Coca Cola is one of the two leading brands in the soda industry and the largest brand of non-alcoholic beverages in the world. The international empire of Coca Cola spans more than countries.
The company has a large product portfolio of sparkling and still beverages. The soda industry has felt the pinch of economic slow-down and post-recession, currency fluctuations have affected the profits of leading soda brands. The popularity of soda drinks has also reduced due to the growing popularity of health drinks and other health trends. Apart from the large market share, Coca Cola is known for its strong brand image and high customer loyalty.
It invests a very large sum each year in marketing and promotion for growing brand recognition and customer engagement.
Coca Cola Strategic Analysis
In recent years, it has focused on optimizing its product mix. Coca Cola has a large product portfolio of sparkling and still brands.
It provides nearly 3, beverage choices. There are 21 billion-dollar brands in its portfolio, of which 19 are available in low or no-calorie choices. Coca Cola has an extensive beverage distribution system. Coca Cola sells an average of 1. Traditionally, the company has relied on its bottling partners for the packaging and distribution of its products. Our Company manufactures and sells concentrates, beverage bases and syrups to bottling operations, owns the brands and is responsible for consumer brand marketing initiatives.
Its bottling partners work closely with customers including grocery stores, restaurants, street vendors, convenience stores, movie theatres, and amusement parks, among many others.
Together they execute localized strategies of Coca Cola company. Pepsi is the arch-rival of Coca Cola and the closest competitor in the beverages segment. Both brands price their products competitively. Moreover, due to the decreasing demand for soda products, price competition between Coca Cola and Pepsi has gotten even intense. The prices lower as the size of the package grows bigger.
Bulk buyers of the product may have to pay significantly lower prices than ones buying single Coca Cola products. Due to the intense competition in the soda industry, the top brands spend much on advertising to drive higher sales and revenue. It utilizes both traditional and modern channels to promote its brand and products. Coca Cola launched its Taste the Feeling campaign in which unites all of its brands.
This one brand approach taken by Coca Cola marks a significant shift from its previous marketing strategy. Apart from TV ads and outdoor ad campaigns, the company serves its ads across the internet and on social media.According to official statistics, an amazing 1.
The Coca-Cola Company is a global business that operates on a local scale, in every community where they do business.
Wonderful Competitive Advantage Through A Unique Distribution Channel
The term is second most well known after okay, making it recognisable in nearly all communities and cultures across the globe. The Company is able to create a global a global reach with local focus because of the strength of its system, which comprises the Coca-Cola Company and their more than bottling partners worldwide.
The system has numerous legal and managerial departments and sections,all independent of each other, and it does not own or control all of it bottling partners worldwide. While it is generally perceived that Coca-Cola runs all its operations globally it, this process it done through various local channels.
The Company manufactures and sells concentrates, beverage bases and syrups to bottling operators. It still however, owns the brand and is responsible for consumer brand marketing initiative. The bottling partners manufacture, package and distribute the final branded beverages to customers and vending partners, who then sell products to consumers.
All bottling partners work closely with suppliers- grocery stores, restaurants, convenience stores, amongst many others- to execute localised strategies developed in partnership with Coca-Cola.
More precisely, although Coca-Cola is a global company, its products never have to travel far to reach the final consumer, making the product more local than you may think, the product is made local to the market where it is sold. The Coca-Cola Company sells its products to bottling and canning operations, distributers, fountain wholesalers and some fountain retailers.
They then distribute them to retail outlets, corner stores, restaurants, petrol stations and many more. The firms distribution system is one of the most well planned and executed compared to all other drinks of the same category.
They have achieved their goal due to this high visibility, and to the availability of their products all over the world, even remote places.
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Coco Cola uses an intensive distribution of its beverages Coco Cola Uses Manual Distribution Centre MDC model which operates within densely populated areas as they involve short distances.
Like Liked by 1 person. The reason could be attributed that it has become a brand of necessity and the brand portfolio has grown very large indluding soft drink, juices, water to manage it efficiently and to better counter the only rival pepsi they have this kind of distribution network in the form of dedicated ageincies.
Like Liked by 3 people. Thanks for the Post. One of my friends owns a take away restaurant. She told me that Coca-Cola approached her and provided the refrigerator to her restaurant. There was no cost to the refrigerator.
The requirement would be selling Coca-Cola drinks in there, but no Pepsi. I would assume Pepsi is doing the same to Coca-Cola. Usually for simple, inexpensive, easily shipped items. Also tends to use the pull strategy to pull through the channels of distribution. In China, you can see Coca-Cola everywhere, they has used three major sales mode of operation: the wholesale, direct marketing, the depth distribution. Meanwhile, Coca-Cola also continues to research the use of new channels for different regions and key channels in different periods, a professional service team to improve service levels to end customers.
As they mature, such as supermarkets, schools, markets, Coca-Cola in the region and gradually establish a corresponding professional services team.Lets vpn hack version
Like Like. I agree with enorton — coke is an example of the pull strategy in action. The investment that global Coca Cola makes in continuing developing the brand makes it easy for its partners to move the product.
A relationship that works both ways. This mutual dependence and shared values has helped both companies rise to become leaders in their respective industries.React sticky disable
Not only have they collaborated on supply chain and logistics issues, but also product development and cross promotion of products. They are an ideal case study on how strengthening both upstream and downstream partnerships can be vital for business growth.Sustainable competitive advantage — a goal which will be always sought and ever elusive in business. It is difficult to define. Yet, we often know it when we see it.
Less traveled distribution channels can become a large competitive advantage. People attempt to draw-up lists in an effort to understand and remember the types of competitive advantage. Maybe even in the future market for batteries according to Elon Musk and Tesla. Another one to add to the list, in my opinion, is competitive advantage which develops by owning or perfecting a unique distribution channel. A unique distribution channel can be a great way to differentiate your company and build a competitive advantage, often in industries where the product or service itself may be at risk of being undifferentiated like some financial services products.
If your company can develop a more effective or less expensive channel to bring your product or service to the marketplace, you can develop a big advantage over companies that do not have your distribution channel.
It is even better if there is some reason why your competition cannot utilize your channel because of channel conflict State Farm may have difficulty selling directly like Geico because their agents would get upset or the expense of building out the distribution channel Apple stores or Coca-Cola bottling plants.
Or, Internet search is a lucrative channel thus far in this century. The flip side is also true. If you do not own your distribution channel, your business just became much more difficult. I see this all the time as small product companies get eaten alive by retail chains who capture too much of the value for distributing product through their channel.
Constant price negotiation, slotting fees, terrible payment terms, all make selling your product through the retail channel very difficult. On the other hand, I have also seen some companies particularly food companies grow their revenues very quickly by utilizing the existing retail channels club stores, etc. There are many examples of large businesses that were built where a unique distribution channel was a core piece of the puzzle and it made the company strong and effective for a long time.
Here are some examples:. If I were starting a business, I might first focus on having a unique distribution channel and then figure out what product or service could be sold through that channel. In any case, I recommend that all business owners and entrepreneurs think hard about the distribution channel they are using, why they are using it, and how they can create sustainable competitive advantage through distribution channels. Mason Myers I am an investor at Greybull Stewardship, an investment group of business owners investing in exceptional businesses.
Mason Myers Blog. First Name. Email Address. Full Bio. Search for:. Recommended Websites Berkshire Hathaway, Inc.As we continue our journey as a total beverage company, building loved brands through disciplined portfolio growth plays an integral role in that journey. Disciplined portfolio growth through a constant focus on innovation, revenue growth management and improved execution — all supported by greater brand-building. We believe executing and improving upon these initiatives forms the foundation to deliver strong results today and in the years ahead.
This strategy is driving results within our flagship brand today. Our brand-building capabilities center around enduring principles such as human centricity, focusing on the basics, including being clear on the occasion, brand, price, pack and channel we are executing against, and finally, capitalizing on new engagement models by creating experiences from points of interruption. The ultimate goal being to increase weekly drinkers of our products.
Our strategy centers around:. We have taken several steps in the ongoing evolution of our revenue growth management RGM agenda. Which pack? Which price tier? Which channel? Which customer? Which competitor? It focuses on identifying revenue pools where to play and revenue growth strategies how to win. RGM is a capability with different markets being at different points of the journey and adjusts based on the business objective and changing landscape.
Digital is beginning to play an integral role in our RGM strategy in order to drive our competitive advantage in making better, more informed decisions faster by translating data into insights into actions.
Digital is improving our insights both at the consumer experience level in addition to driving improved execution with our bottlers. That is why we went through a tremendous transformation over the past several years to put the bottling operations in the hands of the most capable and strategically aligned partners. We are seeing our transformation yielding results. Below is a case study of the North America refranchising results thus far. On average, brands with Leadership status have margins 1.5 Considerations for Sales & Marketing Distribution Strategy - Michael White
Disruptive Explorer brands have entrepreneurial audacity and the ability to disrupt markets where they are either nonexistent or irrelevant. Patient Challenger brands work to amplify their competitive edges by focusing on consumer segmentation that matters, like behavior, values and lifestyle, and investing in experiential brand building.
Purposeful Leaders are representative of wisdom and courage and have the opportunity to expand growth, capture value, and nurture the competitive edge. This success was a result of exceptional discipline and persistence, thorough research in optimal pricing and packaging, and an integrated marketing campaign.
This is the result of strategic leveraging of its edge with distinctive packaging, carafe-style bottle, fresh taste, simplicity, and powerful marketing that elicits a close-to-nature feeling. Featuring a new and improved no-sugar recipe that is similar to the taste of Coca-Cola Original, Coca-Cola Zero Sugar quickly experienced positive retail sales. In one year after the launch, the sales of Coca-Cola Zero Sugar were up 13 percent, almost 20 percent in Germany, 50 percent in Great Britain, and 90 percent in Mexico.
Growth Strategy. Disciplined Portfolio Growth As we continue our journey as a total beverage company, building loved brands through disciplined portfolio growth plays an integral role in that journey.
Our strategy centers around: Use the retail presence strategically to build the brand and experience.The Coca-Cola company was founded Dr. John S.
Pemberton in in Atlanta The Coca-Cola company Now, the company has become the largest beverage company in the world The Coca-Cola company The company has more than 20 sub-brands and the company obtains more than 1 billion US dollars in annual sales The Coca-Cola company The Coca-Cola company has a specific distribution method.
Due to the ingredients of Coca- Cola is a trade secret. Thus, the Coca-Cola manufacturer delivers the beverage bases and syrups to bottling operations Coca-Cola Australia Then, the retailer sells distribution the final beverage to the customers Coca-Cola Australia Therefore, it is one of the franchising distribution methods.
This type distribution method brings some benefits for the Coca-Cola company. For example, the Coca-Cola company only need afford the transportation fee between manufacturer to the bottling operations.
Then, the bottling operations and retailers will afford the transportation fee to customers. Therefore, the Coca-Cola company will save plenty of cost for distribution. However, the Coca-Cola also facing some challenge in the distribution field. For example, the Coca-Cola company has incredible distribution problems, lack of internal communication, high cost in the distribution process and customer loyal problems Stewart Therefore, this blog will provide some suggestion for Coca-Cola base on the marketing concept in the distribution field.
How to improve the Coca-Cola company distribution. For the incredible issue, the Coca-Cola company should establish a sophisticated distribution systems The Coca-Cola company The systems may involve several key functions. For example, the inventory management, orders for shipment, order status, electronic map, customers management, account collection. The functions may help the Coca-Cola company according to the orders location to design the shortest route to deliver their productions.
For the customer loyal problems, the Coca-Cola company should adopt the intensive distribution strategy Kumar It means that the company had better set their retail store at some dense population places, such as shopping centre, leisure centre or some convenience stores. The retail store should be set on the place which is easy to help the consumers purchase their productions. At the same time, the company may use the pull strategy to promotion their production Iacobuccip.
For example, the Coca-Cola company should focus on the customers. It can accredit the retail store giving some discount for the customers in a period.
The company should provide some free sample to customers and giving their some loyalty points Iacobuccip. Moreover, the company should increase some advertises to consumers. For example, the company may choose the paint in red billboard in some supermarkets or retail store Iacobuccip.
This type billboard may attractive the customers attentions. Then, it will stimulate the customers purchase activities. In conclusion, the Coca-Cola company relies on the franchising distribution method to develop their company.Since the invention of the nerve tonic beverage Coca-Cola by Dr. John Stith Pemberton in and the incorporation of The Coca-Cola Company by Asa Griggs Candler inthe American multinational beverage company has been known for its extensive marketing efforts characterized primarily by remarkable advertising.
Of course, there is more to the marketing strategy of Coca-Cola than advertisements. This article provides a concise discussion of the strategy and tactics employed by the company to market its products based on the marketing mix model. To understand its product strategyit is first important to know that Coca-Cola is primarily a producer and marketer of concentrates and syrups. These products serve as the principal raw materials for the end-user beverage products of the company.
In addition, it is also important to note that these concentrates and syrups are sold to subsidiary or independently-owned bottlers that are responsible for producing and packaging the final beverage products for distribution and consumption.
Diversification is also central to the product strategy of Coca-Cola. Apart from producing and marketing the flagship Coke brand, the company also produces and markets other brands of non-alcoholic beverages ranging from carbonated drinks and fruit juices to energy and lifestyle drinks.
The Coca-Cola Company does not explicitly states its pricing strategy. However, based on global operations and the specifics of its distribution strategy, the company employs an operations-oriented pricing strategy in which the objective is to uses price variations to match the supply and demand in a particular regional market, as well as some aspects of profit-oriented pricing through optimization of mass production and distribution.
Furthermore, based on its market stature and the presence of its competitors, the company employs a specific leadership pricing tactic. Its beverage products are more expensive than lesser popular competitors, local producers, and new entrants.
Coca-Cola can maintain this tactic because of its competitive advantages stemming from market leadership, distribution efficiency, and promotional capabilities. Coca-Cola follows two levels in its distribution strategy: the primary bottler-specific distribution level and the secondary regional distribution level. The primary level involves distributing the concentrates and syrups to various subsidiary and independently-owned bottlers throughout the world.
The secondary level involves the bottlers distributing the final beverage products to their respective geographical markets. The company also uses two routes under its secondary distribution level.
The first involves distributing the ready-to-consume products via retail distributors such as supermarket chains, convenience stores, and kiosks while the second involves distributing the concentrates and syrups, as well as ready-to-consume products to restaurants and other food preparation businesses.
Advertising is at the heart of the promotional strategy and of course, the marketing strategy of Coca-Cola.
The company invests heavily in advertising using traditional mediums of communications such as print and television, as well as other mediums and methods through digital marketing activities and outdoor marketing campaigns.
Distribution strategy of Coca- Cola
Both Coca-Cola and PepsiCo are global leaders in the beverage industry, offering consumers hundreds of beverage brands. In addition, both companies offer ancillary products such as consumer packaged goods. On the surface, Coca-Cola and PepsiCo have very similar business models. As potential investors dig deeper, however, they find key differences and key similarities between the two business models that make the companies what they are as of The following are a few comparisons between Coca-Cola and PepsiCo's business model that make the two companies fierce competitors and unique businesses.
PepsiCo is a company known for a highly diversified product portfolioboth within the beverage industry and in other industries such as the consumer packaged goods industry.
In contrast, Coca-Cola only focuses on a diversified product portfolio within the beverage industry and has few products outside of that industry. With PepsiCo's diversified business model, the company has been able to acquire or create complementary products in both the food industry and the beverage industry. According to Information Resources, Inc.
Even though Coca-Cola may have an advantage with a more focused business model, PepsiCo created a scenario where one product the company owns may induce a consumer to purchase a second product the company also owns. In contrast, Coca-Cola has made efforts to dominate the beverage industry almost exclusively and shied away from the cross-promotion of multiple products in multiple industries.
BetweenCoca-Cola has a higher market share than Pepsi, according to Beverage Digest, a trade publication. Pepsi's market share has dropped in the same time period. In addition, Coca-Cola has more focus within the beverage industry, allowing it to make key investments and communicate key messaging with consumers. Both Coca-Cola and PepsiCo are so large, they face the issue of market saturation.
There are not many new or emerging markets that remain untapped for either company. However, both companies have made a push into the energy drink category, as Americans have begun to be more concerned about sugar and chemicals in their food and drinks.
This push highlights the fact that sales volume for Diet Pepsi and Diet Coke have declined steadily in more than 10 years, according to Time magazine. What is interesting to note is that Time magazine also reports that the energy drink segment of the beverage industry has captured year-over-year growth over the past 10 years.
Keeping with the theme of diversification and product complements, Coca-Cola bought a large stake in Monster Energy inand PepsiCo decided to start its own energy drink: Mountain Dew Kickstart.
With both companies facing market saturation, Coca-Cola and PepsiCo have made strong commitments to more efficient operations. Since every large market has been fully tapped by the beverage industry, the remaining smaller markets require efficient operations to turn a profit and make a lucrative investment, since the sales volume felt in countries such as the U. These more efficient operations help both companies increase the price per share given it should result in higher earnings per shareor EPS, even if sales remain flat.
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