Coca-Cola Energy Drink: Macro Environment and Marketing Strategies

This report provides a comprehensive analysis of the marketing strategies for Coca-Cola's energy drink, focusing on its introduction in 2020. It begins with an introduction to marketing principles and the context of Coca-Cola, followed by an examination of the macro-environment using PEST analysi...Read More

UNDERSTANDING
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Analysis of the macro environment in context with an organisation and its selected product
and specify their impact on marketing program of firm.............................................................1
Specify target market for the selected product ...........................................................................3
Formulate two perceptual maps to denote the actual positioning of your organisation in
comparison with the competitors ...............................................................................................3
Discuss about Ansoff's matrix to acknowledge the appropriate strategy for selected brand......6
Mention marketing mix for selected growth strategy.................................................................7
Define how the marketing mix maps on customer buying behaviour and shows the impact of
4ps on each stage of consumer model.........................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Marketing is defined as the procedure to acknowledge customer base and sustains a
strong relation with them to attain maximised sales. In business world, marketing is considered
as main key to achieve organisational growth and success (Armstrong and et. al., 2018). With the
help of right marketing techniques, psychological understanding of consumers can be
acknowledged in a proper manner. This report is based on Coca-Cola which is a soft drink
manufacturing and retailing company dealing in worldwide context. This firm is established in
1892 and headquartered in Georgia, USA. This assignment is going to focus on Coca-Coal
energy drink which will be introduce in market in 2020. Further, this report is going to mention
about macro environment in which a company is operating. Also, target market for selected
product and perceptual maps are prepared. Information about Ansoff growth strategy and
marketing mix is mentioned for selected product. At last, impact of marketing mix on consumer
behaviour model is discussed in brief.
MAIN BODY
Analysis of the macro environment in context with an organisation and its selected product and
specify their impact on marketing program of firm
Macro environment is referred as the condition which exist within economy at a wider
scale rather than impacting a specific region or sector. Basically, macro environment include
aspects like inflation, spending, GDP, fiscal policy, employment, monetary policies etc. In order
to acknowledge the macro environment in which Coca-Cola is operating, PEST analysis is used.
PEST analysis will help the manager in Coca-Cola to identify the external business environment
in a proper manner. Aspects in this context are discussed below:
 Political factor: These factors include about the political scenario of the region in which
a firm is operating their business activities and processes. This aspect involves political
stability, bureaucracy, corruption, tax policy, trade restriction etc. As UK is politically
stable and corruption is less, operating in UK is easier for Coca-Cola. But, after Brexit,
governmental policies for outside organisations have became more strict which can
Impact the working of Coca-Cola and popularity of Coca-Cola energy drink in negative
manner (Datta, Ailawadi and Van Heerde, 2017).
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 Economic factor: This external factor involves aspects like GDP, growth rate, Inflation,
international exchange rates, labour cost, taxation, unemployment rates, monitory
policies etc. People in UK mainly depends upon service sector for their livelihood due to
which they earn disposable income. This is the reason operating in UK is beneficial for
Coca-Cola as people are capable to buy their products without any difficulty. In case of
Coca-Cola energy drink, price of product is not very high which assures that people from
different financial background can purchase it (De Mooij, 2018). Great recession in 2018
has increased inflation in UK due to which purchasing power of individuals is reduced.
This can reduce the sales of Coca-Cola energy drink in UK.
 Social factor: These aspects incorporates social behaviour, trends, attributes, opinion and
perception of individuals which lives in a region or place. People in UK are modern and
health conscious due to which they prefer to buy only those products which will not harm
their health and well being in any manner. In case of Coca-Cola energy drink, it contains
all the safe ingredients and less sugar than any normal energy supplements. Due to this,
UK people favours purchasing this product of Coca-Cola. But, change in perception and
opinion of people about health standards can impact the popularity for Coca-Cola energy
drink in negative way.
 Technological factors: These aspects are related with innovation, technology
advancement etc. so that customers can be retained for maximum time. UK is a
technological advanced nation where people prefers to do online shopping rather than
shopping from brick and mortar stores. In this context, Coca-Cola is needed to update
their machines and communication mediums on regular basis so that proper interaction
with customers can be maintained (East and et. al., 2016).
Political scenario in UK are not very strict due to which concerned company can perform
their marketing activities for Coca-Cola energy drink without any complexities. They do not
have to follow strict procedure to take permission of government for performing marketing
operations. Also, economic stability of Coca-Cola is high due to which organisation can carry
out different marketing programs like campaigns, promotion, advertisements without any
financial issues for the new product “Coca-Cola energy drink”. People in UK are open minded
due to which they are going to like this new product and marketing tactic of Coca-Cola
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associated with social and digital media will assist the firm in achieving their sales target in
proper manner.
Specify target market for the selected product
In order to target a particular market for their product “ Coca-Cola energy drink”,
concerned company can perform segmentation on UK population. People in UK can be segments
on the basis of four aspects i.e. demographics, geographic, behavioural, psychographic factors. In
case of demographic segmentation, people will be divided according to the factors like age,
income, gender, education etc. In context with geographic segmentation, population will be
bifurcated according to the region in which they are residing. Behavioural segmentation is
carried out according to the behaviour of people about a service or product whereas psycho-
graphic segmentation is performed in accordance with the life style of people of a country
(Goldberg, Fishbein and Middlestadt, 2018).
Coca-Cola mainly segment their customers according to the age and lifestyle of people as
people with modern life style and age group between 15 to 50 years prefers to drink soft drinks.
Majorly all the products of company are targeting people according to their lifestyle and age. In
case of Coca-Cola energy drink, manager in Coca-Cola is specifically going to segment people
according to demographic aspect. In case of demography, manager of firm will segment
customers on the basis of age and income. From this segmentation, firm is going to target people
from the age group of 15 to 45. This is because people of this age group are very health
conscious and they will prefer to purchase those product in high quantity which helps them in
maintaining their health without any compromise with taste. Energy drink of Coca-Cola heave
essential nutrients and low calories due to which targeted customers are going to buy the
products of company in high quantity (Homburg, Jozić and Kuehnl, 2017).
Formulate two perceptual maps to denote the actual positioning of your organisation in
comparison with the competitors
Perceptual map is defined as a visual presentation about the opinion and perception of
customers in context with specific attributes of a brand, product or entire organisation. It is
basically a diagrammatic technique in which different products of a firm are placed along one
another to acknowledge their market position. In context with Coca-Cola energy drink, two
perceptual maps are prepared below:
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Perceptual map 1
This perceptual map is based according to the quality and price of the energy drinks
which are offered by different companies. This map shows that energy drink of Coca-Cola is of
high quality but available in low price. This makes it the best choice for customers (Hunter and
et. al., 2019).
 Red: Coca-Cola energy drink
 Blue: Red bull energy drink
 Orange: Living essential energy drink
 Green: Monster energy drink
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Perceptual map 2
This map is based upon health benefits and taste. According to this map, coca cola energy
drink is more tastier and healthier in comparison with the product which is offered by the rivals.
 Blue: Coca-Cola energy drink
 Orange: Red bull energy drink
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 Green: Living essential energy drink
 Red: Monster energy drink
Discuss about Ansoff's matrix to acknowledge the appropriate strategy for selected brand
Ansoff's matrix is also known as market/product expansion grid. This is a strategic tool
which benefits a firm in acknowledging various growth strategies so that a business can earn
high revenues and profits. In context with Coca-Cola energy drink, various growth strategies
that can be adopted by Coca-Cola are mentioned below:
 Market penetration: This is one of the basic growth strategy which is followed by most
of the business organisations to increase their profits and revenues. In this growth
strategy, a firm sell their existing offerings to the existing markets and customers by
offering discount or reducing price so that high sales can be achieved (Katsikeas and et.
al., 2016).
 Product development: In this growth strategy, an organisation emphasis on introducing
a new product or service to the markets where they are already operating. Introduction of
new product will help the firm in gaining wide attention of customers so that high
revenues and sales can be developed.
 Market development: Under this kind of growth strategy, a firm plans to sell their
available products and services in new market so that customer base of for their business
can be increased. In this kind of strategy, new customers are served existing products of
the company to achieve high sales and revenues.
 Diversification: This is the most risky kind of growth strategy in which manager of a
company plans to introduce new product in new market so that maximised profits can be
earned. If new customers will not like new product, this can leads to heavy loss of
revenue for concerned company (Lanier Jr and Hampton, 2016).
Out of all the available growth strategies, manager in Coca-Cola can use diversification
strategy to increase the sales of new Coca-Cola energy drink. Under this strategy, manager of
firm can introduce their Coca-Cola energy drink in new market regions where earlier company
was not operating. Due to this, customer base of company will increase exponentially and they
will be able to gain high revenues.
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Mention marketing mix for selected growth strategy
Marketing mix is a specified as set of tactics and actions which are performed by an
organisation so that they can promote their offerings in a proper manner. 4Ps associated with
marketing mix are product, price, promotion and place. In context with diversification of Coca-
Cola energy drink, these aspects are stated below:
 Product: Coca-Cola is going to introduce their new Coca-Cola energy drink in global
context. This is the first beverage of organisation which is not a soda product. This
product is going to enter the market in first month of 2020. This new drink of Coca-Cola
will come in four flavours i.e. Coca-Cola energy zero sugar, Coca-Cola energy cherry,
Coca-Cola energy cherry zero sugar, Coca-Cola energy (Maduku, Mpinganjira and Duh,
2016).
 Price: In global context, people prefer to purchase those products which are of good
quality but available in genuine price. In this context, company can adopt economic
pricing strategy for their new energy drink. With the help of this pricing strategy,
company will be able to gain the attention of maximum number of people due to which
overall revenue and sales of firm will be high.
 Place: As Coca-Cola is performing their business activities in more than 200 countries,
firm is planning to introduce their new energy drink in worldwide also. This drink will be
easily available to the people at retail stores, super market, hyper markets etc. Also, this
drink of company will available through online sites of company and digital shopping
websites (Menon and et. al., 2015).
 Promotion: There are different traditional and modern promotion channels which can be
used by Coca-Cola to promote their new energy drink in a proper way. In this context,
company can advertise about their new product in newspapers, TV and magazines so that
most number of people can acknowledge about them. Also, with the help of social media
platforms like FB, Instagram etc. features of new product can be shared with millions of
people in minimum time period.
Define how the marketing mix maps on customer buying behaviour and shows the impact of 4ps
on each stage of consumer model
With the help of consumer buying behaviour model, a business firm can acknowledge
journey of a customers while buying a service or product. There are some stages associated with
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this model. These stages will help the manager in Coca-Cola to understand the purchasing
behaviour of customers for their new energy drink. Aspects of this model are stated below:
 Problem recognition: It is the first stage of consumer behaviour buying model in which
customers will recognise their need for a product. In this stage, customers will identify
about the products which can serve their need. Here, product element of marketing mix
will help them in acknowledging the products of Coca-Cola (Ryan, 2016).
 Information search: This is second level in which clients will try to find information
about the selected products so that they can assure that their need is going to be served in
proper manner. In this stage, promotion element of marketing mix will help Coca-Cola in
offering important information of their product to their customers.
 Evaluation of alternatives: This is the third stage where customers will analyse and
evaluate different choices so that most desired product can be purchased by them. At this
stage, pricing element of marketing mix will help in influencing the purchasing behaviour
of customers. By providing right price, company can gain the attention of customers in
comparison with rival organisations.
 Purchase decisions: This is fourth step in which a customers is going to decide if they
want to purchase the product of a company or not. In this context, place element of
Marketing mix will impact buying behaviour of customers. If Coca-Cola energy drink
will be easily available then customers will be able to buy them in high quantity (Stead
and Hastings, 2018).
 Post purchase decisions: It is the last stage in which customers will think that if
purchasing the product was a right decision or not. If they are satisfied with the product
then they will further purchase the product of Coca-Cola. If they will not like the product,
they are going to avoid it. This will impact the sales of Coca-Cola energy drink in a
negative manner.
CONCLUSION
As per this discussed report, it can be summarised that marketing is a basis tactics that is
carried out by every firm to increase the visibility of their offerings in marketplace. By analysing
external environment, it can be identified that which factors favour the company and which
aspects can acts as a barrier in achieving high business advantage. Segmentation and targeting
benefits a firm in identifying which are the customers of company in a clear manner so that right
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customers can be given right product. Perceptual map is a visual presentation to show the
performance of company in context with the rival firms. By using ansoff matrix, a company can
adopt right growth strategy so that maximised profits can be earned.
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REFERENCES
Books and Journals
Armstrong, G.M. And et. al., 2018. Marketing: an introduction. Pearson UK.
Datta, H., Ailawadi, K. L. and Van Heerde, H. J., 2017. How well does consumer-based brand
equity align with sales-based brand equity and marketing-mix response?. Journal of
Marketing. 81(3). pp.1-20.
De Mooij, M., 2018. Global marketing and advertising: Understanding cultural paradoxes.
SAGE Publications Limited.
East, R. and et. al., 2016. Consumer behaviour: Applications in marketing. Sage.
Goldberg, M. E., Fishbein, M. and Middlestadt, S. E., 2018. Social marketing: Theoretical and
practical perspectives. Psychology Press.
Homburg, C., Jozić, D. and Kuehnl, C., 2017. Customer experience management: toward
implementing an evolving marketing concept. Journal of the Academy of Marketing
Science. 45(3). pp.377-401.
Hunter, K. E. And et. al., 2019. Retail proximity marketing. U.S. Patent 10,360,593.
Katsikeas, C.S. And et. al., 2016. Assessing performance outcomes in marketing. Journal of
Marketing. 80(2). pp.1-20.
Lanier Jr, C. D. and Hampton, R. D., 2016. Experiential marketing: understanding the logic of
memorable customer experiences. In Memorable Customer Experiences (pp. 29-44).
Routledge.
Maduku, D. K., Mpinganjira, M. and Duh, H., 2016. Understanding mobile marketing adoption
intention by South African SMEs: A multi-perspective framework. International
Journal of Information Management. 36(5). pp.711-723.
Menon, A. and et. al., 2015. Effective Marketing Strategy-Making: Antecedents and
Consequences. In Proceedings of the 1997 Academy of Marketing Science (AMS)
Annual Conference (pp. 224-224). Springer, Cham.
Ryan, D., 2016. Understanding digital marketing: marketing strategies for engaging the digital
generation. Kogan Page Publishers.
Stead, M. and Hastings, G., 2018. Advertising in the social marketing mix: getting the balance
right. In Social Marketing(pp. 29-43). Psychology Press.
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