Ce diaporama a bien été signalé.
Nous utilisons votre profil LinkedIn et vos données d’activité pour vous proposer des publicités personnalisées et pertinentes. Vous pouvez changer vos préférences de publicités à tout moment.

Marketing report contuing improvements lala

169 vues

Publié le

  • Soyez le premier à commenter

  • Soyez le premier à aimer ceci

Marketing report contuing improvements lala

  1. 1. A Marketing Report For The Soft Drinks Industry With A Comparison Between Coca-Cola And Vimto. Word Count (not including references, tables and figures): 3028 By Alex Kaitiff Newcastle University, StudentNumber: 120021824 Module Code: MKT2000, ModuleLeader: Paul Naughton
  2. 2. Alex Kaitiff StudentNumber:120021824 Contents Introduction and Methodology PEST Analysis Microeconomic Environment Analysis of Macro and Micro Factors Internal Analysis of Coca-Cola and Vimto Opportunities and Threats in the External Environment Strategic Recommendations for Coca-Cola and Vimto Evidence Analysis Figures, Notes and References
  3. 3. Alex Kaitiff StudentNumber:120021824
  4. 4. Alex Kaitiff StudentNumber:120021824 Introduction Global Marketinginvolves conceptualizingandconveyinga productor service worldwide by targetingan international audience. Thisreportwill examinethe macroeconomicandmicroeconomicfactorsimpactinguponthe Soft Drinksindustryandhowthese factorsleadmarketerstodevise suitable global strategiestoachieve corporate goals. SoftDrinks is an oligopolisticmarket,withCoca-ColaandPepsi having large market share,whilstotherbrands holdsmallerproportionsof the market,orare part of large firms’ conglomerates.Companiesmustprovide value tocustomerstogainregularsales. Methodology Thisreportis dividedinto 4sections,withinwhichseveral marketingframeworkswill be used. Firstly, thisreportwill identify importantfactorswithinthe macroeconomicandmicroeconomic environmentwhichinfluence industryperformance. The macroeconomicandmicroeconomicfactors are intrinsicallylinked,with the macroeconomicfactorsoutlinedimpacting the microeconomic environment. Then,there will be ananalysisof howthese factors, togetherwith the state of the competitive environment,incorporatingimpactsof customers,competitors,suppliersandintermediaries,will influencecompanies’strategies. Next,acomparative analysisof mytwochosencompanies,Coca-ColaandVimto, utilisingthe SWOT framework,will be compiled.Thus,strategiesformychosencompanieswill be identified. The final sectionof the reportwill consistof recommendationsforeachcompanytoprogress in the global marketplace.The assembledresearchandinformation,inadditiontothe resulting analysiswill formthe basisof the recommendations.
  5. 5. Alex Kaitiff StudentNumber:120021824 PEST Analysis The PEST analysisis usedtoanalyse the external macroeconomicfactors affectinganindustryand companieswithinit(Baines etal,2011). It establishes the potential factors whichcouldhinderoraid softdrinks companies.The extenttowhichcompanieswithin anindustryare affected differs, dependentonthe size of businessesandtheirinfrastructure,and alsothe marketsubsectionthey target. Recently,the mostprominentmacroeconomicfactorimpacting the softdrinksindustryis healthy living.Businessesnowtrytoappeal to health-consciouscustomers profitably,causingcompaniesto change tactics and abide bynewlaws promotinghealthierlifestyles.Conversely,technologywill contribute verysparsely tothe welfare andattractivenessof the industry. PEST Political-Legal  20% taxation proposedon sugared soft drinks. Increasedtax leadstolowerdemand for sugarydrinks. Customersmay searchfor alternatives.  Import Laws. Some countrieshave strictimportlaws, whichmay limitthe quantityof productsimportedormay increase transparencyof sensitivecompany information.  Sugar contentscrutiny from FDA and FTC. Increasedverificationof sugarcontent claimsthat portraya companyas health-conscious.  Caffeine limitonSoft Drinks. Highlycaffeinatedsoftdrinksmay sufferareduction indemand.More applicable tothe energydrinksmarket. Economic  Consumerincomesrising. More purchasingpowerforbranded softdrinks.  Risingstandards of living. More interestinluxury,brandedsoft drinks.  Continuedurbanisation. Easieraccess to softdrinksdistributors: supermarketsand convenience stores.  DevelopingeconomiesinmostBRIC nations (Brazil,Russia,India,China), seeingstronggrowthpatterns,except Russia.  Africaneconomiesgrowingdue to wealthof natural resources.  Asianeconomiescontinue strong growth(especiallySingapore).
  6. 6. Alex Kaitiff StudentNumber:120021824  Latin Americanhouseholdwealth increase.  IMF lowersMiddle Eastgrowth forecastsas oil pricesremainweak(1).  MediacensorshipinMiddle East (2).  Poorgrowth of Australianeconomy (3).  PoorRussianeconomy (4). Socio-Cultural  Increasedconcern over healthy lifestyle. Leadsto a reductionindemandfor sugarydrinks,butan increase in demandforhealthieralternatives.  Australian obesitycrisis. Measuresputin place to reduce soft drinksconsumption.  Social mediausedfor promotion. Easieraccess forcustomersto interact withproducts,to give feedbackandto expressopinionswhichmayinfluence consumerbehaviour.  Environmental focus on packaging. Increaseduse of recyclable packaging, such as PET. Technological  Research and Developmentinto environmentally-friendly technologies. Companies heavilyinvestinginnew technologiestoappeal to environmentally-consciousconsumers. Table 1.1: A table toshowa PEST analysisof the external environment.
  7. 7. Alex Kaitiff StudentNumber:120021824 MicroeconomicEnvironment The microeconomicfactorsimpacting the SoftDrinksIndustrycanbe separatedintoTrendsand IndustryProfitabilityfactors.Analysingthesefactors enablesmarketerstodecipherhow easyand profitable it’ll be toenterthe market. They understandthe competition’sstrength,wherethe power liesinthe supplychain,andthe trendswithinthe market,resultingfromthe macroeconomicfactors present. Customer/Markettrends Industry Profitability  Increaseddemandforhealthiersoft drinks.  Increasedpurchasingpowerin developingnations.  Newfounduse of alternative sweeteners.  Range of package sizesnowavailable.  Increaseduse of PET bottles.  Supermarketsandconvenience stores are maindistributionnetworks.  Promotionnowprovidingpersonal value.  Extensive competitionleadingtomulti- mediapromotion,includingsocial media.  Mobile consumption.  Celebrityculture.  Power ofBuyers. Bargainingpowerof retailersdepends on size of the brand. Retailers’ abilitytobackwardsintegrate isimportant. Customershave loyaltytoestablished brands.  Threat of Substitutes. No switchingcosts. Healthylivingtrendleadscustomersto re-assesssoftdrinksconsumption. Table 1.2: Micro analysisof the performance environment.
  8. 8. Alex Kaitiff StudentNumber:120021824 Porters-5-ForcesFramework Porter’s-5-ForcesFramework broadensthe conceptof the competitive environment,enabling managersto findpotential competition, avoidingmarketingmyopia(Bainesetal,2011). Competitioncomprises productsandservices whichwouldmeetthe same customerneedasa said product(See Figure 1.1). Summary of Porters-5-ForcesMain points. Power ofBuyers (intermediaries). Large retailers’ orderquantities give thembargainingpower,butit’slessenedforbigbrands, because of customers’ brandloyalty.Regarding Coca-Cola,buyerpowerislow because the customer pullsCoca-Colathroughthe supplychain. Theydemand Coca-Cola,andtherefore,retailersmust adhere toCoca-Cola’sprice,more sothan Vimto.RegardingVimto,retailershave lotsof buyer power,due tothe smallerbrand andavailabilityof similarsubstitutes.Conversely, Coca-Cola’ssecret recipe meansthere’snodirectsubstitute.Manyretailers,likeTesco,canbackwardsintegrate to create theirown-brandversions,enablingthema higherprofitmargin.However,the largerbrands’ brand powermean thatcustomerswon’tsettle forown-brandgoodsandwantbrandswithwhich they’ve developedarelationship. Threat of Substitutes. There’smanyotherbeverage typesto quenchyourthirst,the needsatisfiedby drinking, suchas water.The threat of substitutesis heightenedbythe non-existence of switchingcostsbetween drinks. One can quite simplymove to differentproductswithlittle hassle,rendering maintaining brand loyaltyandstrongcustomerrelationshipsapriorityinthe industry. There’snowa real impetusonhealthyeating,andcustomers demandhealthieralternativesto theirfavourite beverages.Therefore, Coca-ColaandVimtomustproduce productstosatisfy customers’newfounddesire forhealthiersoftdrinks.Coca-Colahave alreadyattemptedtoappeal to health-consciouscustomers,bycreatingCoca-ColaLife andpurchasingInnocentSmoothie.Vimto have adaptedto the healthtrendbyproducingthe “StrawberryStill Drink”,andcouldbe moving towardshealthieroptionsin future. Industry Rivalry. The Soft Drinksindustryisoligopolistic. Firmsare heavilycommittedtopromotionand communication. Theyuse these tools toprotecttheirpositionwithinthe marketandtocontinually interactwithcustomers.Theyaimtoconvince customers thattheirofferingprovidesmore value than theircompetitors’.Customersstruggle todistinguish Coca-ColafromPepsi,therefore promotionandcommunication are essential incustomers’purchasingdecision.The largest competitorswithinthe marketutilise similarpromotionstrategies,suchas heavyadvertisingand acquisitionsof smallerbrandstocementtheirstrongposition.Thishasledto intense rivalry. Extensive promotion mustbe continued,asitcouldleadtoa largerdisparitybetween the brandsif promotionwasreducedbyone firm.
  9. 9. Alex Kaitiff StudentNumber:120021824 Analysisof macro and micro factors. Havingidentifiedthe macroeconomicfactorsand competitive andmarkettrendsresultingfrom them,the reportshall analyse these elements. The proposed20% tax on softdrinks hinderscustomers’purchasingpower.Theymaytherefore re- considertopurchase cheaper,healthieroptions.Thistransitioniseasyasthere’snoswitchingcost. The tax will affectcompanieswithweakerbrandvalue.Theymustraise prices, thereforedecreasing demandor acceptlowerprofitmargins. Therefore,it’s difficultforsmall firmstoenterthe market. In developingmarkets,customersnowpreferbrandedgoods,due totheirincreasedincome. Therefore,taxesmaynothinderdemand.The tax will make sugary drinkslessattractive toretailers, the maindistributionnetwork, whosemarginswill be reduced.Therefore,theymayconcentrate on own-brandgoods,if theycan efficientlybackwardsintegrate,forthe bestprofitmargin. Strong distributioncapabilitiesare aKSF(a) inthismarket. However, brandpowerisimportantand customersmaypull certainbrandsthroughthe supplychain.Tax will increase alternative sweeteners’popularity,likeStevia,alreadyusedinAsia. Its0% sugar rendersit exemptfromthe tax. Therefore,it’sattractive forsoftdrinksmanufacturersand couldbe usedtotarget health-conscious customers. The FDA and FTC,organisationswhichprotectcustomers andpreventanti-competitivepractices, are now hinderingsoftdrinksfirms,whodeceitfullyuse false healthclaimstoentice sales,by ratifyingall claims before theirapproval tobe putinthe publicdomain,hinderingsalesfor companieswhodishonestlytrytogain sales. Furthermore,acaffeine limitisbeing introducedon softdrinks.Whilstthisislikelyto have a greaterimpacton energydrinks,companiesmustavoidmarketingmyopiaandappreciate thatthis may leadtoreductionindemandforenergydrinks, thusanincrease insoftdrinks’demand. Intermsof the world’seconomies, Brazil,IndiaandChinacontinue tosee strongeconomic growth,and therefore couldbe anattractive propositionfor anysoftdrinkscompany.However, Russiaisthreatenedbyrecessionandprovidesaless attractive optionforinvestment.ManyAfrican nations,particularlyNigeriaandSouthAfrica provide huge growthopportunitiesforthe softdrinks market,withNigeriaforecasttoexperience $40 billiongrowth within12years(5). InAsia,Singapore and Indonesiaprovide the strongestmarketoutsideChina.GermanyandBelgiumare the largest Europeansoftdrinksmarkets withaverage figuresof 299 litrespercapita,comparedwith3rd place Switzerland’s266 litrespercapita(6). LatinAmericafaresthe best,with softdrinkssalesmore than double the worldaverage. Australia’s obesitycrisisencourages anincrease insoftdrinks’pricesto deterdemand. Therefore,LatinAmericaandAfricawill provide the bestgrowthopportunities,as well asBrazil,IndiaandChina. In termsof socio-cultural factors,the largestisthe impetusonhealth andwellbeing.Adapting productsto thiswill be a KSF in the industry. There’sbeenmany modificationstoingredientsand package sizestosatisfy health-conscious,active customers.Ingredientsnow include exotic superfruits withhealth benefits.Forexample,Vimto hasrecently releasedtayberryandelderflower- flavouredproductsinBrazil.It’sclear,especiallyin developingcountries,thatfreshnessand nutritional value is desired (7).Tosatisfy on-the-gocustomers,there’s more convenience stores where one can purchase a range of package sizestosuittheirneeds,suchassingle small bottles. However,largermultipacksare afeature inlarge citiesaroundthe globe due tothe rise of supermarketsandthereforethe trend of weeklyshopping.Toprovide additionalvalue,softdrinks manufacturersinChinahave startedtoadd extravolume totheirbottlesforthe same price,moving from500ml to 600ml bottles (8).There’salsoahuge focuson the environment,especiallyin developingnations.Customersnowadaystake actiontoreduce theircarbonfootprint. Thishasled to an increase indemandforrecyclable packaging,andsustainabilityinitiatives. It’sclearthatmore customersare willingtospendhighersumsof moneyonenvironmentally-friendlyproducts. Therefore,companies have beguntoutilise completelyrecyclable PETbottles (9), amaterial whichis growinginpopularity, toattract environmentally-consciouscustomers,.
  10. 10. Alex Kaitiff StudentNumber:120021824 Healthygoods’demand isenhancedbyincessant advertising.Recently,thisadvertising has extendedtothe exponentially growingmarketof social media(10). In thismedium, customersandrespectedfigures influence consumerpatternsdue tothe ease of contact withthe target market.Customers are influenced bycelebritiesandthus,these valuedviews encourage healthierlifestyles,leadingtoreductionsinsugary drinkconsumption.Due tothe increase insocial media,marketinghasbecome increasinglypersonal,andproductsare now often designedtoappeal to specificindividuals.Forexample,Coca-Colahave utilisednamesand characteristicsontheirbottlesintheir “Share a Coke”campaign. Theiraimisto make theirglobal brand personal tothe customerto create memoriesandhappiness (11).Thisenablesthemto improve theirrelationshipandaidbrandloyaltyascustomersfeel asense of cohesionwithinthe brand as a result. Fig2.4: A diagramto showthe rise in popularityof PET.
  11. 11. Alex Kaitiff StudentNumber:120021824 Internal Analysis. The report will nowfocusonan internal analysisof the companies.Here,therewillbe abrief outline of the workingsof eachcompany, inorderto identifythe strengthsandweaknessesof Coca- Colaand Vimto,thusleadingtoa SWOTanalysis,amethodologyusedtounderstandafirm’s strategicposition (Bainesetal.,2011). Coca-Cola. Coca-Colaisthe worldwide leaderwithinthe softdrinksindustry.Theirheadquartersare situated inGeorgia,US andtheirrevenue isover£30 billion (12). Coca-Cola’semployeesexceed130,000, and are spreadin all cornersof the globe.Theyowna vast array of brands,spanningbottledwaterstocolacarbonates.Theirmainrival isPepsiCo. Coca-Cola was originallyusedformedicinal purposeswhenitwasfirstintroducedbyDr.JohnPembertonin 1886 and wentonto become the mostpowerful softdrinksbrandworldwide,atitle whichthey retaintoday. Figure 1.2: A diagram to show Coke’srevenue streams by continent. Assetsand Competenciesorlack of. Unique Brand:Founded1886. Brand associations:associationsof sugary,sweetdrinkwithfew healthbenefits. Veryhighbrandvalue. SCA(a):LargestSoftDrinksManufacturer,25.9% marketshare (13). USP: Unique brandwithtop secretrecipe. NPD:renownedforreleasingnew,innovative,in-demandproducts. Market leaderingrowingmarkets. SCA:Huge Distributionnetworkthroughmost retailers. Table 2.1: A table toshowCoca-Cola’sassetsandcompetencies.
  12. 12. Alex Kaitiff StudentNumber:120021824 Coca-ColaStrengths and Weaknesses. Strengths Weaknesses  Unprecedentedbrandrecognition in manycountries.  Huge financial strength givesscope for strategicfit.  Huge marketingcampaignsand capabilities.  Heavyreliance oncarbonates.  Bad brand image fromhighsugar carbonates,beingthe face of the Coca- Colabrand. Table 2.2: A table toshow Coca-Cola’sinternal strengthsandweaknesses. Vimto Vimtois a smallerbrand,ownedbyNicholsPLC, originally usedformedicinal purposes. It’safruity softdrinkavailable incordial andfizzyvarieties. Theyhave presence inmostEuropeancountries,but theirmostnotable revenue streamisinthe Middle East,duringRamadan. Their2011 revenue was upwardsof £23 million (14),witharound27 employees(15). It’savailableincansor bottles,both large and small.Theypredominantlytargetthe youngergenerationandhave now proliferatedtheir productrange to include newflavours,suchasVimtoCherry,appealingtocustomershungryfornew products. UK salesof the Vimto brandincreasedby4.5% on last year. Meanwhile,Vimtocordial salestoits keyMiddle Eastmarketsincreasedby12% on the back of strong in-countrydemandforthe brand (16). Assetsand competenciesoflack of. Unique Brand:Rich heritage,introducedin1908. The company:OwnedbyNicholsPLC. Brand associations:fruityflavouredjuice drinkaimedmainlyatchildren. Strongalliance withCoca-Colabottlers. Huge presence inthe ‘younger’segmentof the market. NPD:Tappingintohealthtrends. Distributedthroughmostretailers. Relativelysmall insoftdrinksindustry. SCA:Massive influenceinthe Middle Eastdue to sugarytaste for Ramadan. Table 2.3: A table toshowVimto’sassetsandcompetencies.
  13. 13. Alex Kaitiff StudentNumber:120021824 Vimto Strengthsand Weaknesses. Strengths Weaknesses  Large productproliferation (17).  AujanCoca-Colawill alsobe the licensed manufacturerof Vimtoin the Middle East (18).  Large presence inMiddle-East(19).  Highlysugareddrinkandreputation may be affectedbyhealthtrend.  Heavyreliance onRamadanfor Gulf sales.  Relativelysmall brandinhugely competitivemarketrequiringhuge marketingcampaigns –lowerscope for strategicfit. Table 2.4: A table toshowVimto’sstrengthsand weaknesses.
  14. 14. Alex Kaitiff StudentNumber:120021824 Opportunitiesand threats withinthe Industry. Companieswithinthe softdrinksindustryare susceptible tomanyexternal factorswhichimpact upontheirfuture strategies.Some of thesetrendswill have apositive potential impact,whereas otherswill have anegative impact.It’sforthisreasonthatcompaniesmustavoidmarketingmyopia at all costs and shouldinvestinin-depthresearchtoascertainthe opportunitiesandthreatsthatare applicable totheirownorganisation,sotheycandevise strategiestotake advantage of the opportunitiesorcreate contingencyplanstodeal withpotential threats. Opportunities Threats  Growingeconomies (LatinAmericaand Africaholdshuge potential).  Localise the flavours.  Recyclinginitiative.  Vendingmachinesforon-the-go consumption.  Exoticsuperfruit-flavouredbeverages forecastto performwell.  Partnershipswithcompaniesheavily involvedincertainsegmentsof the market.  Use Stevia.  Focuson non-carbonates.  Use of functional ingredients.  Social mediaexposure/partnershipto attract youth.  Purchase of healthybrands.  Legislation (taxesandgovernment controls).  Healthtrend.  Substitute products (Rise of energy drinks).  Economicfrailtyand lack of disposable income.  New,healthyalternatives.  Mediaagainstsugary drinks. (Ownbrandsupermarketdecidingto stock brandedgoods,leadingtoprice war, badimage for Coca-Colaand reducedprofits). Table 3.1: A table toshowthe opportunitiesandthreatswithinthe softdrinksindustry.
  15. 15. Alex Kaitiff StudentNumber:120021824 Strategic Recommendationsfor Coca-Colaand Vimto. Both companies mustfollowstrategieswhichare feasibleforthe size of theirbusinessalongside theirstrengthsandweaknesses.Theymusttake intoaccount the competitiveenvironmentwhich surroundsthemandthe external factorswhichare present. Theymustbe aware of the heterogeneityacrossglobal markets,andthe threatsandopportunitiesthatare synonymouswith them. Bothfirms mustbe equallywillingtoadapttheirproductsto specificmarketsasto standardizingtheirofferingsthroughoutthe globe. Thiswillthenenable acompanytoutilise a strategicfit, the degree towhichan organizationismatching it’sresourcesandcapabilitieswiththe opportunitiesinthe externalenvironment,togainanSCA. To gain thisadvantage,theyshouldfind keyareasof theirbusinessthattheycanperformbetterthantheircompetitorsandcommunicate thisto theirtargetmarket. Withinthe SoftDrinksIndustry,there are manyKeySuccessFactorsthat mustbe considered, whichhave beenidentifiedthroughout thisreport.Appealingtothe health- consciousconsumerwill surmounttoa huge boostto businesses.Use of environmentally-friendly packagingand distributionmethodsisanother keytosuccess. Coca-Cola Vimto  Acquisitionof foreignbottlingplants.  Purchase of healthydrinkingbrands.  Increaseduse of vendingmachinesin largercitiesforon-the-gocustomers.  Continueduse of exoticfruits.  Use Steviainall drinks.  FocusmarketingonAfricaand Latin America.  Reduce marketinginAustralia/USto retaincapital.  Focuson health.  Focuson superfruits (image of fruity beverage alreadysecured).  Vimtoshouldfurtherenhance their grasp on the Middle-Easternmarket.  JointVenture withAujanBottling company. Table 3.2: Table showingpotential strategiestoundertakeforCoke andVimto. Businessesmustbe cautiousof marketingmyopiaasthiscouldleadtoseriousdisadvantages.They mustselectstrategiesthatare applicable totheirbusinessandalsotothe external environment. Vimto From the informationassembledwithinthe report,the mostprofitable projectforVimtowouldbe to expandfurtherintothe Middle-Eastbytakingona jointventure withAujanIndustries,alarge bottlingplantwithwhomtheyalreadylicensetoproduce theirproductsinthe Middle East.By changingto a JointVenture,Vimtowill be able tobenefitfromAujan’sexpertise andknowledge withinthe Middle Easternmarket,whichwill helpthemtopenetrate intothismarketthroughout the year,rather thanmainlyduringRamadan. Theycan reduce transportationcostsas a large proportionof theirrevenue comesfromthe Middle-East.Thus,theycanuse thisbottlingcompany to facilitate salesintheirmostprofitablemarket. Theyalreadyhave anSCA due tobrand loyalty duringRamadan.Therefore,itwouldbe wise totryto attaina similarlevel of demandthroughout the year to increase theirprofits. Itwill be cheaperthanmarketingtoanew segment,asit’seasier to retainthanattain customers. The softdrinksindustryisalsosovastand dominatedbyhuge playersthata niche strategyseemsmore applicable. Theyshouldmaintain astandardisationpolicy, as the sweettaste appealstothe target market,butdue to the increase inhealthconscious consumers,achange to a low-caloriesweetenerisappropriate.Theyshouldalsouse superfruitsto satisfythose lookingforproductswithfunctional benefits.Therefore,the use of exoticfruitswillbe applicable. Usage of PETpackagingwill enhance Vimto’senvironmentally-friendlyimage. It’s importantto note the pooreconomicsituationinthe Middle Eastcurrently,due toreducingoil
  16. 16. Alex Kaitiff StudentNumber:120021824 prices.However, oil isascarce commodity,thus will increase invaluesoon. Theyshoulduse a marketskimmingpricingtechnique,asquality isvaluedoverprice.Due tothe widespread censorshipof media,andawarenessof Vimtointhe Middle East, short-termnon-price promotions wouldbe suitable. Thisniche strategywithfocusonanalreadyloyal targetmarketisa strong strategicfitfor Vimto. A strategicmisfitforVimtowouldbe toconcentrate salesonAustralia,due to theirpooreconomicgrowthand huge obesitycrisis. Coca-Cola For Coca-Cola,arecommendedstrategywouldbe anacquisitionof the patenttoutilise Stevia withinsoftdrinks,asthe healthtrendwasthe biggestfactordiscussed. ThiswouldgivethemanSCA withinthe market,asit wouldappeal to customers’ desireforhealthysoftdrinks.Theyhave huge financial reservesand itwouldtherefore give astrategicfit,giventhe potentiallong-termbenefits. It shouldbe standardisedonall theirbeveragesdue tothe worldwide healthtrend andthe non- existence of legalitiesandcultural boundariesthatitwouldperpetrate.The use of Steviawouldhelp Coca-Colato avoidthe 20% tax on sugaredbeverages,increasingtheirprofits. However,due totheirworldwideappeal,Coca-Colawill have tolocalisetheiradvertisingineach countryto appeal to customersassome countrieshave differentresponse ratesforeachtype of promotion. Steviawouldallow them amarketskimmingstrategyastheirproductisunique. By owningthe patentforStevia,itwill help Coca-Colasheditsreputationaspurelyasugarydrink.This will helpappeal tohealth-consciouscustomers.However,Coca-Cola’sbrandimage hasbeenbuiltup for years,andit may be hard to remove byjustchangingan ingredient.Therefore,itwill require huge investmentinpromotionandsome time toconvince customersof anew-lookbrand. Furthermore,due tothe use of a completelynew sweetener,there will be anelementof strategic uncertaintyanddue to the immediacyandpotentialimpactof the utilisationof Steviaworldwide, thisisa huge change for Coca-Colainternally,thusthe strategymustbe monitoredandanalysed continuallytocheckit’ssuccess.A strategicmisfitforCoca-Colawouldbe tolicense theirproductin China.Thiswouldreduce theirlevel of control andjeopardisetheirsecretrecipe whichtheirbrandis builton.Furthermore,the Chinese couldmanipulate the recipe andpotentiallydamage Coca-Cola’s brand image. Evidence analysis. The researchundertakenhasanalysedtrendsinall cornersof the globe,enablingastrong indicationof the mainfactorsimpactinguponthe industryworldwide.Mostof the research however,hasbeenderivedfrom“Euromonitor”.Whilstasingle source of informationisnever completelyaccurate,it’simportanttounderstandthat“Euromonitor”isan exceedinglyreliable source of information,trustedbysome of the mostrenownedorganisationstoprovide accurate information.However,somearticlesusedasthe basisof thisresearchprojecthave indeedbeen professionalopinionsfromEuromonitor,ratherthanfactual reports.Therefore, it’spossiblethat some of the factsportrayed withinthe reportare somewhatskewed. Moreover,the datacollected fromcompanywebsitesmay be ratherbiasedandnewsarticlesare mostlyopinion-based. Nevertheless, thisreportis asfactuallyaccurate as possible inprovidinginformationandrelevant recommendationsto bothCoca-ColaandVimto,giventhe resourcesavailable.
  17. 17. Alex Kaitiff StudentNumber:120021824
  18. 18. Alex Kaitiff StudentNumber:120021824 Figure 1.1: A figure to show the Porter’s-5-Forces framework toanalyse the competitive environment Industry Rivalry Some largecompetitors in the industry.Uselots of promotionand communication. Market segmentation often used to provide many products to different sections ofthe market. Intense rivalry between the biggestplayers in the market, and also thosewith almostidentical product offerings. Similar marketing mixes lead to more intense competition Threat of New Entrants Large impetus onhealthy living small competition may beableto penetratethemarket witha product offering that benefits consumers’ health. Relatively lowentry barriers No legislation in placepreventing new firms entering themarket No switching costnor capital requirement Increasing product competitionwith very similar products. Coca-Cola maintain strong market position. Potentialentrants leads to lower prices and profitability. Do the new entrants haveaccess tobetter raw mats, largepool oflow costlabour, govt subsidies etc Power ofBuyers(intermediaries) Depends on sizeof brand incomparison tobuyer. As Coca-Cola is a largebrand,thebuyer has little power. Conversely,Vimto is a much smallerbrand and thus, buyer power is higher Larger retailers canbackwards integrate, but only for smaller brands Threat of Substitutes Several substitutes Other beverages satisfy the same need Low switching cost Impetus on healthy living leads to more potential competition providing healthy alternatives Power ofsuppliers Suppliers have little power. Theyall use same ingredients or methods, Judgedmainlyon price. Large companies drive down price and therefore the profit ofthe supplier. No switchingcost andmanysubstitutes. Suppliers must provide the lowest price possible
  19. 19. Alex Kaitiff StudentNumber:120021824 Notes (a) SCA = Strategic Competitive Advantage KSF = Key Success Factor References Baines,P.,Fill,C.andPage,K.(2011). Marketing:UnitedKingdom: OxfordUniversityPress,USA. The Coca-ColaCo in Health and Wellness(World) Last updated:8th July2014 (Accessed:18th November2014) http://www.portal.euromonitor.com/portal/analysis/tab Soft Drinks in Russia IndustryOverview|19 Sep2014 (Accessed:21st November2014) http://www.portal.euromonitor.com/portal/analysis/tab Soft Drinks in Brazil IndustryOverview|28 Jul 2014 (Accessed:1st December2014) http://www.portal.euromonitor.com/portal/analysis/tab Soft Drinks in India IndustryOverview|01 Jul 2014 (Accessed:2nd December2014) http://www.portal.euromonitor.com/portal/analysis/tab Soft Drinks in Indonesia IndustryOverview|21 May 2014 (Accessed:19th December2014) http://www.portal.euromonitor.com/portal/analysis/tab Singapore : Soft Drinks inSingapore Industry Overview| 01 Sep 2014 (Accessed:20th December2014) http://www.portal.euromonitor.com/portal/analysis/tab Soft Drinks in the US IndustryOverview|27 May 2014 (Accessed:22nd December2014) http://www.portal.euromonitor.com/portal/analysis/tab Soft Drinks in Australia IndustryOverview|03 Apr2014 (Accessed:2nd January2015) http://www.portal.euromonitor.com/portal/analysis/tab
  20. 20. Alex Kaitiff StudentNumber:120021824 . (1) Bouyamourn.A, IMFlowers Middle East growth forecasts as oil prices remainweak http://www.thenational.ae/business/economy/imf-lowers-middle-east-growth-forecasts-as-oil- prices-remain-weak Last Updated:20th January 2015 (Accessed:3rdFebruary2015) (2) Asfour,R. Fightingcensorshipin the Middle East is nothingnew - but the battlegroundhas changed, http://www.theguardian.com/world/she-said/2014/oct/19/fighting-censorship-in-the- middle-east-is-nothing-new-but-the-battleground-has-changed Last updated:19th October2014 (Accessed:3rdFebruary2015) (3) Naidu-Ghelani,R. 'All roads lead' to a weakerAustralian dollar, http://www.bbc.co.uk/news/business-31143229 Last updated:6th February2015 (Accessed:15th February 2015) (4) Ivshina.Oand Boldyrev.O,Russia'seconomicturmoil:Nightmare or opportunity? http://www.bbc.co.uk/news/business-31060346 Last Updated:5th February2015 (Accessed:25th February2015) (5) Lee,H. Africa’s Soft Drinks Market: A Rough Diamond http://www.portal.euromonitor.com/portal/analysis/tab Last updated:12 Dec 2014 (Accessed:18th December2014) (6) A GlassHalf Full:The Case for Soft Drinks inWesternEurope http://www.portal.euromonitor.com/portal/analysis/tab Last updated:08 Apr2014 (Accessed:12th December2014) (7) Soft Drinks in Latin America: Keepinga Global Bright Spot Bright http://www.portal.euromonitor.com/portal/analysis/tab Last updated:30 Jan 2014 (Accessed:19th December2014)
  21. 21. Alex Kaitiff StudentNumber:120021824 (8) Soft Drinks in China https://www.euromonitor.com/passport Last updated:06 Jun2014 (Accessed:28th December2014) (9) http://www.napcor.com/PET/whatispet.html (Accessed:29th December2014) (10) Power to the Consumer:How Web TechnologyIs InfluencingBehaviour http://www.portal.euromonitor.com/portal/analysis/tab Last updated:12 Feb2009 (Accessed:18th January2015) (11) http://www.coca-cola.co.uk/share-a-coke/share-a-coke.html (Accessed:15th January2015) (12) Team,T., Coca-Cola Earnings Preview:CurrencyHeadwindsCould More Than Offset Positive Price MixIn The U.S. http://www.forbes.com/sites/greatspeculations/2015/02/09/coca-cola-earnings-preview- currency-headwinds-could-more-than-offset-positive-price-mix-in-the-u-s/ Last Updated:9th February2015 (Accessed:1st March 2015) (13) http://www.statista.com/topics/1392/coca-cola-mpany/ (Accessed:25th February2015) (14) http://outsource-uk.blogspot.co.uk/2012/05/malibu-and-vimto-strike-deals-with.htm (Accessed:24th February2015) (15)http://www.manta.com/ic/mt607sk/gb/vimto-ltd?ftoggle-frontend-prod- on=abTests.engagement.claim_drivers_c&utm_expid=82789632- 35.5hBunVVLRam7e9B6_xvwKA.4&utm_referrer=http%3A%2F%2Fwww.google.co.uk%2Furl %3Fsa%3Dt%26rct%3Dj%26q%3D%26esrc%3Ds%26source%3Dweb%26cd%3D44%26ved%3 D0CDMQFjADOCg%26url%3Dhttp%253A%252F%252Fwww.manta.com%252Fic%252Fmt607 sk%252Fgb%252Fvimto- ltd%26ei%3DYEf3VP6qOYuR7AaSjYCYCw%26usg%3DAFQjCNGt9UeUPQR1iWD2Tlmi_2Hz79P t-Q (Accessed:25th February2015) (16)Frost,R., Vimto providesfizzfor Nichols http://www.insidermedia.com/insider/north-west/134908-vimto-provides-fizz- nichols?utm_source=northwest_newsletter&utm_medium=top_story_article&utm_campaig n=northwest_news_tracker Last updated:5th March 2015 (Accessed:8th March 2015) (17) http://www.vimtointernational.com/products.aspx (Accessed:28thJanuary2015)
  22. 22. Alex Kaitiff StudentNumber:120021824 (18) COCA-COLACO THE, SWOT ANALYSIS,IN SOFT DRINKS (WORLD) http://www.portal.euromonitor.com Last Updated:March 2013 (Accessed:18th December2014) (19) Armitage,S., Vimtohits purple patch inthe Gulf http://www.bbc.co.uk/news/business-23455612 Last Updated:26th July2013 (Accessed:2ndFebruary2015)

×