Coca Cola Company Analysis
Coca Cola Company’s core is to undertake and refresh everyone in the UK. Founded in 1886, we have cut the market share and we are controlling 44% of the soft beverage company in the UK. Our main competitors are PepsiCo and Cadbury. In this paper we are going to discuss the launch of our new product Afiaa fruit juice into the market. We will discuss the soft drinking industry in the UK and our competitors. We will also look at the product and technology analysis, how to exploit opportunities and handling of weaknesses. We will also d o a SWOT analysis for the company and the methodology used to collect the data.
Our vision is to ensure that everyone in the UK is refreshed. We will do this by providing them with a wide range of soft drinks but due to the growth of the market demand and the need for new and different kind of flavor, we came up with this Afia drink which will come in three different flavors i.e. passion, pineapple and orange.
From available data in British Soft Drinks Association’s 2010 UK soft drinks Report, we established that the UK soft drink market had an average growth of 1.7% in 2009. This means that the market for soft drinks is growing and has a huge potential to continue this growth path. The total soft drink consumption was at a high of 14, 1400 million liters which translate to about 229 liters per person with a whooping retail value of £13.3 billion (Laming, 2010).
Euro monitor International report on soft drinks in the UK offered a guide to our market and industry analysis. It has the latest retail sales data which allowed us to identify the sectors that drive growth. The consumption of soft drinks has been on the rise throughout the 1990s and during the beginning of the 21st century. Companies like and Pepsi and Cadbury have responded to this demand by either acquisition of established companies or increasing their manufacturing presence in those areas with demand. Since 2005, the UK soft drinks consumption has been growing by about 1% and despite a continued fall in carbonated soft drink sales, the long-term path will remain steady. Health and the general well being of the consumers has been an area of concern that has come to shape the UK market. The desire for healthier products has seen an increasing trend towards healthier options. The carbonated drinks have continued to suffer due to adverse mention in the media and government pressure to tackle obesity. In our Afia drink, we believe that we will have a growing market from this quarter of consumers. Driven by this kind of statistics and healthier trends, we also have the faith that the UK market will support our vision for growth as it expects the sector to grow by around 2% to reach more than 15 billion liters.
During the market analysis, distribution situation and competitive situation were identified as the most important checklist. For competitive situation, we identified PepsiCo as the main competitor with a 38% of the market share although some small fruit juice companies were identified to have less than 10% of the market. We identified that for distribution of Afia, we will do it the normal way; using the same vehicles that distribute the other Coca-Cola products to ensure that we retain the same market as before.
UK Market Analysis
The UK market is very concerned with the ‘fat tax” from the soft drinks and have voiced their concerns over the same. Due to this concern, we will aggressively embark on a healthy campaign for Afia which we are sure will sell to the UK market.
The soft drinks industry in the UK is shifting with analysis of new product launches in the market, while examining their marketing mix and the specific consumer appeal. This gives us the direction in which the soft drinks industry will develop in the next two years in the UK and before we launch our export strategy (Analysis of the soft industry in the UK, n.d.).
Although we are a giving customers’ a different kind of soft drink, fruit juice drink, our main competition is from PepsiCo and Cadbury Schweppes which have a total shareholding of 90% of the total soft drink market in the UK. Although there is still competition from other small players, we are trying to cut on the monopoly of the above companies with our brand of ‘stay healthy by eating healthy’. Unlike other drinks which will need to be diluted, Afia will enter the market as a ready to drink fruit juice thus giving customers the convenience of consuming it anywhere wherever they are. We are also banking on our strong distribution system to deliver the product to all to target market. PepsiCo has the seven-Up and Teem brands which are considered healthy. We also expect to have competition from Schweppes’ healthy campaign launched recently.
Our target market is the people who are conscious about their health. With the current trends of a tragic shift from junk foods and carbonated drinks, we are sure that a growing interest for healthy foods will be emphasized. With our ‘drink healthy to stay healthy’ driving motto for Afia, we are sure of converting a number of customers to consuming Afia (Eldre, 2008). The product will further cater for those with nutritional, hydrating value and for social needs because it is simply a fun drink. Another group of a large customer base targeted is those who are travelling, with the disposable plastics in 200ml, 500ml and 1 liter packages.
SWOT analysis will involve the strengths, weaknesses and threats which will be discussed separately.
Our strength lies in the already established brand strength. Our company is an already large manufacturer, distributor and marketer of non-alcoholic beverages in the UK. Coca Cola is among the most recognized brands in the UK. This strong brand name will be a basis for our competitive advantage over the other companies in our core markets.
Another that will make the exercise a success is the ability to generate significant revenues to sustain our expansion and innovation strategies. In the last financial year, the company was able to generate a 5% increase from the previous year signaling a growing market for our products and increased revenue. This will be enhanced by the recent acquisitions of the North American operations of Coca-Cola Enterprises in the US where we plan to have our first export of Afia in the next 6 months (Coca Cola SWOT analysis, n.d.).
The main problem with the Coca Cola UK Inc. has been relying on brand extensions to increase sales in some specific lines. This is true especially for its long-time carbonated soft drinks products. But this poses a strong risk of cannibalizing existing sales in the long-term resulting to Afia deterring the sale of the other carbonated products. Thus the company will need to shift from this kind of practice and selling all its products on an equality level.
There is already strong competition in the UK markets from several but few in number of local based and also international brands. In these crowded complex markets, it is difficult to fight for market share. The current trends in which several groups of consumers’ awareness towards beneficial goods may lead to overconsumption of Afia at the expense of other brands those are already in the market. Also several companies are coming up with the idea of health eating and if they are licensed to operate, they may eat into our customer base (Coca Cola SWOT analysis, n.d.).
Due to our extensive distribution network outlined above, we will fully capitalize on it and distribute Afia with other Coca-Cola products to ensure that it reaches the mass market we enjoy with our other products.
Already Coca-Cola has many brands and creating other new brands and in this case Afia will dilute the brand recognition, this will have the effect of diminishing the value and strength of each of these other brands that are already being manufactured. There are also many fruit juice companies in the UK, creating another new brand will result to saturating the already saturated market where manufacturers are already preaching the use of healthy foods which we have already adopted and are using (Coca Cola SWOT analysis, n.d.). The company can again evaluate its brands with those that are selling and those that are not and take the necessary precautions like doing away with a product that stalls in the market.
A research done by Zenith on the UK soft drinks market shows that in 2009 alone, innovation witnessed 135 new products launched in the market, that natural refreshments continue to be the core of the industry’s growth as consumers demanded tasty treats with a 1.7 increase. Promotional activities of soft drinks from the leading companies caused concentrate juice not to blossom while the five leading companies had an increased market share to 65.2% (UK soft drinks 2009). This information shows that we Coca-Cola has a ready market that we need to exploit.
Market Plan Implementation
We believe that through a successful market plan, we need to take the plan from paper to market action and help the company start earning profits hence the importance of a marketing plan implementation. Proper implementation will give the company an edge over its rivals in the market. We will examine implementation in terms of: resources, cost and control.
The resources should be analyzed as to what is needed, the brochures and how much time it takes to sell to customers as well as the available number of sales people. The budget should include the cost of all items needed. We realize that it is better to concentrate our resources to and try to link marketing budget to sales forecast make the most from the budget
The type of data that we used to conduct this research was mainly secondary sources of information by use of books, online research and journals about the UK market. We also did give out questionnaires to sample of the population while we interviewed some customers to know their views and wishes. We realized that many of them wanted to stay healthy and thus we insisted on giving them a healthy drink (Research methodology).
To realize our dreams of making Afia healthy drink, we have to have a marketing strategy centered on creating consumer awareness on healthy living, to establish wide Afia brand recognition and become the top leader in the healthy drinking sector. To achieve all the above we need to have a marketing program that encompasses product strategy, a promotional strategy and a distribution strategy.
The core of the Afia drink is in a bottled and ready to drink format. The product will come in a green bottle of 200ml, 500ml and 1 liter package. With the trade name Afia energy, funky, cool and healthy drink. Market considerations will be based on Coca-Cola’s strategy to broaden its distribution quickly.
The price strategy undertaken considered the following; consumer demand, potential substitutes and the lifecycle of the product. Customer demand is driven by tastes, income and availability of similar products at a different price. For Coca-Cola, the intention is to push Afia as a unique, attractive and healthy drink. Therefore we intend to have a higher earlier pricing in its lifecycle instead of increasing the price midway. This will also ensure higher profit margins. For the potential substitutes, we intend have product differentiation.
The objectives of the promotion are to initiate a strong awareness about the launch of Afia throughout the UK and also win market shares over the top competitor PepsiCo. The message of the promotion will essentially derive the message that Afia is a healthy fruit juicy drink for all who want to have a longer life. We decided to use the internet due to increased traffic over the internet, and TV programs with healthy living talks. We will later introduce a promotion for mountain climbing, where the winner will get Afia merchandise while runner’s up will be rewarded with half the merchandise. We will give free samples to the contestants during the promotional day. Place of distribution for Afia will be Supermarkets, vending machines, groceries and convenience stores throughout the UK.
In order to implement the marketing plan properly, we need to follow the following implementation schedule;
We need to be sure that we check our progress against the targeted so that it will enable us to know what is working and what is not going as to plan. This will help to be with the plans and build from the plans that we are working on.
We also need to recognize employees for a job well done to motivate the working lot. When they meet goals, deadlines, they are supposed to be congratulated.
The market is always changing and we need to be aware and be on our toes. We should always check on customer preferences and tastes whether they have changed and act accordingly.
Lastly, we need to ask for feedback from the market about our new product, Afia. We also need to go to the sales people and ask them how the new product is doing and get their views on how the plan is working and if there have suggestions for improvement.
Human Resource Needed
Due to the fact that we will use the same Coca-Cola distribution channel to market Afia, we will try to avoid heavy overhead costs and thus we propose that for the existing distribution channels, we will need two extra employees while at the main factory fifty workers have been selected to start working.
We also have the proposition that if we cannot break-even within the next one year, we will put on hold all the exportation plans of Afia to the US. But if we do in less than a year as projected, then we will have to study the Chinese market as well as start export to the US.
Controlling Product Launch
The guiding question here will be ‘what are we selling?’ this question will be the driving force behind all other market decisions the company will make. We also need to identify who our product targets and establish a standard for measuring sales changes and determine growth. To do this, we need to set goals for our business’ growth. They will help to encourage us to plan for growth and help stimulate the process. From here we will start implementing the new marketing plan and watch as the business grows for Afia (Brooks, 2010).
The above information contains all that information needed for the launch of a new product in the UK market, Afia healthy drinking juice. The plan outlines all that is needed to successively launch Afia into the market.
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