Marketing Principles Individual Assignment Analyzing Marketing Environment Of Theo Cocacola Company.pdf

MARKETING PRINCIPLES

INDIVIDUAL ASSIGNMENTAnalyzing marketing environment of

Full name: Chu Ngọc Tuấn

Class: HM1602

Student ID: HE150440

Lecturer: Bùi Thị Hạnh Thảo

Course: MKT101 – Marketing principles

Date: Spring2021

Table of content: 2

INTRODUCTION 3

ABOUT THE COCA-COLA COMPANY 3

COCA-COLA: THE PURPOSE AND VISION 4

● ABOUT THE COCA-COLA COMPANY:

The Coca-Cola Company is the world's largest beverage company, refreshing consumers with more than 500 sparkling and still brands and nearly 3,900 beverage choices (CocacolaInfographic, 2021)[1]

On May 8, 1886, Dr John Pemberton served the world’s first Coca-Cola at Jacobs' Pharmacy in Atlanta, Ga From that one iconic drink, a total beverage company has been evolved (The Coca-Cola Company, 2021) [2]

Through the world's largest beverage distribution system, they are the No.1 provider of both sparkling and still beverages More than 1.9 billion servings of their beverages are enjoyed by consumers in more than 200 countries each day (CocacolaInfographic, 2021)[3]

(CocacolaInfographic, 2021)[4]

● COCA-COLA: THE PURPOSE AND VISION:

According to Coca-Cola Company, their purpose is: “Refresh the world Make a difference.”

The Coca-Cola company with the vision is “ to craft the brands and choice of drinks that people love, to refresh them in body & spirit And done in ways that create a more sustainable business and better shared future that makes a difference in people’s lives, communities and our planet.” (Purpose & Company Vision The Coca-Cola Company, 2021) [5]

● TARGET CUSTOMERS:

Age is one of the most important segments of Coca-Cola dividing it mainly into two parts: Coca-Cola mainly addresses its product to a youngcustomer base aged between 10-35 Also, the company targets

universities, schools, Colleges etc in acquiring contracts However, the coca-Cola diet products also addresses an elderly segment considering people with diabetic who are often 40 plus (Comparative analysis of marketing segmentation, targeting strategy between Coca-Cola vs Pepsi in Bangladesh, 2021)[6]

● PRODUCT:

Led by Coca-Cola, one of the world's most valuable and recognizable brands, the company's portfolio features 21 billion-dollar brands, 19 of which are available in reduced-, low- or no-calorie options These brands include Diet Coke, Coca-Cola Zero, Fanta, Sprite, Dasani, vitaminwater, Powerade, Minute Maid, Simply, Del Valle, Georgia and Gold Peak Through the world's largest beverage distribution system, they are the No 1 provider of both sparkling and still beverages More than 1.9 billionservings of their beverages are enjoyed by consumers in more than 200 countries each day (CocacolaInfographic, 2021)[7]

Coca-Cola Classic is Coca-Cola GB’s best-selling The original and iconic cola is still top-seller However, 43% of the cola now sell is made up of Coca-Cola Zero Sugar, Diet Coke or Coca-Cola Life, which have less or no sugar (Coca-Cola UK, 2020) [17]

● This assignment will talk about three parts: Microenvironment, Macroenvironment and discuss how companies can react to the marketing environment

MICRO ENVIRONMENT

Microenvironment consists of the actors close to the company that affect its ability to serve its customers-the company, suppliers, marketing intermediaries, customer markets, competitors, and public (Philip Kotler & Gary Armstrong, 2012)[8]

● THE COMPANY:

The Coca-Cola Company has always been a creator of refreshing beverage brands Today, expansive portfolio includes more than 500 brands, including sparkling beverages, juices and juice drinks, coffee, tea,sports drinks, water, value-added dairy, energy and enhanced hydration drinks Among these brands are 20 that generate more than a billion dollars in annual retail sales Another core competency has been the ability to lead the world’s most sophisticated system of independent bottling partners while creating value for retail and restaurant customers Over the years, Coca-Cola bottling partners have been acquired and managed with the aim of improving performance, optimizing

manufacturing and distribution systems, and ultimately refranchising the bottling territories back to independent status (Five Strategic Actions Of Coca-Cola, 2017)[9]

They look at ways to enhance the employee experience across their Company have looked at ways to enhance further with the goal of creating the world’s most exciting, productive, fun and fulfilling career environment, with workplaces that nourish curiosity, learning, innovation and growth (Five Strategic Actions Of Coca-Cola, 2017)[10]

Coca-Cola is one of the most famous international brands in Vietnam Coca-Cola Vietnam currently has factories located in Ho Chi Minh City, Da Nang and Hanoi with about 2,500 employees, of which more than 99% are Vietnamese Coca-Cola's beverage brands in Vietnam include Coca-Cola, Coca-Cola Light, Coke Zero, Sprite, Fanta, Minute Maid Nutriboost, Minute Maid Teppy, Schweppes, Dasani and Aquarius (cocacolavietnam, 2017)[28]

● SUPPLIER:

According to Siemens (n.d)[11], Coca-Cola Beverages Vietnam Limited has creation plants in Hanoi, Da Nang, and Ho Chi Minh City with more than 1,200 workers, glass container, and PET generation lines with a consolidated yearly yield of more than 18 million instances of soda pop items In the raw materials, Coca Cola Vietnam decides to cooperate with local companies such as Dynaplast Packaging Company provides high quality bottles and Bien Hoa Joint Stock Company (Sovi) offers carton paper for storage and levels of domestic consumption for Coca Cola Beverages Vietnam Moreover, Stepan Company which is importer and provides coca leaf for use in the production of Coca Cola As a result, rawmaterials can be provided from local areas, which means it can be easier for the company to deliver stuff Therefore, they can save a huge amount of time and use it to increase productivity

● MARKETING INTERMEDIARIES:

Coca-Cola Vietnam has tried to distribute a dense network from rural to urban areas, from plains to mountains, from south to north, but still concentrated in densely populated areas Coca-Cola products appear in bars, supermarkets, and grocery stores, on the

streets to alleys (Hoang Tien, Thanh Vu and VanTien, 2020)[12]

In the fast food market, Coca-Cola is distributedunder lucrative contracts with major fast food brandslike McDonald's, Subway, Burger King, etc (BrandsVietnam, 2021)[13]

● COMPETITORS:

The four biggest names in Vietnam’s sweetened beverage market include the US’ Coca-Cola Vietnam, Suntory PepsiCo (a fully foreign-owned joint venture between PepsiCo and Japan’s Suntory Holdings Limited), URC Vietnam from the Philippines, and Vietnam’s Tan Hiep Phat (Soft drinks see hard competition, 2018)[14]

In 2015 and 2016, Coca-Cola Vietnam's revenue was nearly 7,000 billion VND, with pre-tax profit of about 600 billion VND per year Compared to Tan Hiep Phat, Coca-Cola Vietnam's gross profit margin is equivalent to nearly 40% However, the selling cost of this unit is 10% higher (Cafefvn, 2018)[15]

Compared to Coca-Cola'ssideways sales results,PepsiCo's businessperformance in Vietnamwas somewhat better Afterestablishing a joint venturewith Suntory Corporation ofJapan in 2013, the

company's revenueincreased sharply Suntory

PepsiCo Viet's revenue reached more than11,000 billion in 2014, an increase of 2,000billion the following year and nearly 13,600billion in 2016 The profit of this jointventure also doubled in just three years,from nearly 700 billion in 2014 to morethan 1,400 billion in 2016 (Cafefvn, 2018)[16]

● PUBLICS:

The Coca-Cola Company said : “We want a better shared future for the communities we live and work in.” They strive to have a positive impact in communities, especially in times of need (Communities - The Coca-Cola Foundation, 2021)[18]

Coca-Cola has no specific target market Most of the target marketing is geared towards young people, but some advertising is tailored for older people.Coca-Cola is promoting responsible marketing strategies by avoiding extensive advertising to children and disclosing nutritional information of all Coke products to parents in order to allow them to decide what their children should drink Coca-Cola is also trying to targethealth-conscious consumers More of Coca-Cola's advertising also targetsaffluent, young people with products like Coca-Cola Life Coca-Cola's products and marketing campaigns are also targeting international audiences (What Is Coca-Cola's Target Market?, 2020)[19]

The macroenvironment consists of the larger societal forces that affect themicroenvironment-demographic, economic, natural, technological, political,and cultural forces (Philip Kotler & Gary Armstrong, 2012)[20]

(Worldometers, 2021)[21] Vietnamhas a high rate of urbanization, withmore than half of its populationunder the age of 35, securing a largemarket for the carbonated beverageindustry (BrandsVietnam, 2021)[22]

According to a workshop by the Ministry of Health and the World Health Organization (WHO) to recommend the health effects related to sugar andsugary drinks, in 2016 Vietnamese people consumed over 4 billion liters of soft drinks, in 2018 on 5 billion liters and 2025 are 11 billion liters The above study in 1910 people on the habit of using carbonated soft drinks showed that over 57% had a habit of drinking carbonated soft drinks, of which 13% of men surveyed and who drank carbonated soft drinks reported drinking each day, nearly 16% drink 5-6 times / week, nearly 29% drink 3-4 times / week (Tuoitrevn, 2018)[23]

● ECONOMIC:

According to the IMF, at the end of 2020, if calculated in terms of purchasing power equivalent, the scale of Vietnam's economy will reach 1,050 billion USD and GDP per capita must reach over 10,000 USD According to World Bank data, with an average economic growth of 6.8% a year for the 2016-2019 period, Vietnam is among the top 10 highest growing countries.(IMF, 2020)[24]

GDP growth of Vietnam in the past 10 years (Tapchitaichinh VN, 2020)[25]

Dr Nguyen Dinh Cung - Former Director of the Central Institute for Economic Management said that the macroeconomy is very stable, reflected in a series of indicators, such as low inflation, surplus turnover in terms of trade balance trade, budget deficit decreased, credit growth tended to decrease, foreign exchange reserves increased Thus, not only maintaining macroeconomic stability but also improving the resilience of the economy (laodong vn, 2019)[26] The economy is growing which is an ideal trend that makes Vietnam become a good destination for Coca-Cola to expand their business.

● NATURAL:

According to the United Nations Food and Agriculture Organization (FAO), Vietnam emits a large amount of plastic equivalent to 1.8 million tons per year, becoming the 4th largest plastic waste country in Asia (based on United Nations Statistics) Vietnam is one of the countries with the largest amount of plastic waste discharged into the sea in the world, with the amount of plastic waste discharged into the sea equivalent to 6% of the total amount of plastic waste in the sea worldwide (Jambeck et al , 2015).

With such an alarming situation, the control and minimization of plastic waste has become the top concern of Coca-Cola when implementing sustainable development strategies in Vietnam On September 11, 2019, Coca-Cola as one of the 9 founding members of Packing Recycling Organization Vietnam (PRO Vietnam) signed a Memorandum of Understanding with the Ministry of Natural Resources and Environment to share goals, visions and responsibilities in promoting a circular economy through waste reduction, sorting, collection and recycling With 3 main pillars of Design, Collection and Cooperation, the strategy "For a world without waste" is expected to bring comprehensive solutions, covering the life cycle of waste (CocacolaVietnam, 2020)[27]

Da Nang factory currently has four production lines with modern technology During the development process, the factory has continuouslyupgraded its smart and environmentally friendly production technology, with strict certifications from Vietnam and internationally New warehouse system with an area of 4,800 m2, capacity of 4,000 pallets andcan upgrade smart warehouse installation with a capacity of up to 8,000 pallets The warehouse is installed with LED lighting system to save energy and automatic vehicle entry and exit control system The wastewater treatment system is upgraded with wastewater

microbiological treatment technology with modern membrane filtration method (MBR technology - membrane bio-filter) ensure the quality of wastewater at level A after being discharged into the environment, exceeding the current prescribed standards In addition, the wastewater treatment system with a design capacity of 1,000 m3 / day (can be upgraded to 1,500 m3 / day and night) is installed to reduce noise, controland monitor automatically, help minimize Optimize the electric energy used during the treatment of wastewater from the manufacturing plant The technical parameters and quality of wastewater are transferred to the online central control room for storage and synchronization, ensuring the quality of wastewater meets the requirements (cocacolavietnam, 2017)[28]

The Coca-Cola factory in Da Nang (cocacolavietnam, 2017)[28]Coca-Cola Vietnam applies the new biofilter technology MBR (Membrane BioReactor), Coca-Cola VN calculates to increase the treatment efficiency and improve

the quality of wastewater whenreturning them to nature Thiswater source is being reused forirrigation, planting trees, fish

farming in factories The Coca-Cola VN rainwater collection system helps to reduce the annual amount of groundwater exploited for production These improvements help all 3 plants save 3-5% of their water use Particularly at the Thu Duc factory (Ho Chi Minh City), the amount of water needed to produce one liter of beverage has decreased by6%, a significant reduction for businesses that trade 100% of products with water as the main ingredient (Coca-Cola đầu tư công nghệ thân thiện môi trường, 2015)[29]

● POLITICAL AND SOCIAL:

Coca Cola is now known as a 100% foreign owned company (Vietnam News, 2013)[30] In order to attract and support FDI enterprises into Vietnam, there are many types of policy tools used by the State In particular, tax policies are one of the areas of special interest to investors.The tax policy focuses mainly on corporate income tax (CIT), export tax, import tax and other land The State has reduced the tax burden through reducing tax rates, simplifying the tax system, expanding taxable objects, and eliminating tax and transferring profits abroad since 2003 In this period, tax policies have contributed to the direction of to eliminate discrimination between economic sectors and between domesticenterprises and FDI enterprises The reduction of the common tax rate through the revisions of the Law on CIT (the period 2004-2008 is 28%, the period 2009-2013 is 25%, the period 2014-2015 is 22%, and the period January 1, 2016 to now 20%) (Bàn về chính sách ưu đãi đầu tư của Việt Nam đối với doanh nghiệp FDI, 2019)[31]

● CULTURAL:

Mr Truong Dinh Bac, Deputy Director of Preventive Medicine (Ministry of Health) said, according to the report of Euromonitor International, in 2016 Vietnam consumed more than 4 billion liters of soft drink In which,the most instant tea with more than 2 billion liters; followed by

carbonated beverages (over a billion liters), followed by sports drinks, energy drinks, and fruit juices It is forecasted that in 2018, beverage consumption in Vietnam will reach more than 5 billion liters, by 2025 it will reach 11 billion liters Sugar consumption and production in our country also increase annually by 30-40%, especially consumption exceeds the production level This report shows that the carbonated beverage market is expanding very smoothly in Vietnam (vnexpress, 2018)[32]

Including the period 2010 - 2015, on average, each Vietnamese consumesabout 15 liters of milk / year In the coming years, the dairy industry still has great potential as demand is forecast to grow 9% / year, reaching 27-