The Marketing Plan of Coca Cola Company Ltd - Case Study Example

Table of Contents Particulars Page No 1.0 Introduction 2 2.0 Objectives of Marketing Plan & Major Marketing Issues 3 3.0 Company Description 5 4.0 Environmental Scanning 5 5.0 Competitor Analysis and Competitive Advantage 8 5.1 Competitor Analysis 8 5.2 Competitive Advantage 10 6.0 Segmentation 11 7.0 Conclusion 13 8.0 References 14 1.0 Introduction This report has been drafted to highlight upon the marketing plan of Coca Cola Company Ltd which shall look to develop a new product to its existing product line of non-alcoholic beverages as the “Coke Buzz Tea” which shall be a completely new product used as an energized drink containing flavour of tea and shall look to further enhance the revenue for Coca Cola. The report in its endeavour towards a successful marketing plan for Coca Cola shall initially focus upon the marketing objectives of the new product along with a discussion on the major marketing problems/issues currently being experienced by the company and are more likely to occur for its new product “Coke Buzz Tea”. A general and brief description about the Coca Cola Company has been provided to ensure that readers have pure background knowledge of the company and its existing business operations. The report than looks to make a detailed analysis of the various factors of environment like technology, government regulations, legal changes, social and cultural changes and climatic changes shall have on the new and its existing line of products and services offered. To further understand the internal strength and weakness along with new market opportunities a Swot analysis has been conducted along with competitor analysis to find the critical factors which lead the company to gain competitive advantage over its existing and potential rivals. Finally a discussion has been made on the target market and segmentation strategies to ensure both practical and theoretical understanding of the entire marketing plan under study. 2.0 Objectives of Marketing Plan & Major Marketing Issues A marketing plan is an important element of a successful product or service launch or to strengthen upon the existing resources of an organization. Let us first have a look at the marketing objectives of Coca Cola for its existing products and its new product the “Coke Buzz Tea”. Marketing Objectives Future growth of the Coca Cola will emerge from their focus shift towards global market in line with the consumer health conscious market. Coca Cola is looking to implement and continue their global strategies as per continuous market scanning. The company would like to continue their business operations all across the globe without limiting their marketing objectives to certain geographical location. They are having emerging growth in Latin America, BRIC and Western Europe and the new product shall be served in those emerging markets as well. The major reason to such an expansion of new product is due to the rising demand of more health conscious beverages and further obtaining a competitive edge over its rivals by gaining the first mover advantage. The company shall further in future like to focus on more new products in the category of fruit juices, sport drink, health drinks and water lines. The core of the company’s business is healthy and is poised to capture significant growth in the coming years. Consumer behaviour is fast changing in this dynamic global market and therefore, Coca Cola must adjust their marketing strategies and product lines to ensure maximum customer satisfaction along with a large pool of loyal customers who shall contribute for the phenomenal growth and development of the company on a global basis. Major Marketing Issues or Problems Despite the fact that Coca-Cola is one of the leading global non-alcoholic beverage company, it is faced with certain marketing and business issues or problems which are in the form of major challenges and business risks. With changing consumer behaviour and people becoming more health conscious particularly about obesity these has emerged as a composite public health issues for the company. Commitment is required by the company to ensure tackle this health problem issues which is aimed towards its various products like Diet Coke, Sugar free no calorie Coke and particularly the new product “Coke Buzz Tea”. Water quality and quantity is yet another issue for Coca Cola as it form one of the major core raw material for its non-alcoholic beverages, as a result of the same, Coca Cola is making an attempt to take initiative in water resource management, water recycling and water treatment along with partnering with various communities to address the water and sanitation problems. Furthermore with changing consumer patterns and numerous shifts in the demographic patterns along with emergence of consumers who are empowered with more information and knowledge, presence of aging population, and infinite lifestyles greatly affects the business of Coca-Cola. The company needs to expand its product lines on a continuous basis to ensure more choice to meet consumer lifestyle, needs and changing patterns. Competition is yet another marketing issue for the Company as apart from the existing rivals there has been significant rise in the new players capturing a considerable amount of market share on a global basis. Furthermore the existing rivalry between its major competitor Pepsi creates another marketing issue who on a constant basis looks to adopt similar marketing challenges and develop similar products thus swaying a lot of consumers and increasing the marketing competition to its peak. Some other marketing problems includes racial discrimination, ethical issues, distributors and suppliers low supply chain, problems with unions and coke trade secrets etc. 3.0 Company Description To ensure a better understanding of the marketing plan, let us first briefly discuss about the Coca Cola Company so as to enable the readers with a clear understanding of the topic. Coca Cola is one of the leading manufacturers of non-alcoholic beverages extending its business to almost all parts of the globe with human habitants. The company was launched in 1986 by Dr. John S. Pemberton in Atlanta Georgia and is globally the largest and most important manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups which over 500 brands which makes up its huge product and brand portfolio and are marketed and distributed in over 200 countries across the globe. The company’s mission is to ensure the finest drink to its customers and to ensure that its service exceeds the expectations of its targeted audience. Over 1.7 billion servings are sold each single day which was just 9 servings per day when the company started its business operations which itself reflects its growth and development is about 3 decades. In a nutshell, Coca Cola can be regarded as the market leader in its industry which has been serving its consumers with the finest drinks and ensuring to meet its customer expectations in every sphere of its business activities. 4.0 Environmental Scanning Environmental scanning is an important part of a marketing plan as it enables to ensure the current marketing condition in which an organization operates and the impact of the various factors of environment on the running of the business. Let us have a look at the various factors which has an impact on Coca Cola and are important for a successful development of a marketing plan for Coca Cola’s new product “Coke Buzz Tea”. Technology: Invention in technology affects the business running as in a competitive marketing environment this is the only factor which can help to gain sustainable competitive advantage. The very idea of a new product generation of Coke Buzz Tea requires a lot of technological efforts to ensure success of the product. Coca Cola has always been keen in new inventions and use of technology for example, its supply chain and distribution system was strengthened by use of vending machines and dispensing machines. Its uses a lot of internet applications and tools for ensuring a better promotional tool to its targeted audience (Westwood, 2002). The manufacturing of the product, packaging, dispensing, order system all has been highlighted with the use of technological advancements making the business more user-friendly and ensuring a deeper market penetration of its existing and new products. Government Regulations: Government stability, government laws, trade policies, internal regulations, tax structure etc have a deep impact on the business of Coca Cola. Furthermore it is important for Coke to ensure that government regulations are fulfilled as failure to do so may even close doors of the company is a certain market where it enjoys the maximum market share. Many of the Coca-Cola beverages as in this case where the new Coke Buzz Tea shall fall within the Food and Drug Administration of the Government and it is a mandate for the company to ensure abiding of the government regulations in context to the same. There are further potential fines set by the government in case the set standards are not met. For example, the company was found to be guilty in Israel regarding a construction of its site where the company was accused on boycotting Israel so as to please the Arab League, as a consequence of the same it had to pay huge fines and stop its plant in Israel. Legal Changes: Coca Cola operates in over 200 countries and legal factors vary from country to country on basis of the political party in power and the company has to strictly follow such legal changes. There are various legal laws such as the competitive law, consumer protection law etc which needs to strictly adhere to ensure smooth flow of business as non abidance of the same leads to huge penalty, brand disruption and ultimate closure of the business. Health and safety legislations are required to be met in workplace and the product so as to ensure a safe business. Social/ Cultural Changes: Social and cultural factors determines the consumer preferences in terms of life style changes, market demand, market needs etc. For example, with consumers becoming more conscious products such No Calorie Diet Coke, Green Coke, Sugar free Coke were introduced to meet the changing preferences of consumer. Furthermore the new product “Coke Buzz Tea” is an attempt to meet the changing preferences of consumers who are more inclined towards tea flavour as an energized drink (Tosti & Herbst, 2009). The social factors further include demographics, population aging, lifestyle trends, consumer attitude and preferences, class structure, income distribution, socio-cultural changes etc which need to ensured in every product or service as failure of such is a clear indication of the product/service being ruled out of the market. Climate: Climate too plays an important role in the business of Coca Cola as the non-alcoholic beverages are more likely to be successful in warm and humid conditions than in cold places. However, the new Coke Buzz Tea has been aimed towards both these climatic geographical places as people who prefer more of tea in cold places is more likely to switch to the new product which fulfils the desire to have a tea along with health benefits and energizing and refreshing the consumers. 5.0 Competitor Analysis and Competitive Advantage 5.1 Competitor Analysis Coca Cola faces tough direct competition from its near rival Pepsi Co. who almost operates on a similar scale and offers similar products and services as offered by Coca Cola. Its indirect competitors includes a wide range of substitute products and services like Red Bull, Vitamin C, Energy Drinks, Fruit juices etc who look to slowly and steadily capture a considerable amount of market share on a global basis. Let us have a deeper look into Pepsi Co who can be clearly identified as its most potential rival. Pepsi Co. Pepsi Co. was founded in 1965 throughout the merger of Pepsi-Cola as well as Frito-Lay. The brands of PepsiCo are available in over 200 countries across the globe and generate huge sales of over $92 billion through its retail level marketing. Some of the products and brands of the company are over 100 years old and new products are added of a regular basis like Diet Pepsi, Zero Calorie Pepsi, No sugar Pepsi which are similar to the offering made by Coca Cola in terms of product content, promotion and pricing issues. Let us have a look at the marketing mix comparison of Coca Cola and Pepsi Co to understand the intense competition in a better way. Competition through Marketing Mix Both Coca Cola and PepsiCo look to do everything and adopt intense marketing strategies to outperform each other. As anywhere where there is Coca Cola as a beverage there will at times be Pepsi. The competition is so intense that both the company spends billions of dollars on advertising to highlight upon the uniqueness of their product in comparison to a virtual comparison made with each other. Products: Looking at the very product portfolio provides a clear picture of the intense rivalry and competition between both the companies as Coca Cola besides its Coke looks towards products such as Light, Classic, Original, Zero varieties of Coke along with other soft drink brands such as Fanta, Sprite, Juice drinks, Iced Tea in addition to packaged drinking water. Pepsi Co looks to offer similar products in the same category like Pepsi, 7-up, mountain Dew, Mirinda, Tropicana Juices etc. Pricing: There is an intense price war between both rivals Coca Cola and PepsiCo. Prices are completely based on competitive pricing strategy where products with similar features offered by both are equally priced leaving it upon the consumers to finally make a buying decision. Furthermore, a price hike or a price cut strategy is immediately applied by the other whenever such a decision is made by any of the near rivals i.e. Pepsi Co and Coca Cola. Place: Both Coca Cola and Pepsi Co looks towards a strong distribution network and operate within the same global boundaries. Their products are equally available in retail outlets to large supermarket chains (Wong, Zhou, Yang & Yeung, 2005). Furthermore, the competition is so intense that profit margin for distributors and wholesalers are equally matched so as to ensure a steady distribution by each company of their products/services. Promotion: Advertising through television commercials is equally eyed upon by both the competitors where each company looks to outperform each other by highlighting upon the loop holes of one another through television commercials, furthermore, the websites are designed in a similar fashion with other promotional tools such as festive season discounts, off-season discounts, promotion through prizes and gifts on the cap of their bottle are even copied and intensified through a tough competition between each other (Luther, 2001). 5.2 Competitive Advantage Competitive advantage is the advantage which a firms gain over its competitors by offering customer higher value either through lower price or providing more benefits and justifying its higher price. Let us have a look at the competitive advantage of Coca Cola along with its weakness and external opportunities and threats through the use of a Swot Analysis conducted for the purpose of the same. SWOT Analysis Strengths Coca Cola is the number one selling non-alcoholic drink and has high brand equity trusted and preferred by a large pool of loyal customers. Continuous investment is made in R&D to design consumer specific products with new innovation and huge financial backup. Entry into any market on a global basis is much easier for the company due to its huge available resources. Competitive advantage through pursuing environmental friendly products and economies to scale. Huge product portfolio with large market covering almost every geographical local where human habitants are present. Weaknesses Competition is fierce for Coca Cola along with high switching of company secrets to PepsiCo due to high employee turnover rate. Health beverages constitute a low lines in the product portfolio of the company. Water management and available of quality and quantity water is an ever increasing problem for the company. Opportunities The new Coke Buzz Tea can bring a revolutionary change in the beverage industry which would ensure first mover advantage for Coke. Rising demand of Coca Cola in increasing economy along with a considerable demand in underdeveloped and developing countries. Opportunity to advertise its less popular products so as to ensure more demand of such products. Low pricing provides opportunities for the company to strengthen its supply chain distribution network to ensure coverage of even the remotest area on a global basis. Threats Rising indirect competition is firstly accelerating towards a larger market share of the industry. Availability of raw materials as water the main component is scarce. Slowing economy with low disposable income may have an effect on the regular sales of the products of Coca Cola. 6.0 Segmentation Marketing segmentation is a process of identifying meaningful different consumer groups which exist in the market and targeting the product as per specific needs and wants of such identified customer segments. Coca Cola uses various types of segmentation process for ensuring a better positioning of its product and services. The same is discussed as under. Demographic Segmentation Coca Cola uses demographic segmentation basis of statistics such as income level, education level, location, age and gender of its targeted consumers. It is easy for Coca Cola to segment on basis of demographic pattern since different part of its targeted global markets has different demographic variables (Kotler, 2001). For example, its Diet Coke is targeted at the aged group, PowerAde a sports drink is targeted towards the youth whereas Winnie pooh Sipper Cap juice looks to target children aged from 5to 12 years. Behavioural Segmentation Strategies regarding diverse consumer base starts with the process of understanding consumer trends and patterns within the multicultural market place. Coke uses Behavioural segmentation on basis of how some customers are heavy drinkers and some are light or how some are brand loyal and some are not. Geographical Segmentation Coca Cola uses geographical segmentation on a clear country-to-country or region-to-region wise demand and preferences of its products. Geographical segmentation is much automatically generated for the company owing to its huge global market. The company looks to promote and infuse some products in some geographical areas whereas other in other geographical area based on needs and preferences of consumers. Benefit Sought Segmentation Coca Cola can certainly look for benefit sought segmentation of its products as some consumers consider the drink as fit for quench their thirst, other seek to refresh their bodies, some seek to energize their bodies while some for nourishment hence making different segments within the same demographical segmentation (Stapleton, 2007). Coca Cola for its new product “Coke Buzz Tea” can look upon a combination of segmentation which includes a benefit sought segmentation along with demographic segmentation for targeting the youth with an energized drink and aged people with a taste of tea flavour making it pleasant to drink and ensure nourishment benefits to its targeted audience. 7.0 Conclusion The report has been drafted for preparing a marketing plan for Coca Cola and its new product “Coke Buzz Tea”. An analysis of the marketing environment along with competitor move has been done along with segmentation strategies which most suits and fits the new product. Application of both marketing theories and concepts has been used to ensure reader with both practical and theoretical understanding of the topic. 8.0 References Kotler, P., (2001). Marketing Management, 11th edition, Prentice Publication, Upper saddle River, New Jersey Luther, W.M. (2001).The marketing plan: how to prepare and implement it (3rd ed).New York: AMACOM; London: McGraw-Hill Stapleton, J. (2007).How to prepare a marketing plan: a guide to researching the consumer market (5th ed.), Hampshire: Gower Tosti, D., & Herbst, S., (2009). Organizational Performance & Customer Value. Journal of Organizational Behaviour Management, 29 (3 & 4), 294-314 Wong, K, W., Zhou, S., Yang Q. & Yeung J, S., (2005). “Mining Customer Value: From Association Rules to Direct Marketing”. Data Mining & Knowledge Discovery, 11 (1), 57-79 Westwood, J. (2002).The marketing plan: a step-by-step guide. (3. ed) London, Kogan Page. Read More