DIRE DAWA UNIVERSITY SCHOOL OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

MBA PROGRAM (EVENEING)

 ABIBEKER JEMAL HASSEN

TO BE SUBMITTED TO:
 Table of Content
1. Executive summary………………………………………………….1
2. Situation analysis…………………………………………………….2
3. Market analysis……………………………………………………....4
4. Financial projection………………………………………………….6
5. Conclusion…………………………………………………………...9
 Executive summary
The Coca-Cola Company is one of the leading manufacturers, distributors, and marketers of non
alcoholic beverage concentrates and syrups. They produce non alcoholic beverage concentrates
and syrups which are sold to bottling partners. Coca-Cola sells a variety of soft drinks, juices,
sports drinks, teas, and water. They operate in eight segments, but most of their revenues come
from three of those segments. Their three major segments are North America, South Asia and the
Pacific Rim, and Bottling Investments. Their five other segments include Europe; North Asia,
Eurasia and Middle East; Latin America; Africa; and Corporate. Coca-Cola also has the leading
brand (Coca-Cola Datamonitor, 2007) Coca-Cola owns more than 400 brands in which they
market for in over 200 different countries. Ethiopia is one of those countries which coca cola
products are widely produced and sold. For this market plan we select one water product line of
coca cola that are ‘’Desani.’’

Desani water is one of coca cola products it introduced to the market in 2016. But due to some
reasons such as price, cost, promotion now the product is out of market. This market plan aims to
provide some insights and direction for the company to introduce new desani water product. The
beverage industry is moving toward the more health conscious consumer. The market is shifting
from soft drinks to juices, sport drinks, and water products. To remain competitive Coca-Cola
must also enter into this market and follow the healthier trends. " In many European countries,
the increasing consumer trend toward a healthier lifestyle continues to grow demand for
functional beverages that offer physical or mental well being, lower calories and other added
values" (Fuhrman, 2007). Consumers' value products that are going to help them live a healthy
lifestyle and feel better both physically and mentally.
Situation analysis
Strengths
Coca-Cola has a lot of strength in their marketing plan and business. They are the world's leading
brand name, and they have a large scale of operations, and have continuing revenue growth in all
of their three segments. Coca-Cola's three major segments are Latin America; East, South Asia,
and Pacific Rim; and Bottling Investments They own bottle water production and beverage
facilities. These are the segments that earn the highest revenues. Each of these segments
continuously grows in revenues each year. The revenues earned in these segments have helped
The Coca-Cola Company to grow and expand (Coca-Cola Data monitor, 2015). The market for
bottled water is enormous. Desani water bottle allows consumers to drink pure filtered water at a
substantial savings over purchasing bottled water. It is an environmentally friendly option giving
a clear choice to customers.

Coca-Cola's brand name is valued higher than their biggest competitor. Business Week valued.
The brand of Coca-Cola is known globally and allows the company to penetrate the water market
easily. Having a strong brand name also allows them to expand their product. Coca-Cola, with
large scale operations, is the leader in manufacturing, distributing, and marketing nonalcoholic
beverage concentrates and syrups. Selling in 200 countries, Coca-Cola owns 32 beverage
concentrate manufacturing plants. The company's large-scale of operation allows it to feed
upcoming markets with relative ease and enhances its revenue generation capacity" (Coca-Cola
Data monitor, 2015).

Weaknesses

Coca-Cola has three major weaknesses that occur internally in the company, they include:
negative publicity, higher price setting, and decrease in cash from operations. In 2006, Coca-
Cola was accused of selling a product with pesticide residues and received negative publicity.
These residues contained harmful chemicals that could damage the nervous and reproductive
systems and could potentially cause cancer. Coca-Cola was plagued with harmful publicity much
like this scenario throughout the year. This type of publicity can affect their brand image and
decrease demand for their new water product (desani) and even existing soft drink products.

Coca-Cola focuses on soft drinks as their major target market; but mineral water can be one of
the best market targets. That make therefore it is important for them to have a good performance
for the target market. The company selling price for Desani was 9 birr in 2016, Coca-Cola did
not perform well and its market growth ceased in dire dawa. In relation to other competitors
desani water price was somehow higher. That makes the company to loose market position.
Overall company's growth in the future and could allow their competitors to surpass the
company actually got worse. If this poor performance continues, it could affect the company.

Coca-Cola had a decrease of 7% in cash flows from operations in the year 2016. This affected
the company by reducing the amount of funds available for Coca-Cola to reinvest in the
company (Coca-Cola Data monitor, 2015). Coca-Cola must then finance their growth with debt
which makes them vulnerable to interest rates.

Opportunities

"Bottled water is one of the most fast-growing segments in the world's food and beverage market
owing to increasing health concerns (Coca-Cola Data monitor, 2015). The increasing health
conscious market is just one of the new markets that Coca-Cola has shown a growing interest in,
like the bottled water market. Major opportunities for growth for Coca-Cola include acquisitions,
the bottled water market, and the growing Hispanic population in dire dawa. This growing
demographic segment gives Coca-Cola an opportunity to try and reach new consumers and
expand their water product lines. The company spread their product from urban to rural part of
Ethiopia. This enabled Coca-Cola to have a strong hold on the market, which as a result helped
their internal operations grow and get stronger. It also gives them an opportunity for growth and
to enter into new markets.

The increasing health conscious market is just one of the new markets that Coca-Cola has shown
a growing interest in, like the bottled water market.
Threats

Even a large and successful company like Coca-Cola has external threats. Three of their major
threats are intense competition, dependence on bottling partners, and slow growth. Growing
demand for bottled water makes many competitors, appearing to Factors bottles with filters more
economical. Increase daily, some with additional features. Each water bottle requires a filter
increasing with the current economic cash flow from filters sold also. Conditions cheaper brands
may Competitive advantage with social media appear more appealing. The nonalcoholic
beverage industry is highly competitive, leaving Coca-Cola with many competitors in their
industry. Their largest ones are, Vita, Ayan, Aqan-Dire, and Aqa-Dire .This intense competition
influences Coca-Cola and their strategies. Key aspects that are affected are pricing, advertising,
sales promotion programs, product innovation, and brand and trademark. Furthermore consumers
easily switch to other beverage with little cost or consequence.

Market Analysis

The demand for bottled water has exploded in the last couple of years. There are a couple of
reasons for this: an increase in the demand for pure healthy water, the convenience of water
bottle. According to the most recent data, bottled water drinkers consume more than40 billion
gallons worldwide; making the need for a reusable water bottle that saves time, money, and even
storage space a necessity The Coca-Cola Company is a mass company with many marketing
channels. They are widely distributed throughout the world. As Coca-Cola's mission statement
states it wants to "refresh the world". Therefore the company's target markets are any and all
consumers that have a thirst that demands satisfaction. However deasni water strategy doesn’t
have much impact on the market it may due to usage of inappropriate marketing approach is
referred to as market segmentation. Market segmentation is defined as "the process of dividing a
market into meaningful, relatively similar, and identifiable segments or groups" (Hair, Lamb, &
McDaniel, 2006, p. 212). Two ways in which Coca-Cola segments its target market are by
demographic and geographic segmentation. Before 1960 the Coca-Cola Company only had one
beverage aimed at the entire soft drink market (Hair, Lamb, & McDaniel, 2006, p. 212). But
Currently Coca-Cola offers a wide range of products including water, coffee, tea, sports drinks,
energy drinks, and their well-known Coca-Cola soft drinks (Coca-Cola Data monitor, 2015).

Market segmentation allows the Coca-Cola Company to market to people with different product
needs and preferences. For example, in the past year the Coca-Cola Company felt like they
needed to focus on the need that their products satisfy for their consumers. They came out with a
beverage portfolio based on "seventeen need states" of their consumers. Some of these included
relaxation, hydration, weight management, and heart health (MacAuthor &Thompson, 2006).
Therefore the Coca-Cola Company's target market strategy is to segment the entire products
market to better understand and design marketing mixes that specifically matched with the
characteristics and desires of each segments.

Marketing Mix: Product, Place, Price, Promotion

Product:

In order for an organization to be successful it needs to have a well-defined marketing mix. The
marketing mix consists of the four P's; product, place, price, promotion (Hair, Lamb, &
McDaniel, 2006, p. 48). Product is defined as "everything, both favorable and unfavorable, that a
person receives in exchange" (Hair, Lamb, & McDaniel, 2006, p. 48). The Coca-Cola Company's
products consist of beverage concentrates and waters, with the main product being the finished
beverages (Coca-Cola Data monitor, 2015). Desani water products can be viewed as both
business and consumer products. Ultimately, the main goal of desani is to satisfy a consumer's
personal want, which is the definition of consumer products (Hair, Lamb, & McDaniel, 2006, p.
248). The type of consumer product the Coca-Cola Company creates is convenience product.
Convenience products normally require a wide distribution in order to sell sufficient quantities to
meet profit goals (Hair, Lamb, & McDaniel, 2006, p. 285). In addition, the Coca-Cola Company
often pays a certain amount to retail stores to resell their product. Therefore the Coca-Cola
Company products can be considered a business product.

The Coca-Cola Company has a fairly large product mix which contains about 400 brands,
including diet and light beverages, waters, juice and juice drinks, teas, coffees, energy, and sports
drinks (Coca-Cola Data monitor, 2007). The Coca-Cola Company has increased its product mix
width since 1960. This enabled the Coca-Cola Company to spread risk across many product lines
rather than depend only on one and to help generate sales and boost profits within its
organization (Hair, Lamb, & McDaniel, 2006, p. 287). The Coca-Cola Company also packages
its products different sizes to appeal to certain consumers (Hair, Lamb, & McDaniel, 2006, p.
286). For example, Diet Coke is available in twelve-ounce or even six-ounce cans and various
plastic containers, ranging from two liters to twenty ounces (Coca-Cola Company, 2006).

The Coca-Cola Company has increased its product mix by product line extensions as well as
creating new products. The Coca-Cola Company has extended its product line by introducing a
variety of drinks ("Will New Cokes", 2006). These include desani water and many more to
attempt to meet the needs of all of its' consumers. This fairly large product enables the Coca-
Cola Company to satisfy the needs of their consumers' thirst, whatever it may be. This type of
product mix allows the Coca-Cola Company to achieve its mission statement in which it states
that it wants to "refresh the world" (Coca-Cola Company, 2015).

Place/Distribution:

Another crucial part of the marketing mix is place and distribution of an organizations product.
Place and distribution strategies are "concerned with making products available when and where
customers want them" (Hair, Lamb, & McDaniel, 2006, p. 48). The Coca-Cola Company states
in its mission statement that it wants to offer its products to all consumers globally (Coca-Cola
Company, 2006). The Coca-Cola Company uses intermediaries (i.e. retailers and distributors)
instead of directly selling to distribute desani water (Coca-Cola Data monitor, 2015). The Coca-
Cola Company also uses intensive distribution strategies to make sure their products can be
available everywhere. One low profile type of retailing that the Coca-Cola Company does to
increase its distribution of its product is the use of automatic vending machines. These can be
found in a number of places, such as schools and concert venues (Hair, Lamb, & McDaniel,
2006, p. 411). Since their product is a convenience product, it requires a wide distribution in
order to meet profit goals (Hair, Lamb, & McDaniel, 2006, p. 285).
Recently the Coca-Cola Company has focused more on their global health strategy to help them
increase their growth. Much of this growth is coming out of water products. The Coca-Cola
Company's growth in these areas are caused by their improved marketing to consumers, better
relationships with bottlers, their "live happily" campaign in 200 markets, and the launch of Coca-
Cola Zero. Their innovation and introduction of new products as well as their "winning culture"
has helped them begin to grow again worldwide.

Price:

Price of the product or service is another important part of the marking mix. Price is defined as
"what a buyer must give up to obtain a product" (Hair, Lamb, & McDaniel, 2006, p. 49). Price is
the quickest and most flexible element to change in the marketing mix. The prices of desani
water products are communicates affordeblity and quality sold by a wide variety of distributors
and retail stores, such as convenient stores and gas stations, as well as vending machines (Coca-
Cola Data monitor, 2015). The distributors and retail stores that the Coca-Cola Company deals
with often implement their own pricing strategy (Coca-Cola Data monitor, 2015). Gas stations
and convenient stores usually sell Coca-Cola products at a fixed price. However, the retail outlets
use a variety of pricing methods and strategies when selling the water.(Coca-Cola Data monitor,
2015). There is often competition pricing of desani prices are set higher as compare to its
competitors.

Promotion:

The fourth aspect of the marketing mix is promotion of a product. The promotions role in the
marketing mix is to "bring about mutually satisfying exchanges with target markets by
informing, educating, persuading, and reminding them of the benefits of an organizations
product" (Hair, Lamb, & McDaniel, 2006, p. 49). Since the Coca-Cola Company operates on a
global scale, their promotional strategy needs to consider the external environment in which their
products are. These external environmental factors include culture, economic and technological
development, political structure, demographic makeup and natural resources (Hair, Lamb, &
McDaniel, 2006, p. 77). For example, the Coca-Cola Company promoted its new desani in
Addiss Abeba than it did in dire dawa because of the different external environmental factors
associated with that segment. In addition, the Coca-Cola Company often has to adapt its
advertisements in different cultures. The ultimate goal of any promotion is to get someone to by
a good or service. There are four main aspects of the promotional mix that integrate together to
create a competitive advantage for an organization. The four aspects of the promotional mix are
advertising, public relations, sales promotion, and personal selling (Hair, Lamb, & McDaniel,
2006, p. 411)

The advertising part of the promotional mix allows the organization to reach the masses with its
product. The Coca-Cola Company was built heavily on advertising and marketing investments.
Today the Coca-Cola Company spends most of its money on advertising that maintains the
brands awareness (Hair, Lamb, & McDaniel, 2006, p. 468). Thus advertising is a main source in
increasing consumer awareness. The Coca-Cola Company uses many forms of advertising, from
TV advertisements to magazines and billboards (Steinberg & Vranica, 2004). One target segment
that the Coca-Cola Company is having trouble trying to advertise to is the more outdoor, health
conscious and environmentally friendly consumer (Steel, 2007). So creating desani will make the
company to advertisers them in a "health " fashion where the advertisement achieves its goals of
persuading, informing, and reminding as well as being environmentally friendly.

Public relations part of the promotional mix helps maintain an organizations image and educate
consumers (Hair, Lamb, & McDaniel, 2006, p. 444). Many organizations hire outside
professional help to deal with public relations within an organization. Public relations are "the
element in the promotional mix that evaluates public attitudes identifies issues that may elicit
public concern, and executes programs to gain public understanding and acceptance" (Hair,
Lamb, & McDaniel, 2006, p. 441). The type of public relations tools that the Coca-Cola
Company uses widely are product placements and sponsorships (Steinberg & Vranica, 2004).

The Coca-Cola Company also uses publicity to try and create a good company image. An
example of this is when the Coca-Cola Company invested 60 million dollars in creating a
recycling plant in South Carolina. By creating this plant the Coca-Cola Company hopes to help
eliminate carbon dioxide emissions and recycle a mast majority of their plastic bottles (Truini,
2007). This effort in trying to help reduce the carbon dioxide emissions strengthens the Coca-
Cola Company image of wanting to create value and make a difference everywhere they go.

Personal selling allows the organization to build relationships with their consumers or other
business associates (Hair, Lamb, & McDaniel, 2006, p. 444). Personal selling is defined as
"direct communication between a sales representative and one or more prospective buyer" (Hair,
Lamb, & McDaniel, 2006, p. 443). Personal selling in the Coca-Cola Company often is done in a
business-to-business fashion. An example of this is seen when the Coca-Cola Company was
trying to boost their sales in North America by forming alliances with Nestea to create coffee and
tea drinks (McKay & Corderio, 2007). This demonstrates how the Coca-Cola Company uses
personal selling in a business-to-business atmosphere to provide its' consumers with a larger
variety of products that can satisfy their need.

The Coca-Cola Company also uses sales promotions to increase their effectiveness of their
promotional efforts. The essence of sales promotion is to help stimulate a purchase (Hair, Lamb,
& McDaniel, 2006, p. 444). Some examples of sales promotions that the Coca-Cola Company
uses are coupons and rebates and are used frequently because they are more likely to influence
customers' buying decision (Hair, Lamb, & McDaniel, 2006, p. 442). The ultimate goals and
tasks of promotion mix are to inform, persuade, and remind the target audience.

Marketing Research

Many marketing decisions they face are backed with data or conflicts that result in them creating
a fancy or reasonable solution. Even though desani does an excellent job of quenching one's
thirst, they sometimes have trouble understanding what regions of the country to emphasize
marketing certain products towards.

To stay competitive, the company conducts marketing research to try and better understand their
consumers. Coca-Cola creates products and services that will help fit into the needs and wants of
their marketplaces. They have found that people expect more water products. To try and fill this
desire Coca-Cola has developed desani water. In additions, Coca-Cola wants to be able to keep
their market alive and constantly drinking their line of refreshments, so they continue to do
research that will benefit their consumers, as well as being potential profits for the company.

Coca-Cola within the last decade has been slowly grasping the idea of introducing and
emphasizing products that may not be profitable in certain period of time .Coca-Cola also
develops interesting marketing techniques such as business to business strategies to make their
products more appealing and effective. Even though the company has interesting ways to
promote their products, they need to find an effective way that will sell and promote the product.
With more marketing research, Coca-Cola is now being scrutinized for selling their water
products in everywhere. The company has also agreed to only advertise healthier products
towards this targeted market.

A solution to this could be that Coca-Cola should input their marketing skills to other products,
as well. Make desani being one of the most popular water in the world. Coca-Cola could try and
promote this product so that they would acquire to different tastes. Coca-Cola could put more
efforts towards their Dasani, Inc. brand, known for their bottled water. Bottled Water is a non
carbonated drink that is becoming increasingly popular and more of a competition towards the
carbonated and other drinks.

Organizational Structure and Plan

Coca-Cola implements an organizational strategy that better involves the employees and
customers. The ultimate goal of Coca-Cola's structure is to continually build customer
relationships. The company likes to have a flexible organizational structure that will be
compatible with the market environment. Since 2006, the market has been seen as a complex
environment and to help fix this problem, Coca-Cola conducted a thorough company analysis
through their departments and segments. They assembled a diverse, multi-functional executive
group mix from separate countries and divisions. They mixed these executives from the
organizational levels and created a new business model for desani that would accommodate to
the centralized as well as local Coca-Cola divisions.
Coca-Cola claims that the impacts and benefits of this new business model are already showing
improvements. Even though the price of desani compare to compotators may be higher but the
quality is UN comparable. Still the company tries to maintain an affordable price to this new
product. For example, "Among our results, we improved our efficiencies throughout the supply
chain, grew our volumes of single-serve presentations, and increased our EBITDA…" (The
Coca-Cola Company Annual Review, 2007). Coca-Cola has been making new improvements all
over the globe for their operating segments and structure allows them to be more intact with their
consumers and business.

Financial Projections

Coca-Cola has had an extremely successful year with improving the image of the company,
introducing new product lines, acquiring companies, and increasing their products profitability
from around the world. Coca-Cola expects to see a continue rise in profits through the next year.
Even though the rising costs of commodities pose a threat, Coca-Cola will still prove to be
profitable.

With an upcoming year of hopefully new promising products, Coca-Cola might be looking at
their lines of bottled water, juices, and sports drink to bring in most of the revenue due to their
increasing popularity and consumer demand. The company's top sellers in 2006 were their
sparkling beverages, juice and water products. From 2006 to 2007, the net income per share has
already risen 2.6%. This increase is just the beginning for the company which shows extreme
efforts towards the growth of the company. Coca-Cola will continue to expand its empire
throughout the world.

With already being sustainable in China and successful in India, Coca-Cola's profit will only
increase. For instance, Coca-Cola is set to switch its focus to the China market in an effort to
sustain growth. The company said that with current economic growth continuing apace, China
should be its third biggest market by 2008 (Coca Cola Looks to China For Future Growth, 2004).
China is a very profitable segment for Coca-Cola and will only continue to contribute to
increased profits.
With excellent resources and planning, Coca-Cola can only bring in more consumers. The
company's financial future projections are looking promising and the company's profits will
continue to rise with more consumers drinking their products daily world wide.

Summary

The Coca-Cola Company demonstrates unique traits and strategies. Not only do they serve the
world with quality products ranging for any type of taste, but they contribute to the well-being
and restoration of the world. Coca-Cola proves to be a company with goals other than to
maximize profits. They have brought to much needed countries resources to the people and
children. From funding institutions that will teach children how to read t It allows consumers to
control the purity of their drinking water and at the same time be socially responsible. Because
there are many other products on the market offering the same or similar features o
reforestation and building recycling plants, Coca-Cola proves to be a societal-oriented company.