+1-817-968-5551
+61-488-839-671
+44-7480-542904About Expert
Key Topics
Requirement
Take any Business that you would like to own or particularly feel you could run better. Look at their Business Plan and analyse it as per your subject outline.
Solution
Background
The company chosen for analysis is Coca Cola operating through Coca-Cola Amatil (CCA) in Australia. It is the largest bottlers which sell non-alcoholic beverages in various countries and majorly known for Coca-Cola. It manufactures various products that includes soft drinks, juices, tea, coffee, and others. [coca-cola Amatil website]
Coca-Cola started its manufacturing in 1937 in Australia, and with the help of its bottling partner (CCA), it offers 240+ products to the Australian market. The leading brand of Coca-Cola in Australia are Coca-Cola (Classic), Diet Coke, Coca-Cola Zero, Sprite, Powerade, Goulburn Valley and Pump. [coca-cola journey.com]
Currently, Coca Cola Amatil has focused its business plan to include heavy marketing investment on campaigns to boost the sales of soft drinks in the Australian market (forecasts, 2015)). The major portion of business plan focus will be on television screens, as it has already spent most of its previous years’ marketing budget on social media. Investment in marketing has been hiked by 35-40 percent.
Ms Watkins, CCA group managing director, who joined the company in March last year, and has focused on cutting costs by almost $100 million and diverting that amount to marketing and promotions. The investment would be to gain the previous two year loss in profits in the Australian market.
However, recently, Coca-Cola Amatil is facing tough competition from its rival brand PepsiCo with the similar products in the market such as Pepsi Next and others. The aim of this paper would be to evaluate the current business plan of the Coca-Cola Company for the Australian market with suggestions on how it can be improved further.
At Allassignmenthelp.com, students can get excellent management assignment help from the best and most experienced writers. Whether you need supply chain management assignment help or logistic supply chain assignment help. We can provide you with comprehensive academic assistance at a low and affordable cost.
The paper includes mission statement of the company which will help to understand the orientation of the company. Chapters on product offering will detail the product length and width of the company. Market Analysis will evaluate the Australian industry conditions and the existing competition. Rest of the chapters will discuss the promotional techniques, distribution network and pricing strategy. In the end, all the aspects will be critically evaluated to get the overall insight.
Mission
The mission statement of Coca Cola is mentioned below (Cola, 2015):
-
- “To refresh the world…”
-
- “To inspire moments of optimism and happiness…”
-
- “To create value and make a difference.”
The mission statement of the company states the purpose of the company and it also helps the company to set a standard while developing future strategies.
Evaluation: The mission statement states the good value proposition of the organization. Optimism, happiness, and making difference will be the key focus for further evaluation.
Product Offering
Coca Cola currently offers various products to the Australian market (Brand, 2015). They are categorized in two beverages: Non-Alcoholic and Alcoholic. Non-Alcoholic products include Coca-Cola, Diet Coke, Coca-Cola Vanilla, Coca-Cola Zero, Sprite, Fanta, Lift, and others. On the other hand, Alcoholic beverages include Jim Beam, Knob Creek, Basil Hayden’s, Vox, and others.
The current focus of the company is on health soft drinks due to the market condition. The health products include Diet Coke, and Coca-Cola Zero.
Evaluation: The major drawback of the health products – Diet Coke and Coca-Cola Zero – is that it uses aspartame which is less beneficial than Splenda. Therefore, the company should use Splenda in the product to make it more consumers friendly. It should not use phosphoric acid in the product and instead go for citric acid, as phosphoric acid leads to calcium depletion from the bones.
Market Analysis
Mentioned below are the Australian market analysis on two factors (Industry and Competition) which will help us to understand the current situation of soft drink market condition and existing competitors.
Industry Analysis
The soft drinks market of Australia grew by 2.4% from 2011 to 2015, and employs more than 6500 people (ibisworld, 2015). The retail environment has been considered as weak and the soft drinks market has completely depended on the changing characteristics of consumers. Customers have cut their spending on various products due to the poor global economic situation. Despite all the issues, the market has currently reached to $4.4 billion (ibisworld 2015). The market of Australian Soft Drinks is considered to be floating through mature phase. The industry’s contribution to the GDP of the country is expected to be 2.5% within the next ten years passing 2021. However, energy diet drinks has stood well in the market and expected to move up further.
The growth of the soft drinks in Australia is currently being attributed to the innovation in the products and the concerns about the health and wellness of the consumers. Consumers are getting more health conscious which is gradually reflecting in their purchase decisions. It is expected that the consumers are more likely to look at the content of the product before making purchases. The major content that is at red alert is Sugar content.
Consumers have started to prefer premium products, means the products of brands, rather than choosing mainstream goods. Therefore, the innovations from the contemporary companies seem obvious. The launch of Barista Bros by Coca Cola Amatil seems to the one strategy to tap into this kind of market. Companies are also getting involved into heavy promotional activity to out go the competition. High expenditure budget of the companies can be seen as the obvious results (Euromonitor, 2015).
Competition
PepsiCo is posing heavy competition in the face of Coca Cola. The distribution of Pepsi in Australia is handled by Schweppes which is owned by Asahi. The biggest advantage PepsiCo has over is its price point for the Australian market. As the bottling operation of PepsiCo is based in India, it is using the cheap labor and material from India to make cheaper product. Combined with the cheap pricing strategy, the extensive large volume sales strategy of PepsiCo is placing Coca-Cola down in the current market.
As the Coca Cola is concerned, it is using premium pricing strategy for the market, which is leaving up the low priced consumer market for the PepsiCo. Also, as the bottling plant of Coca Cola is under Coca Cola Amatil, which manufactures the product in Australia where cost of labor and raw materials are comparatively higher, therefore, it is unable to pull down the prices of its product down to meet the competition. The only consumers that are left with Coca-Cola currently are its die hard loyal customers who can drink anything as long it is from Coca Cola.
The Coca Cola has adopted the premium margin to improve its margin from its loyal customers. However, if the falling prices of other similar products are taken into consideration, then it can be indicated that the prices of this company is vulnerable to the competitive pricing in the Australian market.
Place Order For A Top Grade Assignment Now
We have some amazing discount offers running for the students
Place Your OrderPrimary Target Market
The consumers have been segmented based on the age group, their taste and related preferences. The target market of Coca Cola Amatil includes people from every facet of life who want to enjoy variety of drinks, be it alcoholic or non-alcoholic. However, the current plan of the company is to boost the sale in health drinks and therefore, the focus is more on acquiring new group of drinkers. The primary target market covers all those people who are health conscious and want healthy drink but also want to enjoy the taste of classic carbonated drinks.
The age group of the target market range from teenagers to elders. However, looking at the current market situation, the orientation has been diverted to some extent from holistic view to the new target market that mainly consists of population in the age group of 18 and 32. This segment is more likely to experiment on new things and therefore they are preferred more over other age groups. Their ability to take risk, consciousness towards health, and high disposable income has helped Coca Cola Amatil to promote its product openly in the market.
Most of the target consumers are the loyal consumers who enjoyed the taste of classic coke and are now searching for more health friendly alternative. Their trust over Coca Cola has garnered appreciable benefit for the company in terms of revenue. Drinking latest and sought after product from the market help this age group earn recognition they crave from their friend circle.
Evaluation: The target market selected by the Coca Cola Amatil can be considered good based on the changing market condition and orientation of the consumers. However, if the pricing of the products could have been optimum and in par with competitors, then it could have benefited from untapped market that cannot afford Coke on regular basis but still wants to enjoy this product.
Marketing
This section will deal with the marketing strategies of the company for Diet Coke in Australia.
Product
As mentioned earlier, Coca Cola Amatil manufactures products that include health drink as well as normal carbonated drinks. The focus of the current business plan being the new orientation of the consumers, they have launched sugar free carbonated drinks such as Diet Coke and Coca Cola Zero.
Diet coke and Coca Cola Zero are no-sugar carbonated drinks produced for health conscious consumers. The main reason behind the launch of the product was to tap the market that is growing more health conscious and rejecting products that contains high carbohydrate and fat content. The product comes in attractive packaging suitable for Australian consumers, labeled with product contents. The product contents mentioned over the bottle gives the consumers idea about the whole product and thus they can analyze whether it fits with their expectation of a health drink. It is available in variety of pack sizes, larger sizes are targeted for family buyers and people enjoying the party.
Evaluation: The Diet Coke comes in white bottle which resonate feminine sense and fewer men are attracted towards this bottle consider it for women only drinks. Therefore, suggestion would be change the bottle design to attract consumers from both gender.
Pricing
The pricing of all the products are at premium level, which is targeted at premium users only. It has done to garner larger revenue from minimum sales. The price of the Coca Cola products is higher than its nearest competitor PepsiCo. One of the reasons behind the higher price is the cost of manufacturing of the Coca Cola products. The Coca Cola produces its products through Coca Cola Amatil which is based in Australia where the labor and material cost is relatively higher than other countries which reflects in its products. On the other hand, having its manufacturing plant in India where labor and material costs are low, PepsiCo is able to introduce its products at lower cost in the market.
For instance, six cans pack of 375ml of Diet Coke cost Aus. $6.00, the competitor product, Pepsi Next costs only Aus. $8.00 for 12 cans pack. Therefore, it can be seen that the Diet Coke is priced almost double than the PepsiCo’s health soft drink Pepsi Next.
Evaluation: This pricing strategy of the Coca Cola may hamper the sale of Coca Cola products in the Australian market, and it is evident that the consumers who are price conscious may rarely try this product due to the presence of other similar products in the market and that too at competitive price points.
Due to the high priced products, Coca Cola is unable to gain larger market share and therefore, it is suggested to relocate the manufacturing plant from Australia to countries where it can produce products at cheaper rates. This will allow Coca Cola to compete with PepsiCo on the common ground.
Distribution
The company has maintained that the retailers take extra care in selling the product by keeping the degree below 36 Fahrenheit. The retailers are advised not to sell the product even at 40 Fahrenheit, which keeps the quality and the taste of the product intact. It has also helped the company to keep the product at premium level in the eye of the consumers.
The supply chain of the Coca Cola is handled by Coca Cola Amatil that includes procurement, maintenance to logistics. It employs almost 1200 plus skilled people all over Australia. It has ten sites that manufacture the product and has 39 lines of production.
CCA has focused on development of the environment where people are encouraged to help the company in innovations through understanding consumers demands and orientation.
Promotion
The company has taken help from Oglvy Sydney to involve heavily in the promotion of its health conscious drinks for the new market. The focus has been to reignite the love for Coca Cola products among youngsters by reminding them that how it can make them feel good while drinking the Coca Cola products.
The integrated marketing campaign has been the major focus, where the company is using all possible media to reach the consumers. The last year investment of the company was heavily into the social media strategy, however, the coming years will see the major investment into television screens to attract consumers from family and friend circle.
The previous year social media campaign of the Coca Cola included major buying in the digital space that focused on customized messaging that included focus on various fields such as fashion, cooking and home styling. Customer loyalty programs were also used to attract the consumers, and partnering with various influencers over the internet such as bloggers was used to personalize the product in the eye of the consumers.
One interesting campaign for the Australian market was the color changing coke cans that attracted huge fan following. The can changed color as it got warmer gradually. It was targeted at young drinkers who were happy taking their pictures with the changing coke color bottles.Financial Planning
As mentioned earlier, the new director of the company has focused on diverting most of its fund (coming from cost cutting) to the marketing campaign of the Coca Cola. Therefore, the budget of the next years marketing plan will majorly consist of television screen advertisements, almost $100 million.
Evaluation: Instead of placing all the money into television ads for the next year, it would be a wise decision to keep social media strategy into the purview. As the importance of social media and all the other online marketing has not yet faded and instead it is expected to rise, therefore, complete focus on television might waste most of the budget.
Critical Risks
The Coca Cola has not achieved the market share it wanted and there are various reasons for that, and most of them are mentioned throughout the previous chapters.
The consumer confidence level and the changing economic situations of the country and various regulatory issues is considered to pose risk for the company in the long run. While to understand the risk exposure, Coca Cola Amatil uses top down and bottom up strategy, yet they do not see significant in handling the risks posed by the competitors.
Evaluation: Various suggestions have been given throughout the chapters which can be taken into consideration to restructure the business plan. One of the major changes that can be suggested is to relocate the manufacturing playing field of Coca Cola. Second is to redesign the product packaging of Diet Coke, and the third is to keep holistic view in marketing investments rather than targeting only televisions for the next year as use of internet is still rampant among the Australian consumers.
References
-
Brand, Coca-Cola. "Brands: Diet Coke". Coca-Cola Journey. N.p., 2015. Web. 30 Dec. 2015.
-
Cola, Coca. "Mission, Vision & Values". The Coca-Cola Company. N.p., 2015. Web. 30 Dec. 2015.
-
Diet, Coca Cola. "Diet Coca-Cola". Coca-Cola Journey. N.p., 2015. Web. 30 Dec. 2015.
-
Euromonitor,. "Soft Drinks In Australia". N.p., 2015. Web. 30 Dec. 2015.
-
forecasts, Coca-Cola. "Coca-Cola Amatil Gets Its Fizz Back". The Sydney Morning Herald. N.p., 2015. Web. 30 Dec. 2015.
-
Ibisworld,. "Soft Drink Manufacturing In Australia Market Research | Ibisworld". N.p., 2015. Web. 30 Dec. 2015.
Give your grades a boost
Just share your requirements and get customized solutions on time.
-
1,168,768 Orders
-
4.9/5 Overall Rating
-
5,052 Experts
