Coca Cola essay example
As mentioned before, Coca-Cola will have to deal extensively with government agencies in making Vitango a success in Botswana. However, as has also been mentioned, the government in Botswana is unlikely to be very receptive to any reasoning from the management of Coca-Cola who are after all out to maximize shareholder wealth. Therefore, the company will have to deal with the government through an intermediary which is GAIN in this case.
The Global Alliance of Improved Nutrition can be considered a marketing intermediary in this respect inasmuch as its involvement is critical in persuading the government in Botswana to promote Vitango among its people. The Botswana government will listen to what GAIN has to say because GAIN is a non-profit organization. Once Gain has managed to convince the government of the effectiveness of launching Vitango, Coca-Cola will be well on its way to recouping the investment it made in developing the product.
GAIN has a lot of experience in this regard. The organization specializes in lowering the trade barriers in the area of products that address the problems of malnutrition and also in arranging public relations events that promote the uses of these products. When it comes to introducing Vitango in Botswana, public relations are the only promotional tools that are likely to have any effect. As mentioned before, a third world country like Botswana is unlikely to have many educated people.
At the very least, the segment of the population which is most suffering from the problems of malnutrition are unlikely to have the education necessary to read newspaper ads and they are also unlikely to have the money with which to purchase television sets. Therefore free-for-all public relations events are the ones to use in a socio-economic scenario such as this. However the government of a third world country like Botswana is unlikely to have the resources with which to bankroll expensive public relations campaigns. GAIN can certainly help in this regard and in the process play the role of a marketing intermediary for Vitango.
Initially Coca-Cola was marketing Vitango in the powdered form. In using the product in its powdered form, the consumers in Botswana would have to source the water on their own. However clean water is scarce in third world countries. Therefore, mixing polluted water with powdered Vitango could lead to harmful results which could lead to a tremendous backlash for Coca-Cola as far as its reputation is concerned. Therefore suppliers of water in Botswana are a major consideration for Vitango if it is to be sold in the powdered form. Coca-Cola does not have to worry about competition in this respect.
It is a true that P&G are developing similar fortified foods. But they are being marketed in other countries. So competition at the time of the case study is not a micro-environmental factor for Coca-Cola as far as Vitango is concerned. Marketing’s impact on individual customers Coca-Cola will have to charge high prices for Vitango. The company does not have a choice in the matter as a project of this kind is very expensive. As has been mentioned before, the company does have years and years of experience in developing foods of this sort. But that still does not guarantee that the product will be right straight away.
Passing government inspection is a huge issue in the industry and that adds an additional number of years to the already long development period of Vitango. Therefore the company will have to invest a lot and the fact that this is for-profit company makes it paramount for Coca-Cola to attach a price tag which will bring about a positive net present value for the whole thing in a reasonable period of time. However even reasonably pricing Vitango is not enough for the dismal socio-economic scenario that exists in Botswana. By the same token, the government does not have enough resources either with which to lend a helping hand in this regard.
If the government did have enough money, it could have lowered the trade barriers and arranged some sort of subsidies which would enable Coca-Cola to finance a lower price and at the same time get the money back. However the government in Boswana is simply not in a position to do it. Nor is it convinced that it should do so at the word of a for-profit company. Therefore, Coca-Cola will have to go on its own when it comes to pricing Vitango in Botswana. The effect on the individual consumers however will be anything but beneficial. They are already living in economically straitened circumstances.
The best they can manage is to get an adequate supply of cornmeal and rice at the very least. To expect them to purchase Vitango even at a low price is not sound marketing sense. However if GAIN and the Botswana government can persuade them that Vitango is essential they will of course have to purchase it one way or the other. What specifically will be the effects on the individual consumer are difficult to say. However, at the very least, the effect will be a negative one. That is certain. Deceptive practices, intentionally or unintentionally, might also be germane to the issue.
A quick reading of the case does not seem to indicate that even in the long term Coca-Cola’s motives in developing Vitango are anything but social and ethical. But there are other issues that GAIN and Coca-Cola might not be aware of such as the issue of obesity and over-reliance on fortified foods. According to the case, Vitango has high sugar, salt and fat content. That might solve the malnutrition problem in the short term but if it becomes a popular drink, then the customers will be repeat purchasing it over a long period of time at the end of which signs of obesity might start to become a problem.
Therefore customers might be lured by Coca-Cola and GAIN to try out Vitango for their kids’ nutrition problems, in the long term however, these two organizations might be condemning kids in Botswana to obesity in the future. In that respect they are certainly engaged in deceptive practices to the long term health detriment of their customers. More importantly, Vitango is very much a short term solution in the sense that it teaches the customers nothing about why they are suffering from malnutrition and what courses of action are available to them to remedy the situation.
Granted the people in Botswana might not even have the money to seek medical advice. But there are some things that they can do on their own to alleviate the problem of malnutrition. Given massive public relations campaigns financed by GAIN in combination with Coca Cola, the customers will have become dependent on the easy solution of drinking Vitango possibly to the long term loss of their physical and mental well-being, not to mention the extent to which they will be financially set back as a result of having to purchase the product repeatedly. This is not to say that the people in Boswana are better off without Vitango.
The point is that they will certainly have improved the health of their children by making them drink Vitango. However this is not a practice that should continue long term. They need to find out that that the causes of malnutrition are nothing but a few vitamin deficiencies and they have the ability to fix these problems on their own simply by growing some fruits and vegetables in their backyard. This will not only solve the financial problems of having to buy an expensive product like Vitango repeatedly, but this will also make the people of Botswana immune to the possible long term side-effects of consuming Vitango for too long.
Poor service to disadvantaged customers is also an issue as Vitango is now being marketed in the powdered form. That means that the water which will be used to prepare the drink will have to come from the public sources in Botswana. Sanitation in the third world is in a dire state world wide. The situation is no different in Botswana. Possibly one of the most important factors contributing to rampant malnutrition in Botswana is the poor quality of the drinking water. If that same drinking water is mixed with Vitango, then the whole point of the fortified foods will have been lost.
Therefore, if Coca Cola is selling Vitango in the powdered form, it raises the question as to what sort of service it is selling to an unknowing public. Planned obsolescence is an issue with Vitango. Coca-Cola and GAIN will have to educate the customers in Botswana about how long they should continue to use Vitango before throwing it away. The formula is necessary for only a certain period of time after which parents will have to discourage their kids from drinking it any longer.
In this case planned obsolescence is operating in reverse. The industry practice is that companies engineer their products in a way which makes those products break down after a certain period of time so that customers have to go shopping again. This is most observable in the computer industry where even a sophisticated system today becomes obsolete over a short period of time because the manufacturing company has decided to discontinue manufacturing hardware related to that system and started a new line of operation.
The same principle applies in Vitango. However in this case, kids’ health are at risk because if their parents continue using Vitango past expiry dates or past the point when their kids have outgrown the need for a product like Vitango, then harmful side effects will be the consequence. Therefore, both Coca- Cola and GAIN need to spread information about the obsolescence effect of Vitango.