marketing management

i think choose coke for this report writing. However, information should be based on australian market .

MARKETING MANAGEMENT

Table of Contents
INTRODUCTION......................................................................................................................1
TASK 1......................................................................................................................................1
1.1 Growth..............................................................................................................................1
1.2 Profitability......................................................................................................................1
1.3 PESTLE analysis..............................................................................................................2
TASK 2......................................................................................................................................3
2.1 Major market segments of Coca-Cola in Australia..........................................................3
TASK 3......................................................................................................................................4
3.1 Involvement of primary segments in business decisions.................................................4
TASK 4......................................................................................................................................5
4.1 Competition......................................................................................................................5
TASK 5......................................................................................................................................6
5.1 Positioning for Coke........................................................................................................6
CONCLUSION..........................................................................................................................8
REFERENCES...........................................................................................................................9

List of Figures
Figure 1: Percentage of soft drink consumption in Australia....................................................2
Figure 2: Positioning map of Coca-Cola....................................................................................7

INTRODUCTION
The concept of marketing management is the planning, analysis, implementation and
control of programs developed to bring desired exchanges in the target market to achieve the
corporate goals. Here, the report is inculcating about marketing management of Coke in the
Australian market. To analyse the way in which company manages its operations and
evaluating factors that impact on the business growth and profitability, the internal and
external analysis of Coca-Cola is undertaken. Moreover, the segmentation and targeting
strategies of the company is evaluated to identify its primary and secondary target market and
level to which business decisions are affected by these targets. Also, the company’s strategic
position is assessed by comparing its strengths and weaknesses from the rivals.
TASK 1
1.1 Growth
Over the past five years, the soft drink manufacturing sector of Australia have been
characterised by a changing customer trends and weak retail environment, which is limiting
the industry’s substantial revenue growth. In spite of these threats, the rising popularity of
high value energy drinks and sports and an improving focus on the ranges of diet drinks have
supported the growth of the industry. As a consequence, the revenue of an industry is forecast
to improve at an annual rate of 2.4% in next five years. It comprises the estimated growth of
2.2% in this year only, i.e. to reach $4.4 billion. Moreover, the global and domestic economic
uncertainty over the past five years has resulted in weak customers’ sentiment and soft retail
conditions, which is causing buyers to cut their spending (Soft Drink Manufacturing, 2014).
1.2 Profitability
The Australian soft drink market leader is Coca-Cola and its sub-brand including
Vanilla Coke, Coke Zero and Diet Coke. Among 14-24 years of youths, 38% generally
consumes at least one soft drink of Coca-Cola in a week, which has been increased by 3%
from 2013 along with the year-on-year increases of the sale of Vanilla Coke, Diet Coke and
Coca-Cola. On the other side, the marked decreases are shown in the soft drink consumption
of Australians belonging to the age group of 25-34 years old. In 2013, 56% drank one soft
drink in a week, which has fallen to 53% in 2014. Specifically, the percentage who drank
Coca-Cola brand has also decreased from 41 to 37% (Soft Drink Manufacturing in Australia,
2016).
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Figure 1: Percentage of soft drink consumption in Australia
(Source: More young Australians drinking soft drinks, 2015)
1.3 PESTLE analysis
Political and legal factors
 Pressure on taurine and caffeine rates
 Restrictive laws implementation
 Government health concern
Economic factors
 Loss in the purchasing power due to
recession
 Energy drinks high prices in comparison
to traditional beverage
 Carbonated soft drinks mature market
 Alternative beverages rising demand
Social factors
 Unemployment (because most of the
people consume energy drinks at the
work)
 More population belonging to the age
Technological factors
 An era of social media and internet
 Technical development affecting
production and distribution activities
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group of 25-34, who are reducing their
spending on soft drinks
 Customers health concerns Energy drinks fashionable dimension
Ecological factors
 Increase in the demand of natural ingredients
TASK 2
2.1 Major market segments of Coca-Cola in Australia
The companies can sell their offerings to the entire market but it is too big. Due to this,
a business divide the overall market for its commodities into different segments. There are
two most widely utilised demographic variables for the purpose of segmentation, such as
gender and age (Collins and Lapsley, 2008). The appropriate segmentation supports the brand
in defining the adequate commodities for the particular customer group. A specific segment is
not targeted by the Coca-Cola but the company adapts its marketing policies by producing
new drinks. Also, it utilises a mix of niche and undifferentiated targeting strategies to
increase sales in the competitive market. The Coca-Cola products are globally known and
liked by all age group of people while the niche segment is targeted by the diet coke, which
includes more health conscious people. The competitive positioning strategy is used by Coca-
Cola to beat the non-alcoholic beverages market competition (Jones and Hill, 2010).
Once the segmentation of overall market has been done, one of these segments are
selected by the company to consider it as target market. The organisation selects a target
market with an aim to direct their marketing strategies to the particular customers group
rather than the overall market. It allows the marketer to satisfy effective the targeted group
needs and wants and makes it easier for the organisation to improve the profits and sales
(Keegan and Schlegelmilch, 2001). Over the years, Coca-Cola target market was modified to
concentrate on young adult and teenage customers. The primary targets of the company
includes customers belonging to the age group of 14-24 and secondary targets comprised
people of 25-34 years old. The following is the demographic features of the Coca-Cola
company target market:
Occupation – No specific occupation is targeted by buyers are mainly family oriented people
and students.
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Life style – No particular life style is targeted but busier people and youth who belongs to the
mobile generation are considered as the most significant customers group of the Coke.
Nature – Entertainment, joy and fun loving (Keller, Parameswaran and Jacob, 2011).
Habits –
 Youths who loves media exposure,
 Using social media and mobile apps are part of their routine life;
 Connected people who like innovations.
In the above given overall market, the primary target of the business generate most of
its revenue. These are more loyal clients, who purchases the company’s offerings on the
repetitive basis. It has been identified through research that generally a small portion of
consumers are accountable for the majority of sales. It is denoted as 80/20 principles, as 80
percent of sales comes from the main or primary customer base. However, the secondary
target market should not be ignored for while the customers’ number may be small, it does
give an alternative in case the primary target customers’ number decreases (Stavroudi, 2016).
TASK 3
3.1 Involvement of primary segments in business decisions
Better understanding of customers is importance for the success of any organisation
while not comprehending the buyers adequately may lead to business failure. It is because the
regular drive to satisfy the consumers is not just a concern for those responsible to carry out
tasks of marketing, the buyers satisfaction is a consideration for all in the entire corporation.
The customers are also considered as the main stakeholders of the business and the company
which ignores their needs and wants may lose the clientele base to competitors. The Coca-
Cola business can be influenced by the consumers through their decision to continue the
purchase of soft drinks from the company (Barclay and Brand-Miller, 2011).
The consumers for most of the businesses have taken over as the main influencer. It is
not just the organisations want to increase their profits. Rather, they have recognised that
satisfied clients and long-term relations with them are main to develop sustainable business
success and profits. The customer relationship management is utilised by Coke as a data-
driven process of business marketing whereby its marketer gather information on customers
for more efficient and targeted sales and marketing efforts (Copeland and et.al., 2007).
Furthermore, the segment of non-alcoholic beverage is more dynamic and competitive.
Several innovations and customers increasing focus on their health and wellness have driven
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soft drinks growth and changing the competitive landscape. The non-alcoholic beverage of
Coca-Cola includes a huge range of liquid refreshment categories of beverage including
energy drinks, carbonated soft drinks, bottled and enhanced water, juices and energy drinks.
All these sub-categories manufacturing decisions are driven by customers rising demand for
functional and healthy beverages and the firm’s ability to offer compelling drinks with
innovative packaging and unique flavours (Cuganesan, Guthrie and Ward, 2010). The value
proposition of Australian customers is ‘No sugar and taste like Coke’. The trend of health and
wellness awareness has impacted the beverage and food sector decisions in recent years. Not
just rising focus on health and well-being cause buyers to replace their choices but is also
develops new occasions of purchasing through functional/preventive meal and products
replacements (Gronholdt, Martensen and Kristensen, 2000).
In addition to above, the customers are now more informed. The increase in the number
of ‘Smart Customer’ has been driven by their rising awareness of negative effects on health
due to highly-processed and artificial ingredients used by the soft drink companies. The
customers are also increasingly placing importance on transparency and simplicity of product
origin and ingredients. The readily accessible and plentiful data empowers buyers to
undertake some type of research before making actual purchases. The internet keeps these
individuals better informed about services and products to buy (Guthrie, Cuganesan and
Ward, 2008). The younger and millennial buyers, who are the primary targets of Coke now
looks at ingredients lists while making purchasing decisions. These clientele group looks the
nutrition label on the bottle to get information about ingredients by focusing on how the drink
is made and its effects on their consumption. The more transparency demanded by the
customers is the main reason of their influence on the company’s decisions. They want to
know completely how and where their food is produced and grown, where the company is
stand on issue which are significant to considered by them. Therefore, by including the
customers’ requirements, Coca-Cola attempts to deliver simple and functional profile of
ingredients to attract more number of shares and gain customers positive acceptance in the
business decisions (Kelly and et.al., 2013).
TASK 4
4.1 Competition
Coca Cola is the authorised manufacturer and distributor of beverages in Australia. The
company is the leader in the 9 billion dollar non-alcoholic beverage industry and have more
than 40 percent market share in its soft-drink segment. There are several other competitors
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within the industry which compete against each other like PepsiCo, Nudie Foods Australia,
Bundaberg, Kirks, Schweppes, Saxbys, Heinz, and Golden Circle etc. The Coca Cola faces
competition challenges from three key areas – price pressure from major competitor like
PepsiCo, private and small brands owned by Supermarket chains, and the Australian
Supermarket itself. Australian Supermarket giants like Coles and Woolworths have more
than 70 percent market share and so has the power that put price pressure on profitability of
Coca Cola (Levy and Tapsell, 2007).
The price war with PepsiCo and others also lead to reduce prices of Coca Cola products
which adversely affect their profitability. The heavy discounting by competitors is another
area of concern which affects the sales volume. Moreover, Supermarket chains have started
to introduce their own brands thorough importing products at cheaper rates which also put
financial pressure on Coca Cola (Mangold and Faulds, 2009).
The most of the strengths of Coca Cola and its top rival PepsiCo are similar. For
instance, both companies have high profile global brand presence, recognition through
aggressive marketing strategies using famous celebrities and are the top 2 leading brands
across the world. The difference lies in the facts that Coke has strong bottling strategy
whereas Pepsi put more focus on constant product innovation. The major chunk of revenue of
Coke comes from the carbonated soft drinks whereas PepsiCo has broader product portfolio
including food snacks like chips (Moodie and et.al., 2013).
The weaknesses of Coke includes over dependence on declining carbonated drink’s
market and its distribution system is not sufficient for other products. Whereas PepsiCo is
leading on this point as they are not so much dependent on only the carbonated soft drinks
but has other products also in its portfolio. The weaknesses of Pepsi lies in its targeting
segment as they target the narrow market segment of young people (Ni Mhurchu and et.al.,
2013).
TASK 5
5.1 Positioning for Coke
The company has strategically positioned itself in soft drink market across the world.
The company keep the overall same positioning for the 200 countries where the brand has its
operations. However, the company also realizes “think global, act local” principal and adopt
the same in Australia. The Coke is willing to keep the same core product, but it adapts its
offers locally to satisfy local needs. The strategic positioning is utilised in order to have the
same image all around the world, which is a success because it is perceived today as a part of
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daily life everywhere. The high value perception of the brand by the consumer leads to a high
degree of loyalty and makes instinctive purchasing decision. Although Coca Cola consider
each customer as a potential target consumer, the primary segment includes the people from
age group 14-24 that generates around 40% of total revenue (Sicilia and Palazón, 2008). Coca
Cola has been successful by using the USP “Live the coke side of life”, related to joy and
happiness which excite its primary customer segment. Consumers like to be associated with
this brand for these emotions. When the name of Coke is mentioned, the first thing that
comes into mind is fun and entertainment (Story and French, 2004).
The positioning strategy becomes successful when marketers are able to satisfy their
target customers need. The better approach for ensuring the marketing success would be to
target specific group of customers and serve them well. In April 2015, Coca Cola launched
Coca Cola Life, which is a good example of effective positioning strategy that can help the
company to achieve better results. The Coca-Cola Life has 35% less sugar and kilojoules than
the flagship Coca Cola drink or rival PepsiCo products. The drink was launched to reposition
the brand and as part of the strategy by offering more choices to customers (Taylor, 2000).
The positioning map of the same is presented below:
Figure 2: Positioning map of Coca-Cola
(Source: TIANSHILI, 2016)
Coca Cola has developed the new low calorie soft drink product and positioned it on
the left bottom matrix of the above positioning map. It reveals that the product will also have
good taste as compared to other low calorie drinks which do not have this feature. The
healthier drink claims to have less calorie than its rival Pepsi Diet while having the same
carbonated drink taste. The perfect balance between the taste and the health could let the
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company well serve the customers who want both taste and health. This position of the
product will help the company to serve consumer needs in better ways while having better
competitiveness (Thorne McAlister and Ferrell, 2002).
CONCLUSION
In conclusion, it can be said that all age group of customers like Coca Cola beverage
products whereas the niche segment of health conscious customers is targeted by the diet
coke. Coca Cola utilizes competitive positioning strategy to beat the non-alcoholic beverages
market competition. The primary segment includes the customers from age group of 18-24
and secondary segment consist of the age group 25-34 years old. The assignment presented
that product innovations are must to serve the changing demand of target customer segment
as more focus on health and wellness have been increased. The company should have strong
strategy to change the competitive landscape.
The wide range of products including energy drinks, carbonated soft drinks, juices and
bottled water help the company to fulfil customers’ different demand with innovative
packaging and unique flavours. In the next part it has been observed that competitive analysis
is a critical part of the marketing plan of Coke. Coca Cola’s major competitors in the
Australian non-alcoholic beverage industry were identified and their strategies were
evaluated to determine the company’s strengths and weaknesses in relation to those of
competitors. The later part of the assignment reveals that Coca-Cola is committed to
implementing a systematic repositioning strategy for its products to progressively reduce
calorie while maintaining the same taste in order to have competitive position in the market
as compare to its major rival PepsiCo.
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