Coca Cola And Its Activities Marketing Essay

Coca Cola And Its Activities Marketing EssayAbstractThis reputation takes the reader by dint of Coca- the skinny and its activities and how it has been able to maintain gross sales de bitterness the scotch ecological niche. It examines how three aspects of lay waste tor deportment - motivation, carriage, the buying process have an effect on the sales of Coca-cola deep down the Europe mart and thereby immune to the frugal recession. Chapter one gives a background into Coca-colas history and opearned run averagetions two in the national and international market. It in like manner presents an e genuinelyplaceview of the sonant drink manufacture in Great Britain, concentrating on blow as an industry leader. It further dialog on the stinting recession and its effect on Great Britain. Chapter cardinal discusses three consumer behaviour aspects motivation, strength and the buying process- on how it do the coca-cola industry immune to the stinting recession in the Great Britain. The conclusion of this write up ends with a sum-up that discusses the whole paper and propose recommendations for the brand as a whole.CHAPTER ONE1.0 IntroductionA consumer is a person who floating policy a need or desire, and therefore purports for the ruff way to contact his or her need either by leverage or skill (Solomon et al, 2010). Consumer behaviour as defined by Solomon et al (2006) is the processes involved when individuals or groups select, purchase, give or dispose of convergences, services, ideas, or experiences to satisfy take or desires. Customer retention is vital these days and organisations ar looking for the best way to please and satisfy the interest of their consumers. gibe to Fill (2009), the soul of the buyers behaviour makes merchandise strategies and plan come out masteryful. The Coca-Cola c eitherer-up is haywire drink industry that has been able to build its brand loyalty with its consumers e precisewhere its course of instru ctions of operation, despite the highly competitive market (Euromonitor, 2010). But this succeeder would non have been realistic without netherstanding who the consumer is, what the consumer involve and how the consumer behaves. The economic recession was a trying time for companies which led to the closures of some and loss for majority, the demulcent drink industry is not an exception and Coca- cola which f totallys nether the soft drink industry entrust be analysed on how strong the management of their consumers was to in ensuring their survival in the recession.1.1 A brief summary of The Coca- Cola operationsThe Coca-Cola Comp some(prenominal) (TCCC) is the largest manufacturer, distri aloneor and marketer of non alcoholic beverage, concentrates and syrups in the humans. Coca-cola has a portfolio of to a greater extent than 3,300 beverages, from diet and regular sparkling beverages to still beverages such as 100 sh ar fruit juices and fruit drinks, waters, sports and energy drinks, teas and coffees, and milk-and soy-based beverages, which argon today sold in much than 200 countries in the reality. (Coca-cola, 2010).)Coca- cola branch got to Britain in the year 1900, after Charles Candler brought a jug of syrup along on a visit to England. Soon after, in the previous(predicate) 1920s, it went on sale at the London Coliseum and in Selfridges. Since then coca-cola Britain has come up with innovative soft drinks namely Coca-cola Diet reversal Coca-cola naught Sprite Sprite zero FantaFanta Zero 5 living Schweppes Schweppes zero Powerade Powerade zero Kia ora Kia ora(no added scar) Dr. Pepper Dr. Pepper zero sound out Lilt Zero Oasis Oasis extra vague Glaceau vitamin water and Relentless. (Coca-cola, 2010) With just about 4,650 employees, Coca-cola GB claims to have sold 228million cases in 2008.Pic. 1.1 The Coca-Cola Company Great Britain brands procurable on this link- http//www.coca-cola.co.uk/brands/1.2 An oerview of the soft drink i ndustry in Great BritainMintel (2010) utter that close to one-quarter of companies in the UK soft drinks market is growing at more than 10% per year. Some of the main players in the UK soft drink industry include Coca-cola, Pepsi cola UK, Tropical UK, Nestle UK etc to mention exclusively a few. The British Soft Drinks Associations 2010 UK Soft Drinks Report found that the everywhereall market grew by 1.7% in 2009, with total phthisis r severallying 14,140 million litres, at a retail value of 13.224 billion (Mintel, 2010). The British Soft Drinks Assocaition (2010) stated that it was encouraging to see that the soft drinks market was holding up during the sparing downturn. According to mintel (2010), for the second year running, Coca-cola kick the bucketped interbrands best global brands table, placing it in a high place its competitors in the soft drink industry. The coca-cola keep company has continued to focus on expanding its phone line through taking tactical places in niche soft drinks producers, by buy a stake in UK smoothie producer, costless Drinks (Euromonitor, 2010).1.3 The recession in United KingdomRecessions occur during the down or contraction phase of the business roll. The end point business cycle refers to the old(prenominal) ups and downs of economic activity. (Pearce and Michael 2006). Furthermore, Pearce and Micheal (2006) opined that recessions cause signifi vernacular declines in resources available to the firm because customers cast less, lenders lend less, and competitive rivalry increases. Initially, the behaviour of consumers shifts during recessions. They have less money to spend and cut back personal spending in rejoinder to the overall decline in economic activity. Industrial and business customers may become disloyal, demand renegotiated contract foothold, and alter purchase patterns. excessively by Pride and Ferrell (1995), recession is a exemplify in the business cycle during which un meshing rises and tot al buying power declines, stifling twain consumers and business peopless tendency to spend.The UK economy was growing faster than the average for the Euro zone end-to-end nigh of this decade. However, an abrupt slowdown began in 2008 and the economy entered a recession in the third quarter. According to Euromonitor (2010), real GDP fell by 4.9% in 2009, making this the UKs longest post-war recession. The UK has been harder hit than many countries because of its large fiscal sector. The pecuniary position has deteriorated over the past several years. The deficit was pushed even higher as a result of the bailout of large banks. The number of unemployed withal rose by 50% during the recession with 800,000 jobs being lost (Euromonitor, 2010). The recession led to business closures, job losings and a lack of employment opportunities in the UK (Athey, 2009). This first global recession in the new era of globalization, started in the US, spread to Europe, and eventually became global its the worst economic crisis since the owing(p) depression. (Stiglitz, 2009).1.4 The Coca-Cola Company and the recessionTCCCs gross meshwork margin change magnitude to 64.2 pctage in 2009 from 64.4 percent in 2008, primarily due to foreign notes fluctuations, unfavourable geographic conflate as a result of ripening in their emerging and developing markets, and current focus to drive greater afford capacity initiatives across many mention markets, unfavourable channel and product mix in certain key markets, and the sale of certain bottling operations in 2008 (Coca-cola, 2010).Even though there was a slight decrease (0.2%) in their profit margin comp bed to the previous year, TCCC arguably performed well despite the economic downturn.Coca-cola unit case volume is one of the measures of the underlying strength of the Coca-Cola agreement because it measures trends at the consumer level. In Europe, the sales volume of year ended 2009 versus year ended 2008 shows that the unit case volume in Europe decreased 1 percent, primarily attributable to the current difficult macroeconomic conditions throughout most of Europe. These difficult macroeconomic conditions affected a number of key markets and contributed to unit case volume declines of 8 percent in randomness and Eastern Europe, 4 percent in Iberia and 2 percent in Germany. The volume declines in these markets were partially offset by 6 percent unit case volume growth in France and 4 percent growth in Great Britain.(Coca-cola, 2010).Great Britain which is the main focus of this excogitate has shown that the recession did not affect the sales volume. Table below shows the financial data of The Coca-cola Company year ended December.Table 1.1- Financial overview of The Coca-Cola CompanyYear Ended December 31, 2009 2008 2007 2006 2005(In millions except per shargon data)SUMMARY OF operationsNet operating revenues $ 30,990 $ 31,944 $ 28,857 $ 24,088 $ 23,104Net income attributable to shareholders 6,824 5, 807 5, 981 5, 080 5, 872 realise PROFIT 19,902 20,570 18,451GROSS PROFIT MARGIN 64.2% 64.4% 63.9%PER SHARE DATABasic net income $ 2.95 $ 2.51 $ 2.59 $ 2.16 $ 2.04 thin net income 2.93 2.49 2.57 2.16 2.04Cash dividends 1.64 1.52 1.36 1.24 1.12BALANCE SHEET DATATotal assets $ 48,671 $ 40,519 $ 43,269 $ 29,963 $ 29,427 long-term debt 5,059 2,781 3,277 1,314 1,1541.5 Scope of StudyThe interest of this study lies mainly with The Coca-cola Company, focusing on Coca-cola Great Britain as the scope of study. This study in any case examines the level at which the recession affected the sales in coca-cola and the consumers attitude towards the purchase of coca-cola.1.6 translation of terms/operational definitionsTo avoid ambiguity and distortions in meaning, the following terms are being described.Ltd LimitedUnit case- mover a unit of measure equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce servings) (Coca-cola, 2010)Unit case volume- means the number of unit cases of Co mpany beverage products directly or indirectly sold by the Company to customers. (Coca-cola, 2010)TCCC- The Coca-Cola CompanyCHAPTER TWO2.0 Key Consumer doings AspectsAccording to British Soft Drinks Association, (2010), Consumers are loyal to the drinks they know and self-confidence but remain open to innovative products and brand extensions which meet their ever-evolving needs. The industrys ability to tolerate the public with a wide range of enjoyable and inexpensive drinks will ensure it remains resilient despite the tough economic clime.Three key consumer aspects have been carefully selected from Jiang (2010) as explained in the Consumer deportment Lectures The following aspect of the consumer behaviour may have regulated the continuous purchase of coca-cola products despite the economic downturn- the buying process, attitude and motivation.2.1 The purchasing processA buying conclusiveness making process is the selection of an option from deuce or more alternative pri me(a)s (Jiang, 2010). Coca-colas consumers can be explained in Consumer as a Problem Solver (Habitual Decision Maker). A usanceual decision maker makes alternatives that are characterised by an impulse made with little drive and without advised control (Solomon et al, 2006). Coca-colas brands are low involvement products and so affect little nurture search. Most decisions made by people who consume coca-cola are with little or no conscious effort. Coca-cola consumers purchase Coke for example based on a habit that has been formed over time.Also the Evaluation of alternatives can be utilize to explain the brands unsusceptibility to the recession, often of the consumers effort that goes into a purchase decision develops at the stage in which a choice must be made from the cordial alternatives (Solomon et al, 2006). In many cases, there are a number of alternatives (such as water, soft drink or alcohol) a consumer could consider in red-blooded a biogenic need, i.e. to charm thirst. A consumer that has formed a habit overtime to purchase Diet Coke for example will endlessly have in mind a diet coke whenever hes dry. The choice a consumer makes over other alternatives is obdurate by the product qualities. stigmatization can in like manner be an influence on the evaluation of alternatives. In a survey of Global Brands, Inter Brand and Business hebdomad identified the significance for companies to create communities around their products and services, which gives the customers the opportunity to feel as if they own the brand (Solomon et al, 2006). Fill (2009) also supported that as a brand becomes established with a buyer, so the psychological benefits of ownership are preferred to competing offerings, and a form of relationship emerges Coke is not only when seen as a drink by its consumers, but seen in the light of its heritage and relationship with them( Payne,2007). Brands also create impressions and strong printings so much that when people se e the coke bottle with its red label, and the content, people absolutely feel thirsty and the need to have a drink (Riesenbeck and Perrey, 2007) According to Mintel, (2010), the Interbrand ranked Coca-cola as the number one global brand in the year 2009 and 2010 respectively. Brands can influence a consumers choice in a decision making process, in a study conducted, 51percent of consumers preferred Pepsi over Coke , while in an open test, only 23percent preferred Pepsi over coke(Jenkinson, 1995). In my opinion, Coca-cola consumers have developed a relationship with the brand, which makes them to choose coca-colas brands amongst all other alternatives even in a recession. The economic downturn did not affect consumers choices, habits did not change despite the recession coca-cola consumers did not change their product preferences because a habit has been formed over time.Table 2.1 Buying Decision making processEvaluationsAfter purchase behaviour/feelingInvolvementInformation searc hNeed recognitionNeed corruptDecisionIdentity AlternativesSource- (Jiang, 2010)2.2 military capability Formation and changeAttitude is a persons learned predisposition, tendency to respond to an object in a consistently favourable or unfavourable way (Allport, 1935) as cited by (Jiang, 2010). An attitude formed, lasts over a period of time, an attitude towards what a person chuck or drink or developing an attitude towards opposite brands (such as drinking diet Coke rather than drinking diet Pepsi) or also having an attitude towards a general consumption pattern(such as take twice to eating once in a day) (Solomon et al, 2006).The Utilitarian power which is related to the basic principles of reward and punishment will be used to explain why TCCC was not entirely affected by recession. Attitudes are formed based on the presumed product qualities (either pleasure or pain) (Solomon et al, 2006). Attitudes influence a consumers decision making and the finale of a marketer is forev er to create a positive attitude towards a product or change existing attitudes (Fill, 2009).In a recent research conducted by TCCC to evaluate consumers attitudes towards its brands, it revealed that coca-cola is the brand most associated with happiness (Coca-cola, 2010). The result of the survey revealed that over a half of the people that participated in the research said its the apprehension that makes them smile others said sharing a bottle of coca-cola with family and friends can can an opportunity to spend time together (Coca-cola, 2010). Coca-cola consumers have developed an attitude overtime, so the recession would not change their product preference but major power just alter their consumption pattern (such as trim back the intake of one three bottles per day to two bottles per day). The theme of the TCCC also stresses straight forward benefits (Coca-cola.Open Happiness).Attitudes towards coca-cola could also be formed by the periodic coca-cola adverts, as supported by Pearce and Micheal (2006) aggressive marketing campaigns may be more effective during recessions, as competitors feeling the pinch might act to forestall losses by reducing their advertising. During the recession, TCCC, engaged in colossal paid advertising to reinforce their brands in the minds of the consumers. Also towards the end of each year, coca-cola does an advert, using the Christmas theme to convey its pass on to its viewers. The viewers feelings about the stage setting in which an advertisement appears can also influence brand attitudes (Solomon et al, 2006). impulse this Christmas themed adverts would naturally link us to Attitude Formation (three hierarchies of effects), move, Behaviour and Beliefs. Affect (like the brand), behaviour (buy the brand), belief (feel satisfied with the brand) or belief (create sureness of the brand), behaviour (buy the brand), affect (like the brand) or belief (create awareness of the brand), affect (like the brand), behaviour (buy the brand).Attitude formed over time influences a consumers purchase behaviour, in spite of the recession, it can be postulated that the attitude of the coca-colas consumers did not change, and there was a recurring process in consumers purchase pattern. Coca-cola was not so affected by the recession because of the consumers attitudes towards their productsTable 2.2 Three Hierarchies of EffectsAttitudes based on cognitive information processingAffectAttitudes based on behavioural instruction processesBehaviourBehaviourBehaviourBeliefsvvvBeliefsvvvBeliefsvvvAttitudes based on hedonic consumptionAffectAffectSource- (Jiang, 2010)2.3 MotivationMotivation is the driving force within individuals that impels them to action, this driving force is produced by a state of tension which exists as the result of an unfilled need (Jaing 2010). Every action is done for a reason. Motivation refers to the process that cause people to behave as they do, motivation occurs when a need (Utilitarian- consumers practical benefits or Hedonic-consumers emotional benefits) is aroused that the consumers wishes to satisfy. The coveted end- state is the consumers goal. The degree of arousal is called a drive (Solomon et al, 2006). The purpose of purchasing a drink would be to satisfy a biogenic need, i.e. to conquer thirst. For a consumer to now choose a diet coke because hes thirsty is called psychogenic. Coca-cola motivates its consumers through its themed message (Open Happiness), and this can be explained in the hedonic needs (Consumers emotional benefits) The survey TCCC conducted for their consumers shows that the taste of coca-cola makes them happy. What motivates a consumer might be different compared to the other consumer. A regular coke consumer willing to stifle his sugar consumption will be happy to switch to coke zero which has no sugar and less calories. Also viewing it from the Consumer involvement angle, TCCC also motivates its consumers by connecting with millions of them every day through their brands Facebook pages, Twitter and influential blogs, creating a dialogue that allows TCCC to build their brand assets and strengthen their consumer relationships. Solomon, (2006) defines involvement as a persons perceived relevance of the object based on his/her inherent needs, values, and interests. through and through this Fans page on facebook, consumers can access their advertisements, Coca-Cola applications and downloads, and get live updates from the Company. Also TCCC involves their consumers through the Coca-Cola Freestyle, this makes the consumers beverage innovators by giving them choices and variety to make more than 100 different branded beverages at the touch of a button, this provides fun, and a relationship that connects the company with its consumers. (Coca-cola, 2010). The recession did not really affect TCCCs sales because of the motivation TCCC tries to create and the relationship they have been able to build with their consumers. pr oof3.1 ConclusionUnderstanding consumers behaviour is key for a successful company marketers need to deepen their research on their consumers because the consumers are becoming aware of the all important(predicate) role they play in their consumption pattern. Competitors are always also looking for tactics to grow and influence new consumers, and any organisation that does not meet up with consumers expectations would be losing a consumer. Companies should look for ways to retain their current customers and also focus on getting new ones attracting new customers should be a priority in a recession (Pearce and Michael 2006). Organisations should actively engage their customers more than before.INTRODUCTIONThere has been an on tone ending concern about the impact of economic impact on the environment,(Peattie, 1995). Nations are getting aware of the need to however the satellite, and make it conducive for both humans and the animals. In the year 2000, the beginning of a new centur y, the nations came together to form the Millennium Development Goals and conducted a millennium Ecosystem Assessment (A quatern year research project to access the health of the natural environment, the impact of human development on natural systems and their ability to support lifespan and provide ecosystem services) (Belz and Peattie, 2009).In 2005, the results of the United Nations Millennium Ecosystem Assessment was released, this revealed that 60% of world ecosystem services have been degraded and species extinctions are running at mingled with 100 and 1000 times the natural background rate, it was also revealed that they were losses in the diversity of life on earth but gains in human well-being and economic growth and the burning of Fossil fuels to provide much of the energy that drove our economies was the release of carbon dioxide (CO2) into the atmosphere.Changes in our climate will have a profound impact on the distribution and availability of water supplies and food productions supplies and immense loss of species. (Belz and Peattie, 2009).To save the planet, conscious efforts have to be made, and so industries, business, consumers and nations have realized that if we do not save the world, then one day the planet will not be able to save us.Using the twofold bottom musical note border on, discuss what is sustainability marketing and why should marketers be concerned with CSR and sustainability issues?Before going into sustainability marketing we need to define marketing, marketing consists of individuals and organisations on activities that facilitate and bucket along satisfying exchange relationships in a dynamic environment through the creation, distribution, promotion and pricing of goods and services and ideas (Pride and Ferrell, 1993).Sustainability marketing as defined by Belz and Peattie (2009) refers to planning, organising, implementing and controlling marketing resources and programmes to satisfy consumers wants and needs, while considering accessible and environment cadence and meeting collective objectivesThis definition is very broad because it has covered the Triple Bottom line People (consumers), orbiter (Environment) and Profit (Corporate objectives). In straightforward terms, Sustainability Marketing has been defined by Belz and Peattie (2009) as the building and sustainable relationships with consumers, the mixer environment and the natural environment.The Triple Bottom line (3PL) is a very important approach when discussing sustainability a positive 3PL reflects an increase in the companys value, including both its profitability and shareholder value and its social, human and environmental capital (Savitz and weber 2006), they consists of Environmental Performance which is the planet and the way which we give and receive from the planet Social performance, which is the people that constitutes the planet and consume different products and services, also emphasizes on satisfying different stak eholders, Being connected and responsive to shareholders, suppliers, communities and customers is the foundation of sustainability (Henrique and Richardson, 2004) and the Economic performance or organisational goals which is the profit and the main aim of setting up an organisation (Leonidou, 2010).PeopleA sustainability marketers aim is to meet the needs and wants of a sustainable consumer. Belz and Peattie (2009) supported this by saying consumers purchasing behaviour will determine the success or failure of new products and services that are marketed on the basis of their sustainability performance. Understanding the behaviour and buying process is also relevant for the sustainable marketer. The process which includes the recognition of need and want e.g. biological needs like food and drink to information search i.e. checking for information about the products, maybe its sustainable or not, to evaluation of alternatives i.e. a choice between two retailers to purchase i.e. buying of the product to the usage of the product (for a sustainable product, the use phase will generate more environmental impacts than non sustainable products) and finally post use which is the recycling, reselling or reproducing strategies, all used to reduce waste to land fill. (Belz and Peattie, 2009).Segmenting and understanding the consumers is really important for a sustainable marketer. They must understand the consumer they are sending the message to, according to the segments as identified by Belz and Peattie (2009), they are theGreens-this are the straight greens, they understand and well educated about the sustainability issues and they consume green products.Consumers with a conscience-they want to be seen as greenWastage focused-they have good association of pollution and wastage but lack awareness of other issues and behaviours and believe to be ethicalcurrently constrained-they like to be sustainable but cant do much in their current circumstances,Basic contributors-t hey have comparatively little knowledge of interest in environment issues and behaviours,Long term restricted- they have other priorities to consider before they can consider their environmental issuesDisinterested-they may be aware of the sustainability issues, but they cannot be bothered as this has not affected current decision making processes.The segmentation allows a marketer to strategise a message to its different target so as to achieve its organisational goals.ProfitThe economic performance of a company is determined by the products and services offered to its consumers and how it has been accepted. The main of a company is to make profit, but the production process and post -post production process determines how sustainable a product/ organisation is. Belz and Peattie, (2009) further said that The underlying values of sustainability marketing should reflect the visions, missions, philosophies or principles of the company. Savitz and Weber (2006) identified 3 ways sustain ability enhances your business (I) protecting the business-This includes risk of harm to the consumers, employees and the community, identifying emerging risks and management failures advance(prenominal). (II)Running the business-eco-efficiency, this includes reducing costs, ameliorate productivity, eliminating needless waste and obtaining access to capital at a cut cost, (III) growing the business-opening new markets and attracting consumers who are sustainable and increasing market share.PlanetEnvironmental performance is the planet we occupy, and also the source of renewable (air, water, food) and non renewable resources (stone, metals, fossil fuel etc) (Belz and Peattie, 2009). Organisations are now more concerned with the use of critical substances and energy consumption, production processes, packaging and recycling of products to reduce the ostracize impacts the economy has had on the planet, solutions were implemented in the production process to reduce pollution and Co2 emissions.Corporate social function has defined by European commission in (Belz and Peattie, 2009) is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with stakeholders on a voluntary basis. In contrast to the definition above the sphere Business Council for sustainable Development separated the corporate social responsibility, corporate financial responsibility and corporate environment responsibility and put them under one umbrella which is Corporate Responsibility (Belz and Peattie, 2009).CSR is now gaining momentum in different organisations and the need to showcase and publish their environmental and social acts is rising. Consumers are equally aware of these activities and tend to build their loyalty with socially accountable organisations.Marketers now should be concerned with CSR and sustainability issues, because the world is moving and every consumer now is informed about the environment and h ow they need to be sustainable to save the planet. Harnes (1982) as cited in Peattie (1995) further explained that the successful company is the one which is the first to identify emerging consumer needs and to offer product improvements which satisfy those needs the successful marketer spots a new trend early and then leads it. Marketers must key into this new trend which can be identified as CSR and sustainability, being socially and environmentally responsible is very important and marketers must continue to emphasize this in their organisation to the top management.Sustainability and CSR should be involved in an organisations values and goals it should not be seen as a tactic to manipulate consumers sustainability concern to just make profit (Peattie, 1995).Critics of SustainabilitySavitz and Weber (2006) have identified critics of sustainability from two camps (The cynics and the sceptics). The cynics concluded that the Sustainability movement as mere hype The cynics would alwa ys want the government to take responsibility in the environment rather than depending on the corporations to change themselves. They also argue that the corporations deliberately improved their environmental performance mainly for financial purposes. The sceptics doom the concept of sustainable business on the grounds that business leaders have no concern with environment or social responsibility, their goal is to make profit, and if their aim is not moved from that, the world will be better off.From the criticism, no one can say whether the critics are mature or not, even though todays efforts towards sustainability seems to be inadequate, that doesnt mean it should be stopped, sustainability has to work. The industries might be aiming at profit, its a step by step approach and no contribution is too small, if all industries are genuinely sustainable, the world will be a better place.Analyse the factors that contributed to the marketing success of FIJI water?Fiji Waters (FW) exp ansion into US market was based on the successful marketing mix campaign to penetrate the market. At the time, it made its entry into the US mar