Coca-Cola Global Marketing Strategy:

Introduction:

As domestic markets mature, it is becoming more and more fashionable for

organizations to seek growth through opportunities in foreign countries.
Faster communication, new technologies and improved transport links are
making international markets more accessible and businesses pursuing a
global position can experience an upsurge in brand awareness and cost
effectiveness. Global marketing is a relatively new concept linked to these
developments.
In the main, it is concerned with decisions for integrating or standardizing
marketing actions across a number of geographic markets. This does not
rule out any customization of the marketing mix to individual countries but
suggests that organizations should capitalize on similarities between markets
to build competitive advantage.
Compelling cases can be put forward for both a standardization or
adaptation approach to international marketing practice. These arguments
are keenly explored, drawing from examples of Coca-Cola's international
marketing programme to elucidate key points.
Background of Coca-Cola:
As the world's largest manufacturer and distributor of non-alcoholic
beverages, Coca-Cola is certainly no stranger to global marketing.
Established in the US, Coca-Cola initiated its global expansion in 1919 and
now markets to more than 200 countries worldwide. It is one of the most
recognizable brands on the planet and also owns a large portfolio of other
soft drink brands including Schweppes, Oasis, 5 alive, Kea Oar, Fanta, Lilt,
Dr Pepper, Sprite and Powerade. Despite this, Coca-Cola often struggles to
maintain its market share over its main rival PepsiCo in some overseas
markets, particularly Asian countries.
Arguments for Standardization:

Converging customer needs and preferences:

        It
is proposed by Levitt that the forces of globalization driven by
technology and wider travel are leading to more homogenized customer
needs and wants worldwide. This paves the way for the building of global
brand identities where companies are able to export their domestic brands to
mass markets abroad and consumers will react to them in similar ways.
        In this sense, standardized marketing with a universal product and
message can be an integrating force across national borders. To send out
different communication messages across countries could lead to customer
confusion and even dilution of the brand. In keeping with this, Coca-Cola
sells virtually the same Coke beverage worldwide.
        The design of Coca-Cola soft drinks has changed little in its history,
from the logo to the distinctive glass bottle. These unique and consistent
characteristics evoke a strong brand image which has cross-cultural appeal.

Economies of scale/experience:

        In
many industries, companies can reap cost advantages by operating
on a global scale and ultimately improve their all-round competitiveness.
Using a centralized structure, a firm can draw economies from bulk purchase
discounts or by sharing functions such as product development, marketing,
production and managerial resources among different markets.
        In Coca-Cola's example, economies are gained through the competent
running of a large-scale franchising system for its bottling operations.

Technological viability:

        In sectors where technological and production processes are

homogeneous, extra weight is placed on standardization of products as a
prerequisite for success. As part of its vision that Coke should taste the
same around the world, Coca-Cola has chosen to standardize its product and
manufacturing process.
        The knock on effects of this are more streamlined procedures and
greater cost efficiencies. It is worth noting Levitt's argument that companies'
which opt to produce an assortment of products serving different customer
segments would be unable to survive globalization due to inefficiencies in
their operation.

Arguments for Adaptation:

Consumer Diversity:

s         Supporters of the adaptation view contend that, regardless of

globalization, consumers in different countries continue to vary dramatically
in their geographic, demographic, economic and cultural characteristics. It is
sensible to imply that, where there are differences in product preferences,
product uses, attitudes, shopping patterns, income levels and education, a
business will need to adapt its product offering or communication program
me in some shape or form.
        By carefully singling out the most significant differences, organizations
can tailor products to suit local tastes and conditions. Dennis and Harris
pronounced that global branding strategy should actually be a local plan for
each component market, as to apply a standard approach worldwide without
considering local preferences and cultural differences is doomed to failure.
Food and beverage organizations in particular, can easily fall prey to
obstacles such as regional taste and category development issues.
        On the other hand, organizations that market internationally have to
bear in mind that customizing communication and product strategy will
increase overall marketing costs. Traditionally, Coca-Cola used a
standardized marketing campaign strategy where it would pull
advertisements for specific markets from a common pool of adverts
designed to have universal appeal.
        Lately, Coca-Cola has chosen to back away from a full standardization
approach and to instead tweak its efforts to accommodate local culture and
nuances. Its former approach was deemed too rigid with some of its
campaigns not always successfully transcending national borders.
        Although the branding and position of Coca-Cola remains consistent
worldwide, its execution is based on what is judged to be best for each local
market. This is evident in its 'Live on the Coke Side of Life' advertisement
campaign launched in 2006 where elements of local culture are included. On
the product side, Coke bottles and cans include the target countries native
language and are sized to match up to other beverage bottles or cans in that
country. The company also offers a varied product line-up to capture
different consumer tastes, for example, soy drinks for its Asian markets.

Differences in Infrastructure and Regulations:

        Several multinational companies, including Coca-Cola, have discovered

that operating from a completely central and standardized perspective can
impede the progress of the company, especially when it comes to
understanding and integrating with local conditions. Coca-Cola is well known
for its widespread accessibility through a variety of channels such as large
supermarkets, petrol stations, restaurants, hospitals, cafes and so on.
        Having a strong brand gave Coca-Cola the supplier bargaining power it
needed to break into the more complex and entrenched distribution systems
of lots of countries. Adding the fact that food laws can vary tremendously
from one country to another, it is not surprising that Coca-Cola describes
itself as multi-local'.
        Despite a standardized product, Coca-Cola is obliged to adopt different
approaches to the global marketplace. This goes some way to disproving
Levitt's idea that one size fits all and emphasizes a plan global, act local
approach instead.
Conclusion:
In essence, the arguments above reveal that global marketing is not
necessarily an all or nothing proposition. Companies have the freedom to
choose from many possibilities on the spectrum from total standardization
through to complete customization. Clearly there are circumstances where
multinationals can gain through increased standardization of products and
marketing, especially with respect to keeping costs down and building brand
power.
On the other hand, in conditions where national market differences are more
marked, this strategy would harm the company and its reputation. By
making standardization decisions using target market conditions as its
starting point, an organization can ensure that, in the long-term, customers
are being offered what they want.
Although Coca-Cola can seemingly gain a great deal from a standardized
agenda, its decision to combine global and local resources is ultimately more
long-standing in a market where national customer differences are
influential.