Marketing Planning in Action: Coca-Cola Company - Case Study Example

MARKETING PLANNING IN ACTION By Location Marketing Planning in Action Introduction For a new product, the manner in which it is launched is always of high importance. The product that will be introduced into the market is a soft drink that is made of passion fruit flavour. The company that will be introducing this new product to the market is Coca-Cola UK. At the moment none of the soft drinks served by this company are of this flavour. The name of the product will be simply passion so that the customers can easily relate the product to the flavour. Coca-Cola operates internationally, but this product will be introduced to the UK market because Coca-Cola UK only deals with the UK market. If the product does well in the UK market than the other franchises can consider introducing this product to various parts of the world given that the Coca-Cola Company operates globally. Situation Analysis In order for a new product to do well in the market it must be bringing something new that its competitors have. Apparently in the soft drink production industry in the UK, it is only Pepsi that can be said to be the main competitor of the Coca-Cola Company. The other producers can be said to be bringing insignificant competition. Pepsi as a brand does not have any soft drink that is passion flavored. The other products that are produced by the other competitors are nothing close to the passion flavour (Elmore 2015, p. 156). Most of the soft drink producers focus on producing cola flavoured soft drinks. This will mean that the product will have an impact on the market unopposed. However, it should be noted that this drink will be facing competition from the other products that are produced by Coca-Cola UK. They will also face opposition from the other soft drink flavours that are produced by other players in the industry such as Pepsi. This will specifically apply for those consumers who are not particularly attached to any flavour. The only unique thing about this product will be the flavour and brand. However, its price will be just like the other products that are produced by the Coca-Cola Company. The Coca-Cola Company has not been famous for price competitiveness. However, over the recent past, with the rejuvenation of Pepsi, they have been rather keen on the prices (Mennen 2010, p. 189). It would be inappropriate to make the price for the new product higher than the other soft drinks produced by the Coca-Cola Company because it will give the customer the impression that the unique thing about the new product is the price (Pride & Ferrell 2010, p. 167). It would be advisable for the new product to be identified by its flavour instead of its price. This is because higher prices will discourage price sensitive consumers (Young-Witzel & Witzel 2013, p. 191). The main goal of Coca-Cola UK is to make sure that they are able to counter competition by making sure that they are the most popular brand in the soft drink production industry. Despite the fact that the company has been able to do well in the UK market, the company knows that it is their responsibility to make sure that they remain in the same position and even make their market capital in the UK bigger (Michman, Mazze& Greco 2003, p. 211). This implies that by introducing a new product to their already existing varieties gives them an upper hand over their competitors. For a consumer, there is nothing as attractive as having a variety to choose from while the prices remain constant (Ferrell&Hartline 2008, p. 186). One of the advantages that Coca-Cola UK will have as they introduce this new product is its popularity as a brand. The Coca Cola Company has been in this industry for a very long time. In fact, it is the only soft drink producer that is known for global consistency. Pepsi, who is their main competitor were dormant at some point, but Coca-Cola remained persistent with some changes always being effected regarding the prices (Butler &Tischler 2015, p. 212). The other advantage that the company has is the fact that they will not have to come up with a new distribution system. The new product will just be distributed through franchising like the company has always done with their products within the UK. In fact this is a trend that the company uses worldwide. Another important factor that will be considered during the launching of the new soft drink is the organization’s culture. It should be noted that the Coca-Cola Company does not do the distribution of their products by themselves. All they produce is the concentrate syrup. This is exactly what is likely to take place in the case of Coca-Cola UK. The strength of Coca-Cola UK comes from the type of relationship that they have with their bottlers. It is important to note that the other outstanding aspects of the company’s culture are teamwork and empowerment (Stead & Stead 2004, p. 203). Coca-Cola Britain considers their employees to be their most valued assets thus always do their best to make sure that employee satisfaction is enhanced.Such an environment always leads to high levels of motivation among the employees (Lopez 2012, p. 178).This also helps them in minimizing employee turnover at the organization leading to consistency in employee productivity. Despite the fact that this company has some strength, it also has some weaknesses. One of their most outstanding weaknesses is the fact that some of their products usually seem to compete at the market. The idea of having a variety of products is good because it gives consumers a number of products to choose from (Belch & Belch 2012, p. 201). However, taking a closer look at their advertisement campaigns, it will be easy to notice that these products are usually advertised individually despite the fact that they are distributed and produced by the same company. It becomes harder because all the products produced by the company should always be advertised as the best in the market (Baines, Fill & Page 2010, p. 203). A keen customer will question the viability of the advertisement campaigns now that all the products are produced by the same company. It has over the years been noted that when it comes to advertisements, the company always puts more emphasis on their main product, which is Coca-Cola (Coke). The UK has a population of more than 61 million people. This is an encouraging number for a company that wishes to introduce a new soft drink. This drink is likely to be attractive to female people if the other products that reproduced under this brand are to be used for the estimation (Meehan, 2011, p. 201). The flavour is in fact the value that this product brings to the market that none of the other products that are produced by Coca-Cola Britain has. As for the carbonated soft drink market in the UK, the only viable competitor that this product will face is soft drinks that are produced by Pepsi. However, failure of Pepsi to invest extensively in the market can mean that Coca-Cola Company has an advantage with the newly introduced products. However, Pepsi usually targets any customers who are between the age of 15 and 50 years old. The strengths of Pepsi include competency in acquisitions and mergers and Complementary product sales. Their weaknesses include over relying on specific stores, weaker brand awareness as compared to Coca-Cola, and low productivity. Despite the fact that Pepsi has been doing well in the recent past, it still has not gotten to the level of Coca-Cola Company in terms of market share. As for Coca-Cola Britain the most important collaborators are their franchises. This is because the franchises have the responsibility of making sure that their products are available all over the UK. There are a number of legislations that might affect the performance of the new product in the market. For instance, the British government does not allow vending machines in schools because of the belief that excessive consumption of soft drink contributes to the high levels of obesity among children. The Coca-Cola Company has not to worry about the financial ability of their target market to pay for the new products because the economies of countries in the UK are not bad. The social and cultural environment in the UK will also make it easier for the new product to do well in the market (Smith &Zook 2011, p. 217). This is because many people in these countries have the habit of taking soft drinks regularly. The vending machines that are used in the UK by the Coca-Cola Company are one of the technologies that will make it easier for the company to get the new product to their customers (Shaw 2002, p. 107). There are a number of opportunities that this company would consider taking advantage of in the UK market. For instance, they can take advantage of the fact that there is not any other carbonated soft drink company in the UK that produces passion flavoured drinks. However, the potential threats include the consistent improvement of the performance of the Pepsi Company in the UK market. Pepsi Company was at some point the leader in the UK market. This is a potential threat that the Coca-Cola Company should handle with utmost seriousness. Market segmentation The segment that this product will be targeting varies with the purpose for which people take carbonated drinks. Most of the people in the UK usually take carbonated drinks as refreshment. One thing that is for certain is that the people who are most likely to buy this new product are those people who often take cold carbonated drinks without having to watch on their weight. The company can choose to target family people and functions. However, given the nature of carbonated drinks and the fact that they are always consumed across many market segments it will be difficult to predict the market section that will be targeted by the new product (Pelsmacker, Geuens & Bergh 2013, p. 121). However, it should be noted that the targeted market are people who are already consumers of carbonated drinks. This segment of the market is known to be choosy and it is always advisable for a company such as Coca-Cola to avail a variety of products so that the customers can choose from. Availing a variable in this case will imply that they will be able to give something that most of their competitors fail to do (Schermerhorn 2010, p. 199). Having a variety of products present helps in enhancing consumer loyalty because everyone will be able to get one of the many products and flavours that are produced by the company that matches their preferences. Given the fact that there have been allot of price related competition between Pepsi and Coca-Cola in the recent past, it can be easily deduced that people who take carbonated drinks in the UK are highly price sensitive in order to make this play to the advantage of the business organization, it would be available for the company to keep the price for the new product as low as possible (Perreault, Cannon &Mccarthy 2014, p. 197). In this case, maintain the price used by the other carbonated drinks that are produced by the company is advisable. Given the fact that it will not be easy making the price of the new product lower than the current existing ones, the company is left with only one viable choice, which is maintaining the prices used by the other products that they produce. However, it will also be advisable for the company to introduce the product with slightly lower prices in order to help the product in gaining popularity faster (Westwood 2005, p. 210). Once the product is popular enough, the company will use the normal prices that they use for the other products. Selected Marketing Strategy The marketing strategy that will be used for this product is likely to make it a huge success. Producing the product under the Coca-Cola brand name, will help in making the product popular. Given the fact that people have already tried and approved products produced under this brand, convincing customers to try the new product would not be a hard task. The new soft drink will give customers a taste and flavour that none of the existing products have. The drink will sell in either bottles or cans depending on the preference of the customers. The theme colour for bottles and cans will be yellow so that customers can easily associate the colour to the flavour of the drink. The price of the new product will be same to the prices of the other Coca-Cola carbonated drinks that are available in the UK market. In order to get the customers aware of the new product, the company will have a number of the advertisement campaigns that will be aiming at creating awareness. The most appropriate media in this case will be using television adverts. Given that people watch allot of television adverts, it will be easier to pass the message to the customers this way. The company could also take advantage of the popularity of social media marketing. The use of television advertisements has been an effective way of advertising product over many decades. The combination of audio and visual messages makes this a very effective way to advertise a product or service. As for the Coca-Cola Company television advertisements have been an effective way through which they advertise their products. This can be seen in the number of successful television commercials that the company has used to promote products. Given the fact that this is a new product, a TV advert will be one of the most effective ways through which the company can pass the message to their customers. People in the UK watch TVs at rate that will be said to be influential to the level to which the use of a TV commercial will be appropriate. In introducing the new product the company will focus on an emotionally appealing advertisement instead of one that has a logical appeal. Given the nature of the product, an emotionally appealing advertisement will be effective in creating an emotional connection between the customers and consumers. Over the past decade the rate at which consumers seek product information online has highly increased. This is an advantage to business organizations because it enables them to have a platform where they can reach to various segments of the market (Hill& Jones 2007, p. 223). The use of social media is appropriate for this product given that many people in UK use social media to communicate with each other. Another advantage is that the use of social media will give the organization a chance to know what the customers think about the newly introduced (Westwood 2002, p. 212). Social media is the easiest way through which business can get responses to a newly introduced product in real time. One of the most appropriate marketing model for this product would be brand positioning map. This model will enable the company in using the perception of customers on their brand and the competing brands thus easing choice of advertisement program. The company will clearly use Porter’s Five Forces because they will need to asses the level to which competition and availability of substitutes will affect the performance of the product in the UK market. Use of the loyalty ladder can also be effective I determining the level of loyalty that their customers have to their brand and this will have an effect to the performance of the new product in the UK market. Alternative Marketing Strategies The marketing strategy that will be used in the introduction of this new product is not the only available one there are a number of other strategies that would have been used. For instance, the company could have opted for a completely different distribution system so that this product would be distinguished from the other products produced by the Coca-Cola. However, if they chose to go with this option, they will have to invest finances on putting up a new distribution process (Clancy, Krieg & Wolf 2005, p. 171). This would have meant that they had to have extra investments in order for the launch to be successful. However, if they use the already existing distribution system the company will be able to make the costs of introducing the new product to the UK market as low as possible, thus avoiding possible losses (Johnson 2004, p. 223. The use of already existing distribution channels do not only save money, but also save time that would have been spent on designing the new distribution. The other strategy that the company would have used in launching this new product is eliminating one of their products and replacing it with the new one, but use the same name in marketing the new product (Brenkert 2008, p. 179). The problem with this strategy is the fact that there were none of the flavours of carbonated drinks produced by the company that5 is doing poorly in the market. Eliminating any of the already existing product will mean that the company will have to forego the potential benefits of having those products in the market (Lamb, Hair &Mcdaniel 2012, p. 199). No manager would ever consider replacing a product that is doing well in the market with one that does not have any popularity in the UK market already. If the company chose to replace a poorly performing product under the same name, they will have passed on some of the negativity that the market had toward the previous product to the new product. This might affect the performance of the new product in the new market. Short and Long-Term Projections The expenses that will be needed for the introduction of this new product include the resources that will be used in the development of the new concentrate and the designing and branding of the packaging materials. The other expenditures will include the resources that will be used in carrying out research on the response of the market to the product once it is introduced to the market (Kotler& Armstrong 2014, p. 267). The possible changes in the future would include making changes on the amount of sweetener used in producing the new cost drink depending on the response that the company will get from the market (Blythe 2008, p. 211). Conclusion It is clearly evident that this product is likely to do well in the UK market. Some of the reasons given herein include the fact that the product is relying in the brand strength of the company. The product will also benefit from the fact that the company already had an existing distribution system which implies that the company will not have to invest in another distribution system. The company also has employees who are already skilled and experience is the various areas involved in this market. Another advantage is the fact that the product will bring something unique to the market. The passion flavour has not been introduced by any of the other players in the industry. It should be noted that it is not going to be an easy entry for this product because it will have to face competition from the other products produced by the company. Bibliography Baines, P, Fill, C & Page, K 2010, Marketing, Oxford University Press, Oxford. Belch, GE & Belch, MA 2012, Advertising and promotion: an integrated marketing communications perspective, McGraw-Hill/Irwin, New York. Blythe, J 2008, Essentials of marketing, FT Prentice Hall, Harlow, England. Brenkert, GG 2008, Marketing ethics, Blackwell, Malden, MA [u.a.]. Butler, D &Tischler, L 2015, Design to grow: how Coca-Cola learned to combine scale and agility (and how you can too). Clancy, KJ, Krieg, PC & Wolf, MM 2005, Market new products successfully: using simulated test marketing technology, Lexington Books, Lanham. 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