Global marketing has become a reality, the product most representative of this process is Coca-Cola’s Robert Woodruff, former chairman of The Coca-Cola Company stated in 1923, that Coca-Cola should always be ‘Within an arm’s reach of desire’.
This study examines how this mission has continued to drive the Company’s marketing strategy, enabling Coca-Cola to build a strong global presence in a world in which citizens on all continents are seeking to purchase leading ‘brands’.
Coca-Cola is the most recognised brand name in the world with 94 per cent recognition. This profile has spread with increasing rapidity in recent years as evidenced for example in China, where Coca-Cola became the most recognised trademark in the late 1990s. Today you can buy a Coke almost anywhere from Beijing to Buenos Aires, from Moscow to Mexico City. The Coca-Cola Company sells half of all soft drinks consumed throughout the world.
A developing business organisation will forever seek new opportunities to renew itself. A successful global business will seek to penetrate new markets and new countries while building on improving its presence in existing markets and in this way it will continue to grow.
The Coca-Cola Company has come a long way since the product was invented in 1886 by Dr John Styth Pemberton in a backyard in Atlanta, Georgia. Today the Company is selling over one billion servings a day. To many business people, such results would indicate that the Company has arrived but key decision makers at Coca-Cola do not see it like that, they believe that the Company is in its infancy. The Company is acutely aware that, although one billion servings of Coca-Cola are consumed each day, there are 47 billion servings of other beverages.
The Company prefers to look forward rather than back and it sees there are enough opportunities in the market to keep it going for a very long time. The average person drinks The Coca-Cola Company’s beverages about once a week. Four billion consumers live in countries where the average is even less. The reality is that countries with about 20% of the world’s population account for 80% of Coca-Cola’s volume. Clearly, this presents a challenge for a global company and its marketing strategy if it is going to tap into virgin territories.
Coca-Cola is focusing on the next billion servings. 70% of the world’s population live in countries where per capita consumption of Coca-Cola products is less than 50 servings per person per year – this means that they are drinking Coca-Cola products less than once a week. Even in developed countries like the United States, there are many opportunities to raise sales.
Marketing involves getting the right product to the right place, at the right time, at the right price and with the most suitable promotional activity. Coca-Cola has always been able to create the most appropriate marketing mix.
Since its beginnings, Coca-Cola has built its business using a universal strategy based on three timeless principles:
- acceptability – through effective marketing, ensuring Coca-Cola brands are an integral part of consumers’s daily lives, making Coca-Cola the preferred beverage everywhere
- affordability – Coca-Cola guarantees it offers the best price in terms of value for money
- availability – making sure that Coca-Cola brands are available anywhere people want refreshments, a pervasive penetration of the marketplace.
Coca-Cola has created an extensive and well-organised global distribution network guaranteeing the ubiquity of its products. (Ubiquity is the ability to appear to be present everywhere at once.) Its approach is founded on the belief that Coca-Cola must try to quench the thirst of everyone in the world – all 5.6 billion of them!
The Company operates a worldwide franchise system supplying syrups and concentrates to over 1,200 bottling operations, (there are more than 350 in the US alone!) which thus involves local companies and suppliers in the 200 countries in which Coca-Cola is sold.
The bottling companies distribute the world’s favourite brands using the most sophisticated technology and distribution networks available. The Company supports its international bottler network with sophisticated marketing programmes seeking to guarantee the Company’s brands are available where anyone is seeking refreshments. Coca-Cola’s bottling system is the largest and most widespread production and distribution network in the world.
The ability to engage in global branding is a key advantage to any large company. Coca-Cola is fortunate in that it possesses a number of instantly recognisable icons which go beyond the familiar taste of its product. In particular, the Company benefits from its registered trade mark, the characteristic classic shapes of its bottles and the highly familiar red and white Coca-Cola can.
No story of Coca-Cola would be complete without the Coca-Cola glass bottle. The design for the bottle was created in the early 1900s when the bottlers of Coca-Cola faced constant threat of imitation of both product and packaging. ‘We need a Coca-Cola bottle which a person will recognise as a Coca-Cola bottle even if he feels it in the dark. The bottle should be so shaped that, even if broken, a person could tell at a glance what it was.’ (The Coca-Cola bottle design brief in 1915.)
Today the glass bottle is seen as an icon. An icon is a symbol or image which directly refers to a specific entity or moment. Acclaimed as one of the most famous packages, the Coca-Cola glass bottle was re-launched in 1997 in a unique new format for Britain at “The Coca-Cola Bottle” exhibition at London’s Design Museum.
Coca-Cola also produces the world’s most popular flavoured soft drinks: Fanta and Sprite, as well as diet Coke and Cherry Coke. These products can be mass marketed across the globe using standard promotions and advertising campaigns. This dramatically cuts promotional and advertising costs as these are distributed over a large market area.
As Coca-Cola is the flagship of the Company, more money is spent advertising and promoting Coke than any of the other drinks. In the United Kingdom, Coca-Cola advertises all year round.
Advertising is a most effective force in gaining social acceptance for any product and Coca-Cola has recognised and used this power from its very first advertisement in 1892.
Over the decades, by emphasising youth and energy, Coca-Cola has created advertising slogans, or ‘straplines’ , which are memorable, innovative and still relevant to the brand today:
1886 – Delicious and Refreshing
1929 – The Pause that Refreshes
1942 – It’s the Real Thing, often used since 1942
1963 – Things go Better with Coca-Cola
1971 – I’d like to Teach the World to Sing
1976 – Coke Adds Life
1982 – Coke is It
1989 – Can’t Beat the Feeling
1993 – Always Coca-Cola
1996 – Eat Football, Sleep Football, Drink Coca-Cola.
Coca-Cola is able to engage in global advertising because the messages created about its products have a universal appeal. Coca-Cola’s powerful brand personality has become a vehicle for promotion in its own right.
Coca-Cola has provided a platform for a number of highly successful artistic and sporting events, including the Olympics. The brand has also proven to be strong enough to support a wide range of branded merchandise bought not only for its quality but because it is fashionable.
Sponsorship and brand recognition
The relationship Coca-Cola has with sport seeks to advance the development of sport overall. It aims to make sporting competitions possible by supporting events for the participation and pleasure of athletes and spectators.
Coca-Cola has a long history of sports sponsorship including the Olympic Games, football, tennis and Special Olympics. Coca-Cola has been involved with the Olympic Games since 1928. It has been sponsoring the football World Cup since 1978 and is actively involved with the Wimbledon Championships. Coca-Cola’s support is at all levels.
In 1993, Coca-Cola became sponsors of The Coca-Cola Cup in England, with Scotland following in 1994. Support is also provided for the English National Football Team and the Scottish International Youth Teams with a grassroots programme for mini-soccer with the Football Association Development Programme. Through sponsorship in leisure activities, Coca-Cola is able to combine the promise of refreshment with a sense of thrill, celebration and passion together with the universal necessity of a healthy, active lifestyle.
Coca-Cola is a global product and can largely be marketed using a global approach, but the Company also engages in national and regional marketing strategies which illustrate recognition of local and cultural differences. The first advertisement of Coca-Cola was an oil-cloth sign containing the phrase ‘Delicious and Refreshing’ Now throughout the world, you can see Coca-Cola advertised in the cinema, on TV, on posters and in magazines.
The Coca-Cola Company’s overall advertising strategy is summed up by the phrase ‘Think Global, Act Local’ Some campaigns are designed for worldwide use and others developed for individual markets. In some cases a product is developed for local consumption, such as Lilt in Great Britain and Ireland.
The ‘Always Coca-Cola’ campaign theme has been used worldwide to reinforce the universality of the brand which is ‘always’ there. However, different advertisements are also made for each market. This enables Coca-Cola to choose the most relevant advertisements for its consumers and to choose how and when they should appear.
In Great Britain, for example, where football is a national passion, ‘Eat Football, Sleep Football, Drink Coca-Cola’ is a massively successful advertising campaign reinforcing the link between Coca-Cola and football while continuing the brand’s support of the game and fans.
Global companies need to generate high levels of profit in order to build on existing competitive advantages. For example, Coca-Cola needs to continually build on its brand image through successful advertising, promotion and provision of value for money products.
The Company requires consistent expansion and development in its distribution systems. Coca-Cola is able to do this effectively due to its strategy of growth which has enabled the Company to develop international market leadership.
This case study has illustrated the way in which Coca-Cola has developed a global mindset which involves utilising working relationships and understanding cultural structures, thereby identifying global opportunities.
Through manipulating and co-ordinating the tools of branding and advertising via image and activity, such as through sports sponsorship, The Coca-Cola Company seeks to provide refreshment for all of the people on the planet – not just the 20% who currently account for 80% of sales.