Cap II

Market Position Analysis

Dwayne Woods

Capstone Experience in Integration & Strategy

Dr. Thomas H. Kemp

December 18, 2013

Assignment 3: Market Position Analysis: The Coca-Cola Company

The Coca-Cola Company is a leading world brand that makes soft drinks that are ready to drink. The company makes products such as Coke, Fanta, Sprite, Minute Maid, Dasani water among others. It has managed to hold its market position as the leading beverage producer in the world, facing competition from PepsiCo. Coca-Cola sells its products in the whole world, having divided its operation areas in regions such as Africa, Eurasia, Latin America, European Union, North America and Pacific. The company’s mission statement is ‘refreshing the world –in mind, body and spirit’.

Coca-Cola Company’s target market is any person who likes soft drinks, but lately they have been targeting teenagers and people below thirty. In short, its main target market is the youth. According to Vendredi (2012), the company uses several strategies to reach its target market. The company has partnered with restaurants and fast foods such as McDonald. This is because most of these young people eat in such places. The company has also made adverts for their current slogan, ‘Open happiness’ with teenagers as the cast. Most of the adverts show young people below the age of thirty having fun while taking their products. Their target market consists of both male and female youth. The young people are seen buying lots of beverages and Coca-Cola has set out to have them as their target audience.

Coca-Cola does not segment its market by age. From, an interview with a Coca-Cola manager, she claimed that their market is undifferentiated. Ali and Mohammad (2011) argue that their market is segmented on the basis of geographic region, demography, climate and behavior. Geographically, it sells higher quality products in the developed nations since per capita income is high. It also sells more in urban areas around the world than in the rural areas. The company segments its market according to climate because it sells its products in hot areas more than in cold areas. All its products are served cold. During summer, Coca-Cola sales are high in most areas around the world. The company also segments its market according to demographics. It has products for children between 4 and 12 since it has some that have flavors such as cherry, vanilla and lime. The Coke, Fanta and Sprite brands mostly targets the youth. The company also packs its products for families, that is, in the economy pack that usually has six cans. It also segments by income and this is seen in packing for example, plastic bottle soda is more expensive that the glass bottle.

The Coca-Cola Company is positive that their products satisfy their customer’s needs. This is because their customers are loyal. They also know this through the interaction with their customers on social media. The company’s website also has a segment left for customers to post their complaints and comments on their products. The company takes care of all their customers’ needs since they have different flavors to suit their consumers’ tastes. For those who don’t take soda, the company makes fruit juices by the brand name of Minute Maid. The company has however been unable to provide low calorie and low sugar soda in all their flavors to the customers. Only the Coke brand has a low sugar and calorie product know as Coke Zero.

Coca-Cola’s main competitor is PepsiCo. PepsiCo makes drinks such as Mirinda, Pepsi, 7Up, Gatorades and Tropicana fruit juice among others. From these two companies, their most famous brands are the cola drinks, with Coca-Cola’s going by the brand name Coke while that of PepsiCo is Pepsi. Let’s compare these two drinks. In the USA, their price is the same with the 2 liters bottle going for $1.79. The two brands have several products produced under them. For coke there’s Diet Coke, Coke Zero and Coke Classic. The Pepsi portfolio has Pepsi, Diet Pepsi and Pepsi-MAX. According to Lubin (2012) Pepsi was found sweeter in a sip test. He argues that Pepsi has a citrus flavor burst while Coke has a vanilla-raisin taste. Both are made with almost the same products but Coke is more carbonated than Pepsi, Pepsi has more caffeine, sugar and calories while coke has more sodium. Their qualities are difficult to differentiate since they taste almost the same, but each brand has its loyal customers. They are both in the market to quench the thirst of their customers. Coke is found world-wide while Pepsi is not available in all countries. Coke is easily available even in remote areas but in some countries Pepsi is only available in leading supermarkets. Coca-Cola is branded in white and red while Pepsi has blue as the major with red and white. Coca-Cola is more valuable than Pepsi with the former worth $79 billion while Pepsi is worth $17 million (Anuar 2013). Coca-Cola is associated with fun and happiness. Pepsi has branded itself using celebrities such as Beyoncé, Britney Spears and Michael Jackson and good music.

Coca-Cola’s competitive advantage lies in their image and availability. Their products are available worldwide and are affordable in every country since pricing is different in each country. The image of the company as well as that of their products has given it a first place before Pepsi. The company is known to have good products and to be a world leader in beverage production. Their products are advertised in fun-filled adverts that target its market segment. They also are packed in well-designed packs that are attractive to the consumer.

The Coca-Cola Company has a sustainable competitive advantage. Its competitive advantage stems from the Coca-Cola brand itself. It is a known brand in the whole world. Its other sources of competitive advantage are; the secret recipe, developing new products and re-inventing new ones and its production techniques that have produced high quality products at low costs (So Opinionated 2012). The company is able to sustain its competitive advantage through re-branding and re-inventing its products and associating them with fun things.

The company has therefore been able to hold a top position against its competitors in the whole world. Even during the US economic boom, Coca-Cola made negligible losses since it sold in other continents and its sales in the US changed slightly. It is also a highly valuable company worth billions of dollars.

Table Showing Coca-Cola’s Market Position

	Coca-Cola	Pepsi
Satisfaction	2	1
Refreshment	2	2
Health	1	0
Quality	2	2
Sweetness	1	2
Total	8	7

References

Ali, S. and Mohammad, S. (2011). Target market and market segmentation of Coca-Cola. Retrieved from: http://www.slideshare.net/sikander22/target-market-and-market-segmentation-of-cocacola

Anuar, D. (2013). Comparison of brands: Pepsi Cola vs. Coca Cola. Retrieved from: http://www.academia.edu/4977803/Comparison_of_brands_Pepsi_Cola_vs_Coca_Cola

Lubin, G. (2012). Here’s the real difference between Coke and Pepsi. Retrieved from: http://www.businessinsider.com/the-difference-between-coke-and-pepsi-2012-12

So Opinionated. (2012). The Coca-Cola business model and their competitive advantage. Retrieved from: http://sopinion8ed.wordpress.com/2012/11/23/the-coca-cola-business-model-and-their-competitive-advantage/

Vendredi. (2012). Coca Cola targeting and positioning. retrieved from: http://softdrinkcolawar.blogspot.com/2012/12/coca-cola-targeting-and-positioning.html