MARKETING STRATEGY
Introduction
In the twenty first century, formulation of an effective marketing and innovation strategy is one of the greatest challenges that have faced many organizations. This is based on the fact that there have been many changes in various markets and industries as a result of high competition levels, due to the introduction of similar and alternative products, serving the same need. Every day, new products are introduced to the market, which come with new innovations and marketing strategies, leaving the customers spoilt of choices (Pangarkar, 2011). To make a mark in the market therefore, a company has to come up with unique and outstanding innovations, backed with effective marketing strategy. This is what this paper is going to assess by taking a critical look at The Coca Cola Company. This includes its marketing and innovation strategies, its new products as well as the flexibility of its operation strategies and policies.
1. The Coca Cola Company’s marketing and innovation strategy transformation
Having been in operation since 1892, The Coca Cola Company is one of the longest existing corporations that have in fact, been in operation for over a century. In February 2008, the company adopted and launched a new and innovative marketing strategy, Buy, Drink, Smile. Having been in operation for such a long time, the company has been able to experience and understand the changes that take place in customers’ preference for various products, especially the beverage products. At the same time, one of the most important things that the company has noted is the fact that customers’ preference on the products change and evolve with changing times and in coordination with the latest thing in the market, the world as well as the people’s social lives. Based on this fact therefore, The Coca Cola Company has consequently formulated its marketing and innovation strategies based on these changes, thereby adopting a flexible strategy to apply in the formulation of these strategies. In order to position The Coca Cola Company on the customer trend’s cutting edge, the company has adopted and formulated a marketing and innovation strategy based on latest trends in the market. This has been achieved through a number of ways (Isdell, 2011).
Secondly, bearing in mind that the company is a multinational service provider, this new strategy acknowledged the fact that different countries and regions had different cultures, norms and beliefs. With these differences, what might be acceptable in one community or region might not be approved in other regions, based on various factors such as religion. With the adoption of this new and innovative strategy, three things were prioritized; the customers demand which was in fact, the core driving the company, the consideration of Coca Cola Company as a brand, provision of all-day-ideal beverages (which in this case recommended non-alcoholic beverages) and lastly (and most importantly),‘local thinking’ in beverages’ provision. With the application of these principles, the company is in a position to cut across all the customers’ trends and at the same time, offer quality products to suit the occasion and season.
2. The Coca Cola Company’s strategy concerning healthy beverages
With the realization that the market is constantly changing both in preferences as well as competition (as a result of emerging alternative products in the beverages’ market), The Coca Cola Company through its Quality Development Team has taken an important step especially in its marketing mix as well as products’ delivery, by considering both the common as well as the special customers. In this case, it has introduced and fiercely marketed health beverages.
According to the company’s Chief Innovation & Technology Officer Mr. Danny Stickland, by taking this major step, the company seeks to provide quality products to its customers and at the same time, maintain its core goal, which is to offer refreshments to the customers. With the underlying concerns from customers demanding health-conscious products, the main step that the company has taken according to Mr. Stickland is to input cholesterol-reducing agents in the beverages as well as implementing a 16.2% brain food in the products. To achieve this, the company has already planned to invest €18.5 billion shillings into the project by the end of this year (2012). These funds will be used to implement this set goal after carrying out research studies in respective target markets, and also finance promotional strategies for these products.
A number of outcomes have already been realized in the market, for example with the introduction of the Minute Maid Juice, which is rich in Omega-3 acid and with 0.0% cholesterol. This new product has been developed in conjunction with The Beverage Institute for Health and Wellness.
3. Mary Minnick: Why people consume beverages
Having served at The Coca Cola Company in the capacity of The Chief Marketing Officer, Mrs. Mary Minnick has critically studies customers’ purchasing behavior, changes and trends. According to her logic and opinion, Mrs. Minnick insists and emphasizes on the fact that customers purchasing behavior and trend will always change according to the current changes and trends in their social lives. As a result, it is always important for the Coca Cola Company to keep abreast with the changes taking places across the world, particularly in their market destinations. Putting this into consideration, the company’s marketing and innovative team will be in a position to develop a marketing mix for the company as well as a strategy based on these changes (The Coca Cola Company, 2008).
Secondly, according to Mary Minnick, some of the most prevalent aspects in the beverages’ industry are always prone to change as a result of the internal and external factors that motivate, change or influence the customers. These include both their personal as well as the collective opinion that directly influence the customers to make the changes. During the Istanbul Conference for example, Mary Minnick pointed out the fact that one of the most important issues that the company should address is production of beverages based on the customers’ health concerns and preferences. This, she relates it to the current health concern especially in the twenty first century, which has prompted health concern extremist customers to go for alternative products that apply a lot of weight on this matter (The Coca Cola Company, 2008).
According to Mary Minnick therefore, one of the most important things that every service provider should consider (and in this case The Coca Cola Company) is the underlying reason why a customer purchases and consumes a beverage. This is based on the fact that as much as the company seeks to offer its beverages and products majorly for refreshment purposes, this might not be the case and reason why all customers purchase the products. Some might purchase them for secondary purposes, for example their nutritive value. These too, should be considered in the manufacturing of the products. In Mary’s opinion therefore, it is important for the company to not only consider it’s opinion of offering refreshments to the customers as the primary motivator to customers’ purchasing behavior, but also put into consideration the fact that some customers opt to purchase beverages based on their nutritive and health value, as their primary motivator.
4. The underlying logic of Coca Cola Company’s non-carb drinks’ strategy
Just as earlier discussed, the customers’ perception and consequent purchasing behavior largely relies and depends on the existing trends both in their social lives as well as their perception towards various aspects in their lives affiliated or connected to the product at hand. In this case for example, it has been traditionally understood that Coke is a carbonated product. Based on the fact that one of its objectives is to create Coca Cola as a brand, one of the characteristics that customers (especially longtime customers from many parts across the world) highly hold concerning Coca Cola products is the fact that they are carbonated drinks. With this association, many people have seen it as a strong feature concerning the products that they can always relate it with (Roth, 2012).
Mary Minnick however, has been advocating for no-carb products to be sold to the customers, and from a corporate and branding point of view, she is committing a career suicide, based on the fact that she is interfering with one of the strongest features that customers have related the product with, over the years. However, this is an important issue that should be addressed from different points of view. To start with, it is important to understand the fact that as much as customers have been associating Coca Cola beverages with carbonation, their opinions concerning this feature is prone to change, just like any other opinion they hold concerning various products. From this point of view therefore, it is the duty of the company to change and influence their opinion concerning the same, by themselves. To start with, health conscience is one of the greatest determining factors that have affected customers’ opinions concerning various products. With this view therefore, it is important to put health considerations first, and develop a non-carb culture in manufacturing and packaging of their products. customer education according to Mary Minnick is one of the most important avenues to use in not only changing the customers’ opinion concerning carbonation, but also dissolving carbonation as a strong feature of the Coca Cola products (Isdell, 2011).
According to Mary Minnick, by adopting a non-carb drinks’ strategy, the organization will be in a position to develop and implement a policy that will not only monitor and put into consideration the customers’ health, but at the same time gradually dissolve the existing carbonation characteristic feature, which is a risk to the company and most importantly its products, if by any chance the customers’ opinions are swayed against carbonated products in future, by the existing and developing competitors. At the same time, this strategy is also a chance for the Coca Cola Company to fiercely market its other products a part from the soft drinks, which in this case include coffee, vitamin drinks and tea, which in fact have a stable and growing market in the Asian countries, particularly the developed countries such as Japan, Korea and China. In this case therefore, the Coca Cola non-carb strategy will not only be breaking down a possibly risky feature that might exist among customers in many parts across the world, but also create a platform through which its alternative products will be sold and promoted (Roth, 2012).
5. Coca Cola and Pepsi’s performance: Comparison and Contrast
The Coca Cola Company and Pepsi are two companies that have existed in the soft drinks and beverages market for a very long time. As a result, they have not only learnt a number of things from each other (particularly their marketing and operational strategies), but also developed their own unique identities across their specific customers. However, even with their uniqueness and identities’ formulation, the two multimillion companies have similarities and differences, not only in their operations, but also in their products, and delivery of the same (Idowu, 2010).
a) Comparison
Secondly, it is also important to note the fact that for both companies, as much as they might be operating and offering their services in similar or almost-similar regions and destinations, each company has its own respective target market. This is the population that guides and dictates its performance and operations, as well as formulation of strategies to use, apply and implement in achieving their own set goals and objectives through strategies (Idowu, 2010).
b) Contrasts
As much as these two companies have their own specific goals based and founded on their customer base, there are a number of differences especially in their operations that makes their services’ and products stand out. These differences as seen in the provided cases are defined and brought about by the policies and the strategies they apply in offering their services to the customers.
Secondly, management of both the local and the international markets in both Coca Cola and PepsiCo is another performance difference between the two companies, based on the fact that PepsiCo has been able to balance and offer equal performance attention to both its local market in the United States as well as its international markets. Coca Cola Company however, has focused more on specific markets, particularly the American, European and Asian markets. This has led to operational crises in various markets such as bottling challenges in its Australian market (Aaka, 2004).
Conclusion and recommendation
Aaka, D. (2004). Brand portfolio strategy: creating relevance, differentiation, energy and clarity. New York: McGraw-Hill, pp. 92-101.
Idowu, S. (2010). Global practices of corporate social responsibility. New Jersey: Prentice Hall, pp. 98-144.
Isdell, E. (2011). Inside Coca Cola. Atlanta: St. Martin’s Press.
Pangarkar, N. (2011). High performance companies: successful strategies from the world’s top achievers. New York: McGraw-Hill, pp. 115-121.
Roth, B. 2012. “Coca-Cola’s Best Practices for Aligning with Healthy and Sustainable Customers.” TriplePundit 2(2), pp 2-3.
The Coca Cola Company. (2008). “The Coca Cola Company Annual Review.” Retrieved from http://www.thecoca-colacompany.com/investors/pdfs/2008_annual_review/2008_annual_review.pdf on July 1st, 2012, pp. 1-30.
