Reference no: EM132811135

Coca-Cola 

When it comes to mass marketing, perhaps no one does it better than Coca-Cola. Coke is the most popular and best-selling soft drink in history. With an annual marketing budget of nearly $3 billion and annual sales exceeding $30 billion, the brand tops the Interbrand ranking year after year. Today, Coca-Cola holds a current brand value of $68 billion and reaches consumers in over 200 countries, making it the best-known product in the world (after okey).

The history of Coke's success is astonishing. The drink was invented in 1886 by Dr. Jhon S. Pemberton, who mixed a syrup of his own invention with carbonated water to cure headaches. The company's first president later turned the product into a pop culture phenomenon by introducing it to pharmacists and consumers around the world and handling out clocks, posters and other paraphernalia with the Coca-Cola logo.

Coca-Cola believed early on that to gain worldwide acceptance, the brand needed to connect emotionally and socially with the masses, and the product needed to be "within arm's - length of desire." So the company focused on gaining extensive distribution and worked hard at making the product loved by all.  In World War II, it declared that "every man in uniform gets a bottle of Coca-Cola for 5 cents, wherever he is, and whatever it costs the company." This strategy helped introduce the soft drink to people around the world as well as connect with them positively in a time of turmoil.

Why is Coca-Cola so much bigger than any other competitor? What Coke does better than everyone else is create highly current, uplifting global campaigns that translate well into different countries, languages, and cultures. Coke's advertising over the years has primarily focused on the product's ability to quench thirst and the Brand's magical ability to connect people no matter who they are or how they live. Andy Warhol said it best, "A Coke is a Coke and no amount of money can get you a better Coke than the one the burn on the corner is drinking."

One of Coca-Cola's most memorable and successful commercials was called "Hilltop" and featured the song, "I'd like to buy the world a Coke." Launched in 1971, the ad featured young adults from all over the world sharing a happy, harmonious moment and common bond (drinking a Coke) on a hillside in Italy. The commercial touched so many consumers emotionally and so effectively showed the worldwide appeal of Coke that the song became a top ten hit single later that year.

Coca-Cola's television commercials still touch upon the message of universal connection over a Coke, often in a lighthearted tone to appeal to a young audience. In one spot, a group of young adults sit around a campfire, playing the guitar, laughing, smiling, and passing around a bottle of Coke. The bottle reaches a slimy, one-eyed alien who joins in on the fun, takes a sip from the bottle, and passes it along. When the next drinker wipes off the slime in disgust, the music stops suddenly and the group stares at him in disappointment. The man hesitantly hands the bottle back to the alien to get re-slimmed and then drinks from it, and the music and the party continue in perfect harmony.

Coca-Cola's mass communications strategy has evolved over the years and today mixes a wide range of media including television, radio, print, online, in-store, digital, billboard, public relations, events, paraphernalia, and even its own museum. The company's target audience and reach are so massive that choosing the right media and marketing message is critical. Coca-Cola uses big events to hit huge audiences; it has sponsored the Olympics since 1928 and advertises during the Super Bowl. Red Coke cups are placed front and center during top-rated television shows like American Idol, and the company spends over $1 billion a year on sports sponsorships such as NASCAR and the World Cup. Coca-Cola's global campaigns must also be relevant on a local scale. In china, for example, Coca-Cola has given its regional managers control over its advertising so they can include appropriate cultural messages.

The delicate balance between Coca-Cola's local and global marketing is crucial because, as one Coca-Cola executive explained, "Creating effective marketing at a local level in the absence of global scale can lead to huge inefficiencies." In 2006, for example, Coca-Cola ran two campaigns. In 2010, the company ran a single campaign during the same event in over 100 markets. Executive at Coca-Cola estimated that the latter, more global strategy saved the company over $45 million in efficiencies.

Sources: Natalie Zmuda, "Coca-Cola Lays Out Its Vision for the Future at 2010 Meeting," Advertising Age, November 22, 2009; Natalie Zmuda, "Cokes's 'Open Happiness' Keeps It Simple for Global Audience, "Advertising Age, January 21, 2009; John Greenwald, "Will Teens Buy It?" Time, June 24, 2001; "Coca-COLA Still Viewed as Most Valuable Brand. "USA Today, September 18, 2009; Edward Rothstein, 'Ingredients: Carbonated Water, High-Fructose Corniness . . . "New York Time, July 30 2007; Brad Cook, "Coca-Cola: A Classic," Brandchannel, December 2, 2002; Coca-Cola, Annual Report.

QUESTIONS:

1. Identify the opportunities Coca-Cola took advantage using their strengths? Explain. Cite Examples.
2. Why is it important for Coca-Cola marketers to be aware of the social-cultural environment in which they plan to do business?  
3. Explain how Coca-cola's Marketing and Integrated Marketing Communications strategies contributed to the success of the company?
4. "Creating effective marketing at a local level in the absence of global scale can lead to huge inefficiencies"- coca-Cola Executive.
5. What is meant by "global localization" ? Is Coca- cola a global product?
6. Describe the difference between ethnocentric, polycentric, regiocentric and geocentric management orientations in terms of (a) extension and (b) adaptation.
7.  What is the management orientation of Coca-Cola (based on #5)? Cite examples why you have considered that management orientation for Coca-Cola.