Principles of Marketing MG412: Coca-Cola Brand Extension Report

This report examines Coca-Cola's brand extension strategy, focusing on the introduction of diet coke as a new product variant. The methodology employed is secondary research, gathering data from articles and journals. The findings highlight brand extension as a marketing concept leveraging brand image. The report applies the Kapferer prism to build brand identity and analyzes the target market using the STP model (Segmentation, Targeting, and Positioning). Segmentation is based on behavioral factors, targeting consumers seeking sugar-free options. The report identifies political, economic, social, technological, legal, and environmental factors influencing the market. A product development strategy is adopted, with diet coke positioned to compete with Diet Pepsi. The conclusion emphasizes the importance of marketing in the product's success and the competitive landscape.

Principles of Marketing

Executive summary
• This report has been described about brand extension of Coca Cola. A new product is been developed
under similar brand name. Moreover, the method used to conduct study is secondary one.
• The data and info is gathered by doing secondary research.
• Furthermore, results are been explained that target market is identified on basis of behaviour. The diet
coke has to face competition from Diet pepsi.

INTRODUCTION
• In such a complex business environment, it is necessary for companies to introduce new products and
services in the market. It is done through brand extension.
• Coca Cola is a brand that operate at global level. It was founded in 1886 by John Stith Pemberton. It
headquarters is in US. It provides variety of products and services to people.
• The products included coke on basis of flavour, calories, etc. its market share is 48.6% of global
beverage market.
• Also, market value of company is $230.6 million in 2019. In recent times, there are many trends in
sales. Now, brand is focusing on variants of coke.

Cont..

METHODOLOGY
• Here, in order to conduct study, secondary research was done. In that data and information was
gathered from previous articles, journals, etc.

FINDINGS
• From research it is analysed that brand is a type of product that is manufactured by company under its
brand name. Brand extension is concept of marketing a product through brand image and selling its
products under different category.
• Branding is way of marketing to create a distinct identity, name, symbol, etc. of company through
which people are easily able to distinguish it from competitors. Here, Kapferer prism is applied which
enable in building a brand and creating identity. In this there are 6 factors included:
• Brand physique- it is brand physical qualities and specifications. Also, it includes product features.
• Brand personality- it shows the way in which product or service reflect what kind of person

CONT..
• Brand culture – it reflects the ethics and values that brand shows. Moreover, what type of population or
culture does brand target.
• Relationship – this factor depicts relationship that allow people to engage with brand.
• Reflection- it is related to views and perception of people towards brand. A strong reflection of people
will allow buyer to recognise it.
• Self image - As stated self image is reflection of target customer. It reflect their internal feelings and
thoughts.

CONT..
Target market
• Coca Cola must specify its target market for diet coke. This is because it allows in determining their
needs and developing marketing strategies. In order to identify target market STP model is used. :-
• Segmentation – Here, segmentation refers to dividing population on basis of factors that are
demographic, geographic, behavioural, etc. thus, it will be done on basis of behavioural basis.
• Targeting – the target audience is identified on basis of segmentation. Here, target people will be those
who want to drink sugar free drink. This include people of all age, gender, etc.
• Positioning – in this it is find out that where services will be placed. So, Coca Cola will position their
product and services by offering discounts, coupons, etc. to customers. The services will be based on
low selling price.

CONT..
It is evaluated that there are certain factors that results in emerging of new market. besides that, new trends
can be evolved as well. Thus, through pestle analysis and Ansoff matrix new market is identified.
• Political – due to change in FDA laws, it may allow company to develop new product.
• Economic- With shift in economic growth of countries or in income level of people, the company can
introduce new variants at low price.
• Social- It is related to change in taste and preference of people. So, they might prefer to drink coke
which is sugar free.

Cont..
• Technological- Any change in technology can impact of business operation of Coca Cola. they need to
keep pace with technology in producing diet coke.
• Legal- they are related to employment, health and safety laws, etc. thus, they have to adhere all laws
and regulations.
• Environment- The company needs to protect environment and contribute in CSR. As Coca Cola uses
high amount of water, so any change in law can affect their operations. So, by producing diet coke
water usage can be decreased.

Cont..
• By analysing the data, it is identified that company is opting for product development strategy. They
will produce new product and offer in it existing market.
• So, this strategy is been adopted by them. The new product developed by them is diet coke which is
sugar free. It does not contain any sugar and content of caffeine is less.
• Besides, natural flavour added is less and carbonated water is mixed in it. Thus, the variant will be sold
under brand name of diet coke.
• The brand will be similar that is Coca Cola. However, there is a competition which new product can
face in the market. It is from Pepsi diet coke.
Diet coke Diet pepsi
This is under the
brand name Coca
Cola.
It is sold under brand
name Pepsi.
There is no existence
of market share.
There is high market
share of diet pepsi

CONCLUSION
• It is concluded that diet coke is brand extension that Coca Cola want to introduce. This will allow them
to attract more people as product contain sugar free ingredients.
• The success of product will be determined on its marketing. It will have to face stiff competition from
diet pepsi.