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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Background of Coca-Cola and Nature of the Soft Drinks Industry

The Coca-Cola Company (CCC) is an American soft drink company which was founded in 1886 in Atlanta, Georgia (O'Reilly, 2015). Most famous for its Coca-Cola product line, consisting of Coca-Cola Classic, Coca-Cola Zero Sugar, Coca-Cola Life and Diet Coke, the CCC also owns over 500 other soft drink brands, such as Sprite, Fanta and Glaceau Smartwater (The Coca-Cola Company, 2017). Originally marketed as a nerve tonic able to relieve exhaustion, the message of the CCC in the modern day is “to refresh the world – in mind, body and spirit… through our brands and actions”; a subtle, yet key difference when it comes to deciding how the company's products will be marketed.

Marketplace Characteristics, Environmental Forces & Competitors

As of 2015, the soft drinks industry in the United Kingdom is worth approximately £15.7 billion (British Soft Drinks Association, 2015), with Coca-Cola products Classic and Diet Coke having 17% and 9.9% of shares in this market respectively. The closest competitors to these are Pepsi, with a market share of 9.5%, and Diet Pepsi, with 5.3% (Thring, 2012) both of PepsiCo, Inc..

Within this marketplace there are several key environmental factors at play, including UK economic law, technological innovation and ecological issues. The former Chancellor of the UK, George Osborne, announced that in April 2018 a new “Sugar Tax” would be introduced. This tax will affect two bands of soft drinks; those with more than 5g of sugar per 100ml, and those with more than 8g per 100ml, with greater sugar content being met with a higher tax (UK Government, 2016). This new tax levy could potentially lead to a change in the cognitive attitudes of the consumers of soft drinks, perhaps leading them to the conclusion that soft drinks with high quantities of sugar in them are unhealthy. Such an attitude, which, according to Hilgard et al. (1975), is “an orientation towards or away from some object, concept or situation and a readiness to respond in a predetermined manner”, could cause consumers to feel as though they do not need these sugary soft drinks, but rather other ones with significantly lower sugar content as they appear to be healthier alternatives. Evidence for this is in the fact that low- and no-calorie drinks contribute 57% to total soft drink consumption (British Soft Drinks Association, 2015), indicating that in order to maintain profits the CCC will have to either reformulate their soft drinks to have a lower sugar content or focus far more on their low-calorie products such as Diet Coke, or both.

Customer Considerations – segmentation, targeting, positioning and buyer behaviour/buying process

When segmenting and choosing their target markets and positioning their products appropriately, the CCC have had to take into account various needs and behaviours of different groups of individuals. With a society ever more driven by appearance, weight-loss/-control has become far more important in many peoples lives. As a result of this, food/drink products aimed at the “diet” market have experienced a sharp increase in popularity. Whilst almost every demographic of people consumes diet soft drinks, the figure below income has a big factor to play in whether a person is more likely to drink diet or regular soda, if at all, with 10% more people with greater than $75,000 income per year drinking diet sodas than those with an annual income of less than $35,000.

Fig.1 Americans' Soda Drinking Habits by Major Demographic and Socioeconomic Groups (Mendes, 2013)

This demand for diet soft drinks is met by products such as Diet Coke and Coca-Cola Zero Sugar (The Coca-Cola Company, 2017) along with Diet Pepsi and Pepsi Zero Sugar (PepsiCo, 2017). Such products have reduced sugar content, reducing the number of calories in the drink, aiding the consumer in their pursuit of weight-loss.

Awareness of environmental protection has increased over the last few decades as an ever-increasing amount of research has shown that pollution has had an extremely adverse effect on the environment. Worldwide we use a total of around 100 million tonnes of plastic for bottles every year, producing approximately 500 million tonnes of carbon dioxide per year (Staley, 2005). Buyer behaviour has been affected as a result, with more and more recycled products being consumed every year. In order to meet this increased demand for recycled products, the CCC has utilised improved technology in order to develop their manufacturing process so that all packaging used in their products is 100% recyclable. Along with this, the plastic bottles, cans and glass bottles used by them are 25% recycled plastic, 42% recycled aluminium and 47% recycled glass respectively (The Coca-Cola Company, 2015). Additionally, Baby Boomers are 51% more likely to pay more for a product from a company committed to being environmentally friendly, whilst Millennials are 72% more likely to (Nielsen, 2015). This could lead to even more technological innovation with a view to being more ecological by the CCC, perhaps through increasing the percentage of materials used in their packaging in order to maintain their huge market share.

Marketing Mix Assessment

The aforementioned Coca-Cola, Diet Coke, Coke Zero Sugar and Coca-Cola Life comprise the Coca-Cola product line

Bibliography

British Soft Drinks Association, 2015. Changing Tastes, The UK Soft Drinks Annual Report. [Online]

Available at: http://www.britishsoftdrinks.com/write/mediauploads/publications/bsda_annual_report_2015.pdf

[Accessed 21 03 2017].

Nielsen, 2015. Green Generation: Millennials Say Sustainability is a Shopping Priority. [Online]

Available at: http://www.nielsen.com/uk/en/insights/news/2015/green-generation-millennials-say-sustainability-is-a-shopping-priority.html

[Accessed 21 03 2017].

O'Reilly, L., 2015. Business Insider UK. [Online]

Available at: http://uk.businessinsider.com/facts-about-coca-cola-2015-9?r=US&IR=T/#coca-cola-was-invented-by-atlanta-based-pharmacist-john-s-pemberton-in-1886-but-the-name-was-conjured-up-by-his-bookkeeper-frank-robinson-who-was-also-a-dab-hand-with-a-pen-he-created-the-unique-flowing-script-that-became-the-coca-cola-logo-that-is-still-used-today-1

[Accessed 21 03 2017].

The Coca-Cola Company, 2015. Sustainability and recycling: how Coca-Cola Great Britain is fighting waste with sustainable packaging. [Online]

Available at: http://www.coca-cola.co.uk/stories/the-complete-package

[Accessed 21 03 2017].

The Coca-Cola Company, 2017. Brands. [Online]

Available at: http://www.coca-cola.co.uk/drinks

[Accessed 21 03 2017].

Thring, O., 2012. Coca-Cola: still the real thing?. [Online]

Available at: https://www.theguardian.com/lifeandstyle/wordofmouth/2012/jun/26/coca-cola-still-the-real-thing

[Accessed 21 03 2017].

UK Government, 2016. Soft Drinks Industry Levy. [Online]

Available at: https://www.gov.uk/government/publications/soft-drinks-industry-levy/soft-drinks-industry-levy

[Accessed 21 03 2017].

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