Feasibility Study on Carbonated Drinks Essay

Feasibility Study on Carbonated Drinks Essay.

I. Introduction

An effervescent drink that releases carbon dioxide under conditions of normal atmospheric pressure. Carbonation may occur naturally in spring water that has absorbed carbon dioxide at high pressures underground. It can also be a byproduct of fermentation, such as beer and some wines. Many curative properties have been attributed to effervescent waters (e.g., aiding digestion and calming nerves), but few have been scientifically tested. The term seltzer once referred to the effervescent mineral water obtained from the natural springs near the village of Niederseltsers in SW Germany.

Today, however, seltzer is simply well-filtered tap water with artificially added carbonation. Club soda is also artificially carbonated but contains other additives as well, including sodium bicarbonate, sodium chloride, sodium phosphate, sodium citrate, and sometimes light flavoring.

Artificial carbonation was first introduced in 1767 by an Englishman, Joseph Priestley, and was commercialized in 1807 by Benjamin Silliman, a Yale Univ. chemistry professor, who bottled and sold seltzer water. After 1830, sweetened and flavored (lemon-lime, grape, orange) carbonated drinks became popular.

In 1838, Eugene Roussel added a “soda counter” to his Philadelphia shop; by 1891, New York City had more soda fountains than bars. In 1886, John S. Pemberton, an Atlanta druggist seeking a headache and hangover remedy, added kola nut extract to coca extract and produced Coca-Cola. A pharmacist named Hires invented root beer in 1893.

Today, heavily sweetened, carbonated drinks, or sodas, are among the most popular beverages in the world. In the last two decades, the introduction of diet drinks containing artificial sweeteners has increased sales of carbonated beverages. Annual Coca-Cola sales alone total more than a billion dollars, and sodas account for one-fourth of the annual sugar consumption in the United States. Soft drinks or carbonated drinks can be found most anywhere in the world, but nowhere are they as ubiquitous as in the United States, where 450 different types are sold and more than 2.5 million vending machines dispense them around the clock, including in our schools. The American Beverage Association says that, in 2004, 28 percent of all beverages consumed in the U.S. were carbonated soft drinks. Beverages are carbonated for various reasons.

Many people find the fizzy sensation to be pleasant and like the slightly different taste that carbon dioxide provides. Carbonated beverages, particularly naturally carbonated spring water, were once thought to be health tonics, and the effervescence can help soothe an upset stomach. To keep the carbon dioxide dissolved, cans and bottles of soda must be kept under high pressure. Containers might explode when shaken, because of the build up of the gas, or the beverage might spray out when a shaken container is opened. The carbon dioxide in a carbonated beverage also causes people to burp after they drink it, because the gas is released after being ingested into the body.

II. Types of Carbonated Drinks

A. Soda – Many people begin to drink carbonated beverages in childhood with a first sip of Coke, Sprite or Dr Pepper at a birthday party. B. Coffee – Although the ventures didn’t succeed, Starbucks tried to introduce a carbonated coffee beverage called Mazagran and Coke attempted the same thing with Kona. C. Carbonated Water – Carbonated water (also known as sparkling water, fizzy water and seltzer) is popular among weight-conscious or other people who want to avoid sugar sodas. It is available plain and in a variety of light flavors, like lemon, raspberry and vanilla. D. Sparkling Wine (Champagne) – Sparkling wine—or champagne, depending on where the beverage was produced—is the drink of choice for celebrations and also pairs well with light dishes like fish or chicken. E. Energy Drinks – Enviga, Red Bull, Jolt and Monster are carbonated drinks that have stimulants that help energize.

F. Juices- You can buy juice that has carbonation but check their nutrition labels to see how healthy they are. One example is the Nantucket Nectars line of lightly carbonated juices called Nectar Fizz.

III. Technical Feasibility
A. Business Location

Location to setup a Carbonated Drink Distribution is on a urban area where everybody can have an access buying drinks. Location can be on a beach for summer is coming everyone wants cold drinks.

IV. Organizational Feasibility
A. The legal status of business play an important role in any setup; the proposed
Carbonated Drink store setup is assumed to operate as a Franchise of bigger organizations.
V. Conclusion
Carbonated Drinks are what most people want. Drinks like this will consumed by most of people especially in urban area where it is now the trend.

Feasibility Study on Carbonated Drinks Essay

Coca Cola Market Segmentation Essay

Coca Cola Market Segmentation Essay.

Introduction

Coca cola utilizes both internal and external marketing strategies to gain a competitive advantage over its competitors becoming a successful company with great earnings. Additionally, the company claims that the innovation is at the heart of everything they do add to their success. The company has segmented its market in terms of demographics, psychographic, geographic and lifestyle.

Discussions

After building a strong reputation and brand image, the Coca-Cola Company changed its name from Coke to New Coke in 1985 as they continued to offer customers a better taste.

Demographically, although the company seems to focus on the whole population globally, its particular target is the young generation showing the energy giving element to the customers. According to world demographics 2013, 57.4 percent of the global population lies in the age bracket of 15-54 years of age. The statistics provide a clear indicator that the Coca-Cola focus on the largest demographic in the world with potential customers thus a right strategy to ensure sustainability and growth.

In regard to family size, the company serve its in different bottle sizes for families to choose according to their sizes ranging from 200ml to 2 Liters pack (Global Functional Drinks Industry Profile, 2014). The Coca-Cola Company practice geographic segmentation in terms of regions.

Through the price remains constant in all parts, the brands vary according to the weather of the region. For example, in Hong Kong during summer season Coca-cola has a unique brand called freezing coke (Global Functional Drinks Industry Profile, 2014). The strategy ensures continued brand loyalty by providing all weather drinks at the same price. Further in terms of place of consumption. Coca-Cola puts up vending machines in meeting terminus and stations to ensure access to all. Locally in states the company provides equal and continuous supply to the local shops. Low-income earners have access to returnable glass bottle with medium income earners having plastic non-returnable bottle and Coke tin for high-income earners.

In psychographic segmentation, Coca-Cola distinguishes customers into different groups based on buyer’s values, lifestyle or personality. Although people share the same demographic group, they exhibit diverse psychographic profiles forcing Coca-Cola to design and manufacture products suiting personality. In terms of lifestyle, consumers portray different lifestyles. Coca-Cola Company presented a more portable packaging for their soft drinks in order to provide for the modern ever busy user. The company endows its products with brand personality in line with a particular consumer personality. Further in observing culture and especially the diet matter, Coca-Cola produced health conscious products such as Coke Zero and Diet Coke (Global Functional Drinks Industry Profile, 2014).

Conclusion

The Coca-Cola Company boasts of high market and business share globally. The company has continuously gained more profits through use of different marketing strategies and market segmentation. Through segmentation, the company has managed to ensure continuous customer satisfaction by providing goods and services that meet all the social classes. Sales wise, the company have continuously experienced increasing sales by increasing the benefits derived from each segment for their products and services. The trend also benefits from the ever increasing customer loyalty as a result of satisfaction. Through its franchising model, the company runs a successful business in non-alcoholic beverage industry globally. It stands to capture any new drink type in the market as it has done before. A slight decline in segment consumption attracts careful analysis from the company to dig down into the cause and innovative measures to curb such loss.

References
Global Functional Drinks Industry Profile. (2014). Functional Drinks Industry Profile: Global, 1-35.

Coca Cola Market Segmentation Essay

Strength & Weaknesses of Coca-Cola Essay

Strength & Weaknesses of Coca-Cola Essay.

INTRODUCTION

The purpose of this integrated essay is to explore the strengths and weaknesses of Coca Cola (Coke) using the Value Chain Analysis Framework developed by Michael Porter. Using Exhibit I from Porter’s Framework, I examined the linkages and strategic significance of Coke’s value system.

DESCRIPTION OF THEORIES/CORE CONCEPTS

According to Michael Porter (1985), information technology changes the way companies operate by specifically targeting how companies create their products. Porter divided the business operation process into value activities that were either technologically or economically based.

Porter then stated that performing the value activities at a lower cost or creating a differentiated, premium-paid product yields a competitive advantage.

Exhibit I classified the value chain activities as either primary or secondary. Primary activities include all facets dealing with product creation, sales, delivery, and servicing new products. On the contrary, secondary activities support the primary activities by providing all services necessary to ready the product for the customer. (Porter, 1985). An example of a supporting activity would include the hiring activities of the human resource department.

Their duty is to hire skilled employees to produce the company’s products.

Lastly, Porter addressed the linkages that exist between interdependent activities in the company’s value chain and with suppliers. Often interdependent activities lead to trade-offs in areas such as performance, cost, and quality. Optimization of those trade-offs leads to a strong competitive advantage. Whereas a failure to capitalize on those trade-offs causes numerous issues include low sales, loss of competitive edge, and layoff.

ANALYSIS/EXPLANATION/DISCUSSION

Coca Cola (Coke) is the largest manufacturer of non-alcoholic beverages in the world. Coke markets over 500 products in over 200 countries. With that being said, Coke’s revenue for 2013 only surmised to $46 billion as opposed to the $64 billion posted by PepsiCo, Coke’s top rival. Upon further examination, I discovered that PepsiCo operates in both the snack and beverage industry unlike Coke, which solely deals in beverages. Of the $46 million in revenues posted by Coke, at least 75% of the revenue came from beverage sales. In comparison, PepsiCo has a diversified portfolio with at least 25% of revenue attributed to beverage sales. Therefore, in reality, the $64 billion reported by PepsiCo equates to roughly $16.5 billion in comparable sales (“KO Income Statement”, n.d.).

Coke’s strongest competitive advantage lies in their name. With having such a long history and loyal customer base, Coke has endured many years of increased profits. In addition, another plus for Coke is the marketing strategy used. Coke makes a stance that Coke is for everyone regardless of age. On the other hand, Pepsi’s slogan targets the young with their new age marketing approach. Lastly, Coke is everywhere. It is in stores, restaurants, vending machines, and served on airlines. Not only is Coke delivering their products to consumers through normal channels, but Coke also uses strategic partners, such as McDonalds, who sell Coke products alongside their company product. This partnership increases Coke’s sales, broadens the customer base, and reduces delivery cost (“SWOT of Coca Cola”, n.d.).

Coke’s biggest weakness is failing to enter another arena. As I mentioned earlier, PepsiCo is also in the snack market (“SWOT of Coca Cola”, n.d.). If Coke enters this market, its profits could more than double. Coke is aware of this major weakness and began a grassroots effort to persuade their employees to purchase substitute and, preferably non-Pepsi, product. For instance, on my first day as a contractor with Coke, I received a pamphlet showcases all of Pepsi’s products. Coke made me aware that if our 80,000 employees purchased a PepsiCo product once a week for a year, our competitor yields roughly $16 million a year. Needless to say, I felt obligated to decrease my loyalties to Doritos and Kentucky Fried Chicken.

CONCLUSION

In short, Value Chain Analysis aids companies in identifying which activities are necessary to sustain business operation and which are not. In addition, this tool is also useful in identifying a company’s competitive strengths that could lead to a competitive advantage in their industry.

In my opinion, Coca Cola’s future prospects are unlimited. Coke has successfully launched several new products including their sparkling beverage line and freestyle drink machines. Even with direct competition from PepsiCo, Coke remains the front leader.

EXTENDING THE CONVERSATION

My greatest strength is my strong educational background with emphasis on my accounting and financial skills. I am able to offer any company ten years of experience in general accounting in full cycle accounts payable, various areas of accounts receivable including Cash Applications, Credit, and Collections. I also offer over four years of experience as an Accountant and three years of experience as a Financial Analyst. For governmental and overseas employers, I offer four years of Middle East experience and a Moderate Risk Security Clearance.

With my background, I believe I have a slight competitive edge over similarly situated candidates. For that reason, I choose to pursue my Doctorate in Business Administration (DBA) for quick access to top financial positions that have eluded me for some time. Having my DBA will place me in the right arena even against more seasoned candidates.

When considering future opportunities that would add value to my resume and simultaneously affect social change, I think organizations such as the Federal Emergency Management Agency (FEMA), the United Nations, and the Peace Corps. These organizations are well-known advocates for peace and well-being in other countries. The overall goal of those companies is not only to into influence the lives of the individuals in another country, but also to influence in a positive manner. I think I can have a successful career with one of those companies, but I do enjoy helping others.

QUESTIONS

If you worked for Coke, how far would you be willing to go to be part of the team? Would you fully commit to Coke and give up all PepsiCo products?

What is your personal competitive advantage?

REFERENCES

KO Income Statement | Coca-Cola Company (The) Common Stock – Yahoo! Finance. (n.d.). Retrieved September 4, 2014, from http://finance.yahoo.com/q/is?s=KO&annual

Porter, M.E. & Millar, V.E. (1985). How information gives you competitive advantage. _Harvard Business Review, 63_(4), 149-161. Retrieved from http://zaphod.mindlab.umd.edu/docSeminar/pdfs/Porter85.pdf

SWOT of Coca Cola. (n.d.). Retrieved September 4, 2014, from http://www.marketing91.com/swot-coca-cola/

Strength & Weaknesses of Coca-Cola Essay

Coca Cola Supply Chain Essay

Coca Cola Supply Chain Essay.

1. Executive Summary

This report comprises of findings, global strategies, strategic fit and recommendations with respect to The Coca Cola Company (TCCC) supply chain management of the beverage product Coke in North America. All findings are based on secondary research from relevant websites. All sources of information have been added into the References and Appendix for referral.

The report starts off briefly about TCCC’s global market position and summary of their suppliers and customer base. Following which, the flow of TCCC’s supply chain were described.

 TCCC’s global strategies and efforts were identified in accordance to the company’s supply chain and the flow of information in the supply chain. The global strategies identified were namely: global diversity and sustainable communities. After which, TCCC’s global strategies are assessed against their supply chain to see if they are strategically fit.

Lastly, recommendations are provided in accordance to their supply chain and global strategy. The two recommended improvements to TCCC are being transparent with their information and share it across their supply chain and to improve their quality control checks.

By adopting these changes into their supply chain and global strategy, TCCC will be able to better align themselves with their business goals and experience a growth in their beverage sales.

2

2. Company Overview
2.1. Company Background

TCCC is currently the largest beverage company in the world. As a market leader in the beverage industry, they feature more than 3,500 different types of products which covers sparkling beverages, still beverages, juices, ready-to-drink coffee and waters. Some of the brands that TCCC offers includes Sprite, Fanta, Diet Coke, Honest Tea, Simple Orange and many more (Coca-Cola at a, n.d.). With their large and well developed supply chain and distribution channel, they are able to reach out globally to more than 200 countries in the world.

2.2. Company suppliers and customers

TCCC adopts a franchise model where they sell their beverage bases or syrups to more than 250 bottling companies worldwide. TCCC monitors all of their suppliers closely to ensure the quality of the products supplied. They ensure the suppliers meet the standards required by the law and follow their Supplier Guiding Principles and be environmentally sustainable.

The report would be focused on the soft drink Coke in North America’s market. Being the bestselling beverage for the company, Coke is sold in most of the countries in the world. The soft drink captures potential market of teenagers, athlete and working adults. The company is trying to target a bigger market regardless of age, ethnic groups, sexes and even lifestyle. To catch up with the increasing trend of having a healthy lifestyle, they have created drinks such as Diet Coke and Coke Zero. They strive to reduce cost, improve quality and provide service and support to tailor to customers’ needs.

3. The Flow of Supply Chain

The supply chain of a company shows all of the parties who are involved either directly or indirectly in the process of satisfying consumers’ request. The supply chain will also show the movement of product and the flow of funds and information. TCCC’s supply chain consist of six different stages. The six stages of the supply chain are supplier, Coca Cola Company, bottling companies, distribution centres, retailers and finally the consumers. (See Figure 1) TCCC aims to provide tailored services to customers all around the world with their constantly improving supply chain. Firstly, the suppliers will supply the raw materials to TCCC for production of concentrated beverage base in their plants.

The concentrated beverage base will then be franchised to the bottling companies. For the production of Coke, bottlers will have to combine the concentrated syrup with other materials in a certain fixed ratio. Next, they bottle the drink into respective containers. After the inspection, the bottled drink are packaged and delivered to distribution centres. The distribution centres will consolidate and deliver the products to the retailers who will then sell to consumers. 4. Global Supply Chain Strategies

TCCC aims to satisfy consumers’ needs and expectations through company’s improvement and implementation of global supply chain and strategies. With the 3

supply chain strategies, TCCC is committed to achieve global diversity and sustainability in communities. The sustainable communities refers to reducing environmental harm, nurture good work environment and increase economy in community.

4.1. Supplier

TCCC believes that it is essential to get trustworthy suppliers to ensure best quality of concentrated syrup produced every time and having a good corporate citizenship will help in promoting future success of the business. The first step in achieving the best suited supply chain would be getting reliable and consistent supplier. TCCC strive to achieve supplier diversity by offering more opportunities for the minorities, women and even lesbian, gay, bisexual and transgender (LGBT) suppliers. Under the Supplier Diversity Mentoring Program, training and assessments are provided by TCCC to the supplier to better position and improve the growth of their operations.

TCCC also created the 2nd Tier Supplier Program to get Coca Cola’s main suppliers to work together with the women and minorities suppliers. This increases procurement opportunities and stretched our company’s network into more markets. TCCC came up with their own set regulations and policies which includes the Supplier Guiding Principles (SGPs), Human Rights Policy and Code of Business Conduct for Suppliers. The SGP conveys the expectations of the suppliers’ workplace policies and responsibility towards the environment. These policies, trainings and assessments are necessary for continuously updated to follow the company’s progress.

4.2. Bottling Companies

Being the largest beverage company, TCCC partners with more than 250 bottling companies all around the world. These bottling companies are responsible for bottling, packaging, merchandising and marketing Coca-Cola beverage products. Some of the authorised bottlers are Coca-Cola Hellenic in Eastern Europe and Coca-Cola Enterprises (CCE) in Western Europe. Most of the bottling companies are independent from TCCC.

Coca-Cola Refreshment (CCR) is a subsidiary of TCCC after TCC decided to acquire it from CCE on October 2010. They focuses mainly on the Northern America market. Other than the concentrated syrup from TCCC, CCR requires other raw materials such as aluminum can sheet from Novelis Inc., PET bottles, high fructose corn syrup and carbonate. CCR is part of the Coca-Cola Bottlers’ Sales & Services Company LLC (CCBSS). CCBSS is a limited liability company and is owned by Coca-Cola bottlers in America (Seasonality.n.d.). CCBSS helps in facilitating and procuring strategies and systems to the bottling companies in America. In order to achieve efficient purchasing, CCBSS consolidates the purchases of raw materials for all bottling companies in America.

The bottlers made an effort to be environmentally sustainable through recycling, reusing and usage of lighter weight package. To encourage recycling, recycle bins are placed everywhere in public. The use of lighter packaging helps in reducing the carbon footprint as well as reducing the amount of material used (See Figure 4). They also use recyclable PET bottles that are made partially from plants (Our progress, n.d.). 4

4.3. Distribution Centres

TCCC have many distribution centres and warehouses around the world. All distribution centres and warehouses are controlled by TCCC. To better enhance their global commitment, TCCC initiated the 5by20 program. TCCC hope that through this program, over five million business women all over the world would benefit from it. Under the 5by20 program, the women entrepreneurs would receive training, financial resource and mentors from TCCC. In America, the 5by20 program is currently under incubation in Haiti and Mexico. These micro-distribution centres will be in-charge of delivering Coca-Cola beverages to local retailers, helping TCCC to gain easy access to more hard-to-reach communities and markets (See Figure 2). TCCC tried to make the delivery process more effective through the transformation of the delivery truck.

The packaged Coke in the warehouse are now delivered to the retailers using the Order Fulfilment System (OFS) trucks instead of the traditional sideloading delivery trucks. These OFS trucks allows CCR to load and deliver products in America more conveniently through palletized orders. The palletized order allows driver to unload just one cart filled with different products ordered by the customer. This will reduce the delivery time and increase the amount of orders delivered. Not only so, the trucks are more fuel efficient as compared to traditional delivery trucks, incurring a lower transportation costs.

The distribution centres in America delivers the beverages to retailers in different area through the Interstate Highway System route. The Interstate Highway system interlinks provides business routes for companies to enter the central business district in each city, making it more convenient for the delivery trucks to deliver the products around America. The vehicle routing software is also implemented to make the delivery process more efficient. The transportation planners will be able to use this software to design which route to take to reduce the time taken and distance travelled to deliver the product to the retailers.

4.4. Retailers

Retailers who purchases the Coca-Cola soft drink includes restaurants, small businesses and international retailers. Retailers are platforms for consumers to purchase Coca-Cola beverages. They are important in the supply chain as they have direct contact with the consumers.

TCCC provides customer training and development when necessary, especially to those smaller businesses. TCCC hopes that through the programs, it will help the retailers be more efficient and profitable in their business. To further help the retailers to be economically sustainable, a global initiative AIM-PROGRESS is implemented. This initiative offers joint trainings either physically or virtually globally covering responsible sourcing.

TCCC also have their own vending machines. The vending machines are designed to increase interaction between the company and the consumers. TCCC are also known for using their unique vending machines to spread happiness or spread awareness. Some of the vending machines includes getting people to mimic the dance moves in South Korea and Hug Me vending machine in Singapore (See Figure 3). These interactions encourages healthy living into people.

4.5. Consumers

The consumer is the most important source of revenue for the company in the supply chain. TCCC hopes to capture as many people in the market as possible regardless of age or lifestyle. Coke is a more popular choice of drinks among the teenagers and middle class consumers. With the increasing number of teenager and middle class consumers globally, this is particularly favourable to the company. TCCC offers a diversity of beverages to cater to different lifestyles. To target the health conscious customer group and address the obesity issue, Coca-Cola Zero, Coca-Cola Diet and beverages with low or no calorie are available in the market. The company would also get people to exercise through efforts such as the interactive vending machine as mentioned in 4.4.

4.6. Flow of Information

The sharing of essential information is important across the supply chain. TCCC came up with the Coca-Cola Retailing Research Councils in order to communicate more efficiently and effectively throughout the supply chain. The Coca-Cola Retailing Research Councils would conduct market research on a periodical basis with regards to the possible factors which may affect the beverage industry. When there is a change, the supply chain will be notified through a collaborative website. TCCC also uses the SAP application in order to improve the flow of information in their existing supply chain. The implementation of SAP in North America has helped in monitoring and maintaining consistency. Information is shared across the supply chain and thus every segment is notified on what is going on.

5. Strategic Fit

Strategic fit is the key to having supply chain profitability and consistency. In order to achieve strategic fit, all parties in the supply chain need to work towards the same goal. They also need to make sure that the goal is relevant to customers’ requests. For TCCC, their strategies fit their supply chain. The nature of the beverage industry is that the profit margin is low, the product life cycle is short, intense competition and high demand fluctuation. This means that TCCC needs to have a very efficient, responsive and well developed supply chain in order to fulfil customers’ requests. TCCC’s supply chain is able to maintain the speed of product flow through their extensive and distributive network. The company have many distribution centres and over 2.4 million delivery points all over the world to help them in the distribution of Coke.

Also, TCCC uses the just-in-time and the total quality management strategies in support with the rest of the supply chain. The collaboration in using these strategies helped in minimising the disruptions that may be caused by problems such as the safety stock. It also reduce delivery time and produce better quality products. TCCC’s strategies are in line with their principles. It is a challenge for TCCC to standardise the packaging and production across all the bottling companies across the world. However, the implementation of strict rules and frequent assessment by TCCC enables the consistent packaging requirements and the quality of Coke. In line with their focus to attain customer diversity, TCCC tries to lower the cost through their 6  supply chain. As mentioned in 4.3, transportation cost is reduced by planning the delivery route wisely and using fuel saving trucks to deliver the products to retailers.

6. Recommendations

6.1. Information Sharing

TCCC could improve the transparency of different levels of their supply chain. The transparency of the supply chain has been getting more important as internet becomes more accessible. Consumers wants to know more about the process and ingredients of the products as they are worried for the safety and quality of the product. They are also more concerned on what impact does the manufacturing of the product do to the environment.

With the increase in scrutiny by the social media, being transparent with the company’s supply chain will help in getting trust from consumers, especially those who focuses on the sustainability and corporate social responsibility. By trying to be more transparent, it encourages the company to be on a constant lookout for any potential or existing risks or problems and solve them before getting media attention. TCCC could also make use of the transparency to minimise any information gaps.

6.2. Improvement in Quality Control

TCCC have stringent control on suppliers to ensure that the ingredients received are of good quality and consistent. However, it is not just the suppliers that constitute to the overall quality of the beverage drinks produced. The choice of ingredients made by the company also influences the quality.

In America, the sweetener, aspartame, is used as an artificial sweetener in Diet Coke. The aspartame gives Diet Coke a taste that is similar to sugar. TCCC uses aspartame as a sweetener in many of their diet beverages. However, the aspartame have negative effects on human if drunk. According to the Medical Daily, aspartame contains high dosage of toxic which could cause neurological problems and depression. Reports also proved that aspartame will result in greater weight gain as compared to consuming sugar (See Figure 5). The negative effects caused by aspartame affects the quality of the beverages and tarnish TCCC’s reputation. The usage of aspartame results in contradiction with one of their strategy which is to promote healthy lifestyle.

Although aspartame is currently one of the most common artificial sweetener found in many food and beverage product, TCCC could source for another alternative that does not have any negative effect and meet their healthy lifestyle strategy. If used effectively, it could be one of the company’s competitive advantage against other competitors. The drop in sales due to use of aspartame can also be picked backed up.

7. Conclusion

In conclusion, TCCC has a well-developed supply chain and an extensive distribution network through their corporate social responsibility efforts. Although the supply chain and strategies are quite developed, there are still rooms for improvement. If TCCC constantly improve themselves and keep up to the rising trends, the company will be able to grow and advance further.

Reference

5by20 markets. (n.d.). The Coca Cola Company. Retrieved November 29, 2014, from http://www.coca-colacompany.com/5by20-map/#TCCC
Callahan, A. (2013, March 15). Partners of women-in-business: IFC and 5by20 join forces. The Coca Cola Company. Retrieved November 29, 2014, from http://www.coca-colacompany.com/stories/partners-of-women-in-business-ifcand-5by20-join-forces#TCCC Christensen, L. (2011, December 14). Creo customer: System logistics tightens up the warehouse.

Coca Cola Supply Chain Essay

Fast Moving Consumer Goods (FMCG) Essay

Fast Moving Consumer Goods (FMCG) Essay.

WHAT IS FAST MOVING CONSUMER GOODS (FMCG)?

FMCG (fast moving consumer goods) is a term that is used to refer to those goods which are sold through retail stores. These goods have a short period of shelf life and as such are used up within days, weeks, or months.

TOP 7 FAST MOVING CONSUMER GOODS

1. PROCTOR & GAMBLE:

Headquartered at Cincinnati in Ohio, United States, Procter and Gamble is a Fortune 500 American multinational company. It was founded in October 31 1837 by William Procter and James Gamble.

Its flagship and best selling brand is ARIEL laundry detergent which was launched in 1967. This detergent is available in different variants. The company also manufactures other best selling products that are highly popular around the world.

2. NESTLÉ:

Nestle is a Swiss multinational engaged in the production of different food products. It has its presence in more than 100 countries. It produces several top selling products in different food categories. Some of its best selling products are LEAN CUISINE, Maggi, Boost, Kit Kat, Friskies, and Nescafe etc.

3. UNILEVER:

Unilever is a multinational engaged in the manufacture of different products like foods, personal grooming products, detergents and beverages etc. This British-Dutch company is the owner of over 400 leading brands in the world out of which 13 are billion dollar brands. One of its top products is AVIANCE which is a beauty product for women. This product is sold in many countries of Asia, Latin America and the Middle East.

4. COCA-COLA:

Coca-Cola Company which is based in Atlanta in Georgia manufactures the world’s most popular soft drink COCA COLA. It was Dr. John S. Pemberton who created this drink in 1886. Coca Cola touched base in every part of the US by 1895. The company began its franchisee operations in 1899 and gradually it opened up bottling plants in every corner of the globe. The universal popularity of Coca Cola is undisputed. The Coca Cola syrup mixed with carbonated water created ripples everywhere and today you can get a Coke in any part of the world.

5. PEPSICO:

PepsiCo was created out of the amalgamation of two companies named Pepsi Cola and Frito Lay. The company which was formed in 1965 has its headquarters at Purchase in Harrison New York. It is a Fortune 500 company. PepsiCo is engaged in the manufacture of snack foods (grain based), beverages and other similar products. One of its best known brands is the cola beverage PEPSI-COLA. Created in 1893 its former name was ‘Brad’s Drink’.

6. BRITISH AMERICAN TOBACCO:

Another multinational tobacco major is the British American Tobacco company which is the world’s second largest tobacco company. It sells its tobacco products in several top markets across the globe. Many world-famous cigarette brands are manufactured by BAT. One of its top selling cigarette brands is PALL MALL. Some other leading cigarette brands manufactured by the company are Dunhill, Kent, Lucky Strike and Vogue.

7 NOKIA:

Nokia is a Finnish multinational engaged primarily in the manufacture of mobile telephones. The company has its headquarters at Keilaniemi, Espoo which is near Helsinki, the capital of Finland. This mobile communication giant is the largest manufacturer of mobile telephones in the world. Its products are sold in every part of the world. Nokia has launched many innovative mobile systems and almost all its products have been hot sellers.

Fast Moving Consumer Goods (FMCG) Essay

Evaluation of Subway’s Branding and its SWOT analysis Essay

Evaluation of Subway’s Branding and its SWOT analysis Essay.

NAMEA brand is a combination of name, term, sign, symbol and design intended to identify the goods or services of one seller, which helps him/her to differentiate from those of competitors (Kotler 2006, 269). Subway is first known as Pete’s Super Submarine in 1965. The name was shortened to Subway and it is also then, the first franchised unit was opened in 1974 in Connecticut (Subway 2008). Perhaps, the founder of subway – Fred DeLuca and Dr. Peter Buck – realized the importance of developing a good brand name.

There are several desirable qualities for a brand name. It should (i) suggest about the product’s benefits and qualities, (ii) be easy to pronounce, recognize and remember, and (iii) distinctive.

Subway has fulfilled all these qualities. Its slogan ‘Eat Fresh” suggests the freshness of the ingredients used for the submarine sandwiches. Also, as Subway offers a wide assortment of products like sandwiches, salads, cookies, potato chips etc, making every visit a fresh one for its consumers.

The colour green and the use of tomatoes in the logo symbolize the healthier aspect of Subway’s food products. Subway has a high degree of brand awareness; consumers are able to associate Subway with its submarine sandwiches that are filled with fresh vegetables. The brand name is not offensive; it did not create any inappropriate excitement like French Connection’s provocative slogan – FCUK, which has resulted in many controversies in countries including Singapore. Brand name is very important as a good one can add greatly to a product’s success (Kotler 2006, 273).

SUBWAY’S OVERALL STRENGTHS AND WEAKNESSES

StrengthsSubway has successfully market itself as a healthier alternative to traditional greasy fast food. In the press release on 18 November 1999, Subway has listed the seven low-fat subs with 6 grams of fat or less menu offering convenience and good nutrition food products for consumers’ fast-paced lives. This has made Subway as the best fast food choice for consumers who are concerned about eating right; counting calories or trying to eat healthy. Also, according to the press release, Subway is conscious of the dietary needs of vegetarian consumers and offer options for them – Veggie Delite, which is simply a salad sandwich.

At Subway, consumers are able to personalize their own submarine sandwich by choosing the type of ingredients, condiments and salad dressing they wish to have for their sandwiches. The choice of getting the sandwich toasted is available too. This personalized service is not common in most of the fast food restaurants. Besides, unique sides like freshly baked cookies and potato chips are offered instead of the usual mash potatoes, French fries or coleslaw. Generally, the portion served is relatively in comparison to normal burgers. Overall, Subway’s sandwiches are loaded with fresh ingredients that differentiate Subway from its competitors.

WeaknessesSubway’s sandwiches tend to become soggy after kept for a period of time without consuming. This will affect the overall tastiness of the sandwich. Such situation happens most frequently to people who do take-away. In addition, Subway’s sandwiches only come in Six-inch or foot-long sizes. This may be considered a relatively large portion to consumers whom may have smaller appetites, especially for the tweens and those younger. Also, Subway’s sandwiches are not Halal Certified. ‘Halal’ is an Arabic word which means lawful or allowable. Any food or drink that falls under this category is permitted for consumption. (Majlis Ugama Islam Singapore 2008)

Since subway’s products are not Halal Certified, the affected people would mainly be the Muslims. As a result, Subway may lose such potential consumers, where actually there could be opportunities to tap a global Halal food market of about 1.4 billion people. Hence, stalls with Halal Certification will have a competitive advantage over Subway. (Majlis Ugama Islam Singapore 2008)

RECOMMENDATIONS

1.To prevent Sandwiches from becoming soggy easily, Subway can separate Sandwich’s dressing for take-away orders. Thus, the taste of the Sandwiches will not be affected.

2.To overcome the weakness of Sandwiches being a relatively big portion to people with smaller appetites, Subway can introduce smaller sizes of sandwich. Also, even though Subway Singapore does provide kids meal to cater to the tweens and younger crowd, known as “Kids’ Pak”, when compared to kids meal available in McDonald’s and Burger King, Kids’ Pak is relatively unknown.

The image of Kids’ Pak. (Official SUBWAY Restaurants’ Web Site 2008)Kids’ Pak®, a specially designed meal package for children that includes a sandwich prepared on a 4-inch round deli-style roll, a fruit roll fruit snack, a 100% juice box and a toy premium. (Subway Singapore 2008) (Is it possible for this paragraph to shift to beside the above pic?)Hence, Subway Singapore should widely advertise on the availability of such kids meal to gain more consumer awareness of the product. This can be done through posters and TV advertising, especially on Kids Central – Singapore’s local channel for kids, where children are the main viewers. This way, it will appeal greatly to them and parents will see the meal as a great option for a healthier meal as fats contained within the Subway’s Kids’ Pak – similar to Subway Fresh Fit for Kids is much lesser than in Kids’ Meal offered by McDonald’s and Burger King. (Subway Fresh Fit n.d.)

The Image of Halal Certification (Majlis Ugama Islam Singapore 2008)However, presently, Subway is not able to obtain Halal Certification due to various market, regulatory and business issues. However, Subway still does cater to customers who need a non-pork menu. Subway obliges by recommending them what is suitable in the menu and would change to a fresh pair of gloves to prepare the sandwiches. (Subway Singapore 2008)

IN GENERAL, GIVE 5 EXAMPLES OF PACKAGING OR BRANDING WHICH SERVES A COMPETITIVE ADVANTAGE FOR A FIRM

Coke: The packaging of coke not only offers convenience to consumers, but also helps consumer to identify the product easily through its shape and colour – red and white, of the bottle. In addition, the branding of Coke has facilitated the promotion of all same-brand products. Examples are Coke Zero, Coke Light and Vanilla Coke.

McDonalds’: The logo ‘M’ is well recognized worldwide which helps speed consumer purchases by identifying the firms’ product. The colour combination of the logo – red and yellow also acts as a tool in identifying its product.

Apple: The logo of Apple denotes product quality and a form as status and self-expresion as apple has successfully brand and market itself. According to Gobe, M., “The power of their branding (Apple) is all that keeps them alive”, where brands have established deep, lasting bonds with their customers. (Kahney 2002) This foster of brand loyalty serves as a competitive advantage over rival firms.

KFC: The acronym of Kentucky Fried Chicken makes it easier for consumer to say and spell. It also denotes the product that it’s selling and differentiates the quality of it chicken sold from competing firms. Moreover, the use of ‘Colonel Sanders’ as a mascot/logo further helps in identifying KFC’s product. (Armin. 2006)Nike: Nike has effectively brand itself using a ‘tick’ as its logo. The incorporating of the simple ‘tick’ onto the design of its products makes it distinctive from rival firms.

In general, all these brands are widely recognized, where consumers are simply able to relate the brand name and its products.

(Need to write conclusion?)Reference List1.Kotler, P., S. Adam, L. Brown, and G. Armstrong. 2006. Principles of Marketing. Australia. Pearson Education Australia.

2.Subway 2008. n.d. About Subway : History. http://www.subway.com.sg/exec/sam/view/id=540/node=206/ (accessed October 2, 2008).

3.Singapore. Majlis Ugama Islam Singapore. 2008. Halal Main Page: Basic Principles. Islamic Religious Council of Singapore. http://www.muis.gov.sg/cms/services/hal.aspx?id=1706 (accessed October 5, 2008)4.Singapore. Majlis Ugama Islam Singapore. 2008. Halal Certification: Halal Certification Benefits. Islamic Religious Council of Singapore.

http://www.muis.gov.sg/cms/services/hal.aspx?id=1704 (accessed October 5, 2008)5.Majlis Ugama Islam Singapore [Image]. 2008. http://www.muis.gov.sg/cms/services/hal.aspx?id=1704 (accessed October 5, 2008)6.Subway Singapore. 2008. About us: Subway FAQ’s. http://www.subs.sg/aboutus/aboutus_faq.html7.Subway Singapore. 2008. Frequently Asked Questions. http://www.subway.com.sg/exec/sam/view/id=544/node=294/8.Official SUBWAY Restaurants’ Web Site [Image]. 2008. http://www.subway.com/subwayroot/menunutrition/menu/menu_kidspak.aspx9.Subway Fresh Fit. n.d. Fit Kids: Nutritional Information.

Evaluation of Subway’s Branding and its SWOT analysis Essay

Oligopoly in India Essay

Oligopoly in India Essay.

A market structure dominated by a small number of large firms, selling either identical or differentiated products, and significant barriers to entry into the industry.

This is one of four basic market structures. The other three are perfect competition, monopoly, and monopolistic competition.

The three most important characteristics of oligopoly are:

1. An industry dominated by a small number of large firms

2. Firms sell either identical or differentiated products

3. The industry has significant barriers to entry.

PRICING

The members of an oligopoly change the nature of a free market.

While they can’t dictate price and availability like a monopoly can, they often turn into friendly competitors, since it is in all the members’ interest to maintain a stable market and profitable prices.

With four or five large firms responsible for most of the output of each industry, avoidance of price competition became almost automatic. If one firm were to lower its prices, it is likely that its competitors will do the same and all will suffer lower profits.

On the other hand, it is dangerous for any single firm to increase its prices since the others might hold their prices in order to gain market share. The safest thing is to never lower prices and only raise prices when there is abundant evidence that the other firms will also raise prices. The largest or lowest-cost or most aggressive firm will often emerge as the price leader. When business conditions permit, the price leader will raise prices with the expectation that the others will follow. The practice of price leadership prevails in many industries:

Competition does not exist in any form. Oligopolies that follow a price leader do not engage in price competition, but they still contest for market share with a variety of forms of non-price competition. Pepsi and Coke each spend billions on TV ads designed to entice the consumer to switch cola brands.

SCALE OF OPERATION

Oligopolistic firms that operate on a national or global scale are also huge in another sense – they are just plain big. Many have several hundred thousand employees and multi-billions of dollars in assets. Size is itself a source of power.

ENTRY BARRIERS

Oligopolies can become unstable when new firms attempt to gain entry. Of course the high cost of acquiring plant and equipment acts as a barrier to entry. It is also costly to enter an industry dominated by a small number of known trade names. Small firms already in the industry present a special problem. Some might try to grow beyond their established niches. The large firm will often simply purchase the up-and-coming small firm. Or the large firm or firms may rely on its established relationships with customers or suppliers to limit the activities of smaller firms.

The new oligopoly is made up of multinational corporations that have chosen specific product or service categories to dominate. In each category, over time, only two to four major players prosper. Starting a new company in that market segment is difficult, and the few that do succeed are often gobbled up or run out of business by the oligopolies.

MANIPULATING DEMAND

The large firm is often in a position to create a demand for its own product through advertising. While this sometimes leads to actual product improvement, it can also lead to the production of images rather than truly different products.

A study of the tactics of brand names points out that good brand names are most important for the type of products that are “relatively undifferentiated in terms of product specifications or performance and where consumers are relatively satisfied with existing brands.” One conclusion of the study is that “…on the whole, branding is important only where the character of the product is not.”

Few multinationals aspire to be monopolies. Monopolies attract government regulation and consumer anger (just ask Microsoft). Small oligopolies (such as Coke, Pepsi) make plenty of money and avoid the constant attention of the regulators.

Oligopoly, then, is a compromise – a social adaptation to powerful technological trends. While the rules of perfect competition should both assure that prices reflect the true costs of production and that firms continue to improve their products and production processes, operating under these rules leads to the type of price competition that continually threatens the value of vast holdings of expensive and specialized production facilities. So we have accepted a set of economic rules that limit price competition but still seem to result in competition over product and production process development. Technology forced firms to become bigger, yet that very bigness put them at such risk that they had to become even bigger in order to control prices.

OLIGOPOLY IN BEVERAGE INDUSTRY

In the Indian context, the soft drink market though it may seem to be duopoly is essentially an oligopoly. Barring the two major cola giants Coke and Pepsi, every city also has local competitors and there is a large unorganized flavoured water market. Moreover, bottled water is also a competitor to the cola brands and in this category neither of the two cola companies are market leaders. However, as far as the cola flavored fizzy drinks are concerned there are only two brands, Coke and Pepsi. Under such a situation economists would say there would be intense competition. Unless, the two parties collaborate with each other, which is certainly not the case in the cola market worldwide or in India.

This implies that the primary battle is for market share and hence intensity of competition is high. Each and every move by a player attracts retaliation. 3 things important to be successful in this category (oligopoly of colas) are:

1. HIGH AWARENESS: This has two components-one is media awareness the other relates to point of consumption. The first one really means large advertising spends, and simple messages repeated umpteen times. Eg. lways Coca-Cola?or il mange more? Simple and memorable. The category leader dictates the awareness level. Once that has been established, the number two player needs to find a lever, which will ensure a position close to the leader, with less money spent.

2. EASY AVAILABILITY: Marketers in this category need to find innovative ways of ensuring availability of their brand at different consumption occasions and time.

3. HIGH EMOTIONS: The key differentiation in this category is emotion. Brand personality can make or break the brands in this category.

In an oligopoly, it is foolish to cut price unless one of the two parties have a much lower cost base. That, too, is not the case in India. Both brands, Coke and Pepsi, invest heavily in advertising and in distribution through their franchise and their own systems. However, a great deal of attention is paid by both companies to cost, particularly in the development of a tightly effective supply chain system in which economies are squeezed out and, wherever possible both overheads and working capital are controlled.

As a result it is extremely difficult to reduce prices. Indeed, it is counter-productive, as when prices are reduced in a particular area by one of the cola brands, the second must follow. There have been some examples of price reduction, but this is generally the local franchise or the sales management of a particular area reducing the price. This is, however, generally not the case and prices have only been reduced in the recent past if there has been a reduction in Government taxes, either at the Central or State level.

However, there has been some major initiative on the price front. The first took place some years ago when the brand Coca-Cola came back to India. At that time colas were sold in 200 ml bottles. Coca-Cola launched itself in all major cities in the 300 ml size at the same price as Pepsi, which was then in a 200 ml bottle.

Pepsi was, however, prepared for Coca-Cola to launch in the larger bottle, which became the standard inmost parts of the country, making the price a parity issue between the two brands.

A few years ago, Pepsi launched itself in one litre and 1.5 litre non-returnable PET bottles at a discount in comparison to a 300 ml returnable glass bottle, the traditional packaging in this product category. This resulted in a significant increase in the depth of consumption; amongst the loyal consumers in the larger towns.

Coke followed Pepsi in each of the above moves in order to reduce the cost per glass to the consumer.

The soft drink majors also pioneered a 500 ml non-returnable PET bottle, which was advertised almost totally on the cost of the consumer per 100 ml of cola. The great advantage of PET bottle is that they not only encourage high level of consumer but increased home consumption which was small compared to out of home consumption.

The latest move to reduce price to the consumer was followed by Pepsi in April,2003 when it reduced the price of its 300 ml returnable glass bottle segment from Rs. 8 to Rs. 6 and priced 200 ml bottle at Rs. 5. However, Coke still priced it 300 ml bottle at Rs. 8. Coke wanted to push the 200 ml “Chota Coke” pack in summer since they wanted to gain volumes so they priced 200 ml at Rs 5/-“.

The fresh price war follows an earlier onslaught when both Pepsi and Coke reduced prices by about 20% across the board just before the Union Budget for 2003-04 provided them with excise duty relief.

In the recent past both the companies took aggressive steps and signed on thousands of new retailers in a drive into rural India that has pushed up sales steeply.

Coca-Cola has made its beverages available in 40,000 additional villages in the last three years. As a result, the rural areas now contribute 35 per cent of the company’s sales compared with 25 per cent in 2000. Sales volume jumped over 125% in some rural areas.

In order to service far-flung markets better, Coca-Cola has doubled the number of refrigerators in the market to 500,000 and added 5,000 new autos and light commercial vehicles to its fleet in the last one year. Pepsi also has also doubled distributors, cooling capacity and even the number of vehicles in rural areas.

Thus, the contribution of rural areas to total sales has climbed from below 10 per cent to 10-15 per cent for Pepsi in the last couple of years.

Pepsi has added more than 200 people to drive rural activation programmes and ensure improved coverage and market penetration. In addition, a new “hub and spoke” model has been put in place to drive the rural expansion plan.

Both companies say there is untapped potential in the rural areas that will fuel quick growth in the coming years. e the rural expansion plan.

In a competitive situation such as the one that exists in the cola market, the important thing is not the price; it is the value that the consumer gets. And that always increases in proportion to the ferocity of the battle in the marketplace.

Oligopoly in India Essay