Essay on coca colas marketing and innovation strategy transformation

Under the direction of Minnick, Coca-Cola is rapidly shifting its focus from its traditional brands, venturing into new areas of consumer products. This will not only transform the organization’s marketing and innovative capacities but also allow the organization to appeal to a greater market by keeping up with consumer trends. With the advent of lifestyle diseases such as obesity, diabetes, hypertension, customers are currently shifting away from conventional beverages that consist of artificial sweeteners, flavor and are overall highly loaded with carbohydrates. In turn, customers are shifting towards healthy living, which entails the consumption of healthy drinks and foods. Conversely, Coca-Cola acknowledges this fact and is currently performing extensive innovative strategies to develop products that appeal to these customer needs. For instance, it was with this in mind that Coca-Cola launched a diet drink called Coca-Cola Zero (Foust, 2006). However, Minnick notes that offering customers new variations of existing brands is not the answer to Coca-Cola’s marketing and innovative limitations. As a consequence, through the stewardship of Minnick, Coca-Cola is at the brink of undergoing a complete image redefinition.

Coca-Cola Company’s current image is one of a manufacturer and distributor of sugar-laden junk and utterly unhealthy products. Consequently, the company’s innovative strategy aims at the creation of new, healthy product brands that appeal to customers who are now increasingly cautious of their eating habits. As part of its innovation strategy, the organization created prototypes of new soft drinks laden with nutritionally valuable elements (Chreiteh, 2011). For instance, in one of the company’s meetings held in Istanbul, the organization showed prototypes of nutritious variations of its existing product; Diet Coke, as well as new juices created to assist women in weight management, skin care and detoxification. In essence, these innovations will ensure the organization remains relevant in the minds of the industry’s customers since the innovations will appeal to the customers’ changing needs. The organization launched at least 18 clinical trials with a view to test the nutritional and health benefits of some of the ingredients that the organization wishes to use in its future drinks. The organization will maximize its performance if its innovative endeavors lead to the creation of healthy products, which today’s health-cautious customers will appreciate.

Evaluation of Coca Cola’s Product Strategy

Currently, Coca-Cola presents an extensive variety of products, which remain relatively unchanged save for a few product variations. However, the organization acknowledged the need to revamp its product strategy through the inclusion of products that appeal to the changing trends in customer needs and demands. As a consequence, Coca-Cola’s product strategy encompasses a holistic redefinition of the organization’s product strategy with a view to reach larger markets and help the organization achieve higher performance ratios. Minnick described Coca-Cola’s product strategy through the definition of the characteristics of a winning beverage company. These characteristics include a beverage company’s ability to develop, produce and distribute breakthrough products, which go beyond conventional beverage categories, for instance, the move taken by Red Bull. Red Bull effectively revamped its product offering by enhancing the products’ energy providing capacities. Coca-Cola’s robust product strategy aims at the creation of healthy beverages that appeal to today’s health-conscious customer.

As a consequence, Coca-Cola launched several beverages laden with healthy benefits. These products include a bottled tea referred to as Gold Peak. Researchers assert that tea is a healthy product that not only boosts the body’s immunity but also enhances a person’s alertness. Gold Peak is only part of the healthy product package offerings by Coca-Cola. A few months after unveiling the tea-based beverage, Coca-Cola unveiled its premium coffee-based beverage licensed through chocolatier Godiva (Foust, 2006). Coca-Cola’s current product strategy aims at going to the market with products, which fulfill the needs of its customers before the competition gets a chance to satisfy these needs. This vision centers on the premise that customers have 10 inherent need states, which include hunger and digestion, health and beauty and mental renewal. Based on this premise, Coca-Cola product strategy encompasses the invention of new product categories fortified with nutrients such as vitamins that attain skin and overall health and wellbeing.

Underlying Logic of Mary Minnick’s Emphasis

Mary Minnick laid immense emphasis on the need to understand and appreciate why people consume beverages. Minnick noted that people typically consumer beverages such as Coca-Cola’s products, Pepsi beverage offerings, as well as other drinks offered by companies within the industry. Minnick’s focus lay on people’s primal needs, which push them to seek beverage products. According to Minnick, people seek beverages to satisfy needs such as hunger and digestion, mental renewal and health, beauty and wellness. Therefore, when a beverage producing organization appreciates these needs, the company can establish effective product offerings to ensure the products satisfy all the aforementioned needs. In addition, by appreciating customers’ primal needs, organizations can redefine their innovative strategies to ensure the organizations search for innovations that meet all customer needs. However, while appreciating customers’ needs is paramount to the attainment of effective product strategies, organizations must seek innovations that meet and surpass customer needs.

This situation is only possible if an organization appreciates people’s urges, likes and dislikes regarding beverages. For instance, Minnick’s vision for Coca-Cola’s product and innovation strategies focuses on creating drinks that meet all primal needs inherent in all customers. This, according to Minnick, is possible through the establishment of new beverage categories that are fortified with health benefits, which all people demand and require for survival (Brigham & Erhhardth, 2005). Another reason why Minnick emphasizes the appreciation of people’s desires to consumer beverages is because, in addition to meeting people’s health requirements, people essentially require to feel and look fabulous. Therefore, a successful product offering is one that provides similar benefits to those provided by renowned beauty products such as facial scrubs and cold creams. Therefore, Minnick’s underlying reason for emphasizing knowledge of customer’s needs is the knowledge that an organization can only be successful if it provides beverages that meet all the 10 primal needs of customers. Such fulfillment, however, should not be at the expense of taste.

Underlying Logic of the Non-carb Drinks Strategy

The non-carbohydrate strategy aims at the creation of beverages that contain little or no carbohydrates. This strategy challenges mainstream beliefs that beverage drinks must be laden with excessive amounts of carbohydrates such as saturated sugars. Coca-Cola is rapidly shifting from this conventional thought process by creating non- carbohydrate drinks. The underlying logic behind this new strategy is the realization that the society is currently seeking healthy foods and drinks, which do not contain saturated sugars or fats (Foust, 2006). In the current age, people are increasingly growing weary of unhealthy lifestyles and are seeking healthy products. Therefore, the logic behind the creation of the low- carbohydrate product category is to appeal to customers who are cautious of their weight, health and overall wellbeing. Drinks such as Coke Zero that contain low quantities of carbohydrates are effective since they fulfill customers’ needs such as hunger and digestion while at the same time ensuring that customers remain healthy.

The health benefits of low- carbohydrate drinks is; therefore, the principal behind Coca-Cola’s creation of low- carbohydrate beverages. Coca-Cola’s low- carbohydrate drink strategy aims at meeting organizational standards of quality refreshments while also meeting customers’ needs to sustain their health in an era shrouded with lifestyles diseases such as obesity and diabetes. Coca-Cola’s C2 Cola aims at creating an entirely new class of beverages while at the same time preserving other conventional products such as the classic Coke (Chreiteh, 2011). The drink gears towards people between 20 and 40 years who immensely enjoy the taste of Coca-Cola but are unable to drink as many drinks as they used to in former years. In essence, the low- carbohydrate Coke products are beverage solutions, which deliver all elements of the company’s brand albeit under low- carbohydrate concentrations.

Comparison of Coca-Cola and Pepsi’s Performance

Although Coca-Cola has long been recognized as the most successful multinational beverage companies of modern time, Pepsi is rapidly encroaching on Coca-Cola’s success by gaining significant market proportions. To date, PepsiCo Inc. is Coca-Cola Company’s biggest rival on account of the former’s innovative product development that enabled the company capture great market sizes. Over the last few years, Coca-Cola’s performance has fallen remarkably, particularly with regard to the company’s stock performance, talent development and growth of earnings. Although Coca-Cola still attained more annual profit margins that Pepsi, the latter currently boosts of a market value of at least $103 billion (MSN Money, 2010). This figure was almost equal to Coca-Cola’s market value although approximately a decade ago; Coke had at least thrice this market value. Notably, despite being an American icon, Coca-Cola is on the verge of becoming irrelevant owing to the organization’s inability to remain relevant in the minds of its customers.

In terms of meeting customers’ needs in the context of changing customer trends, Coca-Cola is in denial and intently fixated on maintaining its traditional position with regard to product and innovation strategy. Both Coca-Cola and Pepsi have formidable liquidity ratios as both organizations have high current assets and current liabilities ratios. However, Coca-Cola’s inventory levels are rapidly decreasing while Pepsi’s levels are decreasing. This is indicative that Coca-Cola’s inventory management is effective. On the other hand, while Coca-Cola’s gross profit increases systematically, the organization’s revenues are rapidly decreasing (MSN Money, 2010). On the other hand, Pepsi’s gross profit, as well as revenues, is both increasing dramatically. Despite Coca-Cola’s dwindling market value and revenues, the organization enjoys increasing profitability since it has access to a large, diverse market and product likeness. This is also the case in Pepsi. Therefore, both organizations are experiencing high profitability, as well as product likeness. With regard to the solvency ratios, Coca-Cola’s debt and equity are increasing while Pepsi’s debts are decreasing as equity increases. Both organizations’ total debt to total assets ratios are decreasing thereby indicating proper asset management.


Currently, Coca-Cola is financially sound with impressive profit margins. However, while Coca-Cola is demonstrating capacities for increasing profit margins, the organization’s revenue margins are declining rather alarmingly, which is a significant cause of concern (Chreiteh, 2011). Coca-Cola needs to develop effective strategies to ensure it achieves higher revenue margins. One effective strategy entails the redefinition of the organization’s product and innovation strategies as outlined in this paper. Of paramount importance to Coca-Cola, is the realization of sufficient revenues to meet the research and development encompassed in product and innovation redefinition. Coca-Cola should also work on reducing its levels of debt to ensure its asset to debt ratios remain high thereby ensuring effective operations. Debts are substantial hindrances to organizational profitability since they eat away at the company’s revenues and profits. Other recommendations aimed at enhancing Coca-Cola’s effectiveness, profitability and performance; include increasing the organization’s gross profit and liquidity ratios. Coca-Cola should revamp its current product offerings, as well as innovative strategies, to develop new product categories to meet the changing trends in customer needs (MSN Money, 2010).

The organization’s greatest opportunity lies in its wide market reach. Coca-Cola has access to over 200 markets globally which provide the organization with a wide market in which it can sell its products. Coca-Cola should ensure its product and innovative strategies fulfill the needs of all customers regardless of their location across the globe. Coca-Cola should steer away from its traditional, rigid product portfolio and offer modern, healthy and captivating products (MSN Money, 2010). Notably, Coca-Cola Zero is a significant move in the correct direction for the organization.


Coca-Cola continues to enjoy unparalleled, global success in the beverage industry. Besides the organization’s most prominent brands, Coca-Cola is also working towards the creation of innovative product in tune with the current shifts in customer demands and demographics. Notably, the organization faces immense competition from other beverage producing companies such as PepsiCo Inc. Nonetheless, Coca-Cola enjoys massive opportunities such as access to a wide market, which allows it the chance to enhance its market value, sales capacity, revenues and ultimately, its profitability. Coca-Cola can revamp its products and innovation strategies to achieve the level of performance and effectiveness that the organization is capable of achieving. Through Minnick’s innovation and product strategy, Coca-Cola will ultimately distinguish itself effectively in the minds of its customers and recover its status as the undoubted leader of the beverage industry (Chreiteh, 2011).


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Chreiteh, A. (2011). Always Coca-Cola. Massachusetts: Interlink Publishing Group.
Foust, D. (2006). Queen of Pop. Bloomberg BusinessWeek. Retrieved from http://www. businessweek. com/stories/2006-08-06/queen-of-pop
MSN Money (2010). Coca Cola financial information. Retrieved from http://moneycentral. msn. com/investor/invsub/results/statemnt. aspx? symbol= ko
MSN Money (2010). Pepsi Co financial information. Retrieved from http://moneycentral. msn. com/investor/invsub/results/statemnt. aspx? symbol= pep
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