With a small number of companies competing for a market that in many cases (North America, for example) is subject to slow growth, the competition can be characterized as intense. Thus, Coca-Cola's marketing message must also take into account the moves that its competitors are making. Coca-Cola not only must respond to shifts in the competitive environment but as industry leader must protect its position by making proactive moves to establish competitive shifts, forcing the competition to respond.
The Coca-Cola Company, with its broad product range and ubiquitous market presence broadly targets the entire world. Coca-Cola has only loose differentiation in its target markets because of this. While the company literally believes it should sell to every single consumer, some segments are more attractive than others. The soft drink business in most markets is subject to fairly strong brand loyalty. Therefore, the company often targets its marketing efforts towards younger consumers -- teenagers and young adults -- to establish that brand loyalty during the years in which such loyalties typically form.
With respect to geographic target markets, the company is strongly focused on building its brands in emerging markets such as China and India, where brand loyalties for hundreds of millions of consumers are still up for grabs. Coca-Cola is engaged in intense competition with Pepsi and local drinks makers in these regions to establish a strong position. Brazil, China, India and Turkey have been identified by the company as strong drivers of growth and those nations have therefore received specific attention (2008 Annual Review).
Some sub-segments are more lucrative and subject to more specific target marketing. Ready-to-drink coffees, for example, appeal to an older demographic than is typically courted by the company. These products have strong margins, and the brand loyalties are both fewer and weaker than in the core soft drink segments.
Coca-Cola focuses on all aspects of the marketing mix. New product introduction...
New products establish new segments in which the company can build a strong early market share. Moreover, new products help Coca-Cola gain shelf space, the visibility of which is vital to maintaining strong sales.
Packaging is also an important component of the marketing mix (Bayne, 2004). This form of promotion is, in essence, a balance between the right product and the right place (format). It also impacts pricing, since different serving sizes can carry different margins or have different appeals to consumers.
Pricing is important for Coca-Cola as well. The company leverages the strength of its brands to charge higher prices, but these prices in turn support the premium image of Coca-Cola products vs. generics and other brands. The importance of this is actually evidenced by Pepsi, which saw its sales improve decades ago when it raised its prices to match those of Coke. The premium pricing, high-end packaging and constant product innovation all allow Coca-Cola to drive high margins on high volumes.
Lastly, distribution is critical to the company's success. The company's target market being virtually anybody, distribution must attain ubiquity for the company's products. The network of distributors successfully gains access to stores, restaurants and other establishments, placing Coca-Cola products within reach of most consumers at most times. If the target market was more focused, this would not be necessary but Coca-Cola's strategy of selling to everybody demands that they make their products as readily available as humanly possible. In their target geographies, they are building out their distribution networks rapidly, in order to attain the saturation levels they enjoy in North America and other key markets.
Coca-Cola 2008 Form 10-K. Retrieved June 18, 2009 from http://www.thecoca-colacompany.com/investors/pdfs/form_10K_2008.pdf
Coca-Cola 2008 Annual Review. Retrieved June 18, 2009 from http://www.thecoca-colacompany.com/investors/pdfs/2008_annual_review/2008_annual_review.pdf
MSN Moneycentral. Retrieved June 18, 2009 from http://moneycentral.msn.com/detail/stock_quote?Symbol=ko&getquote=Get+Quote
Coca-Cola website. Retrieved June 18, 2009 from http://heritage.coca-cola.com/
Coca-Cola Company Fact Sheet. Retrieved June 18, 2009 from http://www.thecoca-colacompany.com/ourcompany/pdf/Company_Fact_Sheet.pdf
Bayne, Katie. (2004). Coca-Cola Focuses on convenience, affordability to drive innovation. Food & Drug Packaging. Retrieved June 18, 2009 from http://findarticles.com/p/articles/mi_m0UQX/is_7_68/ai_n6160843/
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