Marketing for Coca-Cola Co - Business Plan Example

Executive Summary Coca-Cola, a popular carbonated soft drinks company has presence in over 200 countries and 160 brands to its credit. The company now plans to launch energy drink in the UK market. It enjoys brand equity but its credit rating is affected. Nevertheless, due to obesity concerns being high in UK, the external environment in UK is conducive to launch of its new product targeting the young, health-conscious consumers. Competition in this segment comes from small manufacturers but Coke being financially stable can compete against them. Traditional advertising along with social media advertising, public relations such as sports sponsorship and direct interactions with the end consumers should be adopted as the marketing strategy to gain market share. To create awareness about a healthy lifestyle should be the focus of its strategy and the sales would automatically follow. Regular monitoring is essential to know where the strategy is moving. 1. Company History Started in 1886, Coke was marketed as a tonic containing extracts of cocaine and caffeine-rich kola nut until 1905 (Bellis 2011). As the popularity of soda fountain declined, the company released the “New Coke” formula in 1985. Today more than one billion drinks of Coke are consumer every day. In 125 years of its existence the company has developed more than 160 low and no calories drinks in its range of products (The Coca-Cola Company 2010). It currently has more than 500 brands and is available in more than 200 countries across the world. Coke now plans to launch an energy drink in the UK market and since the market is already saturated, it has to evaluate the market characteristics, which would help the company to formulate the marketing strategy. 2. Environmental Analysis 2.1 Economic Analysis The UK is one of the most globalized countries and its economy is the sixth-largest economy in the world. The UK has a GDP of 1.353 Euro or 23.300 Euro per inhabitant, which is the European average (Senior Watch n.d.). The UK has the opportunity to invest at the national as well as the individual level. The UK economy is just recovering and hence even short-term tax imposed on soft and energy drinks could jeopardise the fragile economy recovery (BSDA 2011). The food and drink sector represents over 15% of manufacturing turnover and employment (IfM 2010). Its output was not affected even during the recession. The weekly earnings of people employed in this sector are above average and the job tenure is over nine years; the sector has only 6% temporary workers. 2.2 Social Analysis The wealth of an individual elderly person in UK is high (Senior Watch n.d.). The education level of the people is also high in UK. Obesity levels are very high in UK. Almost two in every adult in the UK are overweight. The quality of food and drink, as well as the sedentary lifestyle has been identified as the reasons for overweight in UK (EMIS 2008). UK soft drinks consumption has gone up by 4% since 2009 as per chart shown in Appendix A. People are keen to include daily exercises and workout because of this the health and energy drinks market has high growth potential. 2.3 Political analysis The UK does not have a President and historically most British governments are composed of ministers from a single political party although at times there is a small opposition party (Darlington 2011). Generally the UK enjoys high political stability and hence the regulations for sectors such as food and drinks sector would not change drastically. The three parts of the UK have their own local administration and responsibilities. 2.4 Legal and regulatory analysis Since soft drinks contain high caffeine levels and since their popularity is growing, the BSDA (British Soft Drinks Association) has released a code of practice stating how the drinks should be labeled and marketed so that consumers have all the information. The labels are also expected to carry the statement, “Not suitable for children, pregnant women and persons sensitive to caffeine” (BSDA 2011). 2.5 Technological analysis Coke uses technology to reduce the carbon footprint of its drinks. A 330ml of Coca-Cola sold in Britain leaves a carbon footprint of 170 gms and the packaging accounts for the largest portion of it (The Coca-Cola Company 2010a). They use recycled content and encourage recycling post use which has decreased the overall carbon footprint by about 60 percent. 2.6 Competitor analysis The greatest challenge for Coke comes from Pepsi and this resulted in Cola wars. The two colas have been engaged in cyber wars (The Telegraph 13 Sept 2011). Competitors such as Sainsbury’s have been trying to imitate Coke’s packaging in UK to try to distract the consumers. Apart from this, the smoothies and juice drinks market is also strong in UK. However, the consumption is yet to catch up as during 2010, 1180 million liters of smoothies and juice drinks were consumed in UK from an overall 14585 million liters of soft drinks (BSDA 2011). The main competitors of Coke are Pepsi. 3. SWOT analysis 3.1 Strengths Established with unique product quality and range Presence in 200 countries Technologically strong Financially stable Reputation 3.2 Weakness Several lawsuits against the company in several countries for unethical practices Strong competition Credit rating affected 3.3 Opportunities Obesity prevalence in UK Demand for fat-free drinks Energy drink required to enable consumers to be energetic before work-outs 3.4 Threats Regulation to provide information on labels Alternative forms of drinks such as bottled drinks, smoothies and juices catching up Carbonated drinks under scrutiny 4. Marketing Objectives Energy drinks market is yet to take off in UK and Coke, with its strong brand and reputation can introduce and compete against small manufactures in the sector. Hence the marketing objective for Coke for its energy drink would be: To penetrate the market and capture at least 10% of the total market in the first year Educate the consumers about the need for maintaining healthy lifestyle Brand enhancement through new product development and innovation Increase sales of its other products 5. Target market The new energy drink is targeted at the obese and overweight adults particularly those between 18 and 30 years. Health has become a primary concern among this target segment and the government too is trying to bring in consciousness of a healthy lifestyle. 6. Marketing mix The detailed marketing plan includes the best mix of the four elements. 6.1 Product mix Coke should emphasize on the benefits of the energy drink through label information. The composition of the drink should be highlighted and its benefits communicated which would serve to enhance the brand image of the product. 6.2 Price mix Pricing has to be at par with competition. Competition in energy drinks is only from small manufacturers but keeping the price too low may create an adverse impact of the brand image. Since Coke has its own brand equity, it should keep its price above average. Moreover, the average UK consumer is educated and well employed and hence would be willing to pay a premium price for a drink that would contribute towards healthy living. Initially however, the pricing can be attractive to capture the market share. 6.3 Place This drink should be sold through the regular outlets but the channels of distribution should be added. For instance, kiosks can be set up gas stations and wherever the youth move. Convenience is what they look for. Thus, targeting the health clubs and Gyms could be beneficial as health conscious consumers may want to buy it just before they start their workouts. 6.4 Promotion This is the most important element of the marketing mix. Promotion is done through advertising, public relations, direct marketing and sales promotions. Social media marketing has caught up lately and is the most effective method to reach a wide audience at minimum cost. Advertising should be continued in the traditional media as well as there could be a segment that does not have regular access to the Net but would be in need of energy drinks. Advertisements should communicate the benefits of the energy drink such as its regenerative and refreshing effect. Its importance in consuming before workouts should be emphasized. Sales promotions could be targeted at Universities. Initial small free sample sachets could be provided to those who are willing to attend consumer awareness seminars conducted by the company in collaboration with the University authorities. Once the consumer buys the product the first time against the free used sample sachet packet, further discounts could be offered. Such strategies help in creating awareness and capturing a market share for new products. Stores display should be able to attract the target segment. Direct marketing for energy drinks is essential as it help the company to build relationship with the end users. Such feedback is essential to change the marketing strategy. Thus, seminars and programs should be held at gyms and other social clubs where the consumers too get an opportunity to interact with the company representatives. Public relations can be done through sponsorship of sports programs or sponsoring prime time television programs. 7. Implementation plan To carry out the marketing strategy several initiatives would have to be taken. A list of the local gyms and health and fitness centers would have to be made and their timings noted. Television channel advertising personnel would have to be contacted and their rates taken. The prime time shows would have to be evaluated data for which can be obtained through statistics gathered by Marketing Research Bureaus. Universities would have to be contacted and they may first have to be convinced of the product before they permit the seminars for the students. Initial pricing would have to be deduced keeping in mind the target segment. 8. Evaluation and control Initially advertisements should be carried out for one month in the pre-launch phase and once the direct selling and sales promotions start advertisements should be discontinued to see the effect. Direct interaction with the consumers is essential. Thus should be done by the company representatives and not by the dealers or distributors. Focus group interviews should be conducted one month after the product launch to evaluate all the elements of the marketing mix. The retailers should also be encouraged to collect data from the consumers who buy across the retail counters. Regular evaluation and monitoring is essential at last in the first six months of the product launch. Works Cited Bellis, Mary. The History of Coca Cola. Web 13 Sept. 2011. BSDA. THE 2011 UK SOFT DRINKS REPORT. Web 13 Sept. 2011. Darlington, Roger. A SHORT GUIDE TO THE British Political System. Web 13 Sept. 2011. EMIS. Obesity and Overweight. Patient.UK, Web 13 Sept. 2011. IfM. VALUE OF FOOD & DRINK MANUFACTURING TO THE UK. Centre for Industry & Government. Web 13 Sept. 2011. Senior Watch. Socio Economic Environment: United Kingdom. Web 13 Sept. 2011. The Coca-Cola Company. History of Coca-Cola. Web 13 Sept. 2011. The Coca-Cola Company. Coca-Cola announces the carbon foot print of some of its best loved brands. Web 13 Sept. 2011. The Telegraph. Pepsi vs Coke: advertising battle turns to social media. 01 Feb 2010. Web 13 Sept. 2011. Appendix A UK soft Drinks consumption Read More