Analysis Of The Transformation Process Of Coca-Cola: Summary
The transformation process for Coca-Cola is highly multi-faceted due to the high variety of products being offered by Coca-Cola and the vastness of the company’s operations. Some of the inputs required include ingredients or materials such as water, colourant, acidulants, sweeteners, preservatives, flavouring and caffeine. Material for packing is also part of the inputs for Coca-Cola; these include glass, plastics bottles, bottle tops, bottle caps and rubber for the inside of bottle caps. Other inputs include information and clients such as consumer knowledge of what the demands are and which products will satisfy these needs. There is a lot of research that must be done beforehand regarding market trends and needs for specific products before the manufacturing process begins. In "Analysis Of The Transformation Process For Coca-Cola: Summary Essays" we will research and analyze of process, trends and needs of market.
As Coca-Cola is one of the biggest companies worldwide and the biggest beverage company worldwide, operating in over 200 countries, each country or market they operate in has different needs and will be segmented in a different way. This is why customer knowledge is so paramount. Aids to these inputs are resources such as human resources, equipment and facilities as well as technology.
Human resources include every person involved in making a Coca-Cola product whether being directly or indirectly. Factory machine operators, bottlers, supervisors, warehouse logistics team and many other people are all part of the human capital required in the transformation process of Coca-Cola. There are various machines required to transform the inputs of Coca-Cola into the finished output. These include machines for mixing ingredients, carbonating, filling and packing. With over 800 facilities around the world, this is a lot of machinery.
Technology is an important part of the transformation process of any product and Coca-Cola is no different. The Coca-Cola Company are constantly looking to improve their products through the integration of the newest technology. This comes in the form of trying to reduce energy consumption, trying to be more environmentally conscious and of course constrain costs. Coca-Cola are even trying to make all their cold drink equipment HFC (hydrofluorocarbon) free by the year 2020. Through combing the various inputs and aids in the transformation process, outputs are created. In South Africa, Coca-Cola are responsible for making the following branded products; Coca-Cola, Fanta, Sprite, Bonaqua, Valpre, Glaceau, Powerade, Just Juice, Fuze Tea, Chaywa, Appletiser, Sparletta, Stoney, Schweppes, Tab and Twist.
Coca-Cola uses mass production for their products. Many would argue that Coca-Cola uses continuous production, however continuous implies that there is little variety in the type of products. Coca-Cola actually make over 3500 different products. The volume of products produced by Coca-Cola rival the production capacity of most companies (with over 1. 8billion drinks consumed per day) but the vast variety is why their production is deemed to be mass rather than continuous.
Due to the high variety of products offered, Coca-Cola cannot make use of Fixed-positon layout nor line flow layout as all the different products have different ingredients and packaging. Since the products are all beverages, process layout does not make sense as products are not grouped together. The only viable option is therefore the cellular or hybrid layout. This also makes sense as products can be classified by ingredients required or by packaging design. Items with similar ingredients will be made together whilst products will similar packaging will be packaged together.
Maslow’s hierarchy of needs identifies 5 needs that each person wants to satisfy. In order of importance these needs are; physiological needs, safety needs, love and belonging needs, esteem needs and finally the most important being self-actualisation needs. Based on the case, Coca-Cola has applied Maslow’s hierarchy of needs in each of the following ways.
Physiological needs - the most basic physiological need in the workplace is a salary. Coca-Cola’s Total Rewards programme includes “base salary; annual incentives; long-term incentives” and other benefits.
Safety needs - safety needs not only relates to workplace safety but also job safety. In order for this need to be satisfied, Coca-Cola must create an environment where employees feel secure, both on the job and about their job in the future. In the case study, it mentions that Cola-Cola believes that “Every worker has a fundamental right to a safe and healthy workplace. Providing a safe and healthy working environment for all of our people is a core element of our Workplace Rights Policy and fundamental to the success of our business. ” This will satisfy the need of workplace safety but not job security. The article also goes on to say that Coca-Cola values every employee and wants each employee to grow in the business, thus creating an implied job security.
Love and belonging needs - To create a sense of belonging, an employee must feel that they are needed and that they are an important part of the organisation. Coca-Cola creates this feeling by outlining what they expect from employees over and above just doing their jobs. By showing that they value each employees way of thinking an input, Coca-Cola makes all their employees feel needed and thus that they belong and are appreciated and loved.
Esteem needs - esteem needs include “the need for a positive self-image and self-respect, and the need for recognition from others. ” The encouragement of open communication by Coca-Cola will be a positive factor in satisfying this need. Furthermore, Coca-Cola likes to provide employees with work that is challenging to them whilst also being meaningful and giving back to the community. This together with the communication as previously mentioned help Coca-Cola to satisfy this need.
In order to determine how Coca-Cola segments their market; the term market must first be defined. A market is defined as “a relatively large number of people who have a need for a specific product; have the money to buy the product; are willing to spend money on it; and are legally able to buy the product. ” There are four different kinds of markets being the consumer, industrial, resale and government. As Coca-Cola is a beverage manufacturer, their customer base will fall into the consumer market.
There are 3 different kinds of approaches to market segmentation which are market aggregation, single-segment approach and finally the multi-segment approach. Because of the vastness of products offered by Coca-Cola in South Africa, it would appear that they make use of the multi-segment approach; offering different products for different segments and market to each segment differently.
The criteria in which these markets can be segmented include many possibilities including but not limited to: region, age, income, religion, race, loyalty status and personality. Based on information gathered about the Coca-Cola Company, it appears that they make use of the following criteria to segment their market: size of city or town, age, social class and usage rate to name a few. The reason Coca-Cola makes use of each of these criteria is as follows: size of city or town- different size cities or towns will have a different demand for products as smaller cities will likely require a lower variety of products due to availability of said products as opposed to a larger city.
Age - children are more likely to prefer to cold drinks whereas adults will prefer water, vitamin water and coffee as a healthier alternative to cold drinks as they would be more health conscious. Coca-Cola will segment their market based on the age of the customers as different aged customers more likely to prefer certain drinks.
Next is social class and usage rate. These two can be bundled together as although they are completely different, the way in which they affect market segmentation is complementary to one another. Different social classes represent different income levels. The higher one’s income level, the ‘fancier’ product they can afford. With regards to Coca-Cola, they offer products of varying price levels. These price levels are set based on demand or usage rate. Therefore, the higher the usage rate, the lower the price and the lower the social class where the drink will be more popular and the same goes the other way round. These are just some of the few factors that Coca-Cola use to segment their market but it worth noting that there will always be outliers being people preferring a product when data points to them likely not to and the same for disliking a product. But with all the options available, Coca-Cola has all possibilities covered.
A channel captain is defined as “the business that controls or dominates the channel. ” Coca-Cola is the manufacturer in the channel and to be deemed the channel captain must have ‘pull’ in the market through creating high consumer demand so that intermediaries will have to buy and distribute the product. To create consumer demand, the manufacturer will make use of high-intensity marketing to create a need amongst consumers for their product and bettering their brand awareness. Furthermore, the manufacturer must also be able to supply to intermediaries enough stock to keep up with demand at all times to be seen as a channel captain.
Coca-Cola are constantly advertising to the public to the point where the colour red for drinks has become synonymous with Coca-Cola. The company has a fantastic brand awareness around the world and their 800+ facilities have the ability to more than keep up with demand. Therefore, Coca-Cola would be seen as a channel captain.
