Module code and Title: RBP020L061A Strategic Marketing Assignment Sample
Part 1: Introduction and Product/Service Description
Coca-Cola has made an announcement regarding the launch of a new variant called the Coca-Cola Zero Sugar. The brand also seemed to have rolled out the ‘#BestCokeEver?’ campaign of marketing featuring actresses and celebrities who shall be seen involved in the promotion of the new product Coca-Cola Zero Sugar, and urging the customers to try it first. The aim of the integrated marketing campaign at driving the trials along with sparkling the conversations around the new Coca-Cola Zero Sugar along with inviting the fans of the Coca-Cola products for trying the all-new product of zero sugar, and for deciding for themselves (Mathews 2021).
The innovation of the product seems to be supporting the continued efforts of the company for increasing the options of calorie free beverage for individuals who look for leading a balanced lifestyle, along with relishing the taste of Coca-Cola as per the strategy of the company in terms of the beverages. Coca-Cola Zero Sugar seems to be coming with a new and real taste of Coca-Cola without calories and sugar, and the drink also seems to be ideal for the people who are calorie conscious.
According to the brand manager of the company, they claim to be striving for the provision of choices to the customers across the portfolio along with as a segment of their latest offering the new Coca-Cola Zero Sugar that seems to be allowing the customers for enjoying the great taste of the same, yet with zero calories. Although the product has been launched globally, it is a brand-new product for India that’s yet to be launched.
Figure: Logo (Source: Wang,2021)
Part 2: A Critical Analysis of the Market Context
Key market trends
Growth trends
The largest source of growth for Coca-Cola over the next couple of years shall likely to be the zero-sugar version of the namesake soda of the company. In actual, the best driver for growth in the year 2021, and for the next several years shall be the Coca-Cola Zero Sugar. Zero Sugar meant for resembling the traditional soda of coke more closely; however, still seems to be appealing to the consumers who are health conscious by leaving out the sugar. However, the product seems to be paying off for the product, helping in fueling the growth of sales during the pandemic of covid-19.
Zero Sugar saw its major growth globally in the year 2020 through pandemic, and in actual over an absolute basis is also considered to be the largest growth driver for the organization. AHA sparkling water and Topo Chico of Coke are also pointed as the new products, which can also seem to be doing well during the early days of their launches.
As per the association of soft drinks, the intake of sugar for the entire industry seems have reduced around 12% since the year 2012, the trends of the customer also seem to be moving away from the beverages of sugar. Since, the year 2012, Coca-Cola has been changing its investment in marketing for the acceleration of growth of either lower sugar or no-sugar drinks. As per latest studies, around 75% of customers in India seemed to have responded to have a responsibility for providing a nutritional and healthy product.
Key Competitors
There is availability of numerous brands in the market that are in competition for the similar set of consumers. The top three competitors of Coca-Cola Zero Sugar include Pepsi Max, Diet Pepsi, Diet Coke (internal competition), and juice brands (Zhixuan 2023). The rivalry in the industry of carbonated soft drink seems to be quite intense, initially between the giants like Coca-Cola and Pepsi.
Both the organizations seem to be having the majority of share in the market, and there happens to be several similarities between them, similar range of products, pricing strategies and heavy advertisements in the market. In the specific industry, the identity of the brand seems to be a massive factor, and the major players seem to be ploughing a huge amount of money over the advertising of marketing over a market that is of mutual target. Presence of a huge number of players of the market also seems to be contributing the rivalry in the industry.
Current customer attitudes/behaviours in this market
According to the bargaining power of the Porter’s Five Forces, the purchasers of soft drinks are mainly convenience stores, supermarkets, fast food outlets, along with the youth, especially females.
Motivation
Initially for the motivation is for the creation of an urge in an individual so that something seems to be accomplished. There can also be arguments that motivation shall seem to be pushing an individual into the accomplishment of a certain task within the provided frame of time. It can also be argued that motivation can be a specific force that helps in the stimulation of human behaviors inclusive of both positivity as well as negativity.
Positive motivation includes the specific products that induces the customers for purchasing Coca-Cola, along with the wants, desires and needs, which seem to be having a net impact to make an individual the urge of using a provided product, and in the specific context seem to be using Coca-Cola Zero Sugar (Xu 2021). Therefore, it can be argued that the positive motivation is the summation of every urge, which can have the net impact to direct an individual into acquiring Zero Sugar for consumption purposes.
It has also been pointed out that there is enhancement of positive motivation through the advertisement and promotion of spirited sales though there is availability of other factors that also seem to be playing certain roles. In this case, the forces of positive motivation inclusive of the desire and need help in driving the customers to purchasing Coca-Cola Zero Sugar, customers are in need of the drink to satisfy their thirst, desiring the drink to be of pleasure, and keep their diet and sugar intake in check.
Main issues / opportunities relevant including social and/or ethical issues.
SWOT analysis
Strength
Diversified portfolio of the product- Coca-Cola seems to be offering one of the most diversified and extensive portfolios of the beverage product, both globally as well as in India (Ilicic et al., 2023). The entire portfolio seems to be inclusive of juices, diet and regular beverages, bottled water, as well as energy drinks. The portfolio also seems to be inclusive of several other products inclusive of Zero Sugar, Diet Coke, Fanta and Sprite.
Capabilities in marketing and advertising- Coca-Cola is considered to be the largest advertisers in the industry of soft drink on a global basis. The budget of advertisement seemed to have accounted for around 6.9% of the total annual revenue every year. Through the advertisement the company seems to be creating both competitive advantages, along with strengths inclusive of customer awareness and brand equity.
Brand Loyalty- The brand loyalty is also considered to be among the major strengths of the company throughout its history. Coca-Cola seems to be maintaining flexibility in the change environment along with providing proactive response to the loyal consumers, along with taking social responsibility and making contributions to communities with the help of Coca-Cola foundation.
Weakness
Significance in revenue from carbonated drinks- Though Coca-Cola seems to be involved in the diversification of the portfolio of the product, the revenue seems to be still dominated by the iconic and original cola (Štofová 2020).
Pressure within margins- As per the annual report of the company, the gross profit of Coca-Cola along with the margins of the operating profit seemed to have been deterioration between the period of 2014-2015. Although, after the specific period, it improved slightly and eventually.
Opportunities
Increase in the healthy beverages demand- Demand for the health drinks is considered to be in increase both nationally as well as globally. The trend of both wellness and health involves in the presentation of a better opportunity for the Coca-Cola Zero Sugar.
Growth through acquisitioning- Coca-Cola also seem to be having the opportunity for expanding the share of market through the acquisitioning of the smaller players in the market. Smaller players seem to be accounting for significant share of the market in the soft drinks industry of India.
Threats
Trend of health and wellness- Consciousness of health seems to be in constant increase among the consumers and is currently the largest threat for Coca-Cola. The fizzy soft drinks seem to be facing mounting negative perceptions in terms of health affecting the purchasing decision of people (Wang 2021).
Intense competition- Though Coca-Cola seems to be having a huge share of the market in the industry of carbonated soft drink with growth in the demand for the soft drinks that comprises of less calories and less sugar, still seems to be facing major threats from both international as well as local competitors in terms of the innovation of the product along with the development of the new product, which help in fulfilment of the needs of consumers in terms of wellness and health.
Part 3: Segmentation, Targeting and Positioning (STP)
Base(s) of segmentation
Being a sugar-free version of Coca-Cola classic, Coca-Cola Zero Sugar seems to be trying to maintain the classical taste of Coke. The United Kingdom was the first market where Zero Sugar was introduced replacing Coca-Cola Zero (Li 2022). Hence, Zero Sugar by Coca-Cola is precisely a rebranded and reformulated version of the Coca-Cola Zero.
The product is expected for doing betterment in terms of sales in comparison to Zero as 5 out of 10 questioned consumers did not have any knowledge that it is a fizzy drink which has no sugar in it. As per the belief of the company, the new brand Coca-Cola Zero Sugar shall communicate the same with clarity and the reformulated taste shall also provide a perfect complement to the classic Coke.
Market Segmentation
The segmentation of the market is considered to be the procedure to partition the market into various teams of potential consumers with needs in common along with a purchase behaviour as well as designing a mix of marketing, which seems to be precisely matching the expectations of multiple segments.
Geographical Segmentations
Both Urban and rural in India. Around 5 sites of manufacturing in the country, the department of customer logistics help in providing the network of logistics for the distribution of products covering entire regions (Zhang 2022).
Demographic Segmentations
The size of the family is among the major segmentations with between 1.25L and 1.75L bottle serving as options for the customers based on the size of the family. Various of sizes of pack help in meeting every need and preference individually like 330 ml, 250 ml, and 150 ml.
As per the ingredients in the Zero Sugar, it seems to be well-suited for every person irrespective of the gender, age and religion. Zero Sugar targets every age of the population, which seems to be in need and desire of reducing the intake of sugar. People from 16 to 64 are considered to be the primary segment of the market for the product since it seems to be of consisting of majority of the population in the country. The specific group of consumer can also involve in the provision of long-term sustainability to the business of Coca-Cola.
Psychographic Segmentations
Currently, soft drinks to be a part of daily life of people. Healthy living is also considered to be the mainstream topic in the life of the customer with wellness and health moving up over the agenda of the customer. Last year, around 50% of the 15-35 years’ group of age seemed to have surveyed seemed to have changed their habits of eating to a healthier diet.
The psychographic segment of Zero Sugar can be described as the consumers of Coca-Cola who seem to be the lovers of carbonated soft drink along with falling into the class of the consciousness of health. Through the maintenance of the same price, the product seems to be remaining affordable to the social class of the specific population (Zha 2021).
Behavioural Segmentations
In the specific segment, the behaviours of the consumers are evaluated by Coca-Cola help in exhibiting in the marketplace for better targeting the customers. The loyal consumers of the company seem to be preferring the new recipe due the taste of the drink is quite similar to the Coca-Cola classic. The health benefits that are offered by Zero Sugar to consumer is considered to be no sugar along with being thirst-quenching without compromising on taste. The loyal customers are considered to be less sensitive to price and is also considered to be less inclined for switching off and over to a certain competitor if there is any kind of increase in price.
Table: Market Segmentation (Source: Created by leaner )
Target Market
On the basis of the campaign of the advertisement, the key point of focus for Zero Sugar seems to be towards every group of age within the customer segment of health-drinkers, who are health conscious. With the strapline for the campaign “Tastes more like Coke and looks more like Coke”, the goal here is retaining huge amounts of loyal customers who seem to be in love with the Coca-Cola classic through the provision of encouragement for trying the version of Zero Sugar that seems to be much healthier as well as similar to the preferred taste of the customers (Lacy-Nichols et al., 2022).
Along with the launch of the Zero Sugar, the company seems to be continuing to make investments of the budget in terms of marketing in products of lower as well as no sugar. As of 2019, around 45% of the products were sold in India by Coca-Cola that are either low sugar or no sugar. The new marketing strategy of Coca-Cola is considered to be aimed at reaching more than 50% by 2024. Furthermore, around 50% of the total carbonates sold in the country were considered to be either zero calories or no calories. Coca-Cola Zero Sugar is being launched for targeting the specific market.
Target Market
Description
Young Adults
Coca-Cola Zero Sugar is targeted towards young adults who are health-conscious and concerned about sugar intake but still want to enjoy the taste of Coca-Cola. This group is typically between the ages of 18 and 34, with a focus on those who lead busy, active lifestyles.
Urban Dwellers
The product is marketed towards consumers who live in urban areas and major cities, as these locations typically have higher populations of health-conscious individuals who are seeking healthier beverage options.
Regular Soda Drinkers
Coca-Cola Zero Sugar targets consumers who enjoy drinking soda on a regular basis but are looking for a healthier option. This includes those who regularly consume regular Coca-Cola and other high-calorie sodas.
Fitness Enthusiasts
The product is positioned as an alternative for those who value convenience and leading an active lifestyle. Coca-Cola Zero Sugar is marketed towards fitness enthusiasts who want to enjoy a refreshing beverage without the added sugar and calories that regular soda contains.
Table : Target market (Source: Created by leaner )
Product Positioning
Every launch of the product to a specific market is in need of a strategy of positioning. There should be development of the perceived product value by the marketers in the market in target with an eye towards competition. There can be further improvement in the analysis of the product through the evaluation of the ways in which the product placement in the place of market can be communicated to the group of the customers in target.
Figure: Positioning Map of Coca cola (Source: Wang,2021)
From the above map of positioning, the major competitor of Zero Sugar seems to be Pepsi Max. Pepsi Max was introduced by the company to the market in the year 2007, is considered to be sugar-free, zero-calorie, as well as sweetened with aspartame. The product is also considered to be fortified with extra caffeine along with ginseng for helping the customers in getting through the day.
Coca-Cola is considered to be having strongest competitive force from the massive profitability along with well-built brand on a global basis, the perceived value of the brand seems to be better than the in term of social responsibility and brand equity that might help in creating the higher value that is perceived in terms of Zero Sugar as a carbonated soft drink that is beneficial in terms of health.
Part 4: Your Recommended Extended Marketing Mix
Product
Zero Sugar is the name of the newly launched product by Coca-Cola, and the aim of the product is indicating and delivering the explicit message to the consumer that the drink is free of sugar. The differential benefit of Zero Sugar is unlike the predecessors, and the with the recipe that is newly developed help in retaining almost the similar kind of taste as that of the Coca-Cola classic (Chu 2020).
The new design of packaging of Zero Sugar under the One-Brand marketing strategy of the company seems to be incorporating the typical red disc of the company along with a partial black demonstration of the broadening of the target market of Coca-Cola with aim of both female as well as male. Customers can also find the nutritional information as well as ingredients over Zero Sugar so that they can make informed choices. The product also seems to be well-suited for vegetarians as per indications by the logo over the package.
Marketing Mix
Description
Product
Coca-Cola Zero Sugar is a low-calorie or zero-calorie alternative to regular Coca-Cola, with a similar taste and packaging. It comes in various sizes and formats, including cans, bottles, and fountain drinks.
Price
The price of Coca-Cola Zero Sugar is typically in line with other Coca-Cola products, but may vary depending on location and retailer. Promotional pricing and discounts may be offered to drive sales.
Promotion
Coca-Cola Zero Sugar is promoted through a variety of channels, including television commercials, digital ads, social media, and in-store displays. The brand also sponsors sports and entertainment events to increase visibility and reach a wider audience.
Place (Distribution)
Coca-Cola Zero Sugar is distributed through a wide network of retailers, including grocery stores, convenience stores, and vending machines. It is also available in restaurants, movie theaters, and other foodservice locations. The brand ensures widespread availability to make the product easily accessible to consumers.
Table : Marketing Mix (Source: Created by leaner )
Figure: Nutrition Information (Source: Wang,2021)
Pricing Strategy
Pricing is considered to be an important segment of the overall strategic planning of the new product, overall environment of the market, demand and competition are considered to be the determined points of price. Since the products of Coca-Cola, along with its pricing seem to be copied by the competitors, rather than lowering the price for being in competition with others, Zero Sugar by Coca-Cola seems to be choosing for emphasizing other elements of marketing over the price for the differentiation of the product from the competitors inclusive of building strong equity of the brand for retaining the loyal customers as well as offering a product that is healthier with no sugar at the similar level of price as other products of the family.
In the supermarket, the tier strategies of packaging are used by Coca-Cola for encouraging the consumers in purchasing massive quantities through the offer of discounts for different sizes of packaging.
Promotional Strategy including Digital Media
Coca-Cola seems to be having heavy reliance over the promotional elements along with the channels of communication for generating the loyalty of the customer and the sale of the product. The marketing campaign of Zero Sugar seems to be having successful infiltration of the social media, retail spaces, digital marketing along with outdoor marketing with the personal paraphernalia (Nair et al., 2021).
Channel or Distribution Strategy
Coca-Cola has made partnership with the CCEP (Coca-Cola European Partners), a distributor and partner of Coca-Cola. The CCEP is considered to be the largest local bottling plant is also in possession of specialization, experience, operation scale, providing it the capability of being in provision of intensive systems of distribution for the products of Coca-Cola. Zero Sugar can seem to be reaching every retail store as well as the restaurants in the country, as well as in sub-urban towns and rural areas.
The entire network of distribution helps in the provision of accessibility, reduction in the search time, and increase in the availability of the product availability in the market in target. The franchise model of Coca-Cola is also considered to be eliminating and reducing the significant investment of capital in association with the operations of a facility of manufacturing, network of distribution, along with reduction in the cost of storage.
Services marketing mix elements (where appropriate):
Process
From the perspective of sales, launching the new product of Zero Sugar seemed to have been quite successful. Coke is also considered to be attracting the renewed interest of the customer in the new brand. The company also seems to be looking into the strong performance of the variant of zero sugar: however, also in terms of the growth of volume as a new product bringing new users into the brand (Dai 2021).
People (including role of customer in the value creation process as well as employees and/or relationship marketing challenges)
The demand of the customer along with change in the lifestyle of the consumer seemed to have provided encouragement to Coca-Cola for the introduction as well as extension of the product of Zero Sugar last year. The sales of Zero Sugar seemed to have increased by quarter, along with the product taking the place of the top fastest growing products of the cola brand in India. Currently, Zero Sugar is considered to be in the stage of growth with the profits and benefits still over the upward trend having yet to reach the climax, and there still seems to be no signs of decline.
Figure: Product cycle (Source: Wang,2021)
Part 5 A discussion of Implementation Issues
The marketing strategy of Zero Sugar by Coca Cola as the development of the product for competing and defeating the rivals of the market rivals in the market of no sugar soft drinks. Implementation of a consistent and dynamic in the development process of marketing strategy that is in accordance with the product development strategy of Ansoff. Coke Zero was considered to be launched in the year 2006 and existed in the market for more than a decade.
Currently, there happens to be around 2 million loyal consumers for the specific brand. Moreover, in lieu of a huge investment in a campaign of marketing, there is involvement of Zero Sugar in the development of the market through the attempt of acquiring the customers to compete in products in a similar segment of the market (Chua et al., 2020). The efforts of promotion to increase the existing share of the market along with securing a certain dominance in the markets of growth all seem to be indicating that the development of the product might the proper strategy for Coca-Cola.
Coca-Cola should be to further taking the location of vending machines into consideration offering Zero Sugar in the market that is in target. Through the placement of vending machines in places like the campus of universities, in central centres of businesses, or the food court that might seem to be frequented through the core demographic, Coca-Cola can try the maximization of the exposure of the new product to the segments in target along with encouraging the purchase.
Furthermore, setting the retail within the optimum places is considered to be substantiated by the specific theory regarding the impulse of the consumer in terms of the buying behaviour. Frequency in the commercial advertisement, lower price, along with the higher availability of Zero Sugar are considered to be the key characteristics that might help in triggering the several impulse purchases.
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