1. Marketing Plan for BURST!
By:
Molly Cooper
Taylor Jacobs
Kenneth Subler
Kathy Daugherty
2. As a product development team for the Coca-Cola Company, we
are producing a new 100% Organic Juice beverage, BURST!
First, we will review Coca-Cola’s mission statement and
corporate objectives; look over their current brands and product lines;
evaluate their general marketing strategies; and discuss the
competitive environment and market shares.
Coca-Cola’s Mission (1)
• To refresh the world….
• To inspire moments of optimism and happiness…
• To create value and make a difference.
Coca-Cola’s mission statement is simple yet powerful. The mission
statement is not only focused on now but for the future into the year
2020. To get the full picture you have to dig into the company’s values
and objectives. By refreshing the world, their goal for every product is
to be number one or at least number two worldwide. To inspire
moments of optimism and happiness, they want people to feel good
about drinking their beverages so they work hard to insure they have
a variety of beverages for every taste. To create value and make a
difference, they promote healthy living, sports activities, and
environmental issues like water stewardship, energy efficiency and
climate protection.
Coca-Cola’s Objectives (1)
Coca-Cola strives to use their formidable assets—brands,
financial strength, unrivaled distribution system, global reach, and a
3. strong commitment by their management and associates worldwide—
to achieve long-term sustainable growth. Their vision for sustainable
growth includes the following:
• People: Being a great place to work where people are inspired to
be the best they can be.
• Portfolio: Bringing to the world a portfolio of beverage brands that
anticipates and satisfies people’s desires and needs.
In 2011, Coca-Cola launched more than 500 new products,
introduced Del Valle (their 15th
brand), placed 2.2 million new
pieces of cold drink equipment in the marketplace, introduced the
Coca-Cola Freestyle (the innovative new fountain dispenser that
delivers more than 125 branded beverage choices), and their brand
and oxygen of their business, Coca-Cola, grew more than 3% for
the 2011, adding nearly 350 million incremental unit cases. (2)
• Partners: Nurturing a winning network of partners and building
mutual loyalty.
Working with their partners they have increased immediate
consumption beverages by 4% through enhanced in-store
activations and additional cold drink equipment. (2)
Coca-Cola helped small traditional retailers in Latin America with a
new retail design initiative. (2)
4. Innovations, such as, the PlantBottle and the Coca-Cola Freestyle
has helped generate greater sales and velocity for their partners.
(2)
• Planet: Being a responsible global citizen that makes a difference.
The Coca-Cola System (3)
Coca-Cola established the $31 million Japan Reconstruction Fund to
support relief and rebuilding efforts in the wake of the tragic
earthquake and tsunami. (2)
5. The Company partnered with World Wildlife Fund to launch Arctic
Home, a bold campaign to help protect polar bear habitat. The
Company has committed $2 million to the effort and will match
consumer donations up to $1 million. (2)
PlantBottle packaging is available in 16 markets, and more than 7
billion PlantBottle packages have been shipped in 2011. (4)
• Profit: Maximizing return to shareowners while being mindful of
our overall responsibilities.
In 2011, increased sparkling volume 4% and still volume 8%, sold
26.7 billion unit cases, earning $46.5 billion in revenues, and
increased operating income by $1.7 billion to $10.2 billion. (2)
• Productivity: Managing our people, time and money for greatest
effectiveness.
In 2011, the Company successfully completed a four-year
productivity program, realizing annualized savings of more than
$500 million. (2)
Current Brands and Products
With a portfolio of more than 3,500 beverages, from diet and
regular sparkling beverages to still beverages such as 100 percent fruit
juices and fruit drinks, waters, sports and energy drinks, teas and
coffees, and milk-and-soy based beverages, their variety span the
globe.
8. Other
General Marketing Strategies
Target Market: The target market for Coca-Cola does not focus on one
specific age or gender; it looks at a full range of people from young
children to senior citizens. America grew up on Coca-Cola and as the
American public has changed its needs for beverages, the Coca-Cola
Company has changed the way it markets its products. Coca-Cola
produces sparkling beverages (Coke, Sprite, Barq’s Root Beer, etc…)
which targets people that throw house parties, offices, bars,
restaurants; any place that people are present. Also, Coca-Cola
produces still beverages (waters, juices, ready-to-drink tea, sports
drinks, etc….), the target market for these types of beverages are
health enthusiast, young people, people with active lifestyles, and non-
sparkling beverage drinking people.
Growth: The flagship products, Coca-Cola, Diet Coke, and Sprite are
the cash cow; they are continually growing and are worth over $11
billion and rising. The rising stars are waters, energy and healthy
beverages. To increase company growth, they plan to release twenty
9. products a month. Due to the ever growing health kick of society both
sparkling and still beverages will rise in sales.
Competitive Environment and Market Shares
The main competitors in the relevant market for the new product we
are considering are:
• PepsiCo.
• Dr. Pepper Snapple Group/Cadbury Schweppes (5)
The market shares of each company:
• Coca-Cola Company 42.8%
• PepsiCo. 31.1%
• Dr. Pepper Snapple Group/Cadbury Schweppes 15.0% (5)
More specifically, in the health and wellness soft drink sector, which
includes diet, functional, organic and natural healthy beverages, Coca-
Cola has a 44% global market share. (6)
Since we want to produce a 100% organic juice beverage there needs
to be further analysis of each of the competitors most health
conscience beverages:
PepsiCo: Naked Juice Position: Good health
Dr. Pepper and Snapple Group: Snapple Position: “The Best Stuff
On Earth”
Coca-Cola: Honest Tea Position: Truly Healthy Organic
10. Both the Naked Juice and Honest Tea products are the closest to being
truly healthy. Snapple on the other hand, says on the bottle “all
natural” yet the ingredients are still from concentrate and the sugars
are very high.
Next, we analyzed the product needs for the target markets of Coca-
Cola. We determined there is a need for more organic healthy juice
drinks. Consumers want a product that is natural in vitamins and
minerals. There is also a need for clean, untouched products,
specifically, organic. More and more consumers are realizing the
affects of pesticides and other chemicals that are used on food.
As for pure healthy drinks the only beverages in Coca-Cola’s lineup are
Fuze (which comes in 13 different flavors), it’s a non-carbonated juice
drink enriched with vitamins. (7) Another beverage is Odwalla. This
type of beverage is all natural in its ingredients and has vitamins,
antioxidants, and proteins plus there are 26 flavors. This product is
not 100% organic.
Coca-Cola needs to dive head first in the production of more healthy
organic beverages. There is an entire target market out there that will
be very welcoming to a new organic product.
11. SWOT
ANALYSIS
Weaknesses
Health Issues
Low Profile Brands
Opportunities
Acquisition of Competitors
Global Expansion
Creation of New Products
Technology
Strengths
• Global Presence
• Strong Advertising
• Brand Loyalty
• Financially Strong
• Training and Development
Threats
• Consumer Shifts to Value
Products
• Increased Competition
• Water Quality and Quantity
• Fluctuation in Foreign
Currency
• Legal and Regulatory
12. SWOT ANALYSIS OF COCA-COLA COMPANY
A SWOT analysis is a tool for auditing an organization and its
environment. It is the first stage of planning and helps marketers to
focus on key issues. SWOT stands for strengths and weaknesses,
which are internal factors and opportunities and threats, which are
external factors. The following is the SWOT analysis of The Coca-Cola
Company.
Strengths:
Global Presence: Coca-Cola has strong brand recognition across the
globe. Their products are sold in over 200 countries and there are
more than 1.7 billion servings sold per day. This can be accredited to
its willingness to enter into international business and investments in
new product development. Changes have become necessary in light of
the public’s rapidly changing tastes and needs. Coca-Cola and its
marketing team is trying to reach those emerging and developing
countries, such as, Russia, China, India, Mexico, Brazil, and Turkey.
By using their marketing strategies they those countries have had
significant growth in 2011 and are continually growing.
Strong Advertising and Brand Loyalty: Coca-Cola has more than 500
brands and 3,500 beverage products including sparkling drinks and
still beverages such as, water, juices and juice drinks, teas, coffees,
sports drinks and energy drinks. Their branding is extremely
recognizable among consumers. They advertise with logos and
promos shown on t-shirts, hats, and collectible memorabilia. The
company has also invested in advertising campaigns with the services
of celebrities. Through their advertising strategies, Coca-Cola has
13. been able to connect with their consumers. The consumers brand
loyalty is shown by them accepting and being apart of something so
big and unifying.
Financially Strong: According to Fortune’s 500 2011 Most Profitable
Companies, Coca-Cola ranked 13 with $11.8 billion just in profits. The
money they earn is substantially better than most beverage
companies, and with that money, they put back into their own
company so that they can improve their business. Being financially
strong allows for a company to maintain and improve their brands plus
develop new products which Coca-Cola continues to for future success.
Training and Development: Coca-Cola focuses on the quality of their
company first and when the quality is fine tuned then the profits will
grow. One of the many things that quality entails is training and
development of employees. Strength of its management teams and
worldwide employees enables the firm to become the world’s largest
beverage company. Coca-Cola wants to inspire and motivate their
staff to achieve company’s goals by offering them an environment for
creative thinking and exploration, professional development and
interpersonal relationships.
Weaknesses:
Health Issues: One weakness that has been greatly publicized is the
health issues that surround some of their products. It is known that a
popular product like, Coke, is not very beneficial to your body and your
health. Some of the effects that are related to having ingredients such
as, caffeine, high-fructose corn syrup, sugar, and acid are numerous.
14. One of the effects is linked to the large amounts of sugar in a can of
soda. Sugar can be related to high stress levels, worsen diabetic
situations and cause weight gain. Along with sugar is the genetically
altered sugar, high-fructose corn syrup. This can also cause obesity,
diabetes and build up in the bloodstream. Another ingredient that
causes problems is caffeine. Caffeine can constrict arteries and veins
plus is can boost heart rates. Lastly, acid added to soft drinks
contributes to the probability of tooth decay because of the reaction it
has with the calcium in teeth and it can be dangerous for those with a
pre-existing stomach ulcer. With today’s constant shift to health
products, some products could possible loose customers. This new
focus on weight and health could be a problem for the products that
are labeled detrimental to your health.
Low Profile Brands: Coca-Cola has many brands and products that are
very popular, such as, Coke and Sprite, but this company has over 500
brands. Most of these brands are unknown because of their low profile
and non-existent advertising. To overcome this weakness the
company needs to promote more of their brands and in turn profits will
continue to grow or they can chose to eliminate those brands that are
under performers.
Opportunities:
Acquisition of Competitors: There are many competitors in the
beverage industry. Since Coca-Cola is financially strong they are able
to buy out some of these competitors. In the past, Coca-Cola has
acquired countless drink brands, such as, Minute Maid, Barq’s,
Odwalla, and Fuze Beverage, and they continue to do so. This is an
15. easy way to turn the competitors profit into their own profit. By
buying their competitors, this allows Coca-Cola to closely monitor
consumer trends and adapt to them quickly and the company will
remain at the forefront of the beverage innovation in the long term.
Global Expansion: Coca-Cola is known well throughout 90% of the
world population today and they would like to reach brand recognition
at 100%. With all their brands they need to continue to widen the gap
between them and their competitors by globally expanding. There are
still many opportunities for Coca-Cola to reach other countries and to
sell to other markets.
Creation of New Products: The trend of health conscious minds can
lead to an opportunity to create new products that help promote
healthy lifestyles. Coca-Cola has the innovation and resources to
come up with many different items that will satisfy those consumers
who are in need of healthy drinks. The market is there for these types
of drinks all Coca-Cola has to do is come up with a solid marketing
plan.
Technology: The advancement of technology, such as, computers,
mobile phones, as ways to communicate can strengthen Coca-Cola’s
advertising and media channels to reach more consumers. There are
so many consumers that rely on their computers and mobile phones
throughout their days and this is a great opportunity for the company
to promote their brands. One example is for Coca-Cola to advertise on
Facebook because there are so many people that spend their time on
that particular website.
16. Threats:
Consumer Shifts to Value Products: With the unreliable economy many
consumers are looking for value products. Price is a very important
aspect of products for the consumer. Coca-Cola has a variety of
premium still beverages and consumers across the industry are
turning to value. Retailers are asking Coca-Cola to lower their prices
but they won’t give in because if they allow one retailer to lower then
others would want them to do the same and this would lead to more
fierce competition on price.
Word-of-Mouth: Word-of-mouth could be considered both strength
and a weakness. While many people have good things to say, there
are many individuals who are against a product. Word-of-mouth
unfortunately is something that is very hard to control. While people
will have their opinions, companies have to try and sway their negative
views.
Increased Competition: One of the major competitors of Coca-Cola is
Pepsi. Coca-Cola needs to be aware and mindful that Pepsi doesn’t
grow to be a more successful drink. In addition to Pepsi, another
competitor is Dr. Pepper and Snapple Group. This company sells
sparkling and still beverages also. Therefore, Coca-Cola needs to be
analyzing the markets in the world today and the consumers who
make up those markets and feed into their needs and wants.
Water Quality and Quantity: Water is the main ingredient in most of
all the company’s products. In today’s world water is a limited natural
resource that is facing challenges from overexploitation, increasing
17. pollution and poor management. These issues pose a threat for
staying a successful company. If water becomes limited then Coca-
Cola may incur increasing production costs or face capacity constraints
which could adversely affect t its profitability in the long run.
Fluctuation in Foreign Currency: Coca-Cola uses 72 functional
currencies in addition to the U.S. dollar to earn revenue, pay
expenses, own assets and incur liabilities. The financial statements
are presented in U.S. dollars also so they must translate revenues,
income and expenses, as well as assets and liabilities, into U.S. dollars
at exchange rates. Therefore, increases or decreases in the value of
the U.S dollar against other major currencies affect the company’s
profitability.
Legal and Regulatory: Cola-Cola has a few legal issues they are
currently negotiating. One of these issues is a grievance filed in June
2011 with the U.S. Securities and Exchange Commission (SEC) by the
Campaign to Stop Killer Coke; it requests the SEC examine violations
that include tax evasion and the cheating of Mexican workers of due
compensation. If Coca-Cola decides to make a 100% organic juice
beverage then they will have to follow the strict USDA guidelines for
using organic foods.
• Organic farming systems rely on ecologically based practices such
as cultural and biological pest management, exclusion of all
synthetic chemicals, antibiotics, and hormones in crop and
livestock production.
18. Product Concept
Before we came up with our concept statement we produced a
concept test questionnaire and asked 40 random people. The
following is the concept test:
Concept Test
Product Description
The beverage production company, Coca-Cola, is considering the
development and introduction of a new 100% organic vitamin fruit
juice. The fruit that will be used in the drink will be 100% organic
which means that each of the fruits will have a higher levels of
nutrients, they will not be treated with synthetic chemical pesticides,
the flavor and color of the fruits will be better than conventional fruit,
irradiation will not be used on the fruits, and each of the fruits will not
be genetically modified. Each type of fruit drink will contain a multiple
of vitamins that is good for your health. These vitamins will vary
depending on the type of fruit that is in the drink.
19. 1. Are you familiar with the Coca-Cola Company?
A. 38 People said yes
B. 2 people said they have heard, but they cannot stand the
company
2. Would you like it if Coca-Cola were to bring a new drink out on the
market?
A. 38 said yes
B. 2 said no
3. Do you prefer to drink juices over carbonated beverages?
A. 23 said yes
B. 15 said no
C. 1 person said they only drink Tea and coffee
D. 1 person said they don’t care as long as it tastes good.
4. Do you prefer organic fruit or conventional fruit?
A. 31 prefer conventional
B. 8 said organic
C. 1 person doesn’t care as long as it taste good
5. Which fruit juice would you buy?
A. Kiwi (12)
B. Mango (9)
C. Pomegranate (5)
D. Passion fruit (14)
6. Have you ever purchased an organic beverage?
A. 12 said yes
B. 26 said no
20. C. 2 said they don’t know
7. Does price affect your decision on buying a beverage?
A. 32 said yes
B. 8 said no
8. Does the fact that organic beverages are healthier for you affect
your decision to buy?
A. 15 said yes
B. 25 said no
9. If you saw a 100% organic vitamin fruit juice made by Coca-Cola in
the store would you be intrigued to buy it?
A. 30 said yes
B. 10 said no
10. Does advertising influence your choice of brand when shopping?
A. 27 said yes
B. 13 said no
11. If you were sent a coupon to buy this new drink by Coca-Cola
would you pass up the opportunity?
A. 21 said yes
B. 17 said no
C. 2 said as long it was free
12. What is your age?
A. (2) 16; (5) 17; (3)18; (4) 20; (3)21; (2) 22; (1) 23; (1) 25;
(5) 26; (2) 27; (1) 28; (2) 29; (1) 30; (1) 32; (1)35; (1)36;
(1)44; (1) 55; (1) 57; (1)63; (1)65;
21. Product Concept Statement
We are going to be producing a 100% organic Passion Fruit juice
beverage that will provide consumers with the vitamins they need for
the day. The vitamins that will be in the 100% organic Passion Fruit
beverage will be:
• Foliates (B9 vitamins), are essential for the production of red
blood cells and for the nervous system. They also are the
essential for unborn baby’s nervous system.
• Niacin (vitamin B3), helps your body metabolize fats and
carbohydrates. It also helps your nervous system function,
digestive system and skin.
• Riboflavin (B2), keeps mucous membranes healthy and also
helps your body metabolize carbohydrates and amino acids; also
supports reproduction.
• Vitamin B6, helps the body metabolize amino and fatty acids, is
also is the creation or red blood cells and antibodies. It helps
support normal nerve function.
In addition to the Passion fruit flavor we will be adding additional
fruit flavor juice beverages. With each different fruit flavor juice there
will be a variety of vitamins included.
Target Market
We are targeting both male and female consumers. We decided
to focus on the target market of people who are pregnant, dieters,
sport enthusiasts, people who are health conscious, people with young
children, and people with a high active lifestyle; between the ages of
16-45. Based on the concept test, we will be testing the product in
Miami, Shelby, and Darke counties of Ohio. The test will be for six
22. months then we will expand to the whole state of Ohio. The beginning
of the second year we will expand even further to the whole United
States.
Packaging
The 100% organic fruit juice will have the brand name, BURST!
We, as a team, choose BURST! because it contains natural fruit and
vitamins plus when consumers drink it they will get a natural burst of
energy. The beverage will be contained in twenty ounce bottles
because they are easy to carry and compared to competitors organic
beverages ours gives you more for your money. The bottle will have a
logo design plus the nutrition information located on it.
23.
24. Distribution
In the beginning, BURST! will be distributed in a test market of
three counties in Ohio, Darke, Miami, and Shelby. The test will run for
three months and then the product will be distributed to the entire
state of Ohio for three months. For the last six months of the first
year the product will be brought to the thirteen states of the Midwest.
After the first year then the product will be distributed to the entire
United States.
The most efficient channel of distribution will be through the
producer (Coca-Cola) to the wholesalers then to the retailers and
finally to the consumers.
Producer
Wholesaler
s
Retailers
25. The product will be distributed to several types of outlets, such
as, convenience stores, supermarkets, superstores, gas stations,
gyms, cafés, and health food stores. Trucks will be the main
transportation for the distribution to these outlets.
For consumer retail, BURST! will be sold by individual bottles and
there will be cases of a quantity of 50 that will be sold to the
wholesalers and retailers.
Promotion
Coca-Cola’s promotion objectives are to encourage product trial
by offering free trial and offering coupons. Also, the company wants
to stimulate demand by informing potential customers about BURST!
and the benefits it can provide.
Pull Promotions
Advertisement/Coupons:
In promoting our product we will have print ads in four popular
magazines, Parents Magazine, Women’s Health Magazine, Men’s
Health Magazine, and Weightwatchers Magazine. The ads will consist
of coupons that will be able to be used to purchase BURST! The first
coupon will offer a free sample of BURST! and this will only be in the
magazine for three months. The second coupon that will be issued will
be buy one get one free and it will be printed in months four through
six. The third coupon that will be printed will be available between the
months seven through twelve. It will consist of .50 cents off one
bottle. In addition to advertisement coupons there will be coupons
available on Coca-Cola’s website and a Facebook page will be made to
26. promote BURST! by allowing Facebook fans to “like” the 100% organic
fruit juice beverage. Both of these coupons will offer .50 cents off one
bottle. To offer more coupons in year two will depend on how sales for
the product goes in year one.
Costs of Print Advertisements:
1-3 Months: Full Page/2 color = $2,665.00 * 4 magazines =
$10,660.00
3-6 Months: Full Page/2 color = $2,665.00 * 4 magazines =
$10,660.00
6-9 Months: Full Page/2 color = $2,665.00 * 4 magazines =
$10,660.00
10-12 Months: Full Page/2 color = $2,665.00 * 4 magazines =
$10,660.00
Cost of Electronic Coupons:
Coca-cola website coupon = FREE
Facebook coupon = FREE
27. Point-of-Purchase:
During the three months of the marketing test Coca-Cola will
have displays at Target, Meijer, and Wal-Mart. These displays will be
refrigerated 12 cu.ft. display cases. (8) This a great way for
consumers to be able to grab and go with a cool refreshing BURST!
After the three month market test Coca-Cola will only have the
displays located in Wal-Marts across the United States.
These units will cost $1,151.00 a piece. Months 4-6 they will be
placed in Ohio Wal-Marts, months 7-12 they will be placed in the Wal-
Marts located in the thirteen states of the Midwest, and in year two the
units will be placed in the remaining Wal-Marts across the United
States.
Push Promotions
Buying Allowance:
Coca-Cola will be giving a buying allowance during both years to
Wal-Mart, Target and Meijer. The stores will receive $10.00 for each
case they buy. This promotion will give an incentive to the retailers
while promoting the product.
28. Advertising Media
Print Advertisement
Our print ad will convey the message that our product is 100%
natural and that it contains only organic fruit and also natural sugars.
With the ad we wanted to attract the target market of health
enthusiast and consumers who enjoy 100% organic beverages.
29.
30. Commercial
The commercial will focus on a person that is trying to pursue a
healthier lifestyle. We focused on getting the message across that
BURST! is a very easy was to get the nutrition you need. Many people
today are trying to better themselves and are looking for ways to
achieve that and BURST! is one of them.
Video is at: http://www.youtube.com/watch?v=KnFQqqGg5hs
Pricing
Our pricing strategy is to introduce our product to the market
using penetration pricing. We wanted to make it affordable for our
consumers since it is organic. Organic products today are slightly
higher priced than non-organic products due to the way producers
have to handle organic items. BURST! will be sold to wholesalers and
retailers for $1.20. The percentage markup will be as follows:
30/1.50 = 20%
Our price compared to competitors is lower and the size of the
container is bigger. We wanted to penetrate the market and gain a
large market share quickly by pricing below the competitors.
Another reason for pricing our product lower is because based on
the concept test that was given 80% of the respondents said pricing
affects their decision on buying beverages. We want consumers to
buy our product so taking this answer into consideration was a major
factor in our pricing strategy.
31. Forecasts of Sales Revenue and Marketing Costs
In our first year of sales our total revenue was $27,750,916.92
and our marketing costs was $28,660,883.38. That left us with a loss
of -$909,966.46. This loss can be explained by the costs of display
cases that needed to be bought for our product to be displayed in the
Wal-Marts of the test markets, Ohio, and the thirteen states of the
Midwest.
In our second year of sales our total revenue was
$222,296,787.36 and our marketing costs came to $52,739,641.71.
That left us with a gain of $169,557,145.65. This gain can be
explained by the company not offering coupons for the whole year and
we were offering our product to the United States instead of a certain
geographical area.
Global Marketing Potential
Organic items are very popular in society so this will be a great
opportunity to expand into the global market. Juice and waters are
more popular because of they are more beneficial than soda.
Additionally, “going green” is a big issue among the world and with our
PlantBottle being made from recycled products and it is also recyclable
this concept will be a big seller to consumers in other countries.
Sources:
