Strategic Marketing Plan: Coca-Cola Company - Assignment Example

Strategic Marketing Plan Coca-Cola Company- Minute Maid Executive Summary Minute Made is a brand of Coca-Cola Company, which is the largest manufacturer of beverages in the world. Minute Made specializes in the manufacturing, marketing and distribution of fruit juices, teas and other drinks. This document serves as a marketing plan for Minute Maid line pf products for the next 12 months. The paper analyses the situation to uncover key considerations and then further establishes corporate and marketing objective and suggests a plan for achieving goals. Table of Contents Table of Contents 3 1. Introduction 4 1.1 Company Overview 4 1.2 About Minute Maid 4 2. Situation Analysis 5 2.1 SWOT Analysis 5 Table 2.1 SWOT Analysis 5 2.2 FEPSOS Analysis 6 SLEPT Framework 6 9 Productivity 11 Systems 11 2.3 Key Issues 12 3. Objectives 13 3.1 Mission and Vision 13 3.2 Corporate Objectives 14 3.3 Marketing Objectives 14 4 Marketing Strategy- STP 15 4.1 Segmenting and Targeting 15 4.2 Positioning Strategy 17 5. Marketing Strategy Alternatives 18 5.1 Ansoff Matrix 18 5.2 ADL Matrix 19 5.3 Competitive Strategies 20 5.4 Competitive Positioning 22 6. Marketing Program 23 6.1 Product Strategy 23 6.2 Pricing Strategy 24 6.3 Promotional Strategy 24 6.4 Distribution Strategy 25 7. Marketing Budget 26 8 Implementation, Evaluation and Control 27 8.1 Implementation Schedule 27 8.2 Responsibilities 28 8.3 Evaluation 28 8.4 Key Performance Indicators 28 9. Contingency Plan 29 2) The Coca-Cola Company 2009 Second Quarter and Year-to-Date Results (2009)Retrieved 7 December,2009 31 1. Introduction 1.1 Company Overview Coca-Cola Company is the world's largest manufacturer, marketer and distributor of carbonated soft drinks and other beverages. The company was established in 1886 and has been successfully operating business over a span 123 years. Coca-Cola has established its presence in more than 200 countries and has 92,400 employees across the globe. The company boasts a product portfolio of over 3000 beverages and has a world wide market share of 47.2% with sales of 4107.1 million cases (1). 1.2 About Minute Maid Minute Maid is a division of the Coca-Cola Company which was established in 1945 and was purchased by Coca-Cola in 1960. The company produces ready to drink juices and teas in over 100 flavors. There has been a visible decline in the consumption of carbonated drinks as a result of the rising health concerns. Carbonated drinks make up a significant portion of Coca-Cola's sales. This is a good opportunity to increase sales of the non-carbonated drinks by entering into newer untapped markets. This document serves as a marketing plan for Minute Maid healthy beverages for the subsequent 12 month period. 2. Situation Analysis 2.1 SWOT Analysis The SWOT analysis is used to determine the internal strengths and weaknesses of an organization and the external opportunities and threats. The SWOT Analysis for Minute Maid is as follows: Strengths Weaknesses Strong brand with world wide recognition Strong supply chain Established distribution channels Excellent financial performance Quick response to market need Partnerships and licenses with other brands Standing out against competition in the saturated market More customer loyalty to the core the Coca-cola products Dormant market demand for soft drinks Opportunities Threats Changing consumer trends towards soft drinks Entering new market segments Developing further partnerships with other brands Competition Health concerns Risk of cannibalization Table 2.1 SWOT Analysis 2.2 FEPSOS Analysis Marketing Functions Marketing functions for Minute Maid include its strong branded high quality products which are designed around customer needs. The products are priced to deliver value and quality to the customers in monetary and non- monetary terms. The products are backed by and effective, extensive and result oriented marketing mix. Minute Maid also has a strong distribution network which delivers its goods to the customers where and when they are needed. Environment The environmental factors affecting Minute Maid can be divided into the macro environment and the micro environment. Macro Environment The company's macro environment can be analyzed using the SLEPT Framework which analysis the impact of the social, legal, economic, political and technological environment on the organization. SLEPT Framework This framework is used to determine the social, legal, economic, political and technology factors in the external environment which impact Minute Maid. Social Changes Increasing trends towards health Lifestyle changes Legal FDA regulations Domestic and Foreign legislations, Copyright, patent and licensing laws Economic Global recession Increasing costs of raw material Political Global political scenarios Government control over edibles prices Government stability Possibility of change Technology For innovation and improvement Effective advertising and marketing Table 2.2 SLEPT Framework Micro Environment Factors making up the micro environment in which Minute Maid exists can be studied using the Porter's Five Forces Model. Porter's Five Forces Model can be used to analyze the impact of factors which make up the macro-environment in which Minute Maid operates. It highlights new entrants in the market, buyer and supplier power, and the threat of substitutes as key elements influencing the degree of competition in the industry. Table 2.3 Porter's Five Force Model Suppliers The Coca-Cola Company has long-term and established relationships with their supply partners and has developed a control over the supply chain. This offers an advantage for the continuous availability of raw material at affordable rates. However Minute Maid faces a threat from the suppliers due to the limited number and selective suppliers for their raw material. Having limited suppliers increases their bargaining power over the manufacturer (Kurtz, 2008). New Entries New entries in the health juice market will face both high cost barriers due to the high costs of production (3) which pose a challenge for the competitors. Another factor which is in favor of the company is its strong brand image. Buyers Minute Maid has a large market for its products, but the buyers' ability to easily access competitor products and compare prices gives then a more negotiating power. Substitutes The enormous consumer base for healthy fruit beverages offers an opportunity for the company extensive sales however the fact that there are numerous substitutes available in the market at similar prices poses a threat for Minute Maid. Consumers have a wide variety of beverages to choose from ranging from carbonated drinks to ready to drink teas. Industry The four forces explained above combine to increase competitiveness in the industry. As a result of the impact of these forces there is a high degree of competitiveness in the beverage market. The similar characteristics and the price range can give rise to price wars. Productivity The company's networks of suppliers and vendors are one of its key success factors. New product development, effective marketing and distribution backed by a dedicated sales force have made the Minute Maid one of the largest beverage marketers. Systems The company makes the most of the latest technology across the world for its manufacturing, production, distribution, marketing, organizational management and customer services. Organization Minute Maid is a part of the Coca-Cola family which is the world leader in beverages market. It operates in more than 200 countries and with over 90,000 diverse employees. Company has a strong supplier and vendor network. Strategy Minute Maid focuses on constant innovation and new product development to introduce better and improved products in the market. They company put their customers' needs and demands first and creates produced around those needs to deliver high quality beverages to meet and exceed customer expectations and to deliver the ultimate product experience. Minute Maid is also highly focused on branding, advertising and developing sustaining strategic partnerships with vendors, suppliers and other players in the food market. 2.3 Key Issues The above macro and micro environment analysis uncovers the following key issues: Position the product distinctly so that it stands out against competition as well as other drinks in the market Target newer markets to avoid cannibalization of existing brands in the market Gain large market share with effective pricing strategies which ensure profitability and keep Minute Maid ahead of competition 3. Objectives 3.1 Mission and Vision Our Mission Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions. To refresh the world To inspire moments of optimism and happiness To create value and make a difference Our Vision Our vision serves as the framework out our Roadmap and guides every aspect of our business day by describing what we need to accomplish in order to continue achieving sustainable, quality growth. People: Be a great place to work where people are inspired to be the best they can be. Portfolio: Bring the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value. Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities. Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities. Productivity: Be a highly effective, lean and fast-moving organization. Minute Maid's marketing objectives for the next 12 months are as follows: 3.2 Corporate Objectives To protect and enhance Minute Maid image as a healthful beverage To increase revenue from $2.2billion to $ 2.4 billion. To sustain profitability under the current global recession To deepen the company's' focus on new product development To secure shareholder investments with favorable returns 3.3 Marketing Objectives To increase the market share 30% to 38% To increase sales form 60 million units to 70 million units. To increase the level of brand awareness as a healthy beverage To introduce two sales promotions for retailers To make 6 visits to retailers throughout the year for brand promotion To initiate marketing research for the launch of a new product within in the 1st quarter 4 Marketing Strategy- STP 4.1 Segmenting and Targeting Pos The definition of market segments for Minute Maid is based on criteria provided by Hair, Lamb& McDaniel (2008). The market for Minute Maid is segmented on the following bases: Geographic Segmentation is done on the base of location, area and density of the area. Demographic Segmentation considers age, gender, income, education, occupation and race and ethnicity. Psychological Segmentation is done on the bases of needs, personality and perceptions of individuals. Psychographic segmentation is based on the lifestyle of individuals. Behavioral Segmentation is conducted on factors such as loyalty, usage rate, benefit sought by customer and the user type. Market Segmentation for Minute Maid Geographic Segmentation Location Nationwide Area Entire area of served country Density Urban and metropolitan Demographic Segmentation Age 12-50 years Gender Male and female Income $15,000 per year Education Elementary and above Occupation student, graduate, professional Race and ethnicity All Psychological Segmentation Needs Health Personality Health conscious, brand conscious Psychographic segmentation Lifestyle Active, living with parents, independent, value social life Behavioral Segmentation Loyalty Strong, medium, low, none Usage rate Frequent, daily, seasonal User type regular, non-users, new Benefit sought Nutrition, hydration, quality Table 4.1 Market Segmentation for Minute Maid The geographic segment consists of individuals from across the nation mostly from the urban and metropolitan areas of the countries. High urban density areas are the major segments over a total area of each country being served. The demographic market consists of all ages falling within the rage of 12 to 50 years of age. It will consist of individuals belonging to both genders with income above $15000 per annum. In terms of education the product is targeted at those with elementary school education and above. From the occupation perspective the target market comprises of students, graduates, young professionals and older professionals. The psychological segment is made up of health and fitness conscious individuals who are also brand conscious. These segments look for healthy alternatives for carbonated soft drinks and demand good health and wellness. The psychographic segment consists of individuals who lead active lifestyles, live with their parents or are independent and have regard for social life. The behavioral segment consists of individuals who are frequent, daily or weekly consumers of the product, they may or may not be regular users or they could even be non users. The benefits sought by this segment include hydration, high quality brand name products which are healthy and nutritious. The segment comprises of individuals who demonstrate hid, medium as well as no product loyalty. 4.2 Positioning Strategy The Minute Maid range of juices will be positioned as healthy, ready to drink fruit juices which are safe and high quality family products which cater to the nutritional needs of the entire family from adults to children with fortification and nutrition enhancements. 5. Marketing Strategy Alternatives 5.1 Ansoff Matrix The Ansoff Matrix explains the different strategies that a company can opt for based on the products it is selling and the market it is selling in (Cheverton, 2004). Products Existing New Market Existing Market Penetration Product Development New Market Development Diversification Table 5.1 Ansoff Matrix Minute Maid's primary marketing objectives for the next 12 months are an increased market share and increased sales. For this purpose the company will have to move around the Ansoff Matrix selling the same products in new and existing markets and brining in new products to sell in existing as well as new markets. Market Penetration Minute Maid can opt for by selling more of its current product to the market already consuming it through various sales promotions along with improved product quality and better relations with retailers to push the product into the market. Market Development The market development strategy can be followed by entering newer markets with the current range of products. This will require extensive marketing research and tapping into markets which have not be served yet and also by taking customers away from competitor brands. Product Development Product development strategy can be followed by introducing new products in to the existing market. This calls for a great deal of innovation to offer customers newer products with new features and benefits. Diversification Minute Maid can use the diversification strategy whereby the company can launch new and innovative beverages into a new market. This will require innovation as well as extensive market research to determine new markets and developing products according to their tastes. 5.2 ADL Matrix The Arthur D. Little (ADL) matrix is uses the company's competitive position and stage of industry maturity to explain the possible strategic direction for a firm. The ADL model presented by Gilligan and Wilson (2009) can be adapted to explain a strategy alternate for Minute Maid. Stage of Industry Maturity Embryonic Growth Mature Aging Competitive Position Dominant Strong Favorable Tenable Weak Table 5.2 ADL Matrix Minute Maid Falls in under the mature stage of the beverage industry yet holds a strong competitive position against competitors. Its position in the ADL Matrix suggests that the company needs to concentrate on focusing its marketing efforts, differentiating its offerings to customers and cutting costs for the company 5.3 Competitive Strategies The table used to analyses Porters Generic Strategies has been adopted from Grant (2005). It explains the position of Minute Maid with respect to the sources of competitive advantage and its competitive scope. Source of Competitive Advantage Low Cost Differentiation Competitive Scope Industry wide Cost Leadership Differentiation Single Segment Focus Table 5.3 Porter's Generic Strategies Model Minute Maid concentrates its marketing on branding, advertising, new product development and quality as its source of competitive advantage in the industry. The company's competitive scope spans across the industry. Based on the company's marketing practice decisions Minute Maid falls into the differentiation area. This strategy will allow Minute Maid to have a strong brand and market its various attributes against those of competitors. This will also allow it to market its products based on features and benefits to consumers who are willing to pay more for quality. 5.4 Competitive Positioning Although Coca-Cola as a parent company is a market leader, Minute Maid holds position as the market challenger in the beverages industry. Minute Maid therefore will focus on gaining an increased market share and greater profitability. The company therefore has to recognize the competitors and from which it can take away market shares and develop strategies to do so. 6. Marketing Program 6.1 Product Strategy The product aims to satisfy the market need for high quality, healthy beverages. The product is designed to provide customers an experience which is up to their expectations. The consumer opinion of the product is based on the perceived quality and the value delivered to the customers (Keller, 2004). The perceived quality of Minute Maid according to Keller (2004) is based on the following aspects: Performance: Minute Maid is a high performance brand. Features: Healthy, nutritious, good tasting, rage of flavors. Conformance: Minute Maid beverages are free from defects and conform to the laws of the FDA. Reliability: The customers will be delivered consistency in the product on every purchase. Style and Design: Attractive and convenient packaging. New Product Development: New flavors and new range of products will be introduced to meet needs and demands of the market 6.2 Pricing Strategy The product will be priced according to the market segment, keeping in mind the competition and their prices. The price will not be set too low or changed since it can give rise to price wars in this highly this highly sensitive industry. The price will give value to its customer and will be priced to communicate the image of high quality associated with the product. (Kotler & Lee, 2002). Both the monetary and non monetary aspects of the price and value to customers is considered in the pricing strategy. 6.3 Promotional Strategy A combination of the push and pull strategy will be used to market Minute Maid beverages. In order to meet sales targets the product will be pushed through retailers by promotions directed at the distribution and retail networks. The pull strategy will be used to create a demand in the market by ongoing promotions of the products in the target market segments. The increase in demand will require the retailers to stock up on the products. Promotional Message: Minute Maid is a high quality, healthy beverage for the entire family for those with active lifestyles. Promotional Mix: The promotional mix for Minute Maid over a period of 12 months will include: Advertising on various media such as; television, radio newspapers, magazines, internet/website, outdoor advertising, public relations and personal selling. Sponsorships of a major event in the coming year. Contests and Sweepstakes held once a year. Point of Purchase displays throughout the year. Promotional mix for retailers and distributors will include promotions in the form of allowances and discounts to encourage more stocking and coordinated and cooperative advertisements which benefit both parties. 6.4 Distribution Strategy Distribution will take place through the company owned distribution channels. It will be sold by retailers nationwide, making the product easily accessible to customers and keeping it within their reach. Minute Maid products will be available to customers at restaurants, superstores, grocers, vending machines and through direct sales. 7. Marketing Budget The budget allocated for the marketing of the Minute Maid will be as outlined in the table below. The total marketing budget will be 15% of the revenue. Department Activity Amount ($ million) Marketing Advertising 4.95 Sales Promotions 3.3 Sponsorships 3.3 Marketing Research 6.6 R& D New Product Development 9.9 All Contingencies 4.95 Total 33,000,000 Table 7.1 Marketing Budget 8 Implementation, Evaluation and Control 8.1 Implementation Schedule The following implementation schedule is based on the objectives set for the 12 month period. Implementation Plan Activities/Months Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Allocation of Resource Promotion for Distributors/Vendors Sponsorships Visit to Vendors Initiate Marketing Research Contest Advertising campaign Ongoing Monitoring and control Table 8.1 Implementation Schedule 8.2 Responsibilities Activity Duration Responsibility Allocation of Resource January Manager Marketing Promotion for Distributors/Vendors April and September Manager Brands/Sales Sponsorships June Manager Promotions Visit to Vendors march and August Manager Sales Initiate Marketing Research February Manager Marketing Research Contest November Manager Promotions Advertising campaign Feb-May and Sep-Dec Manager Brands Ongoing Monitoring and control Feb-Dec Manager Marketing 8.3 Evaluation Once the marketing plan has been implemented the next step will be to analyze the results. Minute Maid will practice on going evaluation through out the span of 12 months. All marketing efforts will be closely monitored to ensure they are being performed according to the plan and objectives are being met. The results for the marketing efforts will be monitored through the process of benchmarking. Annual and quarterly reviews will be conducted to determine the overall performance of the company. 8.4 Key Performance Indicators The results will be evaluated on the basis of these key performance indicators. 1. Monthly/ Quarterly and annual sales reviews 2. Increase in revenue 3. Percentage of sales before and after each promotional effort. Quarterly and annual reports regarding the performance and the achievement of objectives will be presented. This will allow the company to determine exactly where it stands in terms of objective achievement. Monitoring will also require the adjusting and modification of the marketing mix with the varying situations and market findings and in order to achieve better results. Outcomes for marketing efforts will be examined in terms of the sales made in a given period. Continuous adaptation is required to for consistent effective marketing efforts which will produce improved results. 9. Contingency Plan After evaluation and review of the result on monthly quarterly and semi-annual bases, if the planned objectives are not met, the contingency plan will be put into action. As a result of the contingency plan implementation, changes will be brought to the marketing mix. Key features of the contingency plan include: Product: New flavors added to the line Promotion: Heavy advertising, product sampling, sales promotions Prices: reduction in prices People and places: sales teams will be hired to promote the products and Setting up of kiosks to reach customers outside stores. Processes: aligning processes with the new promotions, gaining customer feedback. References 1) Beverage Digest (2009) Retrieved 7 December,2009 2) The Coca-Cola Company 2009 Second Quarter and Year-to-Date Results (2009)Retrieved 7 December,2009 3)Coca-Cola Official website (2009)Retrieved 7 December,2009 4)Coca Cola Sustainability Review(2009)Retrieved 7 December,2009 5) Minute Maid Official Website (2009)Retrieved 7 December,2009 Read More