term paper on coca cola

8/23/2019 Term Paper on Coca Cola

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Analysis of MOJO & Coca-Cola


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Term Paper of MKT 201

Analysis of MOJO & Coca-Cola

Prepared for

Ms. Kashfia Ahmed

Lecturer

Department of Business Administration

East West University

Prepared by

G.M. Wali Ullah # 2008-1-10-096

Ahmed Asif-Ur-Rahman Mallick # 2008-1-10-059

Syeda Samira Tamanna Haider # 2008-1-10-095

Mosfiqur Rahman # 2008-1-10-123

Eva Farzana # 2008-1-10-120


16 August 2009


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Letter of Authorization

28 June 2009

Student of Marketing Management

Summer 2009



43, Mohakhali C/A, Dhaka-1212

Dear Student,

As a part of your Marketing Management course, you are hereby assigned a

group report based on analysis of established brands covered in your MKT-

201 course from the perspective of either Bangladesh or global. In your casethe brand covered by your group was analysis of MOJO and Coca-cola

in Bangladeshi market perspective.

Assigned report must follow the standard system and methodology and

should contain accurate data. This is a group task. You should form a group

consisting of at least 4 but no more than 6 people. The university will

appreciate any additional benefit that can be obtained from your report. You

are required to submit the report on or before August 16, 2009.

I wish you best of luck.

Sincerely

..

Ms. Kashfia Ahmed


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Letter of Transmittal

16 August 2009

Ms. Kashfia Ahmed

Lecturer



43, Mohakhali C/A, Dhaka-1212

Subject: Submission of term paper for analysis of established products for

MKT-201.

Dear Madam:

We are the students of MKT-201 of your section 03. You permitted us toconduct a group term paper based on established brands covered in your

MKT-201 course from the perspective of Bangladesh. You instructed us to

submit it on or before August 16, 2008. We would like to inform you that

we have incorporated our own original ideas, collected data from various

individuals, internet websites, newspapers etc. & have prepared a report

based on the products; MOJO and Coca-Cola; and in some cases; their

parent companies AFBL and Coca-Cola Ltd.. We are presenting the

established brand report to you for your consideration.

We have tried our best to make the report as accurate as possible. We have

given our best efforts in preparing this report. We hope that you will

consider it and oblige thereby.

Thanking you.

.. .. .

G.M. Wali Ullah Eva Farzana Mosfiqur Rahman

# 2008-1-10-096 # 2008-1-10-120 # 2008-1-10-123

... ..

Ahmed Asif-Ur-Rahman Mallick Syeda Samira Tamanna Haider

# 2008-1-10-059 # 2008-1-10-095


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Acknowledgement

It really was a great challenge for us to prepare the group assignment. First

of all, we thank the Almighty, who has provided us the brilliant opportunity

to build and complete this assignment successfully with good health &

sound mind. We are grateful & thankful to our family members, our parents-

without the support of whom this product could never exist.

Our course instructor, Ms. Kashfia Ahmed, Lecturer, Department of

Business Administration, East West University helped us all the way

through. She gave us proper guidelines & directions about this group

assignment. We really want to express our gratitude to her for giving

valuable advice and time, which helped immensely in preparing this

report.

Last but not the least; we would like to specially thank G. M. Refayet Ullah,

former General Manager (Sales) of Akij Food & Beverage Ltd. (MOJO) and

Abdul Monem Ltd. (Coca-Cola) He is the main resource person behind the

success of MOJO, and also had experience in the operation of Coca-Cola in

Bangladesh. He had been a great mentor to us with his vast experience and

knowledge in his related work place.


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Table of Contents

TOPIC PAGE NOExecutive Summary VII

Introduction 01

Current market situation 02

Company Profile

Akij Food & Beverage Ltd. (AFBL) 03

Coca-Cola Ltd. 04

Analysis relating theories from MKT 201 05

with real market situations

Defining Marketing for the 21st Century 05

Developing Marketing Strategies and Plans 12

Creating Customer Value, Satisfaction and Loyalty 18

Crafting the Brand Positioning 19

Dealing with Competition 22

Setting Product Strategy 30

Designing and Managing Services 33

Developing Pricing Strategies and Programs 34

Designing and Managing Value Networks and Channels 37


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Designing and Managing IMC 47

Conclusion 52

Executive Summary

MOJO is one of the most well known and recognized soft drink brands of

Bangladesh. It is manufactured by Akij Food & Beverage Ltd (AFBL), a

sister concern of Akij group. Launched in the Bangladeshi market on April

2006, it has quickly captured the number 1 spot in the cola market of

Bangladesh. Its success story is mainly due to an excellent marketing

strategy employed by the management.

Coca Cola is the flagship brand of one of the oldest organization of the

world, The Coca-Cola Company; dating back to 1885. In Bangladesh;

operated and produced by 2 Bangladeshi bottlers, Abdul Monem Ltd.

(AML) and Tabani Beverage Ltd. (TBL) under direct supervision of Coca-Cola India Ltd. Although they were the global leader in cola market, they are

past their prime in this region of Asia, therefore loosing their 1st position to

MOJO.

Here weve worked on studying basically every theory we have learned on

our MKT 201 course and applied them on reality with current cola market

leader of Bangladesh; MOJO and their closest competitor Coca-Cola.We have analyzed the current and past situations of both these products.

Also we have discussed and argued over each possible theory that is

applicable in their business operations. Therefore we have included and


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presented all our findings in this report. Details of all these findings are

given for your kind consideration.

(vii)

Introduction

The Coca-Cola Company is one of the pioneers in the soft drink industry.

Globally they are always fighting with PepsiCo head to head for the leading

position in soft drink industry. Coca-Cola, their flagship product was

originally intended as a patent medicine when it was invented in the late

19th century by John Pemberton, Later it was bought out by businessman

Asa Griggs Candler, whose marketing tactics led Coke to its dominance of

the world soft-drink market throughout the 20th century. Although globally

they are in constant competition with Pepsi in cola market, several

inefficiency in tactics for both these companies has lead them to lose market

leading positions in Bangladesh.

MOJO, a product of Akij Food & Beverage Limited (AFBL), is one of the

most popular brands in the soft drink industry of Bangladesh. After being

launched in April 2006, they have come a long way in a very short time. As

of the year 2008, they have captured an amazing 38% market share in the

cola market of Bangladesh; making them the current market leader in thissegment. This is an exceptional success keeping on mind that they achieved

all these only in about two and a half years of launching. Their effective

implementation of marketing strategy is the main reason of this success.

Around the year 2005 various disturbing incidents regarding cola products


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led them to lose popularity; MOJO with their innovative, colorful and

vibrant marketing campaigns has once again made them popular and

effectively grab the leading position.

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Current Market Situation

Coca-Cola is one of the pioneers in the cola market globally. The first Coca-

Cola recipe was invented in a drugstore in Columbus, Georgia in 1885. After

years of successful business, their business strategies created several

controversies; thus hurting the whole cola industry.

Some controversies mentionable are:

Coca-Cola adopting an apparent policy of ignoring the practice of

eugenics and anti-Semitism by Nazi Germany before and during

World War II.

Opening business in much controversial state, Israel; causing severe

outrages and boycotting of their products in the Arab League.

Coca-Cola was criticized for causing various harmful health effects

i.e. Acidity and tooth decay, bone development issues and obesity of

todays teens.

Several incidents occurring in neighboring country India including

findings of pesticide residues in Coca-Cola bottles and socially

unethical location of bottling plants in drought-stricken areas.


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Incidents on Indian market posses a larger effect on the whole subcontinent.

Therefore this disturbing issues ultimately shrink the whole cola market;

making way for phenomenal growth of clear drink market in the soft drinks

industry.

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Despite all these controversies, MOJO started their bold marketing

campaign in Bangladeshi market with vibrant and colorful offerings that

connected very well with their initial target segment. Only in 2 and half

years, they have got hold of an impressive 37% share of the cola market of

Bangladesh. Previously this market was dominated by Coca-Cola and RC

Cola. Now their market share has shrunk down to 34% and 18 %,

respectively. MOJO has successfully faced the above mentioned competitive

forces and still managed to achieve further growth. Unfortunately Coca-

Cola, once the market leader is now having trouble facing the tremendous

competition in this segment; as a result losing market share.

Company Profile

Akij Food & Beverage Ltd. (AFBL):

AFBL started business operations in Bangladesh with initial offering of

MOJO, LEMU and SPEED. They had a vast amount of resources available

to them due to being a part of a successful group of Bangladesh, Akij Group.

They have implemented state of the art machineries and purchases raw

materials mostly from Switzerland. MOJO was officially launched as a

flagship product of AFBL in the year 2006. Their initial promotional


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campaigns as well as product designing caught the eye of their target

segment very efficiently. The initial market leader in the cola market was

Coca-Cola when they were launched. There was also tough competition

from RC Cola, Pepsi and Euro Cola. Despite the tough competition they

managed to fight hard; thus grabbing a respectable 23% share within their

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first year of launching. Not only did they manage to grab a large market

share, they also managed to revive the cola market that was struggling due to

the overwhelming negative idea people had about cola products. Their

popularity continued to rise through the preceding year, managing to grab a

towering 37% market share. As we have worked on data dated on the end of

the year 2008, MOJO was the market leader followed closely by Coca-Cola.

Coca-Cola:

In Bangladesh, Coca Cola is marketed and operated by two separate licensed

bottlers; Abdul Monem Ltd. (AML) and Tabani Beverage Ltd. They are

responsible to Coca-Cola India Ltd. for promotion, sales and other activities

along with other bottlers from India, Sri Lanka and Nepal. There have been

several long standing problems between Coca-Cola India and bottlers of

Bangladesh in respect to marketing activities resulting in severe lack of

promotional activities present in Bangladesh. The brand equity of Coca-Cola

is above any other product in the cola market of this subcontinent. Although

globally Pepsi is the closest competitor of Coca-Cola; situation on

Bangladeshi market is completely different. Here Pepsis market share is

tremendously low comparing to its competitors. So the sub continental think


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tanks believe consumers will follow and be convinced easily to purchase

their products through promotions aired and undertaken in the Indian market

and TV channels. Perspective of Bangladeshi buyers is completely

neglected. As a result sales of Coca-Cola are mostly due to brand equity in

consumer minds. But now the competition in soft drinks industry is

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intensifying. Several products have managed to promote their cola products

in terms of Bangladeshi culture; effectively gaining more sales. As there are

no local promotions existing for Coca-Cola, potential new customers are

getting more attracted to these new cola products.

Analysis relating theories from MKT 201 with real market

situations

Defining Marketing for the 21st Century

What Is Marketed Through MOJO And Coca-Cola?

AFBL and Coca-Cola Company market MOJO and Coca-Cola as good,

service, events and ideas to their consumers:

Goods: Coca-Cola and MOJO are marketed as soft drink product to the

consumers.

Service: The need for quenching thirst is an intangible need. It is satisfied

through tangible good MOJO or Coca-Cola. Therefore MOJO and Coca-

Cola are also marketed as services.

Events: AFBL organizes and sponsors various events like Concerts, Pitha

Utsab, and Coxs Bazaar Beach Festival to closely relate their products with

the mass people as well as for promotion purpose. Coca-Cola also sponsors


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events; mostly in international platforms i.e. FIFA WORLD CUP.

Unfortunately due to the lackluster market activities from Coca-Cola India

Ltd. they are not active as much as AFBL in Bangladesh market.

Ideas:MOJO encourages the idea of feeling and enjoying every bit of life

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itself. It promotes the idea of MOJO accompanying and helping to make

every moments more precious and more colorful. MOJO, its inside you!!

incorporates a fantasy to its consumers to have the drink as part of their life.

Also Coca-Cola does the same with their internationally popular slogans i.e.

Open Happiness to deliver similar message.

Demand State:

MOJO and Coca-Cola both face some potential demand states. Companies

seek to influence the level, timing and compositions of demands to meet the

companys objectives. Both companies face these following demand states

to plan for actions to shift the demands to a more desired state:

Demand state of MOJO:

1. Nonexistent Demand State: While MOJO was launched for the

first time AFBL faced non existent demand among its target

markets in Bangladesh as no one knew about the new product.

2. Irregular Demand State: Except hot days like summer season

MOJO faces irregular demand among its potential consumers.

People consume less cold soft drinks in winter and rainy

seasons.


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3. Full Demand: MOJO faces full demand state during hot

summer season and during festivals i.e. Eid. People buys

whatever product companies make available during this time.

Demand State of Coca-Cola:

As Coca-Cola Ltd. has been marketing their products for a long

time, now they face irregular and full demand in Bangladesh.

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1. Irregular Demand State: Coca-Cola faces irregular demand

during winter and rainy seasons like every other soft drink.

2. Full Demand: Company enjoys full demand state during the

summer season and festivals.

Key Customer Markets:

Both AFBL and Coca-Cola are functioning in two key consumer markets:

Consumer market: Soft drinks like MOJO (product leader) and Coca-Cola

(Challenger) are considered as consumer goods in Bangladesh because of

their massive sale and superior brand image accomplished by huge

promotional push directed towards the consumers.

Global market: AFBL is currently exporting MOJO in Malaysia, Middle

East and South Africa. So they are facing additional challenges by

competing in global market. Coca-Cola does its business all around the

world. In this subcontinent, Coca-Cola India Ltd. markets in India, Nepal,

Bhutan, Sri-Lanka and Bangladesh. Coca-Cola has its market nearly


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everywhere in the world. They have been doing global business for a long

period and recognized as the no. 1 brand all around the world.

Satisfying Customers Needs:

As both Coca-Cola and MOJO are cola drinks, they satisfy their target

markets needs through following ways:

1. Stated Need: To get a tasty drink.

2. Real Need: The need for quenching thirst

3. Unstated Need: Need for a cold and healthy drink. It is marked

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on the label that the cola products are best served chilled. Also

companies try to put as much healthy ingredients possible in

their beverage.

4. Delight Needs:Consumers will be very delighted if they get a

10% extra drink on every purchase.

5. Secret Need: The secret desire for conveying consumers chosen

soft drinks superior brand image. Both Coca-Cola and MOJO

have a loyal fan base. Loyal consumers always prefer over

brand equity, and tries to use their brand preference as a way to

improve his/her status among peers.Company Orientations Towards the Marketplace:

Among various competing concepts under which organizations conduct

marketing activities; both AFBL and Coca-Cola follows the Holistic

Marketing Concept. It is explained below:


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Holistic Marketing Concept:

The holistic marketing concept is based on the development, design and

implementation of marketing programs, processes and activities that

recognizes their breadth and interdependencies. It has the following four

broad themes:

1. Relationship marketing:

It refers to developing enduring mutually satisfying long term relationships

with the following key parties in order to build a marketing network:

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Customers

Marketing partners (channels, suppliers, distributors, dealers,

agencies)

Stake holders

Investors

AFBL: In case for MOJO AFBL tries at its level best to reach its customer

as closely possible. To know more about its consumers, it keeps launching

various types of campaigns through out the whole year. It provides ample

chance to the consumers to express their opinions about improving the

product though these campaigns. However, as people of this country are not

comfortable with the toll free calling system, AFBL doesnt provides thisfacility to the consumers. As leading company in the industry, AFBL has

established a healthy chain of intermediaries and other stake holders.

Coca-Cola: Although Coca-Cola follows the holistic marketing concept, as a

convenient product it doesnt have to satisfy all the aspects of relationship


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marketing i.e. collecting the information of all of its customers would be an

impossible task. As it has a great number of loyal customers, it practices

basic marketing in Bangladesh. However, Coca-Cola doesnt provide toll

free number in its bottles label in Bangladesh unlike many other countries it

operates its business on. Coca cola has a strong chain of distributor all over

the country. They have in total 197 distributors working closely under the

two licensed bottlers here and successfully doing business all over the

country with the help of these firms.

2. Integrated marketing :

It refers to many different marketing activities that are employed to

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communicate and deliver value. All marketing activities undertaken by the

company should be coordinated to maximize their joint effects. Here it is

classified into four broad groups; as to 4Ps of marketing; Product, Price,

Place and Promotion.

Product: It refers to various aspects of the product both AFBL and Coca-

Cola is selling. It may include:

Product variety: Coca-Cola and AFBL provide several flanker

products i.e. Sprite, Fanta, Lemu, Clemon, Frutika, Spa other than

their flagship products Coca-Cola and MOJO.

Quality: Both AFBL and Coca-Cola are now established soft drinkproviders in the Bangladeshi market and work hard to providing the

best quality products.

Brand Name: Coca-Cola is the no. 1 brand worldwide; MOJO also has

made great progress towards establishing its own brand name so far.


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Packaging and Size: MOJO and Coca-Cola both are packaged in PET

bottles and cans. Coca-Cola is also available in glass bottles. Various

packaging size include 250ml, 500ml, 1 liter, 2 liter and 2.25 liter etc.

Pricing: Pricing of soft drink products has very less differentiation. Most of

the product manufacturers follow each other in setting price.

Place: Coca-Cola and MOJO both are convenient products. Coca-Cola has

197 distributors as AFBL has 227 distributors all over the country. Both

products are available in convenient shops and both companies try their best

to make their products as widely available possible.

Promotion: Promotional activities of Coca-Cola in Bangladesh are limited to

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some posters and billboards. On the other hand AFBL has promoted MOJO

through mass media and print media. In case of mass media the company

has used radio and television and in case of print media the company has

used newspaper, magazines and billboard to promote their product. They

have also organized and launched campaigns and special events to promote.

3. Internal Marketing:

It refers to ensuring every one working within the organization embraces

appropriate marketing principles. It takes place in two levels:

At one level; various marketing functions i.e. sales force, advertising,

marketing research all work together with the same broad objective.

Problems of the sales force of AFBL and Coca-Cola are addressed to the top

management; than they coordinate these problems with the respective

marketing departments i.e. marketing research.


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At another level, marketing must be embraced by all the other departments.

Finance, accounting, HR all work together to support marketing department

and vice versa.

4. Social Responsibility Marketing:

It deals with understanding broader concerns and ethical, environmental,

legal and social context of marketing activities and programs. Both AFBL

and Coca-Cola work hard to maintain environmental sustainability within

and outside their factories. There was a huge backlash over using pesticides

in cola products; particularly in Coca-Cola. They have turned the situation

so far; engaging in social responsibility marketing in the process.

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Developing Marketing Strategies and Plans

The Holistic Marketing Orientation:

Holistic marketing orientation refers to the integration the value exploration,

value creation, and value delivery activities with the purpose of building

long term mutually satisfying relationships and co-prosperity among key

stakeholders. Both Coca-Cola and AFBL try to integrate these three

marketing activities to create, maintain and renew customer value.

Value

Creation

Value

Delivery

Custo

mer

Focus

Core

Comp

etencie

s

Collab

orative

Netwo

rk

Value

ExplorationCognitive

space

Competency

space

Resource

spaceBusiness

Domain

Business

partners

Customer

relationshipmanagement

Internal

resourcemanagement

Business

partnermanagement


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Figure: A Holistic Marketing Framework

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Value Exploration:

Cognitive Space: Coca-Cola was the first company to meet up customers

latent demand for a carbonated cola flavored soft drink that quenches thirst.

MOJO came to meet the existing demand for a good quality Bangladeshi

cola drink at an affordable price. It also connected well with the target

market with their Bangladeshi culture based promotional campaigns.

Competency Space: Both AFBL and Coca-Cola company have spread their

breadth of business in a broad scope. Instead of focusing on only one

product type they both have focused on producing beverage products such as

cola drink, milk, energy drink, snacks items etc. Their depth of business is

Physical as their production process is completely equipment based.

Customer

benefits


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Collaborators Resource Space: Here it is inapplicable because neither Coca-

Cola nor AFBL acquired or merged with any of their Bangladeshi

competitors

Value Creation:

Customer Benefit: Coke and MOJO both the products give customers

solutions to the need of a refreshing drink.

Business Domain: Both Coca-Cola Company and AFBL have focused their

business domain on the consumers need for a drink that refreshes mind).

Putting this in the center they have shaped Coca Cola and MOJO. Also to

capture more market segment both companies have reshaped their business

concept in various ways such as Coca-Cola Company has reshaped its

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concept by producing SPRITE an uncola drink, POWERADE energy drink

etc and AFBL by producing FRUTIKA fruit juice, SPEED energy drink etc.

Positioning: The Coca-Cola Company, which controls more than half

of the global market in non-alcoholic drinks, wants to strengthen its

position in the consumer mind by stating that it is the number one cola

drink in the cola market. On the other hand AFBL mainly uses

Product differentiation (with their innovatively shaped and designed

packaging) and Image differentiation to make MOJO different and

acceptable to the consumers.

De Positioning: In our country most of the Coca-Cola promotions rely

on the Indian advertisements. Their traditional rival in India is Pepsi.

Pepsi simultaneously released advertisement declaring Today Pepsi


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would like you to try a Coke. Pepsi argued that the consumer had the

right to choose; thus de positioning Coca-Cola. On the other hand

MOJO in our country didnt face any rivalry that did de positioning

technique.

Business Partners:AFBL and Coca-Cola both purchase their raw materials

from outside the country. In Bangladesh, AFBL and Coca-Cola have 227

and 197 distributors respectively. With their cooperation the companies have

managed to distribute their products efficiently throughout the country.

Value Delivery:

Customer Relationship Management (CRM):It consists of the processes a

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company uses to track and organize its contacts with its current and

prospective customers. Both companies undertake survey of point-of-sales

data, market research and automated tracking of sales programs to collect

information about customers and customer interactions about their products

and to make their consumers satisfied.

Internal Resource Management:Both companies try to manage their internal

resource effectively so that they have the capabilities and tools to be

available for the best management of purchasing, production, campaign and

more. By doing this they get the ability to respond efficiently in time of huge

demand (during RAMADAN and EID-UL-AZHA) and in different customer

opportunities.


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Business Partner Management:Both Coca-Cola and AFBL maintain a good

relation with their business partners i.e. their distributors, trading partners

and so on. They also provide good work environment for the employees and

a very effective communication system among the employees and also the

business partners.

Assessing Growth opportunities

Both companies take the following steps to reach their desired sales and

reduce strategic planning gap:

Intensive Growth:

The companies can search for opportunities in the existing business.

Through studying Product Market Expansion Grid, we detected several

new intensive growth opportunities.

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Market Penetration: Coca-Cola tries to increase the consumption of their

product by stating their product is family drink; each and every family

should have at least one family bottle in their refrigerator. They also promote

campaign saying that CRICKET WORLD CUP in India is not possible

without Coca Cola. On the other hand MOJO expand their product usage by

launching a live TV show called Dhora poro hate nate. In this program

people caught while drinking MOJO were offered gifts on the spot.

Market Development Strategy: Coca-Cola is targeting new segment of

market to increase their sales globally. They are taking various activities to

promote coke for sports and music lovers. MOJO are increasing their sales


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by expanding their current target market range. Now they are promoting

MOJO for matured people as their initial target market was for teenagers.

Product Development Strategy: Coca-Cola can introduce new products such

as COKE ZERO (Zero calorie), DIET COKE etc to their current market

segment to increase sales. AFBL on the other hand; is planning to introduce

diet flavored drinks to their existing product mix.

Diversification: As a fully diversified product Coke Company has

introduced Sprite an uncola drink in our local market. AFBL has introduced

Speed an energy drink to capture new market segment.

Integrative Growth:

To reach their desired sales both companies can also have forward and

backward integration. In forward integration both company can acquire one

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or more of their suppliers such as. In backward integration they can acquire

their largest wholesalers or retailers this way they can increase their sales

and also earn huge profit. In case of horizontal integration they can acquire

some existing and profitable competitors firm such as the RC cola, URO

cola, DOUBLE cola, PRAN cola etc.

Diversification Growth:

Concentric strategy: Coke introduced Sprite an uncola drink in the market

which has the same technological and marketing synergy with the existing

product line. AFBL also following suite with their offerings of LEMU,

CLEMON etc


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Horizontal strategy: As a totally new product for the current segment Coca-

Cola can introduce green tea in Bangladesh. AFBL has already introduced

various snacks items i.e. cheeky monkey and OPOTATO in the market.

Conglomerate: Coca Cola Company does not have activities in any other

industry than soft drinks. They focus all their resources on producing and

developing Coca cola and related beverage products. On the other hand;

besides MOJO and related food and beverage products, AKIJ GROUP has

many other industries. They already have tobacco products, printing and

packaging industry, Jute mill, cement industry, textile industry, partical

boards etc. in their business portfolio.

Strategic formulation:

Coca Cola become the worlds largest soft drink company by putting all

their value on an important customer benefit area. They become leader of

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this field in the world by providing high quality product using best

component, having expert employees to produce it and through effective

distribution system thus achieving Differentiation strategy. On the other

handAFBL was able to achieve overall cost leadership as they were able to

lower their production and distribution cost and manage to price lower than

their competitors

Creating Customer Value, Satisfaction and Loyalty

Customer Equity:


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The aim of Customer Relationship Management (CRM) is to produce higher

customer equity. More loyal the customers are, higher the customer equity of

that product is. Among the three distinguished drivers, Both MOJO and

Coca-Cola posses the following customer equity most:

Brand equity: It relates to the customers assessment of their favored brand

above and beyond its objectively perceived value. It is important when

products are less differentiated and have more emotional impact. Cola

products i.e. MOJO and Coca-Cola have little difference between

themselves; consumers chose the product mostly due to brand preference.

AFBL and Coca-Cola try to use advertising, public relations and some other

communication tools to affect and increase their brand equity with their

customers.

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Building Customer Loyalty:

Coca-Cola: Coca-Cola mostly maintains relationship with their customers

through Basic Marketing. Coca-Cola has a huge loyal fan base, so they do

not do much additional investment other than just selling the product.

AFBL: AFBL was new in the market and they had to create loyal customers

of their products. They maintain Reactive Marketing with their customers

to build strong customer relationship. They have trained their sales persons

and representatives to encourage their customers to suggest any ideas and

comments that can help MOJO to be a quality product.


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Crafting the Brand Positioning

Point of Difference (POD) and Point of Parity (POP):

Point of Difference (POD):

POD refers to the attributes and benefits that customers strongly associate

with a brand and believe these benefits are unattainable in any other

competing brands or company. POD for AFBL and Coca-Cola are:

AFBL: A beverage provider who provides the largest assortment of

beverage and food products available in the whole Bangladeshi market.

They are the only company to provide Cola, Clear Lemon, Cloudy Lemon,

Fruit Juice, Milk, Energy Drink and Mineral Water; every category of

beverage products provided in Bangladesh all together under the same roof.

Also they provided MOJO in 150 ml cans, an innovative and never before

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used packaging size.

Coca-Cola: Coca-Cola is produced by the world famous secret recipe known

to only a few top executives of Coca-Cola Ltd. They market the worlds first

and no 1 cola flavored soft drink brand Coca-Cola that shows exclusiveness

and elegance along with their globally recognizable supplementary brands;

namely, Fanta, Sprite and Sunfill. Also in limited scale provided one of the

few diet cola solutions in Bangladeshi market.

Point of Parity (POP):


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POP are attributes that are not necessarily unique to the brand but may be

shared with other brands. POP for AFBL and Coca-Cola are:

AFBL: Provides their products in generally available soft drink packaging

sizes offered by every other competitor in the Bangladeshi market. They also

have distribution coverage in each location Coca-Cola and other competitors

have covered so far.

Coca-Cola: Provides all their soft drink products i.e. Coca-Cola and Sprite in

all the generally used packaging sizes i.e. 250 ml, 500 ml, 1 liter etc

Positioning According To Ries and Trout:

According to the positioning statements made by Ries and Trout; well-

known products hold a distinctive position in the consumers mind. To

overcome them, a competitor can imply any one of the three strategic

alternatives. Alternatives for MOJO and Coca-Cola are:

MOJO: MOJO is trying to strengthen its current position in the consumers

20

mind as a refreshing, upbeat and lively cola drink. Their tag line Its inside

you! states the idea of MOJO accompanying in each part of enjoyment of

life of the youth. They promoted this idea from the very beginning of

product launching, and they have managed to use this idea so far to

strengthen this position in the consumer minds.

Coca-Cola: Coca-Cola has little promotional activities in Bangladeshi

market. The top management of Coca-Cola India Ltd. wants to convey the

promotion of Coca-Cola from Indian market. As we can study from their

promotions, they try to strengthen their no. 1 brand positioning worldwide


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through their positioning strategies. Also in various cases they de-position or

re-position their primary competitor; Pepsi in the mind of Indian consumers.

In the most recent examples, they de-positioned Pepsis Youngistan

campaign with their own product Sprites Koborstan promotions.

Positioning According To Treacy and Wiersema:

According to the positioning statements proposed by Treacy and Wiersema;

a firm could try to be any one of the three alternatives. AFBL and Coca-Cola

both try to achieve operational excellence particularly in the Bangladeshi

market, as they try to provide highly reliable products to their customers.

AFBL is a sister concern of Akij Group, renowned for their lack of

compromising with quality. As to maintain that legacy, AFBL uses state of

the art machinery and top quality raw materials from Switzerland, Vietnam

and Singapore. On the other hand Coca-Cola is the global leader in the cola

market. It is operated in Bangladesh by two licensed bottlers under close

supervision by Coca-Cola India Ltd. They use raw materials from Coca-Cola

21

certified suppliers and always try to maintain global standard in production.

Dealing with Competition

Porters competitive forces model:

Five forces; as identified by Michael Porter poses threat for the soft drink

market and in the activities of both Coca-Cola and MOJO accordingly:

1. Threat of Intense Segment Rivalry: The soft drink industry of

Bangladesh poses a higher and intense rivalry for any competitor.

There are numerous big names actively present in this industry. Coca-


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Cola, Pepsi and RC Cola had been dominating the cola market of

Bangladesh for a long time. Coca-Cola is one of the earliest pioneers

in this industry globally as well in Bangladeshi market. So initial

threat of rivalry in this segment was low for Coca-Cola. Afterward

this market got bigger and more competitive; therefore making the

industry much more competitive. When MOJO was launched back in

2005, all the above mentioned companies were actively fighting for

market share. Initial market rivalry for MOJO was very high. But

AFBL successfully marketed their product, as a result gaining the

market leader position in a very short period of time.

22

Figure: Porters Competitive Forces Model

2. Threat of New Entrants: Soft drink market of Bangladesh can be

defined as a segment where both entry and exit barriers are high.

Here the market potential is very promising, and it is difficult and


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expensive for any new competitor to enter the market. Setting up

factories is very costly, and if any firm is performing poorly, they

cant easily sell off and leave the industry. As a result these poor

performing firms i.e. Double Cola, Uro Cola stay on and fight back

that hurt the industry leader i.e. MOJO, Coca-Cola and RC Cola.

3. Threat of Substitute Products: Consumers of Bangladesh are the most

hardest to convince for any marketer. As there are so many

alternatives of cola products in the market, and they do not

significantly differ in taste, consumers switch very swiftly to any

competitive brand or product. Mineral water is the most popular and

available substitute to any thirsty consumer. As its price is

significantly low and it is widely available; the threat of substitutes

for cola products are extremely high in the Bangladeshi market.

AFBL has done a really thoughtful job of putting mineral water brand

SPA in their portfolio as a flanker product. This ultimately boosts

23

revenue for AFBL; and Coca-Cola should do the same with the

implementation of putting their mineral water brand KINLEY in the

Bangladeshi market.

4. Threats Of Buyers Growing Bargaining Power: In Bangladesh most of

the leading soft drink marketer firms follow each other in case of

setting price. Buyers are mostly unorganized and spread around;

therefore has very little bargaining power.

5. Threat Of Suppliers Growing Bargaining Power: Both AFBL and

Coca-Cola Ltd. are highly dependent on oil, electricity, labor and

other bare industrial necessities to run their factories. Also theyre

largely dependent on the raw material providers for manufacturing.


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AFBL revolves around various suppliers for their raw material

providers. Still if there is a scarce in the supply of materials, this may

easily set the cost up. As a result, the threat of suppliers bargaining

power is really high for this industry.

Industry Concept of Competition:

In terms of number of sellers and to the degree of differentiation, soft drink

market of Bangladesh can be classified as Monopolistic Competition. Here

competitors mostly focus on selected market segments and command a price

premium by meeting customers needs in a superior way. 150 ml cans were

an innovative styling for MOJO. They differentiated their cola offering with

that sized cans; thus differentiated their offerings in part in contrast with its

many competitors in the cola soft drink market.

24

Competitive Strategies for Market Leader:

As currently MOJO is the market leader in the cola market of Bangladesh;

here we will discuss possible strategies that can be undertaken:

Expanding the Total Market:

As cola products has less usage rather than other ordinary products, no such

new usage for cola products exist. So they can undertake the following

strategies to expand the total cola market; mostly applicable for market

leader MOJO:


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New Customers: As mentioned earlier, various disturbing issues

relating to cola products ultimately shrink the global cola market;

making way for phenomenal growth of clear drink market in the soft

drinks industry. MOJO did a phenomenon job to again revive the cola

market in Bangladeshi perspective. They followed these strategies:

1. Market Penetration Strategy: AFBL attracted consumer groups

who might use it but didnt due to the controversies

surrounding cola products. Successful marketing of MOJO

again restored confidence on cola products. Coca-Cola

promoted their products as soft drink with no pesticide for thesame reason.

2. New-Market Segment Strategy: AFBL; with MOJOs colorful

and vibrant promotions, easily grabbed the market of new and

1st time cola users in the form of school going children. Their

target market was teenagers who would try out cola products

for the 1st time of their life. Effective approaches to grab this

25

market would mean expanding the total market in the long run.

3. Geographical-Expansion Strategy: Currently AFBL is exporting

their products to Middle East, Malaysia and South Africa. Not

only are they trying to grab consumers living elsewhere, theyre

trying to grab market of NRBs who are missing out the

opportunity to consume Bangladeshi drinks.

More Usage: Total market of cola products can be increased by

increasing the frequency or quantity of consumption. Larger

containers are supposed to increase the consumption. Also soft drinks

are impulse products; as such usage can be increased by making the


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product more available to the consumers. MOJOs early success was

due to making the product easily available to consumers all around

Bangladesh; something uncommon for any new product. Also Coca-

Cola Ltd. follows the motto Arms Length Desire, emphasizing on

the fact that the company is trying to make their products available in

the closest to their consumers. Making soft drinks available in

restaurants and fast food joints with co-branding with the vendor is

also a good way to increase the total market size. PEPSI generates

most of their sales based on their availability in public gathering

places and fast food joints i.e. KFC, Bashundhara Cineplex, and

Fantasy Kingdom.

Defending Market Share:

Currently MOJO is dominating the cola market of Bangladesh. As AFBL is

trying to expand total market share, they are also continuously defending

their current business. AFBL are using the following strategies to defend

26

their market share:

Position Defense: Currently MOJO has a very desirable market space

in the minds of their target market. As their no. 1 competitor, Coca-

Cola has little promotional activities in Bangladesh; MOJO is easily

becoming a staple name in the consumers mind in case of quality cola

drink.

Flank Defense: AFBL hasnt stopped just because MOJO is the cola

market leader; they are also trying to erect outposts to protect their

weak fronts which could serve as an invasion base for counter attack.


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As a result, AFBL offers various flanking products in their portfolio.

Offering i.e. LEMU, SPEED, CLEMON, OPOTATO, SPA are in

such manner that a MOJO consumer; if decides to consumer anything

other than MOJO can choose products between AFBLs offerings.

Preemptive Defense: AFBL also pulls a more aggressive maneuver to

attack before any of their competitors starts offending them. Coca-

Cola had the biggest distribution coverage of Bangladesh. While

MOJO has already uprooted them in case of distribution coverage,

they are always attempting to cover more areas to be prepared for any

upcoming competition. Counteroffensive Defense: Market leader; when attacked may respond

with a counter attack. So far no such attack has been seen on MOJO in

terms of promotions. But sometimes MOJO responds to price cuts,

special offers and discounts offered to distributors and retailers

against competitors. Once Coca-Cola started offered refrigerators to

many retailers with the clause of displaying only their products

27

in that cooler. In response MOJO offered and put refrigerators in

several key strategic retailer outposts with the similar clause intact.

Mobile Defense: Akij Group is one of the largest and oldest group of

industries operating in Bangladesh. As their primary business

consisted of tobacco based products, they tried to diversify in to

channels that will not have negative reactions from consumers. Nowtheir diversified SBUs consists of Particle boards, Jute based

products, Cement, Textile products, Printing & Packaging solutions

and Food & Beverage products. Akij group has stretched its domain


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by diversifying over territories that can serve as future centers for

defense and offense.

Contraction Defense: AFBL and Akij group has been really successful

in their business activities so far; therefore they have not taken

planned contraction or given out weaker territories. They are doing

business with success so far and hope to do so for the years to come.

Market-Challenger Strategies:

As currently Coca-Cola is in the 2nd position in cola market of Bangladesh,

they can take following aggressive market challenger strategies to overtake

MOJO to regain the leader position:

Defining the Strategic Objective and Opponents(S):

Out of the three options available in this phase, Coca-Cola is attacking the

market leader directly. Although this is a high risk strategy, it has the

potential of high-payoff. As Coca-Cola was the previous market leader, they

28

already have high distribution coverage and brand equity. It is very much

possible to overtake MOJO with the efficient use of promotional campaigns

that really connects with the Bangladeshi consumers and culture. Due to the

negligence from Coca-Cola India Ltd. Bangladeshi themed promotions are

non-existent, making way for MOJO to meet phenomenon growth.

Choosing an Attack Strategy:


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Due to weak marketing activities generated by the figureheads of Coca-Cola

India Ltd. in response to the aggressive activities of AFBL, there has been a

lack of attack strategies generated. Distinguishable strategies include:

Frontal Attack: Coca-Cola is generating a pure frontal attack on

MOJO as they have the capacity to effectively match their product,

price and distribution. Coca-Cola still is the no. 1 recognizable brand

of the whole world, and still has somewhat higher brand equity. There

are no questions in consumers mind about the product quality of

Coca-Cola. Also Coca-Cola still has large distribution coverage all

over Bangladesh; as a result it directly matches with AFBL in terms of

distribution.

Flank Attack: Although AFBL has so many flanking products

available in its portfolio, the leaders in the uncola market are still 7UP

and Sprite; later of the two being the product of Coca-Cola.

CLEMON, flanking product for AFBL in this segment still does not

have the brand equity and the magnitude of marketing campaigns

these two competitors posses. As a result these segment posses a

flanking hole in the portfolio of AFBL, and Coca-Cola should do their

29

best to take grip of this situation and this promising market.

Setting Product Strategy

Product Level of Cola Drinks:

MOJO and Coca-Cola are both cola flavored soft drink products. As such

product level for both will be same. These are explained below:


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1. Core Benefit: Refers to the service or benefit consumer buys.

Consumers want variations in satisfying thirst while buying either

MOJO or Coca-Cola.

2. Basic Product: Here the core benefits are turned into a basic product.

Basic product for cola products are drinks with a sweet and strong

taste.

3. Expected Product: Refers to a set of attributes and conditions buyers

normally expect while purchasing the product. Consumers may expect

disposable and durable packaging, top quality ingredients in the cola

product, glass or free gifts with every bottle or extra amount given

with MOJO or Coca-Cola.

4. Augmented Product: Here benefits are given that exceeds customer

expectations. Home delivery service with large amount of purchase of

MOJO and Coca-Cola could act as augmented offering for consumers.

5. Potential Product: Here all the possible augmentations and

transformations the product might undergo in the future are stated.

With ever expanding Research and Development (R&D); in future

cola drinks may be combined with substances that will transform their

existing use to a substitute of water.

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Product Mix:

Product mixes of both AFBL and Coca-Cola Ltd are given below:

AFBL:


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Coca-Cola Ltd.

COLA CLEAR LEMON ORANGE DRINK FRUIT JUICE

Coca-Cola: offered

in 500ml, 1 and 2.25

liter PET packages;

also offered in 250 ml

and 1 liter glass

bottles

Sprite: offered in

500ml, 1 and 2.25

liter PET packages;

also offered in 250 ml

and 1 liter glass

bottles

Fanta: offered in

500ml, 1 and 2 liter

PET packages; also

offered in 250 ml and

1 liter glass bottles

Sunfill: offered only

in 250 ml glass

bottles (available in

Mango flavor)

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Product Mix Pricing:

In general situations both AFBL and Coca-Cola India Ltd. follow the

mentioned pricing strategies for marketing in Bangladesh:

Cola Cloudy

Lemon

Clear

Lemon

Energy

Drink

Mineral

Water

Fruit Juice Milk Snacks

MOJO:

offered

in

250ml,

500ml, 1

and 2

liter

PET

packages

LEMU:

offered

in

250ml,

500ml, 1

and 2

liter PET

packages

CLEMON:

offered in

250ml,

500ml, 1

and 2 liter

PET

packages

SPEED:

offered

in

250ml,

PET

and

CAN

SPA:

offered

in

500ml, 1

and 2

liter PET

packages

FRUTICA:

offered in

250ml and

1 liter PET

packages

(available

in Mango,

Orange and

Grape

Flavor)

Firm

Fresh:

offered in

Pasteurized

and UHT

form in

500 ml

packages

1.OPotato

2. Cheeky

Monkey


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Product Line Pricing: Both companies market their products in different

sizes; thus introducing price steps. Prices are different for each individual

sized drink, and they are not charged proportionally. Instead the larger

amount consumer buys; the more he/she gains as price starts to decrease for

larger bottles.

Product Bundling Pricing: In limited cases, mostly on some selected retail

outlets soft drinks are offered as mixed bundling. Here products are charged

less for the bundle than if they are purchased individually.Some posh retail

outlets i.e. Agora, Mina Bazar offers in bundles i.e. 2 bottles of 2liter MOJO

for tk. 115 whereas individually they would have cost a customer about Tk.

130.

Labeling:

Labels of the soft drink products do its functions in the following ways:

1. Identifying: Brand names of MOJO and COCA-COLA appears on

the bottles.

2. Describing: The materials, particular health benefits, factory address,

how to dispose properly etc. informations are posted on the bottle

labels.

3. Promoting: Attractive graphics and brand logos over the bottle attract

consumers; particularly in big retail stores where so many similar

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products are stuffed together in large numbers.

Packaging:


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Packaging of both MOJO and Coca-Cola can be classified in the following

ways:

Primary Package: Cola soft drinks coming in a bottle; either PET and

glass containers. AFBL PET bottles are labeled in full sleeved.

Secondary Package: Does not appear in soft drink products.

Shipping Package: Shrink packed that typically holds 24 bottles of

250ml and 500ml PET, 12 bottles of 1 liter PET and 6 bottles of 2liter

PET bottles.

Designing and Managing Services

Service mix:

The offering of soft drinks can be classified as pure tangible good based on

the fact that it consists of only a tangible good. Coca-Cola Ltd. and AFBL

dont offer any service that accompanies the product. But it is also offered as

part ofhybrid service mix in case of food and service at restaurants. Here

both food and beverage accompanying with the service from the restaurant

people makes up for the whole service mix. Therefore both Coca-Cola and

MOJO act as a tool in the hybrid service mix.

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Developing Pricing Strategies and Programs

How Pricing Is Set:


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Pricing is a very important issue for any company, as it determines the level

of profits earned and covers up the cost of operating. In AFBL, pricing is set

by the marketing department. They manage a close relationship with the

factory managers about production cost, and sets different pricing strategies

according to their reports. In case of Coca-Cola, the pricing is generally

done by the local bottlers, AML and TBL in close supervision of Coca-Cola

India Ltd.

Consumer Psychology and Pricing:

Both AFBL and Coca-Cola have to think about how their consumers

perceive of prices and has to deal with the following important issues:

Reference Prices: In most situations consumers have a vague idea

about the products estimated price rather than recalling specific

price. Most soft drinks are priced very similarly and close to each

other. So consumers often compare soft drink prices in terms of

internal reference price (pricing information from memory/

recollecting old prices) or in terms of external reference frame

(posted regular retail price/price range of soft drinks).

Price Quality Inference: In most food items, the belief of price as an

indicator of quality applies. As a result soft drink products are priced

either in a close range or according to the brand image. Pran Cola

was sold at a relatively low price compared to other competitors

(BDT 8 for a 250ml glass bottle comparing to most competitors price

34

of BDT 10). To most of the consumers this resulted in the belief that

Pran Cola had inferior quality. Most soft drink marketers of


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Bangladesh, especially Coca-Cola and AFBL looks at this phenomena

carefully and prices their products accordingly.

Price Discounts and Allowances:

Both AFBL and Coca-Cola offer the following discounts and allowances to

their respective customers and marketing intermediaries:

Quantity Discount: Both companies allow price reduction for traders

who buy in large volumes. AFBL encourages their sales persons to

engage in finding sponsorship opportunities in various cultural and

local events. AFBL offers substantially lower price per unit for large

volume of sales there.

Functional Discount: Both companies offers discounts for their trade

channel members upon performing certain functions i.e. selling and

storing.

Allowance: Both companies engage their dealers in promotionalallowances by rewarding them for activities i.e. participating in

outstanding advertising and sales support programs. AFBL hosted

national sales conference for all their distributors at their factory

premise at Dhamrai where they offered gifts and entertained them.

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Promotional Pricing:


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In many cases, both AFBL and Coca-Cola used the following pricing

technique to stimulate purchases of their products:

Loss-Leader Pricing: In order to sell off the increasing store traffic in

many superstores; prices of products from both companies are

dropped. As seen in various offers from leading superstores i.e.

AGORA, MINA BAZAR; MOJO, Coca-Cola, Sprite, LEMU are

offered at comparatively lower prices in bundles to attract consumers

in to their stores as well as clearing out old unsold items.

Special-Event Pricing: Not just AFBL and Coca-Cola but all other

soft drink manufacturers establish special prices in certain seasons i.e.

Eid-ul-fitre, Eid-ul-ajha. During these seasons consumption jumps sky

high and sales increase in a towering basis.

Differentiated Pricing:

Soft drink industry charges third-degree price discrimination with itscustomers. Price discrimination happens with the following buyer classes:

Product-Form Pricing: Different forms of soft drink products are

priced differently and not proportionately to their respective costs.

While a 1 liter PET bottle of both Coca-Cola and MOJO is priced at

BDT 45, price of a 2 liter PET bottle is BDT 65. This pricing is not

proportional to their sizes, and consumers gain on the purchase of

higher sized products.

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Channel Pricing: Different fast food eateries and restaurants especially

posh ones price soft drinks higher than the average market price. A

250 ml Coca-Cola glass bottle is priced BDT 12 at Sumi

Confectionary at Mohakhali; but the price is BDT 16 for the same

package at the nearby Hotel Jakaria.

Designing and Managing Value Networks and Channels

Breakdown of Marketing Intermediaries:

As AFBL and Coca-Cola are in the soft drink business, their marketing

channel classification has lots of similarities. These channels can be broken

down in to following pieces:

Suppliers: Provides raw materials for soft drinks to the manufacturers.

Bottlers of Coca-Cola purchases materials from selected suppliers. AFBL

revolves around various suppliers and mostly purchases from Switzerland

and Singapore.

37

Supplier

s

Factory/

Produce

rsMarketing

Intermediary

Merchant Agents Facilitator

s

Customers


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Factory/Producer: AFBL has their factory in Dhamrai, Dhaka. Coca-Cola

has two separate bottlers in Bangladesh and they have their own factories.

One of the bottlers, AML has their factory in Alekhar Chor, Comilla while

TBLs factory is on Mirpur, Dhaka.

Marketing Intermediary: They can be classified in the following three

categories:

1. Merchant: Distributors and retailers who sells the product. AFBL has

227 distributors for MOJO while Coca-Cola has 197 all over

Bangladesh.

2. Agents: Sales agents and manufacturers representatives who helps

the retailers and distributors in marketing the product.

3. Facilitators: Generally AFBL and Coca-Cola provide transportation

for goods from factory to distributors. Also AFBL partners with AD

COM and Grey etc. as advertising agencies to promote and market

the product. Coca-Cola works through their local office CCFEL

(Coca-Cola Far East Ltd.) to promote their products in Bangladesh.

Push Vs. Pull Marketing:

AFBL and Coca-Cola use both Push and pull marketing strategies very

skillfully. There activities are listed below:

MOJO: At the very introduction stage of MOJO, AFBL mostly applied

push strategy as there was little brand equity for their product. People

hardly knew about the product at that stage. Although soft drinks are

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regarded to many consumers as impulse items, due to the presence of Coca-

Cola and Pepsi in the market there are always a certain degree of brand

equity present for the soft drink consumers. Before formally introducing the

product in the market, AFBL spent large sum to induce intermediaries to

carry, promote and sell. During formal launching, AFBL spent resources in

both push and pull marketing; using advertising to make consumers

interested to ask retailers for the product. This strategy really paid off well

for the companies; as MOJO got along with their target consumers from the

beginning and continued to achieve positive feedbacks.

Coca-Cola: Coca-Cola has a huge loyal fan base present from the time it

was offered in Bangladeshi market. Coca-Cola is the no. 1 brand of the

whole world. As a result Coca-Cola India Ltd. spends very little for the

advertising and to the purpose of persuading in the Bangladeshi market. As a

result marketing strategy of Coca-Cola in Bangladeshi market can be

remarked as push strategy. The little amount allocated for promotional

purpose are spent to encourage intermediaries i.e. distributors, retailers topromote and sell the product to the end users. They give incentives i.e.

quantity discounts and promotional allowances to increase sales through the

intermediaries using creative processes i.e. DISPLAY PROGRAM AT

RETAILERS SHELVES.

Types of Buyers:

Soft drink buyer can be classified as Habitual shoppers; they pretend to

buy from the same places in the same manner over time. As a result most

soft drink marketers try to use push strategy to encourage retailers to sell and

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promote only their products. Also for the same reason marketers try to reach

out to every little retail outlets possible in order to grab these habitual

shoppers.

Role of Marketing Channels:

Both AFBL and Coca-Cola gain several advantages in operating by using

intermediaries:

Producers of soft drinks lack the financial resources to carry out direct

marketing. AFBL has 227 distributors all around Bangladesh for

marketing MOJO while Coca-Cola has 197. It is very hard pressed for

both these companies to get the asset to buy out their dealers and do

business on their own all around Bangladesh.

In FMCG business, producers gain more return on manufacturing

rather than retailing on their own. It seems unreasonable to make

investment on field other than their core competencies.

Finally it is unreasonable and completely not feasible to market soft

drinks directly to the consumers. If AFBL and Coca-Cola want to

directly market their products, they have to establish soft drinks stores

all around the localities of Bangladesh. It is completely unrealistic.

For these reasons it is utterly necessary for FMCG companies such as AFBL

and Coca-Cola to establish marketing channels to operate in Bangladesh.

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Channel Levels:

As soft drinks are FMCG (Fast Moving Consumer Goods) both AFBL and

Coca-Cola do consumer marketing in a two-level channel. Here

manufacturer sells products to wholesalers who in turns sell it to retailers.

Product than finally are sold to final consumers by the retailers.

Channel Design:

Designing channel contains the following processes:

Analyzing Customers Desired Service Output Levels: Channels of both

AFBL and Coca-Cola produce the following five service outputs:

1. Lot Size: Typical consumers buy one unit of soft drink at a time for

41

Wholesaler

Retailer

Consumer

Manufacturer


50/60

himself/herself in public gatherings. Basic purposes of use and the

resulting lot sizes purchased by the consumers of both products are as

follows:

Bottle/Lot Size Purpose of use

250 ml for a single consumer;

accompanying food

500 ml gives mobility to drink for a

longer period of time or

sharing drinks with 2-3

persons

1-2 liter for parties and largegathering of people

2. Waiting and Delivery Time: Soft drinks are generally not much of a

precious item. Although they are best tasted chilled, consumers do not

expect too much waiting time for these products. The longest amount

of waiting time tolerated is the time necessary to bring the cold soft

drinks from the refrigerator to the hands of consumers.

3. Spatial Convenience: Soft drinks can be classified as convenience or

shopping goods according to the consumers preference. As such they

should be made as much available as possible. Most purchases are

made in local grocery stores. So both AFBL and Coca-Cola try to

reach the most distant corners of locality possible. Coca-Colas motto,Arms length desire reflects this objective. Channels of both AFBL

and Coca-Cola should be as much decentralized and disbursed

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possible to reach out to every potential customer. Although this

process results in a higher cost of operation, effectively these

activities makes their products more convenient.

4. Product Variety: Both AFBL and Coca-Cola try to minimize retailers

assortment and fill up their shelves with their own products to

increase sales. Although mixed assortment results in giving

consumers more choice over products, in those cases the brand equity

and promotional campaigns comes to play because soft drinks

products otherwise has less differentiation.

5. Service Backup: Both AFBL and Coca-Cola provides a lot of add-on

services for their channel members. Retailers get various facilities i.e.

payment on credit, delivery and call backs on faulty products. AFBL

and Coca-Cola try to have less payment made on credit. Still large

retail outlets i.e. Agora, Mina Bazaar makes most of their transactions

in credit; therefore there are always some credit sales made. Also both

companies provide delivery services to retailers through their own

delivery transports.

Establishing Objectives and Constraints:

Generally companies does effective planning on determining which market

segments to serve and which channels to use for each segment. The

objectives of channels get affected by the following factors:

1. Product Characteristics: Soft drinks are mostly sold by using as much

direct marketing possible as they are perishable items. As a result

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manufacturers of soft drinks of Bangladesh mostly use less marketing

intermediaries and try to get their products to the consumers as fast as

possible upon producing.

2. Company Characteristics: Both AFBL and Coca-Cola have huge

financial backing in terms of operating. Although their products are

impossible to sell through direct marketing to each consumer

individually, they try to expand their channel as much as possible all

through the country. This way they try to reach to each of their

potential customers.

3. Middlemen Characteristics: AFBL and Coca-Cola takes account both

the strength and weakness of their intermediaries. Here company sales

reps have to deal with retailers to put their products in to the retailers

shelves. Also as both companies employ a mixture of push and pull

marketing; the importance of sales reps is lot higher than common

thoughts. Although more sales rep means increasing the cost, this

effectively means reaching out to a broader consumers and retailers;which increases the sales as well.

4. Competitors Channel: Designing any new companys channel always

gets influenced by their competitors channels. As MOJO was a new

product and Coca-Cola was in the market from the beginning; AFBL

followed Coca-Colas channel design and modified them to their own

needs wherever necessary.

5. Environmental Factors: Although global economy faced recession for

last few years, activities of AFBL did not suffer much as they are

mostly Bangladeshi market based company. But Coca-Cola is a US

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based company; therefore their whole array of activities got affected.

This in turns was one of the main reasons of their lack of market share

grabbing initiatives as they had a lack of inflow of investment. AFBL

grabbed this situation effectively; gaining the cola market leader

position.

Identifying Major Channel Alternatives:

AFBL and Coca-Cola choose their channels from an array of alternatives in

order to reach their customers at a lower cost. Their channel alternatives can

be described by the following elements:

Types of Intermediaries: As both AFBL and Coca-Cola are in the

same soft drink industry, they imply the similar alternative. Both

companies hire their agents known as distributors throughout the

country in different regions to sell only their products.

Number of Intermediaries: Soft drinks are mostly considered asconvenience goods; therefore the more locations product made

available is, the better. As such both companies impose intensive

distribution to place their products in as many outlets possible. Here

soft drinks need a have a great deal of location convenience. So

retailers compete aggressively for greater consumer coverage.

Terms Of Responsibility Of Channel Members: In order to fulfill a

healthy trade-relations mix, both companies perform the following

services for their channel members:

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o Price Policy: AFBL and Coca-cola sets a price list and

announces a schedule of discounts and allowances for their

channel members which is seen as equitable and sufficient.

o Condition of Sales: AFBL and Coca-Cola provides guaranty

against defective products but dont in case of price declines.

o Distributors Territorial Rights: Companies define their

distributors territorial rights and terms under which the

distributors operate. According to these rights, distributors are

expected credit for sales on their territory and no one else has

the right to enter their territory with the same product.o Mutual Services and Responsibilities: This mostly takes action

in case of the two licensed bottlers of Coca-Cola. They have to

abide by the decisions set by their supervising Coca-Cola India

Ltd. These bottlers have to satisfy companys global standards

in case of manufacturing, cooperating with new promotional

programs and buy supplies from specified vendors.

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Designing and Managing Integrated Marketing

Communications (IMC)

Marketing Communication and Brand Equity:

Various marketing communication activities contribute to developing brand

equity. The following figure shows how the marketing mix tools create

brand equity:

Marketing Communication Mix:

Both AFBL and Coca-Cola use the following tools of communication:

1. Advertising: MOJO promotes through advertising in all the TV

channels of Bangladesh. Although Coca-Colas promotions are

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Marketing

Communicati

on Program

Advertising

Sales

Promotion

Events &

Experience

PR &

Publicity

Personal

Selling

Direct Marketing

Brand

Awarenes

s

Brand

Image

Brand

Responses

Brand

Relationship

Brand

Equity


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noticeably absent; during occasions i.e. Ramadan advertisements are

shown to promote limited time special price offerings. Coca-Cola

advertisements are largely present in the Indian TV channels; which

are also watched by Bangladeshi consumers.

2. Sales Promotion: Both AFBL and Coca-Cola provides short term

incentives to encourage both their distributors and consumers.

Distributors and retailers are given short term incentives i.e. free

products with larger quantity of purchase to sale more products during

off-peak seasons and special occasions. Consumers are given the offer

of lower price in bundle in order to sale and clear off inventory during

much consumed occasions i.e. Eid.

3. Events and Experience: Various events are sponsored to promote own

products. MOJO sponsors Valentines Day Concert and World Cyber

Games (WCG) Bangladesh Qualifying Round 2009 to name a few.

They also organize events i.e. Boishaki Mela and Pitha Utsab to get

closer to their target consumers mind. Coca-Cola occasionally holds

events i.e. Coke Khao Pataiya Jao for Bangladeshi consumers. Also

they sponsor various international events i.e. WORLD CUP

FOOTBALL and AMRICAN IDOL.

4. Public Relations and Publicity: Coca-Cola promotes their brand in

various public places i.e. NANDAN PARK. Also MOJO does the

same in places i.e. WONDERLAND PARKS and SPORTS ZONE.

5. Direct Marketing: It is impossible to market soft drinks through direct

marketing; therefore neither companies does direct marketing in

Bangladesh.

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6. Personal Selling: This marketing communication tool is not applicable

in the soft drink industry and on the business of both AFBL and Coca-

Cola.

Brand Equity:

It refers to the subjective and intangible assessment of a brand by the

consumers. Both MOJO and Coca-Cola have high brand equity due to their

close attachment with their target market. Brand equity consists of the

following tools; and strengthening them in turn increases the overall brand

equity of the brand:

1. Brand Awareness: It is created by the combination of brand

recognition and brand recall.

Brand recognition: Refers to the extent at which a brand is

recognized for stated brand attributes or communications. Coca-

Cola is instantly recognized with their slogan Always Coca-

Cola, The Coke Side of Life, Open Happiness and "Thanda

matlab Coca-Cola!"(Indian). MOJO is also recognized with their

own slogans, Its inside YOU! and Asmane Pakha Melo

Ontore Ontore

Brand Recall: Refers to the ability to retrieve the brand from

memory of the consumer with a given product category. Coca-Cola

had long been in the top of consumers product category ladder

according to Jack Trout positioning statement. But due to their

campaigns in Bangladesh and with the exciting and refreshing

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promotions; MOJO grabbed the top of the ladder of many

consumers. Still Coca-Cola is recalled with their slogans and

Indian TV commercials while MOJO is recalled with their

advertisements and billboards at roadside with their tag line Its

inside you! all around Bangladesh.

2. Brand Image: Refers to the perception of the brand by their

consumers. A positive brand image is created by a successful

marketing program that link a strong unique and favorable

association to the brand in their memory. So far MOJO has been

very much successful with their creative and innovative marketing

that closely links with the Bangladeshi youth culture. Their product

design, artwork over their cans and PET bottles closely link with

Bangladeshi people as a whole. On the other hand, Coca-Cola has

done little to achieve a superior brand image in the Bangladeshi

context. They are the no. 1 brand of the whole world, as a result

they do little customization of their brand with Bangladeshi

context. Consumers are attracted to Coca-Cola only due to their

worldwide popularity and with the marketing programs centered

on Indian culture.

3. Brand Response: Refers to what consumers think and feel about a

particular brand. Consumers personal opinion and evaluation

about both MOJO and Coca-Cola revolves around the following

factors:

Quality: Coca-Cola is world renowned for their superior quality

and their secret recipe in manufacturing. There is always trust and

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belief about good quality in Coca-Cola by the consumers. MOJO,

at first had consumers doubts as they were a Bangladeshi cola

provider. Afterwards that doubt got cleared with their satisfactory

quality as they use state of the art machinery for production.

Credibility: After drinking MOJO; consumers got the trust about

the product. As a result they spread good words about MOJO,

resulting in establishing credibility on the new product. Coca-Cola

is the no. 1 soft drink brand worldwide and their quality control

while manufacturing already ensured credibility among their loyal

consumers. Consideration: Both MOJO and Coca-Cola; with their superior

quality product solves the problem of clinching thrust of soft drink

customers adequately.

Superiority: Although MOJO and Coca-Cola are the two largest

share holders in the cola market of Bangladesh; they are always

working on to ensure superiority over each other. They already are

far ahead of their closest competitors. They are always increasing

their business activities and trying to get closer to their consumers

to achieve supremacy in the cola market.

4. Brand Relationship: Refers to the relationship established between

the buyer and the product. It is done on the basis of trust. To

maintain trust among their consumers neither AFBL nor Coca-

Cola did their brand extensions with their own brand. As a result;

AFBLs milk brand is FIRM FRESH; Coca-Colas mango juice

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brand is SUNFILL. This is important in maintaining the brands

quality and trust issues with their consumers in case of brand

extension in unrelated products and categories.

Conclusion

In the end, we want to say that it was a challenging experience. Working on

established and hugely popular products like MOJO and Coca-Cola was a

big learning experience for us. One of the hurdles was to analyze Coca-Cola,

as they have little activity in the Bangladeshi market. As we have put all the

necessary theories taught in our designated course into the analysis of

MOJO and Coca-Cola, we believe that our analysis is a success. Exercising

and enforcing the right marketing strategies will ensure their existence and

improvement of current standings. It was our pleasure in practicing all the

theories of this course in real life marketing examples.

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term paper on coca cola

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