Coca Cola Product Life Cycle Essay Example

(CSD) business in Ireland. A total of 910 people are employed in Coca-Cola businesses in Ireland.

The payroll to these employees is in the region of ? 15m each year. But this is only a fraction of the money that Coca-Cola contributes to the Irish economy. In addition to wages, Coca-Cola spends? 50m on Irish raw materials and ? 25m on Irish services, such as marketing and transport. That represents ? 90m ploughed back into the economy by Coca-Cola each year. This case study will focus on the second key brand in The Coca-Cola Company, diet Coke. It will examine how diet Coke was developed, positioned in the marketplace and how the advertising for diet Coke has developed as the brand has evolved. Product Life Cycle

The Coca-Cola formula has always been a well-kept secret and has not changed through the years. In other respects, however, Coca-Cola has been constantly developing. This has been important in maintaining the brand in its number one position. It is quite natural for products to go into decline, at some stage, after being introduced into a market. This isknown as the product life cycle. The trick is to delay this decline by constantly developing the product and or the brand, to extend its lifecycle. Within an industry sector it is possible top lot the position of several similar products on a product life cycle diagram.

For example, the diagram below shows the different types of drives that have been used in computers since the 1970s. You may not have heard of the 5” drive but that is because it is not available in most computers today. At the other

end of the scale s a question mark because no one is quite sure what new drives will be launched next? What is happening here is that new products are created as the technology improves. What about the Coca-Cola brand? It has been around for over 100 years. How has it maintained its leadership position even though the product has not changed in over100 years?

The answer is that Coca-Cola are constantly developing the brand image and reinforcing the core product benefits of taste and refreshment to ensure that the brand grows instead of declining. One way Coca-Cola does this is to make the product more accessible, ensuring that it is always there to meet changing consumer needs. For example, you would probably never have tasted Coca-Cola if it had remained available only over the counter from a soda fountain. Once the decision was made to bottle the drink then it became possible to sell the product outside the main cities and indeed outside America.

Years later the 330mlcan continued the growth and development of the brand. The 1990s saw the introduction of the 500ml screw cap bottle and the 2 liter contour bottle was launched in February1999. The lifecycle of the brand has certainly been extended by making Coca-Cola more accessible through new package forms. Launch of diet Coke Another way to extend a product through its lifecycle is to adapt it as consumers need change. The example below illustrates how computer drives were developed to adapt to more technically advanced equipment. For diet Coke it was quite similar.

It began in the1970s when market research indicated that consumer’s attitudes to their diet and

their health were changing. Coca-Cola conducted careful and extensive research and as a result identified an opportunity to develop a product that would meet these changing consumer needs. The identification by The Coca-Cola Company of this unmet need with consumers and the unique opportunity it represented heralded the launch of diet Coke. When diet Coke was first launched in 1982no one could have predicted the huge impact it was to have on the marketplace.

The initial advertising campaign was carefully planned, with no expense spared the introductory sixty-second commercial cost $2. 5 million to make. By 1986 diet Coke was being sold in 61countries with 60 million drinks sold everyday. It was a phenomenal success. Brand Extension Strategy When companies with existing brandsintroduce new products under those brandnames to the marketplace, this is known as abrand extension strategy. A brand extension strategy offers a number of advantages. A popular brand name gives the new productinstant recognition and immediate acceptance.

However, brand extension is not without risk. Ifthe brand extension does not live up to theexisting brand ’ s reputation then it coulddamage its image. Diet Coke is an example of a successful brandextension because it has grown and establisheditself within its own right. Within a year of itslaunch it was the biggest selling diet soft drinkin America and by 1987 it was the third largestselling soft drink of any kind in the world. Diet Coke is now the world ’ s leading low-calorie soft drink, sold in a total of 149countries with most of the sales being in theUSA, Britain, Germany, Canada and Australia.

Northern Ireland has the second highest percapita consumption of diet Coke

in the world. This is second only to the Cayman Islandwhere the consumption of diet. Coke is driven by high tourist industry. Positioning diet Coke During a products life, a company will re-formulate its marketing strategy manytimes in order to retain and driveconsumer interest. Not only do economicconditions change but there are also newproducts being introduced by competitors. The product will also pass throughdifferent stages of buyer and consumerinterest and advertisers must respond tothis.

Anew product like diet Coke presents aparticular challenge to the advertisingdepartment of Coca-Cola: How is it possibleto position diet Coke so that existing sales ofCoca-Cola are not affected and new growthis achieved? The answer was to position diet Coke as theonly soft drink that can give you great Colataste with just one calorie. Previous diet andlow calorie drinks were only aimed atwomen but diet Coke emphasised the uniqueand refreshing taste benefits of diet Cokeright from the beginning and this appealed toboth men and women. The catchy themesong proclaimed that “ you ’ re gonna drink itjust for the taste of it. Advertising Campaigns The main objective of advertising is toproject and communicate the brand image,drive awareness of the availability of theproduct and in turn target and appeal topotential customers. Advertising shouldalso create consumer interest in the brandand persuade the potential customer topurchase. Market Research is an essentialpart of product development but also playsan essential role in the development ofadvertising in order to identify what are the key elements to be included in theadvertisement that will appeal to potentialconsumers eg, music, humour, etc. s Target Audience

Diet Coke advertisements target both menand women. In the years immediately afterthe launch women in their

twenties weretargeted but once the brand was wellestablished the age range was extended tofemales between 18 and 35 years of age. The male audiences for the campaigns areusually over 25 years of age. s Advertising Aim The main aim of diet Coke advertising isto communicate the unique productbenefits of refreshing Cola taste with justone calorie. However, the advertisementmust also communicate and portray otherelements such as the brand image, brandname, people who drink the product, etc. Market Research Coca-Cola uses both qualitative andquantitative research to judge andmeasure lots of different things frommarket share to consumers ’ reactionsto different advertising campaigns. Qualitative research involves getting afocus group of 2 – 8 people to discuss, for example, the new advertisement for a few hours. Quantitative research ison a much larger scale and uses aquestionnaire to ask specific questionsand in this way keep track of trends. Sometimes the researchers can get asurprise. s Advertisements

As a result of continuously using marketresearch and understanding how consumersattitudes towards products change thisinformation has helped diet Cokeadvertisements to evolve and developover the years. Prior to 1990 the diet Coke commercialsfocused on adults enjoying the uniqueand refreshing taste of diet Coke aspart of their lifestyle. Between 1990 and 1992 celebritieswere used to endorse the brand. DemiMoore, Whitney Houston and RodStewart all appeared in diet Cokecommercials during this time. 1994 saw the launch of the first “ Break ” tyle commercial. Both men and womenfeature prominently in the commercialenjoying a break from their routinewith a great tasting, low calorierefreshment. In addition diet Coke commercialsfocus on contemporary lifestyle andfeature adults who are full of energyand vitality and are living their life tothe full. The advertisement illustratesthe

good feeling one gets fromdrinking diet Coke. Character and Personality Companies very often give their products brand personalities in order to identify andpersonify the personality of the consumer.

Over the years, diet Coke advertisementshave ensured that the brand has establishedits own unique character and personality. Researchers are able to imagine what dietCoke would be like if diet Coke was aperson. This type of character andpersonality definition is important whenmaking an advertisement and helpsdetermine lots of things from the type ofactors used, the music, the setting and thewhole focus of the advertisement. Diet CokeBrand Personality If diet Coke were a person, that personwould be: s fun s independent s sociable s confident s lively s unafraid to show emotions. Summary

In 1897 The Coca-Cola Company ’ s maindrink was Coca-Cola and it was not until1982 that the company extended the brandwith the launch of diet Coke. Other brandsin the Coca-Cola portfolio include Lilt,Fanta, Sprite and their diet counterparts. Worldwide diet Coke has grown to be thethird largest brand in The Coca-ColaCompany. The introduction of diet Cokestrengthened the position of Coca-Cola asthe leading supplier of soft drinks inIreland. Over two-thirds of people whowant a non-alcoholic drink choose acarbonated soft drink (CSD) and over halfof those that choose a CSD select a Coca-Colabrand.

Quite often they choose diet Coke – just for the taste of it. Describe the importance of the TheCoca-Cola Company to the Irisheconomy. Draw a product life cycle diagram andshow where you would place each ofthe following electrical goods:(a) black and white television(b) colour television(c) digital television(d) computer monitor(e) digital camera. Outline the brand extension strategyfor any other brand you know. Positioning a product in

the marketplaceis very important. Describe how Coca-Colamet the challenge of introducing diet Cokeonto the world market.