Coca Cola 2004 Annual Report Download - page 27

has no ownership interest or a noncontrolling ownership interest produced and distributed approximately
83 percent of our 2004 worldwide unit case volume.
We make significant marketing expenditures in support of our brands, including advertising costs,
sponsorship fees and special promotional events. As part of our marketing activities, we may provide retailers
and distributors with promotions and point-of-sale displays; our bottling partners with advertising support and
funds designated for the purchase of cold-drink equipment; and our consumers with coupons, discounts and
promotional incentives. These marketing expenditures help to enhance awareness of and increase consumer
preference for our brands. We believe that greater awareness and preference promotes long-term growth in unit
case volume, per capita consumption and our share of worldwide nonalcoholic beverage sales.
The Beverage Industry
We operate in the highly competitive global commercial beverage industry. We face strong competition
from other general and specialty beverage companies. We, along with other beverage companies, are affected by
a number of factors including, but not limited to, cost to manufacture and distribute products, consumer debt
levels, economic conditions, consumer preferences, employment, inflation, political climate, local and national
laws and regulations, foreign currency exchange fluctuations, fuel prices and weather patterns.
Strengths of Our Company
Our Brands. Coca-Cola is the most popular and biggest-selling soft drink in history, and is recognized as the
most valuable brand in the world. Our Company owns or licenses nearly 400 brands—including carbonated soft
drinks, juices and juice drinks, sports drinks, water products, teas, coffees and other beverages—of which
approximately 1.3 billion servings a day are consumed worldwide.
Our Distribution System. Our bottlers sell our branded products in over 200 countries on six continents to
businesses and institutions including retail chains, supermarkets, restaurants, small neighborhood grocers, sports
and entertainment venues and schools and colleges. We continue to expand our marketing presence and
increase our unit case volume growth in emerging economies throughout Asia, Africa and Latin America. Our
strong and stable system helps us to capture growth by distributing existing, enhanced and new, innovative
products to our consumers throughout the world.
Our People. Our employees, whom we call ‘‘associates,’’ are integral to our success. Our associates work
closely with our bottling partners and other key constituencies to understand consumer preferences and market
conditions around the world. To meet our long-term objectives, we recruit and actively cultivate a diverse
workforce and establish a culture that fosters learning, innovation and value creation on a daily basis.
Strategic Initiatives
Establishing Our Marketing Leadership. Carbonated soft drinks (‘‘CSDs’’) remain a fundamental and
profitable part of our family of brands, and we believe we should invest in marketing our family of brands more
aggressively than in the past few years. In addition, we need to further expand our new products pipeline and
continue to develop our innovation capabilities. Accordingly, we plan to increase our marketing and innovation
spending by approximately $400 million in 2005 and intend to maintain the increased spending level for the
foreseeable future.
Unleashing Our System’s Potential. Driving enhanced revenue growth across the system is a key focus area.
Our plans in this area are centered on tailoring strategies to match consumer occasions, offering differentiated
packages, building value with customers, strengthening in-market execution and supporting our family of brands
with strong marketing activities. Markets where we effectively implement a brand, package, price and channel
strategy as a system have seen strong results. Our initiatives in this area are focused around training, sharing
learning across the system, and capitalizing on immediate consumption opportunities. In this regard, we are
refocusing on the basics of distribution and on increased service to the many outlets in the marketplace. To
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