Spicy Cola - Case Study Example

?Spicy Cola Table of Contents Table of Contents 2 Introduction 3 Rationale for brand & brand mantra 3 Brand elements and attributes 4 Target Market 4 Research Methodology and Testing 5 Positioning strategy 6 Packaging 8 Pricing Strategy 8 Advertising & Promotion 9 Brand equity measurement system 10 Assumption taken 11 Conclusion and Recommendation 12 Reference 13 Introduction Last Chance with the plan to expand its product line wants to enter into the soft drink beverage market. With the new product Spicy Cola the company wants to grab the market with its difference in the product feature. The company primarily targets the Australian supermarkets in Class A category and is not expected to be in direct competition with the similar player of the market like Pepsi and Coca Cola. The new product from Last Chance is mainly targeted towards the young generation for its trendy, cool and active nature and taste of the drinks. This product differentiation from the company is expected to have huge potential in the market for its unique taste. This research is mainly concerned with the development of the branding plan for the product. For finding the drawbacks of the product qualitative research survey was conducted amongst sample customer to understand the need of the product and its packaging for a proper implementation of the strategy in accordance to the mood, taste and color of the soft drink. The branding plan describes each and every aspects of the launch process from brand name, logo, target market, positioning strategy, pricing strategy, promotion and advertisement and packaging design for Spicy Cola to brand equity management system for the evaluation of the product success after the launch in the market. Rationale for brand name & brand mantra Building a brand name and brand mantra are one of the essential dimensions of product development process. Building a powerful brand name can even name the whole category of products like Xerox refers to photocopy category (Marconi & American Marketing Association, 2000, p. 4). Last Chance needs to develop a strong brand name for its Soft drinks in the market so that customers are more familiar to the product and can recognize the difference from its name. On the other hand brand mantra depicts the features of the product with a short phrase. The phrase gives the idea to the customer the position in the market and the target market which can influence the group to be more attracted towards the product (Keller, 2008, p. 144). The new soft drink from Last Chance was named as ‘Spicy Cola’ which clearly depicts its difference from the other players with its ‘SPICY’ flavor and also gives the impression in the mind of the people about its trendy, cool taste from the name which was mainly targeted towards the young generation. Brand elements and attributes Brand element is the nature of the product offered by the company and general information about the product with its characteristics and features (Keller, 2008, p. 163). It is the product features which make them different from others in the competitive market. With more relevance with the market need and the character of the product the more successful a brand can be in the market. Spicy Cola with its trendy, cool style refers to the friendly, free nature of the young generation. The black color and candy smell of the drink was perceived to be for both the genders and for all the age group of 12 to 30 and for all the cities. The sparkling cinnamon taste can be consumed at any point of time by the people. The design which was selected after the research survey also suits the identity of the product features which has a great potential to grab the market share in the cold drink beverage industry. Target Market Identifying the target audience can help the company to launch its product in a more successful manner. The primary and the secondary target market are needed to be identified by Last Chance in accordance to the product features and properly implement its strategy to the market to increase sales potential (Hiebing, Hiebing & Cooper, 2004, p. 163). At first the market can be classified according to the type of product which the company is offering. The company needs to identify whether it’s a Business to Customer or a Business to Business product (Boone, Kurtz, 2010). Target market depicts the regions to which the company should concentrate for its marketing efforts. Spicy Cola with its trendy, cool and refreshing taste is primarily targeted towards the age group of 12 to 30 in the market. The active design of the packaging gives a stylish and cool look which depicts the lifestyle of the young generation. The logo printed in local language will also target the Saudi market along with the neighboring country. The market penetrating pricing strategy will focus on the lower segment of the market along with the class ‘A’ segment who are not price sensitive. The product is sold directly to the end user without any modification thus the B2C marketing efforts should target and focus to the needs of the customers and should match with its taste, trend in the market. The target market strategy of Last Chance must depict the goal of the new soft drink ‘Spicy Cola’. Research Methodology and Testing Market research is conducted to by the company to understand the environmental feasibility of the new product in the market. The sustainability of the product in the target market is needed to be understood by the company before its launch. Failing to understand the demand in the market can incur the company with huge loss for false estimation of the needs to the customers. The research can be conducted with various methodologies like Literature Survey, industrial survey and statistical analysis (Kumar, Phrommathed, 2005, p. 43). Before the launch the company has conducted Literature review and industrial survey to understand the trend and consumer behavior towards Spicy Cola and the other players in the market. The field work conducted on Jan 2006 primarily takes the sample respondents from the age group of 18 to 25 with the major survey region on Saudi Arabia. The psychographic factor of trend and practical view of the customers are taken from the research. Focus Group Discussion was carried out to understand the awareness, evaluation of the suitable color, smell, taste, packaging, and brand identity and brand logo with name. This gave the company an idea about the intangible aspects of the product. For testing process the company distributed samples of the product. Product testing gives the idea of the current buying patter of the customers, purchase intention to buy other product and also the improvement required for the new product (Trott, 2008, p. 489). The qualitative testing of the company by distributing samples of Spicy Cola to the small segment of target market determines the crucial factors of success for the product. The respondents were selected according to the target market for Spicy Cola. The research conducted revealed several needs for the product from the sample customers. Few felt the need to remove ‘Cola’ from the name to make it different from Pepsi and Coke. The product taste need more cinnamon and more sparkling. Some also felt the need to change the color of the packaging to suit the taste and mood of the new soft drink. Positioning strategy Positioning is the technique of selecting the right market for the launch of the product. Brand positioning is very important for the success of the product in the market. Selecting the unique market and selling product to gain maximum benefit from that is the primary objective brand positioning (Sengupta, 2005, p. 15). It describes the functional features and physical attributes of the product which are different from the competitors of the market. Proper positioning of product in the market builds a special perception in the mind of the customer. Superior brand positioning can be achieved through mainly two key components of the market. The company should take on account the competitive frame of reference for understanding the target market and the nature of the prevailing competition in the same industry. The company should also differentiate its product from the competitors in the market by producing product which will suit in the market and meet the customer needs. Differentiating the product and delivering in the market with uniqueness can help to develop the brand name. In a competitive environment positioning is the heart of the strategy and the company should also comply in harmony with the positioning strategy (Verma, 2009, p. 38). Segmentation and Differentiation is the base of the positioning strategy. Spicy Cola is not in competition with the leaders of the soft drinks market like Pepsi or Coca Cola. The company mainly focuses towards the young generation of the society with a unique name signifying cool, trendy and different from the rest. Though the taste is quite similar to Pepsi and it smells like candy thus will be more attractive towards the young generation. The drinks have a bitter taste which is liked by many at different age group and the color of the product is suitable for both the genders and can be liked by all and feel cold and refreshing. The cold drinks will also act as digestive drink like 7 up cold drink. The variety of need offered by the Spicy Cola has a great potential in the market providing different flavor, feel, freshness and targeted towards all age group irrespective of the gender of the society. Packaging Packaging of the product is not only done to protect the product from the environment but also it provides a technique of presentation of the offered product to the customers. It gives the idea of the ingredients and the contents of the product along with its size, instructions and manufacturing details (Barnetson, 1996, p. 1). The packaging design of the soft drink Spicy Cola should comply with the taste and the mood of the product so that it gives the idea to the customer about the taste by going through the outlook of the product. The company has designed few packaging for Last Chance for its new soft drinks Spicy Cola. The first impression developed after the survey conducted on the design was different for different designs. Few were referred as a chocolate drinks or power drinks by the respondents while some like the active color combination of the packaging. The whitish blend on one design gave a look of grape juice and looks like a feminine drink for some. Being a trendy, cool, and specially targeted towards the young generation and the ‘Can’ shape is targeted towards both the genders of the market, the company has decided to select the attractive red color of the packaging which depicts the taste of the drinks and reflects cold drinks with the big brand name written in black over the red background. The bold name ‘Spicy Cola’ gives a feel of a mature drinks rather than just an energy drink for the young generation if it is named as just ‘Spicy’. Pricing Strategy Pricing strategy can be of various types. Product pricing can be done in accordance to the market by understanding the competitive pricing of the market (Kotler, 2008, p. 493). The market survey is conducted to evaluate the pricing strategy for similar products. Then the optimal pricing is done for the product to compete in the market. Introducing a new product in the market is a challenging action for the company to place it in the right segment. For new product launch the pricing options available are prestige pricing, market penetration strategy and market skimming pricing strategy (Pezzullo & American Bankers Association, 1998, p. 179). Since there are many players already present in the market Last Chance need to launch its product through market penetration strategy. Market skimming strategy may not work as it is mainly targeted towards the young generation and placing the product with a high price in the market can reduce its attractiveness. Since the product is also quiet similar to the other products in the market thus prestige pricing is also a risky strategy for the company to enter the market. Placing the product with market penetration strategy will give an extra edge to the company to increase product sale with differences in product to some extent from the competitors. The product price if kept low than Pepsi and Coca Cola will attract the customer to taste the product which might drive more customers towards the product and the company will be able to enter the market in the competitive environment. Advertising & Promotion Communicating of the product with the target market is very essential for the launch of the product. The product should be familiar to the customer in order to buy the new product launched by the company in the competitive environment. Last Chance should implement the strategy through which the company not only reach to the customer but also it need to assure its effectiveness of the channel of communication (Saxena, 2009, p. 359). The promotional mix which should be adapted by the company for Spicy Cola can be Advertising, Sales Promotion and Public Relations (Promotional Mix, 2011). Last Chance should advertise the new product Spicy Cola with theme matching the taste and mood of the soft drink. It should depict the target market which is focused towards the young generation both male and female. The taste of the soft drink should be conveyed to the customers and giving the bold attitude with the spicy touch can attract more customers to the advertisements which in turn will increase the promotional activity. The unique identity of the product will get an extra edge amongst its competitors. The company should also give emphasis on its brand name in the advertisement to facilitate the process of promotion. Sales promotion is another technique which can be implemented by the company to increase sales, customer loyalty, creating interest and awareness amongst the customers and building a brand perception in the mind of the customers (Mullin, Cummins, 2008, p. 48). Building public relationship of Last Chance can build the image of the company to facilitate its promotional activity. It maintains a positive image of the company to the customer (Stair & Stair, 2008). But since the company has no direct contact with the customers so to build public relation is very essential for the company to introduce few individual to conduct market research to understand the effectiveness of the advertisements and also building awareness of the product in the mind of the customers. Brand equity measurement system Brand Equity measurement approach is a set of approaches of research problem identification at right time and gives an accurate feedback of the system and the need for the particular changes required from the company for better positioning of the product in the market amongst the competitors. The main goal of brand equity measurement system is primarily to understand the sources and the outcomes of the brand equities company have. Relating the two is the main objective of the firm from the measurement system. The three major components of brand equity system are brand audit, brand tracking lastly brand equity management system (Grover, Vriens, 2006, p. 563). Last Chance should conduct brand audit after the launch of its product to understand the health of the product in the target market. It will help the company to identify the areas of its additional values and the need to improve the brand equity. Brand audit should be conducted on regular basis to stay relevant, strong and maintain its uniqueness in the market (Solomon, n.d., p. 159). Since brand audit is conducted for long term duration. Just after the launch of Spicy Cola the company should also track the performance of the cold drink on short term audit through brand tracking. The company should involve individuals to the market to get information about the response of the customers about the product. This will give the idea for Last Chance to understand how and to what extent their strategy has succeeded in the market. Last Chance can also establish a brand equity management system for the evaluation process which gives the report to the organization about the brand tracking and brand audit for proper implementation of the strategies. With the help of Brand equity charter and brand equity report the manager will identify the partners outside the company and brand equity report will track the performance measures from the survey and distribute the report to the managers to act accordingly. Assumption taken The research conducted for the launch of the new product for Last Chance assumed several aspects which will not affect the brand or the company. Since not much information is provided about the company Last chance, it was assumed that the market is aware of the company for its other products. Already established company Last Chance launching its new brand Spicy Cola primarily in the Australian market of Class A is another assumption taken for the entry of the product. Another aspect which was assumed to be not affecting the new brand development is the manufacturing and HRD issue. Since no data regarding the organization structure or HRD and manufacturing detail was available it was assumed that no problem prevails in those areas to affect the launching process. Conclusion and Recommendation The research study was conducted for the understanding of the key areas of development for the purpose branding for Spicy Cola, the new soft drink from Last Chance. The branding plan for the soft drink beverage was discussed with the requirement of the company to properly evaluate each aspects of the product for its launch. The focus group discussion conducted reveals several problems with the designing process which are evaluated by the company to select the best to suit its product nature. The need for its change are identified and redeveloped to suit the target market and the goal of Last Chance. Along with the development of the new product the company should also implement brand equity management system for time to time evaluation process of the product to maintain its position in the competitive environment. After the launch of the product performance tracking through market survey will be the most important aspect which the company should implement for a sustainable position in the soft drink beverage market. Reference Barnetson, A. (1996). Plastic materials for packaging: developments in markets, materials & processes. iSmithers Rapra Publishing. Boone, L. & Kurtz, D. (2010). Contemporary Business. John Wiley and Sons. Grover, R. & Vriens, M. (2006). The handbook of marketing research: uses, misuses, and future advances. SAGE. Hiebing, R., Hiebing, R. & Cooper, S. (2004). The one-day marketing plan: organizing and completing a plan that works. McGraw-Hill Professional. Keller, K. (2008). Strategic Brand Management, 3/E. Pearson Education India. Kotler, P. (2008). 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