Analysis, Findings and Recommendations for a Product
Industry and company overview
The product that we are going to use in this paper is the coca cola drink that is a product from the Coca-Cola Company and it falls under the industry of beverages. Coca Cola is a carbonated drink that is sold in shops, hotels, restaurants, sores and also vending machines all over the world. The Coca-Cola Company originated from the United States of America and its head quarters are in Atlanta, Georgia. The trade mark of the company is Coke and it is used in all its products (Datong 2011). This soft drink has dominated the market all over the world for a very long time throughout the 20th century. The company sells the coca cola carbonated drinks to licensed coca cola bottlers throughout the world (Khanna, Palepu & Sinha 2005). Moreover, the other drinks that are produced by the Coca-Cola Company are created under the Coke brand name. Therefore, it is easy to keep the drinks from the company safe and customers can easily identify the drinks from the Coca-Cola Company. The global market has for a long time identified coca cola as a drink that dominates the soft drinks and beverages market. It is a very valuable brand all over the world. This has given the company a very good market in different places in the world because it still remains the most popular drinks and it meets the needs of the customers (Datong 2011).
Intense advertising of the product has been done in different parts of the world and this has helped in promoting coca cola in the market. The numbers of advertisements that are done in different countries are classic and this helps in getting the attention of the consumers (Khanna, Palepu & Sinha 2005). This has also ensured that the originality of the drink is maintained because there are changes that are made especially in the packaging of coca-cola and advertisements help consumers to become familiar with the improvements made about the product (Datong 2011). The prices have also been changed at different times across the world in order to meet the needs of the consumers and in order to help the brand to compete favorably in the market. The Coca Cola Company has greatly developed both as a company and also in the industry and it has been involved in commercial sponsorship of different world activities especially games. This also served as a good opportunity for the company to advertise itself and attract more customers. This makes coke more famous to people because as a result of these functions, many people get to enjoy the soft drink and from then they start using it for the good quality. Coca Cola has also been featured by the media in films and televisions programs thus developing the market more (Datong 2011).
Market size, growth and revenue break-up
The drink has a big market base globally. This is both because the drink is famous for its quality and also because the Coca-Cola Company has a wide market globally. The efforts and strategies that are put in place in marketing the product also create a good market base for the product. The market size of the company is on the rise and there are new emerging markets for the coke drink (Datong 2011). These markets include the India and China whereby the middle class consumers are on the increase as compared to the previous years. The market has been on the decline in the market where the soft drink was well established for example the United States and in Europe as people move to the use of healthier beverages. However, the emerging markets in different parts of the world are leading to more profits for the company (Khanna, Palepu & Sinha 2005). The market for the company is still stable although there are very many changes in the market that are leading to fluctuations from time to time (Datong 2011). The decline in market in the United States of America and in Europe is also as a result of austerity measures that have been implemented. The confidence of the consumers has therefore reduced with the sales in these regions reaching the lowest levels since 2009 (Datong 2011). The long term prospects of the beverage company have helped it to remain strong in the market despite the changes. The opportunities for marketing the products are still many and this leads to consumption growth and this compensates for the deteriorating markets. The coca-cola company predicts that it will acquire an investment of $5 billion in the India market by 2020. This is twice over the 2 billion investments that the company has managed since it re-entered India in 1993 (Datong 2011). This shows that the market is growing at a very fast rate and consumption is increasing very fast. The Coca Cola Company is also the leading beverage and soft drinks company leading its rivals Pepsi and others. The market gap between coca-cola and Pepsi Company is very wide showing that the company has the highest market. It leads by 52% global market while Pepsi follows at 21.4% (Datong 2011).
China has been experiencing greater growth and development in the last 2 decades and this has been of advantage to the Coca Cola Company. The company has doubled its business in the past five years and it has plans to invest a total of $4 billion in china (Datong 2011). This is aimed at improving the market and giving the company a better stand in the market. The company is also predicting a continuous double digit growth for the market. The analysis of the company’s market shows that it had a 5% worldwide growth in the first quarter and a much higher growth in the main markets. The growth was 20% in India and 9% in China. Currently, the company’s growth is at 5-9 percent in the last quarter and it has gained 2.45 billion or 54 cents per share in the last quarter (Datong 2011). This is an increase from the earlier year whereby the company had gained $2.31 billion, or 50 cents a share. This increase in growth puts the company at a better competitive position in the market. The global volume capacity of the Coke is at two percent and there is increased popularity in North America. This shows that the market opportunities are increasing for the coca cola company. Other than the two major market increases in growth, there are other countries that have shown an increase in percentage sales. These countries include Eurasia, Mexico, the whole of Africa, and North America (Datong 2011). These are the total opportunities for the company and this shows that there is likely to be an increase in profits for the company. The company is taking advantage of these opportunities by establishing bottling units in these regions for example in Mexico. The company is intensifying its effort in supporting the growth in the regions that show great opportunity in growth (Khanna, Palepu & Sinha 2005).
PESTEL analysis of the beverages industry
A PESTEL analysis involves the external factors or the macro environment that affects the industry and these could include trade barriers, new laws in the market areas for the industry, demographic changes and government policy changes (Gilespie 2007). In an art shell, the PESTEL model involves the political factors, economic factors, social factors, technology factors, environmental factors, and legal factors. These factors affect the industry from without and they cannot be controlled by the industry (Walsh 2005). The only thing that the industry can do is come up with strategies that enable it to cope with these factors. Political factors that affect the beverages industry include government policies that determine the policies that the government can allow to be sold in its country (Gilespie 2007). The political decisions of the countries that Coca Cola Company markets its products affect the business either positively or negatively. Infrastructure is another political factor that affects business for example the roads and rail in which business is executed. Economic factors include taxes, interest rates, economic growth, inflation and exchange rates (Gilespie 2007). The industry is mostly affected by economic factors of different countries. For example, some countries such as Mexico are planning to implement on levying taxes on soda in order to reduce the obesity rates in the country. This will be beneficial for the country but will have negative effects on the market. This means that the market for the beverages will go down due to reduced sales due to higher prices (Gilespie 2007).
The social factors that affect the industry include changes that occur in the social trends of a country (Gilespie 2007). The social changes for example could include the changes in people’s lifestyles. The technology changes that affect the industry include online shopping, technological changes in manufacturing materials, bar coding and others (Walsh 2005). These technological changes can help in making marketing easier, reduce cost, and improve quality (Gilespie 2007). The environmental factors that affect the industry include weather and climate changes that cause people to change their patterns of consumption of beverages (Walsh 2005). The legal factors that affect the industry could include laws of a country that affect the sales of beverages in a particular country. The laws of a country can affect the decisions of the company because they can lead to adjustment of some policies and strategies of a company in the market (Gilespie 2007).
SWOT analysis
A SWOT analysis consists of internal and external factors that affect the company. The strengths and weaknesses are internal factors that affect the company while the opportunities and threats are the external conditions that affect the company in the industry. Coca Cola Company has been operating for a number of decades now and it has points that make up its own strengths and weaknesses (Dyson 2004). One, the company contains over two hundred companies in different parts of the world. The multinational characteristic of the company helps it to prosper in the industry and compete favorably in the market. The company has been able to establish different customer bases in different parts of the world through the sales of the different products that it produces. The probability of finding these companies are very high because they are found in nearly all the countries that the company sells its products in. the reason for this high probability of finding these companies is as a result of the efforts of the coke company to establish a firm market in different parts of the work and compete with its competitors (Dyson 2004).
The other point on its strengths is the product’s image that has been part of the world culture for a long time (Dyson, 2004). The image has been used in different products such as t-shirts, hats, and a good number of other things. This is a great strength because it stands out as a symbol of quality and enjoyment. The probability of coming across the symbol is very high in different nations all over the world. This is because the company has allowed the use of the symbol for purposes of advertisements and bottling system has been given freedom to operate and some are even owned by individual authorized persons. This makes the use of the symbol very easy to come across (Dyson 2004).
The weaknesses of the company include the monitoring of business because its market is very wide. This is necessary in order to ensure productivity and efficiency of business (Dyson 2004). The company has reported a decline in unit case volumes and as a result of a decrease in consumer purchasing power. The probability of such occurrences is very low because the company is taking more caution in ensuring that the sales are monitored keenly. The other weakness is the health effects of the coke drink. It affects teeth and the body sugar levels compromising ones health. The probability of the health effect is very high because many people consume the beverages at a very high rate. The sugar concentrations in the drinks are also high leading to a compromise in health (Dyson 2004).
The biggest opportunity for the brand is recognition (Dyson 2004). This puts the brand at a better competitive position because people go for its products and they coca cola products are hardly affected by new products introduced in the market by other companies. The bottling system also allows the company to serve very many consumers across the world. This increases the probability of the brand succeeding in the market. The possible threat to the company is potential competitors (Dyson 2004). However, there is no substantial sense of the threat but it is very real because there are other companies that produce soft drinks only that they are not strong. The possibility of this threat affecting the market of the brand is very minimal because the market is already strong and there are plans for making it stronger in different parts of the world (Dyson 2004).
Target market
The target market of the coke beverage is targeted to people of 18-34 years. These are teenagers and the youth. The drink is targeted at both males and females and it is targeted at the young people because it is a cool drink to them (Papadopoulos, Chen & Thomas 2002). This drink is targeted to this specific group of people but the company has other drinks that are targeted to the general population. Actually, most of the drinks are targeted at people of all ages but some like coca cola Zero are targeted to the teens that are not interested at getting calories but are interested with the taste. In addition to this target age bracket, coca-cola is also targeted at people who live in households of three or more (Papadopoulos, Chen & Thomas 2002). The 18-34 is chosen because of the high ranks and volume potential and therefore the company is likely to gain more from this bracket of people. This is also a wide market because it consists of the young and middle aged markets. Combining these two groups gives the company a better market (Papadopoulos, Chen & Thomas 2002).
Marketing mix and its constructs
The marketing strategies used by the coca cola company state which customers the company will serve and how it will meet the needs of the customers. The marketing mix (4Ps) is used in the marketing strategy that the company used. Through the use of the 4Ps that stand for price, place, promotion, and product led to the establishment of integrated marketing strategy that the company used (Yoo, Donthu & Lee 2000). The market mix ensures that the right product is in the market, the product is sold at the right price, it is sold at the right place, and it is sold using the most suitable promotion. The integrated marketing strategy ensures that the customers are given the best value that they expect. The integrated marketing consists of print, broadcast, interactive, direct response, outdoor, strategic planning, media planning, brand partnerships, and results tracking (Yoo, Donthu & Lee 2000). The integrated marketing strategy incorporates different markets all over the world. This unifies the beverages for example in terms of advertisements. The company uses mass media advertisements in most areas as the promotion strategy. The product is also affordable to people from different social classes at an affordable price. The product is also available to people and cab be accesses easily in different parts of the world. Different promotion strategies are used to market the products in different parts of the world leading to the increase in profits (Yoo, Donthu & Lee 2000). Strategic planning is also a part of the integrated marketing that ensures that the company sets the right market target and goals.
What should the product do over the next 5 years? Chosen strategic decisions
The coke brand is hoping to widen its market in the next five years and countries such as India, China, and Africa are the main targets. This is also important so as to secure its market as it tries to work on the declining market in the United States and in Europe (Mullins et al 2005). Increasing the bottling systems is a major decision that will make widening the market possible. The market in these areas is still very low and improving it would be a big boost for the company. The brand is also aiming at conducting campaigns that ensure that people believe more on the coke drinks so that they may not loose market to other beverages (Mullins et al 2005). This is a big fight to regain the market because more and more health practitioners area advocating against the use of coke drinks especially sodas because they are compromising the health of consumers (Mullins et al 2005). Therefore, the company has seen this as a possible threat and that is why it is putting in place strategies to fight against these campaigns and secure the market. The strategic decisions that the company came up with are based on the challenges that are exist in modern business environment. These decisions include continuing to supply the products in a better way than before. This is aimed at maintaining the market and also attracting new customers. The other strategic decision is making use of technology more intensely so as to make the provision of services easier and better (Mullins et al 2005). This is putting the needs of the consumers into consideration and ensuring that they can access the product in the best and easiest way possible.
References
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Dyson, RG, 2004, Strategic development and SWOT analysis at the University of Warwick, European journal of operational research, 152(3), 631-640.
Gilespie, A, 2007, PESTEL analysis of the macro-environment, Foundations of Economics-Additional chapter on Business Strategy”, Oxford University Press.
Khanna, T, Palepu, KG, & Sinha, J, 2005, Strategies that fit emerging markets, Rivals from developing countries are invading your turf, How will you fight back?, 4.
Mullins, JW, Walker, OC, Boyd, HW, & Larréché, JC 2005, Marketing management: a strategic decision-making approach.
Papadopoulos, N, Chen, H, & Thomas, DR, 2002, Toward a tradeoff model for international market selection, International Business Review, 11(2), 165-192.
Walsh, PR, 2005, Dealing with the uncertainties of environmental change by adding scenario planning to the strategy reformulation equation, Management Decision, 43(1), 113-122.
Yoo, B, Donthu, N, & Lee, S, 2000, An examination of selected marketing mix elements and brand equity, Journal of the Academy of Marketing Science, 28(2), 195-211.
