Market research

Environmental scanning

Environmental scanning can be defined as ‘the study and interpretation of the political,

economic, social and technological events and trends which influence a business, an

industry or even a total market’. The factors which need to be considered for

environmental scanning are events, trends, issues and expectations of the different

interest groups. The PEST analysis of coca cola company is as under:

PEST ANALYSIS

The PEST analysis examines changes in a marketplace caused by Political, Economical, Social

and Technological factors.

1. Political changes: political changes from one party to another in control- for example

the rise in private healthcare and privatizations under Conservative governments.

1.2 Political Analysis for Coca-Cola

Non-alcoholic beverages fall within the food category under the FDA. The government

plays a role within the operation of manufacturing these products in terms of regulations.

There are potential fines set by the government on companies if they do not meet a

standard of laws.The following are some of the factors that could cause Coca-Cola

company's actual results to differ materially from the expected results described in their

underlying company's forward statement:-

Changes in laws and regulations, including changes in accounting standards,

taxation requirements, (including tax rate changes, new tax laws and revised tax

law interpretations) and environmental laws in domestic or foreign jurisdictions.

Changes in the non-alcoholic business environment. These include, without limitation,

competitive product and pricing pressures and their ability to gain or maintain share of

sales in the global market as a result of action by competitors.

Political conditions, especially in international markets, including civil unrest,

government changes and restrictions on the ability to transfer capital across borders.

Their ability to penetrate developing and emerging markets, which also depends on

economic and political conditions, and how well they are able to acquire or form

strategic business alliances with local bottlers and make necessary infrastructure

enhancements to production facilities, distribution networks, sales equipment and

technology.

2. Economic change: for example a recession creating increased activity at the lower ends

of product price ranges. Rate of interest rises depressing business and causing redundancies and

lower spending levels.

2.1 Economic Analysis for Coca-Cola

Last year the U.S. economy was strong and nearly every part of it was growing and doing well.

However, things changed. Most economists loosely define a recession as two consecutive

quarters of contraction, or negative GDP growth. On Monday 26, the government officially

declared that the U.S. has been in recession since March. However, because of aggressive action

by the Federal Reserve and Congress it will be short and mild. The economy will return to

sustained, positive growth in the first half of 2002. This affected the operations of coca cola

company in china.

3.Social change: involves changing attitudes and lifestyles. The increasing number of

women going out to work, for example, led to the need for time-saving products for the home.

3.1 Social Analysis for Coca-Cola

Many chines citizens are practicing healthier lifestyles. This has affected the non-alcoholic

beverage industry in that many are switching to bottled water and diet colas instead of beer and

other alcoholic beverages. Also, time management has increased and is at approximately 43% of

all households. The need for bottled water and other more convenient and healthy products are in

important in the average day-to-day life. Consumers from the ages of 37 to 55 are also

increasingly concerned with nutrition. There is a large population of the age range known as the

baby boomers. Since many are reaching an older age in life they are becoming more concerned

with increasing their longevity. This will continue to affect the non-alcoholic beverage industry

by increasing the demand overall and in the healthier beverages.

4. Technological change - creates opportunities for new products and product

improvements and of course new marketing techniques- the Internet, e-commerce.

4.1 Technological Analysis for Coca-Cola

Some factors that cause company's actual results to differ materially from the expected results are

as follows:

The effectiveness of company's advertising, marketing and promotional programs. The

new technology of internet and television which use special effects for advertising

through media. They make some products look attractive. This helps in selling of the

products. This advertising makes the product attractive. This technology is being used in

media to sell their products.

Introduction of cans and plastic bottles have increased sales for Coca-Cola as these are

easier to carry and you can bin them once they are used.

As the technology is getting advanced there has been introduction of new machineries all

the time. Due to introduction of this machineries the production of the Coca-Cola

company has increased tremendously then it was few years ago

CCE has six factories in Britain which use the most stat-of the-art drinks technology to

ensure top product quality and speedy delivery. Europe's largest soft drinks factory was

opened by CCE in Wakefield, Yorkshire in 1990. The Wakefield factory has the

technology to produce cans of Coca-Cola faster than bullets from a machine gun.

Sources of Marketing Information

A variety of sources can be used to obtain the information necessary to fuel

a marketing information system. These information sources can be grouped

into two main categories: secondary data and primary data. Secondary data

were previously collected for another purpose. Primary data are generated

for a specific purpose when the information is not available elsewhere.The secondary

data may provide the information necessary to make a decision, and even if they don’t,

they may be useful in developing the collection process for primary data. Figure 1

illustrates the possible sources of information for marketing decisions.

Figure 1: information sources

Regulation of the Republic of China on Import and Export Duties

Mar 30,2007 (Promulgated by the State Council on March 7, 1985, amended and

promulgated by the State Council on September 12, 1987, amended and promulgated for

a second time on March 18, 1992 according to the Decision of the State Council on

Amending the Regulations of the People's Republic of China on Import and Export

Duties)

GENERAL PROVISIONS

Article 1

These Regulations are formulated in accordance with the relevant provisions of Customs

Law of the People's Republic of China with a view to implementing the policy of opening

to the outside world and promoting the development of foreign economic relations and

foreign trade and the national economy.

Article 2

All goods permitted to be imported into or exported out of the People's Republic of China

shall, unless otherwise provided for by the State, be subject to the levy of Customs import

or export duties according to the Customs Import and Export Tariff of the People's

Republic of China hereinafter referred to as Customs Import and Export Tariff). If goods

originating within Chinese territory are purchased from outside Chinese territory for

import, Customs shall levy import duty in accordance with the Customs Import and

Export Tariff. Customs Import and Export Tariff is an integral part of these Regulations.

Article 3

The Tariff Commission established by the State Council is charged with the

responsibility to formulate or amend the guideline, policies and principles for Regulations

on Import and Export Duties and Customs Import and Export Tariff, to examine the draft

of amendments of Tariff, to set temporary tariff rates and to examine and approve partial

adjustment of tariff rates. The composition of the State Council Customs Tariff

Commission shall be prescribed by the State Council.

Article 4

Both the consignee of imports and the consignor of exports are persons obligated to pay

Customs duties. The agent entrusted to go through the related procedures shall abide by

all the provisions of these Regulations pertaining to his client.

Article 5

The measures on the levy of or exemption from import or export duties on incoming and

outgoing passengers luggage and articles and on personal postal matters shall be

formulated by the State Council Customs Tariff Commission.

APPLICATION OF TARIFF RATES

Article 6

Customs import duty shall be calculated in accordance with general tariff rates and

preferential tariff rates. The general tariff rate shall apply to an import originating in a

country or region with which the People's Republic of China has not yet signed an

agreement containing reciprocal preferential tariff clauses. If imports originating in the

People's Republic of China are subject to discriminatory rates of duty or other types of

discriminatory treatment by any country or region, Customs may impose a special

Customs duty on imports originating in the said country or region. The State Council

Customs Tariff Commission shall determine and promulgate for implementation details

of the types of goods subject to the special Customs duty, the duty rates and the time

period when such levies commence and finish.

Article 7

Import and export commodities shall be classified under appropriate tax item numbers in

accordance with the category provisions of the Customs Import and Export Tariff and

shall be subject to tax levies pursuant to relevant tax rates.

Article 8

Customs duties shall be levied on imports or exports at the tariff rates obtaining on the

date of declaration for imports or exports by the consignee or consignor or his agent.

Imports which are permitted by the Customs to be declared priorto their entry shall be

subject to the levy of import duties at the tariff rates obtaining on the date of entry of the

means of transport involved.

Article 9

If an import or export is subject to a supplementary duty payment or refund of duty, the

rate of duty on the date of the good's original import or export declaration shall apply.

The specific measures shall be formulated by the Customs General Administration.

VERIFICATION OF THE DUTY-PAYING VALUE

Article 10

The duty-paying value of the goods to be imported shall be assessed according to the

CIF price based on the normal transaction price verified by the Customs. The CIF price

shall cover the price of the goods, packing charges, freight, insurance premiums and other

service charges incurred prior to the unloading of the goods at the port of entry in the

Customs territory of the People's Republic of China.

Article 11

If unable through examination to determine the CIF price of an import, the Customs shall

assess its duty-paying value based successively on the following prices: (1) the

transaction price of an item equivalent or similar to and from the same country or region

of origin as the said import: (2) the transaction price on the international market of an

item equivalent or similar to the said import; (3) the wholesale price on the domestic

market of an item equivalent or similar to the said import, minus import duty, other

import-linked taxes or duty and the post-import transport, storage and business costs and

after-profit price; (4) a price valued by the Customs using other reasonable methods.

Article 12

The duty-paying value of mechanic appliances, means of transport or any other goods,

which were shipped out of the Customs territory for the purpose of repairs with the

declaration for exports made in advance and shipped back into the Customs territory

within the time limit set by the Customs shall be identical with the normal charges on the

repairs and the cost of materials and spare parts used for the repairs, both of which shall

be subject to the examination and approval by the Customs.

Article 13

The duty-paying value of the goods which were shipped out of the Customs territory for

processing with the declaration for exports made to the Customs in advance and shipped

back into the Customs territory within the time limit set by the Customs shall be identical

with the difference between the CIF price of the processed goods at the time of entry and

the CIF price of the original goods shipped out of the Customs territory or of the identical

or similar goods at the time of entry. The specific measures shall be formulated by the

Customs General Administration governing the varieties of the aforesaid goods and their

control.

Article 14

The duty-paying value of the goods to be imported on lease (including those for rent)

shall be assessed according to the rental for the goods, which is subject to the

examination and approval by the Customs.

Article 15

The duty-paying value of the goods to be imported shall include fees for patents,

trademarks, copyright, proprietary technology, computer software, information, etc.,

which are incurred in relation to the said imports and paid to foreign parties in order that

the goods may be manufactured, used, published or distributed domestically.

Article 16

The duty-paying value of the goods to be exported for sale shall be identical with the

FOB price of the goods with the export duties deducted. The above FOB price shall be

subject to the examination and approval by the Customs. If unable to determine the FOB

price of an export, the Customs shall assess its duty-paying value.

Article 17

The consignee and consignor of imports or exports or their agents shall accurately declare

the transaction price of the said imports and exports. If the declared transaction price is

significantly lower or higher than the transaction price of equivalent or similar goods, the

Customs shall determine the duty-paying value pursuant to the provisions of these

Regulations.

Article 18

The consignee of imports or consignor of exports or their agents shall, at the time of

submitting the declaration for imports or exports, produce to the Customs the invoices

indicating the real price, freight, insurance premiums and other expenses incurred for the

goods (with manufactures' invoices, if any), packing lists and other relevant papers for

the examination and approval by the Customs. All the above invoices and papers shall be

signed and stamped by the consignee or consignor or his agent to affirm their

authenticity. Article 19

The consignee or consignor or his agent shall produce the invoices and other papers for

the Customs to assess the duty-paying value of the goods to be imported or exported. If

necessary, the Customs may examine the relevant contracts, accounts, bills and other

papers of both the buyers and the sellers or make any further investigation. The Customs

may also check the above documents and papers even after the levy of Customs duties

on, and the release of the goods in question.

Article 20

In case the consignee and consignor or his agent fail to produce the relevant documents

and papers stipulated in Article 18 for examination by the Customs at the time of

submitting the declaration for imports or exports, Customs duties shall be levied

according to the duty-paying value assessed by the Customs. No adjustment shall be

made of the Customs duties already collected even though the relevant documents and

papers are subsequently produced to the Customs.

Article 21

In case the CIF price of imports, the FOB price of exports, the rental for imported or

exported goods, the charges on repairs or the cost of materials and spare parts are

computed in foreign currencies, they shall be converted into RMB at the price between

the buying and selling prices quoted by the State administrative organ in charge of

exchange control in Schedule of Exchange Rates of RMB Against Foreign Currencies on

the date of issuance of the duty memorandum. In case the exchange rate of any foreign

currency is not available in the Schedule, the customs may apply the exchange rate set by

the above administrative organ.

PAYMENT REFUND AND RECOVERY OF CUSTOMS DUTIES

Article 22

The consignee or consignor or his agent shall pay Customs duties at the designated bank

within seven days (excluding Sundays and national holidays) after the date of issuance of

the duty memorandum by the Customs. In case of any payment in arrears, the Customs

may order the fulfillment of the payment according to law, and 1$ of the total amount of

the overdue Customs duties shall be charged as a fee on delayed payment per day from

the eighth day to the date of fulfillment of the payment.

Article 23

The Customs shall levy Customs duties and charge fees on delayed payment of RMB

unless otherwise provided for by the Customs General Administration.

Article 24

The Customs shall issue receipts for any Customs duties collected or any fees on delayed

payment charged. The form of their receipt shall be prescribed by the Customs General

Administration.

Article 25

Under any of the following circumstances, the consignee or the consignor or his agent

may, within one year from the date of payment of Customs duties, claim for a refund

from the Customs by submitting to the Customs a written which his claim shall not be

entertained: (1) any amount of Customs duties is overpaid as a result of the wrong

assessment by the Customs; (2) any duty paid on goods imported which are exempted

from the examination by the Customs are discovered to be short-landed with the

verification by the Customs; (3) any duty paid on goods to exported are not shipped for

some reasons and declared to the Customs as shut-out cargo with the verification by the

Customs. Any delayed application for a refund shall not be accepted.

Article 26

In case Customs duties are short-levied or not levied on imports or exports, the Customs

may, within one year after the date of payment of Customs duties or the date of release of

the goods, recover the amount of Customs duties short-levied or not levied. If any

imports or exports are short-levied or not levied owing to an act in violation of the

Customs regulations by the consignee or consignor or his agent, the Customs may

recover from him the Customs duties short-levied or not levied within three years.

REDUCTION OF EXEMPTION OF CUSTOMS DUTIES AND ROCEDURES OF

EXAMINATION AND APPROVAL

Article 27

Goods falling in any following categories may be exempted from the levy of Customs

duties upon verification by the Customs: (1) goods of a consignment on which Customs

duties are estimated to be below RMB ten Yuan; (2) advertising matters and samples,

which are of no commercial value; (3) goods and materials, which are rendered gratis by

international organizations or foreign governments; (4) fuels, stores, beverages and

provisions for use en route loaded on any means of transport, which is in transit across

the frontier. In case any goods exported are shipped back into the Customs territory for

some reason, the original consignor or his agent shall submit a declaration for entry with

the original documents and papers attached and verified by the Customs, import duties

may be exempted. However, the export duties already collected shall not be refunded.

Imports returned abroad for any reason shall be declared to the Customs at the place of

exit by the original consignee or agent and the original import documentation shall be

presented. If the Customs examination verifies the details, export duties may be

exempted, but import duties are not refunded.

Article 28

The Customs may, in consideration of any of the following circumstances, grant

reduction or exemption of Customs duties on any goods falling in any of the following

categories: (1) goods damaged, destroyed or lost en route to the Customs territory or at

the time of unloading; (2) goods damaged, destroyed or lost as a result force majeure

after unloading but prior to release; (3) goods discovered already leaky, damaged or

rotten at the time of the examination by the Customs, provided the cause is proved to be

other than improper storage.

Article 29

Customs duties shall be reduced or exempted on goods and article in accordance with the

relevant provisions of the international treaties, to which the People's Republic of China

is a contracting or acceding party.

Article 30

The levy of Customs duties may be exempted temporarily on samples, exhibits,

engineering equipment, vehicles and vessels for construction, instruments and tools for

installation, cinematographic and television apparatus, containers of goods, and theatrical

costumes and paraphernalia, which are permitted by the Customs to be temporarily

shipped into or out of the Customs territory and reshipped out of or into the Customs

territory within six months, provided a deposit of an amount equivalent to that of the

Customs duties or a guarantee is submitted to the Customs by the consignee or consignor.

The time limit of six months stipulated in the preceding paragraph maybe extended at the

discretion of the Customs. If, subject to examination and approval by the Customs, an

extension of the import period is granted for temporarily imported engineering

equipment, vehicles and vessels for construction, etc, the Customs shall, during the

extension period, levy import duty pursuant to the period of usage of the respective

goods.

Article 31

Raw materials, supplementary materials, parts, components, accessories and packing

materials imported for processing and assembling finished products for foreign business

persons or for manufacturing products for export shall be exempt from import duties

pursuant to the actual amount of goods processed for export; or import duties may be

levied up-front on import materials and parts and subsequently refunded pursuant to the

actual amount of goods processed for export.

Article 32

Measures on the levy or exemption of Customs duties on free replacement goods shall be

separately formulated by the Customs General Administration.

Article 33

Customs duties shall be reduced or exempted in accordance with the provisions set out in

the relevant regulations on goods imported into or exported out of the designated areas,

such as special economic zones or the designated enterprises, such as Chinese- foreign

equity joint ventures, Chinese-foreign contractual joint ventures and sole enterprises with

foreign investment, and also on goods falling in the category of preferential treatment by

laws and regulations.

Article 34

In case the consignee or consignor or his agent applies for ad hoc reduction or exemption

of Customs duties on imports or exports, a written application specifying the reason

therein and necessary documentary evidence shall be submitted to the Customs for

examination prior to the importation or exportation of the goods. The Customs shall

transmit the application verified to the Customs General Administration, which may, in

accordance with the relevant regulations formulated by the State Council, examine and

approve it with or without consulting with the Ministry of Finance.

Article 35

If the Customs, in relation to imports granted preferential duty reductions or exemptions

pursuant to the provisions of the State laws or regulations, examines and approves, within

the supervisory and control period, an application for the sale or assignment of such

goods or their use for other purposes, the value of the goods shall be reappraised in

accordance with the period of usage and supplementary payments of import duties made.

The supervisory and control limit of years shall be formulated separately by the Customs

General Administration.

PROCEDURE FOR APPEAL

Article 36

If a person obliged to pay Customs duties disagrees with a decision by the Customs in

relation to such matters as duty payment, duty reduction, supplementary payment or the

refund of duty paid on imports and exports, the party concerned shall first pay the amount

determined by the Customs, and then, within 30 days of the Customs issuing a receipt of

payment, lodged with the Customs a written application for reconsideration. The

Customs shall not accept an appeal lodge after the expiry of the prescribed time limit.

Article 37

The Customs shall make its decision on the appeal within 15 days as of the date of receipt

of the appeal. Should the person obligated to pay Customs duties refuse to accept the

decision, he may appeal to the Customs General Administration for reconsideration

within 15 days as of the date of receipt of the notice of decision.

Article 38

The Customs General Administration shall make its decision on the appeal within 30

days after the date of receipt of the appeal and accordingly notify the person obligated to

pay Customs duties of the decision. Should the person obligated to pay Customs duties

find the decision made by the Customs General Administration unacceptable, he may

bring the case to the people's court within 15 days as of the date of receipt of the said

decision.

PENALATIES

Article 39

Any act in violation of these Regulations which constitutes the crime of smuggling, or of

the regulations on the Customs supervision and control shall be dealt with in accordance

with the provisions of Customs Law of the People's Republic of China, Regulations for

Imposing Administrative Penalties under the Customs Law of the People's Republic of

China and other relevant laws or regulations.

SUPPLEMENTARY PROVISIONS

Article 40

The Customs shall, in accordance with relevant regulations, reward any individual or unit

who provides any information or assistance which leads to the uncovering of any evasion

or avoidance of Customs duties in violation of these Regulations. The identity of the

individuals or units concerned shall be kept confidential.

Article 41

The Customs General Administration shall be responsible for the interpretation of these

Regulations. Article 42 These Regulations shall come into force as of April 1, 1992. Free

import. The following items can be imported into the country if visiting for less than 6

months.

• Cigarettes .The amount of cigarettes increases to up to 600 if staying more than 6

months.

• Alcohol Beverages – 2 Bottles. The alcohol limit doubles to 4 bottles if staying over 6

months.

• Reasonable amount of perfume.

• Guns and Ammunition

• Explosives and Explosive Materials

• Radio Receivers/Transmitters

• Knives and similar dangerous cutting weapons Restricted

• Amongst the items requiring permission to enter China include TV’S, Computers,

washing machine and other electrical goods.

A unified certification management system will be established so that domestic and

foreign commodities will be quarantined and inspected according to the same standard,

said Li Changjiang, head of the State General Administration for Quality Supervision,

Inspection and Quarantine.