Brand Name, Foundation of a Company and Source of Profits Coca Cola Corporation and Shanghai Shenmei Beverage and Food Co., Ltd. Jointefforts to Build a Top one Enterprise Brand Name

In 2004, Business Weekly published a list of 100 most valuable brand names in the world. With a total value of 67.4 billion US dollars, Coca Cola has been on the top of the list in four consecutive years. According to a survey conducted by China Central Television in 2003, Coca Cola has been ranked as the most popular beverage in China nine years in a row. The survey also shows that compared with other beverages Coca Cola enjoys a greater market share, a stronger brand name loyalty and is favored by more Chinese people. It is the most popular carbonated beverage in China.

The marriage between Coca Cola and China took place in Shanghai. In 1927, Coca Cola Company set up its first bottling plant in Shanghai. Up till now, there are 27 bottling plants and 30 workshops across China. In the 1990s, China’s reforms and opening up, together with the development of Pudong in Shanghai, provided Coca Cola Company with unprecedented development opportunities and a grand market potential. In 2000, Coca Cola Company decided to move its headquarters responsible for the sales in China from Hong Kong to Shanghai. This strategic move not only enables the company to come back to its birth in China, but also provides it with boundless vitality and brighter market potential, which are brought about by localizing the company against the backdrop of China’s huge economic development.

Great and Insuperable Advantages of Shanghai

As early as 1927, Coca Cola has already established its first plant in Shanghai. In 1948, the total sales volume in Shanghai surpassed one millions boxes, a record first made by the company outside the United States. After the establishment of diplomatic relations between China and the US, Coca Cola Company came back to China. It has become one of first transnational companies engaged in manufacturing consumer products, which entered China after the implementation of reforms and opening up. In 1987, the Coca Cola Shanghai bottling plant was reorganized. Shortly after that, went into formal operation. (Shanghai Shenmei Beverage and Food Co Ltd is called, in its abbreviated form, Shanghai Shenmei) Over the past several decades, pushed by China’s reform and opening up, with the constant support of the Shanghai Municipal Committee and the Shanghai Municipal People’s Government and the successful co-operation with Coca Cola, Shanghai Shenmei has become Coca Cola’s largest bottling plant in China.

Market: Respond Quickly and flexibly, Grasp the Early Opportunities

“Quick Response to the Market” has always been the working style of Shanghai Shenmei. Prior to 1995, in accordance with the then real situation in Shanghai’s market, we adopted the 3A market opening strategy “Affordable, Accessible and Extensively Available”, which was formulated by Coca Cola Company. As a result, during the early stage of Shanghai Shenmei’s development we not only lowered the cost of plant construction and the price of our products, but also met the demand of consumers.

With fast development of China’s economy and improvement of consumers’ living standards, we have shaken off the traditional sales model of the past years by adopting a set of new Coca Cola principles, namely, “Pervasiveness, Preference, Price to Value”. Joint efforts have been made by Coca Cola and Shanghai Shenmei to realize direct sales through leaping over the intermediary distribution lines. To this end, Shanghai Shenmei has built a large team of sales personnel. Equipped with motorcycles, they crisscross between various sales locations and bring the products directly to the retailers. We also provide retailers with many refrigerators and water coolers free of charge. Effective management of sales terminals enables Shanghai Shenmei to build quickly a huge sales network with the retailers, supermarkets and food stores in the local markets, which contributes to realizing the Coca Cola’s goal of “Pervasiveness”. Other brands of beverages can never compete with Coca Cola which is more likely to be put on the shelf for sale and more visible and more convenient to purchase.

This strategy of popularizing the brand name is easier said than done. But through the flexible and quick response to the market and close cooperation with Coca Cola, Shanghai Shenmei succeeds in bringing into people’s life various kinds of beverages under different brand names of Coca Cola. And they have actually become part of their life. Surely, what Coca Cola brings to the customers is more than just a bottle of soft drink. It involves a great brand name and is laden with cultural significance.

With its acute sensitivity to the market, Shanghai Shenmei seizes every opportunity to launch a series of promotion activities aimed at helping young people in modern days to build up an attitude of self-confidence, keenness and optimism towards life. For example, in 2003, we launched the market blending activity centered on the theme of “Getting Hold of the Feeling”. Through these activities, the brand name imparts to people the meaning of starting a fresh life with a new beginning. This year’s theme is “Great Feeling is in Your Control”. Through various attractive activities, this theme has done a much better job in identifying the brand name with the free and independent character of young people. In addition, the uniqueness of our products and the brand name’s meaning and close relationship with the consumers have been clearly demonstrated in a series of activities like NBA games, world cup and Olympic torch relay.

Business Operation: Local Logical, Managing according to the Local Unique Conditions

“Local Logical, Managing according to the Local Unique Conditions” is the management philosophy of Coca Cola Corporation. Although the corporation need follow the international universal standard in its management of brand name, it allows the localization of the management. For example, across the globe different markets have different Coca Cola logos with its own characteristics. The logos in various markets are not required to share the same type. In Shanghai, to foreground the meaning of modernity Coca Cola Corporation incorporates a full range of local characteristics into the Chinese logo. By so doing, not only does the new logo become more attractive, but consumers are also becoming more identified with it.

With its acute awareness of the market, Shanghai Shenmei often ushers in a new fashion into the market by bringing new soft drinks to Shanghai consumers. For example, in 2002 we put in market the new product “Qoo Orange Juice”, which has become one of most popular beverages in the market. This year a new series of green tea called “Cha Yan Gong Fang” has been put in market. With its technological innovation in tea making, this brand is well received by the consumers and becomes another famous brand name in the Coca Cola products family.

Furthermore, Shanghai Shenmei has developed its own unique features in the designing and packaging of its new products by incorporating Shanghai’s unique characteristics of being a cosmopolitan city. For example, the soft drink “Fresh Mint Spirit” adopts a unique blue plastic package. Laced with a certain amount of mint, the lemon-tasted juice is quite to the liking of the young people in Shanghai, who are fascinated with its icy and refreshing taste. As a result, it has become consumers’ favorite beverage. The soft drink “Mei Zhi Yuan Orange Juice” is the result of the philosophy of physical fitness called “Tasty for the Tongue, Healthy for the Body”. It is put forward by Shanghai Shenmei in response to the market trends. Shortly after its debut in market, the product “Mei Zhi Yuan” brought about a great trend of lemon beverages so that the close bond between consumers and Coca Cola Company and Shanghai Shenmei has been strengthened.

In the course of its market development, Shanghai Shenmei becomes increasingly aware of the importance of product recognition by the local people and more and more confident in long-term cooperation with Coca Cola Corporation. Only in this way can Shanghai Shenmei make possible that international standardized practices can be continuously adapted to the local use and bring about new and better brand names.

Speed: The Faster The Better, The Nearer to The Public The Better:

Fast speed is a strategy of enterprise’s survival as well as a source of impetus for the development of its brand name. In the competition for market shares, market sensitivity and speed of action are the keys for success. A case in point is Shanghai Shenmei’s support for the Beijing’s bidding to host 2008 Olympic Games.

In Spring 2003, Coca Cola Corporation launched an application to the Beijing Olympic Organizing Committee for the right to make in its unique   and traditional way the memorial Coca Cola tin bottle in order to popularize the message carried by the logo of Beijing Olympic Games. Shortly after reaching an agreement on the protection of the secret design with the Beijing Olympic Organizing Committee, Shanghai Shenmei went into highly secretive production of the memorial tin bottles, which lasted for several months. In the evening of August 3^rd, the logo of 2008 Beijing Olympic Games was unveiled publicly at the Temple of Heaven. Nest day, piles of the memorial tin bottles printed with the logo were displayed in every supermarket of Shanghai.

Today our Chinese government’s policy of “keeping pace with the times” fills every people with joy and excitement. The development strategy and philosophy of Coca Cola in China happen to coincide with the policy. This time-honored brand name enjoys a ceaseless development potential, characterized by its everlasting fresh vitality, its omnipresent passion and its steadfast tenacity in pursuing the excellence of the brand name.

Seeking Common Ground While Reserving Differences

Faced with steep competition in China’s market, Coca Cola adopts a scientific development attitude to the new patterns of market supply and demand under the new economic situation. As for its development strategies, every change in the soft drink sector has been judged and dealt with scientifically by Coca Cola. The strategic and cooperative partnership between Coca Cola and its partners has been safeguarded and developed so that every partner is treated as a member in the Coca Cola family. No matter whether it is distributors, bottling plants or logistics providers and makers of bottles, they all have the same opportunities of making and sharing the fortunes. This is the “philosophy of everybody enjoying the wealth and everybody creating the wealth”. It is applied across the whole spectrum of Coca Cola family. It is the case in Shanghai, where the friendly cooperative partnership among Coca Cola, Shanghai Shenmei and other business-related suppliers enables Coca Cola Corporation to enjoy a booming business development.

The largest Coca Cola bottling plant in China, Shanghai Shenmei is set up with a total investment of 131.5 million US dollars, covering an area of 100,000 square meters. It is the largest Coca Cola bottling plant in Asia. At the very beginning after its establishment, Shanghai Shenmei possessed seven advanced multi-functional production lines, including the can-based production lines, with the production rate of 1500 cans per minute, the PET bottle-based production line, with the rate of 500 bottles per minute and so on. With the expansion of sales volume, Shanghai Shenmei has further enlarged its production capacity so as to meet the burgeoning market demand. Since its operation, Shanghai Shenmei has enjoyed a double-digit growth rate for many years on end and its market share is expanding. In the year of 2003, its sales volume surpassed 100 million boxes.

The highest possible degree of localization pursued by Shanghai Shenmei is reflected not only in the sales volume of its products, but also in the appointment of talented personnel. Currently, there are 2500 employees working in Shanghai Shenmei. Over the past years, the company has carried out a series of training programs at the managerial as well as the employees level, which cover the areas like the code of conduct for the management personnel, the working code for the employees, the training of the sales department and the management of production process and so on. Among all these trainings, the training for the sales department is in the greatest need of implementation. Because of the systematic employee training programs being carried out all these years, Shanghai Shenmei has always been in a leading position in the sector of soft drinks.

Shanghai Shenmei Beverage and Food Co Ltd possesses a good understanding of the local market and successful sales experience. It adopts the entire Coca Cola market strategy for brand name and has optimized and re-arranged its own as well as its social resources in a systematic way. It is benefited through using such highly effective strategies as making progress in both company’s construction and production, making progress in both products development and market exploration, paying equal attention to both scientific management and training of talented personnel and so on. All these enable the company to enjoy a steady consolidation and development of its brand name in the beverage market of Shanghai.

For many years Shanghai Shenmei has always been engaged in setting up a whole set of managing rules. It has borrowed some advanced techniques of sales and management. As a result of all these Shanghai Shenmei has become one of the leading enterprises in Shanghai. It has been ranked many years in a row as the top one among the eighteen overseas-invested enterprises with a huge sales volume and among another eighteen with large revenue per capita. It has been listed consecutively for many years as the top one among Shanghai’s 500 best-performing companies in the sector of soft drinks. It is already one of the leading enterprises in the sector of beverages. For many years Shanghai Shenmei has also been ranked as the “double-excellence” overseas funded company in China and the excellent enterprise with a large export volume in Shanghai. (The title “double-excellence” in China means that a company has done well both in its export volume and in its revenue.)

Never Forget Where One’s Happiness Comes From, Reward Our Society

“Never Forget Where One’s Happiness Comes From, Bring Benefits to People” has as always been the catchword of Coca Cola in its efforts to reward society and become a model corporation. As the most active and earliest overseas funded enterprise engaged in the China’s rural education, from 1993 Coca Cola company has set up 52 Coca Cola Hope-Project Primary Schools and built 100 Hope-Project Libraries with its donations in China’s 26 provinces. This enables more than 60000 children to return to school. From 2001, the company began to provide subject-related and computer trainings for the headmasters and teachers working in these schools. It has also provided these schools with back-up funds. Meanwhile, it has established 30 internet-based training centers and more than 52 multi-media classrooms and TV-based teaching venues.

Shanghai Shenmei also takes an active part in the development of China’s rural education. It has built two Hope-Project schools and Coca Cola internet-based learning centers in Guizhou province. During the 2004 Athens Olympic Games torch relay in China, on behalf of all the children in Guizhou Hezhouling “Star of Hope Project” who comes from Libo Coca Cola-funded primary school has been selected as the Coca Cola torch bearer. During the SARS period last year, it also participated actively in the “fight against SARS” in Shanghai.

With the promotion and support from Coca Cola company, Shanghai Shenmei, together with other bottling plants in China, jointly set up the “first Coca Cola College Scholarship for Rural Students”, which provides financial support for 678 students from remote countryside who have assiduously worked their way into college. It also provides scholarship for 290 excellent junior high school students and 100 senior high school students. All these programs mark the establishment of a complete education support system by Coca Cola Company and its bottling plants in China. This system provides poor students with constant financial support at the levels of primary school, junior high and senior high middle school and college.

In addition, as part of the campaign to protect China’s mother river “Yellow River” the first underground water well used to irrigate trees in Tianmo Sand Dune, Hualai County, Hebei province, went into successful operation. The project completed in 2001 is the result of joint efforts by Coca Cola, China Youth Development Foundation and other donators. Together with its donation of millions of saplings in 2000, the water well is another piece of historical evidence for the company’s financial donations. Shanghai Shenmei also attaches great importance to environmental hygiene. A strict hygiene standard is reinforced in the company so that the pollutants from external environment have been successfully kept from the factory. During the SARS period last year, Shanghai Shenmei took an active part in every “Anti-SARS” campaign. With its increasing development and investment, Shenmei’s function as a role model for other companies has been strengthened by its management philosophy of rewarding our society.

Long Road Ahead, Heavy Responsibility Upon Our Shoulders

Shanghai Shenmei is one of the excellent enterprises, which have been developed during the process of China’s reform and opening up and under the care of Shanghai Municipal People’s Government. More than ten years have past. During this time, Shanghai Shenmei has always maintained its leading position in Shanghai beverage sector through continuously summarizing experience from practices and seeking development opportunities. The market is filled with competitions, which are surrounding Shanghai Shenmei. Under such tough situation, Shenmei will adopt a series of reforms aimed at streamlining its core business and improving its comprehensive competitiveness. It will strengthen the management philosophy of “Pursuing Excellence, Always Striving to Be the Top One”. It will deepen its strategic partnership with Coca Cola Corporation so that the bilateral cooperation can be expanded to cover much deeper and wider areas. Shanghai Shenmei aims at becoming not only the first-rate enterprise in China, but also the first-rate soft-drink producing enterprise in the world. To achieve this goal, it will involves itself deeper in the process of economic globalization and put into practice the policy of “benefiting ourselves through making full use of what we have borrowed from others”.