Battle of the Brand:

By: Aleksandra Kasikovic, Annie Qu, Chen Guo, Christina Chen, Margo Kitner

About Coca-Cola

The Coca-Cola Enterprise Inc.

• Non-alcoholic beverage• Manufacturer, distributor, marketer of concentrates

and syrup • 3,500+ products of 500+ brands• Distributed in 200+ countries• Sells more than 1.7 billion beverage servings

• In Canada: operates in all 10 provinces, employs 6,300 people, 50 facilities

History1886: Created by John Pemberton, sold 9 glass per day for 5¢

WWII: oversea plants to supply troops with beverages

1923: Robert Woodruff began his 60-yr presidency

Advertising budget: $100,000 (1901)$1M (1911)

1889: Asa Grigg Candler bought the rights for $2,300

1915: found signature bottle through competition

1928: Introduced to the Olympics and Times Square

1940: 53 countries

History

1992: Coca-Cola Classic was re-introduced“Coke” caught on

1981: Diet Coke was introduced: instant success

1985: Introduced New Coke: received backlash

1990’s: Increasing associations with global sporting events

Today: the most known brand worldwide and biggest selling soft drink in history

1970: The “wave” was introduced to the brand mark

1953: Ad budget surpassed $30M120 countries

2000’s: continuous innovations in product designs

The Market Industry, Market, Competition, Consumers

IndustryNon-alcoholic beverages industry• Coca-Cola products under carbonated soft

drinks (CSD) market

Carbonated beverages:• Colas, fruit flavoured beverages, ginger

ales, root beers etc.

IndustryOther beverages:• Coffee, fruit juices, bottled water, sports drinks etc.

Industry

Domestic marketTotal revenue of CSDs in Canada was $3,725.8 million (2012)

• 16.3% of the market share of non-alcoholic beverages market/industry (2009)

• Second largest share after coffee (16.3%)

Industry

Industry

Major driving force: trend toward healthier beverage choices (and healthier lifestyle in general)• Thus drinks with low-calorie,

energy, essential vitamins

Market

Coca-Cola has six geographical business segments(North America, Eurasia and Africa, Europe, Latin America, Pacific) • Mass marketing – i.e. targets everyone

(talked about later)

Market

Volume growth of the Canadian CSD market = 0.1% in 2012• 3350.3 million L

• Future market volume is suspected to decrease about 0.2% from 2012 to 2017 to 3,343million L per year

Market

Market value:• Market value in 2012: $3,725.8 million• Compound annual growth rate (CAGR) from

2008 to 2012 was 0.8%• Predicted CAGR from 2012 to 2017 is 0.9%

• CSD market growth is stagnant

Market

Distribution channels for CSD market:• Supermarkets and hypermarkets – 60.3%• Trade markets – 17.7%• Independent retailers – 11.5%• Specialist retailers – 2.8%• Other distribution channels – 7.8%

60%18%

11%

3% 8%

Distribution Channels by Volume Sold

Supermarkets/Hypermar-kets

OtherSpecialist

Independent

Trade Markets

Competition

Coca-Cola Enterprises Inc. – three major product lines (in Canadian market)

Coca-Cola – targets mass marketDiet Coke – targets womenCoke Zero – targets men

Various extensions (caffeine free, various flavours – cherry, lemon,

vanilla etc.)

Competition

Competition

PepsiCo Inc. has direct competing product lines to all above: Pepsi, Diet Pepsi and Pepsi Max, with respective extensions of product lines

CompetitionCoca-Cola Enterprises Inc. • Revenues of $48,017

million(end of Dec. fiscal year 2012)

• Increase of 3.2% compared to 2011

• Net income was $9,019 million in 2012 (vs. $8,572 million in 2011)

• 35.5% share of the Canadian CSD market volume

PepsiCo Inc. • Revenues of $65,492

million in 2012• Decrease of 1.5% from

2011• Net income was $6,214

million in 2012 (vs$6,462 million in 2011)

• 35.1% share of the Canadian CSD market volume

CompetitionOther Competitors: Non-Colas• Cott Corporation – 5.3%

share• Dr Pepper Snapple Inc. –

3.3% share• Other companies –

20.9% share

Low-involvement product = consequences

SWOT Analysis

Consumer

Population of Canada (thus size of CSD market) = 34.9 million people in 2012• Growth of 1.1% since 2008

Average Canadian household spent $103 annually on CSDs in 2011Average income: $29,574 CAD vs per capita consumer expenditure: $27,251 CAD

Consumer

Peak consumption range: ages 35-44• Core consumption market (consumption at least

20% > average): adults age 35-44, income < $30,000 USD, high school education and below

• Underdeveloped markets (consumption at least 20% < average): households with very young children, women over 65 years old, and Asian consumers

*Health concerns*= falling consumption in general

Did You know?• Consumption declines with household income and education!• Typical CSD consumer drinks 3.5 soft drinks each week• 62% of adults drink soda at least every once every two weeks

• CSD drinks are consumed as a beverage 74% of the time

• Consumption is distributed evenly both weekly and annually

The Strategy

Strategy

• 40% of the beverage market• Strategy promises enjoyment and pleasure

in the form of a soft drink• Epitomizes personality of the brand

• internalized → loyal consumers → easier purchase deicision

Strategy• Offered in every

country except cuba and north korea

• Appeals to any type of consumer

• Different cultural needs and wants

• Customized campaigns

Product

Widest portfolio • 300 brands and 3300

products• Presence in 200 countriesUse of the color

red

Price

• According to the market and geographic segment• Competition based• Oligopoly market → cartel contract• New market = lower prices• Psychological pricing

Brand Positioning

• Joy and Happiness: “Open Happiness”• Entertainment and passion: Sponsorship-

Olympic Games, FIFA, American Idol

• Vision of “Planet”: Social Responsible Marketing • Vision of “Partner”: Coca-Cola System, “My Coke

Rewards”

Place

Global business with Local Scale

Place

• 250 bottling partners, 23million retailers, Over 200 countries, 1.8 billion people/ day

• “Coke University”: reach more young adults

• “Direct Store Delivery” System: Coca-Cola Enterprise employees deliver the products to the stores

Big Retailers

Promotion

1. Traditional commercials through media: Santa Claus-American Culture implementation

2. Shift from Website plus Email to Social Media: 1st brand Facebook Page with 73 millions “Like”

3. Content Marketing “Liquid and Linked”: mobile app, television commercials, video clips (i.e. 2012 FIFA World Cup Program)

Promotion

4. Marketing associated with packaging design “My Coke Rewards” “Open Happiness” advertisement campaign

5. Socially Responsible Marketing• Children: Breakfast Club• Health: Anti-Obesity Campaign

• Animal: WWF-Polar Bear Conservation • Environment: Plantbottle-deal with climate changes

The Results

Results

Good segment-specific marketingFreestyle touch-screen fountain machines

Named Creative Market of the Year

• Data on the mix and matching of flavors

• Helped fountain sales

Company Shares of Carbonates by Off-trade Volume 2008-2012

Brand Shares of Carbonates by Off-trade Volume 2009-2012

Company Shares of Carbonates by Off-trade Value 2008-2012

% Off-trade value RSP

2008 2009 2010 2011 2012

Coca-Cola Ltd  38.7 37.4 37.0 37.0 37.1

Pepsi-Cola Canada Beverages Ltd 

30.4 28.3 27.3 26.8 26.2

Brand Shares of Carbonates by Off-trade Value 2009-2012

% Off-trade value RSP

Company 2009 2010 2011 2012

Coca-Cola Coca-Cola Ltd 14.1 14.2 14.5 14.6

PepsiPepsi-Cola Canada Beverages Ltd

13.8 13.1 12.7 12.3

Results

• Most Popular Carbonated Soft Drink (15% share)• Most often drunk soft drink (25.24%) • 259 servings per person

The Recommendations

Recommendations

1. Continue to its brand positioning based on the emotional benefits that it can provide.

2. Use Stevia for Diet Coke to increase its appeal to Aspartame sensitive

customers and increase its perception as a healthy drink.

Recommendations

3. Create its own in-home soda maker system.

4. Launch worldwide ad campaign competition to find the optimal marketing strategies for underdeveloped markets from their POV.

Recommendations

5. Continue with their social marketing initiatives to further enhance and strengthen their brand image.

Always Coca-Cola