Case Study: Coca-Cola in Japan

Haydee Lola Lopez Perez & Kasey Navita PhiferInternational Marketing - Mr. Kristal

B.A. International BusinessUniversity of Applied Science, Berlin

13 November 2012www.knavita.com

Outline

1. Company History2. Japanese Market Entry3. Adaptation to Japanese Market4. Product Line5. Target Groups & Segmentation6. Distribution7. Marketing Strategy8. Conclusion & Questions

• First came as an alcoholic beverage in 1885, called French Wine Cola

• French Wine Cola was a rip-off of Vin Mariani, marketed in Europe since 1863 containing alcohol & cocaine (ca. 6 mg per oz./30ml)

• French Wine Cola was a favorite drink of Jules Verne, Auguste Rodin, Alexandre Dumas, Thomas Edison, and H. G. Wells.

• Pope Leo XIII himself awarded Vin Mariani the Gold Medal of the Vatican.

• Cocaine was considered very effective against asthma, hay fever, sinusitis, toothaches, indigestion, fatigue, and impotence.

• William A. Hammond, former Surgeon General of the United States, suggested it as a cure for masturbation, as well as other ailments such as excessive mental exertion and hysteria

• French Wine Cola didn’t take off in the US• Cocaine Cola was invented in 1886 by Dr. John Slyth Pemberton, a

pharmacist in Atlanta, Georgia• Meant to be a “drug to help people feel better” & quickly sold out

of the pharmacy where he worked• At the same time, people were realizing the addictive effects of

cocaine: an American investigation done in 1896 concluded that "the danger of [cocaine’s] addiction outweighs the little efficacy attributed to the remedy“.

• Mississippi was the first state (in 1901) to require a doctor‘s prescription for the sale of cocaine

• Coca-Cola discovered a way to remove most of the cocaine in 1904, the beverage only contained molecular traces of cocaine. (complete removal was achieved in 1929.)

• In 1914 US Congress passed the Harrison act, which tightly regulated the distribution and sale of cocaine.

Coca-Cola in Japan

• First entered Japan in 1957(WWII ended in 1945)

• Asian financial crises began in July 1997• Coca-cola took this as an opportunity to buy up

other competitors & expand into different areas of beverage industry

• In 2005, international sales accounted for almost 80 percent of the company's operating income and more than 70 percent of beverage volume.

Today‘s Japanese Beverage Market

• Mature, highly competitive market with strong innovation• Japanese market has been developing and changing

quickly in the past few decades• Every market player is racing for the next fad and the

newest „big thing“• For companies in Japan, it‘s normal to have an endless

product line and brand extensions• Japanese consumer wants a wide variety of choices, is

also fickle, and wants to purchase products from a company with similar values (see pic)

Japanese Market & Segmentation

• high context culture• message rest heavily with cultural cues: age, gender,

balance of power• group oriented with similar expectations and experiences• quality over affordability• more likely to drink beverage with lower sugar content,

vitamin water or lower in calories• "shin hatsubai"• In 2005, international sales accounted for almost 80

percent of the company's operating income and more than 70 percent of beverage volume.

Sources1. „Coca-Cola secret recipe revealed? It's the real thing, says

radio host”. Guardian UK. Accessed 11 Nov 2012. http://www.guardian.co.uk/business/2011/feb/16/coca-cola-secret-recipe-discovered

2. „Fascinate: Your 7 Triggers to Persuasion and Captivation“. Sally Hogshead. HarperCollins, 2010.

3. „When and why was cocaine removed from Coca-Cola?” Stephen Janowsky. Accessed 11 Nov 2012. http://www.helium.com/items/1135114-coca-cola-cocaine-pemberton-candler

4. „Case 8: The Coca-Cola Company in Japan”. Global Marketing Management. Kotabe & Helsen. 2007.