Term Paper on "Coca-Cola in India"

Term Paper 7 pages (2301 words) Sources: 6

[EXCERPT] . . . .

Coca Cola in India

Coca Cola

Coca cola stands in the list of leading brands of the world. In the year 2006, it was listed in the global ranking of top hundred brands. Sprite, fanta, coca-cola and diet coke are the leading products of this brand. Cherry coke, Vanilla coke and Lemon coke are the other brand extensions of coca cola. During the last few years, the company for promotion made heavy investment, due to which it has acquired a recognized name in the market. According to a report, researchers found that after the term "ok? The most recognized term among the people is "Coca-Cola" (Bell, 2003, pg 23).

At present, different products of coca cola are available in over two-hundred countries around the whole world. The company generates annual revenues of around twenty-four billion dollars. The reason behind the success of coca cola is their focus on their customers. They give prime importance to their customers in every activity.

Coca cola and its marketing strategies

Coca cola considers that customers of every age group are important and due to this reason the company makes it strategies to influence all age groups i.e. teenagers, matured customers and children. Coca cola usually applies the strategy of innovation in which it keeps on innovating new products in the market to capture customer's attention (Bell, 2003, pg 67). Besides this, for advertisement coca cola applies the strategy of creating ads according to the occasions and it mainly uses electronic media for most of its advertisement. Cola also offers discounts and gifts on bulk purchases or on purchasing in the stated period. In addition to this, arranging different events is also a common practice of Coca Cola Company. Direct marketing strategy, which involves mailing or faxing the customers directly, is not practiced by coca cola because it does not target the customers individually (Pendergrast, 2004, pg 109).

Coca cola want to stand apart in the market and for the reason its basic strategy is to classify the potential customers and then make a target plan for each class of customer. The main channels of coca cola include consumption "on-premise" like bars as well as restaurants, third party contractors, retailers and superstores. Dealing with theses channels requires to firstly analyzing the consumer in detail with respect to location, preference, buying behavior, taste and many other factors. Based on these key factors, coca cola alter its main product, price of the product, its distribution and way of packaging the product. By deeply analyzing these factors, coca cola meets the needs of every consumer.

Besides focusing on the basic consumption factors of the consumers, coca cola believes in marketing through multi-segmentation. It refers to making a different strategy, different product with the different price for each segment. These segments of customers are made based on their income, standard of living, age group, culture, religion, marital status, educational level etc. The distribution channel for each market segment is also different (Company & Allen, 1999, pg 666-668).

Coca cola not just not only select the distribution channel and assign responsibility to it. However, in order to give prior value to its customers, it keeps in touch with its distribution channels in order to know the circumstances of the market. Coca cola always strives in bringing some innovations in its distribution models .From a small retailer to big super markets; coca cola gives adequate attention to all aspects of distribution (Company & Allen, 1999, pg 666-668).

During the past years, coca cola considered the three a's for its basic strategies i.e. acceptability, affordability and availability. This strategy gave a huge growth to the company but on the other hand, it decreased the entry barriers in the market. Because of this barrier coca cola adopted a new strategy which is now based on the three P's in place of the three a's. These three P's refer to persuasive penetration, price-related value and preference.

For its promotion, coca cola has featured its products in a number of television programs and films. It has been a prominent element of the popular culture. Not only this, but coca cola also uses music as a source of its marketing. Some popular songs like "Come Together and the Beatles, uses the word coca cola.

Elvis Preseley, the most renowned artist also played an active part in the promotion of coca cola products.

Coca cola considers water as its great competitor because the company calculates its market share based on liquid consumption by the people. For beating this competitor coca cola wants its beverage products to be a habitual consumption by the people. For this reason, it adopts an affordable price strategy so that it will be affordable by all status groups either they are the upper middle, middle, lower middle or the lower upper class etc. (Thompson & Martin, 2010, pg 566).

Reason for selecting India, Failure of coca cola in India and other issues faced by coca cola

Coca cola has selected India due to its high growth of population. The company thought that it could earn a high profit through operating in India by applying very marketing strategy.

Until the year 1977, coca cola was one of the most popular companies in India. After the arrival of a new regulating body, coca cola faced many challenges. The new government asked the company to reveal its method of preparing the soft drink as it is the requirement of the Foreign Exchange Regulation Act (FERA). After the beginning of the Liberation policy of India, the company returned in the year 1993.

People of India were highly concerned about the production procedure of coca cola. There was great fear among the people that the water used for producing coke might contain some harmful chemicals and pesticides. In addition to this, it was also supposed that aquifers are drying up because large amount of water is being used in the production of coca cola. Villagers thought that this thing is affecting the farmers badly because due to the shortage of water they were compelled to relocate themselves (Thompson & Martin, 2010, pg 566).

A secret of Coca Cola Company was revealed to the public in the year 2003 when a non-governmental institution named as Centre for Science and Environment situated in New Delhi, tested some of the soft drinks and the results showed that these soft drinks contain toxins such as DDT, chlorpyrifos, malathion and lindane pesticides. These harmful substances may result in cancer or other dangerous diseases. Many of the products, which were tested, belonged to the coca cola company. This has badly affected the sales of the company and a decrease of around eleven percent in sales was observed.

After that in the year 2004, the government backed up the findings of the Centre for Science and Environment and the government appointed a committee to set up the standard of pesticides for the soft drinks. This move was completely opposed by the coca cola company and because according to the company these lab tests are not so reliable that they can detect the very small traces of pesticides in the soft drinks.

The coca cola company clearly denied the fact that its products contain pesticides and it responded that it has a filtration system for removing possible contaminants. In addition to this, the company's executives said that their product is produced according to the health standards of the country.

In the year 2006, the production and sales of coca cola and other soft drinks were banned by the state of India, Kerala. This action was made due to the health issues related with the soft drinks but unfortunately, the Kerala High Court backed this act in the same year. The High Court said that the right of banning the food products is only in the hand of the federal government (Eldred, 2008, pg 345).

A bottling plant worth of sixteen million dollar was shut down by the domestic officials of Kerala in the year 2004.The Kerala officials said that the due to this bottling plant, the villagers and farmers are facing scarcity of water. Besides this, this plant is also polluting the clean water.

Many people have said that bottling plants of coca cola should not be located in such areas, which are drought -- stricken. Researchers found that in Plachimada, problems like pollution of the underground water and soil, high shortage of water and destroying of farms is occurring mainly due to the production of coca cola. It was found that the coca cola plant consumes around ninety-thousand liters of water, from which one third is used as a soft drink ingredient while the remaining water is used in cleaning the equipment and bottles. This water comes from two sources, one source is the plant well and the other source is the aquifer share of coca cola with the nearby farmers. Water is almost free for all. The farmers said that this problem began in the year 1999 after the construction of the coca cola… READ MORE

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