Coca Cola Company in Mongolia - Case Study Example

Name Institution Lecturer Course Date Introduction International marketing refers to the act of doing business overseas (Craig and Douglas 2005). An organization can adopt international marketing as a result of the following reasons that is; the domestic market may be inadequate, availability of tremendous opportunities overseas, higher margins overseas due to low operating costs among others. To shed more light on international marketing, this essay focuses on Coca Cola Company in Mongolia. The coca Cola company is a multinational company that produces one of the most preferred soft drinks in the world. Among the most common brands include the coke, Fanta, Sprite, Schweppes, Lilt, among others. Other factors that have contributed to Coca Cola’s success in Mongolia include; external forces, effective market segmentation, good leadership, export entry strategies, marketing mix among others. External Forces The following are the various external forces that influenced the decision by Coca Cola Company to tap into Mongolian market that is social cultural forces, political and legal forces, economic forces and technological forces. With regards to the social cultural forces, Mongolia is characterized by a nomadic culture that creates a hospitable platform through which investors from other countries can perform their businesses. A research, which was done by Oxford Business Group (2012) it, was revealed that the majority of Mongolians are between the ages of 14-30 years, a population that has a different taste, attitude and shopping patterns. The Mongolian population is estimated to grow at a rate of 1.59 % and this guarantees continuity in consumption of Coca Cola products (Oxford Business Group 2012). There are there arms of government in Mongolia that is, the executive, judiciary and legislature. In addition, the country adopts a multiparty system of governance which in turn enhances democracy. The ministry of trade and industry plays a crucial role of regulating trade throughout Mongolia. Efficient business laws made it easier for Coca Cola to register its business, trademarks, copyrights and patents in Mongolia. Mongolia is also a party to various global laws that have an effect on business operations such as the United Nations, International Monetary Fund, World Bank, ILO among others. Also, the presence of effective legal framework in Mongolia guide business registration, hence enhancing global investment. Mongolia is among the fastest growing economies across the globe. According to Leiboi (2012) the economy is expected to grow by double digits by the year 2013. Since the country acquired a market economy status in 1990, the economic growth has accelerated to a record of 17.3 in 2011. The engagement of Mongolia in negotiations with other countries such as Canada and China. The Free Trade Agreements has played a vital role of removing barriers and creating a uniform platform for member states. The strong economic policies have undoubtedly created a conducive environment for international companies like Coca Cola to carry out their businesses in Mongolia. Mongolia is able to connect with other countries in the world due to the availability of advanced telecommunication services. Also, information transfer in Mongolia is quite cheap and thus, most organizations use communication devices such as televisions and radios to advertise their businesses. As such, Coca Cola has taken advantage of advanced technology to conduct business in Mongolia. Entry Strategy The decision to go globally is normally influenced by such factors as cost implications, legal and political frameworks, and organizational strategy among others (Haghirian 2010). The ultimate purpose of investing in the global market is to broaden a company’s horizons as well as make sustainable revenues. In its expansion plans, Coca Cola established new business premises in Mongolia that is wholly owned subsidiaries. Coca Cola entered into a bottle partnership with the government in the year 2002. In 2008, the company opened its bottling plant in on the suburbs of Ulaanbaatar city of Mongolia. This move provided the company with a competitive edge over its rivals such as PepsiCo. Today, the company sells more than 70 beverages to the Mongolian population. This move also helped to reduce the cost of producing bottles offshore. Also, it minimized the risks associated with entry into an international market. Leadership Leadership is a crucial aspect to consider as far as international marketing is concerned. Organizational leaders have the role of introducing key concepts that provide the firm with a competitive advantage. Organizational leaders should ensure that the resources apportioned for strategic implementation are adequate. Coca Cola Company recognizes that, in the face of globalization, its success mainly hinges on strong managerial leadership of the senior leadership team. In so doing, organizational leaders at Coca Cola have clarified strategic intent that is; they have set out a clear vision. Also, the senior leadership team has introduced common mission that steers both the workers and management. These leaders understand that it is not easy to invest in a foreign country. With this regards, Coca Cola senior leadership team focus on doing things right. The leaders have thus created the right conditions that enhance international marketing. First, they have motivated the employees to ensure that they perform their duties effectively and enthusiastically. Also, they have created key performance indicators and encouraged right behaviors amongst workers. Market Positioning Coke consumption in Mongolia has increased over the past few years as a result of choosing the right competitive advantage. The Coke plant helped to lower prices for soft drinks, and this provided Coca Cola with an advantage over rival firms such as PepsiCo. The company also differentiated its beverage products from those of rivals. The strategy for Coca Cola is to be the market leader and thus, it constantly compares the customer satisfaction, promotion and prices with those of competitors. Marketing Mix In addition to choosing a right competitive advantage, the Coca Cola adapted a marketing mix that produced response at once in Mongolia. The company has met its marketing objectives through the adoption of an effective marketing mix. The aspects that the companies strive to achieve include; selling the right product, selling at a reasonable price, the right place and adopting the most effective mode of promotion. The Coca Cola company product mix in Mongolia is comprised of more than 50 brands. Among the brands include food, water, juice, energy drinks and water and this plays a significant role of spreading the risk. Coca Cola products are easy to distinguish from other similar products. Consumers thus identify the brands that they need fast. The products are also packaged well, and this, in turn, attracts attention. In order to obtain market share leadership in Mongolia, Coca Cola has set its prices as low as possible. The brand managers usually set these prices and the senior leadership team approves. Coca Cola uses the following tools to inform its consumers about the brands; advertising, personal selling, public relations and sales promotion. The company has increased demand for its products through extensive advertising. However, the company has designed adverts that are appealing to any individual irrespective of gender, race and culture. The company has been able to develop advertisements that are in native languages. The advertisements in different markets include the elements of local culture. The coca Cola company has ensured that, it has an efficient distribution channel throughout Mongolia. Today, one can find Coca Cola products even in the remote areas of the country. The distribution channels ensure that the products of the coca Cola company are available to the customer at the right time. Conclusion The international market is competitive, and companies have the freedom of choosing the best strategies in order to survive in the competitive international markets. However, the choice of a strategy should not increase the company’s costs of operation. In order dominate the international market; companies should maintain a reputable company and product image. Despite the company being the largest and number one in soft drinks, coca Cola has continued to invest in designing new market strategies, which are country specific. The strategies are specific for country level to meet the cultural requirements of the citizen of these countries. Coca Cola Company has adapted a favorable market mix such that, it is able to adjust the market mix according to the culture and economical differences among Mongolians. Other challenges that the company faces on internationalization include; risk of technological pirating and cultural complexities. Works Cited Craig, Samuel and Douglas, Susan. International Marketing Research .Ed:3. Hoboken: John Wiley & Sons, 2005. Haghirian, Paris.Multinationals and Cross-Cultural Management: The Transfer of Knowledge within Multinational Corporations.London: Taylor & Francis, 2010. Leiboi, Steven.East and Southeast Asia 2012.Ed:4.Maryland: Rowman & Littlefield, 2012. Oxford Business Group. The Report: Mongolia 2012.London: Oxford Business Group, 2012. Read More