Coca Cola Marketing Strategy

Coca-Cola

Company Background

The Coca-Cola Company was organized in 1886 and engages in the manufacturing, distribution and marketing of non-alcoholic beverage concentrates and syrups. The company also produces, markets, and distributes juices, water products, sports drinks, teas, coffees, and other beverage products. Coca-Cola is the most valuable brand in the world, with a brand value of $67.5 billion3. In order to better understand and manage the complexities of cultural, economic and political factors impacting the company, Coca-Cola established an International Advisory Council.

Coke started its international expansion in 1906, and by 2003, generated more than 70% of its income from outside the U.S. In 1993 Coca-Cola returned to India

Sustainable competitive advantage can be achieved by applying one of these within a well defined competitive scope.

Coca-Cola initially entered India using methods already proven successful in the United States. They focused on the power of the brand appealing to the mass market. This strategy failed. Annual per capita consumption was 6 bottles vs. 800 bottles in the U.S. Simply importing the American way of life and planting it in another market would not work, and Coke had to be innovative and devise strategies that would enable it to compete more effectively in the marketplace.

Coke revamped its strategy when it realized that it was leaving a large market untapped. It segmented its market and reached the rural areas with smaller packages that were cheap enough for the 96% who lived in rural areas to afford. Those in the urban areas who cared about differentiation and drinking the product as a lifestyle choice were targeted with separate marketing campaigns. Coke’s financials improved

They did not feel respected nor did they see themselves as stakeholders, as Coca-Cola hadn’t built relationships that would make the locals trust it. In sum, Coke had entered the local market using practices that would be frowned upon in the U.S. and in Europe. It was only a matter of time before they would be found out. Even though subsequent tests by the Indian government found toxic levels of pesticides—including DDT— Coke refused to acknowledge the validity of these tests and apologize for its actions. They treated the issue as a public relations issue and handled it as such.

Coke watched in horror as the stories escalated. Headlines screamed:

“Farmers in India are delighted that they have finally found a use for Coca-Cola—as pesticide”;

“Coca-Cola was distributing its solid waste to farmers in the area as "fertilizer";

“Tests conducted by the BBC found cadmium and lead in the waste, effectively making the waste toxic waste. Coca-Cola stopped the practice of distributing its toxic waste only when ordered to do so by the state government”;

“Coca-Cola products contained high levels of pesticides, and of pesticides, and as a result, the Parliament of India has banned the sale of Coca-Cola in its cafeteria”; and, “Coca-Cola is destroying the food security of the people of the land-by stealing the water and poisoning