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MAJU

REPORT ON:

CAUSES OF FAILURE OF RC COLA IN PAKISTAN AND HOW TO REVIVE ITS MARKET IN PAKISTAN

SUBITTED TO:

SIR MAZHAR ALI

COURSE:

CONSUMER BEHAVIOR

GROUP MEMBERS:

SUFYAN ALI SP08-BB-0116

SYED FARAZ HUSSAIN SHAH SP08-BB-0120

SYED FARAZ TAUHED SP08-BB-0121

TALHA AHSAN SP08-BB-0131

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First of all, We would like to say Alhamdulillah,

for giving us the strength to do this report.

Then we would like to thank our teacher

Mr. Mazhar Ali

for guiding us when we were in difficulties and giving us a chance

to show our skills. Internet, books, computers and

all that as our source to complete this report.

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TABLE OF CONTENT: Page no.

1) Introduction and history of RC Cola _______________________________ 04

2) RC Cola product line ___________________________________________ 05

3) Pakistan’s Soft drink industry ____________________________________ 05

4) SWOT analysis of Pakistan’s Soft drink industry______________________ 06

5) RC Cola in Pakistan _____________________________________________07

6) RC Cola SWOT analysis for Pakistan ________________________________07

7) Reason why RC Cola loosed market in Pakistan_______________________08

8) How to revive RC Cola in Pakistan _________________________________09

9) Ending Words _________________________________________________11

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INTRODUCTION AND HISTORY OF RC COLA:

1905: Mr. Claud Hatcher, Founder, Established the “Union Bottling Works” in Columbus, Georgia in the basement of the wholesale grocery business of his family.

1910: The first line of fruit flavored beverages was named Royal Crown and the first cola drink was called Chero-Cola.

1912: Started to manufacture a line of syrups and flavor concentrates and established a franchised system by licensing sales territories to its bottlers under trademarks of the now Chero-Cola Co.

1925: Over 300 bottlers were part of the bottling network producing Chero-Cola. 263 of these bottlers also produced the fruit flavored products under the new brand Nehi.

1928: The Company changes its name to The Nehi Corporation.

1933: Mr. Claud Hatcher died on December 31st.

1934: Chero-Cola is reformulated and the new product is named Royal Crown Cola.

1940: The Nehi Corporation is listed on the New York Stock Exchange.

1940: The Company first uses results of blind taste tests in the advertising campaign “Best by Taste Test”.

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1946:The Company began to enhance its advertising by using entertainment celebrities like Bing Crosby, Joan Crawford, and Hedy Lamarr.

1958: Company changes name for the third time to Royal Crown Cola Company.

2000: Royal Crown Cola Co. is acquired by Cadbury Schweppes.

2001: Royal Crown Cola International is acquired by Cott Corporation.

2005:Royal Crown Cola Co. commemorated its 100th Anniversary.

RC COLA PRODUCT LINE:

RC Cola has launched eight flavors till date which are:

1) RC Cola (Regular)

2) Diet RC Cola

3) Cherry RC Cola

4) RC Edge Cola

5) Rite Cola

6) RCQ

7) Royal Crown Draft Cola

8) Kick

PAKISTAN’S SOFTDRINK INDUSTRY:

Pakistan has a huge market of softdrinks. The major competitive and ruling brands of the country are Pepsi and CocaCola. 75 million cases a year for Pepsi alone. The total beverage market is about 120 million cases of which 65% per cent are Pepsi products. 20 to 22 %are Coca-Cola products and there are so many colas.

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SWOT ANALYSIS OF PAKISTAN’S SOFT DRINK INDUSTRY:

Strengths:

The soft drinks market in Pakistan enjoyed dynamic growth over the review period in both volume and current value terms. Carbonates dominate the market in both the on-trade and off-trade with the lion's share of sales. Carbonates have become part of the culture in Pakistan and multinational companies have maintained their standards over the years to provide consumers with high-quality carbonated drinks. Off-trade sales of carbonates are higher than those of the on-trade but both achieved strong growth over the review period.

Weaknesses:

Liquid concentrates and powder concentrates are both seasonal categories in the market and their sales peak in the summer in Pakistan. Both Rooh Afza and Jam-e-Shirin are traditional sandalwood drinks in Pakistan which are highly regarded by consumers. These drinks can be found in every home in Pakistan, especially in rural areas, throughout the summer and are the mainstay of liquid concentrates.

Opportunities:

The government of Pakistan has reduced excise taxes to encourage soft drinks manufacturers and importers. The government also reduced other applicable taxes to promise more profits not only for soft drinks manufacturers already in the market but also to attract potential soft drinks manufacturers to invest in Pakistan. The government also decided to tax the beverage industry on capacity of production rather than on actual production and those brave move encouraged soft drinks manufacturers to maximize production and reduce prices.

Threats:

Increasing health and hygiene awareness among Pakistanis has greatly increased sales of fruit juice products. Both the government and the media have started health awareness campaigns to make Pakistanis realize that consumption of fruit juice is as essential as eating food. Fruit juices are doing very well in both urban and rural areas. On the other hand, health and hygiene awareness has also led to increased sales of bottled water in Pakistan. Previously bottled water was targeted only at major cities where consumers are more health-conscious and aware of the

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difference between bottled water and tap water. Nowadays, health-conscious rural inhabitants also drink bottled water due to health concerns.

RC COLA IN PAKISTAN:

RC cola was a very famous drink in Pakistan. It was widely known all over the Pakistan since the time of its arrival in the sub- continent which was the 70’s having the same popularity like CocaCola and Pepsi today. RC Cola was being sued by different organizations internationally so it lowered its investment in the sub-continent and in 90’s, RC cola started to fade away due to some issues and stopped its production in Pakistan. RC Cola is currently not operating in Pakistan and if RC Cola wants to relaunch in Pakistan, it may face strong competitors like CocaCola and Pepsi are ruling the cola market here in Pakistan.

RC COLA SWOT ANALYSIS FOR PAKISTAN:

Strength:

RC Cola is the cola which is more than a 100 years old. In Pakistan the image of the brand is already been made 30 years back and it just want a good marketing strategy to recall the brand.

Weaknesses:

Low advertising budget. International Law suits.

Opportunities:

To produce more concentrative and conglomerate products drinks. The heat factor in the sub- continent. To build a brand equity.

Threats:

Very strong established competitors like Pepsi and Coke. This very fact that Royal Crown cola was faded away in the early 90’s.

REASON WHY RC COLA LOOSED ITS MARKET IN PAKISTAN?

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Pepsi Cola and Coca Cola stormed into the market. Advertising was minimal in Pakistan as compared to its competition. RC Cola was being sued by different organizations internationally so it lowered its

investment in the sub-continent. RC finally stopped production somewhere in the early 90’s.

HOW TO REVIVE RC COLA IN PAKISTAN?

POSITIONING:

RC Cola has to reposition itself here in Pakistan. As you can see in recent and older RC cola advertisements, they haven’t worked well to position as a unique brand in the minds of the customers. RC Cola will be using ‘Adventure/Thrill’ in their positioning statement, BTL activities and Advertisements. We have decided that the word ‘Adventure’ will be associated with this brand as there is no cola brand in Pakistan which claim to be adventurous. Other brands which show that they are Adventurous are Mountain Dew and Sprite 3G but they are not cola. This factor will be the point of differentiation for RC Cola.

TARGET MARKET:

The target market for RC Cola will be the youth of Pakistan as 80% of the consumers of cola products in Pakistan is youth of the age 13 to 35. It is easy to influence the youth of sub-continent as compared to western youth according to a research. The social class will be upper-lower to lower upper class.

MARKETING:

A new marketing mix will be applied on the brand:

1) Product:

Some modifications will be done with the shape of the bottle specially the regular bottle because it seems to be thin and having lower volume compared to other cola-drink bottles. Just two categories will be launched, which will be RC Cola and Diet RC Cola to make the produced

more focused. RC Cola has a unique crisp and clean taste and it’s consistent with its flavor no matter

where you buy it. It has a refreshingly great taste even if it isn’t cold.

2) Price:

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Following factors RC Cola should keep in mind while determining the pricing strategy.

Price should be set according to the product demand of public. Price should be that which gives the company maximum revenue. Price should not be too low or too high than the price competitor is charging from their

customers otherwise nobody will buy their product. Price must be keeping the view of their target market.

Incentive to Retailers will be given in the shape of:

Deep Freezers Return Tickets Free Transportation Services.

Incentive to Dealers will also be given like, The best dealer of the year is awarded with a brand new Suzuki Pickup. The second best is awarded with Motor Cycle. The third best is awarded with Return Ticket to Middle East.

RC Cola will give special offers to consumers on special occasions like Ramadan and Eid days instead of decreasing the price of the products, some special packs like Pakkora Mix, Chat Massala, or Free Drinks with Liter Bottles are offered.

3) Place:

We will use push strategy for our product by using various promotional tactics and through media. Distribution will be divided in zonal basis, which will be 5 in number. We will directly approach retailer by providing credit facility and bonus in form of incentives. We will also provide trade allowances to our distributors and retailer to further intensify usage of push strategy.

Other than these some special points are also being looked after by direct sales vehicles such hotels restaurants, public parks, big and reputed super stores etc. At Avari, Pearl continental, village, Seas magnificence etc. RC Cola directly distributes the products.

4) Promotion:

Comparitive parity method will be used in which RC Cola will be telecasted with the competition in Coca Cola and Pepsi which are its direct competitors.

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Frequency of the RC Cola ads will vary from time to time. When the season comes RC Cola will do heavy advertisement especially in Ramdan days or Eid occasions etc.

(i) BTL:

A successful BTL advertisement program can be their most effective means of increasing consumer awareness, trial, and actual product purchases in Pakistan. BTL Activites can be done in different shopping malls and crowded places.

(ii) ATL:

Newspaper: Top newspapers of the country like Dawn and Jung will be used to advertise the print ads as well as youth magazines will also be used to capture the interests of the target market. Different youth related competitions can be organized in BTL activities in which winners can be rewarded with RC Cola merchandizes.

TVC: TV commercials will be used to advertiser the brand and the frequency of ads will be greater specially on youth channels like Play TV, Aag, Mtv, G kaboom, Oxygene, etc. The theme of the first re-launching ad will be including like all the shots from the previous ads of the brand in black and white and then show youth related scenes and especially adventurous scenes as whole advertising campaign will be done on the theme of adventure.

Radio: Surveys will be conducted in which young individuals will be asked which are those radio channels which they like to listen more. Radio spots will be used to advertise on those selected radio channels.

Billboards: Billboards will be used to advertise on roads and buildings of highly dense areas and gorilla marketing will be used to directly strike the emotions of the target audience.

Online advertisement will also be used, ads will be published through all the famous social networking websites like Facebook, Orkut, Twitter, etc.

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ENDING WORDS:

Well, according to our knowledge about marketing, we conclude that RC Cola failed in Pakistan because of its poor attention given towards the ad campaign. Even in Pakistan people used to drink RC Cola and they really liked it, but it’s all about many many years ago in 1970's n 80's may be because there was no other cola at that time. When other colas came they advertised and they did it so well that people were attracted towards them. Its also about how u present it, the looks of the product. RC Cola's bottle is not appealing and the regular one specially looks so thin, it seems as if it has less drink inside, that’s why the drink has reached its decline and rejection now in Pakistan. It is possible for them to rise again through the proper attention towards the advertising and the outlook of the product. It should be appealing and beautiful, it should be trendy. That’s what it needs and right advertising at the right time can do a lot, It needs to know the important about how can we market a product in a way that it can give a fashionable and trendy impact on the people.