Coca-Cola Product Company Development
Coca-Cola has become a well-known name in many languages of the world. Millions of people associate the word with a refreshing drink, which taste has been familiar to them since childhood. History of Coca-Cola is much more than one hundred and twenty years and is the story of amazing discoveries, far-sighted behaviour, and non-standard solutions that have brought the drink the worldwide fame. Today, Coca-Cola is more than 2,800 drinks, which are produced and sold in more than 200 countries worldwide. Coca-Cola Company owns 4 of the 5 most popular soft drink brands. Coca-Cola brand is the most expensive one in the world, familiar to 94% of the population of the world. The company employs more than 90,000 highly skilled employees worldwide.
The Coca-Cola Company, U.S. food company, has been founded in 1892, and is the world's largest manufacturer and supplier of concentrates, syrups, and soft drinks. The most famous product of the company is a Coca-Cola drink. The recipe for the drink Coca-Cola was invented by John Pemberton. At first, it was a hard liquor, consisting of a mixture of extract of leaves of the coca plant and cola nuts Damiana.
Three of the beverages that are being produced and sold by the Coca-Cola Company own 80% of global sales, these are Coca-Cola, Fanta, and Sprite. In the world, the company produces about 70 varieties of Fanta with a variety of flavors (orange, lemon, mandarin, grapefruit, kiwi, cantaloupe, watermelon, and others). Coca-Cola drink has 8 species. Today, the trademark Coca-Cola is the most famous trademark in the world. Every day, 1 million units of the company's product are sold around the world.
The mission of the company is qualitatively expressed by the set of strategic goals and business skills. The mission helps to determine what, in fact, the company does, what its essence is, its scale, perspective and direction of growth, apart from the competition. However, it focuses on the consumer, not the product as determined by the mission taking into consideration buying interests, needs and requirements, which satisfy business.
The Coca-Cola Company is guided by three principles, which are call mission and formulated as follows: “refreshing the world, the body, mind and spirit; arouse optimism with our drinks and our businesses; bring meaning into everything we do”.
The values of Coca-Cola Company are as follows: work honestly and fulfill all the promises; strive to improve, excel in everything, no matter what we do; compete fairly and go to victory as one cohesive team; create opportunities for realizing the full potential of their employees; demonstrate openness, honesty, respect for others.
Of course, like any successful business, the Coca-Cola Company aims at performance of sustainable growth and development. However, it is necessary to define what helps the company to achieve it for more than one hundred and twenty years. It is because of their vision of objectives. The basis of each of them lays in a word - a coincidence - begins with the letter "P". This is how sound the five "P":
- Personnel: create a working environment that people aspire to maximize return for which they are capable of
- Planet: be a responsible citizen of the world, which makes a real contribution and change in the world for the better
- Products: beverages produced satisfy, and furthermore, anticipate the desires and needs of the people
- Partners: build and maintain the best affiliate network to form a close relationship based on honesty and trust
- Profit: to provide the best return to shareholders, but not to lose sight with the sight of the company’s common responsibilities (Isdell & Beasley 2011).
The mission of Coca-Cola Company is to win the undisputed market leadership. Quench the thirst of consumers to collaborate with them, increase shareholder wealth, and improve the lives of communities. To solve it, it is necessary to contribute to the development of better training, achieve excellent results in the development of partnerships meeting the demands of partners and consumers, explore new opportunities, create and use strong organizational skills, outperform competitors on metrics such as availability, accessibility, product quality, active marketing strategy, continually optimize the cost of services provided and, at the same time, steadily retain the responsibility for the sustainable development of the business served to the population and the region.
Strategy of the Coca-Cola Company
The strategy of the Coca-Cola Company is steadily growing. Only the development will help the company to achieve long-term plans, prosper and grow. The most valuable assets are marketing and innovation. Thanks to the right strategy, Coca-Cola Company is a successful company producing non-alcoholic beverages in the world and the brand is recognizable everywhere. One of the principles is to look for opportunities in everything and everywhere. The Coca-Cola Company constantly improves manufactured products. Company attaches special importance to policy of PR. Big name not only needs but also obliges the company to participate in famous national programs, mass rallies and public events.
Virtually, no event or a large scale festival in the country takes place without the sponsorship of Coca-Cola Company. The "Take it with You” slogan allowed the company to re-expand the range of their customers. Availability of beverage “Coca-Cola” is not a factor. On the contrary, conquering markets, the company seeks to adapt its prices to the market (Hays 2004). Skillfully using aggressive advertising system (commercials, billboards, labels) and providing proximity to customers, Coca-Cola Company can afford to set the price higher than that of ordinary domestic manufacturers. With an emphasis on quality, popularity and convenience of the drink, the company has adopted a general pricing policy that bears its stable profits.
The main segments of the market are large wholesalers with a comprehensive range of goods, with the existing supply system from outside the region and marketing of large and small bulk quantities of goods, medium and small wholesalers with specific highly specialized suppliers from outside the region and small-scale sales, retail chains and large stores, large bulk purchases from a large number of local and non-resident customers, sometimes with small wholesale unit sales.
Competitive factors. Most of the wholesalers aim to export large quantities of goods to foreign markets. On the market, there is a large number of local manufacturers, but the level of quality of their products is low. Representative offices of foreign and largest companies can make a difference in this niche, but in the current economic crisis conditions, the main competitor of the company cannot organize a formal representation and distribution. On the other hand, the competitors are large non-resident suppliers. The increase in sales and market growth as a whole is possible on condition of economic recovery as a whole as it depends on the ability to pay. Therefore, to ensure its own growth to supplant competitors from the market, and look for additional distribution channels in the market, such a mechanism might consist of a network of catering, restaurants and cafes. The successful product on the market should have a clear idea on that this product is designed for the consumer.
New Product Development
New product development (NPD) is established term used to describe the process of creating and outputting a new product or service to a market (Fuller 2005). The process of developing a new product comes along with two parallel tracks: one involves the idea of generation, product design and engineering, and the other involves market research and analysis. New product development is the development of original products, improvement of products and their modernization, the development of new brands of products through its own R&D organization (Trott 2008).
New product is a product, service or an idea that is perceived by some potential customers as new one. Multiple levels of novelty of the product can be selected from a completely new product to the product with a new brand name or packaging. Especially relevant is the release of goods, new products on highly competitive markets in which it is very difficult to gain a competitive advantage by other means. In order to achieve tangible success, the goods should be not just new but should look like new and should have innovative advertising campaign. Thus, the Coca-Cola Company should concentrate on the new product development that will be innovative and can burst the market.
The organization may get a new product in two ways: by buying companies, patents, licenses, know-how or by their own designing. For the Coca-Cola Company, it is important to create the new beverage that will become popular and will win the market, increasing the market share of the company. This will bring additional profits for the company and increase its competitiveness level.
The process of a new product development consists of eight stages: the generation of ideas; selection of ideas; development of the concept and its verification; development of marketing strategies; business analysis; development of the product itself; test marketing; commercial production (Kahn 2005).
Idea generation is the systematic search for ideas about new products. Search of new ideas is mainly based on internal sources of the organization (in the department of new technologies, in the service of research and development, in the department of marketing and sales, etc.), consideration of the views of consumers, competitors, suppliers and distributors, consulting organizations and a variety of exhibitions, printed publications, the use of special methods for generating ideas (Loch 2008). The Coca-Cola Company can produce just a new beverage with a new taste, alter the existing product, design a new healthy drink, etc.
Selection of ideas is an analysis of all ideas about a new product in order to weed out unpromising at the earliest stage of development. As a result, ideas are selected about the possible product that the organization can offer to the market. Thus, the Coca-Cola Company should increase its popularity by the production of a new healthy beverage.
Development of a concept and its verification is connected with the idea that a new product is transformed into a concept of a new product, which is tested on a group of target consumers to determine the extent of its appeal. The concept of the new healthy beverage of the Coca-Cola Company can be presented to consumers in a verbal or illustrative form.
Development of marketing strategy of a healthy beverage by the Coca-Cola Company is defining the marketing strategy of a new product. It addresses the set of following questions. First of all, it describes the size, structure and nature of the target market of positioning the new product. Further, assessments are given by sales, market share, prices, profits, and used to select channels. Of course, in most cases, these forward-looking statements are very indicative (Berenson 2002). However, the use count indicative is even better than its absence.
For information about the new product, the management of the Coca-Cola Company can give interviews to consumers, employees, trade organizations and individual experts. Forward looking information about the possible future of the market of a new product can also be obtained through the analysis of sales (for example, by studying the life cycle curve) of such products, analysis of the situation in the competition field.
Business analysis is the assessment for new product sales, expenses and profits for their compliance with the organization's goals. In other words, it is the assessment of the attractiveness of the new healthy drink to the customers.
The development of the product itself is the transformation of the concept of a new product in the product material. Its goal is to make sure that the product idea can be brought into the working sample. Product development is a broader concept than R&D as it is the transformation of the concept of a new product in the product material, having finished its presentation, also including marketing product development.
Test marketing of a new healthy drink is an approbation of the product and marketing program in real market conditions. The purpose of test marketing for the Coca-Cola Company before the full implementation of the product is to evaluate the product and its marketing program (price, advertising, brand, packaging, service, etc.) and find out the reaction of consumers and intermediaries. The results of test marketing can be used in the forecast of sales and profits of the Coca-Cola Company.
During test marketing of new healthy beverage, the following methods can be used: standardized testing of the market; control testing of the market; simulation testing of the market.
Standard testing of the market is a type of market testing, in which a new product is placed in conditions similar to the conditions of implementation, with the full release of the product. Find a market for sale of the product, where market organizations conduct a complete marketing program, analyze the activity of shopping, carry out consumers and distributors opinion survey, in order to determine the extent to which the product meets the needs of consumers. The purpose of the standard test is the use of the results for sales forecast on a national scale and identification of problems associated with the production and marketing of the product.
An objective test of the market is the creation of the special panel stores that agree for a fee to test various methods of product sale. Organization carrying out a control test of the market, in accordance with its plans, determines the number, and geographic location of stores, controls the location of the product in the sales area, prices, selected methods of product promotion.
Analysis of the results makes it possible to determine their effect on demand. Simulation testing of the market is testing of the product under conditions that resemble actual conditions, such as the purchase by consumers that have an opportunity to choose from a variety of products, among which is a new product in store or shop, which is a laboratory of the organization. At the same time, consumers have samples of advertising and other methods of promoting a product aimed at a variety of products, including the product tested.
During test marketing of industrial products, product samples are sent for a limited time to test potential customers (Annacchino 2007). In addition, the product can be tested on exhibitions and demonstrations organized by traders, distributors, and dealers.
Commercial production is a full-scale production and sale of a new product on the selected market. At this stage of development of a new product, the Coca-Cola Company should choose the right time to launch the sequence and scope of activities in different markets, the most efficient method of distribution and promotion of a product, develop a detailed operational plan the for marketing activity.
The Coca-Cola Company is daily increasing number of consumers that are shown the new production capabilities and product quality, gradually spreads to new territorial markets using advanced business strategies. The company is constantly monitoring the quality of all stages of manufacturing to keep on the highest level. The company is continually evolving and increasing profit margins “in big steps”. The Coca-Cola Company is one of the most successful companies in the world for the production of soft drinks. Ther is no doubt that the company is a stable leader in the global economy and, in the near future, significant changes are expected.
- Annacchino, MA 2007, The pursuit of new product development the business development process, Butterworth-Heinemann, Amsterdam.
- Berenson, C, Iansiti, M, Kosnik, TJ, Lynn, GS, MacCormac, A, Mohr-Jackson, I, Kasturi, RV, Tabrizi, B, Thomke, S, Walleigh, R & Wheelwright, C 2002, New product development, 2nd edn, HBS Publishing, Boston.
- Fuller, GW 2005, New food product development: from concept to marketplace, 2nd edn, CRC Press, Boca Raton.
- Hays, CL 2004, The real thing: truth and power at the Coca-Cola Company, Random House, New York.
- Isdell, N & Beasley, D 2012, Inside Coca-Cola: a CEO's life story of building the world's most popular brand, St. Martin's Griffin, New York.
- Kahn, KB 2005, The PDMA handbook of new product development, 2nd edn, John Wiley & Sons, Hoboken.
- Loch, CH & Kavadias, S (eds.) 2008, Handbook of new product development management, Butterworth-Heinemann, Amsterdam.
- Trott, P 2011, Innovation management and new product development, 5th edn, Financial Times/ Prentice Hall, Harlow.