Strategic Marketing of Coca-Cola Product - Essay Example

Utilising theory, concepts and tools explored in the module, critically evaluate the strategic marketing of a product of Coca-Cola Table of Contents Introduction 3 Brief overview of the industry of Beverage 3 Brief overview of Coca-Cola 3 The rationale of the essay 4 Discussion 4 Strategic marketing process 4 External marketing Audit and external environmental (Macro) Analysis 4 Changes faced by Coca-Cola in External (Macro) Environment 7 Internal Audit of Coca-Cola 7 BCG matrix of diet coke 9 Analysis 9 Market share of Diet coke to determine its effectiveness 9 Marketing mix to improve the demand of diet coke 10 Recommendation 12 Conclusion 13 References 14 Introduction Brief overview of the industry of Beverage The industry of beverage is extremely competitive due to the presence of numerous rival players. Moreover, as the players offer varied types of beverages such as soft drinks, carbonated as well as juices etc, the CAGR rate of the beverage industry is increasing at a rapid pace in the entire globe as compared to other segments. This is mainly due to the enhancement of the demand of the products of beverages in the entire globe to a significant extent rather than other drinks (Bradley, 2012, pp. 332-345). As a result of which, the organizations operating under the segment of beverages is enhancing its brand image and portfolio to a significant extent thereby amplifying their portfolio and reputation in the entire globe. One of such reputed organizations operating successful in the segment of beverage is Coca-Cola. Brief overview of Coca-Cola Coca-Cola is one of the reputed organizations, operating in the segment of carbonated soft drinks, since 1886. It is introduced in the region of Atlanta of Georgia, but expanded its wings in the entire globe very quickly and rapidly (Coca-Cola, 2014). It became possible mainly due to the presence of numerous product lines such as Caffeine-free coca-cola, Parsi Cola, Virgin Cola, Coca-Cola-Vanila, Coca-Cola Cherry etc (Coca-Cola, 2014). Due to which, it attained the reward of best global brand in the year 2011. Other than this, within a very small time frame, it enhanced its profit margin by 15.31 percent in 31st March, 2014 (Ycharts, 2014). Along with this, the market share and brand image of the organization of Coca-Cola enhanced with a significant extent that amplified its position and sustainability as well (Coca-Cola, 2014). The rationale of the essay The rationale of this essay is to analyse critically the strategic marketing policies used by the organization of Coca-Cola in order to promote its product, diet coke in the entire globe among other competing firms. Moreover, the essay also comprises of varied types of marketing concepts, theories and tools in order to evaluate the effective strategies used. Discussion Strategic marketing process Strategic marketing is the procedure to cope up with the policies and strategies of the existing competitors so as to amplify the brand value of an organization. Similarly, the process of strategic marketing is performed for the organization of Coca-Cola, in order to analyse the demands and requirements of its target market so as to fulfil it. Only then, the organization of Coca-Cola might become successful in amplifying its image and reputation in this aggressive market among many other rival contenders (Beall, 2010, pp. 110-123). External marketing Audit and external environmental (Macro) Analysis The external marketing audit of the organization of Coca-Cola is performed in order to analyse the market scenario of United Kingdom with the help of Porter’s five forces. Bargaining power of the buyers: the bargaining power of the customers or buyers is extremely high in the market of United Kingdom. It is mainly due to the presence of numerous rival players such as Pepsi, Thumps-up etc. However, due to which, the organization of Coco-Cola is trying to concentrate over research and development department to present products as per the taste and preference of the customers so as to retain its brand image and reputation in the market of United Kingdom among others. Moreover, as the customers are extremely conscious about the extent of calories and diet, the organization introduced diet coke. Bargaining power of the suppliers: the bargaining power of the suppliers is extremely low as the branded organizations always desire to attain the raw materials from reputed suppliers. Therefore, in order to maintain their portfolio, the small suppliers try to offer the products at quite low prices (Beall, 2010, pp. 776-787). Threat of new entrants: the threat of entry for new entrants is extremely low as it requires high economies of scale. Moreover, the level of dominance of the existing brands is extremely high in the market of United Kingdom such as Coca-Cola, Pepsi so it’s extremely difficult to develop its image for a new brand. Competitive rivalry: the level of competitive rivalry of the organization of Coca-Cola is extremely high due to the presence of numerous contenders. So, the organization of Coca-Cola tries to retain its portfolio and dominance by analysing the target market preferences and tastes. Threat of substitutes: the threat of substitutes is extremely high in the market of United Kingdom and so the organization of Coca-Cola expands its product lines as per the choices of the customers. Moreover, it offers high concentration over advertising campaigns to increase the level of awareness of the features of diet coke in order to enhance its demand and reputation in the market (Beall, 2010, pp. 812-823). Thus, after analysing the external market of United Kingdom, it might be revealed the introduction of diet coke is extremely effective for the organization to retain its position and dominance among others. External environmental (Macro) audit is performed with the help of Pest analysis. It is also another important marketing tool. Political: the political instability of the market of United Kingdom acted as one of the prime cause that hindered the trade as well as import activities of the organization of Coca-Cola. Moreover, due to changes in the policies of the government of United Kingdom, the tariff duties on import of syrup increased to a significant extent that hampered the total sale and demand of the product of diet coke in the market of United Kingdom to a considerable extent as compared to many other rival players. Economic: inflation is the most important factor that reduced the buying behaviour of the customers of United Kingdom that hindered the total sale and profitability of the organization of Coca-Cola to a considerable extent among others. Due to which, the organization of Coca-Cola lowered the prices of the product of diet coke so as to retain its demand in the market. This strategy proved extremely effective for the organization of Coca-Cola that amplified its market share and growth. Social: as the customers of United Kingdom are extremely conscious about their health and well-being, so diet coke became the best solution for them. This is because; it comprised of very less calories that proved extremely effective for their body. Therefore, diet coke acted as the solution that not only refreshed them but also quenched their thirst to a considerable extent. Technology: the organization of Coca-Cola implemented advanced machinery parts for blending the low calorie concentrated syrup in an effective way. Due to which, a huge percentage of revenue gets saved by implementing such type of machinery and so the organization of Coca-Cola is far more advanced than others. Thus, it might be depicted that, as the level of consciousness of the citizens of United Kingdom increased significantly, the product of diet coke proved extremely effective among others. This amplified the brand image and equity of the brand in the market thereby amplifying its position and competitive advantage. Changes faced by Coca-Cola in External (Macro) Environment The organization of Coca-Cola faced numerous challenges due to external macro environmental factors such as inflation. Due to which, the rate of per capita income of the target consumers reduced that hindered their buying behaviour. As a result of which, the market share and total sale of the organization of Coca-Cola or diet coke reduced. Then, the organization, implemented the strategy of low-pricing in order to attain leadership. This strategy helped the organization to amplify its reputation and demand in the market of United Kingdom that enhanced its brand value and popularity as well. In addition as the product of diet coke comprised of very low level of calories so it is highly preferred by the diet conscious consumers of United Kingdom. This factor also acted as a boon for the organization that amplified its total sale and distinctiveness in the market among others. Thus, introduction of diet coke in the region of United Kingdom by understanding he customer preferences, proved extremely worthy for the organization of Coca-Cola that amplified its good-will and position. Internal Audit of Coca-Cola The internal audit of the organization of Coca-Cola is analysed with the help of SWOT analysis. Strengths: High brand image: the brand image of the products of the organization of Coca-Cola is extremely high as compared to many other rival players such as Pepsi, Thumps-Up, and Sprite etc. High dominance: as the level of dominance of the product lines of Coca-Cola is extremely high, so its level of preference is also comparatively high among others. This acted as a positive factor for the new product, diet coke at the time of launch. High reliability: as the level of reliability of the customers is extremely high, so the newly introduced product line, diet coke proved extremely worthy for the organization. Therefore, due to which, the total sale and demand of diet coke increased to a significant extent. Weaknesses: Lack of promotional campaigns: due to lack of promotional campaigns, the awareness and demand of the products of Coca-Cola is reducing at a significant extent. Due to which, its profitability and efficiency in the market is also declining significantly. Lack of availability: due to lack of availability of the product lines, the organization of Coca-Cola lost a huge amount of market share and profit. Opportunity: High brand recognition: due to high brad recognition, the new product line, diet coke attained a significant position in the market of United Kingdom among others. This factor proved extremely effective for the organization. Introduction of low-calorie product: the introduction of low calorie product proved extremely worthy for the organization of Coca-Cola thereby amplifying its demand and profit margin among others. This sis mainly due to increased consciousness for health and diet for the citizens, the total sale and demand of diet coke increased. Threats: High rivalry: the organization of Coca-Cola faced extensive rivalry among the competitors. Therefore, it tried to develop a distinguished and unique product so as to create a different position for itself. Keeping this idea in mind, the organization developed Diet coke that presented a different taste and feeling to its customers. This amplified the brand image and reputation of diet coke among others (Drummond & Ensor, 2010, pp. 512-523). Thus, from internal audit, it might be revealed that, introduction of diet coke proved extremely effective for the organization that amplified its portfolio and reputation in the market among others. BCG matrix of diet coke (Source: Ellis, 2011) After introducing, diet coke, the organization is in the position of star with high market growth and high market share. Due to which, the profitability and productivity of the organization enhanced resulting in amplification of the total demand and competitiveness in the market (Ellis, 2011, pp. 612-623). The prime reason behind such a profitable position is mainly the change of trend and preferences of the consumers. However, as the organization of Coca-Cola offered high attention over customer preferences, so it became successful to enhance its brand value and reliability in the market among other rival players. But, in order to retain its trend and position, the organization of Coca-Cola need to offer high attention over its pricing and promotional strategies along with customer tastes (Guillén & García-Canal, 2012, pp.554-565). Analysis Market share of Diet coke to determine its effectiveness The market share of diet coke is presented below: Thus, from the market share, it might be clearly analysed that, diet coke faced serious competition with sprite as compared to others. So, in order to amplify its position and demand, the organization of Coca-Cola need to offer high attention over promotional campaigns that may highlight the features or benefits of diet coke as compared to others (Grant, 2010, pp. 178-189). Only then the customers might get attracted towards the product that may amplify the portfolio and reputation of the organization in the market among other existing rival players (Gupta, 2010, pp. 213-234). Moreover, the organization might very easily enhance its market share and competitive position in the market thereby reducing the rivalry among its competitors. Marketing mix to improve the demand of diet coke Marketing mix is one of the most important concepts of marketing that might be used to amplify the demand and total sale of the product. It comprises of 4P’s. Product: in order to satisfy the demand of the diet conscious customers, the organization developed the diet coke. It comprises of very low level of calories and sugar. Moreover, it is prepared, in order to quench the thirst without in-taking huge calories (Halimi & et.al. 2011, pp. 110-134). Price: in order to amplify the demand and totals ale of the product of diet coke, the organization needs to market it with a lowest price. So that, it might be purchased very easily by each and every segment of the society, only then, the brand image and reputation of diet coke might get enhanced. Moreover, in order to amplify the demand and reliability of diet coke within the minds of the customers, the organization needs to offer special type of discounts. This might prove effective for the organization to position its product line, diet coke in the market of United Kingdom as compared to others (Johnson & et.al. 2011, p. 115). Place: the organization of Coca-Cola might try to make the product of diet coke available at all supermarkets, hyper and hypo markets, retail stores etc. So that, if a customer desires to in-take it, he or she might consume it, rather than switching off to others. Only then, the demand and dependency of the customers over the brand or the product line might get enhanced resulting in amplification of its popularity and equity among others (Kotler & Keller, 2012, pp. 345-356). Promotion: the organization of Coca-Cola might try to offer high attention over promotions (Hackley, 2010, pp. 412-423). This is because; it is through promotional campaigns, that the level of awareness of the customers over the product line, diet coke might get enhanced to a significant extent as compared to others (Kazmi, 2010, pp. 290-312). Apart from this, it might try to highlight the features of diet coke in billboards, newspapers, social media’s, televisions, online sites etc, so as to amplify its total sale and demand in the market among others. Other than this, the organization of Coca-Cola might recruit highly experienced staffs in order to improve the sale of the product, diet coke as compared to others. In addition to this, the organization of Coca-Cola might try to improve the packaging of the bottles of diet coke in order to increase the attraction of the customers, towards the brand among others (Keegan, 2012, pp. 332-344). Hence, in order to amplify the brand image, customer loyalty, the organization of Coca-Cola needs to offer the product of diet coke at a quite low price. Only then, it might become successful in amplifying the rage of customers as well as profitability of the organization to a considerable extent among others. Other than this, the organization might try to offer high concentration over promotional campaigns in order to amplify the demand and sustainability of the brand in the market among others. In addition to this, the organization of Coca-Cola might become successful in enhancing its portfolio and reputation in global markets. Furthermore, the rate of switchover costs of the customers might also be reduced, which is extremely profitable for an organization, operating in this age of competitiveness. Recommendation Distribution: in order to amplify the demand and total sale of the product, diet coke, the distribution channel of the organization need to be improved. This means, each and every retail outlets, super markets, hyper and hypo markets must contain the diet coke. Only then, the level of reliability and loyalty of the customers over the brand might get enhanced thereby amplifying the profitability of the diet coke (Kotler & Armstrong, 2010, pp. 267-278). Pricing strategy: the organization might try to implement cost leadership strategy at the time of penetration or developmental stage. This means, the product of diet coke might be presented a lowest price as compared to others so as to fascinate a huge range of customers as compared to others (Mathews, 2012, pp. 225-256). Promotional campaigns: in order to increase the brand awareness of the product line of Coca-Cola, a huge attention need to be presented over promotion. Only then, the level of awareness of the customers might get enhanced resulting in amplification of the total sale and profit margin of the organization (Porter, 2010, pp. 223-234). Packaging: the organization needs to offer high attention over packaging in order to amplify the total sale and demand of the product, diet coke in the market among others. Only then, the profitability and productivity of the organization of Coca-Cola might get enhanced resulting in amplification of its reliability and equity in the market. Implementation of attractive discounts: special discounts might be offered at the introductory phase in order to amplify the demand of the product of diet coke in the market among others. Only then, the customers of varying income groups and age-groups might get attracted towards the product line thereby amplifying its reputation and position in the market (Pride & Ferrell, 2010, pp. 123-134). Thus, if the above mentioned strategies might be followed by the organization of Coca-Cola, then it might surely become successful in amplifying the demand and portfolio of diet coke among many other rival players in the market. Conclusion Conclusively, it might be stated that, in order to amplify the demand and productivity of the organization of Coca-Cola and diet coke, high concentration over promotion is essential. Only then, the diet conscious customers might get attracted towards the product thereby amplifying its reputation and portfolio. Other than this, the rate of distribution of the product line of Coca-Cola need to be enhanced in order to amplify the demand of the product in the market. Along with this, due to improvement of the availability of the product in the market, the demand and craze of the young stars might get enhanced that may amplify the prosperity and popularity of diet coke. Furthermore, if the prices of diet coke are comparatively low, then it might prove extremely effective for the organization thereby amplifying its growth and market share as compared to its other rival players. In addition, the packaging of diet coke bottles need to be more attractive and fascinating so as to increase its demand in the market that may increase its uniqueness and distinctiveness among other rival brands. 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