Memorandum

Date: 12/06/2015

Re: Coke Case Brief

Key Marketing Problem

Coca-Cola Corporation was experiencing declining growth, which made its performance unacceptable in 2004. Additionally, the performance was poor compared to its main competitors, a situation that necessitated growth strategies’ considerations. For the company to increase its sales growth, the managers needed to focus on the market, the products and the marketing mix. The essential focus for the company could be its core product market segments because they provided the biggest portion of its sales volumes and had potential for growth.

Strategic Question

Which ONE alternative growth strategy do you believe would contribute the most to improving sales by 10% in 2005 for the Coca-Cola Company?

Strategic Marketing Alternatives

  1. Increase sales by revitalizing adverts and promotions in the current market segments. The focus of the adverts is on specific client demographics for each drink in its core brands. Among the features to improve include packaging to appeal to each target segment. The strategy has the potential to assist in market penetration in the current markets and consequently increase sales.

  2. Develop new markets by expanding globally. Use the brand recognition to gain dominance in various countries. The absence of large competitors in the non-alcoholic beverage industry will provide economies of scale that are essential to overcoming local competition. The strategy will promote sales growth by serving a wide range of clients with the existing products (Week one lecture notes).

  3. Develop new products to serve other segments of the non-alcoholic beverage market. The new products will improve the performance and sales volumes by serving the changing customer needs and preferences. The products will attract back any customers previously lost to competitors. Create new products to ensure that the existing customers are retained by aligning products with their varying needs, which will lead to customer loyalty (IBM Case).

Recommended Strategy

The best alternative is the second one because it helps the company increase its sales volume without incurring heavy costs.

There are many countries with growth potential for Coca-Cola (The Coca-Cola Company, 2004). Therefore, the market is not saturated, which provides opportunities for growth by entering new geographical markets. During the growth phase of the product life cycle, the ideal strategy is to utilize the opportunities in the market instead of focusing on competitors (Kurtz & Boone, 2010). The opportunities include undeveloped markets with potential to increase sales for an organization with a suitable market entry strategy and competitive tactics. The existence of growth opportunities, coupled with the company’s reputation in the industry justifies the global expansion strategy. Additionally, the non-alcoholic beverage’s industry does not have large dominant competitors that create entry barriers in different countries. As such, Coca-Cola will enter new geographical regions with its existing products without facing substantial resistance. The customization of advertisements and promotion techniques for each product line will maximize success in the different geographical markets by reflecting local cultures. The attention dedicated to the unique cultural differences will prevent misunderstandings that are detrimental to the success of the strategy.

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