An Analysis of the Coca Cola Company Report

Executive summary

The food and beverage industry has evolved, over time, to achieve innovation and value addition. Although the global market forces continue to drive its growth, it is evident that consolidation, increased government regulations, and changing consumer preferences have radically impacted the business and manufacturing strategy. Ordinarily, a competitive marketplace requires production of a variety of products to meet consumer demands.

Again, high quality beverage products must be consistent and cost-effective. It occasionally does business plan assessments, and product response by enabling associate planning, training session for tools coupled with active and good performance at the ground level. It also establishes relations with respect to reputation and strategies relating to anchor bottling and franchises to get the process moving.

The Dasani water and Tusker beer market are considered to comprise of customers which are essentially the same. The breakdown and build up method allows analysis of these two markets, one for water and another for beer. A customer who drinks beer also drinks water. Water is life and is taken by everybody. The power of name like tusker and coke greatly affects consumers perceptions hence a name should be memorable by visualizing images thus helping position the product.

The aspect of no-name trap is treacherous to companies. The companies should adopt shorter abbreviations like coke for coca-cola and tusker for tusker lager. The consumers can quickly have translations in their minds. Likewise, Dasani Water Company sees every prospective and new customer who is thirsty as target.

Industry background

Foods and beverages industry is recognized as a basic processor supplying an entire consumer circle that has an insatiable appetite to quench thirst and desire. The industry has evolved, over time, to realize innovation and value addition although the global market forces continue to drive its growth (Kuttnig, 2008). It is evident that consolidation, increased government regulations, and changing consumer preferences have radically impacted on the business and manufacturing strategy.

Ordinarily, a competitive market place requires production of a variety of products to meet consumer demands. Again, high quality beverage products must be consistent and cost-effective. Under all circumstances, the industry has been automated to increase safety of workers, environmental responsibility and energy conservation.

The global beverage and food and beverage sector, constitutes farming, retail and catering, food production, distribution (Kuttnig, 2008). In 2008, it was valued at $5.7 trillion USD and is one of the biggest contributors to economic growth with consistent in growth. The industry is anticipated to increase at a 3.5 percent to $7 trillion US Dollars by 2014.

Structure wise, the industry is greatly fragmented with top few players like Unilever, Kraft Foods, and Nestlé producing less than 5 percent of the entire value. Europe constitutes the largest share in the Food and Beverage industry globally, making revenues of $1.4 trillion USD and employing about 4 million workers. Other large scale manufacturers are the US, China and India (Kuttnig, 2008).

Company background

Coca-Cola Company is an international company, based in Atlanta, USA. It produces and distributes various drinks across the globe. It was started more than 125 years ago after the commercial and scientific success of John S. Pemberton in 1886. Interestingly, it has undergone evolution in brands and market to sell more than 500 brands to about 1.8 billion people in a day.

The earlier challenges were outpacing competitors but were improved by repackaging and increasing the marketing efforts. Since 1980s, the company has adopted many advertising slogans like ‘coke is it’, ‘always coca-cola’ and ‘open happiness’. It is spread in more than 200 countries with successful market penetration. It has started to produce Dasani water, which becomes the main focus of this report.

East African Breweries Limited (EABL), manufacturing Tusker lager commonly known as Tusker, was started by two brothers Charles and George Hurst. It was formally registered Kenya Breweries in 1922. Its first order was ten cases. Unfortunately, a rogue elephant gouged George Hurst, and to memorize him, the lager was renamed Tusker.

The beer has become East Africa’s celebrated brand over the years for international visitors to East Africa. In the recent past, many airlines flying into East Africa have established a brand-extension to market the brand and provide a market share.

Strategic Marketing

Coca Cola Company focuses on its posterity by being in tandem with the dynamic market to create assurance of future presence. It continuously assesses plans of business to enhance greater effectiveness at the ground level. It also builds good relationship in connection to reputation and strategies linked to anchor bottling and franchises for the process implementation. In addition, culture and capabilities are enhanced while engaging other partners in the same field of progress through informed leadership (Dalton, Todoro, & Krackhardt, 1982).

Macro Environmental Forces

1. The demographics: Coca-Cola and Tusker consistently monitor consumption patterns of the general population. Individual preference changes will likely change future uptake of brand and image.
2. Economic Forces: Amid economic crisis, consumers always become sensitive to consumption and probably prefer off-brand products offered by competitors. The two companies will be cautious to bring on board consumers who are out to seek cheaper alternatives.
3. Natural Forces: The firms routinely check on the movements of natural forces on Earth. Coke has established a foundation to assist in the preservation of polar bears, building the world’s largest recycling plant of plastic bottle and developing an energy saving cold drink equipment. Tusker is funding forest and wildlife conservation in Kenya.

Micro Environmental Forces

1. Suppliers: A page in the website of Coca-Cola and EABL has been particularly designed to accommodate issues of suppliers. They concede that diversity, guiding cannons and supplier requirements. Suppliers will also have to maintain quality to have a good rapport with their customers. For example, Coca-Cola offers frequent inspections and intensive training to suppliers, who in this case are taken as partners.
2. Marketing Intermediaries: The two companies directly engage with intermediaries. A website is dedicated to assisting intermediaries with employee training challenges and increase operations. They also work to improve server hospitality to enhance consumer satisfaction.
3. Customers: Coke and EABL developed systems to cater for news alerts and queries or complaints from customers. They are deeply concerned with the likes and tastes of their customers.
4. Competitors: The major objectives of Dasani water and Tusker are to deliver excellent products to their consumers more than any other competitor. They have succeeded by creating costumer brand awareness, aggressive advertising, and constantly new products development like developing a new resalable can that is convenient to consumers.

SWOT Analysis

Strengths:

The image of Dasani, just like coke, is highly romanticized and deeply in the heart of many consumers. This is one of Coca-Cola’s greatest strengths because it is enjoyed by more than 680 million times a day (Hamermesh & Pfann 1996). It gratifies as a strong symbol of quality and enjoyment.

Similarly, Tusker brand is one of the great strengths of EABL in East Africa. It gives the organization an opportunity to undertake their business on an international approach while at the same time having a local approach. Tusker has a strong market presence in the region because of superior quality products which have tasted superiority over time.

Weaknesses:

Minimization of weaknesses is any business requires effective monitoring to attain efficiency and productivity in their business’s activities, Dasani is no exception. Reduced consumer purchasing power has reduced consumer sales volumes in countries like Thailand and Indonesia.

Tusker brand has also been a victim of stringent government regulations on alcoholic drinks in the East African countries. This has seen it sales drop as a result of reduced hours of its consumption (Hamermesh & Pfann 1996). It has also been associated with health problems like gout and continues to face major hurdles through health tough regulations and state decrees (Hitt, Ireland, & Hoskisson, 2011).

Opportunities:

Dasani and Tusker’s competitive position are influenced by reputation of their brands. This strategy gives Dasani a huge leverage to cover a vast geography and diverse area. Tusker sales and industry positioning have been also affected packaging changes by installing a bottling system that has allowed the company to gain greater advantage of infinite East African growth opportunities (Hamermesh & Pfann 1996).

Threats:

Presently, huge competition comes from substitutes like soft drink industry. Though very strong, consumers do not necessarily buy into it. Currently, soft drink consumers are cautious of the health implications of sugar in the drink (Hamermesh & Pfann 1996).

Similarly, Tusker has threats from competitors like summit lager, London distillers and Mt. Kilimanjaro distillers. Wines and spirits directly impact the beer market, and because of their cheaper pricing, spirits are consumed by a large segment of alcoholics. Tusker has expanded to most East Africa markets. They now have a bigger share of the markets.

Another key threat is that of consumer power. The rivalry between castle lager and Tusker saw the former close shop and moved to southern Africa. Furthermore, consumers of beer can easily change to other alcoholic drinks with lower cost, of course with higher costs on their health.

Market Segmentation

The Dasani water and Tusker beer market are considered to comprise of customers which are essentially the same. The breakdown and build up method allows analysis of these two markets, one for water and another for beer. A customer who drinks beer also drinks water. Water is life and is taken by everybody (Ilmakunnas & Maliranta, 2005).

In socioeconomic terms, Tusker and Dasani are consumed by middle class while spirits and tap water are usually taken by the lower income earners but also stretches across the income levels. So beer is about prestige and esteem as seen in some advertisement slogans while water is a basic necessity.

The consumer market of water is almost 100% though much enthusiasm has not developed in bottled water as seen from demographic patterns. Dasani targets consumers of all ages and segments of income earners in all geographical areas around the world.

Tusker brand targets adults who have come of age, that is, over 18 years. Tusker is available in a 330ml, 500ml brown bottles and is favorite among mature men while Dasani bottles even above one liter plastic containers and appeals to all ages. (Ilmakunnas & Maliranta, 2005).

Target Markets

Dasani water considers every potential customer and existing customer who is thirsty as target. The target market for the Dasani and Tusker is based on age. The target audience of tusker is above 18 years while Dasani is younger or youth. Also, targeted are those with a busy life style, mobile generation, and family dependent and fun loving people (Hellerstein, Neumark, & Troske, 1999).

Targeting Strategy

Tusker has developed its channels of distribution through alignment to changing retail trends. They have spread through leading supermarket chains regionally. Tusker Keg is currently being delivered to outside catering and functions (Hulten, 2006).

Tusker usurps the opportunity to meet the needs of the social class, where it is overly accepted, as a beverage, to beat at many social occasions. New interests of diversifying the brand have been included in the strategic plans to broaden to Eastern African, continental Asia, Australia, Europe, North America, and also through brand stratification (Hulten, 2006).

Dasani monitors Customer’s Media Habits through marketing research and promotion. The target consumers of Dasani brand is those who cherish and like media. They are largely a mobile age and more of their time on face book and twitter. They are also entertainment lovers (Foster &Haltiwanger, 2001).

Positioning Strategy

Tusker being iconic and famous brand is repositioning the brand in a manner in which it would benefit from its well founded iconic status and traditions, it constantly reengages with new segments of consumers. Brand framework strategy has been created for the Tusker product family (Froyen, 2012).

“Refresh Your Roots” slogan was adopted to create a media brand based campaign to reposition the Tusker brand. The positioning strategy of Dasani is to be first in getting into the consumers mind as it is easier to recall what is first than second (Daveri, 2004). This gives much advantage than the second comer.

Being a market leader is important, since the first comer takes twice the customer base of the second, which also has twice the share of the market for the third player. It is always better to be first and start a relationship than to be late. Other issues are being ahead of competition, ruling under the power of name and creating more networks.

Recommendations

The most innovative ways the two companies can engage in are, to identify their market and carve out a niche. This can be done by running successful advertisements, which reposition the competitors. Given the fact that product consumers have an attitude of valuing original products more than the label they have, Dasani is more productive in the market more than its parent company, Cocacola.

The power of name like tusker and coke greatly affects consumer perceptions hence a name should be memorable by visualizing images thus helping position the product (U.S. Dept. Of Agriculture, 2008). The aspect of no-name trap is treacherous to companies. The companies should adopt shorter abbreviations like coke for coca-cola and Tusker for Tusker lager. The consumers can quickly have translations in their minds.

All age groups are targeted with consumers of age group from 18-60 which will represent about 75% of overall age segments. The target market for the Dasani and Tusker is based on age. The target audience of Tusker is above 18 years while Dasani is younger or youth. Also, targeted are those with a busy lifestyle, mobile generation, and family dependent and fun loving people. They also target lower class and upper lower class. (Blakemore &Hoffman, 1989).

References

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Daveri, F 2004, Delayed IT usage: Is it really the drag on europe’s productivity, CESifo Economic Studies, vol. 50, no. 3, pp. 397 – 421.

Hamermesh, DS & Pfann, GA 1996, Turnover and the dynamics of labour demand, Economica, vol. 63, no. 25, pp. 359 – 367.

Froyen, RT 2012, Macroeconomics: Theories and policies, Pearson Education Limited, New York.

Hellerstein, JK, Neumark, D, & Troske, KR 1999, Wages, productivity, and worker characteristics: Evidence from plant-level production functions and wage equations, Journal of Labour Economics, vol. 17, no. 3, pp. 409 – 446.

Hitt, M, A, Ireland, R, D, & Hoskisson, R, E 2011, Strategic management: competitiveness & globalization, (9th ed.), Cengage Learning, New York.

Hulten, D 2006, Microeconomics evidence. In Harper, M J (Eds), New Development Analysis, University of Chicago Press, Chicago.

Ilmakunnas, P, & Maliranta, M 2005, Technology, labour characteristics and wage productivity gaps, Oxford Bulletin of Economics and Statistics, vol. 67, no. 5, pp. 623 – 644.

Kuttnig, C 2008, Marketing on the Internet: The food and beverages industry, University of West Florida, Pensacola.

U.S. Dept. Of Agriculture 2008, SWOT analysis: A tool for making better business Decisions, Risk Management Agency, Washington.