COCA-COLA: GREEN Harvard Case Solution & Analysis

COCA-COLA GREEN Case Study Solution

EXECUTIVE SUMMARY

The case illustrates the success story of Coca-Cola in the US, UK and Asian-pacific. The company TCCL operates in four major categories namely, carbonated soft drinks, non alcoholic ready drink drinks, fruit juices and mineral water. Recently the company faced great influence of WTO organization movement on the frame of its sales margin which decreed due to rising awareness of sugar intake as a reason for obesity leading to heart attack. Under such circumstances, the movement of certain countries also posed tariffs and restriction on supply of Sugary product.

In order to retain and adapt to the change in the consumer behavior, the company TCCL, launched its green coke which is made up from natural sugar and low calories, thus meets the changing demand of the consumers.The intuitive of launching new look under the green logo, posted great threat from loss of brand image and ambiguity of the brand identity. Also, it exposed the company to dilute its signature brand image in the market and exposed the whole marketing plan of old coke to the threat of losing the association which people have with red and black coke.

However in order to deal with the issues, it is recommended that the company should initiate its offering into US market first with simultaneous involvement in CSR activities that supports health issues like obesity. Moreover, the approach of nutrition testimonial is also referred to make the impact of new Coke-life strong in the mind of the consumer.

Background

The Coca-cola Company (TCCL), has been an eminent player in the market under non-alcoholic beverages.Its main business concentration has been a coca-cola classic, which is for the customers who prefer taste over health, while it has launched several other products under the same product line as Coke Diet for people who prefers taste and health both.

Over the period, TCCL has been a dominant player in the markets of US, Australia, UK and Argentina, with its main concentration of business through retail stores, followed by restaurant and local shops. It strong distribution strategy has made it come so far that it acquires 60% of the market share in theNon-alcoholic beverage industry. TCCL has emerged over the period, identifying the consumer behavior and the shift in choices.it has launched coke diet which has low calories compared to coca cola classic yet intakes the same traditional trademark taste of Coca-Cola.

TCCL, has kept its taste uniform and constant among its different offerings, because of the emotional association and perception consumer have regarding Coca-cola.it operates its business by the division of the Brand portfolio into four categories.The categories are Carbonated soft drinks (CSD), Non-alcoholic ready-to-drink soft drinks (NASDs), Bottled water and fruit juices. Each of the category carries 35%, 25% and 15% of the market share respectively.

The primary competitor of TCCL isPepsiCo, followed by modeled International, Kraft and others, which compete with TCCL in offering similar products.

Since with time, the trends and political circumstances have changed, sugar consumption has posted a great threat to the lives of the customers in which carbonated drinks faced the great music. Under such circumstances, WTO along with other countries initiated tariff under government intervention act to regulate or restrict the supply of sugary items in the country. Such changing posted great threat to the business and sales margins of Coca-Cola, and other similar countries.

In order to overcome the issue and to keep the grip of the market share tight, the company TCCL, launched its first ever Drink, under the name Coca-life. The drink constituted 35% low natural sugar extracted from a natural plant Sylvia.In addition, Coca-Cola, launched its billion dollar advertisement to support the obesity issue and raise awareness through the advertisement.The new coke-life attributed same Coca-Cola classic taste, with natural sugar and low calories, which targeted the health-oriented loyal consumers of non-alcoholic soft drink. In addition, to make it more fit with the latest trend, the company changed the packaging of the bottle and prepared it through re-cycle plastic, to minimize the impact on the environment.Hence catered the customer tend in both ways.

Since after Coca-life launch, the company quickly initiated its distributions, in US, UK, Argentina and other countries, with different prices strategy, set according to the market forces and customer survey analysis. The company TCCL pans and estimated o convert it 50% of the offering to sugar-free to integrate itself with the changing paradigm of the market.

PROBLEM IDENTIFICATION

There are certain problems identified in the case, among which some problem points major threat to the functional and operational efficiency of the Coca-Cola.

  • The government intervention to reduce or limit the supply of Sugary product in the country. The particular action may shrink the market share of coke classic, sprite and other sweet product.
  • The rising trend of environmentally friendly products.Which makes Coca-Cola, to think and come up with a different idea of producing the plastic bottles which take a lot of water in production. Since the use of eco-friendly bottles is not yet happened, it may pose a great threat to the function of TCCL in future.
  • The coke lovers always prefer Coke real classic taste.it is complicated for the company to position a new brand with a new taste which is sweeter than actual code to a position in the market, and build the same perception and acceptance level.
  • The color of the new coke: Green, Might become a problem for the company in maintaining the brand Coke has always patented the color and logo style of the product.Since Coke life is a coke with new green color and coke-life logo, it may create a confusion and perception distortion in the mind of the customer.it will also create a distortion in brand identity and lack of association which consumers have with black and red coke. Also the new coke may also lose the top of mind factor and may become less identifiable among the stock of other cola drinks.

Courses of Action

Action Phase:

In order to make coca-cola life successful in the coming years and shift the whole process of production to eco-friendly, TCCL, have to take following actions in order to generate great acceptability and hence extract great profits.

  • Since the company aims to target the health-conscious consumer base, it must articulate the offering in a way which covers the natural ingredient part in Coca-Cola, yet engages the traditionality of the cola.In doing so, it should advertise immensely with prime focus on natural sugar ingredient to make a top of mind place in the customer The advertisement should depict the real natural essence which fights obesity but also gives a healthy taste and life-style to the consumers.The advertisement should market before the total distribution in the markets to drive the demand pre-hand.
  • After the advertisement budget has been allocated and used, the company must take the blind test, widely, to incorporate the acceptability rate, in addition to knowing what customer want and factors are resisting the to buy the new coke.Addressing those factors pre-hand will allow the company to rightly manufacturer e the new Coke-life and improve the chances of right positioning and maintenance of brand identity.
  • Followed by the above steps, TCCL, initiate the distribution by concentrating its prime focus on the US market only.Where the factor of environment-friendly products has become more aggressive than another part of the world.it will allow the company to understand the acceptability rate and the success factor and also the loopholes or hurdles that might come along the positioning strategy implementation.
  • The total positioning straight and market penetration strategy will be carried out foreight months to analyze the results. Along with this, a side by side campaign in the c=major countries will be carried out with a supporting survey to check the acceptance level and thus the success level of the new coke.
  • In the initial phase, the company TCCL, has to put its prime focus on the factor of strong identification, the standout element to make the coke-life a distinguishable product, like its other In doing so, it will is continuously taking market survey ad research to gauge the sales margins, its impact on the overall offering of TCCL, and the impact of Coke-life as a single product. This will allow the company to look and analyze the patterns and reservation of the coke consumers about the new coke-life.
  • If Coke-life creates somewhat the make impact on sunset minds as of coke classic. The company will then shift to the other European region where the concept of the eco-friendly stands at the second Here the company will again slowly capture the market through trade marketing, forced sales through retailer sand high advertisement budgets to glorify the concept of coke-life and to make it a trend in the particular region.
  • In the European region, the company should sustain the uniform advertisement and distribution. In doing so, it will focus on retail stores with great visibility and sales to generate the awareness and visibility of the new coke.
  • While the advertisement and distribution are in the process, the company will also incorporate the BTL activities to engage and involve the customers on a personal

COCA-COLA GREEN Harvard Case Solution & Analysis

 

Alternative

Coca-Cola should concentrate its offering in US market initially for three years,

Pros

  • It will enable the company to understand the customer behaviors and purchasing trend.The market of US constitutes largest sales in the portfolio of Coca-Cola.
  • It will help the company control the operational and functional strategy of the coke life where it has strong control over the market force.
  • It will allow the company understand the non-accepting factors of the new coke, and will thus be immediately rectified.
  • It will save the company from investing too much in a portfolio, where the results of success are ambiguous.

Cons

  • It will deteriorate the sales frame of coke classic because of the diversion in brand
  • Coke has always been a red logo.Initiating the new offering with a sudden design and color change might posit threat to the brand identity of the TCCL and may also deteriorate the bard equity of the TCCL.....................

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