Market Analysis of Coca Cola

Coca-Cola, corporation nourishing the global community with world’s largest selling soft drink since 1886. Its nations top soft drink brand, with the best bottling network. It is the largest marketer of non-alcoholic beverages in the world.

In India, Coca Cola was the leading soft drink till 1977 when govt. policies necessitated its departure. It returned to India in 1993 after a 16 year hiatus and made significant investments to ensure that the beverage is available to more and more people, even in the remote and inaccessible parts of the nation. In the minds of world’s consumers the brand has assumed an iconic status. Coca Cola was initially advertised as a remedy for headache and exhaustion. It has been advertising on television for 50 years.

COCA COLA INDIA (CCI)

• Leading player in the Indian beverage market
• A fortune 500 company in India (73rd position)
• Coca Cola India with PepsiCo forms “Duopoly”
• Includes 24 company-owned bottling operations
• Came back in 1993 and acquired local brands

(Ibef, 2010)

(Coca Cola India, 2010)

2. COMPANY BACKGROUND

Marketing Coca Cola in India-The post-liberalization period in India saw the comeback of Coca Cola but Pepsi had already beaten Coca-Cola to the punch, by creatively entering the market in the 1980’s period by way of a joint venture. In a way Pepsi benefited the Coca Cola by developing the Indian soft drink market in the early years of liberalization .The only disadvantage was that CCI in 1993 applied the American way of life approach in selling its product on the contrary, Pepsi targeted the youth.

(Coca Cola India, 2010)

3. The Marketing tools: The Marketing Environment

3.1-The Macro Environment- PEST Analysis of Coca Cola

(P)OLITICAL ANALYSIS-

Political variables have very little effect on the CCI’s selling and production behavior. There are few exceptional things like the ‘environmental protection laws’ they somewhat effect the industry of coca cola. The state government of Kerala released a report on March 22, 2010 holding Coca Cola responsible for causing pollution and water depletion in a state of Kerala and made it liable for Indian rupees 216 corer for damaged caused as a result of the company’s bottling operations.

To deal with this problem the company has made proper adjustments in plant and applied the proper way of wastage management. The company’s production also gets effected by the elections and military take over because in the day of election any countries production in any field is declined.

(E)CONOMICAL ANALYSIS-

Inflation in any country is not good from its production point of view. So, coca cola is no exception. Its impact on coca cola is highly negative. In a country like India where there is a high rate of unemployment, CCI directly employs approximately 6,000 people and indirectly creates employment for more than 1,25,000 people in related industries. It’s among the countries top investors having invested more than US$ 1 billion in India in the first decade and further pledged another US$ 100 million in 2003 for its operations.

(S)OCIAL ANALYSIS-

CCI in partnership with the NGO, Bharat Integrated Social Welfare Agency (BISWA) has launched a program to build awareness on micro-nutrient malnutrition (or “Hidden Hunger”) in the “bottom of the socio economic pyramid” population in India.

They are constantly working to keep their product environmentally and socially beneficial to the communities they serve. Their community water programs are designed to support healthy watersheds and sustainable programs to balance the water used throughout their production process. CCI has been awarded the Social and Corporate Governance Award for Best Practices in Corporate Social Responsibility in 2009.

All India Division COBO’s are now ISO 14001 certified.

(T)ECHNICAL ANALYSIS-

The CCI uses the more advanced technology in its production process. Computers have become the basic needs these days and it is giving the way of other industries to come to new technologies and into a new world of business. Computers can increase the efficiency of its business and the latest coke vending machine will now employ the use of (user friendly) touch screen technology.

SWOT ANALYSIS OF COCA COLA

(S)TRENGTHS

• Brand Ambassadors-focused target marketing by launching appropriate brand ambassador for the target market.
• Diverse Product Portfolio.
• Extremely Recognizable Brand.
• Improved Quality Control.
• Heavy Investment.
• Bottling System.

(W)EAKNESSESS

• Reduced Consumer Purchasing Power.
• Issues for Health Care.
• Environmental Destruction.

(O)PPORTUNITIES

• To serve a large geographic diverse area
• Brand recognition
• Sponsorships

(T)HREATS

• Substitutes
• Heath Consciousness
• Consumer preferences
• Stiff Competition

3.2-The Micro Environment –

The micro environment represents those elements over which the marketing firm has full control in order to reach its target market i.e. the ‘4 Ps’, which it can use in order to gain information that will better help it in its marketing operation.

MAJOR COMPETITORS

Coca cola major competitors is Pepsi as its portfolio includes-

• PEPSI
• 7UP
• NIMBOOZ
• MIRINDA
• SLICE
• MOUNTAIN DEW

After CCI it covers the 2nd largest market share % of the soft drink industry in India –

(Pepsi Co India, 2010)

Consumer Behavior-

The two factors that dictate the Consumers decision-making process are involvement and perceived risk. The consumer will follow the habitual decision making steps while purchasing coca cola.

• Habitual Decision Making

Product

Coca Cola

Level of Involvement

Low ( unimportant decision )

Perceived Risk

Low ( simple , low-cost product )

Information Processing

Respond to environmental cues ( shop signage or displays )

Learning Model

Behavioral learning ( ad shows product in beautiful setting , creating positive attitude )

Needed Marketing Action

Provide environmental cues at point of purchase , such as product display

Fig 4.2 extended problem solving versus habitual decision making

(Solomon, Marshall, Stuart, Barnes and Mitchell, 2009, Pg151)

In India the perception of the people regarding coca cola is that, they consider it as a drink which can quench their thirst as well as creates a sense of belongingness. India’s physical environment is suitable for the sale of soft drinks moreover during festive time sales are doubled. Thus the need of buying a soft drink falls in the first and third level of Maslow’s Hierarchy of Needs (Exhibit 1.)

• Situational Influences

Physical environment

Time

Internal Influences

Perception

Motivation

Learning

Attitudes

Personality

Age groups

Decision

ProcessLifestyle

PURCHASE

• Social Influences

Culture

Subculture

Social class

Group memberships

Fig 4.4 Influences on Consumer Decision Making (Solomon, Marshall, Stuart, Barnes and Mitchell, 2009, Pg151)

• SOCIAL MEDIA NETWORKS-

Different aspects of social media, which CCI uses in order to communicate with its consumers.

This in turn will increase –

• Brand awareness
• Positive image for the brand