case study- virgin cola 2lm

Project in Marketing

Submitted by:

Azurin, Paula Beatriz L.Baylon, Jocelyn

Camba, Denise B.De Mesa, Ayana ThereseDellosa, Mark Kevin U.Diola, Ina Patricia B.

Submitted to:

Sir Bob Torres

Marketing Plan

The marketing

plan for Virgin Cola

has been created by

the 2LM team for an

effective formal full-

entry strategy for

Virgin Cola in the

Philippine soft drink

market.

Executive Summary

Although the Virgin Cola has already

been launched in the Philippine market

years before, the firm has lacked sufficient

efforts in promoting brand awareness

which led to its subsequent failure.

Executive Summary

Effective brand

positioning, influentia

l advertising and

persuasive

promotions will

actually be of big

help in competing

with the well-known

local cola brands.

Executive Summary

With these at

hand, Virgin Cola

will be expected to

increase its market

share, win new

customers, and

maintain brand

loyalty to Virgin

Cola over the next 5

years.

Executive Summary

Table of Contents

I. Introduction

• Background Information

• History

• Mission – Vision

• Product

• Virgin Cola in the Philippines

II. Situational Analysis

• MarketMarket Size Size

• Beverage Market in the Philippines

• Market Demographics

• Market Trends

• Market Share

• Soft Drink Brands in the Philippines

• SWOT Analysis

• Consumer Behavior in the Philippines

Table of Contents

III. Marketing Strategies

• Strategy Pyramid

• Marketing Objectives

• Marketing Goals

• Market Segmentation

• Target Marketing

• Repositioning

• Repackaging

• Marketing Mix

o Pricing

o Promotion

o Channels ofChannel of Distribution

Distribution

Table of Contents

IV. Financial Analysis

• Expense Forecast

• Profit Forecast

V. Controls

• Implementation Milestone

1. Introduction

Virgin Cola

Type Cola

Manufacturer Virgin Drinks Silver Spring

Country of Origin United Kingdom

Year Introduced 1994

Variants Diet Virgin Cola

Local Related

Products

Coca-Cola

Pop Cola

RC Cola

History

• Virgin Cola was first releasedin 1994 in UK by RichardBranson, to compete withCoca-Cola and Pepsi.

• It was actually set up duringthe early 1990’s in conjunctionwith Cott, a CanadianCompany that specializes inbottling own-label drinks.

• With a few months of its release, Virgin Cola had a 50%market share in the outlets that sold it. It went to belaunched in France, Belgium and South Africa.

• In the US, Virgin Cola was first introduced in 1998. Forthe launch, Richard Branson rode in New York TimeSquare atop a tank promising a battle with Coca-Cola andPepsi.

• Richard Branson decided to grant the local bottling franchise of Virgin Cola to Lucio Tan’s Interbev Group.

Company’s Mission (UK)

• The Virgin Cola’s mission is to be the consumerchampion with the help of their brandvalues, which are value for money, goodquality, brilliant customerservice, innovative, competitively challengingand fun.

Virgin Group Brand Values

• Fun• enjoyment and humor, not offensive and incompetent

• Value for Money• Simple, not cheap

• Quality• Attention to detail, not expensive for the sake of it

• Innovation• challenging convention, not different for the sake of being

different

• Competitive Challenge• responding to consumer needs, not being irrelevant

• Brilliant Customer Service• empowered, not unprofessional people

Brand Name

• The brand name "Virgin" arose whenBranson and a partner were startingtheir first business, a record shop.They considered themselves virgins inbusiness.

• The Virgin logo was originally sketched ona paper napkin and remains largelyunchanged from the original style used.

Product

• Virgin Cola is the flagship cola of the VirginDrinks.

• It is a carbonated cola soft drink launched in1994. It is available in cans and bottles.

• It comes in different flavors.

Virgin Cola Flavors

Virgin Cola (Original)

List of Ingredients

Carbonated water Caffeine

Sugar Acesulfame -k

Phosphoric acid Phenylalanine

Sodium Benzoate Phenylketonurics

Aspartame Natural Flavoring

Color = Caramel

Virgin Cola (blue)

List of Ingredients

Carbonated water Flavorings

Sugar Sodium Citrate

Citric acid

Antioxidant = Ascorbic Acid

Preservative = Sodium Benzoate

Virgin Cola (Orange)

List of Ingredients

Carbonated

Citric Acid

Stabilizers:

Acacia Gum Flavoring

Preservative: Sodium Benzoate

Orange Coloring

• Virgin Cola has a sweet taste that is not as gassy as other brands. It does not leave an aftertaste.

PackagingCan

- Virgin Cola is packaged in redcolored can with the Product’sname in white bold letters.

Bottles

- The bottle which contained thecola was designed with curves toresemble Pamela Anderson’s sexybody who was at the height ofher popularity in the UK at thetime of the Virgin Cola’s release.

Product Range

Size Unit per case Type Flavour

500 ml

Sparkling

Diet Cola

500 ml 6 Pack

Sparkling

Diet Cola

Sparkling

Diet Cola

Virgin Cola in the Philippines

• Lucio Tan’s Interbev Group was granted the local bottling franchise of Virgin Cola in the Philippines.

• The Virgin Cola is distributed to all LucioTan’s businesses.

• It could also be found in some stores like 7/11.

2. Situational

Analysis

Current Situation

Virgin cola has long been existentin the Philippine market. Its formallaunching was in 2004, backed byLucio Tan injecting Php. 1 B into thelaunching project. However, due tolack of aggressive follow throughadvertisements the product line’smarket presence was diminished.

As of now the carbonated soft drinkindustry faces the perils of a new trend amongconsumers. It is the trend of healthy living andhow readily and easily the market accepted it.Virgin Cola is not immune from this threat.Not only must Virgin Cola reintroduce itself tothe market it must be able to deal with thistrend along with competing with other marketcompetitors.

Market Size

• According to the National Statistics Office (NSO), the Philippine population is projected at 88.6 million for 2008 with an average growth rate of 2.32%. Over 60 % of the population is between 14 to 60 years old, which means that the Philippine beverage market is at mass.

Beverage Market

• According to the National Statistical CoordinationBoard, 46.58 % of the total family expenditure are usedfor food and beverage (includes consumption athome, school and work).

Family Expenses

46.58%

18.32%

16.80%

House Rental

Transportation and

Communication

Electricity, Water, Fuel

Education

Other needs

Market Demographics

• Population: 88,574,614

• Gender:– Male – 45,483,100

– Female – 44,974,100

• Age structure– 0-14 years: 35.5% (male 17,392,780/female 16,708,255)

– 15-64 years: (male 28,986,232/female 29,076,329)

– 65 years and over: 4.1% (male 1,682,485/female 2,215,602)

• Median age– total: 22.3 years

– male: 21.8 years

– female: 22.8 years

• Population growth rate - 2.04%

• Birth rate - 26.42 births/1,000 population

• Death rate - 5.15 deaths/1,000 population

• Age Group (NSO)

0 – 4 9,669,502

5 – 9 9,694,781

10 – 14 8,949,614

15 – 19 8,017,298

20 – 24 7,069,403

25 – 29 6,071,089

30 - 34 5,546,294

35 – 39 4,901,023

40 - 44 4,163,494

45 - 49 3,330,054

50 - 54 2,622,316

55 - 59 1,903,649

60 - 64 1,633,150

65 - 69 1,138,843

70 - 74 797,970

75 – 79 505,356

80 and over 490,241

Market Demographics

Market Trends

• There is a rise of health consciousness as wellas the fitness trend.

• The product’s/products’ after taste, strategicpackaging, flavor and ingredients are key salesconsiderations

• Filipino soft drinks companies go internationalby pursuing expansion

• Use of sports as marketing tool

Soft drink Brands in the Philippines

• Coca-Cola – leading soft drink in the market

• Pepsi

• Sarsi - a Sarsaparilla rootbeer originally made by Cosmos Bottling, now part of Coca-Cola

• Jaz Cola - a low-cost cola flavored beverage made by Coca-Cola

• Pop Cola - a low-cost cola flavored beverage from Cosmos

• Cheers - a low-cost citrus flavored soda from Cosmos

Soft drink Brands in the Philippines

• Royal - the first CSD in the country, made in 1922 by San Miguel Corporation, now a Coca-Cola brand

• Lift - a citrus flavored soda by Coca-Cola

• Zest-O Corporation - produces various drinks including a Fruit soda, Cola, Root beer, a calamansi-flavored soda and a dalandan-flavored soda.

• Teem - low cost citrus flavored soda popular in the 1970s

• Lemo-Lime - low cost citrus flavored soda popular in the 1970s

• RC cola - the cheapest soft drink in the market

Market Share

• As of 2008, the leading brand of

carbonated drinks is Coca – cola

with 80%; followed by Pepsi Cola

with 15%, RC Cola with 3% and

other brands with 2%.

Market Share

Coca - cola

Pepsi Cola

RC Cola

Others

SWOT Analysis

Virgin Cola’s strength, weaknesses, opport

unities and threats are as follows:

Strengths:

• The power of the brand name;

• Fierce promotion techniques; and

• Innovation through image and packaging.

Weaknesses:

• Too much dependence and emphasis on the brand name

• Incongruence between strategic and tactical levels; and

• Too reliant upon too few distribution outlets.

Opportunities:

• Diversification into new ranges of Virgin Cola products

• Increasing consumption levels of soft drinks

• The ability to gain more market share

Threats:

• Intense competition (the cola wars)

• US saturated soft drinks market

SWOT of Virgin Cola’s

Competitors

Coca Cola Pepsi RC Pop Cola

Strength1. Extensive bottling

system

2. Packaging

3. Brand Strength

1. Brand Strength

2. Effective stride in new

markets

3. Strong existing

distribution channels.

1. Low price

2. Concentrated Brand

Identity

3. Focused on Mass

Market

1. Low price

Weakness1. Health issues 1. Reliant upon line

extensions.

2. Reliant upon particular

carbonated drinks.

3. Brand dilution entrance

into non core

categories.

4. Saturation of

carbonated soft drink

segment.

1. Does not cater to

upper class market

2. Selective advertising

3. Not available in most

fast food areas

1. Does not cater to

upper class market

2. selective advertising

3. not available in most

fast food areas

4. Health issue

Coca Cola Pepsi RC Pop Cola

Opportunities1. Extensive target

market

1. Further

expansion of

market share

2. Brand is

attractive to

global partners

1. Expansion of

target market to

international

1. More bottling

systems for further

expansion into the

local market

Threats1. Other alternative

beverages

1. Strong

competition

2. Potential health

issues

1. Strong

competition

Other alternative

beverages

SWOT of Virgin Cola’s

Competitors

Virgin Cola’s Current Product

Strategy

Core Benefit:

A refreshing non alcoholic beverage.

Actual Product:– Brand Name: Virgin Cola

– Quality Level: Excellent

– Design and Packaging:

• Regular (240 mL)

– Feature: Caffeine content, dark coloring (Aspartame and caramel)

Augmented Product:

Quenching one’s thirst, energy drink

Current Brand Positioning

Virgin Cola is currently one of the cheapestcola brands being sold in the Philippine market.The image being propagated by the brand isnot wholesome especially seen in the shape ofthe bottle which was patterned after PamelaAnderson’s body.

Current Branding

The branding strategy adopted by VirginCola in its launch in the Philippines is themanufacturer’s brand strategy wherein theproducts carry the name of the company withcertain differentiating elements added orattached to the name. One example of this isVirgin Red, Virgin Blue Spirit, etc.

Current Packaging

Packaging’s primary purpose is to preserveand protect the contents of the product until itarrives in the hands of the final consumer. It hasadded use of including the brand informationsuch as the label, size, and nutritional value ofthe product, if any is possible. The focus of thepackaging is on the expansion of distribution bymeans of offering Virgin Cola in a variety ofcolors and sizes while maintaining the signatureshape of the Virgin Cola bottle.

Current Pricing Strategy

In the Philippines, Virgin Cola is under InterBevwhich is owned by Lucio Tan. InterBev in turn isunder Asia Brewery. Virgin Cola is limited to only tobusinesses owned by Lucio Tan such as thePhilippine Airlines. It has a minimal market share inthe country. It is targeted at the younger generationbut it can be consumed by different age groups. Todate, it only has one product offering in the market.

Virgin Cola Red– 240 mL

Virgin Blue Spirit – 240 mL

Channels

• Virgin is a brand whose customer franchise is so strong thatit can be applied to a vast range of businesses.

• In other countries, the Virgin brand has been applied toradio stations, record companies, retailers, airlines (such asVirgin Atlantic, Virgin Blue), mobile phonecompanies, broadband ISPs (Virgin Media), trainservices, motor vehicle sales, credit cards, loans, lifeinsurance, car and pet insurance, homeinsurance, mortgages, pensions, savings andinvestments, music festivals, recreational experiences (suchas using a sheep dog to herd a flock of sheep, and nowspace travel), network marketing businesses (e.g. VirginCosmetics), and much more.

• In the Philippines, Virgin Cola sponsors TV programs like ABSCBN’s morning talkshow “Ruffa and Ai.”

Market Research Done by the

Interbev Group

Whenever a business attempts to implement a new marketing

plan, it must first address its target market and gather relevant informationin order to insure the efficiency and differentiation of the new plan fromthe previous one.

Virgin Cola has done two aspects of market research namelyexploratory research, which tries to address problems encountered by thecompany, and descriptive research, which identifies the market potentialof the product and the target market’s characteristics and how to bestcope with the ever changing market.

However, further research will be conducted after marketpenetration to sustain the product against intense competition especiallyduring the growth and maturity stage.

Factors Influencing Consumer

Choice in the Philippines

In the decision making process, abusiness must take into considerationthe factors that may influence theconsumers’ choice. Several factorsinfluence consumer choice and theseare psychological, socio cultural,economic, and political.

Psychological

Conservatism isprevalent mindsetof the Philippinesociety and is aprime factor thataffects theconsumer’s choice.

Socio cultural

Filipino societyplaces muchimportance onfamily andreligion. It is acommunalsociety.

Economic

The retailprice of Virgincola is adaptedto the currenteconomicsituation of thecountry.

Political

New lawsregarding thepackaging anddistribution of theproducts as well asimposition ofadditional taxes.

Philippine Laws

• In the Philippines, there are certainlaws which limits the freedom of thesoft drink companies or manufacturerin the market.

R.A. No. 3720

• An act to ensure the safety and purity of foods,drugs, and cosmetics being made available to thepublic by creating the food and drug administrationwhich shall administer and enforce the lawspertaining thereto.

• Chapter VII or the Definition and Standards for Foodpromulgates regulations fixing and establishing forany food, under its common or usual name so far aspracticable, a reasonable definition and standard ofidentity, a reasonable standard of quality, and/orreasonable standards of fill of container

R.A. No. 623

• An Act to regulate the use of duly stampedor marked bottles, boxes, casks, kegs,barrels and other containers.

The Virgin Cola is subjected to this lawsince they make use of cans and bottles ascontainers of their product.

R.A. No. 6361

• An act providing for the fixing of themaximum selling price of essential articlesor commodities, creating the price controlcouncil, and for other purposes.

Section 1.(2) states that essential food andfoodstuffs including milk, soft drinks andother beverages are included.

3. Marketing

Strategies

Strategy Pyramid

Strategy

Tactics

Program

Strategy Pyramid:

The Strategy Pyramid emphasizes thepractical importance of building a solidmarketing plan structure. Most marketingplans are developed from the top-levelstrategy first.

Marketing Objective:

• The Marketing team of the Interbev

Group seeks to penetrate the Philippine

market by making the products

visible, accessible and suitable to the

Filipino taste and preference

Marketing Goal:

• The Marketing team of the Interbev

Group seeks:

– To top the Philippine market for

beverages and encourage brand shifting

to our brand. And;

– To maintain brand excellence and achieve

maximum consumer satisfaction.

– To achieve 10% market share in five

years.

Market Segmentation

Segmentation Variables Data

Demographic

Age 15-35+

Gender Male; Female

Family size 5

Family life cycle Married; Single

Income Class B and C

Income Php. 2, 045,000

Education Elementary to College

Religion Roman Catholic, Muslim

Race Asian

Nationality Filipino

Segmentation Variables Data

Psychographic

Social Class Classes A to D

Lifestyle

Behavioral

Occasions Any time

Benefits Thirst quencher

User Status First Time User

Loyalty Status Brand loyal to market leader

Readiness Stage Unaware

Target Market

• The target market of Virgin Cola in thePhilippines are Filipinos between 15-35years of age belonging to classes B and C.Secondary Market will include class D.

• Based on the Marketing demographicspresented in the beginning of thepresentation, the target market is13,017,909 Filipinos.

Computation for the Target Market

• Population = 88,574,614

• Ages 15 to 35 = 34.91%

• Classes B and C = 42.1%

• Computation

88,574,614 x 0.3491 = 30,921,398

30,921,398 x 0.4210 = 13,017,909

New Product Strategy

• For the launch of Virgin Cola, we opt to introduce

the basic product which is Virgin Red. New

flavors will be introduced after three years which

are Virgin Blue and Virgin Orange.

• Virgin Blue will be launched on a summer

because the color suggests „a refreshing and

thirst-quenching‟ feeling

• Virgin Orange, on the other hand, will be

introduced on Halloween because the color

suggest that of a pumpkin and thus is very fitting

to the event.

Repositioning

Once the market segmentation (i.e targetmarket, product definition) has been decidedupon by the company, the positioning processcan now take place. Positioning is the processof creating a product image that will stick tothe minds of the consumers relative to theother competitors in the market. It helps theconsumers identify and differentiate one brandfrom another by remembering the uniquecharacteristics of each brand.

Virgin Cola will bank on symbolicpositioning wherein it will identify itself withPhilippine society and adhere to its norms andtrends. This is the approach that worked forits competitor, Coca Cola. By managing toposition itself in line with the Filipino conceptof family, it has successfully penetrated thePhilippine market and thus takes up majorityof the Philippine market share.

The societal context that Virgin Cola has towork in is full of hurdles not only because ofintense competition but also the conservativemindset of the people. Virgin Cola may have astrong image and brand name. As stated earlier,it is one of their strengths, however, in thePhilippine context, it can be the brand’sweakness as well. It needs to position itself in asubtler manner while maintaining its trademarklook and brand name.

Repackaging

The trademark shape of the bottle will beretained. However, the label’s design wasgiven a makeover. From the plain red colorthat it used to carry, patterns and othercolors such as black and white were added.This is not only to attract the customer’sattention but also to give it a feel ofsophistication.

8 ounce 12 ounce 1.5 L

New Cover for bottles

For Plastic Bottles For Glass Bottles

Bottle Caps

New Can Designs

New Pricing Strategy

We will follow the strategy of the USbased Virgin Cola Company which is adollar less than Coke. In the Philippines, it’llbe a peso less than Coke. Psychologicalpricing is the strategy to be adoptedbecause Filipino consumers have atendency to patronize products that arecheaper even if it is only less a peso.

Suggested Retail Price

Size Coca Cola (SRP) Virgin (SRP)

8 ounce P8.00 P 7.00

12 ounce P11.00 P 10.00

1.5 P 36.00 P 35.00

Promotions

Free Taste

• Upon its re-launch, Virgin Cola would be

available in all SM Malls wherein free taste

promotion would be conducted for a week.

There would be a Press conference for the re-launchedproduct wherein press people and famous people wouldbe invited and asked for their opinion about the product(publicity).

Press Conference

Since we are planning to intensify Virgin Cola‟sappeal to the market, particularly in theprovinces, which are not yet media corrupted, we areplanning to conduct activities sponsored by VirginCola. Such would be Musicfests, Pa-BinggongBayan, Sportsfests, hosting Barrio fiestas, etc.

Sponsorships in Local Events

In relation to the previous entry, we

have decided to get an endorser

and spokesperson for the product.

She should be someone who would

serve as an epitome of the

character that Virgin Cola wants to

show the people- refreshing, pure,

desirable. And with these, we

thought of the perfect endorser for

the product- Sarah Geronimo. Just

like Virgin Cola, she is wholesome

enough to make the youth look up

to her.

Product Endorser

Mysteriousand interestingbillboards willbe put in keylocationsbefore thegrand launchof the productto arousecuriosity.

Mysterious Billboards

Other Billboard Designs:

Are you ready to

experience the

mystery within?

Women aren’t the only ones that are

virgins... forests too. Let’s all help

save them.

Anytime, anywhere,

YOU ARE ALWAYS IN..

always

extremely

Selfish

Protective

Possessive

With my

A WIFE

for my

HEART..

my thirst.

How lucky could humans be?

Suggested Tags:

• You’ll never go wrong with a Virgin.

• What else could come close? When you’ve

already got the Virgin

• No one else comes close. Virgin.

• Cola meets Virgin

• Satisfaction within. Virgin.

• Virgin cola, - kasama mo sa puyatan

• Always in- Virgin

Lively and effective TVCs will be aired in the major TVstations- ABS-CBN, GMA7, QTV11, TV5 and Studio23 particularly during noontime, when everyone wouldbe craving for a refreshing drink to quench their thirstcaused by the summer heat.

Television Commercials

• A male astronaut was

exploring Mars when a big

ugly monstrous alien

approached him. The alien

was frightening and seemed

angry. The astronaut was

scared and took a bottle of

virgin cola out of his bag and

handed it to the alien. The

alien drank it and

transformed to a very

beautiful, elegant, „virgin

like‟ woman. She smiled and

said “thank you”. Then she

walked away.

Sample 1 T.V. Commercial

• A student was having a hard time

studying his history book. He rests

for a while and drank his virgin cola.

He smiles while drinking and his

sweat disappears. (the camera will

turn black and white, light waves

cover the screen,). After drinking

his virgin cola, he opens his eyes

and sees katipuneros running

towards him. He panics and to try to

stop them from attacking him by

offering his Virgin cola. The leader

of the group tastes it and gave some

to his subordinates. At first , the

student thought he had established

peace but instead, the katipunero‟s

wanted more and ran after him.

• Sarah and John are having

their shooting for a very sweet

movie. When the kissing

scene came and John’s lips

are already very close to

Sarah’s, Sara immediately

blocked his kiss with a cold

virgin cola bottle. The camera

will focus to the Virgin Cola

bottle, then Sarah drinks and

smiles at John, stopping the

Magazine and Newspaper

case study- virgin cola 2lm

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