Final Presentation

Principle of Marketing

(Developing a Marketing Plan of Coca–Cola, Pakistan)

Submitted by:

Saad shahzad (12046005005)

Muttayab khan (12046005035)

Usman Khalid (12046005006)

Submitted to:

Mr. Zeeshan shakuat

Class: BBA (H) Fall 2013

University of Management and Technology

Submission Date: 31st December 2013

[Type text] Page 1

Acknowledgement

First of all we will like to thank Almighty ALLAH who has blessed us with knowledge, understanding and ability to do the project.

This project is a dedication to our parents who have enabled us to stand on our own feet and have guided us in all matter of life.

We are also thankful to our teacher Mr. Zeeshan shakuat who has helped us in increasing our knowledge about marketing.

May ALLAH bless them Ameen.

O my Lord! Open for me my chest and ease my task for me , and loose the knot from my tongue that they may understand my speech. (Ta-Ha: 25-28)

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The objective of this project is to overview the marketing strategies of Coca-Cola.

C o n t e n t s

Page Executive Summary …………………………………………………………………………………………………………………………………….4

Introduction………………………………………………………………………………………………………………………………………………..4

Vision, Mission & Values...................................................................................................................................5

Goals ………………………………………………………………………………………………………………………………………………………..…6

Coca-ColaToday…………………………………………………………………………………………………………………………………………..6

Portfolio ………………………………………………………………………………………………………………….………………………………….6

BCG Matrix ………………………………………………………………………………………………………………………………………………….7

Financial Analysis ………………………….………………………………………………………………………………..……………….….………7

Current Market Situation……………………………………………………………………………………………………….………………….…8

Micro-Environment …………………………………………………………………………….………………………………….……………………8

Macro-Environment ………………………………………………………………………………………………………………………….…….....11

SWOT Analysis ………………………………………………………………………………………………………………………………………….…14

STP Module ………………………………………………………………………………………………………….……………………………………..15

Segmentation ……………………………………………………………………………………………………….…………………………………….15

Targeting ……………………………………………………………….……………………………………………….……………………………..……17

Market Positioning ……………………………………………..…………………………………….…………….………………………………….17

Marketing Mix ……………………………………………..………………………………………………………….………………………………….17

Recommendation ……………………………………………………………………………….………………………………………………………18

Conclusion ……………………….…………………………………………………………………………………………………………………………19

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Executive Summary

The Coca-Cola Company is a global business enterprise and one of two main soft drink sellers. The Study of this report helps the reader to know that how Coca-Cola has achieved its current market position. This report highlights those factors that company has adopted during its long journey of 52 years in Pakistan. The report includes mission, vision, goals and objectives, micro-environment, macro-environment affecting coke. It also includes segmentation, targeting, positioning, 4ps and recommendations.

The reader of this report can expect that after having complete study he/she can certainly have a broader view of operation of Coca-Cola in Pakistan. Like who are the competitors, what are the problems that company is facing in expanding its business? In Pakistan Coca-Cola is very much local business and company has provided this region with 52 successful years of service. The dedicated service that company has been providing has made the company the proud holder of several most widely recognized brands in the world.

Introduction of Coca-Cola

The Coca-Cola Company began its journey in 1886, when an Atlanta pharmacist, Dr. John Pemberton began to produce Coca-Cola syrup for sale in fountain drinks. The bottling business started in 1899, when two businessmen Benjamin Thomas and joseph whitehead secured the exclusive rights to bottle and sell Coca-Cola.

Type Soft Drink (Cola)

Manufacturer The Coca-Cola CompanyFounder John S. PembertonIntroduced 1886Area served Over 200 countriesFlavors Cola, Cola Cherry, Cola Vanilla, Cola Lemon, Cola

Lime, Cola Orange ,Cola RaspberryEmployees 92,400

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Vision of Coca-Cola

People: Being a great place to work where people are inspired to be the best they can be.

Planet: Being a responsible global citizen that makes a difference.

Portfolio: Bringing to the world a portfolio of beverage brand that anticipate and satisfy people’s need and desire.

Partners: Combining a winning network of partners and building mutual loyalty.

Mission statement of Coca-Cola

It is a statement of organization’s purpose that it wants to accomplish. Coca-Cola Company creates value by executing business strategy guided by four key beliefs:

Customer is king; customer demand drives everything we do. Brand Coca-Cola is the core of our business. We will serve customers a broad selection of non-alcoholic drink beverages that they want to

drink throughout the day. We will be the best market in the world.

Values of Coca-Cola

We are guided by shared values that we will live by as a company and as an individual’s:

Leadership: ‘The courage to shape a better future’ Passion: ‘Committed on hearts and mind’ Integrity: ‘Be Real’ Accountability: ‘If it is to be, it’s up to me’ Innovation: ‘Seek, Imagine, Create, Delight’ Quality: ‘What we do, we do it at our best’

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Goals of Coca -Cola

All CCBPL (Coca-Cola Beverage Pakistan Limited) plants set up their own goal to achieve the objective. The company goal is

“To increase sales volume and gain market leadership in Lahore”

Coca-Cola Today

Today CCBPL is operated directly under the supervision of Coca-Cola international Based in Atlanta Georgia State. It owns 10 plants all around in Pakistan.

Karachi Lahore Gujranwala Rawalpindi Peshawar Hyderabad Faisalabad Sialkot Rahimyar Khan Multan

Portfolio

The businesses & product that make up the company constitutes business portfolio.

1) Coke 2) Sprite3) Fanta4) Diet Coke5) Minute Maid6) Minute Maid Juices

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7) Kinley Drinking water8) Coke Vanilla

BCG Matrix

Stars Question Marks

Coke and Diet Coke Sprite, Fanta, Minute Maid & Minute Maid Juices.

Kinley Drinking Water Coke Vanilla

Cash Cow Dog

Financial Analysis of Coca-Cola

2009 2010 2011 2012

Income Statement

Revenue 30,990 35,119 46,542 48,017

Less: cost of revenue (11,088) (12,693) (18,216) (19,053)

Gross Profit 19,902 22,426 28,326 28,946

Less: Total operating expense (11,671) (13,977) (18,172) (18,185)

Operating income 8,231 8,449 10,154 10,779

Net Income 6,824 11,809 8,572 9,019

Earnings per share

2009 2010 2011 2012

Basic 1.48 2.56 1.88 2.00

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Diluted 1.46 2.53 1.84 1.97

Weighted Avg. Share

2009 2010 2011 2012

Dilute 4,658 4,656 4,646 4584

Basic 4,628 4,616 4,568 4504

Earnings 10,537 16,419 13,810 14,188

Current Market Situations

The current market situation of Pakistan is not good. Inflation has caused many problems to the people of Pakistan. The current market share of coke in Pakistan is 40%, while of Pepsi it is 50%. Marketers are reporting that coke will take place of Pepsi in some years’ time.

Micro-Environment

1. Customers

Marketing is a process of providing value to the customer and satisfying them. Customer satisfaction is considered as being the most important and vital thing on coke progress. Coke-cola touches millions of life per day. Coke has dedicated a page on their website for customers to show how coke has shaped their lives. Coke cares about every one of its customers and strives to reward its customer with great services and products. Coca-Cola is also running NGO’S and doing charity work for the victims of flood and earthquake in Pakistan. The Value of customer of coke can be understood by these factors that coke spends a lot of efforts (financials and human resource) on customer research. Coke customers vary massively in terms of age. From kids to youngsters, from youngsters to elders and from elders to older. We can divide coke customers into different categories.

Consumer market

This is the group of consumer from where coke purchases are at the highest level because consumer market includes individuals and households. Households mostly buy coke for daily

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use in large number and purchasing by individuals is also the case of repeat purchase. Healthy consumer market is a big advantage for the company.

Reseller Market

Reseller market of coke is very large all over the world. This is the market, which buy the product from the company and resell it at profit. In Pakistan McDonald is the biggest example of reseller of coke. McDonald purchase coke from the company and sell it with each fast food deals served at restaurant. The survey shows that each branch McDonald located in Lahore sell approximately 500-700 liters of coke daily to its customers.

International Market

Coke is worldwide known product and every country where coke is been sold has a manufacturing unit of its own. Similarly is the case of Pakistan, coke manufacturing plants are in Karachi, Hyderabad, Sialkot, Gujranwala, Faisalabad, Rahim yar khan, Multan and Lahore and these plants are producing the drink for the local use. So in Pakistan there are no international buyers of coke.

Characteristics Affecting Consumer Behavior

Cultural Factors

Every group and society has its own culture. Culture factors affect coke purchasing massively. Different communities and group of people have reshaped Pakistani’s culture. In recent years Bahar/Basant festival in Punjab specially has become important part of our culture in which sale of coke goes very high. Soft drinks are purchased in bulk for the parties and other occasions.

Socials Factors

Social factors include consumer’s family, small group and status. Family members can affect buying behavior in such a way that if number of children is more in a family than elders, then the children choice can matter a lot at times of soft drink purchase. Parents most of the times have to go according to kids’ choice and kids have more interest in Cola drink as compared to elders.

2) Competitors

All over the world there are two soft drink giants’ coke and Pepsi. The competition between two companies has always been at its best. Both these companies try to take lead in terms of pricing, promotion, packaging and placing. Coke objective is to deliver a better product to its customers than

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Pepsi. Coke is successful in doing so, because it has created brand awareness with its customers. Coca-Cola is successful in its advertising than Pepsi. It is constantly developing new products for its customers to enjoy. Sponsoring ‘coke studio’ a local version of MTV unplugged, coke has gained significant market share in Pakistan. Musician record their albums in coke studio and can get pay for it. Coca-Cola market share in Pakistan is 40% of all cola sales and Pepsi market share has reduced to 50%. Now Pepsi is sponsoring Pakistan idol to gain popularity in the market. So many times we have seen that as soon as Pepsi lowers down the price of 1 liter per bottle, coke adjust its price right away so that they may not lose its customers.

3) Suppliers

Coke considered its suppliers as a part of their company. For a company like coke it is very important to have good relations with suppliers. They do extensive training to have good relations and maintain quality product. Coke company suppliers in Pakistan vary with the respect to the raw material they provide. Following is a list of supplier of coke in Pakistan.

Balochistan Glass Limited provides glass bottle of all sizes that are used in bottling. Plato Bags limited provide with the labels. Labels are designed by the packages LTD.

The Coca-Cola website offers a special page to its suppliers. On that page there is a list of supplier expectations, diversity and guiding principles because supplier are linked to customer value, Coca-Cola wants its supplier to maintain the best quality possible.

4) Market Intermediaries (Distributors)

Marketing Intermediaries help the company to promote, sell and distribute its goods to end users. Intermediaries include resellers, distribution firms and marketing agencies. When we talk about coke, Coke Company in Pakistan as well as abroad the importance of working with their intermediaries. McDonald in Pakistan is one big reseller of coke. Similarly there are thousands of private agencies that are working for coke to distribute the product to the shopkeepers and retailers all over Pakistan.

Currently there are 46 distributors working for coke in Lahore. Coke Company uses two techniques for distribution. Direct distribution and indirect distribution. In direct distribution, company uses no agencies or middlemen to distribute the soft drinks but the company has its own system of distribution that includes company truck and labor. The other way is indirect distribution in which company has option of choosing various distributors that take the product from the factory to the retailers or resellers.

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Macro-Environment

1) Demographic

Age

Coca-Cola targets all ages. For youngster coke is considered a cool drink that everybody loves. For adults coke is a classical drink which they grew up drinking, provide a familiar taste from the past.

Income Coca-Cola products are not introduced to a specific class. It’s affordable and inexpensive. Their products are suited to everybody, from a teenager with no income to a rich successful business man.

Ethnicity

People from different cultural backgrounds are aware of Coca-Cola products.

Location

Where there are people there is Coca-Cola. Some might think the saying is exaggeration; however the show that I watched on CNBC and other related articles that Coca-Cola can easily be found in remote or underdeveloped cities of Pakistan.

Coca-Cola knows its people very well. It offers different flavors & packaging according to its customer taste.

Standard size returnable bottle (SSRB) Large size returnable bottle (LRB) Non-returnable/ Disposable bottle (NRD) Plastic Bottle 500ml (PET) Plastic Bottle 1.5 liter (PET) CANS (Tin packs 330ml)

1. SSRB is generally targeted to young children, people going to school and universities. It is also targeted to lower class people.

2. LRB and PET 1.5 liter is usually consumed by households.3. Disposable bottles are for the ‘on the go’ people. As they don’t have time to stand at the spot

and drink the whole beverage.

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4. PET 500ml was introduced on the basis of analysis which shows that people nowadays in Pakistan are in a trend to drink 250ml coke bottles

5. Business executives always expect something different for them form an organization, so coke CANS were the answer to their expectation from coke.

Culture Factors

When there is an event or occasion Coca-Cola is always there for the customers. Culture of Pakistan is very unique and good. We people enjoy every moments of life with these soft drinks.

Coca-Cola & Cricket

Pepsi is one of the biggest official sponsors of cricket and it is also the official drink of cricket. Coke is there giving Pepsi a tough time. Coke has sponsored eight Pakistani cricketers. Coca-Cola has launched sprite by roping in shoaib aktar and moin khan to get fans attractions. Coca-Cola is targeting cricket as it is one of the famous and is growing all over the world including Pakistan.

Coca-Cola & Music Concert

When you think of Pakistani Punjabi bhangra, Abra –ul-haq is the first name you think of. Coca-Cola is the official sponsor of abrar–ul-haq. Coke has almost sponsored almost the entire concerts of Abrar-ul-haq. Junnon is a known name all over the world. Coke targets its customers through music celebrities and asks them to perform in their concerts and commercials.

Coca-Cola and Food Mela

Coca-Cola organizes food melas for the people. In Karachi, coke treated thousands of people by bringing 50 bustling restaurants all together in one area. All of those restaurants were offering coke as the only beverage in food mela.

Coca-Cola and Basant

Basant is one of the biggest events in Lahore. Coke was the official decorator of Lahore. Coke has promoted its product so much with relevance to basant that at basant whenever you want to drink something chilled, the first name you think of is coke. It is there in the minds of people that where there is basant there is coke.

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Coke in Ramadan & Eid

Eid and Ramadan is one of the biggest holy events of Muslims. Coke earns its great revenues in the month of Ramadan and on the occasion of eid. It offers new packaging and great discount.

2) Political Factors

Political factors usually affect company working on the international level doing import and export. Coke usually performs its operations in local market. Coke is not usually affected by government regulations because in Pakistan we have a system of capitalism. Sudden changes in political conditions of a country like Pakistan don’t affect much on coke, because coke is purely a consumer market. Pressure groups have tried to de-market (discourage consumers) coke in Pakistan by spreading rumors that the revenue collected from coke goes in Jewish market.

3) Economic Factors

Economic factors do affect company in negative and positive manner. Coke is affected when there is inflation in the country and as a result coke increases its prices. The increased price is a high negative effect on coke. Coke has employed 1800 workers in the last two years and huge amount of revenues have been collected from Pakistan. The economy worldwide was distributed by the incident of 11 th

September 2001. The disposable income of people of Pakistan is improving day by day. Coke that was

bought for luxury purpose is now becoming a necessity for the people of Pakistan.

4) Social Factors

Coke a customer oriented company, always takes steps for the welfare of its customers. The recyclable products used in manufacturing coke help save people’s environment. Coke is also helping the needy & knowledge seeking people with fewer resources by providing them books, scholarships and opportunities to work. Coke has launched a program in Gujranwala, where it provides basic education to the children. Coke has also launched a program in Pakistan to increase the awareness about the conservation of water and natural resources, climate changes, waste environment and recyclable products.

5) Technological Factors

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Technology in any field is effecting the development of that industry at a higher rate. Beverage industry is also affected by the technological factors but in a positive manner. The new method of filling the bottles, the refrigeration method, the disposable bottles, the PET bottles all made so many changes to the coke which is one of these giants in beverage industry. Coke is adopting all the new technologies available. Coke is supplied with the refrigerators, coolers and many more for keeping the bottles chilled as they claim in the subcontinent ‘Thanda matlab Coca-Cola’. Coca-Cola Company got the technology of dispensers so they give coke to people that is as fresh from the fountain. Coca-Cola Company is producing new packaging sizes with differentiated packaging with the help of new technology every day.

SWOT Analysis

Internal

Strengths

Strong Brand Name & Brand Loyalty Global Distribution Customer Loyalty Innovation Strong Research & Development Thanda matlab Coca-Cola Fixed Delivery Time

Weaknesses

Word of Mouth Lack of popularity of many Coca-Cola brands Not Available in small towns and rural areas. Vehicles are less Formality of rules and regulations.

External

Opportunities

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Coke currently holds 40% market share in Pakistan. Pepsi leads by holding 50% shares and 10% to small beverage companies. So there is vast opportunity for coke to capture 60% market share.

The opportunity that we have seen being put to use before is the ability for the Coca-Cola to buy out their competition.

Coca-Cola is known well throughout 90% of the world population today including Pakistan. Coca-Cola has an opportunity to continue to widen the gap between them and their

competitors.

Threats

Competition with Pepsi Lack of Substitutes Change of taste Changing health conscious attitude Legal issues. Delivery not on time can cause customer satisfaction problem.

Segmentation Targeting and Positioning Model

Segmentation

Coca-Cola serves its products using mass marketing techniques. It is a market coverage strategy in which firm decides to ignore market segments differences and appeal the whole market with one offer or one strategy. The idea is to broadcast a message that will reach the largest number of people. It obviously falls in undifferentiated marketing. It means no segmentation, but there are minor factors on which we can say that the coke segments its products and then targets the customer. These factors are as follow:

Geographic Segmentation

Internationally Coke segments its products country wise and region wise. Here the most important thing is the taste and quality. It varies according to taste and income level of the people in that country.

Locally In Pakistan the coke segments more in urban and suburban areas as compared to rural areas.

Demographic Segments

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Age Coke segments small children’s introducing taste like vanilla, lime and cherry. They mainly focus on children from 4 – 12 years, from 15 to 25 years and also old people from 50 year to onwards. Coke mainly targets more young people than older. A family who have 2 or more children’s will use coke many times because kids are fond of cola drinks.

Family Type Coke introduces its economy pack and that’s how they focus family and groups. Like in Ramadan they offer family packs at reasonable price with discounts.

Income The population of Pakistani people is 193,238,866 (July 2013). Pakistan is in a state of capitalism. There are five levels of people when it comes to income level.

i. Deprived households ( < R.s 90000 ) 30% = 579,71,660ii. Aspirers ( 90000-200000) 25% = 483,09,717

iii. Seekers ( 200000-500000) 20% = 386,47,773iv. Strivers ( 500000-1000000)15% = 289,85,830 v. Global Pakistani ( >1000000) 10% = 193,23,886

If Coca-Cola does not get enough sales from deprived households, then that will not make any difference in the sales of Coca-Cola because Coca-Cola will get enough sales from aspires, seekers, strivers and global Pakistani. The total of aspires, seekers, strivers and global Pakistani is 135,267,206 and the amount of deprived households is 579,716,60 so Coca-Cola cover its sales and profit from this. It will not affect Coca-Cola that much.

For small income people it has small returnable glass bottles. For middle people it has small non-returnable bottles. For higher income people it is coke tins.

Psychographic

All variables including social class, lifestyle, personality, Coke almost segments everyone, but again it’s there packaging which is different for different consumers.

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Behavioral

Occasions

Thanks to Coca-Cola Company the local festival of basant has become an international event and an identity of our culture. Over the years the annual spring festival of basant has taken on mega proportions. Previously restricted largely to the walled city, this festival now floods every corner of Lahore. The credit of making this happen goes to Coca-Cola Company. In 2003, Coca-Cola was once again nominated as the official sponsor of basant festival.

Benefits

Sometimes for the promotion strategy of coke, they introduce prizes in the top cover, so they segment people by benefit sought.

Target Marketing

Age The target market for the Coca-Cola is based on age. The audience of Coca-Cola is youngster or youth. It has wide range of targeting people. It ranges from the age of 4-12 years and 15-25 years and 50 years to onwards.

Gender Coca-Cola segments Pakistani market with a percentage ratio of 58% females and 42% males.

Nature Fun loving and entertainment loving.

Socio-Economic status Upper lower and lower class.

Market Positioning

Coca-Cola provides open happiness with variety of advertisements and taste. Coke spends a lot of money to make a different creative slogan for targeted people. Positioning statement of coke to all is who wants to drink best to quench their thrust by

providing the best quality and taste in an affordable price.

Marketing Mix

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The marketing mix is probably the most crucial stage of marketing planning process. The marketing mix refers to the combination of four factors (product, price, promotion, Place)

Product

Business must think about the product at three different levels. Core product, actual product and augmented product. The core product is what the consumer is actually buying and the benefit it gives. Coca-Cola customers are buying a wide range of soft drinks. The actual product is the part and features, which deliver the core product. Consumer will buy the coke product because of high quality and high standard. The augmented product is the extra amount benefits and services provided to customers. Coke cola offers a help line and complaint phone service for customers who are not satisfied with the product or wish to give feedback on the product.

Promotion

Over the time Coca-Cola has spent millions of dollars developing and promoting their brand name, which result in worldwide recognition. Coca-Cola is the most recognized trademark, recognized by 94% of the world population.

There are four types of brand strategy:

i. Individual brand strategyii. Family brand strategy

iii. Private brand strategyiv. Manufacture brand strategy

Coca-Cola utilizes individual brand strategy as Coca-Cola’s major products are given their own

brand name e.g. Fanta, sprite and Coca-Cola.

Price

Since Coca-Cola faces a major threat from Pepsi, so naturally pricing is done keeping in view the increasing rivalry with Pepsi. Price changes occur seldom after a long period of time say, a year etc. In Pakistan, due to ever increasing rate of inflation, prices have increased in short span of time.

Place

The Coca-Cola Company has always on focused wide scale distribution. This is the reason that 94% of world population knows about Coca-Cola. Coca-Cola sets its own distributions directly

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to store. Stores include a wide variety of supermarket, Mart, Convenience Stores, Retail Stores

and Departmental Stores.

Recommendations

1. Currently in Pakistan there are only two flavors of coke available, company can extend their portfolio by introducing new flavors.

2. According to the survey conducted by the international firm Pakistani people like less sweet cola drink. So for this Coca-Cola Company should think about bringing a new product for example new diet flavors in the market to fulfill the local need.

3. Marketing team should try to increase the availability of coke in many areas of Pakistan including rural areas.

4. Now young generation has a trend to drink a coke 2 regular bottle at same time, so providing more satisfaction to them, company should introduce ½ liter disposable bottle.

5. Coca-Cola Company should think about producing Coke Can locally as well because currently coke cans are only smuggled from abroad and sold at a high price.

6. Currently two plants of coke are being run under private companies; one is in Peshawar and other in Rawalpindi. Company should plan to buy these plants as well so that customer can get equally good quality all over the country. This will help the company to maintain good quality.

Conclusion

We have concluded from this detail report that despite the fact Coca-Cola currently occupies the market leadership position overall but it does not guarantee that the company will sustain its position in the future as well. Coca-Cola must be ready for the challenges. Coca-Cola should improve in the future if they want to compete with Pepsi.

Reference

http://www.slideshare.net/almas_sshahid/cocacolamarktingproject

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http://coke.rozee.pk/

http://us.coca-cola.com/

http://en.wikipedia.org/wiki/Coca-Cola

http://financials.morningstar.com/income-statement/is.html?t=KO

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