We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Sales and distribution channel in Coca-Cola Essay Sample

essay

Get Full Essay

Get access to this section to get all help you need with your essay and educational issues.

Get Access

Introduction of TOPIC

The Coca-Cola Company is a beverage retailer, manufacturer and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product Coca-Cola, invented by pharmacist John Stith Pemberton in 1886. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves 1.6 billion servings each day.The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its anchor bottler in North America, Coca-Cola Refreshments.The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the NYSE and is part of DJIA, S&P 500 Index, the Russell 1000 Index and the Russell 1000 Growth Stock Index. Its current chairman and CEO is Muhtar Kent.Coca Cola Company makes two types of selling1)Direct selling = In direct selling they supply their products in shops by using their own transports. They have almost 450 vehicles to supply their bottles. In this type of selling company have more profit margin.2)Indirect selling = They have their whole sellers and agencies to cover all area.

Because it is very difficult for them to cover all area of Pakistan by their own so they have so many whole sellers and agencies to assure their customers for availability of coca cola products.Objectives: A firm’s distribution objectives will ultimately be highly related—some will enhance each other while others will compete. For example, as we have discussed, more exclusive and higher service distribution will generally entail less intensity and lesser reach. Cost has to be traded off against speed of delivery and intensity (it is much more expensive to have a product available in convenience stores than in supermarkets, for example).Narrow vs. wide reach: The extent to which a firm should seek narrow (exclusive) vs. wide (intense) distribution depends on a number of factors. One issue is the consumer’s likelihood of switching and willingness to search. For example, most consumers will switch soft drink brands rather than walking from a vending machine to a convenience store several blocks away, so intensity of distribution is essential here. However, for sewing machines, consumers will expect to travel at least to a department or discount store, and premium brands may have more credibility if they are carried only in full service specialty stores.

Retailers involved in a more exclusive distribution arrangement

are likely to be more “loyal”—i.e., they will tend to• Recommend the product to the customer

Sorry, but full essay samples are available only for registered users

Choose a Membership Plan
and thus sell large quantities;• Carry larger inventories and selections;• Provide more servicesThus, for example, Compaq in its early history instituted a policy that all computers must be purchased through a dealer. On the surface, Compaq passed up the opportunity to sell large numbers of computers directly to large firms without sharing the profits with dealers. On the other hand, dealers were more likely to recommend Compaq since they knew that consumers would be buying these from dealers. When customers came in asking for IBMs, the dealers were more likely to indicate that if they really wanted those, they could have them—“But first, let’s show you how you will get much better value with a Compaq.”Distribution opportunities: Distribution provides a number of opportunities for the marketer that may normally be associated with other elements of the marketing mix. For example, for a cost, the firm can promote its objective by such activities as in-store demonstrations/samples and special placement (for which the retailer is often paid).

Placement is also an opportunity for promotion—e.g., airlines know that they, as “prestige accounts,” can get verygood deals from soft drink makers who are eager to have their products offered on the airlines. Similarly, it may be useful to give away, or sell at low prices, certain premiums (e.g., T-shirts or cups with the corporate logo.) It may even be possible to have advertisements printed on the retailer’s bags (e.g., “Got milk?”)Other opportunities involve “parallel” distribution (e.g., having products sold both through conventional channels and through the Internet or factory outlet stores). Partnerships and joint promotions may involve distribution (e.g., Burger King sells clearly branded Hershey pies).Deciding on a strategy. In view of the need for markets to be balanced, the same distribution strategy is unlikely to be successful for each firm. The question, then, is exactly which strategy should one use? It may not be obvious whether higher margins in a selective distribution setting will compensate for smaller unit sales. Here, various research tools are useful.

In focus groups, it is possible to assess what consumers are looking for an which attributes are more important. Scanner data, indicating how frequently various products are purchased and items whose sales correlate with each other may suggest the best placement strategies. It may also, to the extent ethically possible, be useful to observe consumers in the field using products and making purchase decisions. Here, one can observe factors such as :(1) how much time is devoted to selecting a product in a given category,(2) how many products are compared, (3) what different kinds of products are compared or are substitutes (e.g., frozen yogurt vs. cookies in a mall), (4) what are “complementing” products that may cue the purchase of others if placed nearby. Channel members—both wholesalers and retailers—may have valuable information, but their comments should be viewed with suspicion as they have their own agendas and may distort information.

Outsourcing distribution and manufacturing:Coca-Cola India minimised its capital needs by meeting new manufacturing capacity needs throughexternal co-packers, outsourcing its distribution and meeting its in-market-refrigeration and cooling needs by giving incentives to retailers to self-fund the same through its “Own Your Fridge Scheme.” Today, the company has an extensive rural and urban distribution network. Coca-Cola adopts a hub and spoke format distribution network ensuring that large loads travel longer distances and short loads travel short distances. The company has increased its village penetration from 9 per cent in 2000 to 28 per cent in 2004 and covers approximately 175,000 villages today. Rural India now accounts for 30 per cent of Coca-Cola’s sales volumes. Expanding its distribution networks:The company had also decided to expand its retail network by 18 per cent during the financial year2004-05 taking the total number of retailers to 1.3 million across the country.Other Distribution Strategies:1) Coca-Cola Cricket2) Coca-Cola Concerts3) Coca-Cola Food Mela4) Coca-Cola Basant Festival5) Coca-Cola GO-RED6) Coca-Cola Party in a Park7) Coca-Cola Shopping Festival8) Coca-Cola Ramzan Campaign9) Coca Cola TV Mazza10) Coca-Cola & Mc Donald’s11) Fanta & Sprite Launched12) Diet Coke

We can write a custom essay on

Sales and distribution channel in Coca-Cola Essay ...
According to Your Specific Requirements.

Order an essay

You May Also Find These Documents Helpful

Coca-Cola Company

Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer and marketer of nonalcoholic beverage concentrates and syrups. Coca- Cola Company has been found 131 years ago in May 8,1886 in Atlanta, Georgia, U. S. by Asa Griggs Cadler and John Pemberton. John Stith Pemberton is pharmacist who invented formula for the most popular product Coca-Cola in 1886 in Columbus, Georgia. The formula is still a trade secret. Coca-Cola is a carbonated soft drink where the drink’s name refers two of its original integrities, which are kola nuts (source of caffeine) and cola leaves. Based on Interbrand’s “best global brand” study of 2015, Coca-Cola was the word’s third most valuable brand, after Apple and Google. But, was it always like that? What happened in the past with Coca-Cola? Where they always mindful with their responsibilities? Crisis situation In 1990s, Coca-Cola has been accused of unethical behavior in a number...

The Business Environment of Coca Cola

INTRODUCTION Business environment consists of the factors that affect company’s operations, and includes stakeholders, suppliers, customers, competitors, industry trends, regulations, government activities, economic and social factors, and technological development. Ability to understand the key processes of business environment is severe necessity. Business environment is same as Charles Darwin’s natural selection: ability to adapt to changes in an environment – a main condition in business. The number and a variety of factors to which the organisation is forced to react, is a lot. All the objects and processes in environment always changes. Change of one factor results to a change of set of others. The organisation has very limited possibilities to influence an external context of the activity. The companies should adapt continuously for changes proceeding round them, i.e. to be changed. 1.1 - COMPANY BACKGROUND AND HISTORY The company that was chosen has the most expensive brand name in the...

Organizational Structure Paper

This company is very competitive. They compete with other companies to be number one in sales. They have a decentralized organizational structure, with operational decisions made within the separate business units while being governed by policies at the corporate level. The company that does all of this is Pepsi Cola Company. There is not many people that can do without this drink daily. At times it will almost seem like a habit. Pepsi Company is a company that many people are familiar with. It is a company that people spend their hard earned money one every day all over the world. Pepsi Co consists of three units: Pepsi Co Americas Foods, Pepsi Co Americas Beverages and Pepsi Co International. Pepsi Co Americas Foods encompasses Frito-Lay North America, Quaker and all Latin American food and snack businesses. PepsiCo's chairman and CEO is Indra Nooyi. The Americas Foods, Americas Beverages and International...

Popular Essays

logo

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?