SYMBIOSIS CENTRE FOR MANAGEMENT STUDIES (UG)

A Project on Marketing Plan of a new Product of Coca-Cola Company Product Name BUBBLEBUZZ
Karanpreet Singh Bindra SY-A 09020621118 Batch 2009-2012

COMPANY DESCRIPTION
EXECUTIVE SUMMARY
The following marketing plan forms the basis for the introduction of an innovative new product by the Coca-Cola Company. The analysis allows us to outline the best strategies to follow for the achievement of the companys strategic goals. Bubble Buzz will be marketed as a unique functional drink while striving to reinforce the companys status as the leader in innovation and successful product launches. Success will be reflected by a sizeable capture of market shares within this market, while strategically carrying the company up to the top spot as the market leader in the functional drinks segment of soft drinks.

Brief description of the company

The Coca-Cola Companys core undertaking is to benefit and refresh everyone it reaches. Founded in 1886, we are the worlds leading manufacturer, marketer, and distributor of non-alcoholic beverage concentrates and syrups, which are used to produce nearly 400 beverage brands that make up for our wide portfolio. Our corporate headquarters are established in Atlanta, and we are holding local operations in over 200 countries around the world. Our activities cover all sectors of the beverage industry. We are the second leading player in functional and Asian specialty drinks, while ranking number one in value for the ready-to-drink tea sector.

Situational Analysis
Brief description of the new product, & strategic role in the future position of the company Bubble Buzz will be a bottled beverage and will be positioned as the only ready-todrink Bubble Tea product available on the market. The beverage will have a green tea base with enhanced fruit flavours (passion fruit, strawberry and lime) as well as tapioca pearls .It will bring an entirely unique drinking experience to its consumers. It will present itself as a funky and unusual alternative to traditional tea while providing the great taste of authentic fruit juice in an attractive and convenient packaging. The strategic role of Bubble Buzz for the Coca-Cola Company is centered around three objectives: To stay at the forefront as the market leader in innovative product introductions and successful product launches To strengthen and satisfy the needs of the more adventurous Generation Y consumers with a new eye-catching and functional product To become the market leader in the functional drinks segment with increased market shares

INDUSTRY ANALYSIS
Consumption:
In 2010, soft drinks registered its highest off-trade value growth rate for the review period. This growth was helped by high double-digit volume sales growth in most categories as well as appreciably higher unit prices in 2010. Sports and energy drinks, bottled water, ready to drink (RTD) tea and fruit/vegetable juice all maintained bullish growth even as abundant rainfall seemed to halt the spectacular recovery of carbonates witnessed in 2009. Trends: Through the early 1960s, soft drinks were synonymous with colas in the mind of consumers. In the 1990s, however, other beverages (from bottled water to tea) became more popular. Coca-Cola and Pepsi responded by expanding their offerings through alliances (e.g. Coke & Nestea) and acquisitions (e.g. Coke & Minute Maid), but also by focusing efforts on portfolio diversification. Today, while the soft drink industry s value has increased, the volume sales of carbonated soft drinks has declined due to a large proportion of consumers who are opting for the trend towards healthier alternatives in the functional drink segment (energy drinks, milk & juice drinks, sports drinks) as well as bottled juices and water. Companies have been actively engaged in new product developments in order to counter the growing concerns about negative health impacts of high-fructose drinks, but also to increase the demand in a market where product offerings are quickly maturing . New flavour introductions and healthconscious formulations have been launched in an attempt to offset the decline in carbonated soft drink sales. The functional market is expected to show sustained growth and consumer interest in the future years as consumption shifts to trendier, healthier and more sophisticated products.

COMPETITION
Coca-Colas top competitors for the soft drinks industry are PepsiCo .Coca-Cola is leading with 43.7% of the total soft drinks market. In the functional drinks sector, PepsiCo is the current market leader with 60.5% of the market shares in 2009. Coca-Cola Co is second with 32.8%. BubbleBuzz will launch into a currently unserved subset of that market (RTD Ready-To-DrinkBubble Tea), which is until now unexisting. It is anticipated that the following brands could potentially compete with Bubble Buzz in the functional drinks market: Brisk, Lipton Iced Tea, Sobe (owned by PepsiCo), as well as Snapples and Hawaiian Punch (owned by Cadbury/Schweppes). Bubble Buzz also creates a potential situation for cannibalism with Coca-Colas very own brands of iced tea and other functional drinks. The current market for traditional Bubble Tea is fragmented, since the distribution is restricted to local outlets and selling points such as counters and small Bubble Tea shops in scattered locations. However, direct competition from these local players is not anticipated, since the marketing roll-out will initially emphasize on product awareness and both sales channels do not reach or serve the same market (retailing vs. Counter/restoration). A strong distribution system already exists with coca-cola, since partnerships and channels are already in place.

TARGET MARKET
Segment identification: RTD (Ready-to-drink) bottled Bubble Tea, to be established within the Functional Drinks sector Segment needs: The product will cater to both physiological needs (hydrating and nutritional value) and social needs (perception of a social, fun drink with a sense of belonging within peer consumer groups) Segment trends: The current trends include a shift away from junk foods and carbonated drinks, a growing interest for healthier / beneficial products for the mind and body , the trend towards the availability of on-the-go products for those with an active lifestyle, as well as the trend for personalization through customization (or for beverages, through variety-seeking in a wide introduction of flavours) Positioning strategy The only RTD bottled bubble tea available. Funky & eye-catching bottle, functional packaging, premium-priced, cool, new and unusual, unique drinking experience, aspects of play (tapioca pearls, oversized coloured straw), variety of flavours, sweet, refreshing, for hip & young people, healthier alternative to heavy-sugar drinks.

Marketing program
Product strategy
The Core
Bubble Tea beverage in a pre-bottled, ready-to-drink format.

The Actual Product

Branding: colourful, aspect of play, round shaped, prominent Bubble Buzz logo written in modern font, catchphrases such as Think outside the Bubble and Get Your Buzz. Trade name: Bubble Buzz, a Coca-Cola product Brand personality: energy, funky, cool, functional, original, funny, healthy, etc. Brand equity: Coca-Cola provides a quality, consistent, innovative and accessible soft drink reputation.

Marketing Considerations
Product life cycle: Bubble Buzz is a low-learning product. With a strong marketing campaign, sales will begin immediately and the benefits of the purchase are readily understood . Since Bubble Buzz is prone to product imitation, Coca-Colas strategy is

to broaden distribution quickly, which is currently feasible thanks to the companys high manufacturing capacity. Product class: Food & beverage- Soft Drinks- Functional Drinks Bubble Buzz follows the practice of product modification : Coca-Cola is introducing an existing beverage (bubble tea) but redefines the drink with a new, more convenient package. Bubble Tea will now become a widely available drink in multiple retailing (distribution) channels.

PRICE STRATEGY
The price strategy that will be undertaken should consider the following aspects: 1. Consumer demand 2. The product lifecycle 3. Potential substitutes

Customer Demand
Customer demand is a crucial factor which is driven by tastes, income and availability of others similar products at a different price. For a lot of consumers, value and price are highly related: the higher the price, the higher the value. Consequently, CocaColas intention to position Bubble Buzz as a unique, innovative and attractive product gives it a certain control over Bubble Buzz price. To be able to implement higher pricing though , the minimization of the non-monetary costs to customers should also be included along with awareness of the product (notably by advertising) and value (benefits) .

The product lifecycle

The company should take advantage also to the fact that the newer the product and the earlier in its lifecycle the higher the price can usually be. It ensures a high profit margin as the early adopters buy the product and the firm seeks to recoup development costs quickly and it also brings a certain prestige to the product.

Potential substitutes
Coca-Cola is constrained by the monopolistic market in which it competes. The main characteristic however is product differentiation.

PROMOTION STRATEGY
Objectives
To initiate strong awareness about the launch of Bubble Buzz throughout Generation Y (10-29 years old) consumers as well as their parents. To win market shares over our top functional drinks competitor, PepsiCo.

Message
The promotional outputs will convey the clear message that Bubble Buzz is a healthy drink for sporty and young people who simply enjoy taking care of their body and life.

Concepts
Think outside the bubble: Be Bold, Be Original, Be Different, Be Yourself. A good spirit in a good body For the out-of-the-ordinary individuals who like to challenge themselves.

Media selection
Before choosing the appropriate medias, it is important to note that Generation Y consumers only give partial attention to media. However, they can be reached through integrated programs. They are typically using more than one communication media at a time; a behaviour that is often called multitasking. This group of consumers doesnt give its full attention to one single message, but rather uses continuous partial attention to scan the media. Marketers can still communicate with Generation Y by using a variety of targeted promotional tools. Another important tactic to reach our target market is through Viral or Buzz marketing, which Coca-Cola will heavily use in this campaign (campus, contests)

Promotional Mix
Consumer oriented
Contests: Win another Bubble Buzz flavour, Uncover a secret code underneath the bottle cap and win sporting goods and electronics by logging on the website, Win a trip for the 2008 Olympics in Beijing. (Arguments: It will increase consumer purchases and encourage consumer involvement with the product). Samples: distributed in supermarkets, school/universities. Samples are a way to avoid product resistance since people are not used to find bubbles in their drinks. Arguments: It will encourage new product purchases and it represents low risk for consumers since they get it for free. They have nothing to loose by trying it. Point-of-purchase: in supermarkets (to reach the parents of generation Y). Arguments: It is also a mean to increase product trial and provides a good product visibility. Others: In subsequent years, engage in product placement in TV shows or movies.

Trade oriented
Allowances and discounts: case allowance (Arguments: The free goods approach will be used so it can encourage retailers to buy more of the product to get a certain amount for free). Cooperative advertising: to encourage retailers to buy our product and to maintain our high level of advertisement that consumers expect from Coca-Cola.

Other considerations
Scheduling of the advertising: Pulse scheduling (promotional presence year-round, but emphasized and intensified before and during summer). IMC (integrated marketing communication)

Target Audience
Intermediary: personal selling will be more often used Ultimate consumer: Coca-Cola will use more of mass media because the amount of potential buyers is large.

PLACE (DISTRIBUTION STRATEGY)

Bubble Buzz will be distributed through these channels: supermarkets, convenience stores, independent food stores, discount stores, multiple grocers, vending machines, direct sales.

SWOT ANALYSIS
STRENGHTS
Brand strength
The Coca-Cola Company is the largest manufacturer, distributor and marketer of non alcoholic beverage concentrates and syrups in the world. The Coca-Cola brand is unarguably one of the most recognizable brands in the 200 countries where it sells its products. The strong brand name is one of the bases for the companys competitive advantage on several of its core markets.

Effective strides in new markets

Coca-Cola has partnered with several companies (such as the joint venture with Nestl) in order to increase the ability to react to demands and changes in the markets of iced tea, coffee and juices. The developing markets are more complex than the carbonated soft drinks.

Strong existing distribution channels

Coca-Cola has operations worldwide and is well established in its distribution channels (such as store retailers or vending machines). Therefore, a new product launch can typically rely on the existing distribution system in order to reach the majority of its target market while requiring no major supply / delivery developments.

WEAKNESSES
Relying upon line extensions
Coca-Cola is relying on brand extensions increase sales in specific lines, particularly its long-time carbonated soft drink products. However, there is a strong risk of cannibalizing existing sales in the long term (for example, Bubble Tea might deter on sales for iced tea).

Reliant upon particular carbonated drinks

The long-time presence of Coca-Colas Coke beverage has established this particular line as a flagship product. While the core Coke products bring a solid base of sales and loyalty to the company, consumers expectations also become more and more anchored and single-lined, taking away freedom in the areas of line diversification and product modifications (taste, packaging, price).

Brand dilution
The tremendous amount of existing brands and new product being introduced by the company could diminish the value and differentiating strength of each product that is being manufactured.

Entrance into difficult non-core categories

The Coca-Cola Company is a truly global multinational business giant. While some categories of products are distributed in many areas of the globe (Coke, Powerade, etc.), geographical needs already require that these global brands are heavily adapted to their target region. Further many smaller and diversified product lines are more or less popular in one particular region over another. Therefore the process of diversifying the production and marketing each product involves costly investments. These capital requirements typically increase as the product becomes heavily focused (for example, since the Coca-Cola brand is highly recognizable worldwide , marketing a bottle of Coke in Japan would be less difficult than marketing a bottle of Qoo in that same country Qoo being a lesser-known non-carbonated drink which was one of CocaColas newest brand introduction in 1999)

Saturation of carbonated soft drink segment

Due to the countless number of brands available on the market, it becomes increasingly difficult in the soft drinks segment to innovate and create new products that genuinely stand out from their competition. And as we have seen, an analysis of the industry has shown that growth in the soft drinks market becomes difficult and challenging when the conditions and consumer trends cause a market demand that stays stagnant.

OPPORTUNITIES
New product introductions
The functional drinks market is one that particularly allows more innovation opportunities and gives greater freedom for creativity in the design, production, manufacturing, distribution, promotion and retailing choices and processes

Brand is attractive to global partners

Because of the companys size (including value, brand name and operating revenues) and wide portfolio base, Coca-Cola enjoys a strong purchasing power over its suppliers, and also attracts large partnerships with various levels of consumer reach (e.g. Burger King, movie studio promotions, sponsorship agreements, etc.). Existing brand awareness also provides an international playing field for powerful marketing strategies

THREATS
Strong competition
Coca-Cola is competing in a global market that is characterized by an oligopoly between several (but few in numbers) competitors. The fight for market shares and sales in crowded markets becomes a complex one.

Potential health issues

The current trend of consumer and consumers groups awareness towards goods and services is both beneficial and threatening for companies in the food and beverages industry. Over the last few years, concerns over health issues have risen in the media through an expanded and ever-growing network of knowledge outputs (journals, TV channels, internet and so on). The move of the younger generation towards a healthier lifestyle calls for careful planning and decision-making in new product developments. Large companies can also easily become the target of consumers apprehension.

Free trade
In an era of globalization, large international competitors can come out with comparative advantages (the constant fight to remain the first mover and market leader in a long-term spectrum). Issues arise when dealing with price competition and economic growth. Trade organizations are also faced with public pressure which can disrupt operations in one or more areas of the company.

Pricing strategy (Other constraints)

The first possible constraint would be the regulations on pricing. Another constraint would be that Coca-Cola must not set a price that is too high because competitors will be attracted by potential profits and will follow by a lower price. After having taken all the important factors into consideration, two price-level fixing approaches seem appropriate.

1. Profit-oriented approach: Target profit

One of the central objectives of this project being to become the market leader in functional drinks, Coca-Cola is willing to stay among the top competitors, if not becoming the greater, by achieving a certain target profit. This could be obtained by establish a price that will largely cover variable and fixed costs while bringing tremendous profits.

2. Competition-approach: Above market

Competitors and potential substitute prices can also be part of the strategy. Having a higher price could make customers aware of the additional benefits and the higher quality of Bubble Buzz.

Promotion Strategy (other considerations)

Product life cycle of BubbleBuzz
Bubble buzz is at its Introduction stage; we thus must inform consumers in an effort to increase their level of awareness. Awareness is our primary promotional objective. Then the following months after the launch of Bubble Buzz , in its Growth stage, CocaColawill have to persuade the consumer to buy the product, to gain preference and to solidify the distribution.

Product Characteristics:
Complexity: Bubble Buzz is more sophisticated than already existing functional and soft drinks. Consumers can eat and drink it which has never been experienced before. Unlike most functional drinks, it also requires a straw. Understanding and familiarity is different when compared with other comparable drinks. We should thus use a little bit more of personal selling to retailers, give more sample, and create advertising on how to use bubble buzz than with other brands from the company. Risk: there is no financial, social or physical risk associated with Bubble Buzz thus Personal selling is less needed. Ancillary Services: No support or service are required after the sale; refer customers to the website or free 1-800 for any questions or comments.

Stage of Buying Decision

Our target consumer are at the pre-purchase stage: advertising is more helpful at this stage then personal selling because advertising informs the potential customer of the existence of the product and the seller, but in this case the seller is already well known. Channel Strategy For Intermediary: Push strategy, in order to gain retailers cooperation in ordering and stocking the product. For Ultimate consumer: Pull strategy: We want to direct our promotional mix at ultimate consumers in order to encourage them to ask retailer for the product.

Justifications for advertising selections

-TV: channels for teenagers and for young adults: MTV, V Music, VH1 Arguments: TV communicates with sight, sound and motion, which is needed for BubbleBuzz. It is the only media that can reach large population in India. Coca-Cola has the budget to cover the high costs of this media. -Radio: 92.7 FM, 93.5 FM Arguments: Radio is an already segmented medium. There are over 325 radio stations in India. The average University or college student is a surprisingly heavy radio listener and spends more time during the day listening to radio than watching network television. -Magazines: We should take advantage of the fact that magazines have become a very specialized medium. . Good colour production is also an advantage that creates strong images which is the purpose of Coca-Cola with its Bubble Buzz brand. Each magazines readers often represent a unique profile. -Internet : Online advertising is similar to print advertising in that it offers a visual message. It also has additional advantages, it can also use the audio and video capabilities. As we are targeting our ads to young outgoing people, sound and movement may attract more attention from viewers and has the unique feature of being interactive. Interactive media would offer Coca-Cola the opportunity to reach younger consumers who have developed a preference for online communication.

Conclusion
Based on the aforementioned analysis, Bubble Buzz appears to be a profitable and innovative product with a strong outlook for market share presence and segment growth opportunity. Upon implementation of the marketing plan, the Coca-Cola Company will regain increased market shares and claim its targeted situational position of market leader in the functional drinks segment as well as keeping its long-standing consumer recognition for innovative and successful product launches in diversified markets.