Thorough Analysis of Coca-Cola's Market Situation and Marketing Mix

This paper conducts a thorough analysis of the present market situation of Coca-Cola, suggests changes that can be made, and highlights the range of products available, the customer groups, Porter’s Five Forces Model in relation to Coca-Cola, a PESTLE analysis of Coca-Cola and the Marketing Mix of Coca-Cola.

Running head: Fundamentals of Marketing
Fundamentals of Marketing
Name of the Student
Name of the University
Author Note

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Executive Summary: This paper tries to conduct a thorough analysis of the present market
situation of Coca-Cola. It also suggests changes that can be made by the Coca-Cola Company
while manufacturing its beverages. It also suggests a new product that can be made exclusively
for children. The paper also highlights the range of products available, the customer groups,
Porter’s Five Forces Model in relation to Coca-Cola, a PESTLE analysis of Coca-Cola and the
Marketing Mix of Coca-Cola.

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Table of Contents
INTRODUCTION:..........................................................................................................................6
Line of Products:..............................................................................................................................6
Customer Groups:............................................................................................................................7
Key factors of both Micro and Macro Environments of Coca-Cola Company:..............................7
1. Bargaining power of suppliers:............................................................................................7
2. Bargaining power of buyers or consumers:.........................................................................7
3. Threat of New Entrants:.......................................................................................................8
4. Threat of Substitutes:...........................................................................................................8
5. Competitive Rivalry between existing players:...................................................................8
PESTLE Analysis of Coca-Cola:.............................................................................................9
1. Political Factors:..................................................................................................................9
2. Economical Factors:............................................................................................................9
3. Social Factors:...................................................................................................................10
4. Technological Factors:.......................................................................................................10
5. Legal Factors:....................................................................................................................10
6. Environmental Factors:......................................................................................................11
Marketing Mix of Coca-Cola:.......................................................................................................11

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1. Product:..............................................................................................................................11
2. Place:..................................................................................................................................12
3. Price:..................................................................................................................................12
4. Promotion:.........................................................................................................................12
Conclusion:....................................................................................................................................12
REFERENCES:.............................................................................................................................13

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INTRODUCTION:
The Coca-Cola Company operates in the beverage business. The plethora of products that
the company offers include Coca-Cola, Diet Coke, Sprite, Coca-Cola Zero, Goulburn Valley,
Powerade, Kinley to name a few. For almost seventy years, the only beverage that the company
sold was the iconic Coca-Cola that was first developed in Atlanta, Geogia by Dr. John. S.
Pemberton on the 8th of May 1886. From thereon, the company started expanding their beverage
line of drinks and also introduced various portions for its consumers. The Coca-Cola Company
offers a plethora of drinks to its consumers. Today, there are over five hundred brands of
beverages and they are sold in more than two hundred countries.
Line of Products: In Australia, Coca-Cola Amatil Limted produces, sells and
distributes beverages as well as food products. The company has divided its operations into two
segments. Under its beverage line of products, the Coca-Cola Company sells carbonated soft
drinks and other beverages. The beverages include Coca-Cola, Sprite, Lift, Fanta, Kirks, Deep
Spring and Powerade. In the Health and well being line of products, Coca –Cola Company
manufactures and also distributes a range of low calorie drinks and water. Under the food and
services division, the Coca-Cola Company produces and distributes packaged vegetables and
fruits, sauces and jams throughout Australia and throughout the world. Brands include Goulburn
Valley, Taylor’s and Ardmona (Cook, 2016). Under this division, the Cola-Cola company
distributes coffee products under the Grinder’s brand.
Customer Groups: Coca-Cola does not appeal to a particular segment; instead the
company modifies its marketing strategies to cater to all segments of consumers. It targets a

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plethora of segments and customises its offers for all of them, in their desire to reach as many
customers as possible. This is reflected in the fact that the company produces four hundred
products with a total of three thousand five hundred products in the product mix. Coca-Cola does
not target its products based on gender or age groups (Cook, 2016). The company does not target
very young children, ie. children who are below the age of twelve but other than that, it caters to
every section of the population.
Key factors of both Micro and Macro Environments of Coca-Cola
Company: The Porter’s Five Forces Model, which is named after its creator Michael E
Porter is an analysis tool that helps to understand the important forces affecting the level of
competition in an industry.
1. Bargaining power of suppliers: The bargaining power of suppliers is weak and this is
due to the fact that there a lot of suppliers. Coca-Cola can chooses to switch between various
suppliers, but the suppliers cannot do the same. It cannot switch off from Coca-Cola completely
because Coca-Cola as a brand and a drink, is extremely popular (De Mooij, 2018). Switching off
from Coca-Cola would only lead to a loss for the suppliers.
2. Bargaining power of buyers or consumers: The bargaining power of consumers is
low. Pepsi and Coca-Cola sell similar beverages with similar flavours. The switching costs are
not high for the consumer. In addition, the consumers of Coca-Cola are not price sensitive. If a
retailer gets some bargaining power, it is because the retailer purchases in bulk, in large
quantities. Thus, the bargaining power of consumers is low. Coca-Cola has low buyer bargaining
power but it needs to be careful that it does not price itself out of the market.

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3. Threat of New Entrants: The threat of new entrants for Coca-Cola is low. Several
factors discourage prospective manufacturers to enter the beverage market. A brand cannot be
build overnight and it takes a lot of time and financial resources to build a brand. From
manufacturing to marketing, it requires a significant amount of investment. In addition, it takes
time to build customer loyalty. Thus, it is difficult for new entrants to foray into the beverage
industry and to build a brand that is as big as Coca-Cola requires a lot of financial resources and
skilled manpower.
4. Threat of Substitutes: The primary substitutes of Coca-Cola are the beverages that
are manufactured by Pepsi, fruit juices and other beverages that are available in the market. The
threat of substitutes for Coca-Cola is high. A wide variety of fruit juices and other hot and cold
drinks are available in the market giving consumers a wide variety of choices and an option to
choose some other drink over Coca-Cola. The switching costs are also low for the consumers. In
addition, the quality of substitute products is also very high. Thus, the threat of substitutes is high
for Coca-Cola.
5. Competitive Rivalry between existing players: The two major brands in the
beverage industry are Coca-Cola and Pepsi. Intense rivalry and competition exists between the
two corporate giants of the beverage industry. There are others companies as well in the
beverage sector but they are smaller in size and do not produce a threat to either Coca-Cola or
Pepsi (De Mooij, 2018) Both Coca-Cola and Pepsi offer similar kinds of products with similar
flavours. The level of difference between Coca-Cola and Pepsi is low and the price war between
them is very high. Thus the level of rivalry between the two multinational giants in the beverage
industry is extremely high.

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PESTLE Analysis of Coca-Cola: The word PESTLE, stands for Political, Economical,
Social, Technological, Legal and Environmental (factors).
1. Political Factors: The Coca-Cola Company is heavily dependent on the FDA. They
must meet with the rules and standards put by the government in order to advertise and sell their
products. Change in government may result in a change of rules. Taxes, change in labour laws
etc may affect the company. Increase or decrease of taxes has a direct effect on the profits of the
Coca-Cola Company. Coca-Cola Company must abide by the local laws and regulations. The
Coca-Cola Company has been a target for several lawsuits because the company tends to
consume copious amounts of water for manufacturing its soft drinks. Also, there were allegations
that the company uses pesticides in its products after pesticides were found in the beverage.
These lawsuits and allegations tend to affect the sales of the products of the Coca-Cola
Company.
2. Economical Factors: Economic factors also directly affect a company. When there is
a global financial crisis, people tend to buy only the basic products required for survival. This in
turn affects the sales of the beverage giant thereby having an effect on the profits that are
garnered (Habib, 2016). The Coca-Cola Company sells its products worldwide to billions of
consumers. The Coca Cola Company has $80 billion worth of equity and roughly seventy
percent of their income comes from outside the United States. However, consumers nowadays
are looking for healthier drinks and the Cola-Cola company needs to put in more effort in that
area.
3. Social Factors: Social factors also play an important role in the sales of products of
the Coca-Cola Company. In the recent past, people have become more health conscious and have

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switched from aerated drinks to healthier drinks like fruit juices and energy drinks. This has led
to a decline of popularity and sales of Coca-Cola. The global drive against obesity has also had a
detrimental effect on the sales of Coca-Cola because aerated beverages and drinks are perceived
to be loaded with calories. To negate these effects the Coca-Cola Company introduced low
calories and zero calorie drinks like Diet Coke among other products (Nestle, 2016). The Coca-
Cola Company sells its products worldwide catering to a wide range of populace. In order to
reach out to maximum people in different countries, the Coca-Cola Company adapts its products
to suit the local taste. In Japan, the Coca-Cola Company created thirty different kinds of flavours
to suit the local taste and they are trying to do the same in China. Culture plays an important role
from a marketing perspective. This has resulted in the Coca-Cola Company adopting its
marketing strategy to meet local needs, what is also known as brand localization.
4. Technological Factors: The Coca-Cola Company uses top of the line machinery in its
factories and bottling plants. The production, packaging as well as distribution of the products of
the Coca-Cola Company relies heavily on technology (Otieno, 2018). The Coca-Cola Company
uses the latest technology to produce its drinks thereby resulting in faster delivery without
compromising on the quality of the product. The Coca-Cola Company also takes recourse to
social media to promote its products. Thus, technological factors also play a significant role in
determining the sales of the products of the Coca-Cola Company.
5. Legal Factors: The Coca-Cola Company has all the rights related to their business,
with reference to all its products. The Coca-Cola Company abides by all the laws, rules and
regulations in the countries they operate in. In the past, the Coca-Cola Company was involved
with various tussles because of the composition of its products as well as labour laws. This has

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resulted in the Cola-Cola Company being extra careful when it comes to complying with the
laws of the countries they operate in.
6. Environmental Factors: The Coca-Cola Company requires a lot of water to make its
soft drinks. Thus, scarcity of water would have a negative effect on the Cola-Cola Company and
leads to losses. The Coca-Cola Company is investing in environmental initiatives and investing
in water stewardship. It has undertaken conservation programs like CARE and RAIN. The Coca-
Cola Company also lays a great emphasis on sddustainable packaging of its products and
recycling. The Coca-Cola Company has to abide by the various environmental rules and
regulations to manufacture its products. In addition, countries having a humid climate, especially
in developing countries will have a direct effect on the sales of Coca-Cola. Thus, the sale of
Coca-Cola is dependent on environmental factors as well.
Marketing Mix of Coca-Cola: The marketing mix of Coca-Cola include Product,
Place, Price and Promotion.
1. Product: The Coca- Cola Company offers a wide range of products under its brand. It
has over five hundred products in various categories that are sold in over two hundred countries
worldwide. Some of the most known brands in the Coca-Cola Company include Coca-Cola,
Fanta, Sprite, Coca-Cola Zero, Diet Coke, Coca-Cola Life, Minute Maid, Kinley, Powerade
among other products.
2. Place: The Coca-Cola Company is a multinational company that sells its products to
over two hundred countries worldwide. The places where it sells its products include Asia,
Europe, Latin America, Pacific, North America, Eurasia, and Africa.

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3. Price: Pepsi is the biggest and probably the only competitor of Coca-Cola. The Coca-
Cola Company prices its products competitively. The prices of the products are not too high
neither are they too low. They are well within the means of an average customer. The prices are
comparatively lower if one procures bigger bottles or buys in bulk.
4. Promotion: Due to intense competition between the two Cola giants, Coca-Cola and
Pepsi, the former spends a lot of money amounting to several billions in advertising, promotion
and marketing. The Coca-Cola Company advertises its products, in print media, social media and
electronic media. The company also advertises its products through hoardings and also advertises
products on the internet. (Ransbotham,2015) It uses the platform of social media to advertise its
products and engage with their customers.
Conclusion: The changes that the Cola Company can undertake is to reduce the
amount of sugar in its carbonated drinks, come up with various fruit juices and also introduce a
nutritious drink for children with all the vital nutrients. Sugar and artificial flavours are not good
for one’s health and as people around the world are growing more health conscious, the Coca-
Cola Company should decrease the quantity of sugar from its beverages and introduce fresh fruit
juices for adults and children alike. The Coca-Cola Company could also introduce a healthy
nutritious drink for children complete with all the essential vitamins and minerals that would
benefit the children and also help them tap an untapped market.

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