The purpose of this assignment is to provide a marketing strategy for a new sports drink that will be produced by the Coca-Cola Company.

Market Research is split into 2 different sections.

There is primary research, and secondary research.

Researching is a very important aspect of marketing as it helps me to:

• Find out who the target market are – I will need to find out who my target market are, and how the sports drink market is segmented.
• Understanding different customer needs

To do this, I will use primary and secondary research.

Primary Research

This is research that allows both quantitve (factual data, often numerical) and qualitive (subjective opinions) data to be collected. It involves getting original data directly about the product and market. Primary research data is data that did not exist before. It is designed to answer specific questions of interest to the business

I will start my market research by conducting primary research.  

There are a lot of ways to carry out primary research.

They are:

• Telephone interviews - similar questions to face-to-face interviews, although often shorter.
• Online surveys – using email or the Internet. This is an increasingly popular way of obtaining primary data and much less costly than face-to-face or telephone interviews.
• Questionnaires – The use of questionnaire will allow me to gather information that cannot be found from sources of secondary research such as books, newspapers and Internet resources.
• Focus groups and consumer panels – a small group of people meet together with a “facilitator” who asks the panel to examine a product and then asked in depth questions. This method is often used when a business is planning to introduce a new product or brand name.
• Taste Testing: this is very important, especially for my product. This is where I select a number of people to taste the drink, and give their opinions on the drink. I will definitely be using this method as it is very vital that I gain feedback about what people think of the drink.

For my primary research, I will be conducting 3 different methods of primary research. This way, the information I collect will be a bit more accurate that when I do just one method.

The 3 methods I will be using to conduct my primary research will be:

1. The use of Surveys/Questionnaires – from using the questionnaire, I will find out some basic information that is linked to price, place and promotion.  I will use questions that go straight to the point, so the person filling the form does not get bored and lie in the questionnaire. Main advantage of this is that it is quick to collect information, and a disadvantage is that some people might lie on the questionnaire, possibly because they are in a hurry.
2. Organizing focus groups: By doing this, I will get peoples opinions of the product.  The people I will target for the focus group will be customers that usually or occasionally buy sports and energy drinks.
3. Taste Testing: this is also a bit similar to organizing focus groups, but I will get opinions about the actual product, and what people think about it. A great advantage of this is that other people are able to build on peoples responses, and it’s quick and relatively easy. A limitation is that the response of each participant is not independent.

I have decided not to go with other methods of primary research such as telephone and online surveys as they may not be as reliable as face to face surveys and focus groups, as I decided to go with telephone surveys, people I’m surveying, might not pick up their phones, and people online might not respond on time, so doing face-to –face survey will be a lot faster, and I get the information I need a lot quicker. I have also chosen to go with the focus group method as then; I get information from potential customers and know what they really think, although setting up focus group might be quite tough, as some consumers might not have the time. When I do get the consumers into a focus group though, I might not have control over the group, and time can be lost on issues irrelevant to the topic. The data collected will also be tough to analyze because the talking is in reaction to the comments of other group members.

 I want to establish that my target market will buy the product and what can be done to maximize the sales of the product, which can be done by launching an advertisement campaign to make people more aware.

Secondary Research

This type of research is about looking into the past. That has been researched in the past. It can also be inaccurate and sometimes useless, but I will only use data I think is up to date. Secondary data can be obtained from two main sources.

Internal

Secondary research data can be obtained from internal sources usually from businesses and firms. Examples of this are:

Sales records, stock records, financial records, customer database, existing research data and past promotional data.

External

This is usually obtained by public means. Such as:

Government statistics, commercial firms, the media, competitors’ annual report, internet, library, articles, newspapers can all be used as a source of secondary research. Using external data saves a lot of money and time and also serves as a basis of comparism for other data.

Current Market Position of Sports Drinks

In 2006 the sports drink sector was worth £773m, which is an 11% rise on 2005, according to Mintel, and its value is expected to reach £800m by the end of this year.

But not every segment of this sector is enjoying a boom time. Stimulant energy drinks, in particular, increasingly have to compete with more mainstream soft drinks and have their work cut out

By 2012 the combined sports and energy drink market is predicted to be worth £979m, a 17% increase on this year, according to Mintel

The UK is Western Europe's biggest energy drink market by far. Volume sales rose by more than 14% to an estimated 120m litre in 2006. With strong roots in the on-trade as a mixer for young party-goers, energy drinks are experiencing a swing toward retail.

Energy drinks' growth in the mainstream is a result of consumers' changing agenda, with the factors of health, convenience and provenance affecting purchasing decisions. While still the market leader, Red Bull is witnessing a gradual erosion of its market share as its competition proliferates and ever-more 'healthy' juice- and water-based alternatives appear on the market.

Analysis shows that most of the growth experienced in the market so far has come from existing users drinking the products more often, rather than new users being attracted to the sector. There are key groups that have yet to be won over, most obviously older and female customers. The key target group, however, remains 15- to 34-year-olds. It may well be that the development of new products is necessary to tempt other consumer groups as existing products are not doing the job, but manufacturers are looking to broaden the appeal of their products to build sales.

The role of energy drinks is potentially broader. The long working hours put in by the British, combined with commuting, means many employees could be an ideal target market for these drinks. Their strongest association is with young drinkers and clubbers looking to mix them with alcohol to keep them going through a night out.

This data will help me in to produce a good promotional strategy as now i know what the major target market for sports drinks are. Although, with this new drink, there could be other new unexploited target groups.

Competition Analysis

Coca-Cola’s main competition is the:

Pepsi Company - PepsiCo, Incorporated is a large conglomerate with interests in manufacturing, marketing and selling a wide variety of  and non- beverages, as well as , sweet and -based snacks, and other foods. Besides the  brands, the company owns the brands , , , , , , ,  and . In 2007, Pepsi’s Net revenue increased 12% primarily reflecting favorable effective net pricing and volume growth. Effective net pricing contributed 4 percentage points and the volume gains contributed 3 percentage points to net revenue growth. The impact of acquisitions contributed 3 percentage points and foreign currency contributed 2 percentage points to net revenue growth. Total operating profit increased by 10% from 2006. In the soft drinks market, Pepsi are Coca-cola’s main competitors as they own 14% of the market share in the UK, while Coca-Cola owns 15.2%

Pepsi have a history in providing sports drinks. They have one that especially rivals Coca-Cola’s Powerade, which is the Pepsi Gatorade.

Lucozade Sport

Lucozade are the major producers for sports drinks in the UK and around the world. Since its launch  has been the market leader in the sports drink category with just under 60% value share of the category. Key competitors include Red Bull and Powerade (Coca-Cola) with 27% and 4.5% value share respectively. 2003 also witnessed the introduction of several Private Label sport and energy drink launches from the major grocers. Lucozade will take Coca-Cola’s strategy seriously and probably try to develop a new strategy to stop it gaining market share. They will probably introduce a product with a similar USP. If this should happen, new USP’s will be introduced to he existing product.  

(Source: Nielsen value share data, MAT to December 27th 2003).

How customers currently perceive Sports Drinks

As a part of my secondary research, I was surfing around the internet, and found a question that someone asked. The person asked the general public. What are your thoughts about sports drinks? The public’s answers were as follows:

“We live in the desert, it’s about 45C right now, and as much as Mister and I try to stay hydrated, we still get dehydrated now and then. I tend to keep a bottle of Gatorade on hand, especially during the summer months, and we drink on an as needed basis. Neither one of us likes the newer, fancier formulas, so we try to get the old fashioned stuff just for electrolyte replacement. Mister likes Red Fruit Punch and I like purple Grape flavored. Other than the constant risk of dehydration here, I wouldn’t bother with sports drinks”. This type of customer will be targeted mainly by advertisements of how Coca-cola’s product combats rehydration.

“I drink Lucozade- I take a bottle with me to school every day because i never get enough sleep and so am always low on energy. It really boosts me, but when it wears off the crash is really NOT GOOD. Sometimes I take coca cola or Pepsi instead, and the effects are the same.
I know this isn’t good for me, but it’s either that or fall asleep in every class.” Apart from the fact that coca-Cola’s drink will help to combat rehydration, it is an energy drink, and contains more proportion of water than the human body, and less sugar. This will help keep one active, but unlike other popular sports drinks, actually refreshes body contents, unlike add new ones.

“For us firefighters, dehydration is a MAJOR issue at big incidents. Service policy is that we don’t use them. We stick to water. That said, as individuals, we sometimes find that we need to replace electrolytes so we have sachets in our kit bags that we can make up ourselves should we feel that we need them.”

On a different website for cyclers, I found another question that a curious person asked. “Do you think power drinks help you keep going?”

Answers were as follows:

“Rule of thumb for me is anything under 1 hour = water. Anything over and I take Gatorade, regular concentration (per directions). For extra long or hot rides I am considering taking Endurox or one of the "endurance" formula drinks, there's more salt and electrolytes in them. Post-exercise I have found that a simple low-protein meal replacement powder with milk does the trick and then take Gatorade to bring my weight back up.”

“Higher temps mean more fluids. The higher the temp, the more water I drink. Kidneys get angry when dried out, throw stones. I like a Red Bull, or Boo Koo, sugar free, pre and during rides. Hydration is a 24/7 job. I like Cliff bars pre ride. Gatorade during rides for me when it gets near 90. Type II diabetes, I stay away from too much sugar. It does take energy to turn the cranks. Pop Tarts post ride work too. Hi-Gycemic simple sugars are recovery fuels.  I save my proteins for later.”

So, in general, I would say that sports and energy drink customers perceive sports drinks in a good way. The athletic customers use it to combat dehydration. Although some people like to use them to fight dehydration, some people might be worried about the amount of sugar or salt that can be found in sports drinks. Someone else, probably a teenager takes energy drinks to school every day for energy to work at school. As the drink is a hypertonic one, it contains less sugar than the human body, and more water, so it refreshes the body with more water contents. I will make sure to include this information in the advertising campaign as some consumers might like it natural.

Consumers and Fizzy drinks

While I was researching the sport drink and soft drink market, I found out that most customers of sports and soft drinks are not very big fans of fizzy drinks. This is because, especially for a sporty customer, fizzy drinks can slow them down. My product will increase Coca-Cola’s share in the market a lot as fizzy drinks sales are decreasing.

“The UK spends £5 billion a year on the fizzy drinks, and is the world’s tenth biggest cola market, while the volume of soft drinks purchased by consumers worldwide this year only increased by 1.9 per cent, compared with 3.8 per cent just five years ago. It predicts the figure will fall to just 1.7 per cent by 2007.”

(Source: )

Marketing Mix

The marketing mix of sports drinks in general consists of four basic variables which can be considered as the main and most important.

Primary Research

I will start my primary research by first producing questionnaires. These questionnaires should help me know what customers want, and what they would like.

Questionnaire

1. Do you buy sports drinks?

Yes ▢                No▢

2. Age Group  

14. ▢       14-18  ▢       18-25  ▢       25-30  ▢     30+  ▢      

3. How often do you buy Sports Drinks?

300ml per week  ▢      600ml per week  ▢      1 litre per week  ▢      

2. litres per week  ▢      4 + Litres  ▢

4. Where do you hear most about Sports Drinks?

     TV  ▢       Magazine/Newspaper Adverts  ▢      Internet  

5. Where do you mostly buy Coca Cola Coke?

     Local Shops/Newsagent  ▢       Super Market  ▢      Other  ▢

6. Do you buy according to taste, packaging or content?

                     Taste  ▢      Packaging▢       Content  ▢

7. Would you prefer Cola Flavoured sports drinks over the regular versions of sports drinks?

      Yes  ▢       No  ▢

8. What sports drinks do you Purchase out of the following?

      Lucozade ▢     Coca-Cola ▢     Pepsi ▢     ▢

9. How much would you be willing to pay for a can of the new cola flavoured sports drink?

            £1.00  ▢       £1.50  ▢       £2.50  ▢       £3.00 ▢

10. Do you think that the new cola flavour would be an encouragement to other active sports customers to choose?

 

               Yes  ▢       No  ▢

11. What do you think the drink should be called?

Before I give out the questionnaires to members of the public, I will need to consider who I will give it to, in order to get relevant and accurate information. To do this, I will need to select a suitable sampling method.

Sampling

This is the process of selecting an appropriate sample. I will be using a sampling method to select who fills in my questionnaire to make sure I get the most relevant information needed.  Sampling can be done by 2 different methods:

• Probability sampling

Simple random sampling – this is the purest form of probability sampling. Every member of the public has an equal chance of being chosen. This might not be the best method of sampling to use as it is very random. I have to consider the face that the person who fills the questionnaire in might not be interested in filling it, or be interested in any coca-cola products, not to talk about the energy drinks. If someone like this does fill out my questionnaire, I will end up with irrelevant data. Although, it could be good as when there are very large populations, it is often difficult or impossible to identify every member of the population, so the pool of available subjects becomes biased.

Systematic Random sampling – This is often used instead of random sampling. It is also a random method, but done systematically, that is, choosing random people with a system. For example, having every 5th member of the public surveyed.  As long as the list does not contain any hidden order, this sampling method is as good as the random sampling method. Its only advantage over the random sampling technique is simplicity. Using this method will be a lot easier for me, than just selecting random people from the public as if I used the simple random sampling method, I would rather choose some people over some, but if I use this method, I know I will only have to choose the Nth member of the public, so it will be easier than random sampling, but I would probably also get the same results as random sampling as the members of public are still completely random, and might not be related in any way to the survey.

Stratified Sampling - This is commonly used probability method that is superior to random sampling because it reduces sampling error. A stratum is a subset of the population that share at least one common characteristic. Examples of stratums might be males and females, or managers and non-managers.  Random sampling is then used to select a sufficient number of subjects from each stratum. "Sufficient" refers to a sample size large enough for us to be reasonably confident that the stratum represents the population. Stratified sampling is often used when one or more of the stratums in the population have a low incidence relative to the other stratums. I think this method is just a bit better than the other two as with this, I get to select people based on some characteristics. Using this method will get me more relevant and useful data.

The advantage of probability sampling is that sampling error can be calculated. Sampling error is the degree to which a sample might differ from the population. When inferring to the population, results are reported plus or minus the sampling error

• Non-probability sampling

In non-probability sampling, members are selected from the population in some nonrandom manner.

Convenience Sampling - is used in exploratory research where the researcher is interested in getting an inexpensive approximation of the truth.  As the name implies, the sample is selected because they are convenient. This can be a good method to use as it saves an awful lot of time as it doesn’t incur the cost or time required to select a random sample.

Quote Sampling – This is the non-probability equivalent of stratified sampling. Like stratified sampling, the researcher first identifies the characteristics and their proportions as they are represented in the population. Then convenience or judgment sampling is used to select the required number of subjects from each category. This differs from stratified sampling, where the stratums are filled by random sampling. I think this would be the perfect method for me to use as I need to select samples from a specific category of people. This will ensure that I get the data that I need and that it is accurate.

Snowball sampling - is a special non-probability method used when the desired sample characteristic is rare. It may be extremely difficult or cost prohibitive to locate respondents in these situations. Snowball sampling relies on referrals from initial subjects to generate additional subjects. While this technique can dramatically lower search costs, it comes at the expense of introducing bias because the technique itself reduces the likelihood that the sample will represent a good cross section from the population. As this will take a lot of time to complete and probably cost quite a lot, I’m not going to be using this method.

For my questionnaire, I will use the non-probability sampling method, quote sampling. I will categorize the people who will complete the questionnaire by whether they looked active or athletic.  I chose not to use probability sampling because the information I will get from those that will be asked might not be relevant and could also be inaccurate.  For me to produce a successful marketing campaign for coca-cola, I will be required to find relevant information on what price, place, product and promotional aspects.

Analysis of results

Questionnaire

I have conducted the questionnaire that I had made, in this section I will be analyzing the results of that questionnaire which will give me a good view point of the market strategy that is needed. This questionnaire was asked to a total of 52 people from different age groups. This is the amount of people that said “Yes” to the first question.

Question 2

This result shows that the younger generation has participated more in this questionnaire than any other age group.  This could also mean that they are more interested in the new product than the older age group. This gives me a better viewpoint on whom to target my product at.

Question 3

The results of this question, shows the amount consumers buy in one week. One bottle of the most popular sports drink usually consists of 500ml contents. This result shows that consumers mostly 2 bottles of sports drinks every week.

Question 4

These results show that mostly people hear about Sports drinks through the television and the internet. This improves the viewpoint on advertising, it shows that the most effective way to popularise the new drink must be the internet and the Television.

Question 5

This result defines the popularity of the places that sport drinks are available, at present it shows that supermarkets and Local Newsagents are the most popular; this gives a better insight on where to supply the drink in order for the sales to be most effective. It also partially fulfils the marketing mix, as the place is partially defined through this result.

Question 6

This result interprets the quality of the product in terms of taste, its ingredients and the way that the packaging looks. It also partially defines product sector in the marketing mix. I would have to consider the way that the packaging looks, and the way it is. It must look eye-catching to grab the consumer’s attention. It also at the same time has to keep the drink as fresh as possible for a longer period of time.

Question 7

Some of the customers would like a cola flavored sports drink, although others are not sure has the product has not been tried or tasted with the general public.

Question 9

The lowest price is the most popular according to these results, which is not surprising, the consumer would always demand a low price, but there is also a need for the supplier for a higher price, therefore we would need to consider a price that is suitable for both the consumers and the supplier. Although those that are willing to pay the highest price are not much, the result shows that people are willing to give the cola flavor a try.

Question 10

68% of the people who took parting this questionnaire believe that producing a cola flavored sports drink will prove to be an encouragement for cola lovers to purchase the drink. This is a good sign, as it will make the drink even more popular.

After conducting this questionnaire, I have come to a conclusion that in general, people who buy sports drink will like a cola flavored one.

 Although, the questionnaires alone will not be my final decision maker. I will put a focus group together and will see what they think of the drink.

Focus group

 A focus group is a form of  in which a group of people are asked about their attitude towards a product, service, concept, advertisement, idea, or packaging. Questions are asked in an interactive group setting where participants are free to talk with other group members.

Advantages

Relatively easy to assemble, inexpensive, flexible

Good for groups with lower literacy levels

Generates helpful information

Secure impression on new product concept.

Disadvantages

Difficult for moderator to interrupt once a discussion gets going

Although, I have used questionnaires to find our some raw information, I will also need to use focus groups, and another method of primary research, to make sure the information I gather is accurate and factual.

After

I have put together a focus group. This focus group consists of 8 members of the public who drink sports drinks.  They were made up of 5 men ages 17 to 32 and 3 women ages 22 – 27.  

During the meeting, I asked them what they thought about normal sports drinks first of all, and what kind of flavor of sports drinks they usually buy. The main response that was received was that they thought the drinks were okay. The majority of them said that the liked the orange flavored sports drink best.

Then, I asked them what they thought of Coca-Cola Coke. Most of them said that they did not like it very much as it contained a lot of gas.

After giving them the idea of the new product, most of them said they liked it, but their main concern was the gas in Coca-Cola’s Coke that they were worried about. I then told them that as it is a sports drink, they don’t need to worry about the gas as it has been cancelled out due to the ingredients added, and so, it is just the flavor. The response I got now was all positive. They all said that they would not mind, as most of them already liked the cola flavor.

SWOT Analysis of Product

Marketing Mix

A Marketing mix is the division of groups to make a particular product, by pricing, product, place, and quality. Although some  have added other P's, such as ,  and , the fundamentals of  typically identifies the four P's of the marketing mix as referring to Product, Price, Place, and Promotion.

The marketing strategy will be a long term plan, lasting for more than 5 years, this is because the product is new, it needs to be planned out in detailed ways, if this was an existing product, then it would’ve been a medium term plan, which lasts for 5 years, and is usually used at a maturity stage in the product life cycle.  

Product

When a product is brought into the market, a number of things have to be considered. This requires the business to answer questions related to the product, which in time will help meet the marketing strategies objectives. My questionnaire also shows that consumers look at both taste and contents, and a little bit at the packaging when buying, so I would have to consider the quality and the packaging of the product.

Brand Name: The brand name that I will choose for the new Coca-Cola sports drink will have to be one that is catchy and quite easy to remember. It would be a lot catchier if it had a logo to go with it, so that, for example, when a customer wants to purchase, they recognise the logo, and it’s immediately associated with the drink. When choosing the name, I will also have to consider at which target market the drink is aimed at.

As the drink is aimed mainly at people aged 17 – 40 years old, the name given should sound quite sporty. The name I have come up with for the drink is “Coca-Cola Lightening”.  I have chosen this name, as it gives the impression that, when an athlete is running, the drinks helps make them run lightening fast. As Coca-Cola already have a popularly strong brand name, the name of the product sounds even catchier.

After the analysis of my results from my questionnaire, you can see that mostly youngsters and teenagers took part in the questionnaire. If you look at the analysis of question number 2 (Pg 14) you can see that mostly 18-25 year olds took part in the questionnaire, so I could target that age group. Even on question number 10 (Pg 17) most of the people agree that the new drink will be an encouragement for active sports consumers to purchase the product.

It will contain a greater proportion of water, and a lesser proportion of sugar, than the human body.  This means that the net movement of water is into the cell in the body. If the cell contains more resistant solute than its surroundings, water will enter it.  This is good especially for athletes as it helps the cells in their body stay re-freshened.

The drink also coincides with a well established company, so it shouldn’t be that hard to introduce it to the public? Also, it is Cola flavored, which is different as there is not any cola flavored sports drink in the market.

It is an opportunity as well because according to question 7 of my questionnaire, many people think that they would prefer a cola flavored drink over the regular taste of a sports drink, so this could be a benefit for my product.

The drink satisfies the need of active sports customers, as the will want something that can keep them going for a while, whether they are training, or in a competition. The drink will definitely satisfy their needs as it re-hydrates and replenish nutrients in the body.

The product’s bottle will be made out of recycled plastic. This will make the promoting more effective.

Product Life Cycle

Product Life Cycle:

The product life cycle are four stages that a product goes through, at each stage, an organisation may acquire a promotional strategy to either make it get to the next stage, or to stop it getting to the next stage, or just slow the process down.

The four stages are known as the following:

Introduction – This is the stage that every product starts at when it is brand new to the market, at this stage, the organisation would try to inform the potential consumers of the product and make them aware of it, this would involve a lot of advertisement, and the media to aid the organisation in meeting its objective, this is when organisations will try to push it up to the next stage. At this stage I would try to acquire as much attention as possible by using advertisement, and promotional methods to attract retailers to stock the product, and the Media & Message Strategy, and the Sales Promotion Strategy to help Coca Cola Lightening go to the next stage of the Product Life Cycle.

Growth – When the drink reaches this stage, it means that it has been accepted by the target audience, at this stage, the organisation would try to increase brand awareness so that they can create brand loyalty. At this stage, we could consider things like the sales promotion strategy, and the Media & Message strategy, to make aware the target audience of the benefits that the product is providing.

Maturity – At this stage, the product gains customer loyalty, and is well known within the market, but at the same time, it gains many competitors, at this point, organisations try to show the differentiation between their product and their competitor’s product, and why customers should buy the organisations product. They could do this buy maybe giving the product a new look to make it look more different.

Decline – at this stage the product is in decline, and its elimination from the market is inevitable, at this point, organisations can do nothing but to slow the process down and try to keep reminding people of the product. I however, could re-introduce the product, maybe introduce it with a different flavor, or give discounts to consumers, discounts like a buy 1, get another free discount.

Currently, the product is at the beginning of the introduction stage of the product life cycle.  Due to my marketing mix and strategy, the product will start to move up the introduction stage and into the growth stage in the product life cycle as the target audience begins to accept the new drink.

Quality

Quality control and quality assurance are playing an ever increasing role in competitive markets. Both legislation and customer expectations need to be reliably met for a product to be successful, while quality control also prevents unnecessary losses of materials for the manufacturer. Coca Cola is known for its quality, like all Coca Cola products, the bottles will be made out of Durable and recycled plastic. This can be another effective fact that can help in promoting my product, the material is all recycled. The drink will be vacuumed to keep it fresh, and to keep it carbonated. Each product made will go through a consistent quality control system, which will check the drink for the ingredients, check the packaging for any damages and any other concerning flaws.

Boston Matrix

        High                                                Low

The Boston Matrix is a well known tool for marketing. It has two controlling aspect namely relative market share (meaning relative to your competition) and market growth.

You would look at each individual product in your range (or portfolio) and place it onto the matrix. You would do this for every product in the range. You can then plot the products of your rivals to give relative market share

Stars

These are products that are in high growth markets with a relatively high share of that market. Stars tend to generate high amounts of income. Keep and build your stars.

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 although, some of them can be a good investment.

Cash Cows

These are products with a high share of a slow growth market. Cash Cows generate more than is invested in them.

Dogs

These are products with a low share of a low growth market. These are the canine version of 'real turkeys!’ They do not generate cash for the company, they tend to absorb it.

Coca-Cola’s new product, Coca-Cola Lightening, is a cash cow. This is a good thing as it is in a market that is not grown, or is growing slowly, and Coca-Cola has a reasonably high piece of the market share. This means that Coca-Cola make the most profit out of the market.  Most products pass through all the four stages in the Boston matrix as they mature, and some can also sit on the border between categories.

Promotion

Pepsi Co. does their promotions by using as much means as they possibly can. They have advertisements on television, newspapers, buses, bus and parking tickets, billboards and posters. This influences my choice of promotional activities as they are Coca-Cola’s main competition and to compete with them, I would have to promote in similar ways to how they promote, and if possible, even by more means.

I will be able to get across my marketing message3s to my target audience at places where sporting events are being held, such as stadiums, or even local parks. This is due to the fact that a lot of people interested in sports will be there. In stadiums, the best time I will be able to get across to my target audience will be when a football season is on.

The most commonly used media are:

Magazines – 13.4%

Newspapers – 25.2%

Outdoor – 9.3%

TV – 44.1%

Radio – 6%

Cinema – 2%

The questionnaire that I conducted during my primary research said the Television was the most common method of advertisement, where they usually come across advertised sports drinks, but according to secondary research, newspapers are the most commonly used means of advertisements.

As television is the most popular, the drink will get the most publicity when the advertisement is put on television. Although this can be good, I will have to consider the times the advertisement is on.  Not only will television be used, but newspapers as well. For the drink to get as much publicity as possible, it would be best to association a celebrity with an advertisement. A celebrity such as a famous England football or rugby player.

Costs of Advertising

Television

Between 9am and 5:30pm (Daytime) - £1.000 and £5.000 for 1 TV advert.

Between 5:30pm and 7:30pm - £3.000 and £20.000

Between &:30pm and 11:30om - £4000 and £30000

Between 11:30pm and close of TV - £1.000 and £10.000

Sponsorship

For a company to sponsor a TV program, it can cost up to £40.000 a show.

Newspaper

A 1 day Colour ad in the sun newspaper full page costs £50,000.

In a regional newspaper, it would cost £22 or a single column

Cinema

To advertise a new film for 6 weeks is £105,000. to advertise the film on posters 500 time is £350, 000

Parking tickets

Costs £12 for 1000 tickets

Taxi

To advertise on 144 taxis is £554,000

Sponsorship

Coca-Cola lightening can be the official sponsor of a sporting event, and advertisements will be placed on billboards and on the screens available in the stadium due to this. For a company to sponsor a TV Programme, it could cost up to £40000 a show.

The billboard and poster advertisements will look something like the one above. There will be a Coca-Cola Lightening label on the drink.

There is also the option of using direct marketing mailshot. This will involve sending samples of the drink to a named person with an organisation. Recently there has been massive growth in this strategy, and organisations spend a mass amount of money to get databases containing the names and addresses of impending customers. This strategy is useful because you can send a product to a named person who falls into the category of your target audience, this is useful because you know that they are potential customers, and initially they may purchase something from you after experiencing a sample. The advertising is personalised, therefore the response is great, which initially means that sales increase. This could prove to be efficient in finding out where your potential distribution ties are. My product would be sampled mostly by other organisations who would be potential sellers of the drink.

Internet Promotion

The Internet has become an obligation for a lot of people around the country; it is also a crucial element to the Marketing Mix. The use of the internet means that consumers can gain knowledge about an organisations product and make useful decisions on whether to purchase it or not. Many companies have a pre-ordering system online which allows consumers to order their product before it is released, and it can be delivered to them at their house.

The internet will be a very useful tool for my promotional mix. Coca Cola already have a website online giving latest news about their products etc.

Advertising

The main type of promotion that I will be using on the Coca-Cola Lightening is the informative kind; providing customers with information regarding the product. As Coca-Cola is one of the leading soft-drink providers, they have enough funds for advertising through all means; therefore, I will be advertising the product using television, newspapers, buses, billboards, parking tickets, and at the cinema.  

A successful advertising campaign should include a well thought out message that gives the target audience a quick overview of what the drink product is all about. This can include the use of branding, a logo, or a slogan. These types of things strengthen the benefits that the product is providing and helps the positioning strategy of the product.

Place

There are two ways in which an organisation can distribute its products: Indirect and direct distribution.

Indirect distribution involves the use of a conciliator, this could involve places such as supermarkets, local shops etc. Direct distribution is when the organisation sells direct as the manufacturer to the consumer, this method gives more control to the manufacturer as they can decide such things as price etc. fig2 below shows the comparison between Direct and Indirect cost:

My product will rely on indirect distribution all of the time, as it cannot be sold directly to consumers. It will have to go through the wholesaler, the retailer; supermarkets or local shops/newsagents, and then finally, get to the consumer.

Consumers will most likely look for the sport drink in their local newsagent, as it is the closest to their homes, and they might want to train around their homes, or they could also look in supermarkets for the drink, maybe for those who are closer to a stadium. The most likely place for consumers to look for this product is in a supermarket. They are where customers are most likely to find them cheap enough, as newsagents will want to make a profit, and thus, increase their prices.

If sold in supermarkets, there is a better chance of more people from my target audience buying it as supermarkets are national .i.e. all over the UK, and some like Tesco, are international. This will also mean that the amount that needs to be produced will be increased in number.

Although some customers may depend on their local newsagents for their sports drinks. I believe that Coca-Cola should sell the new drink in both a supermarket, and at local newsagents, as my primary research shows, 54% of the customers surveyed said they would prefer to buy it at their local shops. as the percentage is almost at 50-50, I would strongly suggest that Coca-Cola sell it In both supermarkets and local shops/newsagents.

My competitors, Pepsi Co, and Lucozade, both sell their products in both supermarkets and local shops. They do this probably to make as much profits as they possibly can.

As a result of the information I have found out about where competitors sell their products, and where people like to buy their drinks, I have decided to distribute the new sports drink to supermarkets, and newsagents.

There are a lot of supermarket chains in the UK, but I will only need to supply a few, that is the few of them who supply drinks and food items to consumers.  Some of which are:

•  
•  
•  (this is a warehouse club and predominantly a , but 30% of UK sales are to individuals.)
•  (a  and really a )
•  (German owned )
•  
•  ( as well as 'Local' and 'Central' sites)
•  
•  (Superstores", 'Metro', 'Express', 'Extra’,’ Hypermarket' and "Home plus" sites) (Also the UK's largest Non-Food Retailer)

The drinks will be supplied in bulk to all of these stores, some more than others. Supermarkets like Costco will not be supplied as much as the others as they do not usually sell directly to individuals, although, they might sell to other smaller businesses, or shops.

Price

Price is considered the most important part of the marketing mix. For a company, there are different price strategies that have to be considered. These are:

• Penetration Pricing: This is where an organisation sets a low price to try to penetrate a market with a new product, eventually when the product becomes well known, the price would increase. I don’t think this would be a wise method to use for Coca-Cola’s sports drink. This is because, it is a sports drink. If the price goes up later on, consumers would not really be bothered with paying any higher for what they can get from Coca-Cola’s competition for cheaper prices.

• Skimming Pricing: When an organisation uses this strategy, it usually starts off with a high price; gradually the price would be lowered to make it available for the wider market.  This method would not be much suitable for Coca-Cola’s product either as it is a new product in the market, and the market is already well known, if the market was new, then it wouldn’t have been much of a problem as there would not have been as many competitors, but this market contains many customers, and if I set a high price, then the well known brands can see this as an opportunity and use it against coca-Colas product by reducing their prices.

• Competitive Pricing: This is a price set in comparison with your competitors. Generally, retail pricing for a like product of 10% lower, equal to, or up to 10% higher than the competition can be considered "competitive pricing". A small company with little overhead may be able to charge less while a larger company with more overhead may have to charge more. This method seems rather suitable for my product as it gives a better insight into similar existing products and the prices that they charge.

• Product Line Pricing: This strategy sets the price in accordance with the amount of benefits that the product provides. The greater the benefits, the higher the price, the lower the benefits the lower the price, this type of price discrimination is very helpful in terms of the organisations turnover and profits. This type of strategy would be useless to my product as I am not adding any extra benefits to the drink.

• Bundle Pricing: This is where an organisation bundles a group of products, and sells them at a reduced price.

• Psychological Pricing: This is where the organisation sets its price in a psychological way to in a way trick a customer into thinking that it is a cheap price, when their might be not much of a difference e.g. a seller might charge 99p instead of 1.00 pound, the figures don’t change much in terms of value, but psychologically, a consumer will be attracted more to the 99p product rather than the 1.00 pound product, only because of the visual change of the product.

• Premium Pricing: This pricing strategy is adopted by organisations that sell the exclusiveness of their product, e.g. a First Class Airline ticket would be very expensive compared to an Economy Class ticket. This wouldn’t be of much use to my campaign as my target audience is pretty much all age groups, and if I use this kind of pricing strategy and increase the price, then it wouldn’t be fair to a lot of customers, and compared to competitors, I would have a very low market share.

• Optional Pricing: This is used by organisations who sell optional extras with their products, e.g. a computer would cost more if you put on extra memory into it. My product will not be concerned with this strategy y because it does not give any optional extras.

After considering all of the above pricing strategies, I have decided to go with competitive pricing. This is because in my primary research questionnaire, I found out that customers would prefer to pay prices as low as possible. I will make the price of the product not more that 10% of its competition. Although this may lead customers to believe that as it is less in price, it is less in quality. If I used a different strategy like penetration pricing, this could lead customers to believe that the drink is not as good quality wise, as competitors.

The reason for me using competitive pricing is so that I can compete efficiently with competition. When customers see that prices are a bit cheaper, it could lead to them purchasing the drink and it is also more likely for the drink to get repeat customer.

Although, using penetration pricing may not be so bad for Coca-Cola. If the price of the drink starts off low, but not too low, maybe about 20% less than Lucozade’s, after a while of the drink going through the product life cycle, maybe at the growth stage, the price could get increased by about 10%, and then again by 10%. The profits that will be generated from this strategy may be a little bit low, but eventually, the drink will break even.

 

As the drink will be sold per 500Ml bottles, the prices I have chosen to go with is £1.10 per bottle, as Pepsi Co.’s Gatorade 500Ml bottle is equivalent to £1.25. the priceof £1.10 is an average price on most quality sports drinks. This price will be a competitive one, and as a result of this, Pepsi co. or Lucozade may decide to reduce their prices as well to rival Coca-Cola’s.

Evaluation

I carried out market research for my marketing campaign. Both primary and secondary research was carried out. In this section, I will talk about what I have found out from my primary and secondary research.

Analyzing my market research, I found out about:

My target market were categorized by their ages, I found out that the ones that made use of sports drinks are the athletic ones within the age range of 18-22. This helped me very much as I would need to find out how to promote to this specific age group.

Customers that buy sports drinks have different places where they see the advertisements, and then advertisements always catch the eyes of a sporty person.

I also found out that sports drink consumers buy according to the contents. Most of whose reasons are for re-hydration.

I have also found out where the drink should be sold, that is in supermarkets and local shops. This way, the drink can get popular really quickly and maximum profit is made by Coca-Cola.

Coca-Cola’s major competition for this new product is Lucozade as they are the main sports drink producers in the market.

The pricing strategy used for the product was the competitive strategy. This way, Coca-Cola competes with competitors and thus persuades customers to buy the product.

Strengths and Weaknesses of Marketing Campaign

Strengths

I have come up with a good name for the product, due to the marketing mix, and market research. This name will be an effective one as it is catchy. This will help the product to stay on consumers’ minds and make them consider buying the drink. I have also outlined what I need to do when the product reaches its stages in the product life cycle. I have found out what the most popular and successful method of advertising is, and what costs I will need to advertise. In the advertising campaign for coca-cola, celebrities will be used. Doing so has helped me to create an effective advertising campaign. This will help Coca-Cola by increasing their popularity, and reaching out to a wider audience. As coca cola is a popular brand that is recognised globally, their website will be a useful place to advertise coca-cola lightening. This way, coca-cola gets a very large, worldwide range of consumers to advertise to.  I have recognized where coca-cola should be sold, which is in both supermarkets, and local shops, but mainly supermarkets. This is because local shops will be looking to make a profit, thus increasing their prices and discouraging consumers from buying there, so it will be best to majorly sell in supermarkets. Coca cola will benefit from selling in supermarkets as most supermarkets are nationwide and some even international.

I have determined what price the drink should be sold for, and this is about the average price of most other popular competitors’ sports drinks. The pricing strategy used for this camping is the competitive one.

Weaknesses

Although, there is all the strength, my campaign also has some weaknesses such as

Because I chose a competitive pricing strategy, there’s not too much of a chance of selling at higher price than competitors. Though, this could also mean that regular consumers can choose coca-colas product over competitions.  I have found out that the competitions in supermarkets are massive as there are many sports drink just like coca-colas. Coca-cola can deal with this by making it stand out in a unique way.

Sources

Website

Textbook

AS AQA Business Studies Textbook