Advertising campaign plan of Coca Cola
Table of Contents
1.0 Introduction5
2.0 Context Analysis5
2.1 External Context- PEST Analysis5
2.1.1 Political5
2.1.2 Economic6
2.1.3 Social7
2.1.4. Technological7
2.2 Market Analysis8
2.3 Internal Context- Organisational Analysis8
2.4 Customer Context- Customer Analysis9
2.4.1 Segmentation9
2.4.2 Targeting10
2.4.3 Positioning10
2.5 Business Context- Competitor Analysis’10
3.0 Communication Objectives12
4.0 Communication Strategies13
5.0 Communication mix14
6.0 Implementation16
7.0 Control and Evaluation16
Reference List18
Appendices22
Executive Summary
The purpose of this report is to build up an innovative advertising campaign plan in relation to the exercise of emotional plea. For this, the organisation, Coca Cola has been considered as a case. The company has a strong stand in the beverage industry and a leader among the beverage companies. The report employs an emotional appeal within advertising, advertising media and marketing communications theory, for constructing a plan to attract the customers and enhance brand loyalty. PEST analysis has been used for evaluating the beverage industry of UK for understanding the business environment and customer behaviour. Strength and weakness of Coca Cola and its competitors have been mentioned as well. The report discuses market analysis, customer analysis and competitor analyses of Coca Cola for understanding the market trends of the target segments. Further, strategies related to implementation, control and evaluation of advertisement plan has been highlighted, so that the company’s objectives of communication are attained.
Coca Cola Company is a renowned beverage firm all over the world (except North Korea and Cuba). The company was found 130 years ago and it is traded as S&P 500 Component, Average Component, Dow Jones Industrial and NYSE:KO. The company has range of beverage drinks under different brand names (more than 500) (Coca-Cola, 2016). The organisation is positioned among top ten private employers in the world with more than 700000 system associates. In 2015, the company generated a loss in their revenue figure of about £32.37 billion which impacted on their net income as it earned £5.37 billion as income (Coca-Cola, 2015). On the other hand, currently Coca Cola has approx 123,000 numbers of employees that are involved in production, supply, procurement and other services (UK Finance, 2016). In the financial year 2015, the firm obtained a minority stake ownership in the Suja Life LLC, which is a cold pressured juice manufacturer.
a. The government of UK has set stringent regulations for the beverage companies. The firms are required to abide by the Health and Safety Laws, so that the workers are kept safe from any physical hazard or health risks (Hse.gov.uk, 2016).
b. As UK’s beverage industry is considered here, the Environment Protection Act, 1990 and Consumer Protection Act, 1987 implemented by the government are followed by the company (Legislation.gov.uk, 2016).
c. Companies like Coca Cola have to pay the corporation tax rate as set by the UK government. The corporation tax rate is 20% which needs to be obliged by the firms for operating successfully in the UK’s business environment (Gov.uk, 2016).
d. Coca Cola maintains a definite standard of the laws with uniformity that is situated by the FDA. It ensures that non-beverage drinks are safe for drinking and the company can continue with its production.
If Coca Cola does not abide by the government rules and standards, then it would be charged with penalties or its operation may be shutdown. However, the company accepts the minimum wage policies as introduced by the government, time and again to generate employment.
a. GDP growth rate and consumption level in the UK’s economy influences the development of beverage industry in the nation. In 2016, the UK’s GDP growth rate has risen by 2.1% and it is assumed that the rate would augment to 2.55% by the year’s end (Oecd.org, 2016).
b. The cost of labour in UK is below average, which demonstrates that the organisation could get productive workforce for developing advertising campaign (Boulhol et al., 2011). It would also help in controlling the total operational costs.
c. Due to the rise in costs of intermediaries and raw materials, affirmative rate of inflation has positioned pressure on the production cost. In UK, the rate of inflation is 0.1% as on 2015 (Trading Economics, 2016b).
d. Since 2008, the interest rate in the economy has been as low as 0.5 percent (Trading Economics, 2016a). Therefore, positive economic condition with lower interest rates and more disposable income would help Coca Cola to emphasize more on beverage products that are demanded by the targeted people.
With the increase in GDP growth in the country, the beverage industry has been experiencing positive results in revenue due to the increased expenditure of consumer. However, many customers of Coca Cola have shifted to other brands due to the reduction in income, which is the cause of qualms in the economy of UK trailed by the downturn.
a. Most people in UK have shown a rising interest in healthy lifestyles. This in turn, has strongly impacted the sales within non-alcoholic beverage industry as most of the customers have switched to diet drinks and bottled water.
b. People of UK are quite fun, attractive and loving. Thus, there is few or no societal pressure which positively impacts their buying decisions (Jin and Rashad, 2015). The people are highly independent in making decisions, which can be effective for Coca Cola to target them through advertising campaign.
c. The people of the economy (UK) are mostly educated which shapes their purchase decisions (Albiser, 2015). Therefore, the educated people can relate with the advertising campaign and would likely be interested towards the company’s range of products.
d. The rise in the population of generation Y in the country has been impacting the beverage sector, as this particular segment have different views in relation to brands and various buying behaviour.
Increase in healthy consumption, buying decisions, education and different attitudes have had a major influence on the sales and revenues of Coca Cola over the few years. Therefore, social characteristics of the people need to undertaken by the company for developing advertising campaign plan.
a. Beverage organisations need to highlight on the sustainable functions for controlling the impact of their activities of value chain and logistics (Fernie and Sparks, 2014).
b. Most of the companies in UK have gained success by using advanced technology. Use of social media and internet is high in UK for making buying decisions (Peters et al. 2013).
c. Research and Development allows the firms to develop more attractive and innovative advertisements to attract people.
d. Increase in the use of tablets, iPhones and smart phone devices have compelled the firms to build instant Apps for influencing the customers’ buying process (RBS, 2013).
As the UK is a highly technology advanced nation then it can support Coca Cola to use the most effective technology that can boost the acceptance rate of advertising thereby leading to increase in sales.
In UK, the largest manufacturing sector is the Food and Drink segment with a return of around £96 billion. It has been reported that the industry invests largely in R&D (Research and Development) which leads to the introduction of around 16,000 new products in the market every year (Gov.uk, 2014). On the other hand, it has been reported that the food and beverage industry of UK is viewed to be a relatively established sector, as it is directly linked to the basic human requirements which are necessary for life. Therefore, in the accounting year 2013, the industry generated a turnover of more than £242.1 billion. It has been reviewed by the Food and Drink Federation that every year about £11 billion worth of food and beverages are exported. It can be indicated that food and beverage industry of the nation significantly contributes in the growth of the economy.
Apart from that, the market of food and beverage sector has been slightly affected due to change in the taste of consumers. Majority of the consumers have switched to low, mid and no calorie drinks (Partington, 2016). Due to this the consumption of soft drinks has slipped to 0.5% in 2015 and also 10% drop in sales of fruit juice (Daneshkhu, 2016) (Refer to Appendix 1). However, it is expected that the food and beverage market would increase, as the companies are majorly concentrating on decreasing sugar level content in the drinks.
Strengths of Coca Cola
Weakness of Coca Cola
Market segmentation is the course of positioning market into clusters of prospective consumers that has alike characteristics or/and needs. The market is segmented by the company, Coca Cola, considering the kind of products purchased by the people. Therefore, the market is divided into non-Cola beverage drinks and Cola beverage drinks. On the other hand, it has been studied that the company’s segments the market based on the place of consumption of the beverage. Most of the consumption takes place on premises such as restaurants, railway station, cinemas, etc (Ramya and Subasakthi, 2012). Age of the people is also taken in account by the company, so as to meet up with their beverage demand by producing the most preferred beverage drinks. Further, the income level of people is considered for segmenting the market and customers, so that the required product can be developed and proper advertisement can be carried out to attract them.
Based on the segmentation of the beverage sector, Coca Cola’s target is recognised by the marketers. Different segments are targeted by the company with different ads. The primary market of the company is younger people that falls in the age bracket between 10-25 and people aging between 25-40 comprises secondary market (Cspinet, 2016). The products (Cola products) of the company are targeted towards people who desire and demand a strong flavour whilst diet cola and its variations, are targeted towards the sub segment who is health conscious. Therefore, the company prefers non-cola drinks for targeting the health conscious section of the market. It is evident that some of the products like Limca, targets young working population whereas; Sprite specifically aims the college going youths and teenagers.
According to Bezawada and Pauwels (2013), when any goods/services are released in the market then the responsibility of the management increases to ensure a good image of the products among the targeted customers. In relation to that, the company, Coca Cola place its products as thirst quenching and refreshing. Therefore, the goods of the company are supposed to convey joy as evident from latest tagline of Coca Cola- “Little drops of joy”. It supports the company to position their products in the market separately from the products of the competitors. On the other hand, the management of the company maintains that the products are marketed as of high quality with consistency. Further, the company has initiated a new ‘One Brand’ global marketing strategy to unite Coca-Cola Zero, Coca-Cola, Coca-Cola Life and Diet Coca-Cola/Coca-Cola Light under their Coca Cola brand (The Coca-Cola Company, 2016).
The major rivals of Coca Cola in the beverage market are PepsiCo Inc. and Dr Pepper Snapple Group Inc.
PepsiCo Inc.
Strengths
Weaknesses
Dr Pepper Snapple (DPS) Group Inc
Strengths
Weaknesses
Table 1: Comparison of Market share, sales growth rate, EPS and number of employees in the UK of PepsiCo, DPS and Coca Cola (Refer to Appendix 2)
Market Capitalisation
Sales Growth rate (quarterly)
Number of Employees in the UK
Earnings per Share (ttm)
PepsiCo
DPS
Coca Cola
PepsiCo
DPS
Coca Cola
PepsiCo
DPS
Coca Cola
PepsiCo
DPS
Coca Cola
147.30 billion
17.13 billion
190.05 billion
-0.03%
0.03%
-0.04%
263000
19000
123200
3.50
4.12
1.66
Source: (UK Finance, 2016)
Fill (2009), proposed an effective model of marketing communication which is termed as DRIP which entails Differentiate, Reinforce, Inform and Persuade. It is employed by the organisations for building their communication objectives. Also, it supports in developing awareness and stimulating people for accepting the particular product. Therefore, the SMART objectives would be effective in attaining this process by Coca Cola.
The SMART communication objectives of the company are;
Hence, Coca Cola would be using personal appeals like love, humour, joy and happiness as a part of its integrated advertising campaign for attaining communication objectives of structuring long-term customer association.
Pull Strategy: It comprises huge spending on promotion and advertising for creating demand among the customers for the range of goods of Coca Cola. As the demand for non-alcoholic beverages are relatively high in any economy, the firm can exercise this strategy. Also, the brand conscious customers always tend to buy the high-quality product from labelled firms. Therefore, the company can invest more on display racks, standees, flanges, mobile hangers, tier racks and visi cooler brand strips as a pull strategy. It would help in increasing and attracting sales and customer base respectively (Stritto and Schiraldi, 2013). Also, feeling of happiness, joy and satisfaction could be created as they can feel that branded quality products are consumed by them.
Push Strategy: It comprises exercise of trade promotion channel and sales channel for ensuring a significant demand for products. This strategy would provide with results, if there would be a considerable number of substitutes available in the market, where the customers have sufficient information regarding the products (Naik and Peters, 2009). In context to that, Coca Cola’s advertising campaign is aimed not only to facilitate happiness/joy in the product consumption process, but also to spread a bond of love among the consumers and distributors. It would make them inclined towards the brand of the company and become loyal consumers. Therefore, the company, Coca Cola needs to employ push strategy as the attachment of love could only be developed if there is a successful communication between the consumers, distributors and vendors at the event of promotion.
Profile Strategy: This strategy is employed by the organisations that have a strong business profile and brand equity. The strategy is directed for meeting the overall requirements of the customers and shareholders of the organisation. It includes the establishment of responsiveness of the brand and status via corporate advertising, public relations and sponsorships (Bilton and Cummings, 2010). Therefore, the profile strategy would contribute to extend of happiness among the customers of Coca Cola’s product, as the brand equity encourages a reaction of extreme delight of being a part of familiar brand. On the other hand, profile strategy can create love and affection in the customers and shareholders for the brand as their essential demands and desires could be satisfied by the brand.
Considering the communication objectives of Coca Cola, profile and pull strategy would be suitable for the company. The company is required to deliver an advertisement campaign under a pull strategy through a non-celebrity person to represent the target segment. Moreover, Coca Cola has developed a high brand image and corporate profile in both domestic and international beverage industry (Coca-Cola, 2016). Therefore, both pull and profile strategies would be useful for the company to build up a buzz in the beverage market.
Coca Cola could employ a tangible communication mix for conveying its branding messages to the targeted customers. Through the digital advertisements and marketing campaigns, the company aims at delivering a message of “Drink Healthy and Be Trendy” to the customers. This message significantly relates to the emotional appeal of love, joy and happiness among the individuals using Coca Cola’s products. It has been pointed that happiness arrives from the well-being of people that could be attained through the usual intake of superior products (Geuens, De Pelsmacker and Faseur, 2011). Also, it bonds well with the customers via delivering of products required by them in their life which entails eternal care and love for the customers.
Coca Cola would depend on offline campaign across colleges, public places, schools and social media for releasing its message apart from exercising conventional advertising platforms like newspapers, television, hoardings, radio and magazines (Hwang and Kandampully, 2012). The company would require fixing high promotional budget as high range of target audience is being considered and due to the market reach across the regions of other foreign markets and the UK.
The following communications and promotional mix would be executed by Coca Cola through its brand, to relate with the emotional appeal of love, joy and happiness:
Sales Promotion: The organisation can encourage its sales by using mobile marketing promotional technique. The company can provide offer to the consumers and sending sms (short message service) about products via the accumulated database. On the other hand, the company can use technique like Buy-Two-Get-One-Free for influencing the emotional appeal of customers.
Advertising: The firm can produce an audio-video ad for television with non-celebrities, featuring a large family. It would be encouraging people to emotionally connect with the non-celebrity (Boyland and Halford, 2013). As a result of that, the people would be willing to buy the products of Coca Cola and would be feeling joyful and happy by consuming the product. Therefore, it would link well with the love and happiness appeal of the brand.
Online Marketing: Coca Cola could use social media for facilitating direct interaction with the customers. Therefore, the company would require developing its own page on Twitter, Facebook, Google Plus, etc. by considering the target audience (Roberts and Zahay, 2012). The company can post about the details and availability of products on their walls, which would be helpful in informing the people and making a strong connection with them on personal level. It would be effective in creating an online presence and attracting the customers.
Public relation: The firm could undertake this mix by conducting promotional events in some recognised educational institution for addressing the young generation customers. Therefore, the company can distribute the pamphlets or organise programs like short plays or dramas, where the people would be aware about the features of the products and its relation with health. This in turn, can create a large-scale awareness about the brand.
The campaigning message of Coca Cola could be conveyed successfully to the target customers via continuity. It would uphold a regular model of passing the message of the brand to the customers through delivering a continuous experience of the developed advertisements. Moreover, the company would require airing its TV commercial on a daily basis in almost every channel of UK for addressing both the national and international consumers. On the other hand, the radio ad shall be aired daily, after every four hours and the print advertisements will be published through newspapers and magazines on weekends. It would be effective in receiving expected response from the customers to accept the brand and products (Lin, 2011). Further, the offline campaigning would be undertaken in a number of college campuses, once in a month and shall be continued in other college campuses in UK. This would be effective in generating a reliable result and making more people aware about the company’s products.
The advertisement of Coca Cola is required to be effectively controlled, as the UK beverage market has a number of branded and local companies or suppliers of beverage drinks. These companies exclusively employ a marketing mix to encourage a large costumer segment to consume their products (Karaosmanoglu, Banu Elmadag Bas and Zhang, 2011). Therefore, Coca Cola needs to strategically execute their advertisement campaign plan in the beverage sector that is separable from its rivals. Further, the company can recruit experienced marketing officials for monitoring the campaign performance. It would help in knowing the level of acceptance of advertisement.
Table 2: Yearly Budget Plan of Coca Cola’s Advertisement
Channel
Cost
Hoardings
25,500
Digital Advertisement
7,500
Campus Campaign
17,000
14,000
Print Advertisement
1,00,000
Email Marketing
55,000
Public Relations
20,500
Total
£ 239,500
Source: (Author’s Creation)
Evaluation is a crucial element of each strategy of marketing communication as it sets standards, as well as assesses the advancement of the firm in relation to its strategic marketing and business objectives (Kotler and Armstrong, 2010). For measuring the impact of the advertisement campaign plan, Coca Cola shall estimate its first year sales. It could determine the outcome of the plan via regression examination of the advertisement expenses on the fiscal return of Coca Cola over a definite time period. On the other hand, periodical rise in revenue and sales would provide the result about the success of the campaign plan.
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Appendix 1: Soft drinks groups digest UK sugar tax
Appendix 2: Competitor Analysis
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