Introduction
This is a marketing research and planning project for the Coca-Cola Company based in the United Kingdom. It has been prepared by a member of the Company’s marketing study group. It focuses on the various aspects of the company.
They include corporate objectives, market overview, marketing audit (internal and external analyses). Apart from this, it provides a marketing strategy for the launch of a new product – Coke super that the Coca-Cola Company is to introduce in the market. Data used in this study has been obtained from secondary sources recorded by reputable scholars.
Corporate Objectives
Regarding its sales targets, Coca-Cola has made three main commitments. First, the clients are to be given the freedom to be able to purchase the carbonated company drinks from a supplier that they choose. Secondly, customers should not be accorded rebates for purchasing same more product than the one they had bought previously.
Thirdly, in cases where the customer only wants the best brand, additional purchases should not be rewarded. Additionally, retailers should be allowed to utilize at least twenty percent of the Company’s coolers for a product of their own choice (Joelson, 2006, p. 388).
As far as profit making is concerned, the company has a vision of ensuring that its shareholders receive best returns while it remains financially responsible (The Coca-Cola Company, 2010, p. 1). Coca-Cola has experienced a growth in its global market by about 5% in 2010. This has been due to growth in its market in several regions of the world such as Africa, Europe, Pacific, and North America.
However, Coca-Cola occupies about 33.7% of the market share in the United Kingdom (Anderton, 2000, p. 366).
Although Europe has been experiencing deficit concerns while the Chinese economy has witnessed declining adjustments that has impacted on the consumer confidence, the company is still keen on investing in global operations and in its brands. This plan is likely to redeem back consumer confidence (The Coca-Cola Company, 2010).
Market Overview
The Unique features with the drinking company in the United Kingdom are. Cultural and legal differences are addressed by the Coca Cola Company through the use of dress design. Non-uniformity of customers in diverse geographical markets is also dealt with in the same way. There are two main regions where the company sells its soft drinks. These are North America and Europe.
Whereas Europe accounts for about 25% of Coca-Cola’s sales’ North America takes about the remaining 75% of the company’s sales (Hellriegel and Slocum, 2007, p. 402). Through the place design, Coca- Cola is able to sell products that suit the tastes and preferences of the clients. For example Appletise, and Five-alive, among others are examples of products that Coca-Cola sells to through its market in Europe but not in the United States.
Coca-Cola and PepsiCo have dominated the soft drink market for a long period. They create brand loyalty by investing lucratively in advertising and promotion. This strategy has made it hard for any other new company to penetrate into the market and take away the market share from the two corporations.
Any attempts by a new company to get into the market are countered by these two companies taking measures that include lowering their prices. Such a move causes the new company to hold back its plans to expand their operations (Hill and Jones, 2009, p. 45).
Several trends have dominated the soft drinks market and some of them are likely to be maintained in future. First, there has been a reported increase of loyal consumers of soft drinks in Europe, and this trend is anticipated to carry on in future. Majority of the soft drinks now promote their naturalness by having information on their labels that describe the natural aspect of their flavor.
Secondly, there have been health concerns regarding drinks. Causes of most chronic diseases have been attributed to the ingredients that are contained in some sugary drinks. Examples of such diseases are obesity, dental decay and many others. Most industries that produce soft drinks have responded to these concerns by carrying out some changes in both drink formulations and flavors (Business Insights, p. 2).
Thirdly, most consumers of soft drinks are becoming more receptive to new flavors when they are selecting food and drinks for consumption. Consumers in non-tropical countries are more inclined to tropical fruits, which is marking a crucial trend in the soft drink industry in such nations.
The development of soft drink flavor centers on flavors that enhance functional benefits and those that are obtained from natural ingredients (Business Insights, p. 3).
Marketing Audit
The Marketing Mix
The marketing mix entails some controllable variables that can be used by a business organization to meet its objectives.
In analyzing the marketing mix of a company, four aspects are key. They include the product, price, place, and promotion.
Product Strategies
With respect to the product aspect, Coca-Cola has about 3300 products in more than 200 nations globally. The brand name of the Company is Coca-Cola and the drink type produced is the soft drink. The products within its market in the United Kingdom are Cola lime, Cola orange, Cola lime, and Cola among many others.
For purposes of enhancing consistent product quality and safety, Coca-Cola Company is supposed to have the highest standards and processes. This should take place right from production through bottling to the delivery of products. To ensure that our products meet company standards and the expectations of customers, we measure important product and package quality features.
Being both consistent and reliable are two key aspects to the quality of our products and to ensuring that both global requirements and the company’s standards have been met (The Coca-Cola Company, 2010).
Price Strategies
Price is the only mix that enhances the organization’s turn over. In perspective of the price, for three months that ended in July 2010, Coca-Cola had spent about 8.67 million dollars in the sell of its products (The Coca-Cola Company, 2010). Licensed bottling companies in different nations sell Coca-Cola products. Half of the shares in the enterprise will typically be owned by Coca-Cola.
The pricing policies for the company’s products apply uniformly in all the countries where it is based. In a local market, there is setting of a fixed price in a local market, which is based on the ability to pay, distribution and production costs. Depending on the situation, the price may be adjusted through special offers. For instance, an offer could be placed when purchasing a multi-pack.
In some cases, the size of the bottle can be increased for a limited time. However, price is used as a marketing strategy to attract more clients to the company. When Coca-Cola is faced with threat from new competitors, it rarely lowers its prices (Anderton, 2000, p. 366).
When it comes to the place strategy, Coca-Cola is a global brand dotted in over 200 countries globally. This enables almost everybody in the world to access its products. Therefore, like other multinational and global markets, the company worries less about time zones and international borders (Ward, 2004, p. 88).
To promote its products, the company utilizes several strategies. First, the company uses advertising. During the advertising process, the advert of for instance Fanta is tailored to suit the needs of different customers in diverse markets (Kaynak and Ghauri, 1994, p. 154).
The company has also been generating revenue after using other promotional methods such as mobile marketing for commerce or direct marketing (Stone and Jacobs, 2007, p. 358).
SWOT Analysis
Coca-Cola Company has various strengths. First, it has a strong brand reputation. It is among the world’s top selling soft drink companies. The Company claims to be the most known trade mark across the world.
It remains to be the largest producer of soft drinks globally. It has a larger market share in the United Kingdom market than its rivals.
Its operations are distributed in over 200 countries in the world implying its establishment that makes it not be engaged in extensive marketing like an upcoming company would do. Moreover, the company produces a wide range of products that give the consumers a wide range to choose from.
One of the main weaknesses that Coca-Cola has encountered is the Dasani launch fiasco in the United Kingdom and Europe. Dasani is the company’s water product that is established in the United States and has proved to be a success. Based on this, Coca-Cola saw it fit to introduce the same in the United Kingdom.
However, after investing lucratively in its promotion, the launch turned out to be one of the greatest marketing fiascos ever to be witnessed in Europe. This happened when consumers realized that the product was merely processed tap water that used to be sold at a far much lower cost than Dasani. The product was also proved to contain a cancer-causing chemical. When this took place, the company had to recall all Dasani products.
This was a greater loss given that a lot of money had been invested in promoting and launching it. In 1990s, the company was also reported to have produced contaminated Coke (Lindgreen, Hingley and Vanhamme, 2009, p. 3-5). The company was slow to respond to these claims, making its reputation to be tainted in Europe.
These two scenarios damaged the company’s reputation and may have lowered its credibility besides affecting the way consumers perceive its operations.
Coca-Cola has several opportunities. First, given that most consumers in most regions are open to both topical and natural flavors, the company has the privilege of either modifying the current products with the same or launching more products. This also means more demand for the company. Second, the company still has more room for growth to ensure that the remaining world nations access its products.
Coca-Cola has one key threat, and that is its rival – PepsiCo. Although in most markets Coca-Cola is above it, PepsiCo ranks top in the United States market (its home market). Although Coca-Cola can push new brands through its distribution system at a lower cost, rivals in the new markets have refused to let it do this. This is because if allowed, it may dominate the market (Anderton, 2000, p. 366).
PEST Analysis
Political Analysis
The government has designed regulations that govern the operations involving non-alcoholic beverages. There are possibilities of fining those companies that may not operate within the standards of the law. There are some factors that can cause the results of Coca-Cola to be different from the ones contained in its forward statement. First, changes in accounting, taxation or environmental laws.
Second, changes within the environment of the non-alcoholic products. This includes action by rivals that may cause pricing pressures whose impact may reach out to the sales share in the global market. Third, political instability in international markets may results to difficulties in transferring capital across borders (Anon, 2010).
Economic Analysis
The effect of recession in the previous years has caused nations where the company operates to respond differently. For instance, some nations have resorted to lowering the interest rates. This implies that Coca-Cola and other companies will enlarge and increase use of debt as due to low interest rates attached to borrowing. The loans can be used to carry out research on new products and technology.
Study shows that the non-alcoholic industry has greater sales in markets outside the United States and they are likely to continue contributing to the success of the economy in these nations (Anon, 2010).
Social Analysis
This is an analysis that entails changes in attitudes and lifestyle. Healthier lifestyle has become the priority of most people. Due to this, the non-alcoholic beverage industry is being affected given that most people tend to prefer non-alcoholic beverages and bottled water to alcoholic drinks.
Most consumers are also increasingly concerned about nutrition. All these developments imply an increasing demand for the Coca-Cola products (Anon, 2010).
Technological Analysis
Changes in technology create opportunities for new products and allow modification for the existing products apart from enhancing better marketing strategies. The use of internet and television has made Coca-Cola to improve its marketing and promotion techniques. This is because advertising through them makes products appear attractive to the customers.
The company’s sales have improved immensely due to the introduction of cans and plastic bottles. Their portability and ease of disposing makes them popular. Additionally, due to growth in technology, there has been introduction of new machineries. This has led to an improved production in the Coca-Cola industry (Anon, 2010).
Porter’s 5 Forces Analysis
This is an analysis that fopcuses on the major forces in the business tha affect its operations. Th forces include competitors, suppliers, new entrants, customers and substitutes. PepsiCo is the main rival to Coca-Cola in the United Kingdom martket. In most markets, it ranks second after Coca-Cola. In the former’s home market (United States), it is the leading there (Anderton, 2000, p. 366).
The company uses water, and both nutritive and non-nutritive sweeteners as raw materials. In the manufacture of its bottled products, the company uses Thames water and obtains other raw materials from Marietta (Denning, 2009, p. 115; FDS, 2007, p. 10 ). Other suppliers of non-alcoholic products are supremarkets and other companies such as Unilever and PepsiCo (Angwin, Cummings and Smith, 2006, p. 67).
The company is currently placing priority to innovation since in the past new entrants such as Red Bull and Snapple took advantage of the opportunity after realizing that innovation was key to a competitor’s growth (Meek et al, 2007, p. 257). Both PepsiCo and Coca-Cola have put measures in place to imprdfr new entrants from succeding in their operations.
For instance, when new entrants set in, they respond by lowering prices which causes the new entrants to restrain their expansion plans (Hill and Jones, 2009, p. 45). Due to a wide range of its products, Coca-Cola provides customers with products that suit their varying needs. Given that most people are changing their lifestyles to use non-alcoholi beverages, the company’s products are on high demand.
Only Coca-Cola and PepsCo seem to be the main dealers in non-alcoholic beverages. As such, they have a large number of customers to sell their products to. Moreover, there are substitutes to the products that are produced by the company. This is because other companies like credible supermarkets, PepsiCo, Unilever, and Procter also supply non-alcoholic beverages to the customers (Angwin, Cummings and Smith, 2006, p. 67).
The company therefore ought to put mechanisms in place to ensure that the quality of its products will continue to attract customers to its retail stores.
Assumptions
The Coca-Cola Company plans to launch a new product whose name is Coke super. For the launch and use of this new product to be effective, a new marketing plan has to be prepared based on a number of assumptions regarding the future of the United Kingdom’s economy. First, it is assumed that the United Kingdom will stay out of the Euro.
This is because though the UK has encountered economic recession, it may not be a problem with its currency. And more so, the Euro currency is getting into recession. Secondly, due to chances of inflation rising, the UK is supposed to have exercise independence in its economy and lower interest rates if possible.
These initiatives are supposed to be put in place because the new product (Coke super) requires investment to introduce it. Lowering interest rates will therefore enable the company to access funds that it can use to carry out some operations in the introduction of the new product.
These include cost of raw materials, promotional costs, and transportation, among others. Joining the Euro may also mean being affected by new regulations with regard to trading in non-alcoholic beverages among member countries. This may affect the operations of the company. Moreover, it is assumed that the energy costs will remain constant, and thus the company will not incur additional costs.
Marketing Objectives and Strategies for new or modified product
First, the Company intends to attain at least 50% profit for the Coke super product. This has to be attained by ensuring that the production costs and other expenses involved in its production are lower than the cost at which Coke super will be sold. Secondly, we plan to ensure that Coke super reaches the already existing 33.3% of the company’s market share.
Customers who are acquainted with the existing company’s products should be the ones to access it first. However, attempts will be made to ensure that new markets have been reached with the product. Thirdly, Coke super has additional flavors and other non-alcoholic ingredients. It will also come in several attractive colors.
This is to increase on the quality so as to ensure that it is attractive to customers since that will be the best way to keep them satisfied. From our market research, customers tend to be inclined towards more flavored soft drinks and especially those with ingredients from tropical fruits. Since the new product meets these standards, it is anticipated that customers will be receptive to it.
Growth Strategy
The company intends to sell the new product in two different ways. First, Coke super is to be sold in the already existing market for the other products by the company.
This is because it will be easier for the existing customers to purchase the new product since they are loyal to the company and its products. Secondly, like any other new product, Coke super will be introduced in totally new markets where the company’s products are yet to reach. This includes the market share occupied by the other companies.
Marketing Mix
First, with regard to the product, apart from Coke super having additional flavors than the existing products thus making it more nutritive, it comes in more attractive colors and is packaged cans and plastic bottles that have unique shapes. Secondly, the pricing of Coke super will be based on the costs incurred in its production, and on the cost of other products from the company and those from rival companies.
Thirdly, with regard to the place, the new product targets both existing and new markets. Like other Coca-Cola products, it is to be distributed either directly to consumers or first to wholesalers who then sell it to customers (Plunkett, 2007).
Fourthly, on promotion, the new product will be promoted through advertising through the media such as television and the internet. Billboards will also be used to advertise the product. Coupons will also be distributed to the potential customers informing them of the new product and its features. Moreover, free samples will also be used.
Identification of Alternative Plans
As the marketing department of Coca-Cola, we are optimistic that the launch of Coke super will be successful since the strategies to be implemented are based on effective marketing research.
However, incase things do not work as anticipated, the company may alter elements in the marketing mix. This may include adjusting the price, using a different distribution method, exploring other markets, and changing some features of the product.
Promotional Programme
Therefore, the entire promotional programme is budgeted to cost about 1.65 million dollars.
Measurement, Review, and Control
To gauge the success of the new product, some parameters should be put in place. First, there is a weekly profit target of 2 million dollars from the sale of Coke super in the target markets. Secondly, research shall be undertaken using questionnaires to measure customer satisfaction. Questions to be used shall be decided by the marketing committee. Based on the customer responses, appropriate action shall be taken.
Reference List
Anderton, A., 2000. Economics. New Delhi: Pearson Education India. Web.
Angwin, D. Cummings, S. and Smith, C., 2006. The strategy pathfinder: core concepts and micro-cases. Victoria: Australia: Blackwell Publishing. Web.
Business Insights. 2008. Future Flavor trends in Soft Drinks. Web.
Denning, S., 2005. The leader’s guide to storytelling: mastering the art and discipline of business narrative. San Francisco: John Wiley and Sons. Web.
FDS. 2007. The Coca-Cola. Web.
Hellriegel, D. and Slocum, J., 2007. Organizational Behavior. Mason: Thomson South Western. Web.
Hill, C. and Jones, G., 2009. Strategic Management Approach: An Integrated Approach. Mason: Cengage Learning. Web.
Joelson, M. R., 2006. An international antitrust primer: a guide to the operation of United States, European Union, and other key competition laws in the global economy. The Netherlands: Kluwer Law International. Web.
Kaynak, E. and Ghauri, P., 1994. Euromarketing: effective strategies for international trade and export. New York: Routledge. Web.
Lindgreen, A., Hingley, M. and Vanhamme, J., 2009. The crisis of food brands: Sustaining safe, innovative and competitive food supply. Farnham: Gower Publishing Limited. Web.
Meek, H. et al. 2007. Managing Marketing Performance 2007-2008. Oxford: Elsevier Limited. Web.
Plunkett, J. W., 2007. Plunkett’s Food Industry Almanac 2007 (E-Book): Food Industry Market Research, Statistics, Trends and Leading Companies. Texas: Plunkett research. Web.
Stone, B. and Jacobs, R., 2007. Successful Direct Marketing Methods. New York: McGraw-Hill Professional. Web.
The Coca-Cola Company. 2010. The Coca-Cola Financial Report: Second Quarter, 2010. Volume Profit and Earnings Growth ahead of our Long-term Targets. Web.
The Coca-Cola Company. 2010. The 2009 Annual Review. Web.
The Coca-Cola Company. 2010. Product Safety and Quality. Web.
Ward, K., 2004. Marketing finance: turning marketing strategies into shareholder value. New York: Butterworth Heinemann. Web.