Coca Cola Company (Research Paper Sample)

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Coca Cola Company
Coca Cola is a multi-beverage corporation in America located in Georgia and Atlanta. The corporation is majorly involved in the refilling, manufacturing and marketing of syrups and beverage concentrates non-alcoholic( Rubin, 210). The company is specialized in the production of Coca Cola that was discovered in 1886 by John Stith. The company is involved in producing syrups in larger quantities sold globally to their industries manufacturing beverages. The corporation has its supplier and distribution of beverages in America. The company stock is labeled NYSE. Furthermore, the coca-cola company is the largest supplier of plastic waste globally.
Considering the yearly supply on sales in 2005, the company sold beverage products to above two hundred countries globally, including Europe, India, Kenya and Russia ( Dhar et al, 906). 2005 report on beverage consumption stated that out of all the global beverage consumed by the people, beverage licensed by coca-cola contributed to about $ 1.5 billion consumed globally. Out of these $1.5 billion, the beverage bearing the trademark Coke accounted for about 78% of the corporate gallons distributed globally in that year. In 2010 Coca Cola announced the leading brand in Europe at one billion Euros. In 2017, the company exp0eriance sales dropped by almost 11% because there was a transition of the consumers' taste and preference on sugar.
Coca-cola company operates in an oligopoly type of competitive market. One of the most competitive companies to Coca-cola is Pepsi. Over the previous years, these two companies have not agreed on fixed their product prices to the public. As much as these two companies, Cola cola and Pepsi, do not decide on pricing both formally and informally, the decision made by one company affects the other firm. For instance, if Cola-Cola lowers its prices on a 200ml bottle, it will affect Pepsi's purchasing order. In an area where people have elastic income, they will always go with the least priced beverage type. The price change can lead to market demand for both Pepsi and coca-cola. If one company lowers its product prices, there will be a huge demand for the product, while the company with high pricing is likely to lose customers.
In an Oligopoly market, the companies always resort to non-pricing strategies competition. The non-pricing competition can fluctuate and often results in the same market pricing conditions ( Michael and Banutu, 150). The marginal cost of production in oligopoly market demand on the amount a company will use either on marker research and product promotions. Coca-cola has always been reducing its prices annually, which has made it expand its market over the short periods the price is decreased. For instance, coca-cola is currently cheaper than Pepsi, and we can note the mass consumption of coca-cola is higher majorly in Africa than in Pepsi consumption. The change in pricing has made coca-cola grow in rural areas. The longer Pepsi allows the coca-cola company to dominate the market by reducing the pricing, Pepsi is likely to lose consumers. Coca-cola also faces competition from beverages that are locally made in every country. Currently, the coca-cola company is faced with international competition by the liquid that is domestically manufactured in each country.
Coca Cola demand curve
Price is not the main factor that results in the shifting of the demand curve to the coca-cola. There are other factors such as;
Income: The demand for coca-cola consumption increases if there is an increase in the customer's payment. An expansion and decrease in the consumers' pay will increase and decrease in the demand curve.
Substitutes price: if the price of substitute is reduced, there will be a decrease in coca-cola demand. For example, if Pepsi reduces its cost, the market for Coca-cola will reduce. Decrease and increase in the coca-cola market will affect the demand curve.
Favorable price: A decrease in the price of complementary products such as KFC will increase the demand for coca-cola and, in turn, increases the demand curve.
Taste and preference: Taste and preference are primarily known to impact the demand curve. Coca-cola's introduction of the zero sugar beverage has greatly increased its demand globally.
The demand curve of the Coca-cola company supply and demand can be considered elastic since the change in the above factors affects the demand curve's increase and increase.
Coca-cola Pricing strategies
Pricing charges of service or a business product is the key element that the business managers need to play critically. In the three Ps marketing strategies, pricing is the only element that affects revenue compared to cost (Dhar et al, 920). These are the pricing strategies employed by Coke. The company applies the three pricing strategies: market price by sending price and the market's ongoing competition. Skimming price to earn premium price and marker penetration involves charging a lower cost to get more customers. Considering the competition from Pepsi and other domestic beverages produced in each country, Coke resort to using alternative strategies such as;
Psychological pricing; In 2009, the cost of a two-liter bottle e was $2.49. The c company then set the charge to end in 9, influencing the customer that the price is $2.50.
Promotional pricing; During the major celebration periods, Coke uses promotional strategies by decreasing coca-cola prices for more consumption in the market. Furthermore, the company gives the retailer and intermediaries the best offer, such as free bottles of cut-price of the products that enable them to sell several Coke in the market.
Segmented pricing; coca-cola is available in different quantities packed together. Using the product cost and size, the company increases the revenue because the production cost is not added in various sizes. The packages of Coke include CAN, BIB, Tetra, PET and RGB.
Discriminatory pricing; coke products, when sold through different channels, have different prices. Discriminatory pricing comes in in the various channels Coke is being sold. For example, wholesale, petrol stations, retails, supermarkets and restaurants. Furthermore, discrimination pricing involves direct and indirect supply and sale.
Coke cost categories
In terms of labor, the Coke industry is doing very well because it involves the mass production of syrups they sell to their licensed companies (Rubin and Bloom, 80). The licensed companies run on their cost without depending on the huge cut cost from the main corporate. The coca-cola company has employed a huge spectrum ranging from the management, distributors and consumers. The company's major expense is the cost of production, which involves the task force and raw material. Since the company is doing well in terms of global income, the production cost is low compared to the income received annually. Coca-cola company does not get many losses in the market expense. A decrease in the coca-cola price in the market enables them to acquire more market territories than their competitors, such as Pepsi (Vrontis, 300). The application of discrimination pricing has reduced the market supply expense because it comes to the market through different pricing channels. The Coke company is doing a great job in the cost of categories. However, there is a need to consider several product diversities, just like Pepsi has done to increase the global market and cost categories. Product diversity will minimize the cost categories and cost of the product.
Evaluating if the Coke company is doing better currently or can do better depends on the strategies applied to maximize the company profits. Presently, Coke is one of the famous brands in the international market. Coke strength of profit maximization includes;
Powerful brand identity; coca-cola is known in almost all countries globally. It's the largest selling company of soft drinks in history.
Interband the highest brand equity awarded most increased brand equity; in 2011, the coca-cola company. The coca-cola brand is very popular in social media, adverts, and promotions annually. The Coke brand is considered to have the highest equity compared to Pepsi.
Greatest brand association with consumer loyalty; In all the USA brands, coca-cola is considered the only brand emotionally associated with consumers. It has strong customer loyalty and is being associated with joyfulness.
Dominant market share; if you compare Pepsi and coca-cola, the two largest companies of soft drinks. Coca-cola has the biggest market share, such as Fanta, sprite, diet coke, rest, and limca, which are Coke's highest market drive.
Recommendations
Introduction of new products and diversifying its segments; Coke company can develop innovation to health and food division. The diversification will contribute to their revenue, and there are more likely to move away from carbonated drinks production. Diversification will also make them major in several forms of exhibits that can sell more can of Coke. Increasing Coke's presence in developing nations; nations experiencing hot climates like the middle east and African states consume a lot of soft drink due to environmental factors. There is ned to open new Coke branches in these regions to facilitates more revenue. Expansion of packaged drinking water; coca-cola has many drinking water brands such as Kinley and Dasani that have expansion potential. Opportunity is available to expand and improve the water brands to produce healthy drinking water. Furthermore, the company needs to consider an advanced supply chain s...