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The following marketing plan forms the basis for the introduction of an innovative
new product by the Coca-Cola Company. The analysis allows us to outline the best
strategies to follow for the achievement of the company’s strategic goals. “Bubble
Buzz” will be marketed as a unique functional drink while striving to reinforce
the company’s status as the leader in innovation and successful product launches.
The marketing strategies will enable to reach a market size of an estimated
8,688,300 people (targeted) with a forecasted sales growth prospect of 7.3% over
the next 4 years ($243,029.47 profits), while satisfying the needs of the still-
unserved market for ready-to-drink bubble tea. Success will be reflected by a
sizeable capture of market shares within this market, while strategically carrying
the company up to the top spot as the market leader in the functional drinks
segment of soft drinks. Export potential will be considered in China.
“Bubble Buzz” will be a bottled beverage and will be positioned as the only ready-
to-drink Bubble Tea product available on the market. The beverage will have a
green tea base with enhanced fruit flavors (passion fruit, strawberry and lime) as
well as tapioca pearls. It will bring an entirely unique drinking experience to
its consumers. It will present itself as a funky and unusual alternative to
traditional tea while providing the great taste of authentic fruit juice in an
attractive and convenient packaging. The strategic role of Bubble Buzz for The
CocaCola Company is centered around three objectives: • To stay at the forefront
as the market leader in innovative product introductions and successful product
launches; • To strengthen and satisfy the needs of the more adventurous Generation
Y consumers with a new eye-catching and FUNctional product; • To become the market
leader in the functional drinks segment with increased market shares.
INDUSTRY ANALYSIS Consumption: The sales volume for the functional drinks segment
(ref. D2) in Canada has reached $342.2 millions in 2004 for a volume of 125.9
million liters (ref.2). This product segment has shown a steady growth since 1999:
an increase of 13.5% over a period of 6 years (Appendix A). The consumption rate
per capita in 2004 has reached
4
3.94 liters, which represents a 4.0% increase compared to 1999 (ref.3). The growth
of this particular market is largely due to a slow shift in consumer trends.
Trends: Through the early 1960s, soft drinks were synonymous with “colas” in the
mind of consumers. In the 1980s and 1990s, however, other beverages (from bottled
water to tea) became more popular. Coca-Cola and Pepsi responded by expanding
their offerings through alliances (e.g. Coke & Nestea) and acquisitions (e.g. Coke
& Minute Maid), but also by focusing efforts on portfolio diversification. Today,
while the soft drink industry’s value has increased in 2004, the volume sales of
carbonated soft drinks has declined due to a large proportion of consumers who are
opting for the trend towards healthier alternatives in the functional drink
segment (energy drinks, smoothies, milk & juice drinks, sports drinks) as well as
bottled juices and water (ref.5). Companies have been actively engaged in new
product developments in order to counter the growing concerns about negative
health impacts of high-fructose drinks, but also to increase the demand in a
market where product offerings are quickly maturing (ref.4). New flavor
introductions and health-conscious formulations have been launched in an attempt
to offset the decline in carbonated soft drink sales (ref.6). The functional
market is expected to show sustained growth and consumer interest in the future
years as consumption shifts to trendier, healthier and more sophisticated products
(ref.7). Profitability & future growth potential: In 1993, Concentrate Producers
earned 29% pretax profits on their sales, while bottlers earned 9% profits on
their sales, for a total industry profitability of 14%. While the functional
drinks sector only accounts for 3.7% of the total soft drinks sales in 2004
(Appendix B), estimates are forecasting a growth of 7.3% in sales and 11.0% in
volume consumption by 2009 (ref.4).
5
SWOT ANALYSIS (Strengths and weaknesses, opportunities and threats) Strengths
Brand strength Effective stride in new markets Results of operations Strong
existing distribution channels Opportunities New product introductions Brand is
attractive to global partners
Explanations in APPENDIX C
Weaknesses Reliant upon line extensions Reliant upon particular carbonated drinks
Brand dilution Entrance into difficult non-core categories Saturation of
carbonated soft drink segment Threats Strong competition Potential health issues
Free trade
COMPETITION
Coca-Cola’s top competitors for the soft drinks industry are PepsiCo (31.6%) and
CadburySchweppes (15.8% of market), which combined, represent about 48% of the
total market (ref.9). Coca-Cola is leading with 43.7% of the total soft drinks
market. In the functional drinks sector, PepsiCo is the current market leader with
60.5% of the market shares in 2004. Coca-Cola Co is second with 32.8% (ref.2, see
Appendix D1). Bubble Buzz will launch into a currently unserved subset of that
market (RTD “Ready-To-Drink” Bubble Tea), which is until now unexisting. It is
anticipated that the following brands could potentially compete with Bubble Buzz
in the functional drinks market: Brisk, Lipton Iced Tea, Sobe (owned by PepsiCo),
as well as Snapple’s and Hawaiian Punch (owned by Cadbury/Schweppes). Bubble Buzz
also creates a potential situation for cannibalism with Coca-Cola’s very own
brands of iced tea and other functional drinks. The current market for traditional
Bubble Tea is fragmented, since the distribution is restricted to local outlets
and selling points such as counters and small Bubble Tea shops in scattered
locations across Canada. However, direct competition from these local players is
not anticipated, since the marketing roll-out will initially emphasize on product
awareness and both sales channels do not reach or serve the same market (retailing
vs.
6
counter/restoration).
partnerships and channels are already in place. This will facilitate the product’s
reach into its target market. Further data concerning competing market shares and
distribution channels are available in Appendix D(1-3).
7
Size of the segment (population): 8,688,300 (329,600 L). Refer to Appendix E.
8
SEGMENTATION VARIABLES AND BREAKDOWNS FOR CANADIAN CONSUMER MARKET OF BUBBLE TEA
MAIN DIMENSIONS VARIABLES BREAKDOWNS
Region
Area size Density Climate Age Gender Income Occupatio n Education Race Home
ownership Personality
Lifestyle
Benefits sought
Positioning strategy: The only RTD bottled bubble tea available. Funky & eye-
catching bottle, functional packaging, premium-priced, cool, new and unusual,
unique drinking experience, aspects of play (tapioca pearls, oversized colored
straw), variety of flavors, sweet, refreshing, for hip & young people, healthier
alternative to heavy-sugar drinks. 9
CUSTOMER ANALYSIS Profile: Name: Bob Thomson Date of Birth: 25.03.85 Age: 20
Occupation: University Student Country: Canada Needs: Healthy lifestyle/Social
belonging People: Roommate/Friends/Family Places: Clubs/Coffee
shops/University/Gym Activities: Basketball Team Due to his active and quick-paced
life, Bob wakes up at 6:30AM every morning. Today, he puts on his trendy Lacoste
Polo and Diesel Jeans, and of course, he always has his Puma shoes on. After
having called his friends with his new Samsung camera phone, he leaves his
apartment and goes to his gym by metro, while listening to his favourite music
that he downloaded to his iPod. Bob usually likes to work out before he has to
head to University. That way, he feels he has more energy and feels ready to
confront his busy day attending courses and getting things done. On his way to
school, Bob knows he is thirsty and he feels the need for something very
refreshing. He stops at a convenience store next to the gym. Standing in front of
all the choices in the beverages aisle, one particular bottle catches his sight.
And he instantly recognizes the brand. He knows that this is a bottle of Bubble
Buzz, because not only does his other friends often drink it, but he also heard
them talk about this brand new product that Coca-Cola just launched. He also
previously saw Bubble Buzz ads when he surfed on his favourite websites. He grabs
a bottle, and takes a closer look at the nutritive information label. He is very
pleased to see that the new drink is more nutritive and definitely healthier than
the other soft drinks that were available on the shelves next to it. The higher
price of the product doesn’t bother him, since he perceives “Bubble Buzz” as a
high-quality, functional product,
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which is manufactured by a well renowned company. Plus, he did not feel like
simply buying bottled water, or carbonated soft drinks. Because of his inclination
towards more sophisticated tastes, and because he likes to try new products on his
own, he thinks this bottle is worth the price. Because of his busy schedule, Bob
prefers to save time as much as he can. Thus, he decides to buy two bottles. One
to quench his immediate thirst, and another one that he wants to save for later in
the day. He sees that the packaging is so convenient and easy to carry, and so
when he exits the store, he puts the second bottle in his backpack. He attends all
of his classes. During his break, he always hangs out with his friends. A lot of
them are drinking from different “Bubble Buzz” flavours. He opens his second
bottle, since he had such a great experience with the first one. He liked that the
beverage was so unusual, yet refreshing. The drink surpassed many of his
expectations. He has no doubt about it. Bob will continue to buy Bubble Buzz for
its good taste, and also because at his age, he sees it is the coolest trend right
now.
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Marketing Plan Part 2: Marketing Strategy
12
The objectives of the marketing plan are strategically centered around 3 criteria:
to create a strong consumer awareness towards a completely new bubble tea product
from CocaCola, to establish a wide brand recognition through the capture of market
shares in the functional drinks segment, and to become the top market leader in
that particular segment within the forecasted sales figures.
The actual product o Packaging and labeling: see figure below o Branding:
colorful, aspect of play, round shaped, prominent Bubble Buzz logo written in
modern font, catchphrases such as “Think outside the Bubble” and “Get Your Buzz”.
13
Cola’s strategy is to broaden distribution quickly, which is currently feasible
thanks to the company’s high manufacturing capacity.
o Product class: Food & beverage Soft Drinks Functional Drinks (refer to
Appendix
D2 for a break-down of the functional drinks market).
o Bubble Buzz follows the practice of product modification (ref.11, p.304): Coca-
Cola is
introducing an existing beverage (bubble tea) but redefines the drink with a new,
more convenient package. Bubble Tea will now become a widely available drink in
multiple retailing (distribution) channels.
PRICE STRATEGY The price strategy that will be undertaken should consider the
following aspects: 1. Consumer demand 2. The product lifecycle
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3. Potential substitutes Customer demand Customer demand is a crucial factor which
is driven by tastes, income and availability of others similar products at a
different price (mentioned later in the potential substitutes section). For a lot
of consumers, value and price are highly related: ‘’the higher the price, the
higher the value’’. Consequently, Coca-Cola’s intention to position Bubble Buzz as
a unique, innovative and attractive product gives it a certain control over Bubble
Buzz price. To be able to implement higher pricing though, the minimization of the
nonmonetary costs to customers should also be include along with awareness of the
product (notably by advertising) and value (benefits) . The product lifecycle The
company should take advantage also to the fact that the newer the product and the
earlier in its lifecycle the higher the price can usually be. It ensures a high
profit margin as the early adopters buy the product and the firm seeks to recoup
development costs quickly and it also brings a certain prestige to the product.
Potential substitutes Coca-Cola is constrained by the monopolistic market in which
it competes. The main characteristic however is product differentiation. Other
constraints (See Appendix M) PROMOTION STRATEGY Objectives: • To initiate strong
awareness about the launch of Bubble Buzz throughout Generation Y (10-29 years
old) consumers as well as their parents. 15
•
To win market shares over our top functional drinks competitor, PepsiCo.
Message: The promotional outputs will convey the clear message that “Bubble Buzz
is a healthy drink for sporty and young people who simply enjoy taking care of
their body and life.” Concepts: • • • “Think outside the bubble”: Be Bold, Be
Original, Be Different, Be Yourself. “A good spirit in a good body.” “For the out-
of-the-ordinary individuals who like to challenge themselves.”
Media selection:
Before choosing the appropriate medias, it is important to note that Generation Y
consumers only give partial attention to media. However, they can be reached
through integrated programs. They are typically using more than one communication
media at a time; a behaviour that is often called “multitasking”. This group of
consumers doesn’t give its full attention to one single message, but rather uses
continuous partial attention to scan the media. Marketers can still communicate
with Generation Y by using a variety of targeted promotional tools. Another
important tactic to reach our target market is through “Viral” or “Buzz”
marketing, which Coca-Cola will heavily use in this campaign (campus, contests).
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Others Personal selling Public relations Publicity
Not relevant Direct contact with retailers, sales kit strategies to be explained
later in the text. Stands or special displays and events in schools, malls, sports
events (i.e. 2008 Beijing Summer Olympic Games), sponsorship activities
Conferences, press releases (print and online), buzz marketing through TV coverage
Promotional Mix: Consumer oriented: • Contests: “Win another Bubble Buzz flavour”,
“Uncover a secret code underneath the
bottle cap and win sporting goods and electronics by logging on the website”, “Win
a trip for the 2008 Olympics in Beijing”. (Arguments: It will increase consumer
purchases and encourage consumer involvement with the product).
• • •
Trade oriented: Allowances and discounts: case allowance (Arguments: The “free
goods” approach will be used so it can encourage retailers to buy more of the
product to get a certain amount for free).
Other considerations: •
• Scheduling of the advertising: Pulse scheduling (promotional presence year-
round, but emphasized and intensified before and during summer). IMC (integrated
marketing communication)
Target Audience: •
Intermediary: personal selling will be more often used
17
•
Ultimate consumer: Coca-Cola will use more of mass media because the amount of
potential buyers is large.
Requirement for success analysis: C.M. per bottle = 382,159.36 / 328,000 = $1.17
Break-even: (113,453.56+25,676.33) / 1.17 = 118,914 (bottles) Market share:
118,914 / 1,000,000 = 11.9% In one year, if Coca-cola can sell 118,914 bottles of
Bubble Buzz, or in other words achieve 11.9% of the functional drink market share,
it will break even. After this point, every bottle Coca cola sells will generate
average $1.17 towards the profits. The potential profits can up to $1,030,770.001
based on our target market. Expected Costs: COGS: $597,124 * 36% = $214,964.64
O/H: $597,124* 38% = $226,907.12 Expected Revenues (total) = $597,124 (refer to
Appendix J)
$1.17*(1-11.9%)*1,000,000 = $1,030,770
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China is the target country we’re going to expand our product. Reasons:
1. With a total population of 1,313,015,000 in the end of 2005 and 327,714,000 in
our target market (age 10 to 25 years old), compared with the total population of
Canada---304,453 million, there definitely is a great potential worth to work on.
2. absolute expenditure on food and non-alcoholic beverages is expected to
increase from 1,777 billion in 2005 to 2,154 billion in 2010 (though the
proportion of consumer expenditure on this part is decreasing from 28.39% to
25.75% ) 3. Soft drinks industry is one of the fast growing industries in China,
especially fruit/vegetable juice, RTD tea, and Asian speciality drinks and bottled
water have shown a sharp increase during 1998 to 2003. 4. Bubble tea was
originated in Taiwan. Soon after its introduction in China, it became one of the
most popular beverages sold in tea stores on the streets due to the similar taste
and similar cultural background. So, it is a good chance for us to enter into this
market. 5. Since we are the top sponsor for the upcoming Beijing Olympic in 2008.
With more opportunities to expose to the public, it is going to benefit our sale
there.
2. It is relatively low risk when compared with direct investment there. It is low
cost to
export our new products there since we can maintain lower labour cost and lower
material cost if we produce our products locally, especially in China.
19
Changes to be made: 1. Price: Price sold in China is going to change to
accommodate the local desire. As we set
our price sold in Canada $2.00. Compared to the price sold in the bubble tea store
($ 3.50), it is about 57.14%. So, with the information we gathered from the tea
store in China2, the price sold there would be 57.14% of what sold in the tea
store---$12 Yuen in China currency. Then, it would be around $7 Yuen, about
CAD$13. 2. Naming the product: In order to be recognized and accepted more easily
for the local market, we need not only translate our product name but also make
sure there’s not hidden unintended meaning that would damage our product. 3.
Develop other flavours that would attract the local market: Since milk based
bubble tea sell better in China, we will add in this product line. Also, we will
avoid using too many artificial colors as they are not appreciated as much as in
Canada. Moreover, people in China are becoming more and more health concerned,
especially the amount of sugar and additives added in the drinks. We will make
some changes in the ingredients used to appeal the local market, i.e. less sugary
drinks.
4. Promotion: In contrast to the radio ads in Canada, we will use more TV and Web
advertisement there due to the highly exposed environment in China. Also, we will
put more emphasis on the ads on the public transportation such as
underground/subway system and bus service due to the more frequent use of the
public transport service there. Also, since the outdoor display screen is quite
popular in big cities, we will also take advantage of it.
2 3
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APPENDIX A (ref.2)
Off-Trade Consumption Indicators (Functional Drinks) 350.0 300.0 250.0
Million Litres / Million $CDN
APPENDIX B (ref.4)
Off-Trade Sales of Soft Drinks by Sector: Value 1999-2004
C$ million Carbonates Fruit/vegetable juice Bottled water Functional drinks
Concentrates RTD tea RTD coffee TOTAL 1999 4,651.40 2,135.20 385.9 296.7 193
234 0.2 7,896.40 2000 4,726.30 2,239.60 447.3 312.1 186.5 257.4 0.4 8,169.60 2001
4,828.20 2,347.00 551.2 318.1 171.3 265 0.6 8,481.30 2002 4,991.10 2,454.60 666.8
324.7 166.5 275.4 0.8 8,879.90 2003 4,959.60 2,497.60 763 327.4 159.2 286.8 0.9
8,994.50 2004 4,938.90 2,613.10 859.4 342.2 161.9 307.4 1.1 9,224.10
Functional Drinks: Consumption growth (Liters) from 1998 to 2003: 0.06 per year
Projected consumption (Liters) in 2005: 4.12
4 5
Radio spots
February to April
3 4 5 6 7 8 9 10
The target market will then match an image with the name of
the product more easily. The recognition of Bubble Buzz will be faster.
To send a widespread message over Canada that Bubble Buzz
is now available. Critical step in the promotion.
To get potential buyers to try Bubble Buzz and to create an addiction to it.
Making a special section for the Bubble Buzz in Grocery store
will help the new potential buyers to find our product faster and more easily.
Putting adds in specific places where Generation Y hangs out
will create an increased awareness of Bubble Buzz
We will use special events (sports and others) to promote
Bubble Buzz and also to get in touch with our potential market.
It will allow Coca-Cola to interact with our Generation Y Consumers.
When the summer will come to its end, we will use contest to
give a second "push" to the sales of the Bubble Buzz.
Use of conferences and news to make the general public
aware of the existence of Bubble Buzz.
APPENDIX O Other considerations for the promotion strategy Product life cycle of
Bubble Buzz: Bubble buzz is at its Introduction stage; we thus must inform
consumers in an effort to increase their level of awareness. Awareness is our
primary promotional objective. Then the following months after the launch of
Bubble Buzz , in its Growth stage, Coca-Cola will have to persuade the consumer to
buy the product, to gain preference and to solidify the distribution. Product
Characteristics: • Complexity: Bubble Buzz is more sophisticated than already
existing functional and soft drinks. Consumers can eat and drink it which has
never been experienced before. Unlike most functional drinks, it also requires a
straw. Understanding and familiarity is different when compared with other
comparable drinks. We should thus use a little bit more of personal selling to
retailers, give more sample, and create advertising on how to use bubble buzz than
with other brands from the company. • Risk: there is no financial, social or
physical risk associated with Bubble Buzz thus Personal selling is less needed. •
Ancillary Services: No support or service are required after the sale; refer
customers to the website or free 1-800 number for any questions or comments. Stage
of Buying decision:
Our target consumer are at the pre-purchase stage: advertising is more helpful at
this stage then personal selling because advertising informs the potential
customer of the existence of the product and the seller, but in this case the
seller is already well known. Channel Strategy: (ref.11, p.478) For Intermediary:
Push strategy, in order to gain retailer’s cooperation in ordering and stocking
the product. For Ultimate consumer: Pull strategy: We want to direct our
promotional mix at ultimate consumers in order to encourage them to ask retailer
for the product.
APPENDIX O Justifications for advertising selections -TV: channels for teenagers
and for young adults: MTV, Much Music, VrakTV, YTV Arguments: TV communicates with
sight, sound and motion, which is needed for Bubble Buzz. It is the only media
that can reach 99% of the homes in Canada. Coca-Cola has the budget to cover the
high costs of this media. -Radio: 94.7 FM, 96.9 FM University Radios (McGill,
UDEM, UQUAM, Concordia, UOTTAWA...) Arguments: Radio is an already segmented
medium. There are over 900 radio stations in Canada. The average University or
college student is a surprisingly heavy radio listener and spends more time during
the day listening to radio than watching network television (book p.502) We could
also use of “Interactive radio” as Pepsi has already done in the past. (p.503)
-Magazines: We should take advantage of the fact that magazines have become a very
specialized medium. There are about 500 consumers magazines in Canada. Good color
production is also an advantage that create strong images which is the purpose of
CocaCola with its Bubble Buzz brand. Each magazine’s readers often represent a
unique profile. Reaching: -Young girls: COSMO -Young women: ELLE -Young boys:
Sports Illustrated for kids -Young men: Sports Illustrated -Internet: Online
advertising is similar to print advertising in that it offers a visual message. It
also has additional advantages , it can also use the audio and video capabilities.
As we are targeting our ads to young outgoing people, sound and movement may
attract more attention from viewers and has the unique feature of being
interactive. Interactive media would offer Coca-Cola the opportunity to reach
younger consumers who have developed a preference for online communication.
Official Website (www.bubblebuzz.ca) -Outdoor: Billboards in specific geographical
area would allow us get a good reach and frequency. It is a low cost and flexible
alternative. (Campus, malls, Bus and metro stations)
REFERENCES (Direct) 1. The Coca-Cola Co. (Company Profile). Global Market
Information Database (Euromonitor).
Jul 20, 2005. Accessed Feb 08, 2006.
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2006. 6. COSGROVE, Joanna. The 2005 Soft Drink Report. Beverage Industry. Mar
2005; 96; 3;
p.22. Accessed via ABI/INFORM Global. Feb 08, 2006.
7. THEODORE, Sarah. RTD coffee, tea create a buzz. Beverage Industry. Feb 2005;
96; 2; p.16.
Accessed via ABI/INFORM Global. Feb 08, 2006.
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08,
2006.
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Accessed via ABI/INFORM Global. Feb 08, 2006.
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%
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2005. p.4.
15. Canadian Statistics – Population by Sex and Age Group. Statistics Canada.
http://www40.statcan.ca/101/cst01/demo10a.htm. Modified Oct 27, 2005. Accessed Feb
28, 2006.
16. 2004 Annual Report – Form 10K (The Coca-Cola Co.). The Coca-Cola Co. US
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OTHER CONSULTED REFERENCES 1. New Age Beverages in Hong Kong. Datamonitor. May
2004. Accessed Feb 05, 2006. 2. Boba Tea Direct. Boba Tea Direct LLC.
http://www.bobateadirect.com. Date N/A. Accessed Feb 06, 2006. 3. PREVILLE,
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