Coca-Cola Goes Small in Russia

The Coca-Cola Company is the number-one seller of soft drinks in the world. Every day an average of more than 1.5 billion servings of Coca-Cola, Diet Coke, Sprite, Fanta, and other products of Coca-Cola are enjoyed around the world. The company has the world’s largest production and distribution system for soft drinks and sells more than twice as many soft drinks as its nearest competitor. Coca-Cola products are sold in more than 200 countries around the globe.

For several reasons, the company believes it will continue to grow internationally. One reason is that disposable income is rising. Another is that outside the United States and Europe, the world is getting younger. In addition, reaching world markets is becoming easier as political barriers fall and transportation difficulties are overcome. Still another reason is that the sharing of ideas, cultures, and news around the world creates market opportunities. Part of the company mission is for Coca-Cola to maintain the world’s most powerful trademark and effectively utilize the world’s most effective and pervasive distribution system.

In June 1999, Coca-Cola Russia introduced a 200-milliliter (about 6.8 oz.) Coke bottle in Volgograd, Russia, in a campaign to market Coke to its poorest customers. This strategy was successful for Coca-Cola in other countries, such as India. The bottle sells for 12 cents, making it affordable to almost everyone. In 2001, Coca-Cola enjoyed a 25% volume growth in Russia, including an 18% increase in unit case sales of Coca-Cola.

Today, Coca-Cola beverages are produced and sold in Russia by the company’s authorized local bottling partner, Coca-Cola HBC Russia, based in Moscow. The Coca-Cola business system directly employs approximately 4000 people in Russia, and more than 70% of all supplies required by the company are sourced locally.

“Suppose that in one of the plants of The Coca-Cola Company traditional bottles of 20 ounces are filled. The Quality Control department randomly selects 150 bottles and tests the bottles for fill volume. The descriptive statistics are summarized below. Is there enough evidence to suggest that the production line of 20 ounces should be stopped either because over or under filling?”