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Coca-Cola in China

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Marketing Strategy Plan of Coca-Cola in China

Marketing Strategy Plan of Coca-Cola in China

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  • Rita good day .
    I have come across your article on marketing strategy on China .I am interested to know more on how COCA -COLA overcomes the goverment 's constraints and cultural barriers in China .i am an associate lecturer of international marketing at the Institute of international relations of Cameroun (Iric -Yaounde ).
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  • So on the next “X” minutes , we are going to talk about the subjects that we learn on the MSP lectures: I am going to talk about: ... ; Ansuha Bhat: will talk about...;Mohammad will show our aproach about: ....; Tina Lai will gives you some insights about: ....And finally Victor will speak about ....
  • Starting with the mission statementour goal was to answer threecharacteristics that we considered fundamental. We are talking about: the purpose, the business and the distinctive competence. We believe that the mission of Coca-Cola it to constantly strive to provide a quality range of flavoured drinks for all individuals tastes and lifestyles in China.This can include carbonated drinks but also non-carbonated drinks.In order to achieve this mission, Coca-Cola will need to maintain:» sustainable growth by maximizing in sales and provide profits to the company» Attractive returns to shareholders, through the development of a profitable product line and operational excellence. For us it is clear that the purpose is to maintain the market leadership; The business is soft drinks; And distinctive is profitable product line and operations (eg. Marketing, r&d, logistics… etc)
  • Next, about the corporative objectives we try to estimate what Coca-Cola want to achieve in the future.
  • To designed the Value-in-use, we first defined which benefits the customers can get when they drink Coca-Cola.We assume that different customers can have different benefits, such as Hapiness and fun, Refreshing, Just for taste etc.. And then, we suggest which external and internal attributes of the Coca-Cola drink can led to this values. We believe that the our product as quality and taste, and can led to this values: Hapiness; refreshing, Just for taste; social gathering. However, if the package and labelling look attractive to a customer, can make them believe that the product has quality and is tastefullIngredients are linked to refreshing and just for sure. Perhaps, some customers care what they are drinking exactly.Promotions, we are talking about on trade promotions
  • About the mission statementour goal was to answer the threecharacteristics that we considered fundamental. We are talking about: the purpose, the business and the values of Coca-Cola in China. We believe that the mission of Coca-Cola is:….In order to achieve the mission, it is essential to create value to:* Consumers/Consumers » By offering a broad range of nonalcoholic ready-to–drink “drinks”.* Partners » For instance cultivate a healthy relationship with bottlers, governments, suppliers* Community » Communicate the brand values (hapiness, enjoyment and refreshing) that in suitable to the Chinese culture and life style.
  • Before we start to talk about the perceptual map, we decided to identify who are our customers, having in mind the differences the 2 motivators factor: health awareness and the percepetion of Coca-Cola brand
  • Futher this we wanted to specify
  • About the mission statementour goal was to answer the threecharacteristics that we considered fundamental. We are talking about: the purpose, the business and the values of Coca-Cola in China. We believe that the mission of Coca-Cola is:….In order to achieve the mission, it is essential to create value to:* Consumers/Consumers » By offering a broad range of nonalcoholic ready-to–drink “drinks”.* Partners » For instance cultivate a healthy relationship with bottlers, governments, suppliers* Community » Communicate the brand values (hapiness, enjoyment and refreshing) that in suitable to the Chinese culture and life style.
  • About the mission statementour goal was to answer the threecharacteristics that we considered fundamental. We are talking about: the purpose, the business and the values of Coca-Cola in China. We believe that the mission of Coca-Cola is:….In order to achieve the mission, it is essential to create value to:* Consumers/Consumers » By offering a broad range of nonalcoholic ready-to–drink “drinks”.* Partners » For instance cultivate a healthy relationship with bottlers, governments, suppliers* Community » Communicate the brand values (hapiness, enjoyment and refreshing) that in suitable to the Chinese culture and life style.
  • - Coca-Cola and Pepsi have dominated the Cola Industry... - Low which indicate low profit margin (incentive) to the outsider (new entrants)
  • Hello everybody, we are the learning team 2 and we are going to present our perspective about Coca-Cola in China; The product that we chose is Coca-Cola Regular

Coca-Cola in China Coca-Cola in China Presentation Transcript

  • Coca-Cola in China
    “Think Local, Act Local”
    Product: Coca Cola Regular
    Cranfield University 21/10/2010 Module : MSP
    Presented by learning team 2:
    Ansuha Bhat
    Mohammad Aladalh
    Rita Batalha
    Tina Lai
    Victor Zhang
  • Is
    Agenda
    _
    Mission Statement
    Corporate Objectives
    Value in Use
    Buying Criteria
    Consumer Segment
    Perceptual Map
    PESTLE Analysis
    Porter’s Five forces
    BCG Matrix
    Market Attractiveness
    Critical Success Factors
    Directional Policy Matrix
    Marketing Strategies: 4 Ps
    Marketing Strategies: CSF
    Assumptions
    New product
    Conclusions
  • Mission Statement
    Coca Cola will constantly strive to provide a quality range of flavoured drinks for all individuals tastes and lifestyles in China.
    Wewill maintain sustainable growth and attractive returns, through the development of a profitable product line and our operational excellence.
  • Corporate Objectives
    Weaim to increase oursalesin China by 15% using our effective strategy, "think local, act local“ by 2015Establish 3 new manufacturing firms in the rural areas
    Increase market share by 5%in 2015 by targeting a new segment of customer through a new product which will cater their needs
    Exceed USA and become the second largest market in terms of per capita consumption of Coca-Cola products by 2020
  • Value-in-Use
    Experience Surround
    Value-in-use:
    Hapiness and fun
    Social responsability
    Service
    Refreshing
    ingredients
    Packaging & labelling
    Product
    Just for taste
    quality
    Social gathering
    taste
    Special Offers
    Sense of belonging
    Complementary product
    I feel close to my idol!
    Enjoyment
  • Buying Criteria
    Motivators factors
    Brand affinity*
    Health awareness*
    Packaging
    Taste
    Hygiene factors
    Refreshing
    Convenient location
    Quality
    Affordable
  • Consumer Segment
    Who are we talking to?
    Generation Ycomprehends a group of people born aged between 15-35 years old. They have divided into subsequent trends, such as the Fashionistsand Techno lovers.
    Generation Y
    (http://en.wikipedia.org/wiki/Generation_y)
  • Consumer Segment
    Genuine:Tingis a marketing student with 27 years old . She loves Coca Cola more than her mother. Drinks Coca-Cola on daily basis and she would hardly change it for another brand.
    Being fit its important, but it is not a requirement. She preferes to be updated about the latest trends in fashion or arts.
    In good shape:
    Zhangis a young professional with 34 years old. He is very active and practice several sports.He is not a big fan of carbonated drinks, prefers natural juices or sports drinks.
    He is very rational. Brands does not mean anything to him, however he prefers to consume local brands than international.
  • Consumer Segment
    Brand Consumers:Hong and Li are two best friends both at 18. For them Coca-Cola represents celebration/ party and a feeling of closeness with their idols.They see sports as hobbies and not a requirement for being fit.
    They drink Coca-Cola in parties ,when they go to cinema or go shopping.
    Light on the pocket:
    Chen is a mid-age adult who cares how much is going out of his pocket.
    He neither cares for brands and health.
    He would prefer Coca-Cola to other health drinks because it would turn out cheaper.
  • Perceptual Map
    high health awareness
    In good shape
    Genuine
    high brand affinity
    low brand affinity
    Brand Consumer
    Light on the pocket
    low health awareness
  • Consumer Insights - survey
    Who are they?
    Weekly consumption*
    How old they are?
    18-35: 53,73%
    35-50: 34,33%
    < 2 bottles55%
    3- 5 bottles
    22%
    >50: 11,94%
    > 8 bottles12%
    6-7 bottles11%
    *330ml
    Female
    44,75%
    Male
    55,24%
  • PESTLE Analysis
    What changes in government policy have a big impact on the way Coca-Cola operates?
    Politcal Factors
    What social and cultural aspects affect the customer needs?
    Social Factors
    What economic factors effect Coca Cola’ ability to generate income?
    Economical Factors
    What changes in the technological environment affects the production levels and the business in general?
    Technological Factors
    What significant legal changes may affect Coca-Cola’s behaviour?
     
    Legal Factors
    What environmental factors can affect the consumer’s insights and choices?
    Environmental Factors
  • PESTLEAnalysis
    PoliticalBureaucracy, corruption and a lack of transparency are key obstacles to conduct a business in China
    Tax incentives are offered to foreign investors as part of the "open door" development strategy
    Lack of coordination between central and local authorities
    • Lack of federal structure
    • Investment climate to be insecure
  • PESTLEAnalysis
    EconomicFavorable government policies (Free-market economy)
    • Developing the capital markets
    • Undertaking significant bank reforms
    Rising unemployment
    • In 2008, almost 70% of job seekers were unemployed
    • 11 million people were laid off and are now without jobs
  • PESTLEAnalysis
    Social
    Quality of lifestyle is increasing as the increasing of purchasing power and education level
    Decline in poverty,per capita income was $6,500 which is one of the highest in Asia in 2009
    One child policy to reduce population rate and decrease the pressure on the resources of the country
  • PESTLEAnalysis
    TechnologicalLarger number of R&D institutions:
    • Coca-Cola opened its $90 million Innovation and Technology Center in Shanghai, 2009
    • China produces the second largest number of science and engineering graduates
    The increasing awareness of technology. (E.g. new bottle, new label, design etc.)
  • PESTLEAnalysis
    LegalIncreasing importance of anti-monopoly law:
    • The acquisition of Huiyuan by Coca-Cola failed
    Facilitation of (Foreign Direct investment) FDI:
    • Clear and fast procedures and processes for foreign investments
    Reporting and accounting standards;
    • Only a very small group of certified accounting professionals
    • Lack of modern financial reporting
  • PESTLEAnalysis
    EnvironmentalIncreasing the importance of environmental policies:
    • State Environmental Protection Administration
    • Inspection of industrial companies on a regular basis
    • Coca Cola will be inspected and supervised regularly to make sure that it meets the environmental standards in its industrial operations
  • Porter’s Five Forces
    Threat of substitutes: STRONG
    • There is a number of other soft drinks can easier substitute Cola. Eg. tea
    • The increasing health awareness has lead to the trends of healthy drinks, such as milk or flavored juice
    • Consumers have more choices than ever before
    Bargaining power of suppliers: WEAK
    Availability of the ingredients on the Chinese marketEg. Such as aspartame which many often is substitute for saccharine
    Fluctuations in market price: Eg. Market turbulence increases Coke’s vulnerability to price fluctuations
    Rivalry: STRONG
    Pepsi taste: Pepsi has a similar taste with Coca-Cola
    Pepsi marketing: has more successful marketing strategy in China than Coca-Cola
    Future Cola:has its advantage in coverage in rural areas where Coca-Cola has failed to step into
    Threath of new entrants: WEAK
    • Brand Image / Loyalty: Coca-Cola has consolidate brand equity and loyal customer
    • Retailer and super markets shelf space:
    Retailers require significant margins for the shelf space they offer
    • Advertising Spends
    Eg. In 2008, Coca-Cola invested €81.2 million in the Beijing Olympic
    • Substantial fixed cost
    Bargaining power of buyers: WEAK
    • Individual consumer may have little power over the companies
    • Wholesalers, distributers and retailer may have certain power over Coca-Cola
    • Coca-Cola also has its own well-developed distribution channel in China
    Threath of new entrants
    Bargaining power of suppliers
    Bargaining power of buyers
    Rivarly among existing competitors
    Threath of substitutes
  • BCG Matrix
    Market Share relative to competitors
    LOW
    HIGH
    HIGH
    Brand Consumers
    In good shape
    Market Growth
    Genuine
    Light on the pocket
    LOW
  • Market Attractiveness
    5
    7
    6
    8
    2
    1,25
    1,75
    1,5
    4
    5
    6
    2
    1,0
    1,25
    0,5
    1,5
    3
    7
    2
    4
    2,1
    0,9
    0,6
    1,2
    4
    5
    9
    2
    0,8
    1,0
    1,8
    0,4
  • Critical Success Factors
    Product-market: Genuine
    Relative Business Strengh: 0,5
    7
    8
    2
    9
    0.9
    0,8
    0,2
    4
    3
    4
    3
    0.4
    0,3
    0,3
    0,4
    6
    8
    3
    9
    2,4
    0,9
    2,7
    7
    4
    4
    4
    1,2
    1,2
    2,1
    1,2
    6
    4
    7
    8
    0,8
    1,4
    1,6
  • Critical Success Factors
    Product-market: In good shape
    Relative Business Strengh: -2,25
    7
    3
    2
    3
    0,45
    1,05
    0,45
    0,3
    3
    5
    6
    5
    0,3
    0,5
    0,5
    0,6
    5
    5
    3
    7
    1
    0,6
    1,4
    1,0
    9
    3
    3
    3
    1,2
    1,2
    3,6
    1,2
    5
    5
    3
    6
    0,75
    0,75
    0,45
    0,9
  • Critical Success Factors
    Product-market: Brand Cons.
    Relative Business Strengh: 1,30
    4
    5
    4
    7
    1,4
    0,8
    1
    0,8
    3
    3
    3
    0,3
    0,4
    0,2
    0,3
    3
    6
    4
    9
    0,3
    1,8
    1,2
    2,7
    4
    3
    3
    2
    0,2
    0,3
    0,4
    0,3
    7
    7
    6
    8
    2,1
    2,1
    1,8
    2,4
  • Critical Success Factors
    Product-market: Light on the pocket
    Relative Business Strengh: -0,2
    4
    4
    3
    4
    0,4
    0,4
    0,4
    0,3
    2
    7
    8
    7
    0,6
    2,1
    2,1
    2,4
    3
    3
    4
    4
    0,3
    0,3
    0,4
    0,4
    5
    5
    5
    5
    0,5
    0,5
    0,5
    0,5
    6
    7
    8
    8
    2,4
    2,8
    3,2
    3,2
  • Directional Policy Matrix
    Relative Business Strenght
    LOW
    HIGH
    7
    HIGH
    Brand Consumer
    Market Attactiveness
    In good shape
    6
    5
    Genuine
    4
    Light on the pocket
    3
    LOW
    +2
    1
    -1
    0
    -2
  • Marketing objectives
    Genuine:
    Increase revenue by 5% in 3 years
    In good shape:
    Increase sales by 3% in 3 years
    Brand Consumer:
    Maintain market attractiveness by 4% in 3 years
    Light on the pocket:
    Increase market share by 2% in 3 years
  • Directional Policy Matrix “future”
    Relative Business Strenght
    LOW
    HIGH
    7
    HIGH
    Brand Consumer
    Newsegment 1
    Market Attactiveness
    6
    - 4%
    + 3%
    In good shape
    Newsegment 2
    5
    + 5%
    + 2%
    4
    Light on the pocket
    Genuine
    3
    LOW
    +2
    1
    -1
    0
    -2
  • Marketing Strategies: 4 Ps
    Segment: Genuine
  • Marketing Strategies: 4 Ps
    Segment: Brand Consumer
  • Marketing Strategies: CSF
    Segment: GenuineCSF: Brand Affinity Score: 7 (current) 8(objective)
  • Marketing Strategies: CSF
    Segment: Brand ConsumerCSF: No change Score:N/A (current) N/A (objective)
  • Marketing Strategies: CSF
    Segment: In good shapeCSF: Health Awareness Score: 3 (current) 5 (objective)
  • Marketing Strategies: CSF
    Segment: Light on the pocketCSF: Promotions/Price Score:7/7 (current) 8/8 (objective)
  • New Product
    Coca-Cola Tea
    The taste of coke with the goodness to tea!

  • Coca-Cola Tea
    Features: Coca-Cola Flavour
    Caffeine Free
    Hot drink
    Tea bags
    Needs:
    Who is our target?Tea lovers; Health conscious segment ; Coca-Cola Fans;
    What is the consumer’s need
    Drink a non-carbonated drink with Coke flavour
    Benefits:
    Health
    Stress ReliefCloseness with Chinese culture

  • Assumptions
    Corruption and bureaucracy in China may affect Coca Cola in the near future. Increase in purchasing power of the people will lead to increased sales of Coca Cola. Inflation in prices may not affect sales of Coca Cola as we are assuming purchasing power of people will also increase Anti-monopoly law affecting ban on further acquisitions. New entrants, both local and international, will not be able to compete with Coca Cola's growing markets. Shift of industries to the rural areas will increase markets and thus market share for Coca Cola.
  • Conclusions
    1st Coca-Cola aim provide a quality range of flavoured drinks and exceed USA in per capita consumer of Coca-Cola products
    2nd The genuine segment is the most profitable. We intend to maintain the market attractiveness and increase the business strenght
    3rd The brand consumers required huge investments, so we intend to invest less in promotions (reducing market attractiveness) and maintain the business relative strengh and revenue
    4th The good shape segment provide negative cash flows despite the market is growing. We want to increase the market attractiveness and relative business strenght, by introducing the Coca-Cola tea product
    5th The light on the pocket segment experienced low market growth and relative market share. Despite that, we believe that we can increase in market attractiveness and business strenght by investing more in off-trade promotions and synergies
  • Thank You.
    Let’s discuss!