Marketing Theory and PracticePEST Analysis Coca Cola

Prepared ByAwais Ali Arshad MBT-FA11-157 Prepared ByFeburary 25th 2013Submitted to Bilal JavedContact Me0343-4347631

PEST analysis

INTRODUCTION:-PEST analysis is concerned with the environmental influences on a business.The PEST stands for the Political, Economic, Social and Technological issues that could affect the strategic development of a business.Identifying PEST influences is a useful way of summarizing the external environment in which a business works.Definitions and importance in different perspectives

The constituents of PEST can be considered as macro-environmental factors and its usefulness lies in the assumption that the success of a particular organisation or management solution cannot be understood without having the information relevant to the specific business environment (Buchanan and Gibb, 1998).

Business environment could be defined as all relevant physical and social factors outside an organization that are considered into decision-making process (Duncan, 1972).

According to Ward and Rivani (2005) PEST analysis assumes that specific external and indirect circumstances that characterize the business environment are able to influence organizational capacity to produce value. Hence, PEST analysis provides a satellite view to assess the external environment (Ward and Rivani, 2005).PEST analysis Use

PEST has been conventionally used in two different ways: first, to analyze the position of a particular organization (e.g. Vrontis and Vignali, 2001) or industry sector (e.g. McManus et al., 2007: 19-36) within a particular business environment; second, to analyze the viability of general management solutions in a business environment (e.g. ESCWA, 2005).Coca colaOur Vision

To become a market leader in ready to drink segment while adding best-in-class value to all stakeholders.

Our Mission

Coca-Cola Pakistan exists to refresh the consumers, inspire moments of optimism through our brands and actions as well as benefit all stakeholders, which we will do with highest social responsibility and with uncompromising commitment towards quality of our products and integrity in our operations

Our Values

Our Core Values underlie everything we do. We live by them for two reasons; they are good and right in themselves, worthy of adherence even at the risk of loss of profit-making opportunities, and they epitomize our Companys integrity, which we believe will produce value for our stakeholders over the long term. Accountability We act with high sense of responsibility and hold ourselves acountable. Passion We put our hearts and mind into what we do. Integrity We are open, honest, ethical and we trust and respect each other Teamwork We collaborate for our collective success

Political factorsPOLITICAL FACTORS, ARE HOW AND TO WHAT DEGREE AGOVERNMENTINTERFERENCE IN HIS ECONOMY. SPECIFICALLY, POLITICAL FACTORS INCLUDE AREAS SUCH AS TAX POLICYPakistanIncome Tax Rate 20%

PakistanCorporate Tax Rate 35%

PakistanSales Tax / VAT Rate 16%Coca cola hired local resident tax manager to cope up with Pakistani taxation policy.basit ahmad Tax Manager at Coca-Cola Pakistan & Afghanistan Region Office. Coca cola increased its prices accordingly to shift burden of taxes. LABOR LAWAn essential ingredient in every one of our products is our profound commitment to human rights and workplace rights. Respecting human rights and protecting workplace rights is fundamental to our culture and imperative for a sustainable business. In our Company and across our system, we are working to make sure all people are treated with dignity and respect. .We also Implement the United Nations Guiding Principles on Business and Human Rights while following Pakistani rules which areFactories Act 1934 Punjab Factories Rules 1978 Industrial and Commercial Employment Ordinance 1968 Provincial Employees Social Security Ordinance 1965 Employees Old Age benefits Act 1976 Payment of wages Act 1936 Minimum Wages Ordinance 1961 WP Minimum wages for unskilled worker Ordinance 1969 Worker Children Education Ordinance 1972 Worker Welfare Fund Ordinance 1971 (Benefits Under Law) Workman Compensation Act 1923 Employment of Children Act 1991 Company Profit (Worker Participation Act 1968) Industrial Relation Act 2010 West Pakistan Maternity Benefit Ordinance 1958 Bonded labor System (Abolition) Act 1991An essential ingredient in every one of our products is our profound commitment to human rights and workplace rights. Respecting human rights and protecting workplace rights is fundamental to our culture and imperative for a sustainable business. In our Company and across our system, we are working to make sure all people are treated with dignity and respect.But on the other sideCoca-Cola: foul play in Multan by world cup sponsorGreets new union with death threats, abduction, extortion and dismissals TRADE RESTRICTIONSthere are no trade restrictions in pakistan TARIFFS1. Here are customs tariffs on import of Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and other non-alcoholic beverages, not including fruit or vegetable juices,

Customs duty = 35%Sales Tax = 16%Add Sales Tax = 3%Income Tax = 5%

In some sort of beverages & drinks you also need to pay Federal Excise duty = 12% (If retail price is mentioned on Goods) OrFederal Excise duty = 40% (If retail price is not mentioned on Goods)

POLITICAL STABILITYFor the first time in history of Pakistan PPP have completed its tenure but now in Baluchistan, queta , Peshawer and leari are those areas where government is unstable and elections are expected to be held in Pakistan. Now there is care take Government in Pakistan. Pakistan inching toward political uncertaintyEconomic FactorsHere thecoca colaanalyze the economy of Pakistan and know how the economic factors are influence on company the factors may be include of Economic growth, The Gross Domestic Product (GDP) in Pakistan expanded 3.67 percent in the fiscal year 2011-12 from the previous year. GDP Growth Rate in Pakistan is reported by the Pakistan Bureau of Statistics. Historically, from 1952 until 2012, Pakistan GDP Growth Rate averaged 5.0 Percent reaching an all time high of 10.2 Percent in the fiscal year of 1953-54 and a record low of -1.8 Percent in the fiscal year of 1951-52. Pakistan is one of the poorest and least developed countries in Asia. Pakistan has a growing semi-industrialized economy that relies on manufacturing, agriculture and remittances. Although since 2005 the GDP has been growing an average 5 percent a year, it is not enough to keep up with fast population growth. To make things even worst, political instability, widespread corruption and lack of law enforcement hamper private investment and foreign aid. Pakistan Interest Rate The benchmark interest rate in Pakistan was last recorded at 9.50 percent. Interest Rate in Pakistan is reported by the State Bank of Pakistan. Historically, from 1992 until 2013, Pakistan Interest Rate averaged 12.75 Percent reaching an all time high of 20 Percent in October of 1996 and a record low of 7.50 Percent in November of 2002. In Pakistan, interest rates decisions are taken by the State Bank of Pakistan. The official interest rate is the discount rate. This page includes a chart with historical data for Pakistan Interest Rate .this thing affected Exchange rates1 US Dollar equals 98.20 Pakistani Rupee Pakistan Inflation RateThe inflation rate in Pakistan was recorded at 8.10 percent in January of 2013. Inflation Rate in Pakistan is reported by the Pakistan Bureau of Statistics. Historically, from 1957 until 2013, Pakistan Inflation Rate averaged 8.04 Percent reaching an all time high of 37.81 Percent in December of 1973 and a record low of -10.32 Percent in February of 1959. In Pakistan, most important categories in the consumer price index are food and non-alcoholic beverages (35 percent of total weight); housing, water, electricity, gas and fuels (29 percent); clothing and footwear (8 percent) and transport (7 percent). The index also includes furnishings and household equipment (4 percent), education (4 percent), communication (3 percent) and health (2 percent). The remaining 8 percent is composed by: recreation and culture, restaurants and hotels, alcoholic beverages and tobacco and other goods and services. This page includes a chart with historical data for Pakistan Inflation Rate.Pricing strategyPakistan inflation rate is affecting the consumer purchasing power of consumers.This pricing strategy makes consumers perceive the products to be affordable. They have had the privilege of a worthy competitor constantly driving them to be smarter, faster, and better. Coca Cola planned to use the lower price point to penetrate new cities that were especially price sensitive. The carbonated soft drink market in Pakistan is nearly 57% of the total beverage market there.Position support Pricing Coca Cola has been doing continuous focus on its price related positioned. With the help of experience of over the years coca cola has finally emerged with the best marketing strategy of its time and successfully maintained its position as an affordable enjoyment . Consumer protectionConsumer Rights Commission of Pakistan (CRCP) is a rights-based civil initiative registered under the Trust Act, 1882. Established in 1998, CRCP is an independent, non-profit, and non-governmental organization. It largely works through local fund-raising and engaging volunteers. It is not supported by any industry or commercial sector. It is the first national consumer organization in the country, which approaches the issue of consumer protection in comprehensive and holistic terms. Its vision and strategies have significant cross linkages with both market practices and issues of governanceCoca cola is following and meeting all international and Pakistani consumer rights.Sociocultural Factors.

IN THE SOCIOCULTURAL FACTORS THEcoca colaCOMPANY WILL ANALYZE THE SOCIALFACTORS INCLUDE THEHEALTH CONSCIOUSNESSRESULTSA total of 393 patients were surveyed. The majority were young married men, in either private or government service (Table-I). Respondents preference for consumption or otherwise, of fats and oils, sweets, spicy foods, salt, fruits and vegetables, tea, coffee, cola drinks and alcohol are listed (Table-2).Table-1: Demographic Profile of the Study Population (n=393)PARAMETERNUMBER (%)

SEX:MalesFemales254 (65)139 (35)

Mean Age in Years SD32.912.13

Marital Status:SingleMarriedOthers (Divorced/widowed)144 (37)245 (62)4 (1.0)

Educational Status:IlliteratePrimarySecondaryMatriculationIntermediateGraduatePost-graduateDiploma13 (3.0)18 (5.0)38 (10)65 (16)102 (26)117 (30)35 (9.0)5 (01)

Occupational status:Private serviceGovernment serviceSelf employedUnemployed StudentLaborerOthersincluding housewives124 (32)25 (6.0)36 (9.0)12 (3.0)76 (19)35 (9)85 (22)

Table-2: Respondents attitude towards consumption of food and drink items (n=393)Food/Drink ItemPrefer to consumeAvoid consumptionDo not prefer/avoid

Number%Number%Number%

Fats & Oils10326631622758

Sweets8422721823760

Spicy food8622561425164

Salt1102827725665

Fruits & vegetables2396116413835

Tea31981701841

Coffee117302716951

Cola drinks253641343462

Alcohol1333719493

Respondents practices with regard to hand washing, brushing of teeth, preventive dental check-up, duration of sleep, water consumption and eating of fish are listed (Table-3) Respondents status with regard to chewing of tobacco and betel nuts is listed (Table-4).DISCUSSIONThe demographic profile of the study population shows, that the majority of the respondents were well educated and better placed socio-economically, then the rest of the population in general. This is a limitation in the study since the more affluent and better educated people use the facility. Table-3: Respondents status of healthy practices (n=393 )

Table4: Respondents status of chewing tobacco and betel nuts (n=393)Status of Tobacco/betel nut chewingNumber%

Tobacco chewing YesNo693241783

Betel nut chewingYesNo793142080

Total393100

Waris Qidwai, Danish Saleheen, Sadia Saleem, Marie Andrades, Syed Iqbal Azam Community Health Sciences, Family Medicine Division, The Aga Khan University, Karachi, Pakistan

POPULATION GROWTH RATE,Population growth rate: 1.551% (2012 est.)Definition: The average annual percent change in the population, resulting from a surplus (or deficit) of births over deaths and the balance of migrants entering and leaving a country. The rate may be positive or negative. The growth rate is a factor in determining how great a burden would be imposed on a country by the changing needs of its people for infrastructure (e.g., schools, hospitals, housing, roads), resources (e.g., food, water, electricity), and jobs. Rapid population growth can be seen as threatening by neighboring countries.Source: CIA World Factbook - Unless otherwise noted, information in this page is accurate as of July 26, 2012Population190,291,129 (July 2011 est.)

Age structure0-14 years: 35.4% (male 34,093,853/female 32,278,462) 15-64 years: 60.4% (male 58,401,016/female 54,671,873) 65 years and over: 4.2% (male 3,739,647/female 4,157,870) (2011 est.)Median agetotal: 21.6 years male: 21.5 years female: 21.6 years (2011 est.)Population growth rate1.551% (2011 est.)Birth rate24.3 births/1,000 population (2011 est.)Death rate6.8 deaths/1,000 population (July 2011 est.)Net migration rate-2 migrant(s)/1,000 population (2011 est.)Urbanizationurban population: 36% of total population (2010) rate of urbanization: 3.1% annual rate of change (2010-15 est.)Major cities - populationKarachi 13.125 million; Lahore 7.132 million; Faisalabad 2.849 million; Rawalpindi 2.026 million; ISLAMABAD (capital) 832,000 (2009)Sex ratioat birth: 1.05 male(s)/female under 15 years: 1.06 male(s)/female 15-64 years: 1.07 male(s)/female 65 years and over: 0.89 male(s)/female total population: 1.06 male(s)/female (2011 est.)Infant mortality ratetotal: 61.27 deaths/1,000 live births male: 64.51 deaths/1,000 live births female: 57.88 deaths/1,000 live births (2011 est.)Life expectancy at birthtotal population: 66.35 years male: 64.52 years female: 68.28 years (2011 est.)

CAREER ATTITUDES

New expected investment of Coca Cola pakistanIt was an announcement made so quietly that it did not even make the headlines: having already invested $172 million in Pakistan this past year, The Coca Cola Company one of the worlds largest beverage companies is planning on investing another $248 million in the country over the next two years.It may have something to do with the fact that Pakistanis are estimated to have spent approximately Rs110 billion ($1.3 billion) on carbonated beverages in 2011, according to an analysis byThe Express Tribunebased on figures compiled from industry sources. Coca Cola currently enjoys a 30% market share, second only to arch-rival PepsiCo.We see great potential in Pakistans future, which is why the company is investing significantly in upgrading infrastructure and adding value to allied industries, said Rizwan Khan, general manager for The Coca Cola Company in Pakistan and Afghanistan.The money will be spent on two new bottling plants, one each in Karachi and Multan, as well as investing in more coolers, which will be distributed amongst retailers to help with the companys retail sales efforts. Company officials were quick to point out that the investment is not simply the recycling of profits and cash flows from existing operations in Pakistan, but green-field foreign direct investment that will flow into the country over the next two years.The expansion plans come as rising demand makes it difficult for Coca Cola to keep pace with its existing production capacity in Karachi and Punjab. The new plants will follow the establishment of a Coca Cola facility, already completed in 2011, which manufactures Coke cans. Previously, Coca Cola used to import cans from its factories in other countries.Coca Cola Consumers become more health conscious then company lunch new product to address consumer needs, such as diet coke and coca cola zero.Workplace Diversity Diversity is at the heart of our business. We strive to create a work environment that provides all our associates equal access to information, development and opportunity. By building an inclusive workplace environment, we seek to leverage our global team of associates, which is rich in diverse people, talent and ideas. We see diversity as more than just policies and practices. It is an integral part of who we are as a company, how we operate and how we see our future.Social responsibility in coca coalFahad Qadir, Director Public Affairs, Communications for Pakistan, Afghanistan Region Coca-Cola

Muhammad Yasir isDaily Times Business Reporter

Fahad Qadir has been withCoca-Cola for nearly five years. He leads the ongoing stakeholder engagement with the government, media, non-governmental organisations (NGOs) and others. He also manages the corporate and brand personal relation (PR) strategy and Coca-Cola's corporate social responsibility (CSR) programme.As a result of his advocacy for socio-economic development of local communities in Pakistan, Coca-Cola has initiated various projects to support environment conservation, education and rehabilitation of physically challenged.Qadir is leading key PR projects for Coca-Cola's Eurasia and Africa Group, comprising 92 countries. He is a member of International Government Relations Network of the company and leads Partners for a New Beginning (PNB) projects in Pakistan.Prior to Coca-Cola, Qadir worked for Lahore University of Management Sciences and Din Media Group.In honorary capacity, he advises NGOs like Lahore Businessmen Association of Rehabilitation of Disabled and CARE. He was also a key member of American Business Forum's founding committee.Technological:- Government spending on research1. Pakistan spending less than two percent of budget on researchKARACHI (May 24 2007): Pakistan is among 162 countries in the world for contributing less than two percent of the budget on research, which is the major reason for deterioration in economics and technology.

Research and development expenditure (% of GDP) in PakistanThe Research and development expenditure (% of GDP) in Pakistan was 0.46 in 2009, according to a World Bank report, published in 2010. Expenditures for research and development are current and capital expenditures (both public and private) on creative work undertaken systematically to increase knowledge, including knowledge of humanity, culture, and society, and the use of knowledge for new applications. R&D covers basic research, applied research, and experimental development.This page includes a historical data chart, news and forecasts for Research and development expenditure (% of GDP) in Pakistan.

Energy use and costDemand for CNG has grown 40% annually, while domestic CNG production has increased only 7%, according to government figures cited in media reports.The combined output of the Sui northern and southern gas pipeline companies, the countrys only CNG producers, is 1,900 to 2,000 m cubic feet (MMCF) per day while consumption is 2,800 MMCF, said Saqib Arbab, deputy chief engineer of Sui Northern Gas Pipelines Ltd. (SNGPL).Electricity shortfall2. The electricity shortfall in the country has risen to 5,800MWs. According to PEPCO sources, presently 7,500MWs of electricity were being generated while the demand had soared to 13,300MW.

Energy resource of coca colaCoca-Cola announces participation in MARCON 2012KARACHI: Coca-Cola Beverages Pakistan Ltd (CCBPL) announced the successful conclusion of their participation in the MARCON 2012 and the expansion of CCBPLs Corporate Social Responsibility (CSR) programmes in Pakistan.The CCBPL involved in the Resettling The Indus (RTI) project. Zohair Mahmood, Director of CCBPLs external affairs, highlighted the importance of the project and the people of Sindh and Punjab whose homes were being rebuilt.3. 9.Internet!4. Pakistan has highest growth rate of internet users in region5. 6. Withover 20 million internet users in Pakistan, the country now also has1.79 million broadband users, with an addition of 65,000 in the month of December, 2011 alone. Pakistans growth rate of internet users is second highest in SAARC countries in accordance with its population, as it standing at 16.8 percent as compared with 28.3 percent of Maldives.of HFC users is 37, According to the latest stats issued by Pakistan Telecommunication Authority (PTA), the number of DSL subscribers has risen to 792,397, while the number WiMAX internet users has grown to 459,790. The number 491 and 7,215 users were recorded as FTTH subscribers in December.So coca cola is using internet marketing and social sites awareness like on facebook, tweeter etc

Referenceshttp://www.defence.pk/forums/social-issues-current-events/69796-coca-cola-pakistans-worker-exploitation-harassment.html#ixzz2MAioFDvIhttp://www.dailytimes.com.pk/default.asp?page=2012%5C03%5C30%5Cstory_30-3-2012_pg5_10

http://www.viewpointonline.net/fulls...&y=2010&m=julyww.coca cola Pakistan.comhttp://world-politicsreview.blogspot.com/2013/01/pakistan-inches-toward-political.htmlhttp://www.defence.pk/forums/economy-development/5497-pakistan-spending-less-than-two-percent-budget-research.html#ixzz2M5OFMIzD http://www.defence.pk/forums/economy-development/5497-pakistan-spending-less-than-two-percent-budget-research.html#ixzz2M5O73cXr