Coca Cola’s marketing strategy in China

Marketing is vital for Coke to maintain its competitiveness. Marketing and advertising are designed to make customers brand loyal while nourishes consumer awareness. This helps with maintaining the long-term growth. With regard to Coke’s localization strategy, Coke made sure that its Chinese name had an appropriate meaning along with sounding like Coca-Cola. It has created a Chinese version for its famed logo. They believed that many aspects such as music, color and Chinese people’s interests are important to bear in mind if they wanted to capture the local people’s hearts. They take on innovative approaches to advertising and promotions to strive for the difference. Whenever there was a chance Coke would sponsor football games and many other types of media and activities that the Chinese are interested in to achieve maximum exposure. These also participated in SMS campaigns and hired famous celebrities to help promote the brand. The SMS campaigns were implemented taking into account China is the largest mobile market in the world.

Coke had to constantly keep up with the changing local trends to maintain the ability to be up to date with the Chinese taste which best suited every occasion. Coke must implement an efficient distribution channel to remain competitive. The quality of their products must no doubt be kept at its best at all times, therefore bottlers only chose certain inputs that met Coke’s global standards. Coke had the intention to localize every aspect of the business from sourcing inputs, to production, sales and distribution but this had proven to be a difficult and lengthy process. The consequence from adapting this strategy is the strong market presence it has created today. With an increased sales profit since 1990, it was able to generate yearly revenue of $1.2 billion. Without Coke, the mass additional employment opportunity of over 55000 people would have been forgone and China would lose all the technological updates and training Coke had invested over the decades.

Product positioning and Market segmentation

Coke’s marketing campaigns were customized with the local areas since different geographic locations would contain diverse people of various ages who share a different mindset and taste. Doing this had helped the company establish a traditional and consistent company in China. Consumers in the rural and urban areas had a vast difference in their per capita income which affects the purchasing power in every region. There is a large consumer potential in rural areas. So imperatively China’s market should be considered to be segmented according to economic diversity. The four largest cities in China consisted of 4% of the population with only 15% of retail sales, on the other hand, the small cities constituted 80% of the population with the retail market of 50%, according to 2003 statistics. Strategic marketing mix

The Coca-cola strategy is a mixture of various factors aiming to capture the global market. The strategic binding of these factors enabled it to make its presence in the target market. The following includes two of the four marketing tactics which Coke had implemented in order to achieve its significant positioning in China.

Product

By recognizing consumers’ wants and needs Coca-cola was able to produce diverse products which include carbonated drinks like Coke classics, Sprite, Fanta; Beers like Barq’s Root Beer and Dr. Pepper. It also supports the local brand names Qoo, Sensation, Tianyudi, and SMART which are ready to drink (RTD) tea drinks and juice drinks to suit local preferences. The growing demand of healthy beverages had influenced it to get diversified in soft drinks sectors. Meeting the diverse demand and taste had resulted in the packaging in different sizes and shapes of glass bottles, plastic containers, and cans. A key to Coke’s success is the differentiation in products; this makes the customers coming back for more.

Price

The pricing strategy of Coke is influenced by the strategies of its competitors. In China the biggest competitor of Coke is Pepsi and its price fluctuates according to Pepsi’s pricing. However, coke has always held a better position in the market due to a head start of several years which had lead Pepsi to suffer some downfalls. Still, the price of Coca-cola is the benchmark in the market with it costing 15 to 20 cents higher than Pepsi. This high price is supported by the brand equity of its various products in the market. The competition has lead to better improvements in products and more attractive promotions which are favourable to customers. Without a strong brand image consumers would choose a product with the most competitive price.

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