MARKETING NEWS 1; Coca- Cola Energy Brand.
The Coca- Cola Energy drink brand became the first energy drink released under the Coca-cola brand in 2019. Building on the established and great taste of the Coca-cola brand that people cherish and are aware of, the energy drink itself contains caffeine extracted from the natural sources, B vitamins, and Guarana extracts. It is holistically taurine, free delicious, and refreshing taste.
The brand is available in the United Kingdom, the United States, and other parts of the world in 250ml cans, in two variants – with and without sugar to cater to the people across the divide. The two qualities of energy were cross-examined with care to develop their recipe by Sparling Business with pride to unveil the product under the Coca-cola brand. People are invited to try a new and different energy drink designed to complement the busy and unbeaten lives. The strategy is to offer customers a wide range of drinks to meet various lifestyles and occasions.
Discussions and Analysis
Although Coca-cola has more non-alcoholic beverages beyond people’s imaginations, it licenses and owns more than five hundred brands. More of its emphasis is placed on the lead brands and connecting more consumers, especially to the Coca-cola trademark. From the looks of things, the introduction of the Coca-cola energy drink in Britain, USA, and other 25 countries in the world in 2019 could be an approach that subjects the entire company to test because the new energy product was strategically designed to steal shares and customers from the other existing players in the market.
The biggest question is why the energy drink and why now? This question may raise millions of answers with different opinions. First, energy drink is an enormous business venture with various formats and categories designed to boost the entire market for Coke products globally. It is one of the fastest-growing energy drink products in the world, at 6%, compared to a similar product produced by competitors like Pepsi. Initially, Coca-cola did not possess a compact and robust global portfolio thriving in the context of the energy drink market compared to the rivals. Now, as a marketing executive or manager, questions of the exact market places that are prospect may not seize to crisscross your mind. The overall objective would be strategies to completely master the current customers that consume other brands and require the energy drink, especially generation Z.
The most common answer is that the energy drink is a glaring hole. The number one Soda manufacturer in the world felt the essence of the urgency of market diversification. The reason behind this is the current increasing market pressures resulting from the health-conscious consumers and the government. The seasons hence seemed excellent and proper for unleashing the energy drink with and without sugar types. Another set of questions is why the energy and not any other product? The purchase of energy drinks globally provides the company with approximately 5,000 stores in five continents alongside the numerous youths behind the product worldwide. The venture is also characterized by a large energy drink vending business of over 9,000 express machines located in convenience stores, supermarkets, officers, and movie theatres.
Remember, Coke Company does not have the brick and mortar experience to run the retail shops and outlets. Another reason behind the energy drink venture is the various outlet partners of the Coke Company. For example, China alone has 540 stores for Coca products, with plans to increase the number up to 1,200 by 2022, making it viable for production alongside other brands. On the same note, the growing middle-class countries like China and the USA are essential in driving the economy in a very unusual manner. The absolute size of the market unveils multiple opportunities.
Undertaking in the into the developing and growing notion of energy drink among the young population globally is another justification for the acquisition. For example, the cola hulk already got endowed with knowledge and skills in the sale of canned and bottled Coke brands, especially in places like Georgia, Japan. The established coke brands glamour and might could not be stopped. The Coca-cola distribution network is also very massive, and its global reach and marketing experts provide a new income and profit dimensions. With the staged and entrenched operations of Coca-cola Company for the last 130 years of vast distribution networks and unparalleled expertise, the energy drink will be found in the restaurant, vending machine, convenience store, and supermarkets all over the world.
Supplementing the Company offers in the B2B context is also a significant strategy that the Coca-cola could be targeting in the long run. Currently, restaurants, cafeterias, and hotels globally buy Coke-existing brands such as juices, water, and ice tea, among others. In addition to the well-established and prestigious products in the mix, the Coke energy drink will fortify the very vital market segment for the company and transform the company into a total soft drink and beverage company.
The introduction of the energy drink could also be an expansion strategy for the entire Coca-cola Company product globally. According to the Ansoff matrix concept, market expansion consists of four generic growth options. That is market penetration, market development, diversification, and product development. Coca-cola applied the idea of Market penetration in the sense that a growth opportunity in the areas of sales volume, customers, product, and brand penetration, targeting the existing customers using the current products.
Many people who loved Coca-cola brands and could be bought energy brands elsewhere could thus be closed into the coca-cola brands. Such a mechanism involves attracting new customers from the current target market who don’t buy Coke and lure the existing customers into buying more, changing the customer purchasing behaviors. Also, Coca-cola could potentially penetrate the market by having more of its new and the current products altogether in the stores so that the stores could realize more fabulous sales via promotional events and activities. This notion is supported by the fact that Coca-cola is a market leader with great marketing and distribution strengths.
In the context of product development (devising new products for existing markets), selling the original energy drink brand to the existing market could be a product development mechanism. The predisposed value would be that Coke would take advantage of its existing embedded relationships between supermarkets and retail stores to leverage a positive attitude on customers towards the energy drink. Also, in the concept of market expansion, Coke’s energy drink was an outcome of market diversification. A new product was introduced to attract a new market for the newly invented product and the existing product brands. Coke could effectively apply related diversification principles that go beyond the present market. However, it is still within the confines of the broader industry and adding on the existing expertise and competencies. For example, Coke opening more energy drink shops to supply the customers beyond its current market niche.
Conclusion
The final drive toward the introduction of the energy drink is the aspect of cola split over and completion between the primary production streams; Coke and Pepsi companies globally. The two are titans that fiercely compete with each other within multiple market segments of the soft drink industry. For example, if one of the two launches a successful product line extension or generally a new product into the market, the other also follows the same criteria. Since time immemorial, Coke and Pepsi have been very antagonistic to each other in sales, marketing, and advertising tactics to develop and maintain the market share.
The competition between Coke and Pepsi is global, just like many other corporation duopolies and rivals like Toyota and Ford, Komatsu and Caterpillar, UPS and FedEx, Visa, and MasterCard, and Boeing and AirBus. Consequently, if a firm gets into a country not currently served by its rivals, the competitors invariably follow to shut out their fellow from gaining an advantage.
References
Maamoun, A. (2019). COFFEE-INFUSED COKE? YES PLEASE! Global Journal of Business Pedagogy Volume, 3(3).
Vrontis, D., & Sharp, I. (2003). The strategic positioning of Coca-Cola in its global marketing operation. The Marketing Review, 3(3), 289-309.
Wilson, R. E. (2017). Coca-cola Amatil: A bottler recharging growth with energy drinks. Kellogg School of Management Cases.