Coca Cola

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Coca-Cola Japan: Should tea be introduced?
Outline of Report
Coca-Cola Background
Japan and its culture
Japan’s Beverage and Tea Market
Coca-Cola Japan and its success
Coca-Cola Product Line
Competition
SWOT Analysis
Research and Development
Marketing Plan and Recommendations

Coca-Cola Company Background
Founded in 1886 by John C. Pemberton
World’s leading manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups More than 300 brands
Corporate Headquarters in Atlanta with local operations in over 200 countries around the world Two Business Sectors
North American
Coca-Cola USA
Coca-Cola Ltd. = Canadian Operations
Coca-Cola Foods = juice drinks
International
Greater Europe
Latin America
Middle and Far East
Africa
Japan in the 1980s
Average Exchange Rates, Japanese Yen/US Dollar, 1970-87
Japanese Beverage Market
Japanese Tea Market
Places to Sell
Grocery stores
5.1% annual average growth rate
Convenience stores
15.8% annual average growth rate
Restaurants
Vending machines
The Coca-Cola (Japan) Company
1957, established in Tokyo
Due to trade regulations, focus attention on:
Local connections
Competitive environment
Japanese culture
1961, trade deregulation policies
Form strategic alliances with powerful Japanese corporations which allowed local acceptance of the product 1965, Coca-Cola best-selling soft drink in Japan

CCJC Success
Two main factors contributing to leadership position
Direct marketing approach
Distribution system

“From the TV set to the store shelf”

Direct Sales Concept
Stiff Resistance
Wholesaler concept

Turnaround
Bottlers’ enthusiasm
Strong Coca Cola sales

Key Element
In Principle
Bottlers acted as independent corporation
Sourced raw materials locally
Complete all production on site

CCJC unified bottlers through
Aggressive Monitoring
Marketing Strategies
New Product Development
Japan’s Favorites
HI-C
Opened a way for new fruit juice market

Averted crisis for Japanese citrus farmers
Overproduction of Mikan
Coca-Cola bought crop to produce HI-C

Led to lasting relationship between CCJC and growers

Georgia
Lack of canned coffee product source of controversy between CCJC and Japanese bottlers

Leading brand in market segment
34% of market in 1987
Young businessmen primary target

Aquarious
Isotonic drinks

Touted as “health drink”
Female consumer targeted

Ideal for replenishing fluid and electrolytes lost through perspiration Market Share
Commanded 90% of cola market
60% noncola carbonated market
10% remaining drink market

21.5% of Coca-Cola’s worldwide profits came from Japan

Profit per gallon four times higher than U.S.

Competition
Included private-label suppliers, international and domestic producers Other beverages besides cola competed for their percentage of the market. Advertising, sales promo programs, intro of new packaging and new products, were competitive factors.

Tea market competitors
Ito En Ltd
Suntory Ltd
Kirin
Hitachi Zosen Corp
Ashai Breweries Ltd.
Ito En Ltd.
Leading Japanese canned tea marketer
First to come out with canned tea product
Introduction of green tea with superior quality in 1985
Central focus is just tea products

Suntory Ltd.
Largest distillory in Japan due to production of alcholic beverages Decided to enter tea market by intro of canned oolong tea and resulted into 50 % of market Big competitor of Coca-Cola due to production of beverages including cola, green tea, and health tonics. Kirin

First canned black tea “Afternoon Tea”
Advantage- facilities= 5th largest brewery
Brand recognition due to having 50% market share of beers
Leading domestic soft drink producer along with similar beverages to Coca-Cola Hitachi Zosen Corp.
Prestigious company due to biotech background
Developed “healthy” tea from bark of tochu tree

Ashai Breweries Ltd.
1st producer of...
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