Coca Cola Essay

Exchange rate gains or losses are brought to account in determining the net profit or loss in the period in which they arise, as are exchange gains or losses relating to cross currency swap transactions on monetary items. Exchange differences relating to hedges of specific transactions in respect of the cost of inventories or other assets, to the extent that they occur before the date of receipt, are deferred and included in the measurement of the transaction. Exchange differences relating to other hedge transactions are brought to account in determining the net profit or loss in the period in which they arise. Foreign controlled entities are considered self-sustaining. Assets and liabilities are translated by applying the rate ruling at balance date and revenue and expense items are translated at the average rate calculated for the period. Exchange rate differences are taken to the foreign currency translation reserve.

The Concentrate Producer industry can be classified as a Duopoly with Pepsi and Coke as the firms competing. The market share of the rest of the competition is too small to cause any upheaval of pricing or industry structure. Pepsi and Coke mainly over the years competed on differentiation and advertising rather than on pricing except for a period in the 1990’s. This prevented a huge dent in profits. Pricing wars are however a feature in their international expansion strategies.

The company known as Coca-Cola today was started in September of 1919, but the first Coke brand was served as early as 1886. Since that time it has grown to be one of the most globally recognized brand names with a stock value of $167 billion. Coke’s plan has always been developed with the future in mind. Right away the company realized that it was more profitable to manufacture the concentrate used to make carbonated drinks than to bottle it. From that point on they saw the entire world, not simply the originating country, as their desired market. It seems only practical that the company should pursue this agenda until conquered then focus the effort on expanding into different product lines. This logical

In an industry dominated by two heavyweight contenders, Coke and Pepsi, in fact, between 1996 and 2004 per capita consumption of carbonated soft drinks (CSD) remained between 52 to 54 gallons per year. Consumption grew by an average of 3% per year over the next three decades. Fueling this growth were the increasing availability of CSD, the introduction of diet and flavored varieties, and brand extensions. There is couple of reasons why the industry is so profitable such as market share, availability and diversity and brand name and world class marketing.

Moreover, this scenario is unique because Kokosing has the opportunity to use the price to their advantage: during low demand they can decrease their profit margin to win bids and gain projects and vice versa during peak demand. Thus, research will be conducted to determine if demand truly does have an effect on Kokosing’s pricing strategy and the reasoning behind the strategy.

1. Consider Coca-Cola’s advertising throughout its history. Identify as many commonalities as possible for its various ads and campaigns. (For a list of Coca-Cola slogans over the years, check out http://en.wikipedia.org/wiki/Coca-Colaslogans.)

Coke was a company ruling the markets before Pepsi entered. Earlier the price of coke was cost based i.e. it was decided on the cost which was spent on making the product plus the profit and other expenses. But after the emergence of other companies especially the likes of Pepsi, Coca-Cola started with pricing strategy based on the basis of competition. Nowadays more expenses are spent on advertising rather than on manufacturing.

The pricing technique of Coca-Cola has supported the firm to compete and grow in the soft drink effectively. The volume discount and pricing penetration are the vital aspects to provide the firm generates its sales in the market. For instance, Coca-Cola partners with large supply chains such as Costco, Sam’s Club, and Walmart to provide great discount pricing in order to generate its sales substantially in the U.S and the global market. Equally, the firm also distributes its

As mention before, Coca-cola has 47.3 percent market share in the country’s cola market versus Pepsi which hold 44.5 percent. Coca-cola is also the brand known around the worlds, which are the largest producer and distributor of ark colas in the world. Even in the current monetary crisis, the company continues to expand and the financial position shows that Coca-cola has a strong cash position in compare to PepsiCo which the long term debt of PepsiCo is so high.

Over 3500 products are available in more than 200 countries (The Coca Cola Company, 2013).

Coca-Cola was invented by John Pemberton the Coca-Cola Company began in 1886. With more than 1.9 billion consumers a day, in more than 200 countries, Coca-Cola is dedicated to being the world’s largest beverage company by maintaining and gaining customers. Customer preference is a core value to coke. Coke has dedicated itself to meet the thirst needs of every customer. They engage with their customers at home, restaurants, sporting events. Almost everywhere customers go, they can find a coke product. They build their top line growth and capital efficiency through investment in FIFA World Cup, “Open Happiness” global campaign, and have many worldwide partners, increasing their business nearly 5% every year by creating a diverse customer base.

big market share, such as Pepsi Cola, Mt.Dew, and so on. I like to drink Coke

Supply and demand lies in the heart and soul of economics. The concept is perhaps the single most driving force in an economy, specifically a capitalist economy. Supply and demand is based on two concepts: The law of demand and the law of supply. The law of demand states that the demand of a product rises as its price falls, therefore the demand of a product falls as its price rises. A good example of this occurs in grocery stores. If the price of a case of Coca-cola drops from $6.99 to $2.99 the demand for the product will rise because more people are willing to pay $2.99 rather than $6.99. Not only will typical consumer of Coca-cola purchase more but consumers who are not normally willing to pay $6.99 will make the purchase. Substitution also plays a role in the equation. Substitution occurs when consumers substitute one good for another based on price levels. In the Coca-cola scenario, some Pepsi drinkers will purchase the Coca-cola given the case of Pepsi is price higher.

Since there are a wide range of products available, the pricing for both Coca Cola and Pepsi is done according to the Market demands and the geographic segment and thus both the products pricing are set around the same level. Neither of the brands can win if they enter into a price war, simply because the cost of manufacturing and transportation is huge. The advantage to either of the companies was if they enter into a brand war. Since, Coca Cola always had competitors constantly driving them to be smarter, better and faster and since they were successfully been existing for more than a century, they have had to remain consistent with their pricing strategy. Throughout the years, Coca Cola has made many pricing decisions, but eventually the ultimate goal is to maximize the shareholder value. Coca Cola uses lower price point to penetrate new markets to face competition and also to raise brand awareness. This strategy is strongly implemented till it repositions itself as the Premium beverage as compared to its competitors.

Coca-Cola spends huge amounts of fund on marketing every year to remain its competitiveness. However, recently, Coca-Cola had a weak global growth. The sales volume of soda is not so satisfactory. Coke is claimed to have too many calories and sugar, thus being bad to health, as a result of which, consumers turn their attention to other drinks (Kell n. pag.).