Introduction
Started in 1886, the Coca Cola Company has
since been the market leader in the aerated beverages market around the world.
With little or no close substitutes and limited competition, the company has
maintained its formidable market share and its status as one of the most
valuable brands in the world by implementing flawless management acumen and an
aggressive marketing strategy around the world.
In the early 80s the company launched an
innovative product - Diet Coke, to address to the demands of an aging
population of baby boomers (who were increasingly becoming health conscious).
The product has since attracted masses in developing and developed markets
worldwide, where there’s a growing trend in health awareness. The diet coke
formulation caters to a similar market in Australia.
The usual aerated soft drink dominates the
market share with 40% beverage consumer consuming it, however, diet coke sales
have quadrupled in recent years and show better prospects for growth as against
sugary soft drinks. This is enough reason for Coca Cola Australia to design
such a marketing plan which helps it to take a lead in this market as well; and
help retain as much market share as possible.
Brief Situation Analysis
A situation analysis (in context of Diet
Coke) of the company’s current internal and external environment revealed that
the company’s strength lies in its strong brand recognition and loyalty,
financial capabilities and management acumen. However, its weaknesses too stem
from its strengths. That is, Coca Cola today is viewed as a seller of an
unhealthy product detrimental to the health of millions of its customers. It is
often labelled a bully (given its financial strength) who coerces governments
and exploits resources at the cost of common welfare in order to make profit.
This puts Coke in a bad light – among societies it operates in. Also, there are
growing debates about the safety of aspartame, which is a key ingredient of
Diet Coke.
The opportunity for the product lies in the
growing concerns for a healthy lifestyle and healthy food choices. Diet Coke
being a low calorie substitute for regular Coke, appeals to people who love
Coke but, also want to move to healthier food options in order to maintain
general well being. The threat to Diet Coke arises from the growing popularity
of healthier beverage options as fruit juices, energy drinks and tea.
Given the current situation of Diet Coke,
it is only advisable for the marketing management at Coca Cola to build upon
its strengths however, attention must be paid to developing healthier
formulations such as those using Sucralose.
The company should work towards benefitting
from the opportunity present by growing health awareness; and developing a
positioning that communicates taste and health at the same time, in order to
counter the threat posed by substitutes.
Marketing Objectives
The marketing objectives for Diet Coke
(Australia) brand can be derived from its current situation analysis as well as
its global marketing objective and vision and mission statement. It is states
as under:
‘The marketing plan would focus on creating
a distinct brand personality that is relatable to the target customer and
results in positioning the brand such that it is a preferred choice over
substitutes (and competition); creating value in the customer’s lifestyle. This
will be measurable by the sales produced and the market share retained after
such an exercise.’
Thus, the marketing objective provides for
exploiting the opportunity available (in the form of healthier trends) and
countering competition. Also it fulfils the mission statement objectives by
providing a product that refreshes, spreads optimism and happiness, and creates
value to make a difference.
This is in line with the vision statement
of providing quality beverages, maximising long term profitability and at the
same time fulfil its duty as a responsible world citizen.
Armed by these core philosophies and marketing
objectives that directly address the current concerns, the marketing managers
for Diet Coke can now embark on a process to achieve the objectives.
In the sections to follow a step by step
approach is undertaken to arrive at the unique positioning, targeting and
marketing mix approach, to formulate a sound marketing plan for the product.
Target Market(s) and Positioning
Target Market
The target market of Diet Coke is one which
will go the extra mile to make a health conscious purchase decisions. This type
of consumer can be easily found in the age group of 17-25 (both male and
female). These are young people who value their health a lot. Looking good and
staying fit is one of their primary agenda in life hence their purchase
decisions are in line with their health awareness and knowledge. This is the
primary target market.
The secondary market that Diet Coke will
target in Australia is an age group of 10-40 (excluding the ages 17-25). The
buying decisions for the younger half are either made by parents, influenced by
peers or are emulative (derived from public figures, peers or younger adults).
The other half of the spectrum is either health conscious or moving towards it
or sporadically makes an effort to stay fit (given the realisation of a waning
youth). This is a market which may or may not choose Diet Coke as a purchase
option at each purchase incidence.
Positioning
Positioning is a process by which the
marketer aims to create a particular image of the product in the minds of the
target consumer. The concepts of creating a brand personality and an
appropriate promotional mix are covered under this head.
The personality of Diet Coke should be such
that if the product is imagined as a person, he/she should be someone whom the
target market aspires to be after consuming the product. In case of Diet Coke
the brand personality should be of a physically agile youngster, who never
compromises, is a go-getter and is always on the move.
The appropriate punch line to communicate
this positioning could be, “Just for the taste of it”. The same punch line has
been used to promote Diet Coke in 1982 and at various intervals until 2009 (in
the US and European markets). The line still holds its relevance in
communicating that someone who drinks Diet Coke is choosing a tasty drink which
also happens to be healthy; rather than a healthy drink which is tasty. This
effectively communicates that a Diet Coke consumer does not compromises on
his/her tastes for staying healthy. The positioning if communicated effectively
by choosing the right marketing mix, will easily distinguish the product from
its substitutes and competitors.
Approach to Marketing Mix
Marketing Mix is a composition of various
strategies concerning key elements of a product, to determine the final
offering of a producer to the market. In context of Diet Coke (in the
Australian market), the 4Ps of marketing mix are elucidated below:
1.
Product
The physical attribute of the product
offered is a unique beverage formulation by the Coca Cola Company which retains
the taste of the regular Coke but, contains only one calorie. To the psyche of
the target consumer this offering is communicated as, a tasty drink (one which
tastes exactly as the drink the consumer used to prefer but is shifting due to
health concerns) with minimal calories. Thus, the value offered by the product
is the retention of the same taste preferences and maintaining health too
without having to undergo a change of habits.
2.
Price
Price is the money amount that a consumer
pays to purchase the product. Setting this price will determine the final
purchase decision as well as the profitability and sustenance of the product.
When setting the price, the reference pricing (price of competing products) and
comparative pricing (the difference in value of the attributes of the product
and that of its competitors) must be paid attention to, to arrive at the best
price.
In context of Diet Coke, pricing done by
close competitors such as Pepsi (for a similar product) and price of other
substitutes must be observed. Since a product like Diet Coke doesn’t have much
close competition and functions in oligopolistic conditions, the price will be
referential (that is in relation to its closest competitor’s offering). Diet
Coke should maintain its prices in line with that of Pepsi Max to appear more
lucrative to the consumer.
3.
Promotion
While promoting the Diet Coke brand in
Australia, marketing managers should keep in mind that the world has moved past
30 seconds TV commercials. The new age promotion utilises “distribution”
technologies such as Facebook and Twitter. The content of such promotional
undertaking should be dynamic storytelling rather than one way; it should
involve people in creation of relevant content (coherent with the theme of the
intended product positioning).
The central idea of Diet Coke’s promotion
should be to create ideas which are contagious and spread like a viral campaign
(on their own). Secondly, the content on various promotional platforms should
be interlinked so as to present a unified coherent idea. Thirdly, while the
majority efforts should be towards building engagement and communicating the
product idea, certain allowances should be made for experimentation and
alternative thinking (so as to develop faster approaches to growth).
Apart from social distribution
technologies, the brand can rely on traditional methods as TVCs and billboard
advertisement. Also, publicity activities such as sponsoring sports events,
personalities, special endurance events and the like will also go a long way in
communicating a favorable brand image and a relatable brand personality.
4.
Place
This point refers to the place where the
product can be physically offered to the prospective consumer. The Diet Coke
brand can benefit from the existing distribution network of the Coca Cola
Company in Australia; thereby placing it within arm’s reach of millions of
consumer already experiencing and satisfied with the company’s products.
The management can follow an ‘intensive
distribution’ strategy for the product since its prospect consumer is available
at almost every place in the nation’s territory and the product managers
follows a penetrative referential pricing.
Also special efforts can be made to make
the product available at specific places frequented by the target consumer.
These could be stadiums, movie theatres, shopping malls, college cafeterias,
gyms, health clubs and the like.
Links between Marketing Plan Elements
A fluid approach has been followed while
preparing an outline of a marketing plan for Diet Coke (Australia). The
marketing objective determined for the brand is in line with the mission and
vision statement of the company, and also addresses the threats, weaknesses and
opportunities unearthed in the current situation analysis of the product.
The target market of the product, as
presented by the opportunity of growing health awareness, is one which is
shifting towards healthier choices in life. The product is to be positioned
among this set of people by portraying an offering which is does not compromises
on taste and still is a healthier option.
The price of the product is to be
penetrative, so as to suit the pockets of a young population as well as
maximise sales volume, capture a larger market share and ensure profits for the
company.
The promotion is in line with the recent
trends in communication embraced by the youth. It utilises the flexibility and
increased engagement provided by virtual social media to reach out and involve
the prospects. Also, other promotional efforts targeted specifically at a young
target market are used.
The place strategy is one that utilises the
existing network thus, providing economies in distribution and promoting volume
sales.
Hence, it can be summed up that the
elements of the marketing mix closely follow the requirements of positioning in
a given target market and to fulfil set objectives of a marketing plan.
Conclusion
Concluding from the marketing plan brief
outlined in this essay, it can be stated with reason that a marketing plan is
essential in determining the needs and objectives of undertaking any marketing
effort and then devising methods to achieve these objectives.
In case of Diet Coke, the marketing plan
has been successful in setting up certain concrete measurable parameters and
pointers that will give direction and vision to any marketing effort undertaken
for the brand, by providing clear cut goals to be achieved by such efforts.
Thus, providing a scope for monitoring and corrective measure.
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