COCO-COLA Marketing PLan 14

Porters Analysis

The threat of new entrants is not very high as it requires a lot off capital investment for production facility and distribution and also the approvals from the various government bodies. As a result the profit potentials are very high for Coca-Cola.

The power of buyers is very low as they are very large in number and are different from one another so it reduces their bargaining position with the makers on the price and quality.

The bargaining power of the suppliers is also very low as the syrup (flavor) for the soft drinks is produced and distributed by the Coca-Cola international and the remaining ingredients such as sugar, water and color are available from various suppliers in excess.

The competition is also very low due to the high initial investment and exit barriers and only Pepsi is the major competitor for Coca-Cola in Pakistan

The only negative indicator according to the Porter’s analysis is the availability of the substitutes is very high in form of tea, coffee and juices and consumers can switch to those substitutes.

COCO-COLA Marketing PLan 13

Opportunities:

Coca-Cola has more than 450 brands all over the world. But in Pakistan they have only eleven brands so there is a huge potential for Coca-Cola to introduce other brands in the Pakistani market. The weather in Pakistan is very hot and humid especially in summers the demand for soft drinks goes very high. So if Coca-Cola introduces some new brands then there is huge market potential available.

Threats:

The threat of new competitors in carbonated soft drink industry is very low but the availability of substitutes is major concern. Due to the increasing prices of soft drinks, the purchasing power of buyer is going down so the buyers have started to move to the cheap substitutes available in the form of tea, juices and milk.

COCO-COLA Marketing PLan 12

 Weaknesses:

Although Coca-Cola is well established and is a world renowned brand name. But it has been criticized due to its effect on the health and due to the found quantity of pesticides in the Coca-Cola. Addiction to Coca-Cola cause serious health problems because of its effects on the body.
Out of twelve plants, only eight are owned and controlled by the Coca-Cola beverages Pakistan limited while two plants are not operational and remaining two plants are franchised where the involvement of Coca-Cola international is very low which effects the overall image of Coca-Cola in local market because of the difference in taste and quality.

COCO-COLA Marketing PLan 11

SWOT Analysis

Strengths:

Coca-Cola is operating in Pakistan from more then 50 years and the brand has mixed with the culture of Pakistan quite well. The world renowned brand name is one of the major strengths of Coca-Cola which makes it a household name in Pakistan.

The flavors for the Coca-Cola products are being imported from the U.S.A and are then processed in the local plants so this strategy resists the copying of formula and thus also resists the availability of fake products into the market. So this keeps the taste of real Coca-Cola refreshing and alluring.

The supply chain of Coca-Cola in Pakistan is its greatest strength. There are eight plants of Coca-Cola are operating in Pakistan, employing more then 1800 employees. These eight plants at different locations in the country strengthen the delivery network of Coca-Cola and increase the availability of its products in different territories.

COCO-COLA Marketing PLan 10

Social Factors:

Being a foreign company, Coca-Cola faces major opposition from the Islamic activists who claim that Coca-Cola earns money from here and then use this money to sponsor anti Islamic organizations. These kinds of claims really put a dent in the image of Coca-Cola. Coca-Cola also faced boycott of its products in Pakistan after some Danish newspapers published the sketches of Holy Prophet (PBUH) resulting in the low sales and decreasing profits for the company.

Technological Factors:

The syrup which is being used in the making of Coca-Cola products is being imported from the USA and is mixed in the state of the art local plants. The machinery for these plants is also imported from abroad. So in the field of technology, Coca-Cola is well ahead from its all competitors.

COCO-COLA Marketing PLan 7

PEST Analysis

Political Factors:

The political environment of Pakistan has great affect on the policies of Coca-Cola in Pakistan. Rapid changes in the trade and import policies cause problems in the import of raw material. Trade duties and taxes on the import of raw material from USA increase the cost for the company.

Economical Factors:

The economic condition of Pakistan is very instable from the past 5 years and increasing foreign debts, high rate of unemployment, rise in inflation rates and low per capita income are the major and constant barriers for the company in achieving its sales targets in Pakistan.

COCO-COLA Marketing PLan 7

Internal Analysis

Physical Resources:

Eight production plants and the plants in Lahore, Gujranwala and Rahimyar Khan have achieved the quality system award and four main offices all over the Pakistan

Financial Resources:

Cash: $ 4701 Million

Long term Debt: $ 2781 Million

Capital: $ 7966 Million

Loans: $ 6066 Million

Note:- The above given financial Figures are of The Coca-Cola Company International and of all its subsidiaries around the world including Pakistan for the year ended on 31-12-08.

Human Resources:

There are 1800 permanent employees working in four major departments including Coordination, Sales, Key accounts and Marketing Services.

Intellectual Capital:

Brand Value of Coca-Cola is around $ 6 billion and have eleven brands in Pakistan while 450 brands worldwide.

COCO-COLA Marketing PLan 6

Market Analysis

The target market of CCBPL is mainly teenagers and young generations who are living in extreme weather conditions such as long and burning summers. Consumers select the products of Coca-Cola because it satisfies three levels of needs of Maslow’s need hierarchy.

At first level, it satisfies the physiological need of thirst.

On second level it satisfies the social needs such as the identification with peer group values and image.

And thirdly, it satisfies the esteem needs of individuals such as being modern and fashionable.

COCO-COLA Marketing PLan 5

Environmental Analysis

The environment of soft drink industry is very unstable and there always exist a threat of new competitors entering in the soft drink industry. Availability of substitutes is also a major threat as. The available substitutes which put a pressure on Coca-Cola are coffee, juice, tea and hot chocolates.

Coca-Cola uses imported machinery in its plants to produce the quality products and the flavor syrup for the drinks is also being imported from the USA to deliver the same taste all over the world.

The market share of Coca-Cola is also increasing day by day (currently almost 45%) in Pakistan and the company has a long list of clients including McDonalds, AFC, PC Hotels and others.

The environmental uncertainty for CCBPL is very high due to the political instability and the law & order situation in the country. Policies of the government, rising inflation rates and high rate of taxes contribute in the price increase of the products which ultimately reduces the consumers buying power. Coca-Cola faces major opposition from some of the Islamic organizations existing in the country because of being a non Muslim brand and some times it causes a great trouble for the company (Boycott of Coca Cola products at various places after the publication of the sketches of Holy Prophet (PBUM) in Denish newspapers). 

COCO-COLA Marketing PLan 4

In terms of promotion, Pepsi is using the cricketers of Pakistan cricket team and celebrities from showbiz very effectively to promote its brand and is the title sponsor of Pakistan cricket team from the last one decade Pepsi is also very active on the music scene and sponsors many musical events like battle of bands and others to promote itself while on the other hand Coca-Cola is not very active in terms of promoting its products and sponsor only some musical events in a year to market the brand.

There are also some small competitors in the market like Shandy Cola, Amrat Cola and Mecca Cola who have taken very small market share (almost 5%). But these small players can be a threat for Coca-Cola because the prices of their products are very low and these small companies target the low income group who are very annoyed from the increasing prices of the products of Coca-Cola.

COCO-COLA Marketing PLan 3

Competitor Analysis

Pepsi is the market leader in Pakistan and Coca-Cola is facing very tough competition from Pepsi in terms of market share. Some two or three years back Coca-Cola was totally out from the Pakistani market but now Coca-Cola has made a great come back and is giving very tough competition to the market leaders (Pepsi). But still Coca-Cola is lacking behind from Pepsi in terms of marketing and distribution in which Pepsi has become more aggressive in the recent years. Pepsi captures almost 50% of the cola industry in Pakistan while Coca-Cola is little behind at 45%.

The biggest advantage for Pepsi is its distribution system which has provided the company with market penetration while on the other hand, the distribution system of Coca-Cola is not very vast which reduces the availability of Coca-Cola products and allows Pepsi to operate freely in some of the markets.

COCO-COLA Marketing PLan 2

Introduction

Coca-Cola is a world renowned manufacturer of carbonated soft drinks and sells its products in over two hundred countries. The Coca-Cola brand is owned by The Coca-Cola Company and the brand Coca-Cola is considered as one of the most recognizable and largest selling brand in the world.

In Pakistan, Coca-Cola products are being manufactured and sold from the last fifty years under Coca-Cola Beverages Pakistan Limited (CCBPL). The brand names and basic strategies are designed in the home country but operational and marketing strategies are being designed in the host country. The Coca-Cola Company maps objectives and strategies by looking into the environment of Pakistan. All the brands are produced locally in the state of the art plants of CCBPL and 4 P’s are decided according to the controllable and uncontrollable elements. In Pakistan there are currently 11 brands of the Coca-Cola Company launched by the Coca-Cola Beverages Pakistan Limited.   

COCO-COLA Marketing PLan

Executive Summary

Coca-Cola is a world renowned famous for manufacturing soft drinks including Coca-Cola, Sprite and Fanta. Coca-Cola has 450 brands worldwide and the value of the brand name Coca-Cola is around $ 6 billion.

Coca-Cola is operating in Pakistan from more then fifty years and has eleven brands in the country which are being manufactured from eight plants all over the Pakistan and the flavor for the soft drinks is being imported from the U.S.A. in Pakistan Coca-Cola has 1800 permanent employees working at various positions.

Pepsi is only the major competitor of Coke having a market share of around 50% while market share for Coca-Cola is approximately 45%. The remaining market is captured by small market players such as Nova, Amrat Cola and Shandy.

The environmental uncertainty is very high for Coca-Cola due to the opposition from various religious groups. The threat of substitutes is always present for the soft drink industry. The available substitutes are tea, coffee, juices and milk.

Political and economic instability is a major concern for Coca-Cola in Pakistan. Rising inflation and low buying power of consumers is forcing them to switch to other cheap substitutes which is a worry for the company in Pakistan.

According to Porters five force analysis, the soft drink industry in Pakistan is highly attractive and highly profitable and the only major negative for this industry is the availability of the cheap substitutes.