Sunteți pe pagina 1din 59


Coca Cola

The Partial Requirement for

The Fulfillment of the
MBA Degree






Vision of coca cola
Mission Statement of coca cola
Value of coca cola
Objective of coca cola
Goal of coca cola
History of Coca Cola
Coca Cola in Pakistan
Today of coca cola
Market Conduction
Market Position
Organizational Hierarchy
Board of directors
Financial data

Page #




Business Portfolio and Growth Strategies of Coke

Portfolio analysis
SWOT analysis
Five forces applied on coca cola
Growth strategy
Marketing Environments
Macro environment
Competitive environment
Rivals \ competitor
Competitive advantage
Market Segmentation & Positioning Strategy
Market segmentation
Coke segmentation strategy

Product Strategy
Level of coke as a product







-6Product Line Decisions

Advertisement Objective
Setting of advertising budget
Advertising Strategy
Advertisement Media
Recommendations & Conclusions






Executive Summary:

he Coca-Cola Company is a global business enterprise and one of

two main soft drink sellers. Study of this report helps the reader to
know that how Coca-Cola has achieved its current market position.
This report enlightens those factors that company has adopted during its
long journey of 52 years in Pakistan. This report includes the introduction,
micro and macro environment factors affecting coke, segmentation and
positioning strategy and advertising methods that company uses and much
The reader of this report can expect that after having complete study
he/she can certainly have a broader view of the operations of Coca-Cola in
Pakistan. Like who are the competitors, what are the problems that
company facing in expanding its business etc. In Pakistan Coca-Cola is
very much a local business and company has provided this region with 51
successful years of service. The dedicated service that company has been
providing has made the company the proud holder of several most widely
recognized brands in the world. This report study gives reader the idea
about operation of coke in Pakistan.




Vision of coca cola

To achieve sustainable growth, we have established a Vision with clear goals:

People: Being a great place to work where people are inspired to be the best
they can be.

Planet: Being a responsible global citizen that makes a difference.

Portfolio: Bringing to the world a portfolio of beverage brands that anticipate

and satisfy peoples' desires and needs.

Partners: Nurturing a winning network of partners and building mutual loyalty.

Profit: Maximizing return to shareowners while being mindful of our overall






ission statement is a statement of organizations purposes that

what it wants to accomplish. In order to achieve mission of
increasing market share and maintaining good relations with our
customers all over the world, we wish to create value for all the constraints
we serve, including our consumers, our bottlers, and our communities. The
Coca Cola Company creates value by executing business strategy guided
by four key beliefs:
Customer is king; Customer demand drives everything we do.
Brand Coca Cola is the core of our business.
We will serve consumers a broad selection of the nonalcoholic
ready-todrink beverages they want to drink through out the
We will be the best marketers in the world.
Everything we do is inspired by our enduring Mission:

To Refresh the body, mind, and spirit.

To Inspire Moments of Optimism...through our brands and our actions.
To Create Value and Make a Difference...everywhere we engage.



We are guided by shared Values that we will live by as a company and as


Leadership: The courage to shape a better future

Passion: Committed in heart and mind
Integrity: Be real

- 10

Accountability: If it is to be, it's up to me

Collaboration: Leverage collective genius
Innovation: Seek, imagine, create, delight
Quality: What we do, we do well



The company has sales based objective .Every thing else (marketing plan,
advertising plan, production etc.) is derived from this objective.
Currently the companys objective is to
Increase the volume of sales up to the maximum level as much as
possible during the current fiscal year.
The company sets its objective keeping in view the past
performance, Historical trends, current market position, economic
condition, macro environment and micro environment factors, social
values, market size and growth rate ,future expectations and predictions.



All CCBPL plants setup their own goal to achieve the objective.
The company goal is
To increase sales volume and gain market leadership in Lahore.

- 11 -




oca-Cola Enterprises was established in 1986 is a young

company by the standards of the Coca-Cola system. Yet
each of its franchises has a strong heritage in the
traditions of Coca-Cola that is the foundation for this Company.
The Coca-Cola Company traces its beginning to 1886, when an
Atlanta pharmacist, Dr. John Pemberton, began to produce CocaCola syrup for sale. However the bottling business began in 1899
when two Chattanooga businessmen, Benjamin F. Thomas and
Joseph B. Whitehead, secured the exclusive rights to bottle and
sell Coca-Cola for most of the United States from The Coca-Cola
The Coca-Cola bottling system continued to operate as
independent, local businesses until the early 1980s when bottling
franchises began to consolidate. In 1986, The Coca-Cola
Company merged some of its company-owned operations with two
large ownership groups that were for sale, the John T. Lupton
franchises and BCI Holding Corporation's bottling holdings, to
form Coca-Cola Enterprises Inc. The Company offered its stock to
the public on November 21, 1986, at adjusted prices of $5.50 a
share. On an annual basis, total unit case sales were 880,000 in
1986.In December 1991; a merger between Coca-Cola
Enterprises and the Johnston Coca-Cola Bottling Group, Inc.
(Johnston) created a larger, stronger Company, again helping
accelerate bottler consolidation. As part of the merger, the senior
management team of Johnston assumed responsibility for
managing the Company, and began a dramatic, successful
restructuring in 1992.Unit case sales had climbed to 1.4 billion,
and total revenues were $5 billion at the year-end. Presently The

- 12 -

Coca-Cola Company is the largest soft drink company in the world. Every
year 800,000,000 servings of just "Coke" are sold in the U.S alone.




To provide Coca-Cola at arms length

he Coca-Cola Company began operating in Pakistan in 1953. Coke,

Fantail and Sprite are the brands with whom Coca-Cola is operating
in Pakistan. The Coca-Cola System in Pakistan operates through
eight bottlers, four of which are majority-owned by Coca-Cola Beverages
Pakistan Limited (CCBPL). The CCBPL plants are in Karachi, Hyderabad,
Sialkot, Gujranwala, Faisalabad, Rahim Yar Khan, Multan and Lahore. The
remaining two plants, independently owned, are in Rawalpindi and
Peshawar. The Coca-Cola System in Pakistan serves 70,000
customers/retail outlets. The Coca-Cola System in Pakistan employs 1,800
people working constantly for the company. During the last two years, The
Coca-Cola Company in Pakistan has invested over $130 million (U.S) and
coke has successfully provided 51 years of dedicated service to its
customers in Pakistan. Since the beginning of Coke Company the firm has
been continuously changing its slogans and thats a very creative idea to
get the attention Of the customers.
. Here we would like to include some of the popular slogans of coke since
the coke journey started.
1886 Drink Coca-Cola
1908 Get the genuine
1923 Enjoy thirst
1934 When it's hard to get started, start with a Coca-Cola
1942 The only thing like Coca-Cola is Coca-Cola itself
1956 The friendliest drink on earth
1963 Things go better with Coke
1993 Always. Coca-Cola
2001 Life is Good
2003 Jo Chaho Ho Jaye Coca Cola Enjoy

- 13 -

2004 Flight Of Delight

2005 Galay Delicious Taste
2006 Thanda matlab coca cola
2007 khaly pily jila coca cola
2008 Aja jashan mena ly

Today CCBPL is operated directly under the supervision of the Coca-Cola
International based in Atlanta Georgia State___ USA .It owns 10 plants all
around in Pakistan.










- 14 -











- 15 -

., 10%
., 36%





World wide on global level Coca-Cola is the most popular brand and market
leader and carry 60% of market share.
In Pakistan due to above reasons Coca cola is the market follower but still in a
very strong and stable position holding 36% of the local market share with a
growing and increasing market share every year.
Growth rate in market share:
unit case volume

2007 vs. 2006 GROWTH

2007vs 2006



















- 16 -
























Organizational hierarchy of Coke with respect to marketing department is
Board of Governors
Vice Chairman

Executive Vice Presidents

Vice Presidents

- 17 -


Assistant MKT
Manager 1



Assistant MKT
Manager 2




Assistant MKT
Manager 3


- 18 -

Board of Directors

(As of February 21, 2008)

(Back row, left to right)

James B. Williams
Retired Chairman of the Board and Chief Executive Officer,
SunTrust Banks, Inc.
Alexis M. Herman
Chair and Chief Executive Officer, New Ventures, LLC
Sam Nunn
Co-Chairman and Chief Executive Officer, Nuclear Threat Initiative
Donald R. Keough
Nonexecutive Chairman of the Board, Allen & Company Incorporated,
And Nonexecutive Chairman of the Board, Allen & Company LLC
James D. Robinson
General Partner, RRE Ventures
Herbert A. Allen
President and Chief Executive Officer, Allen & Company Incorporated

- 19 -

Ronald W. Allen
Advisory Director, Former Consultant and Advisory Director, and
Retired Chairman of the Board, President and Chief Executive Officer,
Delta Air Lines, Inc.
Peter V. Ueberroth
Investor and Chairman, Contrarian Group, Inc., and
Nonexecutive Co-Chairman, Pebble Beach Company
(Front row, left to right)
Bary Diller
Chairman of the Board and Chief Executive Officer,
IAC/InterActiveCorp, and Chairman of the Board and
Senior Executive, Expedia, Inc.
Cat hleen P. Black
President, Hearst Magazines
Donald F. McHenry
Distinguished Professor in the Practice of Diplomacy and
International Affairs, Georgetown University
E. Neville Isdell
Chairman of the Board and Chief Executive Officer,
The Coca-Cola Company
Not pictured:
Jacob Walenberg
Chairman of the Board, Investor AB, and Vice Chairman of
Skandinaviska Enskilda Banken AB
1 Audit Committee
2 Committee on Directors and Corporate Governance
3 Compensation Committee
4 Executive Committee
5 Finance Committee
6 Management Development Committee
7 Public Issues & Diversity Review Committee

- 20 -

Financial Data
Year Ended December 31,
(In millions except per share data)













Summary of operations
Net operating revenues
Cost of goods sold
Gross profit
Selling, general and admin exp
Other operating charges
Operating income
Interest income
Interest expense
Equity incomenet
Other income (loss) net
Gains on issuances of stock by e. i
Income before income taxes






Income taxes




Net income

$ 5,981

$ 5,080

$ 4,872

Average shares outstanding




Avg shares outstanding




Basic net income

Diluted net income
Cash dividends

$ 2.59

$ 2.16

$ 2.04

Closing market price on Dec 31







Cash, cash equ and c.m securities

Property, plant and equipmentnet




Capital expenditures




Total assets




Long-term debt




Shareowners equity




Net cash provid by optg Actvty

$ 7,150

$ 5,957

$ 6,423

Per share data

Total market value of common stock

Balance sheet data

- 21 -



- 22 -


he businesses & products that makes up the company constitutes

business portfolio. Coca Cola Company has a vast portfolio & it has a wide
range of products. Here we will be focusing on the different flavors of the
Coke only.
1. Coke Classic:

It was introduced in the 1886 by a pharmacist & was sold at a

small scale. It was not a carbonated drink at the time of the
launch but further development made it a fizzy drink & people
start taking it as a beverage.

2. Vanilla Coke:
Smooth taste of vanillas was added to Coke to give a
refreshing feeling. Since, it was Vanilla cokes debut in 2002.
Millions of people were curious what coke have brought for
them. It was a refresher & soother for the thirst quenchers.
Still, it was not a big success like Coke Classic.

3. Cherry Coke:
Cherry coke is one of the favorite colas taste with a blast of
cherry. This flavor was introduced for the cherry lovers so they
can have cherry wherever they & whenever they are. Some
things never change, other things get better. Like Cherry Coke.


Caffeine free Coke:

Classic is what you really want to have. Caffeine free coke fits
right in with your plan. Its true refreshment, minimize the
caffeine input to your body, & gives a refreshing effect.

- 23 -

5. Diet Coke/Coca Cola Light:

Diet Coke was launched in 1982 which was the beginning

decade of the fitness craze. A gala reception at the radio city
Hall at N.Y.C celebrated the new drink on the scene. In just 1
year after its introduction it became the largest selling drink in
America. It was one of the ideal drinks for the very fitness &
health cautious people. Further flavors were added to the
portfolio of diet coke which attracted the fitness crazy people to
check the taste of it.
a. Caffeine free Diet Coke:
In 1983, Caffeine free diet coke was introduced for the people
who were facing problems with the amount of caffeine present
in the diet coke. The diet coke was ecoming more ideal for them
as it was with less sweet & no caffeine.
b. Diet Cherry Coke:

Then the new Diet Cherry Coke was introduced a new low
calorie flavor craze began. Coca Cola company promoted Diet
Coke with penguins & celebrities in its advertisement. They
were having the slogans like Just for the Taste of it & The
Move is on the Diet Coke. It was becoming a big hit.
c. Diet Coke with Lemon:

When in 2001 the Diet Coke with Lemon was offered a new
citrus taste sensation became a hit. It gave the people chance
to have the taste of sweet coke with citrus lemon flavor.
d. Diet Vanilla Coke:

When in 2002 the Diet coke was celebrating its 20th birthday
Diet Vanilla coke was the product, which company came up with
& it was birthday gift of Diet Coke to its consumers.

- 24 -

E. diet Coke with Lime:

2004 was the year when Coca Cola company came up with Diet
Coke with Lime, which brought a juicy new flavor of coke to its


tool by which the management identifies & evaluates the various

business that make up the company. Generally there are two approaches
of doing the portfolio analysis & Coca Colas portfolio analysis is done with
both the methods & the results are as follows:

In the BCG approach, a company classifies all its Bus according to the growth
share matrix.

Coke is one of the main product line of the Coca Cola company. It is the one
which is giving maximum revenues to it by different products in this line. Here we
have classified some of its major products in the BCG matrix on the basis of their
fame & liking of the people.

- 25 -

Coke Classic is the basic product through which the Coca Cola company
got the fame. It is one product, which gives the maximum revenue
from all over the world. It is one flavor, which has the maximum
consumers all over the world. Coke has already worked a lot on it by
launching new flavors in it, but still it is a product they can turn as famous
as coke Classic.

Cash Cow:

Coke Classic is one product, which the Coca Cola company can never
think of stop producing. It is the one which make the coke company a
huge success, it was one product which gives billions of dollars as
revenue from world over. Whenever the company thinks of launching its
product in a country the first
product they launch is coke classic as they know that if dont work here
then nothing else can.
Question Mark:
A product that is still not a big hit as it havent consumed much time yet. All
the new flavors of coke are the examples of these question marks. In the
above BCG matrix, Lime Coke & Cherry Coke are the two products
mentioned as the question marks as they have not taken much time yet to
get a hold of market & not even the large percentage of the people have
tasted it. So it needs time to be fully tested by the company & the
company needs to think whether it should continue the production or
should divert to something new.


A product that has not worked good or a product which has been a source
of loss. Vanilla coke is one product that was not a big hit. Even its not a
long period which Vanilla coke has consumed but still there are signs that
it wont be a success. So its better for the company to get rid of it.

- 26 -



Single Established Company .

The biggest strength of Coca-Cola is that unlike other beverages, it has

established itself as a single large company CCBPL with 10 plants in all major
cities running directly under supervision of Coca-Cola international. So unlike to
bottler system there is no conflict of decisions and policy. One policy adopted is
for al plants throughout the country. Similarly one decision taken (e.g. price
cuts+Rs.2/-) is implemented effectively and immediately in all plants all over
Pakistan without argument. So you will find same prices, same quality, same
schemes in all cities.
Working Structure .

Coca-Colas organizational structure is of International standards, hence there

are clear cut and well defined policies, procedures rules and regulations that

- 27 -

have to be followed under all circumstances, hence working style is highly

professional, and discipline is maintained.
Human Resource .

The biggest strength of Coca-Cola is its Intellectual brain power of highly

professional qualified and dedicated employees who put in all their efforts to
satisfy their customers by providing the ultimate best of Coke.
Proper Time Delivery.

The fixed time of delivery of Coke to retailers, shopkeepers etc punctuality is

maintained which gives Coke an edge over all its competitors
Brand Name, Symbol, and Bottle Shape .

These all are Cokes strengths which give it an edge over its competitors. CocaCola bottle shape is so unique and stylish than even if the name is rubbed off
people will still easily identify that its Coca-Cola bottle. Same is the case with its
symbol and name which cannot be imitated and are so well known. The most
known and spoken word in world after OK is COKE.
Superior Product Quality :

Coca-Cola Company management never compromise on quality even if they

have to spend a little extra in production. Bottle caps are one example. Examine
and you will find that Coca-Cola brand caps (especially on liter bottles) and
disposable bottles are superior in quality than those of others beverages). Quality
in taste as well as bottle and caps and gifts which are offered doesnt vary from
city to city but is same throughout the company.
Diet Coke:

Coca-Colas strength is that they are market leaders who successfully launched
.Diet Coke to cater the needs of overweight and health conscious people and
have been popular to a certain extent, their closest competitor also followed and
launched their own diet beverages brand, but it never proved to be up to the
mark and failed.

- 28 -

Limitation of resources:

This is the biggest weakness of Coke .They heavily depend on finance from the
CCI (Coca-Cola International) based in USA. Consequently they are not able to
supply as many freezers, coolers or finance sign and electronic bill boards as
shopkeepers demand as does Pepsi which is the major reason why they lag

Non Availability :-

Coke is not available in small towns and in rural areas, reason being that the
distribution channel of Coke is not large, is not extended owing to limitations of
resources and lack of proper infrastructure.
Formality of Rules and Regulations :

The organizational structure of Coke is too formal ( being supervised by CCI),so

the lengthy processes of decision making and implementation through hierarchy
system (i-e follow order from CEO to downwards) have to be followed and
employees in Pakistan even (GM) is not allowed to take decisions to change
even smallest of things like (Instruction on bottle) on their own .So many brilliant
ideas to improve and boost sales remain locked up in employees brain as they
are not allowed to work at their own free will.

Coke currently holds about 36% market share in Pakistan.
Pepsi leads by holding 54% of market share 10% to other small beverages
e.g. RC- cola, Maka-Cola, Pak-Cola etc.
So there is vast opportunity for Coke to capture 70% market share.i.e. 54% of
Pepsi and 10% of others.
Coca-Cola with International standards can increase its market share many folds
with little efforts.

- 29 -

Increasing distributing channels and infrastructure to ensure availability in small

towns and areas.
Line extension like Fanta, Coke, and Sprite in different flavors.
Launch a new product it can do it successfully as its is well established,
Company and has already positioned itself in customers mind (as those who
provide the ultimate in taste and quality) so they are bound to try their new
product as well.

Major Threat :

Pepsi and its products as it is market leader so time to pose a serious threat to
Potential Threat:
New Entrants:

New entrants like Maka-Cola, Pak Cola that can exploit anti Jewish and anti war
sentiments, provoke nationalism sell at low price and thus can be a source of
threat for Coke in future once they fully launch their product in Pakistani market
so Coke management has to look out for them over time.
Nestle Products:

Like juices, Milo cold coffee ,drinks, etc as well as Shezan products e.g.
squashes, tetra pack juices are also sort of threat but not the direct threat for
Coke because they provoke health consciousness and physical fitness .Although
Coke has converted their attack on health issues by offering Diet Coke yet the
threat isnt over .
However Coca-Cola can effectively counter their threat at any time by launching
their own juice.
Taxes (Govt.Laws and Policies):

The Coca-Cola management is not happy with the Govt. tax laws and policies.
Being a multinational with whole plants in 10 cities it is under heavy tax
.Imposition so much so that on single bottle revenue. It has to pay as much as
Rs2.97/- as tax to the government.

- 30 -

With the consequent result that Coca-Cola is the first beverage and 2nd highest
tax paying company in Pakistan. It pays 33% on its total revenues.


rowth is the main objective of every organization. They look forward

for expanding & growing in different markets & making a variety in
their product line. A company can identify their growth through the
product-market expansion grid. The approach is known as ANSOFF.
Coca Cola Company can also identify its expansion through the ANSOFF

Market Penetration is the strategy, which every company has to opt when it
reaches a maximum height of growth. Coca Cola in Pakistan is doing
market penetration through the selling its products to the business buyer,
who are huge multinational organizations like McDonalds, Subway, Dunkin
Donuts & many more & they are also keeping the local market in focus. Fri
Chiks, AFC, PFC are examples of the buyers in the local market. They are
selling the Coca Cola as the only beverage in their restaurants.
Market Development is exploring new markets for the products you are already
selling. Many flavors of coca cola are not being sold in Pakistan. Coca cola can
develop a new market if they introduce those flavors in Pakistan. Many people in
Pakistan want a change in the beverage industry, as they are having the same
flavors from many years.
A company takes a risk when it do Product Development, there is a chance that it
loose its customers or there will be a crowd of people demanding their product.

- 31 -

Coca cola company can do product development by introducing the new flavors
in Pakistan
which are not sold anywhere in the world by the coke company. The company
has to put large effort in that, as it has to conduct all market research &
feasibilities for it. But there is also an opportunity for them as they know the
market of Pakistan, that what the people here can afford & what taste they want.
Diversification strategy is one which every company really want to practice.
There are lots of chances of growth but the risk factor is also there. The company
can manufacture products, which are not manufactured by it before. Coca cola is
only dealing in beverages but it can also manufacture its own snacks item as the
company name is known almost all over the world. So it can cash the name by
producing the items, which are eaten with the beverages.

- 32 -


- 33 -

Marketing Environments:

he forces outside marketing that affect marketing management ability to

develop and maintain successful relationships with its target customers.
There are two types of marketing environments that may affect any
companys operation, Microenvironment and the Macro environment.
Micro environment factors affecting coke:

First we consider the microenvironment factors.


Recent survey shows that coke is the only product in the world with which more
than 85% of the population is well aware of. All the companies have to keep
updated study of their customers and in case of coke the company has always
maintained excellent customer retention. Value of customers for coke can be
understood by these factors that coke spends lot of efforts (financial and human
resource) on customer research. For example, Coke knows through market
survey that we put 3.2 ice cubes in a glass and one million of US population
drinks coke with breakfast every day. This is how coke has been favorite drink of
customers for centuries.
Coke customers vary massively in terms of age. From kids to youngsters, from
youngsters to elders and from elders to older, coke has always captured high
customer attention from decades. We can divide coke customers in different
I: Consumer Market:

This is the group of consumer from where coke purchases are at the highest
level because consumer market includes individuals and households.
Households mostly buy coke for daily use in large number and purchasing by
individuals is also the case of repeat purchase. Healthy consumer market is a big
advantage for the company.
II: Reseller Market:

Reseller market of coke is very large all over the world. This is the market, which
buy the product from company and resell it at profit. In Pakistan McDonald is the
biggest example of reseller of coke. McDonald purchases coke from the
company and sell it with each fast food deal served at restaurant. The survey
shows that each branch of McDonald located in Lahore sells approximately 500700 liters of coke daily to its customers.

- 34 III: International Market:

International market consists of those buyers who are in other countries. Coke is
worldwide known product and every country where coke is been sold has a
manufacturing unit of its own. Similar is the case in Pakistan. Coke
manufacturing plants are in Karachi, Hyderabad, Sialkot, Gujranwala,
Faisalabad, Rahimyar Khan, Multan and Lahore and these plants are producing
the drink for the local use. So in Pakistan there are no international buyers of
Characteristics affecting Consumer Behavior:

Coke purchases are influenced strongly by cultural, personal, social and

psychological characteristics.
Cultural Factors:
Every group and society has its own culture. Cultural factors affect coke purchasing
massively. Different communities and group of people have reshaped Pakistans
culture. In recent years the Bahar/Basant festival in Punjab specially has become
important part of our culture in which sales of coke go very high. Soft drink is
purchased in bulk for the parties and other occasions.
Social Factors:

Social factors include consumers family, small groups and status. Family
members can affect buying behavior in such a way that if number of children are
more in a family than the elders, then the children choice can matter a lot at time
of soft drink purchase. Parents most of the time, have to go according to kids
choice and kids have more interest in cola drink as compared to the elders. On
the contrary sometime people go for the product that shows their status in
society. If a person has high status in society he or she might never go for
disposable coke bottle instead they might prefer the CAN packing of coke. This
change is due to the status matter.
Personal Factors:

Buyers decision is also influenced by personal characteristics such as buyers

age and life cycle stage, occupation, personality and self-concept. Age and
lifecycle stage means that people taste and way of living changes with passage
of time. Lets say in earlier stage of life if a persons best choice for soft drink was
Coke classic but as he proceeds with his life, way of thinking and style may
change. He may not opt for classic coke any more and might be more interested
in diet coke.

- 35 -

Occupation matters a lot when consumer is indulge in buying. If consumer is a

student by occupation he will certainly go for returnable bottle of 8 RS or may be
disposable bottle of 15 RS but most probably not for the coke CAN which is high
in price. Where as if the consumer is a business executive who is financially
strong will prefer more the coke classic can or diet coke can. This change is
mainly because of occupation.
Psychological Factors:

A person buying behavior is further influenced by major psychological factors

such as motivation, perception, learning and self-beliefs.
Motivation is basically a drive thats sufficiently pressing a person to seek
satisfaction of the need. Sometimes a person has no intention to buy a particular
product but what happens is that the group of people around him motivates that
person. If a person is highly satisfied with the taste of Diet coke, he may share
his experience with another person and as a result the latter person might get
motivated by his opinion and may end up buying diet coke.
In some cases consumers have descriptive thoughts and beliefs about
something. For example if a health conscious person has a belief that diet coke
is good for health, he or she is never going to go for classic coke because diet
coke has maintained a clear position in the mind of that consumer. This is all
about the self- beliefs and thoughts that might change with time because mostly
all the self-beliefs are secondary and not the core ones.

All over world there are two soft drink giants, Coke and Pepsi. The competition
between two companies has always been neck to neck. Both these companies
keep on try to take lead in terms of pricing, packaging, promoting and placing.
Pepsi is a world leader in convenient foods and beverages, with revenues of
about $27 billion and over 143,000 employees. Pepsi brands are available in
nearly 200 countries and territories. As we compare the products of these two
competitors we come to know that Coke has two flavors in Pakistan that is coke
plain and coke diet where as similar is the case with Pepsi as only these two
flavors are available of Pepsi as well. So in this perspective both parties have
equal strength. However competition is at its peak in terms of pricing. So many
times we see that as soon as Pepsi lower downs the price of 1 liter pet bottle or
disposable drink, Coke adjusts its price right away so that they may not loose
their customers. Although both these brands have sufficient amount of buyers all
over the world but still both the companies strive to achieve the market leader
position. Coke even after 99 successful years in US still trying best to be more
innovative. Coke manufacturers spent two years and 4 Million $ on research
before settling on a new formula and finally came up with sweeter new coke

- 36 -

and later on with cherry coke. Companies make all these efforts to give more
customer value and satisfaction than its competitors.
In Pakistan recently a few other beverages are also introduced such as MeccaCola and Amrat-Cola but currently these soft drinks are not a threat for coke due
to their very low market share and secondly due to brand loyalty of customers for

Marketing intermediaries help the company to promote, sell and distribute its
goods to the end users. Intermediaries include resellers, distribution firms and
marketing agencies. When we talk about coke, Coke Company in Pakistan as
well as abroad has recognized the importance of working with their
intermediaries. For example recently Coke signed ten years deal with US based
company Wendy that it will provide coke to all the fast food chains located in US.
Wendy in this case is a big example of intermediary for coke. In Pakistan other
than various resellers, McDonald is one big party that is reseller of coke. Similarly
there are thousands of private agencies (intermediaries) that are working for
coke to distribute the product to the shopkeepers and retailers all over the
Currently there are 46 distributors working in Lahore. Coke Company uses two
techniques for distribution, direct distribution and indirect distribution. In direct
distribution company uses no agencies or middlemen to distribute the soft drinks
but company has its own system of distribution that include Companys trucks
and labor as well. The other way is indirect distribution in which company opts for
various distributors that take the product from factory to the retailers and

Suppliers always play an important role in any companys operation. Suppliers

provide resources and raw material that company requires to produce the goods
and services. Coke company suppliers in Pakistan vary with respect to the raw
material they provide. Following is a brief list of different suppliers of coke.

Balochistan Glass Limited provides glass bottles of all sizes that are used
in bottling.
Plato Bag Limited provides pet bottles with the labels. Labels are designed
by the Packages Ltd.
Saharan Mills Limited provides the quality sugar in hygienic packets.
Vanillin Intercool Pakistan provides the machinery such as visicoolers and
chest coolers for the chilled coco-cola.

- 37 -

Dynamic Equipment and Controls (PVT) Limited provides industrial

refrigeration solutions, dispensing equipments, complete bottle line and
capping machines.
Macro environment factors affecting coke:


Coca cola knows its people very well. It offers different flavors & packaging
according to its customers taste. It offers following sizes & every size is
targeting different slots of customers.

SSRB (Standard size returnable bottle)

LRB (Large size returnable bottle)
NRD (Non-returnable/ Disposable bottle)
PET (Plastic Bottle 500 ml)
PET (Plastic Bottle 1.5 liter)
CANS (tin pack 330 ml)

It targets its different sizes according to customers of different age groups &

SSRB is generally targeted to young children & people going to schools &
universities. It is also targeted to the people of lower class.
LRB & PET 1.5 liter is usually consumed by households &I s one of its
economy packs.
Disposable bottles are for the on the go people. As they dont have the
time to stand at a spot & drink the whole beverage.
PET 500ml was introduced, on the basis of the analysis, which shows that
people nowadays are in a trend to drink two 250ml coke bottles together.
As Coca Cola is a company who knows its consumers very well, they
introduced the 500ml Pet bottle.
Business executives always expect something different for them form an
organization, so Coke CANS were the answer to their expectation from

Different flavors always attract different types of people. They are for the
people who always want to try something new.

Classic coke is the one suitable product who dont want a change in their
life or who dont want to try something new.
Keeping the people in view who are fitness oriented or who are health
conscious, Diet coke is the solution for all their beverage problems.
Vanilla Coke was introduced for the people who want a more sweetened
beverage & who are looking for vanilla in everything they have.

- 38 -

Cherry & Lime coke is targeted to the people who want something citrus.

Coca Cola launches its product after they study their customers in deep detail &
conclude that what their customers really wants from them. Consumers always
welcome Coca Colas product, as they know that Coca Cola is the one who
knows them the best.
Cultural factors:

When there is an event or an occasion Coca Cola is always there for its
Coca Cola & Cricket:

Pepsi is one of the biggest official sponsors of cricket & is also the official
drink of cricket. Coke is there, giving Pepsi a tough time. Coke has
sponsored eight Pakistani cricket players. Coca Cola is targeting cricket as
it is one the famous & growing all over the world.
Coca Cola & Musical Concerts:

When you think of Pakistani Punjabi bhangra, Abrar-ul-Haq is the first name
you think of. Coca Cola is the official sponsor of Abrar. Coke sponsors
almost all of the concerts of Abrar. In most of the hoardings, billboards & TV
commercials of coke, we see Abrar performing & promoting coke.
Junoon is a known name all over the world. Coke targeted its customer through
music celebrities & ask them to perform in their concerts & commercials. You see
Junoon performing a desire of having a coke is rite in you.
Coca Cola & Food Mela:

This is the century when food industry is at its boom. Coca cola organizes food
melas for the people. In Karachi, coke treated thousands of people by bringing
50 bustling restaurants all together in one area. All those restaurants were
offering coke as the only beverage in the food mela.
Coca Cola & Basant:

Basant is one of the biggest event in Lahore. Coke was the official decorator of
Lahore hired by PHA. Coke has promoted its products so much with relevance to
basant that at basant whenever you want to drink something chilled, the first
name you think of is Coke. It is there in the mind of the people that Where there
is Basant there is Coca Cola.

- 39 -

Coke in Ramzan & Eid:

Eid & Ramazan is one of the holy events of muslims. Coke earns its great
revenues in the month of Ramazan & at the time of Eid. It offers new
packaging or great discount offers also special offers at Eid.
Political factor:

Political factors usually effects company working on the international level doing
imports & exports. Coke usually performs its operations in the local market.

Coke is not usually affected by government regulations & deregulations as

no major changes occur in the food laws.
Coke is a very environmental friendly product. From the caps till the labels
on the PET bottles, everything is recyclable.
Depreciation of currency generally has no major effects on Coke they
really dont do imports& exports on large scale. They try to be local market
oriented, they keep at least one company owned plant in a country.
Sudden changes in political conditions in a certain country doesnt effect
much on Coke, as it is a purely consumer product.
Pressure groups tried to de-market Coke in Pakistan by spreading the
rumors that the revenue collected from coke goes to the Jewish lobby.

Economic factors:

Economic factors do affect a company in negative & positive manner. Coke is not
an exception here, it is affected if there is inflation in the country & as a result
coke increases its prices. Pepsi is always waiting to take a competitive edge. The
increased price is a high negative effect on coke. Coke has employed 1800
workers in the last two years & huge amount of revenues have been collected
from Pakistan. The economy worldwide was disturbed by the incident of
September 11th,2001. The disposable income of the people of Pakistan is
increasing day by day & coke that was thought as a luxury good is now becoming
a necessity.
Social factors:

Coke, a customer oriented company, always take steps for the welfare of its
consumers. The recyclable products used in manufacturing coke helps save
peoples environment.
Coke is also helping the needy & knowledge seeking people with fewer
resources by providing them books, scholarships & opportunities to work. Coke

- 40 -

has launched a program in Gujranwala, Pakistan where it provides basic

education to children.
Coke has also launched programs to increase awareness about the conservation
of water & natural resources, climate changes, waste environment education &
recyclable products.
Technological factors:

Technology in any field is effecting the development of that industry at a

high rate. Beverage industry is also affected by the technological factors
but in a positive manner. The new methods of filling the bottles, the
refrigeration methods, the disposable bottles, the PET bottles all made so
much changes to the Coke which is one of the giants in the beverage
Coke is adopting all the new technologies available. Coke is being supplied
with the refrigerators, visichest coolers & many more for keeping the bottles
chilled, as they claim in the subcontinent "thanda matlab Coca Cola". Coca
Cola Company got the technology of dispensers so they give Coke to people
that is as fresh from the fountain. Coca Cola Company has opted the
technology for the usage of PET bottles, which are also environmental
friendly. Coca Cola Company opted the recycling method to keep its
environment clean & also to have the soft corner in people's heart. Coca
Cola Company is producing new packaging sizes with differentiated packaging
with the help of new technology everyday.
Demand Management:

Every organization keeps a desired level of demand for its products. Demand for
products change timely. At any point there may be no demand, adequate
demand, irregular demand or too much demand. Regarding coke there are two
different techniques to tackle with the demand management.
Increase the Demand:

Companies want to increase the demand for their products. Penetrating in the
market by lowering the price, giving discount offers and offering special packages
help companies to ultimately increase their demand of the product. Coke follows
the same strategy. Company keeps on adjusting its price structure to attract more
and more customers. More over special packing of coke are introduced at
different occasions and festivals. This helps further in increasing the demand of
this soft drink.

- 41 -


Coca-Cola has there major and large customers in the market, food street 60,000
cerates /year, MacDonalds 40,000 cerates/year and Pakistan Railways who buy
50,000 cerates /year.
However, these three customers being large and powerful are in an influential
and bargaining position they can demand discount or others facilities like (boards
sign/freezers/coolers etc.) and impose a threat to switch to their closest rival and
competitor Pepsi.

Nestle products like juices, coffee, mineral water etc. and Shezan juices are
substitutes of Coke for health conscious people and other fresh juices.

Direct Competitors

The direct competitor of Coca-Cola is Pepsi and that of CCBPL is PCI (Pepsi
cola international) there is always ongoing tuff competition between these two
arch rivals with Pepsi leading with 54% market share and Coke gradually
growing and catching up 36% market share in Pakistan. However on global level
the situation is reverse.
Both companies often engage in price cut wars, prize scheme wars and
sponsorship wars to win over each other customers.
Indirect Competitor

These include Nestle and Shezan juices who do not pose a threat to Coke as yet
but has the potential to do so as it is exploiting the natural aspect and health
issues more and more to make people conscious about physical fitness Coke
has launched Diet Coke to counter the physical fitness demands.

Buffering and Smoothing

For beverages like Coke the buffering and smoothing policies doesnt matter and
they dont apply anymore because Coke remains in demand all the year round in
festivals, parties, events, meetings sports etc.

- 42 -


Coca-Cola has authorized suppliers and which do not pose a threat to it. Any
how Coke does have a quality check procedures in its plants to ensure that they
get the right kind of ingredients from suppliers.
For example

If market has low quality carets of bottles by chance, they call their sales
mangers to lift up all the stock from the market then inquired from the quality
inspector. They take strict notice of that .and don not take materials from that
company again if that default is due to the ingredient contains by it.
New Entrants

Coca-Cola is not afraid of competing .it doesnt fear loosing its share to MakaCola or other new entrants. The company management believes that new
entrants provoke healthy competition, which will provide Coke with a challenge to
hold on to its loyal customers. Besides it will take a lot of effort on the part of new
entrants like Maka- Cola, Pak-cola to fully launch its product in Pakistan and
capture or even motivate people to switch on to their new product from Coke.



Brand Name, Symbol, Bottle shape.

Brand name, symbol and bottle shape are distinctive features of Coca-Cola
which give it an edge over its competitors. (Even with out name people can easily
identify Cokes, fantas, and sprites bottle from crowd.) They can not be copied
or imitated by others.
Diet Coke:

Coca-Cola has successfully addressed to the needs of its health conscious

overweight customers with the launch of diet Coke. Its competitor has yet to
come up with and counter diet Coke properly.

- 43 Snatching Away Customers:

In the market Coke has been able to snatch large customers like Food Street,
Pakistan Railways, McDonalds, as well as Sponsorship events (basant, eid,
concerts etc.) from Pepsi mainly due to its superiority in the following areas.
Cost: It

is very economical, justifies performance,


No quality compromise, get the best all over Pakistan at any cost.


new ideas for billboards design, sponsorship, changing their slogans

time to time, according to the needs of the market.

On time delivery in all over the Pakistan.

- 44 -

Market Segmentation &

Positioning Strategy

- 45 -

Market segmentation:

ividing a market into distinct groups with distinct needs, characteristics, or

behavior who might require separate products or marketing mixes.
In evaluating different market segments, a firm must look at three factors:

Segment size
Segment growth
Segment structural attractiveness and company objectives and resources.

There is no single way to segment a market. The market has to try

different segmentation variables, alone and in combination, to find the best way
to view the market structure.
Target Marketing:

This is the process of evaluating each market segments attractiveness and

selecting one or more segments to enter.
After evaluating different segments, the company must now decide which and
how many segments it will target, because buyers have unique needs and wants,
a seller could potentially view each buyer as a separate target market. Ideally,
then, a seller might design a separate marketing program for each buyer. There
are three types of market segments.

Undifferentiated marketing. (Mass Marketing)

Differentiated marketing.
(Segmented Marketing)
Concentrated marketing.
(Segmented Marketing, small segment)
Coke segmentation strategy:

Coca cola servers its products using mass marketing technique, which obviously
falls in undifferentiated marketing, and undifferentiated marketing means no
segmentation, but there are minor factors on which we can say that the coke
segments its products and then targets the customers somehow. These factors
are as follows.
Geographic Segmentation:

Coke segments its products country wise and region wise, here the most
important thing is the taste and the quality, it varies according to the taste and the
income level of the people in that country, i.e. Third world counties are given low
quality taste.

- 46 Climatic:

In coke marketing, main idea is to serve it cold, so we can say that, they focus
more on hot areas of the world, i.e. middle east etc and there sale increase in

In Pakistan the coke segments more in urban and suburban areas as compare to
Demographic Segmentation:

Internationally coke has segments the small children introducing tastes like
vanilla, lime and cherry, they focus children from 4-12. Coke specifically target
more young people than older.
Family type:

Coke introduces its economy pack, and thats how they focus family and
A question to Amer pasha Country Manager

Pepsi is targeting exactly the same market, and music is also a part of their
brand image, so where does the differentiation lie in your approach?

Pepsis brand personality is different, ours is about togetherness, about us.

Coke will always show activities, where people get together to enjoy moments of
togetherness with our brand. Our research indicates that youngsters love to get
together, and it is when they are enjoying themselves, that will consume coke.
For Pakistani youth, socializing with friends and family is core behavior in their
lives. Cokes brand personality is also about togetherness.

- 47 -

Coke segments different income levels by packaging. Like for small income
people it has small returnable glass bottle, for middle people it has non
returnable bottle and for higher income people it has coke tin.
Psychographics Segmentation:

All psychographics variables the social class, lifestyle, occupation, level of

education and personality, coke segments everyone, but again its there
packaging which is different for different consumers.

Behavioral Segmentation

Thanks to the Coca-Cola Company the local festival of Basant has become and
international event and an identity of the culture of Pakistan. Over the year the
annual spring festival of Basant has taken on mega proportions. Previously
restricted largely to the walled city, the festivities now flood every nook and
corner of Lahore. The credit for making the celebrations available to almost
everyone largely goes to The Coca-Cola Company. In 2003, Coke was once
again nominated as the official sponsor for the Basant festival bye the parks&
horticulture authority, Lahore for the fourth year running. In these four years, the
company has played a pioneering role in making the Basant festival a major
social and culture event in Pakistan. (The News on 50th anniversary of the
Coca-Cola in Pakistan.)
Benefits Sought:

Sometimes, for the promotion strategy of coke, they introduce prizes in the top
cover. So they segment people by benefit sought, i.e. by giving them prizes.

- 48 -


he way the product is defined by consumers on important attributes, the

place the product occupies in consumer minds relative to competing





Here if we talk about more price and more benefits, we can discuss Pepsi
and Coke. As both are the market leaders and 90% market share of
Pakistan beverage industry is secure by them & the rest 10% is secure by
the rest.
And we can also take Pepsi and Coke as challenger for each other as both
of them provides more for same, more for less & same for less. As they are
giving their customers more benefits for same price and also more benefits
for less price with respect to different packaging sizes.
Others colas like Macca Cola, Amrat Cola and Mountain Dew are offering
same for same price and same benefits for more price. They are using
followers strategy, as they follow the other market leaders and giving their
customers same benefits for same price. Others colas like tha bottles (local
colas) are offering less benefits for same price and less benefits for less
price. As they have no existence in market and their products have no
position or we can say very badly positioned in consumer minds.

- 49 -


- 50 -



roduct: Anything that can be offered to a market for attention, acquisition,

use or consumption that might satisfy a want or need.
Levels of coke as a product

Core product:

Core benefit is that it fulfills the thirst.

Actual product:

Design: Pet bottles, returnable glass bottles, economy packs.

Quality: Quality differs with respect to country for example. Coca-Cola Can
quality that is available in Middle East is certainly different as compared to Coke
Can available in Pakistan.
Product Classifications:

Coke is categorized as a convenience product, because the purchasing rate is

very high and this is the product that is bought very frequently.
Individual product decisions

- 51 -






Line extension

Brand extension



New brands

a) Brand Equity:

As far as coke is concerned brand equity for the customers is very high.
People are highly brand loyal.

b) Brand Strategy:

The following is the brand strategy of Coke

Line Extension:

Line extension occurs when a company introduces additional items in a given

product category under the same brand name. For example if Coke introduces
new flavors and package size, it will be considered as line extension.
Brand Extension:

Brand extension means using a successful brand name lets say CocaCola and then launching new product for example cherry coke. This
was an example of brand extension.

It means introducing additional brands in the same category. For example CocaCola not only introduced coke as a brand but also sprite and Fanta.

- 52 -

It means introducing new product with the new brand name. It means
diversification but this is something Coca-Cola has not adopted for as yet.
Product Line Decisions:
Product Line Length:

It means the number of products that company is offering. For example Coke,
Diet Coke, Fanta , Sprite.
Product Line Filling:

Product line filling means that earlier when Coca-Cola started it had only one
flavor of coke available and that is classic coke but with the passage of time
company filled the product line by adding diet coke, diet lemon etc.


- 53 -

- 54 -


he field of advertisement is one area where Coca-Cola has always

In year 2000 Coca-Cola unveiled the biggest advertising billboards in the history
of Pakistan. Each unveiling was marked by entertainment and light shows
watched by thousands of people. Similarly in July 2000 Coca-Cola launched its
first under the crown promotion by the name of Dream Vacations in which the
consumers could collect caps of promotional bottles of Coca-Cola like Sprite,
Fanta and Coke.
Advertisement Objective:

Type of advertising with respect to product life cycle that Coca-Cola adopts is
reminder type. The reason behind this fact is that coke is such a product that is at
the maturity level currently so for such a product companies mostly go for
reminder type of advertisement so that they can penetrate more and more and
same is the case with Coke.
Setting of advertising budget:

Coca-Cola sets its advertisement budget on the basis of competitor based

budgeting. Major competitor of coke is Pepsi and as coke realizes that Pepsi has
increased its advertising budget, straight away Coca-Cola management plans to
do the same so that they can compete in advertising department as well.
Advertising Strategy:

Before creating advertising message the Coca-Cola Company gives lots of time
to the factor that the message must gain customer attention. This is basically
called Clutter Buster means that only that advertisement will leave impact on
customer mind that has some specialty or uniqueness in it. For example in India
Coke current slogan Thanda Matlab Coca-Cola has gained reasonable
customer attention.
Advertisement Media:

Coca-Cola Company advertises its products mainly coke through electronic

media that includes Television, Radio and Internet as well. Moreover leading
newspapers of Pakistan are also the targeted by coke for advertising. So we can
say that coke not only uses electronic but print media for advertisement as well.

- 55 -


- 56 -


fter completing our project we have come up with

recommendations for the coca cola company, which are following.


Currently In Pakistan there are only two flavor of coke available, company
can extend their portfolio by introducing new flavors.
According to the survey, conducted by the international firm Pakistani
people like less sweet cola drink. So for this coca-cola company should
think about bringing a new product for example new diet flavors, in the
market to fulfill the local need.
Marketing team should try to increase the availability of Coke in rural
Now young generation has a trend to drink a coke 2 regular bottles at
same time, so providing more satisfaction to them company should
introduce liter disposable bottle.
Coca Cola Company should think about producing Coke Can locally as
well because currently coke Cans are only smuggled from abroad and
sold at high price. Company can capitalize on this factor.
Currently two plants of coke are being run under private companies, one is
in Peshawer and other in Rawalpindi. Company should plan to buy these
plants as well so that customers can get equally good quality all over the
country. This will help company to maintain quality control.


e have concluded from this detailed report that despite the fact Cocacola currently occupies the market leadership position overall but it
does not guarantee that the company will sustain its position in the
future as well. In Pakistan as compared to Pepsi, Coca-Cola has less number of
consumers as Pepsis market share in Pakistan is approximately 58% where as
coke market share is hovering about 32%, hence the conclusion is that CocaCola must enhance factors such as relationship marketing, innovation and
technology specially in Pakistan to attain market leader position in this region as

- 57 -

- 58 -

Five forces applied on coca cola

Traditional competition

Prices of Pepsi brands

Market share
Promotional actions of competition

- 59 -

Light, diet coke, cherry coke a.o variations


Price and availability of ingredients on world market

Quality speed safety traceability, flexibility of supply chain
New entrants:

New look-a-like manufacturers (foreign; global competition)

Substitute products

Fashionable new drinks, Red Bull, coffee, Belgian beer, ...

Consumer taste, fashion quality of perception, image: Is it cool? or:
Is it hot?

Combined purchase power of shops, bars, supermarkets