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Loyalty Programs Of Coke Refocus On Customer Satisfaction

Paper Type: Free Essay Subject: Marketing
Wordcount: 2944 words Published: 27th Apr 2017

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Coca-Cola, the corporation nourishing the global community with the world’s largest selling soft drink concentrates since 1886, returned to India in 1993 after a 16 year hiatus, giving new thumbs up to the Indian soft drink market. In the same year, the Company took over ownership of the nation’s top soft-drink brand and bottling network. It’s no wonder our brands have assumed an iconic status in the minds of the world’s consumers.

Coca-Cola India is among the country’s top international investors, having invested more than US$ 1 billion in India in the first decade, and further pledged another US$100 million in 2003 for its operations.

Sunil Mithas (2005): This evaluates the effect on customer knowledge and customer satisfaction of customer relationship management (CRM) . The use of CRM application is positively associated with improved customer knowledge and improved customer satisfaction showed by an analysis of archival data for a cross-section of U.S. this article also shows that gains in customer knowledge are enhanced when firms share their customer-related information with their supply chain partners.

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Andres Kusik (2006): the studies influence of various factors on customer loyalty. The list of most important factors affecting loyalty is dependent on the level of loyalty of customers this is insisted by the main theory of this study. In Estonia, for testing the theory a LOGIT method was used on the sample of survey data about 1000 customers of the Coca Cola Company. The results bring out that there are 4 factors affecting customer loyalty that are playing different role on the different levels of customer loyalty. These factors are:

A Smidths (2006): in this study “whether loyalty programs really raise behavioral loyalty “is the pressing issue in marketing. With the loyalty program, a much higher share-of-wallet i.e. income is with loyalty program members as compared to non-members, but this does not necessarily imply that loyalty programs are effective. Loyal customers may select themselves to become members in order to benefit from the program. We estimate models for both the membership decision (using instrumental variables) and for the effect of membership on share-of-wallet, since program membership derives internally. This model act as measure of behavioral loyalty. We find a small positive effect of loyalty program on share-of -wallet. This effect is 7 times smaller than it is suggested by naïve model which ignores the endogeneity i.e. originating internally of program membership. The predictive validity of the proposed or former model is much better then naïve model. Our results show that creating loyalty program membership is crucial step to raise the share-of-wallet and we provide the guidelines about how to achieve this.

Vincet Oneymah (2006): The strategic process of shaping the interactions between a company and its customers with the goal of maximizing current and lifetime value of customers for the company as well as maximizing satisfaction for customers is customer relationship management (CRM). CRM is a complex set of activities that together form the basis for a sustainable and hard-to-imitate competitive advantage: the customer – focused organization. Strategic and implementation issues are addressed by this conference from a cross-functional perspective.

Suman Lodh (2007): its analyze that the relationships among the functional units along a value chain varies. These relationships are generally well defined in the organizational chart. The performance of one functional group can be defined for other group along the same value chain as ‘outputs’ of the former. Internal customer is the functional group receiving the output. Therefore, satisfaction of these customers is the focal point of the organization. The key factor that affects satisfaction level are highlighted in this paper by analyzing the data collected within a organization and further suggests the potential area to be considered to maintain the high level of satisfaction.

Jacob Kristiansen (2007): it’s give the relationship between customer satisfaction, customer loyalty and the future business potential of existing customers.

Bruce Mac Williams (2007): in this analyze that Money back guarantees (MBGs) are offered by major retailers in the USA under which they return money to dissatisfied customers. Low price guarantees (LPGs) is also offered by these retailers under which they promise to refund price differences if buyers i.e. customers find a lower price after purchase. Some researchers have argued that LPGs should be legally challenged because they limit price competition and contribute to higher prices. This study suggests and shows that adding an LPG to MBG can improve economic efficiency as both losses of retailer and inconvenience or trouble costs of customer from excessive returns are reduced. This reduction serves as a argument against those who believe that LPG should be prohibited.

Racob Jacobs (2009): As a starting point of analysis we make use of the efficient markets theories. We outline an approach for accessing financial value-relevance of marketing measures. By investing the association between information contained in the American customer satisfaction index (ACSI) customer satisfaction measures and stock market performance we illustrate the approach. Our findings differs from previous research , previous approach follow methodological approach which do not include nesting other models , incorporates a number of efficient market considerations are not also included. The ACSI metric (measures) provides statistically significant incremental value-relevance to accounting measures only for firms in the computer sector. For other sectors i.e. the majority of firms in the sample , unpredictable changes in satisfaction do not provide statistically significant incremental information to accounting measures in explaining stock returns.



Coke has begun to move away from national programs to local activities that are crucial to specific customer interests. the company collaborates with individual retailers on marketing projects that are intended to have intangible effects than , for example , a discount offer in the weekly newspaper.

Coke’s current joint efforts with retailers are focused on family and friends. The promotions during joint sitting in the house like football match because this is an activity in which friends and family get together.


Coca-cola co. is running a mobile campaign via the CHACHA mobile answer service to generate interest in its loyalty program and coke zero soft drink.

The soft drinks giant is one of CHACHA’s first advertisers. CHACHA has been charged with enabling a conversational relationship between coca cola and the millions of users of its answer service.

Users can call 1-800-2CHACHA or type text questions to CHACHA (242242) on mobile phones and receive answers within minutes. Users can ask question related to any field any problem, they can even ask the different schemes and loyalty programs running in the company. This program really attracts the customers.


Coca cola company changes their product prices according to the season . Summer is supposed to be a good season for beverage industry, so in winter they reduce their prices to maintain their sales and profit.


Cards are given by the company to the customers at opening of new product or with simply purchase made by the customer. When the customer totally scratches the card then he/she gets the rewards. The rewards can be reduction in price on purchase, getting some points, getting smaller product etc


Coca cola launched coke zone as its reward scheme. The Carlson marketing – the lead agency on ‘coke zone ‘- designed the new site. Its main aim is to build brand loyalty across its portfolio of drinks and it has worked with partners in the music, fashion, entertainment to renovate the site. So that more and user visit the site and also find other features also like music.


The company also promotes sporting activities which include financial assistance to hold these activities and therefore this has created a connection with the consumers,. These promotions have created a positive feeling toward the coca cola company and this has contributed to the high consumer loyalty the company enjoys. For instance,

Coca cola launched a competition for the 72 clubs of the football league – it was called “win a player”. This allowed fans to place 1 vote per day for their beloved club with 1 entry being chosen at random earnibg$250,000 for the club.

But in 2007 this competition changed to “buy a player “. This competition allowed fans to buy a bottle of coca cola zero or coca cola and submit the code on the wrapper on the coca cola website (www.coca-colafootball.co.uk) . this code could earn anything from 50p to $100,000 for a club of their choice .

This competition was favored over the old “win a player” competition as it allowed all clubs to win some money.


Consumer drinking coke will be rewarded with millions of ‘happy prizes’ on the site as part of its ongoing “open happiness “ad push. The prizes that are offered at the site is of random nature. Any consumer can get any prize


The, technology platform enable all the of the companies brand to deliver interactive content direct to consumers through websites, email, mobile channels. As a result, consumers were developing separate relationships with each brand. To gain customer few new features or benefits could be provided to them .the consumer might receive a diet coke health tips newsletter and an email coupon offer for their next purchase.


Coca cola has gone through a number of different advertising slogans in its long history , including “coke is it ” , ” things go better with coke ” , “it’s real thing ” etc.

The song “I’d like to buy the world a coke “with popular singing group new seekers had created a great impact on the viewers or consumers.

As well as the creation of a “real ” theme song , there will also be the launch of coke FM , radio spots featuring a variety of new artists.


On some special occasion like holi, the company try a new campaign with brand ambassador Genelia D Souza. The company applied this campaign on the brand “fanta” . as a part campaign , the company will roll out special holi themed gift packs and special PET bottles with fanta-holi hai! As signature. The company new theme on the occasion does really affect the customer at this time



Coupons certificate that gives buyers a saving when they purchase a specified product. The company gives coupons in various schemes during some occasion. The company provides schemes like some discount, or free product etc.


The company when introduce new product or do any modification in the existing product then provides a sample of it to their customer. By this company evaluates whether prefer the product or change in product or not. The company sometimes provides the sample to the retailers or at the shops or even provide door to door.


Offer to refund part of the purchase price of a product to consumers who send a “proof of purchase” to the manufacturer.


Good offered either free or at low cost as an incentive to buy a product.



Display and demonstration that takes place at the point of purchase or sale.

Contests, Sweepstakes & Games:

Promotional events that give consumers the change to win something, Such as cash, trips or goods etc


The company has shaken up the Indian carbonated drinks market greatly, giving the consumers the pleasure of world-class drinks to fill up their hydration, refreshment and nutrition needs.

The company for their more growth from year to year launches and introduces many loyalty programs in the market. These loyalty programs namely are: mycokerewards, card program , coca cola zero , coke zone , sporting activities , pepsistuff.com , scratch card etc . all these programs are introduces and originated by the company to have impact on customers , to more and more attract the consumers towards the brand. In all the loyalty programs or in promotion schemes, the company some customer retention tools. The coca cola have also these tools. The tools are : sample , coupon , price pack , cash refund , competition , contests , advertising etc.these tools are adopted by the coca cola to effect the sales of the product.

The brand development needs some strategy to be followed. the brand development strategy of coca cola comprised redesigning of its brand development policies and techniques to keep up with the changing mindset of its customers. Earlier, we observe that this brand believed in the following:

Afford ability



However, this brand development strategy of coca cola was re worked to stress on the following:

Price value


The company has a mission ahead to be on top position in the market with providing a good quality of beverages to the customer. Coca cola have great value for consumers , customers , bottlers , and communities. The coca cola company creates value by executing comprehensive business strategy guided by six key beliefs :

Consumer demand drives everything coca cola do.

Brand coca cola is the core business

Serve consumers a broad selection of the non alcoholic ready to drink beverages they want to drink throughout the day.

Be the best marketers in the world

Think and act locally

Lead as a model corporate citizen.

Every company has certain strengths with which the company grows. Similarly we analyses that the coca cola have certain strengths which the company to grow more than other brands in beverages industry. These strengths are:

Most recognized brand name in the world

Our analysis shows that coca cola is the largest consumer brand name in the world. Coca cola is now in a position where it does not have to spend as heavily on creating a brand image since it is a very established product.

Consumer loyalty

Due to the high caffeine level and the distinct taste and brand image , the customer loyalty for coke is very high . coke is perceived as the most premium product within the cola industry.

Largest market share in the soft drinks market

Coca cola has the largest market share in the soft drinks industry. as a result of this popularity coke is able to generate high profits which it is able to spend on advertising and product development for the purpose of increasing sales i.e. customers.

We analyses that the coca cola is brand which makes customer as a priority , tries to satisfy its customer and thus customer become loyal to the brand.


The coca cola company products, brand loyalty and loyalty programs and how the company has achieved loyalty among its customers worldwide , some of the factors discussed include promotional activities , advertising , position of the company in the market and product differentiation by the coca cola company . Importance of market information is that it helps in decision making and also in choosing the best strategy to increase market size and loyalty.

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The company wants to provide refreshment to a large number of audiences i.e. customers which satisfy their demands. The company has to defeat other brands in the market .for this to achieve the coca cola launches various loyalty programs like mycokerewards, online mycokerewards etc. Coca cola adopted unique strategy, schemes and loyalty programs which created a history effect on the company to profit and sales. Different loyalty programs are launched by company to create and enhance the customer’s loyalty towards the brand. The company enjoys benefits with all these programs and promotion. The benefits are like : coca cola become most wanted drink in the market , with various schemes and programs like mycokerewdard do really attract the customer , coca cola also introduces new rinks under coke brand like sprite , fanta , dew which have different flavors and tastes which ultimately attract the different range of customer , as brand loyalty increases the company enjoys profit and sales , coca cola now has made a image which cannot be made easily by others the brand is popularly identified and preferable drink in younger age group. The company invests more and more in loyalty programs, promotion, advertisement because the main focus is customer for the company. The customer loyalty should be maintained by the company by making new, creative loyaltyprograms.


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