The Coca Cola Company and the New Product Offering
The Coca Cola Company is one of the leading multinationals, with operations in more than 200 countries, producing over 500 brands to its customers. Founded in 1886 in Atlanta, U.S, Coca Cola has grown and expanded beyond the United States and its product portfolio includes Coca Cola Zero, Sprite, Fanta, Dasani water, Coke diet, Fuze tea, Minute maid and honest tea, among others (World of Coca-Cola, 2017). The company is listed in New York stock exchange and has operations in Europe, Asia, North and South America and Africa.
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Although Coca Cola Company has invested in the soft drinks market, the increasing competition from other market brands such as Red Bull and Pepsi Cola requires the company to diversify its market portfolio. The new product offerings will ensure the company increases its revenues even under the shrinking global market for soft drinks. It is for these reasons that the paper introduces new Coca Cola branded chewing gums called “You Gum”. The “You” gums would retail under the same taste as existing Coca Cola leading drinks. The presence of huge untapped market in Africa, Asia and Eastern Europe, offers major incentive to invest in the product.
Approaches to Use in Order to Use and Incorporate Branding and Co-Branding Opportunities
The term branding has existed for decades and is often used as means of creating a distinction of good from one producer and the other. Brand can be defined as a sign, symbol, design, name, term or a combination of the five (Mohr, Sengupta & Slater, 2009). There exist different types of branding strategies today that include co-branding, in-branding and ingredient branding. Branding is useful when entering a market where already established and strong brands exist. According to (Kotler & Pfoertsch, 2010) most companies that enter into market with less power have to be cautious and adopt branding as a means of gaining good market share.
In order to incorporate branding and co-branding, the new product will use same ingredient as that used in Coca Cola leading soft drinks such as Fanta and market the product together with Coca Cola brands. The new chewing gum name will have a unique name, with a highlight that shows that it has the Coca Cola ingredient inside. According to (Kotler & Pfoertsch, 2010) the use of co-branding and ingredient branding is critical in capitalizing on the capital equity of the leading brand and enhance product success. The new product will be advertised together with Fanta products and the product name though different would show its ingredients as including the major Fanta ingredient inside together with the Fanta taste. The rationale for adoption of the co-branding and ingredient branding is based on the information integration theory (pp. 22).
Strategy for Advertising the New Product
Gum has been chewed over a long time since the discovery of the “natural” gum from trees. In the United States, for instance, people chewed gum from as early as 1850; a gum that exuded from trees (Segrave, 2015). The first gum was extracted from trees and sold in its natural taste without any additional ingredient (pp. 5). However, modern gums employ different types of ingredients in the manufacture of gums. Considering that chewing gums have been in existence over a long period of time, it is common knowledge that there are leading market brands and gaining entry into such a market requires effective advertising strategies to attain marketing objectives.
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The advertisement strategy that “You Gum” would adopt is a combination of creative and media strategy. The creative strategy involves the creation of a compelling message targeted at informing and persuading the customers (Du Plessis, 2000). The media strategy will involve the use of media outlets to promote the creative message. Du Plessis (2000) asserts that a combination of media and creative strategy ensures that a product gains good reception in the market. While the media will play a role in communicating the message, the creative strategy will be crucial in developing the message. Combining the two advertisement strategy will ensure “You Gum” reaches wide audience with a convincing message.
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However, the advertisement message would vary from country to country. The reason to these is that the differences in culture and consumer preferences demands that the advertisement strategies be tailored according to specific market segments. For instance, a message designed in an English perspective may create a different perception, while some form of media are more effective in developed countries than less developed countries like Africa and Asia.
Market Segmentation Variables for “You Gum” in South Africa
South Africa perhaps offers one of the best emerging market owing to the large population, good infrastructure and yet a largely untapped market. However, offering product in such a market can only be successful if effective segmentation strategies are employed. According to (Strydom, 2004) segmentation is the grouping of consumers using similar variables such as age, gender or region. However, the author asserts that there is not specific way of segmenting the market (pp. 65).
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The marketing strategy for “You Gum” in South Africa will adopt geographical segmentation. South Africa is made up of several provinces and dividing the market based on the provinces will provide a way in which the people within those provinces could be targeted. The provinces will be further divided according to cities and towns. According to (Strydom, 2004) South Africa has 9 provinces, each with a city. The segmentation of the South African market will therefore result in creation of nine segments of Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Mpumalanga, Northern Cape, North West, Limpopo and Western Cape provinces.
Main Types of Pricing Strategies for “You Gum”
The pricing strategies define the methods that would be used to set profitable prices in the market, but are also justifiable (Kurtz & Boone, 2010). According to the authors, pricing are subject to influence from a lot of factors such as competition (pp. 47). Many pricing strategies exist, which include competitor-based, demand-based, price skimming, economy, premium and penetration pricing. The “You Gum” will be priced using the economy and penetration pricing, which combines both low and affordable prices. The use of economy and penetration pricing will be critical in establishment of substantial market share, the major marketing objective of the company. The modern economic down-turn has affected almost every country, and the use of economy based pricing is important in creating prices that would be taken easily by the price conscious public in South Africa. Through a successful economy pricing, the company intends to attain about 12 percent of market share by the end of fourth quarter.
Key Methods for Creating Distribution Channels
The distribution method defines the method that is used to deliver products to the consumers in the market. Cognizant of the existing distribution channels for the Coca Cola Company in South Africa, “You Gum” will be sold through large scale and retails stores. This will ensure the company leverages on the existing supply network and that the product reaches wide range of consumers in the market.
Strategy for the New Product
For the new product, a multi-country strategy would be appropriate for the new product. The chewing gum market is yet to globalize, and is characterized by domination of multi-country competition. In addition, multi-country strategy offers a good way of initiating a global enterprise (Sinha & Sinha, 2008). Moreover, (Wagner & Barkley, 2010) points that multi-country strategy is good where countries are diverse and government regulations prevents standardization.
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