will focus on the various marketing strategies, target consumer, marketing techniques and the external and internal forces that affect the company. The complete understanding of the current strategic plan will allow to delve deeper into the present scenario of the company and help in coming up with new proposals to add to the existing marketing plan. A section of the report will also cover a brief SWOT analysis of the chosen organization that will allow a better understanding of the entire assignment topic and help in formulating significant recommendation and conclusion for the report. The recommendation section will put forward further proposals that could be used in the strategic marketing plan to achieve a faster growth for the organization and to penetrate deeper into the market.
Marketing strategy is an important process that allows the organizations to concentrate the limited resources on the various opportunities so that the sales can be increased and the competitive advantage can be achieved (Baker 2014). The concept of strategic marketing is a focus, philosophy, and orientation which focus on the identification of the marketing opportunities as a basis for corporate growth and marketing planning. Marketing leads to the various processes with the help of which the organizations, individuals and groups obtain the things that they want and need by communicating, providing and delivering it. The concepts of marketing include the customers’ need, values and wants. Strategic marketing is concerned with the scope and direction of the activities that are performed by an organization for obtaining a competitive advantage (Armstrong et al. 2015). The organization makes use of the resources that it has for satisfying the needs of the customers and meet the expectations of the stakeholders. The organizations have to develop strategies so that they can cope with the competitors, the market opportunities have to be identified, and new services and products have to be developed and commercialized (West, Ford and Ibrahim 2015). An organization like Coca-Cola skillfully uses the strategic marketing ideas to create a dominant place for them in the market. The brand of Coca-Cola enjoys huge value in the market and nearly the entire consumer base recognizes the red-white logo of the soft drink manufacturer. The extensive role that strategic marketing played in making Coca-Cola a popular brand in the market is evident from the fact that around 3% of all the beverages consumed in market is a product of the Coca-Cola Company (The Coca-Cola Company 2018). Resources need to be allocated among the marketing activities and a proper organizational structure needs to be designed so that the desired performance is achieved. Strategic marketing makes sure that an organization makes use of the proper materials for the services and products. It also ensures that all the productions are according to the needs of the customers. Strategic marketing allows the organizations to reach the target market (Proctor 2014). There are different marketing strategies used in the business organization in order to reach the target market. It has been reported that there are almost 52 types of different marketing strategy used in today’s world, which helps the organization to shine in the world of marketing. Some of those are discussed below.
Coca Cola is the leading maker of soft drinks in the world. Coca Cola has strong brand recognition all over the world (McDonald and Wilson 2016). Segmentation helps in defining the products that are appropriate for a particular customer group (Chernev 2014). The company does not target any specific segment. Rather, it adapts the marketing strategies and develops new products.
The strategic marketing planning process further includes option evaluation, choices of action followed by proper formulation, implementation of the strategy and the control over the whole strategy.
Coca Cola plays a very critical role in serving the two-hundred nations. The company has segmented the revenue strategies in the business in accordance to the type of market. The employee incentives are also aligned accordingly. In the emerging markets, the company focused on increasing the volume and keeping the beverages affordable. A healthy business requires investment that is continuous. The company invested a huge amount to increase the quality and the quantity of the advertising. Coca Cola invested around $250 million for the media advertising (The Coca-Cola Company 2018). The company also increased the productivity and efficiency of the products and reduced the costs for increasing the financial stability. Coca Cola reshaped their business and worked on the areas where they needed to be smarter, efficient and faster. Both the strategies lead to the company gaining more and more loyal customers. The huge increase in the profits of the company shows that the link between the strategies in strong and in alignment with the goals of the brand. The corporate strategies that have been adopted by the company have helped the organization to implement the marketing strategies more successfully. The corporate strategies, which have taken a role in strategic marketing of the company largely, are discussed below:
Strategic planning is the organizations’ process of defining various tactics, direction and making the decisions and allocating the resources for pursing the strategy. The various models that are used to make an analysis of the entire business before formulating the strategic management are as follows-
Porter’s model
Porter’s five-force model for industrial analysis has been used as one of the most trusted models for analyzing the factors that show the competitiveness in the market. The model also portrays the qualities that attract the consumer in the market owing to its popularity among the people. Porter’s model allows getting a better idea of the company in respect to the domain in which it is catering. The model puts forward five direct criteria that cover some of the major internal and external concerns that a company can face (Dobbs 2014). They are-
PEST model
The PEST model is touted as the most common approach for measuring the external business environment of the company. It takes into consideration the following fields – Political, Economic, Social and Technological. All the sectors need to work in tandem with each other to ensure growth for the company in a given environment. The location of a company and its manufacturing unit is a deciding factor when it comes to profit earning for the company. All the factors that surround a place are to be taken into consideration and PEST does that analysis for the organization. (Linked to section 4)
SWOT Analysis
To incorporate interior condition and outer condition an association underlined both uniformly. The ideal approach to coordinate them is SWOT investigation:
SWOT examination empowers a relationship to perceive its characteristics, deficiencies, openings and threats. Characteristics and deficiencies of an affiliation are within parts where openings and perils rise up out of the effect of external segments. SWOT examination proposes to focus on characteristics of the affiliation and to shore up on inadequacy. It similarly allows endorsing openings by seeing perils. (Linked to section 4)
Positioning helps in driving the marketing tactics and strategy because it helps in creating the target audience. Positioning defines the product in accordance to the demands and the various characteristics of the people. Positioning further helps in locating the venue of the market where the company can find its target (Solomon 2014). The marketplace of Coca Cola is vast. This is why the market should be segmented first and the different customer groups should be identified. Coca Cola defines the customer and then they shape their strategies to reach out to the customers. Positioning helps in establishing where the company is present and where it wants to be in the future (Slack 2015). One of the best examples of positioning of Coca Cola was a television commercial that depicted a young boy giving Mean Joe Green a bottle of Coke after the football game. Green hands over his jersey to the boy and the boy thanks him. At the end of the commercial, the music of Coca Cola and the logo state that this beverage is best for refreshing oneself, especially when he is thirsty and tired. Positioning is something that is always kept in mind while framing a marketing tactic for the company. A product like Coca-Cola that has enormous youth appeal always creates tactics that are primary targeted towards the youth in the population, as they are the primary consumers of the drink. The advertisements and the celebrity endorsements make the move successful as the youth connect themselves with the brand and this connection is the success of the marketing technique that has been formulated by the company keeping in mind the positioning of the product in the market.
Strategic positioning is the method of determining the relative position of a particular company within its own industry and positioning itself in the market in future taking the changing environment in account. Coca Cola has its own comparative strategy of positioning which secures its position in the market of Non-alcoholic beverages market. The strategy of positioning has been sketched keeping the factor of effective service served to the target customer. The picture of the target market for a particular product is clearly stated and based on that the positioning strategy is defined. Through the positioning strategy the company can concentrate on the distinct characteristics and uniqueness with relation to the other competitive brands keeping the individuality in mind. The strategic positioning of Coca Cola also analysis the comparative study of the other rival brands like Pepsi, and the strategy includes convincing the customer to believe that Coca Cola’s product is better in quality and standard than the same type of beverages manufactured by the rival company (Chernev 2014). In the competitive world of soft drinks the effective strategic positioning along with the proper brand management plans have held the position of the company static in the market. Moreover, the strategic positioning of the company has established the guarantee of profitability. To achieve a stable brand position in market, establishment of a distinct brand image in customer’s mind is equally important along with the quality of product and service. The strategic positioning marketing help to create the same in customer’s mind, and builds a direct connection between the producer company and the consumer.
Coca Cola makes use of the competitive strategy of positioning in order to be ahead of the competitors in the market of non-alcoholic beverages (Madsen and Walker 2015). Coca Cola has gained huge popularity over the years and many people irrespective of their age prefer it. The diet coke is popular for targeting the market that is health conscious. The mission of Coca Cola is to refresh the entire world and create differences by inspiring moments of happiness. Coca Cola is known for the competitive edge that it has over the competitors when it comes to Operations, Brand Portfolio, Cost Control, Collaborative relationship with the customer and Channel Marketing.
Coca-cola segments the market in the broader sense based on factors like demography, location, psychograph and behavior (Wedel and Kamakura 2012). They do not select specific target consumer base rather they target the entire market with varying approaches to the different segments of the consumer base. The non-liquor soft drink market is so huge for Coca Cola that it caters to consumers from all backgrounds. It has been reported recently that around 20% of consumers have changed their choice of drink from regular sugary beverages to the low calorie diet drinks. (Forbes.com 2018). However, the number of health drink consumers is increasing with time, and because of the recent trend of health-consciousness in the western countries, a large part of Coca-Cola consumers are shifting towards health drinks. For the people who are health conscious the company has diet coke and for those who do not have inhibitions towards consuming high calorie drinks the regular coke is the foremost choice among others.
The strategic marketing plan is a complete report that is designed to counter the market requirements. To make sure that the plan is effective, various techniques are employed. Ansoff matrix is such a strategic marketing tool that is used to determine product and growth strategy. The main motive of this matrix is to suggest the company their area of focus amongst existing and new market, existing and new products.
Marketing Penetration: (Existing market and Product)- The purpose of this strategy is to attain growth in the market share within the existing industries. It can be done by either achieving higher sales or by acquiring new customers within the present market. The element of ‘Promotion’ should be used in order to achieve the growth. Coca-Cola has a superior brand presence and this has allowed them to penetrate the market easily by associating with festivals such as Christmas. Special adverts for Christmas period help the brand in achieving growth in the existing market.
Product development: (Existing market and New Product) – This part deals with the development of new products to meet the needs of the existing market and remove competition. The launch of flavored drinks by Coca-Cola, especially the Cheery Coke in the year 1985, was a strategy that was used to outperform emerging competitors in the market who sold flavored drinks.
Market Development: (Existing product and New market) – This strategy looks forward at pulling in new groups of buyers for an existing product. Coke Zero launched in the year 2005 was an ideal case of this – its thought being undefined to Diet Coke; the significant taste of Coca-Cola yet with zero sugar and low calories. Diet Coke was moved more than 30 years back, and keeping in mind that a bigger number of females drink it reliably than some other pop brand, it ended up noticeable that youthful colleagues shied a long way from it on account of its profound impression of being a lady’s drink. With its gleaming dim can and consummate backwards advancing endeavors, Coke Zero has successfully created a more ‘masculine’ offer.
Related diversification: (New market and product) – This incorporates the formation of another order of item that supplements the present portfolio, with a particular true objective to enter another yet related market. In 2007, Coca-Cola consumed $4.1 billion to get Glaceau, including its prosperity drink stamp Vitamin water. With a lessening in yearly offers of carbonated pop pops like Coca-Cola, the brand speculates the refreshments market may head less-sugary future – so has bounced on board the creating wellbeing drink fragment.
Porter’s Generic Strategy of the Coca Cola Company- Michael Porter is the founder of three strategies that are generic in nature. They are-
Differentiation Strategy- With the use of this strategy the organization looks at positioning itself in a way that it emerges different from the competitive products in the market. Coca Cola has successfully done this in the huge span of time it has topped the soft drinks market. The huge advertising budget and the unique logo of the brand helps it in maintaining the differentiation from other similar products. The logo, founded in 1923, has not been chznged from since then. The curvy design of the bottle is a differentiation technique used by the company and it attracts the consumer and plays with the psychology of the consumer that such slim bottles meant the drink will not lead them to losing their shape. The freestyle vending machines by Coca-Cola is a differentiation strategy as it is unique and allows the customers to mix needed flavors to the beverage.
Cost Leadership- With this the company looks at effectively reducing the cost of the product by cutting down the production cost. The Coca-Cola Company has used a static price method and hence they do not increase or decrease their prices very regularly. This static factor has helped them maintain the cost leadership in the market.
Focus strategy- The company uses this strategy very efficiently and focuses on the needs of the customers. They focus on the cost and various differentiation strategies that will lead to greater market space for the product. The designing of the product by coca cola and the various USP of the brands are all part of their focus strategy.
Core Competencies- The core competencies of a company are the main strengths that allow the company to outperform others in the industry. The Coca-Cola company has a brand name that is huge and so is the brand value and hence these are the primary core competencies for the company.
GE model- This model helps a business in evaluating the overall strengths that are prevalent in the organization. For Coca Cola, the strengths are its huge market share and the connection it has created with the consumers in this span of time. The company has dominated the market and has never been a market follower; they have started new trends in terms of both content and designing for the products in the specific industry.
A better strategic marketing demands certain tactics to satisfy the target customers. Seven core tactics are defined in study of marketing. Coca Cola Company maintains seven P’s of marketing mix in order to define its marketing technique. Those factors include:
The strategic marketing objectives should be created to achieve the growth in business. The objectives are directly in line with the business goals. Objectives allow fixed targets to achieve and the entire marketing technique should be co-related with the business objectives (Aversano, Grasso and Tortorella 2013). The objectives of Coca Cola Company for their strategic marketing plan are as follows:
-Increase in market penetration so that it results in enhanced brand visibility.
-Improving the distributor channel so that the product is available in maximum retails outlets in every part of the world.
-Making footsteps in the low calorie drink market so that those who are avoiding soft drinks due to health hazards avail the low calorie drink from the brand.
– To collaborate with the fast food brands such as McDonald’s and KFC to increase their sales as part of bundled offers.
Competitor threat: Medium
The beverage industry is a low cost industry to enter and many new brands are making their inroads into the industry regularly. While it is tough for any new company to gain an image and position like coca cola enjoys but it is not impossible. According to Romaniuk (2013), the power that the beverage behemoth holds as a brand is so much that people are very unlikely to switch their brand loyalty for a new brand.
Substitution threat: Medium – High
With multiple soft drinks, energy drinks and juices circulating in the market, the threat lies in the commonality of the product by coca cola. The taste of the drink is not unique; hence, the company has not projected itself with a special flavor or taste that will position the brand as a unique one (Singh, Kalafatis and Ledden 2014).
Buyer’s bargaining power: Low
The individual buyer does not bargain for a product like coca cola. Due to end consumer loyalty, the bargain put forth by retailers like Walmart is not taken much into consideration.
Suppliers bargaining power: Low
As coca cola happens to be the largest customer for raw materials such as sweetener, carbonated water and caffeine, the suppliers do not put pressure for the rates. According to Tseng, as they go into deals with the suppliers hence the rates are pre-discussed hence leaves no room for bargaining.
Rival firms: High
According to Forbes, the top rival to Coca Cola happens to be Pepsi and it deals in the same non-soda section such as orange juice and bottled water that Coca deals with. The tastes also are quite similar and Pepsi has an advantage over coca cola that it also has products in the other sections than the soft drink area. The increase in the demand for low calories and no soda drinks can affect coca cola but Pepsi is better equipped with its non-soda line up. Dr. Pepper is also a rival to the brand because of the unique flavor it offers in its drinks.
The government policies and rules for the sale of beverage product in a country vary from place to place. Coca Cola has to adhere to the rules of the land in which it markets its product. Taxes are imposed on the company and they have to provide the tax in order to function in that country. The tax may vary with food and regulations unit getting complex every year and new rules and laws being framed time to time. These changes affect the business of coca cola. The company has faced many lawsuits regarding the usage of pesticides in its product in the recent times. A ban on the intake of such beverages by the government can lead to huge losses in the market for coca cola (Terpstra, Foley and Sarathy 2012). Political tensions, disasters or wars also affect the business negatively.
The economy of a country yields to the final growth of a company’s business. Economical depressions will have a direct impact on the business. In recent times of recession, coca cola surprisingly remained unaffected by the wave of depreciation that every global business was suffering from. Coca Cola is a luxury product and there can be times, when the consumer may stick to just buying the necessary items (Hu, Shi and Wu 2013). Such situations will lead to the company’s sales going down and affecting the annual profit margin.
Social factors add up much to the business aspect of a company because societal changes lead to alteration of choice. A person moving away from flavored drinks to healthy drinks recently has been a major concern for the company. Anti-obesity drive gaining momentum every day is an alarming situation for coca cola because of the image it has of a “high calorie” drink. Culture plays a major role in global trade of a company (Baker 2014). Such is the impact that Coca Cola, which is an American company, faced a steep decline in its sales in various countries when America attacked Iraq.
The technological factors include the promoting media, production process and the packaging unit of the product. The money spent on advertisements, banners and campaigns do add to the increase in the volume of the sales (Nichols 2013). The growing reach of electronic media it is important for them to invest in order to remain as a top of the mind recall brand (Armstrong et al. 2015). The use of latest machinery for the production process is always kept in mind so that fast production takes place in huge volumes. Coca Cola Enterprises has six manufacturing units with latest technology placed in Britain to ensure fast production process.
Strengths
Weakness
Opportunity
Threats
The company in this age of globalization has faced competition from various brands that have emerged in the market. In order to counter them Coca-Cola has taken up several measures so that their market dominance is retained and the they do not miss the huge consumer base that they have. The company has a strong supply chain that ensures continuous supply to all the markets in the world. The shops should maintain sufficient stock of the drink and the excellent distribution channel of Coca-Cola assures this. Lack of stock at a counter will lead to people opting for other emerging brands and that will risk coke’s market dominance. The company has faced opposition from various brands in the market but it has had no effect because of the huge brand equity of Coca-Cola Company. The global trend to shift towards healthier drinks is a massive challenge for the company and more low calorie products are health oriented marketing strategies have to be taken up in order to maintain trust that consumers have had on the brand for decades.
The firm will have to keep bringing new products in the low calorie segment as well as the snack segment to counter its rival Pepsi. Coca cola has to push the consumer towards its low calorie drinks by putting more stocks of those drinks in the retail chains (Mohan, Sivakumaran and Sharma 2013). This will act as an anti-sobesity drive by such a leading firm which was referred to as a company primarily dealing with junk food items. Something that can outplay its entire competitor in the market is regular on-road health drives that will help people become aware of the ill effects of junk food and hence the need to shift to low calorie drinks from Coca Cola Company. Increasing the public awareness regarding the ill effects of the calorie-laden drinks will result in improving the image of the company among the consumers. People will relate to the brand as an entity that promotes good health and hence build a positive association with the entire brand (ElMaraghy et al. 2013).. Though Coke adds as much as nearly 40% of the total revenue by the company, the firm must try and put more focus in its other products too so that the market gets a variety.
Conclusion
The report concludes that Coca Cola being one of the largest brands of the non-alcoholic drinks market and needs to evolve constantly to maintain its popularity. The various strengths and weaknesses that have been put forward in the report add up both positively and negatively to the company image. With globalization in process, the fast increasing market for products those were unknown as of yet to consumer, may lead to a decline in the sales of the coke. Coca cola is a very powerful brand with circulations in over 200 countries. The company also has bottled water under its brand that allows it to move away from the notion that it only produces hazardous drinks such as Coke. People are attached to the brand emotionally and they have created a certain image of the brand in their minds, which has helped the company to rule hearts for decades now. Notwithstanding Coca Cola’s fortress in the soda pop industry and tremendous worldwide achieve, the organization has successively enhanced its promoting spend every year. Coca-Cola puts stock in extending its purchaser base through experiential advertising, which goes for making an enthusiastic associate with clients. Positive shopper discernment is critical for Coca-Cola, as it faces headwinds in the CSD class because of the undesirable tag related with these beverages. For any company to overtake the firm, it will require a huge strategic planning and consistent market penetration that can create a dent in the annual reports of Coca Cola Company. Coca-Cola is an exceptionally solid brand on the planet. Adaptable market systems influence Coca-Cola to keep pioneer position in soda field. Nevertheless, the names of “Garbage Food” and “obesity causing drinks” are the first sins of sodas. To dispose of this picture, Coke redefines its image picture as well as make benefits from other non-soda pop fields. The Coca-Cola Company is the restrictive merchant of Evian filtered water and Rockstar caffeinated drinks in a large portion of the U.S. and Canada. These allows them to come out of the believe that the brand only produces health hazardous content.
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