marketing strategy of coca – cola 4ps” product, price, promotion and place

INTRODUCTION As the world‟s third most valuable brand, Coca-Cola is also one of the most successful Its products are available in every country, and through the gray market, this also includes Cuba and North Korea Having a marketing strategy uniquely designed for the company has given it a huge boost at increasing global brand recognition Like other companies, Coca-Cola bases its marketing strategy on the well-known marketing mix of the “4Ps”: Product, Price, Promotion and Place However, due to the uniqueness of the company‟s brand, we‟ve mixed things up a bit by including other, more subtle reasons behind the company‟s success and the uniqueness of the brand Our essay includes sessions: Session 1: Introduce about Coca-cola Session 2: Marketing mix in general Session 3: 4P- Elements Session 4: Conclusion & Quizzes We hope to get your evaluation for improving our essay! Coca – Cola in general 1.1 About the company  The Coca-cola is one of the largest beverage coporation in the entire world  The main products are their wide variety of soft drinks  In recent years, Coca-cola has had an average about $46 billion dollars in sale and revenue per year  After all of the deductions, Coca-cola has accumulated an average of $ 8.5 billion in net income  Estimated 123200 employees  Coca-cola is on a New York Stock Exchange with a current stock value of $ 43.53 per share 1.2 Mission Coca-cola‟s mission statement is “To refresh the world in mind, body, and spirit To inspire moments of optimism and happiness through our brands and action” 1.3 Strategy  Coca-cola is unique in the way they brand their soft drink product  Those who are marketing for Coca-cola focus heavily on having that strong relationship with its customers, and so they create their brand to focus on the happiness that their products bring  Coca-cola keeps their drinks at a low price so that their customers may enjoy the drinks regularly  Remain consistent in their quality and service of their products over time  Design has been renovated and recreated over the years to keep up with capturing their customer‟s attention  Coca-cola not only sells soft drinks, they sell happiness Their marketing campaign to see happiness in the lives of people has become widely accepted by millions of people who have their heart captured by Coca-cola 1.4 Target market ● Coca-cola has reaches people all over the world by distributing their products over 200 countries ● Falls an undifferentiated marketing which means there is no segmentation ● The company uses a multi- segment targeting strategy which explains why they have more than one well- defined target market ● However, within their line of products, they have different groups, for instance: ○ Oasis juice is marketed towards 20-30 year- old located in the United Kingdom ○ Powerade is marketed towards “sporty” customers that range from 13 to 27 years old ○ Diet Coke and Coke Zero is a healthier option for those who want to cut calories and life a healthier lifestyle 1.5 Competition ● Coca-cola is leading the world in the beverage business, yet still share the market other companies ● Top three competitors that remain up against Coca-cola are: ○ Pepsico, Inc ○ Nestle S.A ○ Dr Pepper Snapple Group, Inc ● Even Coca-cola keeps a close eye on their competition, they holds the position of being the leader in the market ● Coca-cola dominates in this soft drinks market with 26% of the market share and specifically 43% in the United States market alone 1.6 Brand  Coca-Cola is a firm that sells many consumer products to customers for their personal enjoyment  The beverages are classified as a convenience product because the consumers who buy these drinks not spend much effort or time evaluating the quality before purchasing Coca-cola‟s product mix is made up of breadth of categories such as soft drinks, juice, diet beverages, sport drinks and water  Within each product line our depth of drinks, for example for the soft drink of and include: Coke, Sprite and Fanta Coca-cola goes one step further to make even more variation of each flavor in the line For Coke, there‟s vanilla and cherry For Fanta, there‟s orange and strawberry Marketing Mix in general Marketing mix is a marketing concept that includes all of the tools available to marketers to develop efficient actions and achieve their sale penetration targets within a target market Marketing Mix contained elements: Product, Price, Place and Promotion 2.1 Product The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-user's needs and wants It involves decisions about the product‟s quality, its style and design and the branding policy  Product life cycle: all products follow a logical product life cycle and it is vital for marketers to understand and plan for the various stages o Introduction: the product will be very new to the market and only a few people will know about it Marketing strategy in this stage is to create awareness among customers o Growth: after a while the product will become widely known Marketers, therefore, focus on building their brand o Maturity: the market will become saturated Marketing is used to differentiate producer‟s products o Decline: at the end of a product‟s life it will become less popular and will be replaced by other newer products In this stage, advertising budget will be cut down  Product variation is a change of the product by adding attributes such as size and color  Product differentiation is the process of distinguishing the differences of a product or offering from others, to make it more attractive to a particular target market This involves differentiating it from competitors' products as well as one's own product offerings  Product innovation involves the introduction of a good or service that is new or substantially improved This includes, but is not limited to, improvements in functional characteristics, technical abilities, or ease of use  Product elimination is the removal of products from the product portfolio once they have reached the decline stage of the life cycle Usually the choice rests between immediate withdrawal and phasing it out slowly 2.2 Price This refers to the process of setting a price for a product, including discounts  Cost recovery pricing: setting the price to cover costs  Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time Price skimming is frequently used when a new product just entered the market, the business may be able to charge high prices as some customers would want to be first to buy the product It commonly occurs in technological markets as firms set a high price during the first stage of the product life cycle The top segments of the market which are willing to pay the highest price are skimmed off first When the product enters maturity the price is then gradually lowered  Penetration pricing is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers The strategy works on the expectation that customers will switch to the new brand because of the lower price There is much controversy over whether it is better to raise prices gradually over a period of years (so that consumers not notice), or employ a single large price increase A common solution to this problem is to set the initial price at the long-term market price, but include an initial discount coupon 2.3 Place This refers to the channel by which a product or service is sold  Distribution channel: path or 'pipeline' through which goods and services flow in one direction (from vendor to the consumer) A distribution channel can be as short as being direct from the vendor to the consumer or may include several inter-connected intermediaries such as wholesalers, distributors, agents, retailers Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer  Direct Sales: a retail channel for the distribution of goods and services  Indirect sales through partners, is a strategic possibility for growth and incremental sales for vendors Though invaluable, no direct sales force, vendors can hope to achieve the same coverage and breadth of expertise as an effective channel partner network For sustainable growth, vendors and distributors are looking beyond their internal resources to extend their sales opportunities with the right partners 2.4 Promotion Promotion involves disseminating information about a product, product line, brand, or company Promotion is generally sub-divided into two parts: ● Above the line promotion: promotion in the media (TV, radio, newspapers, Internet in which the advertiser pays an advertising agency to place the advertisements) ● Below the line promotion: much of this is intended to be subtle enough for the consumer to be unaware that promotion is taking place (sponsorship, product placement endorsements, sales promotion, etc) ● Promotional mix: ○ Advertising: any paid presentation and promotion of ideas, goods, or services by an identified sponsor (television, billboard, brochures and catalogs, signs, in-store displays, posters, Web pages, banner ads, emails) ○ Personal Selling: a process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral presentation (sales presentations, sales meetings, telemarketing) ○ Promotions: incentives designed to stimulate the purchase or sale of a product, usually in the short term (coupons, contests, product samples, trade shows, exhibitions) ○ Public relations: paid intimate stimulation of supply for a product, service, or business unit by planting significant news about it or a favorable presentation of it in the media (newspaper and magazine articles/reports, TVs and radio presentations, charitable contributions, speeches, issue advertising, seminars) Coca – Cola’s marketing mix strategy 3.1 Product As the most recognizable brand in the world, Coca-cola certainly knows how to gain successful global marketing Over a century, Coke remains an industry leader both in product sales and marketing The following are some of the keys to the iconic company‟s strategies:  Invest for growing brand recognition and customer loyalty When mentioning Coca-cola, the first one that appears in customer mind is the original coke It is quite easy to understand because the original Coke beverage brought about the rise of the company It is the most successful drink in the world Since its launch in 1886, it has shown high demand year after year in different nations despite the general life cycle of a product Logo uses a timeless font which has been written in the Spencerian script, because it would differentiate it from its competitors The company standardized the logo in 1923 and, like the recipe, decided that while packaging could adjust to the times, the core logo was to be untouched It's resulted in a logo that has had more than 100 years to become imprinted in the minds of people around the world  Design a large product portfolio to satisfy a range of target customers Coca-cola product strategy in its marketing mix can be studied by understanding its wide product range According to Nielsen's data, Coca-Cola is the number one brand in the beverage, juice, and bottled water market in 2010 Its flagship product is carbonated drinks, now Coca-Cola has diversified products with many designs, colors and flavors such as Fanta, Maaza, Limca, Sprite, Danisa or Nested Iced Tea New products have helped Coca-Cola gain new customers and venture into new markets Coca-Cola aims at satisfying a range of different people It has about 3,300 products sold around the world targeting different ethnic groups, sexes, lifestyles, age groups etc  Change to adapt to international trend Over the years, the world has witnessed a growing awareness of the impact of a variety of drinks on public health The Coca-Cola Company‟s response to the public concerns has been prompt For example, some of the products are now caffeine-free The company also has a reduced or no-sugar, no-calorie option for almost all of its products Due to its great popularity around the world, and upcoming trends towards healthier lifestyles Coca-Cola began to make other cola drinks such as coke zero, Coca-cola light, Coca-Cola with lime, diet Coke among others These different beverages with a similar basic taste enabled the company to target a much broader market  Provide different packaging & sizes to extend the product cycle life In some markets, the company has different packaging sizes according to consumer demands In most countries, they consist of 300 ml, 600ml, 1.25 liters, liters bottles and in most regions cans with a capacity of 375ml However, in some instances e.g in Mexico there was the introduction of a convenient 2.5 liter bottle due to the high consumption of the soft drink in the country Coca-Cola's packaging is constantly improving to extend the life cycle of the product to give customers a new feeling, eye-catching, optimistic and more convenient to use During each Tet holiday, Coca-Cola uses the image of "swallow bird" to signal the spring to create a good impression for consumers, making the product more valuable, very suitable for giving and making Tet gifts Overall, in the product strategy, Coca-Cola expanded its current product portfolio by increasing the depth of a product line and increasing the number of product lines, positioning the product in accordance with each specific market Especially Asia and Vietnam market and Coca knows how to exploit brands to compete in the "giant" beverage market 3.2 Price Price is the amount the customers pay for the product Price is important because it determines profit and then the survival of the company Price adjustment has a profound impact on marketing strategies, and depending on the price elasticity of the product, often it will affect demand as well as sales Marketers should set a price that compensates for other factors in a marketing mix campaign Thanks to the variety of products, Coca-Cola‟s selling price is adjusted appropriately for each market segment and geography Each Coca – Cola brand has a different pricing strategy This strategy is based on a competitor format, of which Pepsi is Coke's biggest direct competitor Pepsi is the arch -rival of Coca – Cola and the closest competitor in the beverages segment Both brands price their products competitively Prices are not too high to go beyond the average customers‟ reach and nor too low to give an impression of low quality Coca-Cola‟s pricing strategy is aimed at driving brand loyalty Moreover, due to the decreasing demand for soda products, price competition between Coca-Cola and Pepsi has gotten even intense The prices lower as the size of the package grows bigger Coca – Cola products are valued by looking at buyer‟s perceptions of the value, not the cost of the seller Coca – Cola has pursued a 3P and 3A pricing strategy to gain the best advantage and serve the consumers  3P strategy: o Price to value: Consumers are not only able to buy Coca – Cola but also benefit from the products o Pervasiveness: Consumers can buy Coca – Cola everywhere o Preference: make consumers not only love the product but also ensure that Coca-Cola is the first choice when they come to beverage  3A strategy: 10 o Affordability: Coca – Cola„s selling price ensures it is suitable for everyone, anyone can buy it o Availability: Consumers can buy Coca – Cola whenever and wherever o Acceptability: Coca – Cola must make customers love and accept the products, feel happy when using them Coca-Cola products are priced based on the buyer at the perceived value They believe that buyers 'perception of value, not sellers' costs, is an important basis for pricing According to Vienam Sales and Marketing Camp 2016, in each can of Coca-Cola, the most expensive cost is advertising (59.8%, equivalent to more than 4,700 VND in 8,000 VND) and the smallest cost is raw materials (only accounting for 4.3%, ie 11 just over 300 dong) Other costs are distribution costs, shipping costs, and administration costs Pricing Strategy: - Penetration pricing: Unlike the price skimming strategy to curb the market, Coca-Cola choses a relatively low new product pricing strategy to penetrate the market, hoping to attract a large number of customers and achieve a large market share - Discounts pricing: Coca-Cola will adjust the price to reward customers who pay in advance or buy in bulk - Discrimination by product type pricing: Coca-Cola usually produces diversified products They vary in brand, appearance, size… Therefore, they are priced at different levels to suitable for each group of customers 3.3 Distribution (Place) Coca-Cola is the most loved brand and is available almost everywhere in the world Coca-Cola's distribution systems follow the model of fast-moving consumer goods (FMCG) Coca-cola has an extensive beverage distribution system Its products are sold in more than 200 countries across operating regions including Europe, Latin America, North America, Pacific, Eurasia & Africa Coca-cola sells an average of 1.9 billion servings each day Traditionally, the company has relied on its bottling partners for the packaging and distribution of its products In Vietnam, Coca-Cola beverage products are produced in bottling plants in Ho Chi Minh City, Hanoi, and Da Nang With three manufacturing plants in the north, central and south enabling companies to expand the distribution network in the area, to provide adequate product for the subsidiaries in this area At the same time, Coca-Cola's distribution network is nationwide, from big cities to rural areas, from general agents to small stores, available throughout retail locations nationwide, cafes, soft drinks or restaurants, cafes, etc Coca-Cola attracts small distribution points by providing financial support, store decoration, giving umbrella… Thus, Coca-cola is generally available throughout the Coca-Cola Company in: - Wholesalers/ distributors - Retail/corner stores/ supermarkets/Groceries 12 - Restaurants/cafés/night clubs - Petrol stations - Automated teller machines (ATMS) - Convenience stores, movie theatres, and amusement parks Coke has also built an extensive reverse supply chain where they collect the leftover glass bottles from the retailers and convert them into a reusable product thus saving cost and additional resources As Coca-cola notes, “While many view our Company as simply “Coca-Cola” our system operates through multiple local channels Our Company manufactures and sells concentrates, beverage bases and syrups to bottling operations, owns the brands and is responsible for consumer brand marketing initiatives Our bottling partners manufacture, package, merchandise and distribute the final branded 13 beverages to our customers and vending partners, who then sell our products to consumers” (Coca-Cola company) Coke's distribution system is one of the most important and is very impressive compared to all other drinks in the category It has such an impact on consumers and is so successful that even wholesalers and distributors need the product for their business' success.Coke's position on consumer's mind makes it essential to retailers, wholesalers and away-from-home market They have achieved their goal thanks to this high visibility, and to the availability of the products all over the world, even in remote places 3.4 Promotion Due to low customer loyalty and high competition in the beverage industry, the company needs to pay heavy focus on the advertising and promotion of the products to increase sales and create top of the mind recall in the customer‟s mind Promotion plays an important role in the marketing mix of Coca-cola for creating awareness and promoting their products Coca-cola is best known for its clutterbreaking and out of the box marketing campaigns The company very well uses experiential marketing to connect and engage with customers Coca-cola adopts various advertising and promotional strategies to create an increased demand in the market by associating with life style and behaviour and mainly targeting value 14 based advertising You are more likely to see a coke ad individualised for a particular festival or in with a general positive message Coca-cola uses CSR as its marketing tool to gain emotional benefits in consumers mind The current promotions through CSR include “Support my school” campaign with NDTV It has many brand ambassadors like Shahrukh khan, Hrithik Roshan, South Indian Actor Vijay and Trisha, Gambhir, Aamir khan etc and has signed contract recently with Imran khan It is programme for healthy, active and happy schools The soft drink company said that the campaign aimed to create awareness and address In March, Coke installed five special phone booths in Dubai labor camps that accepted Coca-Cola bottle caps instead of coins In exchange for the cap from a bottle of Coke which costs about fifty-four cents, migrant workers could make a three-minute international call The ad shows laborers in hard hats and reflective vests lining up to use the machine and grinning, for the first time in the video, as they wait “I‟ve saved one more cap, so I can talk to my wife again tomorrow,” one man tells the camera More than forty thousand people made calls using the machines Coca-Cola achieved many marketing goals with this latest installment of Happiness:  Coke has done something the competition has not done  The target market (perhaps a younger generation with an eye on social good) was reached  Coke re-ignited a previous campaign and extended the reach to a more global audience  The brand successfully associated itself with happiness and giving It goes without saying that Share A Coke is one of Coca-Cola‟s most noteworthy digital campaigns.The campaign was originally trialled back in 2011, resulting in a 7% increase in sales It also earned a total of more than 18 million media impressions, and traffic on the Coke Facebook site increased by 870%, with page „likes‟ growing by 39% The campaign gives people the chance to order personalised Coke bottles through a Facebook app, while in some countries the labelling has been changed altogether so all Coke products have different names on 15 them.It‟s been a massive success on social networks as it turns out that people love to share images of Coke bottles with their name on the side Coca cola spends a lot of money advertising and even though the brand name is very popular Coca cola still uses consumer sales promotion in order to attract new customers and also to provide their existing customers with an incentive to purchase more of their product It allows price discounts and allowances to distributors and retailers and uses various types of sales promotions in order to push more products into the market It employs both push strategy through promotions and pull strategy through advertisements and campaigns 16 CONCLUSION Whatever marketing strategy is implemented, one of the goals of the marketing activity is to consume many products with high sales and low costs through satisfying customer needs From maintaining customer satisfaction about products, businesses increasingly have a foothold in the hearts of customers Therefore, the more products of the enterprise are selected by customers, resulting in the increasing number of products and services that the Company offers, the greater the profit the enterprise will receive To accomplish this, businesses more than create higher quality products, design eye-catching packaging, apply new sales measures, set prices and advertise products However, the biggest goal of the business is to ensure the production and supply of attractive products for the target market, in addition to the coordination of other functions in the company Currently, marketing issues are increasingly focused by businesses Marketing has affected the entire life of every person in society, it connects customers with businesses With the appropriate marketing mix strategy, Coca-Cola has a firm foothold in the hearts of consumers in the world in general and Vietnam in particular This is also the lesson about how successful brands are worth learning for brands 17 ... moments of optimism and happiness through our brands and action” 1.3 Strategy  Coca- cola is unique in the way they brand their soft drink product  Those who are marketing for Coca- cola focus... bigger Coca – Cola products are valued by looking at buyer‟s perceptions of the value, not the cost of the seller Coca – Cola has pursued a 3P and 3A pricing strategy to gain the best advantage and. .. determines profit and then the survival of the company Price adjustment has a profound impact on marketing strategies, and depending on the price elasticity of the product, often it will affect demand