The re-localization of Coca-Cola:



A glance at the 1999 Annual Report of The Coca-Cola Company leaves you with a strong impression of two words that seem to be very deeply-etched in every statement made by the company - 'Consumer* and 'Localization'. The Chairman Douglas Daft states in his address to shareholders that, " If there's one thing that I've learned in my 30 years at Coca Cola it is - Think locally and act locally." Coca -Cola's localization drive appears to be partly spurred by the adverse impact on the image of the company, due to the various issues that cropped up last year in different parts of the world. Like the product contamination in Belgium and France, the problems with regulators in Europe, the racial discrimination lawsuit in United States.
In a recent article in The Financial Times, Mr. Daft talks of how Coca-Cola whose basic success emanated from its strength of being a 'multi-local' business relying heavily on the insight of local business partners, quite forgot the secret of its success and veered on the path of centralization. He has staled in this article that Coca-Cola wandered off the right path and endured a year of dramatic setback, by ignoring the changing global scenario and continuing to believe that a strategy that was once successful will always yield results. As
The puts it "As the Century was drawing to a close, the world had changed, and we had not. The world was demanding greater flexibility, responsiveness and local sensitivity, while we were further centralizing decision making, standardizing practices and were moving away from our traditional 'multi-local' approach".
The company in the 80's and 90's had focused on centralizing its operations for enabling effective management of a vast global enterprise that was being spread over 200 countries. It has now woken up to the fact that the world is changing very fast today and that a localized management that can quickly respond to the challenges and needs of the relevant market will be critical to success, rather than a unified management at the center. And that is precisely what Coca-Cola has set out to do. It appears to be handing out a greater degree of freedom and responsibility to the frontline managers in their respective areas
of operations. It has decided to cut jobs and convert itself into a leaner structure. In India too, the complex holding structure has been broken down and converted into a simplified structure. A single holding company Hindustan Coca-Cola Holdings Pvt. Ltd and one downstream subsidiary - Hindustan Coca-Cola Beverages - formed by the merger of 4 bottling subsidiaries of Coca Cola and that of Schweppes now operate in India. The parent has performed a comprehensive review of its Indian bottling operations and has announced that it will be writing off $400mn worth of assets in India in the first quarter of this year.
The meeting hosted last week by the company to update investors on its business strategies and outlook for the future also sang the same tune of how members of the global Coca-Cola management team are implementing their "Think Local Act Local" philosophy. The company's focus, according to the management, will be to encourage higher consumption of non alcoholic beverages and the Coca-Cola brands in every country. This will be achieved through an intense focus on consumers, communities, customers, the Coca-Cola system and Coca-Cola people. The Consumer focus strategy involves using innovative and tailored marketing programs\ based on local consumer insights to enable the company to keep growing. "We want to ensure that we have a tailored nonalcoholic beverage portfolio in every community that touches consumers in locally relevant ways." states the annual Report of the company. It gives the example of the company's innovative marketing strategy in India, which leveraged on the Diwali Festival and the entrenched family values in the Indian society to connect to the Indian consumer at a personal level. In Mr Daft's words
"The 21st Century has taught us one important powerful lesson - that the next big evolutionary step in going global has to be going local".


Marketing Mix and Strategy: ¬
Marketing mix of any organization consists of 4 P's i.e. product, price, place and promotion having its own significance, which varies from one organization to the other. In Coca-Cola the information about all the 4 P's that can be available to me is given here: ¬



PRODUCT:-
Product mix of Coca-Cola consists of the various brand packs and flavors given in the table. Product strategy of the Coca-Cola is to promote all the brands available in all the brands packs and to introduce the product in new flavors and. even new product. Regarding this Kinley soda is introduced. Fanta in green apple flavor is also introduced.
PRICE:
Regarding the pricing policy or the price to the distributor is not disclosed to me, but as done for the different product of the company, company has priced the product same as that of its major competitor or the market leader.
PLACE:
The Coca-Cola Company in India is governed from its corporate office located at Gurgaon in Haryana. It governs the working of five
zones covering whole India these zones are: - Northern zone, Eastern zone, Western zone, Southern zone and Andhra Pradesh zone. These zones are divided in to various, plants, which govern the area assigned to them. The areas are the various distribution centers called distributors and C&F agents. Then comes the retailers/customer for the company's product, they receive goods from distributors and C&F agents. Finally consumer is there, having the product from the customer's shops or delivered to their home, it is more clearly visible through this chart. The Coca-Cola Company, which gave its reach to the mouth of billions of people all around the world having a wide distribution, network. In India, the pace and speed at which Coca-Cola has widened its business is really amazing. Distribution network is the biggest strength of the company.