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7/29/2019 28723513 Bubble Buzz in India
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Group-E Page 1
Student Names & ROLL NO:
PARMAR BHAVIN : -22
J OSHI KULDIP :- 15
PRATIC SHAH:- 46
BERA NANDLAL:- 3
RAO CHIRAG:- 43
Course Information
Marketing Management I
SIR.PANKAJ PATEL
Date of submission: MONDAY, March
22th, 2010
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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. The marketing strategies will enable to reach a market size of an
estimated 8,688,300 people (targeted) with a forecasted sales growth prospect of 7.3% over the
next 4 years ($243,029.47 profits), while satisfying the needs of the still-unserved market for
ready-to-drink bubble tea. 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. Export potential will be considered in INDIA.
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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
Brief description of the new product
Bubble Buzz will be a bottled beverage and will be positioned as the only ready-to-drink
Bubble Tea product available on the market. The beverage will have a green tea base with
enhanced fruit flavors (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:
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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.
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Trends: Through the early 1960s, soft drinks were synonymous with colas in the mind of
consumers. In the 1980s and 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 industrys value has increased in 2004, 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, smoothies, 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 flavor introductions and
health-conscious 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 .
Profitability & future growth potential: In 1993, Concentrate Producers earned 29% pretax
profits on their sales, while bottlers earned 9% profits on their sales, for a total industry
profitability of 14%. While the functional drinks sector only accounts for 3.7% of the total soft
drinks sales in 2004, estimates are forecasting a growth of 7.3% in sales and 11.0% in volume
consumption by 2009 .
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SWOT ANALYSIS (Strengths and weaknesses, opportunities and threats)
Strengths Weaknesses
Brand strengthEffective stride in new markets
Results of operationsStrong existing distribution channels
Reliant upon line extensionsReliant upon particular carbonated drinks
Brand dilutionEntrance into difficult non-core categoriesSaturation of carbonated soft drink segment
Opportunities Threats
New product introductionsBrand is attractive to global partners
Strong competitionPotential health issuesFree trade
COMPETITION
Coca-Colas top competitors for the soft drinks industry are PepsiCo (31.6%) and Cadbury-
Schweppes (15.8% of market), which combined, represent about 48% of the total market
.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 2008. Coca-Cola Co is second with 32.8% .Bubble Buzz will launch into a
currently unnerved subset of that market (RTD Ready-To-Drink Bubble Tea), which is
until now unexacting. It is anticipated that the following brands could potentially compete
with Bubble Buzz in the functional drinks market: Brisk, Lipton Iced Tea, So be (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
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scattered locations across Canada. 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. This will facilitate the products reach into its
target market.
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 (ref. 10), 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
Segment growth potential: Statistical reports anticipate a segment growth of 1.72% over the
next 9 years (2015) for the 10-29 years old subsets ..
Size of the segment (population): 8,688,300 (329,600 L).
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SEGMENTATION VARIABLES AND BREAKDOWNS FORINDIAN CONSUMER
MARKET OF BUBBLE TEAMAIN
DIMENSIONS
VARIABLES BREAKDOWNS
Region Nationwide (all provinces and territories) with emphasis on
urban / metropolitan areas, and adapted strategies for allgeographical groups
Area size 5000-19,999 to 4,000,000+Density Urban, suburban, ruralClimate All (East, West,north,south)
Age 10-29 years old (teenagers, studying age and young adults)Gender Male and FemaleIncome All under or upper Rs.50,000Occupation Students; new graduated; new workers; young professionals
Education Elementary 4th grade, High school,
Personality Brand conscious,anchored in popular culture,inclined fordifferentiation and sophistication,very tolerant towardsmulticulturalism and internationalism (open-minded), quickmaturation with modern products
Lifestyle Most of them dependent on parents,no major responsibilities,highly influenced by peer groups, active life, importance ofschool, work and social life
Benefits
soughtCOMMUNICATIONBENEFITS-Nutritional information-Informational text on history of productFUNCTIONAL BENEFITS-Healthier than soft drinks
-Convenient, easy to take outPERCEPTUAL BENEFITS-Quality/Premium price-Social standing/good-looking
Usage rate Seasonal (peak in summer), daily-basis, weekly basis
User status Non-user, regular user (current user through existing bar-shops)
Loyalty
statusNone, medium, strong
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 colored straw), variety of flavors, sweet, refreshing, for
hip & young people, healthier alternative to heavy-sugar drinks.
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The objectives of the marketing plan are strategically centered
around 3 criteria:
1)to create a strong consumer awareness towards a completely
new bubble tea product from Coca-Cola,
2)to establish a wide brand recognition through the capture of market shares in the functional
drinks segment,
3) become the top market leader in that particular segment within the forecasted sales figures.
PRODUCT STRATEGY
The core
o Bubble Tea beverage in a pre-bottled, ready-to-drink format.
The actual product
o Packaging and labeling: see figure below
o Branding: colorful, aspect of play, round shaped, prominent Bubble Buzz logo written in
modern font, catchphrases such as Think outside the Bubble and Get Your Buzz.
o Trade name: Bubble Buzz, a Coca-Cola product
o
Brand personality: energy, funky, cool, functional, original, funny, healthy, etc.o Brand equity: Coca-Cola provides a quality, consistent, innovative and accessible soft
drink reputation.
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Augmented product
o Nutritional information, Status (social drink), Features promoting the website, Health
benefit of a green tea base.
Marketing considerations
o 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.
o Product class: Food & beverage Soft Drinks Functional Drinks
o Bubble Buzz follows the practice ofproduct 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.
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PRICE STRATEGY
The price strategy that will be undertaken should consider the following aspects:
1. Consumer demand2. The product lifecycle3. 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, Coca-Colas
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 coststo customers should also be include 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.
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Projected Financial Performance
Revenues $ 597,124.00 Based on sales @ different channels price
COGS 214,964.64 Based on weighted average percentage in past data
C.M. 382,159.36 Revenues - COGS
Fixed Costs :
SG&A cost : 113,453.56 Half of the O/H costs estimated, based on past data
Capital expenditures : 25,676.33 4.3% of revenue, based on past data
Profits 243,029.47 CMSG&ACapital expenditures
Requirement for success analysis:
C.M. per bottle = 382,159.36 / 328,000 = $1.17=Rs 65.25(1 ltr)
Break-even: (113,453.56+25,676.33) / 1.17 = 118,914 (bottles)
Market share: 118,914 / 1,000,000 = 11.9%
In one year, if Coca-cola can sell 118,914 bottles of Bubble Buzz, or in other words achieve 11.9%
of the functional drink market share, it will break even.
After this point, every bottle Coca cola sells will generate average $1.17 towards the profits. Thepotential profits can up to $1,030,770.001 based on our target market.
Expected Costs:
COGS: $597,124 * 36% = $214,964.64
O/H: $597,124* 38% = $226,907.12
Expected Revenues (total) = $597,124
1 $1.17*(1-11.9%)*1,000,000 = $1,030,770
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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. Projected profits will be $243,029.47 (see financial projections).
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REFERENCES (Direct)
1. The Coca-Cola Co. (Company Profile). Global Market Information Database (Euromonitor).
Jul 20, 2007. Accessed Feb 08, 2008.
2. Functional Drinks Off-trade Sales in Canada (Country Report). Global Market InformationDatabase (Euromonitor). Oct 03, 2007. Accessed Feb 25, 2008.
3. Functional Drinks, Canada, Retail Volume (Statistics). Global Market Information Database
(Euromonitor). Oct 03, 20075. Accessed Feb 25, 2008.
4. Soft Drinks in Canada (Industry Report). Global Market Information Database
(Euromonitor). Oct 03, 2007. Accessed Feb 08, 2008.
5. Functional Drinks in the United States. Datamonitor. Dec 2007. Accessed Feb 08, 2008.
6. COSGROVE, Joanna. The 2007 Soft Drink Report. Beverage Industry. Mar 2007; 96; 3; p.22.
Accessed via ABI/INFORM Global. Feb 08, 2008.
7. THEODORE, Sarah. RTD coffee, tea create a buzz. Beverage Industry. Feb 2007; 96; 2; p.16.
Accessed via ABI/INFORM Global. Feb 08, 2008.
8. The Coca-Cola Company. (Company Profile). Datamonitor. Jun 2007. Accessed Feb 08,
2008.
9. HANNAFORD, Steve. Industry Brief, Beverages I. Oligopolywatch.
http://www.oligopolywatch.com/2003/04/21.html. Accessed Feb 07, 2006.
10. POPP, Jamie. Leading in a healthy direction. Beverage Industry. Dec 2004; 95; 12; p.22.
Accessed via ABI/INFORM Global. Feb 08, 2008.
11. BERKOWITZ, Eric N. CRANE, Frederick G. KERIN Roger A. HARTLEY, Steven W. RUDELIUS,
William. Marketing, 5th
Canadian Edition. McGraw-Hill Ryerson. 2007.
12. Consumer Lifestyles in Canada. Global Market Information Database (Euromonitor). Feb
01, 2007. Accessed Feb 08, 2008.
13. Top 20 Global Brands, Ranked by Brand Value, 2004 & 2005 (in billions and as a %
increase/decrease vs. prior year). BusinessWeek; Interbrand. Jul 22, 2007. Accessed via
eMarketer. Feb 28, 2008.
14. THEODORE, Sarah. Surprising suggestions from teens. Beverage Industry. Vol.96, no 7. Jul
2007. p.4.
15. Canadian Statistics Population by Sex and Age Group. Statistics Canada.
http://www40.statcan.ca/101/cst01/demo10a.htm. Modified Oct 27, 2007. Accessed Feb
28, 2008.
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16. 2004 Annual Report Form 10K (The Coca-Cola Co.). The Coca-Cola Co. US Securities
and Exchange Commission, File no. 1-2217. http://www2.coca-
cola.com/investors/annual_other_reports.html. Accessed Feb 13, 2008.
17. WILBERT, Caroline. Coke, Pepsi focus on China market. The Daily Sentinel.
http://www.gjsentinel.com/world/content/shared/news/stories/COKE_0224_COX.html.
Cox News Service. February 24, 2008.
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