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Coke Tabs PLAN Coca-Cola Marketing Plan April, 2013 Connor Barrett Evan Bond Alex Hayes Lucy King Kate Zhukova Table of Contents Executive Summary..................................................................................... 2 Situational Analysis...................................................................................... 3 Internal! Analysis .................................................................................... 3 Objectives..............................................................................................3 SWOT Analysis......................................................................................4 External Analysis................................................................................... 5 Potential Projects...................................................................................7 Marketing Strategy....................................................................................... 9 Product Options and Analysis............................................................... 9 Segmentation Scheme.........................................................................10 Product Market Focus..........................................................................10 Target Market.......................................................................................10 Marketing Mix...................................................................................... 11 Market Research........................................................................................13 Implementation and Control Plan...............................................................15 Exhibits...................................................................................................... 16 Biblography................................................................................................ 21 Executive Summary In recent years, Coca Cola has lost significant market share due to changing consumer needs and a static product development. This loss in market share has also resulted in financial implications, including decreased net income. Changing consumer needs mean that Coca Cola must adapt to continue its position as a market place leader. During the next five years, Coca Cola will be implementing a new product, Coke Tabs, to target the most current and growing consumer trend: convenience. Tabs are a new product featuring tablets that dissolve in water, creating both carbonation and authentic Coca Cola brand flavors whenever or wherever a consumer chooses. Additional flavors, including Diet Coke, Fanta, Sprite, and more will also be adapted as tablets, to appeal to all of Coca Cola’s current users. Through this new product, Coca Cola will target segments desiring greater convenience, ultimately expanding its target market and overall market share. Tabs will stand out from other products because they are portable and easy to use, as well as attractive in their innovation and bright packaging. They also promote overall sustainable practices for Coca Cola and its customers, featuring recyclable and reusable containers and encourage reusable bottles, thereby eliminating plastic, cans, and waste. Coca Cola will implement this product aggressively. With one of the widest global distribution systems, Tabs will be pushed everywhere. The main target market of Tabs is 18-35 year olds with busy, active lifestyles, interested in new and trendy products. Promotions, communications, and advertising will be directed at this segment, and include popular brand ambassadors, upbeat concerts and other events, and marketing on college campuses and social media. With an aggressive five year manufacturing, distribution, and marketing plan, Tabs will be the next generation of Coca Cola beverages. 2 Situational Analysis Internal Analysis Business The Coca-Cola Company is the world’s largest beverage company with a current market capitalization of approximately $170 billion. The company produces and markets more than 500 non-alcoholic sparkling and still brands with 15 of those being billion dollar brands such as Diet Coke, Fanta, Sprite, Coca-Cola Zero, Vitamin Water, Powerade, Minute Maid, Simply, Georgia, Del Valle and most importantly Coca-Cola, the signature soft drink of the company. Through one of the largest and most efficient beverage distribution systems, the company is able to sell its products in over 200 countries. Consumers worldwide drink Coca-Cola products at a rate of 1.8 billion servings a day. The company, along with its bottling partners, has more than 700,000 system employees. Company Mission “To refresh the world, to inspire moments of optimism, to create value and make a difference.” Positioning The company positions itself within the non-alcoholic beverage segment, producing beverages that appeal to different target markets within that segment. One way the company attempts to differentiate itself from competitors with products similar to Coke such as Pepsi is through brand name recognition. In a recent report by Interbrand, Coca-Cola was viewed as the world’s most valuable brand, worth about $78 billion, while Pepsi, the company’s main competitor, was ranked #22. Coca-Cola is also percieved very well by it’s customers, compared to others in the non-alchoholic beverage market (see exhibit 1). Coca-Cola also attempts to differentiate itself by gaining customer loyalty. It does so through various promotional offers, such as Coke Rewards, so that it can retain existing customers and also appeal to potential customers in the process. While Coke’s products may be similar in taste and quality as other competitors, the company differentiates itself through building brand name recognition as well as customer loyalty. Objectives Coca-Cola states that their main objectives are as follows: • People: Encourage hard work and enthusiasm • Portfolio: Have a portfolio of brand name products that satisfy the needs and wants of consumers worldwide • Partners: Strengthen the company/customer and company/supplier relationship for the mutual benefit of both parties • Planet: Be a more eco-friendly company by reducing the environmental footprint • Profit: Consistently make a profit and attempt to increase it each year in order to maximize the long-run return of the shareholders 3 • Productivity: Be an efficient, effective and fast-moving company that responds to changing consumer wants and needs Like any corporation, Coca-Cola’s main objective is to make a profit. The rest of the said objectives (people, portfolio, partners, planet, and productivity) help to achieve this main objective and also improve the company’s image. SWOT Analysis Strengths: • The company has notable brand name products (it is able to price its products at a premium relative to generic products, higher gross profit margin than PepsiCo) • Coca-Cola has very high market share (it is the world’s largest beverage company) • They generate lots of cash flow from internal operations, which makes Coke financially flexible • The company has an extensive and well-organized global distribution network • Coca-Cola’s customers are loyal to the brand • The company has contracts with restaurants, universities, etc., which provides stable cash flows over the life of the contract • The product portfolio of Coca-Cola is very wide which results in a large customer base Weaknesses: • The company has notable brand name products (it is able to price its products at a premium relative to generic products, higher gross profit margin than PepsiCo) • Coca-Cola has very high market share (it is the world’s largest beverage company) • They generate lots of cash flow from internal operations, which makes Coke financially flexible • The company has an extensive and well-organized global distribution network • Coca-Cola’s customers are loyal to the brand • The company has contracts with restaurants, universities, etc., which provides stable cash flows over the life of the contract • The product portfolio of Coca-Cola is very wide which results in a large customer base Opportunities: • Consumers have new health needs, including natural/organic ingredients and energy drinks to support exercising habits • Demand for products supporting child nutrition are rising in popularity, creating a growing market segment • Accelerated lifestyles mean convenience/ready-to-go beverages and caffeinated beverages are in increased demand • Sustainable practices reduce waste and long term costs, and also give companies a positive public image based on eco-friendly practices • Coca Cola can expand as a distributor, which they have done in their “freestyle” machines resembling vending machines for Coca Cola products 4 Threats: • Increased health needs mean Coca-Cola is at risk for losing market share from unhealthy products • Competitors have advantages in healthy drink markets such as juices and teas • Possible health risks for diet sodas are arising, which would detract from their market share in the beverage industry • With so many substitutes in the beverage industry, consumers have the majority of purchasing power • New players are constantly entering the beverage market, meaning existing firms will have difficulties securing market share External Analysis Consumer lifestyle - There has been an increase in consumer value of smaller-sized multipacks of their favorite beverage, since they are beneficial for the “on-the-go” lifestyles of many consumers today. Consumers see themselves as needing smaller sizes of beverages, as opposed to the traditional large liter bottles.
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