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MSc Marketing

Marketing Management

London School of Business and Finance

Assignment onCoca-ColaMarket

Plan for product line Extension.

Student Name: ISHTIHAR KHAN

Registration No. : M1002508

Tutor Name: Kate Walsh

Date: 07-05-2010

Words Count: 3472

Email: [email protected]


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Contents:

Exclusive summery:--------------------------------------------------------------------------------------3

Situation Analysis:------------------------------------------------------------------------------------4

Market Analysis:------------ ---------------------------------------------------------------------

4

Internal business environment:-----------------------------------------------------------------4

External business environment:----------------------------------------------------------------4

SWOT analysis:----------------------------------------------------------------------------------4

Porters Five Force:------------------------------------------------------------------------------5

Product Lifecycle:--------------------------------------------------------------------------------8

Marketing Strategy:---------------------------------------------------------------------------------------9

Target Market:----------------------------------------------------------------------------------10

Product Line Extension:-----------------------------------------------------------------------10


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Exclusive Summary:

Business Definition: The Coca-Cola Company exi t to benefit and refresh allthe touches.

(The Coca-Cola Company 1, p. 1). To achieve this goal, the Coca Cola wants to use product

line Extension in its product, especially in Coke. The Coke brand ofthe company is the basic

ofthe company, so to introduce new products in the same product will encourage the

customers fortheir satisfaction. f Coca-Cola introduces Diet Coke+ (Lemon, G tea), then the

productivity, profitability, stability and sustainability factors may broughtin Coca-Cola

market. That are discussing later.

Business Mission:

y T f t w l ...y T i pi t f pti i ppi ...y T t v l iff .

(http://www.thecoca-colacompany.com/ourcompany/mission_vision_values.html).

Acting does maintain successful until and protect our brands, particularly Coca-Cola. By

adding a Coke with Diet Coke+ (Lemon, G tea) phenomenon is thatthe people, who are

suffering from fatness and diabetes, the West has turned to use in recent years (Preville, SP1),

the concentration of new generation to avoid from the fatness and diabetes and(new vine in

old bottle) will be introduce in the world marketing. Coca-Cola will gain to achieve the

occasion of new and growing market segment.


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Situation Analysis:

Coca Cola introduced more than 400 specific productlines and brand extensions, Coca-Cola

Company, is the largest and best-known beverage manufacturer, distributor and developer of

the world (Coca-Cola Company 3, a). The company offers bottled drinks, fountain syrups for

many ofits products.

Market analysis:

The market analysis examines both the internal and external business environment. tis

importantthat Coca-Cola carefully monitor both the internal and external aspects oftheits

business, the internal and external environment and their respective influences important

characteristics in relation to the success of Coca-Cola and survivalin the soft drink industry.

Internal Business Environment:

The internal environment and its influence is that which to some extent within the company

has no control. The mostimportant attributes in the internal environmentinclude efficiency in

production, with management skills and effective communication channels.For effective

control and monitoring ofthe internal business environment, Coke must conduct ongoing

assessments ofthe business operations and willingly to allthe factors that cause inefficiencies

actin every phase of production and consumer process.

External Business Environment:

The external environment and theirinfluences are generally strong forces that affect an entire

industry and can, in fact, a whole economy. Changes in the external environment create

opportunities orthreats in the market Coca Cola has to be aware off. Fluctuations in the

economy, changes in customer needs, attitudes and values, and demographic patterns strongly


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influence the success of Coca Cola products on the market and the reception they receive

from consumers.

SWOT analysis:

SWOT stands for Strengths Weakness Opportunities Threats. SWOT analysis is a technique

thatis used heavily in many general management and marketing scenarios. SWOT consists of

examining the current activities ofthe organization, its strengths and weaknesses, and then

using this and external researches data existinclude the opportunities and risks.

Strengths:

Coca-Cola has been a complex part of world culture for a very long time. The productis the

image of over-romanticizing loaded, and this is an image many people have taken deeply to

heart. The Coca-Cola image is displayed on T-shirts, hats and memorabilia collectors. This

extremely recognizable branding is one ofthe greatest strengths ofthe Coca-Cola. "Enjoyed

more than 685 million times a day is the World of Coca-Cola as a simple but powerful

symbol ofquality and enjoyment" (Allen, 1995).

n addition, Coca-Cola bottling plantis in operation one ofits greatest strengths. t allows

them to conduct business on a globallevel, while simultaneously maintaining a local

approach. The bottling companies are locally owned and operated by independent business

people who sellthe right products ofthe Coca-Cola Company. Because Coke is no absolute

ownership ofits bottling network, its main source ofincome, the sale of concentrate to its

bottlers.

Weaknesses:

Weaknesses of each company must be minimized and well controlled to achieve effective

productivity and effectiveness in their business activities. Although domestic business as well

as many international markets are growing and thriving (volumes in Latin America by 12%),

Coca-Cola has recently reported some declines in unit case volumes in under developing


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countries where the per capita income is low. Coca-Cola on the other side effects on the

health, teeth which are an issue for health care. t can also cause permanent sugar which will

cause of diabetes. So due to the weaknesses the people are avoiding their selves from the use

of Coca-Cola.

Opportunities:

Brand recognition is the key factorin Coke's competitive position. Coca-Cola brand is also in

97% ofthe worldwide known. The main focus in recent years has been to getthe name brand

even more popular. Packaging changes have also affected sales and industry positioning, but

in general, the public tend notto be affected by new products. Coca-Cola bottling plantin

service also allows companies the advantages ofinfinite growth opportunities to take overthe

world. This strategy gives Coke the opportunity to a large geographic, diverse service area.

Threats:

Currently, the availability of Diet Coke+ (Lemon, G tea) is notintroduced by the popular

rivalry competitors, which have great name e,g. Pepsi. The soft drinkindustry is very strong,

but consumers are not necessarily married to it. Possible substitutes that continuously putthe

pressure on both Pepsi and Coke include tea, coffee, juices, milk and hot chocolate. Although

Coca-Cola and Pepsi almost 45% ofthe total beverage market control could meetthe

changing health-consciousness ofthe market have a serious influence. Of course, both Coke

and Pepsi have already diversified into these markets so thatthey have further significant

market shares and offset any losses incurred because of fluctuations in the market. The

consumeris a king is also the key threats to the industry. So consumers can easily switch to

other beverages with little effort or effect. But when Coca-Cola is introducing the productthe

consumertrend can be move to the Coca-Cola beverage, because the product will be

beneficial and health friend.


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Product Lifecycle:

(http://tutor2u.net/business/presentations/marketing/default.html)

To be able to sellthe product properly, businesses must recognize the productlifecycle ofthe

product. A typical productlife cycle has five phases:Development, Introduction, Growth,

Maturity and Decline. Coca-Cola is currently in the process of maturity, which is first and

foremost by the factthatthey occupied a large, loyal group of stable customers. n foreign

markets the Coke's advantage in this area primarily because ofits establishment strong

branding and itis now in a position to use, this area of stable profitability to supportthe

domestic Cola Wars. So in this case when Diet Coke+ (Lemon, G tea) will come to the

marketi-e the new productin the existing productin the existing market will be more

beneficial forthe development process of Coca-cola, because it will change the people taste,

the focus on the quality ofthe product will encourage the people to purchase.

CocaCola


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Marketing Strategy:

Objectives are the main thing which tries to reach the business target.

Objectives need to use SMART criteria.

The SMART can be summarized below:

Specific - the objective should specify whatis to be achieved.

Measurable - an objective should be capable of measurement.

Achievement - are you trying it?

Relevant - objectives should be relevantto the people responsible fortheir achievement.

Time Bound - objectives should be set with a time frame in the head. The periods must also

be realistic.

Objectives for Growth:

The present market boundary of Coca-Cola is wide because itis in maturity stage, but here it

will concentrate atlow cost and great satisfaction. So it willtry to use the productline

extension, which will reduce cost with great satisfaction.

Market shared objectives:

With introducing the Diet Coke+ (Lemon, G tea) the market shares of Coca-Cola will

increase from 80% (in 2010) to (infinity).

Promotional Objectives:

t willincrease availability for every one in the market.

Profitability objectives:

t willincrease on capital employed.

Objectives for Survival.

t will encourage the industry to survive in future.


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Target Market:

Situation analysis is completed, ifthe marketing objectives attend the target market. Soft

drink marketis huge market and business in the world, so to fulfilthe customers desire and

to improve capital gain, the market segmentation is important. Afterthat we take potential for

selection. A 'target market or target Audience is the market segment which a particular product is

marketed to. It is often defined by age, genderand/or socio-economic grouping. Market Targeting is

the process in which intendedactual markets are defined, analyzedand evaluated just before the

finaldecision to enter is made (http://en.wikipedia.org/wiki/Target_marke).

Coke's target marketis very satisfactory as is the variety of consumer needs, the average

person eating a healthy consciousness of Diet Coke, regular Coke drink, cherry max Coke.

There are four major ways to segment the market of Coca-Cola:

Mass marketing.

Intensive Marketing.

Marketing differentiation.

Niche Marketing.

The most obvious way, clearly differentiate Marketing methods used by Coca-Cola and

satisfaction is the range of different markets. The Diet Coke+ (Lemon, G tea) forthe diabetic

people and adults. n addition will say thatit will cover all rage of people.

Positioning:

The Company is focusing on the market segments to develop its target market. ts product

can be developed the positioning strategy. Positioning is the process ofimage creation ofthe

product, to keep in the minds of consumers in versus of other competing products.

Positioning helps customers to understand that whatthe speciality in the products is? Coca

Cola created plan for more positions thattheir products will be the greatest advantage in their

target markets. Coca Cola has positioned based on the process of positioning by a direct


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comparison and have positioned their products to benefittheirtarget audience. Most people

create the image of a product by comparing it with another product, well beyond the famous

battle between Coca-Cola and Pepsi products. Now-a-days the psychology of people is to fit

their body slim to avoid themselves from sugar mix and caffeine mix drinks. Wheneverthe

Diet Coke+ (Lemon, G tea) willintroduce, then the demand forthe product will be very high

and the market share of Coca-Cola will be increased.

Marketing mix:

Marketing mix is probably the mostimportant stage ofMarketing Plan. The marketing mix

refers to the combination ofthe four factors (price, promotion, product and place) that

make up the hub of a businesss marketing strategy.

Now we will discuss each element of marketing mix.

Price:

t can cause the supply and demand for Coca Cola. The price of Coca Cola products is one of

the mostimportant factors in the decision ofthe customerto buy. The price is becoming able

a customerto push the products to buy. Forthis reason, the pricing policy must be designed

with consumers and external factors to achieve effectiveness and stable balance between

revenue and cost, to coverthe production costs.

Pricing strategies and tactics

The pricing strategy of a company will be used to focus on the achievement ofthe marketing

plan. There are five strategies available to business:

Market skimming pricing.

Penetration pricing.

Loss leaders.

Price Points.

Discounts.


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If Coca-Cola introduces the productthen this is necessary to concentrate overthe price for

the product, e.g. ifthe product price will high then consumertrend may be move to another

side, and the new entrance willtakeover overthe market.

Promotion:

Before the Diet Coke+ (Lemon, G tea) entrance, itis important forthe company to use

promotion strategy. Promotion strategy is used to convince the customers to a new product.

Promotion is the combination of:

Personal selling.

Advertising.

Sales promotion.

Public relations.

The Coca-Cola is using this strategy forits marketing plan. Above the line activities relates to

the mainstream media:

Advertising through common media such as television, broadcasting, transport, billboards

and newspapers and magazines.

Because most ofthe targetis mostlikely to media such as television, radio and magazines are

exposed, Coca Cola has used this as the mostimportant form of support forthe extensive

range of products. Although advertising is usually very expensive, itisthe most effective way

to remember and exposing potential customers Coca-Cola products. Coca Cola also uses

below the line activities:

Such as sweepstakes, coupons and free samples.

These activities are an effective attract over people.

Product:

The companies have aboutthe products on three differentlevels:

Who think the core product?


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The core productis the phenomenon of whatthe consumeris actually buying and

what benefits it offers. According to the psychology oftoday people (to keep

themselves fit and slim) the productis more beneficial.

The product itself.

The real productis the sharing and features that deliverthe core product.

Consumers will buy the product because ofthe high standards and high quality of

Coca-Cola.

The increased product.

The increased productis the additional benefits for consumers and customer services

provided. Coca Cola provides a helpline and complaints telephone service for

customers who are not satisfied with the product orto give feedbackto the products.

Place and distribution:

Coca-Cola may be selected from fourtypes of sales strategies,intensive, selective, exclusive

and direct sales. Itis the popularity of Coca Cola product on the marketthatthe business in

the past, the method ofintensive distribution as the productis available at every outlet

possible surrender. From supermarkets at railway stations to yourlocal service shop around

the corner where you go, you'll find the Coca Cola products.

Physical Distribution Issues:

Coca Cola has a number ofissues related to the physical distribution of soft drink products

tested. The five components of physical distribution which Coca-Cola uses:

Order processing.

Warehousing.

Materials management.

Warehouse management.

Transportation.


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Coca Cola have to try to furthertheir operations more efficient channels of distribution

equilibrium.

Market research:

The new plan for marketing, the business must be dealt with in the target market and the

behaviour ofthe relevantinformation to secure a new plan for marketing. When conducting a

market research, a company must first define the problem and then gatherthe necessary

information to troubleshootthe problem. There are three types ofinformation that a company

can derive its problems.

* Exploratory research.

* Descriptive research.

*Casual Research.

Coca-Cola uses allthree types of research for solving its problems.

Factors affecting the choice of consumers:

Psychological factors: such as motivation, perception, lifestyle, personality and self concept,

learning, and attitudes affect consumer behaviourtowards a product and Coca-Cola can be

addressed this problem by introducing Diet Coke+ (Lemon, G tea) to satisfy the

psychological factors of people.

Socio cultural factors: such as culture, subculture, socio-economic status, family and

reference groups influence consumer behaviourtowards a product.

Economic factors: such Coca-Cola impacts by maintaining a low price to the price ofits

products.

Government Factors: such as the new regulations, inflation, interest rates affect all

consumer spending and choice.


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Financial Matters:

Now we will discus the financial matters in the light of following heads.

1. Financial forecasts

2. Monitoring

1. Financial forecasts:

Financial forecasts are closely related to the expected cost ofthe annual sales expected future

events and future costs.

There are five major marketing expenditures:

Research funds.

Product development costs.

Product costs.

Promotional costs

Distribution costs.

Sales and earnings forecasts are the mostlogical method of complex forces. This includes

estimates from individual sales representatives to sellthe entire business to workthe total.

These are expected costs and revenues. The combination of strategy and marketing mix, can

managementto provide the most profitable low-cost sales.

2. Monitoring:

Businesses can verify the actual distribution ofthe budget.Itis important for Coca-Cola,

because it can meetthe objectives of marketing necessary measures. There are three tools to

monitorthe Coca-Cola marketing Plan:

1. Marketing Profitability Analysis:

This analysis, look atthe cost of marketing and product profitability, sales territories,

market segments and sales people.There are three indicators to monitor profitability

of marketing, market research to sale, advertising to sale and sales representatives to


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sales. The results ofthese three tools help Coca Cola to identify emerging trends, such

as the need for another product. Comparing these results with the actual results the

company has an idea to change ifthey are.

2. Market share analysis:

Market share analysis to compare the performance of sales of Coke's business

competitors. Coca-Cola looks to increase 70% over market share. Coca-Cola changes

are ongoing and they aim to regain control ofthe market. College and high school

students living in age from a variety oftarget markets, man and woman.

3. Sales Analysis:

Sales down analysis will be suspended in orderto identify weaknesses in different

areas of strength and total sales revenue ofthe business market segment.Sellers

small retail shop in the corner ofthe main Coca-Cola products vary depending on the

supermarket. This gives maximum exposure to customers attheir convenience in their

products.

Controls:

The Committee will discuss with management, internal audit, and the independent auditors.

The Company's internal controls (with particular emphasis on the scope and performance of

the internal audit function), and discuss with the internal auditors the results ofthe internal

audit program. The Committee shall examine and discuss the Company disclosure controls

and procedures, and the quarterly evaluation ofthese controls and procedures by the Chief

Executive Officer and Chief Financial Officer. The committee examines issues related to

transactions with the person, Chairman ofthe Board (if he or she is an employee ofthe

Company) orthe Chief Executive Officer or any holder of 5% or more ofthe common stock

of companies. The Committee is to examine the authority forthe approval of such person in


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connection with transactions and, if possible, to approve such transactions before they are

entered into.

Implementation:

Implementation is the process of turning the plan into action. Implementation depends on

how people blend of business; the program supports the marketing plan organize corporate

culture and organizational structure. For further success, Coca-Cola needs to impose some

significant changes. Production must meet the demand from wholesalers and quotas. The

inventory stocks are so efficient, so you should not build a stock price and motivated

marketing requires knowledge ofthe product. The focus should be promotion and other forms

of advertising to seduce and get the maximum amount of potential exposure to the product

target market. Ensure the success of products in store, must be efficient distribution.

Marketing Organization:

The Committee shall be determined by the board, assistthe Board in discharging its

responsibilities with regard to supervising the financial affairs ofthe company.

Committee Membership:

The committee is composed of no fewerthan three members. The members ofthe Committee

of Directors shall be identified and removed by the Board. A majority ofthe members shall

constitute a quorum (minimum number required for valid meeting).

Committee powers and responsibilities:

1st The Committee will formulate a regular basis and recommend for approval ofthe Board

of Directors the financial policies ofthe company, including management ofthe financial

affairs ofthe company. The Committee for approval by the Board of Directors annual

budgets and such financial estimates are prepared, have whatitthinks is right; supervision is

on the budget and have allthe financial operations ofthe Company, then the dividend policy

ofthe Board of Directors and recommend to time. Time will reportto the Board on the


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financial position ofthe Company. All capital expenditure ofthe companies will be reviewed

by the Committee and recommended for approval ofthe Board of Directors. The Committee

may set up the other committee ofthe Board of Directors or one or more ofthe authorized

officers ofthe Company, bonds, loans, investments and guarantees up to that particular

amount or on such conditions as the Committee may, subjectto the approval ofthe Board of

Directors and to open bank accounts and designate those persons authorized to carry out

checks, notes, drafts and other orders forthe payment of money in the name ofthe company.

2nd The Committee will regularly evaluate the performance and are the authorized capital

expenditure.

3rd The Committee will also have a mandate to advise and support ofinternal or external

laws, preserve, accounting or otherissues.

4th The Committee will provide regular reports to the Board.

5th The Committee may delegate authority and according to the subcommittees.

6th The Committee reviewed periodically to evaluate new and the adequacy ofthis charter

and recommend any proposed changes to the Board for approval.

7th The Committee shall review annually its own performance.

(http://www.thecoca-colacompany.com/investors/governance/finance.html)


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References:

(The Coca-Cola Company 1, p. 1)

http://www.thecoca-colacompany.com/ourcompany/mission_vision_values.html).

(Coca-Cola Company 3, a).

(Marketing Management by K Porter).

www.thecoca-colacompany.com.

www.wikipedia.com.

http://www.thecoca-colacompany.com/investors/governance/finance.html.

(Allen, 1995).

(http://tutor2u.net/business/presentations/marketing/default.html).

(http://en.wikipedia.org/wiki/Target_marke).

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