Tuesday, May 5, 2020

Analysis of Marketing Strategies Coca Cola

Question: Describe about the Analysis of Marketing Strategies for Coca Cola. Answer: Introduction For the purpose of this report, Coca Cola has been selected for the analysis. In this report, discussion regarding Coca Colas external environment and internal environment were analysed and reported in this report. PESTLE analysis has been used to analyse external environment and for the analysis of internal environment SWOT analysis has been used. Following is the analysis of SMART technique in this report: Specific- This area of marketing plan analysis focuses on specific objective of marketing plan of Coca Cola. It means, there are many objectives of marketing plan of Coca Cola but each objective is backed by separate plan. This marketing plan of Coca Cola is more specific in achieving customer loyalty and customer involvement. Measurable- Marketing plan of Coca Cola needs to have some standard or benchmark that will be used to measure success and failure of marketing plan or strategy. In this case of Coca Cola, high turnover of customers and positive feedback in terms of price and quality of products is measurement scale of marketing plan. Achievable- Here achievable denotes that management or marketing manager making marketing plan shall set achievable objectives or outcome. That means achievement or objectives of marketing plan shall be based on some facts and figures and should be achievable (Fifield, 2012). Realistic- Under this category, marketing plan of Coca Cola shall set realistic objectives that can be possible to achieve. In this case, marketing objectives of Coca Cola shall be based resources available with them (Kendrick, 2013). Marketing objectives to be achieved shall be based on facts and not on figures. Timeframe- All these objectives shall be achieved within set timeframe that is decided by management. This means activities in marketing plan shall be scheduled Background of the organisation Coca Cola is one of the leading brands in food and beverage industry serving customers worldwide. Coca Cola is mainly engaged in manufacturing soft drinks under the brand name of Coca Cola and has established business operations worldwide. In last 19th century John Pemberton invented Coca Cola soft drink. Coca Cola start serving drinks in bottles and cans so as to attract more customers. Coca Cola has many products, produced under the brand name of Coca Cola. Product of includes diet coke, coca-cola vanilla, coca-cola zero, coca-cola cheery, etc. External Environment Analysis Environments Analysis While operating their business in UK, there are various laws and regulations related to environment that are followed by Coca-Cola. These laws are related to environmental protection, limitation on use of natural resources, sustainable use of resources and many other laws that impacts operations of Coca Cola. Adequate disposal of waste material, adequate use of material while making soft drink, etc are some issues that is addressed by Coca Cola (Nair and Ganesh, 2013). Technology Technology has been deciding factor for many companies in terms of their business operation i.e. reaping technological advents can create competitive advantage for companies. Coca Cola is customer oriented company and success and failure is largely depends on customers or population (Afsarmanesh et al., 2012). Therefore to attract more population, sales promotion activities need to be undertaken. It includes advertisement; intense marketing of product, product awareness and many other promotional programmes has been introduced with the help of technology. In order to be more cost effective, Coca Cola has start using more technological equipments that not only helps Coca Cola in cost reduction but they are now able to produce high volume also (Fountoukidis, 2015). Another important impact that technologies has made on the Coca Cola is of packing design and has created competitive advantage over other companies of same industry. Therefore marketing strategies largely depends on technol ogical changes and advancements (Sun et al., 2014). Government Regulations Government regulations are one of the core requirements that every business organisation has to fulfil so as to operate their business within limits of government. Not only in UK market, but in all other countries, government regulations plays important role in influencing business operations and marketing plan of Coca Cola. Marketing tactics involves many aspects that are to be achieved by Coca Cola and same shall be within the limits as decided by government and other regulatory bodies. These policies and changes in government regulations has impacted business environment of Coca Cola on large basis. Since Coca Cola is multi - national company, therefore it faces many challenges related to cross border capital and resource utilisation (Azadi and Rahimzadeh, 2012). Foreign direct investment, permissible international transactions, etc are some government regulations that were undertaken by Coca Cola while developing and implementing marketing plan. Trade barriers, trade restriction and incentive for trade in foreign countries have impacted development of marketing policy of Coca Cola, in terms of making adjustments (Pearson, 2014). Legal Changes Legal impact on Coca Cola includes impact of trade mark, licences and other permissions related to marketing and promotion of products of Coca Cola. Since there is huge competition in the related market therefore Coca Cola has obtained trade mark and copy right in terms of business operations. Many promotional events of Coca Cola are dependent on legal bodies of respective countries in which Coca Cola is operating their business (Dodds, 2015). For the purpose of marketing plan analysis, it can be analysed that there is huge changes has taken place in non alcohol business in term of product design, pricing of products, government policy and ceiling on market. Social / Cultural Changes Social or cultural changes or environment plays important role while formulating marketing plan or strategies for better development and implementation. In case of Coca Cola, since it is largely depends on customers i.e. customer preference, customer taste, customer behaviour or attitude towards product and other changing habits of customers (Srivastava, 2013). Therefore this makes customer analysis or customer trend more important for Coca Cola in order to develop and analyse its marketing plan with ease. Therefore customers lifestyle and their social values shall be understood by Coca Cola and then marketing tactics or strategies shall be developed. Social and cultural analysis in terms of marketing plan will support prising policy of Coca Cola in their marketing plan (McKay-Nesbitt et al., 2012). Price of product is largely depends on those population who will be actually paying to the company, that means price of product shall be based on customer capacity to pay. Age of customer s, gender to be more targeted, income level of targeted population, social status of target customer, etc are some bases on which marketing strategy of Coca Cola is based (Farris et al., 2015). Climate and Seasonal Another important factor that impacts marketing plan of Coca Cola is seasonal and climate factor under which seasonal change will change focus of customer base. For Coca Cola peak season is summer season in which Coca Cola achieves maximum sales level. In summer season, Coca Cola increases its products price as compared to its price in other seasons (Karagouni et al., 2013). Marketing plan for all seasons are different and developed accordingly. Internal Environment Analysis Competitor Analysis (SWOT) STRENGTH Global Brand- Coca Cola is globally recognised brand and has support of vast population and has been valued as premium brand (Yuan, 2013). A Strong Marketing- Marketing activity of Coca Cola has been tends to be most effective. They spend huge amount on advertisements and sales promotion. Customer Loyalty- It has been observed that Coca Cola has loyal customer and resulted in high customer turnover Bargaining Power- Since Coca Cola covers vast market area therefore possess storing bargaining power. WEAKNESS Undiversified Product portfolio- Coca Cola has put emphasis on producing and selling soft drinks. There is no other product of Coca Cola that has attracted customers. Higher Debt- Coca Cola has been facing issue of high leveraged company that means debt of Coca Cola as compared to its equity is at higher side. OPPORTUNITIES Increasing Trend- It can be analysed that there is increasing trend in terms of consumption of soft drinks or bottled water in many countries. Coca Cola can reap opportunity. FDI- Government of many countries has opened doors for international companies or foreign companies to come and operate business their county at cheaper labour and other resources (Gupta and Mishra, 2016). THREATS Changing customer preference- Customer taste has been changing in terms of soft drink consumption level. Now people are keener towards healthier drinks. CSR and Sustainability- Each every organisation operating in the business has to undertake CSR and sustainability activities. (Research and Markets, 2013) Target market segments/ Segmentation Target market strategy in marketing plan can be define as the strategy which is made for targeting specified population of the total market. Demographic- In terms of age factor, Coca Cola has focused on population having age in between 8 years to 40 years. Males and females both are targeted in marketing plan and all customers falling under any profession i.e. students, processionals, employment, etc all are targeted. Middle class people are the main target of Coca Cola as they are providing its products at affordable price brand (Lin et al., 2013). Marketing and brand awareness- Another important aspect of marketing plan of Coca Cola is brand awareness activities that they undertake. This process is included in the marketing plan of Coca Cola and has undergone many programmes. Event organisation, promotional sales prices, marketing campaigns, etc are some targeting stagey of Coca Cola (Hutt and Speh, 2013). Conclusion / Recommendations Following are recommendations for the same: Product- Product line of Coca Cola is very limited i.e. only beverages have focus on. Apart from beverages or soft drink, there is no other product that can compete in the market. Therefore it is recommended to put more focus on other products also (Satit et al., 2012). Price- Prising strategy of Coca Cola is good enough after considering competition level in the market. Price of product includes variable cost, fixed cost, other costs and profit margin of company. Breakeven point is at higher side that restricts Coca Cola to earn more profits. Cost mix of Coca Cola manufacturing process needs to be more effective i.e. cost management shall be undertaken by adopting new technical equipments (Cave et al., 2012). Promotion- Coca Cola shall spend more on advertisements and other promotional events that enhance brand awareness among target population. Therefore promotion shall focus on low cost, best quality, international brand and service level of Coca Cola shall be promoted (Brooks and Simkin, 2012). Promotional activities shall be carried out in terms of events, shows, etc. Promotion will also be undertaken by adopting many other strategies or promotional tools like advertisement, distribution of broachers, public relation activities, seminars, etc (Oksentyuk, 2012). Place- Place of distribution of products also plays important role in marketing plan and is considered as important part. Coca Cola shall establish more distribution channels and limit intermediaries so as to cut cost of final product (Baldwin, 2012). Budget for implementing Marketing strategies Budgeting is the process of assignment cost or expenses for items or cost areas of those activities which is required to be undertaken in future. Under budgeting process, budgets are prepared for the future course of actions that business organisation is required to undertake. Budgets are most effective planning tool that is made in advance for future activities. Budgets are treated as most effective planning tool for the management. In this case, management or marketing manager of Coca Cola will be making marketing budget for the next 6 months i.e. January to June. In this budget, expenses related to marketing activities or promotional activities are undertaken. Each expense is compared with budgeted sales revenue of the respective month. Following statement showing sales revenue and marketing expenses budget for the next 6 months i.e. January to June: Particulars Jan Feb March April May June Targeted sales revenue 450,000 510,000 545,000 590,000 635,000 670,000 Marketing Expenses Budget: Advertisement-expenses 25,000 28,000 30,000 22,000 14,000 14,000 Website-expenses 6,000 5,000 4,000 4,000 3,000 3,000 Event management-expenses 12,000 15,000 11,500 6,000 4,000 2,000 Broacher-expenses 3,000 2,400 1,500 1,000 1,000 1,000 Recruitment and Selection-expenses 6,000 2,500 1,000 1,500 4,000 1,000 Public relation-expenses 5,000 7,000 6,000 6,000 6,000 6,000 Training and development of sales personnel-expenses 6,500 4,000 1,500 1,500 3,000 1,000 Salary-expenses 10,000 14,000 16,000 18,000 22,000 24,000 Seminars-expenses 3,400 4,000 3,500 3,000 1,000 1,000 Legal-expenses 1,100 1,100 1,100 1,100 1,100 1,100 Total expenses 78,000 83,000 76,100 64,100 59,100 54,100 PROFIT 372,000 427,000 468,900 525,900 575,900 615,900 Percentage of Sales revenue 17.33 % 16.27 % 13.96 % 10.86 % 9.31 % 8.07 % (Koosha and Albadvi, 2015) Analysis- From the above prepared budget for Coca Cola for next 6 months, it can be analysed that Coca Cola will be engaged intensely with marketing activities for its first 3 months i.e. January to March. They had focused on advertisement form of promotion of their products. Advertisement includes advertisement in TV, hoardings, glow hoardings, etc. Apart from advertisement, Coca Cola will organise many events for the promotion of their products and for first s3 months there will be more expenses on it. Legal expense is fixed expenses throughout the budgeted period and legal expenses will not change in 6 months budgeted period. Salary expenses will be at increasing trend because as and when marketing activities will be undertaken then more staff is required to be appointed. This is the reason of increase in salary expenses for marketing budget of Coca Cola. It can be analysed that, in first 3 or 3 months, marketing expenses as compared to sales revenue will be at higher side and in later months marketing expenses will reduce. From the budgeted marketing expenses it can be observed that, sales revenue will get increased and marketing activities or expenses will be reduced. This will happen because in later time more population will be aware about products of Coca Cola. References Afsarmanesh, H., Msanjila, S.S. Camarinha-Matos, L.M. 2011;2012;, "Technological research plan for active ageing", Information Systems Frontiers, vol. 14, no. 3, pp. 669-692. Azadi, S. Rahimzadeh, E. 2012, "Developing Marketing Strategy for Electronic Business by Using McCarthy's Four Marketing Mix Model and Porters Five Competitive Forces", Emerging Markets Journal, vol. 2, no. 2, pp. 46-58. Baldwin, R. 2012; Understanding Marketing Mix: Theory, Strategy, and Practice, 2nd;2; edn, Oxford University Press, Oxford. Brooks, N. Simkin, L. 2012, "Judging marketing mix effectiveness", Marketing Intelligence Planning, vol. 30, no. 5, pp. 494-514. Cave, M., Baldwin, R. Lodge, M. 2012;, Understanding Regulation: Theory, Strategy, and Practice, 2nd;2; edn, Oxford University Press, Oxford. Dodds, M.A. 2015, "Foreign Corrupt Practices Act cases impact sport marketing strategies", Sport Marketing Quarterly, vol. 24, no. 4, pp. 258. Farris, K.B., Aquilino, M.L., Batra, P., Marshall, V. Losch, M.E. 2015, "Impact of a passive social marketing intervention in community pharmacies on oral contraceptive and condom sales: a quasi-experimental study", BMC public health, vol. 15, pp. 1495. Fifield, P. 2012;, Marketing Strategy, 2nd;2; edn, Taylor and Francis, Saint Louis. Fountoukidis, E.F. 2015, "The Impact of Rapid Technological Developments on Industry: A Case Study", International Journal of Information, Business and Management, vol. 7, no. 1, pp. 215. Gupta, G. Mishra, R.P. 2016, "A SWOT analysis of reliability centered maintenance framework", Journal of Quality in Maintenance Engineering, vol. 22, no. 2, pp. 130-145. Hutt, M.D. Speh, T.W. 2013, Business marketing management: B2B, 11th edn, South-Western Cengage Learning, Mason, Ohio. Karagouni, G., Protogerou, A. Caloghirou, Y. 2013, "Autotelic capabilities and their impact on technological capabilities", EuroMed Journal of Business, vol. 8, no. 1, pp. 48. Kendrick, T. 2006;2013;, Developing strategic marketing plans that really work: a toolkit for public libraries, Facet Publishing, London. Koosha, H. Albadvi, A. 2015, "Allocation of marketing budgets to customer acquisition and retention spending based on decision calculus", Journal of Modelling in Management, vol. 10, no. 2, pp. 179-197. Lin, T.T., Lee, C. Lin, H. 2013;, "Analysis of customer profit contribution for banks with the concept of marketing mix strategy between 4Cs and 5Ps", Service Business, vol. 7, no. 1, pp. 37-59. McKay-Nesbitt, J., DeMoranville, C.W. McNally, D. 2012, "A strategy for advancing social marketing", Journal of Social Marketing, vol. 2, no. 1, pp. 52-69. Nair, S.R. Ganesh, C. 2013, "Reasons and Influences of the Practice of Environmental Marketing", Journal of Management Research, vol. 13, no. 2, pp. 77-88. Oksentyuk, R. 2012, "Algorithm of the internet marketing product", Socal?no-ekonom?n Problem DerÃ… ¾ava, vol. 6, no. 1, pp. 135-143. Pearson, D. Books24x7, I. 2014;, The 20 Ps of Marketing: A Complete Guide to Marketing Strategy, Kogan Page Ltd, GB. Research and Markets: Systemair AB Fundamental Company Report Including Financial, SWOT, PESTEL, Competitors and Industry Analysis 2013, , Business Wire, Inc, New York. Satit, R.P., Tat, H.H., Rasli, A., Chin, T.A. Sukati, I. 2012, "The Relationship Between Marketing Mix And Customer Decision-Making Over Travel Agents: An Empirical Study", International Journal of Academic Research in Business and Social Sciences, vol. 2, no. 6, pp. 522-530. Srivastava, R. 2013, "Exploring product category and promotion type association for impulse buying in malls in India", Abhigyan, vol. 31, no. 3, pp. 41. Sun, Y., Guo, P., Ma, Z., Li, T. Dang, S. 2014, "UK-based external business environment analysis of outdoor adventure clothing using the PESTEL tool and its future outlook", IEEE, , pp. 306. Yuan, H. 2013, "A SWOT analysis of successful construction waste management", Journal of Cleaner Production, vol. 39, pp. 1-8.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.