Lnternational Marketing of Coca Cola - Essay Example

? International marketing Table of Contents Executive summary 3 2 Situational analysis 3 2 Market Summary 4 2.2 Swot Analysis 6 2.3 Competition 9 2.4 Product Offerings 9 3 Marketing strategy 9 3.1 Mission 10 3.2 Marketing Objectives 10 3.3 Financial Objectives 10 3.4 Target Markets 11 3.5 Positioning 11 3.6 Strategies 11 3.7 Marketing Mix 12 4 Budgeting 12 5 Implementation 13 6 Marketing organization 13 7 Conclusion 13 Bibliography: 14 1 Executive summary Coca Cola Enterprises Limited intends to introduce a new energy drink in Chile. The drink is Lucozade which is made by using Glucose Fructose Syrup, orange juice from Concentrate, Citric Acid and Sodium Benzoate. The company has already made the decision for the selling price by establishing a price which should not be more than 5% difference with existing drinks in the market. The packaging shall be done in both 275ml plastic bottles and 250ml cans. The company intends to Launch Lucozade brand in Chile. Most of the consumers are health conscious and prefer the low calorie energy drinks. The promotional activities will include endorsements by sports personalities and mass advertisements. The company has set enough financial resources for the operations and timelines for the execution of the marketing plan. The marketing organization includes the chief marketing director, the territory directors, the area directors and the public relations personnel. 2 Situational analysis A situational analysis is the foundation of the marketing plan. The situational analysis will include a thorough examination of the internal and external factors which affect the introduction of Lucozade drink in Chile. It will enable Coca Cola to understand the factors which will influence the market growth in the future. Internal analysis will consider the strengths and weaknesses of Coca Cola enterprises Limited (Dibb, Simkin, Pride and Ferrell 2005). The internal analysis will consider the company culture and image, the staff, the operational efficiency and capacity (Kotler 2010). The internal analysis will also consider the weaknesses which hinder the launch of the Lucozade drink in Chile and which may impair the growth in market share and profitability. The external analysis will evaluate the suppliers, the trade partners, customers, new technology, competitors and the economic environment prevailing in Chile which may enhance the operations of Coca Cola Enterprises Limited in Chile (Dibb, Simkin, Pride and Ferrell 2005). The external analysis will also consider the treats which exist in the market which could curtail the achievement of the Coca Cola Enterprises objectives in Chile. 2.1 Market Summary Coca Cola Enterprises Limited is the world’s largest bottler of non-alcoholic drinks by volume. The company produces, sells and distributes its drinks using a wide distribution channel which covers all the continents in the world (Kotler 2010). Coca Cola Company is the largest bottler for the Coca Cola Company since it produces 20 percent of the entire Coca Cola drinks world wide. 85 % of its products are classified as carbonated soft drinks while the rest are non-carbonated soft drinks. The company annual revenue was $ 21.65 billion in 2009 while the net income from its operations was $ 731 million. 2.1.1 Market demographics This section of the marketing plan will include analyzing the customers in terms of the demographic features such as the age, the race, gender, educational attainments, marital status, income levels, attitudes and beliefs, and the household size. Chile population comprises of 15,166,500 people but the population has been on the decline due to controlled birth rate. It is estimated that the population is likely to hit 20 million people by 2050. About 80 percent of the populations live in urban areas with the population mainly concentrated in Greater Santiago. Chile population consists of all races including European and Indians. The most dominant religions are Roman Catholics and Evangelical (Kotler 2007). Spanish is the main language though German is also spoken in Southern Chile. The major ethnic group is White and White-Mestizo. The population of Chile is youthful since 67% comprise of people aged between 15-64 years while those above 64 years comprise only 10 percent. 2.1.2 Market needs The soft drinks industry has experienced a challenging environment as the consumers needs keep on changing. Consumers demand premium drinks which meet their health, indulgence and convenience needs (Kotler 2010). Traditional drinks such as the carbonates are on the decline as the consumers now demand premium drinks such as the energy drinks. In Chile, the consumers need health conscious drinks (Dibb, Simkin, Pride and Ferrell 2005). The youthful population needs mostly the energy drinks since they are actively engaged in sporting activities and other recreational functions (Kotler 2010). 2.1.3 Market trends The market needs drinks which are natural and light. The working population needs a drink which is refreshing and relaxing after a busy day at work. Innovative drinks such as low sugar and flavored waters and low calorie iced teas are experiencing a lot of demand in the outlets (Kotler 2007). Chile people are spending more hours in the workplace hence need places where they can both eat and drink (Kotler 2010). Coca Cola has created barriers for the small players who cannot afford similar investments (Kotler 2007). 2.1.4 Market Growth Globally, the fastest growing category of the soft drinks is the functional drinks which include the energy drinks at an annual growth rate of 5 percent. The bottled water segment is the next with a growth rate of 4 percent while the concentrates are growing at a rate of 3.3 per cent. Soft drinks sales will keep recording robust growth in the coming years if the existing players provide attractive offerings (Dibb, Simkin, Pride and Ferrell 2005). Low calorie carbonates, bottled water and flavored juices have experienced growth in the market share since the consumers are wiling to pay a premium price if the product enables them to stay health and feel relaxed (Kotler 2010). The middle income and middle lower income classes have started the consumption of energy drinks for the prestige purposes (Kotler 2007). Red Bull which is distributed by Commercial Peumo Limited accounts for 44 percent of the market share by value and 33 percent of the share of volume sales (Dibb, Simkin, Pride and Ferrell 2005). 2.2 Swot Analysis SWOT (strengths, weaknesses, opportunities and strengths) is a marketing technique which is used to analyze the competitive strengths of a business (Kotler 2007). SWOT analysis will involve identifying the internal and external factors which are favorable and unfavorable for business success (Kotler 2010). The opportunities include the global influences, the new markets, technology advancements, major contracts and partnerships which the company can sign with other trade partners. The threats are obstacles to business success and include the legislation effects, the competitors’ actions and unfavorable economic climate. 2.2.1 Strengths Coca Cola Enterprises Limited posses core capabilities which it can utilize in Launching Lucozade in Chile. Coca Cola Enterprises Limited is part of the American culture of hard work and quality hence the company has a reputation of bottling and distributing products which are symbols of quality and enjoyment hence it can easily penetrate the Chile Market (Dibb, Simkin, Pride and Ferrell 2005). The company has extensive advertising and marketing campaigns which are localized to the target market which is why it has been able to achieve international recognition. The company bottles and distributes products of the major international soft drinks company hence this major business contracts and partnerships can enable the company to achieve substantial market share in Chile easily (Kotler 2007). The company brands are recognized worldwide due to the excellent promotion and social connection with consumers through displaying the logos on T-shirts, umbrellas and hats. Eighty percent of the revenues come from about twenty percent of the loyal customers (Kotler 2007). The company is endowed financially hence it has managed to build bottling facilities in major markets of Europe. The company has acquired some of the major competitors in the energy drinks segment (Kotler 2007). 2.2.2 Weaknesses Although Coca Cola Enterprises Limited is an international Company which has achieved success through customer loyalty, it suffers some weaknesses which can jeopardize the achievement of its mission and the launch of Lucozade in Chile. One of the weaknesses is the highly publicized health issue of the Company products (Kotler 2007). Popular products like Coke and other carbonated products contain high sugar levels that are risk to the healthy of the customers (Kotler 2010). The Company has incurred costly legal suits due to employment malpractices and healthy safety problems in the drinks thus this could negatively affect market penetration in Chile where the consumers are conscious of their weight and heath. 2.2.3 Opportunities There are numerous opportunities which the company can exploit using its competitive strengths. The company can expand its market share and profitability by increasing the advertising and promotion of the less popular brands like the energy drinks, sports drinks teas and water segment offerings (Kotler 2007). The company can utilize major sports personalities and role models in the society in advertising the energy and sports drinks to the youthful population in Chile. The company can also utilize its modern technology in distributing the offerings in Chile through the establishment of automated vending machines in the streets which is essential in reducing the operational costs of the company (Kotler 2007). The company can also partner with institutions in Chile like the Universities, major international hotels and tourist facilities together with sporting teams where it can achieve exclusive distributorship deal to those target customers (Dibb, Simkin, Pride and Ferrell 2005). 2.2.4 Threats The fact that the company is the dominant player in the bottling and distribution of the soft drinks means it has to encounter some threats in the market. Recent Healthy legislations have presented challenges to the production of the new products of the company. PepsiCo Company has presented a lot of competition in the energy drink category and especially in the Middle East market (Kotler 2007). The consumers have shifted their eating and drinking habits towards low sugar foods and drinks. There are numerous environmental awareness campaigns on the packaging of the company products hence the company will have to implement packaging methods which are renewable and which reduce carbon emissions in the environment (Kotler 2007). The company relies mainly from Coca Cola Company for most of its concentrated syrups hence it has limited discretion of the pricing thus this could negatively affect its profit margins and profitability (Kotler 2007). 2.3 Competition The main competitor is PepsiCo which holds 30 percent of the US market against 45 percent which is held by Coca Cola enterprises limited in the US. Other competitors include Cadbury Schweppes which accounts for about 14 percent of the US market. 2.4 Product Offerings As a bottling company, Coca Cola enterprises limited product line consists of the offerings of its concentrate manufacturers. The product portfolio is composed of the Coca Cola Company products though the company produces and bottles for other companies (Kotler 2007). Majority of the products include the carbonated drinks which account for 80 percent and include some of the global popular brands like Sprite, Diet Coke, Fanta, Coca-Cola Zero and Coca-Cola Classic. The non-carbonated soft drinks include juices, tea, coffee and dairy drinks and account for about ten percent of the company revenues (Dibb, Simkin, Pride and Ferrell 2005). Some of the offerings include Capri Sun, Arizona Teas, POWER Ade, Minute Maid juices. In the water segment, waters offered in the market include Dasani, Evian and Chaudfontaine. In 2009, the company signed distribution agreement with Hansen Natural (HANS) to distribute the Monster line of energy drinks (Dibb, Simkin, Pride and Ferrell 2005). 3 Marketing strategy Marketing strategy allows the organization to utilize its limited resources on the opportunities available in order to achieve and sustain growth in sales volumes (Kotler 2007). The marketing strategy helps the company to achieve the marketing objectives which are crucial in the achievement of the company overall objectives and goals. The objective of a company may be to identify enter a new market but it should also increase brand awareness (Kotler 2007). 3.1 Mission The mission of the company in Chile is to ensure satisfied customers through the establishment of working and cordial relationship. 3.2 Marketing Objectives A marketing objective is a statement of the specific outcomes which are to be achieved. Coca Cola Enterprises Limited in launching Lucozade in Chile has set various marketing objectives which should be achieved (Kotler 2007). The first objective is to achieve market share leadership by dominating the urban market where most of the target customers are located. The company also desires to enhance customer loyalty and brand recognition in the market (Dibb, Simkin, Pride and Ferrell 2005). The company has set an objective of being the leading provider of energy drinks which revitalizes the muscles to the sportsmen in the country (Kotler 2007). The objectives are aimed at better utilization of technology and ethical marketing together with compliance with the relevant legislation in the country. The objectives also consider the optimum utilization of financial resources by focusing on the core target markets (Dibb, Simkin, Pride and Ferrell 2005). 3.3 Financial Objectives The company is committed to enhancing the profits levels from the Lucozade brand. The company has set the objective of generating an average of $ 50 dollars per month from all the target customers. For repeat customers, the company has set the objective of generating about $ 300 in revenues per month. The company wishes to generate an average of $ 2 million in revenues from the brand alone in the next five years. The company wishes to generate $ 200,000 in net income from the Lucozade sales in Chile for each year for the next five years before it considers establishing a bottling plant in Chile (Dibb, Simkin, Pride and Ferrell 2005). 3.4 Target Markets The company will have to segment the Chile market according to the unique needs of the customers. The company will focus on the Sporting market which is mainly located in urban areas like Greater Santiago where the brand will first be introduced to sporting institutions like Universities and other community sporting centers (Kotler 2007). The company will also consider the elderly population who use Lucozade to stay healthy and revitalize their aging muscles. The next target market will be the young populations who use the brand for prestige and for relaxation. 3.5 Positioning Coca Cola Enterprises Limited will position itself as an innovative provider of the energy and sports drinks which cater for the health of the customer. The company will also position itself as a customer intimate company which maintains working relationships with all the customers in order to achieve customer loyalty (Dibb, Simkin, Pride and Ferrell 2005). . The company will emphasize on the quality and healthy of the Lucozade drink and stress the low price charged to the customers in order to enhance the brand recognition (Kotler 2010). 3.6 Strategies The company will achieve its marketing and financial objectives through the use of several strategies which include cost leadership. The company will emphasize on cost leadership through the use of technology to sell the brand to the target customers. The company will price its products cheaply than those of the competitors in order to achieve price leadership. The company will also provide discounts for bulk purchase (Dibb, Simkin, Pride and Ferrell 2005). . The company will create a loyalty program for the repeat customers where they have the chance of winning Lucozade gift vouchers (Kotler 2010). 3.7 Marketing Mix The marketing mix for a product consists of the price, the product, the promotion and place. The company will choose a market penetration strategy whereby it will set its price at 5% percent below that of the competitors in order to attract customers. The company will introduce price discounts for bulk purchases (Kotler 2007). The company will gradually adjust its prices upwards after the customers have experienced the benefits of the product. The company will offer its Lucozade brand to all Universities and major sporting Clubs in the Greater Santiago (Dibb, Simkin, Pride and Ferrell 2005). . The company will emphasize will utilize referral promotions tactics whereby major sports personalities will be used to endorse the product. The company will also use mass advertising through the radios, televisions and billboards which will be placed strategically new the sporting facilities. The Lucozade packaging will be done in both plastic bottles and cans which are easy for the consumers to carry during the training sessions. The promotions will emphasize on the relaxation effect of Lucozade and the health benefits (Dibb, Simkin, Pride and Ferrell 2005). 4 Budgeting The company has adequate resources for the marketing campaigns. The company will have to employ qualified marketers and excellent customer care personnel. The staff budget of the company is $ 0.2 million dollars per annum while the promotional budget has been set at $ 0.3 million dollars per annum. Research and development activities will consume $ 0.1 million annually while distribution costs are estimated to total $ 0.25 million annually. 5 Implementation The company has set out timelines for the implementation of the marketing plan. The launch of the product will be done in the first two weeks of the following year where different sports personalities will endorse the product (Kotler 2007). In the next one month, the distribution coverage will have extended to all the sporting clubs in the major towns. The loyalty program will be established after two months while direct marketing efforts through telephones will start after three months of the product launch. 6 Marketing organization The marketing function will consists of three main levels which include the chief marketing director who is responsible for the overall marketing activities in Chile. The territory directors will be responsible for business development in geographical areas while the area directors will be responsible for marketing to specific customers. The public relations personnel will handle the marketing activities through enhancing the positive image of the organization by publishing documentaries of the Lucozade brand (Kotler 2007). 7 Conclusion Coca Cola Enterprises Limited is the world’s largest bottler and distributor of soft drinks. The company can achieve success by launching Lucozade brand in Chile and emphasizing on marketing strategies which aim at enhancing the customer experience. The promotional efforts should address the health benefits of drinking Lucozade. Bibliography: Dibb, S., Simkin, L., Pride, M. and Ferrell, C. 2005. Marketing: Concepts and Strategies. 5th Edition. Abingdon, UK: Houghton Mifflin Kotler, P. 2007. Marketing management. London. Prentice-Hall. Kotler, P. 2010. Principles of marketing. London. Prentice-Hall. Read More