bubble buzz in india

Student Names & ROLL NO:

PARMAR BHAVIN : -22

JOSHI KULDIP :- 15

PRATIC SHAH:- 46

BERA NANDLAL:- 3

RAO CHIRAG:- 43

Course Information

Marketing Management I

SIR.PANKAJ PATEL

Date of submission: MONDAY, March 22th, 2010

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The following marketing plan forms the basis for the introduction of an innovative new product

by the Coca-Cola Company. The analysis allows us to outline the best strategies to follow for the

achievement of the company’s strategic goals. “Bubble Buzz” will be marketed as a unique

functional drink while striving to reinforce the company’s status as the leader in innovation and

successful product launches. The marketing strategies will enable to reach a market size of an

estimated 8,688,300 people (targeted) with a forecasted sales growth prospect of 7.3% over the

next 4 years ($243,029.47 profits), while satisfying the needs of the still-unserved market for

ready-to-drink bubble tea. Success will be reflected by a sizeable capture of market shares within

this market, while strategically carrying the company up to the top spot as the market leader in the

functional drinks segment of soft drinks. Export potential will be considered in INDIA.

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Brief description of the company

The Coca-

Cola Company’s core undertaking is to benefit and refresh everyone it reaches. Founded in 1886,

we are the world’s leading manufacturer, marketer, and distributor of non-alcoholic beverage

concentrates and syrups, which are used to produce nearly 400 beverage brands that make up for

our wide portfolio. Our corporate headquarters are established in Atlanta, and we are holding

local operations in over 200 countries around the world. Our activities cover all sectors of the

beverage industry. We are the second leading player in functional and Asian specialty drinks,

while ranking number one in value for the ready-to-drink tea sector

Brief description of the new product, & strategic role in the future position of the company

“Bubble

Buzz” will be a bottled beverage and will be positioned as the only ready-to-drink Bubble Tea

product available on the market. The beverage will have a green tea base with enhanced fruit

flavors (passion fruit, strawberry and lime) as well as tapioca pearls. It will bring an entirely

unique drinking experience to its consumers. It will present itself as a funky and unusual

alternative to traditional tea while providing the great taste of authentic fruit juice in an

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attractive and convenient packaging. The strategic role of Bubble Buzz for The Coca-Cola

Company is centered around three objectives:

To stay at the forefront as the market leader in innovative product introductions and

successful product launches;

To strengthen and satisfy the needs of the more adventurous Generation Y consumers with a

new eye-catching and FUNctional product;

To become the market leader in the functional drinks segment with increased market shares.

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Trends: Through the early 1960s, soft drinks were synonymous with “colas” in the mind of

consumers. In the 1980s and 1990s, however, other beverages (from bottled water to tea) became

more popular. Coca-Cola and Pepsi responded by expanding their offerings through alliances

(e.g. Coke & Nestea) and acquisitions (e.g. Coke & Minute Maid), but also by focusing efforts on

portfolio diversification. Today, while the soft drink industry’s value has increased in 2004, the

volume sales of carbonated soft drinks has declined due to a large proportion of consumers who

are opting for the trend towards healthier alternatives in the functional drink segment (energy

drinks, smoothies, milk & juice drinks, sports drinks) as well as bottled juices and

water .Companies have been actively engaged in new product developments in order to counter

the growing concerns about negative health impacts of high-fructose drinks, but also to increase

the demand in a market where product offerings are quickly maturing .New flavor introductions

and health-conscious formulations have been launched in an attempt to offset the decline in

carbonated soft drink sales .The functional market is expected to show sustained growth and

consumer interest in the future years as consumption shifts to trendier, healthier and more

sophisticated products .

Profitability & future growth potential: In 1993, Concentrate Producers earned 29% pretax

profits on their sales, while bottlers earned 9% profits on their sales, for a total industry

profitability of 14%. While the functional drinks sector only accounts for 3.7% of the total soft

drinks sales in 2004, estimates are forecasting a growth of 7.3% in sales and 11.0% in volume

consumption by 2009 .

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SWOT ANALYSIS (Strengths and weaknesses, opportunities and threats)

Strengths Weaknesses

Brand strengthEffective stride in new marketsResults of operationsStrong existing distribution channels

Reliant upon line extensionsReliant upon particular carbonated drinksBrand dilutionEntrance into difficult non-core categoriesSaturation of carbonated soft drink segment

Opportunities Threats

New product introductionsBrand is attractive to global partners

Strong competitionPotential health issuesFree trade

COMPETITION

Coca-Cola’s top competitors for the soft drinks industry are PepsiCo (31.6%) and Cadbury-

Schweppes (15.8% of market), which combined, represent about 48% of the total

market .Coca-Cola is leading with 43.7% of the total soft drinks market.

In the functional drinks sector, PepsiCo is the current market leader with 60.5% of the

market shares in 2008. Coca-Cola Co is second with 32.8% .Bubble Buzz will launch into a

currently unnerved subset of that market (RTD “Ready-To-Drink” Bubble Tea), which is

until now unexacting. It is anticipated that the following brands could potentially compete

with Bubble Buzz in the functional drinks market: Brisk, Lipton Iced Tea, So be (owned by

PepsiCo), as well as Snapple’s and Hawaiian Punch (owned by Cadbury/Schweppes). Bubble

Buzz also creates a potential situation for cannibalism with Coca-Cola’s very own brands of

iced tea and other functional drinks.

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The current market for traditional Bubble Tea is fragmented, since the distribution is

restricted to local outlets and selling points such as counters and small Bubble Tea shops in

scattered locations across Canada. However, direct competition from these local players is

not anticipated, since the marketing roll-out will initially emphasize on product awareness

and both sales channels do not reach or serve the same market (retailing vs.

counter/restoration). A strong distribution system already exists with Coca-Cola, since

partnerships and channels are already in place. This will facilitate the product’s reach into its

target market.

TARGET MARKET

Segment identification: RTD (Ready-to-drink) bottled Bubble Tea, to be established within the

Functional Drinks sector

Segment needs: The product will cater to both physiological needs (hydrating and nutritional

value) and social needs (perception of a social, fun drink with a sense of belonging within peer

consumer groups)

Segment trends: The current trends include a shift away from junk foods and carbonated drinks,

a growing interest for healthier / beneficial products for the “mind and body” (ref. 10), the trend

towards the availability of on-the-go products for those with an active lifestyle, as well as the

trend for personalization through customization (or for beverages, through variety-seeking in a

wide introduction of flavours

Segment growth potential: Statistical reports anticipate a segment growth of 1.72% over the

next 9 years (2015) for the 10-29 years old subsets ..

Size of the segment (population): 8,688,300 (329,600 L).

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SEGMENTATION VARIABLES AND BREAKDOWNS FOR INDIAN CONSUMER MARKET OF BUBBLE TEA

MAIN DIMENSIONS

VARIABLES BREAKDOWNS

Region Nationwide (all provinces and territories) with emphasis on urban / metropolitan areas, and adapted strategies for all geographical groups

Area size 5000-19,999 to 4,000,000+Density Urban, suburban, rural Climate All (East, West,north,south)Age 10-29 years old (teenagers, studying age and young adults)Gender Male and FemaleIncome All under or upper Rs.50,000Occupation Students; new graduated; new workers; young professionalsEducation Elementary 4th grade, High school,

Personality Brand conscious, anchored in popular culture, inclined for differentiation and sophistication, very tolerant towards multiculturalism and internationalism (open-minded), quick maturation with modern products

Lifestyle Most of them dependent on parents, no major responsibilities, highly influenced by peer groups, active life, importance of school, work and social life

Benefits sought

COMMUNICATION BENEFITS-Nutritional information-Informational text on history of productFUNCTIONAL BENEFITS-Healthier than soft drinks-Convenient, easy to take outPERCEPTUAL BENEFITS-Quality/Premium price-Social standing/good-looking

Usage rate Seasonal (peak in summer), daily-basis, weekly basis

User status Non-user, regular user (current user through existing bar-shops)Loyalty status

None, medium, strong

Positioning strategy: The only RTD bottled bubble tea available. Funky & eye-catching bottle,

functional packaging, premium-priced, cool, new and unusual, unique drinking experience,

aspects of play (tapioca pearls, oversized colored straw), variety of flavors, sweet, refreshing, for

hip & young people, healthier alternative to heavy-sugar drinks.

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The objectives of the marketing plan are strategically centered

around 3 criteria:

1)to create a strong consumer awareness towards a completely

new bubble tea product from Coca-Cola,

2)to establish a wide brand recognition through the capture of market shares in the functional

drinks segment,

3) become the top market leader in that particular segment within the forecasted sales figures.

PRODUCT STRATEGY

The core

o Bubble Tea beverage in a pre-bottled, ready-to-drink format.

The actual product

o Packaging and labeling: see figure below

o Branding: colorful, aspect of play, round shaped, prominent Bubble Buzz logo written in

modern font, catchphrases such as “Think outside the Bubble” and “Get Your Buzz”.

o Trade name: Bubble Buzz™, a Coca-Cola product

o Brand personality: energy, funky, cool, functional, original, funny, healthy, etc.

o Brand equity: Coca-Cola provides a quality, consistent, innovative and accessible soft

drink reputation.

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Augmented product

o Nutritional information, Status (social drink), Features promoting the website, Health

benefit of a green tea base.

Marketing considerations

o Product life cycle: Bubble Buzz is a low-learning product. With a strong marketing

campaign, “sales [will] begin immediately and the benefits of the purchase are readily

understood” .Since Bubble Buzz is prone to product imitation, Coca-Cola’s strategy is to

broaden distribution quickly, which is currently feasible thanks to the company’s high

manufacturing capacity.

o Product class: Food & beverage Soft Drinks Functional Drinks

o Bubble Buzz follows the practice of product modification: Coca-Cola is introducing an

existing beverage (bubble tea) but redefines the drink with a new, more convenient

package. Bubble Tea will now become a widely available drink in multiple retailing

(distribution) channels.

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PRICE STRATEGY

The price strategy that will be undertaken should consider the following aspects:

1. Consumer demand2. The product lifecycle3. Potential substitutes

Customer demand

Customer demand is a crucial factor which is driven by tastes, income and availability of

others similar products at a different price. For a lot of consumers, value and price are

highly related: ‘’the higher the price, the higher the value’’. Consequently, Coca-Cola’s

intention to position Bubble Buzz as a unique, innovative and attractive product gives it a

certain control over Bubble Buzz price. To be able to implement higher pricing though,

the minimization of the non-monetary costs to customers should also be include along

with awareness of the product (notably by advertising) and value (benefits) .

The product lifecycle

The company should take advantage also to the fact that

the newer the product and the earlier in its lifecycle the

higher the price can usually be. It ensures a high profit

margin as the early adopters buy the product and the firm

seeks to recoup development costs quickly and it also brings a certain prestige to the product.

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Projected Financial Performance

Revenues $ 597,124.00 Based on sales @ different channel’s price COGS 214,964.64 Based on weighted average percentage in past dataC.M. 382,159.36 Revenues - COGSFixed Costs :

SG&A cost : 113,453.56 Half of the O/H costs estimated, based on past dataCapital expenditures : 25,676.33 4.3% of revenue, based on past dataProfits 243,029.47 CM – SG&A – Capital expenditures

Requirement for success analysis:

C.M. per bottle = 382,159.36 / 328,000 = $1.17=Rs 65.25(1 ltr)

Break-even: (113,453.56+25,676.33) / 1.17 = 118,914 (bottles)

Market share: 118,914 / 1,000,000 = 11.9%

In one year, if Coca-cola can sell 118,914 bottles of Bubble Buzz, or in other words achieve 11.9% of the functional drink market share, it will break even.

After this point, every bottle Coca cola sells will generate average $1.17 towards the profits. The potential profits can up to $1,030,770.001 based on our target market.

Expected Costs:

COGS: $597,124 * 36% = $214,964.64

O/H: $597,124* 38% = $226,907.12

Expected Revenues (total) = $597,124

1 $1.17*(1-11.9%)*1,000,000 = $1,030,770

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Based on the aforementioned analysis, Bubble Buzz appears to be a profitable and innovative

product with a strong outlook for market share presence and segment growth opportunity. Upon

implementation of the marketing plan, the Coca-Cola Company will regain increased market

shares and claim its targeted situational position of market leader in the functional drinks segment

as well as keeping its long-standing consumer recognition for innovative and successful product

launches in diversified markets. Projected profits will be $243,029.47 (see financial projections).

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REFERENCES (Direct)

1. The Coca-Cola Co. (Company Profile) . Global Market Information Database (Euromonitor).

Jul 20, 2007. Accessed Feb 08, 2008.

2. Functional Drinks Off-trade Sales in Canada (Country Report) . Global Market Information

Database (Euromonitor). Oct 03, 2007. Accessed Feb 25, 2008.

3. Functional Drinks, Canada, Retail Volume (Statistics) . Global Market Information Database

(Euromonitor). Oct 03, 20075. Accessed Feb 25, 2008.

4. Soft Drinks in Canada (Industry Report) . Global Market Information Database

(Euromonitor). Oct 03, 2007. Accessed Feb 08, 2008.

5. Functional Drinks in the United States . Datamonitor. Dec 2007. Accessed Feb 08, 2008.

6. COSGROVE, Joanna. The 2007 Soft Drink Report. Beverage Industry. Mar 2007; 96; 3; p.22.

Accessed via ABI/INFORM Global. Feb 08, 2008.

7. THEODORE, Sarah. RTD coffee, tea create a buzz. Beverage Industry. Feb 2007; 96; 2; p.16.

Accessed via ABI/INFORM Global. Feb 08, 2008.

8. The Coca-Cola Company. (Company Profile). Datamonitor. Jun 2007. Accessed Feb 08,

2008.

9. HANNAFORD, Steve. Industry Brief, Beverages I. Oligopolywatch.

http://www.oligopolywatch.com/2003/04/21.html. Accessed Feb 07, 2006.

10. POPP, Jamie. Leading in a healthy direction. Beverage Industry. Dec 2004; 95; 12; p.22.

Accessed via ABI/INFORM Global. Feb 08, 2008.

11. BERKOWITZ, Eric N. CRANE, Frederick G. KERIN Roger A. HARTLEY, Steven W. RUDELIUS,

William. Marketing, 5 th Canadian Edition. McGraw-Hill Ryerson. 2007.

12. Consumer Lifestyles in Canada . Global Market Information Database (Euromonitor). Feb

01, 2007. Accessed Feb 08, 2008.

13. Top 20 Global Brands, Ranked by Brand Value, 2004 & 2005 (in billions and as a %

increase/decrease vs. prior year). BusinessWeek; Interbrand. Jul 22, 2007. Accessed via

eMarketer. Feb 28, 2008.

14. THEODORE, Sarah. Surprising suggestions from teens. Beverage Industry. Vol.96, no 7. Jul

2007. p.4.

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15. Canadian Statistics – Population by Sex and Age Group . Statistics Canada.

http://www40.statcan.ca/101/cst01/demo10a.htm. Modified Oct 27, 2007. Accessed Feb

28, 2008.

16. 2004 Annual Report – Form 10K (The Coca-Cola Co.) . The Coca-Cola Co. US Securities

and Exchange Commission, File no. 1-2217. http://www2.coca-

cola.com/investors/annual_other_reports.html. Accessed Feb 13, 2008.

17. WILBERT, Caroline. Coke, Pepsi focus on China market. The Daily Sentinel.

http://www.gjsentinel.com/world/content/shared/news/stories/COKE_0224_COX.html.

Cox News Service. February 24, 2008.

BIBLIOGRAPHY

www.yahoo.com

www.googli.com

www.slideshare.net/.../ marketing - plan -final-march-29

www. buzzmarketing .com/got buzz intro.html

indiamicrofinance.com/.../microfinance-bubble-repayment-revolt-india.html

ww.medianama.com/.../223-bubble-motion-launches-bubbly-a-mobile-voice-social-network/ -

www.nytimes.com/.../struggling-to-regain-technological- buzz -after- bubble -s-burst.html ?.

scotttesta.com/.../quoted-twitters-100m-funding-coup-prompts-bubble-buzz-ecommerce-times/

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