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CCHBC Eurasia — company description
In this case we have chosen Coca-Cola company – the largest beverage producer and distributor in Russia- for e-commerce analysis because nowadays the company is rapidly developing towards selling its product using e-commerce.
First of all, to get a clear picture of the company we’ve selected to analize, let’s refer to its history and description.
CCHBC’s business consists of producing, selling and distributing non-alcoholic beverages. In 2006, it sold over 1.7 billion unit cases, generating net sales revenue of €5.6 billion. The company’s product portfolio consists of 147 carbonated soft drinks, or CSDs and 461 non-carbonated soft drinks, or non-CSDs across the water, juice and juice drinks, energy drinks, sports drinks, and ready-to-drink iced tea and coffee categories. In 2006, CSDs accounted for 67% and non-CSDs accounted for 33% of our sales volume. CCHBC offers its products in a range of package sizes as it strives to achieve profitable volume growth across different retail channels and consumption occasions.
Coca-Cola Hellenic operates in three business segments, each comprised of countries with similar levels of eceonomic growth prospects:
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Established Countries: Italy (northern and central), Greece, the Republic of Ireland, Northern Ireland, Austria, Switzerland and Cyprus.
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Developing Countries: Poland, Hungary, the Czech Republic, the Slovak Republic, Croatia, Lithuania, Estonia, Latvia and Slovenia.
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Emerging Countries: Nigeria, Russia, Romania, Bulgaria, Ukraine, Serbia, Montenegro, Bosnia and Herzegovina, FYROM, Belarus, Armenia and Moldova.
By uniting Availability, Affordability, Acceptability and Activation, essential elements in creating a world-class selling organisation, Coca-Cola Hellenic is well positioned to maintain constant and growing demand in its markets.
Availability – Coca-Cola Hellenic reaches out to consumers by placing its full range of products not just within an arms reach of desire, but by providing the right package, in the right location, at the right time.
Affordability – By offering a wide variety of desirable, quality products, in the package appropriate for each market, for each occasion, and for the right price, Coca-Cola Hellenic gives consumers affordable choice.
Acceptability – Relentless control, effective customer service, outstanding efficiency, and the best route to market, combined with a detailed knowledge of consumer needs, guarantees that Coca-Cola Hellenic products are acceptable to consumers across every market.
Activation – Consumer motivation for choosing Coca-Cola Hellenic products comes through providing them at the right price for the right brand, in the right location. By placing them in interesting and enticing point-of-purchase displays, by making them available via precisely placed coolers, or vendors, or racks, or fountains, and by making them relevant to the lives of purchasers, Coca-Cola Hellenic activates consumer demand.
CCHBC began its business in Russia with launching the Fanta production in Mineralnye Vody in 1992. Since then, CCHBC have been extending its production facilities almost each year. Thus there were its plants built in Moscow, Saint Petersburg and Volgograd ,then in Krasnoyarsk and Samara, Vladivostok, Nizhny Novgorod and Ekaterinburg. In 2005 ABC crowned the success with acquisition of one of the biggest juice businesses in Russia — the Multon Company.
CCHBC comes to 74 distribution centers including 11 production plants with 24 production lines, 63 depots (an office with a warehouse without production). Each distribution centre has a Sales Team of 5 to 200 Market Developers(in Moscow) who sell the company products to Russian customers. The distribution system covers the whole territory of Russia and about 144 mln of the population. The majority of sales (85%) is performed to direct customers, as the direct marketing strategy is pursued.
CCHBC has been keeping its leading positions with 42.7% of market volume share in the category of Carbonated Soft Drinks in Russia. But it’s necessary to mention that this figure varies from region to region, for example , 56.2% share in Vladivostok, 52.4% in Krasnoyarsk, 46.1% in Moscow and 26% in Nizhny Novgorod, 23.1% in Stavropol. According to the pecularities of logistics, as, for example, the farthest location — Vladivostok, which is 8900 km away from Moscow , some products were only produced in Moscow (for instance, Iced Tea, Sport Drinks etc.) until late 2005 and CCHBC had to deliver it from Moscow to all over the country in order to supply the market with a full range of its products. Nowadays, CCHBC has got another Aseptic production in Nizhny Novgorod but still there is a necessary delivery scheme which is quite complicated and intricate as there are different means of transportation to be used in the shipment of the product like ships, trucks and trains.
CCHBC, with the Head Office located in Moscow, has got about 9000 employees in Russia, 3000 of them are engaged in operations including production, maintenance, procurement, logistics, warehousing, and fleet management.
The biggest competitor of the company is the Pepsi-Cola International (PCI). It has another strategy which concentrates on fewer production facilities, but with bigger volumes. Thus, it has only 4 working plants in St.-Petersburg, Moscow, Yekaterinburg and Samara and one toll filling facility in Novosibirsk.
Comparing CCHBC with PCI, PCI’s capacities are on the average twice bigger than those of CCHBC. Besides, PCI is much more opened to work with distributors and uses third-party services wider and more often than CCHBC.
Thus different marketing and operations approaches leads to different effects on sales volumes:
In major of regions the CCHBC sales are more than 1.5 greater than the competitor’s