Q3. Identify the key stakeholder groups and their specific expectations of the organisation with reference to corporate social responsibility (CSR) and describe how CCA strives to improve their social impact.
- Coca Cola Amatil Q3. Identify the key stakeholder groups and their specific expectations of the organisation with reference to corporate social responsibility (CSR) and describe how CCA strives to improve their social impact.
CASE STUDY
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Coca Cola Amatil (CCA) Bottled Water
When we hear the name Coca-Cola we might not instantly think of
water. However Coca-Cola Amatil's brand, Mount Franklin, is the
number-one brand of bottled water in Australia. In a market crowded
with hundreds of competitors, Mount Franklin and the Pump range of
products account for more than one-quarter of all bottled water sales in
Australia. Coca-Cola Amatil (CCA) is the local Coca-Cola licensee,
manufacturer and bottler operating in Australia, New Zealand, Fiji,
Indonesia and Papua New Guinea. Coca-Cola is continually striving for
growth in this Pacific region. A core objective of the company is to
become the supplier of choice for carbonated and non-carbonated
beverages. The company has also set a goal to expand in the health
and wellbeing segment, or market category.
The non-alcoholic drink market consists of different product categories,
the main ones being carbonated beverages (both sugared and sugarfree), water, sports drinks, energy drinks, juices and fruit drinks. Over the
past two decades the growth in the market share in Australia of diet
drinks, bottled waters, sports drinks, energy and lifestyle drinks and
other sugar-free, non-alcoholic drinks has been steadily increasing. One
of the most consistent growth segments in the non-alcoholic beverage
market is bottled water. This growth is particularly evident among
women under 40 years of age, and with younger, 'urban' consumers. In
particular sales of bottled water have increased markedly over the last
ten years while the proportional share of carbonated sugared drinks has
been falling. In Australia in 2006, CCA enjoyed a 58 percent market
share of carbonated beverages through its key brands, Coke, Fanta and
Sprite, a 27 percent market share in the water category via Mount
Franklin and Pump and a 57 percent market share in the Sports
category, primarily through Powerade.
As little as 20 years ago the market share of bottled water in Australia
was almost zero. Save for a few imported high-end European brands
and some sales of sparkling mineral water, Australian consumers
purchased very little bottled water. This was in stark contrast to the highconsuming Europeans and even US water consumers. However a
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fundamental lifestyle shift has occurred over this time which has seen
this product category grow tremendously. Despite this, Australia still lags
behind most of the developed world in the consumption of bottled
waters, but organisations such as Coca-Cola have extended their
product lines to create opportunities for increased sales.
The main reasons for this change can be summarised as:
1. A shift towards a healthier lifestyle including a move away from
carbonated, sugared-drinks
2. A growing demand for kilojoule-free beverage options, especially
when accompanying lighter meals such as bought lunches
3. The willingness of consumers to pay for the convenience of
cleaner, more natural and ready-to-drink chilled water
4. The convenience offered by innovative packaging options such as
squirt and pump-tops and bottle designs.
Australians now consume more than 20 litres of bottled water per person
each year and the market is growing more than 10 percent a year.
However local market consumption is still well below many European
countries, with many consuming more than 100 litres annually per
capita, such as Italy which consumed 184 litres per capita. The US
consumed over 90 litres per capita.
Ongoing growth in health and wellbeing products has impacted on CocaCola's revenue sources. In 2001, CCA earned 95 percent of its revenue
from carbonated beverages and only 5 percent from noncarbonated
sources. By 2007, this had changed to 67 percent and 23 percent
respectively, (the other 10 percent now coming from food products
following the acquisition of SPC Ardmona).
There is a general feeling within the community and especially by
younger females (the target demographic for bottled water) that drinking
water is a positive act both for oneself and for the community at large.
Coca-Cola Amatil's ongoing marketing of Mount Franklin has established
brand value associated with this positive behaviour. Drinking water is a
cleansing and purifying act that results in positive consequences. The
purchase and consumption of Mount Franklin water promotes a sense of
wellbeing. This association demonstrates how the positioning of a
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product, in this case Mount Franklin as Australia's number one choice for
bottled water, represents the values of its consumers. In order to
continue to grow the brand Coca-Cola Amatil will strive to "…build an
emotional connection with our consumers, giving them a compelling
reason to choose Mount Franklin above all else."
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