Economical
Though the economic environment is influenced by domestic economic policies, it is also dependant upon World economic trends. Rates of economic growth, inflation, consumption patterns, income distribution and many other economic trends determine the nature of products and services required by consumers, as well as how difficult it becomes to supply them.
Social
The social influence is regarding the people’s taste, interest and lifestyle and the effect that it may have on the product because people are more concerned about healthy living, therefore it may have a negative effect on the product because they have a lot of sugar in their soft drinks.
As will changes in cultural values and social trends, such as family size and social behaviour. Factors may include the consumer lifestyle changes; as if the consumer decides to drink drinks with high fat etc, then the coca cola product will face huge problems. Further more if the product contained animal fat or such, then this will put off potential buyers as they may be vegetarian or it may be against their religion.
If consumers or any other organisations are unhappy the product Coca cola in anyway, they can either set up or join a pressure group. Protection pressure groups may be set up to fight a specific issue, such as the closure of a plant or the increased traffic on a road as a result local business. Promotion pressure groups are usually more formal and would be set up to fight highly organised campaigns across a range of issues.
Technological
In making goods and services, organisations must become of new materials as well as developments in manufacturing and business purposes. At the same time, organisations to look at the nature of products and, in particular, they’re cost effectiveness, as well as their performance in relation to the competition.
The Boston Matrix
The Boston matrix is a useful tool to understand product/services portfolio in multi product firms, the Boston matrix classifies products on the:
- Expected growth rate, measured by expected growth in sales revenue
- Market share relative to rival products
The most appropriate marketing strategies based on the Boston matrix are those, which aim to keep a balanced portfolio of goods or services ensuring that there is enough cash – generating products to match the cash-using ones.
All of the sections in the Boston Matrix represent where a business’s products are in the market and how they are doing. Most of Coca-Cola products would be in the star section because they are in a high growth market with a high share of that market and they generate a high amount of income. Stars need to be in a balance by not having problem child, dog, or cash cows. The funds generated by the Cash Cows are used to turn problem children into Stars, which may eventually become Cash Cows. Some of the Problem Children will become Dogs, and this means that a larger contribution from the successful products will be needed, to compensate for the failures.
Here I have looked in to each section and placed it in the matrix. This is does for every product in the range in order to plot the products of their rivals to give relative market share. Therefore coca cola product fits into star section in the Boston matrix because it is a existing product which has a high market share and is doing very well in the market. One example of this is ‘Red Bull’ this is because it hasn’t been on the market for too long and is still selling well.
Problem Children-
These are products with a low share of a high growth market. They consume resources and generate little in return. They absorb most money as you attempt to increase market share. Therefore this may relate to Coca cola as such their soft drink Fanta because it needs a lot of money in order to increase the market share by investing in advertising and on promoting the product.
Cash Cows-
These are products with a high share of a slow growth market. Cash Cows generate more and more than is invested in them. One example of this is Coca-Cola classic, this is because the product has been out for a long time and is still selling well and is one of their best selling products after all the years its been out.
Dogs-
These are products with a low market share and a low growth market. They do not generate cash for the company they tend to absorb it. One example Cherry Coke because it has been out for a long time and it is now being taken of the shelves because it is not selling anymore.
Ansoff's Product/Market Matrix
The Ansoff matrix is analysing the current future state of the business and identifying the strengths and weaknesses of the business environment and identifying the strengths and weaknesses of the business. The Ansoff matrix is a simple planning tool that can help with strategy development. The Ansoff matrix recognises that in order to grow a business has to consider both its markets and products. The combination of existing and new products and markets provides different marketing opportunities.
Market Penetration
The Coca-Cola Company lies in this position at the market penetration because they concentrate their activities on those areas where they have established a competitive advantage and focus their attention on maintaining their market share.
Product Development
New product development can be risky and expensive and it requires insight to make a decision about whether to go ahead with it or not. Coca-Cola must try and identify where there is a place in the market and try and fill it.
Product life cycle
1. Introduction: Product introduced, promoted and advertised.
Sales slowly pick up.
2. Growth: Products well accepted in the market.
Sales and profits rise rapidly.
3. Maturity: Potential sales have been achieved and there is a slow down in any further growth.
Profits begin to decline due to increase costs to fight
4. Decline: Increasing competition on results in falling sales, this leads to crop in profits.
Product will eventually be withdrawn from the market.
The product I have chosen is Coca-Cola, therefore To prolong the lifecycle, a brand or a product, an organisation needs to readjust the ingredients of the marketing mix, (this is what I plan to do). Periodic injections of new ideas are needed for product improvements, line extensions or improved promotions.
Coca cola will also promote heavily by advertising everywhere, including televisions, magazines, billboards, and etc.