PRODUCT RE-LAUNCH

PRODUCT RE-LAUNCH

PRODUCT RE-LAUNCHMARKETING MANAGEMENT REPORT

Acknowledgement

First of all, we would like to express our gratitude to IQRA University for giving us an opportunity to pursue Masters in our field of studies. We are heartily thankful to our teacher, Atif Shahab Butt, whose encouragement, guidance and support from the initial to the final level enabled us understand the various steps involved in conducting a research report.Furthermore, we would like to thank all my friends for their kind cooperation and efforts to assist us in every helpful way they can. We must admit that this semester we had the best studying experience and will always cherish this year of our academic life.

project report of failed product re-launch (rc cola)

SUBMITTED TO:Atif Shahab Butt

Individual: Signatures

Ushair Fareed (20988) Junaid Naeem (21545)

MARKETING MANAGEMENTTHURSDAY 6:30 PM TO 9:00 PM

DATE OF SUBMISSION12-DEC-2013

Table of ContentsExecutive Summary7Company Description8Reasons Of Failure9Strategic Focus And Plan10Mission10Goals10Core Competency11Ansoff matrix11Porter Generic Strategies12Situation Analysis13SWOT analyses13Strengths;13Weaknesses:13Opportunities:13Threats:13PEST ANALYSES14Political Factor:14Economical Factor:14Social Factor:15Technological Factor:15industry analyses16Porters five forces Model16Bargaining Power of Buyers:16Bargaining power of Suppliers:16Threat of New Entrants:16Threats of Substitute:17Rivalry among existing players:17Attack strategy17Frontal attack17Bypass attack17Defense strategy18Preemptive (blocking) defense:18Customer Analyses18Segmentation of Target market:18Demographic Factor:18Geographic18Psychographic18Behavioral19Market-Product Focus19Point of parity:19Point of difference:19Positioning:20Marketing Program20Product20Branding:20Sssshhhh.Coming again with new style and taste20Logo:21Branding Strategy:21Style and Design:21Packaging:21Price:21Promotion23Advertising Media:23Sales Promotion:23Direct Marketing:23Personal Selling:24Place24Plant location24Distribution Strategy:24Marketing expenditure25Electronic Media25Print Media26Billboards27Budgeting27conclusion29

Executive Summary

RC cola ones the top among many in the field of beverages in Pakistan in 1970's is coming back through our project re-launch to gain yet again which was gained in the era of 1970. through our product re-launch we will try to cope all the basics of project launch such as reasons of failure, strategies ,SWOT, marketing mix , segmentations etc.The offering of RC cola is soft drink to the targeted consumers starting from the age of 14-40 with the income more than 15000. They are mostly experiences and strivers. The product fulfills the need of thirst. RC cola is striving to achieve favorable sales figure and trying to reduce expenses but most of the expenditures are done on marketing the product.

Company Description

INTRODUCTION ANDHISTORY OF RC COLA:1905:Mr. Claud Hatcher, Founder, Established the"Union Bottling Works" in Columbus, Georgia in the basement of the wholesale grocery business ofhis family.1910:The first line offruit flavored beverages was named Royal Crown and the first coladrink was called Chero-Cola.1912:Started to manufacture a line of syrups andflavor concentrates and established a franchised system by licensing sales territories to its bottlers under trademarks of the now Chero-Cola Co.1925:Over300 bottlers werepart of thebottling network producing Chero-Cola. 263 of these bottlers also produced the fruit flavored products under the new brandNehi.1928:The Company changes its name to The Nehi Corporation.1933:Mr. Claud Hatcher died on December 31st.1934:Chero-Cola is reformulated and the new product is named Royal Crown Cola.1940:The Nehi Corporation is listed on the New York Stock Exchange.1940:The Company first uses results of blind taste tests in the advertising campaign "Best byTaste Test".

1946:The Company began to enhance its advertising by using entertainment celebrities like Bing Crosby, Joan Crawford, and Hedy Lamarr.1958:Company changes name for the third time to RoyalCrown Cola Company.2000:Royal Crown Cola Co. isacquired by Cadbury Schweppes.2001:Royal Crown Cola International is acquiredby Cott Corporation.2005:Royal Crown Cola Co.commemorated its 100th Anniversary.Reasons Of Failure

RC cola was a very famous drink in Pakistan. Itwas widely known all over the Pakistan since the time of its arrival in thesub- continent which was the 70s having the same popularity like Coca Cola and Pepsi today. RC Cola wasbeing sued by differentorganizations internationally so it lowered its investment in the sub-continent and in 90s, RCcola started to fade away due to some issues and stopped its production in Pakistan. the following are the basic reasons for failure of RC cola; Pepsi Cola and Coca Cola stormed into the market.

Advertising was minimal in Pakistan ascompared to its competition.

RC Cola was being sued by different organizations internationally so it lowered its investment in the sub-continent.

RC finally stopped production somewhere in the early 90's. RC Cola's bottle is not appealing and the regular one specially looks so thin, it seems as ifit has less drink inside

RC Cola is currently not operating in Pakistan and if RC Cola wants to re-launch in Pakistan, it may face strong competitors like Coca Cola and Pepsi who are ruling the cola market in Pakistan.Strategic Focus And Plan

Mission

"To fulfill the basic need of customers by providing them a nice choice among big brands, within affordable price range and maintaining sustainable profitable growthGoals

To increase profit To satisfy Customer To increase and capture the market share

Core Competency

The core competency which RC cola posses is its international image and its history of over 100 years in the beverages market with the knowledge of failure and success as they have learned it through market experience. Ansoff matrix

Under the Ansoff matrix RC cola would fall into the category of market penetration and product development. As an existence product in terms of international market RC cola would use market penetration as it falls in present market and present product. whereas if we see in aspect of Pakistani local market the re-launch will place RC cola under the dynamics of product development as it would be coming into the market yet again but having an stage of development.

Porter Generic Strategies

To gain a competitive advantage over our compotator in a broad market scope RC cola would be following Porter generic strategy of overall cost leadership through; Increasing profits by reducing costs, while charging industry-average prices. Increasing market share through charging lower prices, while still making a reasonable profit on each sale because of reduced costs.

Situation Analysis

SWOT analyses

Strengths; RC Cola is the cola which is more than a100 years old. In Pakistan the image of the brand is already been made 30 years back. Consumers ability to recall. low prices.Weaknesses: International suits for law. Low Advertisement. Budget for promotion is also so low.Opportunities: Building equity for its brands. Hot weather in Pakistan Production of more suitable products to satisfy consumer needs. Re launching in new market.Threats: Very strong competitors in the market like Pepsi and Coke. More competitors are looking to enter in the market. Govt. Policies. High tax rate on beverages.

PEST ANALYSES

Political Factor:Infect Pakistan is a democratic country but political condition now days is very worst. Investment in private sector is equal to none. Tax is levied heavily on beverages industry. Trade agreement is supported but there are also strict restrictions following these. There is no regulation in the favor of the labor community. They are not even paid equivalent to their work.Economical Factor:It is a second largest element of PEST analysis. It involves economy conditions, inflation rate, employment level, spending power etc. In Pakistan unemployment is up above the sky. People are searching for jobs even after getting 16-18 years of education. Unemployment level reduces the buying power of consumers and in the end economy starts declining. The big threat of Royal Crown Cola re launch in Pakistan is what prices they set to get the attention of people in limited buying power.Social Factor:ROYAL CROWN was first launched in Pakistan by keeping a religious and social status of Pakistani people and it worked. They offered low quantity of gas in it. Current situation is that media is also on top of the list so if ROYAL CROWN cola re launches in Pakistan then advertisement campaign could be run on high level. So ROYAL CROWN should be able to offer those products which aims to benefit people lifestyle and behavior. If it doesnt then the re launching of this organization will be in vain once again.Technological Factor:The current era is running in lot of pace. Everybody wants to leave the other person back. Technological changes aims to get the instant results and it does happen. Technology is all about the quick and accurate outcomes. Research and development department of Pakistan is not less than the others. ROYAL CROWN should launch the product by keeping in view the technological changes and development.

industry analyses

Porters five forces ModelApplying five forces to the beverages industry of Pakistan allows us to create a view of potential attractiveness in the sense of profitability in the related industry.Bargaining Power of Buyers:The buyers of this industry are in extremely large numbers and buyers want to purchase this industrys products on relatively low prices, impulse, and convenience basis so making is beneficial for the industry.Bargaining power of Suppliers:In beverages industry most of the raw material is used in which there are no specialized people of such commodities like sugar, syrup, glass, plastic, tins and water etc so bargaining power of the supplier is high because shifting to another company takes a time and initially there will also be a bargaining of prices. When the suppliers are not specialized then losing them is not a big issue for the organizations.Threat of New Entrants:In this industry the threat of new entrants is relatively low because it needs a huge investment and specially when the giants like Pepsi and coca cola are in the market. It is also very difficult to set up industries for bottling plant specially for new entrants.Threats of Substitute:Threat of substitutes in this industry is high whether it comes to the health issue or some other issues. People can move easily from one company to others because they have choices if company of their choice is not offering good products in terms of health, quality and money.Rivalry among existing players:In Pakistan market is heavily dominated by to giants of beverages industry Pepsi and Coca Cola with a share of 75% and 18% relatively leaving less room for others but Royal Crown Cola is an existing industry still they can make profits by making it more attractive for the customers.Attack strategy

RC cola will be following 2 attack strategy which are as follows;Frontal attackThrough media war to show our existence in the market and to take a sweet revenge for what coke and Pepsi did to RC cola in the late 1970's.Bypass attackRC cola didn't come Pakistan directly as they are coming after capturing the Bangladeshi market which proves it to be a bypass attack.

Defense strategy

Under defense strategy RC cola would be using;Preemptive (blocking) defense: The entrance of RC cola into the market would itself an attack for its competitors as now RC has to wait to see the retaliation of it.Customer Analyses

Segmentation of Target market:Demographic Factor:Age: 10 25 yearsClass: Upper, Upper Middle, MiddleGender: Male and FemaleGeographicA Zone (N.Nazimabad,Nazimabad,GulshanB Zone (Defence,PECHS,Saddar,)C Zone (North Karachi,Gulzar e Hijri,Lyari) Psychographic Social class: Middle class, upper classLifestyle: Actualizes, fulfilled, Believers, AchieversBehavioral Occasions: Parties, Birthdays, SportsUser status: Carbonated drink user

Market-Product Focus

Point of parity:The point of parity for RC cola is its different flavors like; RC Cola Diet RC Cola Cherry RC Cola RC Edge Cola Diet Rite Cola RCQ Royal Crown Draft Cola Kick Point of difference:Although there is no such point of difference as compared with the competitors but the only slight difference could be its price as RC cola offers its product at low prices.Positioning:Positioning should be done on its unique looks and different taste as well as at low price which will act as a USP for the target marketMarketing Program

Product

Royal Crown Cola no doubt is an international brand working for more than 100 years but due to some reasons it failed in Pakistan so new they should need to develop a new product with meet the requirements of the consumer. To develop a new product there should be an idea which can be taken by the survey of asking to customers, employees and other stake holders. Then form all the ideas and select the best one.

Branding:People dont buy products they buy brands. Keeping this in view Royal Crown Cola brand should be attractive in terms of logo, symbol and slogan which must be different from others.The slogan which we have suggest isSssshhhh.Coming again with new style and taste

Logo:

Branding Strategy:Royal Crown Cola is an international brand so its strategy will be own label branding.Style and Design:When it comes to the design and style of the product then it must be full of attraction and acceptance of people.Packaging:Packaging of Royal Crown Cola should represent protection, advertisement, and should be informative.Price:Pricing strategy for Royal Crown Cola should be market penetration strategy. In which Royal Crown Cola offer cheap prices as compare to other competitors to get the attention of the customers and afterwards increasing the prices. This strategy will also discourage the new entrants.Royal Crown cola pricing strategy will be competition based strategy because Royal Crown Cola must offer fewer prices from its competitors to get the attention of customers. And for new products the strategy will be market price penetration because by offering low prices people will come to buy and another strategy would be price skimming furthermore there should be incentives given to the retailers like chillers, tours on extra buying etc. different offers must be offered on special occasions like Ramadan and Eid.

Prices of different bottles

QuantityPrice in Rupees

Jumbo 80

1.5 Liters65

1 Liter37

500ml30

250ml16

Tin25

PRICING STRATEGIES: Market Penetration Pricing Policy Price skimming Discounts Quality Discount: 1/10 Discount 2/20 Discount Promotion

Advertising Media:Broadcasting on TV and radio which will increase the awareness among peopleCreating advertisement short messages service by collecting the data from cellular companies and offering customers to buy the productBill boards and posters will be applied on high ways, centre points, on buses and cabs.On internet little ads will be displayed to tell the product informationOffering free cards with famous magazines for first month.Sales Promotion:Free vouchers will be given to retailers for the customers who buy in quantity for dine in like in McDonalds, KFC and other restaurants.For first month there will be an offer for regular pack to get 3 cans for the price of 2.Free samples will be distributed in markets and in grounds on mobile vans and opening outlets outside the public parks.Price discounts will be given to customers.Direct Marketing:SMS will be sent to customers taking data base from cellular companies.Direct mails will be sent to customers.Personal Selling:Marketing managers will go directly to retailers and take the orders because it will save the time of involving whole sellers.Appointing persons to go house to house and offer attractive prices to households if they buy huge quantity.Offers will be made to customers to retain them for a long time with the company.

Place

Plant locationThe plant of RC cola is located at D-210, state Avenue, SITE, Karachi. Royal Crown Cola should use the push strategy for their product by using different promotional tactics and through media. Distribution will be divided according to the number of areas and the nature of customer according to the literacy rate. Because if the company offers online buying than it would not be affective in rural areas of Pakistan. Representative of the company should directly go the retailers to offer them facilities like bonuses and incentives. In Lahore they should try to ask international Royal Crown Cola to give them franchise in a tax free zone and provide plants for both glass and PET bottles.Distribution Strategy:Distribution strategy which we suggest for RC is Intensive distribution because beverages are the FMCGs and these types of products need more outlets as much possible.

Marketing expenditureElectronic MediaCHANNEL TIME DURATION TOTAL

GEO PRIME TIME & POST PRIME TIME 1 MIN 22,00000

DUNIYA TVPRIME TIME & EARLY DAY 1 MIN 2050,000

AJJ NEWSPRIME TIME & EARLY DAY 1 MIN 15,00000

SAMAA NEWS EARLY DAY & PRIME TIME 1 MIN 14,00000

Total 7150000

Print Media

NEWSPAPER PAGER COLOR ORBLACK & WHITE SIZE DAILY BASIS WEEKLYBASIS CHARGES

JANG FRONT COLORED STANDARD SIZE DAILY 18,000

EXPRESS MID COLORED STANDARD SIZE DAILY 14,000

DIN FRONT COLORED STANDARD SIZE 15,000

DAWN MID COLORED STANDARD SIZE 20,000

DAILY TIME BACK COLORED STANDARD SIZE 12,000

AKHBAR E-JAHAN BACK COLORED STANDARD SIZE WEEKLY 20,000

Total 99000

LOCATIONS SIZE DURATION TOTAL COST

DEFENCE 2060 1 MONTH 2,00000

NORTH NAZIMABAD 2060 1 MONTH 2,50,000

SHAHR-E-FAISAL 2060 1 MONTH 2,15,000

GULSHAN 2060 1 MONTH 1,15,000

SADDAR 2060 1 MONTH 1,50,000

BillboardsTOTAL 9,30,000

BudgetingS.NO DESCRIPTION AMOUNT

1. COST OF LAND 5,0000000

2. RAW MATERIAL 40,00000

3. STATIONARY 5,00000

4. OFFICE EXPENSE 1,00000

5. FURNITURE 5,00000

6. STAFF SALARIES 5,00000

7. FREIGHT INWARD CHARGES 6,00000

8. REPAIR & MAINTENANCE 1,50,000

9. RESEARCH & DEVELOPMENT 1,00000

10. TECHNOLOGY 10,00000

11. MARKETING & MEDIA EXPENSES 1,13,59,000

TOTAL 6,88,09,000

BREAK EVEN ANALYSIS:filtration plant2= (10,000,000*2) = 20,000,000sterilization plant 2 = 8,000,000*2= 16,000,000packaging and labeling plant 2= 16,000,000Factory size 3500 feet height 16 yearly rent= 6,000,000Sum of Salaries of employees= 7,200,000Other supplies = 5,000,000Total fixed cost 70,200,000Electronic media cost 7,150,000Print media cost 99,000Billboards costs 930,000Total cost 78,379,000Average Variable cost per unit 11BREAK EVEN SALES POINT:Revenue = 25+30+35/3=30*QCost=78,379,000+11*QRevenue = fixed cost + variable cost30Q=78,379,000+11QQ=4,125,210units must be sold each year to reach to breakeven point.conclusionWell, according to our knowledge about marketing, we conclude that RC Cola failed in Pakistan because of its poor attention given towards the ad campaign. Even in Pakistan people used to drink RC Cola and they really likedit, but it's all about many years ago in 1970's n 80's may be because there was no other cola at that time. When other colas came they advertised and they did it so well that people were attracted towards them. It's also about how you present it, the looks of the product.RC Cola's bottle is not appealing and the regular one specially looks so thin, it seems as ifit has less drink inside, that's why thedrink has reached its decline and rejection. It is possible for them to rise again through the proper attention towards the advertising and the outlook of the product. It should need to be appealing and beautiful, it should be trendy. That's what it needs and right advertising at the right time can do a lot, It needs to know the important about how can we market a product in a way that itcan give fashionable and trendy impact on the people.Page 4

MARKETING MANAGEMENT