What is Coca Cola Differentiation Strategy?

Coke differentiation strategy is for development of product (soft drinks) and services (delivery) to offers unique feature & attributes.

Value Addition in features helps a company to offer a special price for it. Like when you buy mineral water is cost you less but when you buy vitamin water, its price is little high. This higher price is to Cover Company’s cost that usually doesn’t cover from routine priced products.

Customers surely pay when they don’t have any alternative for you.

Coca Cola maintains their differentiation from other soft drinks by spending more than 20% of their advertisement budget to only differentiate their product. It has positioned successfully with following standards

• Corporate repute for innovation and quality
• Communication of product strength perceived by users
• Enjoy & fun symbol

Why this definition, Coca-Cola has unquestionably chosen a differentiation strategy. This has always been Coca-Cola’s strategy since the early days of the company’s life as evident by Woodruff refusing to match Pepsi’s 6 cent 12 ounce bottle. (Pendergrast, 2000) Coca-Cola hopes to isolate their competition away from the market by creating a strong, brand loyal customer base.

This strategy is a good choice for Coca-Cola, however it can be detrimental if they are not careful. A couple more years of slipping market share may take Coca-Cola into the Stuck-in-the-Middle category of which it can be very hard to climb out. There is a fine line between being confident in a company and being content.

Coca-Cola better is careful that they do not mistake confidence with being content as their overwhelming success over the past century could and very well may lead to ignorance of their current situation.

Therefore if Coca-Cola wishes to not only exist but also prosper in the future, a much stronger concentrated effort toward a differentiation strategy will prove to be highly beneficial.