Coca Cola

Coca Cola

Coca Cola

Introduction

The original Coca-Cola Company was established in the US in 1886. The Coca Cola Company is the largest soft drink concentrates and syrups manufacturer in the world which operates world widely in almost all the countries in the world. Coca-Cola remains the largest single brand in the UK, in value terms, with estimated sales in excess of £600 million in 2000 in the off-trade, outselling brands like Walker's Crisps and Persil. Furthermore, "in 1999 the international branding consultancy, Interbrand, declared Coca-Cola the world's most valuable brand, worth $83.8 billion".

Competition

There is a lot of competition in this market as there are several different companies selling different brands of soft drinks. Keeping an eye on competition is becoming one of the key roles of the government as firms merge and expand in the hope of dominating rapidly growing international markets. Coca Cola Company's direct competitor is PepsiCo. This is not only in the UK but world wide.

Competition is so intense in this sector of the market that Virgin Drinks recently complained to the competition authorities about Coca-Cola's trading practices in the UK, which are already under scrutiny in other parts of Europe. The argument centres on the way in which Coca-Cola grants bonuses and discounts in the independent sector. Such is the power of Coca-Cola that a can of Coke was recently selected to be a part of the European Eurowatch shopping basket to track pricing trends(Carlsson 2003).

Market Trends

The table in appendix 1 details brand shares in the carbonates market in 2000, along with data from 1998 to 2000 for the purpose of comparison.

Looking at the table we can clearly see that Coca Cola Company has the largest proportion of market share in the soft drinks market. Looking more closely, Coke is the major brand in the soft drinks market and in the Coke's market. Coca Cola has well positioned it self in the market having a constant increase in sales every year. "The carbonates market continues to show steady growth with other flavoured carbonates and cola sectors the key drivers. A major growth area is the larger volume, resealble bottle preferred by consumers which provides great potential for impulse purchase"-Mike Wood, General Manager- Customer Marketing of Vimto Soft Drinks, The Grocer, 9th May 1998. The second brand with the largest market share is Diet Coke, again a Coca Cola Company's brand. This again demonstrates Coca Cola Company's strength in the UK soft drink market(Bilen 2002).

Consumer and Trade Attitudes

Carrying out some primary market research in two of the biggest supermarkets in the UK, Sainsbury's and Tesco, we found out that consumer are very brand loyal to Coca Cola. That evening, more than 50% of the sampled people bought Coca Cola and Diet Coke and one of the reason was because they "simply like the taste and we only buy this drink" although Pepsi prices are lower than Coca Cola's products.

An interesting thing we noticed that day was that the consumer don't actually spend much time in the ...