GREAT ZIMBABWE UNIVERSITY

MUNHUMUTAPA SCHOOL OF COMMERCE

DEPARTMENT OF MANAGEMENT STUDIES

NAME : TARISAI ATHANAS MUVENGI

REG NUMBER : M142286

PROGRAMM : MASTER IN BUSINESS ADMINISTRATION

COURSE TITLE : STRATEGIC MARKETING MANAGEMENT

COURSE CODE :

LECTURER : DR ZIMUTO

1. Evaluate how coca-cola sought growth and profitability. Use case study examples
Coca-Cola Company is the world largest beverage company with approximately 500 brands.
Apart for coca-cola brand, the company has other 14 brands; Coca-cola zero, vitamin water,
PowerAde, minute maid, diet coke, Fanta, sprite and Georgia coffee whose portfolio is over a
billion dollars. Coca-cola Company remains the world leader in manufacture and distribution
of beverages, soft drinks, coffee and teas, and other types of juices. It owns one of the largest
distribution networks in the world marketing in more than 200 countries of the world and
serving rate of nearly 1.6 billion per day (The Coca-Cola Company, 2010

In terms of its growth strategy, which is their market position in the beverage industry, Coca
Cola Company is concentrating in opening more opportunities in developing markets by
leveraging the scale & reach of the Coca Cola system to shape & capture value. The company
intends to accomplish it by sharpening their execution at the point of sale and expanding the
brand portfolio. The company has projected that these developing markets are expected to
contribute approximately 20 percent of incremental population growth over the next 10 years.
Personal expenditure per capita in these markets is expected to increase by 65% over the next
decade. Furthermore, Coca Cola company anticipates that developing markets will contribute
approximately ¼ of the incremental unit case volume by 2020.

The coca cola company’s long term growth strategy of investing in emerging markets, is
related to the Coca Cola Company projections in these markets. The CCC attributes this to a
positive correlation between wealth and the increase in consumption of Nonalcoholic ready-
to-drink(beverages. From now to 2020, more than 1 billion people will join the middle class,
and the per capita wealth for individuals will increase by nearly 30 percent. They have the
ability to invest in new plants in places like china & India. Over the next 3 years Coca Cola
company plans to invest $2 billion, 3 new plants are expected to be finished in that time
period. The company clearly understands in order for intended strategy to be attained,
consumer access and system alignment is key to their growth in these emerging markets. This
means placing more coolers throughout these countries, in order to drive on-the-go
consumption.

The Coca Cola company is also encouraging their partners in the value chain, to enhance
their soft skills within these developing markets. The company is focused on growing annual
consumption of beverage products. The company intends to work with its bottling partners to
establish new customer relationships & grow existing ones, from street vendors &
restaurants, to large-scale grocers.
The reason why the CCC emphasizes the development of soft skills, the Coca Cola Company
has a vast distribution network to contend with. To remain a leader in the beverage industry,
communicating with its partners along the value chain is an important aspect of their
continued success in the beverage industry. Coca Cola Company has a huge distribution
network and it is one of the best distribution networks in the world, nobody in the beverage
industry can match this tremendous asset. Another reason why the Coca Cola Company is
successful in its core activities, stems from its mission, vision & values. This is the source
where the CCC can attribute its success, & its long-term strategy to become the most widely
available & consumed soft drink in the world. Perhaps the following statement which comes
from the CCC’s mission, vision & values strategic outlook can be deemed a poignant
assertion.

The company did not focus only on the international market but it had its focus on the local
market for example the company targeted North Carolina by increasing its capital spending
and increasing 25 000 new vending machine in that area, each machine could generate 30 to
50 percent annual return and this has an impact on growth and profitability of the firm since
new employees would be needed. The vending machines were meant to ensure that the brand
name of coca-cola will be known all over America despite the size of the city. The vending
machines will attract customers and increase the client base of the company in North Carolina
leading to increased revenue and profitability in the long run.

2. WHAT ARE THE STRATEGIC LESSONS THAT COULD BE DRAWN

FROM INVESTOR STYLE OF MANAGEMENT

Coca Cola brand is world’s most popular brand. Therefore, Coca Cola Strategic Management
is to the continued achievement of its famed brand. Warren Buffett is key investor in Coca
Cola and believes that no sensible observe questions that Coca Cola will lead in its field
worldwide for an investment of lifetime, and certainly the supremacy will possibly
strengthen. Coca Cola brand is strong but few at management at Coca Cola think that there is
danger of public will get bored with brand, so they led Coca-Cola through great change in
management structure.

Strategic planning is one of the lessons which can be drawn from Ivestor’s style of
management. Planning is essentially a process directed toward making today’s decisions with
tomorrow in mind and a means of preparing for future decisions so that they may be made
rapidly, economically, and with as little disruption to the business as possible. Ivester began
the delicate task of shifting Coke’s corporate culture, which had developed a reputation in
some quarters for arrogance and stodginess. To speed the decision-making process Ivester cut
several layers out of Coke’s organizational Hierarchy Under Goizueta he began scrapping
Coke’s grueling December planning marathons with managers in favor of real-time
budgeting, giving his field generals more freedom to respond to any opportunities that might
arise. And, he tried to soften Coke’s old “tough-love” style of management. According to
Ivester, “Many employees today did not grow up in traditional households.” You’ve got to
transition to a modern style of motivating people. “We’re dealing with human thirst,”

Another lesson which can be withdrawn from Ivesters style of management is strategic
thinking. As part of that strategic effort, Ivester had encouraged more of his troops to think
boldly to take more risk, even encouraging one manger who had a scheme to use a laser to
beam Coke’s trademark off the moon to “go for it.”

To secure its position in the industry and to fight competition the company did not only
implement short term strategies but it also implemented long term strategies. Ivestor as a
CEO he planned ahead as evidenced by his 100year plan which he introduced to his
managers. This simply shows that he was a strategic thinker who could come up with
strategic issues and he knew how to tackle problems faced by the company. The company
CEO believed that where there is a crisis there are also opportunities and therefore the
company did not focus on the threats from new entrants for instance Pepsi. The company
took advantage of the crisis to grow its market share in and around the world.

3. COMPETITION

Typically, whenever one talks about competition, emphasis is placed on price, quality of
product, delivery time, and other marketing variables. For the purposes of strategy
development, however, one needs to go far beyond these marketing tactics. Simply knowing
that a competitor has been lowering prices, for example, is not sufficient. Over and above
that, one must know how much flexibility the competitor has in further reducing the price.
Implicit here is the need for information about the competitor’s cost structure Natural
competition refers to the survival of the fittest in a given environment. It is an evolutionary
process that weeds out the weaker of two rivals. Applied to the business world, it means that
no two firms doing business across the board the same way in the same market can coexist
forever Strategic competition is the studied deployment of resources based on a high degree
of insight into the systematic cause and effect in the business ecological system. It tries to
leave nothing to chance.Coca Cola’s main competitor is Pepsi which almost sell the similar
product and it is in direct competition with us. Indirect competitors are Red Bull, Vitamin C,
Energy drinks etc.

SEGMENTATION
Segmentation aims at increasing the scope of business by closely aligning a product or brand
with an identifiable customer group. Take, for example, cigarettes. Thirty years ago, most
cigarette smokers choose from among three brands: Camel, Chesterfield, and Lucky Strike.
Today more than 160 brands adorn retail shelves. In order to sell more cigarettes, tobacco
companies have been dividing the smoking public into relatively tiny sociological groups and
then aiming one or more brands at each group.Coke needed to turn around its situation so that
it becomes favorable

DEMAND
Demands is an economic principle referring to a consumer's desire to purchase goods and
services and willingness to pay a price for a specific good. This was explained in the case
study by the CEO of Coke when he said customer’s thirsty will not change this shows the
desire the consumers have to drink beverages.

Marketing mix
According to Philip Kotler “Marketing Mix is the set of controllable variables that the firm
can use to influence the buyer’s response”. The controllable variables in this context refer to
the 4 ‘P’s that is the product, price, place (distribution) and promotion. Marketing is
concerned with providing the right products and services and then forging the best
relationships between customers and products and services. The “marketing mix” is the
means by which that relationship is expressed.  These elements are very useful for marketer
to conduct a marketing plan. The 7ps stand for product, price, place, promotion, people,
process, physical evidence

  Product Concept.
This orientation holds that consumers will favour those products that offer the most quality,
performance, or innovative features.  Managers focusing on this concept concentrate on
making superior products and improving them over time. They assume that buyers admire
well-made products and can appraise quality and performance. for instance Apple
companyhave been working on their models for years and coming up with new features,
which convince their customers to stay. Their products are expensive, but you don’t get just
any kind of product, you get the most cutting-edge technology.

  SELLING CONCEPT. 

This is another common business orientation. It holds that consumers and businesses, if left
alone, will ordinarily not buy enough of the selling company’s products.  The organization
must, therefore, undertake an aggressive selling and promotion effort.  This concept assumes
that consumers typically show buying inertia or resistance and must be coaxed into buying.  It
also assumes that the company has a whole battery of effective selling and promotional tools
to stimulate more buying.  For example in the case study when coke scaled back ad
campaigns in favor of instore instant win promotions. In Poland, Coke bundled free candy
bars with its half-liter bottles

TARGET MARKET
Target market is a group of people with some shared characteristics that a company has
identified as potential customers for its products. Asian market or African market.The Coca
Cola’s soft drinks are essentially for all consumers but there are some areas where Coca Cola
target specific consumers. For instants Coca Cola diet is targeting the consumer whole are
older and between the age of twenty five to thirty nine. PowerAde is targeting the people who
are very fit and conduct healthy sports. Winnie the Pooh sipper cap is a Juice which is
targeting children of small age such as five to twelve. Coca Cola company advertising target
primary market of age between thirteen to twenty four, and secondary market is between ten
and thirty nine of age.

NEEDS
Firms compete to satisfy customer needs, which may be classified as existing, latent, or
incipient. Satisfaction of customer need is the ultimate test of a business unit’s success. Thus,
an effective marketing strategy should aim at serving customer needs and wants better than
competitors.
VALUE
Value is the monetary worth of something market price for example the 87 million the value
which coke bought from a british company.Over time, top management values come to
characterize the culture of the entire organization. Corporate culture in turn affects the entire
perspective of the organization.It influences its product and service quality, advertising
content, pricingpolicies, treatment of employees, and relationships with customers, suppliers,
and the community.

      
4. USING CASE STUDY EXAMPLES, DEMONSTRATE THE RATIONALE OF
STRATEGIC MARKETING MANAGEMENT.

The idea behind strategic marketing management is to adapt to your market as things change
around you. The goal remains the same, but the path that leads you towards your goal can
change. The benefits of implementing strategic marketing management are fairly
recognizable in the business world (Naisbitt, J. 1982).

According to Subash C 1997 First, the battle for market share is intensifying in many
industries as a result of declining growth rates. Faced with insignificant growth, companies
have no choice but to grasp for new weapons to increase their share, and strategic marketing
can provide extra leverage in share battles. McDonald’s main occupational strategy is to
make quality fast food to clients at a pocket-friendly price and get profit by deploying low
costs of production and expanding the entity to foreign markets, to have a larger market
segment.

Second, deregulation in many industries is mandating a move to strategic marketing. For

example, take the case of the airline, trucking, banking, and telecommunications industries.
In the past, with territories protected and prices regulated, the need for strategic marketing
was limited. With deregulation, it is an entirely different story (Drucker P. 1974). The
prospect of Sears, Roebuck and Merrill Lynch as direct competitors would have been
laughable as recently as ten years ago. Thus, emphasis on strategic marketing is no longer a
matter of choice if these companies are to perform well.
Third, many packaged-goods companies are acquiring companies in hitherto no-nmarketing-
oriented industries and are attempting to gain market sharethrough strategic marketing. For
example, apparel makers, with few exceptions,have traditionally depended on production
excellence to gain competitive advantage.But when marketing-oriented consumer-products
companies purchasedapparel companies, the picture changed. General Mills, through
marketing strategy,turned Izod (the alligator shirt) into a highly successful
business.Cheesebrough-Pond’s has done much the same with Health-Tex, making it
theleading marketer of children’s apparel. On acquiring Columbia Pictures in 1982,the Coca-
Cola Company successfully tested the proposition that it could sellmovies like soft drinks. By
using Coke’s marketing prowess and a host of innovative in financing packages, Columbia
emerged as a dominant force in the motionpicture business. It almost doubled its market
share between 1982 and 1987 andincreased profits by 20 percent annually. Although in the
last few years Izod,Health-Tex, and Columbia Pictures have been sold, they fetched these
marketingpowerhouses huge prices for their efforts in turning them around.

Fourth, shifts in the channel structure of many industries have posed newproblems.
Traditional channels of distribution have become scrambled, and manufacturersfind
themselves using a mixture of wholesalers, retailers, chains, buyinggroups, and even captive
outlets. In some cases, distributors andmanufacturers’ representatives are playing more
important roles. In others, buyinggroups, chains, and cooperatives are becoming more
significant. Becausethese groups bring greatly increased sophistication to the buying process,
especiallyas the computer gives them access to more and better information, buyingclout is
being concentrated in fewer hands.

Fifth, competition from overseas companies operating both in the UnitedStates and abroad is
intensifying. More and more countries around the world aredeveloping the capacity to
compete aggressively in world markets. Businesspeoplein both developed and developing
countries are aware of world markettrends and are confident that they can reach new markets.
Eager to improve theireconomic conditions and their living standards, they are willing to
learn, adapt,and innovate. Thirty years ago, most American companies were confident
thatthey could beat foreign competitors with relative ease. After all, they reasoned,we have
the best technology, the best management skills, and the famousAmerican can do’ attitude.
Today competition from Europe, Japan, and elsewhereis seemingly insurmountable.
Sixth, the fragmentation of markets the result of higher per capita incomes and more
sophisticated consumers is another factor driving the increased importance of strategic
marketingCohen, W. 2001. In the United States, for example, the number of segments in the
automobile market increased by one-third, from 18 to 24, during the period from 1988 to
1995

Seventh, in the wake of easy availability of base technologies and shortening product life
cycles, getting to market quickly is a prerequisite for success in the marketplace. Early
entrants not only can command premium prices, but they also achieve volume break points in
purchasing, manufacturing, and marketing earlier than followers and, thus, gain market share.
For example, in the European market, the first company to market car radios can typically
charge 20 percent more for the product than a competitor who enters the market a year later.

Eighth, the days are gone when companies could win market share by achieving cost and
quality advantages in existing, well-defined markets. As we enter the next century,
companies will need to conceive and create new and largely uncontested competitive market
space. Corporate imagination and expeditionary policies are the keys that unlock new
markets

Finally, demographic shifts in American society have created a new customer environment
that makes strategic marketing

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