Coca-Cola External Marketing Audit

Political

            A few decades ago, Coke used to be a symbol of Americanism but now it is being looked upon as a drink that is unhealthy and high in calories. Of course, there is the history of coke that says for short period cocaine was used in Coke, however, that was discontinued after just a few years. The political situation per se is favorable for Coke as the developing world is looking to America for direction and coke being an American symbol tends to benefit from that.

Economic

            Compared to Pepsi’s 23%, Coke depends on Fizzy carbonated drinks for 85% of its profits, and that is a very bad situation to be in. the US economy is growing and so is the European economy, consumer spending is also doing fine, but customers are not increasing their spending on carbonated drinks. The sales of carbonated drinks are stagnant. Therefore, if profits need to grow, that growth will not come with a high reliance on carbonated drinks. We need to diversify our portfolio into products that are profitable and have high growth potential.

Social

            The only problem now is that the consumer is getting health conscious and coke and other carbonated drinks are not seen as health drinks. Pepsi is also seen in the same light; however, Pepsi has Tropicana and many other drinks that get it a lot of revenue.

Coke is coming up with new products and trying to coax customers to different and newer versions of coke, however that seems like a wrong strategy, what coke needs is products that challenge Pepsi at the healthy lifestyle image, coke continues to give them the coke side of life and that is what the customers have been living for a century now. They need health, not carbonated drinks. Coke it the greatest brand ever, it has made supernormal sales and profits for a century now and we can expect it to go for another century, we need new products that supplement the customers’ lifestyle.

Technological

            Coke needs to put in more money into research and development of new products. Pepsi seems to have cracked the science of coming up with new products. We are still in the drinks business while Pepsi has a strong presence in the snack business and that seems to be flourishing. The snack business – healthy snacks – seems to be doing wonders for Pepsi; we need to put in money there. I hope that we can come up with the best products in the market; if not a comparable product will at least help, us stop the growth that Pepsi is enjoying in the snack market.

SPICC

Suppliers

            Our suppliers are not a problem right now, but we need to expand our suppliers and get ready to go to the market with our new products.

Publics

            Consumers and publicity are both lagging, we are losing our strength and we need to work effectively to become organized.

Intermediaries

            The intermediaries are critical to our business but we need to strengthen our position with them and audit to see if they will need to upgrade their facilities as we grow into new markets and products.

Customers

            Our customer base is dwindling in percentage and we need to be aware on how to increase it. It is critical that we capture the younger generation of today just as we captured all the generations before this.

Markets

            We need to have our presence in growing markets like China India and a stronger presence in the East European region.

Competition

            Our competition is going out and introducing new products and racing away into new categories, we should be worried.

Market Size and Structure

The total market size is close to a 100 billion and coke has nearly a quarter of it. However, there was a time coke had over 60% market share.

Internal Marketing Audit

7 P’s

Product

            The product is not the preferred drink anymore and that has many consequences for the company. Coke must introduce more products that the customer wants, its not the customer doesn’t want coke, they do, but they don’t want it as much as they wanted it before and that is a sign for slower growth or even decline in the coming years.

            Our product as a carbonated drink is better and more popular than Pepsi, we are the world’s biggest brand and we are a superior product on a product vs. product basis. However, there are other product categories where we do not have a hold or a product to fill in the gap.

Price

            Our price will be similar to that of Pepsi as the products are substitutes, our brand is superior but we do not want to lose cost conscious customers to Pepsi.

Promotion

            Our promotion needs to improve. Pepsi seems to have signed up some big starts and is coming out with some very attractive advertisements. With an impetus of a new marketing budget of 400 million, we should be able to do a better job than Pepsi and start promoting our brand as we did a decade ago.

Place

            We want coke and its products to be available widely and we ought to beat Pepsi at the supermarkets, because of their snack products, Pepsi does better than we at the supermarkets do and we must come up with new products not only to improve our sales and capture different segments but also not to lose crucial revenue in the supermarkets.

People

            We need people who hold Coke close to their hearts and want to stick around with us for many years. The people in the marketing and the advertising liaisons that we have must be the best people available. As we get into introducing new and exciting products, we must find and keep the best talent within Coke.

Physical Evidence

            This factor will be crucial for the new products that we are going to introduce; we need to have attractive brochures and marketing materials. It will be ideal to have many samples so that we can do proper marketing activities and keep the distributors and marketers involved and enthusiastic about our products.

Process

            I feel that we need better processes to find new products and we need to look at our distribution and build up that area for more capacity. The snack business is a volume-based product, there are huge packets that weigh very less but occupy a lot of space. This is the opposite of our current system where all our drinks have a lot of weight and take lesser volume. We should look at ways on how we can cramp in more and more snacks in lesser volume – if we have such products, they would a source of competitive advantage for us.

Mckinsey 7’s

Strategy

            Our strategy to introduce people to the coke way of living might be a good strategy if we want to continue selling coke. As we can see, competition is making a lot more money in sectors that are growing – health products. Moreover, the carbonated drinks sector is stagnant. Therefore, we ought to come out with a strategy that is broader and has more products to offer people.

            More products do not mean products that have low sales. We need another coke. That might be a distant dream, but we should look for a brand that can and will carry our company for another century, coke per se has carried us a century, we need another brand like that. We cannot continue to rely on coke to take us forward for another 100 years.

Structure

            We need to put in resources into product development, distribution and advertising, we need another major brand that can give us a few billion dollars in sales on a yearly basis and has potential to grow.

System

            The people in the strategic sectors need to be given highflying careers and more financial rewards. The product development team must be our focus area for the next few years but we must and must always allocate sufficient budget to this team and the marketing team.

Style/Culture

            The organization culture has helped us thrive for the last 100 years and we do no see easy changes there. However, the managers need to be enterprising people and must come from the sales and marketing arena. We ought to find the best talent in the world and keep it.

Staff

            The development of people has been strength at coke but we must add more focus on doing things. People with high potential ought to be sent to the best marketing schools in the world and we should organize talks by the top people in coke so that new recruits get the best exposure and have lots to learn in their initial years to apply their talent and nascent knowledge effectively in the future.

Skills

            Our competence has always been sales and marketing and we must continue to keep them as our flagship departments, however product development must join the same foray and be given equal importance as the time has come for us to find new products so that we can grow faster than our current levels.

Shared values / Superordinate goals

            The shared values of coke have always been the basis of our growth and are the basis of our current enthusiasm towards the future of our company.

SWOT

Marketing Objective and Strategy

            The objective of our marketing strategy is to increase market share. We have a 5 billion dollar profit so for the coming year we want to focus on getting back our market share. Profits are important but they will follow once we can get our market share back in place. The only major objective is to promote the brand such that the market share goes up.

            We are currently gaining from our tie-ups with McDonalds and other fast food chains but we must get our market share back in place where the consumer has a choice, places like supermarkets where people buy the product for their home use.

            The other critical part of our strategy is to have special focus on our new products. We need the new products to be blockbuster hits and they are going to drive our revenues and profits in the future.

            Our pricing has to be competitive as we would be entering new product categories and have to challenge the incumbent. However, the prices are not going to be lower.

            Promotions will be done in different places like gyms and sports arenas. We want to touch different sports and areas of growth.

            We want to attract the best talents and in appropriate places like our career portal and top colleges across the country and the world, we want to go and build our brand to attract the top people to coke.

            We want to involve better processes to improve our go to market strategy while incorporating better systems to gain insights into the mind of the customer, retailer, distributor and other partners of our chain.

References

Coca Cola (2006) Wikipedia http://en.wikipedia.org/wiki/Coca-Cola

Soft Drinks Industry Yahoo Finance http://biz.yahoo.com/ic/ll/348tor.html