Coca-Cola's Marketing Strategies for a Diverse Market

Coca Cola is effectively using a marketing mix to reach its target market, but there are areas for improvement. The company should introduce health drinks as the majority of customers prefer them over carbonated drinks. Additionally, Coca Cola should reduce the calorie count of its existing products to retain customers.

Running head: MARKETING PRINCIPLES
Marketing principles
Name of the student
Name of the university
Author note

1MARKETING PRINCIPLES
Executive summary
The aim of this report is to discuss about the marketing policies of Coca cola along with
considering the marketing mix of them. The marketing strategies implemented by them had been
discussed in order to determine the effectiveness of them. It is been concluded that they have
initiated distinctive approach in reaching out to their customers. The marketing mix and
strategies initiated by them in according to their target market. Recommendations are also been
discussed and it is expected that effective implementation of the recommendations will help
them to effectively operate in the market.

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Table of Contents
Introduction......................................................................................................................................4
Micro environmental analysis..........................................................................................................5
Customers....................................................................................................................................5
Competitors..................................................................................................................................5
Company......................................................................................................................................6
SWOT analysis................................................................................................................................7
Macro environmental analysis.........................................................................................................8
Political factors............................................................................................................................8
Economical factors......................................................................................................................8
Socio cultural factors...................................................................................................................9
Marketing strategy of coca cola.......................................................................................................9
Segmentation strategy....................................................................................................................10
Segmentation strategy by Coca cola..........................................................................................10
Targeting the chosen segment.......................................................................................................11
Target strategy by coca cola......................................................................................................11
Differentiation strategy..................................................................................................................11
Brand positioning...........................................................................................................................12
Marketing mix...............................................................................................................................13
Product.......................................................................................................................................13

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Place...........................................................................................................................................14
Price...........................................................................................................................................14
Promotion..................................................................................................................................15
Recommendations..........................................................................................................................16
Conclusion.....................................................................................................................................16
Reference.......................................................................................................................................18

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Introduction
Contemporary business organizations are not only selling their products to the customers,
but also determining the requirement and trend of the market to offer products accordingly. This
is due to the fact that, the current market scenario is of customer’s era rather than being the
manufacturers’ era. Thus, it is important for the organizations to target the specific market
effectively and determining the preferences and requirement of the target market (Chan, Kwong
& Dillon, 2012). It will help them to provide service that is more effective to their customers.
Another aspect that has been considered by the contemporary business organizations is the
marketing of their products (Baker, 2014). This is due to the reason that, the current market
scenario is much more complex and competitive. Emergence of several competitors in the
market forces the business organizations to effectively market their products to attract more
customers and to stay ahead in the competition.
Coca cola is one of the leading multinational organizations in the current business
scenario. They mainly operate in the market of carbonated soft drinks. They are being considered
as a truly global organization with having presence in every major region around the world. The
effectiveness and distinctive nature of their marketing activities have caught several eyeballs and
are being considered as benchmark.
This report will discuss about the marketing policies of Coca cola along with considering
the marketing mix of them. Evaluation of the macro environment for Coca cola will also be done
in relation to the Australian region. The marketing strategies implemented by them will be
discussed in order to determine the effectiveness of them.

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Micro environmental analysis
Customers
Customers for coca cola comprise from all age groups and income groups. People
looking for non alcoholic refreshment will be their customers. In addition, sports people and
working people looking for instant refreshment are also included as the customers for coca cola.
The customers for coca cola are mainly influenced by personal, social and psychological factors.
This is due to the reason that, the brand value and penetration of the coca cola is so effective that
people looking for refreshment will first recall the brand of coca cola, which is the personal
buying behavior (Tingchi et al., 2013). Accordingly, the society is also influenced by the
presence of coca cola and it is been seen as the most effective option to fulfill the thirst. The
brand marketing of them is being done in such way that, coca cola is being portrayed as the thirst
quenching beverage which will also act as complimentary for enhancing happiness. Thus, it is
being effectively associated itself with the happiness in the society. It has positive influence on
the psychological state of the customers.
Competitors
One of the key competitors for coca cola is Pepsi which is also offering similar products
to the market. Pepsi is also operating in the various regions with having positive brand value in
the market. However, in terms of the market share, Pepsi is much behind of coca cola. Other
competitors such as Nestle and Dr. Pepper Snapple are also far behind in terms of the
competition. As of 2016, the annual net revenue of coca cola is US$ 41863 million (Hollensen,
2015).

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Figure: 1
Market share in the soft drinks industry
Company
The main strength of coca cola is their brand equity. Coca cola is being considered as the
most prominent valuable brand in the world (Huang & Sarigollu, 2014). Thus, with the help of
the brand equity, it is easier for them to operate in the market and push new products in the
market. Another strength for them is their presence around the world. Coca cola is being
available in every major regions and the market penetration of them is very high and effective.
However, they are also having some weakness also which includes the less diversified
product portfolio. Their major competitor Pepsi has market presence in the snacks and food
sector also. On the other hand, coca cola is only catering with their portfolio of beverages.
Moreover, the absence of health drinks in their portfolio will also have adverse effect on their
business due to the reason that majority of the customers are shifting for the health drinks from
the carbonated soft drinks.

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SWOT analysis
Strengths  Huge brand equity.
 Huge market penetration.
 Global presence.
 Market leadership status.
 Unique marketing activities.
 Effective distribution mechanism.
Weaknesses  Having close substitutes.
 Different private level brands.
 Lower diversification of products.
 Issues with water management.
Opportunities  Introduction of health and energy drinks.
 Increasing operations in the developing economies.
 Introduction of the packaged drinking water.
 Pushing new products under the same brand.
Threats  Issue with water sourcing.
 Emergence of new competitors.
 Introduction of strict rules regarding the soft drinks.
 Change in taste and preference pattern of the customers.
Macro environmental analysis
Macro environment refers to the external environment in which organizations have to
operate in the global market. It includes political economical, legal, technological, environmental

8MARKETING PRINCIPLES
and some others factors. These are the factors, which cannot be controlled by the operating
organizations. Thus, it is important for the business organizations to effectively determine the
external environment and effectively adhere with it. To determine the external factor being faced
by Coca cola in Australia, political, economical and socio cultural factors will be discussed using
the PESTLE analysis.
Political factors
The political environment in Australia is stable and favorable for the business
environment. Moreover, the business friendly attitude of the government and initiation of various
business friendly policies is further helping the business organizations in operating in Australia
(Keating & Loughlin, 2013). However, one of the key factors that should be considered by Coca
cola is the issuance of more stringent rules and regulations by the government. With the
emergence for more complexities in the current business scenario, government is issuing stricter
rules, which can pose challenge for the business organizations.
Economical factors
Being a developed country, the economical environment in Australia is favorable for the
business environment. The per capita income and gross domestic product of Australia is showing
positive trend in the recent years (Schneider, 2013). The annual GDP growth rate of Australia is
2.8 percent as of 2016. Thus, the market potential for the business environment is favorable and
increasing in the recent years. Development of the economy will lead to increase in the
purchasing power of the customers. Thus, the demand for the products will be more. However,
emergence of the economic crisis in the global business scenario in the recent times will pose
challenges for the business organizations. Thus, this type of crisis will adversely affect the
business potential for Coca cola as well as other organizations.

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Socio cultural factors
In the present era of globalization, majority of the countries are being influenced by the
global culture. Thus, it will be a huge opportunities for the multinational organizations in
offering their global product portfolio to the Australian market (Mak, Lumbers & Eves, 2012).
Organizations such as Coca cola will have more market for their globalized products. However,
one of the key issues that may be faced by coca cola in operating in the Australian market is the
change in the taste and preference pattern of the customers. More and more customers in the
Australian market are opting for healthier options such fruit drinks over the carbonated soft
drinks (Lopez & Fantuzzi, 2012). This is due to the reason that customer awareness regarding the
bad effects of the carbonated soft drinks is increasing. Thus, it will pose challenge for the
business operations for coca cola.
Marketing strategy of coca cola
Marketing strategy involves by the business organizations to attract more number of
customers effectively. Moreover, in the present business scenario, marketing involve not only
promoting the products but also determining the requirement of the customers and classification
of the customers based on various aspects (Kumar et al., 2012). Marketing strategy involves
various criterions such as segmenting, targeting, positioning and differentiation, which all will be
discussed in the following sections.
Segmentation strategy
In the present business scenario, majority of the business organizations segments their
target market prior to the initiation of the marketing activities. Segmentation refers to the concept
of choosing a certain section of the potential customers based on some particular aspects, which

10MARKETING PRINCIPLES
will be similar to the approach being possessed by the organization (Wedel & Kamakura, 2012).
It helps the organization to effectively determine the requirement of the target segment and offer
products accordingly.
Segmentation strategy by Coca cola
Coca cola involves geographic, demographic and psychographic segmentation policies in
order to effectively segmenting the available customer base. In the case of the geographic
segmentation, coca cola targets majority of the regions around the world (Cliquet, 2013). This is
due to the fact that, the products being offered by coca cola is having universal acceptance in the
market. Moreover, soft drinks are being accepted in every cultures and social traditions. Thus,
they do not face any cultural or social barriers. Moreover, coca cola is having diverse product
portfolio, which is being offered in different regions according to the local taste and preference.
For instance, they offers berry and lemon flavored drinks in Wales.
In the case of demographic segmentation, they mainly target the customers having age
group between 15-25. However, they are offering various products based on the preference
pattern of the customers across different age groups (Sandy, Gosling & Durant, 2013). For
instance, coca cola offers diet coke for the more health conscious people from the higher age
group. For the psychographic segmentation, coca cola involves effective marketing and
promotional activities in order to create and enhance the brand awareness. They have created
their brand image in such way that coca cola as a brand is more of creating positive impression
than its utility. Thus, young generation is more attracted by this concept.

11MARKETING PRINCIPLES
Targeting the chosen segment
Having selected the chosen market segments, the next step for the marketers is to
effectively target the segments by reaching out to them with the help of marketing activities
according to their taste and preferences. Targeting helps the organizations in effectively reaching
out to the chosen segments (Hassan & Craft, 2012). The more effective will be the target
strategies, the more will be the customer loyalty.
Target strategy by coca cola
To target the chosen age group of 15 to 25, coca cola have joined hand with other brand
having presence among the younger generation such as McDonalds. It helps them in offering
their products with the other leading brands, which results in more brand awareness among the
target segments. The advertisements of coca cola are also designed keeping in mind the
considerations of the young generations. Thus, they design their advertisements as adventurous
and joyful which will attract more customers in the targeted segments.
Differentiation strategy
Differentiation strategy is more important for the contemporary business organizations
due to the reason that, in the presence of several competitors, differentiation will help to create
unique image in the market and attract more number of customers (Valipour, Birjandi &
Honarbakhsh, 2012). In the case of coca cola, they have initiated various strategies in order to
differentiate their products in the market. They complimented their products as symbol of joy
and happiness. The initiation of distinctive retailing such as vending machine also created
distinctive image. Brand promotion by sponsoring various events and with the help of various
celebrities helped them to stand out among the crowd (Sola, 2012). Their competitive advantages

12MARKETING PRINCIPLES
include market leadership status, co-creation strategies and initiation of distinctive marketing
campaigns is helping them to differentiate their products in the market.
Brand positioning
Brand positioning is the concept of effectively position the products in the mind of the
customers in such a way that it will match with the characteristics of the products and will have
positive outcome (Maarit Jalkala & Keranen, 2014). Different brand positioning strategies will
help the similar products in the market to have different outcomes. In the case of coca cola, they
positioned their products more as tastier products rather than having products with lower calorie
count.
High calorie
Coke classic, Maaza, Coke vanilla
Superior taste Lower taste
Coke Zero, organic coke Diet coke
Low calorie
Figure: 2
Brand positing map of coca cola

13MARKETING PRINCIPLES
Marketing mix
Marketing mix constitute of product, price, place and promotion. All of these four aspects
are required for the business organizations in order to effectively operate in the market.
Marketing mix helps in designing all the four aspects effectively and in coordination with each
other (Gordon, 2012). The more effective will be the marketing mix, the more will be the holistic
marketing activities of the organizations in the market. All the four aspects of marketing mix will
be discussed in the following sections.
Product
Product is the main component which creates value for the customers and generates
revenues for the organizations (Gordon, 2012). Coca cola caters to the customers with their range
of convenience products. This is due to the reason that, there is no requirement of prior planning
for buying coca cola by the customers and it targets to a large section of the customers.
According to the product life cycle, coca cola is having different products in different categories
of product life cycle (Stark, 2015). The coke classic is the oldest product of them and it is in the
maturity stage due to the reason of having high demand of it. This is the effectiveness of coca
cola to extend the life cycle of their products. Diet coke the other hand went quickly to the
decline stage due to fewer acceptances in the market. Coca cola life is on the introduction stage
and coke zero is one the growth stage.
According to the three levels of products, the core benefit of coca cola is their taste which
is unmatched and unique in the market. The actual product is the beverage that they are
providing. Moreover, according to the market trend, they have change their designs and color of
their beverages and bottles. However, the taste remained same. The augmented product offered
by them is the brand value and status and trendiness being garnered by the customers.

14MARKETING PRINCIPLES
Place
Place in the marketing mix is important to provide convenience to the customers.
Distribution channels are included in it (Gordon, 2012). Coca cola involves intensive distribution
strategy to Cater to more number of customers. It enables them to be available in more number
of markets around the world. However, coca cola involves indirect channel of distribution in
operating in the market. Some of the key advantages that they derive from it are less
responsibility and cost required in distribution, catering to more number of regions due to high
penetration of the third party vendors and increased customer convenience.
Price
Price is the value that is to be paid by the customers for the products. Pricing should be
done in accordance to the target market (Gordon, 2012). The pricing strategy involved by coca
cola is made in consideration to the mass markets. Thus, majority of the products are being
accessible by the mass-market customers. However, products of them such as powergrade are
being targeted for the higher end sports people. Thus, pricing is being done to cater to more
number of customers. Coca cola involves competition based pricing strategies due to the reason
that, the market for soft drinks is intensely competitive with the presence of several close
substitute products. Moreover, due to the fact that soft drinks are basically targeted for the mass
market and are priced lower, thus Coca cola involves competition based pricing in order to stay
ahead in the competition. The nature of market for coca cola is monopolistic competitive and
thus effective pricing strategies are important to attract the customers. Price for them is being
determined by the market force.
In the introduction of the new products, coca cola follows the penetration pricing
strategies in order to penetrate the market for the new product. This is due to the reason that, the

15MARKETING PRINCIPLES
majority of the products of coca cola is lower priced for mass market and all the products for
them are in the same product line. Thus, price-skimming strategy will not be applicable for them.
The motive of their introductory products is to penetrate market as much as possible in less time.
Promotion
Promotion refers to the activities to increase the identity and exposure of the particular
promoted product among the customers. The more effective will be the promotion, the more will
be the awareness for the product in the market. As discussed earlier, distinctive promotional
activities are being involved by coca cola to effectively attract the customers. Their promotional
strategies involve various sponsored events, celebrity endorsements, extensive advertisements
and co-creation strategies (Kalafatis et al., 2012). Promotions mix includes various mode of
promotion such as advertising, sales promotion, personal selling, public relations and direct
marketing. All of these modes are having their own set of advantages as well as disadvantages.
Among all of these options, coca cola involves advertising, sales promotion and public relation.
Due to their involvement of major mode of promotion, they can cater to the large of audience
effectively. The key advantages of advertising and sales promotion are the effectiveness of the
activities as well as covering more target audience. However, limitation includes involvement of
huge cost and determining the cultural diversity among the target market.

16MARKETING PRINCIPLES
Figure: 3
Promotion mix.
Recommendations
The current strategies being involved by them are effective for them in marketing their
products. However, there are some areas for improvement is being identified. One of the key
areas is the introduction of the health drinks. This is due to the reason that, majority of the
existing customers is preferring health drinks over the carbonated drinks. Thus, coca cola should
come up with health drinks brand. Another issue is the calorie count of the existing products.
Coca cola should reduce the calorie count of their existing products to retain the existing
customers.
Conclusion
Having discussed the marketing strategies being involved by coca cola, it can be
concluded that they have initiated distinctive approach in reaching out to their customers. The

17MARKETING PRINCIPLES
marketing mix and strategies initiated by them in according to their target market. Segmentation
and positioning of their products are also been done effectively to target the chosen market
effectively. However, some issues have been identified which should be rectified in order to
increase the business potential. Recommendations are also been discussed and it is expected that
effective implementation of the recommendations will help them to effectively operate in the
market.

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