Coca-Cola in Great Britain Live On The Coke Side of Life Table of Contents Introduction3 PESTLE Analysis of the macro-environment4 SWOT Analysis5 BCG Matrix6 SPICC7 Suppliers7 Publics7 Intermediaries7 Competition8 Customers, consumers and markets10 Soft Drinks Market10 Table 1: Soft Drinks UK Market Segmentation11 Market for smoothies12 Table 2 : Forecast of UK retail sales of smoothies, 2001-1113 Table 3 :Brand manufacturers sales of the smoothies market, 2001-0614 Table 4 : UK value sales of smoothies by type, 2001-0615
Table 5: Consumption of fruit and vegetable juice 2002-200617 Table 6: Consumption of drinks – 7-14-year-olds, 2001-0517 Marketing Mix (4Ps)19 Product19 Price21 Table 7 :Average prices of soft drinks in the UK in ? per litre, 2001-0622 Place22 Table 8: UK retail sales of smoothies, by type of outlet, 2001-0623 Promotion23 Action Plan26 Appendix 127 Appendix 227 Appendix 329 References30 Bibliography35 Introduction The Coca-Cola Company was established in 1886. It owns four of the world’s top 5 nonalcoholic sparkling beverages brands.
The Coca-Cola Company operates with more than 2,800 products in more than 200 countries. One of those countries is Great Britain. (The Coca-Cola Company Website) Coca-Cola Great Britain (CCGB) is responsible for marketing 21 brands which contain over 100 products to consumers in Great Britain. CCGB is also responsible for developing new brands, extending existing brands and protecting Coca-Cola trade marks in GB. Furthermore, there is also the Coca-Cola Enterprise Ltd. (CCE) which is the local bottler.
CCE is responsible for the manufacturing, distributing, sales and trade marketing of the brands of CCGB throughout Great Britain. Together, CCGB and CCE form the so-called “The Coca-Cola System”. (CCBC Website) This report provides a marketing audit on which a marketing objective is based. Finally an action plan for 14 months is provided. Social * Growing and aging population * Consumer show a preference for healthier soft drinks * UK consumers take a compensatory attitude towards dietary habits * Obesity, especially among children Strong economy boosts discretionary spending among UK consumer Technology * Introduction of lighter-weight bottles * More efficient production machines * New vending machines Environment * Growing recycling awareness * Green consumerism trend * Use less water and energy for production (In 2006, Coca-Cola Company used 290 billion liters of water for their beverage production) 3 litres of water necessary to make 1 litre coke * Reduce waste * Environmentally friendly packaging Legislation Smoking ban creates new on-trade opportunities for soft drink companies * UK Soft Drink Regulations * Food Standard Agency (labeling, hygiene, packaging etc. ) * EC legislation on food and drink labeling2 Economic * Economy rose by 0. 6% in Q4 2007 * Employment rate increased to 74. 8% * Average earnings including bonuses rose by 3. 7% in the year to January 2008 * Consumer Price Index annual inflation was 2. 5% in February 2008 (2. 2% in January 2008) * On 7th of January Bank of England reduced its official Bank Rate to 5. 5% * Innocent is lobbying the Government to cut VAT for smoothies from 17. 5% to 5% Political * One of the EU founder states * No tariffs on drinks and food (Free Trade Zone) * UK has not introduced the Euro. Still has its Pound Sterling * VAT on food is 0%, otherwise 17,5% * Due to increasing obesity among children, the UK government banned fizzy drinks from primary schools * Ofcom introduced new regulations on TV advertisement on food and drink products PESTLE Analysis of the macro-environment SWOT Analysis Strengths | Weakness| World’s leading brands, such as Coca-Cola, Fanta and Diet Coke * Brand recognition * According to Interbrand, highest brand value in 2007 (65,324$m) * Availability * Relationship with the Coca-Cola Company * Operation focused on the developed markets * Advertising * Extensive distribution capacity and strong production network * Launch of Coke Zero, respectively the whole Zero range * Recycling Zone (Pilot programme) * Sponsoring of sport events| * Unbalanced portfolio * Lack of product diversity * Lack of bottled water * Heavily reliant on carbonated drinks * Disasters like Dasani water * Market failures Sprite 3G * Consumers perceive Coca-Cola as an unethical company * Lack of innovation, mainly variants * Highly focused on The Coca-Cola Company * Shift in consumption * Mature market| Opportunity| Threats| Growing bottled water market * Fast growing markets for pure juices/fruit juices, and especially for smoothies * Growing market for healthier drinks * Recycling initiatives * Possible acquisition of Highland Spring and other possible acquisitions * Smoking ban * Aging population * Healthy drinks in schools| * Mature market – Decline in carbonated drinks * Intense competition * Own labels * Consumers are increasingly concerned about health and obesity * School ban on carbonates * Fear of benzene in diet drinks * Consolidation of retail * Acquisition activities of rival companies * Challenging cost environment| BCG Matrix Powerade Functional Drink| Five Alive Fruit/Vegetable Drinks | Minute Maid Fruit/Vegetable Drinks| Oasis Fruit/Vegetable Drinks| Malvern Bottled Water| Capri Sun Fruit/Vegetable Drinks (CCE)| Kia-Ora Fruit/Vegetable Drinks| Appletizer Carbonates(CCE)| Sprite Carbonates| Coke Zero Carbonates| Dr Pepper Carbonates| Lilt Carbonates| Schweppes Carbonates| Fanta Carbonates| Diet Coke Carbonates| Coca-Cola Carbonates| SPICC Suppliers
Coca-Cola tries to strengthen and develop the relationship between the company and its suppliers; thus Coca-Cola has developed the Supplier Guide Principle Program for their direct suppliers. Additionally, Coca-Cola expects their suppliers to fulfil the Code of Business Conduct for Suppliers, Workplace Right Policy and Human Rights Statement. Furthermore, Coca-Cola tries to operate locally where possible. (CCE Website & The Coca-Cola Company Website) Publics Coca-Cola attaches great important on promoting a positive image of its products and activities, spending a huge amount on advertising. However, Coca-Cola is still perceived as an unethical company by many activist groups e. g. Killer Coke and Coke Watch. (Waronwant Website) Intermediaries
In order to distribute all products CCE works with a variety of customers, namely: * Retailers – ranging from large supermarkets to corner shops, etc. * Organisations – schools, universities, pubs, clubs, cinemas, cafes, restaurants and workplaces * Wholesalers The relationship with these companies has always been mutually beneficial. All those businesses are valued highly by CCE. (CCE Website) Competition Coca-Colas largest competitor in Great Britain is Britvic Plc. Britvic is the franchise of PepsiCo in the UK. Britvic Brand| Market| Market share in respective market for 2006| Pepsi| Carbonates| 10. 8%| Tango| Carbonates| 2. 1%| J2O| Juice Drinks| 6. 7%| Fruit Shoot| Juice Drinks| 12. %| Tropicana| Fruit Juice| 21. 5%| * Britvic has a strong and diverse portfolio, especially in fruit juices/juice drinks and carbonates. * Britvic has important distribution deal with PepsiCo, which ensures high share in carbonates sector GlaxoSmithKline Brand| Market| Market share in respective market for 2006 (for Ribena) and for 2007 (for Lucozade)| Lucozade| Sports Drinks| 59. 5%| Ribena| Juice Drinks| 13. 8%| * Company owns two of the most well-known drinks brand in the UK * Both brands hold strong share in the respective market PJ Smoothies Brand| Market| Market share in respective market for 2006 | PJ Smoothies| Smoothies| 18. 7%| Cut prices in 2008 Danone Waters Brand| Market| Market share in respective market for 2006 | Volvic| Bottled water| 15. 7%| Evian| Bottled water| 13. 7%| * Is in a good position due to the two top-selling brands * Tap water is very popular among those people after the age of 55 years The Red Bull Company Brand| Market| Market share in respective market for 2007(estimated) | Red Bull| Energy and Stimulant Drink| 42. 5%| * Flagship global brand with one single core brand * Lack of variety and single sector focus AG Bar Brand| Market| Market share in respective market for 2006 | Irn-Bru| Carbonates| 4. 1%| * High brand loyalty for carbonates brand Irn-Bru Extended portfolio (bottled water) * Irn-Bru’s main strength is through impulse channels * Irn-Bru performed less well in supermarkets Innocent Brand| Market| Market share in respective market for 2006 | Innocent| Smoothies| 61. 9%| * Dominates the UK smoothies market * Beat first mover PJ Smoothies * Known for having a strong ethical and sustainable business stance * Donates 10% of its profits to charities in countries where it sources fruit. Customers, consumers and markets Soft Drinks Market Coca-Cola changed its strategic direction, by presenting itself as a “total beverage” company, in an attempt to distance itself from a reliance on carbonates.
In 2006, the company continued its above-the-line campaign promoting all its brands together, with the purpose of communicating to the consumer that it is more than just a carbonates manufacturer. (Global Market Information Database) According to Mintel Market Intelligence Reports, the soft drink market can be divided into: * Carbonates * Fruit Juices * Juice Drinks * Sports Drinks * Energy and Stimulant Drinks * Smoothies Table 1: Soft Drinks UK Market Segmentation | 2000| | 2003| | 2005| | 2006 (est)| | % change| | ? m| %| ? m| %| ? m| %| ? m| %| 2000-06| | | | | | | | | | | Juice & juice drinks| 2,091| 24. 7| 2,473| 21. 9| 2,846| 24. 4| 3,095| 25. 9| +48. 0| Bottled water| 1,148| 13. | 1,582| 14| 1,700| 14. 5| 1,733| 14. 5| +51. 0| Energy & stimulant drinks| 615| 7. 3| 940| 8. 3| 1,049| 9| 1,125| 9. 4| +82. 9| Sports drinks| 39| 0. 5| 98| 0. 9| 137| 1. 2| 150| 1. 3| +284. 6| Smoothies| 8| 0. 1| 43| 0. 4| 79| 0. 7| 134| 1. 1| +1,575. 0| Carbonates| 4,570| 53. 9| 5,393| 54. 6| 5,727| 50. 3| 5,856| 47. 9| +28. 1| | | | | | | | | | | Total| 8,471| 100| 10,529| 100| 11,538| 100| 12,093| 100| +42. 8| (Mintel Reports) Market for smoothies As consumer turn more and more to healthy eating and especially the pursuit of 5-A-day fruit and vegetable consumption, the market for smoothies is experiencing continuing rates of exceptional growth. Mintel) As Coca-Cola has no smoothies in its product rage, this would be a great opportunity to follow the trend. Facts about the market for smoothies: * Between 2001 and 2005 retail sales of smoothies increased by 267% * Untapped market, 31% of the adult population buy smoothies * The young 15-19 and 25-34 age groups are the main consumers of smoothies. Those groups should be considered as the target group. * Smoothies are most popular in London and the South * Introduction of one-litre pack boosted sales, and in-home consumption * Market is segmented into fruit, dairy and functional smoothies * Market penetration is rising * Market is led by Innocent and PJ Smoothies Expenditure on fresh fruit and vegetables has increased (Mintel) Table 2 : Forecast of UK retail sales of smoothies, 2001-11 | Volume| | At Current Prices| | At 2006 prices| | | m litres| Index| ? m| Index| ? m| Index| 2001| 6. 3| 19| 21. 5| 16| 22. 6| 17| 2002| 9. 4| 28| 31. 8| 24| 33. 1| 25| 2003| 11. 4| 34| 41. 4| 31| 42. 6| 32| 2004| 12. 4| 36| 46. 0| 34| 47. 0| 35| 2005| 24. 0| 71| 79. 0| 59| 79. 8| 60| 2006 (est)| 34. 0| 100| 134. 0| 100| 134. 0| 100| 2007 (fore)| 48. 9| 144| 151. 8| 113| 149. 5| 112| 2008 (proj)| 58. 7| 173| 175. 3| 131| 169. 8| 127| 2009 (proj)| 71. 0| 209| 204. 9| 153| 195. 0| 145| 2010 (proj)| 85. 0| 250| 218. 3| 163| 203. 9| 152| 011 (proj)| 97. 3| 286| 235. 28| 176| 215. 5| 161| (Mintel) Table 3 :Brand manufacturers sales of the smoothies market, 2001-06 | 2001| | 2003| | 2005| | 2006| | % change| % change| | ? m| %| ? m| %| ? m| %| ? m| %| 2001-03| 2003-06| | | | | | | | | | | | Innocent| 3. 5| 16| 11. 2| 27| 47. 4| 60| 83| 62| +220| +641| PJ Smoothies| 8. 6| 40| 14. 1| 34| 14. 3| 18| 25| 19| +64| +77| Own-label| 9. 0| 42| 14. 9| 36| 15. 8| 20| 23| 17| +66| +54| Others| 0. 4| 2| 1. 2| 3| 1. 5| 2| 3| 2| +200| +150| | | | | | | | | | | | Total| 21. 5| 100| 41. 4| 100| 79. 0| 100| 134. 0| 100| +93| +224| (Mintel) Table 4 : UK value sales of smoothies by type, 2001-06 2001| %| 2003| %| 2005| %| 2006 (est)| %| % change| | ? m| | ? m| | ? m| | | | 2001-05| | | | | | | | | | | Fruit| 15. 7| 73| 31. 9| 77| 63. 2| 80| 107. 2| 80| +582. 8| Dairy| 5. 2| 24| 6. 6| 16| 7. 9| 10| 10. 7| 8| +105. 8| Functional| 0. 6| 3| 2. 9| 7| 7. 9| 10| 14. 7| 11| +2,350| | | | | | | | | | | Total| 21. 5| 100| 41. 4| 100| 79. 0| 100| 134. 0| 100| +523. 3| | | | | | | | | | | | 2001| %| 2003| %| 2005| %| 2006 (est)| %| % change| | m litres| | m litres| | m litres| | | | 2001-06| | | | | | | | | | | Fruit| 4. 7| 75| 9. 3| 82| 20. 6| 86| 39. 6| 86| +742. 6| Dairy| 1. 4| 23| 1. 4| 12| 1. 7| 7| 2. 8| 6| +100. 0| Functional| 0. 1| 2| 0. 6| 5| 1. 7| 7| 3. | 8| +3,600| | | | | | | | | | | Total | 6. 3| 100| 11. 4| 100| 24. 0| 100| 46. 0| 100| +630. 2| (Mintel) Table 5: Consumption of fruit and vegetable juice 2002-2006 Base: adults aged 15+ | 2002| 2004| 2006| | %| %| %| | | | | Drunk in last 12 months:| | | | All users| 58. 8| 56. 0| 56. 3| | | | | Heavy users| 5. 0| 5. 3| 6. 1| Medium users| 11. 6| 12. 5| 13. 4| Light users| 40. 2| 38. 1| 36. 8| | | | | Non-users| 41. 2| 44. 0| 43. 7| Taken from the TGI survey of around 25,000 adults (Mintel) Table 6: Consumption of drinks – 7-14-year-olds, 2001-05 | 2001| 2003| 2005| | %| %| %| | | | | Ever drink:| | | | Fruit juice & fruit drinks| 84| 85| 86|
Flavoured milk| 63| 61| 56| Fizzy drinks| 93| 92| 88| Bottled water| 42*| 53*| 74| Base: youths aged 7-14 * 11-14s only Taken from the Youth TGI survey of around 6,000 youths aged 7-19 (Mintel) Marketing Objectives A marketing strategy is the means by which an organisation sets out to achieve its marketing objectives. (Weeks 2007, p. 393) There are many different objectives for companies. However, if the objective is growth, the Ansoff’s growth matrix (see Fig. 1) suggests four different possibilities. Market Penetration Market Development Product Development Product Current New Current New Market Diversification Figure 1 Ansoff’s growth matrix
In the case of Coca-Cola diversification or concentric diversification would be the possible growth and as the corporate objectives are clearly set to expand the product portfolio and to lead the soft drinks and beverage category in which Coca-Cola competes. (Euromonitor) The new SpecificMeasurableAchievableRealisticTimed marketing objective for Coca-Cola Great Britain is to introduce smoothies in the UK and to gain 1% of the market within 12 months of its launch. Marketing Mix (4Ps) Product Product planners need to think about the product on three levels (see figure 2) Each level adds more customer value. Augmented product Actual product Core benefit Figure 2: The anatomy of a product Based on Kottler & Armstrong, 2004, p. 279 Hill, 1997, p. 122
Core benefit| Health benefit and convenienceFacilitate the consumption of fruit in a convenient formatPleasant health treat| quick, nutritious and portable| Actual product| Brand name| | | Quality| 100% fresh fruit| | Packaging| Bottles and cartons| | Design| | | Features| Different flavours (soft fruit and exotic fruit)Seasonal flavours| Augmented product| Guarantees| No additivesNo sugarNo water| | Service| Product hotline| | Image| Coca-Cola’s image for healthy living| Branding Branding has become so strong that today hardly anything goes unbranded. Brand names help consumers identify product which might benefit them; they also tell the buyer something about the product quality. Consumers who always buy the same brand know that they will always get the same features, benefits and quality. (Kotler & Armstrong, 2004, p. 85) A branding strategy according to Coca-Colas mission should be developed, namely: The Coca-Cola Company Mission * To refresh the world – in mind, body and spirit * To inspire moments of optimism – through our brands and actions, and * To create value and make a difference – everywhere we engage (CCBC Website) Packaging Packaging is an important part of the product which not only serves a functional purpose, but also acts as a means of communicating product information and brand character. (Weeks, 2007, p. 580) The primary function of the package is to contain and protect the product, however, the package needs to grab the consumer’s attention and involve them with the product. (Weeks, 2007, p. 81) The smoothies should be distributed in many different packages, namely 1-litre cartons, 250ml bottles as convenient portable formats are more and more demanded, and other formats including 330ml, 500ml and 750ml as well as 90g pouches and multipacks of small cartons for lunch boxes. Almost 50% of the new product launches in 2005 were 250ml bottles, as well as the smaller multi-packs for children (Mintel) Labeling Labels may range from simple tags attached to products to complex graphics that are part of the package. The label can identify the product or brand, promote the product and also describe several things about the product. (Kotler & Armstrong, 2004, p. 88) Furthermore, food labeling is now of growing importance in the UK as can be seen by the increase in those who avoid foods with artificial additives. (Mintel) Price Pricing is one of the most important elements of the marketing mix, as it is the only mix which generates a turnover for the company. Pricing a product too high or too low could result in a loss of sales. Pricing should consider external influences like competitors, demand and price elasticity, customers and consumers, channels of distribution and internal influences like costs, marketing objectives and organisational objectives. (Weeks, 2007, p. 612, 618) Furthermore, it is very important to get the launch price right, as it is difficult to change the price later.
Price skimming and competition-based pricing Coca-Cola should consider the strategy of price skimming in order to establish a quality brand image. If the initial price is too high, it can be slowly lowered until an appropriate level is found. (Weeks, 2007, p. 626) In 2005, the average branded 1-litre bottle or carton was sold at ? 2. 99. The smaller 250ml bottles were retailed at ? 1. 75, which pushed up the average price per litre. However, it has to be taken into consideration that PJ Smoothies are repositioning with a new strategy to open up the market. A recent survey revealed that 42% of consumers said that the price was the biggest barrier to consumption.
The PJ Smoothies are now priced at 99p for 250ml and ? 1. 99 for 1 litre. (Talkingretail. com) Initially, the price for the product should be at ? 3. 19 for the 1-litre pack and at ? 1. 79 for the 250ml bottles. The average price suggests psychological pricing, whereas the ? 3. 19 suggests more quality and product difference. Table 7 :Average prices of soft drinks in the UK in ? per litre, 2001-06 | 2001| 2002| 2003| 2004| 2005| 2006 (est)| | | | | | | | Smoothies| 3. 41| 3. 38| 3. 63| 3. 70| 3. 29| 3. 94| Juice drink| 0. 85| 0. 85| 0. 84| 0. 87| 0. 90| 0. 90| Fruit juice| 1. 20| 1. 22| 1. 23| 1. 23| 1. 23| 1. 22| Source: Mintel Place Distribution Channels
As Coca-Cola has sophisticated and fully developed distribution channels, it should make use of the existing channels to distribute the smoothies. Those channels are: * Multiple Retail * Licensed * Cold * Wholesale The multiple retail channel ranges from off-licence to forecourts, video stores, high street chains and corner shops to the UK’s top Grocery chains like Tesco, Sainsbury, Asda, Safeway, Somerfield, Waitrose, Morrisons, Co-op, Iceland & the continental discounters. (CCE Website) The licensed channel includes licensed wholesale (including Scottish Courage and Coors) and licensed retail (including pubs and bars such as JD Wetherspoon, and high street restaurants such as Pizza Express). CCE Website) The cold channel is responsible for the key national account customers across a wide range of sub-channels including cinema, theme parks, fast food, workplace, education, travel, health & fitness and hotels. (CCE Website) The wholesale channel includes the Cash & Carry and Delivered Wholesale customers. (CCE Website) Table 8: UK retail sales of smoothies, by type of outlet, 2001-06 | 2001| | 2003| | 2005| | 2006 (est)| % change| | ? m| %| ? m| %| ? m| %| ? m| 2001-06| | | | | | | | | | Grocery multiples| 8. 8| 41| 19. 0| 46| 47. 6| 60| 83. 1| +844. 3| Others*| 12. 7| 59| 22. 4| 54| 31. 4| 40| 50. 9| +300. 8| | | | | | | | | | Total| 21. 5| 100| 41. 4| 100| 79. 0| 100| 134. 0| +523. 3| * includes independents and convenience stores (Tesco Metro, Sainsbury’s Local are included in grocery multiple figures) Logistics
Not only the distribution channels are fully developed at Coca-Cola but also its logistics, of which Coca-Cola should make use. Coca-Colas logistics is made up of three distinct areas – Logistics Planning, Customer Logistics and Logistics Strategy & Analysis. (CCE Website) Promotion The recommended promotion strategy for this product would be the pull strategy. A promotion strategy that calls for spending a lot on advertising and consumer promotion to build up consumer demand. If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers. (Kotler & Armstrong, 2004, p. 483) Advertising
Advertising is one of the most important promotion tools for Coca-Cola. In 2006, the company spent $2. 6 billion on print, radio, internet and television advertisement worldwide. (The Coca-Cola Company Website) Advertising Message The advertising message for the smoothies should be product-oriented. Advertising Media Television, print media, online media, outdoor and ambient media and sponsorship should be used to convince consumers to buy the smoothies. Television Television’s impact can be high, as it not only intrudes into the consumer’s home but also offers a combination of sound, colour, motion and entertainment that has a strong chance of grabbing attention and getting a message across.
Television advertising does present a tremendous communication opportunity, enabling a seller to communicate to a broad range of potentially large audiences. (Weeks, 2007, p. 712) Initially, a nationwide TV campaign during breakfast and peak time should be started. After a couple of months Coca-Cola could try to get product placements. Furthermore, reminder and reinforcement advertising should be used after a while to remind consumers that the product exists. Print Media In order to target the consumer, ads should be placed in several health, food and lifestyle magazines. One example would be Health and Fitness, Men’s Health. Online Media The ad could be placed on selected websites (banners etc. , like Facebook etc. Outdoor and Ambient Media Coca-Cola could use the transport-orientated advertising media and place their ads on buses, metro and tube. Sponsorship Sponsored events would also be an effective promotional tool to create awareness and brand loyalty among consumers. Coca-Cola has been a very successful global sponsor. Consumer Promotion Coca-Cola could use trade promotions to get retailers to carry the new product and consumer promotion like product sampling to gain market share. In-store promotions should be taken into consideration. Price promotions should be used from time to time to encourage new consumers to enter the sector.
Action Plan| May| Jun| Jul| Aug| Sep| Oct| Nov| Dec| Jan| Feb| Mar| Apr| May| Jun| Market Research| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Research| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Monitoring | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Feedback| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Product| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Start production| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bottle Design| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Label Design| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Product Launch| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Promotion| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Create TV Spot| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Create Print Ad| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Create Online Ad| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Create Outdoor and Ambient Media| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Create Trade Promotion| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Run TV Spot| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Run Print Ad| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Product Placement| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Run Online Ad| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Run Outdoor and Ambient Media| | | | | | | | | | | | | | | | | | | | | | | | | | | | Run Trade Promotion| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Sponsored Events| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Product Sampling| | | | | | | | | | | | | | | | | | | | | | | | | | | | | In-Store Promotion| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Price Promotion| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Distribution| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Negotiate with Wholesalers| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Negotiate with Grocery Multiples| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Negotiate with Retailers| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Negotiate with Vending Distributors| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Negotiate with Restaurants and Pubs| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Appendix 1 European Commission (EC) legislation, introduced in July 2007 but yet to be implemented, includes a list of approved health and nutritional claims permitted on food and drink labelling. Manufacturers will need to ensure their claims on energy and functional beverages, in particular, fall within the EC’s definitions. Innocent is lobbying the Government, with the British Soft Drinks Association (BSDA) backing, for the VAT on fruit juices and smoothies to be cut from 17. % to 5% in reflection of their positive contribution to the health debate. Fruit juice volume sales have suffered since late 2006 as a result of volatile raw material costs, according to BSDA, with the price of orange juice doubling since 2004. Appendix 2 SWOT Analysis Strengths | Relationship with The Coca-Cola Company – Coca-Cola Enterprises Inc’s strength lies in its powerful relationship with The Coca-Cola Company. The Coca-Cola Company’s expansive portfolio of brands in carbonates and their brand equity are the cash cow of Coca-Cola Enterprises. The Coca-Cola Company’s rapid expansion in non-carbonates also gives Coca-Cola Enterprises a wider platform to operate in the soft drinks industry. | Operation focused on the developed markets – Coca-Cola Enterprises’s territories are well established economies which offer strong purchasing power and stable economies. Therefore, the company operates in a relative predictable and well regulated environment, which is beneficial to setting up of long-term strategies and planning. | | Distribution capacity – Coca-Cola Enterprises has extensive distribution networks and large production capacity which allows the company to win business deals over rival companies. | Weaknesses | Heavy reliance on The Coca-Cola Company – Coca-Cola Enterprises’s financial success is dependent upon its relationship with The Coca-Cola Company which can make Coca-Cola Enterprises susceptible to The Coca-Cola Company’s brand performance.
The hit rate of The Coca-Cola Company’s carbonates brand extensions can directly impact on Coca-Cola Enterprises’s operating profits. | | Consumption shift – Coca-Cola Enterprises’s cash cow business remains carbonates, and consumers’ consumption shifts have negatively affected volume growth. | | Maturity of the market – Coca-Cola Enterprises’s territories are developed soft drinks markets and the consumption is rather saturated in these markets, meaning that the potential growth in total consumption can be limited. | Opportunities | The Coca-Cola Company’s acquisition activities – The Coca-Cola Company’s commitment in developing diet carbonates and expansion in non-carbonates provide good growth opportunities.
Additionally, Coca-Cola Enterprises can benefit from The Coca-Cola Company’s aggressive acquisitions in the non-carbonates sector and diversify the product portfolio. | | Healthy drinks in schools – many schools in developed market have started to ban or restrict the consumption of carbonates within the school premises. This is a challenge for Coca-Cola Enterprises’s carbonates business; however, it has also opened a new door for the company to develop juices and water. | Threats | Consolidation of retail – the retail industry is in the process of consolidation and players are armed with increasing purchasing power, which potentially can squeeze Coca-Cola Enterprises’s operating margin. Negotiation with these retail giants is an ongoing challenge. | Acquisition activities of rival companies – rival bottlers and brand owners are actively acquiring non-carbonates companies thus posing a potential threat to Coca-Cola Enterprises’s market shares. | | Challenging cost environment – increased expenditure on energy, raw material and packaging mix has also negatively affected the operating margin. | (Source: Global Market Information Database) Appendix 3 Buyers and non-buyers of smoothies, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel’s Special Groups, working status, tenure, region, ACORN category, technology usage, newspaper readership, commerical TV viewing, supermarket usage, household size, and terminal education age, June 2006 Base: 1,047 adults aged 15+ Buyers| Non-buyers| | %| %| | | | All| 31| 69| | | | Gender:| | | Men| 31| 69| Women| 32| 68| | | | 15-19| 49| 51| 15-24| 44| 56| 20-24| 39| 61| 25-34| 48| 52| 35-44| 42| 58| 45-54| 24| 76| 55-64| 23| 77| 65+| 8| 92| | | | Social grade:| | | AB| 39| 61| C1| 37| 63| C2| 27| 73| D| 23| 77| E| 17| 83| | | | Marital status:| | | Married| 30| 70| Not married| 34| 66| | | | Lifestage:| | | Pre-/no family| 47| 53| Families| 41| 59| Third age| 21| 79| Retired| 9| 91| | | | Age of own children:| | | Children aged 0-4| 44| 56| Children aged 5-9| 46| 54| Children aged 10-15| 38| 62| Children any 0-15| 41| 59| No children| 28| 72| | | | Special Groups:| | |
ABC1 pre-/no family| 56| 44| ABC1 families| 49| 51| ABC1 third age| 24| 76| ABC1 retired| 12| 88| | | | Working status:| | | Working| 41| 59| Full-time| 38| 62| Part-time| 46| 54| Not working| 31| 69| Retired| 10| 90| Tenure:| | | Owned outright| 21| 79| Buying home| 38| 62| Renting| 34| 66| | | | ITV region:| | | London/South| 44| 56| London| 43| 57| South| 41| 59| Anglia/Midlands| 32| 68| South West/Wales| 23| 77| Yorkshire/North East| 17| 83| North West| 24| 76| Scotland| 31| 69| | | | ACORN group:| | | A Wealthy Achievers| 30| 70| B Urban Prosperity| 42| 58| C Comfortably Off| 28| 72| D Moderate Means| 24| 76| E Hard Pressed| 38| 62| | | |
Technology users:| | | Internet users| 38| 62| Satellite/cable/digital TV| 33| 67| | | | Daily newspapers:| | | Broadsheet readers| 40| 60| Mid-market tabloid readers| 30| 70| Popular tabloid readers| 33| 67| | | | Commercial TV viewing:| | | Heavy (5+ hours/day)| 30| 70| Medium (2-5 hours/day)| 32| 68| Light (0-2 hours/day)| 31| 69| | | | Supermarket usage:| | | Asda| 34| 66| Co-op| 30| 70| Iceland| 32| 68| Marks & Spencer| 32| 68| Morrisons| 28| 72| Sainsbury’s| 34| 66| Somerfield| 33| 67| Tesco| 35| 65| Waitrose| 41| 59| Any discounter eg Aldi, Lidl, Netto| 26| 74| | | | Household size:| | | 1 person| 29| 71| 2 people| 22| 78| 3 people| 34| 66| people| 43| 57| 5+ people| 42| 58| | | | Age finished full-time education:| | | | | | 16 or under| 5| 95| 17-18| 24| 76| 19-20| 34| 66| 21+| 39| 61| Still studying| 46| 54| References Bank of England, 2008. Bank of England maintains bank rate at 5. 25%. [Online] Available at: http://www. bankofengland. co. uk/publications/news/2008/015. htm [accessed at 29th March 2008] Blair, A. & Halpin, T. , 2006. Schools to ban fizzy drinks and chocolate. [Online]. Times Online Available at: http://www. timesonline. co. uk/tol/life_and_style/education/article736951. ece [accessed at 27th March 2008] Coca-Cola Enterprise Ltd. Cold. [Online] Available at: ttp://www. cokecce. co. uk/cce/workingforus/business_2_4_1_3. html [accessed 18th April 2008] Coca-Cola Enterprise Ltd. Licensed. [Online] Available at: http://www. cokecce. co. uk/cce/workingforus/business_2_4_1_2. html [accessed 18th April 2008] Coca-Cola Enterprise Ltd. Multiple retail. [Online Available at: http://www. cokecce. co. uk/cce/workingforus/business_2_4_1. html [accessed at 18th April 2008] Coca-Cola Enterprise Ltd. Operations. [Online] Available at: http://www. cokecce. co. uk/cce/workingforus/business_2. html#Logistics [accessed 18th April 2008] Coca-Cola Enterprise Ltd. Wholesale. [Online] Available at: http://www. cokecce. co. k/cce/workingforus/business_2_4_1_4. html [accessed 18th April 2008] Coca-Cola Enterprise Ltd. Your business. [Online] Available at: http://www. cokecce. co. uk/cce/your. html [accessed at 11th April 2008] Coca-Cola Great Britain. About Us. [Online] Available at: http://www. coca-cola. co. uk/About_Us/ [accessed at 21st March 2008] Coca-Cola Great Britain. Mission Vision and Values. [Online] Available at: http://www. coca-cola. co. uk/Mission_Vision_and_Values/ [accessed at 31st March 2008] Digital Library Business Source Premier Datamonitor. Coca-Cola SWOT [Online] Available at: http://content. epnet. com/pdf19_22/pdf/2007/P3C/01Nov07/27876982. pdf?
T=P&P=AN&K=27876982&EbscoContent=dGJyMNLr40SeqLM4y9fwOLCmrlCep7FSsa64TbCWxWXS&ContentCustomer=dGJyMPGqsE%2Bwp7VQuePfgeyx%2BEu3q64A&D=buh [accessed at 25th March 2008] Digital Library: Business Source Premier Datamonitor: Innocent drinks case study. [Online] Availabe at: http://content. epnet. com/pdf19_22/pdf/2008/1Q3/17Jan08/29297316. pdf? T=P&P=AN&K=29297316&EbscoContent=dGJyMNHX8kSep7A4v%2BbwOLCmrlCep69Srq64SLKWxWXS&ContentCustomer=dGJyMPGqsE%2Bwp7VQuePfgeyx%2BEu3q64A&D=buh [accessed at 12th April 2008] Food Standards Agency, [online]. Available at: http://www. food. gov. uk/ [accesed at 10th April 2008] Global Market Information Database Report – Barr (AG) Plc – Soft Drinks – United Kingdom Global Market Information Database Report – Bottled Water – United Kingdom
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Mintel Market Intelligence Report – Soft Drinks – Consumer Attitudes – UK March 2006 Mintel Market Intelligence Report – Sports and Energy Drinks – UK – July 2007 National Statistics. Inflation. [Online] Available at: http://www. statistics. gov. uk/cci/nugget. asp? id=19 [accessed at 29th March 2008] Office of Communications, 2006. New restrictions on the television advertising of food and drink products to children. [Online] Available at: http://www. ofcom. org. uk/media/news/2006/11/nr_20061117 [accessed at 27th March 2008] Talkingretail, 2008. PJ’s Smoothies repositioning with lower price points. [Online] Available at: http://www. talkingretail. com/products/8164/PJs-Smoothies-repositioning-wi. html [accessed 16th April 2008] Tech Digest, 2007. New technology by Coca Cola allows ice-cubes to form in bottles of Sprite. [Online]. Shiny Media Available at: http://techdigest. tv/2007/09/new_technology_1. html [accessed at 27th March 2008] The Coca-Cola Company, 2005. Around the world: Supplier Guiding Principles. [Online] Available at: http://www. cokefacts. com/citizenship/cit_aw_supplier. shtml [accessed at 11th April 2008] The Coca-Cola Company, 2008. Behind The Brand. [Online] Available at: http://www. thecoca-colacompany. com/ourcompany/index. html [accessed at 12 April 2008] The Coca-Cola Company, 2008. FAQ – Advertising. [Online] Available at: http://www. hecoca-colacompany. com/contactus/faq/advertising. html [accessed at 17th April 2008] The Coca-Cola Company, 2008. Supplier. [Online] Available at: http://www. thecoca-colacompany. com/citizenship/suppliers. html [accessed at 11th April 2008] The Information Centre, Lifestyles statistics, 2008. Statistics on Obesity, Physical Activity and Diet: England January 2008. [Online] Available at: http://www. ic. nhs. uk/webfiles/publications/opan08/OPAD%20Jan%202008%20final%20v6%20with%20links%20and%20buttons. pdf [accessed at 27th March 2008] UK Magazine Subscriptions. [Online] Available at: http://www. magazines-subscriptions. co. uk/health-magazines. tm [accessed 19th April 2008] War on want. Coca-Cola: The Alternative Report. [Online] Available at: http://www. waronwant. org/downloads/cocacola. pdf [accessed at 12th April 2008] Bibliography Crawford, M. & Di Benedetto, A. , 2006. New Products Management 5th ed. London: McGrawHill Hill, N. , 1997. Marketing for business. Droitwich: Peter Andrew Publishing Company Limited. Kerin, R. & Peterson, R. , 2007. Strategic marketing problems. New Jersey: Pearson Prentice Hall. McDonald, M. , 2002. Marketing Plans 5th ed. Oxford: Butterworth-Heinemann. Kotler, P. & Armstrong, G. , 2004. Principles of marketing. New Jersey: Pearson Education International. Weeks, P. complied, 2007. Managing People, Finance and Marketing. Harlow: Financial Times Prentice Hall. Wilson, A. , 2002. The Marketing Audit Handbook. London: Kogan Page Limited. ——————————————– [ 2 ]. For more information on VAT and EC legislation see Appendix 1 [ 3 ]. See Appendix 2 for more detailed information [ 4 ]. Based on information from Global Market Information Database [ 5 ]. All information is retrieved either form Mintel Intelligence Report or Global Market Information Database. Detailed list can be found in the reference list [ 6 ]. For more information on buyers and non-buyers of smoothies see Appendix 3