Sustainable Marketing

Because we are part of the SOCIETY...

Coca-Cola India being one of the largest beverage companies in India, realized that CSR had to be an integral part of its corporate agenda. According to the company, it was aware of the environmental, social, and economic impact caused by a business of its scale and therefore it had decided to implement a wide range of initiatives to improve the quality of life of its customers, the workforce, and society at large.

Coca-Cola India Bags the Prestigious Golden Peacock Award for CSR, Third year in a Row

Coca-Cola’s footprint in India was significant as well. The Company employed 7000 citizens and believed that for every direct job, 30-40 more were created in the supply chain. Like its parent, Coke India’s Corporate Social Responsibility (CSR) initiatives were both community and environment-focused. Priorities included education, where primary education projects had been set up to benefit children in slums and villages, water conservation, where the Company supported community-based rainwater harvesting projects to restore water levels and promote conservation education, and health, where Coke India partnered with NGOs and governments to provide medical access to poor people through regular health camps. In addition to outreach efforts, the company committed itself to environmental responsibility through its own business operations in India including

•  Environmental due diligence before acquiring land or starting projects
•   Environmental impact assessment before commencing operations
•  Ground water and environmental surveys before selecting sites
•  Compliance with all regulatory environmental requirements
•  Ban on purchasing CFC-containing refrigeration equipment
•  Waste water treatment facilities with trained personnel at all company-owned bottling operations
•  Energy conservation programs
•  50% water savings in last seven years of operations

One of the most recent initiative by Coca – Cola is “Support My School” campaign in collaboration with NDTV. Sachin Tendulkar is the ambassador for this campaign. The campaign focus on providing sustainable sanitation facilities, infrastructural development such as building proper hygienic sanitation facilities for boys and girls, improved access to water, renovating the grounds to promote physical sports and recreation, building a green environment and equipping schools for rain water harvesting. “Support My School” Campaign garnered contributions from the public through the course of the campaign and during the telethon which was hosted by Sachin Tendulkar in mid-2011.

Organisational Buying Behaviour

Coca Cola Company is based on Business to Business marketing, which means that the company provides goods that bought for a resell rather than personal use. Coca Cola Company first started its bottle agreement on 1899 and today it has 300 bottling partners worldwide. The company manufactures and sells concentrate, beverage bases and syrups to the bottling operation which than manufacture, package, merchandise and distribute the final product to the costumers and vending partners that than sell it to the final costumers. The Coca Cola Company owns the brand and responsible for the marketing initiatives.

Coca-Cola Company works together with more than 300 bottling partners globally and operates the most extensive beverage distribution system in the world. Electronic commerce had become a preferred method of doing business for the grocery industry and therefore the company developed a high volume site for Business to Business e-commerce (B2B).

Except the bottling partners, Coca Cola Company has strategic alliances with different large companies to leverage their brand. 

Here are few examples from Coca Cola's alliances:

• Apple and Coca cola made iTunes alliances on 2006; Coca-Cola used this initiative to promote their calorie-free Coke Zero brand along with iTunes.
• McDonald's and Coca Cola have a strong alliance based on trust for more than 60 years, Coca Cola products are being sold in 31,000 restaurants over 100 countries.

Coca Cola Company performs large number of alliances with great size companies to strength its operation and to compete better worldwide.
The company's alliances base on commitment and trust.
"Our customers include large international chains of retailers and restaurants and small independent businesses. We work with them equally to create mutual benefit. Together with our bottling partners, we serve our customers through account management teams, providing services and support tailored to their needs." from the Coca Cola Company

Customer Behaviour

Whether to BUY or NOT ??

Customer behavior is effected by various factors like Social factors and Personal factors.

Social Factors:

Reference groups: Friends, family, formal groups are a part of reference groups. Coca - Cola targets groups together specially family as they influence the buying decision of an individual.

Roles and Staus: As discussed in segmentation, people prefer to drink Coca - Cola to show class and status. Their buying decision is influenced due to their class and role.

Personal Factors:

Age and Stage in the Life Cycle: Generally youth prefer to drink Coca - Cola. At this time they hang out most with their friends and are more social.

Occupation and Economic Circumstances: As Coca - Cola is an FMCG product with low price, this factor doesn't effect the buying decision much.

Personality: Personality effects buying decision a lot. People who are sociable buy Coca - Cola. As it is a youthful drink, people's buying decision is effected with this personality.

Sales Management

Sales Funnel

Suspect: A suspect is someone you have not spoken to and he appears similar in profile to your target customer, you may decide that they are worth pursuing. You generate awareness for these leads. To gain customers attention, Coca - Cola makes a lot of advertisement and in colours that will get the attention.

Prospect: Then interest is generated in the suspect. A prospect has confirmed interest in your offering. By using various marketing tools like promotions, Ad campaigns etc. Coca – Cola generates interest in the suspect by targeting on his need and converts him into a prospect

Qualified prospect: Qualification is the most critical and demanding stage of the sales funnel. In the qualification process, you verify that the prospect has a need for your product, that the prospect sees value in your offering, that there is sufficient budget for a deal, that you have access to the decision-maker, and that there is an agreed-upon timeline for the sales process. As Coca – Cola is an FMCG product, it is easy for the company to create value for the prospect and convert him into a qualified prospect.

Committed: Ideally, you want to close the deal when all red flags have been dealt with. When a customer has agreed to move forward with a deal, they are “committed”. What remains is to work out the details of delivery and payment, all of which have the potential to “undo” the commitment. Being an FMCG product, it is east for Coca – Cola to persuade the customer to buy the product.

Transacted: A sale has transpired when the customer buy the product. With the use of marketing mix, Coca – Cola completes all the stages of Sales Funnel.

Distribution Decision

Which way to go...

DISTRIBUTION NETWORK 

Coca - Cola has a wide and well managed network of salesmen appointed for taking up the responsibility of distribution of products to diverse parts of the cities. The distribution channels are constructed in such a way that the demand of customers is fulfilled at the right place and the right time when it is needed by them. A typical distribution chain at Coca Cola would be:

Production---Plant Warehouse---Depot Warehouse---Distribution Warehouse---Retail Stock---Retail Shelf ---Consumer 

DISTRIBUTION ROUTES

The various routes formulated by Coca - Cola for distribution of products in India are as follows:

Key Accounts:

The customers in this category collectively contribute a large chunk of the total sales of the Company. It basically consists of organizations that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being made by them after a certain period of time i.e. either a month of half a month.

Examples:

Clubs, fine dine restaurants, hotels, Corporate houses etc.

Future Consumption:

This route consists of outlets of Coca-Cola products, wherein a considerable amount of stock is kept in order to use for future consumption. The stock does not exhaust within a day or two, instead as and when required stocks are stacked up by them so as to avoid shortage or non-availability of the product.

Examples:

Departmental stores, Super markets etc.

Immediate Consumption:

The outlets in this route are those which require stocks on a daily basis. The stocks of products in these outlets are not stored for future use instead, are exhausted on the same day and might run a little into the next day i.e. the products are consumed at a fast pace.

Examples:

Small sized bars and restaurants, educational institutions etc.

General:

Under this route, all the outlets that come in a particular area or an area along with its neighbouring areas are catered to. The consumption period is not taken into consideration in this particular route.

Promotion

Get to know us...

Coca-Cola is using all elements of promotion in its various Ad campaigns like Happier tomorrow, Aamir Khan “Thanda matlab Coca – Cola” campaign, Open Happiness etc. Different mediums used by Coca – Cola for Integrated Marketing Communication are:

Advertisement- Coca-Cola uses the concept of aggressive advertising to promote its products They mainly does national advertising through traditional media such as: TV, newspapers, magazines, billboards, bus stops, and etc. The company is also using the new methods such as websites and blogs to supply more information about the company and its products. Big names of Indian film industry became the brand ambassadors of the company. Coca – Cola’s slogans and TV commercials have always been memorable like “Thanda matlab Coca-Cola”, “Coca-Cola piyo sir uthake”, “Jo chahe ho jaaye Coca-Cola enjoy” and “brrrrrr”.

Public Relations- the company has its own website where consumers can view press releases, executive speeches, and statements which address law-suits, rumours, stories, and new products etc. Coca – cola also undertake CSR like “Support my School” campaign with Sachin Tendulkar. Coca – cola also sponsors various cricket tournaments and music events.

Sales promotion- Coca – cola generally uses under the crown sales promotion. In "My Coke Reward" was a very successful sales promotion campaign. It also uses merchandising goods, free goods or free tours for sales promotion.

Personal Selling- Cola-Cola has highly trained sales team, the company primary used personal selling for business to business sales. The company sells its products to retail stores using intermediaries, it can also be called Interpersonal communication, direct- face to face communication. Coca- Cola also sells its products to restaurants, part of the restaurants sell only Coca-Cola Coke.

Direct Selling – Coca-Cola uses direct marketing in many ways. It partners with various restaurants, movie theatres etc. to carry its product. Eg. Mc Donalds. Coke also uses mobile graphics and test to appeal to markets on a personal level

Last, Coca-Cola uses viral marketing. The brand became a giant because of individuals telling their friends, family, or coworkers about how great Coke products were. Today, the company can still use viral marketing to their advantage. For instance, when Coke produces a new product, and someone on their lunch break purchases that new product, and enjoys it, they will tell others in the office about how great the new product is. This will cause others to purchase the product, and in-turn increase sales.

Pricing

Coke ab bas 5 rupey mein...





The price of Coca Cola’s products is one of the most important factors in a customer’s decision to buy. Price will often be the difference that will push a customer to buy our product over another, as long as most things are fairly similar. For this reason pricing policies need to be designed with consumers and external influences in mind, in order to effectively achieve a stable balance between sales and covering the production costs.

Price strategies are important to Coca Cola because the price determines the amount of sales and profit per unit sold. Businesses have to set a price that is attractive to their customers and provides the business with a good level of profit. Long before a sale was ever made Coca Cola had developed a forecast of consumer demand at different prices which inevitably determined whether or not the product came on the market, as well as the allocation of adequate money and resources to produce, promote and distribute the product.

To first determine its price, Coca-Cola used a cost-based pricing system. They first designed the product, determined the costs for the product (product costs, capital costs, and operational costs), set a price based on the cost of Coke, and finally convinced the consumers of the soda's value. From there, Coke chose to use market-penetration pricing for its price. Here, they set low initial prices in order to attract a large number of buyers quickly, to gain a large market share.

Over the years Coca Cola has used Penetration Pricing as a way of grabbing a foothold in the market and won a market share. Its product penetrated the marketplace. Once customer loyalty is established as seen with Coca Cola it is then able to slowly raise the price of its product. There has been a fierce pricing rivalry between Coca Cola and Pepsi products as each company competes for customer recognition and satisfaction. Till now it appears as if Coke has come up on top, although in order to gain long term profits Coke had to sacrifice short term profits where in some cases it either went under of just broke even, but as seen it has been all for the best.

Pricing Methods

Good pricing decisions are based on an analysis of what target customers expect to pay, and what they perceive as good quality. If the price is too high, consumers will spend their money on other goods and services. If the price is too low, the firm can lose money and go out of business.
Pricing methods include: Cost based Pricing, Market based pricing and Competition based Pricing. Over the years Coca has lost ground here in its pricing but has regained its strength as it employed the Competition-based pricing method which allowed it to compete more effectively in the soft drink market. Leader follower pricing occurs when there is one quite powerful business in the market which is thought to be the market leader. The business will tend to have a larger market share, loyal customers and some technological edge, thus the case currently with Coke, it was first the follower but through effective management has now become the leader of the market and is working towards achieving the marketing objectives of the Coca Cola.

Other pricing strategies used by Coca - Cola:

• Coke uses the promotional pricing strategy. In store that cell Coca-Cola, prices are often temporarily priced below the list price to increase short-run sales. It gives the product a sense of urgency and customers purchase the product because of the lower price.
• Coke uses the segmented pricing strategy. For instance, Coca-Cola offers liter bottles, 6-pack cans, 6-pack bottles, and 12-pack cans of the same product, all for separate prices. By their product in different sizes and at different costs, they get to increase their revenue, because there is not much difference in the costs required to produce the products.
• Coke also uses the international pricing strategy. For instance, the price of a 2-liter bottle of Coke in India is different from the price of the same product in China. This has to do with the difference in economic conditions, competitive situations, and laws.