OPTION A: Existing Business

Introduction

The current report presents an analysis of the Coca Cola Company. The report begins with the provision of information on the background of the company. This is followed with the identification of the nature of the company’s market focusing on its target market and the basis for the segmentation of the market. The current and future needs of the customers to the organization are also discussed. The report also presents an analysis of the marketing mix that indicates how the customers’ needs are satisfied. The paper finally presents the use of the Ansoff’s Matrix in proposing a suitable strategic orientation for the organization’s products.

Background Information

The Coca Cola Company has been in business for almost 70 years now. Since its inception in the year 1886, the company has continued to offer beverage drinks to customers from across the world (Alon, Jaffe & Vianelli, 2013). The beverage offerings began to expand in the 1955 following the introduction and sale of Fanta orange. Since then, the company has continuously introduced a variety of beverages with different brand names and in different portion sizes to the consumers (The Coca Cola Company, 2012). According to Pendergrast (2013) the organization believes in offering a variety of beverage products for every life occasion, life stage and lifestyle, hence the different kinds of beverages that are availed by the company.

Currently, Coca Cola sells its over 500 beverage brands to more than 200 nations across the world. These beverages are offered in numerous categories such as low, regular and no-calorie beverages, fruit juices and drinks, sports and energy drinks, ready to drink coffee and tea, and bottled water. Recent development has also seen Coca Cola pack soup in canned containers (Alon, Jaffe & Vianelli, 2013). Coca Cola pays much attention to its customers’ needs and the culture of the region they are to venture in. This has seen the company make products that suit the customers’ needs in very region across the world.

Prior to the release of any product into the market, the management of the Coca Cola Company ensures that the products undergo nearly 450 tests to ensure that the ingredients used and the packaging quality meets the company’s standards (Pendergrast, 2013). This explains the consistency in quality of the Coca Cola products that are offered in different countries across the world. The intensive promotion and advertisement of the Coca Cola products also explains there large market that they have garnered since the introduction of the products. It is observed that Coca Cola commands more than 50% of the beverage industry in most of the nations across the world (The Coca Cola Company, 2012). The rapid growth and expansion of the company since its inception are attributed to the quality of the products that they offer, their focus on providing products that meets the customers’ needs and that are in line with their respective culture, and their effective promotion and advertisement of the products that they offer to create awareness on their existence and suitability to the customers.

Organization’s Market

The target market for Coca Cola Company

The Coca Cola Company offers products that seek to satisfy the needs of a wide range of people. The organization has soft drinks that target people of different age groups, sexes and lifestyle. For instance, the company has fruit juices that are mainly made for young children of the age between 3-10 years (Alon, Jaffe & Vianelli, 2013). Disney hundred Acre Woods and Qoo are the major fruit juices that are made for children within this age group.

Coca Cola Company also produces fruit juices that target the adults of the age between 30-50 years. This fruit juice is mainly availed for the adults who need a healthy juice with a grownup taste (Pendergrast, 2013). The products are offered in different flavors such as orange, grapefruit, tangerine and carrot. Odwalla is the brand name for the product.

The company also targets the teenagers and young adults in the market. Oasis and Hi-C are designed for teenagers and adults of the age between 13-25 years. The minute maid fruit juice and a range of Coca Cola beverages with brand names such as sprite, Fanta and coca cola are however availed to all consumers irrespective of their age and gender. The products are acceptable to the youths, young adults and adults as well as the children. However, the products are not recommended for children below the age of 3 years (Pendergrast, 2013).

Apart from targeting the children, teenagers and adults, Coca Cola Company also targets athletes and other individuals engaged in any form of sports. The company produces a range of energy drinks that are mainly consumed to boost energy and for thirst quenching. The energy drinks are also offered to men in the workforce due to their ability to boost energy. Coca Cola also offers bottled water that mainly targets the athletes and any other individual who needs to quench their thirst (Alon, Jaffe & Vianelli, 2013). Ideally a large number of consumers are targeted with the bottled water since it is likely to be suitable for any thirsty individuals.

Coca Cola Company also offers products that are suitable for consumers that are dieting or want to stay healthy. The company has focused on producing a wide range of beverage products that are low in caffeine and calorie content making the products suitable for those who need to balance their calorie intake with physical exercising. Coca Cola zero, Coca Cola diet and Coca Cola with lime are the products that are availed to this group of individuals.  

The target markets for the company therefore includes, children, teenagers and young adult and adults. The company also targets athletes and other individuals engaged in different kinds of sports. The individuals who are dieting or need a healthy lifestyle are also targeted.

Basis for the segmentation of the market

The wide population of the consumers of the Coca Cola products and their location in different nations makes segmentation a vital approach that must be adopted by the organization to meet the different needs of its target customers. According to Appiah-Adu & Amoako (2016) segmentation assist an organization in improving the sales of their services and products by identifying the needs of their customers and carrying out innovations to offer the most suitable products. Coca Cola has divided its large market into different segments to enable it meet the needs and demands of the customers effectively. Geographical segmentation is one of the approaches that have been adopted by the organization to divide the market. According to Hollensen (2015) the company has divided the market based on the geographical locations of the nations under which the organization operates. Chu & Chiu (2013) has indicated that the consumers from every region across the world are likely to have different needs and preference for the beverage products. As such, they are not likely to have the same level of acceptability for the different products that are offered by Coca Cola (Amini, Darani, Afshani & Amini, 2012). The company has therefore segmented the markets into various locations based on the similarities in the culture of the different people living in the region. For instance, the Eastern part of Africa is treated different from the Asian nations due to the difference in the cultural values of the citizens that are likely to have significant influence on their needs and perceptions on the different kinds of products that are offered by the organization.

Apart from the geographical segmentation of the market, Coca Cola has also divided the huge market based on the psychographics of the consumers. This refers to the use of the lifestyle and opinion of the consumers to divide the market. According to Pendergrast (2013) every region where Coca Cola operates has different kinds of people with different kinds of lifestyle. The organization has therefore divided the market based on the lifestyle of the individuals by offering different range of products to the regular consumers of beverage drinks and to those who are dieting or desire to have a healthy lifestyle. These different kinds of people are not only provided with different kinds of products but are also treated differently in terms of the advertisements and promotional strategies adopted to convince them into making purchases.

The Coca Cola market is also segmented based on the demographics of the potential customers. Generally, the major targeted customers for the Coca Cola products are the teenagers and the young adults; however, the organization also offers additional products to the adults and the children of between the ages of 3-10 years (Amini, Darani, Afshani & Amini, 2012). The company has therefore segmented the market based on the age of the customers. There are products that are only suitable for different age groups, yet there are also others that can be consumed across the board. The segmentation process has enabled the organization to know the specific needs of the consumers within every segment for better services to be offered.

From the analysis of the segmentation process, it is observed that the Coca Cola Company has no specific defined segment that it targets. Rather, the organization has different segments that it treats differently to allow for proper sale of the different kinds of beverage, fruit drinks, energy drinks and bottled water that it offers.

The current and future needs of the customers

One of the current needs of the Coca Cola customers is to quench their thirst with the consumption of the different kinds of beverages that are offered by the organization. Most of the consumers also have a need of consuming a caffeinate beverage to keep them active and more energized. It is observed that a certain group of the Coca Cola products also aim of acquiring additional energy to perform certain tasks through the consumption of the energy drinks that are offered by the organization. The Coca Cola products are also associated with parties and festivities hence are needed by individuals who want to make their parties a success through the provision and consumption of the Coca Cola beverage products.

As much as people will still need to quench their thirst in the future, they are likely to require a product with lower calorie levels. The recent development has seen the Coca Cola products being associated with increased obesity levels in different regions across the world. Majority of the products offered by the company contains a higher level of calories thus are not considered as health drinks. With the health implications arising due to obesity, people will tend to move away from the consumption of the Coca Cola products that are high in calories and contain a higher level of caffeine to ensure they stay health.

Marketing Mix

Every organization needs to create an appropriate mix of right product, at the right place, at right price and through the right promotion to effectively market its products. The marketing mix is a therefore a marketing tool that is made up of the 4ps that must be considered in any marketing process. According to Resnick, Cheng, Simpson & Lourenço (2016) all the 4ps in the marketing mix tool are interrelated, therefore a decision to change one of the Ps will have significant effects on the other Ps. Marketers must be aware of the changes and implications that are likely to be observed in any of the 4Ps of marketing mix in the event that any is changed. As indicated below, the marketing mix tool is appropriate in assisting the marketers make vital decisions on the kind of products to avail to the consumers, the prices to charge, the promotional strategies to adopt and the approaches to use in ensuring that the products reaches the consumers. The elements of the marketing mix are graphically presented below.

Focusing on the case of the Coca Cola Company, the marketing mix adopted by the organization is to meet the needs of its customers. The company seeks to offer the right product, at the right price, at the right place and through the use of the right promotional approaches to its customers. A discussion of the 4Ps of marketing as adopted by the organization are advanced herein

Product

Coca Cola Company is the leading provider of soft drinks to the consumers in the world. The company has more than 3000 kinds of beverages that are offered to the large number of consumers across the world. There are a number of brands that are offered for purposes of quenching the consumers’ thirst. The bottled water and the regular coke as well as other brands of beverages such as fanta and sprite are availed to the customers for purposes of quenching their thirst. According to Pels & Saren (2013) for the above mentioned range of products to be effective in ensuring that the consumers quench their thirst, they must be consumed when cool or cold. The company has provided refrigerators to different retailers in the hot countries to ensure that the products reach the consumers when cold.

Coca Cola also offers energy drinks that are capable of offering additional energy to individuals, athletes and other persons taking part in other kinds of sports. The company also produces fruit juices and drinks that are suitable for children and consumers who do not consume caffeinated drinks. Coca Cola availed the diet coke that was suitable for people with a healthy lifestyle. However, Czinkota & Ronkainen (2012) has reported that the product was largely associated with women and men were not comfortable consuming it. The introduction of the diet Coke has seen a number of men who were on dieting and weight management considering its consumption since its masculine in nature. The focus on fruit juices and low calorie products is assure way that the company will be capable of meeting the future needs of the consumers even when they revert to the consumption of drinks that are low in calories.

Price

Coca Cola adopts a value oriented strategy in its pricing. Despite being a market leader in the non-alcoholic beverage industry, the intense competition and its fierce rivalry with Pepsi has made the company to maintain an affordable pricing for its wide range of products (Civi, 2013). This pricing is appealing to the consumers within the middle class that are its major target. The company have been in certain case been accused of maintaining lower prices even during the period of economic recession in different nations, nevertheless, Coca Cola has a role of satisfying the needs of the consumers from both the high end as well as those in the middle and lower class within its markets. As such, the company has maintained its prices at a suitable level to provide an opportunity for different category of consumers to make purchases.

Place

The place refers to the extent of distribution adopted by the company in ensuring that the products reach the consumers.It also refers to the strategies adopted by an organization to ensure that the products reach the consumers (Civi, 2013). The Coca Cola distribution strategy focuses on making its wide range of products easily accessible to the target customers. The company’s products are available in almost all the supermarkets in different towns across the world. The products are also available in the retail shops and restaurants. Coca Cola also sells its products in a thousand pop vending machines that are placed in differed businesses and public buildings. The ease and convenience of getting the Coca Cola products have made it suitable for the company to sell huge volumes of its product and have equally enhance the level of customer loyalty to their products. Shaw (2012) has also indicated that the effective and extensive distribution network adopted by Coca Cola have eroded the middle and small level players within the industry. It is observed that the Coca Cola products are even found in very small villages in different nations across the world. The extensive distribution strategy adopted by this company has contributed to it being the market leader in the provision and distribution of beverage products in most of the countries under which it operates.

Promotion

A number of promotional approaches and strategies have been put in place by Coca Cola Company to create an increased demand for its wide range of products. The company’s promotional approaches are associated with lifestyle and behaviors and are mainly value based advertisements. Coca Cola spend a significant amount of its promotional resources on television advertisement. According to Motohashi (2015) this approach is the most effective in reaching a larger number of audiences. As such, concentrating on this kind of advertisement ensures that the organization creates a higher demand by communicating its product benefits to a large number of consumers.

Magazine advertisement, social media and online platforms have also been used to create demand for the products. Since the major target for the company are the youths, they are likely to be reached through these kinds of marketing approaches thereby creating a higher demand. Coca Cola also adopts sales promotions at the retail store to improve revenue during low seasons. These promotional approaches adopted by Coca Cola inform the customers on the benefits of the products as well as increase demand for the different kinds of products that are offered by the organization.

Ansoff’s Matrix

Ansoff’s matrix is a tool adopted in strategic planning to avail a framework needed to assist the executives and senior managers’ device suitable strategies for their future growth. The matrix suggests that any business growth is dependent on whether the organization markets existing or new products in existing or new markets (Hussain, Khattak, Rizwan & Latif (2013). The matrix highlights the four strategies that can be used to aid in the growth and expansion of the business. The matrix also assists the managers analyze the risks involved in taking any of the strategies. The major idea is that as the decision maker moves to a new quadrant, the risk in business increases. Hence the matrix does not only show the strategies that can be adopted to improve the growth of the business but also inform the decision makers on the potential risks associated with the strategies (Hussain, Khattak, Rizwan & Latif, 2014). The four quadrants of the Ansoff’s matrix are illustrated below

Market Penetration

       Market penetration is a growth strategy adopted by an organization to sell the existing products in the existing markets. The main objective that the market penetration strategy seeks to accomplish is to maintain or increase the market share of the existing products. In addition, this strategy seeks to ensure that the organization secure dominance growth in the market. The market penetration strategy also has an objective of increasing the usage of the products offered by the organization and also restructuring the mature market by driving out competitors.

       As much as the Coca Cola has maintained a lead in the beverage industry, the organization needs to enhance its dominance in the industry as well as increase the current market share of the different products that it offers. This can be accomplished through aggressive promotions of the products that are offered by the organization to enhance their demand. Moreover, the company should consider devising a competitive pricing strategy that is likely to drive the competitors away giving it an opportunity to not only increase its market share but also maintain dominance in the industry.

Market Development

       Market development refers to a growth strategy adopted by an organization to offer the existing products in the new markets. According to Basu (2014) this strategy is more risk than the market penetration approach since it involves venturing into a new market that is new to the business owner.  Shaw (2012) has indicated that market development requires the business owners to move to new geographical markets or adopt new distribution channels. The company may consider adopting new pricing strategy to create a new market segment. It is evident that Coca Cola is the only beverage producer that has managed to operate in most countries across the world. The effectiveness of the company in distribution of its services has also made it possible for the products to be accessible to a larger number of its consumers. Nevertheless, the organization should consider creating a new market segment through the use of different pricing policies. As much as the Coca Cola products are popular to most people across the world, the cost charged by the manufacturers is still not affordable to individuals in the lower class. As such, the organization should consider offering lower prices to some of the products that will target this group of consumers. This will ensure that their needs are met at the same time assist the company collected additional revenue.

Product Development

       Product development growth strategy focuses on the introduction of a new product into the existing markets. This approach requires the business to avail products that are modified in nature and that are appealing to the existing markets. According to Hussain, Khattak, Rizwan & Latif (2013) this strategy is suitable and effective in situations where the organization needs to remain competitive. Basu (2014) has also indicated that the growth strategy can only be effective in cases where there is a detailed insight on the needs of the customers and when the research and development and innovation of the company is effective. Focusing on the case of Coca Cola Company, the organization has in the recent past developed a new product Coke zero that mainly focused on meeting the needs of the customers who needed to stay healthy. However, with the constant campaigns on the benefits of fresh juices over the processed juices or the soft drinks, the company should consider carrying out research on how to avail the fresh juices for it to remain competitive even when most of the consumers moved to the consumption of the fresh products. The increase in the different kinds of diseases that have been associated with most of the beverages makes it a reality that their consumption may reduce in the near future. Coca Cola should therefore consider offering products that are healthy and more appealing to the consumers.

Diversification

       Diversification is a growth strategy that focuses on the marketing of new product in the new market. According to Medarac, Vignali & Vignali (2016) this kind of strategy is more risky since the business is venturing in a market that it has little of no experience in. the diversification growth strategy can either be related or unrelated. In the unrelated diversification, the organization considers offering new products that are totally unrelated with the beverage drinks (Hussain, Khattak, Rizwan & Latif (2013). Coca Cola has reported a better performance in the beverage industry hence entering into a totally new business market is not advisable due to the high risks involved. Nevertheless, the organization should consider adopting the related diversification growth strategy by entering the health drink sector. It is not doubt that in the future people will require less if no sugar drinks, as such the company should consider producing a wide range of products that are likely to meet the needs of consuming less sugar and non-caffeinated drinks.

       Coca Cola Company should consider penetrating into the existing markets, diversifying into new markets and producing new products to the existing customers. All the aforementioned growth strategies are likely to lead to an improvement in the performance of the organization, however, the decision-maker needs to evaluate and prioritize the strategies based on the kind of resources each requires and their effectiveness in meeting the organization’s goals.