Coca Colas Entry Strategies Into The African Market Marketing Essay

coca plant Colas Entry Strategies Into The African Market Marketing EssayCoca senss entry strategies into the African securities industry.The Coca-Cola confederacy is one of the largest manufacturers, distri onlyors and food marketers of nonalcoholic beverage abridges and syrups in the world. Coca-Colas headquarters ar in Atlanta, Georgia, in America. It is best k right offn for its flagship product, Coca-Cola, and is one of the largest corporations in the United States.Today, Coca-Cola is an worldwidely acknowledge soft drinks confederacy with ambitious plans to further grow the stag. The company owns the majority of the soft drinks available in coolers and in vending machines in the western world. Some of these brands include, Coca-Cola and sub brands1, Dr Pepper, Fanta, Sprite, Oasis and PowerAde. A full inclining of Coca-Colas affiliated brands can be found on their corporate web personatee2.The 2005 annual Report states the company sells beverage products in more th an 312 countries or territories.3 The international presence of Coca-Cola is phenomenal and its logo, advertising and colours are among the most recognized in the world.When an organization has do a decision to enter an afield market, in that respect are a variety of options open to it.An organization wishing to go international faces three major issuesi) Marketing which countries, which segments, how to manage and tool trade effort, how to enter with intermediaries or directly, with what information?ii) Sourcing whether to obtain products, make or profane?iii) Investment and control joint venture, spherical partner, acquisition?Decisions in the marketing area focus on the value cosmic string . The scheme or entry alternatives must ensure that the necessary value chain activities are performed and integrated.. One of the critical questions to examine in establishing an international increase scheme is to select the entry mode in the target remote solid ground and t he distribution channel. Several alternative entry strategies can be considered,Multinational enterprises (MNEs) are expanding their international reach, carrying theirproducts and brands to new and diverse markets in emerge economies. As they tailortheir strategies to the local context, they arrive at to create product and brand portfolios thatmatch their competences with local needs.A multi-tier strategy with local and/or planetary brands may provide MNEs with thewidest reach into the market and the potential for market leadership. However, it has to besupported with an appropriate combination of global and local resources. Foreign entrants consequently hold up to develop operational capabilities for the specific context, which requirescomplementary resources that are typically controlled by local firms.One of such an organization is coca cola company. ampere-second has recently started to heavily invest in the African market. Africa was actually a low priority region for C oca-Cola until 1997 when citing rapid population growth anddisproportionately low sales, the company developed a new market strategy aiming to doublesales in 5 years.Indeed, per capita consumption in Africa has grown from 18 servings in 1986 to 37 servings in2006. Unit case hatful sales are up 4 percent from 2005 to 2006. This growth waspreponderantly driven by 23 percent unit case rule book growth in Egypt, after Coca-Cola opened anew divisional office in Cairo.Coke has clearly decided to focus its energies on emerging markets passim the world andCoke can honestly shove along intimately increasing its sales volume on a global scale. However, as newcountries are aggressively targeted by Cokes marketing machine, dietetic patterns spay, andthe rate of western-style diet-related diseases increase.Entry strategies into the African market.Coca Cola Company entered into the global market utilise various modes of entry. The most common modes are exporting, licensing and franchis ing. as closely exporting beverages and its special syrups, Coca cola besides exporting its merc fadeises to remote distributors and companies.The company has also started licensing with bottlers around the world and adding its special syrup necessary to produce the product. Coca cola works with more than ccc bottlers internationally to produce, exhibit, market and sell products around the world. In 1984 a glass store owner Joseph A Biedenham began bottling coca cola to sell using common glass called Hutchinson. Benjamin F. Thomas and Joseph B. Whitehead have made first bottling agreement with Coca cola. During 1900-1909, three main bottlers divided the country into territories and sold bottling rights to local entrepreneurs. In 1916, a distinctive bottle called mannikin bottle has been designed to distinguish from imitator. The contour bottle became trademark posture by U.S patent office. During 1920s more than 1000 coca cola bottlers were operating in U.S. Between 1920s a nd 1930s, company leader Robert W. fragrant bedstraw began expand internationally through establishing bottling operation outside U.S. In 1940, in advance World War II, 64 bottling plant were setup around the world. During seventies and 1980s many small and medium-sized bottlers consolidated to better(p)serve extensive amount of global customers. Strong licensing relationship with bottlers became the base for Coca Colas integral business concern growth. Franchising is a special guinea pig of licensing strategy.There is various type of franchising. The type used by Coca Cola is manufactured-sponsored wholesalers franchise system. In franchising the finished products and sold to the retailers in local market. In case of Coca Cola Company licensing proved most suitable mode of market entry. T he licensing strategy must ensure ongoing agonistic advantages such as export market opportunities, low-risk manufacturing relationships, and diffusion of new products. different market en try mode such as exporting also proved useful in expanding globally. Coca-Cola has massive world appeal. The products escort is wet with over-romanticizing, and this is an image many people have sendn deeply to heart. The Coca-Cola image is displayed on T-shirts, hats, and collectible memorabilia. This extremely recognizable branding is one of Coca-Colas great strengths.7 Additionally, Coca-Colas bottling system is one of their greatest strengths. It allows them to conduct business on a global scale while at the same time maintaining a local approach. The bottling companies are locally owned and operated by independent business people who are authorised to sell products of the Coca-Cola Company. Because Coke does non have outright ownership of its bottling network, its main source of revenue is the sale of concentrate to its bottlers.Other brands owned by the Coca Cola company that have a strong brand image.8 Seasonal advertising awareness e.g. TV Christmas advert and summer adv ert. Coca-Colas brand name is known well throughout 94% of the world today Coca-Colas bottling system also allows the company to take advantage of infinite growth opportunities around the world. This strategy gives Coke the fortune to religious service a large geographic, diverse area.. Coca-Cola has successfully employed the hub-and-spoke system model in multiple country-bred emerging markets. In Africa, for instance, 9Coca-Cola set up Manual Distribution Centers in which an independent person was given the rights to distribute Coca-Cola products within a defined radius14. Similarly, in India local entrepreneurs sell Coca-Cola using all possible means of transport, ranging from trucks, auto-rickshaws, cycle rickshaws and hand carts, to even camel carts in Rajasthan and mules in hilly areas, to transport its product from the nighest hub.15 (See exhibit 3) As Colgate and Coca-Cola have shown, the hub-and-spoke model for FMCG products works well because it addresses the inventor y cost and transportation foundation issues that are associated with distributing products in folksy emerging markets while also providing for good product availability at the small-village level.In the villages, farmers earn the bulk of their income during two to three peak draw months, earning nothing during troughs. Farm labors get a daily wage when theres work to do at other times they sit around idle, migrate to towns, or scratch a living from other sources.36Equally important is the ability to execute on the ground and deliver consistently across this wide variety of markets, even as they change and mature over the longer term.Many of the early entrants to Africa have established successful, profitable businesses. Companies have been able to generate competitive advantage by influencing consumer preferences, building brand loyalty and shaping industry structure forrader competitors have a chance to become established. The majority of emerging market nations continue to have largely agricultural, agrarian-based economies.1 In Africa alone, of the seven hundred cardinal residents , roughly five hundred million people lived in clownish areas.2 Delivering products and services into this market presents both unique challenges and enormous opportunities for companies.The nature of rural emerging markets makes building a successful marketing channel challenging. The population is widely dispersed, transportation infrastructure is poor or non-existent, household incomes are low and unpredictable, and traditional methods of creating brand trust and awareness will not work.I propose that an entering company needs to design marketing channels that both successfully deliver products to customers in a capital-efficient way, and that open up the latent desire that customers have to barter for and receive those products. In this manner, not only are transporters and warehouses part of a successful marketing channel, but so are entities that educate custom ers about products and services they may not know they need, as are the financial programs that attend customers finance their purchases.The find points coca cola company should focus on when designing their rural distribution networks in emerging markets are as follows1. The company should contain the distribution network model that is appropriate for the product or service it is selling.2. While continuing to meet the customers needs, the company should aggregate consumer demand into underlying locations as much as possible in order to decrease inventory and transportation costs.3. The company should consider taking advantage of rural entrepreneurs (REs) to facilitate last-mile product deli really and sales. Such rural entrepreneurs include retailers and stand operators.Although consumers in rural emerging markets clearly have low and sporadic incomes, it would be a mistake to assume that these consumers necessarily desire to purchase cheap products. Instead, as Prahalad wri tes, the consumers are very brand-conscious and are motivated to buy quality goods. However, at the same time, they are by necessity very value-conscious.37 The challenge for companies entering this market is to offer consumers high-quality products and brands while also oblation .When assist advocates in Africa noticed that Coca-Cola products were available in remote African villages, it sparked the idea that perhaps the companys provide chain justs could assist in delivering life-saving drugs to aid victims. The drugs are typically hard to come by, especially in the outlying(prenominal) regions of poor countries. In some regions, it is not uncommon for the drugs to take 30 days to get through a nonprofits supply chain originally arriving at their final destination.In 2009, the Global Fund to Fight AIDS, terbium and Malaria asked Coke for assistance improving the organizations supply chain. The company agreed to help with a project in 2010, and the corporation worked with th e Global Fund, Tanzanias Medical Stores Department, the supply Foundation and Accenture Development Partnerships to get life-saving drugs to far-flung villages in Africa.What we noticed was that Coca-Colas products perpetually seemed to get to every remote region, and we thought that if they could get their products there, with their support, maybe we could, too, verbalise Gabriel Jaramillo, the Global Funds general manager, according to the Daily Beast.The drug supply chain hasnt been perfected, according to a study from the Yale School of Public Health. However, it has greatly improved access to medication in rural regions. Ill patients now have an 80 percent chance of receiving the purify medication, up dramatically from only a 50 percent chance two years ago. While the old delivery systems took a month to get drugs to the correct area, supply chains have been optimized and delivery time is now estimated at merely five days.Coca-Cola isnt doing all the work for the project t hey give expert advice and input, but Tanzanias Medical Stores Department is chipping in and having its employees learn the rudiments of supply chain management, logistics and distribution. However, the project doesnt only involve learning about how supply chains operate. All the partners are working to develop infrastructure in poorer developing areas, so Coke products and medications can more soft get where theyre needed most.Due to the success of this program, it has expanded to Ghana and Mozambique, where supply chains are still too underdeveloped to get rural residents the drugs they need. By working with one of the worlds largest distributors, groups looking to expand access to AIDS medication have developed a new system to better serve ill patients in remote regions.