term paper on coca cola
TRANSCRIPT
-
8/23/2019 Term Paper on Coca Cola
1/60
Analysis of MOJO & Coca-Cola
-
8/23/2019 Term Paper on Coca Cola
2/60
Term Paper of MKT 201
Analysis of MOJO & Coca-Cola
Prepared for
Ms. Kashfia Ahmed
Lecturer
Department of Business Administration
East West University
Prepared by
G.M. Wali Ullah # 2008-1-10-096
Ahmed Asif-Ur-Rahman Mallick # 2008-1-10-059
Syeda Samira Tamanna Haider # 2008-1-10-095
Mosfiqur Rahman # 2008-1-10-123
Eva Farzana # 2008-1-10-120
Department of Business Administration
16 August 2009
-
8/23/2019 Term Paper on Coca Cola
3/60
Letter of Authorization
28 June 2009
Student of Marketing Management
Summer 2009
Department of Business Administration
East West University
43, Mohakhali C/A, Dhaka-1212
Dear Student,
As a part of your Marketing Management course, you are hereby assigned a
group report based on analysis of established brands covered in your MKT-
201 course from the perspective of either Bangladesh or global. In your casethe brand covered by your group was analysis of MOJO and Coca-cola
in Bangladeshi market perspective.
Assigned report must follow the standard system and methodology and
should contain accurate data. This is a group task. You should form a group
consisting of at least 4 but no more than 6 people. The university will
appreciate any additional benefit that can be obtained from your report. You
are required to submit the report on or before August 16, 2009.
I wish you best of luck.
Sincerely
..
Ms. Kashfia Ahmed
-
8/23/2019 Term Paper on Coca Cola
4/60
Letter of Transmittal
16 August 2009
Ms. Kashfia Ahmed
Lecturer
Department of Business Administration
East West University
43, Mohakhali C/A, Dhaka-1212
Subject: Submission of term paper for analysis of established products for
MKT-201.
Dear Madam:
We are the students of MKT-201 of your section 03. You permitted us toconduct a group term paper based on established brands covered in your
MKT-201 course from the perspective of Bangladesh. You instructed us to
submit it on or before August 16, 2008. We would like to inform you that
we have incorporated our own original ideas, collected data from various
individuals, internet websites, newspapers etc. & have prepared a report
based on the products; MOJO and Coca-Cola; and in some cases; their
parent companies AFBL and Coca-Cola Ltd.. We are presenting the
established brand report to you for your consideration.
We have tried our best to make the report as accurate as possible. We have
given our best efforts in preparing this report. We hope that you will
consider it and oblige thereby.
Thanking you.
.. .. .
G.M. Wali Ullah Eva Farzana Mosfiqur Rahman
# 2008-1-10-096 # 2008-1-10-120 # 2008-1-10-123
... ..
Ahmed Asif-Ur-Rahman Mallick Syeda Samira Tamanna Haider
# 2008-1-10-059 # 2008-1-10-095
-
8/23/2019 Term Paper on Coca Cola
5/60
Acknowledgement
It really was a great challenge for us to prepare the group assignment. First
of all, we thank the Almighty, who has provided us the brilliant opportunity
to build and complete this assignment successfully with good health &
sound mind. We are grateful & thankful to our family members, our parents-
without the support of whom this product could never exist.
Our course instructor, Ms. Kashfia Ahmed, Lecturer, Department of
Business Administration, East West University helped us all the way
through. She gave us proper guidelines & directions about this group
assignment. We really want to express our gratitude to her for giving
valuable advice and time, which helped immensely in preparing this
report.
Last but not the least; we would like to specially thank G. M. Refayet Ullah,
former General Manager (Sales) of Akij Food & Beverage Ltd. (MOJO) and
Abdul Monem Ltd. (Coca-Cola) He is the main resource person behind the
success of MOJO, and also had experience in the operation of Coca-Cola in
Bangladesh. He had been a great mentor to us with his vast experience and
knowledge in his related work place.
-
8/23/2019 Term Paper on Coca Cola
6/60
Table of Contents
TOPIC PAGE NOExecutive Summary VII
Introduction 01
Current market situation 02
Company Profile
Akij Food & Beverage Ltd. (AFBL) 03
Coca-Cola Ltd. 04
Analysis relating theories from MKT 201 05
with real market situations
Defining Marketing for the 21st Century 05
Developing Marketing Strategies and Plans 12
Creating Customer Value, Satisfaction and Loyalty 18
Crafting the Brand Positioning 19
Dealing with Competition 22
Setting Product Strategy 30
Designing and Managing Services 33
Developing Pricing Strategies and Programs 34
Designing and Managing Value Networks and Channels 37
-
8/23/2019 Term Paper on Coca Cola
7/60
Designing and Managing IMC 47
Conclusion 52
Executive Summary
MOJO is one of the most well known and recognized soft drink brands of
Bangladesh. It is manufactured by Akij Food & Beverage Ltd (AFBL), a
sister concern of Akij group. Launched in the Bangladeshi market on April
2006, it has quickly captured the number 1 spot in the cola market of
Bangladesh. Its success story is mainly due to an excellent marketing
strategy employed by the management.
Coca Cola is the flagship brand of one of the oldest organization of the
world, The Coca-Cola Company; dating back to 1885. In Bangladesh;
operated and produced by 2 Bangladeshi bottlers, Abdul Monem Ltd.
(AML) and Tabani Beverage Ltd. (TBL) under direct supervision of Coca-Cola India Ltd. Although they were the global leader in cola market, they are
past their prime in this region of Asia, therefore loosing their 1st position to
MOJO.
Here weve worked on studying basically every theory we have learned on
our MKT 201 course and applied them on reality with current cola market
leader of Bangladesh; MOJO and their closest competitor Coca-Cola.We have analyzed the current and past situations of both these products.
Also we have discussed and argued over each possible theory that is
applicable in their business operations. Therefore we have included and
-
8/23/2019 Term Paper on Coca Cola
8/60
presented all our findings in this report. Details of all these findings are
given for your kind consideration.
(vii)
Introduction
The Coca-Cola Company is one of the pioneers in the soft drink industry.
Globally they are always fighting with PepsiCo head to head for the leading
position in soft drink industry. Coca-Cola, their flagship product was
originally intended as a patent medicine when it was invented in the late
19th century by John Pemberton, Later it was bought out by businessman
Asa Griggs Candler, whose marketing tactics led Coke to its dominance of
the world soft-drink market throughout the 20th century. Although globally
they are in constant competition with Pepsi in cola market, several
inefficiency in tactics for both these companies has lead them to lose market
leading positions in Bangladesh.
MOJO, a product of Akij Food & Beverage Limited (AFBL), is one of the
most popular brands in the soft drink industry of Bangladesh. After being
launched in April 2006, they have come a long way in a very short time. As
of the year 2008, they have captured an amazing 38% market share in the
cola market of Bangladesh; making them the current market leader in thissegment. This is an exceptional success keeping on mind that they achieved
all these only in about two and a half years of launching. Their effective
implementation of marketing strategy is the main reason of this success.
Around the year 2005 various disturbing incidents regarding cola products
-
8/23/2019 Term Paper on Coca Cola
9/60
led them to lose popularity; MOJO with their innovative, colorful and
vibrant marketing campaigns has once again made them popular and
effectively grab the leading position.
1
Current Market Situation
Coca-Cola is one of the pioneers in the cola market globally. The first Coca-
Cola recipe was invented in a drugstore in Columbus, Georgia in 1885. After
years of successful business, their business strategies created several
controversies; thus hurting the whole cola industry.
Some controversies mentionable are:
Coca-Cola adopting an apparent policy of ignoring the practice of
eugenics and anti-Semitism by Nazi Germany before and during
World War II.
Opening business in much controversial state, Israel; causing severe
outrages and boycotting of their products in the Arab League.
Coca-Cola was criticized for causing various harmful health effects
i.e. Acidity and tooth decay, bone development issues and obesity of
todays teens.
Several incidents occurring in neighboring country India including
findings of pesticide residues in Coca-Cola bottles and socially
unethical location of bottling plants in drought-stricken areas.
-
8/23/2019 Term Paper on Coca Cola
10/60
Incidents on Indian market posses a larger effect on the whole subcontinent.
Therefore this disturbing issues ultimately shrink the whole cola market;
making way for phenomenal growth of clear drink market in the soft drinks
industry.
2
Despite all these controversies, MOJO started their bold marketing
campaign in Bangladeshi market with vibrant and colorful offerings that
connected very well with their initial target segment. Only in 2 and half
years, they have got hold of an impressive 37% share of the cola market of
Bangladesh. Previously this market was dominated by Coca-Cola and RC
Cola. Now their market share has shrunk down to 34% and 18 %,
respectively. MOJO has successfully faced the above mentioned competitive
forces and still managed to achieve further growth. Unfortunately Coca-
Cola, once the market leader is now having trouble facing the tremendous
competition in this segment; as a result losing market share.
Company Profile
Akij Food & Beverage Ltd. (AFBL):
AFBL started business operations in Bangladesh with initial offering of
MOJO, LEMU and SPEED. They had a vast amount of resources available
to them due to being a part of a successful group of Bangladesh, Akij Group.
They have implemented state of the art machineries and purchases raw
materials mostly from Switzerland. MOJO was officially launched as a
flagship product of AFBL in the year 2006. Their initial promotional
-
8/23/2019 Term Paper on Coca Cola
11/60
campaigns as well as product designing caught the eye of their target
segment very efficiently. The initial market leader in the cola market was
Coca-Cola when they were launched. There was also tough competition
from RC Cola, Pepsi and Euro Cola. Despite the tough competition they
managed to fight hard; thus grabbing a respectable 23% share within their
3
first year of launching. Not only did they manage to grab a large market
share, they also managed to revive the cola market that was struggling due to
the overwhelming negative idea people had about cola products. Their
popularity continued to rise through the preceding year, managing to grab a
towering 37% market share. As we have worked on data dated on the end of
the year 2008, MOJO was the market leader followed closely by Coca-Cola.
Coca-Cola:
In Bangladesh, Coca Cola is marketed and operated by two separate licensed
bottlers; Abdul Monem Ltd. (AML) and Tabani Beverage Ltd. They are
responsible to Coca-Cola India Ltd. for promotion, sales and other activities
along with other bottlers from India, Sri Lanka and Nepal. There have been
several long standing problems between Coca-Cola India and bottlers of
Bangladesh in respect to marketing activities resulting in severe lack of
promotional activities present in Bangladesh. The brand equity of Coca-Cola
is above any other product in the cola market of this subcontinent. Although
globally Pepsi is the closest competitor of Coca-Cola; situation on
Bangladeshi market is completely different. Here Pepsis market share is
tremendously low comparing to its competitors. So the sub continental think
-
8/23/2019 Term Paper on Coca Cola
12/60
tanks believe consumers will follow and be convinced easily to purchase
their products through promotions aired and undertaken in the Indian market
and TV channels. Perspective of Bangladeshi buyers is completely
neglected. As a result sales of Coca-Cola are mostly due to brand equity in
consumer minds. But now the competition in soft drinks industry is
4
intensifying. Several products have managed to promote their cola products
in terms of Bangladeshi culture; effectively gaining more sales. As there are
no local promotions existing for Coca-Cola, potential new customers are
getting more attracted to these new cola products.
Analysis relating theories from MKT 201 with real market
situations
Defining Marketing for the 21st Century
What Is Marketed Through MOJO And Coca-Cola?
AFBL and Coca-Cola Company market MOJO and Coca-Cola as good,
service, events and ideas to their consumers:
Goods: Coca-Cola and MOJO are marketed as soft drink product to the
consumers.
Service: The need for quenching thirst is an intangible need. It is satisfied
through tangible good MOJO or Coca-Cola. Therefore MOJO and Coca-
Cola are also marketed as services.
Events: AFBL organizes and sponsors various events like Concerts, Pitha
Utsab, and Coxs Bazaar Beach Festival to closely relate their products with
the mass people as well as for promotion purpose. Coca-Cola also sponsors
-
8/23/2019 Term Paper on Coca Cola
13/60
events; mostly in international platforms i.e. FIFA WORLD CUP.
Unfortunately due to the lackluster market activities from Coca-Cola India
Ltd. they are not active as much as AFBL in Bangladesh market.
Ideas:MOJO encourages the idea of feeling and enjoying every bit of life
5
itself. It promotes the idea of MOJO accompanying and helping to make
every moments more precious and more colorful. MOJO, its inside you!!
incorporates a fantasy to its consumers to have the drink as part of their life.
Also Coca-Cola does the same with their internationally popular slogans i.e.
Open Happiness to deliver similar message.
Demand State:
MOJO and Coca-Cola both face some potential demand states. Companies
seek to influence the level, timing and compositions of demands to meet the
companys objectives. Both companies face these following demand states
to plan for actions to shift the demands to a more desired state:
Demand state of MOJO:
1. Nonexistent Demand State: While MOJO was launched for the
first time AFBL faced non existent demand among its target
markets in Bangladesh as no one knew about the new product.
2. Irregular Demand State: Except hot days like summer season
MOJO faces irregular demand among its potential consumers.
People consume less cold soft drinks in winter and rainy
seasons.
-
8/23/2019 Term Paper on Coca Cola
14/60
3. Full Demand: MOJO faces full demand state during hot
summer season and during festivals i.e. Eid. People buys
whatever product companies make available during this time.
Demand State of Coca-Cola:
As Coca-Cola Ltd. has been marketing their products for a long
time, now they face irregular and full demand in Bangladesh.
6
1. Irregular Demand State: Coca-Cola faces irregular demand
during winter and rainy seasons like every other soft drink.
2. Full Demand: Company enjoys full demand state during the
summer season and festivals.
Key Customer Markets:
Both AFBL and Coca-Cola are functioning in two key consumer markets:
Consumer market: Soft drinks like MOJO (product leader) and Coca-Cola
(Challenger) are considered as consumer goods in Bangladesh because of
their massive sale and superior brand image accomplished by huge
promotional push directed towards the consumers.
Global market: AFBL is currently exporting MOJO in Malaysia, Middle
East and South Africa. So they are facing additional challenges by
competing in global market. Coca-Cola does its business all around the
world. In this subcontinent, Coca-Cola India Ltd. markets in India, Nepal,
Bhutan, Sri-Lanka and Bangladesh. Coca-Cola has its market nearly
-
8/23/2019 Term Paper on Coca Cola
15/60
everywhere in the world. They have been doing global business for a long
period and recognized as the no. 1 brand all around the world.
Satisfying Customers Needs:
As both Coca-Cola and MOJO are cola drinks, they satisfy their target
markets needs through following ways:
1. Stated Need: To get a tasty drink.
2. Real Need: The need for quenching thirst
3. Unstated Need: Need for a cold and healthy drink. It is marked
7
on the label that the cola products are best served chilled. Also
companies try to put as much healthy ingredients possible in
their beverage.
4. Delight Needs:Consumers will be very delighted if they get a
10% extra drink on every purchase.
5. Secret Need: The secret desire for conveying consumers chosen
soft drinks superior brand image. Both Coca-Cola and MOJO
have a loyal fan base. Loyal consumers always prefer over
brand equity, and tries to use their brand preference as a way to
improve his/her status among peers.Company Orientations Towards the Marketplace:
Among various competing concepts under which organizations conduct
marketing activities; both AFBL and Coca-Cola follows the Holistic
Marketing Concept. It is explained below:
-
8/23/2019 Term Paper on Coca Cola
16/60
Holistic Marketing Concept:
The holistic marketing concept is based on the development, design and
implementation of marketing programs, processes and activities that
recognizes their breadth and interdependencies. It has the following four
broad themes:
1. Relationship marketing:
It refers to developing enduring mutually satisfying long term relationships
with the following key parties in order to build a marketing network:
8
Customers
Marketing partners (channels, suppliers, distributors, dealers,
agencies)
Stake holders
Investors
AFBL: In case for MOJO AFBL tries at its level best to reach its customer
as closely possible. To know more about its consumers, it keeps launching
various types of campaigns through out the whole year. It provides ample
chance to the consumers to express their opinions about improving the
product though these campaigns. However, as people of this country are not
comfortable with the toll free calling system, AFBL doesnt provides thisfacility to the consumers. As leading company in the industry, AFBL has
established a healthy chain of intermediaries and other stake holders.
Coca-Cola: Although Coca-Cola follows the holistic marketing concept, as a
convenient product it doesnt have to satisfy all the aspects of relationship
-
8/23/2019 Term Paper on Coca Cola
17/60
marketing i.e. collecting the information of all of its customers would be an
impossible task. As it has a great number of loyal customers, it practices
basic marketing in Bangladesh. However, Coca-Cola doesnt provide toll
free number in its bottles label in Bangladesh unlike many other countries it
operates its business on. Coca cola has a strong chain of distributor all over
the country. They have in total 197 distributors working closely under the
two licensed bottlers here and successfully doing business all over the
country with the help of these firms.
2. Integrated marketing :
It refers to many different marketing activities that are employed to
9
communicate and deliver value. All marketing activities undertaken by the
company should be coordinated to maximize their joint effects. Here it is
classified into four broad groups; as to 4Ps of marketing; Product, Price,
Place and Promotion.
Product: It refers to various aspects of the product both AFBL and Coca-
Cola is selling. It may include:
Product variety: Coca-Cola and AFBL provide several flanker
products i.e. Sprite, Fanta, Lemu, Clemon, Frutika, Spa other than
their flagship products Coca-Cola and MOJO.
Quality: Both AFBL and Coca-Cola are now established soft drinkproviders in the Bangladeshi market and work hard to providing the
best quality products.
Brand Name: Coca-Cola is the no. 1 brand worldwide; MOJO also has
made great progress towards establishing its own brand name so far.
-
8/23/2019 Term Paper on Coca Cola
18/60
Packaging and Size: MOJO and Coca-Cola both are packaged in PET
bottles and cans. Coca-Cola is also available in glass bottles. Various
packaging size include 250ml, 500ml, 1 liter, 2 liter and 2.25 liter etc.
Pricing: Pricing of soft drink products has very less differentiation. Most of
the product manufacturers follow each other in setting price.
Place: Coca-Cola and MOJO both are convenient products. Coca-Cola has
197 distributors as AFBL has 227 distributors all over the country. Both
products are available in convenient shops and both companies try their best
to make their products as widely available possible.
Promotion: Promotional activities of Coca-Cola in Bangladesh are limited to
10
some posters and billboards. On the other hand AFBL has promoted MOJO
through mass media and print media. In case of mass media the company
has used radio and television and in case of print media the company has
used newspaper, magazines and billboard to promote their product. They
have also organized and launched campaigns and special events to promote.
3. Internal Marketing:
It refers to ensuring every one working within the organization embraces
appropriate marketing principles. It takes place in two levels:
At one level; various marketing functions i.e. sales force, advertising,
marketing research all work together with the same broad objective.
Problems of the sales force of AFBL and Coca-Cola are addressed to the top
management; than they coordinate these problems with the respective
marketing departments i.e. marketing research.
-
8/23/2019 Term Paper on Coca Cola
19/60
At another level, marketing must be embraced by all the other departments.
Finance, accounting, HR all work together to support marketing department
and vice versa.
4. Social Responsibility Marketing:
It deals with understanding broader concerns and ethical, environmental,
legal and social context of marketing activities and programs. Both AFBL
and Coca-Cola work hard to maintain environmental sustainability within
and outside their factories. There was a huge backlash over using pesticides
in cola products; particularly in Coca-Cola. They have turned the situation
so far; engaging in social responsibility marketing in the process.
11
Developing Marketing Strategies and Plans
The Holistic Marketing Orientation:
Holistic marketing orientation refers to the integration the value exploration,
value creation, and value delivery activities with the purpose of building
long term mutually satisfying relationships and co-prosperity among key
stakeholders. Both Coca-Cola and AFBL try to integrate these three
marketing activities to create, maintain and renew customer value.
Value
Creation
Value
Delivery
Custo
mer
Focus
Core
Comp
etencie
s
Collab
orative
Netwo
rk
Value
ExplorationCognitive
space
Competency
space
Resource
spaceBusiness
Domain
Business
partners
Customer
relationshipmanagement
Internal
resourcemanagement
Business
partnermanagement
-
8/23/2019 Term Paper on Coca Cola
20/60
Figure: A Holistic Marketing Framework
12
Value Exploration:
Cognitive Space: Coca-Cola was the first company to meet up customers
latent demand for a carbonated cola flavored soft drink that quenches thirst.
MOJO came to meet the existing demand for a good quality Bangladeshi
cola drink at an affordable price. It also connected well with the target
market with their Bangladeshi culture based promotional campaigns.
Competency Space: Both AFBL and Coca-Cola company have spread their
breadth of business in a broad scope. Instead of focusing on only one
product type they both have focused on producing beverage products such as
cola drink, milk, energy drink, snacks items etc. Their depth of business is
Physical as their production process is completely equipment based.
Customer
benefits
-
8/23/2019 Term Paper on Coca Cola
21/60
Collaborators Resource Space: Here it is inapplicable because neither Coca-
Cola nor AFBL acquired or merged with any of their Bangladeshi
competitors
Value Creation:
Customer Benefit: Coke and MOJO both the products give customers
solutions to the need of a refreshing drink.
Business Domain: Both Coca-Cola Company and AFBL have focused their
business domain on the consumers need for a drink that refreshes mind).
Putting this in the center they have shaped Coca Cola and MOJO. Also to
capture more market segment both companies have reshaped their business
concept in various ways such as Coca-Cola Company has reshaped its
13
concept by producing SPRITE an uncola drink, POWERADE energy drink
etc and AFBL by producing FRUTIKA fruit juice, SPEED energy drink etc.
Positioning: The Coca-Cola Company, which controls more than half
of the global market in non-alcoholic drinks, wants to strengthen its
position in the consumer mind by stating that it is the number one cola
drink in the cola market. On the other hand AFBL mainly uses
Product differentiation (with their innovatively shaped and designed
packaging) and Image differentiation to make MOJO different and
acceptable to the consumers.
De Positioning: In our country most of the Coca-Cola promotions rely
on the Indian advertisements. Their traditional rival in India is Pepsi.
Pepsi simultaneously released advertisement declaring Today Pepsi
-
8/23/2019 Term Paper on Coca Cola
22/60
would like you to try a Coke. Pepsi argued that the consumer had the
right to choose; thus de positioning Coca-Cola. On the other hand
MOJO in our country didnt face any rivalry that did de positioning
technique.
Business Partners:AFBL and Coca-Cola both purchase their raw materials
from outside the country. In Bangladesh, AFBL and Coca-Cola have 227
and 197 distributors respectively. With their cooperation the companies have
managed to distribute their products efficiently throughout the country.
Value Delivery:
Customer Relationship Management (CRM):It consists of the processes a
14
company uses to track and organize its contacts with its current and
prospective customers. Both companies undertake survey of point-of-sales
data, market research and automated tracking of sales programs to collect
information about customers and customer interactions about their products
and to make their consumers satisfied.
Internal Resource Management:Both companies try to manage their internal
resource effectively so that they have the capabilities and tools to be
available for the best management of purchasing, production, campaign and
more. By doing this they get the ability to respond efficiently in time of huge
demand (during RAMADAN and EID-UL-AZHA) and in different customer
opportunities.
-
8/23/2019 Term Paper on Coca Cola
23/60
Business Partner Management:Both Coca-Cola and AFBL maintain a good
relation with their business partners i.e. their distributors, trading partners
and so on. They also provide good work environment for the employees and
a very effective communication system among the employees and also the
business partners.
Assessing Growth opportunities
Both companies take the following steps to reach their desired sales and
reduce strategic planning gap:
Intensive Growth:
The companies can search for opportunities in the existing business.
Through studying Product Market Expansion Grid, we detected several
new intensive growth opportunities.
15
Market Penetration: Coca-Cola tries to increase the consumption of their
product by stating their product is family drink; each and every family
should have at least one family bottle in their refrigerator. They also promote
campaign saying that CRICKET WORLD CUP in India is not possible
without Coca Cola. On the other hand MOJO expand their product usage by
launching a live TV show called Dhora poro hate nate. In this program
people caught while drinking MOJO were offered gifts on the spot.
Market Development Strategy: Coca-Cola is targeting new segment of
market to increase their sales globally. They are taking various activities to
promote coke for sports and music lovers. MOJO are increasing their sales
-
8/23/2019 Term Paper on Coca Cola
24/60
by expanding their current target market range. Now they are promoting
MOJO for matured people as their initial target market was for teenagers.
Product Development Strategy: Coca-Cola can introduce new products such
as COKE ZERO (Zero calorie), DIET COKE etc to their current market
segment to increase sales. AFBL on the other hand; is planning to introduce
diet flavored drinks to their existing product mix.
Diversification: As a fully diversified product Coke Company has
introduced Sprite an uncola drink in our local market. AFBL has introduced
Speed an energy drink to capture new market segment.
Integrative Growth:
To reach their desired sales both companies can also have forward and
backward integration. In forward integration both company can acquire one
16
or more of their suppliers such as. In backward integration they can acquire
their largest wholesalers or retailers this way they can increase their sales
and also earn huge profit. In case of horizontal integration they can acquire
some existing and profitable competitors firm such as the RC cola, URO
cola, DOUBLE cola, PRAN cola etc.
Diversification Growth:
Concentric strategy: Coke introduced Sprite an uncola drink in the market
which has the same technological and marketing synergy with the existing
product line. AFBL also following suite with their offerings of LEMU,
CLEMON etc
-
8/23/2019 Term Paper on Coca Cola
25/60
Horizontal strategy: As a totally new product for the current segment Coca-
Cola can introduce green tea in Bangladesh. AFBL has already introduced
various snacks items i.e. cheeky monkey and OPOTATO in the market.
Conglomerate: Coca Cola Company does not have activities in any other
industry than soft drinks. They focus all their resources on producing and
developing Coca cola and related beverage products. On the other hand;
besides MOJO and related food and beverage products, AKIJ GROUP has
many other industries. They already have tobacco products, printing and
packaging industry, Jute mill, cement industry, textile industry, partical
boards etc. in their business portfolio.
Strategic formulation:
Coca Cola become the worlds largest soft drink company by putting all
their value on an important customer benefit area. They become leader of
17
this field in the world by providing high quality product using best
component, having expert employees to produce it and through effective
distribution system thus achieving Differentiation strategy. On the other
handAFBL was able to achieve overall cost leadership as they were able to
lower their production and distribution cost and manage to price lower than
their competitors
Creating Customer Value, Satisfaction and Loyalty
Customer Equity:
-
8/23/2019 Term Paper on Coca Cola
26/60
The aim of Customer Relationship Management (CRM) is to produce higher
customer equity. More loyal the customers are, higher the customer equity of
that product is. Among the three distinguished drivers, Both MOJO and
Coca-Cola posses the following customer equity most:
Brand equity: It relates to the customers assessment of their favored brand
above and beyond its objectively perceived value. It is important when
products are less differentiated and have more emotional impact. Cola
products i.e. MOJO and Coca-Cola have little difference between
themselves; consumers chose the product mostly due to brand preference.
AFBL and Coca-Cola try to use advertising, public relations and some other
communication tools to affect and increase their brand equity with their
customers.
18
Building Customer Loyalty:
Coca-Cola: Coca-Cola mostly maintains relationship with their customers
through Basic Marketing. Coca-Cola has a huge loyal fan base, so they do
not do much additional investment other than just selling the product.
AFBL: AFBL was new in the market and they had to create loyal customers
of their products. They maintain Reactive Marketing with their customers
to build strong customer relationship. They have trained their sales persons
and representatives to encourage their customers to suggest any ideas and
comments that can help MOJO to be a quality product.
-
8/23/2019 Term Paper on Coca Cola
27/60
Crafting the Brand Positioning
Point of Difference (POD) and Point of Parity (POP):
Point of Difference (POD):
POD refers to the attributes and benefits that customers strongly associate
with a brand and believe these benefits are unattainable in any other
competing brands or company. POD for AFBL and Coca-Cola are:
AFBL: A beverage provider who provides the largest assortment of
beverage and food products available in the whole Bangladeshi market.
They are the only company to provide Cola, Clear Lemon, Cloudy Lemon,
Fruit Juice, Milk, Energy Drink and Mineral Water; every category of
beverage products provided in Bangladesh all together under the same roof.
Also they provided MOJO in 150 ml cans, an innovative and never before
19
used packaging size.
Coca-Cola: Coca-Cola is produced by the world famous secret recipe known
to only a few top executives of Coca-Cola Ltd. They market the worlds first
and no 1 cola flavored soft drink brand Coca-Cola that shows exclusiveness
and elegance along with their globally recognizable supplementary brands;
namely, Fanta, Sprite and Sunfill. Also in limited scale provided one of the
few diet cola solutions in Bangladeshi market.
Point of Parity (POP):
-
8/23/2019 Term Paper on Coca Cola
28/60
POP are attributes that are not necessarily unique to the brand but may be
shared with other brands. POP for AFBL and Coca-Cola are:
AFBL: Provides their products in generally available soft drink packaging
sizes offered by every other competitor in the Bangladeshi market. They also
have distribution coverage in each location Coca-Cola and other competitors
have covered so far.
Coca-Cola: Provides all their soft drink products i.e. Coca-Cola and Sprite in
all the generally used packaging sizes i.e. 250 ml, 500 ml, 1 liter etc
Positioning According To Ries and Trout:
According to the positioning statements made by Ries and Trout; well-
known products hold a distinctive position in the consumers mind. To
overcome them, a competitor can imply any one of the three strategic
alternatives. Alternatives for MOJO and Coca-Cola are:
MOJO: MOJO is trying to strengthen its current position in the consumers
20
mind as a refreshing, upbeat and lively cola drink. Their tag line Its inside
you! states the idea of MOJO accompanying in each part of enjoyment of
life of the youth. They promoted this idea from the very beginning of
product launching, and they have managed to use this idea so far to
strengthen this position in the consumer minds.
Coca-Cola: Coca-Cola has little promotional activities in Bangladeshi
market. The top management of Coca-Cola India Ltd. wants to convey the
promotion of Coca-Cola from Indian market. As we can study from their
promotions, they try to strengthen their no. 1 brand positioning worldwide
-
8/23/2019 Term Paper on Coca Cola
29/60
through their positioning strategies. Also in various cases they de-position or
re-position their primary competitor; Pepsi in the mind of Indian consumers.
In the most recent examples, they de-positioned Pepsis Youngistan
campaign with their own product Sprites Koborstan promotions.
Positioning According To Treacy and Wiersema:
According to the positioning statements proposed by Treacy and Wiersema;
a firm could try to be any one of the three alternatives. AFBL and Coca-Cola
both try to achieve operational excellence particularly in the Bangladeshi
market, as they try to provide highly reliable products to their customers.
AFBL is a sister concern of Akij Group, renowned for their lack of
compromising with quality. As to maintain that legacy, AFBL uses state of
the art machinery and top quality raw materials from Switzerland, Vietnam
and Singapore. On the other hand Coca-Cola is the global leader in the cola
market. It is operated in Bangladesh by two licensed bottlers under close
supervision by Coca-Cola India Ltd. They use raw materials from Coca-Cola
21
certified suppliers and always try to maintain global standard in production.
Dealing with Competition
Porters competitive forces model:
Five forces; as identified by Michael Porter poses threat for the soft drink
market and in the activities of both Coca-Cola and MOJO accordingly:
1. Threat of Intense Segment Rivalry: The soft drink industry of
Bangladesh poses a higher and intense rivalry for any competitor.
There are numerous big names actively present in this industry. Coca-
-
8/23/2019 Term Paper on Coca Cola
30/60
Cola, Pepsi and RC Cola had been dominating the cola market of
Bangladesh for a long time. Coca-Cola is one of the earliest pioneers
in this industry globally as well in Bangladeshi market. So initial
threat of rivalry in this segment was low for Coca-Cola. Afterward
this market got bigger and more competitive; therefore making the
industry much more competitive. When MOJO was launched back in
2005, all the above mentioned companies were actively fighting for
market share. Initial market rivalry for MOJO was very high. But
AFBL successfully marketed their product, as a result gaining the
market leader position in a very short period of time.
22
Figure: Porters Competitive Forces Model
2. Threat of New Entrants: Soft drink market of Bangladesh can be
defined as a segment where both entry and exit barriers are high.
Here the market potential is very promising, and it is difficult and
-
8/23/2019 Term Paper on Coca Cola
31/60
expensive for any new competitor to enter the market. Setting up
factories is very costly, and if any firm is performing poorly, they
cant easily sell off and leave the industry. As a result these poor
performing firms i.e. Double Cola, Uro Cola stay on and fight back
that hurt the industry leader i.e. MOJO, Coca-Cola and RC Cola.
3. Threat of Substitute Products: Consumers of Bangladesh are the most
hardest to convince for any marketer. As there are so many
alternatives of cola products in the market, and they do not
significantly differ in taste, consumers switch very swiftly to any
competitive brand or product. Mineral water is the most popular and
available substitute to any thirsty consumer. As its price is
significantly low and it is widely available; the threat of substitutes
for cola products are extremely high in the Bangladeshi market.
AFBL has done a really thoughtful job of putting mineral water brand
SPA in their portfolio as a flanker product. This ultimately boosts
23
revenue for AFBL; and Coca-Cola should do the same with the
implementation of putting their mineral water brand KINLEY in the
Bangladeshi market.
4. Threats Of Buyers Growing Bargaining Power: In Bangladesh most of
the leading soft drink marketer firms follow each other in case of
setting price. Buyers are mostly unorganized and spread around;
therefore has very little bargaining power.
5. Threat Of Suppliers Growing Bargaining Power: Both AFBL and
Coca-Cola Ltd. are highly dependent on oil, electricity, labor and
other bare industrial necessities to run their factories. Also theyre
largely dependent on the raw material providers for manufacturing.
-
8/23/2019 Term Paper on Coca Cola
32/60
AFBL revolves around various suppliers for their raw material
providers. Still if there is a scarce in the supply of materials, this may
easily set the cost up. As a result, the threat of suppliers bargaining
power is really high for this industry.
Industry Concept of Competition:
In terms of number of sellers and to the degree of differentiation, soft drink
market of Bangladesh can be classified as Monopolistic Competition. Here
competitors mostly focus on selected market segments and command a price
premium by meeting customers needs in a superior way. 150 ml cans were
an innovative styling for MOJO. They differentiated their cola offering with
that sized cans; thus differentiated their offerings in part in contrast with its
many competitors in the cola soft drink market.
24
Competitive Strategies for Market Leader:
As currently MOJO is the market leader in the cola market of Bangladesh;
here we will discuss possible strategies that can be undertaken:
Expanding the Total Market:
As cola products has less usage rather than other ordinary products, no such
new usage for cola products exist. So they can undertake the following
strategies to expand the total cola market; mostly applicable for market
leader MOJO:
-
8/23/2019 Term Paper on Coca Cola
33/60
New Customers: As mentioned earlier, various disturbing issues
relating to cola products ultimately shrink the global cola market;
making way for phenomenal growth of clear drink market in the soft
drinks industry. MOJO did a phenomenon job to again revive the cola
market in Bangladeshi perspective. They followed these strategies:
1. Market Penetration Strategy: AFBL attracted consumer groups
who might use it but didnt due to the controversies
surrounding cola products. Successful marketing of MOJO
again restored confidence on cola products. Coca-Cola
promoted their products as soft drink with no pesticide for thesame reason.
2. New-Market Segment Strategy: AFBL; with MOJOs colorful
and vibrant promotions, easily grabbed the market of new and
1st time cola users in the form of school going children. Their
target market was teenagers who would try out cola products
for the 1st time of their life. Effective approaches to grab this
25
market would mean expanding the total market in the long run.
3. Geographical-Expansion Strategy: Currently AFBL is exporting
their products to Middle East, Malaysia and South Africa. Not
only are they trying to grab consumers living elsewhere, theyre
trying to grab market of NRBs who are missing out the
opportunity to consume Bangladeshi drinks.
More Usage: Total market of cola products can be increased by
increasing the frequency or quantity of consumption. Larger
containers are supposed to increase the consumption. Also soft drinks
are impulse products; as such usage can be increased by making the
-
8/23/2019 Term Paper on Coca Cola
34/60
product more available to the consumers. MOJOs early success was
due to making the product easily available to consumers all around
Bangladesh; something uncommon for any new product. Also Coca-
Cola Ltd. follows the motto Arms Length Desire, emphasizing on
the fact that the company is trying to make their products available in
the closest to their consumers. Making soft drinks available in
restaurants and fast food joints with co-branding with the vendor is
also a good way to increase the total market size. PEPSI generates
most of their sales based on their availability in public gathering
places and fast food joints i.e. KFC, Bashundhara Cineplex, and
Fantasy Kingdom.
Defending Market Share:
Currently MOJO is dominating the cola market of Bangladesh. As AFBL is
trying to expand total market share, they are also continuously defending
their current business. AFBL are using the following strategies to defend
26
their market share:
Position Defense: Currently MOJO has a very desirable market space
in the minds of their target market. As their no. 1 competitor, Coca-
Cola has little promotional activities in Bangladesh; MOJO is easily
becoming a staple name in the consumers mind in case of quality cola
drink.
Flank Defense: AFBL hasnt stopped just because MOJO is the cola
market leader; they are also trying to erect outposts to protect their
weak fronts which could serve as an invasion base for counter attack.
-
8/23/2019 Term Paper on Coca Cola
35/60
As a result, AFBL offers various flanking products in their portfolio.
Offering i.e. LEMU, SPEED, CLEMON, OPOTATO, SPA are in
such manner that a MOJO consumer; if decides to consumer anything
other than MOJO can choose products between AFBLs offerings.
Preemptive Defense: AFBL also pulls a more aggressive maneuver to
attack before any of their competitors starts offending them. Coca-
Cola had the biggest distribution coverage of Bangladesh. While
MOJO has already uprooted them in case of distribution coverage,
they are always attempting to cover more areas to be prepared for any
upcoming competition. Counteroffensive Defense: Market leader; when attacked may respond
with a counter attack. So far no such attack has been seen on MOJO in
terms of promotions. But sometimes MOJO responds to price cuts,
special offers and discounts offered to distributors and retailers
against competitors. Once Coca-Cola started offered refrigerators to
many retailers with the clause of displaying only their products
27
in that cooler. In response MOJO offered and put refrigerators in
several key strategic retailer outposts with the similar clause intact.
Mobile Defense: Akij Group is one of the largest and oldest group of
industries operating in Bangladesh. As their primary business
consisted of tobacco based products, they tried to diversify in to
channels that will not have negative reactions from consumers. Nowtheir diversified SBUs consists of Particle boards, Jute based
products, Cement, Textile products, Printing & Packaging solutions
and Food & Beverage products. Akij group has stretched its domain
-
8/23/2019 Term Paper on Coca Cola
36/60
by diversifying over territories that can serve as future centers for
defense and offense.
Contraction Defense: AFBL and Akij group has been really successful
in their business activities so far; therefore they have not taken
planned contraction or given out weaker territories. They are doing
business with success so far and hope to do so for the years to come.
Market-Challenger Strategies:
As currently Coca-Cola is in the 2nd position in cola market of Bangladesh,
they can take following aggressive market challenger strategies to overtake
MOJO to regain the leader position:
Defining the Strategic Objective and Opponents(S):
Out of the three options available in this phase, Coca-Cola is attacking the
market leader directly. Although this is a high risk strategy, it has the
potential of high-payoff. As Coca-Cola was the previous market leader, they
28
already have high distribution coverage and brand equity. It is very much
possible to overtake MOJO with the efficient use of promotional campaigns
that really connects with the Bangladeshi consumers and culture. Due to the
negligence from Coca-Cola India Ltd. Bangladeshi themed promotions are
non-existent, making way for MOJO to meet phenomenon growth.
Choosing an Attack Strategy:
-
8/23/2019 Term Paper on Coca Cola
37/60
Due to weak marketing activities generated by the figureheads of Coca-Cola
India Ltd. in response to the aggressive activities of AFBL, there has been a
lack of attack strategies generated. Distinguishable strategies include:
Frontal Attack: Coca-Cola is generating a pure frontal attack on
MOJO as they have the capacity to effectively match their product,
price and distribution. Coca-Cola still is the no. 1 recognizable brand
of the whole world, and still has somewhat higher brand equity. There
are no questions in consumers mind about the product quality of
Coca-Cola. Also Coca-Cola still has large distribution coverage all
over Bangladesh; as a result it directly matches with AFBL in terms of
distribution.
Flank Attack: Although AFBL has so many flanking products
available in its portfolio, the leaders in the uncola market are still 7UP
and Sprite; later of the two being the product of Coca-Cola.
CLEMON, flanking product for AFBL in this segment still does not
have the brand equity and the magnitude of marketing campaigns
these two competitors posses. As a result these segment posses a
flanking hole in the portfolio of AFBL, and Coca-Cola should do their
29
best to take grip of this situation and this promising market.
Setting Product Strategy
Product Level of Cola Drinks:
MOJO and Coca-Cola are both cola flavored soft drink products. As such
product level for both will be same. These are explained below:
-
8/23/2019 Term Paper on Coca Cola
38/60
1. Core Benefit: Refers to the service or benefit consumer buys.
Consumers want variations in satisfying thirst while buying either
MOJO or Coca-Cola.
2. Basic Product: Here the core benefits are turned into a basic product.
Basic product for cola products are drinks with a sweet and strong
taste.
3. Expected Product: Refers to a set of attributes and conditions buyers
normally expect while purchasing the product. Consumers may expect
disposable and durable packaging, top quality ingredients in the cola
product, glass or free gifts with every bottle or extra amount given
with MOJO or Coca-Cola.
4. Augmented Product: Here benefits are given that exceeds customer
expectations. Home delivery service with large amount of purchase of
MOJO and Coca-Cola could act as augmented offering for consumers.
5. Potential Product: Here all the possible augmentations and
transformations the product might undergo in the future are stated.
With ever expanding Research and Development (R&D); in future
cola drinks may be combined with substances that will transform their
existing use to a substitute of water.
30
Product Mix:
Product mixes of both AFBL and Coca-Cola Ltd are given below:
AFBL:
-
8/23/2019 Term Paper on Coca Cola
39/60
Coca-Cola Ltd.
COLA CLEAR LEMON ORANGE DRINK FRUIT JUICE
Coca-Cola: offered
in 500ml, 1 and 2.25
liter PET packages;
also offered in 250 ml
and 1 liter glass
bottles
Sprite: offered in
500ml, 1 and 2.25
liter PET packages;
also offered in 250 ml
and 1 liter glass
bottles
Fanta: offered in
500ml, 1 and 2 liter
PET packages; also
offered in 250 ml and
1 liter glass bottles
Sunfill: offered only
in 250 ml glass
bottles (available in
Mango flavor)
31
Product Mix Pricing:
In general situations both AFBL and Coca-Cola India Ltd. follow the
mentioned pricing strategies for marketing in Bangladesh:
Cola Cloudy
Lemon
Clear
Lemon
Energy
Drink
Mineral
Water
Fruit Juice Milk Snacks
MOJO:
offered
in
250ml,
500ml, 1
and 2
liter
PET
packages
LEMU:
offered
in
250ml,
500ml, 1
and 2
liter PET
packages
CLEMON:
offered in
250ml,
500ml, 1
and 2 liter
PET
packages
SPEED:
offered
in
250ml,
PET
and
CAN
SPA:
offered
in
500ml, 1
and 2
liter PET
packages
FRUTICA:
offered in
250ml and
1 liter PET
packages
(available
in Mango,
Orange and
Grape
Flavor)
Firm
Fresh:
offered in
Pasteurized
and UHT
form in
500 ml
packages
1.OPotato
2. Cheeky
Monkey
-
8/23/2019 Term Paper on Coca Cola
40/60
Product Line Pricing: Both companies market their products in different
sizes; thus introducing price steps. Prices are different for each individual
sized drink, and they are not charged proportionally. Instead the larger
amount consumer buys; the more he/she gains as price starts to decrease for
larger bottles.
Product Bundling Pricing: In limited cases, mostly on some selected retail
outlets soft drinks are offered as mixed bundling. Here products are charged
less for the bundle than if they are purchased individually.Some posh retail
outlets i.e. Agora, Mina Bazar offers in bundles i.e. 2 bottles of 2liter MOJO
for tk. 115 whereas individually they would have cost a customer about Tk.
130.
Labeling:
Labels of the soft drink products do its functions in the following ways:
1. Identifying: Brand names of MOJO and COCA-COLA appears on
the bottles.
2. Describing: The materials, particular health benefits, factory address,
how to dispose properly etc. informations are posted on the bottle
labels.
3. Promoting: Attractive graphics and brand logos over the bottle attract
consumers; particularly in big retail stores where so many similar
32
products are stuffed together in large numbers.
Packaging:
-
8/23/2019 Term Paper on Coca Cola
41/60
Packaging of both MOJO and Coca-Cola can be classified in the following
ways:
Primary Package: Cola soft drinks coming in a bottle; either PET and
glass containers. AFBL PET bottles are labeled in full sleeved.
Secondary Package: Does not appear in soft drink products.
Shipping Package: Shrink packed that typically holds 24 bottles of
250ml and 500ml PET, 12 bottles of 1 liter PET and 6 bottles of 2liter
PET bottles.
Designing and Managing Services
Service mix:
The offering of soft drinks can be classified as pure tangible good based on
the fact that it consists of only a tangible good. Coca-Cola Ltd. and AFBL
dont offer any service that accompanies the product. But it is also offered as
part ofhybrid service mix in case of food and service at restaurants. Here
both food and beverage accompanying with the service from the restaurant
people makes up for the whole service mix. Therefore both Coca-Cola and
MOJO act as a tool in the hybrid service mix.
33
Developing Pricing Strategies and Programs
How Pricing Is Set:
-
8/23/2019 Term Paper on Coca Cola
42/60
Pricing is a very important issue for any company, as it determines the level
of profits earned and covers up the cost of operating. In AFBL, pricing is set
by the marketing department. They manage a close relationship with the
factory managers about production cost, and sets different pricing strategies
according to their reports. In case of Coca-Cola, the pricing is generally
done by the local bottlers, AML and TBL in close supervision of Coca-Cola
India Ltd.
Consumer Psychology and Pricing:
Both AFBL and Coca-Cola have to think about how their consumers
perceive of prices and has to deal with the following important issues:
Reference Prices: In most situations consumers have a vague idea
about the products estimated price rather than recalling specific
price. Most soft drinks are priced very similarly and close to each
other. So consumers often compare soft drink prices in terms of
internal reference price (pricing information from memory/
recollecting old prices) or in terms of external reference frame
(posted regular retail price/price range of soft drinks).
Price Quality Inference: In most food items, the belief of price as an
indicator of quality applies. As a result soft drink products are priced
either in a close range or according to the brand image. Pran Cola
was sold at a relatively low price compared to other competitors
(BDT 8 for a 250ml glass bottle comparing to most competitors price
34
of BDT 10). To most of the consumers this resulted in the belief that
Pran Cola had inferior quality. Most soft drink marketers of
-
8/23/2019 Term Paper on Coca Cola
43/60
Bangladesh, especially Coca-Cola and AFBL looks at this phenomena
carefully and prices their products accordingly.
Price Discounts and Allowances:
Both AFBL and Coca-Cola offer the following discounts and allowances to
their respective customers and marketing intermediaries:
Quantity Discount: Both companies allow price reduction for traders
who buy in large volumes. AFBL encourages their sales persons to
engage in finding sponsorship opportunities in various cultural and
local events. AFBL offers substantially lower price per unit for large
volume of sales there.
Functional Discount: Both companies offers discounts for their trade
channel members upon performing certain functions i.e. selling and
storing.
Allowance: Both companies engage their dealers in promotionalallowances by rewarding them for activities i.e. participating in
outstanding advertising and sales support programs. AFBL hosted
national sales conference for all their distributors at their factory
premise at Dhamrai where they offered gifts and entertained them.
35
Promotional Pricing:
-
8/23/2019 Term Paper on Coca Cola
44/60
In many cases, both AFBL and Coca-Cola used the following pricing
technique to stimulate purchases of their products:
Loss-Leader Pricing: In order to sell off the increasing store traffic in
many superstores; prices of products from both companies are
dropped. As seen in various offers from leading superstores i.e.
AGORA, MINA BAZAR; MOJO, Coca-Cola, Sprite, LEMU are
offered at comparatively lower prices in bundles to attract consumers
in to their stores as well as clearing out old unsold items.
Special-Event Pricing: Not just AFBL and Coca-Cola but all other
soft drink manufacturers establish special prices in certain seasons i.e.
Eid-ul-fitre, Eid-ul-ajha. During these seasons consumption jumps sky
high and sales increase in a towering basis.
Differentiated Pricing:
Soft drink industry charges third-degree price discrimination with itscustomers. Price discrimination happens with the following buyer classes:
Product-Form Pricing: Different forms of soft drink products are
priced differently and not proportionately to their respective costs.
While a 1 liter PET bottle of both Coca-Cola and MOJO is priced at
BDT 45, price of a 2 liter PET bottle is BDT 65. This pricing is not
proportional to their sizes, and consumers gain on the purchase of
higher sized products.
36
-
8/23/2019 Term Paper on Coca Cola
45/60
Channel Pricing: Different fast food eateries and restaurants especially
posh ones price soft drinks higher than the average market price. A
250 ml Coca-Cola glass bottle is priced BDT 12 at Sumi
Confectionary at Mohakhali; but the price is BDT 16 for the same
package at the nearby Hotel Jakaria.
Designing and Managing Value Networks and Channels
Breakdown of Marketing Intermediaries:
As AFBL and Coca-Cola are in the soft drink business, their marketing
channel classification has lots of similarities. These channels can be broken
down in to following pieces:
Suppliers: Provides raw materials for soft drinks to the manufacturers.
Bottlers of Coca-Cola purchases materials from selected suppliers. AFBL
revolves around various suppliers and mostly purchases from Switzerland
and Singapore.
37
Supplier
s
Factory/
Produce
rsMarketing
Intermediary
Merchant Agents Facilitator
s
Customers
-
8/23/2019 Term Paper on Coca Cola
46/60
Factory/Producer: AFBL has their factory in Dhamrai, Dhaka. Coca-Cola
has two separate bottlers in Bangladesh and they have their own factories.
One of the bottlers, AML has their factory in Alekhar Chor, Comilla while
TBLs factory is on Mirpur, Dhaka.
Marketing Intermediary: They can be classified in the following three
categories:
1. Merchant: Distributors and retailers who sells the product. AFBL has
227 distributors for MOJO while Coca-Cola has 197 all over
Bangladesh.
2. Agents: Sales agents and manufacturers representatives who helps
the retailers and distributors in marketing the product.
3. Facilitators: Generally AFBL and Coca-Cola provide transportation
for goods from factory to distributors. Also AFBL partners with AD
COM and Grey etc. as advertising agencies to promote and market
the product. Coca-Cola works through their local office CCFEL
(Coca-Cola Far East Ltd.) to promote their products in Bangladesh.
Push Vs. Pull Marketing:
AFBL and Coca-Cola use both Push and pull marketing strategies very
skillfully. There activities are listed below:
MOJO: At the very introduction stage of MOJO, AFBL mostly applied
push strategy as there was little brand equity for their product. People
hardly knew about the product at that stage. Although soft drinks are
38
-
8/23/2019 Term Paper on Coca Cola
47/60
regarded to many consumers as impulse items, due to the presence of Coca-
Cola and Pepsi in the market there are always a certain degree of brand
equity present for the soft drink consumers. Before formally introducing the
product in the market, AFBL spent large sum to induce intermediaries to
carry, promote and sell. During formal launching, AFBL spent resources in
both push and pull marketing; using advertising to make consumers
interested to ask retailers for the product. This strategy really paid off well
for the companies; as MOJO got along with their target consumers from the
beginning and continued to achieve positive feedbacks.
Coca-Cola: Coca-Cola has a huge loyal fan base present from the time it
was offered in Bangladeshi market. Coca-Cola is the no. 1 brand of the
whole world. As a result Coca-Cola India Ltd. spends very little for the
advertising and to the purpose of persuading in the Bangladeshi market. As a
result marketing strategy of Coca-Cola in Bangladeshi market can be
remarked as push strategy. The little amount allocated for promotional
purpose are spent to encourage intermediaries i.e. distributors, retailers topromote and sell the product to the end users. They give incentives i.e.
quantity discounts and promotional allowances to increase sales through the
intermediaries using creative processes i.e. DISPLAY PROGRAM AT
RETAILERS SHELVES.
Types of Buyers:
Soft drink buyer can be classified as Habitual shoppers; they pretend to
buy from the same places in the same manner over time. As a result most
soft drink marketers try to use push strategy to encourage retailers to sell and
39
-
8/23/2019 Term Paper on Coca Cola
48/60
promote only their products. Also for the same reason marketers try to reach
out to every little retail outlets possible in order to grab these habitual
shoppers.
Role of Marketing Channels:
Both AFBL and Coca-Cola gain several advantages in operating by using
intermediaries:
Producers of soft drinks lack the financial resources to carry out direct
marketing. AFBL has 227 distributors all around Bangladesh for
marketing MOJO while Coca-Cola has 197. It is very hard pressed for
both these companies to get the asset to buy out their dealers and do
business on their own all around Bangladesh.
In FMCG business, producers gain more return on manufacturing
rather than retailing on their own. It seems unreasonable to make
investment on field other than their core competencies.
Finally it is unreasonable and completely not feasible to market soft
drinks directly to the consumers. If AFBL and Coca-Cola want to
directly market their products, they have to establish soft drinks stores
all around the localities of Bangladesh. It is completely unrealistic.
For these reasons it is utterly necessary for FMCG companies such as AFBL
and Coca-Cola to establish marketing channels to operate in Bangladesh.
40
-
8/23/2019 Term Paper on Coca Cola
49/60
Channel Levels:
As soft drinks are FMCG (Fast Moving Consumer Goods) both AFBL and
Coca-Cola do consumer marketing in a two-level channel. Here
manufacturer sells products to wholesalers who in turns sell it to retailers.
Product than finally are sold to final consumers by the retailers.
Channel Design:
Designing channel contains the following processes:
Analyzing Customers Desired Service Output Levels: Channels of both
AFBL and Coca-Cola produce the following five service outputs:
1. Lot Size: Typical consumers buy one unit of soft drink at a time for
41
Wholesaler
Retailer
Consumer
Manufacturer
-
8/23/2019 Term Paper on Coca Cola
50/60
himself/herself in public gatherings. Basic purposes of use and the
resulting lot sizes purchased by the consumers of both products are as
follows:
Bottle/Lot Size Purpose of use
250 ml for a single consumer;
accompanying food
500 ml gives mobility to drink for a
longer period of time or
sharing drinks with 2-3
persons
1-2 liter for parties and largegathering of people
2. Waiting and Delivery Time: Soft drinks are generally not much of a
precious item. Although they are best tasted chilled, consumers do not
expect too much waiting time for these products. The longest amount
of waiting time tolerated is the time necessary to bring the cold soft
drinks from the refrigerator to the hands of consumers.
3. Spatial Convenience: Soft drinks can be classified as convenience or
shopping goods according to the consumers preference. As such they
should be made as much available as possible. Most purchases are
made in local grocery stores. So both AFBL and Coca-Cola try to
reach the most distant corners of locality possible. Coca-Colas motto,Arms length desire reflects this objective. Channels of both AFBL
and Coca-Cola should be as much decentralized and disbursed
42
-
8/23/2019 Term Paper on Coca Cola
51/60
possible to reach out to every potential customer. Although this
process results in a higher cost of operation, effectively these
activities makes their products more convenient.
4. Product Variety: Both AFBL and Coca-Cola try to minimize retailers
assortment and fill up their shelves with their own products to
increase sales. Although mixed assortment results in giving
consumers more choice over products, in those cases the brand equity
and promotional campaigns comes to play because soft drinks
products otherwise has less differentiation.
5. Service Backup: Both AFBL and Coca-Cola provides a lot of add-on
services for their channel members. Retailers get various facilities i.e.
payment on credit, delivery and call backs on faulty products. AFBL
and Coca-Cola try to have less payment made on credit. Still large
retail outlets i.e. Agora, Mina Bazaar makes most of their transactions
in credit; therefore there are always some credit sales made. Also both
companies provide delivery services to retailers through their own
delivery transports.
Establishing Objectives and Constraints:
Generally companies does effective planning on determining which market
segments to serve and which channels to use for each segment. The
objectives of channels get affected by the following factors:
1. Product Characteristics: Soft drinks are mostly sold by using as much
direct marketing possible as they are perishable items. As a result
43
-
8/23/2019 Term Paper on Coca Cola
52/60
manufacturers of soft drinks of Bangladesh mostly use less marketing
intermediaries and try to get their products to the consumers as fast as
possible upon producing.
2. Company Characteristics: Both AFBL and Coca-Cola have huge
financial backing in terms of operating. Although their products are
impossible to sell through direct marketing to each consumer
individually, they try to expand their channel as much as possible all
through the country. This way they try to reach to each of their
potential customers.
3. Middlemen Characteristics: AFBL and Coca-Cola takes account both
the strength and weakness of their intermediaries. Here company sales
reps have to deal with retailers to put their products in to the retailers
shelves. Also as both companies employ a mixture of push and pull
marketing; the importance of sales reps is lot higher than common
thoughts. Although more sales rep means increasing the cost, this
effectively means reaching out to a broader consumers and retailers;which increases the sales as well.
4. Competitors Channel: Designing any new companys channel always
gets influenced by their competitors channels. As MOJO was a new
product and Coca-Cola was in the market from the beginning; AFBL
followed Coca-Colas channel design and modified them to their own
needs wherever necessary.
5. Environmental Factors: Although global economy faced recession for
last few years, activities of AFBL did not suffer much as they are
mostly Bangladeshi market based company. But Coca-Cola is a US
44
-
8/23/2019 Term Paper on Coca Cola
53/60
based company; therefore their whole array of activities got affected.
This in turns was one of the main reasons of their lack of market share
grabbing initiatives as they had a lack of inflow of investment. AFBL
grabbed this situation effectively; gaining the cola market leader
position.
Identifying Major Channel Alternatives:
AFBL and Coca-Cola choose their channels from an array of alternatives in
order to reach their customers at a lower cost. Their channel alternatives can
be described by the following elements:
Types of Intermediaries: As both AFBL and Coca-Cola are in the
same soft drink industry, they imply the similar alternative. Both
companies hire their agents known as distributors throughout the
country in different regions to sell only their products.
Number of Intermediaries: Soft drinks are mostly considered asconvenience goods; therefore the more locations product made
available is, the better. As such both companies impose intensive
distribution to place their products in as many outlets possible. Here
soft drinks need a have a great deal of location convenience. So
retailers compete aggressively for greater consumer coverage.
Terms Of Responsibility Of Channel Members: In order to fulfill a
healthy trade-relations mix, both companies perform the following
services for their channel members:
45
-
8/23/2019 Term Paper on Coca Cola
54/60
o Price Policy: AFBL and Coca-cola sets a price list and
announces a schedule of discounts and allowances for their
channel members which is seen as equitable and sufficient.
o Condition of Sales: AFBL and Coca-Cola provides guaranty
against defective products but dont in case of price declines.
o Distributors Territorial Rights: Companies define their
distributors territorial rights and terms under which the
distributors operate. According to these rights, distributors are
expected credit for sales on their territory and no one else has
the right to enter their territory with the same product.o Mutual Services and Responsibilities: This mostly takes action
in case of the two licensed bottlers of Coca-Cola. They have to
abide by the decisions set by their supervising Coca-Cola India
Ltd. These bottlers have to satisfy companys global standards
in case of manufacturing, cooperating with new promotional
programs and buy supplies from specified vendors.
46
-
8/23/2019 Term Paper on Coca Cola
55/60
Designing and Managing Integrated Marketing
Communications (IMC)
Marketing Communication and Brand Equity:
Various marketing communication activities contribute to developing brand
equity. The following figure shows how the marketing mix tools create
brand equity:
Marketing Communication Mix:
Both AFBL and Coca-Cola use the following tools of communication:
1. Advertising: MOJO promotes through advertising in all the TV
channels of Bangladesh. Although Coca-Colas promotions are
47
Marketing
Communicati
on Program
Advertising
Sales
Promotion
Events &
Experience
PR &
Publicity
Personal
Selling
Direct Marketing
Brand
Awarenes
s
Brand
Image
Brand
Responses
Brand
Relationship
Brand
Equity
-
8/23/2019 Term Paper on Coca Cola
56/60
noticeably absent; during occasions i.e. Ramadan advertisements are
shown to promote limited time special price offerings. Coca-Cola
advertisements are largely present in the Indian TV channels; which
are also watched by Bangladeshi consumers.
2. Sales Promotion: Both AFBL and Coca-Cola provides short term
incentives to encourage both their distributors and consumers.
Distributors and retailers are given short term incentives i.e. free
products with larger quantity of purchase to sale more products during
off-peak seasons and special occasions. Consumers are given the offer
of lower price in bundle in order to sale and clear off inventory during
much consumed occasions i.e. Eid.
3. Events and Experience: Various events are sponsored to promote own
products. MOJO sponsors Valentines Day Concert and World Cyber
Games (WCG) Bangladesh Qualifying Round 2009 to name a few.
They also organize events i.e. Boishaki Mela and Pitha Utsab to get
closer to their target consumers mind. Coca-Cola occasionally holds
events i.e. Coke Khao Pataiya Jao for Bangladeshi consumers. Also
they sponsor various international events i.e. WORLD CUP
FOOTBALL and AMRICAN IDOL.
4. Public Relations and Publicity: Coca-Cola promotes their brand in
various public places i.e. NANDAN PARK. Also MOJO does the
same in places i.e. WONDERLAND PARKS and SPORTS ZONE.
5. Direct Marketing: It is impossible to market soft drinks through direct
marketing; therefore neither companies does direct marketing in
Bangladesh.
48
-
8/23/2019 Term Paper on Coca Cola
57/60
6. Personal Selling: This marketing communication tool is not applicable
in the soft drink industry and on the business of both AFBL and Coca-
Cola.
Brand Equity:
It refers to the subjective and intangible assessment of a brand by the
consumers. Both MOJO and Coca-Cola have high brand equity due to their
close attachment with their target market. Brand equity consists of the
following tools; and strengthening them in turn increases the overall brand
equity of the brand:
1. Brand Awareness: It is created by the combination of brand
recognition and brand recall.
Brand recognition: Refers to the extent at which a brand is
recognized for stated brand attributes or communications. Coca-
Cola is instantly recognized with their slogan Always Coca-
Cola, The Coke Side of Life, Open Happiness and "Thanda
matlab Coca-Cola!"(Indian). MOJO is also recognized with their
own slogans, Its inside YOU! and Asmane Pakha Melo
Ontore Ontore
Brand Recall: Refers to the ability to retrieve the brand from
memory of the consumer with a given product category. Coca-Cola
had long been in the top of consumers product category ladder
according to Jack Trout positioning statement. But due to their
campaigns in Bangladesh and with the exciting and refreshing
49
-
8/23/2019 Term Paper on Coca Cola
58/60
promotions; MOJO grabbed the top of the ladder of many
consumers. Still Coca-Cola is recalled with their slogans and
Indian TV commercials while MOJO is recalled with their
advertisements and billboards at roadside with their tag line Its
inside you! all around Bangladesh.
2. Brand Image: Refers to the perception of the brand by their
consumers. A positive brand image is created by a successful
marketing program that link a strong unique and favorable
association to the brand in their memory. So far MOJO has been
very much successful with their creative and innovative marketing
that closely links with the Bangladeshi youth culture. Their product
design, artwork over their cans and PET bottles closely link with
Bangladeshi people as a whole. On the other hand, Coca-Cola has
done little to achieve a superior brand image in the Bangladeshi
context. They are the no. 1 brand of the whole world, as a result
they do little customization of their brand with Bangladeshi
context. Consumers are attracted to Coca-Cola only due to their
worldwide popularity and with the marketing programs centered
on Indian culture.
3. Brand Response: Refers to what consumers think and feel about a
particular brand. Consumers personal opinion and evaluation
about both MOJO and Coca-Cola revolves around the following
factors:
Quality: Coca-Cola is world renowned for their superior quality
and their secret recipe in manufacturing. There is always trust and
50
-
8/23/2019 Term Paper on Coca Cola
59/60
belief about good quality in Coca-Cola by the consumers. MOJO,
at first had consumers doubts as they were a Bangladeshi cola
provider. Afterwards that doubt got cleared with their satisfactory
quality as they use state of the art machinery for production.
Credibility: After drinking MOJO; consumers got the trust about
the product. As a result they spread good words about MOJO,
resulting in establishing credibility on the new product. Coca-Cola
is the no. 1 soft drink brand worldwide and their quality control
while manufacturing already ensured credibility among their loyal
consumers. Consideration: Both MOJO and Coca-Cola; with their superior
quality product solves the problem of clinching thrust of soft drink
customers adequately.
Superiority: Although MOJO and Coca-Cola are the two largest
share holders in the cola market of Bangladesh; they are always
working on to ensure superiority over each other. They already are
far ahead of their closest competitors. They are always increasing
their business activities and trying to get closer to their consumers
to achieve supremacy in the cola market.
4. Brand Relationship: Refers to the relationship established between
the buyer and the product. It is done on the basis of trust. To
maintain trust among their consumers neither AFBL nor Coca-
Cola did their brand extensions with their own brand. As a result;
AFBLs milk brand is FIRM FRESH; Coca-Colas mango juice
51
-
8/23/2019 Term Paper on Coca Cola
60/60
brand is SUNFILL. This is important in maintaining the brands
quality and trust issues with their consumers in case of brand
extension in unrelated products and categories.
Conclusion
In the end, we want to say that it was a challenging experience. Working on
established and hugely popular products like MOJO and Coca-Cola was a
big learning experience for us. One of the hurdles was to analyze Coca-Cola,
as they have little activity in the Bangladeshi market. As we have put all the
necessary theories taught in our designated course into the analysis of
MOJO and Coca-Cola, we believe that our analysis is a success. Exercising
and enforcing the right marketing strategies will ensure their existence and
improvement of current standings. It was our pleasure in practicing all the
theories of this course in real life marketing examples.
52