International Business:

Global Marketing
A case study on Coca-Cola

Presented by:
Mallika Singh
Vanshika Shukla
Introduction
• Coca Cola - John Stith Pemberton in 1886.
• The Coca-Cola formula and brand was bought in 1889 by
Asa Candler who incorporated The Coca-Cola Company in
1892.
• Coca-Cola currently offers nearly 400 brands in over 200
countries or territories and serves 1.5 billion servings each
day.
 Elements
• Coca Cola is also called an Upstream
Manufacturing Company by selling their product
to downstream bottling and distributing
companies.
• Coca-Cola begun to implement ‘forward vertical
integration’ by buying its previously franchised
independent bottlers, Coca-Cola Enterprises.
• This integration increased operating effectives and
efficiency by combining the current manufacturing
and distribution capabilities into one unified
organization
Coca-Cola as a MNC
• Huge Assets and Turnover
Coca-Cola revenue for the quarter ending June 30,
2019 was $9.997B, a 6.11% increase year-over-
year.
• Coca cola owns a home company and its
subsidiaries: Coca cola corporation and Coca
Cola India.
• Coke has a centralised management system.
• It operates in more than 200 countries.
• It tailors strategies according to the local
market.
Case Study
 Declining Sales In Carbonated
Soft Drink
• Even though marketing increased, sales of
carbonated soft drinks fell by three percent in
2013, which is speculated to be the lowest
since 1995.
• Coca-Cola has 42.4 percent of the U.S. fizzy
drinks market. In 2013, the company
performed better than its competitor PepsiCo.
• The third in the market, Dr. Pepper Snapple
declined by 2.4 percent. Nevertheless, Coca-
Cola increased its market share (Esterl, 2014).
 Coca-Cola’s biggest soda consumers, US and Mexico are facing
problems because of expanding waistlines, which is a cause of
concern for regulatory authorities.

• United States-
• 2014, Michelle Obama as part of her Let’s Move
campaign placed ban on advertising sugary drinks (Nicks,
2.1 Government 2014).
Regulations • New York-
• Cap the size of sugary drinks to no more 16-ounces.
Affect Sales • Mexico-
• January 2013 “Fat” tax of one peso or eight cents is placed
on every liter of sugary drinks that are sold in the country
(The Guardian, 2013). This has already resulted in reduced
sales volume by more than 5% (Guthrie, 2014).
 UK and Ireland-
Introduced in 2018, the Soft Drinks Industry Levy in the UK has
two thresholds for the tax, one at 5g of sugar per 100mls, and
2.1 Government one at 8g/100mls.
In Ireland, the 2018 Sugar-Sweetened Drinks Tax is
Regulations at 10.6g/100mls.
South Africa-
Affect Sales The Sugary Beverages levy (as part of the Health Promotion
Levy) is fixed at 2.1 cents per gram of the sugar content that
exceeds 4g per 100ml.
Portugal-
Portugal introduced tax on sugar sweetened beverages in 2018
soft drink prices have gone up 15 cents a bottle or 30 cents for
beverages with more than 80gms of sugar per liter.
 The Coca-Cola Company
Coca- Cola Classic saw volumes
recorded a 15% net operating
in Europe decline by 1% over the
revenue decline in 2017 to
three months attributed mainly
$35.41 billion as it continues to
to the new soft drink industry
refranchise its bottling
taxes.
Impact Of operations.

Government
Regulations South Africans spent about
In Mexico, a sugar tax of 10 per
cent introduced in 2014
R7.2-billion on carbonated
prompted a 5.5% fall in the
drinks in 2017,
consumption of soft drinks in
but sales dropped by about 5%,
that year followed by a 9.7%
to R6.8-billion in 2018.
decline the following year.
The Soda Tax Decreased Sugary Coca-Cola sales decreased
Drink Sales by 21% in First Soda 32% in Philly 1-year after
Tax City (Berkeley, CA). Soda Tax.

The U.K.'s tax brought in 36

percent less revenue than Berkeley, California, the first
projected in its first six months, U.S jurisdiction to pass an
government figures show, excise tax on SBs in 2014,
reflecting that sugar content in observed a 9.6 percent
beverages is lower across decrease in sales.
product lineups.
 Rise of Diet Coke &
Diversification
Coke Zero

Actions Taken By New Can Size- Coca-

Reducing Sugar
Coca Cola Colas

Publicity
IMPACT OF THE STRATEGY
 2.2 Health And Awareness
Trends Affect Consumption
Of Csd
• Sugar levels in Coca-Cola are 39 gms in 355ml
bottles.
• Consumers have started opting for ‘healthier
options’ like flavored water, tea and juice drinks
(Bond, 2014).
• In terms of the ‘low calorie’ drinks, these saw a
decline too because of links to cancer and lack
of nutritional value (aspartame – artificial
sweetener).
Action Taken By Coca Cola

• The company created newer, more slender

cans.
• It introduced a line of new flavors (feisty
cherry, ginger lime, zesty blood orange, and
twisted mango, to name a few).
• Rebranded the packaging with brighter
colors that give Diet Coke a new look.
 • The Coca-Cola Company launched new campaign that for
Diet Coke.
• The Coca-Cola Company distributes its calorie-free Diet
Diet Coke & cherry Coke in Great Britain and the United States.

Diversification • American Heart Month, The Coca-Cola Company distributed

limited-edition cans of Diet Coke in support of The Heart
Truth campaign. The Heart Truth's Red Dress logo on more
than 6 billion packages of Diet Coke.
 Diet Coke sales have overtaken classic Coca-Cola with sales figures
showing that the low-sugar variant’s rebrand has had an impact. The

IMPACT OF soft drinks giant saw an instant boost in Diet Coke sales in the week
after the rebrand, with sales hitting £10.9m in the week ending 24
February 2018, ahead of sales of classic Coca-Cola at £10.76m,
THE STRATEGY according to figures from market research company, IRI.

This trend continued into May, with Diet Coke value sales hitting
£13.7m while classic Coke was at £11.4m in the week ending 19 May,
highlighting the growing sales gap between the two.

The advertising campaign was targeted at millennials, with the

television spot telling consumers to do what they want “because I can”.
This was supported with activations including bus advertising and
digital marketing.

Volume sales of Diet Coke hit 11.47 million litres in the week ending 31
March 2018 and rose again to 11.49 million litres by the week ending
21 April. Classic Coke sales, by comparison, have fallen from 9 million
litres at the end of February to a low of 6.7 million litres for the week
ending 14 April.
FINAL ANALYSIS
Coca-cola Sales declined

Strategies applied (focus on

Diet Coke & Coke Zero)

Sales increased for Diet Coke &

Coke Zero but soon declined
Global Taxation Policy on due to artificial sweetner
Sugar.

Repositioning, advertising & re-

designing done

Sales start to increase

Focus on diversification of
other brands & categories
 Management
Orientation(ERPG)
• Coca-Cola sees similarities between the countries
and their markets located in one region and are
used in order to develop an integrated regional
strategy
• Coca- Cola is interested in obtaining both profit
and public acceptance (a combination of the
ethnocentric and polycentric approaches) and
will use a strategy that allows it to address both
local and regional needs.
• The staffing policy of Coca-Cola is Regio centric.
Six regional groups; North America, the European
Union, the Pacific Region, the East Europe/Middle East
Group, Africa, and Latin America
 Market Entry (India case)
Wholly owned subsidiary Franchise
• Most costly global entry alternative • Coca Cola does franchising only for
bottling plants.
• Aka Greenfield venture
• Gives direct control to the organisation. • Authorised bottlers independently
develop local markets and distribute
• Procures majority of raw materials from beverages to retailers
the local sources.
• In turn, these retailers make the
beverages available to consumers.
 THE COCA-COLA SYSTEM IN INDIA
The Coca-Cola Company (TCCC), Atlanta, USA

Hindustan Coca-Cola Franchisee bottlers

Coca-Cola India Beverages Private (operating in India
Private Limited Limited under license from
(under Bottling
TCCC)
Investments Group)

Anandana
The Coca-Cola India
Foundation
Source: https://www.coca-colaindia.com/about-us/coca-cola-worldwide-and-in-
india
PESTLE ANALYSIS

SOCIAL
POLITICAL
1. Cultural shift from
1)Political contributions made in
carbonated drinks to
compliance with laws and ECONOMICAL
healthy beverages
regulation Impact of economic crisis
2. Coco cola attempts to
2) Changes in political scenario
women's economic
of a country
empowerment

LEGAL
TECHNOLOGY
1) Laws and Government ENVIRONMENTAL
1) Use of technology in
regulations on food and 1) Sustainability goals for 2020
production
beverages 2) Enduring water quality and
2) Digital technology to
2) Regulation and taxes on the availability
analysed opportunities
irredentas of the products
A Brief on Porter's Value Chain
Analysis and 5 Forces Model
Threat of New Entrants/Potential Competitors: Medium Pressure
• Entry barriers are relatively low for the beverage industry: there is no consumer
switching cost and zero capital requirement. There is an increasing amount of new
brands appearing in the market with similar prices than Coke products
• Coca-Cola is seen not only as a beverage but also as a brand. It has held a very
significant market share for a long time and loyal customers are not very likely to
try a new brand.

Threat of Substitute Products: Medium to High pressure

• There are many kinds of energy drink s/soda/juice products in the market. Coca-
cola doesn’t really have an entirely unique flavor. In a blind taste test, people can’t
tell the difference between Coca-Cola and Pepsi.
The Bargaining Power of Buyers: Low pressure
• The individual buyer no pressure on Coca-Cola
• Large retailers, like Wal-Mart, have bargaining power because of the large order quantity, but the
bargaining power is lessened because of the end consumer brand loyalty.

The Bargaining Power of Suppliers: Low pressure

• The main ingredients for soft drink include carbonated water, phosphoric acid, sweetener, and
caffeine. The suppliers are not concentrated or differentiated.
• Coca-Cola is likely a large, or the largest customer of any of these suppliers.
Rivalry Among Existing Firms: High Pressure
Currently, the main competitor is Pepsi which also has a wide range of beverage products under its
brand. Both Coca-Cola and Pepsi are the predominant carbonated beverages and committed heavily
to sponsoring outdoor events and activities.
There are other soda brands in the market that become popular, like Dr. Pepper, because of their
unique flavors. These other brands have failed to reach the success that Pepsi or Coke have enjoyed.
Conclusion
Our
Thoughts
• Good strategy taken by Coke to acquire Zico
in the year 2013, as coconut water sale was
on the rise.
• Could have diversified product breadth and
depth which they have started recently.
Thank You!