Coca Cola Beverages Ltd. Analysis
Coca-Cola Beverages Ltd. is the largest bottler of soft drink products. The company manufactures markets, and supplies soft drink and non-carbonated beverages for instance Schweppes, Coca Cola and Nestea. The company also distributes other types of products such as energy drinks and mineral waters. Apart from retailing these products, Coca-Cola Beverages Ltd also distributes to bottlers and other wholesalers. Their main target markets are adults, major grocery shoppers, and the younger generation. Currently, the company owns about 58.83% of the total world market. In 2002, Coca-Cola realized the highest growth rate by nearly 249 million unit cases (Bateman et al, 2004). The company has largely been successful due to their massive investment in non-alcoholic soft drinks.
Value proposition for Coca Cola
Value proposition refers to the benefit that a customer receives when they purchase a product. Coca-cola Enterprises possess an exclusive product with a formula that is closely guarded. This undisclosed prescription, when combined with a limited use of the Coca-Cola brand name, implies that no other company can manufacture a Coca-Cola product. The best they can do is produce imitations of soft drinks such as Pepsi. Therefore, Coca-cola is a unique product. Coca Cola considers its products on three levels, which are the augmented product, the core product and the actual product. The core products are consumed by the clients and its accompanying benefits. To this extent, Coca Cola customers can access a wide selection of soft drinks. Consumers therefore purchase Coke products because of the high quality and standards that the company upholds. The traditional red and white colors that are also synonymous with Coca Cola help in adding value, as they are commonly associated with quality.
The augmented products are additional customer benefits and services. For Coke, the augmented level is very inadequate. However, Coca Cola provides a constant complaint phone service for disgruntled clients or people who desire to give feedback on the Coke products. However, despite all these benefits, the Coca Cola Company experiences certain costs. One, due to the magnitude of the firm, any slight changes or disruption in the supply, distribution and marketing of its products results in massive losses financially and technically. Similarly, Coca Cola has spent millions in promoting their products and these investments can be rendered useless if a rival company also engages in the same.
Competitive Analysis of Coca Cola Beverages Ltd
Coca-Cola operates within a very competitive setting with Pepsi Cola Company as their main competitor. Focusing on Pepsi Co, the company is a global leader in supplying and processing beverages, having revenues of about $26 billion and over 144,340 employees (Bateman et al, 2004). The company’s main subsidiaries include the snack chains Frito-Lay International and Frito-Lay North America. Other private label competitors also offer significant competition. In 1993, the company engaged in an aggressive marketing campaign when it started losing its market share to other rivals (Bateman et al, 2004). This reaction came in the form of innovative marketing programs, increased technologies and packaging.
The strong competition among Coke and its rivals always leads to increased pressure to lower the price. There is also a rising need for frequent innovation of branding and products. Considering the type of competition among these companies, every fluctuation in the selling price results in far-reaching modifications on their net income. Working with the current net operating revenues and sales volume, a decrease in the selling price by one cent might result in an estimated loss of about $1.2 million. Coca-Cola and Pepsi have also engaged in various price wars with the determination of regaining their market share (Bateman et al, 2004).
Bateman, Thomas S, and Scott Snell. Management: The New Competitive Landscape. Boston: McGraw-Hill/Irwin, 2004. Print.