Global Business Strategy A Case Study Of Coca-Cola Company Logo

Page 2: A global and local strategy

The Coca-Cola Company is the world's largest beverage company and is the leading producer and marketer of soft drinks. The Company markets four of the world's top five soft drinks brands: Coca-Cola, Diet Coke, Fanta and Sprite.

The success of The Coca-Cola Company revolves around five main factors:

  1. A unique and recognised brand - Coca-Cola is among the most recognised trade marks around the globe
  2. Quality - consistently offering consumers products of the highest quality
  3. Marketing - delivering creative and innovative marketing programmes worldwide
  4. Global availability - Coca-Cola products are bottled and distributed worldwide
  5. Ongoing innovation - continually providing consumers with new product offerings e.g. Diet Coke (1982), Coca-Cola Vanilla (2002).

The illustration shows the worldwide distribution of sales of Coca-Cola products by quantity in 2003. Although Coca-Cola is a global product with universal appeal, the Company actually operates in local environments around the world, with each country having its own unique needs and requirements.

So while Coca-Cola is probably the only product in the world that is universally relevant in every corner of the globe, the Company feels that its responsibility is to ensure that with every single can or bottle of Coca-Cola sold and enjoyed, individual connections are made with their consumer. That can only be achieved at a local level.

The challenge facing The Coca-Cola Company today is therefore to continue to build an organisational structure that will deliver a global and local strategy.

According to Interbrand, Coca Cola, a 126 year old company, has a name that is more universally recognized than any other in the world.”It’s not the length of time that Coca Cola has been around; after all, there are lots of tenured brands that are not as well known. It may not even be the taste of the beverage that builds brand recognition. Interbrand says,for millions, it’s the way Coca-Cola makes them feel.”And that “feeling” has everything to do with message design.

Today, Coca-Cola is one of most well-known brands in the world. This company has continued to gain momentum and growth, capitalizing on the rapidly expanding beverage industry and ranking as the largest beverage company in the world. With its push for global market share, Coca-Cola now operates in over 200 countries with over 84,000 suppliers. Currently, over 70% of Coca Cola’s business income is generated from non-US sources (Coca-Cola Company, 2012).

In over a century, Coca-Cola has grown the company into a multi-million dollar business.Coca Cola Company strategy of sales was price penetration where low price are charged and the company attends large market as possible. Unlike price skimming where higher price are charged.

Product strategy was strongly applied such as the modification of its product as well as after sales services which all help to facilitate the marketing of the product. The four (4) basic marketing strategies which are commonly called the 4ps which denote Price, Product, Promotion and Place are exceedingly used as integrated marketing communication by this Coca Cola Company.

Wide Geographic Coverage
Coca-Cola sells finished beverage products bearing the Coca-Cola trademarks in more than 200 countries. Up to 2011, Coca-Cola has 7 operating leadership groups worldwide: Eurasia & Africa Group, Europe Group, Latin America Group, North America Group, Pacific Group, Bottling Investments Group and McDonald’s Division. Their consumers come from different parts of the world. According to the Annual Report of the Coca-Cola, in 2010, worldwide consumption of each person was 89 bottles of 8 ounces finished Coca-Cola beverage. There were 23 countries having the average number of consumption over 100 bottles, e.g. Australia, South Africa, Japan, Spain, Argentina, Canada. In Mexico, each person drank 675 bottles in 2010.

Coca-Cola’s Journey to Globalization
Founded back in the 1880’s, Coca-Cola was developed by John Pemberton as an American iconic brand known for high quality and consistency. During this period in history, storekeepers demanded pre-packaged products with brand name recognition. Coca-Cola met these demands with its iconic red and white logo and brand marketing to instill confidence in the consumer that the Coca-Cola product would taste the same everywhere it was purchased. These strategies soon became the foundation for Coca-Cola’s plan to expand globally. At first, the drink was introduced in Atlanta, Georgia, & was sell for five cents. In 1886, sales of Coke averaged 9 drinks perday. In 1891, Atlanta entrepreneur Asa G C&ler acquire entire ownership of the Coke business & in 1919; TheCoca Cola alliance was sold to a set of investor for twenty five million. In the history 112 years, Coke has surrounded itself into American society. In 1994, theAmerican consumption was further than 773 millionhelping of Coke, diet Coke Sprite, Fanta, & otherfoodstuffs of The Coca Cola Company.

In the early 1900’s, Coca-Cola started to globalize. Bottling plants were initially built in Cuba and Panama as the US military spread to these regions, causing a rise in demand for the Coca-Cola brand. These plants proved to be successful, reducing shipping and delivery costs typical in these regions. Soon after, additional bottling plants opened in Hawaii, Puerto Rico, and the Philippines. These efforts launched Coca-Cola’s investment in testing foreign markets for future expansion opportunities. By 1926, Coca-cola had established foreign relationships and plants around the world in support of its newly created center of global operations. Coca-Cola continued on its path of mass production and rapid expansion for the next several decades. Local branches along with local partnerships to produce and distribute the signature Coca-Cola products were established throughout the world. The ending of World War II and the Cold War marked the signature period in which Coca-Cola had established itself as a true global corporation known for its efficiency and worldwide capabilities. Next, let us take a look at three key strategies employed by Coca-Cola to support rapid growth and expansion across the globe: global marketing strategies, product differentiation, and technology.

On 7th February, 2005, the Coca Cola Company publicize that in the 2nd quarter of 2005 they designed to start a Diet Coke product sugared with the artificial sweetener sucralose, the similar stimulus at present use in Pepsi One. On 21 March, 2005, it announces 1 more diet product, Coca Cola Zero, sweetened to a certain extent with a mix of aspartame & acesulfame potassium. In 2007, Coca Cola begin to put up for sale a innovative “healthy soda” Diet Coke with vitamins B12, niacin, magnesium, and B6, plus zinc,marketed as “Diet Coke Plus.”

Global Marketing Strategies
Coca-Cola’s marketing strategies played a significant role in successfully globalizing the company. The company’s popular advertising slogans and catchy jingles played into the hearts and minds of people around the world. Some of the most remembered advertising slogans include:
⦁ “Drink Coca-Cola.”
⦁ “Things go better with Coke.”
⦁ “Good ‘til the last drop.”
⦁ “It’s the real thing.”
⦁ “Always Coca-Cola.”
⦁ “Enjoy.”
⦁ “Life tastes good.”

Coupled with these slogans, songs were used for strong remembrance of the brand. One of the company’s most popular jingles was known as “I want to buy the world a coke,” produced in 1971 by Billy Davis. The commercial featuring this song portrayed a world of hope and love produced by a group of multicultural teenagers on top of a hill. This commercial went down in history as one of the most well-known commercials of all time.

In addition to Coca-Cola’s advertising efforts, Coca-Cola became the first commercial sponsor of the Olympic Games in Amsterdam in 1928. Coca-Cola continues to be an Olympic Games sponsor today. Coca-Cola has also sponsored many other sporting events such as the International Federation of Association Football (FIFA), National Hockey League (NHL), National Basketball Association (NBA), National Football Association (NFL), Major League Baseball (MLB), NASCAR, and Cricket World Cup.

HISTORY OF COCA COLA’S ADVERTISEMENTS

1800’s
It was the eventful date of May 8, 1886, where it all started. John Pemberton sold his first Coca-Cola drink at a soda fountain in Jacob’s Pharmacy, Atlanta. Subsequently he published the first Coca-Cola advertisement in the Atlanta Journal.

Image by Georgia Info.

There is little creativity found in the first ad, just some text. No artsy fonts, no images, no gimmicks. The first newspaper ad showed the company’s first (and definitely the last) tagline: ‘Delicious! Refreshing! Exhilarating! Invigorating!’ John Pemberton ran a longer and more persuasive newspaper ad. It still promoted the drink as a ‘delicious, exhilarating, refreshing and invigorating’ drink, but added more promises that the drink is an ‘intellectual beverage’, ‘temperance drink’, ‘brain tonic’, and it even claims to be able to cure ‘headache, neuralgia, hysteria, melancholy’ and more.

Early 1900’s
Coca-Cola advertising during the early 1900’s relied on young women as their spokespersons. The first spokesperson of Coca Cola is model Hilda Clark.

By 1920, Coca-Cola could be found at all but six soda fountains across the United States. The drink was popular with on-the-go people, especially since prohibition was keeping bars shut down. Usually people would meet up with their friends or co-workers on their breaks.
Coca-Cola took advantage of this trend. In 1929 Archie Lee came up with the slogan “The Pause That Refreshes,” and it became the first of many popular marketing campaigns. The “pause” became synonymous with Coca-Cola.

Most other advertising campaigns of the 1920’s and 1930’s depicted Coca-Cola as part of the American way of life. Many think that the advertisements made Coke familiar to Americans, and that is the reason why people continued to associate and drink Coca-Cola into the Great Depression.

Advertising for Coca-Cola definitely stands out in the minds of many Americans, and that is most evident in the Coca-Cola Santa Clause ads.

Before artist HadoonSundbloom’s ads appeared in the 1931, Santa Clause had been illustrated as wearing blue, green, yellow, or red. He was also of average size.

But new Coca-Cola advertisements showed Santa as a plump, round man with rosy cheeks and a long, white beard. He is also wearing bright red. He was essentially the perfect image of Coca-Cola. Not only did the ads become popular, but they have helped to shape the way all Americans look at Santa Clause. After the Coke ads, all Santa illustrations became more similar. Now, most of them depict a fat, jolly, red-suit donning man. 

1930’s to 1960’sCoca-Cola is often credited for creating the image of the modern Santa Claus as an old, jolly and fat man in a red and white suit. Coca-Cola did invent the red-and-white jolly Santa during the 1930’s, the illustration done by Haddon Sundblom. Before Santa, pretty young women were used to endorse Coca-Cola.

The image of Coca-Cola Santa Claus appeared through their advertisements for three decades. Because of Coca-Cola advertising, the Santa Claus we all know and love today came into being. Before Coca-Cola’s Santa, the image of Santa is somewhat varied, he can be big, small, fat, elf-like, lovable, old, young, etc. He has worn all kinds of suits, even donning a priest’s robe or even huntsman animal skin.

1960-1980
It was during this era that Coca-Cola went global. The company has now spread to 163 countries worldwide. Year after year, it has captured new markets such as Macau, Turkey, Paraguay, the Philippines, to name a few. Not only this, Coca-Cola has expanded into many different flavors such as Fanta and Sprite.With the swift expansion, Coca-Cola went with a massive advertising campaign. Coca-Cola always believed in advertising. The international appeal of Coke was shared in their advertising with the slogan: ‘I’d Like to Buy the World a Coke’.

1980’s
This decade marked the birth of the diet Coke.

1993
Aside from Santa Claus, one of Coca-Cola’s most memorable symbols of the company,is the animated Polar Bear. It came from the Northern Lights advertising campaign. The first ad featured polar bears watching a ‘movie’, a play of aurora borealis while drinking Coca-Cola.

‘movie’, a play of aurora borealis while drinking Coca-Cola.

2000 – Present

The Coke Side of Life
The ad campaign was launched in 2006 and it’s main theme centers around people drinking Coke and feeling happy and positive. You drink Coke, you feel good. The campaign has optimistic and positive vibes, and it captures the very essence of life. It encourages people to love spontaneity and to see the world in full color.

photos of coca cola art which provide evidence on the theme open happiness.

 

 

 

INNOVATIONS IN PACKAGING

A Unique Bottle Design

At a time where refrigerators were not available, soft drinks were stored in coolers of ice. This made it very easy for imitators to jump into the competition, since all of the bottles were shaped the same and consumers couldn’t see what they were grabbing. It also didn’t help that the paper labels helping to identify Coke would often fall off in the ice.

To alleviate this problem, Coca-Cola began taking submissions for new bottle designs. They wanted the packaging to be unique and identifiable, so much so that if a Coke bottle was shattered, you would be able to tell what it was.In 1916, the winner was announced. Workers from a glass plant in Terre Haute, Indiana came up with the winning design. Ironically, their design was based on misinformation. They thought that cocoa was an ingredient in Coca-Cola, so they made the bottle look like a cocoa seed. The design was slimmed down, and it became known as the contour bottle and the hobble skirt bottle. The unique qualities of the bottle still remain on the plastic bottles of today.

In the early 1920’s, Coca-Cola was on the rise and many people began drinking it. Some people would go to grocers and buy two or three bottles of Coca-Cola at at time.
Coca-Cola noticed this trend and took advantage of it. Meaning, the six pack was born. Cardboard cartons with six holes in it made carrying six bottles of Coke easier for the consumer, and of course, it is a Coca-Cola innovation that is still in use today.

A funny thing happened to Coke in the times leading up to the 1950’s. A new cola named Pepsi was gaining popularity and taking customers away from Coke.One way Coke responded to the new drink was to create more than one bottle size.

This was a scary idea because Coca-Cola had always had just the 6.5 ounce bottle. In fact, a Coke executive said that, “Bringing out another bottle was like being unfaithful to your wife.”
But Coke pushed on with the new bottles. In addition to the traditional bottle, Coca-Cola introduced a king-sized bottle and a family-sized bottle. The purpose was to help out women buying groceries. It would be a lot easier for them to carry one larger bottle among other groceries than carrying a cumbersome six pack.

The 1970’s: More Years of Epic Advertising, Buying the World a Coke
In the late 1969, Coke came up with the slogan “The Real Thing.” To go along with this slogan was a 1971 ad featuring a diverse group of young people.
The ad is recognized by many people. It was filmed on an Italian hillside, and all of the people are singing a familiar songs: “I’d like to teach the world to sing in perfect harmony/I’d like to buy the world a Coke and keep it company.”
This ad held the ideals that Coke ads from years before have held. It had a world appeal, and it associated Coke with friendship.

Release of “New Coke” unwelcomed by fans

In the 1980’s, the sugary soda market began to decline. Executives at Coca-Cola wondered, “Are people getting tired of Coke?” This notion, along with increased competition from Pepsi, prompted Coca-Cola to take a drastic measure.

The research and development team kept a new soda under wraps from nearly everyone, even the bottlers. The team found that among test group after test group, “New” Coke was winning against Classic Coke in blind taste tests.

However, researchers failed to mention one thing to their test subjects: The New Coke that they thought tasted better would completely replace the Classic Coke.

On April 23, 1985, New Coke was launched, but not without backlash from Classic Coke lovers. A group called the Old Cola Drinkers of America formed, and in July Coke had about 8,000 calls a day expressing their anger over the new formula. In addition, angry letters poured into Coca-Cola headquarters every day.

The problem with New Coke was that it broke tradition. By 1980, Coke was an identifiable icon, and changing the taste was almost like changing people’s lives. The taste of New Coke probably didn’t offend them the most; it was the idea of New Coke that hurt fans of Coca-Cola. On July 10, 1985, it was announced that Coca-Cola classic would be returning to store shelves.

World War II

Coca-cola shipped coke to troops while celebrating the war efforts in print ads.Iconic brands have been guided by a set of tacit strategic principles that may be called as the cultural branding model. These principles differ entirely from those advanced by conventional branding schemes. In fact, cultural branding upend many verities by which managers have sworn for decades. To learn how cultural branding works requires setting aside conventional thinking and developing a new mind-set…

Technology

Technology advances contributed to Coca-Cola’s ability to globalize rapidly throughout the 20th century. Product transportation became more efficient and cost effective with the development of bigger and faster semi-trucks, cargo ships, jet aircraft, and trains. Coca-Cola was able to manufacture and ship products quicker and farther to market segments that were unreachable before these transportation improvements. In addition, technology advances became the driving force behind the ease and speed at which information was available. Distributors and warehouses were able to more accurately track inventory levels and fill order shipments, resulting in lower overall operating costs.

Computerization also led to slashed product costs and improved efficiencies. Computerized and automated manufacturing equipment increased the speed and volume in which products were produced. These technological advances enabled Coca Cola to compete on a global scale, selling the well-known brand of products across the world at competitive prices.

It is no surprise that after being in the marketing game for more than 125 years, Coke has brand messaging down to a science, but it is somewhat surprising that they have been able to evolve it with the times so seamlessly. Bedwell asked a simple question, “Why do you use a product?” The first thought that popped into my head was, “because I like it” – of course, but Bedwell corrected – because it has meaning. He noted that when he was younger, he liked Coke because it was American cool (he is a Brit, by the way) and that it had meaning behind that impression. With that in mind, Bedwell stated, “A brand’s job is to create meaning”. What a clean and concise statement, but certainly not easy to do.

Coca-Cola has decided that their meaning, the experience they want consumers to get from their brand, is happiness. This isn’t news to any of us, all of their marketing and advertising revolves around it, but what was interesting to hear was Bedwell’s view of this meaning from behind-the-scenes at Coke.

Summary
The Coca-Cola Company is the world’s largest manufacturer, distributor, and marketer of nonalcoholic beverage concentrate (including carbonated soft drink) and syrups. It was originally founded in the United States in 1886.

Coca-Cola is one of the most well-known brands in the world, operating in over 200 countries.

While the global marketplace has presented numerous opportunities for Coca-Cola, the company has also encountered global attacks on the nutritional value of its products, along with unfair labor practice accusations. Founded in 1880, Coca-Cola began its journey toward becoming the world’s best and largest beverage company. Coca-Cola’s American iconic logo, brand recognition, convenient packaging, and consistent product manufacturing became the foundation for the company’s plan to expand globally.

A pioneer in globalization, Coca-Cola began expanding bottling and manufacturing facilities back in the early 1900’s, establishing key foreign partnerships. Coca-Cola has strong brand recognition across the globe. The company has a leading brand value and a strong brand portfolio. Interbrand, a branding consultancy, ranks Coca-Cola the top leading brands in their best global brands ranking in 2009 and 2010. In 2010, it valued Coca-Cola at US$70,452 million in 2006.

Coca cola’s Brand consistency plays a critical role in establishing their presence both on and offline. In today’s marketplace, there are more platforms to convey the brand message than ever before – making it even more difficult to remain consistent. From smartphones, apps and mobile websites to social networks like Facebook and Twitter, the face of marketing has changed drastically. To give consumers a clear depiction of thebrand, one must deliver a cohesive message across all advertising channels.

Coca cola’s Successful branding is achieved over time, not overnight, and consistency is the key. Once they establish a persuasive, simple message, they stick with it and continue to deliver that message time and time again. Delivering a consistent message doesn’t mean they have always used the same words.

They stayed relevant and bring fresh, new ideas to their campaigns while ensuring that everything they do remains consistent with their brand message.

Coca-Cola’s marketing strategies, including memorable advertising slogans, catchy jingles, and sporting event sponsorships, played a significant role in winning the hearts and minds of consumers globally. Product differentiation, such as offering different beverages in flexible packaging options, allowed Coca-Cola to customize the product for different market segments.

Technology advances, including product transportation, telecommunication, and computerization, became the driving force behind Coca-Cola’s ability to capitalize on the rapidly expanding marketplace across the globe.

DR.SHANMUGA PRIYA
`VELTECH MULTITECH DR.RR & DR.SR ENGINEERING COLLEGE
CHENNAI, TAMILNADU, INDIA
culled from the Brand Nigeria Publication(2014)

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