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.

Brand Value

Its a PROMISE... 

There could be hardly any person around the world that hasn't heard the name Coca Cola. Ever since it beginning as world's leading name in cold drinks, Coca Cola has created a strong brand image irrespective of age, sex and geographical locations. Millions of people around the world are consuming cold drinks or soft drinks as part of their daily meal. Coca Cola, ever since its inception has been the leader in soft drink market. Brand image is the significant factor affecting Coke’s sale. Coca-Cola’s brand name is very well known all over the world. 

Over the past 124 years, Coca - Cola brand's promise has remained the same -- to inspire moments of optimism and uplift. 

Coca-Cola’s slogan for example, changes very frequently. They adept their promise to the circumstances in the society, so their core value of making people happy is always fulfilled. Their innovations are not only real, tangible products, but also new promises.

Coca-Cola's brand equity is difficult to measure because they have extended their brand to include numerous products. In addition to the numerous of versions of Coca-Cola worldwide that compete against other beverage brands, Coca-Cola competes with itself. Nationally there are numerous versions  brands that are a part of the Coca-Cola family. Some of the brands include Coca-Cola Classic, Dasani Water, Full Throttle, Fanta, and Soy Products. In addition to competing against itself the Coca-Cola Company has saturated the market and consumers who may dislike one product may actually enjoy a different Coca-Cola product. However, the consumer may be unaware that the beverage is actually in the Coca-Cola family. As a result measuring brand equity may be difficult as consumers may be loyal and repeat customers of a brand and not know its origin.

Coca Cola was taking its core product, Coke, and expanding the product in new form factors and new overseas markets. The brand promise stayed the same whether it was sold in a Coke store in New York or a road side stand in Mongolia -refreshment, good times, and pure Americana.

Despite the numerous brands and the difficulty in measuring brand equity it is evident that Coca-Cola has high brand equity. They are a company who has been in business for many years they have gained the business of consumers in the soda market as well as numerous

Services and Services Marketing

We are here to SERVE you..

As Coca – Cola comes under pure tangible good category of Service mix, there is no service attached to it. Being an FMCG good, there is no major service provided to the customers.

Coca – Cola is a very big company, one service which can be counted is the Website of the company. Coca Cola India’s company provides every information about the company. Its products, initiatives, sustainability and much more is just one click away from the consumer.

Coca – Cola India’s Website - http://www.coca-colaindia.com

Coca – Cola also have a Consumer Helpline number for its consumers. This will also be included in the service provided by the company to its consumer. Consumers can also mail them their queries. The website of the company has also listed various FAQ’s for the consumers.

Other service of Coca – Cola can be Vending Machines. But the concept of vending machines is not much famous in India, therefore, we won’t consider it as a service in India

PRODUCT LIFE CYCLE

All products have a particular life span, which is called the product life cycle. The product goes through four stages from Introduction to Decline in a particular time span. The four distinct but not wholly-predictable stages are

·                     Introduction

·                     Growth in sales revenue

·                     Maturity, during which sales revenue stabilizes

·                     Decline, when sales revenue starts to fall and eventually vanishes or becomes too little to be viable.

As a product moves through these stages, its pricing, promotion, packaging, and distribution are re-evaluated and changed if required to prolong its life. In summary, it is the journey from "new and exciting" to "old and dated."

The stage of its life cycle the product is currently in will impact the way it is marketed to consumers. For example, a brand-new product will need to be explained to consumers, while a product that is further along in its life cycle will need to be differentiated from its competitors.

The length of time a product is on the market is largely contingent upon its competition, technology and even the savvy of a company's marketing department. One of the best ways of extending a product's life cycle is to continuously garner feedback from consumers, finding out what they need and want from a particular product.

INTRODUCTION STAGE OF COCA COLA

In the Introduction stage, Coca Cola was launched and initially promoted. Efforts were made for creating its awareness in the market, inducing trial of the product and securing space in the outlet shelf  When their costs were high, sales volume were low, and there was no existing demand for Coca Cola in this stage.

GROWTH STAGE OF COCA COLA

In the growth stage Coca Cola experienced rapid increase in sales volume and its competition began to increase. People got more awareness about Coca Cola and the increase in the competition leads it to decrease prices.In this stage the marketing strategies used by Coca Cola were as follows:

·         Product improvement

·         New models were developed

·         It entered new market segments

·         It enlarged its distribution channels.

MATURITY STAGE OF COCA COLA

Coca Cola is in the Maturity stage from years now. The marginal costs of Coca Cola are low in this stage, sales volume is at the peak and most of the market is covered. There is increase in competitors which are entering in the market. Coca Cola’s brand differentiation and features diversification is emphasized to maintain and increase market share.

DECLINE STAGE

This is the stage in which sales of the product begin to fall. Either everyone that wants to, has bought the product or new, more innovative products have been created that replaces that product. The only way to increase sales during this period is to cut the cost of the product.

Product Mix

Product-Mix is the set of all products and items a particular seller offers for sale.
Following chart shows the Product Mix of The Coca Cola Company.

Product Category: The Coca-Cola Company offers two kind of drinks

• Carbonated Drinks
• Non-Carbonated Drinks

Product Mix Width: The sub-categories like energy drinks, soft drinks etc. under categories form the width of the product mix. Here, the width is 6.

Product Line: It is a series of different products which form a group. Product lines under Soft Drinks will be:

• Coca Cola
• Diet Coke
• Thumbs Up
• Sprite
• Fanta
• Limca

Product Depth: Number of variants under a product line is called as product depth.

Different Variants of Coca Cola are:

• Cans: 330ml
• RGB: 200ml, 300ml
• Pet: 600ml, 1l, 2l, 2.25l, 6l

Competition

Identifying Competitors

As the product selected is Coke which is a Cola Brand, so we will take only cola soft drinks into consideration for competition. Pepsi and Coke are fighting for the top position from ages. Pepsi is the biggest competitor of Coke. Along with Pepsi, all the Cola brands like  RC Cola, are also competitors of Coke. Other soft-drinks, juices, fruit drinks are competitors of Coke as they satisfy the same need as Coke satisfies but they are the weak competitors. Coke claims that its biggest competitor is water and it wants to replace it.

 

Analysing Competitors

As Pepsi is the biggest competitor of Coke, we will take only this product into consideration.

Strategies

Pepsi and Coke belong to the same strategic group as they want to cover huge part of the market through good quality and low price. They have the same target audience and adopt same strategies to attract customers.

Objectives

Coke has identified Pepsi as its main competitor and strategies. After comes the objective of the competitor. Pepsi’s main objective is to capture maximum market share and become the topmost soft drink.

Strengths and Weakness

Pepsi’s strength is that it is a more youthful brand. It portrays itself as a brand for youth while on the other side Coca-cola doesn’t have image of that of a youthful brand. It is connected to a family brand.

Selecting Competitors

Strong vs Weak – Brands like Pepsi, Thumbs up are the strong competitors of Coke. On the other side, RC cola and other substitutes will be the weak competitors

Close vs Distant – Pepsi will be a close competitor while Lime, juices will be distant competitor.

Customer Buying Decision

Behind the visible act of making a purchase lays a decision process that must be investigated. The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy.

Buying Decision Process:

STAGE 1

Coca-Cola is a soft drink product which can be seen as a product to reduce the need of thirst. Coca-Cola satisfies in the first place a useful need, it takes away the thirst of a consumer. But coca-cola can also be seen as to satisfy a pleasure need.

STAGE 2

The choice of drinking cola when one is thirsty depends on a consumer's cultural environment, his or her learning experiences and his or her history. For example, in western countries it is normal to drink coca-cola when you are thirsty, while in developing countries people will satisfy this need with water. Based on what is learned and what the cultural conditions are, people will or will not drink coca-cola.

The need recognised is thirst which could also be reduced by drinking water or another soft drink. Consumers have a variety of brands of beverages to choose from. As coca-cola is a popular brand, they don’t search much about the information of the product as well as its competitors. Coca-cola is more like a want than a need so generally people skip this step.

STAGE 3

As Coca-Cola has so many strong competitors in the market, this step is very important for the process. It not only competes with other soft drinks but all other beverages and water which satisfy the need of thirst. Though competition is very high in this market but most people will choose coca-cola as their favourite because it satisfies their stimulus.

STAGE 4

As Coca-Cola is the best-selling soft-drink in the market, people don’t take much time to buy it. When there’s a can of generic cola behind a counter right next to a can of Coke, chances are a customer is going to go for the Coke. Coke’s customers are very loyal to the brand and buy coke most of the time to satisfy their want.

STAGE 5

Coca-Cola is known around the world and to many cultures which makes the company very much productive. People don’t think before purchasing Coke for the next time. Coke’s customer are very loyal to this product and as they develop a particular taste, they don’t like to buy any other soft-drink. They are very satisfied with the product.

Customer Value

Customer Value is the difference between what a customer gets from a product, and what he or she has to give in order to get it.

Customer Value Added is the level of satisfaction of a firm's or product's customers, as compared with that of the customers of its competitors.

When there’s a can of generic cola behind a counter right next to a can of Coca Cola, chances are a customer is going to go for the Coca Cola. It won’t matter that the generic brand is cheaper – customers aren't just buying a low-cost beverage, they’re buying quality taste and the “refresh yourself” philosophy that seems to underlie those fizzy bubbles.

People will value products and services beyond the lowest cost if you sell your company the right way. 

Coca-Cola delivers on the simple but enduring promise, “Always Coca-Cola”—always thirst-quenching, always good with food, always a part of your life.”

For Coca- Cola, commercial leadership translates brand strategies into customer value. For Coca-Cola’s customers, the name is synonym to soft-drinks.

When there’s a can of generic cola behind a counter right next to a can of Coke, chances are a customer is going to go for the Coke. It won’t matter that the generic brand is 67 cents cheaper – customers aren’t just buying a low-cost beverage, they’re buying quality taste and the “refresh yourself” philosophy that seems to underlie those fizzy bubbles. Customers will see beyond the price if they feel an emotional attachment to a product or services.

The following reasons add value to the customers of Coca-Cola:

·         Brand Strategies

·         Quality

·         Being local in nature

·         Reachable and availability

·         Low price

·         Brand Value