Coke No Sugar Marketing: Value Proposition, Positioning, and Marketing Mix

This report analyzes the marketing strategy of Coke No Sugar in Australia, including market segmentation, value proposition, and the marketing mix. The report discusses how the product is positioned in the market and how it is promoted. The report also highlights the challenges faced by the product in gaining acceptance as a replacement for Coke Zero in the Australian market.

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COKE NO SUGAR MARKETING
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Contents
Introduction.................................................................................................................... 3
Market segmentation........................................................................................................ 4
Product’s Value proposition and positioning in the market..........................................................5
Product element of the marketing mix...................................................................................6
Pricing element of the marketing mix.................................................................................... 7
Place element of the Marketing mix...................................................................................... 8
Promotion element of the Marketing mix............................................................................... 8
Conclusion..................................................................................................................... 9
References................................................................................................................... 10
Introduction
Coca-cola is a leading producer of soft drinks operating in all corners of the world.
Currently ranked as the best company in the soft drinks industry, the company has one of the

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most impressive product offerings consisting of 3500 products and over 500 Brands. The
company has maintained its global position through the launch of new products as a way of
satisfying the changing needs of its consumers. Compared to other multinational companies,
Coca-Cola has the most distributed products with its products available in more than half of all
countries globally. In addition to its distribution network, the company also enjoys a 50% market
share, the biggest in the Industry. Coca-Cola operates in Australia through Coca-Cola Amatil,
one of its main bottlers. Apart from Australia, Coca-Cola Amatil also operates in Samoa, Fiji,
Papua New Guinea, Indonesia and New Zealand. Some of its competitors in the Australian
market include Nudie Foods Australia, PepsiCo and Australian supermarkets such as
Woolworths and Coles. Some of its newest entrants into its product portfolio include Coke Zero
launched in 2006 and coke No sugar in July 2017. The Australian market has been skeptical
about playing along with the new No sugar Product. The demand for Coke zero is quite high in
the Australian market based on its sweet taste and unique flavor. The announcement by the
company that it would be replacing Coke zero with Coke No sugar sparked outrage among its
consumers (Andrews and Shimp, 2017). In this report, my focus will be on the Marketing of
Coke no Sugar in Australia. The case study address concepts such as marketing mix, value
proposition and target market for Coke No Sugar in Australia.
Market segmentation
Market segmentation refers to the process through which organizations use market
characteristics to divide their potential markets into segments or groups. Through segmentation,
organizations place consumers sharing similar characteristics and attributes in similar segments.
Segments are defined by their location, needs, and interests (Sahaf, 2008). Consumer segments

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are perceived to respond in the same way to marketing concepts. Market segmentation is
particularly important for marketers in that it provides an opportunity for marketers to
understand the specifics of what their consumers want for them to devise the appropriate
advertising and marketing strategies towards them. Marketers use either behavioral,
Psychographic, Demographic or Geographic segmentation to classify their consumers
(Anesbury, Winchester, and Kennedy, 2017). Through market segmentation organization are
able to effectively carry out their marketing campaign successfully with a minimal budget.
The launch of Coke zero was specifically launched for the males who had labeled the
previous Diet Coke as a drink for women. The primary target was the young Adult males. it
marketing campaign involved the use of calorie-free to distinguish it from the diet tag used on
diet coke associated with women. The new product Coca-Cola no Sugar has a taste close to that
of coca-cola classic but has lower calories just like Coke-Zero. The Consumer profile for the new
product can, therefore, be described as health-conscious males and females focused on the
reduction of sugar consumption (Benstead and Reif,2017). By maintaining the taste of coca-cola
classic Coke No sugar is intended to attract more fans who value the coke flavor and at the same
time focused on reducing their sugar consumption. The Australian coca cola market has in the
past experienced declining sales of soft drinks, attributed to the demand for healthier soft drinks
options in smaller portions. The entrance of the new product in the market is, therefore, part of
the attempts to satisfy the needs of such consumers looking for healthier alternatives. The
modern consumers have become significantly concerned about the number of sugars that they
consume (Sheth, 2017). This new alternative, therefore, comes into the market as a way of
meeting the rising demand for sugar-free beverages.

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Product’s Value proposition and positioning in the market
Value proposition refers to the statement that a company uses as a statement of why the
target of specific consumers should buy a product. The value proposition is used to convince
consumers that a particular product will be of value to them and why the particular product is the
most suitable for meeting their needs as compared to other products available in the market.
Product’s value proposition is therefore important in that it helps in convincing consumers that a
particular product is better than other alternatives. It can be used by a company to gain
competitive advantage.
The most applied value proposition by the Coca-Cola Company is the uniqueness of its
products. The formula for making coca-cola products is a closely guarded secret. The new
product extensively uses this secret going by its maintenance of the flavor and taste for the coca-
cola classic drink. In addition, the new product has been branded with the coca-cola brand name
and colors. The New product has adopted the use of No sugar tag as part of its labeling and
branding. The use of the tag “no sugar” means that the new product will attract the interest of
consumers interested in the consumption of products without sugars. It provides the consumers
with a reason as to why they should try the new products (Cavazzana et al., 2017). The
introduction of a product labeled no sugar in a country shifting to the consumption of sugar-free
products is an effective selling point for the new product. This differentiates the product with
Coke Zero whose Name tag did not directly communicate to a number of the targeted consumers.
The product is also packaged in different sizes and shapes but with similar branding and labeling.
The extensive use of coca-cola formula, coca-cola brand names and colors and the use of “no
sugar” statement give the product a unique value proposition that cannot be reproduced by any of

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the company’s competitors. The product has been strategically positioned through the use of the
coca-cola branding and image.
Product element of the marketing mix
The term marketing mix refers to the set of marketing tools used by organizations in
pursuing their marketing objectives within their target market (Schreyer, Schmidt and Torgler,
2017). It includes actions and tactics adopted by an organization as a way of promoting its
products or brand in the market. The product element of the marketing mix communicates
messages such as the needs that a product intends to satisfy, the features in the product that will
enable it to satisfy that particular need, the usage and area of usage for the product, the sizes and
appearance of the products, its overall appearance, name, branding, differentiation and cost.
The product is the most important element of the marketing mix. There would be no
concept of marketing in the absence of the product. The aim of the whole marketing concept is to
satisfy a particular need existing in the market (John et al., 2017). The company, therefore, needs
to have a deep understanding of the needs of the consumers when coming up with a new product.
Apart from the basic uses, a product needs to provide additional benefits in order to have it
differentiated from other similar products in the market. Consumers are more focused on the
benefits that they get from a product other than its physical characteristics. The features of the
new product include a taste similar to that of classic coca-cola. It is made of zero calories and
Zero sugar. The product is also made with the same nutritional ingredients just like Coke Zero
and includes a taste sweetened with acesulfame and aspartame just like Coke Zero. It is packaged
into 330,100, 375,200,250,390, 600 ml and 1.25 L Fountain and cans (Chávez et al., 2017). This
extensive packaging offers consumers a range that was previously not available in the market.

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By maintain the original taste of Coca-Cola and being sugar-free, the new product will enable
coke lovers to enjoy a great taste of coca-cola without sugar. These elements communicate its
value proposition to the potential customers.
Pricing element of the marketing mix
The price of a product represents the value that consumers get form it. The price of a
product has to be in line with the pricing of similar products by competitors. The sensitivity of
consumers to prices should also be considered in deciding the price for a product. The price
component t also involves the determination of whether discounts will be used as a way of
introducing the product to the market or particular segments (Crawford, Brennan and Parker,
2017). Unlike other elements, the price is important because it determines the revenues of an
organization and influenced demand or lack of demand for a particular product
The new product has adopted the 2nd-degree price discrimination strategy used for other
coca-cola products. Its recommended retail price is as per the retail price for other trade-mark
drinks of the coca-cola company. The price for the new product is based on the value that
consumers get from the product. However these prices are only recommendations and retailers
are free to set their own prices (Parsons, Maclaran and Chatzidakis,2017). The use of a similar
pricing strategy and price within the range of other coca-cola products communicate the value
proposition of the new product to the target market.
Place element of the Marketing mix
An organization creates value for its products by availing them at convenient places for
their consumers. Place, therefore, refers to the process of moving a product from the producer to

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the consumer (Constantinides and Fountain, 2008). The place is concerned with where a product
is bought and how it is bought. The Movement of a product from its producer to the consumer
might be through a collaborative effort of retailers, wholesalers, and distributors. Place creates
value for a product. Without the place component, a price would not find its way to the
consumers hence denying an organization an opportunity to earn revenue. The place is concerned
with where buyers can look for a product, the kind of stores, distribution channels and sales force
(Onkvisit and Shaw,2008).
The new product was officially launched in Australia in 2017 and is currently available in
the Shelves of Woolworths, other major supermarkets in Australia and retail outlets. Amid
resistance from the Australian consumers, who had developed a personal attachment with Coke
Zero, the intention of Coca-Cola Company is to completely phase out coke zero from the
Australian market and have coke no sugar in all major outlets. The availing of the product in
Woolworths a leading retail chain, as well as other Supermarkets, communicate the value
proposition of Coke no Sugar (Pansari and Kumar, 2017).
Promotion element of the Marketing mix
Promotion is a major component of the marketing mix. It refers to the kind of
communication used by an organization to create awareness about a product, brand or service or
persuade targeted audiences to try it (Sicilia and Palazón, 2008). Promotion is made up of five
main elements including personal selling, direct marketing, sales promotion publicity and
advertising (Louis and Lombart,2010). Promotion is important in generating sales for a product.
The promotion for the new product involves the use of a combination of traditional and
modern strategies of marketing. These methods include the use of different types of media,

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outdoor campaigns, internet and TV adverts. In addition, the company uses corporate social
responsibility programs to create awareness and promote its new product. In addition, the
promotion of Coke No sugar involves the use of promotion videos posted on its YouTube
channel. Upon the launch of the product last year, the company carried out a free sampling
campaign that saw Australian consumers receive more than 2 million free samples of coca-cola
no sugar in over 60 days (Hong and Li,2017). The free sampling campaign also involved an
outdoor advertising panel where consumers were required to say yes in order to receive a free
sample. The panels were deployed to chosen footfall central business district locations.
Conclusion
In conclusion, the price, place, promotion and product elements of the marketing mix
have been effectively integrated to deliver value proportion for coke no Sugar in the Australian
market. Unlike its predecessor Coke zero which was largely perceived as a drink for Adult
males, the new Coke no Sugar is intended to win the hearts of both males and females. Its
introduction into the market has come at a time where there has been growing health awareness
on the Australian population. The new product’s packaging into different sizes has filled a gap
that was initially not filled. The new product, therefore, gives the consumers a healthy alternative
to the classic coke packaged in various sizes as per their needs. The introduction of coke no
sugar therefore in the Australian market is a way meeting the rising demand for healthy
alternatives. The use of free sample promotion and the introduction of the product in major
Australian chains like Woolworths have effectively played the role of creating a value for the
product. This has also been achieved with through the adoption of a pricing strategy, similar to
the one adopted for other Coke products. Although faced with challenges in gaining absolute

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acceptance as a replacement for coke zero in the Australian market, the successful integration of
the marketing mix components will soon lead to the overall acceptance.
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