Coke Marketing Plan for Line Extension
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Coke Bubbler: A Line Extension
Business Definition: The Coca-Cola Company “exists to benefit and refresh everyone it touches (The Coca-Cola Company 1, p. 1).” To achieve this goal, Coke continually brings to market new products that address consumer interests, emphasizing both quality of products and emerging nutritional and taste features. To that end, Coca-Cola will introduce Coke Bubbler, a flavored tea-based beverage containing small “bubbles” or spheres of tapioca- or gelatin-based semi-solid flavors that augment to base beverage, adding excitement and interest to the beverage.
Business Mission: Coca-Cola (2, 1) states that “The Coca-Cola Company exists to benefit and refresh everyone it touches,” providing “refreshment, value, joy and fun to our stakeholders, (acting to) successfully nurture and protect our brands, particular Coca-Cola.” By adding a Coke Bubbler line extension, Coca-Cola will capitalize upon the Bubble Tea phenomenon that has swept the West in recent years (Preville, SP1), arriving from Asia in the early 2000s and initially available on in foodservice operations. By extending the basic Coca-Cola line of cola-based products to include bottled, flavored teas (some using fruit bases such as apricot, raspberry, and melon) containing “bubble,” Coca-Cola will gain the opportunity to reach a new emerging market segment not presently served by bottled beverage options.
Situation Analysis: With over 400 specific product lines and brand extensions, Coca-Cola Company is the largest and most well-known beverage producer, distributor and developer in the World (Coca-Cola Company 3, 1). Coca-Cola has moved into such diverse fields as teas, coffees, energy drinks, diet soda, mixers, and so on, gaining market share with each extension and meeting new and emerging consumer needs and interests in the process. The Company offers bottled beverages as well as fountain syrups for many of its products. It ha an international presence and there are few markets in which the firm lacks a presence, often through partnerships with bottlers and distributors.
However, as reported by Arndorfer and Macarthur (3) consumers now have so many traditional “soft” beverage choices and options available that competition for shelf space in supermarkets and other venues is intensifying. Many people are confused by the plethora of choices, ranging from fruit flavored to diet to energy to more traditional coal-based beverages. Consequently, beverage makers are struggling to find brand and line extensions that care easily be differentiated “from the pack” by consumers (Arndorfer and Macarthur, 3).
William Roberts (13) put it this way:
The sheer variety of beverages in the average supermarket could be regarded as overwhelming, particularly when considering that many of the categorys offerings often are split among several areas of the store: juices and sports drinks in one area, carbonated drinks in another, the growing variety of waters elsewhere. While, at first glance, this would seem an inconvenience to shoppers, it has not deterred the rapid growth of beverage sales. Shelf-stable, ready-to-drink (RTD) beverages, carbonated drinks, juices, waters and sports drinks will hit $26.7 billion this year, a 14% jump from 1999.
Attached are charts depicting sales in this sector which illustrate the growth of beverage sales in the U.S. These data illustrate the fact that the sector has room to expand, but suggest that it is desirable to find something new, something unique, and something that will clearly stand out from the crowd in pursuing brand extensions – a conclusion reached as well by Arndorfer and Macarthur (3) as well as Roberts (14).
Enter “bubble teas,” described by King (24) as an Asian-inspired trend that younger consumers have adopted in large numbers, largely through foodservice establishments. For Coca-Cola, creating bottled versions of bubble tea, using cola as well as other natural and artificial flavors, seems a logical extension. King (24) noted that these beverages are gaining ground outside of the student communities in which they first took root, enjoying new popularity among older consumers in urban as well as suburban settings. These flavored teas are not currently available in bottled form, and with the research and development capacity at Coca-Cola, creating viable high-quality products of this type should be an easily accomplished feat.
Objectives: The specific objectives are: 1) Employ research and development to create an assortment of no less than four “Coke Bubblers,” fruit-flavored teas containing tapioca spheres and available in bottled form; 2) Develop a targeted marketing and product release campaign in key urban and university markets in the U.s.: 3) develop unique Asian-themed packaging for the Coke Bubblers; and 4) move products to market within 12 months. Further, obtaining a spokesperson for the products (perhaps an Asian figure from film such as Chow Yung Fat) to promote the products is desirable. The overarching goal is to generate sales improvement of 2 to 5 percent share point incremental across the board in the non-traditional bottled “soft” beverage category.
Strategy: To achieve these objectives, the strategy will consist of a pilot launch of the new products in a limited set of markets as described above, to be followed by a national roll-out by the middle of year 2 of product development and sales. Coca-Cola will promote the products as a brand extension for Coca-Cola, and as a high-quality state-of-the-art beverage choice offering a new taste sensation to consumers interested in alternatives to traditional non-alcoholic beverages (including teas, colas, soft drinks, and so forth). The launch will