Marketing Strategies and Techniques by Coca Cola - Assignment Example

Marketing Strategies and Techniques by Coca Cola Table of Contents Introduction 3 Executive Summary 3 Mission, Direction and objectives 4 Market Summary 5 Consumer Market 5 Business Market 6 Market Trend and Market Growth 6 Current Product offerings 7 Business Environment 7 SWOT Analysis 7 PESTLE Analysis 9 BCG Matrix 10 Porter’s Five Force Model 11 Key Issues 12 New product Development 12 Marketing objectives (SMART) 13 STP Analysis 14 Product and Brand decisions 16 Pricing Decision 17 Channel and Logistic Decision 18 Marketing Communications Decisions Tools 18 Customer Service and Internal Marketing 19 Marketing and Service Mix: 7Ps Framework 19 Financial Forecasting 21 Implementation and Control 22 Implementation 22 References 24 Introduction Coca Cola is a popular global soft drink brand. This soft drink company did not have any kind of bubbles at the starting selling time (Deichert, Ellenbecker, Klehr, Pearchick and Ziegler, 2006, p.55). The first ever slogan for the new drink of Coca Cola was “Delicious and Refreshing”. The organization has been effectively successful over the last 100 years. The organization has become an icon of global culture. The organization believes in partnership business with several bottlers around the globe. The organization has generated revenue of more than 35 billion US dollar in the year 2010. Moreover the organization has achieved a net income of almost 12 billion US dollar in the same year. These are quite impressive number. Presently the organization is operating in more than 200 countries (Vpcomn, 2008, p.2). Moreover, during this point of time near about 139,600 employees are working under the pay roll of Coca Cola (Vrontis, 2003, p.2). The following parts will reveal various marketing strategies and techniques implemented by Coca Cola in order to become one of the leading global soft drink brands. Executive Summary The leading global organizations are trying to capitalize on the opportunities that have been created due to globalization. After the Second World War the concept of globalization has evolved dramatically around the globe. Coca Cola is one of those organizations who have effectively capitalized on those opportunities. The brand name is hugely popular in more than 200 countries. Current UK soft drink market has become competitive enough. Several potential organizations within the industry including Coca Cola are competing within this competitive UK market. Due to high calorie issue, recently the consumers are trying to consume several fruit flavour juice or low calorie soft drinks (Pitt, 1999, p.1). PepsiCo the only potential competitor of Coca Cola is creating several challenges for the organization by introducing several product lines. The current market trend, huge competition and matured sift drink UK market has make Coca Cola busy to perform its business activities in the UK market (Wmich, 2012, p.1). Mission, Direction and objectives Coca Cola is one of the leading soft drink manufacturing companies. Their business values and activities reflect in their mission statement. Mission The organization used to do business practices according to their mission statement which are: The products will refresh the world....in mind, spirit and body. The organization will inspire optimism moments......through products, actions and brands. The organization will create huge value and will create difference...wherever they are involved (Svendsen, 2013, p.4). Direction and Objective Segment The major business objective of Coca Cola is to expand its diet coke range with the inclusion of several healthy elements. Moreover the organization is trying to achieve an impressive market share by entering in UK fruit drink segment. The organization already has started to execute the require strategies in several parts of the globe. But due to huge market saturation in UK, the organization is planning to enter in the fruit drink market by monitoring all the strategies and current market trend (Jones, 2010, p.9). Market Summary This part will reveal several elements of consumer market, business market and current UK market trend and market growth of Coca Cola. Consumer Market This part will reveal target consumer segmentation with the help of following table. Age People between 15 and 25. Gender Both male and female individuals. Nature Fun and Entertainment loving individuals. Socio-Economic Status Upper middle class and Middle class people. The age group from 15-25 used to cover 50% of total age segment in UK. 57% female and 43% male consumers fall under the gender segment. People who used to fun loving in nature and try to engage with friends and sub-ordinates used to consume the soft drink products. People of middle class and upper middle class in UK are the major target audience of Coca Cola. Business Market The organization is the market leader within the UK soft drink market. Despite of several problematic issues, the organization is trying to achieve more market share by effective marketing strategy. The above figure has provided an idea about the business target segment of Coca Cola. The organization used to set business targets according to the product characteristics and consumer behaviour trend. Market Trend and Market Growth The soft drink market trend has dramatically changed in last 10-15 years. People of UK are trying to consume substitutes of these soft drink products of Coca Cola, such as milk, tea, coffee and other fruit juice. The knack of consuming Soda and sweetened soft drink product is decreasing. Current Product offerings The organization is responsible for producing, selling, processing and selling huge range of soft drinks across the UK market (Dhar, Chavas, Cotterill and Gould, 2002, p.6). Under the soft drink and refreshment segment the organization used to sell Coca Cola, Coca Cola Zero, Diet Coke, Sprite, Fanta, Lilt, and Dr Peeper (Longwood, 2012, p.1). Under the fruit drink segment the organization used to sell Ocean Spray and Capri-Sun 100%. Under the sports and energy drink segment the organization used to sell Powerade ION4 and Powerade Zero (Harvard, 2008, p.17). Business Environment This part will execute internal and external marketing audit. SWOT Analysis This strategic analysis tool will highlight Coca Cola’s internal strengths, weaknesses and external opportunities and threats in the UK market. Strengths Huge brand popularity and market leader within UK soft drink segment. Effective bottling system and partnership with several bottlers around the globe. Effective CSR activities, unique promotional campaigning and acquiring leading brands with strong brand image. Efficient distribution and supply chain network. Weaknesses Health and environmental issues. Soft drinks under this brand cause high sugar and calorie level in human body. Failure of marketing strategies, such as Desani and Coke Zero. Opportunities The organization should implement huge brand image in other developing countries. Introducing new healthy drinks in competitive UK market. Develop and increase social responsibilities in small demographics. Implementation of green business strategy and sustainability in the packaging system. Threats Threats from new viable and existing competitors. Huge threat of substitute, such as milk, coffee and tea. Decreasing purchasing power of people and economic downturn. Government and other legal restriction. Comparing with Competitors Coca Cola is the leading brand within the soft drink segment. The only potential competitor of this brand is PepsiCo. Opportunities The business structure and marketing strategy of both of these organizations are very much similar. Moreover, these two brands used to fight neck to neck in global competitive market. Therefore, both of the organizations have same opportunities as it was discussed earlier in the table. PepsiCo has capitalized on some of those opportunities effectively, where Coca Cola has not. PepsiCo has implemented green business strategies and doing CSR activities has become a huge strength for the organization. Threats The competitor itself is the huge threat for Coca Cola. On the other hand, in terms of both of the organizations, the challenges and threats are very much similar. PESTLE Analysis This analytical framework will provide the impact of external environment factors on Coca Cola in UK market. Political Government changes, political and environmental disturbance and civil unrest recently have created some challenges for the industry in UK (Columbia, 2013, p.1). Economical Economic slowdown of UK, decreasing purchasing power and low disposable income of people has affected the buying behaviour of UK people (Samuelson and Varian, 2001, p. 3). Social Several health issues, such as rising calorie level in human body has restricted several people in UK to buy the soft drink products. Technological Technological development of UK and adoption of advanced technology in the business process has increased the core competency of Coca Cola in UK market. Legal Laws for the protection of global environment and strict regulations can hugely impact the manufacturing process of Coca Cola (Pauwelyn, 2004, p.21). Environmental The issues regarding the negative impact on the environment due to the manufacturing process has been recognized in UK. Government has restricted the unethical manufacturing process of the organization. BCG Matrix BCG matrix of a product comprises of four matrix element, such as Cash Cow, Star Products, Question Mark and Sleeping Dogs. A table of BCG Matrix has been provided below in order to find the position of co-brands under Coca Cola in UK market. Stars Bottled water Dasani and Diet Coke are the star products due to high growth rate and high market share. Question Marks The energy drinks of Coca Cola, such as Powerade Zero due to its large net cash consumption. Cash Cows Coca Cola regular and other soft drinks like Sprite are cash cows due to low growth rate but high market share. Sleeping Dogs Coca Cola Zero due to its low growth rate and low market share. Porter’s Five Force Model Porter’s five force model is a micro environmental analytical tool. This analytical tool will reveal the competitiveness of Coca Cola in UK market. Threat of New Entrants Threat of new entrants is low, as the market is very much saturated and competitive. Moreover, the new organizations have to face huge legal barrier in order to enter in the UK soft drink market. Threat of Substitutes Threat of substitute is high as the current UK market trend is to consume milk, tea, coffee and other healthy and energy drink. Buyer’s Power Buyer’s power of Coca Cola in UK is moderate as the major buyer groups are several convenience stores, restaurants, large grocers and super markets. As the organization has strong brand image, Coca Cola has to face limited threat of Buyer’s bargaining power despite of huge competitive market. Supplier’s power Supplier’s power is low as the major suppliers of Coca Cola in UK are specific bottlers and commodity ingredient suppliers. Industry Rivalry The organization has to face strong rivalry from his sole potential competitor PepsiCo. Key Issues Several issues like environmental and social issues are affecting the brand image of Coca Cola in UK market. These issues are highlighted below. Consumption of Soda and sweetened soft drinks of Coca Cola used to increase the calorie level of human body. Several unhealthy ingredients have caused critical diseases in human body. Looking into these factors the government of UK had undertaken several strict decisions that have affected the sales of organization (Wharton, 2008, p.1). Lack of green business strategy is increasing the carbon emission level in UK. The government has implemented a law for every multinational organization that they should reduce the emission level of carbon during their business activities (Smith, 2012, p.11). The government has restricted the digital media advertisements of the soft drinks of Coca Cola for a shorter period of time in order to keep away the children from the brand (Geneseo, 2008, p.1). New product Development Minute Maid lime juice is a brand extension of Coca Cola. This particular brand is very much popular and famous in Indian market. It is a successful brand extension of Coca Cola in Indian market. It is lemon flavour fruit drink. According to the objective of the study this product can be launched in UK. This Minute Maid Nimboo Fresh is made of original extract of Fresh lemon. The current market trend of UK is shifting towards the fresh fruit and healthy drink. Therefore, it will be profitable if Coca Cola decide to expand this product in UK. Marketing objectives (SMART) The marketing objective needs to follow SMART structure. Following table will provide SMART business objective. This business objective has followed SMART. The following table will prove it. Specific Increase total market share by 25% in next 3 years. Measurable The sales of the brand should be increased by 15 %, 25% and 35% respectively. Attainable Acquire new potential and target customers by effectual promotional activities. Realistic The deposit sum should be elevated by 5%. Timely 8% increase in sales in 6 months and inform the consumers about the benefits of the products within 100 days of its introduction. STP Analysis The STP analysis of Minute Maid includes segmentation, targeting and positioning of this new product. Targeting Minute Maid should follow the below targeting structure. Age Group: 12-60; College students, Business executives, Sportsman and people who are conscious about healthy drink (Brooklyn, 2011, p.1). Sex: Male, Female and Kids. Marital Status: Married and Unmarried. Income: More than 15,000 US dollars monthly. Residence: UK community. Positioning The organization should implement reasonable pricing strategy for the high quality products. The following perceptual map will determine the proposed positioning of Minute Maid. As the product will be in introduction phase and being a leading brand, Coca Cola should use this kind of positioning strategy (Washington, 2008, p.1). According to the proposed positioning strategy, the position of Minute Maid in perceptual map would be as Brand D. Segmentation In terms of demographic segmentation, Coca Cola should target people between the age of 12 and 60 for Minute Maid. In terms of income segmentation they need to target middle class and upper middle class people. In terms of psychographic segment they need to target the people who are brand conscious. Moreover, the organization needs to target both male and female customers in order fulfil the current market trend. Product and Brand decisions As it is discussed earlier that, new product would be Minute Maid Fresh lemon juice, Coca Cola should start to market this product according to the attribute and flavour of the drinks. The organization should implement several promotional strategies in order to support the product and brand decision. This part is elaborated in the marketing mix part. The organization need to provide promotion in national magazine and news paper about the newly developed product. Moreover, they need to conduct a survey through the magazine. Then they need to provide similar table that has been highlighted. This strategy will effectively increase the brand awareness. Pricing Decision Coca Cola is the leading player within the UK soft drink industry. As the UK soft drink market is saturated and highly competitive, the organization should implement reasonable pricing strategy for Minute Maid fresh lemon juice. If the organization can achieve success through the superior quality of product and effective pricing strategy, then it will be easy for the organization ton achieve the business objective for the newly developed product. Channel and Logistic Decision Coca Cola will use their existing logistic and supply chain network for the newly developed Minute Maid in UK market. It will bring huge efficiency. Moreover this strategy will be both time and cost effective. Marketing Communications Decisions Tools The organization should implement direct and indirect selling for their newly developed Minute Maid in UK market as marketing communication decision tool. Coca Cola has achieved huge success by implementing these communication strategies in terms of their other existing product (Unc, 1996, p.1). The new product can effectively communicate with target customers by the aggressive selling strategies of retailers and distributors. Providing rewards to distributors and retailers will help the organization to increase the sales figure of newly developed product. Customer Service and Internal Marketing There is limited scope of customer service for these kinds of products. The organization can follow the posts of people in the Facebook pages and should respond it as early as possible. It will increase the brand awareness in the UK market (Furre, 2013, p.7). Coca Cola should implement training, self-development programmes and several effectual integration and internal communication schemes to design general marketing orientation for the newly developed product within the organization. It can develop the business process for Minute Maid effectively in UK. Marketing and Service Mix: 7Ps Framework This part will determine the product, price, promotion and placement analysis of Minute Maid in UK market. Product The product is a healthy fruit drinks. This soft drink is the extraction of fresh lemon. The product has achieved huge success in Indian market. As the market trend in UK is shifting towards the healthy soft drinks, this newly introducer product will able to fulfil the current customer demand. Price The organization has always implemented reasonable pricing strategy for its existing products due to huge competition in UK market (Stern, 2009, p.13). Coca Cola needs to implement the same pricing strategy for Minute Maid, as this product will be new and in introduction phase in the competitive and saturated market place. Therefore, it is recommended that the organization should follow the same strategy for its new products. Place The organization should motivate the supermarket chains, convenience stores, distributors and retailers to sell the new product. In terms of distribution, the organization should follow the similar distribution channel of the existing products. This strategy will be both cost and time effective. Promotion Promotional strategy is an important strategy for a newly developed product to compete in a market place (Kotler, 2008, p. 32). There is no doubt that, Coca Cola is a leading soft drink organization. Therefore, they should implement effective promotional strategy for Minute Maid. Firstly they should motivate the super market chains, convenience store, distributors, retailers and other restaurants to keep their product (Sbu, 2009, p.29). Rewarding the distributers and retailers will motivate them to sell more number of products. Creating social media pages, such as Facebook and twitter promotion would be effective social media promotional activities (Mayes, 2011, p.8). The organization can implement digital promotional activity. It will bring bulk of target audience towards brand. Last but not the least; providing sponsors to several sports ream, such as English premier league football team will effectively increase the brand awareness of Minute Maid in UK. People Here people mean the employees of organization. The organization should implement same strategy for the newly developed Minute Maid in UK market. Moreover, the organization should give effective value to their customer in order to achieve good business output. Process The organization need to keep similar service and business process for Minute Maid, which they do for other existing product. Physical Evidence The management should implement same strategy for Minute Maid. The supplier, sales or operation team and especially the packaging of the product should be contained similar physical structure like other existing products of Coca Cola (Virginia, 2008, p.1). Financial Forecasting The organization is forecasting that they will be able to increase 15%, 25% and 25% sales in next three years respectively. After monitoring the gross profit, operating expense and operating profit is feasible that the organization will increase their profit by 15.17%, 16.42% and 18.12% in next three years. Implementation and Control This part will determine the implementation and control of the strategies and objectives. Implementation Activity Date Promoting in local youth and business magazines. June 20, 2013. Certificate registration of healthy food safe license. Within July 21, 2013. Providing free trial to the people in Supermarkets. Entire August, 2013. Reconsider consumer idea and speak to the distributers. September-December, 2014. Implementation of loyalty plan for the consumers. January 21, 2014. Inclusion in company website and present adverts in Facebook page. February 20, 2014. Promotion through digital media. March 21, 2014. Control The following table will determine the control over the strategies of the newly developed product in UK. Activities Responsible Methods Date/Frequency Survey work report in order to recognize of the satisfaction level of the customers. Internal Audit. Feedback form during the marketing and promotional campaign. Annually. Measurement of financial outcome against the estimated projection. Accountants of the organization. ……. Monthly/Quarterly. Take suitable action plans. Operation and Sales Manager for the specific product line. ……. Essential Annually. Performance appraisal and rewards for the sales and operation teams. Operation Manager and Sales Manager. ……. Quarterly/Half-yearly. References Brooklyn., 2011. Market segmentation and targeting. [Online]. Available at: . [Accessed on May 11, 2013]. Columbia., 2013. Columbia Business Law Review. [online]. Available at: . [Accessed on May 11, 2013]. Deichert, M., Ellenbecker, M., Klehr, E., Pearchick, L., and Ziegler, K., 2006. Industry Analysisi: Soft Drinks. [Pdf]. Available at: < http://www.csbsju.edu/documents/libraries/zeigler_paper.pdf>. [Accessed on May 11, 2013]. Dhar, T., Chavas, J., Cotterill, R., and Gould, B., 2002. An Econometric Analysis of Brand-LevelStrategic Pricing Between Coca-Cola Company and PepsiCo. [Pdf]. Available at: [Accessed on May 11, 2013]. Furrer, P., 2013. Marketing Straegies. [pdf]. Available at: . [Accessed on May 11, 2013]. Geneseo., 2008. Coca Cola Problem. [Online]. Available at: Read More