Marketing Plan: The Coca-Cola Beverage Brand - Research Paper Example

Marketing Plan: The Coca-Cola Beverage Brand 1. Terms of Reference The main ambition of Coke and Diet Coke brands is to reinstill, in the UK and broader European environments, a new perception of the brands based on repositioning the products and redeveloping packaging/presentation. The company operates within a mass market promotional environment and must utilise existing systems and talents to create a new and unprecedented connection with European consumers. 2. Executive Summary Coke and Diet Coke, two well-known brands of the Coca-Cola company, are currently not being positioned in a method which is congruent with the values and lifestyles of the European consumer. This has been established from several marketing failures which attempted to position Coke and Diet Coke as sexy or far-too-traditional. Coke has a mission to refresh and inspire whilst making a difference, however there is evidence that from a social perspective, it is competition who is making the most powerful difference in terms of identifying with consumer needs for entertainment and advocacy in the beverage industry. It is being recommended to reposition the Coke and Diet Coke brands to reflect a more sophisticated and modern consumer with values toward the traditional and who are likely looking for good humour and relationships in difficult economic conditions. Sexy and vogue take a proverbial backseat to real-life social issues and if Coke and Diet Coke can succeed in creating a new consumer connection through promotion and redevelopment of marketing strategy, profit potential against competition can be significant and highly-measurable. 3. Business Mission Coca-Cola very clearly spells out its mission: “To refresh the world…to inspire moments of optimism and happiness…to create value and make a difference” (Coca-Cola, 2006). What this suggests is that the cola brand works to create a business model, through the use of promotional activities and distribution strategies, to bring a better lifestyle for consumers across the globe with its Coke brand products. At the same time, the brand looks to bring value for not only the consumer but the investor as an outcome of positive strategic business activities. The brand suggests this mission, however is the brand really achieving results toward the mission goals? With this mission in mind, Coke products would be positioned to create lifestyle connections with consumers as a routine promotional strategy. Creating optimism and happiness are inspirational goals and there is evidence that Coke beverage brands might not be creating the appropriate value outcomes it hopes to achieve with current strategic marketing. Consumers are driven to changes in buying behaviour based on social trends. This is a relatively commonly-understood reality in marketing. A previous European marketing effort which positioned Diet Coke with sex appeal was recently scrapped as it did not produce the desired value (Bokaie, 2008). A follow-up positioning strategy to make Diet Coke appear more “glam and vogue” also did not seem to boost beverage sales in this brand division (Bokaie, 2008, p.22). Since the business requires creating consumer connection, there is a need to reposition the Coke and Diet Coke brands to adapt to current social trends toward entertainment. 4. External Marketing Audit There are a number of external factors which impact the extent to which Coke brand products can achieve the company mission of creating consumer value and strengthening the brand image. Utilising a PESTL analysis, the audit has identified a key political factor involving relationships with the World Health Organization (WHO). Generically, the WHO acts as an advocate for the betterment of the social and physiological conditions of consumers across the globe. A recent series of discussions between Coca-Cola and the WHO involved information exchanges on cycling, physical activity, carbon emissions reduction efforts, and other health issues (Roberts, 2008). This suggests interaction with a watchdog organisation who will likely propose questions about the proposed health benefits of internationally-branded Coke products. Though many company brands are exposed to different governmental regulatory agencies in the process of business and marketing, with Coke having such broad international exposure this is a potential risk to the business in terms of how positioning the brand might be perceived by health officials such as the WHO. The social environment, spotlighting Europe specifically, is a complicated conglomerate of different values, beliefs, lifestyles and personal agendas. However, there does seem to be a commonality in relation to health benefits and lower-fat eating for better nutrition in many consumer segments. One publication identifies that consumers recently brought a lawsuit against the company for alleged mismarketing of a Vitamin Water drink (The Lancet, 2009). This represents a group of consumers, from a mass market perspective, who want not only the health benefits of beverage products but want to ensure that they are being exposed to information (media and promotion) which is accurate in every detail. This is a social risk in terms of changing consumer values which will force Coke brand products to remain focused on providing accurate labeling, promotion, and health-related literature as well (when requested). This will be an extra strain on research and development teams as well as the internal business expertise necessary to provide for Coke brand sodas. Also in terms of social analysis, was a recent situation in which Coca-Cola had been working for months to negotiate a merger deal with the Chinese government with Huiyuan Juice Group. This caused severe public anger including threats against the life of CEO Huiyuan (Davis, 2009). When attempting to move a foreign brand into a market which values tradition, there is likely going to be social unrest about a particular business deal. The point is that Coke represents a very powerful corporate entity and consumers are likely to always play a role in driving appropriate corporate behaviour in promotion and other marketing. This must be taken into consideration in all marketing efforts. At the microeconomic level, there is one significant advantage for Coke brand products as the UK marketplace is the second largest consumer of soda beverages in Europe, just behind Germany (Decision News Media, 2009). Remaining congruent to company mission, creating value for a mass market audience requires the Coke brand to simply identify with consumer needs in a method that impacts the majority. There are literally millions of potential consumers in the European marketplace thus there are virtually unlimited opportunities to utilise new marketing ambitions to provide value and inspire the United Kingdom and generate higher sales volumes. Main competitors of Coke and Diet Coke brand products are Pepsi, its main corporate rival, and only a handful of other less-seasoned beverage manufacturers. Pepsi appears to maintain the same values and mission of Coca-Cola in terms of providing consistent value for consumers, thus promotional efforts create the well-known cola wars between the rival brands as they vie for market share. Much to the benefit of Coke products, there is very little risk of new entrants as this multinational distribution system currently underway with two highly profitable beverage companies takes years and billions of dollars to develop. Competing against these two companies, in an attempt to gain excess market share, is a virtually impossible task. Thus, the focus must always tightly-measured by Pepsi’s activities in the event of lost market share. 5. Internal Marketing Audit Coke’s current marketing objectives are to “conduct product and packaging research, establish brand positioning, develop precise consumer communications and solicit consumer feedback” (Coca-Cola, 2008). The intention is drive revenue from consumer sales by using positioning efforts consistent with mission to provide value and inspiration to its buying segments. The market is rarely segmented due to the appeal of soft drinks for mass markets and the limited competition in the market. It would require multiple budgets for the Coke and Diet Coke brands in order to appeal to hypothetical Lifestyle A group, Lifestyle B group, and so on through the alphabet of proverbial consumer values groups. Therefore, the Coke brands must establish an appeal which provides mass identification as a core philosophy and objective of all marketing efforts. There is no evidence that the Coke brands maintain competitive advantage over its main business rival in terms of promotion (specifically). This will be examined in further sections. In terms of internal staff cohesion necessary to build a new brand image for Coke, there is conflicting evidence of the culture of the business. Hein (2009) identifies a situation in which Coca-Cola employees received T-shirts to celebrate a new bottle design. However, unlike its competitive rival which releases its annual report using vivid imagery and employees in happy work environments, Coca-Cola’s annual report is professional and devoid of any inspirational materials. Cultural congruency within Coca-Cola, for the sake of building a better Coke and Diet Coke brand, might need examining prior to launching a new positioning strategy. 6. SWOT Analysis Strengths for this brand starts with the recognition that Coca-Cola has been titled the 12th most admired company across the world by Fortune Magazine (Colvin, 2009). This is due to its excellence in establishing business capacity and cost reductions as well as giving a quality product to international consumers. The company can build on this strength as, internally, it strives to move higher up that respected ranking list, giving Coke brands a stronger team unit for brand-building efforts. Hollenbeck, Peters and Zinkhan (2008) identify that entertainment is becoming largely important to today’s consumers. There is no evidence that entertainment is on the forefront of Coke brand products when determining positioning strategies. Entertainment would seem to be a simple, unified social and cultural belief, therefore for a company looking for mass marketing strategies, this is a weakness which needs to be developed. Since it was identified that previous promotional and positioning strategies met with failure, this is clearly a weakness in marketing strategy. The company has significant opportunities for building a new image for Coke products, one of which is a further development of the company’s cokesolutions.com website which provides marketing information for restaurants and franchises which carry Coke products (Nation’s Restaurant News, 2009). If the site is designed to offer more sophisticated marketing concepts and strategies which are in-line with mission and strategic marketing, this could better develop partners and commercial buyers to improve brand image at lower cost. A partnered promotional strategy is recommended. The most significant threat to the business are the competitive and innovative staff at Pepsi who consistently hold on to their portion of market share year after year. Promotional tactics on behalf of this competitor must be monitored and assessed to determine whether they are making solid connections with consumers, through the use of dedicated research team professionals. There are currently systems in place to achieve this consumer data at Coca-Cola. The business requires a contingency marketing strategy which can be launched in short order in the event that competitive behaviours and activities begin to erode the effectiveness of a current Coke brand promotional strategy. 7. Marketing Objectives Product development failures have been widely-recognised for Coke’s transition to the new Coke formula in the 1980s which led to widespread consumer outrage. Of course, the transition back to the original Coke formula regained some of the lost brand image. However, was product development the failure or was it the marketing approach taken to entice consumers to desire the new formula. This is widely important to consider because when considering market penetration, is potential sales success really measured on flavour or on presentation? The taste-for-taste research studies between Pepsi and Coke seemed to generally return mixed results, however the rivalry benefitted both companies during its regular duration. Could Coke, as part of its new marketing focus, redevelop taste and formula, using a new positioning strategy, to build consumer confidence and improve market share? As there is no risk of new market entry by competitors in the short-term, this could be an opportunity to outperform Pepsi in terms of taste and then position the results favourably. The strategic objectives are clear: Improve market share over Pepsi brand soft drink products and improve consumer- and commercial-based revenue streams in the process. Assuming that the marketing strategy fulfills its intended objectives and repositioning of the Coke brand drinks can be accomplished effectively, no new market entry is required as this strategy will target only the UK marketplace. There is no recommendation to divest any existing brands in the Coke line. 8. Core Strategy The target market, much to the benefit of Coke, is the mass market audience. No niche marketing construction or redevelopment will be required. The company will be competing against its main rival and the variety of independent soft drink manufacturers in the region with a mass positioning focus; and an adaptable framework of contingency positions. This was identified in a previous section. Weaker competitors do not have the marketing resources necessary to accomplish wide-scale promotional efforts in the capacity of Coke brand products. This is a superior strength in advertising which will give Coke the opportunity to flex its new creative muscle in print, radio, and television advertisements. Pound for pound, ad copy for ad copy, Coke can achieve significant growth in brand-building over smaller competitors. The key in this new positioning strategy is to outperform main competition by building stronger connection with the broader UK market. Coke’s recent considerations regarding purchasing its independent bottlers (Bauerlein, 2009) shows that the business is en route to discovering new flexibility in how the process of distribution and sales is managed. This is a competitive strength assuming that the new positioning strategy reaches its full conception and expectations. Additional competitive strengths include the ability to rely on promotional materials dating back over a century as added cultural significance which is not present in competitor marketing portfolios. 9. Marketing Mix Decisions Product and Promotion – The most significant advantage of this new marketing focus is that the brand has already a strong level of recognition and even loyalty in the UK market. This is not an effort to build generic consumer knowledge about a repositioned Coke, only to reexpose them to a different conceptual product known as Coke and Diet Coke. The changes apply largely to promotion, which is linked to packaging in this marketplace. The Coke and Diet Coke cans should be redesigned to reflect a more modernised business with a flair for inspiration and value, as part of creating brand image transparency for values related to mission. It is visioned for several can scenarios related to the positioning strategy which will be later defined. One will depict a rather traditional, 1910’s beach-goer, in her trademark one-piece, laced bathing suit, sitting atop a modern, expensive sports car on the beach. This is the new UK ECONOMY pack titled, Life’s a beach or One thing remains the same as the traditional character raises her Coke bottle in squealing delight. Print literature associated will characterise these trademark phrases associated with the inspirational and motivational blend with Coke traditional advertisements. As the concept begins to take off, perhaps an extended life cycle on this concept of three months, Coke should unveil its GRAVITY soda pack which promotes its commitment to greener technologies and cleaner energy as well as depict how Coke and Diet Coke help to keep consumers grounded. Cans should be redesigned (ahead of time before launch of new positioning) with illustrations of different social and professional scenes with conservation. An illustrated, upscale woman gingerly tossing her used Diet Coke can (clearly visible) into a recycle bin (clearly labeled with appropriate green logo) is the basis of this new positioning concept. Social buzz is necessary and all online venues which can bring value to Coke and Diet Coke brands should be considered for exploitation. Pricing and Place – Should the design changes and packaging illustrations pose a larger cost to the manufacturing process, then small price increases can be added to specific consumer products which will be least transparent to buyers. It is recommended that price increases, if required, be added to multi-can or multi-bottle beverage packs. In terms of distribution, there is already an effective network of distribution in place in this marketplace, thus requiring no additional costs for supply chain or sales in this area other than the tangible movement of advertising print literature. 10. Budget Locating specific budget data regarding available resources for Coke and Diet Coke brands could not be achieved through research. However, there is a generic expectation for this campaign to require the same level of commitment, or perhaps higher by two or three million pounds, to provide excellence in this new consumer positioning and promotional concept. The total budget for this change in labeling, advertising and packaging (from design perspectives only) should be divided into the following: 70% promotion – 20% product – 10% research and communication. 11. Organization and Implementation In terms of brand management, there are well-developed structures in place at this large conglomerate business with the creative expertise in place to make the advertising changes which are recommended to improve brand image and market share by a significant margin over major competition. If the business shows signs that it will take this approach to its fullest capacity, reorganisation will occur as the business meets with any creative difficulties in project management. This is a superior benefit for Coke and Diet Coke in the UK market since creativity divisions already provide the support in the current business structure to make this new positioning effort a reality and bring true inspiration and proverbial divine value to the business’ profit and competitive outperformance demanded. 12. Control Control planning to ensure higher sales success can be measured by sales volumes. Retail delivery schedules for Coke and Diet Coke syrup, rapidly-depleting inventories, and vendor orders (among other measurement tools already in place) can secure a fairly-rapid system of control to determine whether the new concept strategy and repositioning effort has achieved success. This is another advantage for this new brand concept as all of these systems are in-place currently at the company. Senior-level leadership should also assess the success ratios routinely to discover which markets are making higher purchases and then inundate these regions with even more in the new promotional plan to ensure loyalty to the brand over competition. The development of this marketing plan came across some interesting consistencies with the company being researched which were not considered prior to gathering research on the current financial, marketing, and promotional strengths/weaknesses of the company. One of which was the level of high professionalism which Coca-Cola, as a whole company, seems to project in comparison to PepsiCo (as a corporate whole). There would seem to be a different cultural make-up between the two competing companies, though perhaps only in representation rather than actuality, in terms of how divisions work together and with communities. Reputable PepsiCo literature seems to depict people in a different light than its competitor, which gave the researcher more thought about why sales are down today in the soda areas in this marketplace. Essentially, it completely changed the course of research direction based on findings. This made the researcher consider the importance of considering how very much important it is to consider that when making a mission, it is more than just putting a few words down on professional letterhead to fulfill a corporate obligation, it is about real-world scenarios of positive internal organisational unity as part of a whole, packaged presentation. Competition seems to have this edge. Promotion seems to be a significant method to ensure higher sales growth and the ability to outperform others in similar markets and it just did not seem that Coke and Diet Coke had fully capitalised the European desire to be entertained as part of its promotional marketing model. The researcher believes that their greatest learning was the impact of positioning and promotion on building a positive company image. Having research take this marketing analysis in a new direction, which was unanticipated, further strengthens in the importance of marketers having a full understanding of what drives consumer behaviours in the UK marketplace. As the researcher, pre-conceived biases about what might be discovered in Coke-related literature had led to a search to entertainment-related marketing examples only to discover more traditional and professional-oriented business concepts in this area. If consumers share these biases, this could be impacting the sales declines related to beverage manufacturers. Constructing the project involved ensuring that an accurate understanding of Coke and its mission was developed and then examine whether or not the company was applying marketing concepts that were in-line with mission goals. Largely, this did not seem to be the case. With an original research lean toward distribution and sales, the new information led to a need for a change in design and presentation and how these changes are promoted in an advertising format. The researcher realised the vast importance of consumer influence in business decision-making and tried to take this point of view in further research about potential marketing redevelopment. Bibliography Bauerlein, Valerie. (2009). Corporate News: Coca-Cola CEO Defends Bottling System. Wall Street Journal, New York, NY. 22 Apr, p. B3. Bokaie, Jemima. (2008). Chief translator. Marketing, London. 23 Jan, p.22. Coca-Cola. (2008). Annual Report. http://www.thecoca-colacompany.com/investors/pdfs/form_ 10K_2008.pdf. (accessed April 22, 2009). Colvin, Geoff. (2009). The world’s most admired companies 2009. Fortune, New York. 43(8), p.40. Davis, Anita. (2009). Coke deal highlights PR failings. Media, Hong Kong. 26 Mar, p.2. ABI/INFORM global database. (accessed 20 Apr 2009). Decision News Media. (2009). Soft drinks boast hard sales. http://www.foodnavigator.com/Financial-Industry/Soft-drinks-boast-hard-sales (accessed 21 Apr 2009). Hein, Kenneth. (2009). Employees in the Atlanta office all got T-shirts with the new slogan Next to Coke’s contour bottle. Brandweek. 50(7), p.AM8. http://www.scibd.com. (accessed Apr 21 2009). Hollenbeck, Candice R., Peters, Cara and Zinkhan, George M. (2008). Retail Spectacles and Brand Meaning: Insights from a Brand Museum Study. Journal of Retailing, 84(3), p.352. The Lancet. (2009). Myths and morality at Coca-Cola. London. 373(9671), p.1224. Roberts, Ian. (2008). Corporate capture and Coca-Cola. The Lancet. 372(9654), p.1934. Smith, Peter. (2009). Watchdog hits at Coke advert. Financial Times, London. 3 Apr, p.17. Wiggins, Jenny. (2009). Brands tap into today’s values and past campaigns; Well-known names are focusing on the personal and the familiar to offer comfort in tough times. Financial Times, London. 25 Feb, p.14. Read More