Marketing project report on coca cola
There are many modes of entries that businesses wanting to participate in the foreign markets can use. These include joint ventures and franchises. All these depend on the legal contracts and regulations in the country. The paper sought to analyse the international marketing of Coca-Cola in the UK and China. In this paper, it was found that franchising and joint ventures are some of the methods that the company used to get into these markets. With such type of success, Coca-Cola has been at the centre of much research being undertaken by marketing and business scholars around the world on finding the viable international marketing strategies for a company (Hartogh, 2002). Since its inception in 1886, the company has been observed to use various marketing strategies in a bid to penetrate the market as well as ensure customer loyalty to the brand (Hossain & Wang, 2008).
With the company evolving ever since it has employed a variety of marketing strategies to guarantee that its consumers are loyal to the brand as well as attracting other prospective customers. One of the marketing strategies that are undertaken by the company is differential strategies. In this, Coca-Cola uses this to ensure that the consumers in the market have a strong identity to the product. As such, Coca-Cola is increasingly facing competition from Pepsis, which has been increasing its market in the United States progressively, thus leading to the decline in the sales of its major competitor, as their products are perfect substitutes. From the graph below, it is observed that the growth rate of Pepsi was larger than that of its closest competitor, Coca-Cola.
As such, with the competition rising and shrinking market share, searching for an international market can be only option to sustain the sales of the company. The figure below shows the shrinking growth rate of Coca-Cola while Pepsi grows. Source: (Market Realist, 2016) For Short Term Security Another that might have forced Coca-Cola to seek for the international markets would be to grant the business with short-term security. Coca-Cola in China China is a country that has been experiencing high growth in its GDP since 1979, the year Coca-Cola, first started its operations in the country. Furthermore, the state is among the most populous nations in the world (Mok, Dai & Yeung, 2002). These two features have worked in placing China as one of the countries with the great market potential for many of the Multi-National Corporations (MNCs).
It, therefore, comes as a no surprise that most the two fiercest competitors in the carbonated drinks have their operations in the country. Coca-Cola was the first foreign MNC, to starts its operation in the country, and as a result, it boasts of the first in advantage. During that time to present, the company has evolved, cementing its place as the market leader in the country, when it comes to the non-alcoholic drinks. In the year 2017, a volume of about 319. 2 million litres of the standard coke drink was consumed in the country compared to approximately 127. 6 million litres of standard Pepsi was consumed. These are shown in the graph below. Evaluation of the Markets From the above studies, several things are visible regarding the choice of these markets by the company.
China was mainly chosen due to its massive population as well as increasing GDP, which means that the citizens may have a higher disposable income to spend on these products (Dreger & Zhang, 2011). In China, the cost of wages is low due to their numbers as well as government policies (ZHOU, 2004). As such, by setting up units in this region, Coca-Cola can save costs that would be accrued by the high cost of wages experienced in some countries. On the other hand, the market in Europe was mainly chosen by Coca-Cola due to strategic reason. Franchise with the bottling firms was inevitable as during this time the government in China never allowed foreign arms to own such plants. After this mode of building a franchise with the bottling companies, Coca-Cola undertook to get into joint ventures with the firms in the market.
Such was necessary to enable them to penetrate the market as well internalize the market transactions (Greene, 2014). Joint ventures were mainly acquired by getting the management rights to the bottling firms that were previously franchisees. Such happened in 1985 after the liberation of the economy. By using adoption marketing strategies, the multiple demographics in a country can also make easy or the message to reach the target market easily. One of the key reasons why Coca-Cola is developing the use of adoption marketing strategies is due to the fact that in China, the company is not only competing with Pepsi Co, but there is also the advent of many aggressive local brands with similar products, making competition in the country to be highly complex.
In this, Coca-Cola has been observed to use the various localized versions of the campaign, in a bid to get through the retail landscape market of the country. One of the localized campaigns can be said to be a variation of “share a coke” in China which was originally coined in the year 2011. In this, since names couldn’t be put on the side of the bottles in the country due to many reasons, the company decided to change the campaign and put various Year One nickname and these, they have been observed to change consistently to match with the current theme year (Hamill, 2017). International Marketing Review, 19(1), 16-20. http://dx. doi. org/10. 1108/02651330210419706 Chung, H. facebook. com/notes/coca-cola/2018-chinese-new-year-promotion/1225977264171178/?_rdc=1&_rdr Dreger, C.
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