Analysis of business strategies of Coca-Cola Company

Based on the theories related to advertising and cultural attributes, this paper analyzes the development process of Coca-Cola Company’s advertising in China, and summarizes Coca-Cola Company’s localized advertising strategy in China. Now I will unravel the business strategy of Coca-Cola Company for everyone, I hope it can help you.

The Coca-Cola Company’s business strategy

Coca-Cola’s status in Chinese beverages is constantly being rewritten, just like it has a different feeling when we are growing up, from childhood to now.

When we were young, it was so sacred in our minds. Regionally, it was an imported product and a foreign-style product. At that time, we lived in the countryside, and only those from relatively well-off families were living there. Only our companions can consume it, so we envy our companions, and at the same time we envy the cola that we cannot drink but he can drink frequently. We envy the mysterious color of cola and the high-spirited feeling they feel after drinking it. So in childhood, we looked at Coke just like the poor look at the rich, with an envious view, and a desire to have the same enjoyment as the rich, the same material, the same happiness. Coke is the enjoyment we wanted to pursue when we were children. He Become an epitome of our material pursuits.

As we grow up day by day and our living conditions improve, we can occasionally buy Coke. We will hide aside and savor the feeling it brings, and we feel so comfortable. We long for this kind of frequency more and more? As we grow up in middle school, high school, and college, we have a better understanding of the history of Coke. After every exercise, we will use it to wash away our fatigue. Although history has given him too much mystery, we feel that he is powerful and uplifting, and we are eager to maintain the vitality he possesses.

?Localized thinking, localized marketing? is the core of Coca-Cola’s global business strategy, but when it comes to China specifically, it does not use Western culture to change Chinese people’s consumption concepts. On the contrary, it chooses to use Chinese Culture to influence the way Coca-Cola is produced and marketed. [1] It was the "localization" strategy that first had the concept that guided Coca-Cola to have a series of "localization" market operations in China, including the use of marketing methods adapted to the Chinese market, and the collaboration with Chinese partners *** Develop Chinese brands, provide quality services to consumers and become a local corporate citizen.

1 Coca-Cola Company

Coca-Cola is a world-famous century-old enterprise. Since its birth, it has continued to create miracles one after another in the world market. Taking China as an example, in just ten years from 1989 to 2006, the company achieved sales growth of nearly 30 times and continued to maintain the top brand ranking.

1.1 Development of Coca-Cola Company

Coca-Cola Company was born in 1886 and is headquartered in Atlanta, United States. The Coca-Cola Company is the world leader and pioneer in soft drink sales. It has nearly 400 beverage brands that are sold in 200 countries and regions around the world, with more than 1 billion cups consumed every day. In 2004, Coca-Cola and Sprite*** both won the title of Super Brand. [2] In the same year, among the 100 most valuable brands in the world announced by the US "Business Week", Coca-Cola ranked first with a brand value of US$67.4 billion.

1.2 The development of Coca-Cola Company in China

Coca-Cola has become one of the most famous international brands in China. According to a 1999 Gallup survey in China, 81% of Chinese consumers were aware of the Coca-Cola brand. In 2003, an independent authoritative Chinese consumption survey showed that Coca-Cola had been selected as China's most popular beverage for eight consecutive years.

In 1927, Coca-Cola established China's first bottling plant in Shanghai.

In 1948, the Shanghai plant became the first bottling plant outside the United States to sell more than 1 million cases.

In January 1979, Coca-Cola returned to China and became the first international brand to return to China. For 25 years, in a sense, China's reform and opening up created an era of miracles, and the maturity and development of China's business concepts can also be called a grand business epic. Coca-Cola is fortunate to be one of the first to be integrated into this business epic. It has not only witnessed the rapid development of China's economy, but also used its own successful experience to write a successful chapter for foreign investors investing in China.

The first bottling plant was established in Beijing in 1981.

In 2000, Coca-Cola moved its China headquarters from Hong Kong to Shanghai.

Currently, Coca-Cola’s cumulative investment in the Chinese market has exceeded US$1.4 billion, its annual sales have exceeded 900 million TEUs, and the Coca-Cola system employs a total of more than 30,000 employees in the Chinese market. By 2005, Coca-Cola had established 29 bottling companies and 35 production plants in China, most of which were controlled by Chinese-funded or Chinese companies.

Coca-Cola beverages have gone through a glorious journey of 120 years since their creation. Currently, consumers in nearly 200 countries around the world enjoy more than 1 billion cups of Coca-Cola products every day. The Coca-Cola brand has been deeply rooted in the hearts of the people. Someone once made an interesting statistic: If all the Coca-Cola bottles sold over the years were placed upright and side by side, their length would be equal to 115 round trips from the earth to the moon. From 1927, when Coca-Cola entered Shanghai and Tianjin, China, it has invested US$1.1 billion in China and established 23 canned beverage factories, forming a nationwide production base and sales network with annual sales of nearly 10 billion yuan. has become the market leader in China's soft drink market. In urban consumer surveys, Coca-Cola has topped the list of similar products many times. After 30 years of innovative brand management and effective marketing, Coca-Cola has now become a well-known beverage brand in China.

2 Coca-Cola Company’s localization in China

In 1927, Coca-Cola set up factories in Shanghai and Tianjin for production, and later in Qingdao and Guangzhou. In 1933, the Coca-Cola factory in Shanghai was the largest Coca-Cola factory outside the United States. In 1948, it was the first factory outside the United States with an annual output of more than 100 boxes. Coca-Cola returned to China in 1979 and has invested US$1.1 billion in China so far. After more than ten years of development, The Coca-Cola Company has established 23 canned beverage factories in China, forming a production base and sales network radiating across the country, with annual sales of nearly 10 billion yuan. Such brilliant achievements and the application of brand localization strategy are inseparable. Mr. Han Chengping, deputy general manager of Beijing Coca-Cola Beverage Co., Ltd., said that Coca-Cola’s localization includes all aspects, from factories, raw materials, personnel, products, packaging, and marketing, 99% of which are Chinese.

2.1 Localization of brand naming

Since different countries have formed their own cultures over a long period of time, brand naming will affect the market’s acceptance of products. [3] Coca-Cola's early translation in China was "Tadpole Chewing Wax". This name did not respond well to the market. The name made consumers confused and lost interest in the product. The market sales were once very poor, so the company made a major decision to change its name to "Coca-Cola" to adapt to the local culture. The new name is catchy, easy to read and remember. People like it and it is quickly accepted by the market. It has also become a must-have drink on people's tables during festivals and celebrations. The door to the market has been opened, laying a good foundation for Coca-Cola's operation in the Chinese market. .

2.2 Product localization

Du Dafu, chairman of Coca-Cola, said: "Only localized beverages are best-selling beverages." They found that Asian consumers consume less than 100 cans of carbonated drinks per person per year, while Americans drink 395 cans. The popularity of carbonated drinks in Asia cannot be compared with that in the United States and Europe. Asians, especially Chinese, prefer fruit juices and traditional tea drinks. Coca-Cola saw this change in demand and made corresponding adjustments to its products. Since 2002, it has successfully launched its first non-carbonated drink, Ice Dew, and has since launched other products. It has launched a series of non-carbonated and even local specialty drinks such as Queer, Tianyidi, Shuisenhuo, Minute Maid, Fruit Orange, Tea Research Workshop, and Health Workshop, which are very popular in the market. Zhao Zhongbin, vice president of Coca-Cola China, said that new product development has been relatively successful, such as fruit orange, which is very successful in China. The Coca-Cola Company also invested US$80 million to locate its largest overseas R&D center in Shanghai to accelerate product localization.

2.3 Localization of advertising

Sandy Aihua, President of Coca-Cola Asia, said: The direct result of the implementation of the localization concept is that Coca-Cola is closer to consumers than ever before. . [4] This concept is prominent in advertising.

The headquarters of Coca-Cola Company has strict control over advertising. However, the TV commercial launched in China in 1999 was the first time it was shot in China, the first time it was designed by a Chinese advertising company, and the first time it invited Chinese actors to shoot an advertisement. The picture was full of vitality. A healthy image appears, focusing on China’s localized image. For example, the series of episodic advertising dramas by Liu Xiang, S.H.E, Wilber Pan, and Shawn Yue that are popular on TV are some of the plot arrangements that Chinese people are most familiar with. They are very close to life, contagious, and are loved by the people. In fact, the localization of Coca-Cola has a deeper meaning? That is, both the product and the spokesperson are inseparable from local consumers!

2.4 Packaging localization

In addition to In addition to localizing brand naming, products, advertising, etc., Coca-Cola also focuses on making a big fuss about packaging. During the traditional Chinese festival "Spring Festival", based on local traditional customs, the images of "Ah Fu" and "Gillian" were launched, making Chinese consumers feel more cordial and deeply loved by people. In addition, the traditional Chinese zodiac New Year packaging is used to cater to the traditional Chinese New Year culture and is promoted with the images of animals that are familiar and loved by Chinese people. Subsequently, various packaging with Chinese colors, such as the Olympic Games gold can, the China Team football version, and Spring Festival paper-cutting, have brought Coca-Cola closer to Chinese consumers. In response to the needs of Chinese people on special occasions such as daily gatherings and festival celebrations, large bottle packaging is specially launched, which is in line with the cultural characteristics of Chinese people who like to gather together and share in large bottles, and fully meets market demand. At the same time, packaging of different materials and capacities such as glass bottles and plastic bottles has also been launched to meet the diverse needs of the Chinese people in different situations.

2.5 Localization of personnel

In the process of developing and occupying the Chinese market, the most unique point of Coca-Cola Company is the localization of talents. The theoretical essence of Coca-Cola's employment strategy is: (1) Set up a company in the local market and use local people as all employees; (2) The head office shall be responsible for sales policies and personnel training. It is this principle that has enabled Coca-Cola (China) Company to achieve rapid and fruitful development.

　2.5.1 Localization of management personnel

Generally speaking, the impression given to Chinese employees of multinational companies is that they are foreigners with beards, green eyes and suits; They often spend half of their time working in China and half of their time on vacation abroad. Apart from secretaries, there are no more internal employees to communicate with, which is an unfathomable attitude. The language of communication is undoubtedly a foreign language. In Coca-Cola (China) Co., Ltd., this is not the case at all: (1) In China, more than 99% of Coca-Cola system employees are Chinese employees; in Coca-Cola Beijing, except for the general manager and financial director, they are from Taiwan and Australia. The others are all mainland natives. (2) The communication language of all managers is not only fluent English, but also fluent Chinese. Even the foreign president of Coca-Cola (China) Co., Ltd. can converse and joke in fluent Chinese; many foreign colleagues can also use it Speak Cantonese and other dialects. (3) All documents should be sent in both Chinese and English. The localization of management talents is the real charm of localization. Just imagine which other multinational company has such magnanimity and dares to implement such a large-scale localization of high-level talents at the beginning of entering a non-native country? There is no "glass ceiling" of huge promotion space for local managers. Can truly relieve worries, grow with the company in a down-to-earth manner, and serve the company for the long term without any worries.

2.5.2 Localization of general employees

Wherever the sales network of Coca-Cola products extends, people will be selected and employed there. The management of Coca-Cola Company believes that local specific operators have unique conditions: first, they are familiar with business conditions, including neighborhoods, merchants, purchasing habits, etc., which can integrate the sales of Coca-Cola beverages into the local environment as soon as possible; second, they have a large scope of influence and local specific Relatives and friends of operating employees will be affected by their work and provide help for their work expansion; thirdly, the team is stable. Local employees settle down locally, have no worries, have a stable work mentality, and can concentrate on their work. These innate advantages are incomparable to outsiders. Therefore, the specific operators in the 23 bottling plants in China and all offices of Coca-Cola (China) Co., Ltd. are all locals.

Here, localization not only includes recruiting local employees, but also further development based on local conditions. For example, recruiting laid-off sisters-in-law as tallies in the Beijing area, recruiting community street workers in Shanghai to collect information, etc. are all the most outstanding and profound extensions of the localization strategy.

The rapid development of Coca-Cola Company in China can be said to have benefited from the application of localization strategy. As Coca-Cola (China) Beverage Co., Ltd. President Ke An said: Coca-Cola has implemented a series of "localization" measures. This includes using marketing methods adapted to the Chinese market, cooperating with Chinese partners to develop Chinese brands, providing quality services to consumers and becoming a local corporate citizen.

Analysis of the reasons for the success of Coca-Cola Company

1. Strengthen the concept of localization

Brand localization refers to formulating different strategies based on target market countries with different characteristics. Combination and localized communication are based on the theory of national cultural diversity. Enterprises need to adapt to the differentiated needs of target consumers in various markets and maximize the organic combination of internationalization and localization. The essence of localization is the process in which multinational companies fully integrate production, marketing, management, personnel and other aspects of operations into the host country's economy. Since the Coca-Cola Company entered China, it has made great contributions to international brand enterprises in terms of regional development, building bottling plants, seamless cooperation with partners, new product promotion, hiring of local managers, advertising and localization. example. The rapid development of Coca-Cola in China also proves that localized operations can give wings to the development of multinational companies.

　2 Establishing a partnership

Coca-Cola works closely with three important bottling partners? China Cereals, Oils and Food Import and Export (Group) Co., Ltd., Kerry Group and Swire Group, in China Japan has invested more than US$1.2 billion to establish 28 bottling companies and 34 factories. Currently, more than 600 wholesalers have formed partnerships with Beijing Coca-Cola Beverage Co., Ltd. Establishing partnerships with local companies has accelerated Coca-Cola's market expansion in China.

Coca-Cola relies on close cooperation with its partners and bottling companies to achieve product production, marketing and after-sales service. As an active promoter of localization, the concentrate used by all Coca-Cola's Chinese system bottling plants is currently manufactured in Shanghai, 98% of the raw materials are purchased locally in China, and 99% of the employees are local Chinese employees.

Coca-Cola has been operating in China for 25 years and has always been a localized company. Coca-Cola does not simply move its business model in the United States or other regions to China. Instead, it constantly adjusts its products and services based on the characteristics of the Chinese market to truly meet the needs of Chinese consumers. At the same time, Coca-Cola attaches great importance to cooperation with its bottling partners and works with them to promote the rapid and healthy development of Coca-Cola's business in China.

3 Win by cooperating with the host country

The Coca-Cola Company provides more than 414,000 employment opportunities in China and directly or indirectly increases profits and taxes by RMB 1.6 billion for the tax authorities every year. At the same time, a huge supply and sales network has been established, which has also greatly stimulated the development of many industries including the sugar industry, transportation industry, plastic processing industry, warehousing and logistics industry, etc., and promoted the healthy development of the local economy.

　4 Building public welfare undertakings

The Coca-Cola Company has a clear long-term commitment: to make every Coca-Cola business unit a local model corporate citizen, and to make every Coca-Cola business reach Everyone can benefit. As Coca-Cola's business in China continues to develop, Coca-Cola China's system spares no effort to engage in various social welfare undertakings and strives to fulfill its corporate citizenship responsibilities. So far, the Coca-Cola China system has participated in many national and regional public welfare projects involving education, sports, environmental protection, disaster relief, poverty alleviation, employment, etc., with a total donation of more than 40 million yuan, becoming the most active advocate of social welfare undertakings in China. and one of the participants. For decades, Coca-Cola has fully supported and actively participated in various public welfare undertakings in China. Coca-Cola has a clear understanding that on the road to practicing the core values ??of a model corporate citizen, there is only a starting point and no end.

Saying goodbye to yesterday's achievements, Coca-Cola will continue to fully support and actively participate in various public welfare undertakings in China, strive to become a popular social member and community partner, shoulder corporate social responsibilities, and establish a good social image.

5 Make reasonable use of the celebrity effect

Coca-Cola Company hired celebrities to advertise from the beginning, hoping that consumers would imitate baseball superstar Ty Cobb or female star Hilda Clark. By the 1930s, movie stars ranging from Clark Biber and Kate Grant to Jane Harrow and Joan Crawford had all done advertisements for Coca-Cola. In the late 1960s, singers from Neil Demand, Leslie Gower, Ray Charles to Aretha Franklin believed that drinking Coca-Cola would make everything better. However, there are dangers in excessive celebrity status. On the one hand, audiences remember mostly celebrities rather than products. Coca-Cola has always had real stars in its commercials, and PepsiCo has had headaches with overcharging stars. Thus showing another danger in relying too much on celebrities. Although Madonna and Jackson did a lot to increase Pepsi's popularity, it wasn't as good as the company had hoped. Coca-Cola solved this thorny problem by reviving the images of late stars Louis Armstrong, Groucho Max and Humphrey Burxant for skits.

Coca-Cola's achievements

These mergers culminated in the creation of Coca-Cola Enterprises (CCE) and the sale of 51% of the shares to the public in November 1986. After the establishment of CCE, it renegotiated new negotiations with its suppliers and sales channels, consolidated its main markets, cut its labor force by 20%, and reduced costs through unified distribution and raw material procurement. In 1986 and 1987, CCE's net selling price per case of Coke decreased by 2.5%. In 1989, KKE bought 20% more Sutuo than in 1986. CCE's profits were unstable throughout the late 1980s.

In late 1980, The Coca-Cola Company suggested that its franchise agreement should be replaced by a "Master Bottle Contract" that reduced the fixed syrup price and Coca-Cola trademark royalty. By the end of 1989, the new contract covered approximately 70% of U.S. Coca-Cola production. Between 1978 and 1989, bottlers under the new contract experienced an approximately 60% increase in Coca-Cola syrup prices