Loialitatea Clientilor Coca Cola

CHAPTER I

CUSTOMER LOYALTY PROGRAMS

INTRODUCTION

For decades, retailers have pursued strategies which are product and transaction oriented. Hence, they focused on the profitability of an individual transaction with a customer, rather than the profitability of a long lasting customer relationship. But in the late eighties they became aware of customer relationships’ value. Consequently the focal point of research shifted from short-run profitability and acquisition to customer lifetime value, customer care, and identification of appropriate methods to account for those effects.

A loyalty program is a marketing program designed to increase brand loyalty by developing an ongoing relationship between a marketer and his customer. It can be defined as a scheme offering delayed or immediate, accumulating benefits to consumers who buy certain brands or buy in certain shops. It is a process, a program, or a group of programs geared toward keeping a client happy so he or she will provide more business.

Most loyalty programs offer discounts, coupons, low interest rates on financing, extended warranties, rebates, and other rewards and incentive programs. Unfortunately, customers have plenty of customer loyalty programs to choose from, which can often dilute their value.

In marketing generally and in retailing more specifically, a loyalty card, rewards card, points card, or club card is a plastic or paper card, visually similar to a credit card or debit card, that identifies the card holder as a member in a loyalty program.

OBJECTIVES OF CUSTOMER LOYALTY PROGRAMS

At a very general level, loyalty is something that consumers may exhibit to brands, services, stores, activities, product categories. First of all, loyalty is an attitude that sometimes leads to a relationship with a store. (Foxall, 1994). Second, loyalty is received as an expression of patterns of past purchases (Fader, 1996). Third, loyalty is defined as buying moderated by an individual’s characteristics and the purchase situation (Belk, 1977).

Loyalty programs can be appreciated as vehicles to the following eight aims: increasing single-store loyalty, decreasing price sensitivity, enlarging switching costs, inducing greater consumer resistance to solicitations of competitors, dampening the desire to consider alternative brands, encouraging word-of-mouth support, attracting a larger pool of customers and increasing the amount of products bought (Uncles 2002). Customer loyalty programs help companies learn more about customers’ intra-corporate, inter-branch, or even cross-company purchase patterns. This knowledge allows for up- and cross-selling as well as for custom-tailored solicitations.

Keeping the loyalty of the customers involves many factors: personal relationships, product quality, customer service, price, and other brand values. Customers may express high satisfaction levels with a company in a survey, but satisfaction does not equal loyalty.  Loyalty is demonstrated by the actions of the customer; customers can be very satisfied and still not be loyal.

Successful loyalty programs encourage the consumer to buy frequently, to increase the amount spent each time, and to concentrate all or most of their related purchases on that brand. The ultimate goal of customer loyalty programs is happy customers who will return to purchase again and persuade others to use that company's products or services.

EFFICIENCY OF LOYALTY PROGRAMS

Numerous firms currently view customer loyalty programs as crucial, especially those used by retailers. Companies often complain that these loyalty program discount goods to people that are buying their goods anyway, and that the expense of doing these programs rarely pays.

Other critics see the lower prices and rewards as bribes to manipulate customer loyalty and purchasing decisions, or in the case of infrequent-spenders, a means of subsidising frequent-spenders. Commercial use of the personal data collected as part of the programmes has the potential for abuse. It is highly likely that consumer purchases are tracked and analyzed towards more efficient marketing and advertising (in fact, this can be one of the purposes of the loyalty card.) To some, participating in a loyalty program funds activities that violate privacy.

Also directing resources to good customers is probably inefficient since a good buyer is already loyal. Incentives will remain useless and all one can hope for is stable loyalty. The battlefield actually lies in the intermediate customer base: too small not to offer any chance of increasing activity, but large enough to justify investment.

Loyalty and credit card reward plans might be viewed as modern day examples of a kickback. An employee who needs to buy something (such as a hotel room or an airline flight) for a business trip but who has discretion to decide which airline or hotel chain to use has a powerful incentive to choose the payment method that provides the most credit card rewards or loyalty points instead of minimizing cost for the organization.

BENEFITS OF CUSTOMER LOYALTY PROGRAMS

A properly executed loyalty program can deliver significant, long-lasting benefits to the host company in the areas of customer knowledge, product and service differentiation, customer retention, and profitability.

Greater Customer Knowledge.A loyalty program enables a company to gain detailed knowledge about its customer base with the customer’s consent; customers actually want to provide transaction and detailed profile information to ensure that they receive the full benefits of being a member of the program. Companies use databases containing information on the name, address, city, certain behaviour and background information for individual customers with the intention to reward loyal, frequent buyers more often. By keeping records about the behaviour of the clients companies can make a distinction between good and bad customers. The success of the program lies in providing customers with specific rewards.

Increased Customer Retention.A well-honed loyalty program improves customer retention rates, by increasing a member’s “switching costs,” which are costs a member would bear in order to switch to a competing provider. These costs can include decreased service and the time and resources required to build a new relationship. The higher a member’s switching costs, the more likely that member is to remain loyal.

Companies use their loyalty programs to create these switching costs, by:

Leveraging in-depth member profile and transaction data to create unique offers and product/services that a competitor, which does not know as much about the member, cannot match.

Providing targeted service consistently across all channels.

By using the personalized data provided by their loyalty program, companies can create a win-win relationship with their members that cannot easily be replicated by their competitors.

Differentiated Service and Brand Equity.Most companies do not want to compete on price. Even those whose business models are initially predicated upon providing the lowest-cost service often find that they must focus on providing value beyond price as they mature, their costs rise, and new upstarts beat them on price.

In addition, for companies that have not traditionally competed on price but suddenly find that their products are becoming commodities, brand equity is often determined by the additional value these companies can provide beyond products alone.

Companies can create this additional value by moving away from generic, one-product-meets-all-requirements products to targeted products and services that address their customers’ unique needs. A loyalty program provides this detailed information on transactions, demographics, and personal preferences required to successfully identify the unique groups among a company’s customer base and then design products or services that meet those segmented members’ needs. For example, retailers can use their loyalty data to ensure that the products desired by high-value customers are always in stock, are easy to find and reach, and are prominently displayed.

It is critical to note that customers are typically willing to pay for those products and services that do a better job of meeting their underserved needs. Brand equity, which is achieved by providing highly valued, well-differentiated products and services, is the cornerstone of loyalty. It is the additional value that customers believe a company provides relative to its competitors that encourages loyalty to the host company and makes customers potentially willing to pay more for its products and services.

Improved Profitability. All of the benefits lead to a loyalty program’s key goal and most important metric of success: improved profitability. Greater profits are a result of profitable customer retention, higher prices paid for unique products/services, increased average purchase size, decreased marketing costs and decreased unsold expired inventory.

Increasing customer retention significantly improves a company’s profitability.

CHAPTER II

THE COMPANY

BOTTLING COCA COLA

Coca-Cola’s early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage called Coca-Cola impressed the store's owner, Joseph A. Biedenharn. He began bottling Coca-Cola to sell, using a common glass bottle called a Hutchinson. Biedenharn sent a case to Asa Griggs Candler, who owned the Company. Candler thanked him but took no action. One of his nephews already had urged that Coca-Cola be bottled, but Candler focused on fountain sales.

Title: The Evolution of Coca-Cola Bottle, from 1899 to 1994

Source: http://www.pollsb.com/polls/p7976-evolution_coca_cola_bottles_liked_stop

Two young attorneys from Chattanooga, Tennessee believed they could build a business around bottling Coca-Cola. In a meeting with Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United States (specifically excluding Vicksburg) – for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their venture.

Between 1900 and 1909 Coca-Cola sales registered an astonishing growth. The three pioneer bottlers divided the country into territories and sold bottling rights to local entrepreneurs. Their efforts were boosted by major progress in bottling technology, which improved efficiency and product quality. By 1909, nearly 400 Coca-Cola bottling plants were operating, most of them family-owned businesses. Some were open only during hot-weather months when demand was high. However,bottlers worried that the straight-sided bottle for Coca-Cola was easily confused with imitators. A group representing the Company and bottlers asked glass manufacturers to offer ideas for a distinctive bottle. A design from the Root Glass Company of Terre Haute, Indiana won enthusiastic approval in 1915 and was introduced in 1916. The contour bottle became one of the few packages ever granted trademark status by the U.S. Patent Office. Today, it's one of the most recognized icons in the world – even in the dark!

As the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the U.S. Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after their 1923 introduction. A few years later, open-top metal coolers became the forerunners of automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola exceeded fountain sales.

Led by longtime Company leader Robert W. Woodruff, chief executive officer and chairman of the Board, the Company began a major push to establish bottling operations outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time Worl the dark!

As the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the U.S. Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after their 1923 introduction. A few years later, open-top metal coolers became the forerunners of automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola exceeded fountain sales.

Led by longtime Company leader Robert W. Woodruff, chief executive officer and chairman of the Board, the Company began a major push to establish bottling operations outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time World War II began, Coca-Cola was being bottled in 44 countries in the 1920s and 1930s.

During the war, 64 bottling plants were set up around the world to supply the troops. This followed an urgent request for bottling equipment and materials from General Eisenhower's base in North Africa. Many of these war-time plants were later converted to civilian use, permanently enlarging the bottling system and accelerating the growth of the Company's worldwide business.

In 1950s, for the first time, consumers had choices of Coca-Cola package size and type – the traditional 6.5-ounce contour bottle, or larger servings including 10-, 12- and 26-ounce versions. Cans were also introduced, becoming generally available in 1960. Following Fanta® in the 1950s, Sprite®, Minute Maid®, Fresca® and TaB® joined brand Coca-Cola in the 1960s. Mr. Pibb® and Mello Yello® were added in the 1970s. The 1980s brought diet Coke® and Cherry Coke®, followed by POWERADE® and DASANI® in the 1990s. Today hundreds of other brands are offered to meet consumer preferences in local markets around the world. As technology led to a global economy, the retailers who sold Coca-Cola merged and evolved into international mega-chains. Such customers required a new approach. In response, many small and medium-size bottlers consolidated to better serve giant international customers. The Company encouraged and invested in a number of bottler consolidations to assure that its largest bottling partners would have capacity to lead the system in working with global retailers.

Political and economic changes opened vast markets that were closed or underdeveloped for decades. After the fall of the Berlin Wall, the Company invested heavily to build plants in Eastern Europe. And as the century closed, more than $1.5 billion was committed to new bottling facilities in Africa.The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage serves the Company well today as people seek brands that honor local identity and the distinctiveness of local markets. As was true a century ago, strong locally based relationships between Coca-Cola bottlers, customers and communities are the foundation on which the entire business grows.

THE WORLD OF COCA COLA

Coca-Cola has created even a selective an argumentative museum called “The World of Coca-Cola”, opened in Atlanta in August 1990. Opulently conceived and planned by the well-known exhibition specialists Staples & Charles of Washington, it is also strategically placed. Its fountained plaza abuts the entry to Underground Atlanta, a major tourist attraction, and the museum strands, appropriately, just a short distance from the Georgia Capitol. So, Coke’s ceremonial presence is placed where it can most easily be visited.

Once inside, the visitor encounters reaffirmation of the company's global status in a three-story atrium from which hang the flags of those nations (more than 160 according to the brochure) where Coca-Cola is produced or distributed. From there, on payment of $3.50 for adults, the World of Coca-Cola is fully accessible.

Surrounding the bottling monster are cases filled with antiquities from the extensive Coke archives- certificates, photographs, syrup bottles, pharmaceutical materials- along with an introductory video and summary narratives of the company's history. The emphasis here is on the significance of bottled Coke and the importance of the contour bottle as the first package actually to become a product's trademark. Coke's battles with imitators and interlopers are also featured, giving narrative drama to its emergence as the standard of the world.

Of special interest to historians are the nearby interactive video shelters or kiosks two screens, large and small, placed within three-dimensional versions of Coke cans. Four of them on this level, and another four on the level below, use news-reel footage, photographs, film clips, and sound tracks to depict five-year segments of what the brochure calls "world events and life-styles." Viewers can select from titles like "Festival of Dreams" (immigration), "The Lure of the City:' and "The New Woman." Coke is fit, subtly and not so subtly, into each segment. After this piece of nostalgia, the visitor is jolted into corporate reality by an electric bulletin board, in the Times Square mode, that gives bursts of company history ("Fabulous Facts") and documents the number of soft drinks served since 1886 by Coke. Moving faster than the national debt, during Harris Neil’s visit in 1995 the figure reached 4,355,445,188,000 but just for an instant.

Beyond the video kiosks lies a second pod, lined with some of Coke's colorful advertising (a few illustrators such as Haddon Sundbloom are given special attention), showcases with trophies, coolers, trays, all surrounding an old-time soda fountain with a fast-talking soda jerk who entertains the visitors with a repertoire of counter rituals and Coke folklore.

All this is prelude to the third pod, Coke's most elaborate if laconic presentation of itself, a thirteen-minute video titled "Every Day of Your Life." Here, spectacularly and unapologetically filmed, accompanied by stereophonic sound, Coke is shown being drunk or distributed in the shadow of and shadowing historic and natural landmarks throughout the world: in the land of the Pyramids, in the harbor of Hong Kong, on the beach at Rio, with surfers in Malibu. This combination of travelogue, newsreel, sporting event, and beauty contest has touches of cheesecake, beefcake, Special Olympics, and tourist adventure. Rhapsodic music makes verbal commentary unnecessary. The theater walls are covered with blown-up color photos of Coke in various parts of the world, seconding the global domination theme that has been sounded before. It is much like viewing an extended but brilliantly filmed commercial.

Down on the second floor, the experience is somewhat different. Here the emphasis, in the first pod, is on Coke advertising; cases are filled with photographs of sports celebrities who endorse or are seen using Coke and with Haddon Sund-bloom's standard-setting Santa Claus and Coke ads. A telephone stand invites listeners to tune into a thirteen-minute, twenty-one-selection anthology of great radio Coke songs, with performances by the Supremes, Roy Orbison, Linda Ronstadt, the Everly Brothers, and Miriam Makeba among them. In a small theater, visitors can watch "Perfect Pages," highlights taken from Coke's extensive repertoire of television advertising. The World of Coca-Cola knows how powerfully commercials can provoke spasms of personal nostalgia. Like automobile styling, fashions, movies, and popular music, commercials in almost any form are keys to unlocking reminiscence. To judge from the enthusiasm and attention of the visitors, they are even more popular avenues to historical review than newsreels and documentary.

The final descent to the ground floor leads to the Coca-Cola Trademart, forty-five hundred square feet, fully one-third of the entire structure. This is the museum gift shop gone wild, a miniature department store with a single brand. Here an extraordinary variety of Coca-Cola commodities are on sale: caps, shirts, toys, glasses, mugs, umbrellas, trains, trays, golf balls, pens, glassware, towels. Also on sale are collectibles issued in series, some in limited numbers. Having encountered true antiques on the upper floors, the visitor can now become an instant antique owner; for established collectors, price lists for older Coca-Cola collectibles are also available for purchase. In this lively museum of commodity capitalism, almost every aspect of the product and of its symbolic values is explored, and nothing is more truly interactive than this immense trade mart.

The pavilion created by Coca-Cola is popular and accessible; management estimates that the museum receives almost one million visitors annually (more than most American metropolitan art museums). It is open seventy-five hours a week: eleven and one-half hours each day except Sunday, when it is limited to six hours. Again, this schedule is beyond the dreams of most major American museums, con-strained by budget economies to little more than half this availability. But such generosity is natural in a profit-making corporation, which has, in its museum, an institution simultaneously of commercial promotion, civic benevolence, and pedagogic influence. Or, as its fact sheet proclaims, "a dream for collectors, a fantasyland for children and an educational marvel for consumers.”

ANALYSIS ON COCA COLA COMPANY

In 1992 Coca Cola makes its entrance on the Romanian market; at the moment they own 7 bottling facilities in several locations of Romania. At the beginning they only introduced three drinks: Coca Cola, Fanta orange and Sprite. At the moment, the range of drinks looks like this:

Coca Cola regular, light

Fanta lemon, orange, Madness (grape), exotic, berries, Shokata (elder berries and lemon)

Sprite

In 1996 Coca Cola is selling on the Eastern European market twice as its main competitor Pepsi. Following a secret recipe, the Coca Cola Company founded in Atlanta, Georgia is making drinks in 4 factories, drinks that are bottled and distributed by authorized companies. Because the investors weren’t willing to take the risk of investments in Eastern Europe, the mother company itself financed the production facilities in Romania and Poland; there was a study saying that for every job created by direct investment in Romania and Poland, 10 more jobs were created indirectly as a result. In order to avoid the stagnancy of the consumption, the Coca Cola Company is constantly launching different products on the market; 5.5 billion consumers are drinking Coca Cola today (2.4 billion in 1984).

At the beginning of 1999, sales ran to $ 83.3 billion and a profit of $ 15.5 billion; at the beginning of the year, the company held 39200 employees. They fired 5200 and 34000 remained; the company sales 1 billion glasses a day in more than 200 countries, under 231 brands (Coke, Diet coke, Sprite, Nestea, etc…).

On the 21 of February, 2001 Coca Cola and Procter & Gamble sign a protocol for combined sales between some of the Coca Cola brands and the P&G shacks; they found a new company together and they are estimating sales of $ 4 billion for 2001. For over one century, the Atlanta Company has been the absolute leader of juice essences and non-alcoholic drinks. At the moment they have 34.000 employees in the whole world, 231 brands sold in more than 200 countries.

Over 6 billion potential consumers are enjoying a billion glasses of Coke, Sprite, Fanta, etc… every day, offered through 16 million automatic chargers. The multinational company has along The Minute Maid Company division (with P&G) five other divisions, geographically distributed: North America, Latin America, Greater Europe, Africa and Middle East division and Asia Pacific division. The remarkable results the company has achieved are due to the management of Roberto Goizueta, the best manager the company has ever had; it was a period when top management was concentrating most on major lines: “Our objective is Excellency and we do not conceive of anything else; quality is not a simple destination, but a way of life”.

In present, the world’s number one refreshment maker is being charged on all fronts. The model and the myth of Wall Street are recording counter-performances. Hardened in bureaucracy, the Big Red has not received just in time the progress made by the competitors. The strike of the afro-American employees, the trials that don’t seem to finish and mostly the awaking of Pepsi Co brought the official sponsor of the Olympic Games to a lower level of “artistic impression” and to the loss of some traditional markets. In 1999 the company only sold 91 billion liters of its products, which is 1.5% less than in 1998. The king of the red spots is losing ground to its old rivals Pepsi, Danone and mineral water producer Nestle. The loss of speed in sales is being felt as a loss in profit.

In Romania, the drink is being produced and bottled by Coca Cola HBC Romania SRL, in Bucharest; the brands offered are Coca Cola, Coca Cola light, Fanta (6 models), Sprite and Bon Aqua (mineral water).

Coca Cola launched its promotional Fanta campaign in Romania under the name “Fantastica Excursie”; it was a powerful campaign sustained by several hundreds of thousands $. The competition that took place in this campaign had almost one million prizes; out of these, 3 trips for 2 persons in Arizona were handed over to the lucky winners, each trip in value of 5000$/person.

ADVERTISING

Over the years Coca-Cola has produced hundreds of distinct advertising signs, in porcelain, various metals and paper. The most well-known are the round porcelain ‘Drink Coca-Cola’ buttons and the early color lithographed metal signs featuring women such as the ‘Betty’ series produced in 1914.

In the beginning, Coca-Cola was a brand that nobody knew anything about. It was a flavor profile that was not known at the time. Most drinks before Coca-Cola were fruit-flavored drinks—oranges, grapes, strawberries, raspberries—and root beers. Along comes this new cola product. They had to find ways to get people to taste it, to increase sampling. One of the ways to do that was to produce advertising materials that would encourage you to try this new product the next time you’re at a soda fountain.

They were actually the first company to use sampling coupons. They would have these salesmen go out on street corners and hand out coupons entitling you to a free drink of Coke at the soda fountain. And so people would redeem it at the soda fountain, try the new product. Well, now those sampling coupons are highly prized collectibles.

Another early advertising form was the clock. They would give clocks to pharmacies that sold Coca-Cola. They would give away apothecary scales, things that the pharmacist would use every single day. Again, there would be an ad for Coke on the scales. They also gave away ceramic syrup urns, which were highly decorative, but fully functional, pieces. These things were designed to sit on the front of the soda fountain itself, so they were very visible.

Coca-Cola antiques have that wonderful Victorian quality to them. The very ornate trays with those fashionably dressed women on them immediately take you back to that period in our history.

Advertisements for Coke in the 1920s capture a picture of how people looked like. If you want to know what a flapper looked like, just take a look at a Coca-Cola tray. Coca-Cola advertising from that period captured the lifestyle perfectly.

Up until the 1920s, there was no home refrigeration. When home refrigeration started to become more common, they introduced a six-pack carton. So, instead of buying Coke one at a time, you could bring home a six-pack and put it in your refrigerator to enjoy at your convenience. People didn’t have to walk down to the corner store to get an ice-cold Coke anymore.

When you get into the 1960s, all of a sudden Americans are more mobile. They want packaging that can travel with them, and so you see the introduction of things like cans and no-deposit, no-return packages. They’re going on picnics, they’re going on family outings, and they want to bring Coke with them. So they have to give it to them in a package that’s going to work in those kinds of situations.

In late 1960s, early 1970s, they started to see a boom in collectibles. Maybe it was because during the 1960s there had been a lot of social upheaval in the United States, so perhaps these images of a simpler time appealed to people in a special way. That was also the period when they started to see the emergence of clubs that were formed just to collect Coca-Cola memorabilia.

There are two categories: vintage Coca-Cola collectibles and more recent items. The vintage pieces are difficult for young collectors and new collectors on a budget because they tend to be pricey. It’s a lot easier to get into collecting bottles or cans or pins because they tend not to be expensive. You can develop a pretty nice collection without spending a lot of money.

People are comfortable with Coca-Cola memorabilia. It brings back memories. It may remind them of a simpler time in our history. There are all-American girls on the trays and calendars, suggesting a more innocent age, if you will. That’s kind of the appeal of the product: Coke is a brand that people associate with happy times—a birthday, a football game, the prom, graduation. It’s a product that people have around when they are with friends and family.

On the design of the logo, the script has pretty much been unchanged since 1886. It was designed by Frank Robinson, who was the bookkeeper of John Pemberton, who invented the product. Because he was a bookkeeper, Robinson had this flowing handwriting, Basically the Coca-Cola logo is Mr. Robinson’s signature.

The look of the script has been mostly consistent, but the elements we put around the script have changed a lot. Currently, for example, the words Coca-Cola are placed within a square. In previous years, they’ve put it in a circle or they’ve put it in a rectangle. They’ve put it in what they call a fishtail. So the script has been used in a number of configurations and has had different sizes and shapes, but the script itself is relatively unchanged.

An artist named Haddon Sundblom did the Coca-Cola Santa Clauses for years and years. People love it. The Santa Clauses that were created back in the 1930s are still used in their advertising and packaging in the 21st century. They began creating Santa Claus imagery in 1931, and Sundblom did all of it through 1964. So for more than three decades, they had one artist working on creating an image of what Santa Claus ought to be. Today his Coca-Cola Santa Clauses are part of their collective DNA.

The history of Coca-Cola advertisements. The drink was first served on May 8, 1886. Two weeks later, they had their first ad in an Atlanta newspaper. So advertising was a very early part of their history. Advertising was always one of the key things that helped to make Coke a successful product.

For the first 13 years, Coca-Cola was only available at the soda fountain. It wasn’t until 1899 that they started bottling it. So there were 13 years when the soda fountain was the only place you could get a Coke. In fact, it wasn’t until the late 1920s before bottling overtook the fountain business in terms of the number of gallons that they served to consumers.

The biggest change in advertising, obviously, is that today so much of it is electronic. It’s radio, television, the Internet, and websites. That’s probably another reason why the collectibles arena is so strong for Coca-Cola—they’re simply not doing the same kind of advertising. They don’t produce trays, calendars, posters, and print ads in the same way that they did even back in the 1950s. That era is behind them. They do very little print today because that’s not how consumers get their information.

THE PRICE SYSTEM

Surprisingly, the price of 6.5-ounce Coca-Cola was 5 cents (a nickel) from 1886 until 1959. Thus, we are documenting a nominal price rigidity that lasted more than 70 years! The case of Coca-Cola is particularly interesting because during the 70-year period there were substantial changes in the soft drink industry as well as two World Wars, the Great Depression, and numerous regulatory interventions and lawsuits, which led to substantial changes in the Coca- Cola market conditions. The nickel price of Coke, nevertheless, remained: “The prices system works so well, so efficiently, that we are not aware of it most of the time. We never realize how well it functions until it is prevented from functioning, and even then we seldom recognize the source of the trouble.” stated writers Milton and Rose Friedman (1990)

Economists Daniel Levy and Andrew Young identified a combination of three possible factors as an explanation for the Coca-Cola price rigidity. Two of these explanations are technology based, while the third has to do with a weird contract between the Company and its parent bottlers that encouraged retail price maintenance. First, an installed base of vending machines with nickel-only capability, and the evolution of technology that could accommodate multiple type coins and change making, imposed and important constraint on the ability of the Coca-Cola Company to adjust the Coke’s price. Second, at the 5¢ price per serving, the smallest price increase compatible with the consumer still using a single coin was a 100% jump to 10¢. A monetary transaction technology for smaller price adjustment while keeping consumer "inconvenience costs" low in terms of the number of coins needed for purchasing a bottle of Coca-Cola, was not available.

It turns out that the price of the Coca-Cola syrup to bottlers was fixed by a contract and, therefore, the third explanation offered is a simple model of monopoly under stages of processing with fixed upstream cost, which demonstrates a motive for adjusting only quantity given a constant syrup price. This explanation differs from the common fixed nominal contract story because it relies on an upstream price contract creating a retail price maintenance motive. The model can help explain the Coca-Cola price rigidity, but only until 1921, the year a new contract was signed with bottlers, which introduced flexibility in the Coca-Cola syrup pricing.

MISSION, VALUE AND VISION

The Coca Cola Company represents the largest corporation in the United States ; and is also the world`s largest beverage company , distributor , manufacturer , marketer of non-alcoholic beverage concentrates and syrups .

Globally Coca Cola, says it leads in sparkling , juice and juice drink, ready-to-drink-coffee and tea. It is No.2 in sport drinks and No. 3 in packaged water which includes plain bottled water and bulk water , categories where there is competition .

Coca Cola Company’s mission is: „to refresh the world, to inspire moments of optimism happiness and to create values and make a difference "Thus, this company wants to refresh the world in body , mind and spirit and to inspire great moments through their brands and actions . The organization prides itself on its "secret formula" of what sets it a part from its competition: internal and external teamwork, its ability to sustain safe and quality product, its strong leadership within the industry, its long lasting partnerships and its support of world events. The mission statement of the company is: „The Coca Cola company exists to benefit and refresh everyone who is touched by our business ".

In 1923 Robert Woodruff, former chairman of this company, stated that Coca Cola should always be „within an arms reach of desire". This mission has continued to drive the company’s marketing strategy, enabling Coca Cola to build a strong global presence in a world in which citizens are seeking to purchase leading brands. (mission )

At its 2020 Vision Meeting with analysts and journalists, Coca Cola laid out goals within the areas of profit, people, portfolio, partners, planet and productivity. Key priorities include doubling system revenue to $200 billion in 2020 from $95 billion in 2009. Their vision serves as the framework for their Roadmap and guides every aspect of their business by describing what they need to accomplish in order to continue achieving sustainable, quality growth. The Coca cola Company wants to create a great place to work where people are inspired to be the best they can be ; to bring to the world a portfolio of quality beverage brands that anticipate and satisfy people`s desires and needs ; to nurture a winning network of customers and suppliers because together they believe that they can create mutual value and to be a highly effective , lean and fast – moving organization ( productivity) . Regarding the Planet , they want to represent a responsible citizen that makes a difference by helping build and support sustainable communities . This company also wants to maximize long-term return to shareowners while being mindful of their responsibilities – profit. (vision)

Coca Cola has a strong brand identity in the global market and is one of the most respected brands in the world. For example, in 2007 this company ranked 4th in the list of top 10 powerful brands in the world as published by Millward Brown`s BrandZ Index. The brand value in that year was of 44.13 billion US dollars. Their values serve as a compass for their actions and describe their behavior in the world. Their values are : Be real ( integrity) ; leverage collective genius ( collaboration ) ; the courage to shape a better future ( leadership ) ; " If it is to be , it’s up to me " ( accountability ) ; committed in heart and mind ( passion ) ; as inclusive as our brands ( diversity ) and " What we do , we do well " ( quality ) . The values of Coca Cola company are based on integrity , collaboration , leadership , accountability , passion , diversity and quality and all these values , together with the teamwork will manage to remain a strong brand . (values)

ELEMENTS OF THE EXTERNAL AND INTERNAL ENVIRONMENT

External environment – micro and macro environment. The company’s microenvironment is consisted of the external environment components with which it enters in direct, permanent and powerful relations dictated by the necessity of achieving its goals:

Provisionary are organizations that provide resources of which the company has need; we may include here the provisionary of raw material, bottles (Stirom Bucuresti), lids, labels and advertising material (MEGA Press Holdings), IT equipments (Flamingo Computers), transportation (Daewoo, Dacia), etc… The number of provisionary is high due to the fact that the company owns production facilities in different locations of the country.

Providers of services are BRD (banking operations) and insurance companies (ING Nederland – full cover insurance).

Labor providers are the learning institutions (high schools, universities, etc…), the Labor Office and different labor recruitment companies.

The clients are physical and judicial (retail companies) persons.

The market and the competition: we will be concentrating on the first six top selling brands in 2002 (Coca Cola, Frutti Fresh, Fanta, American Cola, Pepsi and Sprite). These are the companies competing on the Romanian market:

Pepsi Company: the Pepsi Cola division based in Romania is bottling and selling refreshments well known throughout the world. This brand has made its entrance in Romania more than 25 years ago and is the sole company still competing today. Their range of products: Pepsi, Pepsi Light, Pepsi Max, Pepsi Twist, 7-Up, Mirinda.

European Drinks: owned by millionaires Ioan and Viorel Micula, the industrial complex in Rieni is concentrating the activity of two mixed Swedish – Romanian companies that became national leaders in producing and bottling refreshment drinks. Starting first as producers for the “1 + 6” drinks, the company has fast developed and now their range of products looks like this: Frutti Fresh (12 types) and American Cola.

As I said, we will concentrate on the first six top selling brands, with over 20 million liters in 2002; these are Coca Cola, Frutti Fresh, Fanta, American Cola, Pepsi, Sprite. At a high distance behind, we find the Rio brand (Rio – Bucovina SRL owned by Omar Hayssam), Kick (Quadgat), Leader (Lermalpol) and Bibco, which together had sales of 46 million liters.

In 2002 Coca Cola was situated first, though on some segments they have been overcame by European Drinks which has a much wider and well represented range of products.

In order to form a clearer image, we propose the following market segmentation:

“Cola” type refreshments: Coca Cola, Pepsi, and American Cola; for this segment, the battle has been won by coca Cola, the “perfect drink” for the segment, also sustained by the price/quality index and massive advertising.

Fruit flavored refreshments: Frutti Fresh and Fanta; we notice the clear advantage that the European Drinks company is holding in front of it’s competitors, because of the wide range of products they are offering (9 types).

Lemon flavored refreshments: for the year 2002 the figures wouldn’t allow a comparison between Sprite and Lemon Lime, but the competition seems to be interesting.

A contribution to the sales is made by the aspect of the products, the bottling conditions and the quantity offered. At this level, we can not distinguish any major differences: each of the 6 types can be found in plastic/glass bottles for “individual consumption” (0.25l, 0.5l), plastic bottles of 1l and 2l for the Coca Cola products, while the European Drinks company offers 1.5l and 2l plastic bottled. To mention that in the autumn of 2000, Coca Cola came back with its promotional campaign in which the drink was bottled in 1l returnable glass bottles making it cheaper this way.

An important factor that can influence sales is the price; in the table below, medium prices for the main competitors are presented:

The public organizations are: consumers’ organizations, Mass Media, state organizations (justice, financial).

The company’s macroenvironment is consisted of the whole factors that act on a long term basis and at a lower intensity on the company:

The demographic environment – the population living in the activity zones of the company; in this case – the population in Romania, because the company is selling in all areas of Romania, especially in highly populated zones.

The economic climate – the whole elements consisting the economic life of the space in which the company is acting; we can appreciate that the instability of the Romanian economic climate does not encourage the consumption of these products.

The technological climate – the components that are making the products; they are the most dynamic components of the company and Coca Cola has the latest technological additions, placing it on top of the market for this factor.

The cultural climate – the elements regarding the system of values, customs, traditions and standards that govern people’s status in the society. We can appreciate a positive cultural climate in Romania, the population is receptive.

Political climate – reflects the structure of the society, the social classes and their role in the society, the political factions and the relations between them, the political stability at internal, zonal and international level. The political climate in Romania is highly unstable.

Institutional climate – juridical regulations targeting directly or indirectly the company’s activity on the market. In Romania, the institutional climate is unstable, often changes in legislation occur.

Natural environment – we can appreciate positive conditions of relief and climate in Romania.

Internal environmen. The sum of elements that favorite the achievement of the company’s goals. Consisted of:

Land and natural resources owned by the company

Buildings: factories, warehouses, main headquarters and other locations

Equipment – the company owns modern equipment, from production to IT sector

Personnel – qualified personnel in proportion of 80%, while the number of employees with a University diploma is continuously growing; of the total number of employees, the highest heft is owned by young personnel ranging 30 years old.

To follow, we will analyze the general situation of Coca Cola HBC Romania.

SWOT ANALYSIS

The SWOT analysis means concluding the analysis of the internal and external environment. Here we separate important data collected during the marketing audit; the main goal is to identify opportunity and treats coming from outside, weak and powerful strategies applied by the company on the market.

Starting from the identification of the weak and powerful strategies from the current marketing campaign, we must plan the correction of the weak points, development of the powerful points in order for the company to be capable of avoiding treats and using the external environment with maximum efficiency

Combining the internal and the external elements of the company with the elements of the environment can determine the general strategic lines of marketing. The four possible choices:

SO strategies (strong points – opportunities) are aggressive strategies through which the company is maximizing the opportunities in the environment by using it’s strong points;

ST strategies (strong points – treats) using the company’s strong points in order to avoid treats from the environment;

WO strategies (weak points – opportunities) using the opportunities in the environment in order to rectify the weak points;

WT strategies (weak points – treats) have the main target of avoiding the treats from the environment, since the company has many weak points.

KEY SUCCESS FACTORS

The Coca-Cola Company is one of the largest, most successful and most widely recognized corporations in existence. Coca-Cola is a dominating force in the beverage industry and sets a very high standard of competition. Research shows that its trademark is recognized by over 94% of the world’s population. There are many factors contributing to Coca-Cola’s success, however, it is believed that their key success factors are Marketing, Innovation, and Globalization.

Marketing strategy. Their local marketing strategy enables Coca Cola to listen to all the voices around the world asking for beverages that span the entire spectrum of tastes and occasions. What people want in a beverage is a reflection of who they are, where they live, how they work and play and how they relax and recharge. They are determined not only to make great drinks but also to contribute to communities around the world through their commitments to education, health, wellness and diversity.

They focus on needs of their consumers, customers, franchise partners and execution in the marketplace every day. The major part of their marketing strategy is based on the fact that they get out into the market and listen, observe and learn.

Coca Cola is seen as one of the founding fathers of the modern day marketing model. They were among the pioneers of advertising techniques and styles used to capture an audience. Through its immense marketing campaigns, has developed an image that is reflected in what we think of when we buy Coca Cola and what we associate with drinking it . This image has been subconsciously installed in our brain by the advertising campaigns that show Coca Cola associated with “good times".

Being the biggest company in the soft drink industry, Coca Cola enjoys the largest market share. This company controls about 59% of the world market. This shows that the market of the company is geographically vast and it is controlling it with great success.

In 2002, the company grew their carbonated soft-drink business by nearly 250 million unit cases and generated record volumes. Because carbonated soft drinks are the largest growth segment within the nonalcoholic ready-to-drink beverage category measured by volume, that is why they are focusing more on this and they are continually increasing the pace because they know that accelerating this pace is crucial to their future success. Thus they are increasing their market day by day.

This strategy has worked a lot and it has helped them to become the World’s leading Soft Drink Company. The global unit sale of the Coca Cola Company is increasing from the last ten years.

So there is positive growth in the market of the Coca Cola Company. There is a worldwide volume increase by 4% with strong international growth of 5%. This is only due to the innovative marketing programmers, which has deepened the relationship of the customers and Coca Cola. The financial health and success of their bottling partners is a critical component of The Coca-Cola Company's ability to build and deliver leading brands.

In 2002, the company had worked with their bottlers to turn good intentions into reality by improving the system economics. The results in 2002 reflect this steadily improving and mutually constructive relationship between the Company and their bottling partners. The main reason behind this relationship is to continue realizing shared opportunities for growth, with closer coordination of operations including customer relationships, logistics and production.

According to the 2005 Annual Report the company sells beverage products in more than 200 countries. The report further states that of the more than 50 billion beverage servings of all types consumed worldwide every day, beverages bearing the trademarks owned by or licensed to Coca-Cola account for approximately 1.5 billion. Of these, beverages bearing the trademark "Coca-Cola" or "Coke" accounted for approximately 78% of the Company's total gallon sales.

Also according to the 2007 Annual Report, Coca-Cola had gallon sales distributed as follows:

37% in the United States;

43% in Mexico, Brazil, Japan and the People's Republic of China;

20% spread throughout the rest of the world.

In 2010 it was announced that Coca-Cola had become the first brand to top £1 billion in annual UK grocery sales.

Innovation. “Innovation is at the heart of everything we do. It is the driving force behind our 3,000 juices, waters, sports drinks, sparkling beverages, energy drinks, teas and coffees. It is the inspiration behind our environmentally-friendly packaging and refrigeration equipment. And it is what makes our cutting-edge marketing connect with consumers around the world every day. Innovation is what keeps us thirsting for success.” (The Coca-Cola Team)

The Coca-Cola company uses innovation in different departments of its business from their products, packaging techniques, equipments to market place.

Lucky people in Milan recently enjoyed a taste of "5,000 years of wisdom in a bottle," with the European launch of Jianchi, a new drink inspired by the ancient principles of traditional Chinese wisdom. Jianchi means "strong inner energy" in Chinese. The drink, made with fruit juices and plant extracts and available in three flavors, is inspired by ancient Chinese wisdom to enhance the inner balance.

Innovative equipments like interactive vending machine and climate friendly coolers make their name much stronger and increase clients trust and interest in purchasing their products. The video vender, which debuted at the 2008 Beijing Olympics, and is now in select Simon Malls throughout the United States, integrates a Samsung 46-inch LCD touch screen into the front of a Coca-Cola vending machine. The large-format display combined with Flash technology, motion graphics, high-definition video and Bluetooth capabilities for mobile downloads, creates a uniquely immersive experience for consumers. The video vender took home the Gold Lion in the Point of Sale category at the 2009 Cannes Lions International Advertising Festival. Therefore, they sustain that „The Coca-Cola Company is committed to sustainable refrigeration for its vending equipment. Our Climate Friendly Coolers use a CO2 refrigeration system and HFC-free insulation foam that reduce potential direct CO2 equivalent green house gas emissions by approximately 99%. They also contain an intelligent management system reducing energy use and indirect carbon emissions up to 35%. By using these technologies, our typical Climate Friendly Cooler will reduce direct and indirect carbon emissions by over 3 tons over the Cooler's lifetime.

The foodservice industry is an evolving world. Every day new restaurant concepts open, new items appear on the menu, and new consumers walk through the door with their own individual wants and expectations. As the leading beverage supplier for the foodservice industry, our customers turn to us to provide the products, programs, packaging and marketing support that are in tune with the ever-changing playing field of foodservice.

As a result, we've become an organization where innovation is paramount to our success. Through innovation, we have helped, and will continue to help, our customers maintain and grow their businesses, especially in uncertain economic times. Some of these innovations offer consumers more beverage choices; some tap into growing categories like tea, coffee and smoothies; and some provide custom beverages and food/beverage pairings.

Let's look at some recent examples:

Our new Bevariety beverage dispenser allows consumers to choose from 12 brands and multiple flavor shot options, totaling more than 50 different drink combinations, in the same footprint as the existing legacy dispenser.

Gold Peak variety tea dispenser is a self-service urn that offers four different tea flavors, offering choice and variety in the growing tea category.

Juan Valdez caféREALE system enables foodservice operators to serve hot, fresh cups of Colombian coffee on demand (no brewing required).

Our Minute Maid two- and four-valve juice dispenser delivers healthy beverage choices throughout the day, such as orange juice at breakfast and lemonade in the afternoon.

The Coca-Cola Brands with Meals website provides customers with suggested food and beverage pairings, and a tool to develop specialty beverages with chefs from the Culinary Institute of America.

In addition, we continue to develop beverages, programs and promotions to meet specific customer needs, such as the successful custom milkshake, crew training and marketing materials we recently created for one of our customers.

But innovation, like any change, comes with some inherent risk. As an organization, we've been able to learn from innovations that worked as well as those that didn't. Fortunately, many of our innovations have met with business success. But on the occasions they haven't, we've used that knowledge to do things a better way. We've learned from past experiences to introduce an innovation only when it's ready. Those experiences, and the lessons learned, have helped guide the launch of Bevariety and other innovations still in development.

If you think about it, a fountain innovation is what started this great Company. A simple combination of syrup mixed with sparkling water created what is now the No. 1 beverage company in the world. We know firsthand that innovation is critical to our – and our customers'– continued growth and success.

That's why innovation will keep our Company moving toward undisputed beverage leadership and our customers ahead of the competition. There are so many new things to offer our consumers and customers and revolutionary innovations still to come, highlighs the company.

Globalization. Today’s big business takes place on a global scale, and Coca-Cola is no exception. Technology is continually changing business, and these constant changes have been making it more feasible and profitable for businesses to expand their operations globally in order to serve all different types of diverse markets around the world. This global view is reflected in Coke’s recent “I’d like to teach the world to sing” commercial. Coca-Cola is taking advantage of the large revenue opportunities made possible by participating in a global market and now offers products in 200 countries around the world.

Some of the newest and famous Coca-Cola products spread all over the globe:

Coke is the most popular well known cola around the world, with a young spirit who are thirsty of getting the best from life. Coca-Cola is the experienced drink that quenches thirst and inspires the connection between the people who enjoy every single moment. Because only ice-cold Coca-Cola has the delicious taste that deeply refreshes the body, mind, and spirit.

Coca-Cola Light is a light beverage that allows to enjoy the authentic cola flavor without breaking your commitment of feeling well physical and emotionally, because only Coca-Cola Light combines the authentic cola flavor with zero calories. Good for body conscious to stay fit.

Sprite is the official drinks of NBA. Good For adolescents and young adults who are in process of establishing their own identity. Sprite is the only young drink that quenches your thirst and your wish of being authentic, because its honest and direct attitude is instinctively combined with its fresh and clear taste. Obey your thirst!

Fresca – Recommended for extreme teenage have more energy consuming life. Fresca is the light drink that best refreshes you physical and emotionally for its refreshing grapefruit taste and its fun, daring, and open attitude.

Coke Cherry – Enjoy the extraordinary of cherry and coke mixed. For out outgoing teens who love to have fun with lots of friends, Coke Cherry combines the bold, exhilarating taste of cherry with Coca Cola to add life to the party.

Coke Blak – Enjoy the aroma of Coca cola and Coffee mixed. Coke Blak is a blend of Coke and coffee essence, in a sleek aluminum contour bottle by British design firm Pearl fisher. Aimed at adults, the bottle’s graphics lend a sophisticated look to a company famous for its iconic red cans.

Fanta – Good For teenagers with passion to experiment life at its fullest, standing out from their group of friends. FANTA is the drink with fruit taste that amazes your senses and intensifies your everyday-funny-moments. Because only FANTA has the intense taste and sparkling colors that have a creative, fun, and spontaneous attitude.

Senzao made from Guarana, a fruit grows only in Brazil, A carbonated softdrinks with the spirit of Carnival and spirit of Brazilians. Good for youngsters who want to be themselves creating and showing their own style, Senzao is the light and the only drink with a Guarana taste that naturally un inhibits you filling up your body with energy and fortifying your spirit.

Beat – Good for adolescents who live life at its fullest, Beat is a cool drink that is part of the spontaneous and energetic intensity of the group, because its color, taste, caffeine and design combine its wish to live without limits.

Enjoy with Delaware Punch is the sweet that activates your imagination, creating an atmosphere of suspense and mystery because only Delaware Punch combine a deep color with an intense taste experience you cant forgot.

Ciel – Coca cola Mineral water version. This product is for balanced, optimist, and complete people who search equilibrium in life, Ciel is the purified and fresh water that helps you feel good with yourself because its mineral balance, achieved by the Coca-Cola Company, gives you the physical and mental balance that your body needs.

Powerade – Coca cola energy drink. This is for active young adults who always want to achieve more, Powerade is the sports drink that gives you the strength to perform better and the confidence to surpass your own limits, because it offers you the precise combination energy and hydration to maximize your body performance and it gives you a quick recovery. Good for Sport professionals that give extra energy long last.

The newest soda advertised by Coca Cola company. Coke Zero has no sugar less calorie soda, good for body figure conscious, stay in good shape. No sugar recommended for diabetes patient.

It takes a very forward-thinking company to create a whole new subsidiary, one whose sole existence is dedicated to mitigating the environmental footprint that is a byproduct of their manufacturing processes.  That is, however, exactly what Coca-Cola Enterprises (CCE) did.

In late 2007, CCE – the world’s largest bottler and distributor of Coca-Cola beverages – formed Coca-Cola Recycling to develop cost-efficient solutions for reclaiming used beverage containers and beverage packaging materials.  Their goal? To recycle 100 percent of the packaging materials generated by the Coca-Cola system in North America by the year 2020. Coca-Cola Recycling has more than 30 internal recycling centers at manufacturing facilities throughout North America.  These facilities collect pre-consumer waste, and each has a target to divert more than 90% of the waste in the facilities from landfills.  Everything from paper to cardboard to plastic to the strapping from the bailing is being recycled, and some facilities across the country have achieved rates of 99.85%.  Coca-Cola Recycling has also begun a joint venture with United Resources Recovery Center to form the world’s largest bottle-to-bottle recycling center in Spartanburg, SC, and other test sites in throughout the Southeast are being considered.  Coca-Cola Recycling is also doing some work with local MRFs (Material Recovery Facility).

Coca-Cola Recycling’s main focus, however, is education. In the sustainable community, this might sound crazy but John Burgess, the President and CEO of the company pointed out some staggering numbers. “Aluminum is the highest recycled beverage container in the US, but only 55% of it is recycled.” Plastics, in particular PET, at are a distant 27%. In fact, 70% of what is collected from curbside recycling programs is paper. So last year, Coca-Cola Recycling conducted 300 days of education. Most exciting is the direct benefits that have come to the local bottlers.

The focus of the education has been to prevent landfills from being crowded with recyclables. Based on current technology, there is a limit to how much recycled material can go in a “new” bottle so ensuring that the material gets recycled into other products is of critical importance for Burgess and Coca-Cola Recycling. Another challenge with using collecting recycled PET is that the bulk of what Americans recycle goes overseas to be used in manufacturing. So even if Coca-Cola Recycling could capture all of it for use in new bottles, there would be supply issues.

Coca-Cola Recycling is more interested in problem solving with local governments instead of influencing policy. A wise choice considering that the market is still changing. “Awareness about the need to recycle is still the key. We need a convenient way to do it. Everyone agrees it should happen but it must be easy to create an infrastructure to support it,” added Burgess.

CHAPTER III

ANALYSIS OF THE LOYALTY PROGRAM OFFERED BY COCA COLA AND THE LEVEL OF SATISFACTION OF THE COCA COLA CLIENTS

INTRODUCTION

I conducted this research in order to make an in-deepth research of the loyalty program offered by the Coca Cola Company. I have chosen to focus specifically on this company, as although it is the latest appeared on the Romanian coke market, due to its different approach in coke products provided and publicity campaigns has managed to conquer a substantial market share. In order to analyse what makes Coca Coladifferent from the rest, I have decided to do a comparative analysis of the level of customer satisfaction regarding the products, services and benefits received from the loyalty program offered by the coke provider.

First of all, I have chosen a representative sample of 166 clients that use Coca Cola. Then, I divided them into those having Coke every day and those using Coca Cola from day to day in order to highlight the differences between the two types of users.

After this, I wanted to see how much the respondents spend on Coca Cola products in order to see if they have the potential to became key-account clients. In order to do so, I have chose question 6 (What is the amount of your monthly Coke use?) and 7 (What is the monthly value Coke bought?) from the questionnaire.

Next, I analysed question8 (Are you familiar with the loyalty program offered by Coca Cola Company?) in order to see if customers are aware of the benefits offered to them if they remain loyal and refrain from brand-swiching. I wanted to test the response to this question so I also choose question 9 (What is the name of the loyalty program?) to se the real level of awareness of the customers.

Also, I chosed question 10 (What are the benefits you receive from the loyalty program?) and 11 (What were the benefits which you actually used in the last year?) to see what out of the provided benefits were effectively used.

Finally, I have analyzed their answers at the questions 13 to 23 in order to understand their opinion and determine the strong points and weaknesses of the company’s products and to find out their satisfaction towards different aspects of the loyalty program.

ANALYSIS OF THE LOYALTY PROGRAM OFFERED BY COCA COLA

I will now begin to analyze some of the issues regarding the loyalty programs that concern the Coca Cola customers, both regarding daily and from day to day users.

I will start by analyzing how much the customers spend on Coke and then I will pass to questions related to benefits from the loyalty program and issues related to that.

6. What is the amount of your monthly Coke achievement?

□ < 5 Euro □ 5-15 Euro □ 15-25 Euro □ 25-35 Euro □ > 35 Euro

My research confirmed myanticipation that due to their income level, the majority of users pay for their monthly Coke between 5 and 15 euros. In fact, over half of Coke users, more exactly 55% of those questioned, have spent between 5 and 15 Euro. Also, the fact that Coke achievements lower than 5 euros came second was expected. This is explained by the fact that currently Coca Cola offers the best price on the Romanian market.

What came as a surprise though was the fact that the percentage increased for the highest values of the product by 3%. The fact that 9% of the questioned admitted to pay over 35 euros on their Coke products shows that there is an opportunity in the market for Coca Cola to offer more expensive products. By concentrating on key account customers, Coca Cola’s revenue could increase as one ‘big client’ alone can contribute more to Coca Cola’s profit than several small ones. Coca Cola could thus resort to up-selling in order to convince clients to choose products that are more expensive but have also more features.

7. What is the monthly value of Coke bought?

As we can see in the table above, most people interviewed charge their Coke products, on a monthly basis, with 5 euros ranging up to 15 euros. Also many people bought with 5 euros or less, and less bought with 15 euros and more up to 35 euros. No one among those interview pays more than 35 euros to buy Coke products.

This situation shows that people don’t waist hours on hanging out, they spend a fair amount of money every month to cover their need regarding Coke products.

8. Are you familiar with the loyalty program offered?

□ Yes □ No

Answers of customers that have bought Coca Cola products on a daily basis

The result showed that there are many people that did not have information about the loyalty program, although the programs are designed to provide benefits to the consumer. 39% of interviewees admitted not to be aware of the existence of such a program while 61% pretended to be informed.

The finding is concerning given the fact that Coca Cola invests in its loyalty program in order to prevent brand-switching. Coca Colashould proceed to designing an advertisement campaign in order to promote its current products and to receive more benefits for the efforts made in providing facilities to its users.

Answers of day to day users:

According to the table and the chart presented above, we can see that most people that were asked about the loyalty program said that they are aware of the Coca Cola loyalty program. 66% answered positively, saying that they know there is a loyalty program Coca Cola offers. This means that people interested in the programs Coca Cola offers, in order to get best deals and subscribe to promotions and loyalty programs. The fact that most people know the loyalty program, means that Coca Cola does a good job at advertising and promoting it’s products, and whenever they have something new coming up on the market, they make sure their customers take advantage of it.

There are, of course, people who don’t know about the loyalty program Coca Cola offers, although they are it’s customers. We may identify reasons for this situation. Let’s say there are the people who work, adults who don’t have the time to bother with the loyalty programs, as they may be too concerned with their job and possible, family. As much as Coca Cola may advertise and be commercialized on TV, we may find people who don’t watch TV and as a consequence may not be aware and informed regarding the loyalty programs.

9. What is the name of the loyalty program?

Answers of customers that have buyed Coke products on a daily basis

The findings deepened the concern that not enough information concerning the loyalty programs reaches the end consumer. Out of those claiming to know about the loyalty program, only close to 41% mentioned the correct name and 10% simply stated “Loyalty Program Spotlight”. Another 8% showed to have some idea about what they have to do in order to benefit of the program, that is gather loyalty points, 5% of them consider the name to be the same as the name of their Coke product, while 3% mistaken the name with one of the benefits, promotional free bottles.

Answers of Coke day to day users

The chart and table above suggest the information on the awareness of the name of the loyalty program Coca Cola offers. Although we saw that 66% of the interviewed people were aware that a loyalty program exists, only 18% really recognized the name of the program and knew which in fact it was. 34% answered that did not know and most of them did not answer at all.

So, although is people are aware that a loyalty program exists they don’t know what is the name of it, what it offers and further details on it.

This situation should trigger some action from Coca Cola, as most of their customers don’t know what the loyalty program does. Marketing strategies should be set-up and implemented, in order to inform the customers about the advantages they may have due to the loyalty program, and find a way to make them more interested in what Coca Cola has to offer.

10. What are the benefits you receive from the loyalty program?

Answers of Coca Cola day to day users

As we can see in the table, most people interviewed said that, as a result of the loyalty program, they receive Coke bottles for free.

I consider the fact the customers are aware of the possibility to use these chances, is very good for Coca Cola. That means that they did a good job at promoting the thing with the free Coca Cola products. Also, if people beneficiate from this offer, it means they have good acces to the offer and Coca Cola products are worth to be bought.

Other benefits

In the previous table was mentioned that the customers have other benefits other than those mentioned. So, some of those interviewed said that they beneficiated of free travels from Coca Cola, also they got free cars, or got other free gadgets, meaning that they had the possibility to socialize more, due to Coca Cola loyalty programs.

I consider it to be good that among the ones interviewed by me, I found people who remembered to mention some other benefits I did not stress upon, although the number the persons who put down other benefits was very small. So, Coca Cola offers various benefits and does not stop, but continues to improve and develop strategies to attract more customers and keep the old ones satisfied.

11. What were the benefits which you actually used in the last year?

Free ipads

Free ipods

Free iphones

The possibility to travel for free

Different facilities offered by the company

Different facilities at the partner companies

Others (specify)

Answers of customers that have used Coca Cola products on a daily basis

Almost tree quarters of those questioned ticked the answer reffering to the free bottles. Ofering free Coca Cola products is a common practice among companies. In fact, as shown in the graph regarding the name of the loyalty program, many responders mistaken the name of the program with the beneficies offered. This could indicate that the free bottles is one of the most important benefit people want from their loyalty program, question that will be analysed in the section regarding the satisfaction of customers.

Close to half of the respondents also answered that they receive free gadgets. Among a quarter use their points for different facilities offered by the company. Finally, 18% benefit from facilities at other companies and only 5% have other benefits.

Answers of day to day Coca Cola products users

When it came about the benefits the customers received in the last year, most answered that they got free bottles Also, many of the interviewed people said that they beneficiated of free ipods and iphones.

So, analyzing by the results we can say that the most popular benefit of the loyalty program are the free bottles that Coca Cola gives away, of a normal basis.

Also, the offer with the free phones is very common. It seems that the clients are enthusiastic about getting discounts. This makes Coca Cola closer, more preoccupied with the clients, and makes them more pleased with their company.

A small percentage of those interviewed said they use other benefits and also few said that have benefits from the partner companies and from Coca Cola.

THE LEVEL OF SATISFACTION OF THE COCA COLA CLIENTS

In this section I will try to analyze whether the benefits offered trough customer loyalty programs have led to a subsequent increase in the general level of satisfaction of the Coca Cola clients. I feel that it is important to find out what is the perception of the customers as regard to the efforts made by the company. I have chosen to focus only on customers that have bouight Coca Cola products on a daily basis as they automatically have a higher degree of loyalty due to the fact that they can experience the products offered by Coca Cola for a long period of time.

At the question “Which is your level of satisfaction related to the products of Coca Cola Company?” the distribution of the answers of the persons was the following:

As we can see in the table above, the majority of the clients interviewed answered they are satisfied with the Coca Cola products. Also, many of them are very satisfied with the its products and few are rather satisfied. Few of them are unsatisfied or not sure but the trend of the answers shows that clients are satisfied with the products it offers so we can conclude that the company is generally considered to have products of a high quality. However, the company should try to maintain these high standards and improve even more the performance of its services in order to reach the highest level of quality desired by the clients.

At the question “ Which is your level of satisfaction towards the ratio quality/ price of your products?” the persons answered :

The majority of the clients of the company answered that they are satisfied and rather satisfied of the ratio quality price of the products. Many of them declare themselves very satisfied with this ratio and some of them are neither satisfied nor unsatisfied. Few of them are not satisfied with the price they have to pay for the quality of the products they are offered, considering that they pay a high price for the products they receive. Taking into account their answers we can conclude that Coca Cola offers its clients quite high quality services at affordable prices. However, the company should pay attention because the number of clients that are neither satisfied nor unsatisfied is significant and there is place for improvement

At the question “Which is your satisfaction related to the offer?” the persons answered:

The majority of the clients are satisfied with the offer of the company. Many of them confess to be rather satisfied or neither satisfied nor unsatisfied. Some of them are very satisfied and few are unsatisfied. The answers show that the offer of the company is good but it is not exactly what the clients are expecting, there are some aspects that should be modified and improved in order to achieve the clients’ total satisfaction.

At the question: “Which is your level of satisfaction related to the loyalty program of the company?” the distribution of the answers was the following:

The majority of the clients consider the loyalty program of the company to be good. However, there are many clients that confess to be neither satisfied nor unsatisfied with the program. Some of the clients are rather satisfied and very satisfied and few are unsatisfied. On the whole, the clients consider the program to be good and attractive but there is still a considerable amount that is not quite impressed by the features of the program enforced by Coca Cola. In order to maintain its clients and meet their specific needs it is essential for the company to pay greater attention to the design of the loyalty program and invest more to develop the desired appealing features.

At the question: “Which is your level of satisfaction related to the way fidelity is rewarded?” the distribution of answers was the following:

The answers given by the clients at this question is similar to the ones received at the previous question related to the loyalty program of the company. The general trend of the answers shows that the majority of the clients are satisfied with the way fidelity is rewarded but there are still many clients that are neither satisfied nor satisfied with this feature of the loyalty program. A considerable amount of the clients confess to be rather satisfied or very satisfied and there are few to be rather unsatisfied. There are very few clients that are very unsatisfied or not sure. The answers of the clients that have chosen prove that the way loyalty is rewarded is an attractive feature of the program but not an excellent one.

At the question “Which is your level of satisfaction related to the possibilities obtained through the loyalty program?” the distribution of the answers was the following:

The answers of the clients have shown that the majority of them are not quite convinced of the real benefits and possibilities offered by the loyalty program. Many of the clients are rather satisfied or satisfied and some of them are rather unsatisfied. The number of the clients that are really satisfied with the possibilities offered by the loyalty program is low and the number of the ones that are unsatisfied or really unsatisfied is similar. The ones that are not sure of the possibilities offered by the loyalty program is also significant. The company should develop promotion campaigns and come up with more ads in order to increase the awareness of the clients related to the features and possibilities of the loyalty program. However, the majority of the ones that have heard or used some of the possibilities offered by the loyalty program are in a neutral position, they are not really convinced of benefits. The program needs to be redesigned in order to meet the clients’ needs and expectations.

CONCLUSIONS

Good companies know that finding out what their customers think of the service they provide matters – and matters a lot. Feedback about whether or not expectations are being met is crucial for managers. To say that satisfied customers are the key to long-term business success may be a statement based on worthy research, but it is also a blindingly obvious one, as is the finding that organizations which have superior service quality are market leaders in terms of sales and long-term customer loyalty.

Knowing that is the easy bit. The hard bit is finding out just what your customers think, and the even harder part is trying to find out how their opinions match those of competitors’ customers. To make the problem even tougher, managers also have to be aware that customers tend to have different expectations for different experiences. For instance, they might have a different expectation of having a Starbuck’s coffee in a retail store than buying one at a gas station. If the experience at the gas station is good or bad, does the nature of the service encounter count as a plus or minus for the coffee company or the fuel station? Similarly, if you are served up a well-known branded snack on an airline, does the airline go up or down in the customer’s estimation depending on the snack – or vice versa? And if customers have different expectations of the quality of service they might get at bank than at a concession stand at a sports event, why?

It is a complicated subject and no wonder that there is no universally accepted method or measurement scale that exists. Indeed, the measurement of consumer behaviour and customer satisfaction is more exploratory in its development rather than a precise, exact science. Yet the importance of measurement of customer service is well-established in marketing and management literature. What is needed is a simple, fast and accurate way of assessing service satisfaction in a standardized manner both within and across industries that meets the needs of managers of the business units they control. G. Ronald Gilbert and Cleopatra Veloutsou say: “The use of measures that can be validly applied in a timely manner across stores representing a variety of industries could facilitate the improvement of a conglomerate of service outlets in commonly shared business locations such as neighbourhood shopping centers, business associations, and the like.”