Free Essay on International Marketing Strategies: A Case Study of the Coca-Cola Company

Published: 2023-03-26
Free Essay on International Marketing Strategies: A Case Study of the Coca-Cola Company
Type of paper:  Essay
Categories:  Coca-Cola International business Strategic marketing Leadership style
Pages: 7
Wordcount: 1709 words
15 min read

The Coca Cola Company operates across more than 200 countries, offering its 3,300 drink products. The company is widely revered for its brand strength, sustained customer loyalty, and competitive advantage. That 94% of the world's population can recognize the Coca-Cola brand (Banutu-Gomez, 2012) is a testament to the company's brand strength. Likewise, the company has consistently optimized its product mix by enhancing the four P's: price, place, product, and promotion (Vrontis & Sharp, 2003). The company has a vast geographical across Europe, Asia, Africa, Pacific, North, and Latin America. Coca Cola has achieved sustainable competitive advantage across the world by adopting a strategy to ensure the availability, acceptability, and affordability of its brand in the entire world.

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The global market has been spurred by nontariff trade and the elimination of barriers. Even so, globalization has led to increased competition as companies strive to expand geographically, in a bid to tap into new markets (Vrontis & Sharp, 2003). Thus, an effective international marketing strategy is vitally important for any company that wants to gain a competitive advantage. An international marketing strategy is an organization's activities towards planning, promoting, pricing and distributing its products in various markets. The strategy guides how the company will serve different markets based on its unique characteristics (Shenkar, Luo, & Chi, 2014). Thus, marketing strategies are aimed at achieving sustainable competitive advantage.

Coca-Cola's global brand success is underpinned by its robust campaign to think global while acting local, through which the company focuses on the local cultures of each market that it serves. In every market that Coca Cola operates, it identifies with the local culture and the psyche of the local population (Vrontis & Sharp, 2003). The company refrains from presenting itself as an American company, opting to present its brand as a local company with headquarters in the U.S. The "glocal" culture is at the heart of the Coca Cola's value proposition and product offering (Vrontis & Sharp, 2003). Therefore, rather than having standardized products or marketing communication, the company uses market-specific approaches to earn the trust of the people and to engender their emotions. Thus, the company's strategic strength is in its capacity to have a global reach and still maintain an area focus through the following international marketing strategies.

Coca-Cola derives more than 80% of its sales from markets outside the United States, making it one of the most active companies in the international market (Banutu-Gomez, 2012). The company has successfully penetrated emerging markets even in politically volatile countries where the business environment is uncertain because it has found the right mix to scale the global and local markets (Vrontis & Sharp, 2003). Therefore, much as the brand is global with a uniform value proposition of creating happiness for consumers, the brand is communicated differently in each market. The company's target market comprises of many cultural consumers across many countries. As a result of its "glocal" strategy, the company is an exemplar of the successful implementation of international marketing strategies. The company takes cognizance of the different market factors in each country, such as cultural factors, linguistic factors, per capita income, government policies, and geographical factors, to customize its brand campaigns and value proposition (Vrontis & Sharp, 2003). In consequence, about 94% of the world knows of Coca Cola and can recognize its bottles, while the daily sales average at about 1.9 billion servings (Vrontis & Sharp, 2003). Hence, the company has different marketing strategies for different markets.

Robust consumer marketing strategies

Coca Cola invests in understanding the local customer. For example, during the Arab uprisings in Egypt, the company understood the psyche of the locals and leveraged it to increase sales. Amid the uncertainty, the locals, especially the teenagers, were hopeful for a bright future. Hence, coca colas brand promise of happiness and optimism came in handy, enabling the local marketing team to come up with a suitable message that if all the people came together, then they could build a better future together. This message was captioned in a thrilling advertisement in which showed the dark and overcast skies over Tahrir Square, and then people came together and threw ropes to the clouds and started pulling. The clouds opened up to the sun (Banutu-Gomez, 2012). Such a message resonated well with the people at that time, enabling the company to tap into the emotions of the Egyptian people appropriately. Coca Cola tries to replicate the concept in all markets based on the consumer insight data to craft messages that resonate with the markets.

Advertising and Promotional Strategy

Coca Cola has a robust promotional and advertising strategy with massive budget allocations. In 2016, the company spent $4 billion, while in 2018; it spent $ 4.1billion on marketing and promoting its products (Mayureshnikam &Patil, 2018). The marketing expenditure is a testament to the company's aggressiveness in promoting its products through advertisements in the traditional and social media. The company's advertisements are in various national languages (Banutu-Gomez, 2012). For example, the company uses mandarin in China and Arabic in Morocco to appeal to their customers. Also, the beverage manufacturer promotes its brand through major sponsorships in events like the FIFA world cup, Olympic Games, BET Network, and American Idol, among others. For example, in 2016, Coca Cola used the "Taste the Feeling" promotional campaign to remind the markets of its value proposition, which is to inspire happy and joyous moments in their lives (Mayureshnikam &Patil, 2018).Such specific messages target demographics, such as the youth who are vibrant and always in pursuit of happy moments. These advertisements are then telecasted across various channels, and at frequent intervals. The company also uses its social media platforms to connect and actively engage with its millions of customers and fans across the world. On its YouTube channel, for example, Coca Cola has over 1,250 promotional videos (Mayureshnikam &Patil, 2018).

International Collaborative Strategy

Coca-Cola relies on external distributors in foreign countries (Banutu-Gomez, 2012). In all its markets, the company has outsourced production and distribution functions to bottling companies. In its two largest markets, China and the U.S, the company has control over the distribution system. For example, in all Chinese cities with a population of more than one million people, Coca Cola has a sales center to cater for distribution to retailers (Mayureshnikam &Patil, 2018). Thus, Coca-Cola operates a franchise system. The bottlers are local, and so the company's effectiveness largely depends on the effectiveness of franchise relationships. The company has a geographical orientation with five major operating groups: Pacific, Europe, Latin America, North America, Eurasia, and Africa (Banutu-Gomez, 2012). To enhance franchise relations, the company defines quality standards based on the specific market and in compliance with the local government quality regulations. Thus, decisions are made based on local contexts.

Localization strategy

Localization is a critical element of Coca-Cola's international marketing strategy. The premise is that since countries have different cultures and the world heterogeneity of cultures. Therefore, it logically follows that standardization would not yield, and any company that is seeking a competitive advantage in a foreign market should localize and adapt its marketing strategies to achieve relevant in each specific market. In Peru, for example, Coca Cola has presented itself as a Peruvian company that has its headquarters in the U.S. Thus, the company has earned the trust of Peruvians (Mayureshnikam &Patil, 2018).

Further, Coca-Cola has increased its geographical footprint in the country by penetrating all areas from market stores to significant events. In China, Coca-Cola uses the slogan "think local, act local" by including the Chinese culture and elements in its television commercials. For example, they use the spring festival couplets and Chinese zodiac animals in the commercials (Banutu-Gomez, 2012). Thus, whereas Coca Cola has an overall value proposition, its variants are replicated in various markets to reflect the culture of the people or their emotions at a particular time.

Brand differentiation strategy

Branding entails delivering the message with clarity, affirming the company's credibility, engendering the emotions of target prospects, and establishing brand loyalty and affinity. Coca-Cola is the most distinguishable trademark in the world: it is recognizable by 94% of the world's population. The company invests heavily in quality standards, brand recognition, charity sponsorship, and sustainability. For over a century, Coca-Cola has embodied the culture of happiness and sharing through all its communication and advertisements. All the company's ads epitomize the brand promise of happiness. The adverts are focused on the individual and not the company, which is a smart and effective way of the company to communicate its philosophy while telling great stories about individuals. Coca-Cola also leverages its superior quality to differentiate its brand. For example, Coca-Cola has achieved brand recognition in Peru since 1936 due to its sustained employment excellence and sustained quality. Its record in Peru has enabled the company to differentiate itself in the foreign market.

International diversification strategy

International diversification is the establishment of a strong identity in a market (Shenkar, Luo, & Chi, 2014). The manufacturer introduces variants of a particular product into the product category under one name, to cover the array of products in the specific category (Banutu-Gomez, 2012). For example, Coca-Cola offers diet-decaffeinated soda, decaffeinated soda, diet soda or regular soda under the same brand name. The differentiation strategy means that each type of soda is targeted at a different product market segment (Banutu-Gomez, 2012). Hence, the company is able to tap into a larger market.

The full range of products helps the company to establish its name in the product category market (Shenkar, Luo, & Chi, 2014). For example, in Peru, Coca-Cola introduced isotonic beverages like Sporade and Powerade to compete with the products from its competitor and increase its market share. Thus, the introduction of Powerade was not a self-cannibalization move, but a strategy for Coca-Cola to get a chunk of the market share from Gatorade, a major competitor in the isotonic beverage market (Banutu-Gomez, 2012). Another example is when Coca-Cola introduced the Nestea Vitao beverage in Belarus to cater for a gap in the tea category.

Product diversification

Coca-Cola provides its global market with a vast range of non-alcoholic beverages to choose form. The products are grouped into three main categories; still beverages, sparkling beverages, and waters. The company has a product offering of more than 3,300 beverages ranging from diet to regular sodas, fruit juices, waters, energy drinks, sports drinks, coffees, teas, and dairy and soy beverages. The company's vast product portfolio includes still beverages, sparkling beverages and waters.

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