Coca Cola In Egypts Market Marketing Essay

“ The Coca-Cola Company is established in 1886 by the druggist Dr. John Pemberton in Atlanta, in the beginning it was sold as a medical specialty. The Company registered its trade grade in March 27, 1944. Nowadays it is spread in more than 200 states with over 500 trade names and 3,300 drink merchandises. These merchandises include scintillating drinks and still drinks, such as Waterss, juice drinks, teas, javas, athleticss drinks and energy drinks. The top five NARTD ( non alcoholic ready to imbibe ) are: Coca-Cola, Diet Coke, Sprite and Fanta. The figure of employees worldwide is 92,400 and headquarter is in Atlanta. The Coca-Cola Company is listed on the New York Stock Exchange under the heart symbol KO. The Coca-Cola system operates on a local graduated table in every state where they do concern. It does non have or command most of its bottling spouses, its via medias the company and the bottling spouses. The Company has more than 300 bottlers worldwide. Coca-Cola industries and sells dressed ores, drink bases and sirups through its dressed ore works to bottlers ; it does own the trade names and is responsible for trade name selling enterprises. The bottling Companies industry, bundle, ware and administer the finished branded drinks to Coca-Cola clients and peddling spouses, who so sell the merchandises to the consumers.1

This was an overview on the Global Coca-Cola Company. Let ‘s expression to Coca-Cola Egypt as the paper is analyzing the company in Egypt. Coca-Cola exists since 1942 and has two bottlers TCCBCE and El Nile Beverage Company. The bottling operation ownership for The Coca-Cola Bottling Company ( TCCBCE ) is: 51 % TCCBCE and 49 % Coca-Cola Company as for El Nile it ‘s 100 % owned by El Nile. The full system has 11,494 full clip employees.

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1-coca-cola one-year study

The Strategic concern units that the company operates in Egypt are carbonated soft drinks,

energy drinks and mineral H2O.

The company recorded grosss of $ 78,526 million during the fiscal twelvemonth ended December 2009 with an addition of 15 % compared to 2008. The addition of 12 % in grosss was coming from CSD ( carbonated soft drinks ) section and 3 % from the Mineral H2O section. However there is a lessening in the CSD growing rate by 3 % in 2009 which was 15.6 % ( FY 07-08 ) versus 12 % ( FY 08-09 ) the lessening is due to alter in the consumer life manner became healthier witting.

Egypt juice Industry analysis

The non carbonated soft drinks are considerate to hold a immense potency within the juice sector. Egypt juice industry is a moneymaking market with a value of $ / $ 216mm, it is turning from 11-22 % over the last eight old ages. The industry gross revenues are 44 mm unit instances in 2009. The juice section expected to turn at 11 % Compound Annual Growth Rate ( CAGR ) in 2012 while the Carbonated Soft Drinks ( CSD ) section is expected to turn at 4.7 % Compound Annual Growth Rate ( CAGR ) in 2012. Based on retail audits done by the AC Nielsen and Protrac analyzing the Egyptian drink market the consequence shows that the consumer life manner is altering and became healthier witting and they are switching to the drinks that are healthier. The CSD market is shriveling and other markets are developing. “ Juice ” is a moneymaking merchandise class that has been turning systematically over the past 8 old ages. The juice industry depends on farms that cultivate fruits. The different juice type:

“ Fruit-Flavored Drink ” is a 100 % dressed ore, “ Juice Drinks ” it contain up to 24 % Juice, “ Nectar ” contains 25 % up to 99 % juice and merchandise called “ 100 % juice ” is a merchandise of 100 % juice.

PESTEL Analysis for Juice in Egyptian market

PESTEL analysis is a concern measuring tool that helps to understand the external milieus and market as such the place, possible and way for a concern. PESTEL stands for Political factors e.g. alterations in authorities policies, Economic factors relate to alterations in the wider economic system such as rises in life criterions or the general degree of demand, Social factors explain the purchasing forms and purchasing attitude, Technologic factors is the alterations in invention potency, Environmental factors include the conditions and clime alteration and Legal factors major legal alterations that have affected houses ‘ where they operate. All these factors are used to measure the market.

Political factor

Egypt ‘s political status is unafraid and a wholly democratic democracy is projected within the close hereafter. Egypt was ruled by many states before set uping freedom and today it is run by a multi-party semi-presidential system where the supervisory power is separated between the president and the premier curate, although in pattern the president tends to keep a larger portion of the power. Egypt ‘s political system soon receives much needed fiscal support from the US which is assisting to develop the state into a new epoch of optimism. Egypt increased inward investing, making a rich investing ambiance.

Economic factor

The economic environment in Egypt is ready for investing. Egypt ‘s economic freedom mark is 59.0, doing its economic system the 94th freest in the 2010 Index. 3.2 % addition in gross domestic merchandise ( GDP ) Per capita to make $ 2,161. Per capita ingestion of non alcoholic ready to imbibe ( NARTD ) will increase by 30 % stretch in 2020. Growth is extremely driven by stills ( juices and H2O ) . Juice is the fastest turning class with Compound Annual Growth Rate ( CAGR ) addition of 11 % driving growing of non alcoholic ready to imbibe NARTD.

Social factor

Key factors behind the forecast addition of juice market in Egypt is the new consumer life style penchants for healthier drinks and panic of fleshiness which resulted a deceleration growing rates for gross revenues of carbonated soft drinks ( CSD ) market. Despite the fact the carbonated soft drinks ( CSD ) market has remained profitable. One of the chief feature of Egyptian life manner is the importance of household and friendly relationships. Egyptians are tremendously sociables and one of the importances of their life manner is the relaxation clip which they spend with friends or households at place, cafe or eating houses. An of import portion of Egyptian occupants is the eating behaviour. The last five old ages the java stores spread really fast in day-to-day life particularly in immature grownups and adolescent coevals. The ingestion of juice is correlated to individual age. Population is 81 Million out of which 50 % are under 20 old ages. 50 % of the population is the prospective juice mark ( childs and adolescents ) because 64 % of ready to imbibe juice volumes comes from 8-29 year olds – skewed towards 8-11 years old.

Technology factor

The juice industry benefits of a immense engineering. It ‘s for the interest of both concern and the consumer when new engineerings guide to better quality merchandises. The industry depends on the quality of fruits that are turning in the state. Juice shapers divided their production into two different signifiers pasteurized and natural juice. Technology helps to retain the belongingss of fruit the same as its original gustatory sensation. Juice shelf life is little due to desert that can go on based on environmental clime. To widen the shelf life, juice is pasteurized on the same method as milk which for decennaries can be considered a “ in-between land ” between natural and ultra-pasteurized. The spirit of milk is affected by pasteurisation much more strongly than fruit juices tend to be.

Ecological factors

Juice Industry is depending on agribusiness and fruit growing wherever it spread. It is necessary to recognize that fruit turning relies on agricultural land, H2O and suited clime. Fertilizers used in agribusiness can be a beginning of environmental pollution. Major alteration in clime happening due to planetary heating can impact the agriculture industry. This leads to a demand of integrating of husbandmans into an agro environmental plan that needs a support and maintaining production processs in conformity with environmental protection and sustainability of natural procedure.

Legal factors

Legal issues involve Torahs in juice production regulated by Egyptian authorities which prohibits usage of returnable glass bottles. Such ordinance negatively affects juice industry as returnable glass bottles are more profitable.

Porter five forces theoretical account for juice sector

Porter ‘s Five Forces Model was developed by Michael E. Porter in his book “ Competitive Scheme ” : Techniques for Analyzing Industries and Rivals in 1980. The celebrated book he wrote in his mid-thirtiess became an international best marketer, published in 19 linguistic communications and re-printed approaching 60 times. Since that clip Porter ‘s Model became an of import tool aid for analysing an organisations industry construction in strategic procedures. Porter has identified five competitory forces that shape every industry and every market. These forces determine the strength of competition and hence the profitableness and attraction of an industry and reply the inquiry of “ What are the cardinal factors that can find a concern success? ” The five forces are described as follows:

Menace of new entrants

Dickering power

of clients


competition within

the industry

Dickering power

of providers

Menace of


Recklies Management Project GmbH

( figure 1 )

Dickering Power of Customers

Menace of New Entrants

Menace of Substitutes

Competitive Rivalry between Existing houses

In combination with a PESTEL-Analysis, which reveals drivers for alteration in an industry, Five Forces Analysis can uncover penetrations about the possible hereafter attraction of the industry. Porter ‘s Model is utile tools to find possible alterations of competitory forces.

Dickering power of providers

Dickering power of providers is described by how much power providers have on you in a specific industry or market. A concern or a bring forthing industry requires inputs to give a concluding merchandise such as natural stuffs, labour, constituent and other supplies. This lead to a relationship between purchaser and provider provide natural stuffs used in the production. Supplier is called powerful when he has influence on the bring forthing industry. Let ‘s focal point on providers in Egyptian juice industry and how much they have power act uponing the production of the concluding juice merchandise. Juice industry depends on many providers ; sugar, stuff required in packaging, preservative, spirit and a cardinal participant in juice industry is the juice dressed ore provider. Juice supply concatenation starts signifier farm that depend on fruit seasonality. The harvest of any fruit varies from clip to clip in measure and quality based on clime alterations and natural crises. This is the chief grounds that change in juice dressed ore handiness monetary value and quality. Juice dressed ore providers are divided in three classs. Suppliers that produce dressed ore and utilize them in the production of concluding juice merchandise, others that produce dressed ore and utilize portion of their production to do a concluding juice merchandise and sell the remainder and providers that sell all their production of juice dressed ore. Its worth to advert that a large portion of the juice dressed ore is exported outside Egypt to other states and one of the chief states who import from Egypt are the Gulf states. Therefore the provider power is considerate high because the market is dominated by a few big providers instead than fragmented beginning of supply, supplier client are fragmented, there is a possibility for provider to increase dressed ore juice monetary values and there is no replacement to the juice dressed ore. To cut down supplier power in juice industry it is of import to cognize what is the influence of outside factors to be taken in consideration to happen a topographic point in the market. Juice manufacturers make a partnership with providers that produce juice dressed ore to cut down the power of providers.

Dickering power of clients

Dickering power of clients is how much dialogue power the clients have and how much power he has over you in a specific industry or market, intending how much client can enforce

force per unit area in border and volume. When purchaser has a strong economic power the relationship to the bring forthing industry is near to what economic expert call monopsony, a market where there is many providers and one purchaser. In such instance your ability to capture a high proportion of the value created will diminish, and you will gain lower net income.

Having a few big purchasers will hold a important purchase to negociate monetary value and others footings because you will be afraid losing an of import purchaser and volume which puts you in a weak place. Buyers have besides power on you if they can bring forth the merchandise themselves and they can play providers against each others. However there is a few big purchasers and they buy in a big measures. Meanwhile there are many little purchasers that you have greater control over them because they buy a little part of your gross revenues.

Dickering power of consumer in the juice industry, there are three type of purchaser which is the direct consumer, the retail mercantile establishments and the jobbers. 75 % of direct consumers for juice newly prepare juice at place or they buy it from a field juice stores. In this state of affairs the chief competition of those purchasers is any apparent juice stores or fresh fruit that can replace the juice merchandise. The juice manufacturer can cut down this bargaining by offering a differentiated merchandise and make trueness to the trade name that offers higher value as the juice newly prepared its shelf life is limited.

The Jobbers are few in figure therefore their bargaining power of consumer is important due to the figure of juice merchandise that they do hold on the retails shelf and how do they show the merchandise to the consumer. The retails mercantile establishments are many in Numberss and they do hold a large figure of merchandises nevertheless the bargaining power of jobbers and retail mercantile establishments are non important if the consumers are loyal to the trade name.

By and large the juice industry in Egypt, purchasers has more power than the enterprisers due to the fact that consumer have different option to amusement, figure of retail mercantile establishments that have a several merchandise on ego. Therefore the distinction, making value to the merchandise and trueness to the trade name is really of import.

Menace of a new entrant

Menace of a new entrant is how easy a rival can come in into your industry or market? New rivals deterrences alterations in the market environment in footings of addition market portions, force per unit area to cut down the monetary values which have an impact on net income and impact on client trueness at any clip. In term of reaction and accommodation the bing participants have a force per unit area on them. Menace of new entrant depends on barrier to come in industry or market and how the bing participant will respond with a new rival. New entrant barrier is economic systems of graduated table, the experience that the bing participants have which lead to be advantage, high fixed assets cost and strong distribution channel of bing participants. The bing of these barriers protects the bing participant from the menace of new entrant. In add-on the existent participants can respond by cut downing monetary value or organizing a partnership to cut down the menace of a new entrant.

Menace of new entrant is considerate in Egyptian juice industry due to high capital cost and cognition required. Based on this normally the menace of new entrant is higher for the companies that are involved in fabricating so service. It ‘s non ever negative that you do hold a competition near to you. Some industry promote a new entrant specially if they do hold already experience in a similar field and they do hold a large portion of their capital already established such as the mill which merely need the production line and holding their ain distribution channel.

Menace of a replacements merchandises

Menace of replacements merchandises, we give term replacements to a merchandise that a purchaser can replace a concern merchandise with another 1. What merchandises your purchaser can replace your merchandise with? It exists when a purchaser can replace your merchandise with another merchandise for the same intent with a lower monetary value. In such instance they can pull a important proportion of the market and have impact on gross revenues and volume of the bing participants. The replacement ‘s merchandise besides applies on complementary merchandise. The chief factors that can impact replacement ‘s merchandise are client displacement to another similar merchandise based on lower monetary value because your merchandise does n’t give different value from the rivals one and client have a small trueness to your merchandise hence, the menace of replacement is considerable. A replacement menace can be reduced by distinguishing your merchandise than the other bing in market and make trueness to the trade name through selling enterprise ( Television, wireless, out-of-doorss advertisement… etc ) .

Following the new unrecorded manners tendency, consumers became healthier witting make the menace of replacement ‘s merchandises low in juice industry. The ingestion of carbonated soft drinks decreased. The utility merchandise in this industry can be a healthy merchandise such as fruit juice drink, fruit flavored drink, powdered fruit drinks can replace the juice dressed ore drink and it can besides be substituted by milk, fruit base yoghurt and mineral or bottled H2O. Assortment of replacements merchandises are available at the market consumer have an unfastened picks which they can take whatever suits their demands. However they are non existent replacement ‘s merchandises because juice is drunk in different clip and occasions.

Competition between bing houses

Competition is the competition between bing houses in an industry. In certain industry the competition is high and has an impact on net income as you can non put your ain monetary value and it can do the net income to zero. This force might be the most of import in Poters five forces as it describe the strength between bing participants. The competition is called high when the rivals on a same industry have similar merchandises with no distinction and they compete in term of monetary value. The market participants are same in mass with comparable schemes. Having high barrier to go out the market and when the market is increasing easy or shriveling this makes the competition a considerable force. To diminish the competition between bing participants you should avoid monetary value competition, distinguish your merchandise and schemes, focal point on a different sector and avoid high capacity production.

The Egyptian juice market is a disconnected market with many participants. Four companies have 50 % of the market the remainder are less than 5 % each. The market is non merely splited between the participants in footings of market portion but besides shrinked by merchandises.

This means that there is a good opportunity to come in the market. However, PepsiCo the major competitory to Coca-Cola is fixing new juice launch during the current twelvemonth. PepsiCo made a joint venture with Almarai Company ( highly successful dairy nutrients company in the Middle East ) and have acquired Beyti good known trade name name in Egypt. It produces a assortment of high-quality dairy and juice. They are large in size with a really strong distribution channel nevertheless the consumer has a jurisprudence trueness to specific trade name. This state of affairs will do competition in the close hereafter.

Egypt juice market analysis

Let ‘s travel more deep and look into the market analysis to be able to find the juice market sucess. The end is to be able to happen out the market attractivness and understand more about the chance and menaces of the sector.

Key success factors

Key success factors depend on two inquiries which need to be analyzed

What does the consumer privation? ( Here we need to analyse the market )

How to confront the competition? ( Competition analysis )

In Egypt juice sector to do a success from the consumer point:

Egyptians does n’t do a great difference between unreal distilled fruit drink and fruit juice they are comparing merchandises in footings of monetary value. Therefore you need to hold a competitory monetary value or to construct a distinction scheme to enable you to put your monetary value.

Invention is one of cardinal success factors that need to be present to derive consumer. The consumer has a jurisprudence trueness to brands this makes the merchandise handiness in market really of import. The handiness plus the invention in bundles and merchandise scope that suits the new consumer life manners will assist to construct trueness to the trade name.

For the competition, you need to be different in merchandise image, have a strong distribution channel to be able to place yourself in the market and to get down to vie.

Demand Analysis

Demand characteristic

Following the new consumer life manner, the juice market has a high demand based on questionnaire done by MEMRB bureau to the Coca-Cola Egypt company here is the result.

Those that consume juice merchandise on monthly bases do n’t believe it is as strong on “ Thirst extinction ” , “ Good for you ” , “ Great tasting ” and reviewing ” . However, an betterment on all steps for juice, frequent ingestion coming from hebdomadal consumers. Consumer that thinks that they are ever making new thinks shows growing from0 % to 7 % in 2008-2009 while the carbonated soft drinks shows 3 % addition in 2009 and the 1 that things that uice gives energy shows an betterment from 5 % to 9 % for twelvemonth 2008-2009 while the carbonated soft drinks shows a lessening from -6 % to -11 % for twelvemonth 2008-2009.

The market survey besides shows that the Egyptian consume 60 % of juice drink out of place in cafe , stores or kiosks this is the antonym of the carbonated soft drinks per centum. 25 % are consumed in forenoon occasions from 9-12am other than breakfast. Noshing the biggest juncture came with 36 % it stats from 3-4pm.


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Internal resources from the Coca-cola Egypt

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