Ferrell and Hartline (2012) defined the marketing channel independent groups that assist a service or product available for consumptions by the business users or customers. According to Mohamed and Omwenga (2015), Coca-Cola Company has used several marketing channels that have made them the top company worldwide. One of the strategies used by Coca-Cola is producer-distributor- the customer. Using this channel, consumers buy the products in bulk from the wholesaler. By purchasing the products in bulk, the prices go down. It is because the wholesaler takes extra individual cost such as force costs and service costs (Ferrell & Hartline, 2012. However, the wholesaler in some cases may not sell directly to the customer but may go through the retailer. This brings the second distribution channel that has been used by Coca-Cola known as a producer- broker- retailer t- the customer. In this case, the company has been using more than one intermediary before the products land on the hands of the client.
Marketing channel strategy
Coca-Cola utilizes the distribution channels as the marketing strategy that bridges the supply gap and the demand to make sure the products reach the different market segment. Majorly, the company uses the direct and indirect selling (Armstrong et al., 2014). The strategy in which the corporation uses its small retailers to reach the consumer is a direct selling where the syndicate supplies their various items to the retailers. The company uses its resources to deliver the stock to the retail outlets which mean that it generates a small part of revenue using the strategy. Indirect selling strategy is whereby Coca-Cola involves various purveyor agencies, through partnership and the organization delivers its products to the distributors. However, the creative way of direct selling strategy is the utilization of Coke vending machines in intentional locations like school premises and gas stations (Mohamed & Omwenga, 2015). This channel distributes the products direct to the customers, and the company is gaining from these machines since it does not incur costs of prime promotions and trade.
As the global system with operations in more than 200 territories and countries, the company depends on demand from their customers and a strong relationship with distributors, suppliers, retailers and the all the communities. The value chain of the company consists of five major activities that include suppliers (inbound logistics), operations, buyers and customers (outbound logistics), marketing and sales, and service (Mohamed & Omwenga, 2015). They ensure that the human right is one major factor that is upheld throughout their value chain.
One of the primary pricing strategies that Coca-Cola has used is the penetration strategy. Throughout its years of operation, the company has set the prices that are a bit lower than the competitors such as Pepsi, which always complains about the pricing strategy of Coca-Cola. It lowers its price to penetrate the new markets and maintains its prices as that of the competitors in the area that it commands significant customer base (Armstrong et al., 2014). Once it is sturdily implemented, it transposes itself as premium but the marketing strategy focuses on an inexpensive enjoyment of life. It uses that pricing strategy to raise the awareness of the brands in the entire population. For example in Pakistan, the company is focused to reduce its prices of the 200ml can. I believe this kind of pricing strategy is right since the Company first establishes its customers and then maintains them.
Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson Australia.Ferrell, O. C., & Hartline, M. (2012). Marketing strategy, text and cases. Cengage Learning.
Mohamed, K. S., & Omwenga, J. (2015). Supply chain risks mitigation strategies adopted by manufacturing firms in Kenya: A case of Coca Cola Company (K). International Academic Journal of Procurement and Supply Chain Management, 1(4), 45-65.
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