The Coca Cola Company is a USA based Multinational Corporation which deals in beverages and soft drinks. It expanded its operations from USA to Japan in 1957 and has since been the number one beverage company in Japan. The company has been able to retain this position over several decades in Japan due to two main strategies adopted by it, the Direct Marketing approach and the Independent Local Franchise Distribution System.
The company changed its strategy from country-specific to regional when financial crisis hit the Asian markets in 1997. It began an extensive marketing campaign to cater to the needs of the Japanese customers. Its region oriented marketing strategy was largely based on the fondness of Japanese customers for innovative and new products.
The Direct Marketing approach thus, entailed innovating and producing new products according to the highly volatile tastes of the Japanese customers. This strategy resulted into the introduction of more than 25 beverage brands in more than 60 flavors in the Japanese market. The renewed marketing initiatives also led to the acquisition of local coffee and tea brands by the company in order to build a rapport with the Japanese customers. In 2007, The Company also launched an innovative marketing campaign to advertise their new product, ‘Coke Zero’ in the country. The campaign featured twenty two short films based on a Japanese television show. The films showcased a fictional character, ‘Vending Machine Red’ which was an instant hit with the Japanese consumers.
The company has also made good use of the Independent Local Franchise Distribution System in Japan over the past few decades. The 1997 crisis led the company to purchase a local bottling unit in South Korea in order to enhance the distribution network in Asian markets. Another leap taken by the company to enhance its distribution system was the installation of vending machines. Till date, the company directly distributes its products to its customers through a large network of vending machines that have been installed all over the country. The company is considered to have “the largest network of vending machines in Japan, controlling approximately 980,000 machines nationwide, or 30% of all soft drink vending machines in Japan” (Kotabe and Helsen 10).
Japan is a dynamic and growing market where innovation lies at the core. Japanese customers are extremely fond of using new and innovative products, which is why Coca Cola has been able to flourish in a foreign land through its new marketing approach. The beverage industry in the country is itself divided into “the following categories: Carbonates, Fruit/vegetable juice, Bottled water, Functional drinks, Concentrates, RTD tea, RTD coffee, Asian specialty drinks, and Soft drinks” (Kotabe and Helsen 7). Coca Cola offers products from all these categories however; its best selling products are the RTD tea and RTD coffee which generate almost 80% of the company’s total revenue.
The innovative and region-oriented marketing and distribution approach adopted by Coca Cola Company has been the major cause of its success in Japan. “Innovations in advertising, brands, packaging, and vending have been the hallmarks of this amazing company, as well as a commitment to persevering even in the most trying of times” (Ryan). The company’s zeal to thrive in a foreign country can be contributed to its flexible strategic initiatives and modified approach towards handling a different market. Its success can also be attributed to its ability to please the palates of the Japanese customers as per their cultural orientation.
Works Cited
Kotabe, Masaaki and Kristiaan Helsen. Global Marketing Management. 5th ed. Hoboken, NJ: Wiley, 2010. Print.
Ryan, Ted. "Innovation, Resilience Key to Coca-Cola Heritage in Japan". The Coca-Cola Company. N.p., 2012. Web. 18 May 2016. < http://www.coca-colacompany.com/coca-cola-unbottled/innovation-resilience-key-to-coca-cola-heritage-in-japan/>
