The standardization or adaptation of price, product, placeand promotion of any business can be said to be very critical factors thatdirectly impact the success of the business in a new market.One company that has successfully implemented Standardizationand adaptation to its marketing mix strategy effectively is Coca Cola. Thecompany was established in the year 1886 and has in the end transformed intothe main maker, wholesalers and advertiser of non-mixed refreshments, syrupsand concentrates. The company is as of now working in more than 200 nations andis known for its creative formula named “Coca-Cola”, after which thecompany is named. The headquarters of Coca-Cola are situated in Atlanta,Georgia and its backup’s subsidiaries on 30,000 representatives, all around theglobe.80 percent of the profit generated by the company and 70 percent of itsvolume comes from outside the United States, making it one of the largestcompanies of the world (Anon.
, 2015). The worldwide achievement of Coca-Colacan be ascribed to various elements. The message was passed on by the previouschief marketing officer of Coca-Cola that if the firm needed to think global,it should first attempt to act locally. This message has been conveyed multipletimes by Coca-Cola Company. Coca-Cola has managed its effective worldwidepicture for a long time.
Coca-Cola is the brand that leads towards worldwideacknowledgment, in any case, the organization works similarly well in itsnearby operations; endeavoring to meet the requests of the local culture andtaste. Adaptation refers to the marketing strategy where theproducts and communications are adapted or tailored to reflect varyinginfrastructure, cultural and behavioral dimensions associated with differentmarkets in the global arena (Britt, 1974; Buzzell, 1968; Douglas & Wind,1987).This essay represents a critical analysis of standardizationand adaptation in international marketing in Coca cola. The essay begins with acritical analysis of different strategies and theories implemented by Coca Colain executing its marketing plan across the world. The essay is completed bydrawing conclusions on whether these strategies implemented are appropriate.Coca-Cola’s international success can be attributed to manythings but Sergio Zyman, former chief marketing officer of the Coca-ColaCompany argued (1999) that in order to think globally, a company must actlocally. This essay will use will use the 4ps in analyzing the marketing mix ofCoca cola:( 1) Product ± features, quality, quantity.
(2) Place ± location, number of outlets.(3) Price ± strategy, determinants, levels.(4) Promotion ± advertising, sales promotion, public relations.
Product: One of the aims of Coca Cola is to expand their business byunderstanding the trends and forces that will help them to sustain by creatingvalue and making difference. Coca cola quickly learned that although it costsless to create standardized products in every country, the ability to adapt tothe different environments ensures great success. Therefore the concept of“think global, act local” has been clearly adopted by Coca cola. Adaptation has been implemented by Coca cola for multiplereasons, including but not limited to customers tastes, and laws and customsgoverning a community. For example, the taste of coke in India might differfrom one from of the US; this is due to the fact that the drink is franchised.Despite the fact that the ingredients for Coca-Cola focusdoesn’t change, there can be slight contrasts in sweetness since packagingorganizations may change the measure of sweeteners used to fit the local’ssense of taste, and a few adaptations of the cola are said to be sweeter ormore sharp in different nations. The United States has seen, particularly in nationsnear Mexico, an increase in the demand of Mexican Coca-Cola imported into theUS and sold at various Mexican and Latin or South American markets.
They reportthat most Mexican bottlers include sugarcane rather than corn syrup to theingredients for Coca-Cola, and numerous individuals lean toward the Mexican adaptation;however at first the taste can be somewhat unusual. Since the cost of bringingin sugar cane to the United States is costly, bottlers import the drink fromnations where it’s inexhaustible or utilize substitutes like corn syrup whichis sponsored by the legislature too (Hays, 47).PLACEMost of Coca-ColaCompany’s products are sold in retail locations, convenient stores, petroleumstations and so forth. In spite of the fact that the pricing are set by thosethe organization sells to, coca cola suggests particular rules and have a fewlimitations on pricing.
For instance gas stations and convenient stores for themost part offer Coca-Cola items at a fixed cost, whereby restaurants have moreflexibility on what they can charge. In a majority of places competition-basedpricing is used. PRICEA standout among the most evident valuing techniquesCoca-Cola utilizes is psychological pricing. In many cases the promoted costsend in seven or five, this is usually below different competitors, for example,Pepsi.
Coca-Cola items are generally evaluated beneath, above orequivalent to its competitors’ prices. For instance, In the Easter of 2010 saleperiods, the normal cost for a 2 liter Coca-Cola was 1.67 and a 2 liter Pepsibottle was sold for 1.83 on average (Virginia, 3). With a specific end goal tocreate more sales and clear extra item, Coca-Cola likewise adopts a discountpricing technique.
Coca-Cola items are frequently discounted during salesperiods and extraordinary events. For example Coca-Cola often will send outcoupons for an amount to be taken off the cost of a specific product or allowthe markdown below MAP pricing to make room for new sales or products. PromotionCoca-colas drinks are for the most part for all customers.
Nonetheless, there are a few of their products, which target particularcustomers. For instance, Coca-Cola’s diet sodas are focused at buyers who are olderin age, between the ages of 25 and 39. PowerAde sports drink focuses on theindividuals who are fit, solid and take an interest in sports. The Winnie thePooh sipper top Juice Drink targets kids between the ages 5-12. This kind ofmarket approach is called market segmentation. The Coca-Cola Company whenpublicizing has an essential target market of the individuals who are 13-24,and a secondary market of 10-39 (Coca-Cola, 3).
Universally, Coca-Cola has embraced a worldwide techniquethat incorporates sponsoring professional sports leagues, music artists orgroups and the Olympics. For instance the organization publicizes with the NBA,World Cup Tournaments, the NCAA and prominent music gatherings (McKay, 13). Coca-Colapays a few million dollars so as to have the restrictive rights to publicize orcooperate with these occasions. In spite of the fact that it a costly method topromote, its advantages stretch out far past the cost of publicizing.
A lot ofviewers tune into or watch these occasions and the brand exposure is huge.Watchers are presented to the brand and the Coca-Cola brand becomes synonymouswith that popular athlete, league or artist. By paying these well-knowncompetitors and stars to underwrite their items, they impact millions topurchase or promote the Coca-Cola brand. From there it’s up to Coca-Cola tokeep the consumers to continue to use its products. ConclusionThere has been an extensive research on topics that arerelated to standardization of global strategy, but the number of conclusionsreached is very limited. In a research conducted by Demetris & Sharp (2000)global marketing can also be termed as another aspect of internationalmarketing that does not exist in its true form.
It is based on the idea that itcovers a wider perspective of countries and endeavors to develop a standardmarketing strategy between different countries.Coca-Cola’s global brand’s success is accredited to its”think global, act local” campaign. Most of their marketing strategies focusspecifically on local culture and customs. Localization is a key element in theeffectiveness of Coca-Cola’s international strategy plan.
We have also notedCoca-Cola’s performance could be better when compared to other mid-sizedcompanies.By attaining both qualities of each strategy, Coca-Colaenjoys an identifiable brand image as well as instilling local practices thatallows them to create and embrace cultural differences. Answer 2 – InternationalizationProcess Theory The theoretical framework of the Internationalization Processtheory was developed by Wiedersheim and Johansson. This theory lays itsemphasis on the four aspects which are market commitment and knowledge, currentmarketing activities and commitment decisions. The major internalizationtheories that are implemented by a company while entering into any new marketare contract manufacturing and exporting and licensing. Licensing is consideredto be the permission granted by the proprietor owner to any foreign company tosell their product, which would otherwise have been forbidden. Franchise on theother hand is when any company undertakes the right to take the businessactivity, by using the company’s name.
However, Joint venture can be totallydifferent from these two internationalization theories, as in this case acompletely new identity is created in which both the companies take an activerole. Export can be direct or indirect. When the firm exports indirectly itoperates through the confirming house, buying a house or export house (Anon.,2015). However, in this case franchising can be a better option for the company.The company started giving away its bottling rights for a dollar each, whilemaintaining the rights of the syrup produced. This was the initiated of what isnow addressed as the Coca-Cola system of franchise partnership.
Thispartnership with the bottlers is what led towards the internalization of thebrand. These bottlers are the public companies operating with the rights fromCoca-Cola such as Coca-Cola Enterprises, Coca-Cola Bottling Company, Coca-ColaConsolidated Bottling, etc. It International Marketing 9 was in the year 2013,when the company updated its franchising model in Canada and US, making itsagreement with the American and Canadian bottlers and expanding its territory(Feloni, 2015). Coca-Cola has implemented all the theories of internalizationat some point of time. The internationalization strategies of Coca-Cola havebeen a success in the first place. The company exports the syrups to the bottleowner, who have the right of manufacturing the firm’s product. There are anumber of challenges that Coca-Cola faces while operating in the global market.
In the developed countries, children may become obese due to the excessiveconsumption of CocaCola. These allegations are often addressed by Coca-Cola.As, once the CEO of the company gave the statement that children in thedeveloped countries are not obese because of the consumption of Coca-Cola but,they are obese because they do not take part in enough sports’ activities. Healso added that company’s products, like diet Coke is healthy for children, aswell as the adults. The internationalization theories adopted by Coca-Colahelps it in facing the competition from the local companies. Competing in theglobal market exposes the company to local competitors (Mok, et al.
, 2002). Conclusion The global companies continuouslyneed to generate and sustain high profit levels, to create competitiveadvantage for the company. For example, Coca-Cola continuously needs to buildits brand image by adopting effective and successful strategies related to promotion,provision and advertising.
The distribution system of the company needsconsistent development and expansion. Coca-Cola has been doing thissuccessfully over the years with the help of its strategy of growth, enablingthe company in the development of its international market InternationalMarketing 10 leadership. The company over the years had successfully developeda global mindset which involves understating of different global cultures,utilizing work relationships and identifying and grabbing every globalopportunity.