Market segmentation refers to the process through which organizations use market characteristics to divide their potential markets into segments or groups. Through segmentation, organizations place consumers sharing similar characteristics and attributes in similar segments. Segments are defined by their location, needs, and interests (Sahaf, 2008). Consumer segments are perceived to respond in the same way to marketing concepts. Market segmentation is particularly important for marketers in that it provides an opportunity for marketers to understand the specifics of what their consumers want for them to devise the appropriate advertising and marketing strategies towards them. Marketers use either behavioral, Psychographic, Demographic or Geographic segmentation to classify their consumers (Anesbury, Winchester, and Kennedy, 2017). Through market segmentation organization are able to effectively carry out their marketing campaign successfully with a minimal budget.
The launch of Coke zero was specifically launched for the males who had labeled the previous Diet Coke as a drink for women. The primary target was the young Adult males. it marketing campaign involved the use of calorie-free to distinguish it from the diet tag used on diet coke associated with women. The new product Coca-Cola no Sugar has a taste close to that of coca-cola classic but has lower calories just like Coke-Zero. The Consumer profile for the new product can, therefore, be described as health-conscious males and females focused on the reduction of sugar consumption (Benstead and Reif,2017). By maintaining the taste of coca-cola classic Coke No sugar is intended to attract more fans who value the coke flavor and at the same time focused on reducing their sugar consumption. The Australian coca cola market has in the past experienced declining sales of soft drinks, attributed to the demand for healthier soft drinks options in smaller portions. The entrance of the new product in the market is, therefore, part of the attempts to satisfy the needs of such consumers looking for healthier alternatives. The modern consumers have become significantly concerned about the number of sugars that they consume (Sheth, 2017). This new alternative, therefore, comes into the market as a way of meeting the rising demand for sugar-free beverages.
2). Product’s Value proposition and positioning in the market
Value proposition refers to the statement that a company uses as a statement of why the target of specific consumers should buy a product. The value proposition is used to convince consumers that a particular product will be of value to them and why the particular product is the most suitable for meeting their needs as compared to other products available in the market. Product’s value proposition is therefore important in that it helps in convincing consumers that a particular product is better than other alternatives. It can be used by a company to gain competitive advantage.
The most applied value proposition by the Coca-Cola Company is the uniqueness of its products. The formula for making coca-cola products is a closely guarded secret. The new product extensively uses this secret going by its maintenance of the flavor and taste for the coca-cola classic drink. In addition, the new product has been branded with the coca-cola brand name and colors. The New product has adopted the use of No sugar tag as part of its labeling and branding. The use of the tag “no sugar” means that the new product will attract the interest of consumers interested in the consumption of products without sugars. It provides the consumers with a reason as to why they should try the new products (Cavazzana et al., 2017). The introduction of a product labeled no sugar in a country shifting to the consumption of sugar-free products is an effective selling point for the new product. This differentiates the product with Coke Zero whose Name tag did not directly communicate to a number of the targeted consumers. The product is also packaged in different sizes and shapes but with similar branding and labeling. The extensive use of coca-cola formula, coca-cola brand names and colors and the use of “no sugar” statement give the product a unique value proposition that cannot be reproduced by any of the company’s competitors. The product has been strategically positioned through the use of the coca-cola branding and image.
3). Product element of the marketing mix
The term marketing mix refers to the set of marketing tools used by organizations in pursuing their marketing objectives within their target market (Schreyer, Schmidt and Torgler, 2017). It includes actions and tactics adopted by an organization as a way of promoting its products or brand in the market. The product element of the marketing mix communicates messages such as the needs that a product intends to satisfy, the features in the product that will enable it to satisfy that particular need, the usage and area of usage for the product, the sizes and appearance of the products, its overall appearance, name, branding, differentiation and cost.
The product is the most important element of the marketing mix. There would be no concept of marketing in the absence of the product. The aim of the whole marketing concept is to satisfy a particular need existing in the market (John et al., 2017). The company, therefore, needs to have a deep understanding of the needs of the consumers when coming up with a new product. Apart from the basic uses, a product needs to provide additional benefits in order to have it differentiated from other similar products in the market. Consumers are more focused on the benefits that they get from a product other than its physical characteristics. The features of the new product include a taste similar to that of classic coca-cola. It is made of zero calories and Zero sugar. The product is also made with the same nutritional ingredients just like Coke Zero and includes a taste sweetened with acesulfame and aspartame just like Coke Zero. It is packaged into 330,100, 375,200,250,390, 600 ml and 1.25 L Fountain and cans (Chávez et al., 2017). This extensive packaging offers consumers a range that was previously not available in the market. By maintain the original taste of Coca-Cola and being sugar-free, the new product will enable coke lovers to enjoy a great taste of coca-cola without sugar. These elements communicate its value proposition to the potential customers.
4).Pricing element of the marketing mix
The price of a product represents the value that consumers get form it. The price of a product has to be in line with the pricing of similar products by competitors. The sensitivity of consumers to prices should also be considered in deciding the price for a product. The price component t also involves the determination of whether discounts will be used as a way of introducing the product to the market or particular segments (Crawford, Brennan and Parker, 2017). Unlike other elements, the price is important because it determines the revenues of an organization and influenced demand or lack of demand for a particular product
The new product has adopted the 2nd-degree price discrimination strategy used for other coca-cola products. Its recommended retail price is as per the retail price for other trade-mark drinks of the coca-cola company. The price for the new product is based on the value that consumers get from the product. However these prices are only recommendations and retailers are free to set their own prices (Parsons, Maclaran and Chatzidakis,2017). The use of a similar pricing strategy and price within the range of other coca-cola products communicate the value proposition of the new product to the target market.
5).Place element of the Marketing mix
An organization creates value for its products by availing them at convenient places for their consumers. Place, therefore, refers to the process of moving a product from the producer to the consumer (Constantinides and Fountain, 2008). The place is concerned with where a product is bought and how it is bought. The Movement of a product from its producer to the consumer might be through a collaborative effort of retailers, wholesalers, and distributors. Place creates value for a product. Without the place component, a price would not find its way to the consumers hence denying an organization an opportunity to earn revenue. The place is concerned with where buyers can look for a product, the kind of stores, distribution channels and sales force (Onkvisit and Shaw,2008).
The new product was officially launched in Australia in 2017 and is currently available in the Shelves of Woolworths, other major supermarkets in Australia and retail outlets. Amid resistance from the Australian consumers, who had developed a personal attachment with Coke Zero, the intention of Coca-Cola Company is to completely phase out coke zero from the Australian market and have coke no sugar in all major outlets. The availing of the product in Woolworths a leading retail chain, as well as other Supermarkets, communicate the value proposition of Coke no Sugar (Pansari and Kumar, 2017).
6).Promotion element of the Marketing mix
Promotion is a major component of the marketing mix. It refers to the kind of communication used by an organization to create awareness about a product, brand or service or persuade targeted audiences to try it (Sicilia and Palazón, 2008). Promotion is made up of five main elements including personal selling, direct marketing, sales promotion publicity and advertising (Louis and Lombart,2010). Promotion is important in generating sales for a product.
The promotion for the new product involves the use of a combination of traditional and modern strategies of marketing. These methods include the use of different types of media, outdoor campaigns, internet and TV adverts. In addition, the company uses corporate social responsibility programs to create awareness and promote its new product. In addition, the promotion of Coke No sugar involves the use of promotion videos posted on its YouTube channel. Upon the launch of the product last year, the company carried out a free sampling campaign that saw Australian consumers receive more than 2 million free samples of coca-cola no sugar in over 60 days (Hong and Li,2017). The free sampling campaign also involved an outdoor advertising panel where consumers were required to say yes in order to receive a free sample. The panels were deployed to chosen footfall central business district locations.
In conclusion, the price, place, promotion and product elements of the marketing mix have been effectively integrated to deliver value proportion for coke no Sugar in the Australian market. Unlike its predecessor Coke zero which was largely perceived as a drink for Adult males, the new Coke no Sugar is intended to win the hearts of both males and females. Its introduction into the market has come at a time where there has been growing health awareness on the Australian population. The new product’s packaging into different sizes has filled a gap that was initially not filled. The new product, therefore, gives the consumers a healthy alternative to the classic coke packaged in various sizes as per their needs. The introduction of coke no sugar therefore in the Australian market is a way meeting the rising demand for healthy alternatives. The use of free sample promotion and the introduction of the product in major Australian chains like Woolworths have effectively played the role of creating a value for the product. This has also been achieved with through the adoption of a pricing strategy, similar to the one adopted for other Coke products. Although faced with challenges in gaining absolute acceptance as a replacement for coke zero in the Australian market, the successful integration of the marketing mix components will soon lead to the overall acceptance.
Coca-cola is a leading producer of soft drinks operating in all corners of the world. Currently ranked as the best company in the soft drinks industry, the company has one of the most impressive product offerings consisting of 3500 products and over 500 Brands. The company has maintained its global position through the launch of new products as a way of satisfying the changing needs of its consumers. Compared to other multinational companies, Coca-Cola has the most distributed products with its products available in more than half of all countries globally. In addition to its distribution network, the company also enjoys a 50% market share, the biggest in the Industry. Coca-Cola operates in Australia through Coca-Cola Amatil, one of its main bottlers. Apart from Australia, Coca-Cola Amatil also operates in Samoa, Fiji, Papua New Guinea, Indonesia and New Zealand. Some of its competitors in the Australian market include Nudie Foods Australia, PepsiCo and Australian supermarkets such as Woolworths and Coles. Some of its newest entrants into its product portfolio include Coke Zero launched in 2006 and coke No sugar in July 2017. The Australian market has been skeptical about playing along with the new No sugar Product. The demand for Coke zero is quite high in the Australian market based on its sweet taste and unique flavor. The announcement by the company that it would be replacing Coke zero with Coke No sugar sparked outrage among its consumers (Andrews and Shimp, 2017). In this report, my focus will be on the Marketing of Coke no Sugar in Australia. The case study address concepts such as marketing mix, value proposition and target market for Coke No Sugar in Australia.
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