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 Coca-Cola Company
Marketing Final Report Jason Zhang Introduction Our group chose to analyze The Coca Cola Company on its marketing practices as well
as the company as a whole. They have a large portfolio of products that have had some of the
best marketing campaigns of our time. In this analysis, we will be delving deep into the
company’s history, financials, and the soft drink market in addition to the marketing strategy that
Coca Cola uses. To fully grasp the company’s esteemed reputation, you must go back to the
beginning of Coca Cola, over one hundred years ago. History of Coca Cola In 1886, one pharmacist in Atlanta would invent a drink that would one day become the
most popular beverage in the world. Coca-Cola’s story begins with an American soldier, John
Pemberton (King). He was a fighter in the Civil War and also a doctor for pharmaceuticals.
Pemberton had a vision for himself, where he would one day create a product that would earn
him great commercial success. While he had many inventions, such as various medications, he
never found any achievement (Coca-Cola). It was not until he moved to Atlanta, that he decided
he would attempt to create a new beverage that was unlike any other (King). During this time
period, soda fountains were growing in popularity and were a prevalent spot for young people to
gather. Pemberton first developed a product that he referred to as Coca Wine, which was an
alcoholic beverage. When legislation was passed for the prohibition, he altered his recipe to
make the non alcoholic beverage. He used a flavored syrup of his own making and mixed it with
carbonated water. The concoction was sold for five cents in Pharmacies and as a patent medicine
because during the time period, carbonated water was believed to be good for health (Cantwell).
Frank Robinson partnered up with Pemberton and is credited for creating both the name and logo
for the product. Robinson also worked to get the patent for the beverage and came up with the
iconic logo “The Pause That Refreshes” As Pemberton’s invention began to spread, he decided to sell his formula to three other
businesses. The three manufacturers worked together to produce Coke and distribute it among
soda fountains. One of the businessman involved in the shared operation of Coca-Cola, was Asa
G. Candler. Unfortunately, only two years after inventing Coca-Cola, Pemberton passed away
and was never able to see the success that would be his invention (Cantwell). After John
Pemberton passed away, Candler bought the company from Pemberton’s son, Charley. Candler
also bought the remaining shares of the company and in 1989, he was the sole owner of CocaCola Company. It was during the ownership under Asa G. Candler, that Coca-Cola began to
thrive in the commercial world. Candler was the first to implement marketing techniques that
would further expand the brand. He introduced the ideas of door to door salesmen. The salesmen
would travel around cities and neighborhoods and offer free samples of the beverage (Cantwell).
Candler also began to use coupons as a way for consumers to try coke for free and hopefully go
and buy their second bottle. Candler also began to put the Coca-Cola logo on various items that
could be found all over stores and pharmacies. The logo was printed onto items such as
calendars, posters, and bookmarks (Coca-Cola). This marketing tactic led consumers to
recognize the Coca-Cola logo easily. Candler marketed his new drink by claiming that it cured
diseases like morphine addiction, headaches, and impotence. Pemberton himself had become
addicted to morphine, after he was wounded in battle. While there was no scientific proof that
Coca-Cola cured any diseases, the beverage became extremely popular. Once the patent was
released on the taxation of medical drugs after the Spanish American War, Coca-Cola went to
court in order to drop the claim that their beverage was medicine (Cantwell). The company won
the case and Coca-Cola was no longer known as a drug, but just a soft drink. Coca-Cola was first put into bottles by Joseph A. Biedenharn in Vicksburg, Mississippi.
The bottles were made in a design that was very different from the hobble-skirt shape that the
glass Coca-Cola bottles now hold today. In 1989 Candler decide to make the big decision to sell
the bottling rights of Coca-Cola to Benjamin F. Thomas and Joseph B. Whitehead for only one
dollar. The two businessmen had approach Candler with the proposal to begin bottling CocaCola, so it could be enjoyed outside of the soda fountain (Cantwell). At the time Candler did not
believe that the two entrepreneurs would be able to successfully bottle the beverage. This doubt
led Candler to easily agree to a contract agreement with the two men. What Candler did not
realize was that the invention of bottle caps was underway, which would preserve the flavor of
the soft drink and enable the bottling of the soda. This led to Chattanooga, Tennessee becoming
the location of the first Coca-Cola bottling company. By the early 1900s, bottled Coca-Cola was
made available in salons and grocery stores. Only a decade later, there were over 370 Coca-Cola
bottling companies in America. With the soar in sales and popularity for the beverage, the Coca-Cola company began to
work on their marketing tactics. One of the earliest brand promotions for Coke was to associate
the drink with the American way of life. Since Coca-Cola was first made popular during
prohibition, many people would gather during breaks or at the end of work days and share a
Coca-Cola together (Coca-Cola). Advertisers used this idea that Coca-Cola was the routine at the
end of a long day and eventually Coca-Cola became associated with the Great Depression. The
concept that no matter what the struggles were, Americans could rely on the delicious taste of a
Coca-Cola, began to play into the idea that Coke was America’s beverage (Catwell). Another monumental effect that the marketing of Coca-Cola had on the the nation, was
the introduction of the Santa Claus promotion. Santa Claus used to be represented as a medium
sized man in colors of green, yellow, and red. When Coca-Cola began to design their holiday
campaign, they illustrated Santa to be a rotund man with rosy cheeks wearing a bright red
costume. The red color scheme perfectly correlated with the Coca-Cola logo and bottle design.
The campaign gained so much popularity, that the original Santa Claus design for Coca-Cola is
now the accepted figure that all American’s think of when picturing the jolly old man in red
(Cantwell). Coca-Cola made even more headway in marketing in the 1950s, when television sets
began to appear in every American’s household. The company began to create television
advertisements that further exemplified how Coca-Cola was a part of everyday American
lifestyle. The use of television commercials to market the product, allowed marketers to reach
more consumers and develop more creative ways to promote the soft drink. The branding in the
1950s focused on making Coca-Cola appear to be a classic and respectable family beverage
(Coca-Cola). This kind of image would alter slightly in the 1960s. With the introduction to the
Vietnam War and the fight for peace and love, Coca-Cola had to adapt to the changing times,
while still being a reliable soft drink. Marketers began to work with Rock bands in order to come
up with songs which the public would enjoy and that also mentioned drinking Coca-Cola.
Another change which occurred in the 1960s, was the conscious effort for women to lose weight.
In order to satisfy all market segments, Coke developed the first diet drink in 1964, with a
sweetener that was less calories than sugar (Cantwell). In the 1970s another famous campaign launched. It was titled “I’d Like to Buy the World
a Coke” and featured several individuals singing in the Italian countryside. The promotion
contains people of all ethnicities, singing in harmony about how they wish they could buy a
Coca-Cola beverage for everyone in the world. This campaign was a huge success and
consumers loved the song and message that went along with it. Radio stations were swarmed
with requests to play the Coca-Cola song and the brand was able to improve their image even
more so. Another successful campaign was the “Mean” Joe Greene commercial (Coca-Cola). In
the commercial the football player is walking away from a defeated game, when a young boy
comes up to him and gives him a Coke. Joe Greene then gives the young boy his jersey, causing
a very heartfelt and emotional response from audiences. This campaign was used in other
countries as well, further expanding the global image of Coca-Cola. In the 1980s Coca-Cola
company made the mistake of creating a “New Coke” which had a new formula. After outcries
and complaints from fans of the classic coke, the company got rid of the new flavor and reverted
to back to the original. The success of Coca-Cola in the time span of 100 years would continue
through the present day market. The current Coca Cola campaign is “Share a Coke” (Coca-Cola). The commercial that
kicked off the campaign was of a young girl buying a Coke from a gas station from a young boy
who seemed interested in the girl. She finds a Coke with her name on it and then buys a Coke for
a friend. This continues on as she brings more and more friends, signifying that it can be an
endless cycle of giving. It ends with the girl buying the young boy a Coke and then going outside
to a big, summer party. Sharing a Coke is all about “creating moments of happiness” which is at
the basis of Coca-Cola’s history. It’s about celebrating stories, people and moments with
someone that you care about and Coca-Cola gets the social media attention which is free
marketing for the company. Customers Coca-Cola has always made their slogan that a Coke is for everyone. Each customer has
their own preference for which type of Coke they enjoy but everyone seems to know the main
two Coke products, Coke original and Diet Coke. The Coca-Cola company is constantly
improving their product to give the consumers the best possible Coke for their money. “Our
customers are continually looking for ways to reduce costs, improve sales and profits, and
deliver better-quality, more diverse products to consumers. We work to create additional value
for our customers by anticipating their demands and interests and to proactively deliver viable
solutions for their businesses” (Coca-Cola Journey). Coca Cola has always made customers their
top priority and has a great Customer Relationship Management. In the Coca Cola Bottling
Company’s home page, it says, “We develop strong relationships with our customers by focusing
on excellent execution of customer marketing promotions and merchandising at the point of
sale” (Coca Cola). Competitors
Coca-Cola has been the most popular and biggest-selling soft drinks in history. With a
market share of 42%, they are dominating the soft-drink industry. Alas, they still have
competitors looking to infringe on their success. The biggest rivalry known to Coca-Cola is
PepsiCo. PepsiCo is the second largest seller of soft drinks such as Pepsi, Mountain Dew, and
Brisk. The infamous battle between Coke and Pepsi is termed “The Cola Wars”. While CocaCola is the seller of the first and second most popular soft drinks, Coke and Diet Coke, PepsiCo
comes in third and fourth with Pepsi and Mountain Dew. Comparing the two companies side by
side leads to some interesting results considering the initial belief that Coca-Cola is the more
successful one of the two corporations. When it comes to their actual revenues, Pepsi beats
Coca-Cola with 64.42 billion in sales while Coca-Cola has only 41.166 billion (O’Brien).
Because PepsiCo only depends on their beverage sales for a quarter of their entire revenue, they
get most of their sales in consumer packaged goods such as Lay's and Doritos chips. Coca-Cola
relies on their beverage sales for over two thirds of their revenue. However, Pepsi’s actual net
income comes to only 6.503 billion compared to Coca-Cola’s 6.884 billion due to the fact that
Coca-Cola sells the two most popular drinks and so their profit margins are higher. Due to
Pepsi’s larger business portfolio with their snack segment, they have about two times more
employees with 271,000 employed compared to Coca-Cola’s 129,200 employees. This also goes
for their distribution centers with Pepsi’s 1,600 plus compared to the 900 Coca-Cola owns. Both
companies have expanded globally and invest a lot of their income on advertising. Coca-Cola
spends around 2 billion each year on advertisements while Pepsi only spends around 1 billion
each year. The rivalry between them is said to be the cause of such high advertising budgets, in
the 1980’s Pepsi launched a very successful marketing campaign against Coca-Cola called “The
Pepsi Challenge” which encouraged people all over the country to participate in blindfolded taste
tests between Coca-Cola and Pepsi. The results proved that Pepsi was actually the favored drink
and thus spurred Coca-Cola to run attack ads against the rival soft drink company. (Bhasin) To
this day, Coca-Cola and PepsiCo still maintain fierce competition and devote billions to help
promote their product and company. Furthermore, PepsiCo is not the only competitor for Coca-Cola. The third largest
corporation in the market share is The Dr. Pepper Snapple Company. Although it is a much
smaller company, they still sell popular products such as Dr. Pepper, Snapple Teas, and Mott’s
Apple Juice. Alas, their financials are not as impressive as Coca-Cola but they do have influence
in the beverage industry. For total revenue, Dr. Pepper Snapple Company made 6.121 billion
compared to Coca-Cola's 41.166 billion. In addition, they only had a net income of 703 million
as opposed to Coca-Cola's 6.884 billion in net income. Due to their smaller size, they have
around 19,000 employees as of 2014 and 115 distribution centers. (Google Finance) Lastly, the third competitor of Coca-Cola is the Cott Corporation. The Cott Corporation
sells what would be considered “off-brand” drinks such as Vess Sodas, Dr. Tinder, and the pretty
popular seltzer brand Polar. The Cott Corporation only has a mere 4.2% of the market share
which is really no threat to the massive company of Coca-Cola but Cott does take some of the
beverage industry shares. The Cott Company had a total revenue of 2.1 billion dollars and a net
income of 108 million. (Google Finance) This amounts to about 5% of what Coca-Cola makes in
revenue. They have a total of 3,960 employees and 180 distribution centers which is actually
more distribution centers than their direct competitor Dr. Pepper Snapple. (Cott Corporation) Financials Coca Cola is a huge company with about 200,000 shareholders. When Coca Cola first
was traded on the New York Stock Exchange in 1978, it traded at about 78 cents per share.
Currently, as of December 7th 2015, the stock price is about 43 dollars. During the 2015 period,
the share price has fluctuated between 35 dollars and 46 dollars. The Pepsi Co. share price is
about a hundred dollars due to the fact that Pepsi Co. has a larger portfolio and includes more
sub-companies than Coca Cola. Another direct competitor, Dr. Pepper Snapple, has a share price
of about 92 dollars. In 2014, the company as a whole had a revenue of about 45 billion dollars
and a net income 6.8 billion which is significant for a declining market. Each quarter, the
company rakes in billions of dollars that contribute to this revenue while most companies do not
make half that much. The Coca-Cola brand is worth an estimated $74 billion. That’s more than
Budweiser, Pepsi, Starbucks and Red Bull combined. Coca Cola has looked to drive revenues up
by through strategic pricing and pumping more money into advertising and promotion. As stated
earlier Coca Cola’s advertising budget is about a billion more than their direct competitor
Pepsico. Apple and Microsoft don’t even have half the budget that Coca Cola does. Coca Cola also dominates the market share in soft-drinks with about 43 percent while
Pepsi only holds about 28 and Dr. Pepper Snapple only has 17 percent. And as for the revenue
distribution within the company, North America has the largest share while Asia Pacific and
Europe are in a close second and third place. Also, Coca Cola, despite the soda market being on
a decline, its brand value has continued to increase. From 2006, the value has increased about 40
billion dollars which Coca Cola claims is from their advertising campaigns and their increased
spending in that area. Product Coca-Cola is known for it’s iconic products in the glass bottle . The glass bottle was first
introduced in 1899 as a straight-sided clear bottle with a metal stopper. In 1915, Coca-Cola was
looking to improve their glass bottle and give it a unique edge compared to its competitors in the
soft drinks packaging. Coca-Cola held a competition dedicated to improving their cola bottle.
The Root Glass Company from Terre Haute, Indiana submitted their bottle design to Coca-Cola
and unknowingly made the iconic bottle we still see today. The inspiration for their bottle was
based off an actual coca seed, which prompted the circular contour of the glass. Coca-Cola loved
this new design because not only was it easily recognized as a Coke bottle, but also it was even
recognizable as Coke’s bottle when shattered on the ground or even in the dark thanks to the
unique shape of the bottle. Although the bottles were an extreme success, there was a greater
demand in the 1960’s for more functional packaging so Coca-Cola introduced the first aluminum
can to consumers. The Coca-Cola bottle is not only an iconic symbol of the brand but it also won
a prestigious award called the Cannes Lions Grand Prix for Design in 2008 for their introduction
of the sleek red aluminum bottle. Coca-Cola has also started to make their products
environmentally friendly after a larger consumer concern for green products to be introduced for
Coca-Cola. In 2009, Coca-Cola introduced the “plant bottle” which is an 100% recyclable bottle
made up with at least 30% renewable plant-based material. In 2011, it was officially introduced
to the market in nine countries but they have plans to expand. The most recent product
innovation goes along with the “Share a Coke” campaign where the coke bottles now all feature
names or titles to help encourage others to share a coke with those that remind them of the bottle
(The Contour Bottle History). Price The price of an original Coke rose from 5 cents at its inception to about $0.89-1.29. The
Coca Cola company tried to get the federal government to mint a coin especially for the Coke
products so the company could fight inflation. However, the government denied Coca Cola’s
request and the company was forced to raise the price to adjust for inflation. The values at the
core of the Coca-Cola company insures that they will always keep their product at a cost
accessible to the middle-class and average income family (Kokemuller). In 2011, CEO of Coca
Cola Muhtar Kent said that Coca Cola would continue to keep is prices low despite the pressure
to raise its average prices about 3-4 percent per year (Rappeport). The CEO said, “We are selling
moments of pleasure at a sensitive time. These price points have worked for us.” This gives Coca
Cola a competitive edge against its direct rival Pepsi Co., as the company raised its prices 8-9
percent in the financial crisis (Rappeport). Promotion Another component of the marketing mix is promotion, which is how marketing agencies
spread product information to consumers in order to differentiate their product from competitors.
Through promotion, a company is able to raise awareness its brand and, thus, elaborate on the
benefits of its product in order to boost sales. Companies who effectively utilize promotional
strategies use it as a way to communicate with their consumers to educate them on the specific
product. Promotion is especially important for Coca-Cola, who strives to keep customers loyal so
that they become advocates and are able to promote the product. They first type of promotion that Coca-Cola utilizes is one that is very well-known,
advertisements, or a paid form of non-personal communication. This type of promotion is the
most important marketing tool for Coca-Cola as well as many other companies. However, within
the broad term “advertisement” are a variety of different types. One type is print media which
consists of magazines and newspapers and is not incredibly common for Coca-Cola. However,
television advertisements are the most common for Coca-Cola and also tend to be the most
attractive as well. One type of television advertisement that Coca-Cola uses is the “Cola Wars”
commercials. One specific commercial consists of Coca-Cola cans fighting Pepsi cans. Overall,
the Coca-Cola cans prove to be dominant, showing its dominance in the carbonated soft drink
market. Another type of advertisement that Coca-Cola employs is outdoor advertising, which is
Coca-Cola billboards on highways, main roads and heavy traffic areas. Coca-Cola strategically
positions their billboards at these places in order to generate high exposure. They are able to get
the best places because of the amount of money that they devote to advertising to assure that
their advertising is the best. Another type of promotion that Coca-Cola takes advantage of is public relations, which
Armstrong says, “allows companies to build good relations with the company’s public by
obtaining favorable publicity, building good corporate image, and handling or heading off
unfavorable rumors, stories, and events” (Armstrong). The way that Coca-Cola maintains public
relations is through a press center section on its website. This website provides consumer with
access to press releases, speeches and statements regarding current information as well as law
suits and rumors. There is a part of the site dedicated to investors, both current and potential, as
well. Coca-Cola provides investors with its financial statements as well as up-to-the-minute
stock information. Maintaining a positive reputation is crucial for any business in today’s society
and this portion of the website allows Coca-Cola to stay on top of any publicity regarding the
company. It is clear that promotion is incredibly important in today’s society for a company to
prosper and do well. Coca-Cola effectively uses promotional strategies to assure people
remember their product. Promotion has the potential to be the reason that Coca-Cola is the
market share leader in carbonated soft drinks. Competitors, such as Pepsi, offer such similar
products at similar prices which makes promotion that much more important for Coca-Cola. Placement The fourth P of the marketing mix is placement, which focuses on where and how the
product is displayed. The purpose of this is to put the product in the right place to try to gain
customers. It is also the process of distributing the product to its intended consumers. CocaCola’s placement strategy deals with coke only college and high school campuses, movie
advertisements and its distribution channel. Coca-Cola has contracts with high school and college campuses to force out competition
and makes their products easily accessible to their consumers. This competition of “pouring
rights” between Pepsi and Coke began in the early ‘90s. Eighty percent of public schools that
have contracts have them with either Coke or Pepsi. It’s very popular in high schools as well as
colleges because public high schools do not have any tuition money coming in; therefore, having
a contract that will bring in a profit is very beneficial for them. For example, this was the case for
the school district of Rockford, Illinois. Their school district is under an “existing ten-year
contract, Coca-Cola paid the district four million dollars upfront and an additional $350,000 a
year to sell its beverages” (Philpott) at their school with no competitors. This particular school,
and many other public schools that have made similar deals with Coke or Pepsi, use this money
for things that would otherwise have been cut without the contract money, so schools benefit just
as much if not more than Coke or Pepsi does. The money from the contract was put towards field
trips, sports uniforms and new technology for the school that they could not afford otherwise.
Coke spends all this money because they get a lot of advertising with no fear of any competition
and they receive all the profits from what the high school students are buying. The only
downside to this system is the schools are taking away the choice of beverage away from the
students and the faculty. Some colleges also have contracts with either Coke or Pepsi to raise money instead of
raising tuition prices. Forty-three percent of all colleges have contracts and out of that Coke
holds about two-thirds of them. University of Minnesota is a college with 37,000 students and
Coke gave them a ten-year contract worth twenty-eight million to only serve Coke products.
Most college contracts also include that they have the rights to be the only soft drink to be
advertised on campus. Universities want these contracts because they benefit them more than
burdens them and that is why University of Rhode Island recently just put out an advertisement
to soft drink companies in hopes of receiving a soft drink offer and hoping they will have a
decision by June 30th. Coke’s idea of these deals is not to just have a Coca-Cola sign in the
football stadium, but to get rid of all competition and allow students to form brand loyalty.
Studies show young teen agers drink the most soda, but older teens choose a brand, so it is
important to form brand loyalty students. Coca-Cola does much more to make their product known than just commercials and
creating contracts with schools. Coke was very creative by choosing to place their products into
popular movies in order to advertise them to a larger audience. Coke started movie product
placement in 1933 with its first movie E.T. and spent $1,127 million. Pepsi started later than
Coke by placing their product in Spiderman in 1961 for $480 million. Coca-Cola’s second movie
was Jaws and cost them $1,000 million and their third was The Exorcist for $820 million. Pepsi’s
prices do not compare with their second movie being Back to the Future for $470 million and
their third movie being Ghost for $400 million. Coke uses a variety of ways to display their
products in movies; a can is used 32% of the time; a sign, 20%; a bottle, 18%; a glass, 12%; a
cup, 7%; other, 11%. For example, Coca-Cola is displayed on the billboards in Time Square in
King Kong. Coke dominates the brand influence in Hollywood movies by holing 9.7% of the
movie product placement market. The next two brands are Apple with 9.1% and Toyota with
7.5%. Coca-Cola spends a lot of money to make their brand a household name and they have
been very successful considering 96% of the world’s population can recognize the Coca-Cola
logo. Coke is in many different types of movies to try and expand there audience, for example
Elf is to target families and younger children. There is a scene where the main character, Buddy,
drinks an entire two-liter bottle of Coca-Cola, which is a perfect way to capture children’s
attention to it. Coke also focuses on using big time actors to promote their products and that is
why Will Farrell drank it in Elf and Chris Pratt drank it in Jurassic world. There is a scene in
Jurassic World, where famous actor, Chris Pratt, is working on his motorcycle when Bryce
Dallas Howard comes over to talk to him, but Pratt takes a sip of Coca-Cola and says “I’m busy”
and takes a huge “commercial quality sip.” Other movies Coke is featured in are Batman,
Million Dollar Baby, Bonnie and Clyde, and Breakfast Club. Distribution is an important part of Coca-Cola’s placement strategy. A distribution
channel is the process of moving the product from the producer to the consumer. The two main
types of distribution channels are direct, which is the producer directly distributing the product to
the consumer, and indirect, which is the producer distributing it to the wholesaler who distributes
it to the retailer who distributes it to the consumer. Coke is a global business that is sold in over
two hundred countries that operates on a local scale. Coke has 250 bottling partners worldwide,
who manufacture, package, merchandise and distribute the final branded beverages to all the
places the products need to go throughout these two hundred countries Coke is sold in. The
distributers bring Coca-Cola products to places such as grocery stores, restaurants, street
vendors, convenience stores, movie theaters and amusement parks. Grocery stores are a
convenient place for consumers to buy soft drinks and grocery stores also have certain places to
put Coke based on consumer behavior. Street vendors sell Coke products in major cities, such as
New York City, D.C. and Philadelphia. Amusement Parks, specifically Six Flags, make
partnerships with Coke for more advertisements. Coca-Cola’s distribution process is successful
because it allows all products to be easily accessible to all customers. BCG Matrix The BCG Matrix is very important in finding a way to grow a business. The purpose of
this is to figure out what the best strategy is to generate more cash in the business, to invest in
new products and expand the company. This strategy is helpful for Coca-Cola because it has
more than three thousand products that are sold in over two hundred countries. Some of these
products include energy drinks, juices, juice drinks, soft drinks, sports drinks, tea, coffee and
water. Coca-Cola also has many other brands, such as Thums Up, Sprite, Fanta, Limca, Minute
Maid, Maaza, Kinley and Georgia. Therefore, this matrix is helpful by organizing all these
products to figure out which ones to invest more in or if a product should be discontinued
because it is not bringing in enough revenue. The two dimensions of the BCG Matrix are relative
market growth rate and relative market share. The star has high market growth rate and high
market share with the recommendation to invest its profits for future growth. The question mark
has a high growth rate and a low market share with the recommendation to either invest heavily
to push the products to star status or divest to avoid it becoming a dog. The cash cow has low
market growth and high market share with the recommendation to use the profits to finance new
products and grow in other parts of the company. The dog has low relative market growth and
low relative market share with the recommendation to divest and get the product out of the
market. For Coca-Cola the star products are Coca-Cola and Sprite. The question marks are
Thumbs Up and Maaza. The cash cows are Fanta, Georgia and Minute Maid. The dogs are
Kinley and Limera. Each specific box on the matrix has a certain recommendation that should be
followed in order to improve the company. Four common recommendations are growth, maintain
position, harvest and liquidation. Growth usually refers to question marks turning into a star
using money from the cash cows. Maintaining position usually refers to stars or cash cows, but
sometimes for dogs if the dog is beneficial to the company overall. Harvest or milk is
recommended for cash cows, question marks and dogs. Dogs, however should be milked and
then removed from the market. Liquidation is needed for most dogs and question marks that are
not financed by cash cows. The BCG Matrix is a very useful tool to show marketers the data of
each individual product and how it affects the company as a whole and gives helpful advice on
how to handle each product individually. SWOT Analysis A way for a company to identify strengths, weaknesses, opportunities and threats is to
conduct a model known as the SWOT analysis. This tool gathers information from an analysis
and separates the information into internal and external factors. Internal factors, such as strengths
and weaknesses, are factors that are in the company’s control. In contrast, external factors, such
as opportunities and threats, are out of the company’s control and happen whether the company
likes them or not. After the creation of a SWOT analysis, the company is able to use this
information to create goal statements that show how the firm can reach its obstacles and map out
the challenges the company must overcome. The first part of the SWOT analysis consists of the strengths of Coca-Cola, otherwise
seen as the advantages Coca-Cola has over its competition that they possess internally. The first
strength is the global presence that Coca-Cola has, as it is found in more than 200 countries. In
addition, Coca-Cola is the best known and most admired trademark in the world and Coca-Cola
is the second most well-known phrase in the world, behind “okay”. It is clear that Coca-Cola has
the strongest global presence compared to its competitors which certainly makes it strength and
is why Coca-Cola is such a large market share. In addition, another one of Coca-Cola’s strengths
is its market share, as it consists of 42.3%. Considering the company holds the highest
percentage of the market share, this is a strength no other competitor is able to have. Moreover,
their marketing strategies are also extremely important to their company. Coca-Cola spends so
much money on its marketing that they are extremely memorable campaigns. They also do not
focus solely on one age group; they market to people of all ages to greatly improve its sales. The following component is the areas with the company that weaken Coca-Cola and that
it needs to improve upon, the weaknesses. The first weakness is the health concerns that have
consistently become more prominent in today’s society. People are constantly worried about
their weight and health as a result of the obesity problem affecting our culture. One regular sized,
12 ounce, Coca-Cola has 39 grams of sugar. The American Heart Association says that men
should have a maximum amount of 37.5 grams of sugar a day, and females 25 grams of sugar a
day. Both of these numbers are lower than the amount of sugar in one can of Coca-Cola. As a
result, people will switch to healthier alternatives. Another weakness of Coca-Cola is the low
product diversification, with beverages being their only point of sale. Their main competitor,
PepsiCo, switch to selling food as well, greatly increasing its revenue. If Coca-Cola were to be
present in this segment, food would have the ability to drive their revenue as well. The following part of the SWOT analysis is opportunities, factors that will most likely
cause Coca-Cola to prosper. The first opportunity that Coca-Cola should take advantage of is
diversification. By doing this, Coca-Cola will increase the products that it can provide to its
customers and stay on top of its competitors. By creating more products, Coca-Cola is going to
gain higher revenue from existing customers because it is cross selling its products. Cost also
will not be an issue because they supply chain that distributes beverages can also distribute
snacks and, thus, cost is shared. The next opportunity for Coca-Cola is to market their less
popular products. The soda, Coca-Cola, is the main product that the company advertises and is
easily recognizable by an abundance of people around the world as a result of its promotion.
However, if Coca-Cola concentrates on marketing the less popular products then these products
will have a bigger presence in the market. Marketing is something Coca-Cola clearly does
extremely well and these products have the potential to increase the revenue. The final part of the SWOT analysis is the external factors that have the potential to put
Coca-Cola at risk, the threats. Although Coca-Cola may not have control over these, the outcome
has the potential to be lessened if Coca-Cola is prepared for them. The first threat is raw material
scarcity. Water is a threat to Coca-Cola because the scarcity of water is on the rise. The climate
today proves to be a problem especially because some countries are already experiencing water
scarcity. If the supply of water is limited, this would cause a downfall in revenue and how much
Coca-Cola is able to distribute. However, this would also affect rivals, such as PepsiCo, too.
Another threat is from indirect competitors. Today, coffee chains such as Starbucks are
becoming increasingly popular and offer healthier alternatives to carbonated drinks. Healthier
drinks such as Tropicana also have the same effect as stores such as Starbucks. Their threat to
Coca-Cola is not detrimental; however, it does affect their sales. Conclusion Coca-Cola Company is a progressive and innovative business which has been leading the
market for soft drinks since the 1800s. Through their various campaigns, vast portfolios, and
several marketing strategies; Coca-Cola continues to be a company that delivers to its customers
and increases their revenue and market share. There is no telling where this company will be in
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