Executive Summary

Coca-Cola is a carbonated soft drink sold in the stores, restaurants, and vending machines of more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the United States since March 27, 1944). Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century. The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and vending machines. Such bottlers include Coca-Cola Enterprises, which is the largest single Coca-Cola bottler in North America and Western Europe. The Coca-Cola Company also sells concentrate for soda fountains to major restaurants and food service distributors.The Coca-Cola Company has, on occasion, introduced other cola drinks under the Coke brand name. The most common of these is Diet Coke, with others including Caffeine-Free Coca-Cola, Diet Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero, Coca-Cola Vanilla, and special editions with lemon, lime or coffee.In response to consumer insistence on a more natural product, the company is in the process of phasing out E211, or sodium benzoate, the controversial additive used in Diet Coke and linked to DNA damage in yeast cells and hyperactivity in children. The founder of coca cola was John Dock Pemberton in 1886 when he experimenting with cocaine and wine. The founder of the name coca cola was Frank Robinson. The Coca-Cola Company is the world's largest beverage company, refreshing consumers with nearly 500 sparkling and still brands. Globally, they are the primary provider of sparkling beverages, juices and juice drinks and ready-to-drink teas and coffees. Through the world's largest beverage distribution system, consumers in more than 200 countries enjoy the Company's beverages at a rate of nearly 1.6 billion servings a day. With an enduring commitment to building sustainable communities, the Company is focused on initiatives that protect the environment, conserve resources and enhance the economic development of the communities where they operate.

IntroductionThe Coca-Cola Company is an American historical multinational beverage corporation and manufacturer, retailer, and marketer of nonalcoholic beverage concentrates and syrups, which is headquartered in Atlanta, Georgia. The company is best known for its flagship product Coca-Cola, invented in 1886 by pharmacist John Smith Pemberton in Columbus, Georgia. The Coca-Cola formula and brand was bought in 1889 by Asa Griggs Candler (December 30, 1851 – March 12, 1929), who incorporated The Coca-Cola Company in 1892. The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its anchor bottler in North America, Coca-Cola Refreshments.Its stock is listed on the NYSE (NYSE: KO) and is part of DJIA; S&P 500 index; the Russell 1000 Index; and the Russell 1000 Growth Stock Index. As of 2015, its chairman and its CEO is Muhtar Kent.Coca-Cola is a carbonated soft drink. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the United States since March 27, 1944). Originally intended as a patent medicine when it was invented in the late 19th century by John Smith Pemberton, Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century. The name refers to two of its original ingredients: kola nuts, a source of caffeine, and coca leaves. The current formula of Coca-Cola remains a trade secret, although a variety of reported recipes and experimental recreations have been published.The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold exclusive territory contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. A typical 12 oz (355 ml) can contains 38g of sugar (usually in the form of HFCS). The bottlers then sell, distribute and merchandise Coca-Cola to retail stores, restaurants and vending machines. The Coca-Cola Company also sells concentrate for soda fountains to major restaurants and food service distributors.The Coca-Cola Company has, on occasion, introduced other cola drinks under the Coke brand name. The most common of these is Diet Coke, with others including Caffeine-Free Coca-Cola, Diet Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero, Coca-Cola Vanilla, and special versions with lemon, lime, or coffee. In 2013, Coke products could be found in over 200 countries worldwide, with consumers downing more than 1.8 billion company beverage servings each day. Based on Interbrand's best global brand study of 2015, Coca-Cola was the world's third most valuable brand.

Environmental Analysis

PEST analysis is valuable while analyzing external environment where a business is conducted or where an organization is planning to start a business (Henry, 2008). This section studies the environmental factors that have an impact on operation of Coca Cola.

Political

Coca Cola is subjected to strict regulations since its products come under food category. However, few changes in law are expected to impact Coca Cola. Following are some such factors:

- The issue of negative impact of Coca Cola manufacturing plants on environment has been highlighted in many countries. Laws for environment protection and stringent regulations in this regard can impact the production process. Coca Cola can work towards minimizing this impact by improving the efficiency of its processes and reducing wastage.

- Government changes, civil unrest, military takeover and other disturbances in a country can affect sales and operations of Coca Cola in that country.

- Expansion to a new country depends on the political conditions of the area. Coke abstained from Israel for many years because it wanted to protect the Arab market, which was quite large.

Economic

Following economic variables can impact Coca Cola

- Economic downturn in a country is going to have a negative impact on sales of Coca Cola. The impact on the company would be specially huge since its products are non essential.

- Various macroeconomic factors such as inflation and labor price would impact operations of Coca Cola.

- Countries with high income per capita would have more to spend on products such as beverages.

Social

The Coca Cola Company can be impacted by following social variables.

- Soft drink beverages are considered unhealthy and people are getting health conscious. This is both a threat and an opportunity for Coca Cola. While sales in traditional brands might go down, Coca Cola can introduce new products in new categories

- The company has witnessed opposition from social groups in some countries due to the environmental issues surrounding its production.

- Social and culture of a country has a huge impact on food habits of its citizens and this would impact the portfolio that Coca Cola can introduce in the country

Technological

Technology is used at every step of Coca Cola’s value chain – syrup manufacturing, bottling operations and storage at retail shops. Following technological factors have an impact:

- Coca Cola’s strength is marketing and new marketing and advertisement channels have a big impact on the company. Coca Cola has been quick to embrace new mediums that have developed over the years – radio, television and now internet. It is important for the company to connect to the customers through different channels.

- Different type of packaging has helped Coca Cola drive sales. Apart from the original glass bottle, the beverages are now available in plastic bottles and cans. These are easier to store and transport.

- New machines and processes impact the manufacturing operations. Adoption of new technology allows a company to manufacture more efficiently, with better quality and in greater quantity.

- The beverages need to be cooled before consumption. Therefore, consumption is limited to the places that can provide the facility of cold storage.

Customer analysis – STP analysis

This section looks at how Coca Cola views it customers and the way it designs the consumer strategy. STP (segmentation, targeting and positioning) analysis is used to study customers.

Segmentation

According to Weinstein (2004, pp4) market segmentation is the process of portioning market into groups of potential customers with similar needs and/or characteristics who are likely to exhibit similar purchase behavior. Objective of such a process is to analyze and understand market, identify opportunities and use or develop competitive edge to capitalize on those opportunities .The Coca Cola Company segments the customers based on the following criteria

- Geographic segmentation: Coca Cola has segmented the worldwide market on the basis of geographies. There are various divisions created for major regions of the world and heads of each division report to the parent company. Lot of autonomy is given to each division to run the operations.

- Place of consumption: Coca Cola segments the market on the basis of the place of consumption of the beverage. Most of the consumption takes place on premise such as cinemas, railway station, restaurants etc, while rest of it takes place in homes.

- Product type: Coca Cola segments the market on the basis of the type of products bought by customers. The market is divided into Cola products and non cola products. Cola products currently provide majority of the revenues, but the proportion of non cola products is increasing.

- Demographics: Coca Cola segments the market on the basis of demographics. The segmentation is on the basis of age as well as income.

Targeting

Coca Cola target different segments with different ads. Primary market of Coca Cola is younger people in the age bracket 10-25 with people from 25-40 comprising of secondary market. Cola products are targeted towards people who want strong flavor, while diet cola and its variants are targeted towards the sub segment that is health conscious.

Coca Cola uses non cola beverages to target the health conscious segment of the market. Some of the products such as Sprite specifically target teens and college going youth while others such as Limcatarget young working population.

Positioning

Coca Cola position its products as refreshing and thirst quenching. The products are said to bring joy, as apparent from Coca Cola’s latest tagline – Little drops of joy. The products are associated with having a good time with friends and family and enjoying everyday life. The products are also marketed as consistent and of high quality.

Competitive Analysis

This section discusses the strategic capabilities that Coca Cola has built over the years, and how it has helped the company in creating sustainable competitive advantages.

SWOT Analysis

SWOT analysis would give a good insight of the strategic capabilities and resources available and the way these capabilities strengthen the competitive advantage as well as allow the company to exploit new opportunities (Kotler, 1991). SWOT framework analyzes both internal factors (strengths and weaknesses) as well as external factors (opportunities and threats) that define the market environment as well as capability of a firm to respond to the market conditions. At the same time, distinction is also made between positive factors (strengths and opportunities) and negative factors (weaknesses and threats).

Strengths

The Coca Cola Company enjoys the following strengths that has seen the company become the most recognized one in today’s world.

- Brand: The Company has a very strong brand across the globe. The brand has been recognized as one of world’s leading brands by various studies conducted by Interbrand, Business week and other experts. Apart from Coca Cola, the company owns other top beverages brands such as Fanta, Sprite and Diet Coke. The Company has spent huge amount of money over more than a century to build a brand that has a high customer recall and is the most recognized one. It also allows the Company to go for brand extensions and introduce various types of beverages.

- Economies of scale: The Coca Cola Company is the largest manufacturer and marketer of non alcoholic beverages in this world. The company sells its products in more than 200 countries. The large scale of operations ensures that the company is able to invest in new markets and reap benefits when the business grows profitable there.

- The Coca Cola System: The whole supple chain of Coca Cola and its bottling system is a big strength for the company. It allows the company to target various markets globally and take the bottlers’ help to gain knowledge about the local market. It also allows the company to expand rapidly to new markets without a big upfront investment.

Weaknesses

Though the company has been hugely successful, there are various weaknesses that need to be

addressed by the company. These are:

- Criticisms regarding health and environmental issues: Products of the Coca Cola Company are considered to be high in calories and harmful for health. Various groups have advocated healthier drinks over carbonated ones. In 2006, the Company was involved in a controversy in India when government agencies alleged that Coca Cola contains pesticides and is dangerous for health. Such negative publicity can cause a lot of damage to the company, especially in international and growing markets.

- Dropping sales in several countries: In recent years, the company has witnessed zero or negative growth in various key markets. The performance of the company has been weak in North America, which is its largest market, in last few years. The company’s performance has been weak in Japan, Latin America and South East Asia as well. This could prevent Coca Cola from being aggressive in marketing and prevent the company from higher growth overall.

Opportunities

- Inorganic Growth and Acquisitions: The Coca Cola Company has been acquiring various local beverages companies aggressively over the last decade. Also, the company has increased its stake in major bottling operations. This has given the company more control over the entire value chain and allows it to align the goals of these bottling operations with those of the company. The company acquired other companies in almost all major markets around the world. These acquisitions gave head start to Coca Cola in the international markets and allowed the company to diversify its revenue stream.

- Growing healthy drinks and bottled water: The market for carbonated drinks is getting saturated in many Western countries and the trend is to move towards healthier drinks. Also, the market for bottled water is increasing fast globally. Coca Cola has developed and acquired various brands catering to these two segments. Coca Cola can use its strong brand position in carbonated water to increase its presence in other beverages category and take advantage of these growing markets.

Threats

- Changing trends: In carbonated drinks, Pepsico is the only real competitor of Coca Cola. But the trend is to move towards healthier drinks and there is a big threat of substitution facing Coca Cola. Possible substitutes include coffee, tea, milk, juices and energy drinks. The company has already taken steps to address this issue by launching products in the category of healthy drinks.

- Dependence on third party bottling partners: The Coca Cola system of bottling partners, which is a strength for the company, is potentially a threat as well. The company does not have the ownership in most of the bottling operations and makes money by selling syrup to these bottling companies. The interest of The Coca Cola Company can be different from the bottling companies as each of them try to maximize their profits. The major dependence on independent third party vendors is a major risk to the company. This threat is being addressed by vertical integration as well as entering into long term partnerships with the bottling companies.

- Competition: Pepsico competes fiercely with Coca Cola in most cannot let down its guard.

Porter’s Five Force Analysis

This analysis would give us a good idea of the competitive environment that the company operates in

(Porter, 2008). The following factors define the competitive landscape for Coca Cola.

Competition

The largest competitor for Coca Cola is Pepsi Co. They compete in almost all the markets worldwide. Coca Cola has higher sales worldwide, though Pepsi Co dominates the US market. There are other players in various beverages category, but none of them as large as Coca Cola or Pepsi Co. The new competition in the industry is to increase the product portfolio and introduce new variants of carbonated drinks and non-carbonated drinks.

Most of the strengths and weaknesses of Pepsico are similar to those of Coca Cola. Pepsico enjoys good brand value as well as economies of scale. At the same time, it also has come under criticism for health and environmental issues. While Coca Cola operates almost exclusively in beverages segment, Pepsico derive a big share of total revenues from non-beverages category such as chips and oats. This can potentially provide opportunities to Pepsico to take advantages of synergy among various products. While Coca Cola is enjoyed by people from various age groups, Pepsico mainly targets young people.

Threat of new Entrants

Threat of new entrants is very low in this industry and the following factors are responsible:

- Brand name: It has taken these companies decades to build their brand and it’s not easy for a new company to emulate that.

- Distribution channel: The two existing companies have wide distribution channel across the world and it’s difficult to match up to that.

- Huge initial investment: The high cost of setting up manufacturing plants, transportation channel and distribution channel is a big barrier for new entrants.

- Economies of scale: Both the existing companies enjoy large economies of scale that help in keeping the costs down. A new entrant would not be able to match the cost of the biggies and would be forced out of the business.

Threat of substitute products

The threat of substitution is high for soft drink industry with products like bottled water, juices, tea and coffee readily available. To take care of this, The Coca Cola Company has increased its presence in these sectors as well. For people who take soft drinks for its caffeine, tea and coffee can be easy substitutes. In some cases, alcoholic beverages such as beer can be a substitute as well. It costs nothing for a customer to substitute a soft drink with another drink and hence there is a high threat of substitution. Many people are moving towards healthier drinks and substituting soft drinks with juices etc.

Supplier power

Supplier power is low in case of Coca Cola. Following are the suppliers for the company:

- Raw materials such as sugar and water are standard and the suppliers can be easily replaced without any problems.

- Bottling equipment manufacturers are suppliers for Coca Cola since the company owns stake in many bottling units. These equipments can be supplied by many companies and hence they have low bargaining power.

- Other factors such as labor, power etc would not be a problem for the company.

For all the inputs, Coca Cola has higher bargaining power since it enjoys economies of scale and orders in huge quantities from the suppliers.

Buyer Power

In case of The Coca Cola Company, the bottling units are the buyers since the company sells the syrup to them and rest of the activities are undertaken by them independently. But the company owns many of the bottling plants and in such a case, buyers are the retail outlets.

Bottling partners have low degree of bargaining power with Coca Cola. Though the company is dependent on bottlers for selling their product to the end consumers, they can replace the bottling partners. To start the business, the bottling company has to invest a lot and this creates a lock in for them, reducing their power.

- The power of mass retailers is moderate. On one hand, the brand of Coca Cola is very strong and the retailers have to store the product to satisfy the customers. On the other hand, the retailers can switch to other drinks without any cost and stop storing the products of Coca Cola.

Strategic approach and competitive advantages

The Coca Cola Company is known for its marketing expertise and the company has always followed a great marketing strategy that is responsible for bringing the success to the company for over a century. The biggest strength of Coca Cola is its brand. It has taken a lot of effort and good strategy to create the widely known brand. Apart from this, there are various strategies that Coca Cola has followed over the years in order to achieve competitive advantage using its strategic capabilities. These strategies include:

- Marketing and branding strategy: Healey (2008) defines a brand as a promise of satisfaction and emphasis that good branding reinforces reputation, generates loyalty and assure quality. Few companies in this world have developed a brand as strong as Coca Cola. The company has used its marketing resources to create a brand that is widely known and has become the biggest competitive advantage for the company. Coca Cola has been successful in creating brand loyalty among its consumers. This is a result of sustained marketing efforts starting from early 20th century. Coca Cola has adopted innovating marketing techniques right from the times of Candler and Robert Woodruff. Apart from usual advertising through bill boards and newspapers, Coca Cola focused on organizations, universities and colleges and this increased sales while promoting the brand name.

- Coca Cola’s glocal strategy: Coca Cola has used its organizational capability to adopt a glocal strategy Gay et.al. (2007) – using a mix of central and local marketing functions in order to achieve maximum marketing and distribution effectiveness. Using this, Coca Cola maintains the strong global brand while introducing the local elements in the marketing to make sure that the product image is in harmony with the local culture.

- New Product Introductions: Coca Cola follows out to in approach while developing new products. Coca Cola has always preferred taking note of customer preferences and designing its products according to them, instead of taking an internal approach – the process of taking stock of internal assets and expertise and using them to produce something that customers

would buy. Based on these, the company either introduces a new product or acquires a company producing the suitable product. This is essential to survive in the changing market and to change the product portfolio according to customer requirements.

-Price Strategy

Coca cola company gives incentives to middle men or retailers in way a that they offer them free samples and free empty bottles, by this these retailers and middle man push their product in the market following "Seen as sold"

- Different Price in Different Seasons

-Sometimes Coca Cola Company changes their product prices according to the season. Summer is supposed to be a good season for beverage industry in Pakistan.

So in winter they reduce their prices to maintain their sales and profit.

Promotion Strategy

Getting shelves:

They get or purchase shelves in big departmental stores and display their products in those shelves in attractive style.

Eye Catching Position:

Salesman of the coca cola company positions their freezers and their products in eye-catching positions. Normally they keep their freezers near the entrance of the stores.

Sale Promotion:

Company also do sponsorships with different college and school's cafes and sponsors their sports events and other extra curriculum activities for getting market share.

Development Strategy of Coca Cola:

Brand development strategy of Coca Cola has been far reaching and has managed to remain in the limelight ever since it became a favorite with the non alcoholic drinkers. It has been noticed that brand loyalty is an important factor in maintaining the number one position. The article below suggests the various brand building techniques of the company.Founded in the year 1886, the Coca Cola company enjoys the status of being one of the biggest non alcoholic beverage companies of the world. It has a distribution system, which makes it unique from the rest of the non alcoholic beverage manufacturers. Over the years, Coca Cola has passed several tests of brand enhancement and the company makes it a point that the products under the banner Coca Cola continue to invade the minds of the consumers.The brand development strategy of Coca Cola comprised redesigning of its brand development policies and techniques to keep up with the changing mindset of its consumers. Earlier, this brand believed in the following:

- Afford ability - Availability - Acceptability

However, this brand development strategy of Coca Cola was re worked to stress on the following instead:

- Price value - Preference - "Pervasive penetration".

The essence of brand building of the company lies in the fact that it wants its consumers accessibility to be "within an arm's reach of desire". In an attempt to build its brand identity, as many as 20 brand attributes are tested every month involving as many as 4000 customers. The brand development strategy of Coca Cola is effective as it has been able to construct, manage as well as maintain its brand image since yesteryears.Another reason why this brand has gained unanimous acceptance all around the globe is due to the fact that it has been able to connect very well with its consumers. This implies brand loyalty. Brand loyalty has been instrumental in keeping up the brand image of Coca Cola. It believes in shelling out the best so that the consumers are retained by default. A part of the brand building technique is also to enhance "purchase frequency". The company has also invested in various advertisement campaigns often engaging the services of celebrities around the globe. In addition to the consumers, there is another category of consumers, who increase the consumer base and they constitute the collectors of the brand. The collectors usually indulge in collecting old as well as upcoming logos of Coca Cola, bottles and literary matter. With regard to the brand development of Coca Cola Zero, the company came out with an advertisement, which was quite different from the conventional ones. In this regard, (no calorie beverage), it has shelled out three types of products.

- Coca Cola Classic - Diet Coke - Coca Cola Zero.

There are few experts who believe that when Coca Cola had the tag line of "The Real Thing", it was really that but with the invention of various categories of coke, the "real thing" changes to "many things", and the original flavor is usually lost. Hence, the brand building strategies should be such that it does not confuse people and is able to retain consumers despite the fact that several new non alcoholic beverage firms are on the anvil.

Channel Analysis

This section looks at the communication and distribution strategy of Coca Cola.

Communication – Innovative advertising

The company has used every medium available for advertisement and has been on the edge of technology for it. Use of radio has been one of the oldest medium of advertising and with the advent of television; the company became one of the first major advertisers through the medium.Coca Cola always presents itself as a pleasurable and refreshing drink. The Company has successfully launched many famous campaigns such as “The Coke adds life” and “Have a coke and smile” in 1970s; “can’t beat the feeling” and “Coke is it!” in 1980s; “can’t beat the real thing” in 1990s and “always life” in 2000s.The company sponsors major sporting events around the world and hires top sportspersons to promote the brand. The company also hires top models and movie stars as their brand ambassadors. The company always portrays itself as the number one and has the best products available. With the advent of internet, the company has been advertising online to connect with the online population.

Distribution

Coca Cola has developed its distribution network all over the world. It follows two types ofdistribution strategy:

- Direct selling: In this method, Coca Cola supply various products to retailers. These retailers may be retail stores, restaurants, cinema halls etc. The company uses its own vehicles to deliver the products. Direct selling brings in only small part of the revenue.

- Indirect selling: Most of the revenue comes from this channel. Coca Cola gets into partnership with various distributor agencies. The company supply products to these distributors, who then make them available to the retailers.

In the traditional model, products are transferred from bottling plants to large distributors. These distributors then transport the products to retailers or smaller distributors. Small distributor node is added in case of rural areas or areas with low density population. The small distributors then supply the product to retailers. Most of the bottlers are under contract with Coca Cola. At the same time, the Company has direct contract with big retailers such as Wal-Mart.Coca Cola Company has introduced an innovative distribution mechanism in African countries to help the local economy thrive. According to the company’s report, “Our unique distribution model allows the Coca Cola system to build relationships with small enterprises, creating economic opportunity and wealth creation at the community level in developing markets. These micro distribution businesses, commonly known as Manual Distribution Centers (MDCs), are run by local small-scale entrepreneurs who employ local workers to deliver our products to small retailers in their neighborhoods. They typically reach consumers in dense urban areas in the developing world where traditional truck delivery is not feasible.”The creation of MDCs has been going on under the initiative led by UNDP (United Nations Development Programme). This programme calls on companies to identify the steps that can be taken to reach Millennium Development Goals (MDGs). This model ensures availability of Coca Cola’s product in difficult to reach places while contributing towards development of the region.

New “one brand” strategy

Over the years consumer taste, preference and lifestyles have changed, and with that so has Coca-Cola. They’ve innovated to include a range of lower and no sugar and calorie alternatives, each with their own identity. But recent research has showed that not everyone understands the options available to them, and the benefits of each drink, which is why they’re introducing a new “one brand” strategy to help make choice easier and simpler.From May in Great Britain their four colas will be marketed under one brand –Coca-Cola – allowing Diet Coke, Coca-Cola Zero and Coca-Cola Life to benefit from its widespread appeal. They’ll be promoting the different characteristics of each variant, and giving black, silver and green greater presence in Coca-Cola advertising. The strategy will also play an important part in our goal to achieve, by 2020, more than 50% of Coca-Cola sales from lower or no calorie colas in Great Britain.“With our new ‘one brand’ approach, they are uniting four distinct brands under the umbrella of Coca-Cola. They believe their no and lower sugar variants will benefit from this closer association with Coca-Cola and that featuring all variants in their advertising will make clear to more consumers the full choice they offer them (consumers).” Jon Woods, General Manager of Coca-Cola Great Britain & Ireland said.

6 changes they're making:

Coca-Cola advertising will show their full range of colas. Coca-Cola TV ads will feature all four variants in the final frame.  Their packaging will clearly highlight the benefits of each variant. The branding on every Coca-Cola can and bottle will be in the same style, with different colors

to distinguish each variant. In 2015, they’re doubling their marketing spend for their lower and no sugar and calorie colas. It’s the first time their sponsorship of a major international sporting event - Rugby World Cup

2015 – will promote all four variants, and champion Coca-Cola with zero calories

Our instantly recognisable Spencerian script will be used across all 330ml Coca-Cola cans, which will also feature the UK Government’s front-of-pack labelling scheme, combining nutrient amounts and percentage Reference Intakes with colour-coding. 

Marketing Approach

Both the Coca-Cola and Pepsi try to market as part of a life-style. Coca-Cola uses phrases such as "Coke side of life", while Pepsi uses phrases such as "Hot stuff", to promote the idea that Pepsi is "in sync" with the cool side of life. Pepsi tries to reach out to the younger generation by appealing to pop culture. Coca-Cola's is less flashy and uses a classical appeal, most likely because of Coca-Cola's long history as the standard for cola beverages.The operation review according to the segments is as follows:

So the volume is least in the Africa and most in the North America. The data about the market share of this company area wise is given in the following table.The above table shows the geographical earning of the Coca Cola Company and from this data; we can find out that the customers of Coca Cola are increasing which is shown by the company’s per capita income. Unit case equals 24 eight-ounce servings. The column, which shows the non-alcoholic beverages consist of commercially, sold beverages, as estimated by the Company based on available industry sources. The country column is derived from the Company's unit case volume while the industry column includes nonalcoholic ready-to-drink beverages only, as estimated by the Company based on available industry sources. In Asian population, which is the satisfied customer of Coca Cola, is approximately 3.2 billion and the average consumer enjoys close to two servings of our products each month. Through an intense focus on Coca-Cola, innovation and new beverages, the company has achieved volume growth of 10 percent in 2002. With developing economies and populations, this region has strong long-term potential, and the company is building an exciting family of beverage brands in addition to expanding the popularity of our core brands, led by Coca-Cola. In China, for example, sales of Coca-Cola increased 6 percent.

Coca

cola’s international revenue

International image of the companyThe founder of coca cola was John Dock Pemberton in 1886 when he experimenting with cocaine and wine. The founder of the name coca cola was Frank Robinson. The Coca-Cola Company is the world's largest beverage company, refreshing consumers with nearly 500 sparkling and still brands. Globally, they are the No.1 provider of sparkling beverages, juices and juice drinks and ready-to-drink teas and coffees. Through the world's largest beverage distribution system, consumers in more than 200 countries enjoy the Company's beverages at a rate of nearly 1.6 billion servings a day. With an enduring commitment to building sustainable communities, the Company is focused on initiatives that protect the environment, conserve resources and enhance the economic development of the communities where they operate.

Market share

Market share is the percentage of a market (defined in terms of either units or revenue) accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67% responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful. Increasing market share is one of the most important objectives of business. The main advantage of using market share as a measure of business performance is that it is less dependent uponmacroenvironmental variables such as the state of the economy or changes in tax policy.veryone has heard of Coca-Cola, and you would be hard pressed to find somebody who was unable to recognize the iconic white lettering against the bright red background of this global brand. Various sources cite Coca-Cola as a billion dollar brand and that is not surprising, when one considers it was rated by Interbrand as one of the most valuable brands in 2015, based on a brand value amounting to 78.42 billion U.S. dollars.

The Coca-Cola Company is a global key player in the beverage industry. The firm comprises the corporate division, headquartered in Atlanta, GA, and about 300 bottling partners worldwide. According to its most recent annual report from 2014, Coca-Cola's net operating revenue amounted to 46 billion U.S. dollars. Bringing in 46.7 percent of the global revenue in 2014 was the North America segment, making it the company's flagship market. In the U.S., the Coca-Cola Company held a market share in the soft drink segment with 42.3 percent in 2014. The company’s leading four brands in the U.S. market are Coca-Cola, Diet Coke, Sprite, and Fanta. The Coca-Cola Classic brand itself, held a market share of 17.6 percent in the United States in 2014.

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Coca-Cola’s Growth Potential & Dividend Analysis

Coca-Cola is the largest seller of non alcoholic beverages in the world.The company has had a great run.  It is a Dividend King with an amazing 54 consecutive years of dividend increases.There’s no doubt Coca-Cola has generated tremendous growth since being founded in 1892.Some investors think Coca-Cola’s growth days are over.That is not the case.Coca-Cola is benefiting from the growing global beverage industry more than any other company.The worldwide beverage industry (excluding the US) is expected to increase in value by $300 billion from 2014 to 2020.Coca-Cola has 30% market share of the global beverage industry.   If the company maintains its global market share up to 2020, it will add $90 billion to its market cap based on the expected increase in global beverage value. Coca-Cola had a market cap of ~$150 billion at the beginning of 2014.  This gives the company an expected compound growth rate of 6.9% (not including dividends and share repurchases) up to 2020. If the company does not gain any market share.I believe Coca-Cola will continue to gain market share and reward shareholders with share repurchases and dividends.  This will drive up the company’s growth rate into the double-digits for the next several years.

Well Positioned for International Growth

Coca-Cola has positioned itself very well to take advantage of growing non-alcoholic beverages worldwide.The image below shows the company’s strong competitive position around the world.

As per capita income increases in Eurasia, Africa, and the rest of the developing world, Coca-Cola stands to gain.

Beverage Industry Growth & Rising Per Capita Income

Rising personal income throughout the world gives consumers more disposable income to purchase non-essential items like Coca-Cola.Coca-Cola is enjoyed on a per capita basis much more in some countries than in others.  This gives Coca-Cola the opportunity to focus on countries with low levels of per capita consumption as the market is less saturated.About 50% of teens and young adults have not enjoyed a Coca-Cola in the last 30 days.  Coca-Cola still has a long growth runway ahead.

Per-Capita Emerging Market Growth

Here are two facts that show Coca-Cola’s growth potential: Coca-Cola sells just 3.5% the amount of beverages in India as it does in the US on a per capita

basis. China only consumes about 10% the amount of Coca-Cola products as a US citizen does on a

per capita basis.

These 2 countries alone are each about 4 times the size of the United States.Keep in mind, Coca-Cola is much more than just a soda company.  The company currently has 20 brands with more than $1 billion in annual sales.  Of these 20 brands, 14 are non-carbonated.If Coca-Cola can increase its per capita beverage consumption in these emerging markets, it will greatly expand revenues.In both developed and emerging markets, consumption of still (non-carbonated) beverages are rising.   The image below shows Coca-Cola’s per capita consumption by country:

Still Beverages Shine

International still beverage growth will drive Coca-Cola’s growth for the future.The company has 14 still brands that do over $1 billion per year in sales.  Coca-Cola has grown still volume 5% over the last 12 months.  This is on top of 8% international still volume growth in the previous year (fiscal 2014).

The company has excelled in still beverages over the last several years.   Coca-Cola has captured about 1/3 of global juice growth since launching its global juice center in 2007.The company has a more than 2 to 1 lead on its nearest competitor in still beverages.  Coca-Cola is focused on expanding its tea portfolio.The company’s Fuze Tea brand recently joined the $1 billion a year in sales brand club.

Fuze is not the company’s only up and coming brand.In addition to the company’s 20 $1 billion brands, Coca-Cola has around 20 up and coming brands that do between $500 million and $1 billion per year in sales.  Of these brands, over half are still beverages.   Coca-Cola is looking to partnerships with innovative companies to bolster its strong brand portfolio.

Innovative Partnerships

Coca-Cola is also expanding by partnering with businesses in key categories.  The company partnered with Keurig to offer branded sparkling and still beverages on the company’s cold beverage dispenser.In addition, Coca-Cola will release a hot Keurig Honest Tea product in the near future.   The company’s partnership with Keurig opens up a new growth market for Coca-Cola.Coca-Cola also partnered with Monster in a deal that transfers energy brands between the two companies and gives Monster access to Coca-Cola’s extensive distribution network.  The move gives Coca-Cola a stake in Monster and its world class energy soda brand.  Coca-Cola has had limited success in the energy category, and the move is a capital efficient way for Coca-Cola to better position itself to gain from the quickly growing energy beverage industry.

Fundamental Ranking of Coca-Cola

Coca-Cola has ranked as a Top 10 stock based on the 5 buy rules from the 8 Rules of Dividend Investing several times in the past 2 years.The 8 Rules of Dividend Investing compare businesses with a long history of dividend growth to each other based on several quantitative rules that have historically improved long-term results.Coca-Cola’s ranks relative to other high quality dividend stocks are shown below, along with why each rule is relevant.

Rule 1:  Consecutive Years of Dividend Increases

Coca-Cola has increased its dividend payments for 54 consecutive years.  This is one of the longest active streaks of any business.  The company’s long dividend history shows it has the ability to grow profitably under a variety of economic, political, and competitive environments.Why it matters: The Dividend Aristocrats (stocks with 25-plus years of rising dividends) have outperformed the S&P 500 over the last 10 years by 2.88 percentage points per year.Source: S&P 500 Dividend Aristocrats Factsheet.

Rule 2:  Dividend Yield

Coca-Cola has a dividend yield of 3.1%, which is the 55th highest out of 182 businesses with 25+ years of dividend payments without a reduction.  Coca-Cola’s relatively high dividend yield should appeal to income oriented investors.Why it Matters: Stocks with higher dividend yields have historically outperformed stocks with lower dividend yields. The highest-yielding quintile of stocks outperformed the lowest-yielding quintile by 1.76 percentage points per year from 1928 to 2013.

Rule 3:  Payout RatioCoca-Cola has a payout ratio of 71%, which is the 150th lowest out of 182 businesses with 25+ years of dividend payments without a reduction.  The company’s relatively high payout ratio is safe due to the exceptional stability of Coca-Cola’s cash flows and the low levels of capital expenditures needed to operate Coca-Cola.Why it Matters: High-yield, low-payout ratio stocks outperformed high-yield, high-payout ratio stocks by 8.2 percentage points per year from 1990 to 2006.

Rule 4:  Long-Term Growth Rate

Coca-Cola has managed to grow earnings-per-share at about 9% a year over the last decade.   The company has the 72nd highest growth rate out of 182 businesses with 25+ years of dividend payments without a reduction.

Why it Matters: Growing dividend stocks have outperformed stocks with unchanging dividends by 2.4 percentage points per year from 1972 to 2013.

Rule 5:  Long-Term Volatility

The company has a ten year price standard deviation of 18.6%, the 10 th lowest out of 182 businesses with 25+ years of dividend payments without a reduction.  Coca-Cola’s low volatility is due to its strong competitive advantage in a slow changing industry.Why it Matters: The S&P Low Volatility index outperformed the S&P 500 by 2 percentage points per year for the 20-year period ending September 30th, 2011.Coca-Cola is the gold standard in non-alcoholic beverage companies.  Coca-Cola has significant growth potential ahead in developing markets, especially India and China.The company’s long dividend streak makes it a Dividend Aristocrat and a Dividend King.As consumer preferences slowly shift from sparkling to still beverages, Coca-Cola has positioned itself as the dominant still beverage company in the world.Shareholders of Coca-Cola will likely be rewarded in the future with a double digit compound annual growth rate resulting from:

Dividend yield of 3% Share repurchases Growing market share Tailwinds from growth in the overall beverage industry in the developing world.

Conclusion

Coca Cola is a truly global company with presence in multiple countries. The company’s biggest

competitive strength comes from the strong brand that has been developed over 125 years of consistent

marketing efforts. Economies of scale and the network with suppliers and distributors also contribute

to the success.

Marketing and advertising has been the most important function that has taken Coca Cola to new

heights. The company has adopted innovating marketing techniques right from the times of Candler

and Robert Woodruff. Apart from usual advertising through bill boards and newspapers, Coca Cola

focused on organizations, universities and colleges and this increased sales while promoting the brand

name.

References

- Bell, L., 2004. The Story of Coca Cola. Mankato: Smart Apple Media

- Healey, M. 2008. What is Branding? Miese: RotoVision SA

- Henry, A. 2008. Understanding Strategic Management. New York: Oxford university press

- Kotler, P., 1991. Marketing Management. 7th edition. Englewood Cliffs: Prentice-Hall - Porter, M. E., 2008. Strategic. Competitive Forces that shape Strategy. Harvard Business Review.

Cambridge: Harvard Press

- The Coca Cola System. 2011. The Coca Cola System. [online] Available at: < http://www.thecoca-colacompany.com/citizenship/the_coca-cola_system.html> [Accessed on 27th June, 2011]

- United States Securities and Exchange Commission. 2010. Form 10-k: The Coca Cola

Company. [online] Available at:

<http://www.sec.gov/Archives/edgar/data/21344/000104746911001506/a2202147z10-k.htm> [Accessed on 27th June, 2011]

- Weinstein, A. 2004. Handbook of market segmentation: strategic targeting for business and technology firms. 3rd edition. New York: Probus Publishing Co