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Marketing strategy of Coca-Cola

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Current situation analysis of the company

The Coca-Cola Company is the world's largest beverage company, largest manufacturer, distributor and marketer of non-alcoholic beverage concentrates and syrups in the world. The company is best known for its flagship product Coca-Cola, invented by pharmacist John Stit Pemberton in 1886. Coca-Cola currently offers nearly 400 brands in over 200 countries or territories and serves 1.6 billion servings.

The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is

then sold to various bottlers throughout the world who hold an exclusive territory.

According to the 2009 Annual Report, the company sells beverage products in more than 200 countries. Of these, beverages bearing the trademark Coca-cola accounted for approximately 78% of the Company's total gallon sales. Coca-cola currently enjoys over 60% market share in India followed by Pepsico.

Coca-Cola in its recent annual report claims to be No.1 in Sparkling Beverages, Juices and Juice Drinks, Ready-to-Drink Coffees and Teas; No.2 in Sports Drinks; No. 3 in Packaged Water and Energy Drinks.

Real value today, Real opportunity tomorrow.

Nearly 1.6 billion times a day, people around the world enjoy one of our beverages—moments of refreshment that historically have translated into a return of value to our shareowners. And

by anticipating and preparing for the changing world, we will be poised to deliver refreshment and value to our consumers and shareowners in the years ahead.

A Healthy Growth to The Indian Economy

Coca-Cola India has made significant investments to build and continually consolidate its business in the country, including new production facilities, waste water treatment plants, distribution systems, and marketing channels.

Coca-Cola India is among the country’s top international investors, having invested more than US$ 1 billion in India in the first decade, and further pledged another US$100 million in the coming years for its operations.

A Pure Commitment to The Indian Economy

The Company has shaken up the Indian carbonated drinks market greatly, giving

consumers the pleasure of world-class drinks to fill up their hydration, refreshment,

and nutrition needs. It has also been instrumental in giving an exponential growth

to the country’s job listings.

Creating Enormous Job Opportunities

With virtually all the goods and services required to produce and market Coca-Cola

being made in India, the business system of the Company directly employs

approximately 6,000 people, and indirectly creates employment for more than

125,000 people in related industries through its vast procurement, supply, and

distribution system.

The Indian operations comprises of 50 bottling operations, 25 owned by the

Company, with another 25 being owned by franchisees. A network of 21 contract

packers manufactures a range of products for the Company.

On the distribution front, 10-tonne trucks – open bay three-wheelers that can

navigate the narrow alleyways of Indian cities – constantly keep Coca-cola’s brands

available in every nook and corner of the country’s remotest areas.

Coca-Cola revenues in 2009 rose 9% to $8.39 billion. Coca-Cola got a boost from its

international business, particularly in China, Turkey and India. The exhibit attached

below shows Per Capita Consumption of Company Beverage Products in various

regions. The growth of sales in India, China remain very high as per capita

consumption is still very low.

Current segmentation and target market(s)

The target market is where Coca Cola focuses its marketing efforts as it feels this is where it will be most productive and successful. The target market for Coca cola is very wide as it satisfy’s the needs for many different consumers, ranging from the healthy diet consciousness through Diet Coke to the average human through its best selling drink regular Coke. Most Coke products satisfy all age groups as it is proven that most people of different age groups consume the Coca Cola product. This market is relatively large and is open to both genders, thereby allowing greater product diversification.There are four broad ways in which Coca Cola can segment its market:

Mass marketingConcentrated marketingDifferentiated marketingNiche-marketing

The most apparent method used by Coca Cola is the differentiated marketing method as Coke satisfies a range of different markets. Diet coke satisfies the weight consciousness, regular coke, sprite, fanta- the average person along with coffee, iced tea etc. Each group of beverages satisfies a particular group of people.

Positioning

Positioning is the process of creating, the image the product holds in the mind of consumers, relative to competing products. Positioning helps customers understand what is unique about the products when compared with the competition. Coca Cola has been positioned based on the process of positioning by direct comparison and have positioned their products to benefit their target market. Most people create an image of a product by comparing it to another product, thus evident through the famous battles between Coca-Cola and Pepsi products.

Branding

Coca Cola has spent millions of dollars developing and promoting their brand name, resulting in world wide recognition. 'Coca-Cola' is the most recognised trademark, recognised by 94% of the world's population and is the most widely recognised word after "OK". Coca Cola’s red and white colours and special writing are all examples of world-wide trademarks.There are a number of branding strategies:

Generic brand strategyIndividual brand strategyFamily brand strategyManufacturer’s brand strategyPrivate brand strategyHybrid brand strategy.

Coca Cola utilizes the Individual brand strategy as Coca Cola’s major products are given their own brand names E.g. Fanta, Sprite, Coca Cola etc although they maybe presented as different lines they operate under the name of Coca Cola.

Market Target Market Segment Target Segment

People who drink

beverages

People who drink aerated

and carbonated beverages

Geographic Urban Rural

Semi Urban

Income High

Medium Low

Gender Male

Female

Customer Type• Individual (B to C)

• Contractor• Corporate

Behavioral• Occasions• Benefits

• User status• Usage rate

Geographic• All

Income• Medium to High

Gender• Male/Female

Customer Type• Individual

Behavioral• Occasions

Marketing Mix

Marketing the beverages effectively is core to the success of the entire Coca-Cola system.

The emotional connections Coca-Cola makes with consumers while providing them with product quality and variety builds brand value and drives preference for its beverage products.

The ever-broadening portfolio of brands enables Coca-Cola to connect with more people, more often, everywhere the company operates. The strength and broad appeal of our flagship brand, trademark Coca-Cola, has enabled it to expand its portfolio to include beverages that meet a range of consumer needs and preferences.

Coca-Cola is building on the success of “Coke Side of Life” campaign with new, fully integrated global Coca-Cola campaign,“Open Happiness.”

Also, the company is increasing marketing at the point-of-sale and the variety of product and package sizes for sparkling beverages.

In 2008, Coca-Cola introduced Minute Maid Pulpy to five new markets and grew unit case volume for the brand more than 40 percent in China.

Strategic innovation responds to consumer needs. Based on its understanding of ever-evolving consumer needs and preferences, Coca-Cola introduces products featuring new ingredients, flavors and benefits.

In 2008, Coca-Cola launched more than 700 new beverage products, providing more low- and no-calorie options and beverage choices and expanded its “Zero platform” for Fanta, Sprite and other brands across new markets.

Sponsoring and partnering with high-profile sports, entertainment and cultural events help Coca-Cola reach consumers through a variety of marketing efforts, while promoting the brands and beverage portfolio. Sponsorship activation of the Beijing 2008 Olympic Games created a lasting legacy for the Coca-Cola system and our brands in China.

With consumers embracing new media, Coca-Cola are talking to them through television, print, mobile technologies and in-store communications, as well as engaging with them through the Internet and social media forums.

Online loyalty programs in markets around the globe, like cokerewards.com in North America, help Coca-Cola extend reach with millions of consumers globally.

Collaboration with bottling partners on new packaging sizes, price points and point-of-sale promotions drove unit case volume growth across retail channels.

In 2008, co-marketing with retail customers helped grow unit case volume.

Part three presents the company's Current marketing

Product:

Coca-cola has several products under its portfolio like Coke, Sprite, Thums-up, Minute maid, Diet coke etc. All the products are beverages and come in various

sizes ranging between 200ml and 2litre. Coca Cola customers are buying a wide range of soft drinks. The actual product is the parts and features, which deliver the core product. Consumers buy the coke product because of the high standards and high quality of the Coca Cola products. The augmented product is the extra consumer benefits and services provided to customers. Since soft drinks are a consumable good, the augmented level is very limited. But Coca Cola do offer a help line and complaint phone service for customers who are not satisfied with the product or wish to give feedback on the products.

Price:

Price is a very important part of the marketing mix as it can effect both the supply and demand for Coca Cola. The price of Coca Cola’s products is one of the most important factors in a customer’s decision to buy. Price will often be the difference that will push a customer to buy our product over another, as long as most things are fairly similar. For this reason, Coca-cola came out with small 200ml bottles of

coke priced at just Rs 5, to compete with milk, lemon juice, tea and coffee in rural and urban areas.

Pricing Strategies And Tactics

There are 5 strategies available to business:

Market skimming pricingPenetration pricingLoss leadersPrice PointsDiscounts.

Over the years Coca Cola has used Penetration Pricing as a way of grabbing a foothold in the market and won a major market share. Once customer loyalty is established as seen with Coca Cola it is then able to slowly raise the price of its product. There has been a fierce pricing rivalry between Coca Cola and Pepsi products as each company competes for customer recognition and satisfaction.

Promotion:

Effective communication with the target market is essential for the success of the product and business. The promotional mix is the combination of personal selling, advertising, sales promotion and public relations.

Coke puts lots of thrust in advertising though sporting events as big as Olympic. It has started sponsoring Olympics since 1928 and is doing till date to reach to the masses and with effective communication.

Coke Advertises through common media such as television, radio, transport, and billboards and in newspapers and magazines. Because most of the target is most likely to be exposed to media such as television, radio and magazines, Coca Cola has used this as the main form of promotion for extensive range of products.

Coca Cola also utilizes the line promotions such as contests, coupons, and free samples. These activities are an effective way of getting people to give your product a go.

Localised advertisements: Thanda matlab coca cola, life ho to aisi.

Coke ads:Aspirational messages, celebrating occasions, product specific( diet coke)

Advertising Budget of Coke over the years:

2000 2001 2002 2003 2004 2005 2006 2007 20080

0.5

1

1.5

2

2.5

3

3.5

Ad Budget($ Billion)

Ad Budget($ Billion)

Place and Distribution:

The place ‘P’ of the marketing mix refers to distribution of the product- the ways of getting the product to the market. The distribution of products starts with the producer and ends with the consumer. One key element of the “Place/Distribution” aspect is the respective distribution channels that Coca Cola has elected to transport and sell its product. There are four types of distribution strategies that Coca Cola could have chosen from, these are: intensive, selective, exclusive and direct distribution.

The actual production and distribution of Coca-Cola follows a franchising model. The Coca-Cola Company only produces a syrup concentrate, which it sells to bottlers throughout the world, who hold Coca-Cola franchises for one or more geographical areas. The bottlers produce the final drink by mixing the syrup with filtered water and sweeteners, and then carbonate it before putting it in cans and bottles, which the bottlers then sell and distribute to retail stores, vending machines, restaurants and food service distributors.

Coca Cola uses the following distribution channels:

1. Retail Stores including Convenient stores (Super markets etc…)

2. Vending machine/Self Service Slot machines (school and other miscellaneous business)

3. Ho-Re-Ca (means Hotels, Restaurants, Cafes including Fast food outlets, cuisine Restaurants etc.)

4. Mobile Carts (mechanized and non- mechanized)

5. Entertainment Zones (theme park, Disneyworld and so on…)

It is apparent from the popularity of the Coca Cola’s product on the market that the

business in the past used the method of intensive distribution as the product is

available at every possible outlet. From supermarkets to service stations to your

local corner shop, anywhere you go you will find the Coca Cola products.

Physical Distribution Issues

Coca Cola needs to consider a number of issues relating to the physical distribution

of its soft drink products. The five components of physical distribution are, order

processing, warehousing, materials handling, inventory control, transportation.

Coke’s strategy revolves around availability, affordability and acceptability. Coke

follows a Hub and spoke model for distribution. Coke acquired thumps up, imca,

maaza, citra, gold spod to acquire physical manufacturing, bottling and distribution

and also to better cover consumer preferences.

Part 4: Marketing Strategy of a New Product:

Energy Drink Snapshot:

An Austrian company ‘RedBull’ first introduced energy-drink in 1997. Ever since then the market has grown by leaps and bounces and now there are close to 250 energy-drink brands all over the world.

An energy drink is a beverage that contains some form of legal stimulant and/or vitamins which are meant to give consumers a short term boost in energy for about 60-90 min. The most popular energy drinks include Red Bull, Monster, XS ,Boost, Crunk, Rockstar, Crunk Juice, Full Throttle, Spark, AMP , Rush, SoBe, Pimp Juice, Shark, Piranha, Red Line, Bookoo, Socko, Fuze, Hype, Guru, and Atomic X.

The market share in % of USD sales (2008) of top 15 energy drink companies is as below:

40

23

12.3

84

2

1.5

1.410.700000000000001 0.5 0.5 0.44 0.4 0.4

Red BullMosterRockstarAMPFull ThrottleDoubleshotNOSNo FearPrivate LabelSOBE AdrnalineVitamin EnergySOBE LeanVenomJoltGo Girl

Fig. Market Share – Top 15 Energy drink companies-2008

Statistics of Energy Drink Market:

CRITERIA USA India

Market Size $4 billion – Rs. 18720 Crore

Rs.100 Crore

Growth Rate CAGR 5-6% CAGR - 25%

Players >50 Only 3-4 players

SKU 16 OZ 250 ml

Average Price $ 2.5 Rs.75

Table: Comparative Analysis – USA & India

Drivers for Energy Drink market in India:

Increasing party-going segment Increasing expenditure on trendy beverages Alternate to alcoholic beverages Nascent market, CAGR of 25% over past 3 years Market to reach Rs.400 Crore by 2014 Youngsters want to try out something different

Consumption pattern:

A survey conducted among 253 university students in US reflected some outcomes. The majority of users consume energy drinks for

Insufficient sleep (67%), To increase energy (65%), and To drink with alcohol while partying (54%). The majority of users consume one energy drink to treat most situations although

using three or more is a common practice to drink with alcohol while partying (49%).

Frequency:

Although for the majority of situations assessed, users consumed one energy drink

with a reported frequency of 1 – 4 days per month, many users consumed 3 or more

when combining with alcohol while partying.

Segmentation, Targeting and Positioning

Market and Target Market

The market in which the drink competes will include all other beverages including

alcohols, tea, coffee and also energy booster products like Glucose and Glucon-D.

Because the energy drink is still part of a new and developing industry (especially in

countries like India), the energy drink target market is different than in some of the

other beverage industries. Early in energy drink history, when they were first being

sold in the United States, athletes were the primary consumers. This shows that even

initially energy drinks were directed at a select crowd, a group of people with specific

interests. Although the consumer base for energy drinks has now expanded beyond

that of simply athletes, the target market is still more particular than in other

industries. . Although everyone is susceptible to the fatigue of the super-charged,

over-worked lifestyle, young people are especially vulnerable to persistent exhaustion

and insufficient energy. This group of people, more specifically male teenagers and

people in their 20s and early 30s, are also most likely to believe in the veracity of the

energy drinks’ claims.

Segments and Target Segments

With corporate competition increasing and employees working late into nights, the

concept of an energy drink has a lot of relevance in the present market. Another major

market of energy drink is sportspersons, night-clubbers, long-distance drivers etc.

When thinking about the energy drink target segment, it is important to consider who

is most receptive to the purported effects of the beverages. Research has shown that

the primary consumers of Energy Drinks are people below 35 years of age and the

consumers are predominantly male. A recent survey estimates that only around 35%

percent of energy drink consumers are above 35 years old. Rest of the demand come

from young people in the age group 20-35. Furthermore energy drinks with high sugar

levels are more popular among children and women, while energy drinks with strong

taste and flavour are more preferred by male consumers. Recent studies also

indicated that 65% of the energy drinks market consists of male consumers. Coca Cola

has always been a strong taste, not too sweet product. Infact they have a history of

introducing a sweeter version called New Coke which flopped. So the energy drink

should also, wisely, be strong in taste and not too sweet. This will go along well with

the current perception of customers. With strong taste it can attract more male

customers.

Positioning

If we observe the current market scenario, the major players are Red Bull and

Gatorade. But these drinks are not immensely popular for which one of the reasons

could be their high price and low advertisements. Also drinks like Gatorade and

stamina are exclusively positioned as a sports drink. Red bull is not heavily advertised

as a sports drink, but the high price (Rs 75 a can) will be a deterrent for people to use

it regularly. So Coca-Cola can introduce the drink as a general energy drink for the

youth which will provide instant energy just like a Glucon-D or even tea or coffee. This

will help it gain mass appeal faster. Also it should affordably price the product so that

people will consider it for regular use. The brand should thus be positioned as an

affordable energy drink for everyone rather than concentrating on the extreme

populations as what Redbull, Gatorade etc. are doing.

Product Category:

Market Target Market Segments Target Segments

People who drink beverages

People who consume energy drinks

Age

-Children

-Young people

-Middle aged

-Aged

Gender

-Men

-Women

Geographic

-Urban

-Rural

Occupation/Hobbies

-Executives

-Sports-persons

-Corporate employees

-Govt. Employees

-Army personnel

Income Group

-High

-Medium

-Low

-Young people

-Middle aged people

-Men

-Urban

-Executives

-Sports-persons

-Corporate employees

-Army personnel

-High

-Medium

Brand Name and Identity:

PRODUCT LINE

Non-alcoholic soft drink

PRODUCT TYPE

Caffeinated energy drink

Less caffeine <145 ppm

Packaging in tin cans

SKU standard size of 250 ml

Brown coloor

Xplode

Sudden change in

state

TrendySimple

High impulse

Name: Xplode

Meaning Xplode - Represents sudden spurt in energy level Simple Trendy Indicates high impulse

The product is consumed mostly among urban youth and middle-aged people so a product name that attracts youth and is self- explanatory is necessary.

Pricing strategies - penetration pricing

Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large, if not dominant market share which is viable for the energy drink since the utmost priority at present for this new product is to acquire the market share from well established brands like Red Bull and Cloud 9.Also since the product is from Coke low margins initially will not affect its cashflows by much.

Since the product is currently a niche product and our aim is to commoditise it we need to first price it so that the middle income groups also start drinking it like any other softdrink.The case with Redbull or Cloud9 is that they are priced in the upper range which restricts people from having it on a consistent basis.

For the current product we assume that we will be manufacturing at 80% capacity utilisation and then increasing capacity utilisation gradually to 100% levels

Asuuming 100% capacity utilisation to be 400000 cans/days whcih will involve initial utilisation of 80% for first 2 years followed by 90% for next 2 years and then complete 100% utilistaion.

This will only be possible where demand for the product is believed to be highly elastic, i.e. demand is price-sensitive and either new buyers will be attracted, or existing buyers will buy more of the product as a result of a low price or if the people are willing to use the product but are being restricted due to its high price which is the case with energy drinks.

A successful penetration pricing strategy may lead to large sales volumes/market shares and therefore lower costs per unit. The effects of economies of both scale and experience lead to lower production costs, which justify the use of penetration pricing strategies to gain market share. Penetration strategies are often used by businesses that need to use up spare resources (e.g. factory capacity) which Coke might be having from the other production facilities.

Before implementing a penetration pricing strategy, Coca Cola must be certain that it has the production and distribution capabilities to meet the anticipated increase in demand.

The most obvious potential disadvantage of implementing a penetration pricing strategy is the likelihood of competing suppliers like RedBull and Cloud 9 following suit by reducing their prices also, thus nullifying any advantage of the reduced price (if prices are sufficiently differentiated the impact of this disadvantage may be diminished).

Cost Structure and Project Appraisal:

The established of new facility will require new mixing equipments,though it can make use of the existing facilities of Coke for packaging(canning & bottling) and transpotartation.

Product:330 ml Canned Energy Drink

Facility:Existing Coke manufacturing and Bottling units

We assume an initial investment of 200 crores which includes equipment and allied costs.

The variable cost per can is 15 Rs per can which is similar for Redbull and Cloud9 but we have accounted for economies of scale and experience advantage of Coke by reducing it by 2 Rs.

We assume advertising spend to be high during the initial year(20% of sales) and then reduces to 15% of sales for next 3 years and then again increases to 20% for 6th year due to the boost and rejuvenation the product might require.

We assume selling & administration spends to be 22% of sales which accounts for 5% distributor margin and 10% retailer margin and the rest for inhouse administration.

Depreciation and tax expenses have been accounted for while calculating cashflows

For initial 6 years we get a positive net NPV suggesting us to undertake the project with the payback period being 2.91 years which is comparable to the cold beverages industry payback period of 2.4 years.

Estimated breakeven sales is 197902933 units which is achieved over a period of 1.7 years

Overall the penetration pricing strategy seems reasonable from capital budgeting point of view for the new product.

We suggest that the new product project should be undertaken

Promotion of XplodeWhen a product is new the organisations objective will be to inform the target audience of its entry. Television, radio, magazine, coupons etc may be used to push the product through the introduction stage of the lifecycle. Push and Pull Strategies will be used at this crucial stage.

Xplode Personal Selling

By Distributor: Xplode sales representative will contact a small distributor and insist that he or she sell only Xplode. Otherwise, Xplode will set up a warehouse and hire kids to load up the vans and deliver product. These start-up distributors can focus their entire energies on getting Xplode fully stocked in stores with prominent shelf placement. They generally break even within three months and are profitable within six."They buy direct from company and there's enough margin and volume to make it work,"

In Pubs:The sales team will visit key on-premise accounts: hot clubs and trendy bars. When owners will begin buying a few cases, they will receive a Xplode branded cooler and other POP items. We plan to go to on-premise accounts [vs. retailers] first, because the product gets a lot of visibility and attention. It goes faster to deal with individual accounts, not big chains and their authorization process.Plus, on-premise provides fertile ground for new drink trends. In clubs, people are open to new things.Punch line which will be used for such places will be”If you had a tough week and want to dance, the Xplode works."

Others:There's more to the guerrilla strategy than building buzz at clubs. Sales teams will open off-premise accounts at convenience stores near colleges, gyms, health-food stores and supermarkets.

Sales Promotion:

Student:

Students will work as brand managers who would be used to promote Xplode on university campus these students would be encouraged to throw parties where red bull will be distributed.

Coupons:

Coupons will be given with every product of Coke, consumers having those coupons can avail a discounted Xplode. This will result in increased sales of other products as well and will push consumers towards energy drink, They would like to buy the product instead of wasting the coupons.

Road Show:

A road show will be conducted in every metro with one famous personality of that area. Cars used in this road show will be painted with Xplode mark.

Direct and interactive marketing:

Networking Sites:

Promotion through social networking sites such as face book, twitter, Hi 5 and orkut. We plan to have a pop up of Xplode on each of these websites. Youngsters spend a lot of their time on these social networking sites.

Search engines:

We plan to buy a permanent space on search engines like Google and Bing .Whosoever opens these search engines will come to know about the product.

Advertising:

Advertising professionals realize that the heart of any campaign is not just the product but also the position it holds in people's minds.

Posters and leaflets:

Large display in departmental store will be able to get into minds of people and Xplode stickers on the walls of departmental store will leave a impact and this will create an image in their minds about energy drink.

TV Advertising:

In order to promote product, advertising on prime channels like star sports, ESPN, Neo sports, MTV and Zoom India will be done.

Sponsoring TV shows:

Sponsoring a TV show is another idea which will increase the popularity. We plan to promote TV shows like MTV roadies/splits villa. Youngsters comprise of the main crowd for these shows and the show is a big hit in youth India.

Sponsoring Events:

IPL:

Sponsoring event is something that creates sales as well as value for the product and to launch an energy drink in India nothing can be a better option than sponsoring coming IPL although it requires a huge budget but at the same time sales will also be huge and a brand for the product will be created.

Expected Return:

Capacity of each Ground in India: 35000(min)

No. of matches in IPL:44

Expected Viewers on TV per match: 2Cr

So minimum reach of Energy drink will be at least 10 Cr even if viewers are same.

Others:

Apart from IPL Musical events like Goa music festival will also be targeted where people require a lots of energy for a continuous period. Any college festival like MOOD INDGO can create space into mind of students.

Common Wealth Games:

India will be hosting Common wealth games in 2011 and it will be best chance to make every one aware about the product .Free energy drinks will be provided to all participants. This will bring awareness about drink in every sports person and everyone who has any kind of interest in games as well as normal people.

Establishing Budget for Promotions:

Magazine: Sports and automobile

50k*12= 6Lac per annum

Newspapers

1L*4 weeks*12 months=48Lacs

TV

5L*4 weeks*12months=240Lacs

Expenditure

Magazine&NewsPapersRoad shows&othersTVPosters,Coupons

Time line graph

March April May June0

20

40

60

80

100

120

140

160

180

TVMagazineOut of HomeTransit

Distribution for Explode

Coca-Cola distribution network is based on Woodruff’s (Ex-CEO of Coca cola) goal:

“To make Coke available wherever and whenever consumers wanted it, in arm’s reach of desire.”

Coca cola has a huge distribution network set up for its current products.

Explode can make use of the current network of Coca cola.

A typical distribution chain at Coca cola would be:

Production --- Plant Warehouse --- Depot Warehouse --- Distribution

Warehouse --- Retail Stock --- Retail Shelf --- Consumer

Coca-Cola adopts a hub and spoke format distribution network ensuring that large loads travel longer distances and short loads travel short distances.

This can be used by Explode to address the traditional customers like retail stores, vending machines.

Alternate Distribution Route For Explode

Key Accounts

The customers in this category collectively contribute a large chunk of the current total sales of the Company. It basically consists of organizations that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being made by them after a certain period of time i.e. either a month of half a month.

Examples: Clubs, fine dine restaurants, hotels, Corporate houses etc.

This would be an important channel for Explode. The beverage will be available in locations such as pubs, bars and gyms, rather than large retail outlets such as supermarkets. This ensures that, for now at least, Explode is not in direct competition with existing powerhouses like Red Bull. Consumers are also traditionally receptive to energy drinks on occasions such as high-energy nights out and gym workouts.

Urban Distribution Network

The urban distribution network of coca cola will be used as the primary launch pad for Explode. This help the company focus on its target markets of Tier I and Tier II cities.

The actual production and distribution of Coca-Cola follows a franchising model. The Coca-Cola Company only produces a syrup concentrate, which it sells to various bottlers throughout the world who hold Coca-Cola franchises for one or more geographical areas. The bottlers produce the final drink by mixing the syrup with filtered water and sugar (or artificial sweeteners) and then carbonate it before filling it into cans and bottles, which the bottlers then sell and distribute to retail stores, vending machines, restaurants and food service distributors

References:

http://www.nutritionj.com/content/6/1/35

http://www.financialexpress.com/news/indias-energy-drink-market-is-growing-

above-50/550749/

http://marketresearchworld.com/

http://www.thecoca-colacompany.com/ourcompany/ar/

operatinggroupoverview.html

http://www.thecoca-colacompany.com/investors/annual_review_2008.html

http://www.thecoca-colacompany.com/ourcompany/ar/operatinggroup-eurasia-

africa.html

www.euromonitor.com

www.datamonitor .com