Table of Contents
UMKDCA-15-3 Brand Management The research of Coca-Cola and its extension product- Coca-Cola Pizza
Student ID:2002984
Title: The research of Coca-Cola and its extension product ——Coca-Cola Pizza
(Word Count:2268)
Table of Contents
3. Coca-Cola’s New Product Idea. 4
6. Brand Measurement Techniques. 8
The success of a brand depends on the ability of a company to create brand awareness that results in the facilitation of efficient programs that provide simple solutions for brand merchandise. Brand extension is an important factor in brand management where a company introduces a new product into an existing market (Armstrong and Kotler, 2009, p. 243). Expansion into a different product line benefits a brand especially their sales (Aaker, 2006). Coca-Cola, an American-based manufacturer, retailer, and distributor of beverages and soft drinks has been successful in brand extension do the brand awareness of their hallmark (Coca-Cola Company, 2020). This report aims to introduce a new brand extension of Coca-Cola pizza.
Coca-Cola has secured a large portion of the market share over the years and became the largest beverage company globally. In the last quarter, the company’s organic revenue increased by 7% and 6% for a whole year (Coca-Cola Company, 2020). In 2019, the net revenue increased by 16% in the last quarter and 9% for the whole year (Coca-Cola Company, 2020). An increase of 10% was also experienced in the operating income for the whole year and for the last quarter; it was a 19% increase (Coca-Cola Company, 2020). For the non-GAAP, Coca-Cola experienced an increase of 23% every quarterly and 13% for the full 2019 (Coca-Cola Company, 2020). A growth of $0.47 in the quarterly EPS which indicates an increase of 134% was experienced (Coca-Cola Company, 2020). For the comparable EPS, a growth of 1% which makes it $0.44 was registered (Coca-Cola Company, 2020). For the whole year, EPS grew by 38% to $0.27 (Coca-Cola Company, 2020). In 2019, Coca-Cola’s cash operations were equal to $10.5 billion shibboleth means 37% growth. The free cash flows shot to $8.4 billion by 38% (Coca-Cola Company, 2020).
Coca-Cola is the most competitive beverage company with revenue of $33.5billion and a 3500 brand portfolio and other 16 major brands (Owler, n.d.). PepsiCo Inc. is the biggest competitor with revenue of $68.9B and a product portfolio of 22 brands (Owler, n.d.). Nestlé is another competitor with revenue of $85.6B (Owler, n.d.). Dr. Pepper Snapple is also a major competitor in the industry with revenue of $11.4B (Owler, n.d.). Dr. Pepper Snapple is the third largest beverage company with over 50 brands and other brands like juices, soft drinks, water, and beverages (Owler, n.d.). Another competitor is Danone with revenue of $27.7B (Owler, n.d.). Mondelez International also competes with Coca-Cola company with revenue of $26.2B (Owler, n.d.). The revenue of Krafts Heinz is $25.8B which gives it a position in the beverage industry (Owler, n.d.). Suntory is also a major competitor with revenue of $23.6B (Owler, n.d.). Red Bull, General Mills, and Unilever are other major Coca-Cola competitors with $6.5B, $8B, and $57.4B revenues respectively (Owler, n.d.).
Brand Personality/ Coca-Cola’s Current Marketing and Branding
Coca-Cola is the most recognizable brand with a powerful model that allows it to determine the success of its products. This brand has been ranked as the third most valuable global brand with a brand value of 81.6 million (Owler, n.d.). Its product portfolio includes Coca-Cola, Sprite, Fanta, Diet Coke, Coke Zero, Dasani, Minute Maid, Ciel, Powerade, Simply, Fresca, Vitamin Water, Honest Water, and NOS (Coca-Cola Company, 2020). The brand logo provides it with the opportunity to build its brand image. Coca-Cola’s promotion is focused on a sustainable environment campaign to bring back the bottle and fewer calories to meet the needs of health-conscious customers. Being the largest beverage company in the industry, Coca-Cola’s mission is to refresh the world and make difference through its various product portfolio (The Coca-Cola Company, 2020). The vision is to become the choice of drinks that people love (The Coca-Cola Company, 2020). The company has made its products to show a unique brand showing distinct brand attributes. Its trademark and logo symbols have been part of Coca-Cola’s current marketing strategy which has led the brand to choose the best packaging and labeling technique. Coca-Cola uses promotional strategies such as banners (Coca-Cola Company, 2020). Brand packaging depends on the products.
Coca-Cola is positioned third after Nestlé and it is the most powerful brand based on its market share and growth. The major segments are Europe, North America, the Pacific, the Middle East, and Africa. Coca-Cola offers products suitable for all irrespective of age, sex, or race. In terms of promotion, the brand focuses on adaptability, affordability, and availability (Coca-Cola Company, 2020). Coca-Cola’s marketing techniques are differentiated marketing with the promise to refresh consumers’ minds, bodies, and spirits and to inspire optimistic moments through value creation and making difference (Coca-Cola Company, 2020).
3. Coca-Cola’s New Product Idea
The new product idea will be the brand extension of Coca-Cola products to pizza. This is an excellent market opportunity because most Coca-Cola customers love to take Coca-Cola products with pizza and thus the brand will be able to expand its product portfolio. These products will include Buffalo pizza, Hawaiian pizza, Margherita pizza, pepperoni, meat, BBQ chicken pizza, cheese, and veggies (Coca-Cola Company, 2020). The source of this product will be meat, veggies, and crust style and the packaging will be cases and boxes. The target market will be youths 18-34 years, young adults 12-17 years, and older ones of over 35 years (Aaker, 2011). Factors such as culture where they associate pizza with the rich and urbancity who like luxury food will be considered. The major competitors will be Pizza Hut with a 29% market share, Papa Johns with a market share of 21%, and Dominos with a market of 50% (Owler, n.d.).
Coca-Cola will focus on a unique selling proposition which will include product quality, excellent customer services like a guarantee of delivery in 20 minutes, and product satisfaction. Quality pizza will be quality but also simple and innovative (Innovation, n.d.). This quality will be enhanced through high technology, timeless design, and tasty to provide the ultimate pizza experience. By setting up to deliver hot pizza within 20 minutes, Coca-Cola will be the only brand that guarantees delivery within 20 minutes or provide a regular free pizza voucher (Keith, 2004, p. 163). The brand will provide a guarantee for customer satisfaction and this will show that they are committed to delivering the best quality pizza as well as great service and value (Zmuda, 2013). The brand will guarantee hot, great taste, and fresh pizzas as they arrive at the customer’s doorstep. If not, Coca-Cola will replace the pizza or money refund to the consumer. For take away orders, Coca-Cola will promise customers they will receive their orders in 10 minutes or the brand itself will give a free individual pizza voucher for failure to give the order at the guaranteed time (Coca-Cola Company, 2020). The brand will also provide free pizza delivery. Customers will be able to save their time and fuel going to buy pizza at Coca-Cola stores. A unique selling proposition will also be attained by promoting the pizza in such a way that it attracts customers’ attention (Innovation, n.d.). This will create consumer affection by reminding them that they should ‘live the Coca-Cola pizza side of life’ (Coca-Cola Company, 2020). It will also remind them of the experience and memories experienced after eating Coca-Cola pizza. This will promote customer retention as they will remain positive and wait for the good Coca-Cola pizza experience (Coca-Cola Company, 2020). Customer retention will also be enhanced by introducing discounts. Lucky coupons will also be introduced to award loyal pizza buyers and for future purchases.
The Coca-Cola pizza brand will fill the major requirements of the value proposition. The brand’s value proposition will involve meeting the needs of the target market by ensuring that the product is always available around the consumers and better tastes to satisfy even the lower-class consumers (Coca-Cola Company, 2020). The brand will also enhance the uniqueness of the Coke pizza through unique packaging crusts. The product will also ensure customer satisfaction by concentrating on customer lifestyle. They will encourage customers to try the new and refreshing pizza as well as train partners on how to provide the proper taste at a pocket-friendly price for many consumers. The brand will use one of its slogans ‘open contentment’ (Coca-Cola Company, 2020). This slogan will be designed to make consumers enjoy the new product. The brand’s value proposition will also be the “the Coke’s aspect of life” which shows the enjoyment of the customers when they open a box of Coca-Cola pizza. The “Coke part of life” slogan will also talk about the enjoyable, sociable, and comfortable environment when the customer eats Coke pizza (Coca-Cola Company, 2020). In general, Coca-Cola will implement a specific, consistent, and enduring message to the customers to enhance brand awareness and growth in terms of the new brand extension by satisfying customer needs as well as create a representation of happiness. To obtain brand equity, the brand labels its products using simple tags and complex graphics on the whole package (Worthington, Russell-Bennett, and Härtel, 2010, p. 250). This labeling design helps Coca-Cola to make it is brand identifiable and to promote the products in the marketplace (Mantoya, 2002, p. 179). This leverages Coca-Cola’s brand equity.
The prices will be set to meet the prices of the major competitors. The prices of Coca-Cola pizza will be the same as those of competitors so that the consumers perceive the new product as different and quality at the same time (Coca-Cola Company, 2020). The pricing of Coca-Cola pizza will be determined by factors such as the size of the pizza, the packaging design as well as other external impacts like elasticity of price, demand, consumers, and the branding objectives of Coca-Cola (Coca-Cola Company, 2020). Thus, for the Coca-Cola pizza, the company will quote a pocket-friendly price to extend the market size and leverage brand equity. Also, the pricing strategy will depend on the market and the geographical segment (Coca-Cola Company, 2020).
The Coca-Cola pizza will be ordered online from the brand’s website. The brand will also partner with food delivery sites as well as provide offers to its customers. The product will be available in different parts of the world such as Canada, America, the UK, and other parts of China, Europe, Asia Pacific, South America, Middle East, and Africa (Coca-Cola, 2014). Home delivery services will also be available for online customers with a time gap of 20 minutes or other scheduled deliveries (Semenik et al., 2008). The brand will deliver timely and high-quality pizza which will help achieve a high level of customer satisfaction and brand identity.
The brand will fascinate its customers with brilliant advertisements (Armstrong & Kotler, 2009, p. 400). For this product, the brand will use leaflets, television advertisements, and billboards to reach out to the customers. With this plan, Coca-Cola will be able to create a brand image that will influence customers’ psychology by using artistic designs and respected celebrities (Hofer and Ladner, 2006, p. 440). This promotional strategy will promote brand personality through attractive videos and product designs and labels by creating a vivid image in consumers’ minds (Smith et al., 2009). The advertisements will use the Coca-Cola red trademark color which will make the brand emotive and appealing. This will give potential customers the impression that those buying Coca-Cola pizza seem to be enjoying it. The promotion will also focus on the needs of health-conscious customers and fewer calories. In social media, customers will be advised to recommend friends to the Coca-Cola pizza (Coca-cola Company, 2020). This campaign will have a favorable impact on Coca-Cola pizza’s brand reputation.
This brand extension will increase Coca-Cola’s brand loyalty which arises from customer taste, preference, product, and price. Since Coca-Cola pizza will be also sold in retail, brand awareness will be improved because of the Coca-Cola trademark on the merchandise (Saul, 2014). The trademarks of the Coca-Cola brand will make the brand easily recognizable and accepted globally. Through the innovation of Coca-Cola pizza, the brand quality will be improved (Semenik et al., 2008). To make the brand successful, the Coca-Cola pizza will be distributed worldwide by Coca-Cola bottlers, Minute maid distribution system, and Fair Life LLC. The success of the brand extension will be measured by increased acquisitions and selling the pizza under new brand names.
The effective launch of this brand extension will enhance Coca-Cola’s increased market share and success in this competitive environment. Coca-Cola will also attain global brand loyalty and brand identity if this new product launch becomes successful because of the increased product portfolio. This brand extension will also help the Coca-Cola brand to increase brand awareness, brand recognition, brand identity, and brand relevance in the marketplace. This will also improve the brand image and reputation of Coca-Cola as a global brand. The brand will also get a response from consumers on product quality and consistency as well as enable them to identify new products they are interested in and want the brand to develop. Consumers will also be able to trust Coca-Cola pizza though the risk associated with buying it is high given that the brand has already been interested in the manufacture of soft drinks and beverages and not fast food.
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Table of Contents
1. Description………………………………………………………………… 10
2. Interpretation …………………………………………………………………………………………..10
3. Evaluation………………………………………………………………….. 10
4. Analysis……………………………………………………………………. 10-11
5. Conclusion………………………………………………………………………………………………..11
6. Action plan…………………………………………………………………. 11
References…………………………………………………………………………. 12
This task has made me want to develop a proper understanding of the aspect of brand extension as an important factor in developing a brand’s product portfolio. When I was starting this task, I was very confused about what I was going to write or how I had to go about it. I feel like I need to understand brands that give meaning to brand value as well as communicate to consumers all they need to know about a certain brand (Reast, 2005, p. 5). This has motivated me to do in-depth research on this area so that I will not get confused in the future especially in my future profession as a marketing manager.
Though I had little knowledge at the start, I have been able to learn a lot of things about brand extension and how branding is done when companies want to enter into a new market. I have come to learn and appreciate Akaka and Alden (2010) that the sources of brand equity in a company include proper labeling and packaging to create solutions that make a brand identity as well as promote products extensively in the marketplace. I think the reason why I face difficulties in this area because I lack real-world marketing experience which might be the reason for my lack of understanding of branding extension. Learning this will be very helpful to me in my future professional life especially during the beginning of my career.
Having a clear comprehension of the brand extension will help me to make informed decisions in the future. According to Gensler et al. (2013), a manager who understands branding management well can describe what is their brand and the impact of their brands on the consumers. This means that I will be able to gain more knowledge about my brand identity and brand personality and be able to launch new brands successfully in the future.
Though I have made a lot of progress since I started this task, I still feel like I should have done this before starting this report. I would have tackled this task easier if I had known more about branding and marketing. Everything became worse only because I did not give myself time to plan this task before starting it.
If I knew from the start, I should have made a lot of changes that would have made everything easy and effective for me. I should have asked my course mates and my lecturer to explain to me everything I needed to know to be successful in completing this task. If I had done this before, I would not have gone through all this trouble. I would have been prepared beforehand and such problems would not have come in my way. Every task needs early preparation for it to be successful.
I am going to put to use everything that I have learned using SMART goals to develop and improve my understanding of all the factors related to branding especially brand extension. Before the end of the semester, I plan to read three journal articles that relate to brand extension in different sectors, especially the major companies like Apple, Nestlé, Starbucks, and Pepsico. I also plan to prepare myself for real-life experiences through interviews and face-to-face conversations with experienced marketing and Branding managers so that I can know the popular and successful branding strategies they use and how effective they have been in the market. I will measure by comparing how I have been competent in these different strategies through a checklist that I will develop and complete after I am done with this assessment.
References
Akaka, M.A. and Alden, D.L. (2010) Global brand positioning and perceptions. International
Journal of Advertising . 29 (1), pp. 37–56. doi:10.2501/S0265048709201026.
Gensler, S., Volckner, F., Liu-Thompkins, Y. and Wiertz, C. (2013) Managing Brands in the
Social Media Environment. Journal of Interactive Marketing. Vol. 27. Iss.4 pp.242-256.
Reast, J. D. (2005) Brand trust and brand extension acceptance: the relationship. Journal of Product and Brand Management, 14(1), pp. 4-13.
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