Coca Cola New Item Analysis

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The Coca-Cola Company’s core undertaking is to profit and refresh everyone it gets to. Founded in 1886, we will be the world’s leading manufacturer, marketer, and distributor of non-alcoholic beverage concentrates and syrups, which are being used to produce nearly 400 beverage brands that define for our large portfolio. Our corporate headquarters happen to be proven in Atlanta, and we are holding local businesses in over 200 countries around the world. Our activities cover all sectors of the beverage industry. We are the second leading player in useful and Asian specialty refreshments, while ranking number 1 in worth for the ready-to-beverage tea sector (ref.1, p.1).

description of the brand 4th grade book new product, & strategic role in the future position of the company

“Bubble Buzz” will be a bottled beverage and you will be positioned as the sole ready-to-drink Bubble Tea item available on the market. The beverage will have a green tea base with improved fruit flavors (interest fruit, strawberry and lime) in addition to tapioca pearls. It will bring an entirely unique drinking experience to its consumers. It’ll present itself as a funky and unusual alternative to traditional tea while providing the great taste of authentic fruit juice within an attractive and convenient packaging. The strategic role of Bubble Buzz for The Coca-Cola Company is centered about three objectives:

  • To stay at the forefront as the market leader in innovative product introductions and effective product launches;
  • To strengthen and satisfy the wants of the even more adventurous Generation Y customers with a fresh eye-catching and functional merchandise.
  • To end up being the market innovator in the functional beverages segment with increased market shares.


Consumption: The sales volume level for the functional refreshments segment (ref. D2) in UK has reached $342.2 millions in 2004 for a level of 125.9 million liters (ref.2). This product segment has shown a steady growth since 1999: a rise of 13.5% over a period of 6 years (Appendix A). The consumption rate per capita in 2004 has reached 3.94 liters, which represents a 4.0% increase in comparison to 1999 .The growth of the particular market is basically because of a slow change in consumer trends.

Trends: Through the first 1960s, soft drinks were synonymous with “colas” in your brain of consumers. In the 1980s and 1990s, however, other beverages (from bottled water to tea) became 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 industry’s value has increased in 2004, the quantity sales of carbonated carbonated drinks has declined because of a big proportion of consumers who are deciding on the trend towards healthier alternatives in the efficient drink segment (energy beverages, smoothies, milk & juice refreshments, sports drinks) along with bottled juices and drinking water .Companies have been actively engaged in new product developments as a way to counter the growing issues about negative well being impacts of high-fructose drinks, but also to improve the demand in a market where product offerings happen to be quickly maturing .New taste introductions and health-conscious formulations have been launched so that they can offset the decline in carbonated soda sales .The functional industry is expected to show sustained growth and consumer interest in the foreseeable future years as usage shifts to trendier, better and more complex products .

SWOT Examination (Strengths and weaknesses, prospects and threats)


  • Brand strength
  • Effective stride in brand-new markets
  • Results of operations
  • Strong existing distribution channels


  • Reliant after line extensions
  • Reliant after particular carbonated drinks
  • Brand dilution
  • Entrance into tricky non-core categories
  • Saturation of carbonated soft drink segment


  • New product introductions
  • Brand is attractive to global partners
  • Strong competition


  • Potential health issues
  • Free trade


  • Brand strength

The Coca-Cola Company may be the major manufacturer, distributor and marketing expert of nonalcoholic beverage concentrates and syrups in the world. The Coca-Cola company is unarguably probably the most recognizable brands in the 200 countries where it markets its products. The strong brand name is probably the basis for the business’s competitive advantage on many of its core markets.

  • Effective strides in fresh markets

Coca-Cola offers partnered with some companies (such as the joint venture with Nestlé) as a way to increase the capability to react to demands and improvements in the markets of iced tea, espresso and juices. The producing markets are more complex than the carbonated carbonated drinks.

  • Results of operations

In 2004, net-operating revenues totaled around $21.9 billion, an 8% increase

from 2002. Gross income totaled $14.3 billion in 2004. The company generated $5,968 million from its operating actions and re-invests heavily into its business. The opportunity to generate significant money flows is probably the its primary strengths (ref.16).

  • Strong existing distribution channels

Coca-Cola has functions worldwide and is more developed in its distribution channels (such as for example store retailers or vending machines). As a result, a fresh product launch can typically rely on the existing distribution system in order to reach nearly all its target market while requiring no main supply / delivery developments.


  • Relying after line extensions

Coca-Cola is counting on brand extensions increase revenue in specific lines, specifically its long-time carbonated soda products (we.e. the introduction of Vanilla Coke helped maintain sales for the key Cola beverages). However, there exists a strong risk of cannibalizing existing revenue in the long-term (for example, Bubble Tea might deter on sales for iced tea).

  • Reliant upon particular carbonated drinks

The long-time presence of Coca-Cola’s Coke beverage has generated this particular brand as a flagship merchandise. While the core Coke items bring a good base of product sales and loyalty to the business, consumers’ expectations also become more and more anchored and single-lined, removing freedom in the areas of line diversification and product modifications (taste, packaging, price tag).

  • Brand dilution

The boat load of existing makes and new item being introduced by the business could diminish the value and differentiating strength of every product that’s being manufactured.

  • Entrance into hard non-core categories

The Coca-Cola Firm is a truly global multinational organization giant. While some types of products are distributed in many areas of the world (Coke, Powerade, etc.), geographical needs already require that these global brands are seriously adapted with their target region. Furthermore, various smaller and diversified products are pretty much popular in a single particular place over another. Therefore, the process of diversifying the production and marketing each item involves expensive investments. These capital requirements typically increase as the merchandise becomes heavily focused (for example, because the Coca-Cola brand is highly recognizable worldwide, promoting a bottle of Coke in Japan will be less difficult than advertising a bottle of “Qoo” for the reason that same country - “Qoo” being a lesser-known non-carbonated drink that was one of Coca-Cola’s most recent brand introduction in 1999).

  • Saturation of carbonated soft drink segment

Due to the countless number of brands available on the market, it becomes increasingly complicated in the carbonated drinks segment to innovate and create new products that genuinely stand out from their competition. And as we have seen, an evaluation of the market has shown that progress in the carbonated drinks market becomes difficult and challenging when the conditions and consumer trends result in a market demand that stays stagnant.


  • New product introductions

The functional drinks industry is one that particularly allows more technology opportunities and provides greater freedom for creativity in the design, production, manufacturing, distribution, advertising and retailing selections and processes.

  • Brand is of interest to global partners

Because of the company’s size (including value, brand name and operating revenues) and large portfolio bottom, Coca-Cola enjoys a strong purchasing vitality over its suppliers, and in addition attracts large partnerships with various degrees of buyer reach (e.g. Burger King, movie studio offers, sponsorship agreements, etc.). Existing brand awareness also provides an international playing field for powerful marketing strategies.


  • Strong competition

Coca-Cola is certainly competing in a worldwide market that is characterized by an oligopoly between more than a few (but few in numbers) competition. The fight for marketplace shares and revenue in crowded markets becomes a complex one.

  • Potential health issues

The current development of consumer and consumers groups’ awareness towards items and companies is both beneficial and threatening for companies in the meals and beverages industry. Over the last few years, concerns over health issues include risen in the media through an expanded and ever-developing network of “knowledge outputs” (journals, TV channels, internet and so forth). The move of younger generation towards a healthier lifestyle demand careful setting up and decision-making in innovative product developments. Large firms can also easily end up being the target of consumers’ apprehension.

  • Free trade

In an era of globalization, large international competition will come out with comparative advantages (the constant fight to remain the 1st mover and market innovator in a long-term spectrum). Issues arise when dealing with price competition and economical growth. Trade organizations are also confronted with public pressure that may disrupt operations in a single or more areas of the company.


Segment identification: RTD (Ready-to-beverage) bottled Bubble Tea, to become founded within the Functional Beverages sector

Segment needs: The product will focus on both physiological necessities (hydrating and nutritional value) and social needs (perception of a interpersonal, fun drink with a feeling of belonging within peer consumer groupings) - (ref.11, p.127).

Segment trends: The existing trends include a shift away from junk foods and carbonated drinks, an evergrowing interest for healthier / effective products for the “mind and body” (ref. 10), the tendency towards the option of on-the-go products for those with an active lifestyle, plus the style for personalization through customization (or for beverages, through variety-seeking in a broad intro of flavours - ref.6).

Segment growth potential: Statistical information anticipate a segment development of 1 1.72% over another 9 years (2015) for the 10-29 years old subsets (ref.12). Refer to Appendix E.

Size of the segment (population): 8,688,300 (329,600 L). Refer to Appendix E.

Positioning strategy: The simply RTD bottled bubble tea available. Funky & eye-catching bottle, functional

packaging, premium-priced, cool, latest and unusual, one of a kind drinking experience, areas of play (tapioca pearls, oversized coloured straw), selection of flavors, nice, refreshing, for hip & young people, healthier option to heavy-sugar drinks.

The objectives of the marketing plan are strategically centered around 3 criteria: to produce a strong consumer consciousness towards a totally new bubble tea merchandise from Coca-Cola, to establish a wide brand reputation through the record of industry shares in the functional drinks segment, and to end up being the top market leader in that particular segment within the forecasted product sales figures.


The core

Bubble Tea beverage in a pre-bottled, ready-to-drink structure.

The actual product

Packaging and labeling: look at figure below

Branding: colorful, facet of play, round formed, prominent Bubble Buzz company logo written in contemporary font, catchphrases such as “Think beyond your Bubble” and “Get Your Buzz”.

Trade brand: Bubble Buzzâ„¢, a Coca-Cola product

Brand personality: strength, funky, cool, functional, classic, funny, healthy, etc.

Brand equity: Coca-Cola offers a quality, consistent, impressive and accessible soda reputation.

Augmented product

Nutritional information, Status (public drink), Features promoting the website, Health good thing about a green tea base (ref.17)

Marketing considerations

Product life routine: Bubble Buzz is certainly a low-learning product. With a solid marketing campaign, “sales [will] commence immediately and the advantages of the purchase are readily understood” (ref.11, p.301). Since Bubble Buzz is definitely susceptible to product imitation, Coca-Cola’s strategy is definitely to broaden distribution quickly, which happens to be feasible thanks to the business’s high manufacturing capacity.

Product class: Food & beverage ïƒ CARBONATED DRINKS ïƒ Functional Drinks (refer to Appendix D2 for a break-down of the functional refreshments market).

Bubble Buzz comes after the practice of item modification (ref.11, p.304): Coca-Cola is presenting a preexisting beverage (bubble tea) but redefines the take in with a new, far more convenient package deal. Bubble Tea will now become a widely available take in in multiple retailing (distribution) channels.


The price strategy that will be undertaken should consider the next aspects:

  • Consumer demand
  • The product lifecycle
  • Potential substitutes

Customer demand

Customer demand is a crucial factor which is motivated by tastes, income and availability of others similar items at a different value (mentioned afterwards in the potential substitutes section). For a lot of consumers, value and selling price are very related: ‘’the higher the purchase price, the bigger the value'’. Therefore, Coca-Cola’s intention to put Bubble Buzz as a distinctive, innovative and attractive product gives it a particular control over Bubble Buzz cost. To implement higher pricing though, the minimization of the non-monetary costs to customers should also be contain along with knowing of the merchandise (notably by advertising) and value (benefits) .

The product lifecycle

The company should make the most also to the fact that the newer the product and the sooner in its lifecycle the bigger the price can generally be. It ensures a high profit margin as the early adopters choose the product and the company seeks to recoup advancement costs quickly and it also brings some prestige to the merchandise.

Potential substitutes

Coca-Cola is definitely constrained by the monopolistic industry in which it competes. The primary characteristic however is item differentiation.

Other constraints (Find Appendix M)



To initiate strong recognition about the release of Bubble Buzz throughout Technology Y (10-29 years old) consumers together with their parents.

To win industry shares over our leading functional beverages competitor, PepsiCo.


The promotional outputs will convey the clear message that “Bubble Buzz is a healthy beverage for sporty and fresh persons who simply enjoy taking care of their body and life.”


“Think outside the bubble”: Be Bold, End up being Original, VARY, Be Yourself.

“An excellent spirit in an excellent body.”

“For the out-of-the-ordinary people who like to challenge themselves.”

Media selection:

Before choosing the correct medias, it is necessary to note that Generation Y customers only give partial focus on media. However, they may be reached through integrated courses. They are typically using several communication media at a time; a behaviour that can often be called “multitasking”. This band of customers doesn’t give its total attention to one single message, but instead uses continuous partial focus on scan the media. Advertisers can still communicate with Generation Y by by using a variety of targeted promotional tools. Another important tactic to attain our target market is through “Viral” or “Buzz” marketing, which Coca-Cola will intensely use in this advertising campaign (campus, contests).


Refer to APPENDIX H for in depth explanations




MTV, Many Music, VrakTV, YTV


MIX96, CKOI 96.9, 94.7 FM, Universities


For girls: Cosmo, Elle

For boys: Athletics Illustrated (or Children edition)


Banners on go for websites (gaming 500 word paper, sports activities, etc.)

Official promotional website:


Billboards and prints in go for areas including:

Campuses, transportation (bus, metro, stations)

Tourist areas in huge seasonal periods

Outskirts of key locations in geographical reach


Not relevant

Personal selling

Direct connection with retailers, sales kit strategies to be explained later on in the text.

Public relations

Stands or special shows and events in schools, malls, sports occurrences (i.e. 2008 Beijing Summer Olympic Game titles), sponsorship activities


Conferences, press releases (print and on line), buzz marketing through Tv set coverage

Promotional Mix:

Consumer oriented:

Contests: “Win another Bubble Buzz flavour”, “Uncover a key code underneath the bottle cap and succeed sporting goods and electronics by logging on the site”, “Win a vacation for the 2008 Olympics in Beijing”. (Arguments: It’ll increase consumer buys and inspire consumer involvement with the merchandise).

Samples: distributed in supermarkets, school/universities. Samples are a way to avoid product resistance since persons are not used to discover bubbles in their drinks. Arguments: It will encourage new product purchases and it represents low risk for customers given that they get it for free. They have nothing at all to loose by seeking it.

Point-of-purchase: in supermarkets (to reach the parents of era Y). Arguments: Additionally it is a mean to increase product trial and provides an excellent product visibility.

Others: In subsequent years, take part in product placement in TV shows or movies.

Trade oriented:

Allowances and discounts: case allowance (Arguments: The “free of charge goods” approach will be used so it can motivate retailers to buy more of the product to get a certain amount for free).

Cooperative advertising: to inspire retailers to buy our product and maintain our advanced of advertisement that consumers expect from Coca-Cola.

Other considerations:

Scheduling of the marketing: Pulse scheduling (promotional occurrence year-round, but emphasized and intensified ahead of and during summer).

IMC (integrated marketing conversation)

Target Audience:

Intermediary: personal selling could be more often used

Ultimate consumer: Coca-Cola use more of mass media for the reason that amount of potential buyers is large.


Bubble Buzz will come to be distributed through these channels: supermarkets, convenience stores, independent food stores, price cut stores, multiple grocers, vending equipment, direct sales.

China is the target country we will expand our product.


With a complete population of just one 1,313,015,000 in the end of 2005 and 327,714,000 inside our target market (age 10 to 25 years old), compared with the total population of Canada—304,453 million, there definitely is a great potential worth to work on.

absolute expenditure on meals and non-alcoholic beverages is likely to increase from 1,777 billion in 2005 to 2,154 billion this year 2010 (though the proportion of buyer expenditure on this portion is decreasing from 28.39% to 25.75% )

Soft drinks industry is probably the fast growing sectors in China, especially fruit/vegetable juice, RTD tea, and Asian speciality drinks and water in bottles have shown a sharp rise during 1998 to 2003.

Bubble tea was originated in Taiwan. Soon after its launch in China, it started to be one of the popular beverages sold in tea shops on the streets because of the similar taste and identical cultural background. So, it is a good chance for us to enter this market.

Since we will be the best sponsor for the upcoming Beijing Olympic in 2008. With more possibilities to expose to the public, it is going to benefit our sale right now there.

Our entry-strategy for entering China is through licensing.


We have already provided licenses for manufacturing our goods in China (licensing the bottlers and offer them with our syrup necessary for producing). Therefore, added in a single or two more products in our production chain would not be that difficult.

It is comparatively low risk when compared with direct investment there. It really is low cost to export our services there since we can maintain lower labour cost and lower material price if we develop our products locally, specifically in China.

Changes to be produced:

Price: Cost sold in China is going to change to accommodate the local desire. As we place our cost sold in Canada $2.00. When compared to price distributed in the bubble tea retail store ($ 3.50), it really is about 57.14%. So, with the information we gathered from the tea shop in China [1] , the purchase price sold there will be 57.14% of what purchased in the tea retailer—$12 Yuen in China currency. Then, it would be around $7 Yuen, about CAD$1 [2] .

Naming the product: In order to be recognized and accepted easier for the local market, we need not only translate our product name but also make certain there’s certainly not hidden unintended meaning that would damage our merchandise.

Develop other flavours that could attract the local market: Since milk established bubble tea sell better in China, we will add this product line. As well, we will stay away from way too many artificial colors because they are not appreciated up to in Canada. Moreover, persons in China are becoming an increasing number of health concerned, especially the amount of sugars and additives added in the drinks. We will make some changes in the materials used to appeal the neighborhood market, i.e. much less sugary drinks.

Promotion: In contrast to the radio ads in Canada, we will use more TV and Web advertisement there because of the highly exposed environment in China. As well, we will put extra emphasis on the ads on the public transportation such as underground/subway program and bus service due to the more frequent utilization of the general public transport service there. Likewise, because the outdoor display screen is pretty popular in big towns, we will also take advantage of it

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