MECCA-COLA: Global Marketing Ethics and Culture - Iloka Benneth Chiemelie

EXECUTIVE SUMMARY

This research paper is designed to understand culture and implications of cultural factors in organisational management. As part of the requirements, this research paper is basically divided into three sections that analysis chosen organisation, describes their mode of entry and highlights their organisational practices in the markets they maintain existence. The chosen organisation for this research paper is Mecca-Cola (a soft drink manufacturing company), and the sections are as described below.

Sections one: the first section presents an overview on the issue of understanding global marketing ethics and culture. This section went on to present a background analysis of the company and products chosen, as well as environmental analysis of the company's country of origin by adopting PESTLE model.

Second section: one the background analysis of the company has been completed, the next step as contained in this section was to discuss their mode of entry and cultural practices. The modes of entry feature three different modes from three different countries, while their cultural practices feature both practices in terms of culture, corporate social responsibility and ethics.

Third section: the final section pin-points some of the unethical practices in Mecca-Cola, and suggest ways these practices can be eliminated. This section also contains the conclusion for the research paper as well as bibliography for all citied contents.

1.0 UNDERSTANDING GLOBAL MARKETING ETHICS AND CULTURES

Marketing has been criticized for unethical business activities in recent years (Murphy and Laczniak, 1981; Tsalikis and Fritzchs, 1989; Sagar et al., 2006). This is because marketing involves more consumer centric activities than other parts of business, thus it remains in the centre for unethical practices (Ferell and Gresham, 1985; Swan and Nolan, 1985). This has made marketing managers more ethically sensitive, as they believe trust is essential for building and maintaining customer loyalty. This argument has been supported by marketing theories stating exchanges to be based on trust (Kotler, 2003), as lack of trust in exchange can lead to dissonance in marketing (Morgan and Hunt, 1994).

Ethics in marketing involves doing the right things to provide customers their want, with the sole intention of satisfying customers' needs in a socially acceptable way. Therefore, it can be seen as the central prerequisite for trust (Ahmed et al., 2003; Ferrell et al., 1989). Culture on the other hand, can be defined as a controlled mechanism (principles, belief, practices etc.) that governs the way people live within a society. Marketer's behaviours are generally affected by change in values, culture and ideology. Marketing and communication has long been regarded as an important activity (Reynolds and Gutman, 1984).

They are several acceptable and non-acceptable norms in marketing, and they depend on the social, cultural, and demographic conditions in which events take place. Some of these norms include those related to marketing mix such as products claims and safety, deceptive pricing, discrimination in distribution and advertising (Smith and Quelch, 1993; Brinkmann, 2002). Marketing generally involves persuasive communications that are designed to create value for products or services. The constantly rising globalization have influenced marketers to presume that the world is a uniform society, but in reality this case is unthinkable as consumers from across the globe still abide by their cultural norms and behave in a different way. For instance, a CNN advert with sexy model (e.g. Linday Lohan, Rihana etc) dressed on bikini shown in Saudi Arabia is unethical, although the advertiser from  USA might presume that there is nothing wrong with such adverts.

Issues like this have created paradoxical dilemma as global advertisers continue to find the best way for encoding their messages to their audience. Successful brands such as the ubiquitous Coca-Cola have successfully penetrated different cultures across the globe; but in reality they have done this my localizing their brands in each parts of the globe. This concept is based on the general assumptions that global markets are products and local markets are people. Thus, it is clear to see the reason why understanding variances in cultures across the globe will help in a better ethical behaviour amongst global marketers.

From the above discussion, it can be seen that variation in cultures across the globe has an undeniable impact on ethical behaviours in global marketing. This can be as a result of false presumption from marketers (Marketers behave unethically without knowing they do so) or for selfish reasons (Marketers behave in unethical way for profit reasons). Nevertheless, the end result is same no matter the reasons behind unethical behaviour by marketers; because every culture across the globe sees ethical behaviour as a way of building relationships between companies and consumers.

Differences in cultures have the biggest impact on global marketing as different societies have adapted to different forms of life. Differences in cultures can includes languages, arts and symbols, religion, social norms (for instances ways of greeting elders), lifestyle etc. it is difficult to generalized these differences as even people from the same society tend to think and behave differently. For instance in the USA, the White-Americans associate slim women (Example, Miley Cyrus, Taylor swift etc.) as being healthy and sexy, while the Back-Americans associates women with big body (Example, Serena Williams, Oprah Winfrey) as healthy and nice. Nevertheless, both ethnic groups accept the very big women (obsessed or very fat) as unhealthy. These differences have been attached to them from birth and changing these perceptions is almost impossible, as culture tend to mould every single individual from the grass root (birth – learning from parents and people around them).

It is possible to write over 100 thousand pages of illustration on how ethics and culture influence global marketing, but the few examples highlighted above serves as a clear prove that global marketing ethics and cultures is a vital focus field for marketers nowadays. This is also supported by numerous researches done in areas such as improving the understanding of marketing values, marketers' ethical decision-making processes, and cross-cultural issues in global marketing (Nill and Schibrowsky, 2007). Although ethical and cultural issues in marketing have been a major study area in recent years, global marketers and advertisers continue to see the world as a uniform society. Thus, this project paper will go a long way in highlighting impacts of cultural differences and unethical behaviours in global marketing; and illustrating that the world is not a uniform community.

 2.0 REPORT ANALYSIS ON CHOSEN PRODUCT AND PRODUCT'S COUNTRY OF ORIGIN

2.1 PRODUCT: MECCA-COLA

Figure 1: Mecca-Cola's logo

2.2 PRODUCT FEATURES

The product was produced similarly with other Cola brands. It consisted of a sweetener, a flavour base and carbonated drink. The Mecca-Cola compared to Coca-Cola and Pepsi has lesser sugar and carbon level. The red and white bottle mimics the American brand Coca-Cola and the logo bore a strong resemblance to the famous Swirl. The resemblance ended in these section, as the labelling bore a writing in Arabic "Do not shake me, Shake your conscience", and a pictures of the mosque. Some media have asserted the choice of name to the Muslin holy city in Saudi Arabia (Henley and Vasagar, 2003; Prepared Food, 2003).

2.3 PRODUCT BENEFITS: TANGIBLE AND INTANGIBLE 

1. Health and wellness: compared to other Cola brands such as Coca-Cola and Pepsi, Mecca-Cola contained less carbon and sugar. This is of health benefit to all the consumers as it limits the possibilities of health issues associated with consumption of these two elements (Henley and Vasagar, 2003).
2. Affordability: as already highlighted above, the Mecca-Cola product less expensive compared to other brands. This is a tangible benefit to the customers as they can save from consumption of Mecca-Cola rather than consumption of other Cola brands (Henley and Vasagar, 2003).  
3. Sense of belonging: following the boycott on American products by most Muslims, consumption of Mecca-Cola can offer intangible benefits to customers by giving them some sense of belonging. This will also be a leading point in securing market shares in Islamic markets across the globe (Henley and Vasagar, 2003).  

2.4 MARKET PERFORMANCE

By the time Mecca-Cola was launched in 2002, Carbonated Soft Drink (CSD) products where the dominant leader in soft drink industries worldwide. Coca-Cola and Pepsi dominated this market, with 60 percent market share in Western Europe and 90 percent in Middle East and North Africa (Beverage Marketing Corporation, 2003). To give a perspective, Coke (One brand under Coca-Cola) sold in half a day the same amount of beverage that Mecca-Cola had reached in a year (480 million bottles in 2003) as illustrated from the table (1) below.

Table 1:Global soft drink market volume by company (1997-2002)

Global soft drink market volume by company (1997-2002) Millions of 192-ounce cases
Company	1997	1998	1999	2000	2001	2002
Coca-Cola	14,358,20	15,094.40	15,173.10	15,701.20	15,925.90	16,211.00
Pepsi-Cola	5,865.30	6,086.80	6,217.10	6,384.70	6,520.30	6,764.20
Cadbury	1,993.10	2,175.30	1,891.60	1,882.80	1,857.70	1,871.70
Zam Zam Cola	–	–	–	–	–	156,3
Mecca-Cola	–	–	–	–	–	0.5
All other companies	6,512.80	6,163.80	7,395.50	7,458.30	7,607.30	7,587.60
Total	28,729.40	29,993.10	30,677.40	31,426.90	31,911.20	32,591.20

Source as adapted from: Beverage Marketing Corporation (2003).

Nevertheless, a corporation between Qibla-Cola and Mecca-Cola in 2003 catapulted the new brand into major market shares in the world. Qibla is also another anti-Americanization Cola brand original from Pakistan in the market many years before the launch of Mecca-Cola. By 2004, the beverage was available and sold in four more countries: Canada, Norway, The Netherlands and Pakistan. By the end of 2004, the beverage was distributed in 34 countries; Europe presented a lucrative market with its over 12 million Muslim residents. By April 2005, sales volume has already doubled with monthly growth rate of 15 percent in Europe (Amalou, 2004). The figure (1) below illustrates Mecca-Cola's sales volume in hundreds of millions by end of 2005.

Figure 2: Mecca-Cola's Sales Volume (2005 year ended 31^stDecember)

Year in year out, the beverage brand has continued to grow at a high rate even with competitions from both Zionist brands and similar brands such as Qibla-Cola. Their success has been attributed to the company's dedication of 20% of their total sales revenue to Islamic charities across the globe.

2.5 BCG MATRIX: PLACING MECCA-COLA IN THE BCG MATRIX

Figure 3: Mecca-Cola's BCG Matrix analysis

Source as modified from: NetMBA (2011)

From the figure (3), it can be seen that Mecca-Cola is currently placed in the "Question Mark" box. This is because, the company is currently high market growth due to their anti-American brand and Islamic positioning, but their market share is still relatedly lower since their establishment in 2003; compared to their main competitors such as Coca-Cola and Pepsi. Another main reason why their market share is low is because of entrance of imitators and substitutes such as Qibla-Cola, Zam Zam-Cola, Turkey-Cola etc., who also preaches boycotting of American brand and drinking of Islamic brand.

2.6 PRODUCT LIFE CYCLE

Figure 4: Mecca-Cola's product life cycle

2.6.1 GROWTH STAGE

Mecca-Cola is current at the growth stage. This was determined based on comparison with other brands, their market share and year of establishment. With low advertising, even in the Middle East and North Africa; the brand is not an established household brand in many homes. Most of their adverts are more emotional (use of Islam as their bases) rather than psychological or factual. 

2.7 COUNTRY OF ORIGIN: FRANCE

2.8 PESTLE ANALYSIS OF FRANCE

2.8.1 POLITICAL FACTORS

France is a republican state, with a semi-parliamentary system of government, where executive power is shared between the President of the Republic and the Prime Minister. The government is headed by the Prime Minister, and he is responsible to bicameral parliament (the National Assembly and the Senate). The government also has a judicial branch and the legal system is based on Roman law.

There have been five republics in France since the revolution of 1789, and the current republic is the fifth republic, which was founded in 1958. Being an advanced country, the French government understands the importance of FDIs in their country and offers numerous options to make it is easy for interested individuals or companies to invest in France. This is the main reason behind Mecca-Cola's unquestioned establishment in France in 2002.

2.8.2 ECONOMIC FACTORS

France is the world's fifth largest economic power in terms of Gross Domestic Profit (GDP). The public spending of residents in France was 53% of GDP in 2007, against an OECD average of about 40%. The French republic is in the midst of a transition from modern economy that has featured extensive government ownership and intervention to a system that relies more on market mechanisms.

The French government have either partially or fully privatized many government companies, banks, and insurers, and has relinquished shares in firms such as Air France, France Telecom, Renault, and Thales. Some of the economic facts are as listed below (Enterprise Europe, 2009):

1. GDP per capita in 2008: €30,413
2. GDP Growth: 0.7% (2008 estimate.)
3. Unemployment rate: 9.4% (June 2009)
4. Inflation rate: 1% (2008 estimate.)
5. Net average annual earnings (2007): €21,480
6. Gross average household savings: 15.3% of disposable in-come

These facts give France a high purchasing power, thus creating sales opportunities for Islamic related products to the Muslim communities in France.

2.8.3 SOCIO-CULTURAL FACTORS

With 62.5 million residents in the country, France is one of the least populated countries in Europe. Their national language is French, but German, English, Dutch and Russian are also spoken in France. Christians make the highest population, followed by Muslims with 12% of total population (Enterprise Europe, 2009). Others include Orthodox, Buddhist, handiest and non-religious people. The social atmosphere in France, given accepts to everybody; this is because of the fact that the population is mixed with different races and ethnicities across the world. The highest non-French ethnic group is the African immigrants mainly from North Africa, the part of Africa where Mecca-Cola's founder was born.

This socio-cultural influence on companies results in high ends of product demands and sales. Mathlouthi understood this factor and utilized it to the fullest, by first creating an Islamic and African heritage based radio, which was pivotal to the marketing of Mecca-Cola to its over 3 million audience in 2002.

2.8.4 TECHNOLOGICAL FACTORS

Being one of the world's powers, France has come through numerous eras of technological advancement, which have pioneered them into the world stage in-terms of heavy duty productions. Four of French companies are listed in the top 20 of fortune 500 companies, and only the USA and Japan has more companies than France in the overall fortune 500 listing. This showcases their technological abilities and production capabilities. On a business context, this was an added advantage towards the establishment of Mecca-Cola in France, as they had all the technical tools required for production at a fair price.

2.8.5 LEGAL FACTORS

Unlike other nations, in France the rule, regulations, rights, obligations and public financial support are equal for all companies regardless of whether they are French companies or foreign companies. Foreign companies can set up their own business activities in France at a free will. Investors have the same legal position as French held companies; thus, they can acquire or rent property; acquire French companies; or create their own legal entity (Frédéric, 2010).

Having such an advanced and business friendly legal system, France has proven to be the best option on Europe for foreign investors. This also presented a positive atmosphere for the establishment of Mecca-Cola, as the founder had the same right as other French nationals and companies despite being a foreigner, and most importantly can establish a new entity if he so desires. Thus, it must be commended that the French legal system played a crucial role in the decision to lay the foundation of Mecca-Cola in France instead of other countries.

3.0 MECCA-COLA'S MODE OF ENTRY

3.1 FOREIGN DIRECT INVESTMENT

3.1.1 UNITED ARAB EMIRATE

Foreign direct investment has been considered as a source of economic development because of the employment and investment opportunities it offers both to the county and investors. It triggers technology spill-overs, assists human capital formation, enhances international trade integration and generally creates a more competitive business environment (United Nations (UN), 2004). With insufficient saving, FDI can be used as means of financing domestic investment and an engine for achieving poverty-reducing growth and development (OECD, 2002).

One of the entry modes adapted by Mecca-Cola is foreign direct investment. This generally involved basing a company's production unit within its target market; thus reducing the cost of importation and boosting competitiveness in the market (Nissanke and Stein, 2003). Originally established in France, Mecca-Cola has a production part in the industrial city of Dubai that was commissioned in September 2007. As part of its US $8.7 million project to enhance production rate and supply, the plant have a PET bottling section, a can-filling plan, and a packaging plant (Arabian Business, 2007).

3.1.2 REASONS WHY MECCA-COLA USES FDI IN UAE

The main reason behind the adaption of foreign direct investment is because the company moved their headquarter from its original place of establishment in France to United Arab emirate as they intend to boycott westernization and see the French as an American elite as well as emulating their slogan "shake your conscience, drink Mecca-Cola" that they are conscious about where the Islamic brand is headquartered.

3.1.3 ADVANTAGES OF FDI TO MECCA-COLA

1. It offers total control of all business activities, thus is a good ways of ensuring high return on investment as Mecca-Cola will be able to understand their customers more, produce according to their demands and pay no importation tax.
2. Foreign direct investment also offers Mecca-Cola a competitive edge compared to other brands that enter the market through other modes such as importation and franchising.

3.1.4 DISADVANTAGES OF FDI TO MECCA-COLA

1. One of the disadvantages faced by Mecca-Cola is the operation cost. The operation cost is very expensive compared to other mood of entry as the company has to pay for all production and overhead costs associated with the production, marketing and distribution of their products.
2. Change in government policy could result on a negative impact to the company as they are a foreign company. For instance increase in tax does not result in increase in sales and revenue, thus this can reduce their profit.

3.2 PARTNERSHIP AND COOPERATION

3.2.1 PAKISTAN (QIBLA-COLA)

Numerous writers such as Bello et al. (1999), Olsen and Ellran (1997), and Cousins (1994) are of the same opinion that a clear definition of partnership and collaboration has largely been missing from literature. This argument was supported by Patterson et al., (1999), who argued that existing characterisations of real-life corporation between business are do inadequate to describe the subtle difference in complex business relationships.

Veludo and Macbeth (2000), in their partnership conceptual framework, attempted to define the dimension and features of partnering. The dimensions highlighted within this framework are: trust, win-win outcomes where the both market benefits and lost are share between parties involved, long-tern orientation, co-ordination, problem solving and flexibility. Mudambi and Helper (1998) shared more lights on this argument by stating that all business have elements of formal and informal commitment, and partnership is built mainly on commitment towards the success of each other (mutualistic symbiosis).

Another mode of entry adapted by Mecca-Cola is business partnership and cooperation. After their establishment in 2003, the first country penetrated into was Pakistan and Mecca-Cola collaborated with Qibla-Cola in Pakistan. This partnership involves Mecca-Cola distributing Qibla-Cola in France, while Qibla-Cola distributed Mecca-Cola in Pakistan. This business partnership lead to the success of Mecca-Cola in Pakistan, as the Cola drink quickly became of high demand within 6months of its distribution into the Pakistani market.

3.2.2 REASONS WHY MECCA-COLA CHOOSE PARTNERSHIP WITH QIBLA-COLA IN PAKISTAN

The main reason for partnering with Qibla can been understood to be because Mecca-Cola was new to the market and no much funding, they had to partner with other brands that exhibit the same organisational culture and principle in other to increase their market share.

3.2.3 ADVANTAGE OF PARTNERSHIP WITH QIBLA-COLA

1. Partnership with Qibla offered Mecca-Cola the opportunity of increasing their market share as they can now sale their products to more customers, considering the fact that Pakistan is a major Islamic state.
2. This also increased their brand image, as the company aimed to use this partnership as a means of educating the Islamic people to learn to cooperate, work together and help their fellow Muslims. Thus it ensured that the brand was seen not just as a beverage but also as a mentor.

3.2.4 DISADVANTAGES OF PARTNERSHIP WITH QIBLA-COLA

Since this partnership involves redistributing each other's brand, and considering that they are offering the same product; it can create confusion in customer's mind and thus reduce the rate of positioning of the brand in the customers mind as they will easily get confused by the differences in both brands.

Partnership with Qibla-Cola also reduces their competitive edge and ability as they cannot compete with Qibla-Cola. Thus, sharing the same market share will potentially reduce their profitability and establishment in the market.

3.3 IMPORTATION

3.3.1 THAILAND

The movement of goods and services across international borders has significantly transformed businesses, resulting in extremely challenging and competitive business environment (Appelbaum and Christerson, 1997; Dicken, 2003; Jones and Hayes, 2004; Taplin and Winterton, 2004). Global economic integration, domestic deregulation and evolving information and communication technology have resulted in intensified international market competition ((Hitt et al., 1998).

In response to these issues, multi-national companies have increasingly pursued cross-border acquisitions and strategic alliance while developing import-export relations as means of promoting best practices, process, and products across the glove (Lado et al., 1997). Importation literary represents making available products and services which are demanding in a given market by bringing in these products and services from other market due to lack of production unit in that market.

This is another market entry mode used by Mecca-Cola who exports their products from their Malaysian plant into Thailand through their licenced distributors. As Meeca-Cola continues to fight the American brands of Coca-Cola and Pepsi, it is strategically penetrating the Asian markets as possible. Their Malaysian plant was built to serve their Malaysian customer, but with Thailand seen as a potential market opportunity, the company has started importing their brands from Malaysia into Thailand since September 2007 which marks Mecca-Cola's first entrance into the Thai-Market (The nation business, 2008).

3.3.2 REASON FOR IMPORTATION OF MECCA-COLA INTO THAILAND

With an already established plant in Malaysia, the company choose to serve the Thailand market by importing from their neighbouring countries instead of spending huge millions into establishing new production plant.

3.3.3 ADVANTAGES OF IMPORTING INTO THAILAND

1. Importation is cheaper than foreign direct investment. In other to ensure that Mecc-Cola continues to penetrate new markets, product importation is an easy way to reach me customers as it does not involve huge expenditures for establishment of a production unit.
2. This is a good tool for market testing. Because Mecca-Cola is new into the Thailand market, importation is a strategic method of testing the market before making final decisions to establish a production unit in the market.

3.3.4 DISADVANTAGES OF IMPORTATION

1. Importation incur high import tax, thus this can reduce their profitability level in the Thailand market.
2. Importation increases the possibility of limited supply, as the company might not necessary understand the demanded quantity. This can lead to competitive disadvantages, thus offering other Cola brands in Thailand market the edge to attract new customers and increase their market shares.

4.0 MECCA-COLA'S CURRENT PRACTICES IN THEIR MARKETS

4.1 INDIAN MARKET

Business process management process has been described to range from purely information technology driven to holistic understanding (Rosemann and de Bruin, 2005; Harmon, 2010). While the technical aspect of business process management generally involves supporting business process and their design with information system and technology (van der Aalst et al., 2003; Reijers, 2003), the holistic aspect (Pritchard and Armistead, 1999; Zairi, 1997) include further organisational processes as supported by the people in the organisation as their core central process (Jeston and Nelis, 2008, p. 4). Culture is increasingly being recognized as the core central process that influences and is being influence by business process management.

Sinha and Sinha (1990) and Sinha (1997) identified 5 social values that form part of India's culture both in everyday life and business:

1. Affective reciprocity – implies power play in terms of affection (Sneh) and deference (Shradha). Those who yield to power are given both fair and unfair treatment, while does who do not are discriminated.
2. Preference for personalized relationship – involves low masculinity and freedom or privacy (Kanungo and Mendonca, 1996).
3. Group bonding – members of a group are owned and bonded by personalised relationship, while others are considered strangers and must be distanced (Sinha and Sinha, 1990, p. 710).
4. Duty and obligation over hedonism – this emphasis on Hindu religion as the central control, and containing impulse; thus duty consists of appropriate role behaviour which involves protecting in-group members and valuing them over others (Sinha, 1997, p. 59).
5. Hierarchical perspective – the high power of decision making needs to be dependent on the patron or eldest in the society (Sinha, 1997, p. 58). Indians tend to arrange virtually everything in hierarchy and even their Gods are hierarchized.

4.1.1 CULTURAL PRACTICES OF MECCA-COLA IN INDIA

4.1.1.1 LABELLING AND BOTTLING – LANGUAGE ADAPTATION

Figure 6: Mecca-Cola's packaging in India

Mecca-Cola's products are bottled and labelled in India. The labelling is written on both English and Hindi, which are the official and widely spoken languages of India. This cultural adaptation is essential in communicating their messages to their customers and ensuring that most of their potential customers have no language barrier in terms of understanding the brand's messages.

4.1.2 ETHICAL PRACTICES OF MECCA-COLA IN INDIA

4.1.2.1 PRICING

One of the ethical practices undertaken by Mecca-Cola in India is the level of affordability of their products compared to Coca-Cola and Pepsi. Mecca-Cola is cheaper than most of their competitors and such ethical practice make the alternative drink affordable within the Islamic markets of India; for both the high-class, middle-class and low-class markets. This ethical issue can also be attributed to their souring growth within the Indian market.

4.1.2.2 MANAGEMENT STYLE

Another ethical practice of Mecca-Cola in India is the adaptation of a management system that respects and values each employee's religion and belief and treats each employee with due respect to their achievements and contributions to the company. Through this measure, the company is also able to replace the pork-extract found in some of other Cola brand with a more expensive substitute (Arabian Gum), as a public display of their commitment towards respecting individual religions and valuing the codes of Islam.

4.1.3 CORPORATE SOCIAL RESPONSIBILITY PRACTICES OF MECCA-COLA IN INDIA

4.1.3.1 DEDICATION OF 20% PROFIT TO CHARITY ORGANISATIONS

As part of the organisation's strategic plan, 20 per cent of their overall profit is dedicated towards supporting charities in India and one of their main beneficiaries is UNICEF. This practice is based on the founder's ideology of maintaining peace between man, nature and God, by helping the less fortunate as much as possible.

4.1.3.2 LESS CARBONATION AND SUGAR COMPARED TO COCA-COLA AND PEPSI IN INDIA

Compared to their main competitors in India, Mecca-Cola also display their commitment towards their stakeholders by offering a Cola drink that has lesser carbon and sugar. This shows that they prioritize their consumer's health and wellness more than just profiting from the sale of their products in India.

4.2 PALESTINE MARKET

One of the key factors firms considered when investing in a nation is the moral environment of the candidate nation (Craig and Douglas, 1996; Habib and Zurawicki, 2002). The legal standards and ethical practices of other firms in the target nation are also crucial factors for developing a viable market entry strategy (Combs and Nadkarni, 2005; van Tulder and Kolk, 2001). The current global competitive environment has created a scenario where managers must ensure they determine the right from wrong in many cultural and legal contexts (Akhter, 2004; Dyer and Chu, 2000; Myers, 1999).

Ethicists have concentrated their effort in building normative theories to determine the acceptable behaviour (how one ought to act) and the development of methodologies of moral judgement (Mowshowitz, 1978). Two of the most common ethical theories are rule (deontological or categorical) and consequence-based (consequentialist or utilitarian) (Laudon, 1995; Smith, 2002). In general, both theories are of the same agreement that ethics is a set of principles and norms that govern the way people behave and act in the society. People in this aspect have been widely acknowledged to represent both individuals and corporations.

Palestine being an Islamic state is governed by the norms and principles of Islam. Islam is based on a divine revelation called the Qur'an as was revealed to Prophet Muhammad. The Islamic teaching presents a way of life based on moral virtues and regarded as a social system of well-defined features. Every act is worship, resulting in rewards and pleasures from Allah (God). Islamic faith provides Islamic directions that cover religious affairs, administration, right and duties of citizens, judicial systems, laws governing war and peace, and international relations and environmental protection (Ahmad, 2003).

The Qur'an commands to forbid evil and do good. Honesty, trust, fair dealing, justice and loyalty to promise are obligatory and lying, unfaithfulness, breaking of contracts is forbidden. Islam provides an equitable balance between the good of the community and the good of the people (Rice, 1999). These principles also govern businesses and considering the fact that the founder of Mecca-Cola is a Muslim; it is clear to illustrate that the building forces of Mecca-Cola's foundations are certain to have an Islamic background that is in accordance with the Qur'an's preaching.

 4.2.1 MECCA-COLA'S ETHICAL PRACTICES IN PALESTINE

4.2.1.1 NO PORK EXTRACTS, LESS SUGAR AND CARBONATION COMPARED TO COCA-COLA

According to two US publications (Buckley and Liu, 2004; Checa et al., 2003), as alternative colas increased within the Arab market, Coca-Cola modified its strategy, playing down its American image and adapting to Arab tastes and Islamic sensibilities. This resulted in not only tailored commercials, but also new product components and a Halal certification on each other bottle sold. Nevertheless, as Mecca-Cola's owner pointed out; Coke's Halal certification was in response to public announcements made to Arab media that, as opposed to Coca-Cola, Mecca-Cola did not contain pork extracts.

Addition of pork extracts is an unethical behaviour from Coca-Cola as it is widely acknowledge across the globe that Muslims have three common principles of 1) don't smoke, 2) Don't consume alcohols, and 3) don't eat pork as directed by the holy book (Qur'an). On the other hand, it is an ethical behaviour from Mecca-Cola as they south to respect the principles of Islam. Their products also contained less sugar and carbon compared with the American brands of Coca-Cola and Pepsi. The Mecca-Cola website welcomed customers with the statement "You can make profit and be an ethical business at the same time. We have! (Parmar, 2004)"

4.2.2 CULTURAL PRACTICES OF MECCA-COLA IN PALESTINE

4.2.2.1 ADVERTISING

Figure 7: Mecca-Cola's Advertisement in Middle-East

As illustrated in the figure (7) above, Mecca-Cola values the Islamic culture of Palestine and respects their religious believes. This can be seen in their incorporation of praise and worship to Allah, use of a well-dressed Muslim woman with Hijab (hair tie) instead of beach body celebrities, and use of Arabic language in their adverts. Through this measure, the company comes in close relationship with the stakeholders because they are seen as responsible citizen.

4.2.3 CORPORATE SOCIAL RESPONSIBILITY PRACTICE OF MECCA-COLA IN PALESTINE

4.2.3.1 20 PER CENT PROFIT IS DONATED TO CHARITY

One of the main attractions for buyers Mr. Mathlouthi highlighted because of the fact that 10% of profit is donated to charities operating in Palestine and the other 10% to NGOs across the globe. The funds are given to UNICEF operations in Palestine and used in building of schools and hospitals in Gaza (BBC News, 2003). The founder believes this is an ethical aspect in terms of Islamic teachings, which teaches its followers to engage in a decent way of wealth acquisition, as Allah states in one of the Quranic verses as follows:

O you who believe! Eat not up your property among yourselves unjustly except it is a trade amongst you, by mutual consent. And do not kill yourselves (nor kill one another). Surely, Allah is Most Merciful to you (Al-Quran 4:29).

This verse of the Quran is highly linked with Mathlouthi's decision to offer 20 per cent of Mecca-Cola's profit to charities, as he intend to emulate the preaching of Allah not to eat up his wealth alone but to share it among others. This ethical approach is contributing to a great extent with the development of Palestine as they continue to offer 20% of their overall profits to charities up-to-date

4.3 MALAYSIAN MARKET

Corporate sustainability is regarded as one of the key priorities in businesses and researchers often equate it with financial, social and environmental performance (Elkington, 1994; McWilliams and Siegel, 2001; Orlitzky et al., 2003). Some scholars attempt to view corporate social responsibility as the substitute of social and environmental performance (McWilliams and Siegel, 2001; Reinhardt et al., 2008).

According to Friedman (1970), businesses have only the social responsibility of maiming profit. By meeting this obligation, it is believed that firms do their own part in meeting societal welfare, as opposed to what governments, social service organisations, educational institutions, non-profits and these institutions should do their own role to meet social welfare. In the late 1970s, researchers began to build around Friedman's idea to determine the real meaning of social responsibility in organisations and the most widely accepted is that offered by Caroll (1979) (Matten and Crane, 2005). Carroll's (1979) model defined corporate responsibilities to include:

1. Economic responsibility to generate profit;
2. Legal responsibilities to comply by laws and regulations of the country they are operating in;
3. Ethical responsibility to meet other social expectations which are not part of the law – for instance, avoiding harm to employees, and respecting moral beliefs and cultures of the society they operate in.
4. Discretionary responsibility to meet additional behaviours and activities that are desirable in the society – for instance, philanthropic initiatives such as contributing money to the less privileged.

Similar to other countries highlighted earlier on in this research, Mecca-Cola also indulges in corporate social responsibility practices, ethical practices and cultural practices in Malaysia as they seek to create a business that makes profit by respecting their consumer's values and beliefs.

4.3.1 CORPORATE SOCIAL RESPONSIBILITY OF MECCA-COLA IN MALAYSIA

4.3.1.1 10 PERCENT OF PROFIT IS OFFERED TO CHARITIES IN MALAYSIA

As part of their business principles, Mecca-Cola donates 10 percent of their profit to charities in their respective markets and the remaining 10 percent to Palestine which makes up their 20 percent donation to charities from their overall profit (Coroller, 2003).. This implies that, if Mecca-Cola is operating in Malaysia, 10 percent of their profit will be donated to charities in Malaysia, 10 percent of their sales in Singapore will be donated to charities in Singapore same applies to all their markets across the globe, and the remaining 10 percent from these global markets is channelled to Palestine charities.

This is a very unique business principle and showcases the fact that Mecca-Cola is society conscious and cares a lot about their stakeholders. Considering the present economic situation, it can easily be seen that companies function just for the sole aim of profit maximization thus, companies that still care as such as Mecca-Cola does should be appraised and seen as socially responsible corporations.

4.3.1.2 WORKPLACE COORDINATION AND PROTECTION

As part of their corporate strategy, Mecca-Cola is doing their best to ensure that all labour laws are being obeyed and that their staffs are satisfied. Satisfaction in this case is the extent to which people like or dislike their job (Spector, 1997). This definition suggests that job satisfaction is a global affective reaction that people hold about their jobs. Their staffs are duly paid all their earning (Salary / wages, and commissions). All their staffs are under health insurance and safety measure are constantly taken to ensure that these staffs are not exposed to any harm or injuries in the workplace.

4.3.2 ETHICAL PRACTICES OF MECCA-COLA IN MALAYSIA

4.3.2.1 PRICING

The prices of Mecca-Cola products in Malaysia are relatively lower than that of Coca-Cola and Pepsi in similarity with their price in the Indian Market. By lowering the price, Mecca-Cola intends to make their products more affordable to their consumers in comparison with some of their competitors as highlighted above.  

4.3.2.2 MANAGEMENT STYLE

Another ethical practice of Mecca-Cola in Malaysia is the adaptation of a management system that respects and values each employee's religion and belief and treats each employee with due respect to their achievements and contributions to the company. Through this measure, the company is also able to replace the pork-extract found in some of other Cola brand with a more expensive substitute (Arabian Gum), as a public display of their commitment towards respecting individual religions and valuing the codes of Islam.

4.3.3 CULTURAL PRACTICES OF MECCA-COLA IN MALAYSIA

4.3.3.1 HALAL CERTIFICATION – AS A SIGN OF ISLAMIC VALUE

Mecca-Cola's products in Malaysia are Halal certified. This certification is given based on their replacement of pork-extracts found in some Cola brand with Arabic Gum. Pork is considered unclean (Haram and should not be eaten) in the Islamic society, and by so doing Mecca-Cola adjust itself to the religious and cultural value of the Malaysian society.

5.0 UNETHICAL MECCA-COLA IN THE GLOBAL BUSINESS

5.1 THE EFFECTS OF MECCA-COLA'S ANTI-AMERICANISM ON CONSUMER PERCEPTION IN THE GLOBAL MARKET

When asked if he was trying to compete with Coke and Pepsi, Mathlouthi laughed it off and actually admitted that he likes American way of doing business but went on to say that: he is only giving shopper an alternative to consumer "responsibility" (Henley and Vasagar, 2003). Thus it must be asked, are Coca-Cola and Pepsi consumers irresponsible? Mathlouthi went on to state that he "fiercely" to American (Henley and Vasagar, 2003).

From the above comments it can clearly be seen that Mathlouthi's motivation and desire to create a new Coke substitute is highly linked with his personal emotion and desire to fight the Americans both as a corporation, nation and individuals. In other to offer the best possible solutions, it is essential that the whole concept of imperialism and anti-Semitism is broken down to assimilate understanding and this will be done in the following paragraphs.

5.2 CULTURE OF AMERICAN IMPERIALISM DEFINED

Organisation theories and practices continue to function and march western imperialism. Both public and private organisations remain at the primary line of metropolitan expansion into the non-metropolitan world, and what researchers have come to study only offer ways for growth through adaption of western growth regimes (Arendt, 1973; Deetz, 1992; Habermas, 1974; Horkheimer, 1995).

A look at the recent literature on inter-organisational change and networks illustrates that organisation of nowadays stand the same threshold as that which pioneered the practices of Western expansionism (Milward, 1996; O'Toole, 1997, 1993; Said, 1994; Arendt, 1973). Studies suggests that traditional forms of organisation no longer guarantee achievable performance standards, thus network relationships not only are desirable but also have become a social, economic, political and technological necessity (Elg and Johansson, 1997; Mankin et al., 1996; Milward and Provan, 1998; Milward, 1996; O'Toole, 1997).

Inter-organisational change has come to be known as a function of administrative methods, with organisation's survival becoming dependent on their ability to dominate, through technological, political and administrative superiority over other organisations in the network (Habermas, 1974; Marcuse, 1995). For instance, managers of big organisations across the globe continue to scan their environment and establish new business strategies for maintaining their authority (market leadership) in the markets they exist (O'Toole, 1997, p. 48). Imperialism generally involves the dominate authority exercising power on the networks either by enforcement or persuasion to adapt their system and practices. The three types of cultural imperialism include cultural domination, cultural imposition and cultural fragmentation.

Cultural domination involves a forceful approach of changing the network's culture by decree, while cultural imposition involves changing the culture by persuasion and cultural fragmentation as the name implies involves crashing cultures against each other to gain an advantage of the networks (Arendt, 1973).

5.3 IS COCA-COLA AN AMERICAN BRAND OR AN AMERICAN POLICY?

Coca-Cola is an independent beverage company that functions on its own and is not related or controlled by the American government in any form. Thus, their idea to expand globally is profit oriented just like any other international company and cannot be linked with any American government policies. From this, it can be concluded that American policy if a thing of the government and Coca-Cola's policy is to reach as many customers as possible. Although the American government can be generally considered imperialistic in nature, the management of Coca-Cola is considered profit oriented as they continue to expand globally in the pursuit to maintain their market leadership.

From the above descriptions and argument, it can be seen that Mathlouthi's idea of competing against Coca-Cola with particular reference to American imperialism and persuasion to boycott the beverage company might not go well with the educated markets who understands the concept of marketing. Although the company is reaping benefits of this cola war, their future position is not predictable or guaranteed as Coca-Cola can develop new product and marketing strategies to knock down Mecca-Cola's market share in the Islamic markets. In other for Mecca-Cola to ensure business sustainability, they must reposition their multi-perception brand into a single stronger brand image.

6.0 RECOMMENDATIONS

6.1 MECCA-COLA SHOULD REPOSITION TO ENSURE BUSINESS SUSTAINABILITY

Currently, they are many perceptions about Mecca-Cola across the world as discussed in the above paragraph. These perceptions are as illustrated below in figure (1)

Figure (8) Mecca-Cola's current market perceptions

From the figure (1) above, it can be seen that Mecca-Cola currently represents varied perceptions in the market and this can hinder their market penetration as they are not totally positioned as a brand, but more of a governmental or political tool. Although all religions must be respect, the truth about business is that no matter what religion the organisation comes from, the main purpose is for profit maximization and organisational sustainability. Thus it is proposed that the company should reposition their brand into a single image in the market and distance their brand from political perception as this could interfere with their market profitability.

Aaker (1992) defined brand positioning as part of a brand's identity and value proposition, which is actively communicated to the market. Positioning is known to be a good source of product differentiation and offers competitive advantage. This highlights the reasons why repositioning is essential to distance it from all political attachment, as customer could base their purchase decisions on the perception of Mecca-Cola.

6.2 PROPOSED REPOSITIONING STRATEGY FOR MECCA-COLA

Figure (9) proposed repositioning strategy for Mecca-Cola

The figure (2) above, is designed in such a way that it curtails all Mecca-Cola's strengths and products benefits and uses it to position itself in the global as a renowned alternative for (not just Coca-Cola) for all soft drinks. This gives them a better competitive advantage and create brand image that will ensure customer loyal and distanced political connection of linkage. 

7.0 CONCLUSION

In conclusion, this project paper has been able to analyse all aspects of Mecca-Cola's business models, the secrets to their success, mode of entries and proposed way forward. Mecca-Cola is a beverage established for the main purpose of combating American imperialism in the Middle-East and giving customers another choice of beverage apart from the dominant American brands of Coca-Cola and Pepsi.

Mecca-Cola was originally established in France in the year 2002 by Algerian born Mathlouthi, a high Islamic faith believer who opposes American brands as he labelled it non-Islam and stupid from Mecca-Cola's "Don't drink stupid" company logo.  Mathlouthi does not support American policies on Islamic nations and called the United States "biased and misleading". The main reason behind the foundation Mecca-Cola was when his son proposed for an alternative to his favourite Coke drink after the father told him to boycott American brands.

Since 2002, Mecca-Cola has gone to establish presence in 64 countries serving millions of Muslims across the world and is currently one of the most recognized alternative to American brands of Coke and Pepsi. The company is headquartered in the United Arab Emirates, and adapts various entries mode such as foreign direct investment, importation and exportation, and partnership when entering new markets. Mecca-Cola continues to reap millions in profit mainly attributed to its corporate police of donating 20 percent of the overall company profit to charities.

Although the company has gone to become and established brand, their business model has gone under scrutiny as the founder is playing his personal feelings into the company. This has led to creation of different perceptions by the customers and thus putting the company in a risky position. It is considered risky because they have opened up their business model, structure, image and core values to all their competitors. In today's dynamic business environment, it can be argued that all it takes is just one strategic approach and Mecca-Cola will be knocked back to the picking other by their competitors as they company has been understood to be profiting due to it Anti-Americanism and donation of 20 percent profit to charity. The final paragraphs proposed a new repositioning model that Mecca-Cola could adapt to reposition itself and gain better competitive advantage.

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9.0 APPENDIX: 1

9.1 TAOUFIK MATHLOUTHI: MECCA-COLA'S FOUNDER

Born in Kalaa El Kebira, a little Tunisian Village in 1956, he was the eldest son of a nine children family. His father who was an Iman of the Kalaa El Kebira mosque instilled in his children a respect for Islamic religion and sense of pride for their origins. Nevertheless, this did not prevent Taoufik from developing a sense of attraction towards exploring new horizons. His first test was at the age of 21, when he migrated to France due to numerous strikes in Tunisian University with 17 Tunisian Dinars (12.3 US Dollars as of August 13^th 2011) and a one way ticket in 1977. His father told him, "that is enough, if you succeed you will have money to come back; if not don't come back".

His first experience as an entrepreneur was in 1982 when he founded SOCOFRAR (A consulting agency that helps France investors to invest in Arab nations) with the help of an Arab tourist in France. The business was forced to close few months later, but this lead him to understand the major cultural differences between Arab and French managers. Following his experience, he founded BUSINESSCOPE (A business magazine written in both French and Arabic to help investors in understanding each culture) in 1984. He was criticized for anti-Semitism, as the Arab world accused him of selling their cultures to the Western Countries. He used the money from the BUSINESSCOPE to found a radio station (Radio Mediterranne´e) in France in 1992, after he failed in struggles with his local government in Tunisia to regain full rights of DHL in Tunisia. This exposed him to the media world and soon became favourite station for Mediterranean and Arab immigrants to France.

9.2 BIRTH OF MECCA-COLA

The date of foundation for Mecca-Cola is traced back to May 2002. Just like many other Arabs, Mathlouthi had been disappointed with American policies in the Middle East for many years. With the possibility of war in Iraq, many American perceived symbols were boycotted. This boycott reached international levels when petition drives, demonstration and physical attacks where wide spread on American born brands in 2002. This was also revealed in research that one in five Europeans will shun American brands due to their policies on international laws (Global Market Insite, Inc., n.d.). Similar to this case was the research conducted in the United States of America, where surprisingly 12 percent of American residents are determined not to buy American brands such as Coca-Cola and McDonald's as they are associated with perceived American imperialism and global capitalism (Gapper, 2004).

Interestingly enough, the main reason behind the foundation of the new Cola brand was that Mathlouthi's son demanded from his father to over him an option to Coca-Cola after Mathlouthi advised him to boycott Coca-Cola brands because they are from America. After failed attempt to distribute ZAMZAM-Cola another Anti- Coca-Cola brand from Pakistan, Mathlouthi went on to found Mecca-Cola in 2002 in France with just 22, 000 Euro; mainly borrowed from friends. He helped promote the new brand with his Radio station and launched it few weeks before Ramadan (Muslim's holy month).

9.3 SWOT ANALYSIS OF MECCA-COLA

Strengths	The brand is focused on Muslims: this focus on Muslim people is strength because it creates huge market for the company following the boycott of American products with Muslims. Lower price than competitors: Mecca-Cola is sold at a lesser price than their competitors such as Pepsi and Coca-Cola. This is strength because of the high sales volume it offers the company.
Weaknesses	Competitions against Zionist beverages:besides Mecca-Cola, they are also world brands such as ZamZam-Cola, Quibla-Cola, Nestle and Kraft that have Muslim (HALAL) markets as their brands too, and this is a weakness because they have less experience compared to these established brands. Lack of Advertising: although Mecca-Cola is constantly expanding their production and distribution in the Muslim Market, they lack enough adverts which; it is weakness compared to the rate of advertising undertaken by their competitors.
Opportunities	Focus on Charity: the company gives out 20% of their total revenue to charity and is an opportunity to penetrate the global market as they will be considered socially responsible citizens. High Market Share in the Muslim Market: considering the fact that most Islamic nation are filthy rich because of abundant of natural resources, this is an opportunity for Mecca-Cola as they will likely gain high market shares and capital investments.
Threats	Product image: the product is positioned as an Islamic brand, and this is a threat because non-Islamic markets will not be keen to purchase the product. Survival of the fittest: with Coca-Cola and other big Cola industries already occupying major markets in the world, competition is high and customers have numerous choices to choose from. This is a threat because it limits their sales possibilities; if we consider the fact that they are also thousands of other soft drink (Cola) brands across the globe.