Coca-Cola Case Study
INTRODUCTION
The Coca-Cola Company is a beverage company that produces carbonated soft drinks. Coca-Cola is one of the most recognizable brands around the globe. The Company sells its beverage in more than 200 countries. The Coca-Cola Company trademark was registered in the USA in 1944. Being invented in the 19th century (1886) by Atlanta pharmacist John Pemberton, at first, the beverage was intended as a patent medicine. However, the marketing tactics of Asa Griggs Candler led the drink to its world dominance in the market of soft drinks in the 20th century.
Nowadays, the company produces a kind of concentrate and sells it to a variety of licensed bottlers of Coca-Cola around the globe. Then, the bottlers produce the finished product in bottles and cans from the concentrate mixed with sweeteners and filtered water. Later on, Coca-Cola is sold, distributed, and merchandised to vending machines and retail stores. The Coca-Cola Company has also introduced other cola drinks under its brand name including Coca-Cola Cherry, Caffeine-Free Coca-Cola, Coca-Cola Zero, Diet Coke, Coca-Cola Vanilla, as well as drinks with lime, lemon, or coffee (The Coca-cola Company n.p.). In general, the Coca-Cola Company is home to 16 billion-dollar brands, including Sprite and Fanta. Among the other top brands are Powerade, Minute Maid, and Vitaminwater. The company licenses own, and markets over 500 beverage brands, including sparkling drinks, juice drinks, waters, energy and sports drinks, coffees, and ready-to-drink teas.
In spite of its long history and popularity in the whole world, Coca-Cola is more and more often blamed for the negative effects it has on the human body. The paper aims to study the issues that are related to the drink. Obesity is analyzed as one of the diseases caused by the beverage; water problems in India are also considered being caused by the company as it takes too much water and exasperates the drought. A new marketing campaign in Israel that is the reason of people’s dissatisfaction is also considered.
OBESITY
Obesity is becoming a more burning problem within modern society today. It is said that over half of all suffer from this disease. It has been said that one of the main causes of obesity is the soft drinks that people consume on a daily basis. Now, this is not the only thing on why people are obese, but most soft drinks contain a large amount of sugar, which is not good for people. One of the key issues that Coca-Cola faces with this is the ethical standards that come from how and what kinds of drinks, into which they decide to put the most of their advertisement. One thing that they have tried to start doing is not advertise to kids anymore; however, this will not be enough to keep people or kids from drinking unhealthy drinks if they are still advertising them. One reason for this being unethical on the things that they advertise is because they want to be a leading company in the world trying to fight obesity. The only problem with this is that they keep advertising drinks that are not very good for people. Granted they still need to make their money as a company and be able to meet all their demands, but there are better ways to go about it than just to keep putting all their advertisement money into their main brand, which is the worst drink that they offer people to drink. They spend more than 2.9 billion dollars annually on advertisement. With spending that much money on an advertisement you would think that you would see more advertisements for their other products.
Solution
One of the solutions that we would recommend for them to take is to put more advertisement into their other products. The Coca-Cola Company has more than 3500 different types of drinks that they offer around the world. That is a lot of different types of drinks; however, most of the money they spend on advertisement goes into the common Coca-Cola drink, which is not very good for people. Therefore, if they really want to become a leading face in the world for the fight on obesity, they need to come up with a new advertising strategy and start putting money into all their other products (Bhasin n.p.).
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INDIA AND WATER RESOURCES
India has been having difficulty with quality water accessibility for many years. While a number of large population areas have some infrastructure for water, much of it is inadequate or poorly planned. In addition, there are many citizens spread out across their rural areas who do not have access to adequate water resources at all. Thirty-three percent of the country has access to traditional sanitation and twenty-one percent of the country’s diseases are water-related. There have been many factors contributing to the inefficient water system in India. A lack of government planning increased corporate privatization, industrial and human waste. Today, children in 100 million homes lack water. Much groundwater and many local wells have dried up requiring rural residents to rely on water supplies trucked in daily from the government.
Coca-Cola operates fifty-two water-intensive bottling plants in India. Locals blame Coca-Cola for taking in too much water and exasperating the drought. Coca-Cola was required to pay 47 million in compensation for agricultural land and extracting too much water at a bottling plant (Nair, 2010, n.p.). Once Coca-Cola entered the region in 1999, farmers in and around its plants have leveled accusations that the water tables have dropped drastically, and water supplies were contaminated, which also got into the soil and made the soil unfertile (Nair, 2010, n.p.). In April 2013, fifteen village councils requested the government reject Coca-Cola’s application to expand because it would contribute even further to the water supply problems. Coca-Cola has also applied to expand its groundwater usage. The village councils have requested the company be denied any expansion under any circumstance on the grounds that it would make water supply problems even worse.
We at Newport Management Consultants have two solutions for this problem. Our first short-term solution is to give immediate attention to our current plant operations. Attention will focus on the systems that incur and dispense water. We want to ensure that we are using the right amount of water and that this water goes through the system in an efficient and effective manner. We also want to look at the processes and systems that treat our wastewater and discharges to ensure that those waters are recycled if possible. If the waters discharged through the beverage system are not re-usable, then we need to make sure we dispose of those waters appropriately.
Our second suggestion is a long-term solution. Our long-term solution is to develop the Coca-Cola Foundation for emerging markets. This foundation will serve the emerging markets with different infrastructure projects. This foundation will be a department within the Coca-Cola Corporation and will employ people who only cooperate with the developing countries and their population, and some non-profit organizations to build out the infrastructure of these countries. For example, this foundation will hire the best minds in engineering that can build out highways, bridges, and roads. The best scientists, who deal in sustainable water infrastructure, water risk management research, drinking water treatability, building and expanding urban areas, agriculture irrigation systems, irrigation methods used by farmers, would be employed. There would be a satellite office in different countries with their own staff. Each area would have its own priorities and projects. When different countries are looking to assist a country with an infrastructure project, they will be able to tap into their satellite offices and use their resources or knowledge to do their projects. This foundation would collaborate with other non-profits organizations, such as the World Wildlife Fund, WaterAid, and Coca-Cola Africa Foundation. Newport Management Consultants felt that this new foundation was an important endeavor for a number of reasons:
- It shows countries that we do foreign direct investment with that we are committed to providing significant resources to countries and assisting them in developing their communities into world-class communities;
- It creates synergies among many of the projects and endeavors that Coca-Cola engages in. It allows Coca-Cola to utilize resources more efficiently and allows re-use of proven solutions and expertise.
It is our vision that this foundation will allow Coca-Cola to make more efficient and effective contributions to countries where they make a foreign direct investment. As a matter of fact, we suggest creating a marketing campaign around this endeavor. It would be called the Coca-Cola Commitment. Coca-Cola commits to its products, its people, and to the idea of assisting countries in building great communities around the world.
NAME ON COKE BOTTLE
Coca-Cola launched a new marketing campaign in Israel called “Share a Coke” in May 2013, which centers on individualized bottles and cans of Coke, Diet Coke, and Coke Zero. The bottles “are not produced to order; rather, the company said, the bottles use a range of about 150 of the popular first names of residents” (Shamah n.p.) and other generic titles such as husband, wife, and others. The hope that people of all ages would be excited to see their names printed on cans and be more inclined to purchase is what drives the campaign.
Israel has a very ethnocentric culture and its “cultural identity can be tightly tied to religion and ethnicity, and where issues of perceived inclusion or exclusion are extremely sensitive” (Eglash n.p.). Therefore, many feel discriminated by Coca-Cola as a result of their name being excluded.
Israel is also home to many Arabs whose “population numbers more than 1.5 million.” Other complaints have come from members of Israel’s sizable Russian immigrant community and from other minorities, such as arrivals from Ethiopia, whose African names also failed to make the list” (Eglash n.p.). With such diversity within Israel’s borders, as well as a long standing tension between some of its major inhabitants, the division created by Coca Cola’s labeling has increased the social and cultural strain.
Coca-Cola has rebutted the discriminatory argument with “a defense on its Facebook page, where company representatives are telling disgruntled customers that individuals who cannot find their names can print them out on a coke label at certain designated stores” (Eglash n.p.). The Arab population has argued back that the print shops may not necessarily be equipped to print Arabic letters.
Solution
When choosing to customize products with names, Coca-Cola must carefully examine social and cultural ties of the region with a person’s identity. The marketing team failed to enhance their cultural knowledge about the region and, therefore, has suffered a backlash from its community. In an effort to minimize these issues in the future, Coca-Cola should focus on areas that are not as culturally and socially divided. Israel is home to a long standing war between the Arab and Jewish communities. By launching a personalized campaign in an area that is already so divided on their issues, only offering one side of names discriminates against the opposing culture. Understanding the social dynamics of the region would facilitate Coke’s marketing techniques and further avoid alienating of any other cultures.
CONCLUSION
The Coca-Cola Company and its activity have been the reason for criticism arisen from various groups, concerning a number of issues including negative health effects, business practices, and environmental issues. It is evident that Coca-Cola has a harmful impact on human health, particularly young children, who consume soft drinks excessively. The beverage is blamed for being one of the main causes of childhood obesity. Coca-Cola’s new advertisement, which encourages people to fight obesity, is considered to do damage and prevent the control to combat obesity. The drink has also been criticized for its content of caffeine.
A new marketing campaign in Israel, launched in May 2013, has been also heavily criticized for discrimination of multicultural communities causing an increased social and cultural strain.
Of the 200 countries where soft drink is sold, India has the fastest-growing market. However, the company’s adverse impacts on the environment have caused a lot of criticism and protest. The utilization of natural water resources by the Coca-Cola Company poses a serious threat to many communities. The company’s activities in India have made many communities experience severe water shortages and the problem of contaminated groundwater. Massive movements have emerged across the country to hold the company responsible for its harmful actions. The Coca-Cola practice has turned farming communities into virtual deserts. As a result, there is a rapidly growing rate of suicide among Indian farmers whose living conditions are being destroyed. Several Indian states have even partially banned the drinks in hospitals, schools, and colleges.
