Coca cola

LETTER OF TRANSMITTAL

Date:
To:
From:
Subject:

We are given pleasure to transmit this report, “Strategic Analysis” under
the unprejudiced conclusions of International Marketing Course, during
summer semester (4th) 2004 of MBIT program, IBIT department,
University of the Punjab.
We have arranged our superlative efforts in originating this undertaking.
We enormously enjoyed it. Working on this task was exceptionally erudite
for us.

Group Members Signature

1 Institute of Information & Technology,
University Of The Punjab, Lahore.

ACKNOWLEDGMENT

We are thankful to the ALLAH ALMIGHTY, by the assistance of HIM, we
have accomplished our Task. We would like to thank all of the people who
directly or indirectly helped us to achieve this Target.
Special Thanks to:

• Mr. Amjad Rasool Alvi
• Mr. Fasial Hashmi
• Mr. Matloob
• Mr. Rana Imran
• Mr. Sahil

This Report fabricates its foundation on numerous discussions among the
panel (Group Members). Our conspirator’s encouraging ideas and
strengthening of our thoughts are reflected in this comprehensive Report.
All the stuff regarding this report has been explained marvelously and
carefully. This write up is being demonstrated in easy mode which is
understandable by the reader. It will provide the intramural and threshold
aura to read and it will cover all the requisites and proviso about the topic
under discussion. One of the aesthetic and charming characteristics of this
speculation is this, that it is easygoing and genial.


ABSTRACT

The vibrant capability of Marketing Department in Coca-Cola career
planning has been highly accentuate. This department has been
acknowledged as the means through which the swift industrialization and
other progressing goals of the association can be conquered. This report
delves into the role of International Marketing for the promotion of
organization, role of other departments in this process, internal & external
support of different institution department in this process. The verdict
about Coca-Cola’s marketing department process may facilitate policy
makers, employment agencies, organization to ascertain and over and
above existing cooperation’s the genteel maneuver to improve the overall
performance of the company, not only in Pakistan but also in all parts of
the world.


METHODOLOGY

Aspect about international marketing has been pile up by means of
primary sources by interviewing marketing executive, in the production
unit & Head Office, Visiting to office of Human Resource managers in
Lahore. Human Resource administrator in Head Office was the part of that
information collecting activity.
Secondary information has been congregated through different marketing
books, internet sites of Coca-Cola Company, articles and generals related
to advertisement and promotion.
Our foremost endeavor was to compile and evaluate all relevant
information with reference to marketing strategies in the host country
(Pakistan) and to judge against this information with standard set by
international marketers.


TABLE OF CONTENTS

Executive Summary 06
Introduction 07
Brands 08
The Coca-Cola Story 09
New Coke to Present 10
Coca-Cola IN Pakistan 12
Community Involvement 14
Marketing Involvement 14
Uncontrollable Elements 15
Methods of Doing Business 17
Customer Market 18
SWOT Analysis 19
Post 9/11 Effects 22
IPR 22
PEST Analysis 24
BCG Matrix 27
EPRG Model 28
Product Life Cycle 29
Duties & Taxes Applied 30
Strategies to Reduce Political Vulnerability 31
Cultural Borrowing 32
Problems 34
Recommendation 36
Bibliography 40
Appendix 41


EXECUTIVE SUMMARY

Role of Marketing Department in the improvement process continues to be
at the vanguard of strategy contest not only in this part of the world
(Pakistan) but also in other countries. Most of the specifics about
promoting brands have been renowned in the entire world. The
competitive allege for marketing department are infinite, containing
promotions and strategies that make possible for them to survive in
persistently varying environment (Such as technology) of world. By
applying international marketing concepts the company can acquire
multinational status with a reputed brands and the company is globally
recognized for the quality and standard.
Coca-cola’s headquarter is in USA and there are more than 200 countries
in which it is acting as a host company. In Pakistan there are 9 plants and
over 1800 employees, 8 plants are functional and three plants in Lahore,
Gujranwala and Rahimyar Khan have achieved the Quality system award.
Coca-cola with its 450 brands is claiming to be the world’s best non-
alcoholic beverage maker and is yet proving his claim by having 63%
share in the world market and they are fulfilling their promise to maintain
a standard and proving to become a quality symbol. And their aim is to
serve the nation by making only non-alcoholic drinks and to give the world
a cool and fresh treat.


INTRODUCTION

Coca-Cola (also known as Coke) is a popular carbonated soft drink sold in
stores, restaurants and vending machines in over two hundred countries.
It is produced by The Coca-Cola Company, which is also occasionally
referred to as Coca-Cola or Coke. It is one of the world’s most
recognizable and widely sold commercial brands. Coke's major rival is
Pepsi. Although Coke has been the target of urban legends decrying the
drink for its supposedly copious amounts of “acid”, or the "life-threatening"
effects of its carbonated water but still it is the most in-style soft drink.
About its safety and the ethics of the company that produces it, it is widely
accepted as the most dominant soft drink in the world today.
Originally intended as a patent medicine when it was invented in the late
19th century, Coca-Cola was bought out by shrewd businessman Asa
Griggs Candler, whose aggressive marketing tactics led Coke to its
dominance of the world soft drink market throughout the 20th century.
Although faced with accusations of perverse side-effects on the health of
consumers and monopolistic practices by its producing company, Coca-
Cola has remained a popular soft drink well into the first decade of the
21st century.


BRANDS
Globally, the Coca-Cola Company owns or licenses nearly 450 brands in
the nonalcoholic beverage business. Many of those brands are considered
among the worlds most valuable. Some of these include:

- Carbonated soft drinks
Such as Coca-Cola, Diet Coke, Fanta, Sprite and Fresca
- Juices and juice drinks
Such as Minute Maid, Qoo, Fruitopia, Maaza and Bibo
- Sports drinks
Such as POWERade and Aquarius
- Water products
Such as Ciel, Dasani and Bonaqua
- Teas
Such as Sokenbicha and Marocha
- Coffee
Such as Georgia coffee, the best-selling noncarbonated beverage in
Japan.


THE COCA-COLA STORY
Coca-Cola was invented by John S. Pemberton in 1886 in Columbus,
Georgia, originally as a coca-wine called Pemberton's French Wine Coca. It
was initially sold as a patent medicine for five cents a glass at soda
fountains, which were popular in America at the time thanks to a belief
that carbonated water was good for the health. It was re-launched as a
soft drink to counter Prohibition.
The first sales were made at Jacob's Pharmacy in Atlanta, Georgia on May
8, 1886, and for the first eight months only thirteen drinks were sold each
day. Pemberton then ran the first advertisement for the beverage on May
29 of the same year in the Atlanta Journal. Asa Griggs Candler bought out
Pemberton and his partners in 1887 and began aggressively marketing the
product — the efficacy of this concerted advertising campaign would not be
realized until much later. By the time of its 50th anniversary, the drink had
reached the status of a national symbol. Coca-Cola was sold in bottles for
the first time on March 12, 1894 and cans of Coke first appeared in 1955.
The first bottling of Coca-Cola occurred in Vicksburg, Mississippi at the
Biedenharn Candy Company in 1891. Its proprietor was Joseph A.
Biedenharn. The original bottles were Biedenharn bottles, very different
from the much later hobble-skirt design that is now so familiar. Asa
Candler was tentative about bottling the drink, but the two entrepreneurs
who proposed the idea were so persuasive that Candler signed a contract
giving them control of the procedure. However, the loosely-termed
contract proved to be problematic for the company for decades to come.
Legal matters were not helped by the decision of the bottlers to
subcontract to other companies — in effect, becoming parent bottlers.
When the United States entered World War II, Coke was provided free to
American soldiers, as a patriotic drink. The popularity of the drink
exploded in the wake of World War II as American soldiers returned home,
more grateful than ever to partake of a beverage that had become
synonymous with the American way of life.


NEW COKE TO THE PRESENT
In 1985, Coca-Cola, amid much publicity, attempted to change the formula
of the drink. Some authorities believe that New Coke, as the reformulated
drink was called, was invented specifically to respond to its commercial
competitor, Pepsi. Double-blind taste tests indicated that most consumers
preferred the taste of Pepsi (which has more lemon oil, less orange oil, and
uses vanillin rather than vanilla) to Coke. New Coke was reformulated in a
way that emulated Pepsi. Follow-up taste tests revealed that most
consumers preferred the taste of New Coke to both Coke and Pepsi. The
reformulation was led by the then-CEO of the company, Roberto Goizueta,
and the President Don Keough.
It is unclear what part long-time company president Robert W. Woodruff
played in the reformulation. Goizueta claims that Woodruff endorsed it a
few months before his death in 1985; others have pointed out that, as the
two men were alone when the matter was discussed, Goizueta might have
misinterpreted the wishes of the dying Woodruff, who could speak only in
monosyllables. It has also been alleged that Woodruff might not have been
able to understand what Goizueta was telling him.
The commercial failure of New Coke therefore came as a grievous blow to
the management of the Coca-Cola Corporation. Coca-Cola management
was unprepared, however, for the nostalgic sentiments the drink aroused
in the American public; some compared changing the Coke formula to
rewriting the American Constitution.
The new Coca-Cola formula subsequently caused a public backlash. Gay
Mullins, from Seattle, Washington, USA, founded the Old Coke Drinkers of
America organization, which attempted to sue the company, and lobbied
for the formula of Old Coke to be released into the public domain. This and
other protests caused the company to return to the old formula under the
name Coca-Cola Classic on July 10, 1985. The company was later accused
of performing this volte-face as an elaborate reuse to introduce a new
product while reviving interest in the original. The company president
responded to the accusation by declaring: "We are not that stupid, or that
smart."


The Coca-Cola Company is the world's largest consumer of natural vanilla
extract. When New Coke was introduced in 1985, the economy of
Madagascar crashed — vanilla being a prime export — and recovered only
after New Coke flopped, since New Coke used vanillin, a less-expensive
synthetic substitute. Purchases of vanilla more than halved during this
period.
Meanwhile, the market share for New Coke had dwindled to only 3% by
1986. The company renamed the product "Coke II" in 1992 (not to be
confused with "Coke C2", a reduced-sugar cola launched by Coca-Cola in
2004). However, sales falloff caused a severe cutback in distribution. By
1998, it was sold in only a few places in the Midwestern U.S.


COCA-COLA
IN
PAKISTAN


Introduction
The Coca-Cola Company is a global company with some of the world's
most widely recognized brands, the Coca-Cola business in Pakistan has
completed its 50 years of operation. The beverages are produced locally,
employing Pakistani citizens. And their product range and marketing
reflects Pakistani tastes and lifestyles, and they are deeply involved in the
life of the local communities in which they operate

History
The Coca-Cola Company began operating in Pakistan in 1953. Benjamin H.
Oehlert Junior, former senior vice president of The Coca-Cola Company,
served as United States Ambassador to Pakistan from 1967 to 1969.

Brands
Coca-Cola®, Fanta®, Sprite®

Bottling Information
The Coca-Cola System in Pakistan operates through twelve bottlers, 10 of
which are owned by Coca-Cola Beverages Pakistan Limited, out of these
twelve plants now eight are operating. The CCBPL plants are in Karachi,
Hyderabad, Lahore, Gujrawala, Faisalabad, Rahimyar Khan, Multan and
Sialkot. The remaining two plants, independently owned, are in Rawalpindi
and Peshawar. The Coca-Cola in Pakistan serves 70,000 customers retail
outlets.

Employment/Economic Impact
In Pakistan it employs 1,800 people. In Pakistan it has invested over $130
million (U.S.).


Community Involvement
In 2000, when Eastern Pakistan suffered its worst droughts, The Coca-Cola
System initiated a famine-relief program to help victims and was the first
private-sector company to assist.
It initiated a voluntary Haj program that allows one employee from each
plant, selected through a draw, to be sent on the Holy Pilgrimage to Mecca
at the Company's expense.

Sponsorships
The Coca-Cola Company sponsors the Basant Festival in Lahore, a festival
that marks the beginning of spring and attracts visitors from all over the
world. Part of the festival is the Coca-Cola Kite Flying Championship.
The Company sponsors Pakistan's leading pop group and organizes
concerts throughout the country for teenagers and underprivileged
children.
It sponsors Pakistan's No. 1 solo artist, who will participate in concerts and
charity events organized by The Coca-Cola Company in Pakistan. The
Company has signed a sponsorship agreement with eight of Pakistan's
national cricket players for promotional and advertising use.
The Coca-Cola System in Pakistan is the exclusive supplier for Pakistan
Railways, serving soft drinks in stations, platforms and on trains. The
Company will be undertaking a beautification program of stations and
platforms.

Marketing Involvement
Coca-Cola Corporation is a multinational organization. And it is indulged in
the international marketing .The brands and basic strategies are made in
the home country but the local strategies are defined in the host countries.
Also the 4P’s are made according to the demographics and taste of the
people of the host country.
In Pakistan the Coca-Cola Company maps the strategies and the brands by
looking into the environment in which it is working. The brands are
produced locally. And the product, price promotion and placement are
planned with respect to the controllable variables and uncontrollable
variables.

Uncontrollable Elements

Whenever any business start operating in two or more than two countries,
it come across some of the problems which are beyond the control of
business , like legal restraints, government controls, weather, consumer
behavior, economic conditions of the host country, social and cultural
factors, geography & infrastructure, channel of distribution available, level
of technology and competitive forces. These problems are different in all
the countries in which business starts its operations. So business has to
design a separate framework for each country to overcome these
problems.
Coke is one of the oldest companies which are in international business;
they have a vast experience of controlling these elements. They heavily
rely on research to overcome these problems.

Legal And Political Problems
They perform thorough study of legal and political problems to decide to
enter into any country. They track the previous record of the ruling party
and policies. They also keep in mind the attitude of other opposition
parties about foreign companies. If any problem arises regarding political
or legal issues, they don’t sacrifice their policies and secrecies, as we have
a case of COKE AND INDIAN GOVERNMENT. When Indian Government
asked to have formula for the concentrate and they deny and left the huge
Indian market.

Social And Cultural Factors
Social and Cultural factors have a very vital impact on the business in the
host country. Although this is the most difficult task to understand the
culture of the host country but business has to do reasonable care to
understand this problem.
Coke performs research to understand these issues and design their
strategies accordingly. They design their products, prices, place, promotion
and customer service according to the culture of the country. As we see
that coke has 400 brands allover the world but in Pakistan we have only 4
brands and in India which is a market of 1.1 billion people coke has 15


brands. This is because of cultural differences that they cannot introduce
all the brands in all the countries.

Geography & Infrastructure
If any business wants to start its business in any other country, it also
studies the geography and infrastructure of the host country. That is if
feasible for doing business or not. They decide the channel of distribution,
modes of transportation and there cost to make decisions regarding prices
and designing strategies.
In Pakistan Coke found a reasonable infrastructure to do business, which is
continuously improving to facilitate distribution system.

Economic factors
Different counties have different economic conditions at a time so Coke
designs different strategies to handle these conditions. As Coke is one of
the largest businesses in the world, they have a strong financial
background to overcome these economic problems. In host countries they
change their prices, investment and penetration strategies to overcome
economic factors.

Competitive Forces
Whenever any business enters into any other country they face
competition with some local and international brands. Coke Combat this
problem with their quality commitment and continuously providing its
customers with quality product, services and entertainment.


Methods of Doing Business
Diverse structure, management attitude, and behavior encounter in
international business, they are behaviors encountered in international
business, and there is considerable latitude in the ways business is
conducted. Coca-Cola Company had taken into the consideration these
facts that a certain amount of cultural shock occurs when differences in
contract level, communications emphasis, tempo, and formality of foreign
business are encountered. Ethical standards are likely to be different as
well as negotiation emphasis.

Coca Cola Company determines the prominence of status and position
(PDI) combine to influence the authority structure of business. It adopts
low (PDI) value that they could take the suggestion of his employees to
make a right decision at a right time, which could deal with of the
customer; also they could take the suggestion of his customers about its
taste, branding and other related features which could enhance its
efficiency of sales and promotion.
As its business grows and professional management develops, their is shift
towards decentralized management decision management. They are
making their decisions either in committees or meeting. Committee may
operate on a centralized or decentralized basis, but the concept of
committee management implies some thing quite different from
individualized functioning.

Coca Cola company is doing its business allover the world they hire locals
wherever they do business and take their suggestions in designing their
strategies. Because company is very much well aware of the fact that local
know their social culture very well and help company to design effective
and efficient strategies.
• Target Market:
o Upper upper class

o Upper middle class

o Upper lower class


o Middle upper class

o Middle middle class

o Middle lower class

They mainly emphasize on students and teenagers, they gain their
attraction by indulging into the activities like:
• Becoming a partner at the Basant
• Promoting new age music and hiring pop stars into their promotion
Compaign.

CUSTOMER MARKET
Demographic Factors
People of all ages and gender use Coca-Cola. Educated people belonging to
upper and middle-income groups also commonly use Coca-Cola. Major
emphasis of Coca-Cola is to attract teenagers.

Life Style Pattern
The Taste and quality conscious people Drink Coca-Cola brands especially
Coca-Cola. Diet Coca-Cola offered by Company is Very popular among
diabetic patients.

Preference for Specific Benefits
For over 51 years Coca-Cola Corporation has maintained a tradition of
producing only the Quality drinking beverages. That is why it continues to
be a familiar and trusted household name in Pakistan. Today, Coca-Cola’s
lives up to its well earned reputation as market leader by insuring that
consumers get the best carbonating drink. The best of nature, technology
and human resource have together contributed to Coca-Cola’s reputation
for unparalleled quality- a standard now recognized internationally. Above
all, the entire process is overseen by a professional management and
trained workforce.


SWOT
ANALYSIS


STRENGTHS
Coca-Cola has been a complex part of Pakistani culture for over a half
century. Being a strongly recognized brand the product's image is loaded
with coolness and refreshment, and this is an image many people have
taken deeply to heart. The Coca-Cola image is displayed on T-shirts, hats,
and collectible memorabilia. This extremely recognizable branding is one of
Coca-Cola's greatest strengths. "Enjoyed more than 685 million times a
day around the world Coca-Cola stands as a simple, yet powerful symbol
of quality and enjoyment".
Additionally, Coca-Cola's bottling system is one of their greatest strengths.
It allows them to conduct business on a global scale while at the same
time maintain a local approach. The bottling companies are locally owned
and operated by independent business people who are authorized to sell
products of the Coca-Cola Company. Because Coke does not have outright
ownership of its bottling network, its main source of revenue is the sale of
concentrate to its bottlers.
The Coca-Cola Company in Pakistan has the mover advantage, as it was
the first to introduced soft drink. There are 8 plants working in Peshawar,
Karachi, Lahore, Gujrawala, Rawalpindi, Faisalabad, Raheem Yar khan, and
Multan. These big plants have employed more than 1800 employees.
Duopoly of two main beverage companies in Pakistan including Coca-Cola
has been diffused into the local markets.

WEAKNESSES
Although domestic businesses as well as many international markets are
thriving, Coca-Cola has recently reported some "declines in unit case
volumes due to reduced consumer purchasing power”
Coca-Cola on the other side has effects on the teeth's which is an issue for
health care. It also has got sugar by which continuous drinking of Coca-
Cola may cause health problems. Being addicted to Coca-Cola also is a
health problem, because drinking of Coca-Cola daily has an effect on your
body after few years (International report of Coca-cola).
Out of twelve plants, eight are the operational plants while two are
franchised with other group of companies, which is a drawback for coca-

cola in Pakistan as in these two plants the involvement of Coca-Cola
International is not present which effects the overall image of these plants
in the local market about the quality and international standards.

OPPORTUNITIES
Brand recognition is the significant factor affecting Coke's competitive
position. Coca-Cola's brand name is known well throughout 94% of the
world today. In Pakistan it is the well-known brand among the people of all
ages specially the children are more attracted towards the coke.
As Coca-Cola is in business of soft drinks and has more than 450 brands
allover the world, but in Pakistan they have only four brands, so there is a
potential in Pakistani market for other brands too. Pakistani weather is hot
and humid. This causes a tremendous growth in the sales during the
summer season.
Packaging changes have also affected sales and industry positioning, but in
general, the public has tended not to be affected by new products. Coca-
Cola's bottling system also allows the company to take advantage of
infinite growth opportunities around the world. This strategy gives Coke
the opportunity to service a large geographic, diverse, area.
The unique formula (concentrate) is being imported from U.S.A and it is
then processed in the local plants, this resists the copying of formula and
formation of fake formula thus keeping the taste of pure and real Coca-
Cola revitalizing and tempting.

THREATS
Currently, the threat of new viable competitors in the carbonated soft drink
industry is not very substantial. The threat of substitutes, however, is a
very real threat. The soft drink industry is very strong, but consumers are
not necessarily married to it. Possible substitutes that continuously put
pressure on both Pepsi and Coke include tea, coffee, juices, milk, and hot
chocolate ("Cola Wars", 1991).
Even though Coca-Cola and Pepsi control nearly 5% of the entire beverage
market, the changing health-consciousness of the market could have a
serious affect. Of course, both Coke and Pepsi have already diversified into

these markets, allowing them to have further significant market shares
and offset any losses incurred due to fluctuations in the market ("Cola
Wars", 1991). In Pakistan the consumption of cold beverages is 5% which
have to be stabilized.
Consumer buying power also represents a key threat in the industry. The
rivalry between Pepsi and Coke has produce a very slow moving industry
in which management must continuously respond to the changing attitudes
and demands of their consumers or face losing market share to the
competition. Furthermore, consumers can easily switch to other beverages
with little cost or consequence.

Post 9/11 Effects
After 9/11 incident Coca-cola suffered a loss due to boycott of religious
activists at a larger scale. The market share and market value was
dropped down to several points .Price competition was started after this
incident. Due to sanctions imposed on Pakistan after May5, 1995 taxes
were to be paid in high amount thus increasing the cost of production and
price offered to consumers and decreasing the buying powers of
customers. So any of the activists behavior can cause decline in the
production and sale of coke and other cold beverage company.

Intellectual Property Rights
Coke is one of the biggest brands in the world, and its brand value is
approximately 4 billion $. It is said that the most common word to speak
in this world is “OK” and after this the second most common in this whole
world is “COKE”. Sometimes different people and organizations used their
names to make money, in the form of fake bottling.
The main threat to the company is the production of fake bottles. Fake
bottling is growing day by day Fake bottles problem for a company comes
under the “act of unfair practices”. In a black marketing aspect whole
sellers and retailer could take the fake bottles at a low price for selling at
the price of original bottles which could be harm full for the health of
consumers. Coca Cola Company could create a check and balance to meet
the need of time, which in turn could help to increase its market share. It


already had made several steps to prevent fake bottling and production of
fake coke but due to mushrooming industry the laws and management of
the corporation is failed to stop this industry from flourishing. The
government is also not of great help to the company in solving this main
issue.


PEST
ANALYSIS


POLITICAL FACTORS
The political environment of Pakistan affects the coca-cola beverages and
Coca-Cola Export Corporation, to some extent. For instance, the political
instability in Pakistan causes trade and import policies to change rapidly as
the government changes which causes many problems in the import of raw
materials. Trade barriers such as tariffs and duties on the import of syrup
(concentrate) from USA increases the operational cost. A relaxation has
been given by the current government. So the situation for the beverage
industry is getting better day by day for the last couple of years. Also the
policies have been more or less constant and also the emaciation of free
trade zones by the government will help the Coca-cola to flourish more
effectively in Pakistan.

ECONOMIC FACTORS
The economic condition of Pakistan has not been stable for a long time but
The recent economic indicators suggest that the economy is growing and
macroeconomic issues are getting sold but at the same time there has not
any marked increase in the consumer buying power (inflation). When the
recession occurs the price of bottles are dropped down to increase the
sales and to achieve the targets of the company. So overall economy of
Pakistan directly affects the cost and price of the Coca-Cola Company.

SOCIAL FACTORS
Being a foreign based company Coca-cola faces opposition by Muslim
activists. The main social issues are:
It faced scandal of humiliating Muslim’s religion that when the inverted
image of Coca-Cola brand name is being viewed on the mirror it disgraces
the name of Holy city Makkah and Hazrat Muhammad (P.B.U.H). This was
a wrong conception as there was no reality in it and this scandal was
flopped after a short span.
One of the greatest social barriers to coca-cola Lahore is the restriction of
coke in the campus premises. Jamiat’s strike to coke affects the sales and
overall image of coke as a larger number of students from all over the


Pakistan are studying in the University of The Punjab. But on the contrary
in the all parts of the country coke is viewed as the partner in the major
events like Basant and promoter of music thereby making a place in the
hearts of young generation of the society.

TECHNOLOGICAL FACTORS
The making of Coke, Fanta, Diet coke and sprite involves "mixing and
blending, filling and capping ". For this process, concentrate or syrup is
imported from USA and is then mixed in the local plants .Machinery for the
local plants was also imported but now the coca-cola company follows
Local content law as most of the spare parts are locally made. The system
is automated and equipment is fully operational and up-to-dated. In
technology Coca-cola company is far ahead than the several other local
beverage brands of Pakistan. It is a Highly Technical 10 Steps Process.
Which are all done in the local plants using local content law.


BCG MATRIX

High ?

Growth
Of
Market Cash
Low Dog
Cow

High Low

Relative share

A Coca-cola beverage limited is now at a stage of question mark if we
place it in a BCG Matrix. Because overall market is growing and it has
relatively less market shares then its real competitor PEPSI. Only about
5% of the cold beverages are being utilized and this number is increasing.
Coke is sold in the 1:2 approximately ratio with respect to Pepsi as market
share or Coca-Cola Company is 27% and that of Pepsi is 68%.


EPRG MODEL
Coca –cola has a geocentric policy regarding their human resource and
policy making for host countries. They design their 4 P’s and management
policies according to the environment and atmosphere of the host country.
And they hire employees on merit regarding their qualifications and
knowledge without any discrimination between the countries and races.

As for as Pakistan is concerned here Coca –cola is being lead by a Pakistani
head, Mr. Asadullah Sherazi (GM CCBPL). 4 P’s are designed by
management of the host country, as BASANT is being celebrated by Coca –
cola in Pakistan, which is a very important event celebrated by the main
target market of the company.


PRODUCT LIFE CYCLE

LA
CO
CA
CO

IN R U O Y
T OD CT R GR T
OW H MTR Y
A U IT DE INE
CL

Coca-cola is in a stage of growth according to a product life cycle analysis.
It is recovering its market share very quickly which it had lost in previous
years although there is good competition in market but it is still recovering
and enjoying healthy profits. There are no barriers for new entrants, and
many companies are entering in this industry because of healthy growth.


DUTIES AND TAXES APPLIED
Duties and Taxes are the tariff barriers for any company to import or
export something to other country. The most important component of coke
is their concentrate which is provided allover the world from USA. Pakistani
Government treats their concentrate under the head of luxuries and
applied second highest duty after tobacco. According to their spokesman if
this duty is removed, then price of coke’s 250ml bottle can be lessened up
to Rs.5.

Laws Abided By & Methods of Conflict Resolution
Coca-cola is one of the oldest multinational corporation, they have a vast
experience of dealing with different governments and different
organizations allover the world. When ever they enter into some country
they made a thorough research work. They analyze the political
restrictions, rules and regulations of doing business, political parties which
can affect policies and policy making authorities. They respect the laws of
host country and design their framework according to the rules and
regulations of the host country.

Methods of Conflict Resolution
World wide Coca-cola tries to solve any disputes which may arise through
arbitration and they mention this clause in contract that if any dispute
arises, they will go for arbitration but if arbitration does not solve the
problem then they refer their dispute to litigation. They prefer arbitration
because litigation is very expensive and lengthy process; there is fear of
poor image and damaging public relations, fear of unfair treatment in host
country and fear of loss of confidentiality.
As far as Pakistan is concerned up till now no such dispute has arisen in
which they need to go for arbitration. But they go for litigation against
those firms which are involved in using their brand name for fake bottling.


STRATEGIES TO REDUCE POLITICAL VULNERABILITY
Nowadays political governments are very conscious about foreign
businesses and foreign investments, so they usually have standardized
policies for all the competing businesses; there is no biasness in dealing
with different competing business. But sometimes a situation may arise
due to some political reasons that may create some problems, so coke
deals with such problems strategically.
As we have a example, when Pepsi launch their tin can at Rs.10/-they got
special permission to manufacture tin cans and that was the only plant
which got permission to manufacture cans, as we know that time Pepsi
and Coke are bitter competitors so Coke must go with guns and guns with
Pepsi, they tried to get permission but they failed. So they imported Coke
cans from Dubai at Rs.13/- and sell it for Rs.10/- to compete in the
market. So if some problem arises which can affect their image and that
cannot be solved due to some political and legal problems they solve this
strategically.
As we know that nowadays Pepsi in Pakistan is under the administration
and control of Mr. Hamayun Akhtar who is a Federal Trade Minister of
Pakistan, but nowadays policies are standardized so it doesn’t create any
problems.

Current Strategies Regarding International Operations
One of the reasons of losing their market share in Pakistan in last few
years was their quality. In Pakistan they were operating as franchisee but
now Company has acquired most of the plants except from Peshawar and
Rawalpindi plant now they are very much conscious about their quality
standards and the quality of other two is being controlled by Coca Cola
Exports Corporation.
Another reason was that their backup was not as strong as Pepsi. They
were not getting any kind of help regarding financial problems,
management problems from Coca Cola International. But now most of the
plants are under the control of Company itself and Coke International is
also very keen to raise its market share in Pakistan so they are fully


supporting Coca Cola Beverages Pakistan and Coca Cola Exports
Corporation Pakistan.
In Pakistan there main focus is on standardized products as Coca Cola,
Sprite, Fanta, and they are going to launch some of new products in next 2
or 3 years.

Adaption and cultural borrowing
Adaption is a key concept in international marketing, and willing to adapt
is a crucial attitude .Adaptation, or at least accommodation, is required on
small matters as well as large ones. Coca-Cola Company recognizes the
need of affirmative action, that is, open tolerance of concept “different and
equal”. Coca-Cola company feels that essential to effective to Adaption is
awareness of its own culture and recognize that differences in others can
cause anxiety, frustration and misunderstanding of the host intention .The
self reference criterion (SRC) is specially operative in business custom but
Coca-Cola company could not indulge its own (SRC) in others culture it try
to adopt the strategies of the host countries where they are doing business
around the world ,it reduce the (SRC) to lower the barriers of cultural
differences . Coca-Cola Company develops an understanding and
willingness to accommodate the differences that exists. Company is doing
a successful business internationally since 1953.
And operating in a home country for more than 50 years it have set up its
strategies to meet the needs of required customer in every way possible
where it is doing business it aware of the possibility of cultural differences
and the probable differences, consequences of failure to adapt, or
accommodate, the seemingly and less variety of customs must be
assessed.
Coca-Cola Company business customs includes imperatives and adiaphora.
Cultural imperatives are the business customs and exceptions that must be
met and conformed to or avoided if relationship is to be successful.
Company knows the best how to do the business at their best. Human
relation, friend ships and or attaining the level of trust are right tricks to
do a business in a home country as well as in a host country. They that


there is no substitute for establishing friend ship in some cultures before
effective business negotiation can begin.
Company motivate their local agents to make more sales and the
friendship helps establish the right relationship with end users that to more
sales over a longer period of time.
Culture adiaphora relates to the area of behavior or to customs that
cultural aliens may wish to conform or to participate in but that are not
required.
Company feels that such Culture adiaphora has a minute effect on its sale
but it has no longer effects. When an issue arises in a home country about
its penny per bottle is given to the Israel to war against Muslims and mean
while many brands came into existence such as Mecca Cola, Shandy Cola
etc.
They have adapted their company culture according to the external
environment as they are indulge in many community programs such as
scholarship and school funding programs and they have borrow the
culture of Pakistanis. They hire local employees and plan according to the
local environment


PROBLEMS BEING FACED BY COCA-COLA COMPANY
There are some problems being faced by a company which affects its
business strategies. It is difficult to know where to begin and isolate the
events which shape the business environment.

Distribution
Coca-Cola Company is facing a problem of distribution, as distributors are
expecting more from coco cola to provide an extra distribution channels
which could help them to spread their products at large .Coca-cola
products are some where not available in rural area due to inefficient
distribution system.

Investment
Coca-Cola Company is now facing a problem regarding investment, like
investment in distribution system, to make it efficient. They need
investment to encourage retailers to provide space to their products, in the
form of providing coolers. Company is not in a situation to provide it to all
its retailing stores while its competitor PEPSI COLA provides it to its
distributors to promote his products in the market which is their
competitive edge to increase it s share in the market. It creates an
attraction to its distributors to take its products more to take incentives of
special discounts provided by the company to its distributors, wholesaler,
and retailers. This is a relatively a long term process to penetrate in the
market and gain market share.

Brand Awareness
Having low promotional strategies that most of their customers are
unaware of their brands mostly they mix their brands with Pepsi, they feel
that Sprit and Fanta are the brands of Pepsi but in actual these are the
brands of Coca-Cola Company they are facing these problems due to
having low promotional strategy so that the unaware of its brands.


Single Advertising Platform
They have only one Advertising platform regarding promotion which is
music; on the other hand Pepsi has another very important Advertising
platform which is Cricket. Most of our youngsters are attracted towards it.

Low value of share
Coca-Cola company having a share of about 27% which is lower than its
competitors i.e. Pepsi having market share of 68% involve in more
promotional strategies as compared to Coca-Cola.

Fake Bottling
Fake bottling in Pakistan is one of the major problems being faced by the
company. This problem not only affects the sale volume and profit margins
but also brand value and loyalty of the customers. The profitability which
company gain, ultimately that part of gain goes to fake bottle producers,
who running their business in the name of company


RECOMMENDATIONS
Distribution
Products of the company must be physically transported from its
warehouse where the products are needed. Company must add value to its
products that eventually bought by individuals in order to create a viable
“value chain” model to create a relationship of distribution management
and select other facilitating organizations as a member of value chain .so
the distributors within a marketing mix is getting the product to its target
Market .the most important activity in getting the coco cola company
products to the target market is arranging for its sales and transfer of a
product to its final customer by assuming its financial risks. for ultimate
selling company try to carry out the functions in exchange for the order
and payment from the customer by providing more easily available
products at a required place. Company try to carry out the functions in
exchange for the order and payment form the customer by providing more
easily available products at required places.
Companies try to hire Agent middle man who works as their own to
distribute its products at various locations.
As the middle man could not be disinter mediate from the process
although some of unnecessary or redundant functions which cause the lost
of financial resources. Company create assortment and storing products
can be shifted from one party to another in order to increase efficiency.

Designing Distribution Channel
• Specify role of distribution.
• Select the distribution channel
• Determine the intensity of distribution
• Choose specific channel members

Market Segmentation
With different wants, buying preferences or product use behavior relatively
minor and benefits sought by the customer can be satisfied with single


marketing mix .as a result segments must be targeted individually and
alternative marketing mix is required.
The process of market segmentation
• Identify the current and potential wants that exist within a market
• Identify characteristics that distinguish among the segments
• Determine the size of segment and how well they are being satisfied

New Product Development
To achieve strong sale and healthy profits company should have an explicit
strategy with respect to developing and evaluating new products. This
could also help it to defend its market share. Stages in product
development which could enhance business activities.
• Gathering new product ideas
• Screening of ideas
• Business analysis
• Prototype development
• Market test.
• Commercialization.

Dispose of Used Products
Consumers desire for convenience in the form of throw away containers
conflict with their stated desire for clean environment .some discard
packages wind up little ,other add to solid waste in land fills. So the coco
cola company recycles its disposable bottles and cans to recycle so the
cost of production could be minimized to deal with other financial
resources.

Promotional Programs
Promotion, in some where it takes, is an attempt to influence so the
company could hold a defined marketing promotional mix so that the
consumer could be aware of its brand at large. They adopt the strategy by
the following methods:
• Personal selling.
• Advertising.
• Sale promotion.

• Public relations.
Company sells its products by creating an attraction for the customers by
adopting these strategies.

Formation of a Pakistani Website
Web ushered in another level of networking of marketers. E-information
form of networking involves creating a corporate website and posting
information on it .Firms are able to make vast amount of information
available on their website .The information ranges from product description
and invitations to suppliers to submit bits on planned purchases to product
operation instruction and information about contracting sale personnel. So
the coco Cola Company must be create its website that the ultimate
customer could know about the product available in the market .They must
create a web sit which could fall in the categories of
• Background and general information
• Current business operations
• Links
• Attraction and entertainment features
• Contact point
The impacts of internet marketing create an opportunity to increase its
wellbeing in the market place so opportunity of dealing in a host country
as well as in the international marketing could increase.

Establishing the Budget
Once the promotional budget has been established, it must be allocate
among the various activities comprising the overall promotional
program .One method that the coco cola company use to extend their
budget “cooperative corporative ads which is a joint effort two or more
firms intended to benefit each of the participant. So the company could
use any of the two strategies of corporative ads i.e. vertical and horizontal.
In vertical corporative ads Coco cola Company could share the cost of ads
with the retailers or by giving a special discount to the retailers, to
encourage the retailer advertise.


BIBLIOGRAPHY
Reference Books
• John Bratt, Jeffzay Gold, 2003, Human Resource Management
(Theory & Practice), 3rd, Plagrave Mecmiilan.

• Will Rowan, 2002, Digital Marketing (Using New Technologies to Get
Closer to Your Customers), 1st, Kogan Page Limited.

• Miller & Layton, 2001, Fundamental of Marketing, 4th, McGraw-Hill
Book Company Australia Pty Limited.

• David Jobber & Geoff Lancaster, 2004, Selling and Sales
Management, 6th, Pearson Education Singapore Pte. Ltd.

• Peter Rix, 2001, Marketing (A Practical Approach), 4th, McGraw-Hill
Book Company Australia Pty Limited.

• Dillon, Madden, Firtle, 1994, Marketing Research in a Marketing
Environment, 3rd, McGraw-Hill Book Company Australia Pty Limited.

• Hawkins, Best, Coney, 2004, Consumer Behavior (Building
Marketing Strategy), 9th, McGraw-Hill Book Company Australia Pty
Limited.

Reference Sites
www.coca-cola.com

www.cocacola.co.in

www.coca-cola.co.uk

www.cokebuddy.co.au

www.cocacola.co.jp

www.cokecce.com

www.woccatlanta.com


APPENDIX


QUESTIONIARE
1. Information about:
• Company’s History
• Line of business
• Number of Employees
• Information about Host Country Analysis

2. How do you adjust the controllable variables with the uncontrollable
variables? Like:
• Economic climate
• Structure of Distribution
• Competitive Forces
• Political and legal Forces
• Cultural Forces
• Geography and Infrastructure
• Domestic Environment

3. What are Barriers faced by the company to operate (Tariff and non
Tariff)?

4. What are Duties and Taxes applied?

5. Culture and its impact, any resistance if any like boycott of foreign
brands nowadays

6. Cultural borrowing, if any like in promotion strategies?

7. What are Imperatives, Adiaphorous and Exclusives followed by the
company?

8. What are Strategies adopted to reduce political, operational and
administrative vulnerabilities?

9. What are Laws abided by and methods of conflict resolution? (Both
internal and external) Like:
• Conciliation
• Arbitration
• Litigation

10. Any issues related to Intellectual propriety rights, Fake Coke, How you
deal with this problem.

11. What are the current strategies regarding International Operations in
Pakistan?
Like Standardization vs. Adoption.

12. Localization Issues:
Localization of Business in Pakistan (any raw material import, extend of
local vendors)

• Localization of Products
• Localization of Profits
• Localization of Production
• Localization of Management

13. How to deal with competitors strategies

14. What are the current problems and opportunities in this business that you are
facing?

15. Describe mode of international import/export, joint venture, and subsidiary?

16. Information About:
• Ratio of International profits vs. domestic profits
• Sales figure
• Production Cost

17. Any Future Problem:
• W.T.O. tread
• New Business Entrance


Coca cola

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