Coca Cola Business Strategy Paper

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To: Mr. Muhtar Kent, CEO
From: Erica Wei, Corporate Analyst
Date: May 1st, 2013
Subject: Increasing Marketing Focuses in Asian Markets
As society becomes more health conscious, domestic consumers are looking for healthier products. Increasing public concern of health issues, such as obesity, poses new challenges for the carbonated soft drink (CSD) industry, which has experienced declining growth in demand for recent years (Exhibit 1). As the United States has been Coca-Cola’s largest source of revenues by country and the company relies heavily on its domestic CSD market, this trend threatens the company’s future profitability. Coca Cola must dedicate more resources to the emerging markets of Asia in order to capture
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* Expanding Advertising Efforts – as the CSD industry is one with little product differentiation and depends most heavily on brand image, Coca-Cola should increase its allocated advertising budgets in Asian markets with the goal of pulling demand and pushing sales, focusing mostly on promoting popularity on top of its already established well-known brand image.

* Increasing Public Media Exposure – like advertising, media exposure is crucial to the company’s brand image and links directly to sales. Coca-Cola should further increase budgets for social media exposure such as public event sponsorships with the goal of enhancing brand perception and building loyalty.

* Focusing Selectively – despite Asia’s rapid GDP growth as a whole, it is a region characterized with highly uneven wealth distribution, and incomes varying widely from area to area. As CSD is a discretionary luxury good, Coca-Cola should selectively focus on cities with higher real disposable incomes. Focusing selectively will generate the best results from increased advertising and most efficiently utilize resources as a first step.
Competition & Challenges
Competition from Local Manufacturers – Many CSD companies compete in the rapidly growing Asian market and may create barriers to Coca-Cola’s effort to capture large shares quickly. However, most local firms are significantly smaller in both
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