Final Paper Outline draft

Product Overview

The product is Coca-Cola and it is the best-selling and most popular soft drink in history. It was created in Atlanta, Georgia in 1886 by Dr. John S. Pemberton and was at first a fountain only beverage.  In 1899 Coca-Cola began bottling its product and selling it throughout the United States and in 1906, Coca-Cola expanded to selling internationally. To this day, Coca-Cola is one of the most recognizable brands in the world. (Coca-Cola)

Coca-Cola has been a major player in the beverage industry throughout the United States and international markets. The beverages are all non-alcoholic and they include flavored water, sports drinks, and energy drinks, ready-to-drink tea, coffees, dairy, and carbonated soft drinks. Popularity for the original Coca-Cola is dwindling and Coca-Cola is working to bring back customers with Coke Plus.

The problem is customers are losing a taste for Coca-Cola products and soft drinks in general. By the year 2019, there will be a 30% decline in carbonated beverage sales. Customers are now buying sport type drinks and energy drinks, and this has cut into the profits Coca-Cola once had. (The Guardian) The trends of healthfulness have led to customers moving from calorie rich products, to more natural drinks. (The Guardian)

 Product Profile

The Coca-Cola Company name was established shortly after the soda was created by Dr. Pemberton. His bookkeeper, Frank Robinson, theorized that the two C’s put together would look well in advertising. Robinson then penned the logo in his own handwriting and since then, it has become one of the world’s most famous trademarks. (Coca-Cola Journey Staff, 2015) The name Coca-Cola Plus is significant in its simplicity. It is meant to be an opposition to the drink ‘Coke Zero’. Whereas Coke Zero is meant to simply take out many of the ingredients that consumers find unhealthy, for consumers looking for something more, Coca-Cola Plus aims to add into customer’s diets by featuring new ingredients that have health benefits.
Product Sales History
Coca-Cola, with its 3,500 products, is the world leader among soft drinks with a 44 percent market share (Trefis Team, n.d.). Approximately 1.8 billion bottles of coke are sold every day and 10,450 Coca-Cola brand drinks are consumed every second, bringing in a total Annual Revenue of $47.51 billion ("Coca-Cola Company Statistics – Statistic Brain," n.d.).
            Coca-Cola was originally created by Pharmacist Dr. John Styth Pemberton in 1886. Only 25 bottles were sold its first year ("Coca-Cola Company Statistics – Statistic Brain," n.d.). Coca-Cola was incorporated

 In product marketing, there are a variety of product classifications that distinguish the type of product being sold.  According to the article “The Classification of Products in Marketing” by Stan Mack, these classifications include convenience, shopping, specialty, and unsought products.  As it relates to Coca-Cola, the product classification can be described as a convenience product due to the fact that Coke products do not require customer forethought to make a purchasing decision.  Because Coca-Cola is represented as a food and beverage staple, it remains a convenience product because it can be bought virtually anywhere at approximately the same price.  In a highly competitive market such as the beverage industry, companies such as Nestle and Pepsi offer similar, extensive portfolios of popular drinks to gain customer loyalty and market share.  For this reason, convenience products can be difficult to market due to a variety of substitutes competing for market position, ultimately driving the price down.  It is vital for Coca-Cola to understand their product classification in order to develop unique marketing strategies that help set them apart in crowded market (Mack, n.d.).

Product characteristics are influential in the development of the marketing strategy because they help communicate the product to the consumer.  In an article in the Journal of Marketing titled “Product Characteristics and Marketing Strategy” by Gordon E. Miracle, he defines product characteristics as “...the sum of physical and psychological satisfactions the buyer receives when he makes a purchase” (Miracle, 1965, p.19).  Being a convenience product, the aim of Coca-Cola is to offer a “total product” meaning that the channeling, promotional, and marketing initiatives are streamlined in an effort to promote a purchasing decision.  According to Miracle’s assertions, this means product characteristics not only include physical features such as nutritional information and packaging, but additionally, psychological features.  Specifically, for Coca-Cola, these psychological characteristics include a convenient purchasing location, ability to purchase at a convenient time, and available information about the item.  Essentially, it is important consider the product conveniences that Coca-Cola provides to customers in addition to their competitive price, global availability, and user-friendly packaging that create the “total product” (Miracle, 1965).

Coca-Cola’s products come in concentrate form directly from our manufacturing and distribution centers. The concentrate is then sold to licensed Coca-Cola bottling companies around the world (Coca-Cola, n.d.). All the bottling companies have contracts directly with Coca-Cola and produce the final product that we see in stores, in the form of cans and bottles, and fountain machines within various distribution channels. Coca-Cola will now be able to offer the new Coca-Cola Plus to the bottling companies, which will then be distributed through bottlers distribution channels. In addition to selling the concentrate to licensed bottle companies, the company will now be offering Coca-Cola Plus to major restaurants and food chains across the globe. Offering this new product line will allow us to stay competitive in the distribution industry and give us new opportunities to gain more of the overall market share.

Product life cycle has four phases

1.     Introduction

2.     Growth

3.     Maturity

4.     Decline

Coca-Cola is a dominate player in the United States of America, Europe, Asia, and Africa; but some of the regions are currently is different phases of the cycle. For example, Coca-Cola is currently in their maturity stage within the United States and Europe (Murray, 2016). These regions are great markets for the company to introduce the new Coca-Cola Plus product line; due to the strong brand loyalty that’s already been established with our company. Asia on the other hand is currently in the growth phase. This might not be the best market for us to introduce our new Coca-Cola Plus product line, due to the simple fact that we are still building brand loyalty and market share. By introducing our new product line in locations that are currently in their maturity phase, we can stay competitive within our market by differentiating ourselves from competitors. Ultimately, this will allow us to stay competitive, increase profits, expand our market share, capitalize on a new product niche, and reduce the risk of going into the decline phase.

The Brand

The Coca-Cola brand is recognized around the world. Because it was established so long ago and has become so far reaching, it has become a cultural phenomenon. Through marketing campaigns and clever market placement, Coca-Cola has cemented itself into the minds of most consumers. One of the key reasons that the brand has fared so well over the last 130 years is because it was designed to be completely different than competitors. While the drink did have a different flavor than anything else at soda fountains, it also stands out because of its unique packaging. The original glass bottles were designed specifically for Coca-Cola after the shape of the cocoa bean (which was picked because of the similar sounding name to ‘Coca’) (Feloni, 2015). Coca-Cola is now aiming to further its brand in the way it once did, by offering something that will change the way consumers look at soda. The difference is that this time, instead of creating unique packaging, the drink itself will change.

 The Company

Coca-Cola has been a major player in the beverage industry throughout the United States and international markets. The beverages are all non-alcoholic and they include flavored water, sports drinks, and energy drinks, ready-to-drink tea, coffees, dairy, and carbonated soft drinks. Popularity for the original Coca-Cola is dwindling and Coca-Cola is working to bring back customers with Coke Plus.

Coca-Cola is a corporation and their headquarters is in Atlanta, Georgia. Coca-Cola is a beverage company and they became incorporated in 1919. As of 2016 the company owned and licensed over 500 non-alcoholic beverage brands. (Reuters, n.d.) The red and white Coca-Cola logo is recognized by 94% of the world’s population. Operating in 5 different regions of the world and encompassing over 200 countries, this makes Coca-Cola the largest beverage company in the world. (Coca-Cola B, n.d.)

Company History

An Atlanta pharmacist Dr. John S. Pemberton created the Coca-Cola Company in 1886, his curiosity led him to create a distinctive tasting soft drink that could be used and sold at soda fountains. He created a flavored syrup and added carbonated water, and the people who tasted the creation said it was “excellent” (World of Coca-Cola, n.d.) Dr. Pemberton’s partner at the pharmacy called it Coca-Cola and created the design for the logo that is known to this day.

·      Coca-Cola (CC) used Couponing in 1886 to market their product. (Coca-Cola)

·      1899 Coca-Cola is bottled and sold around the United States. (World of Coca-Cola,      n.d.)

·      1906 “CC” Goes international (Coca-Cola)

·      1916 the unique Coke contour bottle was created. (World of Coca-Cola, n.d.)

·      1977 the Coke contour bottle is trademarked. (World of Coca-Cola, n.d.)

·      In the 1970’s Coke connected with people with their brand of fun, friends and a good time. (World of Coca-Cola, n.d.)

·      1980’s CC released Diet Coke. (World of Coca-Cola, n.d.)

·      In the 90’s the Coca-Cola Polar bear came out and it has been success since then. People connect the mischief, fun and innocence of the polar bear with Coca-Cola products. (World of Coca-Cola, n.d.)

·      As of 2016 CC is severed over 1.7 Billion times daily. (Coca-Cola)

·      2017 Coke Plus is to be released in Japan. (Coca-Cola)

Coca-Cola employs over 700,000 individuals from around the world in order to operate one of the most successful global brands.  The leader of this company, Muhtar Kent, is Chairman of the Board and CEO of Coca-Cola.  Kent started with Coca-Cola in 1978 and worked his way to the top of the organization when he assumed his current position eight years ago.  His commitment to the improvement of the global business community is evidenced by active participation in a variety of political, educational, and business boards around the world.  James Quincey is President and COO of the Coca-Cola corporation.  According to Coca-Cola’s official website, he plays a vital part in the organization “In this role he has responsibility for all of the company's operating units worldwide” (“Our Company,” para. 1, n.d.).  Quincey has a variety of strategic business experience due to previous high level operational roles.  Marcos de Quinto serves as Executive Vice President and Chief Marketing Officer (CMO) of the Coca-Cola Company.  Similar to Kent, De Quinto has been with the organization since 1982 and is responsible for developing global marketing strategies.  These three key individuals head the organization and establish the direction of Coca-Cola Company (“Our Company,” n.d.).

According to Coca-Cola’s main website, the company was founded in 1886 in Atlanta, Georgia by John Pemberton and remains the corporate headquarters today (“Who We Are,” n.d.).  Coca-Cola services over 200 countries in regions including Asia Pacific, Europe, the Middle East, Africa, Latin America, and North America.  Essentially, Coca-Cola can be found in any part of the world due to their extensive distribution network and recognizable brand.  As far as subsidiaries are concerned, Coca-Cola holds a variety of stake in many other companies.  In the article “The Top 5 Companies Owned by Coca Cola (KO)” by Nathan Buehler, he explains that Coca-Cola subsidiaries include Monster Energy, FUZE, Vitaminwater, Minute Maid, and the Bottlers Investment Group.  As a result, these companies have benefitted from the huge network created by Coca-Cola in order to be provided in stores, gas stations, and vending machines globally.  These subsidiaries combined with the vast location network developed by Coca-Cola are the main factors contributing to their sustained success (“Who We Are,” n.d.).

Coca-Cola has an impressive list of brands and products that are recognized both nationally and overseas.  These include brands such as Coke, Sprite, Fanta, Powerade, and Mello Yello in addition to the subsidiaries previously mentioned.  These major products are sold in markets around the world, to age groups both young and old.  The popularity of these brand name products has facilitated organizational growth and expanded product offerings annually.  It is a core strategy of Coca-Cola to increase its portfolio in order to maintain its position as the market leader in the beverage industry (“Brands,” n.d.).

The Coca-Cola brand is recognized around the world. Because it was established so long ago and has become so far reaching, it has become a cultural phenomenon. Through marketing campaigns and clever market placement, Coca-Cola has cemented itself into the minds of most consumers. One of the key reasons that the brand has fared so well over the last 130 years is because it was designed to be completely different than competitors. While the drink did have a different flavor than anything else at soda fountains, it also stands out because of its unique packaging. The original glass bottles were designed specifically for Coca-Cola after the shape of the cocoa bean (which was picked because of the similar sounding name to ‘Coca’) (Feloni, 2015). Coca-Cola is now aiming to further its brand in the way it once did, by offering something that will change the way consumers look at soda. The difference is that this time, instead of creating unique packaging, the drink itself will change.

            Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth (The Coca-Cola Company, n.d.). Coca-Cola offers a great work environment, where people are inspired to be the best they can be. We offer to the world a unique portfolio of quality beverages that satisfy people’s desires and needs. Our partnerships ensure a winning network of customers and suppliers that create one of a kind value. Our vision is to make a difference in the world we live in, by helping build and support sustainable communities, maximize long-term return to shareholders, and maintain a highly effective and fast-moving organization.

Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions (The Coca-Cola Company, n.d.).

·                To refresh the world...

·                To inspire moments of optimism and happiness...

·                To create value and make a difference.

SWOT Analysis

A.    Strengths

There is no denying that Coca-Cola is a well-known brand. Even in many other countries, the companies red and white logo is easily recognizable. Because of this, it is number four on Forbes’ 2016 list of “Most Valuable Brands” (Forbes, 2016). It is worth noting that their main competitor PepsiCo, is listed as number 29 on this same list (Forbes, 2016). Brands that are easily recognizable tend to be more popular and have higher sales figures. This basically means that their strength is in their stability. 

Another strength that the Coca-Cola Company has is its large distribution network. They are able to meet the needs of customers all over the world because of their unique system. The main company owns the brand and is responsible for global marketing efforts, but they actually do not bottle or distribute the final products. They manufacture the syrups and concentrates and then send them off to “bottling partners” in local communities. The bottling partners are in charge of “manufacturing, packaging, merchandising, and distributing the final branded beverages to our customers and vending partners, who then sell our products to consumers”. This strategy allows the bottling partners to distribute based on the specific needs of their local community. (Coca-Cola A, n.d.)

B.     Weaknesses

One weakness for Coca- Cola that has been going on for quite a while is the negative publicity associated with health concerns. Around the mid-90’s to mid-2000’s era, an uptick of obesity in Americans had researchers pointing their fingers at fast food and soda companies (Suddath, 2014). Coca-Cola took a lot of the heat, and has seen a decline in sales (along with many other soda companies) since its peak in the late 80’s (Suddath, 2014). The problem is that research has made it hard for the company to deny that their main product is not a possible reason for national health concerns, so they have had to bite the bullet, admit to their products problems, and try to come up with healthier alternatives.

Another one of Coca-Cola’s weaknesses is the public’s concern over the company’s water usage. In 2007, news broke that Coca-Cola was taking control of the subterranean aquifers in some of the more underdeveloped countries in which it operated (War on Want, 2007). And considering it takes three liters of water just to make one liter of the finished products, many social justice groups and local communities were understandably upset (War on Want, 2007). The biggest issue with overcoming the water sustainability problem is that the process to make Coca-Cola will always require more water than what is in the finished product. Even though the company has made steps to lessen the excessive water usage (down to using 2 liters by 2015), there is still a lot of public disapproval put on their tapping into natural resources (Coca-Cola, 2017) (War on Want, 2007).  

C.     Opportunities

While new health trends may have caused headaches for the Coca-Cola Company, they are also a source of possible growth. The company will be able to expand their current options in ways that may not have been accepted by consumers in the past (Suddath, 2014). For instance, with Coca-Cola Plus, the company can appeal to consumers looking for the newest health trend. This meshes the ideal of trendiness and the classic Coca-Cola taste, without going too far into the trends which can sometimes limit the size of consumer market.

Coca-Cola should also continue taking advantage of the advertising opportunities for younger markets. Younger generations have grown up with Coca-Cola and know the brand well, but they have also seen the tremendous shift in perspective caused by the rise in obesity. This negative narrative will only grow stronger if the youngest generations are ignored by the company’s marketing campaigns. However, by tapping into the culture of e-sports (gaming tournaments with online viewers or audiences in stadiums), Coca-Cola could become a major player in the minds of younger consumers.

D.    Threat

As consumer’s tastes change, Coca-Cola has not been the only company that has had to change its offerings. The company now has to deal with incoming products from brands such as Dr. Pepper Snapple Group and PepsiCo. Dr. Pepper Snapple Group has recently introduced Bai, a fruit water drink that has little sugar and other artificial ingredients (Dr. Pepper Snapple Group, 2017). And PepsiCo has been doing well offering its Naked brand juices as a premium health drink offering (PepsiCo, 2017). It is also worth noting that Pepsi has recently started offering a new mix of their popular soda with 30% less sugar and no artificial sweeteners as Pepsi Next (Pepsi Next, 2015). This could be a threat to the success of the new ‘good-for-you’ offering Coca-Cola Plus

 Industry and Marketplace

Coca-Cola is a product sold within the Soft Drink Industry under the category of carbonated soft drinks. The Soft Drink Industry is based on the production, distribution, and marketing of nonalcoholic water-based beverages. This industry has a history extending back to the 1700’s when a British chemist, Joseph Priestly, discovered a way to synthetically carbonate water.

This Industry as a whole can be seen as an Oligopoly due to there being only two firms controlling the vast majority of the market with a 70% (Bailey, 2014) market share. These two firms would be the Coca-Cola Company and Pepsi Co. This industry also has very high barriers for new entrants due to high operating costs. The two major firms with in the industry also use non-price product differentiation in order to compete.

            Over the past few years, the carbonated soft drink category has seen declined sales throughout the industry. This is due to increased health awareness among consumers on the side effects of many of the ingredients used in these beverages, including sugar. Soft drink manufacturers have been receiving pressure to create low calorie beverages with less sugar. Due to this pressure, the three largest soft drink manufacturers with in the industry, Coca-Cola Company, Pepsi Co., and Dr. Pepper Snapple Group Inc., have ensured that over the next decade they will aim to reduce high sugar beverages by 20% (Bailey, 2014). The Soft Drink Industry is shifting in products to meet these new consumer demands. This shift in demand is offering this industry the opportunity to grow in different markets such as the non-carbonated category of the Soft Drink Industry.

Coca-Cola operates within one of the largest global industries, the soft drink industry.  In fact, in the article titled “Market size of soft drinks in the United States from 2010 to 2014 (in million U.S. dollars)” it shows that the U.S. soft drink market has swelled to over $98 billion as of 2014.  It has seen steady gains over this five year period.  

Soft Drink Market Size

This highly competitive market includes a variety of players fighting over market share.  In the article titled “Soft Drinks: Investing Essentials” by Isaac Pino, he includes a graph that details individual market share within the soft drink industry.

This graphical representation shows that Coca-Cola dominates this market as they hold 42% of total market share with Pepsi and Dr. Pepper trailing behind at 30% and 15%, respectively (Pino, 2014).  Each of these companies hold vast product portfolio that include a variety of popular soft drinks as evidenced by the visual representation found in the article “An Overview of the US Nonalcoholic Beverage Industry” by Sharon Bailey.

Seen clearly, Coke is by far the most popular soft drink brand in the United States, but Pepsi Corporation brands Pepsi and Mountain Dew hold the second and third places and Dr. Pepper the fourth (Bailey, 2016). This data shows that the shape of the industry continues to evolve as the market progresses forward and each of these companies battle for both industry and brand position.  

The soft drink industry has experienced interesting developments in the recent past that has shifted the way companies in this market do business.  While this industry has increased in value, the demand for sugary sodas has declined.  In a market that has long been dominated by popular soda brands such as Coke, Pepsi, Mountain Dew, and Dr. Pepper, there has been a paradigm shift for alternative options.  In the article “The 4 biggest ways American beverage consumption will change in 2016” by Kate Taylor, she explains that these companies are developing new healthy drink options as a result of changing consumer preferences.  New products will include organic Gatorade, Aquafina flavored waters, sparkling Minute Maid, and sparkling Smartwater.  This is due in large part to meet the needs of the target market who are now, more so than ever, focused on the health benefits of the beverages they consume.  In line with the health initiatives established by the audience, soft drink companies will aim to redesign their products in both content and packaging.  Whether it is reformulating their current products or developing new product lines, the aim will be to create products with fewer calories, sugar, and caffeine.  Also, many have already begun to offer smaller cans and bottles that promote moderation.  Isaac Pino backs up these statements with statistics that show that unsweetened variants in soft drink portfolios have seen the most growth in the past five years.

“According to IBISWorld, Dr. Pepper Snapple's Canada Dry brand was the only one of its five core drinks to achieve volume growth during the past half-decade, in part due to "unsweetened variants such as plain and tonic water." Expect Dr. Pepper and its rivals to increase their focus on a sparkling water category that's posting growth rates of 16.3% and 34% in 2011 and 2012, respectively” (IBISWorld as cited in Pino, para. 9, 2014).

All in all, these developments display a common trend away from traditional soda brands and an increase in healthier beverage alternatives.  Research suggests that these changes will continue to be implemented as the industry develops to meet the needs of changing consumer preferences (Taylor, 2016).

When it comes to market research Coca-Cola “CC” has had its fair share of failure. In the 1980’s CC did a research survey on 200,000 taste tests and created a new formula over the original flavor. The people who were surveyed liked the new coke flavor, but they were not aware the old one was to be canceled. So, the data CC received was inaccurate and this caused the “New Coke” to fail because people still wanted the original formula. This is one major failure CC has had with market research (PHD, 2013). This type of research was primary, because it was done by CC. Coca-Cola understands the different types of consumers in the marketplace and therefore CC has the “One Brand” campaign. This campaign is pushing how CC offers a taste for everybody with Coke Life, Zero, Diet and light. Coca-Cola has a customer care survey and this is the qualitative type of survey. Qualitative data seems to be what CC tries to gather, this gives them a better understanding of the consumers wants and needs (Business Case Studies).

             Coca-Cola knows their customer base is turning towards the healthier side of beverages. This is the reason we have Coke Life it has only 60% of the calories that original Coke does, without losing the flavor. Also Coke Zero has low-calories and no sugar and is marketed towards men, because men associate diet coke as a “women’s” drink (Huffington Post). The reason CC is still the current beverage leader because they observe the market and see the trends. They now have a bottle water brand, energy/sports drink, tea, and coffee beverages.

·         Supermarkets/Grocery Stores these are the largest source of revenue for the beverage industry and 41.2% of their total revenue. (Ibisworld)

·         Gas stations/Connivance Stores these are key for this industry because they are usually open 24 hours. These stores represent 19.9% of the total revenue. (Ibisworld)

·         Vending machines these are placed where consumers have not alternative. Bus stations, airports, work places, etc. These currently account for 14.4% but this number is decreasing due to healthier options that are not being put into vending machines. (Ibisworld)

·         Warehouse centers/ Club stores, they make up 12% of the beverage industry revenue and this is stable and going to increase. (Ibisworld)

·         Other retailers such as restaurants, liquor stores and online retailers make up the rest of the industries revenues. (Ibisworld)

The marketplace for the beverage industry is different than it once was. Major beverage companies are about developing new healthy beverages. If they are not doing that, they are at least trying to conceive a healthier image (Taylor, 2016).  Also, pushing the beverages to be single serve, this will help the healthier image, the companies are trying to achieve. With all competition creating healthier versions of their main soft drink, Cokes answer to this is Coca-Cola Plus. The soda and beverage industry is currently at an annual growth of -1.3% and being that it is in the mature lifecycle it will be difficult for the industry to bounce back (Ibisworld). The soda and beverage industry is increasing in the import and export markets.

Changing demographics and purchasing behaviors make it crucial for beverage industry leaders to understand and capitalize on key consumer insights that identify growing trends (PR Newswire, 2017). An opportunity we are starting to see for companies is creating more healthy beverages that are packaged in fresh and eco-friendly containers. These new changes will include packaging that will provide appropriate product protection that aligns with enhanced brand values for health and environmental responsibility. With Millennials holding huge buying power in today’s market, beverage companies are gearing their products to be more real and made with less processed ingredients. Beverage companies are removing preservatives and artificial ingredients, and replacing them with natural and nutrient-dense ingredients. Consumers are increasingly looking to beverages to play new roles in their diets and health routines. Drinkable breakfasts and the "snackification" of beverages are fueled by consumer interest in nutrition and performance drinks that act as meal replacements and guilt-free snacks (PR Newswire, 2017). That said, beverage companies should expect consumers in 2017 to demand beverages that work harder, whether for refreshment, satiety, energy, immunity boosting, sleep aid, blood sugar management, or a host of functional benefits now associated with these multifunctional power beverages (PR Newswire, 2017).

Competitive Situation

Direct Competitors
Coca-Cola is a giant of the beverage industry, and as a major company, they are used to having many competitors to contend with for the consumer market. Their biggest direct competitors are PepsiCo and Dr. Pepper Snapple Group. All three of these companies sell brands for soft drinks (including diet versions), juices, sports drinks, bottled water, flavored waters, energy drinks, bottled (or canned) coffee, and teas. Below is a table explaining each company’s directly competing products.

	Coca-Cola Company Brands	Dr. Pepper Snapple Group Brands	PepsiCo Brands
Soft Drink	Coca-Cola	Dr. Pepper	Pepsi
Diet Soft Drink	Diet Coca-Cola	Diet Dr. Pepper	Diet Pepsi
Fruit Juice	Minute Maid	Hawaiian Punch	Tropicana
Sports Drink	POWERADE	BODYARMOR	Gatorade
Bottled Water	Dasani	Deja Blue	Aquafina
Flavored Water	Vitamin Water	Bai	Sobe Lifewater
Energy Drinks	Monster	Venom	AMP Energy
Ready to Drink Coffee	Gold Peak Coffee	High Brew	Starbucks Ready to Drink Beverages
Ready to Drink Tea	Gold Peak Tea	Snapple	Brisk

(Buehler, 2016) (Dr. Pepper Snapple Group, 2012) (Dr. Pepper Snapple Group A, 2017) (Dr. Pepper Snapple Group B, 2017) (PepsiCo, 2012) (PepsiCo, n.d.) (The Coca-Cola Company A, 2017) (The Coca-Cola Company B, 2017).

 Indirect Competitors
            Besides direct competitors, Coca-Cola must also deal with indirect competitors, those with products who can fulfill the same consumer’s needs. Within the beverage industry, the consumer’s needs are to drink. Because Coca-Cola has so many different kinds of beverages, most smaller companies would actually be considered direct competitors, so the most threatening indirect competitors are alcoholic beverage companies. The main companies in the alcoholic beverage sector are Anheuser-Busch, Heineken Holding, and Molson Coors Company (World’s Top Exports, 2017). They each sell different brands in beer, light, beer, hard ciders, and premium beer. While these companies are considered competitors to Coca-Cola, there are restrictions to their products that allow Coca-Cola to reach more consumers. For example, the legal restrictions on alcohol do not allow for individuals under the age of 21 to drink, and you cannot drive while intoxicated or have an open container in the car within reaching distance. Also, there are social and physical restrictions for drinking alcohol. Some people may get sick very easily after ingesting alcohol and it is largely considered indecent to drink early in the day.

Consumer Stakeholder

Stakeholder’s Characteristics

·         Bottling Partners – group meetings to plan future strategic plans. Top senior to top senior communication and Global environmental council. (Stakeholder Engagement, n.d.) This group has a lower influence of Coke, but they have a high interest. Coca-Cola “CC” keeps these companies working by selling large amounts of CC products.

·         Consumers – Focus groups, surveys, research, plant tours and websites. (Stakeholder Engagement, n.d.) This group has high influence on CC because they buy the products and are the data CC uses to sell products.

·         Customers – Social media engagement, surveys, account teams, joint business planning. (Stakeholder Engagement, n.d.) They have a high influence on CC because they are the ones who buy the products. The health-conscious customer is whom CC is trying to capture with Coke Life.

·         Employees – town hall meetings, employee communications, health and safety programs, employee well-being projects and individual development plans. (Stakeholder Engagement, n.d.) Employees should be considered high influence and high interest. However, this may not be the case for all employees.

·         Governments and regulatory authorities – Chambers of commerce, foreign investment councils and recycling and recovery initiatives. (Stakeholder Engagement, n.d.) High interest and high influence, they can make or break CC if they wanted to. Nothing gets done with such a large company like CC without government interference.

Shareowners and analysts – Annual shareholder meetings, earnings reports and other investor presentations. (Stakeholder Engagement, n.d.) High interest and high influence, these people have invested money into CC and they want the company to succeed.

·         Suppliers – Annual supplier meetings, supplier guideline principles and packaging associations. (Stakeholder Engagement, n.d.) High interest and low influence, the supplier companies need CC to succeed, but they do not have total influence over CC, but could if they voiced it.

·         Golden Triangle approach is a business practice Coca-Cola uses. The approach involves engaging public, private and civil society sectors to create a collective business partnership. Coca-Cola works with these 3 groups for business, and believes working together is better than working in isolation. Coca-Cola can have sustainable business growth, environmental stewardship and social programs using the Golden Triangle approach. (Stakeholder Engagement, n.d.)
Primary
            The Coca-Cola Company has three primary stakeholders: Customers, Employees, and Shareholders. To drive engagement with these key stakeholders, the Coca-Cola Company utilizes different formal and informal methods. These methods allow for development of strategies to ensure stakeholder’s objectives are met.
            Coca-Cola customers want great value for their money. To facilitate engagement with these stakeholders, Coca- Cola uses joint business planning, joint value creation initiatives, customer care centers, research and development teams, surveys and social media platforms. Methods used for employees are training and development programs to help with employee advancement. Other methods uses for engagement include engagement surveys, town hall meetings, employee communications, individual development plans, community and employee well-being projects, and senior executive business updates. Lastly, the objects of the Shareholders are the organization's strategies to maximize wealth and company growth. The Coca-Cola Company has been able to meet these objectives throughout the years as it is currently selling its products in over 200 countries. The responsibility of meeting these objects have been accomplished through engagement such as annual Shareholders meetings, quarterly earnings reports, quarterly Shareholder newsletter, and dialogues with investors and analysts.

Secondary Stakeholders
While primary stakeholders have a direct interest in a company, secondary stakeholders have an indirect interest (Gomez, 2017). However, secondary stakeholders could also be primary stakeholders because local workers might live in the communities (Gomez, 2017). The Coca-Cola Company’s secondary stakeholders are the residents who live in the areas surrounding the Coca-Cola factories or bottling plants.

The secondary stakeholder residents have an indirect interest in the company because of how it could affect the surrounding environment and workforce. There are 900 manufacturing and bottling facilities worldwide, and some of them are still in developing countries (Journey Staff, 2012). For example, Coca-Cola bottling subsidiaries in India have had a dismal track record with pollution and excessive water usage, and as a result one plant was shut down and one potential plant was denied land to build (Ethical Consumer Research Association, 2017). In many of the other communities with a plant or factory, Coca-Cola is a force for good by

Strategic Target Audience

Current Consumer Characteristics
Coca-cola is a globally recognized brand that reaches a variety of consumer types.  Because Coca-cola focuses on marketing convenience products, which are products that are inexpensive, readily available, and provide minimal differentiation between similar offerings, they appeal to a wide swath of consumers.  Described in the article titled “Marketing Strategy of Coca-Cola” by Hitesh Bhasin, he clearly defines Coca-cola consumer characteristics “Coca cola targets a mass market. And the customer expectation is low price, great taste, convenience & accessibility and various options to choose from” (Bhasin A, para. 30, 2017).  Further, in another article by Bhasin titled “Mass Market” he details that reaching mass markets are one of the core strategies of companies like Coca-cola that appeal to all consumer types “A mass market is a general population which can be targeted at wide for the sales and marketing of a product (Bhasin B, para. 1, 2017).  Essentially, due to the nature of Coca-cola products, Coca-cola consumers can be defined as the general population and their characteristics include an expectation of global availability, streamlined offerings (meaning that products do not change based on geographic location), and low prices.  Additionally, with the recent shift in consumer preferences in both the food and beverage industries relating to healthier products, there is an expectation that Coca-cola should offer alternative options.  In response to this new characteristic of consumers, Coca-cola has started to produce sparkling waters and reduced calorie drinks to meet this demand.  All in all, current consumer characteristics are in-line with the convenience product Coca-cola offers and the mass market they serve (Bhasin B, 2017). 

Demographics
            Touched on previously, Coca-Cola appeals to a vast number of consumers in many global markets.  Specifically, in the United States, the article titled “Coca-Cola Consumer Insights” articulates the common Coca-Cola consumer “A Coca-Cola consumer is generally median income, Caucasian, and senior age. Coca-Cola consumers are more likely to purchase Coca-Cola during larger pantry stocking trips” (“Coca-Cola Consumer Insights,” para. 1, n.d.).  In fact, a graphical representation found in this article provides a top-level view of Coca-cola demographics.

From this data, we can determine that consumers range from all levels of income, with a majority falling into the $60k - $80k range.  Additionally, it was interesting to find that men purchase Coca-Cola products at a much higher rate than women.  However, due to the fact that Coca-Cola products are low priced and readily available in many different channels (gas stations, grocery stores, etc.) they appeal to all demographic types.  This information highlights that Coca-Cola, as a brand, is far-reaching (“Coca-Cola Consumer Insights,” n.d.).

Physiographic

Coca-Cola is a global brand and the only 2 countries in the world that do not sell it are North Korea and Cuba. (BBC, n.d.) The country that drinks the most is Mexico, then the United States followed by Canada. The lowest 2 countries are China and India and this is where Coca-Cola is looking to expand. (Franklin, n.d.) Coca-Cola sales have been declining in North America and Europe, but have been increasing in Asia. (Coca-Cola sales decline in key countries, n.d.) North American and European countries are looking for healthier alternatives, which is why Coca-Cola Life is headed to these market places.

Proposed Primary Target Audience

Coca Cola does not target to a specific segment, but adapts its marketing strategy by developing new products (Bhasin A, 2017). Coca-Cola focuses most of their marketing strategies towards the younger generations. The primary target audience for Coca-Cola products is geared towards consumers who are between 13-24 years of age. Half of Americans aged 18 to 34 say they drink regular soda. This age demographic and men in general are also slightly more likely to consume soda than their counterparts (Brandon Gaille, 2015). Coca Cola has designed their products to satisfy their various consumer’s needs. By doing so, the company can provide drinks for many different target markets: ages, sexes, etc. In a world where people are trying to live healthier lives, Coca Cola recognized this need, and has begun to produce different beverages that are satisfying to these consumers as well.

Proposed Secondary Target Audience

The secondary target audience Coca Cola focuses on are adults 40 years of age and up. For example, Diet Coca Cola targets adults, between 30-50 who are health conscious, and still looking for a great taste (The Coca-Cola Company, 2016). This is a great product for older people looking to lower their sugar intake, but still enjoy the great taste of Coca Cola. Seeing that Coca Cola caters their products to all demographics, data for their secondary target audience is limited. This shows how much power and control Coca Cola has in the market, but also shows that they can create products for everyone simply by understanding their consumers wants and needs.

Research Development

 Precedent Studies

Coca-Cola has a long history of marketing and advertising strategies utilized to generate interest in products and grow brand strength.  Described in the article “A History of Coca-Cola Advertising Slogans,” slogans used in advertising has been a core aspect of Coca-Cola’s marketing plan since its inception in 1886.  Characterized by short, to-the-point sayings, Coca-Cola has used slogans as simple as “Drink Coca-Cola” and “Open Happiness.”  The variation in slogans over time has been largely dependent on consumer trends and outside environmental influences.  For example, during prohibition Coca-Cola served as an alternative product to consumers starting to veer away from alcoholic beverages.  During this time, they chanted slogans almost yearly to communicate marketing messages to a wide variety of new customers.  From there on, Coca-Cola has focused on different advertising strategies based upon consumer trends including an emphasis on quality, refreshing taste, and its role in entertainment.  Despite these variations in advertising, the company has remained centered on communicating the idea that Coca-Cola is a part of life’s best moments and the role the product plays in those experiences.  While advertising themes and strategies have changed, the core message remains the same (“A History of Coca-Cola Advertising Slogans,” 2012).

 Marketing Programs and Marketing Strategies

Current Marketing Objective

Currently, Coca-Cola’s marketing objective is to increase sales by bringing the brand closer to the consumer on an emotional level. To accomplish this, Coca- Cola has launched a new marketing strategy called “Taste the Feeling.” This campaign, through a one brand approach, will be extending the iconic appeal of Coke to the other trade mark brands such as Diet Coke, Coke Zero, and Coke Life.

 The objective of the “Taste the Feeling” campaign will show the correlation between the product and how it makes everyday moments more special, by displaying both the functional and emotional aspects of the brand experience. Through T.V. Commercials, print ads, and digital storytelling, The Coca- Cola Company will be aiming to remind their consumers about why they love the brand.

Media Expenditure

In 2016, Coca- Cola had a total advertising budget of four billion dollars. Television advertisements make up the bulk of this budget with spending at $1.9 billion (Trefis Team, n.d.). However, Coca-Cola has recently discovered that mobile video offers a much higher return on investment. In order to drive profit, the Coca-Cola Company has started investing 15 percent of their advertising budget into creating mobile videos ("Higher mobile budgets correlate to higher revenue, says Coca-Cola exec | Mobile Marketer," n.d.).

Promotional Strategy

Coca-Cola just recently announced that for the first time, all Coke Trademark brands will be united in one global creative campaign: “Taste the Feeling” (Moye, 2016). This strategy focuses on the iconic appeal of the world’s number one beverage brand to Coca-Cola Light/Diet Coca-Cola, Coca-Cola Zero, Coca-Cola Life, and the all new Coca-Cola Plus. Through this promotional strategy, we can show our commitment to choice, offering consumers whichever Coca-Cola suits their taste, lifestyle, and diet – with or without calories, with or without caffeine, and with or without healthier alternatives. We are reinforcing that Coca-Cola is one brand with different variants for everyone, all of which share the same values and visual iconography (Moye, 2016).

Advertising Strategy

The proposed advertising strategy for Coca-Cola revolves around the recommended slogan “Live Fast, Sip Slow” Essentially, this relates to our target market because it hinges upon the fast pace lifestyle of our target market.  Today’s consumer values time, convenience, and availability due to the need for instant gratification, hence “Live Fast.”  In addition, we want to stay true to our roots and incorporate “Sip Slow” to make the connection between enjoying the best moments in life with a Coca-Cola product.  Together, the marriage of both statements appeals to the lifestyle of our core consumers as well as provides a relationship to our foundational marketing message.  This advertising campaign exhibits how Coca-Cola plays a role in the busy lifestyles of consumers and how it can be used as a means of relaxation and enjoyment, both key aspects of Coca-Cola’s marketing strategy.  With this slogan, print ads, social media posts, and commercials will be developed to reflect the new message of Coca-Cola and appeal to our consumer base.

Coca-Cola is one of the largest advertisers in the world. Although Marco de Quinto has recently resigned as chief marketing officer, Coca-Cola is still moving forward with the “Taste the feeling” advertising campaign (Adbrands,2017). This strategy focuses on the iconic appeal of the world’s number one beverage brand to Coca-Cola Light/Diet Coca-Cola, Coca-Cola Zero, Coca-Cola Life, and the all new Coca-Cola Plus.  The three advertising agencies that Coca-Cola has partnered with are Ogilvy New York, SRA Rushmore, and Santo in Buenos Aires (Richards, 2013). The idea is to bring together the best ideas from around the world, through these award-winning agencies, to create a message that will resonate with Coca-Cola consumers (Richards,2013).

Sales Promotions

Sales promotions targeted at Coca-Colas consumer base include online sales promotions, live events such as the Barclaycard presents British summer time in Hyde Park, London England, and digital storytelling (Coca-Cola  Zero, Coca-Cola Co. UK). For summer 2017, Coca-Cola worked with information analysts to determine the 20 most common last names in the U.S. and will be printing them across the bottles to give it a personalized twist (Isidore,2016). Trade promotions utilized by Coca-Cola include manufacturer coupons, store coupons, My Coke Rewards promotions, and share a coke promotion codes.

Public Relations

The Coca-Cola Company’s public relations strategy for Coca-Cola Plus should not stray too far from the advertising or promotional campaigns, but it should be based more around media communications. Public relations strategy is all about creating a positive image for the company through media outlets. So, to create the right image for Coca-Cola Plus, the company will reach out to publications that talk about healthy eating. Magazines like Women’s Health or Prevention, often talk about healthy recipes and new health trends so mentioning Coke Plus would fit right in, because it is meant to be a healthier alternative to regular Coke, Coke Zero, or competitors offerings. This would create the right image for Coca-Cola Plus while simultaneously advertising the product.

Personal Selling

 Coca-Cola is a global company and caters to the diverse population of people who live within it. The company has many salespeople who sell their products and manages their accounts. For example, Coca-Cola has sales people who mainly take care of orders. Company Order Takers, make sure that their accounts have a steady supply of products always. In addition, Order Takers make sure their accounts have displays, restock the displays, and answer incoming account phone calls. Coca-Cola also has salespeople who oversee in the process of landing new accounts. These salespeople are responsible for generating leads, providing information to prospects, persuading customers and closing sales. For each location across the globe, Coca-Cola trains their salespeople differently. Through these personal selling strategies, Coca-Cola has been able to establish one of the strongest sales teams in the world.

Direct Marketing

Direct marketing efforts by Coca-Cola are innumerable. The devices operated integrate vendor company partnerships designed for selectness, i.e. restaurants and movie theaters only offer Coke products, eliminating any direct competition. Coca-Cola sponsors sporting events via use of the company, e.g. baseball fields, again offering associated consumers the brand’s products exclusively. This allows for one-to-one sales to important clients in especially reserved seating areas. Mobile marketing endeavors send out text messages to personalize promotions, and viral marketing exertions rely heavily on word-of-mouth communication from brand loyalists (Wilkin, 2009).

Advertising and Marketing Objectives- Our Recommendations

Coca-Cola Plus, which is the healthiest version of the soft drink Coke, offers consumers the classic Coke appeal without any sugar and calories. This soft drink also contains five grams of indigestible Dexedrine, a supplement created for people with fiber deficiencies.  The fiber in Coca-Cola Plus could offer the added benefit of fat absorption if drunken while eating by lowering triglycerides in the blood.

Coca- Cola Plus, like other Coca-Cola beverages will be produced in the company plants. In the past Coca-Cola has used their own trucks for delivery and used intermediaries to increase sales figures. It is the recommendation that Coca-Cola continue to do so.

The recommendations for advertising this new product would be to gain awareness and sales for the Coca-Cola Plus target audience, which would consist of consumers over the age of forty. This product targets the over forty demographic because although they still desire the flavor of classic Coca-Cola, they are less willing to intake the unhealthy number of calories.

Since Coca-Cola Plus is similar to Coca-Cola Zero, it can be expected to share a similar consumer demographic. The Coca-Cola Zero consumer is typically a middle-aged Caucasian male, of a higher income. He will most likely purchase this product with a credit card during his weekly grocery shopping trip, on a Friday or Saturday afternoon.

The three best mediums used for marketing to the forty-year-old demographic are Television, Internet, and Print. It is recommended that Coca- Cola utilize these three mediums for promotion and positioning. The average adult in their forties spends 2.5 hours a day watching T.V.. Commercial adds used during programming such as 20/20, Monday Night Football, and Dateline are examples of where and when to reach this demographic.

In 2015, 79% of adults between the ages of 30 and 49 owned a smart phone. 54% of adults between the ages of 50 and 64 also own smart phones. This aids the use of the internet as a channel to reach the Forty and over consumer demographic. When it comes to online advertising, some independent studies have suggested that this age group prefers engagement that is informational as opposed to promotional. This demographic prefers facts and details rather than bullet points. It will be important to adjust on line content to meet these needs.

Lastly, print advertising is still an effective way to reach this audience and therefore should be utilized in an advertising campaign for the Coca-Cola Plus product.  With the Coca-Cola Plus demographic being a Caucasian male in his forties, it is recommended that print advertisements be used in popular magazines for this demographic. Such magazines would include, Men’s Health, Men’s Fitness, Motor Trend, Car and Driver, and Sport Illustrated.

Aims of Our Campaign

Our campaign is aimed at how Coca-Cola is using recyclable packaging for their products. Healthier ingredients are now being used in the creation of Coca-Cola products. The new and improved pop ingredients and the recyclable packaging is the new direction of Coca-Cola. Keeping the original flavor, and becoming and healthier drink. We are changing with new generation and we want to change with you.      

12. References