Tuesday, April 12, 2011
Africa: Coke's Last Frontier
Many companies are looking to Africa as their next opportunity for growth in the world market. One company that has been aggressively pursuing the African market is Coca-Cola. Read the article, Africa: Coke's Last Frontier, from Bloomberg BusinessWeek. What do you think about Coca-Cola's African strategy? What other U.S. companies do you think could be successful in Africa? What do you see as potential problems for U.S. companies wanting to market their products in Africa? Post your thoughts to the blog no later than the beginning of class on Thursday, April 14th.
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Coca Cola's African strategy seems like it could work in the long run. What concerns me about Coca Cola's strategy is that they are assuming that Africa's economy is going to be able to perform well and be a 'stable government.' A quote from the article says," Poverty, war, and shortages of fresh water plague the region and make commerce extremely difficult, especially for a company whose chief product is discretionary and offers no nutritional value aside from calories. Political instability complicates the building and supplying of factories, and transportation is notoriously unreliable." This quote sums up all of my worries about looking to Africa to expand their market.
ReplyDeleteOne thing I do like about marketing in Africa is the use of reusable bottles. It's a great idea in order to keep costs down for both those buying Coke and for Coca Cola providing products. I believe that if Coca Cola could survive in Africa that Pepsi definitely could too! One advantage that Coca-Cola has in Africa is that Pepsi hasn't already consumed there market like they have in other countries! Overall, I think this is a risky decision made that could potentially have a great return.
The Coca-Cola African strategy makes sense as far as a new market, since the United States market is not increasing much since the past 20 years have gone by. Selling the product to little vendors instead of the rights to huge corporations doesn't make sense in the long run because there are no contracts for these shops to sell. They can stop selling whenever they want and put the product wherever they want in the store. It was mentioned in the article that the Fanta is in the middle of the holder and Cola was on the bottom. This to me makes me feel as if the product is not going to be seen as easily.
ReplyDeleteAny large American beverage company would do well in Africa as long as they have the distribution process of handling business out there. I think anheuser busch would do good in Africa because the beer choices must not change very often there, and anheuser busch offers plenty of choices that might not be available there.They have the large scale operations to market a country such as Africa. A potential problem of a U.S. company wanting to market their product in Africa could be the thought of ethics such as do their products offend any culture present there.
As far as the Coca-Cola African stragedy goes, I believe it could possibly go somewhere in the future. It mentions in the article that it IS the largest employer on the continent, which makes is more likely to expand with the U.S. contibuting. There are, however, a few problems I see coming out of the new market they have planned. Marketing their produts in Africa doesn't necessarily mean that it's going to help them and their government out. They seem to have many problems going on especially poverty and they would have to take a lot of time and effort to help out the factories in order to make sure business is going well. I believe any other U.S. company could be successful in Africa they just have to make sure they take the appropiate actions do to so.
ReplyDeleteI think Coke has a logical plan by expanding its market to Africa. I see a problem with it being popular for people buying. No one needs coke to survive and many of Africas countries are so poor they do not have clean drinking water. In order for coke to really expland its market I think it should think about selling its dasani water at a lower cost. This way it shows good ethics along with slowly expanding its market.
ReplyDeleteI think any business that is about helping the enviroment or showing good ethics can work with africa. The reason is that alot of that continent is poor and by expanding there business to people with no money will not help them. I am not saying that all of Africa is poor but if businesses come in and bank on expanding there products to all of Africa, if it does not help everyone there will not be a huge amount of profit.
I think introducing and marketing Coke in Africa is a smart, but somewhat risky, business move. Coke is confident in that Africa will develope into a large market, much like Latin America did. Coke is using the same approach in Africa that was successful in Latin America. Coke is the largest employer there and they are investing in some of the communities they serve. If they can divert some of their profits into helping the infrastructure, then success will soon follow. Immediate problems for companies expanding into Africa are political in nature. The political unrest could cause many unforeseen problems. With the shortage of water, I believe water suppliers would do well in Africa. As one person stated, she drinks coke not for the taste, but because she is thirsty. Bottled water would do well in that market. Maybe coke would do better to present their bottled water as the primary product, and coke as secondary.
ReplyDeleteCoca Cola strategy to market in Africa is brillant. It's a big continent, we only see the bad parts of Africa by the way so we can't assume that it would not be a good place to market. As for the other companies, Subway would be a great company, they had an ad about Jerry running the NYC marathon and had people from Ghana running getting in shape by eating his subs. They have already made a name there I think they should continue. Some problems that may face Coca Cola is who exactly in Africa they want to market to first. It's a big continent they need to pick the city with the highest wealth and start there. Also being able to establish there taste, many people from Africa may not be custom to soda, so it may be hard for them to get people to like something they have never tried.
ReplyDeleteIntroducing Coke to the African market is a smart business move; however one of the things that Coke should keep in mind is that this group of people don't necessarily have as much disposable income. Therefore, they may give up getting a Coke to something that they actually need. I think that Campbell's products would do well in this area. Since there is a shortage of food and water here, Campbell's produces affordable food which would be ideal for this group.
ReplyDeleteI think it’s a good idea. If no one has claimed an area of the globe to market their product, why not give it a try. However, Africa seems like a very hard country to enter into marketing wise due to large amounts of poverty. I’m not completely sure what other companies would strive in Africa. New companies would have to design their product to be cheap and serve a necessary purpose in daily life in order to prosper. The only example I can think of would be some form of water purification or sewage treatment company. These types of companies would do well because of the lack of necessary utilities in the area. Spreading business to Africa may not turn out as companies plan. The lack of disposable income in many areas does not leave residents with extra money to spend on unnecessary products or entertainment. Jobs would have to be available in the area first before products could be realistically sold. Lets’ be real…if someone can’t even afford to put clothes on their back, a roof over their head, or food in their stomach, what makes companies think they want to buy a Coke.
ReplyDeleteI feel like what coke is doing in Africa is working for them. They are continuing to increase their sales as they spread across the continent. I think that their strategy is slowing moving forward but they are moving forward. I feel like Deer Park or any other bottled water company would succeed quite well in Africa. I feel like a big setback could be the lack of money in some parts of Africa and the possibility that their government would feel about US companies being in their country. The government would most likely be the biggest problem.
ReplyDeleteAfter reading the article I think Coca Cola's strategy in Africa is smart and legal, but sort of unethical at the same time. It's smart because it could earn such profit, but unethical because the African people don't necessarily need Coke products being served down their throat, they need the necessaries, which are water and food. Some other companies that I think will be profitable in Africa are any type of water or energy drinks (Vitamin Water and Gatorade) because liquid is such an essential in Africa. Once this is introduced than food companies can start coming over. Some potential problems that I see from U.S. companies wanting to market their products in Africa, is lack of demand, not enough wealth distribution and health care of the people. Overall I think trying to make it in Africa is going to be extremely hard, but very profitable if it pays off.
ReplyDeleteCoca-Cola’s approach to market and sell Coca-Cola in Africa is a good start, but with the cultural background and living style some problems could arise. I think Coca-Cola needs to keep in mind of Africa’s customs, cultural value, and living style. Areas like Nairobi aren’t wealthy areas and I think Coca-Cola’s approach to market here is odd because they barely can have access to clean water. However, not having access to clean water could promote their product as a need verses a want. Majority of the U.S. companies can market their product as long as they create that need verses a want. The priorities and the living style of Africa varies greatly from anywhere else and Coca-Cola needs to keep that in mind. In the end I believe Coca-Cola will be very successful, as long as they approach it correctly. Culture, customs, and lifestyles will always be a factor when U.S. companies market their products to anywhere because every culture is so different and they need to change marketing according to that particular culture in order to be successful.
ReplyDeleteI think that Coca-Cola's marketing strategy used in Africa is showing that it is successful now, however down the road it is something that may not stay as stable as it is now. I think companies like Gatorade or Powerade would do well in the situation that Coca-Cola is in because those drinks are actually somewhat good for you to consume, unlike sodas which are mostly bad. I think something that the US companies could run into troubles with is when they get too comforatble and don't keep up with cultural differences.
ReplyDeleteI think Coca-Cola placing there product in Africa is a great idea, but I feel it's also risky. There government isn't that stable and so on. I think Coca-cola would do a lot better and continue on down the road if they place their bottle water over there as their number one product instead of the soda. There is a shortage of water in Africa, so bringing water could only benefit them.
ReplyDeleteAfrica is the last place where businesses go to market their products. Because so many of the countries in Africa are not as technologically advanced or do not have the economic stability to invest in products like these makes Africa not a popular place for international brands like Coca Cola to market. Africa needs so many other things besides soda right now. Many of the continents countries are living under political unrest, poverty, and famine. There are some developing countries like Egypt, South Africa, and Ethiopia that are attempting to catch up to the rest of the world, but many of the African countries are not in that same boat. It will be hard for Coca Cola to be able to segment their target market because of the so many different languages, tribes, and cultures in Africa. It will be interesting to see what type of marketing strategy they will come up with to reach consumers in those countries.
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