Global Marketing Strategy - Essay Example

A Review of Coca-Cola’s Global Marketing Strategy Introduction The brand equity of Coca-Cola has been recognized as one of the strongest in the world. They are seeing the entire globe as an integrated whole and standardized marketing technique is being applied by the company. Coca-Cola’s marketing decisions are made and implemented on a local level to assimilate with the preferences, needs, and cultural values of the local population. The company made a decision to expand its reaches outside national borders and research and development in marketing was initiated in China, America, and several other nations across the globe (Gillespie & Hennessy 2010). Due to the effective and competent marketing research and development of Coca-Cola it was able to manufacture and distribute worldwide. Coca-Cola is evidently a transnational organization. Even though the main office of Coca-Cola is in Atlanta, Georgia, USA, the beverage magnate is greater than merely an American firm with several branches abroad (Gillespie & Hennesy 2010). It is genuinely an international business. Almost 80% of the operating income of Coca-Cola (Ferrell 2007) originates from its operations overseas. Influence of Global Economic Interdependence and Trade Practices and Agreements Trade agreements smooth the progress of joint enterprises, franchising, distribution systems, and other global transactions between and among companies. Products of Coca-Cola are manufactured and distributed in a large number of countries all over the world. National governments curb barriers to trade like tariffs cutback and funding that took place specifically a decade (Gillespie & Hennessy 2010). This has been one of the major reasons compelling Coca-Cola to spread out globally. In the meantime, there has been an increasing financial market deregulation since 1980s. This has involved abolishing floating of currencies and exchange regulations (Ferrell 2008). This aids Coca-Cola in identifying financial deal globally. Lifting regulations on interest rate permits the company to take advantage of overseas lending effortlessly, with the intention of reaching the global market (Gillespie & Hennessy 2010). The financial market deregulation has significantly enhanced competition and promotes remarkable escalation in worldwide financial movement (Gillespie & Hennessy 2010). In sum, Coca-Cola has effectively reached the global market in reaction to the motivators of globalization. Importance of Demographics and Physical Infrastructure Coca-Cola has become successful through market segmentation and differentiation. For instance, the company recognizes that individuals with dynamic or hectic lifestyle will prefer beverages that have high contents of caffeine or glucose, like energy or sports drinks (Ferrell 2008). Likewise, the company is aware that children, teenagers, and young adults want sweet beverages (Ferrell 2008). This is how Coca-Cola uses the importance of demographics. For example, the company determined through market research that Coca-Cola Lite was considered a ‘female drink’ by males. Consequently, the company introduced a fresh product, named Coke Zero, which is intended for the male consumers (Gillespie & Hennessy 2010). In the meantime, the company is affected by physical infrastructure in terms of its response to the fast growing beverage market. Coca-Cola takes into consideration the capacity for expansion of its current factories, acquisition or building of other facilities, and acquisition of goods from other producer (Gillespie & Hennessy 2010). As an outcome of this consideration the company is able to choose the best sites or places at which to broaden or enlarge their production capacity. Influence of Cultural Differences Promotional campaigns of Coca-Cola have been in agreement with the local culture. An adjusted or localized marketing mix implies modifying the mix with the dominant economic, physical, and cultural differences in various countries. Diverse cultures and languages created difficulties. Furthermore, the bottling system of the company is considered one of their major strong points. It allows them to carry out their business operations globally while simultaneous sustaining a local strategy (Ferrell 2008). The bottling organizations are locally owned and administered by private investors or entrepreneurs (Gillespie & Hennessy 2010) who are granted the permission to distribute Coca-Cola products. Importance of Social Responsibility and Ethics versus Legal Obligations Coca-Cola has definite markets at all locations where in it operates. And based on legal obligations the business activities might be with local bottling facilities and factories in the area. Understanding the difficulties of handling operation in various sites Coca-Cola has formed an International Advisory Council (IAC) to support top managers in making appropriate and socially responsible decisions for the firm (Gillespie & Hennessy 2010). Still, the company has been implicated in several violations and legal proceedings linked to its association with unethical practices, such as the alleged violation of human rights (Ferrell 2008). According to Ferrell (2008), several legal proceedings have been publicized with regard to its purportedly discriminatory and oppressive practices, a number of which have been disregarded, several of which have forced the company to modify its business practices, and quite a few of which have been resolved in court. Influence of Political Systems and International Relations Because matters of public policy and international relations have the capability of affecting Coca-Cola’s markets, people, and business operations, the company utilizes its resources from time to time to promote issues of political importance that are in harmony with the principles, values, mission, and sustainability of the company. To that objective, Coca-Cola acknowledges the significance of appropriate corporate governance strategies as it involves corporate political influences in various countries all over the world (Ferrell 2008). The violations of Coca-Cola are recorded and sanctioned (Gillespie & Hennessy 2010), which compelled the company to respond in accordance to business ethics and international standards. Influence of the Foreign Corrupt Practices Act of 1977, and Local, National, and International Legislation In agreement with pertinent laws, corporate political involvements could be granted to political groups and individuals whose opinions and programs are in agreement with the principles and goals of the company, the entire business structure, bottling, and the locations where in Coca-Cola operates (Ferrell 2008). Since the principles and vision of the company are an outcome of its inimitable people and brands, it acknowledges that political groups and individuals may advocate standpoints that complement several facets of the company’s involvement rules. Coca-Cola bases its participation on mutual agreement that it thinks will have the biggest advantage to its shareholders and major stakeholders. The company advocates political transparency concerning corporate public involvement and it conforms to all pertinent laws and official reporting obligations concerning (Ferrell 2008) corporate political involvement. Effect of Technology Technological development in the arena of beverage production, distribution, logistics, and information and communication has remarkable favorable effects on the global marketing operations of Coca-Cola. The introduction of new beverage items allows the company to launch new selection of its products to its current market segments, not overlooking the importance of gaining new consumers (Gillespie & Hennessy 2010). Ultimately, the introduction of the Internet has allowed the Coca-Cola consumers across the globe to be updated with the newest products and promotions of the company. Conclusions Due to the diversity of culture within which Coca-Cola is situated, the function of the global marketing practitioners is to sustain the connection between the company and its business operations. The marketing function structure strengthens this task and allows the company to think globally while acting locally. References Ferrell, O. & M. Hartline. Marketing Strategy. Mason, OH: South-Western College Pub, 2007. Gillespie, K. & H.D. Hennessey. Global Marketing. Mason, OH: South-Western College Pub, 2010. Read More