The marketing mix is a standard strategic tool used to formulate a plan for product development and promotions. Examining the mix for a successful company like Coca-Cola can help a business leader understand the dynamics and synergy involved between the four core elements -- product, place, price and promotion.
Coca-Cola is the leading provider of soft drinks in the world. In 2018, it not only had the No. 1 selling soda with regular Coke, but its Diet Coke brand outpaced Pepsi for second billing. Within the pop category, Coca-Cola has a number of brand variants, including Dr Pepper and Sprite. The company also produces fruit juices and sports drinks. Emphasis on the soft drink industry, though, has contributed to Coca-Cola's ability to distinguish itself as a quality provider.
The concept of "place" has been generally replaced by distribution in the marketing mix system. Distribution means getting products to customers in a strategic way. Coca-Cola's distribution process is a key element of its offering. The company's products are available in cans and bottles in supermarkets and other retail stores around the world. Additionally, the company provides supplies for fountain drinks in many restaurants. It sells its products in thousands of pop vending machines placed in businesses and public buildings. The ease and convenience of getting to the product is important to customer loyalty.
The long-term pricing strategy of Coca-Cola can be best described as value oriented. Despite being a leader in its industry, its fierce rivalry with Pepsi has forced Coca-Cola to maintain affordable price points to appeal to its vast middle class market. The company was criticized by shareholders and analysts in 2011 for maintaining relatively low price points in response to economic recession in the United States. While this point emphasizes the risks to any company of adopting a price-driven strategy, Coca-Cola's strong global brand allows for brief periods of price drops.
Coca-Cola invests billions of dollars a year in advertising and promotions around the world to maintain its position of industry leadership against rival Pepsi. Pepsi increased its TV ad budget by 30 percent in 2011 when it fell behind Diet Coke. Coca-Cola spends a good portion of its ad budget on television advertising. It has used polar bear characters and a message of nostalgia and tradition as part of its branding over time. Magazine ads, online and social media have also been used as media for Coca-Cola marketing. Sales promotions at the store are used to drive revenue during slow periods.