Xiaojing Ling MANAGING CUSTOMER RELATIONSHIP Case study Coca-Cola Company Thesis CENTRIA UNIVERSITY OF APPLIED SCIENCES Degree Programme in Business Management April 2017 ABSTRACT Centria University of Applied Sciences Date Author Kokkola- Pietarsaari April 2017 Xiaojing Ling Degree programme Degree programme in Business Management Name of thesis MANAGING CUSTOMER RELATIONSHIP Case study Coca-Cola Company Instructor Pages Birgitta Niemi 43 Supervisor Birgitta Niemi The Coca-Cola Company is an American multinational beverage corporation, a manufacturer, retailer and marketer of non-alcoholic beverage concentrates and syrups with its headquarter in Atlanta, Georgia. This thesis is aimed to affirm the superiority of the Coca-Cola Company and to find out its shortcomings in managing customer relationships based on studying the customer relationship management strategy for Coca-Cola Company and discussing the comparison between Coca-Cola and Pepsi Cola, then put forward the corresponding strategies to solve the problems. The topic is mainly divided into two parts. In the theoretical part, the definition、development process and main contents of customer relationship management are stated. In the empirical part, the author studied the customer relationship management strategy research of Coca-Cola in depth, by contrast with Pepsi Cola, find out the insufficiency and its reason of the Coca-Cola Co in the customer relationship management, then put forward the improvement strategy of the customer relationship management of Coca-Cola Company. As a result of the thesis, a more effective relationship management strategy for Coca-Cola was worked out to achieve a win-win between Coca-Cola and customers, meanwhile help Coca-Cola Co to adhere to the customer as the center, cultivate loyal customers and provide the best quality service. In addition, the thesis also emphasized the importance of strengthening customer relationship management. Key words Coca-Cola, customer relationship management, strategy, Pepsi Cola, comparison ABSTRACT CONTENTS 1 INTRODUCTION................................................................................................................................ 1 2 CUSTOMER RELATIONSHIP MANAGEMENT .......................................................................... 2 2.1 Creating value for customers ........................................................................................................ 3 2.2 Customer retention and development .......................................................................................... 4 2.3 Models of CRM............................................................................................................................... 5 2.4 The connotation of CRM ............................................................................................................... 7 3 CASE COMPANY: PRESENTATION OF COCA-COLA CO...................................................... 9 3.1 Company overview ......................................................................................................................... 9 3.2 Marketing analysis ....................................................................................................................... 10 3.2.1 The SWOT analysis of Coca-Cola Co. .............................................................................. 11 3.2.2 The Porter’s five forces analysis of Coca-Cola Co. .......................................................... 12 3.2.3 The PESTEL of Coca-Cola Co. .......................................................................................... 15 3.3 Competitor: Pepsi Co. .................................................................................................................. 18 4 COCA-COLA CUSTOMER RELATIONSHIP MANAGEMENT STRATEGY ANALYSIS . 21 4.1 Existing strategies of Coca-Cola Company................................................................................ 21 4.2 Comparison between Coca-Cola and Pepsi-Cola ...................................................................... 25 4.2.1 Customer relationship maintenance strategies.................................................................. 25 4.2.2 CRM guiding ideology ......................................................................................................... 26 4.3 Problems and reasons ................................................................................................................. 27 5 IMPROVEMENT STRATEGIES FOR COCA-COLA ................................................................ 29 5.1 Customer acquisition strategies .................................................................................................. 29 5.1.1 Sales promotion .................................................................................................................... 29 5.1.2 Advertising ............................................................................................................................ 30 5.1.3 Merchandising ...................................................................................................................... 31 5.2 Customer retention strategies ..................................................................................................... 31 5.2.1 Creating customer delight ................................................................................................... 32 5.2.2 Adding customer-perceived value....................................................................................... 33 5.2.3 Doing customer research ..................................................................................................... 34 5.2.4 Customer development ........................................................................................................ 36 6 CONCLUSION .................................................................................................................................. 38 REFERENCES...................................................................................................................................... 39 GRAPHS GRAPH 1. Coca-Cola spending on supplier diversity program ............................................................. 14 GRAPH 2. Beverage consumption in the US ......................................................................................... 17 GRAPH 3. Leading Global Soft Drink Brands....................................................................................... 21 FIGURES FIGURE 1. The QCi customer management model ................................................................................. 6 FIGURE 2. The CRM value chain............................................................................................................ 7 FIGURE 3. Top 20 most valuable global brands 2015........................................................................... 10 FIGURE 4. Porter’s Five Forces Model ................................................................................................. 12 FIGURE 5. The PESTEL Model ............................................................................................................ 16 FIGURE 6. Customer delight through product quality........................................................................... 32 PICTURES PICTURE 1. The map of Coca-Cola’s location...................................................................................... 22 PICTURE 2. My coke rewards website (home page) ............................................................................. 34 PICTURE 3. My coke rewards website (registration page) ................................................................... 34 TABLES TABLE 1. SWOT analysis of Coca-Cola Co. ........................................................................................ 11 TABLE 2. PORTER’s five forces of Coca-Cola Co. ............................................................................. 12 TABLE 3. Coca Cola vs. Pepsi Co main indicators. .............................................................................. 19 TABLE 4. List of Available flavors of Coca-Cola ................................................................................ 24 TABLE 5. Comparison of CRM between Coca-Cola and Pepsi-Cola ................................................... 28 1 1 INTRODUCTION With the progress of society and development of science and technology, change rapidly, especially the development of information technology has gone beyond our imagination. The development of information technology has also promoted the great progress of customer relationship management (CRM). Customer relationship management has been playing an increasingly important role in the process of economic development. Nowadays, many companies pay more and more attention to customer relationship management. The fundamental reason for companies wanting to build relationships with customers is economic. Companies generate better results when they manage their customer base in order to identify, acquire, satisfy and retain profitable customers. These are key objectives of many customer relationship management strategies (Buttle 2009, 31.) If the company's marketing is grain, then the customer management is a granary. If grain is not managed, sorted, replaced, it will become worthless waste even if it was put in the granary. Coca-Cola Company is the world's largest beverage company, refreshing consumers with more than 500 sparkling and still brands and more than 3,800 beverage choices.