For many years Coca Cola was a successful summer drink. In 1931, Coca Cola introduced its famous Father Christmas advertisements in the United States, reminding people that Coke need not be just a summer drink. These advertisements became so popular that they are largely responsible for our image today that Father Christmas is a bearded old man with white hair in a red suit. Coca Cola continues to have Christmas as one of its main advertising times.
Following competition from other drinks manufacturers Coca Cola has launched drinks of a variety of flavours including cherry (in 1985), lime, lemon and vanilla as well as Diet Coke.
Diet Coke, launched more than 30 years ago, has always appealed more to women than to men. Market research indicated that men perceived it as a drink for women who were dieting. Coke brought out a new brand, Coke Zero, marketed at men with a more ‘masculine’ image.
Prospects are not too good at the moment with bad publicity about the amount of sugar in soft drinks and the introduction of a soft drinks tax. Coca Cola are likely to find ways of meeting these challenges with a new range of less sugary drinks. One possibility is through Glaceau, a subsidiary bought in 2007 which manufactures and markets energy drinks and other health drinks.
Coca Cola is almost entirely focused on soft drinks but it does also market merchandise such as fridges (in some countries) pens and glasses.
1 Apply Ansoff to Coca Cola.
In the first, market penetration stage Coca Cola used Father Christmas advertisement for their product as a tool to inform their customers about broadening of the seasons, during which they could pursue their product. Afterwards due to new healthy trends, in order to remain at the top of the sales Coca Cola decided to enlarge their target market and introduced diet coke (for women), as well as coke zero (for men).
To keep their customers interested they’ve differentiated their product by developing and launching new flavors for the drinks (cherry, vanilla, etc.)
Besides Coca Cola, they have a big variety of products, such as other, less sugary drinks, like Glaceau, fridges, pens and glasses. Regardless of a high risk due to lack of experience, the company has a clear vision as well as assessments and therefore is rewarding.
2 Discuss ways in which Coca Cola could respond to a sugar tax on soft drinks. (10 marks)
As a response to a sugar tax on soft drinks Coca Cola could develop and introduce new products with less sugar. By research and development the company could produce a drink that would contain fewer sugars in it and perhaps be healthier than the previous ones. A good name for it would attract different public and change the perception of the brand, so that it no longer has any problems with the soft drink tax.
Due to related diversification, Coca Cola has many other, non-sugary drinks, which contain vitamins and will aid the consumer’s health, rather than damage it. Even if they face loses on sugar tax because of Coca cola, they won’t face any difficulties, as they still have substitute products that bring income.
Also, as they have a very high market share and are the lowest- cost operators, they could reduce their prices in order to keep brand loyalty and cause as least changes to their customers as possible. They won’t lose much, as otherwise demand would decrease, as well as customer satisfaction.
3 Discuss the reasons why the Government is introducing a sugar tax.
One of the reasons for introducing a sugar tax is in order to avoid physiological and physical problems amongst children, such as obesity, blood problems and etc. Due to variety of tasty, new flavored fizzy drinks children tend to consume three times as much sugar as they should, most of it coming from soft drinks, putting themselves at risk of damaged health in the nearest future.
Not only children are facing these problems, but also many adults are suffering from health issues, which can cause productivity reduction and perhaps even a depressed state – they want people to be healthier in general and have a balanced diet in order to live a good lifestyle.
Sugar tax would also improve the economy of the UK and therefore raise a budget for reinvesting in growing strategies such as import-export, health and safety and other objectives to better the nation as a whole.
4 Using Porter’s generic strategy, explain the difference between Coca Cola and Lidl’s Freeway Cola.
Porter’s generic strategies helps a company to find a way to achieve competitive advantage over the other competing products/ businesses in a market.
There are 2 advantages- low costs and differentiation. As Coca cola has been a successful soft drink since 1990’s it has gained a high market share as well as became the most popular/well-known brand. Porter would put it into the differentiation leadership
Lidl’s Freeway Cola is more cost focus, as the prices on that product is lower and branding is less significant, rather that in Coca Cola. The package doesn’t look as visually pleasing,
coca cola case study - any corrections?? Watch
- Thread Starter
- 09-10-2017 14:29
- 09-10-2017 14:32
Sorry I can’t comment on the content but it’s a bad idea to post it in its entirety on the internet