Marketing Planning - Resources and Capabilities of Coca-Cola - Book Report/Review Example

? Marketing Planning Report Contents 0 Introduction 3 1 Company 3 2 Products 3 2.0 Marketing plan 4 2 Current situation 4 2.2 New product Requirements 4 2.3 Projections 5 2.4 resources and capabilities of Coca-Cola 5 3.0 Relevant Audits 5 3.1 Pestle Analysis 6 3.2 Porter’s five forces 6 3.3 Value Chain analysis 7 4.0 Future Marketing planning 8 5.0 Barriers to marketing planning 8 6.0 Ethical issues in marketing planning 9 6.1 Consumer ethics 9 Works cited 11 Name of the Student Name of the Professor Course Number Date Marketing Planning Report 1.0 Introduction Focal point of any business strategy is to determine key resources and capabilities of a firm and how a firm can use its resources to achieve competitive advantage. As the consumer demands are ever changing, this industry has also constantly evolved over the years. Emergence of new entrants and constant innovation by the existing firms in this industry has induced tough competition (Ahmed 35-50). Companies are now planning strategies to increase the sustainability of their organization’s growth. The present report aims to identify the business drivers of Coca-cola retailer and prepare an effective marketing planning for future growth and development. 1.1 Company Coca-cola is an American multinational beverage company. The organization is involved in manufacturing, retaining and marketing of non-alcoholic beverages, syrups and concentrates. The headquarters of the company is in Atlanta, Georgia (“Our Company”). Often referred to as Coke, Coca-cola was touted as the most valuable brand in the world. The company was first introduced in the year 1886. However official foundations were laid in the year 1892 by Asa Griggs Candler (“History”). The current CEO of the company is Muhtar Kent (“Leadership”). The company boasts of more than five hundred brands and has spread all over the globe. On the basis of long term objectives and planning, the company has created a vision for 2020. According to this, the organization aims to double its revenues by focusing on five major areas- people, profit, partners, portfolio and planet. 1.2 Products The company boasts more than five hundred brands under its umbrella (“Brands”). Coke is the flagship brand of the company. The brand has established different variants in different regions across globe, depending on local preferences and tastes. Apart from coke and its variants the company also boasts various other big brands. Some of them are Sprite and Fanta. The most common difference is their coloring, sprite being colorless and Fanta in orange flavor. Minute Maid is another latest addition in the company portfolio. It is basically a flavored substitute for lemon water. Other major brands in the portfolio include Ceil, Fize, Burn, Honest Tea, Vitamin Water, Smart water, Simple Orange etc. 2.0 Marketing plan 2.1 Current situation The current marketing situation for Coca-Cola Company can be summarized as follows; The industry is observing a continuous decline in sales volume in the soft drinks sectors. These can be attributed to increased competition, new entrants and growing health concerns among consumers. The growing trend in health and wellness can be taken as both threat as well as opportunity. Increasing competition from bigger players 2.2 New product Requirements Looking at the changing consumer needs, the company can opt for new product development process. As discussed earlier, consumers are increasingly shifting towards products which are considered as healthy. In order to get a deeper insight on this changing trend, the company can opt for strategic marketing research. This will include customer surveys from different strata and economies, demographics and of different lifestyle. These customer surveys will not only confirm the current trends among consumers but will also help in identification of new target markets. The organization has come to a conclusion that selling only carbonated drinks will not be enough for sustainable growth and development (David 145-175). The brand will have to diversify its portfolio of product into other segments such as non-carbonated drinks and healthier and nutritional beverages in order to stay profitable and competitive in this volatile business environment. Taking cue from this opportunity, the company can opt for beverages with features such as zero fat and less carbon content. These will not only require regular communication between the marketing and research departments but also a detailed analysis of external as well as internal environmental and business factors. Since these products will be of high value in terms of health, the company will be able to opt for premium pricing for these products. The distribution system will have to depend on the target market and location of its consumers. Restaurants, large grocery stores and movie theaters will serve as the primary target locations (Produce Marketing Association 49-59). 2.3 Projections Realizing the various opportunities and issues in the present business environment, the brand has planned for many future strategies and projections. One of the most critical future plans is continuous revival of the brand. This can be done through establishment of various advertising and promotional campaigns at regular intervals (Sternquist 175-190). The company has a stringent compliance policy and is known by its strict compliance to quality and standards. The brand will expect to maintain the level and continue building trust and loyalty among its customers. 2.4 resources and capabilities of Coca-Cola Capabilities and resources are the major building blocks of an organization. Resources are firm’s inputs which are used to create services and goods. These services can be intangible or tangible. Tangible resources include physical attributes of the products and intangible attributes include trademarks, patents, knowledge and location. Capabilities are the manner and tactics that a company uses in order to utilize its resources and create services or goods (Gagnon 130-135). Capabilities can be tasks like daily operations, placing orders, marketing and such. The company has its operations in more than two hundred countries and there are more than three hundred bottlers of Coca-Cola. These bottlers allow the firm to be able to manufacture as well as distribute their unique products to producers and customers around the globe. The core capabilities of the company are its consumer marketing strategies, commercial leadership and franchisee leadership. 3.0 Relevant Audits Organization auditing is a crucial and important part in the process of marketing planning. It can be implemented during initial phase of the planning process as well as during the main process. The organizational audit influences the marketing and planning process through various external and internal factors. These are basically organizational auditing techniques used in order to evaluate the overall performance of the firm. Most commonly used internal organizational audit tools include value chain analysis. Although the best way to evaluate external organizational and marketing environment is by using PESTEL and Porter’s five forces tools. In the following sections, internal and external auditing of Coca-cola will be done by using the above mentioned auditing tools and techniques. 3.1 Pestle Analysis Pestle analysis is a form of macro environmental analysis. However, the details depend on the business involvement as well as industry involvement. Being a beverage company, factors such as non-alcoholic beverage compliances and regulations, pricing policies, and community pressures are critical factors to tackle. Other conditions in the political markets such as tax laws, government changes and civil conflicts should be closely monitored in order to help the company to make proper strategies at the right time. Even though recession affected the operations of most of the companies, aggressive growth kept the US economy on a positive side. Coca-cola has been able to borrow capital and as the interest rates are getting lowered, the company is investing in other new products. It will also help in them to borrow for research and development purposes. Products such as Diet Coke and Coca-cola Zero are getting favored over normal ones. This can be attributed to the growing concerns towards a healthier lifestyle. Technology not only increases production efficiency, but also influences operations such as advertising, promotional and marketing programs. 3.2 Porter’s five forces Porter’s five forces describe the external factor which influences a management’s decisions. In case of Coca-Cola Company, the bargaining power of suppliers is weak. Majority of the required ingredients for snacks and beverages are readily available. Bargaining power of buyers is high as the profit margins are particularly low in the fast food industry. Threat of new entrant can be considered low because of the established player’s brand image, loyalty, bottling network, supply chain and other advertising expenses. Threat of substitutes is high in this industry as many substitutes are present in the market like tea, water, coffee, juices etc. In order to counter them, the company can implement massive advertising strategies and innovative marketing practices. The brand can also opt for offering diversified products to reach out to more customers and increase its market share. Finally between Coca-cola and Pepsi, the competition within the beverage industry can be described as duopolistic. Other competitors do not encourage any price wars as their share of market is too low. Here Coca-cola can adopt the strategy of premium pricing in order to gain competitive advantage. 3.3 Value Chain analysis In order to understand the internal competencies of an organization, value chain analysis is the best organizational tool which can be used. It includes inbound logistics, outbound logistics, operations, sales and marketing and service. Inbound logistics of Coca-Cola includes suppliers such as IBM, Ogilvy, Prudential etc. They provide Coca-cola with raw materials, machinery and packaging facilities. In order to maintain quality, the company has set some standards and compliances. The company can also implement surprise visit by third parties in order to ensure quality and proper maintenance (Croom 109-110). The operations of the company consist of syrup production and privately owned concentrate. The objective of their operations management is to reduce the impact on environment and cause minimum damage to the nature and environment during the entire product life cycle, beginning from procurement, production, sales, delivery, marketing and recycling (Lewis, Brandon-Jones, Slack and Howard 1035-1050) Outbound logistics are the activities which include delivering finished services and products to customers. These include order fulfillment procedures, warehousing, distribution management and transportation. The distribution system of Coca-cola is one of the world’s largest systems. Their operations are established in eight hundred plants around the globe. The company majorly uses grocery chains, fast food restaurants and vending machines as distribution units in order to reach customers. Sales and marketing form another critical component of Coke’s value chain. Although the sector is relatively small, mass advertising and creativity form the important aspects of marketing strategy. In order to strengthen the brand connection with its consumers, Coke has been constantly reinventing its products as well as advertising strategies. Services such as repair, customer support, training and installation are provided for maintaining and enhancing product value. 4.0 Future Marketing planning According to the traditional and old view of marketing, strategic planning is regarded as a corporate function among finance, production, Research and Development, design and people management. Several perspective and studies suggest that though this view of marketing covers a holistic approach, it is still not enough for establishing successful plans in the changing environment. Most the time, these traditional planning tactics result in biased or limited perspective. A valid perspective of marketing in the current volatile and changing environment will presume long terms goals and objectives as well as market positioning of the organization. However, this view is neglected in most of the short term objectives and profit perspectives (Terpstra and Sarathy 45-75). Though profitable in the short run, these strategies and perspectives can be disastrous in long term view. It is considered as a narrow orientation because it overlooks investments necessary for the development and maintaining of market positioning. 5.0 Barriers to marketing planning Marketing planning can be a complex exercise and encounters various kinds of barriers. These can be environmental, cultural, behavioral, cognitive, procedures and systems and right resources (McDonald 6-15). Environmental barriers include prevailing social, economic, legal, technological, political and ethical regulations and norms which all together form the external environment. Cultural barriers refer to the cultural differences and sensitivities varying from region to region. These can be difference in core beliefs, opinions, core perceptions, values, customers or even habits shared by individuals and groups. Behavioral barriers may be in terms of functioning of teams and perception towards marketing plans and strategies. Some teams can be conservative while others may be broad minded and risk takers. It also includes ego clashes and interpersonal issues. Cognitive barriers can result from lack of skills or knowledge resulting in incompetency and unsuccessful business and marketing plans. Lack of proper skills might also prevent team from conducting successful market surveys and identifying new consumer’s preferences and trends. Lack of proper information or data or use of inappropriate systems and technology may impede business and marketing plans. Lack of proper resources can also be termed as a barrier for marketing planning as it prevents the organization to put their ideas and strategies into action. In order to make the strategies successful, organizations will have to overcome all marketing planning barriers. There are various ways through which it can be implemented. Support of the top management is very essential for the success of marketing planning. Support as well as involvement from senior managers will ensure that the operational teams and middle managers are doing the right work. Allocation of responsibility is another factor critical for the success of the planning process. Allocating separate responsibility will ensure that each individual is motivated and is aware of the exact focus. Regular communication and consultation will ensure responsibility and confidence among team members as well as managers. Individual barriers can be minimized through proper training and development procedures. Inclusion of reward and encouragement will help team members pay more attention in implementation and completion of the project. The last one is contingency planning. It is the process of making an alternative or escape plan in case the current plan is no longer desirable or impossible to achieve. 6.0 Ethical issues in marketing planning In broad terms, ethics can be described as moral guidelines with the objective of governing and preserving good behavior among employees. Business practice is the study of policies and the management of controversial and critical issues. These include issues such as insider trading, corporate governance, corporate social responsibility, discrimination, fiduciary responsibilities and bribery (Tran 240-150). In order to gets acceptance from the government as well as the bodies controlling policies and laws, organizations have to accept and follow certain rules and regulations and maintain certain standards in the work process. A collaborative study of these regulations, laws and issues can be termed as business ethics. 6.1 Consumer ethics Every business or organization expects to be in the good books of the government as well as regulatory bodies. Decisions in an organization are taken by higher management but these decisions are always influenced by the culture of the company as well as the external environment in which the company operates. Ethical processes might seem difficult and lead to cutting down of short-term profits, but it is very essential for a successful and sustainable long term growth of the organization (Robertson and Athanassiou 132-140). Companies can benefit significantly from positive corporate social responsibility and ethical behavior. Customers are attracted to the products and services of the firm, which in turn boosts the profits and sales. Employee perception towards the organization becomes positive and loyalty increases. Thus, there is a decline in labor turnover and overall increase in productivity. As a result of the positive perception and growing popularity of the organization, further skilled talents are attracted and recruitment costs are reduced significantly. The share price of the company increases and investors are pulled in due to which business shows a perpetual growth. Thus it can be said that proper implementation of consumer ethics has helped Coca-cola in establishing itself as an ethical and environmentally favorable organization. Works cited Ahmed, Pervaiz, K. “Culture and Climate for Innovation.” European Journal of Innovation Management, Vol. 1.1(1998): 30 – 43. Print. “Brands”. Coca-Cola. The Coca-Cola Company. 2013. Web. 25 October 2013. Croom, Simon."Business Success: A Way of Thinking about Strategy, Critical Supply Chain Assets and Operational Best Practice", International Journal of Operations & Production Management, Vol. 18.4(1998): 409 - 410. Print. David, Fred. Strategic management: Cases and concepts (13th ed.). Florence, South Carolina: Pearson, 2011. Print. Gagnon, Stephane. "Resource-based Competition and the New Operations Strategy", International Journal of Operations & Production Management, Vol. 19.2(1999): 125 - 138. Print. “History”. Coca-Cola. The Coca-Cola Company. 2013. Web. 25 October 2013. “Leadership”. Coca-Cola. The Coca-Cola Company. 2013. Web. 25 October 2013. Lewis, Michael, Alistair Brandon-Jones, Nigel Slack and Mickey Howard. "Competing through Operations and Supply: The role of classic and extended resource-based advantage", International Journal of Operations & Production Management, Vol. 30.10(2010): 1032 - 1058. Print. McDonald, Malcolm. "Ten Barriers to Marketing Planning,” Journal of Services Marketing, Vol. 4.2(1990): 5 - 18. “Our Company”. Coca-Cola. The Coca-Cola Company. 2013. Web. 25 October 2013. Produce Marketing Association. “Mass Grocery Retail.” China Retail Report, Vol. 4.2(2012): 48-59. Print. Robertson, Christopher and Nicholas Athanassiou. “Exploring business ethics research in the context of international business.” Management Research News, Vol.32.12: 1130 – 1146. Sternquist, Brenda. International Retailing, (2nd Ed.). New York, NY: Fairchild, 2007. Print. Terpstra, Vern, and Ravi Sarathy. International Marketing. Chicago IL: Dryden Press, 2001. Print. Tran, Ben. “International business ethics.” Journal of International Trade Law and Policy, Vol. 9.3(2010): 236 – 255. Read More