Cola
Turka is the first real attempt of a Turkish company to go head to
head with the famous American rivals in the Turkish cola market. Although
there have been Turkish cola brands before Cola Turka, they aimed at
capturing tiny shares of the market through low prices. The company who
took the challenge of battling rivals like Coca Cola and Pepsi is actually
a large Turkish company called Ülker, which specializes in cookies and
chocolate. Ülker had no experience in the beverage market prior to 2002.
In short, Cola Turka is a Turkish cola produced by a Turkish firm with no
experience in the cola market and a cola which had more or less the same
price as its rivals when it came out. In such few words, it is possible to
understand the nature, the price and the distribution of this product, and
more details are provided in following sections of the paper. The more
important question that must be asked initially is what promotion method
was used and why Cola Turka became a success?
Chevy
Chase advertising Cola Turk
PROMOTION
Although the advertising campaign of Cola Turka seems like a very original
concept, it actually rests on a well-known concept, or rather joke, in
Turkey. We always joke around the fact that we are very different from
other cultures because we have our own look at life and our own way of
doing things. Taking this into account, Ülker concentrated on the idea
that Cola Turka brings out the Turk in people. To better understand what
we mean, a Turkish joke could come handy. We say that if a Turk would go
to hell, he would make small talk with the devil and tell him “You’ve
got a hard job here with all this heat and stuff. So do you get a heating
bill here or how does it work?” If the Turk would end up in heaven, he
would make small talk with the angels asking them how much they paid for
their harps and where they got them.
One writer actually wrote that the success behind the commercial was the
acting and directing, rather than the idea (Yaman, 2003). The commercials
were successful because they had been able to successfully implement the
idea at hand. The writer further added that “This is all related to the
amount of money you have to set aside for advertising. With the right
amount of money, one could even make Bill Clinton play a Turkish song on
his saxophone.” In fact, it cannot be argued that the commercials
prepared by Young & Rubicam were of high quality. They used Sinan Çetin,
an award winning Turkish director, to direct it and famous American actor
Chevy Chase to star in it.
In the first commercial, Chevy Chase walks down an avenue in the United
States and sees a car passing by loaded with people waving the Turkish
flag; a scene one would easily witness in Turkey after the national
football team would get good a good result. The surprised Chase goes into
a café and sits on a stool, next to a man with a cowboy hat. The man asks
him “Hey, did you see the game last night?” Chase, trying to think
what basketball, baseball or hockey game there was, gives up and asks him
which match he is talking about. The cowboy starts telling him about the
Beşiktaş match (a famous Turkish football team) and how Sergen
(one of its famous players) scored an amazing goal. The stunned Chase then
listens to the man with the cowboy hat use various Turkish expressions he
has never heard in his life. In the end Chase decides to leave the café
and the man, patting his chest, does not let him pay for his coffee. This
is again an act one would see from hospitable Turkish people who love to
argue over who will pay the bill.
Cola
Turk commercial
In the second commercial with Chevy Chase, which is a continuation of the
first one, he goes home and starts telling his wife that the weirdest
thing happened today. At that point he realizes that his wife is cooking
some kind of food he has never seen in his life. His wife tells him it is
“biber dolması”, a popular Turkish food. He then turns his
attention to the living room where his children seem to be kissing the
hand of their grandfather, who gives them some money in return. Later on,
the whole family sits down to have dinner and they are all in a happy
mood. They start to sing “Take Me Out to the Ball Game”, but after
they have sipped their Cola Turkas, they change the song to a Turkish boy
scouts song. By this time Chase thinks that he has gone crazy. His wife
tells him to relax and offers him some Cola Turka. Upon drinking this
cola, Chase also joins in to sing the Turkish song. At the end of the
commercial, we see Chase outside of his house and he has sprouted a
Turkish style moustache by now. A final joke is added when an old man
selling potatoes and onions – as you would often see on the streets of
Turkey – passes by the screen. We see the final message of the
commercial, which can be translated into English roughly as “Cola Turka
brings out the Turks in you.”
INTERNAL ENVIRONMENT
SUPPLIERS and CUSTOMERS
Ülker was established in 1944 a small bakery. Four years later, it opened
a larger factory in Istanbul’s Topkapı district and tripled its
production. In 1970, the company established Andolu Gıda in Ankara,
doubled its cookie production and started exporting to the Middle East. In
1974, Ülker established its second plant in Istanbul and began modern
chocolate production. It also established a research and development unit
to help the company better compete with international brands. In 1992 the
company moved in to the margarine, vegetable oil and industrial fats
segments. Four years after that, it moved also into the dairy product
market. Last but not least, Ülker also got into the carbonated beverage
market (Ülker Corporate Website).
The main customers of Ülker products depend on the product. In the case
of cookies and chocolate, Ülker reaches most of Europe (including
Romania), most of the Middle East, half of Africa, all of the Turkic
republics, USA, Canada, Panama, Trinidad, Hong Kong, Taiwan, Korea, and
Australia. In the case of Cola Turka however, Ülker currently does not
reach any foreign country, but has plans to export to countries with large
Turkish populations (e.g. Germany and Turkic republics). In this sense,
Cola Turka is only a rival to American cola brands in Turkey.
COMPETITORS and ALLIES
Competitors of Cola Turka have been mentioned throughout the paper and, by
now, are quite obvious. The main competitors are Coca Cola and Pepsi. A
more detailed examination of each competitor’s market share in the
Turkish market is provided later on in the paper. Perhaps a less obvious
factor, especially to those unfamiliar with the Turkish market, is who the
current and potential allies of Cola Turka are.
In June 2005, Beşiktaş Jimnastik Kulübü, one of Turkey’s
greatest sports clubs signed a five year sponsorship deal with Cola Turka
worth $21 million. While $9 million of this amount was paid upfront, $11
million of the remainder will be paid in various installments from 2007
onwards. Interesting enough, the remaining $1 million will be paid in the
form of Cola Turka drinks rather than cash (NTV-MSNBC, 2005).
Cola
Turk sports sponsorship
This sponsorship agreement is very important because Cola Turka has earned
one of the most important allies it could hope for in the sports industry.
Football is by far the most watched sport in Turkey and along with two
other Istanbul based clubs, namely Fenerbahçe and Galatasaray, Beşiktaş
has the most number of supporters in the country. By being the sponsor of
this sports club, Cola Turka is also gaining the support of millions of
football fans. Moreover, Beşiktaş also has a popular basketball
team. Two of the other most popular basketball teams in Turkey are Efes
Pilsen and Ülker, which is the parent company of Cola Turka. Thus, with
the sponsorship deal, Cola Turka has also doubled its exposure in the
basketball league. Additionally, Beşiktaş also has one of the
most successful women’s volleyball clubs.
Within the framework of the deal, sportsmen or sportswomen of Beşiktaş
will have the commercial of Cola Turka on their uniforms. This means a
great deal of exposure on Turkish television, which has extensive sports
coverage. Furthermore, success by Beşiktaş sports teams in
European competition could also spell exposure on European television.
Also, as part of the payment will be made in the form of drinks, this
means that the sportsmen and sportswomen and various officials working for
the club will get to drink Cola Turka at the camps or in the club
buildings. This in turn could result in preference of Cola Turka over
other colas by Beşiktaş personnel and their families. Thus, we
could easily say that Beşiktaş will serve as an important ally
for Cola Turka in the next five years.
In 2004, Turkish Airlines (THY), Turkey’s largest and most popular
airlines, started serving Cola Turka in all of its domestic flights, in
addition to serving Coca Cola and Pepsi. In January 2005, THY also started
serving Cola Turka on certain international flights. Ahmet Doğan,
Catering Director of THY was quoted as saying that they considered the
countries heavily populated by Turks when deciding which international
flights to serve Cola Turka on. The first international flights chosen
under this framework were those to and from New York, Chicago, Germany and
the Turkic republics in the Caucasus (Zaman, 2004).
This clearly is an important development for Cola Turka and it can be said
that THY will serve as a great ally in this respect. What THY did was to
allow people to make a choice: they could choose to drink Western cola
brands or a Turkish cola brand on these flights. In other words, the newly
formed Cola Turka was treated as an equal to the billion dollar industries
of Coca Cola and Pepsi. This is quite an accomplishment and I doubt such
an example was observed elsewhere in the world. What is even more
interesting is that THY officials noted that there had been quite a few
American passengers who asked for Cola Turka because they had either seen
its advertisement or had heard about it in the international press.
If we think about the number of people that travel via THY and the
percentage of them that wish to drink cola on the flights (which are both
quite high), we can easily say that Cola Turka is getting a great daily
exposure. What is even better for them is that this is a kind of exposure
they did not even have to pay for. It is simply there because people
wanted it to be there and THY is simply an organization that gave people
the right to choose. In this sense, THY and other organizations which
might also take a similar decision to allow Cola Turka to go head to head
with its foreign competitors on equal ground, will serve as allies and an
important platform for people to voice their preferences.
CULTURAL and SOCIAL
Cola in essence cannot really be considered part of any culture other than
that of the United States, as Coca Cola and Pepsi both originate from this
country. However, every country has taken these brands more or less into
their everyday life. This in turn has decreased the importance of various
cultural drinks found elsewhere in the world. In the case of Turkey, these
colas have invaded the country starting from the early 1980s and the
popularity of Turkish drinks such as gazoz and ayran have since decreased.
The new generations cannot seem to survive with cola, despite the fact
that many of their grandparents still might not have drunk a cola up to
this day.
In short, we can easily say that cola is a Western invention and has no
place in traditional Turkish culture. Many Turkish people today believe
that the West is to blame for many of the things going wrong in the world
today and do not see Western countries, especially the US, to be
trustworthy. Most feel that the only thing the West is after is the
financial exploitation of the rest of the world. Products of the US are
viewed as the extension of their exploitation of the world. For example,
some Turkish university students seem to especially be anti-West and to
make a stand, they do not eat at American fast food restaurants such as
McDonald’s, Burger King, and Kentucky Fried Chicken and go as far as not
drinking cola. However, most Turkish youngsters, although they might agree
from a political standpoint with the former group, cannot stop using
certain American products. Perhaps, cola is the most important example in
this respect.
From one point of view, if one does not eat American fast food, he or she
still has quite a few alternatives. One can visit Turkish-owned fast food
joints making hamburgers or can eat more Turkish fast food products, such
as döner. Moreover, one can always cook hamburgers, fried chicken,
pizzas, etc. at home, even if not at the same professionalism as the
American fast food joints. Moreover, the Turkish food culture is so rich
that not being able to eat a hamburger would not cause much concern.
However, the case of cola is different as finding alternatives is very
hard. First of all, cola has a distinct taste one cannot get out of any
other drink. If one were to examine the ingredients included in brands
like Coca Cola, he or she would see that there is always a special
ingredient. You do not find that ingredient in bubbly water or the once
popular Turkish soda pop known as gazoz. To stop drinking cola, for most
people, is as hard as quitting smoking.
One example I can give from my own experience is related to my young
niece. When she was around three or four years old, she used to drink a
lot of cola. Realizing the dangers of this habit, my sister decided that
she would not allow her to drink cola for some time. Upon this decision,
my niece went into some sort of psychological shock in less than half a
day. She cried non-stop and practically begged for a sip of cola.
Second of all, Turkish alternatives to the American colas have been
unsuccessful prior to Cola Turka. The general view was that the taste of
Turkish colas was far off their American counterparts. The Turkish colas
tried to gain a share of the market by having much lower prices in
comparison to the Coca Cola and Pepsi, but this did not end up being a
healthy solution. Moreover, the majority of restaurants in Turkey never
carried these Turkish cola brands. Customers, at best, had a choice
between Coca Cola and Pepsi. In the majority of the cases, restaurants
would just carry only one of these American brands. There simply was no
reason to carry a cheaper and worse tasting Turkish brand.
In short, although many Turkish people wanted to take a stand against the
West, their cultural and social identities were not enough to cut American
colas out of their lives. Clearly, what the market and these people needed
was not an alternative to cola itself, but an alternative to American
colas. That could only be provided by a good tasting Turkish cola that
would go head to head with the Americans with its quality, rather than its
price. That is exactly what Ülker provided with Cola Turka and it
explains quite a bit of the success of this Turkish made cola, without
even considering the success in its advertising.
ECONOMIC and LEGAL
The demand for non-alcoholic drinks is worth around $220 billion in the
world’s twelve richest countries. Soft-drinks (pops) form around 60
percent of this market, with colas forming the largest sub-segment. In the
case of Turkey, the non-alcoholic drink market is worth around $960
million, of which 65 percent are composed of pops. The cola market in
Turkey was worth $250 million before Cola Turka entered it. Coca Cola was
the leader in the Turkish market holding 55 percent of the market, while
Pepsi followed it with 40 percent (Yaman, 2003). In other words, Cola
Turka entered a market owned 95 percent by two American brands.
In fact, this duopolistic state of the cola market was what made many
Turkish firms turn their attention to it. Over the years, Turkish cola
brands such as Kristal Cola, Can Cola, Huzur Cola, as well as various
supermarket colas such as Gima and Carrefour, entered the Turkish cola
market. However, none of them seriously entered the market to be a true
competition for the two American brands. Rather, they simply were after
small shares of the market and they sought after selling their colas
through lower prices. It can be argued that this tactic was a more
realistic one, as no cola brand had been able to go beat Coca Cola and
Pepsi elsewhere in the world.
For example, the British group Virgin, which entered every market from
airlines to music, also entered British the cola market in 1994. Despite
its home filed advantage, Virgin Cola could only get 4 percent of the
British cola market at the end of its second year. Other cheaper colas
formed 18 percent of the British market, while Coca Cola and Pepsi
continued to hold roughly 78 percent (Yaman, 2003). Thus, even a giant
name like Virgin was unable to go head to head with the two American
brands in its own country. This should have been enough of a lesson for
Virgin. However, they took a weird decision and entered the American cola
market. Needless to say, despite the millions of dollars Virgin spent in
the US on advertising, it could only hold up its budget for two years. At
the end of this period, Virgin officials stated that they were pulling
Virgin cola out of the country as it was simply meaningless trying to
battle with the two American brands.
It is hard to assess exactly how much of the market Cola Turka has
captured. Ülker is not a company of which the majority of the shares are
public, so it has no legal obligation to make its sale numbers public.
However, Ülker Food Group President Metin Yurdagül was quoted in
February 2005 as saying that Cola Turka had captured 20 percent of the
Turkish cola market and that it was ranked second in the market (Yeni
Şafak, 2005). As noted before, Coca Cola and Pepsi had formed 55 and
40 percent of the market two years earlier than the above statement. Thus,
in two years Pepsi would have had to lose around 20 percentage points,
since we can assume that the leader in the Turkish cola market is still
Coca Cola. Nevertheless, this is a great accomplishment for Cola Turka,
which came out of nowhere and captured 20 percent of the market. This is a
success Virgin Cola could not even come close to in the United Kingdom
despite being a billion dollar company.
Additional information found in 2005 showed that, according to surveys,
Cola Turka has entered 63 percent of Turkish households. Ülker also
boasted that as a result of Cola Turka entering, the cola market in Turkey
grew by 13 percent in 2003 and 27 percent in 2004 (Yeni Şafak, 2005).
Assuming that this is an increase higher than anticipated, we can also say
that Cola Turka actually increased the amount of cola sales in Turkey.
Thus, more people feel that a Turkish brand is more in conformity with
their social and cultural beliefs. In fact, Yurdagül also stated that
their 2005 end of year target was $200 million, compared to the total
value of the market worth $250 million in 2003. We could assume that if
this trend continued in the Turkish cola market, both the shares of Cola
Turka and the overall value of the market increased greatly by 2006. The
increase in the demand in the market can also be explained by the two
American brands decreasing prices as a result of Cola Turka entering the
market.
Cola
Turk sport shirt
What can be said about the overall legal environment in Turkey? Other than
obtaining a license from the Ministry of Health, there are not many
obstacles, especially for an already established brand like Ülker.
Obtaining this license is not a major problem for colas, but is only a
problem in the case of energy drinks. However, a much more important
aspect of the legal setting is the legal obligation of American fast-food
joints towards Coca Cola and Pepsi.
Anyone who was eaten at McDonald’s knows that there is only one brand of
cola available there: Coca Cola. In the case of Burger King and Kentucky
Fried Chicken one can only find Pepsi as the brand of cola. One will not
be able to make a choice between Coca Cola or Pepsi in any of these
popular fast-food restaurants. Moreover, the brand of cola does not change
from one country to another in these restaurants. If one finds Pepsi in a
Burger King in Bucharest, one will also find the same brand in a Burger
King located in New York, Tokyo or Istanbul. What this means is that no
matter how popular Cola Turka becomes in Turkey, it has no chance of
replacing Coca Cola or Pepsi in any of these restaurants unless a major
legal reform was to take place.
We do not know the full details of the agreement between the American cola
brands and American fast-food restaurants. Could exceptions be made for
countries such as Turkey in which a local cola brand is battling
successfully with the American brands? Some of these restaurants have
provided traditional Turkish drinks such as ayran, but as this is not a
cola, I doubt it affects any legal obligation between the two parties
mentioned. Nevertheless, Cola Turka being offered in a very popular
fast-food restaurant is food for thought. One wonders how much of Coca
Cola and Pepsi sales actually come from these restaurants in which the
customer has no control over what brand of cola he can drink. One further
wonders how those sales would be affected upon the introduction of Cola
Turka in these restaurants. If we take the example of what happened in the
market as a whole, we could assume that the market shares of Coca Cola and
Pepsi would further decrease if people were allowed to make a choice
between an American and Turkish brand. As mentioned in the Turkish
Airlines example, in the section dealing with the allies of Cola Turka,
people do in fact choose the Turkish brand when they have the freedom to
choose.
We
are seeking venture (seed) capital to develop our supply
chain and begin a world marketing
campaign. We are offering shares in our
company by way of equity funding.
Although, this product has potential for good
growth, the value of shares in any company,
private or public, can go down as well as
up.
Prospective
investors in our company should consult their
own independent investment advisers, and please
note this information is provided for general
guidance only. It is not a prospectus, but
is provided in response to the number of
requests we have received asking for more
information.
