October 8, 2008
The Coca-Cola Company is the world's largest beverage company, operating in over 200 countries with a product line that includes over 2,800 diverse items. The company's primary responsibility is to develop concentrates, beverage bases and syrups, which are sold to bottling companies that comprise the world's largest beverage distribution system. In addition to product development, the Coca-Cola Company is responsible for product marketing. Their mission is to refresh the world, inspire moments of optimism, and to create value and make a difference.
B. External Environment
Coca-Cola is recognized as the world's most valuable brand. The company has been extremely successful in global marketing, and experts indicate that this success is largely based on product variation and adaptation (Lamb, Hair & McDaniels, p. 114). Since the Coca-Cola Company extends to over 200 countries (with headquarters located in Atlanta, Georgia), they have an immense need to diversify their products and create a marketing plan that meets the socio-cultural interests of all their customers (vendors) and consumers (drinkers) around the world. The Coca-Cola trademark is recognized worldwide, no matter what language is printed on the bottle. However, the Coca-Cola Company must continue to tailor their marketing plan and product development to respect each consumer's unique values, beliefs and cultures. An example of the Coca-Cola Company adapting to the external socio-cultural environment is in 2007, the Coca-Cola Company received a silver award at the Iberoamerican Advertising Festival for their "Levate la Mano" (Raise Your Hand) commercial that was aired in Latin America (2007 Annual Report: Marketing Highlights). Coca-Cola has also created a unique formulation for Sprite sold in Japan to meet the cultural preferences (p. 114). Social factors have been carefully considered in the company's marketing plan. The Coca-Cola Company has successfully developed products to please the 21st century's health-conscious consumer with brands like Coca-Cola Zero (their best selling brand in over 25 years), sports drinks, and bottled water. Coca-Cola must continue to adapt to the external environmental threat of the healthy lifestyle movement through product development and marketing of healthy options available in the product line. Economic Factors
The United States is currently experiencing an economic recession. This period of negative growth includes higher unemployment, inflation, and cost of living expenses while consumers are experiencing lower disposable income and purchasing power (p. 641). The Coca-Cola Company contracts with numerous bottling companies around the world to create and distribute their beverages. The weakened economy could have a negative impact on any of the bottling companies, which would threaten the stability of the Coca-Cola Company due to the dependent relationship. The Coca-Cola Company must be profitable in order to sustain their investment in communities around the world. Furthermore, small communities depend on large businesses like the Coca-Cola Company to strengthen their own economy and help create social and environmental programs. The Coca-Cola Company has been very successful in helping other nations grow and become economically stable by investing millions of dollars back into the countries in which they are operating. Legal Factors
Legal factors that could pose an environmental threat to the Coca-Cola Company include new legislation or regulation of food and beverage products. Activists are trying to push for more government involvement in product advertising and labeling. While many laws have already been passed in this regard, expanded or new laws could threaten the company by creating more overhead expenses and decreasing the profit margin. Technological Factors
In today's marketplace,...