Description
The basic description of the product looking at its advantages, challenges and SWOT analysis. We look at the technical feasibility of the product and identify the POPs and PODs for the new product. We also discuss the Segmentation, Targeting and Positioning of the new product. The Indian touch to Thums Up with the new flavors will be highlighted at every point.An effective Marketing Strategy has been developed for the products. This would cover the Marketing Mix, Communication at various stages of the Product Life Cycle, Advertising Strategies and Promotional Tools.
Marketing Strategies Assignment
Launching a New Innovative Product
Submitted by:
Jigar Mange - 033 Rohan Shah - 053 Nishank Vora - 060 Kaustubh Joshi - 118
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Sr. No 1 Executive Summary
Topic
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Introduction Coca – Cola: The Company Thums Up: The Brand Current Market Situation Key trends & development in Industry Marketing Opportunity Basic Problem Market Research Need Identification Offerings Product Description Advantages & Challenges SWOT Analysis Marketing Identification Segmentation Targeting Positioning Differentiation Marketing Strategies Marketing Mix Product Life Cycle Advertising Strategies Promotional Tools Finances Pre-Launch Development Budget Post-Launch Marketing Budget Profitability Analysis Sales Projection Future Prospects Conclusion
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1. Executive Summary
Thums Up, a well-established brand of the Coca-Cola Company, is the most sold carbonated beverage in India. It has been a ruler in the Indian market for over 20 years. It is famous for its strong, fizzing taste and unique masculine attitude. Thums Up sells almost 55 million cases in one year. However, this number has been slowly declining in comparison to previous years. The consumption of Thums Up is high outdoors. However, people generally do not consume or store cold-drinks indoors. This can mainly be attributed to the Storage Problems and De-fizzing problems faced by the consumers. To tackle this situation, we provide an innovative product to deal with the aforementioned problems. In addition to this, the brand also needs a fresh look, a fresh taste. Hence, we will provide Thums Up in two Indian flavours, “Masala Thums Up” and “Thums Up Lime”. The report gives the basic description of the product looking at its advantages, challenges and SWOT analysis. We look at the technical feasibility of the product and identify the POPs and PODs for the new product. We also discuss the Segmentation, Targeting and Positioning of the new product. The Indian touch to Thums Up with the new flavours will be highlighted at every point. An effective Marketing Strategy has been developed for the products. This would cover the Marketing Mix, Communication at various stages of the Product Life Cycle, Advertising Strategies and Promotional Tools. We try to estimate the Finances required for the project in the Pre-Launch and Post-Launch periods. We also take the Marketing Research costs, Sales and Advertising costs, Manufacturing costs and overhead Legal costs.
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2. About the company: Coca-Cola
Coca-Cola, the corporation nourishing the global community with the world’s largest selling soft drink concentrates since 1886, returned to India in 1993 after a 16 year hiatus, giving a new thumb up to the Indian soft drink market. In the same year, the Company took over ownership of the nation’s top soft-drink brand and bottling network. A Healthy Growth to the Indian Economy: Ever since, Coca-Cola India has made significant investments to build and continually consolidate its business in the country, including new production facilities, waste water treatment plants, distribution systems, and marketing channels. Coca-Cola India is among the country’s top international investors, having invested more than US$ 1 billion in India in the first decade, and further pledged another US$100 million in 2003 for its operations. A Pure Commitment to the Indian Economy: The Company has shaken up the Indian carbonated drinks market greatly, giving consumers the pleasure of world-class drinks to fill up their hydration, refreshment, and nutrition needs. It has also been instrumental in giving an exponential growth to the country’s job listings. Creating Enormous Job Opportunities: With virtually all the goods and services required to produce and market Coca-Cola being made in India, the business system of the Company directly employs approximately 6,000 people, and indirectly creates employment for more than 125,000 people in related industries through its vast procurement, supply, and distribution system. The Indian operations comprises of 50 bottling operations, 25 owned by the Company, with another 25 being owned by franchisees. That apart, a network of 21 contract packers, manufacture a range of products for the Company. On the distribution front, 10-tonne trucks – open bay three-wheelers that can navigate the narrow alleyways of Indian cities – constantly keep their brands available in every nook and corner of the country’s remotest areas.
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3.
The Brand: Thums Up
Thums Up is a leading sparkling cold-drink and most trusted brand in India. Originally introduced in 1977, Thums Up was acquired by The Coca-Cola Company in 1993. Thums Up Marketing: Thums Up was launched by Parle Agro Pvt. Ltd to fill the void left by the government ban on American soft drinks giant Coca-Cola in the 1970s. The thumbs-up logo was adopted early on, but the brand was positioned differently then. Thums Up was earlier positioned as a refreshing cola, with slogans such as “Thums Up Makes it Great” and “Happy Days are here Again”. It was post-1996 that the brand moved towards a more individualistic, masculine positioning. Around this time, Coca-Cola began focusing on the brand—its positioning changed, to a more masculine brand. The strategy was rooted in the simple insight that India is a market where most of the soft drink consumption is outdoors, and a majority of consumers are male. Using the strong taste of Thums Up, Coca-Cola repositioned the brand by marrying the taste to their target group. Thums Up was a major sponsor of cricket matches. In the early 1980s, it came out with several postcards featuring Sunil Gavaskar and Imran Khan. Besides cricketers, Thums Up's celebrity endorsers include Akshay Kumar and Abhishek Bachchan popular south Indian actors Megastar Chiranjeevi and Mahesh Babu. Besides this, Parle’s southern bottler was a major sponsor of Indian motorsport in the 80s. In addition to sponsoring several Indian track drivers in Sholavaram races, they sponsored several regional Cars and Bike rallies. They also sponsored NDTV in 2009 Thums Up is available to its consumers in various packaging sizes: Packaging Glass Bottles Pet Bottles Can Fountain Sizes 200ml, 300ml 500ml, 1.5L, 2L, 2.5L, 500ml + 100ml 330ml Various Sizes K.J. Somaiya Institute of Management Studies And Research
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4. Environment: Current market situation
• • • • The 50-bn-rupee soft drink industry is growing now at 6 to 7% annually. In India, Coke and Pepsi have a combined market share of around 95% directly or through franchisees. There are about 110 soft drink producing units (60% being owned by Indian bottlers) in the country, employing about 125,000 people. There are two distinct segments of the market, cola and non-cola drinks. The cola segment claims a share of 62%, while the non-cola segment includes soda, clear lime, cloudy lime and drinks with orange and mango flavours. Boom in Retail Industry creates more opportunities for soft drink players. The per capita consumption of soft drinks in India is around 5 to 6 bottles (same as Nepal's) compared to Pakistan's 17 bottles, Sri Lanka's 21, Thailand's 73, the Philippines 173 and Mexico 605. This indicates a great opportunity existing for development in this market. The industry estimates that the beverage market should grow at twice the rate of GDP growth. The Indian market should have, therefore, grown by at least 14-16%. However, it has been growing at a rate of about 6%. In contrast, the Chinese market grew by 16% a year, while the Russian market expanded at almost four times the rate of growth of the Indian market. An evidence of this shift comes from Sprite, a clear lemon drink from Coca-Cola India, which has replaced PepsiCo’s flagship brand, Pepsi, at the number-two spot in soft drink sales. PepsiCo, too, has noted the shift in demand for lime/lemon drinks, and has introduced packaged lemonade, Nimbooz, under its 7Up brand. Coke has 4 of its brand in top 5 soft drinks in India. Coca-Cola is identifying new flavors. Its core cola brands continue to contribute more to revenues. Thums Up is the top-selling soft drink in India. But the scales are now shifting in flavor of flavoured beverages.
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Key trends & development in Industry • Localisation of Flavours is Accelerating
There is a rising trend of local flavours like Aam, Nimbu, Santra, etc., all local to Indian tastes. Therefore all the players in the market are trying to increase their share by introducing new drinks in sync with local flavours. • Product Diversification is Gathering Pace
Off late it has been seen that all the companies are expanding their product portfolio by continuously introducing varied products across all flavours. Apparently every new season has a launch of new product. Apart from soft drinks the companies are also diversifying into packaged drinking water, hot beverages and related segments. • Consumers are showing a willingness to try different flavours
Consumers now-a-days have an inclination for trying new flavours. There is a rising trend in consumption of Appy Fizz, Real Fruit Juice, Nimbooz etc. • Packaging is gaining more Importance for Brand Differentiation
Companies are following innovative packaging techniques mainly to differentiate their products from that of the competitors and also to attract more customers. Since the core product offered by most of the players is almost same, companies see advertising as an avenue to capture market. Innovative packaging technique followed by companies focuses on peculiar package shape and package size that will instantly help a customer to differentiate the brand. • Soft Drinks Players are Enhancing Below-the-line Marketing Activities-Price Promotions, Point-of-Sales displays, Value Offers Companies are more and more indulging into promotional activities that influence the buying behavior of the customer at the point of purchase. This includes increased promotion via displays through refrigerators, posters and hangers. Also they come up with Value offers like Cost Discount on bulk purchases or even free offers. • Naturally Healthy Soft Drinks are Benefiting from Growing Health Consciousness
There is a paradigm shift in consumption rationale of consumers. They are shifting more towards health conscious beverages.
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5. Competition analysis
The visual below indicates the most appreciated beverages in different parts of India.
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The comparison below emphasizes the difference in the consumption pattern of cold-drinks between Urban and Rural areas. The comparison is made around the prevailing trends and existing competition.
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The graphs below give a description of the global scenario of the cold-drinks market. This clearly indicates a huge scope of development in the sector. Also, amongst the various brands available in India, most of Coca-Cola brands lead their competitors in their respective markets.
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Competitors Competitors to our offering can be bifurcated into two sections: Primary Competitors and Secondary Competitors.
Primary
• Other Soft Drink Brands • Rasna, Tang etc • Local Flavored Drinks like Jaljira, Nimbu Paani etc
Secondary
• Water • Tea & Coffee • Fruit Juices
Our Primary competition comes from direct substitutes for Thums Up i.e. 1. Other Soft drinks brands like Pepsi, Sprite, 7Up, Mountain Dew, Lemonade, etc. 2. Flavoured, powdered, non-aerated drinks like Ransa, Tang, Glucon-D, etc. 3. Local flavoured drinks available at a road-side vendor viz. Nimbu Paani, Jaljira, etc.
We also face secondary competition from other substitutes for the soft drinks category. These include:1. Water (Packaged as well as locally available) 2. Tea & Coffee (available with local vendors as well as stores such as Cafe Coffee Day, Tea Lounge, etc. 3. Fresh fruit juices (available with local vendors, restaurants, specialty kiosks in malls, etc.)
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6. Product concept: Marketing Opportunity
Basic Problem Problems generally identified with cola beverages are Storage, De-fizzing and ill effects on health. Let us try to understand each problem. 1. Storage Colas are available in bottles which need to be served chilled for maximum effect. It can be very inconvenient in a market like India. Firstly let’s talk about cities, the cola companies need to generally provide a refrigerator to the retailers adding to their cost. Also larger bottles find no adequate storage space inside a consumer’s refrigerator. Secondly, In tier two cities there are abrupt power cuts which hamper the cooling process therefore cooling is done mainly by ice chunk boxes, if the retailer can afford it. Lastly In rural areas there is no mode of chilled storage available. Also disposable income of a rural individual is not enough to buy a big or even a medium sized bottle, he would generally prefer a smaller unit for one time consumption
2. De-fizzing Another major problem seen with larger bottles is De-fizzing. The cold drink loses its carbonation after a while of opening the bottle. The entire taste changes and since it’s a bigger bottle it has to be stored for further consumption and the consequent consumption is almost without any fizz. 3. Health effects One of the major ingredients in cola drinks is CO2. The entire onus of CO2 is to give fizz to the beverage. However, though a highly debatable issue, many studies indicate that ill-effect on health is caused due to CO2 staying in cola for some time. Constant consumption of carbonated drinks have known to cause health issues like tooth problems, bone demineralization and the development of metabolic syndrome and diabetes.
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7. Market Research
What is your gender?
MALE 131 64% FEMALE 75 36%
What Age Group do you fall in? 11-20 yrs 21-30 yrs 31-40 yrs 41-50 yrs above 50 47 77 36 29 20
11-20 yrs 21-30 yrs 31-40 yrs 22% 37% 41-50 yrs above 50
10% 14% 17%
Which city do you reside in?
NORTH
SOUTH
15%
EAST
WEST
11% 4% 70%
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Which is your favourite refreshing drink?
COLD DRINK FRESH JUICE COFFEE TEA WATER Other
25% 42% 21% 18% 20% 5%
Do you consume cold drinks? YES 188 90% NO 21 10%
Which is your favourite Cold-Drink? THUMS UP 74 42% COCA - COLA 24 13% PEPSI 38 21% FANTA 18 10% MIRINDA 17 10% SPRITE 47 26% DEW 15 8% 7UP 19 11% Other 17 10% People may select more than one checkbox, so percentages may add up to more than 100%.
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Are you brand loyal?
YES 79 41% NO 112 59%
How often do you consume cold drinks?
MORE THAN ONCE A 0 0% DAY ONCE A DAY 17 9% ONCE A WEEK 66 34% TWICE A WEEK 37 19% ONCE A MONTH 54 28% Other 20 10%
On what occasions do you consume cold drinks? WITH EVERY MEAL 15 8% AT PARTIES 133 69% AT MOVIES 75 39% ON VACATIONS 48 25% Other 37 19% People may select more than one checkbox, so percentages may add up to more than 100%.
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Where do you buy cold drinks from?
LOCAL GENERAL 158 81% STORE SUPERMARKETS 68 35% CHEMISTS 12 6% MALL 34 17% Other 18 9% People may select more than one checkbox, so percentages may add up to more than 100%.
Do you store cold drink at home for later use?
YES 50 26% NO 70 36% SOMETIMES 76 39%
If yes, you store it for how many days?
120 100 80 60 40 20 0 One Week One Month 3 Months 6 Months
One Week One Month 3 Months 6 Months
103 18 3 0
84% 15% 2% 0%
People may select more than one checkbox, so percentages may add up to more than 100%.
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If no, then what is reason for not storing cold drinks at home?
DE-FIZZING 22 25% PROBLEMS STORAGE 12 14% PROBLEMS NO REQUIREMENT 61 70% Other 3 3% People may select more than one checkbox, so percentages may add up to more than 100%. Would you like to try a powdered form of your beverage?
What kind of packaging do you prefer?
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Would you like to carry your powdered form of beverage while travelling?
Do you make/have a customised drink by adding your own flavour to your beverage?
Do you consume powdered drinks like Rasna, Tang etc?
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If yes, why do you consume powdered drinks?
How do you get to know about the upcoming brands or new ranges of the existing brand?
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8. Need Identification
After the survey conducted on cold-drinks we have identified the following need amongst the masses. 1. Consumers would like to have a cola drink at home but want to do away with the storing and de-fizzing hassles. 2. Consumers would in fact love to have their favorite cola drink anytime anywhere eg: while travelling etc. 3. Consumers would like to have their cola drink to have a longer consumption pattern when at home so a onetime buy would suffice for say a couple of months. 4. Consumers would also like their cola drink with differentiated flavors. 5. Retailers prefer stocking something that takes up less storage space, less storage cost and gives high profit margin.
9. Actual product: Product Description
Based on the Needs of the consumers that were indentified, our product will provide a cheap yet high-quality solution to its consumers. The product will be available in the powdered form as against the conventional bottled form. This would be the first time that a commercial product like this would be launched in India. This will essentially help in tackling major problems like Storage & De-fizzing faced by the consumers. Also the powdered form of the cold drink will provide ease and convenience of making the beverage anytime anywhere.
10. Advantages and Challenges
Advantages: 1. The cold-drinks, till now, faced the problem of de-fizzing when they were stored for a few days in the refrigerator. Using our product, the drink will be made only when required, thus will always be fresh. 2. Thums Up will now be available in Indian Flavors of Masala & Lime which will appeal to the Indian Consumer. 3. Storage of Powder boxes will be easier at home as compared to large volume bottles. Also, this box does not need to be stored in the refrigerator unlike the bottle. Local General Stores where most families buy their consumables refrain from storing cold-drinks because it forces them to allocate space for a refrigerator and also bear the cost of electricity for the same. For a powder-box, no such requirements would be necessary and thus, more distributors will be willing to sell the product.
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4. The new product will now be available in the remotest of places where you would have never dreamt of having any flavored drinks. This is possible because now all you would require is fresh, clean water and some ice-cubes and you could make your favorite beverage on the move. 5. The packaging cost will reduce drastically and transportation will become much easier.
Challenges: 1. Making people accept this new concept and encourage consumers to take more Thums Up home and consume it on a daily basis. 2. Packaging would require being air-tight else the carbon-dioxide molecules in the powder would get reacted with moisture in the air. 3. Rural Marketing of the drink considering the use of Hard Water in those regions. They could take up a social issue like this and create awareness about the use of clean water.
11. SWOT analysis of the company:
STRENGTHS
1. Established Brand 2. Financial and Technical resources 3. Indian-ness 4. Easy to prepare 5. Storage convenience 6. Different package sizes
WEAKNESSES
1. New concept - Acceptance Problem 2. Preparation on the move
SWOT
OPPORTUNITIES
1. New Market (Rural) 2. New Flavours 3. Elimination of fountain cold drink concept
THREAT
1. Quality of water used 2. Threat of water used
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STPD:
12. Segmentation
Our target market would be one where business focuses attention on & where marketing efforts are most productive & successful. Masala Thums Up would be marketed on the basis of differentiation. It would satisfy range of different markets thanks to its qualities, characteristics and properties. As our product is a completely new variant in form of powdered drink with Indian flavours, we can target more segments. 1. Geographic : • We will target different parts in the whole of India - the cities and the rural areas. We will start off with heavy marketing in the urban areas and rural marketing will be a part of Phase – II of the marketing plan. • In the cities more of party servings and big packs would be used, while in the villages more of sachets would be marketed. 2. Demographic: • Age group 15-30 years • The product can be consumed by both, males and females. • Families of any size can consume the product as it would be available in various packaging sizes. It would cater to all income groups as it is cheaper to the bottled one and it is available in various sizes. 3. Psychographic: • It could avail to various people of different lifestyle. It can be used by people who party frequently or have get- to gathers at their place. • People can carry it when they are travelling as it is easy & convenient to carry. • It would serve sports-oriented & outdoor-oriented people too. 4. Behavioural: • It is can be used at several occasions like parties, get-togethers or simply individually while having a meal, etc. • It will appeal to various categories of people who drink daily, weekly or regularly. • It will be for all readiness stage customers-unaware, interested, intending to buy, etc.
13. Targeting:
Our pattern of target market selection would be one of selective market specialization. It would serve different segments of people and the variety in flavors would add new customers
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to the existing ones. It basically targets young generation for the various flavors being served and encourages household consumption for the convenience of making and storing it.
14. Positioning:
• • • • • • Powdered form of cold-drink Convenience in storage Indian/desi taste Low-priced drink Best Quality as it’s an old renowned brand Drink for special occasions like unplanned get-to-gathers, travelling,etc..
15. Differentiation:
• • • • • No De-fizzing problem which is a crucial concept in storage of colas Customized flavours of Indian origin and taste. Easy, convenient and long term storage Extremely cost effective and affordable prices Easy travel drink with less storage space
16. Marketing Mix
Product: 1. The existing product “Thums Up” will be modified and offered in the powder form. This modification will help in dealing with the de-fizzing problem and storage problem. These are the major difficulties that consumers face and hence do not store cold-drinks at home for later use. We want people to now store cold-drinks beyond one week and consume it fresh whenever, wherever they want. 2. The product portfolio will be expanded by introducing different flavours of the cold drink in the form of “Masala Thums Up” and “Thums Up Lime”. These flavours will appeal to the younger generation as they would like to try a different version of the Thums Up as indicated by the results of the survey. 3. The core product is the cold drink itself which has been well established for several years and people consume it because of its taste and quality. The augmented product will provide
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the consumers with the option of consuming the cold drink whenever they want in different flavours.
Price: 1. The product will prove to be a cheaper substitute for the existing bottled cold-drinks. This will deliver value-proposition to the consumers who will have to now spend less for more. With the product available in various packaging sizes, a consumer has the freedom of selecting the appropriate size as per his own requirements and finances. 2. The aim is to make more number of people consume Thums Up every day. Hence it will be priced low as compared to the bottled packages. • Single Serving – Rs. 5 • 4 serving – Rs. 15 • 12 serving – Rs. 35 • 20 serving – Rs. 50 3. Since most of the people consume cold drinks once a week or less, a lower priced product might attract them to consume it more often.
Place: 1. Thums Up was available majorly at General Stores and Supermarkets and at a few Chemists, Malls, etc. The company already has a well established distribution system. However, with the new packaging sizes, the distribution will become easier. 2. There are few General Stores who do not store cold-drinks as it requires a Refrigerator for storing the cold-drink occupying space and consuming electricity. However, as the product will now be available in the powder form, a refrigerator will not be required for that. Only a hygienic place would be enough to store and sell the powdered cold-drink. We can use this property of the product to increase its distribution. 3. Several crowded places will be targeted where Purchase Centres will be established to increase sales.
Promotion: 1. We will try to increase the visibility of the product by increasing exhibition coverage. Purchase Points will be set up at strategic places which will target large crowds.
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2. Advertisements campaigns will try to generate curiosity amongst the consumers which will in-turn encourage “word-of-mouth” publicity. 3. A brand ambassador will be part of all advertising campaigns which will add a desirability value to the product. 4. Promotional campaigns will have themes which will be in sync with the product offerings and advertisements.
17. Product Life Cycle:1. Market Penetration: This would be the Introductory Phase in the PLC of the product. The drink will come in several Indian flavors which will generate the interest amongst the consumers. It will also enter the market as a cheap substitute for bottled beverages. This would prove to be a point on which we try to reach out to more number of people and eventually stress upon Rural Marketing.
2. Service / Program Development: This will be the Growth Phase in the PLC of the product. Here we introduce several contests for the consumers wherein they send us their recipes about tweaking their drinks. The best recipe will be selected by the company and printed on the labels of the next batch. This should generate the acceptance of flavored beverages amongst the consumers and make them willing to try new flavors.
3. New Market Development: This would be the Maturity Phase in the PLC of the product. In this phase, we try to consolidate our position in the existing markets and also explore new markets. These new markets can be identified based on age groups and geographical areas. We will also try to penetrate the rural market. Rural marketing can be coupled with the CSR activities of the company like emphasis on clean drinking water.
4. Diversification: This phase is to avoid the Decline Phase in the PLC of the product. Here, we intend to introduce new flavors with the existing range of flavors. These flavors can be identified by conducting market survey and also from the contests held for consumers. This will continue to keep the interest of the consumers in the brand.
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18. Advertising Strategy:
For advertising our product, we intend to use the AIDA model. The various stages of this model will be dealt with as follows:1. Attention: In this phase, we try to grab the attention of our consumers with the help of abstract images. These images will be displayed on hoardings, prints, etc. extensively. Followed by this, similar images will be displayed in TV Commercials aired at prime time. The product will not be available in stores as yet. 2. Interest: In this phase, TV commercials will be aired emphasizing on the PODs of the product. These commercials will try to make an emotional connect with the consumers through appropriate family-oriented advertisements. We also emphasize on the various advantages of the product including the ease of making the drink. 3. Desire: Advertisements will include a brand ambassador who will generate the desire amongst the consumers. These advertisements will be based on different situations in which the product will come in handy, for eg. Party, Trekking, etc. 4. Action: In this phase, we emphasize on the pricing of the product. It will be available as a cheaper substitute for bottled beverages. The product will also be available at more number of local general stores in residential areas. This will be conveyed through extensive “Point-ofPurchase” advertising.
19. Promotional Tools
We look forward to launching the product in 4th week of February 2011. Since the DLF IPL T20 Tournament is scheduled to commence around this time, this provides an excellent opportunity to create awareness about the product. For doing this, Coca-Cola would have to become one of the sponsors for the tournament. The promotional policies around this period would be as follows:1st week of February 2011: Begin with introductory campaign generating inquisitiveness amongst the consumers. These advertisements will be restricted to Hoardings and Newspapers.
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3rd week of February 2011: Begin with the TV commercials which go hand-in-hand with the initial print advertisements. These commercials will be aired at prime time. They will have the “Coming this Summer.” message continuing the inquisitiveness campaign.
4th week of February 2011: The product will be launched in 15-20 major cities in India. The product has to be made extensively available at every local general store with emphasis on “point-of-purchase” advertisements. In the same period, the TV commercials started in the previous week will be extended to finally reveal the product. 1st week of March 2011: Begin with the DLF IPL linked advertisements. Here, we use the “Desi Jhatka…” campaign. Here the advertisements will promote DLF IPL as well as new Thums Up flavors.
During IPL: Coca-Cola can set up stalls at venues of IPL matches where consumers will be exposed to the new product. A contest shall be organized in which participants will compete for who can make the fastest Thums-Up beverage and drink it. This will try to emphasize on the easiness of making the drink. Live coverage of the same will not only create awareness amongst the people present at the venue but also the large number of viewers of the telecast at home.
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May 2011: We include the “Gola-walas” in the promotional campaign for the product. Maximum number of Gola-walas will be a part of this campaign with each one given a ThumsUp banner to be put up at their stalls. They will be provided with sachets of the product from which they can make and serve the drink to their customers.
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Beyond that: Simultaneously, new advertisements will be aired on TV. These advertisements will be based on general themes in sync with the “Desi Jhatka..” theme. We will indulge in online marketing on social networking websites such as Orkut, Facebook, Twitter, etc. The commercials aired till now will be uploaded on Video Sharing websites such as Youtube, Metacafe, etc. We will also enter into Radio Advertisements at this point. We will book a slot with a Radio Channel at a prime time for an entire week. During this slot, only Thums-Up advertisements will be aired. We will organize a contest where people have to come up with Jingles for the new product and the Best Jingle will be given some Thums-Up goodies. As we move ahead in the product life cycle, emphasis will be shifted to targeting the lower income groups. In this phase, we will start off with advertising in BEST buses. This is the facility that is most used by lower income groups and large scale visibility in such places will generate a lot of awareness. Emphasis will be given on the low pricing of the product which should generate the desirability for the product. This promotion campaign will also be coupled with advertising at Local Bus Stops through banners.
Contests: In order to promote the new form of Thums Up in the powder form, we will arrange contests for consumers to participate in. In this contest, consumers can send in their recipes of tweaking their Thums Up drink by adding several flavors or masala or anything else. Their recipes will be collected either through email or post. The best recipe will be selected and printed on the labels of the next stock. Trekking Contests We also plan to come up with another campaign ‘Trek to Thums Up Hill’ campaign. In this promotional campaign consumers would have to buy a large pack of Lime/Masala Thums up and will have to fill a form that will be inside the package. They will have to answer just one question “What is your idea of Adventure?” Best Entries will be selected and they will be
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taken for a 1-day fully paid free trekking trip to ‘The Thums Up Hill’. Awareness about this will be created through TV & Print Media. Promotional Vehicles There will be intensive use of promotional Vehicles at selected college campuses and crowded places to create awareness and increase visibility. We also plan to have on the spot games and the prizes for which will be Thums up sippers, wrist watches, caps, bags etc. Website Promotion We plan to design an exclusive website for various activities during promotion phases the name will be www.tagline.com which will cater only to Lime and Masala Thums up. The website will promote through following avenues: o Games o Wallpapers & Screensavers o Mobile ringtones o Ad Videos o Chatrooms o Link to Social Networking forums dedicated to Thums Up o Information about contests.
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Financial estimates of expenditure
20. Pre-launch development budget
The pre-launch budget is spread across duration of six months Months Research and development Packaging Marketing research and testing: -Market research -Product testing Quality assurance Advertising Sales Force Manufacturing New equipment needed Discretionary funds Legal Costs Total 1st and 2nd 3rd and 4th 5th and 6th Total Percent
2,00,00,000 1,25,00,000 75,00,000 18,75,000 20,00,000 22,50,000
4,00,00,000 61,25,000
16.00% 2.45%
35,00,000 75,00,000 15,00,000 1,47,50,000 35,00,000 56,25,000
30,00,000 85,00,000 15,00,000 3,40,00,000 50,00,000 60,00,000
25,00,000 1,00,00,000 20,00,000 4,64,00,000 1,50,00,000 67,50,000
90,00,000 2,60,00,000 50,00,000 9,51,50,000 2,35,00,000 1,83,75,000
3.6% 10.4% 2.00% 38.06% 9.4% 7.35%
58,50,000 25,00,000 10,00,000 Rs. 676,00,000
50,00,000 25,00,000 15,00,000 Rs. 815,00,000
40,00,000 25,00,000 20,00,000
1,48,50,000
5.94%
75,00,000 3% 45,00,000 1.8% Rs. Rs.10,09,00,000 25,00,00,000
The budget is divided into three, two month periods. The majority of funding shifts from research and development to manufacturing and advertising as the launch date approaches. In the first two months the greater part of funds is allocated to research and development, market research, and new equipment purchases. Packaging is a branch of the research and development segment. Packaging of the new product is a key part of its success therefore extra funds are allotted specifically for this purpose. Packaging plays all of these roles: containment of the drink, protection from hot temperatures, a display for Thums up, and a provider of information. New equipment has the most funding during the first and last two months, this decision was made under the assumption that the majority of new types of equipment would be purchased during the first two months as product prototypes where being developed. The new equipment that would be purchased during the last two months is
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to aid in the manufacturing process. Marketing research has a relatively level amount of funding for the duration of product development. Marketing research will further define the target market as well as potential flavor combinations. Product testing will first cover the taste of the drink and shift into packet design modification. Discretionary funds are intended to control interdepartmental competition. For example, if more funding for research is needed instead of cutting the budget for another team, the project manager has Rs.25,00,000 available every two months to help the team stay on track. The various departments may not be informed that there is extra funding available on a first come first serve basis. Such a policy would support overspending. The section labeled “Legal costs” is intended to cover patents, copyrights, and general legal counsel. The funding for sales force teams grows tremendously as the launch date approaches. This is essentially intended to cover extensive training and salaries of the large sales team. After the launch date, the marketing budget will be in effect.
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21. Post launch marketing budget
Months Sales Force: -Sales Force training -Sales Force salaries Advertising: -T.V. Commercials -Radio Commercials -Print Ads Consumer Incentives: -Promotional events -Sampling Distribution Channel Support: -Wholesale discounts -In store displays -Co-operative Advertisements Total 1st to 4th 2,00,00,000 5,00,00,000 14,50,00,000 24,00,000 75,00,000 5th to 8th 4,50,00,000 9,00,00,000 18,00,000 50,00,000 9th to 12th 4,25,00,000 31,85,00,000 6,25,00,000 18,00,000 25,00,000 5,62,50,000 1,25,00,000 3,00,00,000 87,50,000 50,00,000 17,00,00,000 1,25,00,000 1,25,00,000 3,75,00,000 Rs. 32,99,00,000 1,25,00,000 50,00,000 3,75,00,000 Rs. 20,55,50,000 1,25,00,000 25,00,000 3,75,00,000 Rs. 16,68,00,000 Rs. 70,22,50,000 Total 15,75,00,000
The bulk of the budget is rationed for the four months, in order to support the rapid marketing launch. Consumer awareness is vital. Television, radio and print advertising are intended to increase awareness of the cold drink across all age demographics. Promotional events will be targeted at consumers who actively engage in outdoor activities and may have missed electronically transmitted advertisements. These BTL activities will help the company demonstrate the ease of preparing Thums Up to its customers now. In store displays and Cooperative advertisements are intended to influence consumers at point of purchase. In order to gain more trial ability free samples will be distributed. Wholesale discounts will encourage stores to be well stocked with both the new variants of Thums up.
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22. Profitability Analysis
1 serving Manufacturing Cost Distribution Cost Total Cost 0.75 0.05 0.8 4 servings 3 0.2 3.2 12 servings 12 0.6 12.6 20 servings 15 1 16
Retailer Margin
2
5
10
20
Profit Profit % Selling Price
2.2 44.00 5
6.8 45.33 15
12.4 35.43 35
14 28.00 50
On the basis of the Pricing mechanism as illustrated above, the product should enjoy a healthy profitability rate between 30-40%, depending on the SKU. As observed from the table above, 4 serving packs are the most profitable for the company and are the most likely SKUs to be purchased by the customers.
23. Sales Projections
In India, the total consumption of carbonated soft drinks recorded is 4 billion litres per year. This industry is dominated by two big companies viz. Coca Cola co. And PepsiCo with combined market share of 95%. Coca Cola enjoying the larger pie with 55% market share
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(2.37 billion litres per year) the highest contribution is due Coke and Thumbs up. Thumbs up accounts for about 20 % total revenue of Coca Cola Co. in India. In forecasting the sales, we have made the use of following information available to us. Total Consumption of CSD Total Consumption of Coca Cola products Total Consumption of Thumbs Up Initial Consumption of new drink introduced (2.5%) In the terms of Servings, Consumption of new drink introduced would be 4 billion litres per annum 2.37 billion litres per annum 400 million litres per annum 10 million litres per annum 50 million servings per annum
1 serving makes 200 ml of Soft Drink. Therefore, 10 million litres of S.D. can be obtained from 50 million servings
24. Future prospects
a. The concept provides the advantages of carrying your favourite cold-drink, Thums Up, anywhere you want, anytime you want. This is the major advantage which will be stressed upon in all communication activities as well as positioning and packaging activities. b. If the Indianized flavours of Masala Thums Up and Thums Up Lime enjoy success in the market, we will launch two more Indian flavours of Thums Up in the market in subsequent years. c. The concept of powdered cold-drinks can be extended to other brands under the Coca-Cola company i.e. Coca-Cola, Sprite,
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25. Conclusion
Considering the current trends in the beverages market, it is important for brands like Thums Up to retain the loyalty of its consumers. The changing consumption pattern of the consumers has poised a challenge in front of the market leaders. With these new products, Masala Thums Up and Thums Up Lime, the consumers will get their favourite cold-drink in a new form. The change in the physical form of the product provides a long list of functional advantages to the consumers. Since the consumption of cold drinks is very large outdoors, the aim is to increase the consumption of cold drinks indoors. This will be achieved with the new powder form of the product. Also, the Indian flavours offered with the powder will add a personal connection with the consumers in India as this will suit their taste and yet at the same time, provide them something new. With proper execution of the marketing plan, effective advertising and promotional campaigns, these two products can be successful in the market.
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doc_589315202.pdf
The basic description of the product looking at its advantages, challenges and SWOT analysis. We look at the technical feasibility of the product and identify the POPs and PODs for the new product. We also discuss the Segmentation, Targeting and Positioning of the new product. The Indian touch to Thums Up with the new flavors will be highlighted at every point.An effective Marketing Strategy has been developed for the products. This would cover the Marketing Mix, Communication at various stages of the Product Life Cycle, Advertising Strategies and Promotional Tools.
Marketing Strategies Assignment
Launching a New Innovative Product
Submitted by:
Jigar Mange - 033 Rohan Shah - 053 Nishank Vora - 060 Kaustubh Joshi - 118
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Sr. No 1 Executive Summary
Topic
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Introduction Coca – Cola: The Company Thums Up: The Brand Current Market Situation Key trends & development in Industry Marketing Opportunity Basic Problem Market Research Need Identification Offerings Product Description Advantages & Challenges SWOT Analysis Marketing Identification Segmentation Targeting Positioning Differentiation Marketing Strategies Marketing Mix Product Life Cycle Advertising Strategies Promotional Tools Finances Pre-Launch Development Budget Post-Launch Marketing Budget Profitability Analysis Sales Projection Future Prospects Conclusion
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1. Executive Summary
Thums Up, a well-established brand of the Coca-Cola Company, is the most sold carbonated beverage in India. It has been a ruler in the Indian market for over 20 years. It is famous for its strong, fizzing taste and unique masculine attitude. Thums Up sells almost 55 million cases in one year. However, this number has been slowly declining in comparison to previous years. The consumption of Thums Up is high outdoors. However, people generally do not consume or store cold-drinks indoors. This can mainly be attributed to the Storage Problems and De-fizzing problems faced by the consumers. To tackle this situation, we provide an innovative product to deal with the aforementioned problems. In addition to this, the brand also needs a fresh look, a fresh taste. Hence, we will provide Thums Up in two Indian flavours, “Masala Thums Up” and “Thums Up Lime”. The report gives the basic description of the product looking at its advantages, challenges and SWOT analysis. We look at the technical feasibility of the product and identify the POPs and PODs for the new product. We also discuss the Segmentation, Targeting and Positioning of the new product. The Indian touch to Thums Up with the new flavours will be highlighted at every point. An effective Marketing Strategy has been developed for the products. This would cover the Marketing Mix, Communication at various stages of the Product Life Cycle, Advertising Strategies and Promotional Tools. We try to estimate the Finances required for the project in the Pre-Launch and Post-Launch periods. We also take the Marketing Research costs, Sales and Advertising costs, Manufacturing costs and overhead Legal costs.
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2. About the company: Coca-Cola
Coca-Cola, the corporation nourishing the global community with the world’s largest selling soft drink concentrates since 1886, returned to India in 1993 after a 16 year hiatus, giving a new thumb up to the Indian soft drink market. In the same year, the Company took over ownership of the nation’s top soft-drink brand and bottling network. A Healthy Growth to the Indian Economy: Ever since, Coca-Cola India has made significant investments to build and continually consolidate its business in the country, including new production facilities, waste water treatment plants, distribution systems, and marketing channels. Coca-Cola India is among the country’s top international investors, having invested more than US$ 1 billion in India in the first decade, and further pledged another US$100 million in 2003 for its operations. A Pure Commitment to the Indian Economy: The Company has shaken up the Indian carbonated drinks market greatly, giving consumers the pleasure of world-class drinks to fill up their hydration, refreshment, and nutrition needs. It has also been instrumental in giving an exponential growth to the country’s job listings. Creating Enormous Job Opportunities: With virtually all the goods and services required to produce and market Coca-Cola being made in India, the business system of the Company directly employs approximately 6,000 people, and indirectly creates employment for more than 125,000 people in related industries through its vast procurement, supply, and distribution system. The Indian operations comprises of 50 bottling operations, 25 owned by the Company, with another 25 being owned by franchisees. That apart, a network of 21 contract packers, manufacture a range of products for the Company. On the distribution front, 10-tonne trucks – open bay three-wheelers that can navigate the narrow alleyways of Indian cities – constantly keep their brands available in every nook and corner of the country’s remotest areas.
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3.
The Brand: Thums Up
Thums Up is a leading sparkling cold-drink and most trusted brand in India. Originally introduced in 1977, Thums Up was acquired by The Coca-Cola Company in 1993. Thums Up Marketing: Thums Up was launched by Parle Agro Pvt. Ltd to fill the void left by the government ban on American soft drinks giant Coca-Cola in the 1970s. The thumbs-up logo was adopted early on, but the brand was positioned differently then. Thums Up was earlier positioned as a refreshing cola, with slogans such as “Thums Up Makes it Great” and “Happy Days are here Again”. It was post-1996 that the brand moved towards a more individualistic, masculine positioning. Around this time, Coca-Cola began focusing on the brand—its positioning changed, to a more masculine brand. The strategy was rooted in the simple insight that India is a market where most of the soft drink consumption is outdoors, and a majority of consumers are male. Using the strong taste of Thums Up, Coca-Cola repositioned the brand by marrying the taste to their target group. Thums Up was a major sponsor of cricket matches. In the early 1980s, it came out with several postcards featuring Sunil Gavaskar and Imran Khan. Besides cricketers, Thums Up's celebrity endorsers include Akshay Kumar and Abhishek Bachchan popular south Indian actors Megastar Chiranjeevi and Mahesh Babu. Besides this, Parle’s southern bottler was a major sponsor of Indian motorsport in the 80s. In addition to sponsoring several Indian track drivers in Sholavaram races, they sponsored several regional Cars and Bike rallies. They also sponsored NDTV in 2009 Thums Up is available to its consumers in various packaging sizes: Packaging Glass Bottles Pet Bottles Can Fountain Sizes 200ml, 300ml 500ml, 1.5L, 2L, 2.5L, 500ml + 100ml 330ml Various Sizes K.J. Somaiya Institute of Management Studies And Research
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4. Environment: Current market situation
• • • • The 50-bn-rupee soft drink industry is growing now at 6 to 7% annually. In India, Coke and Pepsi have a combined market share of around 95% directly or through franchisees. There are about 110 soft drink producing units (60% being owned by Indian bottlers) in the country, employing about 125,000 people. There are two distinct segments of the market, cola and non-cola drinks. The cola segment claims a share of 62%, while the non-cola segment includes soda, clear lime, cloudy lime and drinks with orange and mango flavours. Boom in Retail Industry creates more opportunities for soft drink players. The per capita consumption of soft drinks in India is around 5 to 6 bottles (same as Nepal's) compared to Pakistan's 17 bottles, Sri Lanka's 21, Thailand's 73, the Philippines 173 and Mexico 605. This indicates a great opportunity existing for development in this market. The industry estimates that the beverage market should grow at twice the rate of GDP growth. The Indian market should have, therefore, grown by at least 14-16%. However, it has been growing at a rate of about 6%. In contrast, the Chinese market grew by 16% a year, while the Russian market expanded at almost four times the rate of growth of the Indian market. An evidence of this shift comes from Sprite, a clear lemon drink from Coca-Cola India, which has replaced PepsiCo’s flagship brand, Pepsi, at the number-two spot in soft drink sales. PepsiCo, too, has noted the shift in demand for lime/lemon drinks, and has introduced packaged lemonade, Nimbooz, under its 7Up brand. Coke has 4 of its brand in top 5 soft drinks in India. Coca-Cola is identifying new flavors. Its core cola brands continue to contribute more to revenues. Thums Up is the top-selling soft drink in India. But the scales are now shifting in flavor of flavoured beverages.
• •
•
•
• • •
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Key trends & development in Industry • Localisation of Flavours is Accelerating
There is a rising trend of local flavours like Aam, Nimbu, Santra, etc., all local to Indian tastes. Therefore all the players in the market are trying to increase their share by introducing new drinks in sync with local flavours. • Product Diversification is Gathering Pace
Off late it has been seen that all the companies are expanding their product portfolio by continuously introducing varied products across all flavours. Apparently every new season has a launch of new product. Apart from soft drinks the companies are also diversifying into packaged drinking water, hot beverages and related segments. • Consumers are showing a willingness to try different flavours
Consumers now-a-days have an inclination for trying new flavours. There is a rising trend in consumption of Appy Fizz, Real Fruit Juice, Nimbooz etc. • Packaging is gaining more Importance for Brand Differentiation
Companies are following innovative packaging techniques mainly to differentiate their products from that of the competitors and also to attract more customers. Since the core product offered by most of the players is almost same, companies see advertising as an avenue to capture market. Innovative packaging technique followed by companies focuses on peculiar package shape and package size that will instantly help a customer to differentiate the brand. • Soft Drinks Players are Enhancing Below-the-line Marketing Activities-Price Promotions, Point-of-Sales displays, Value Offers Companies are more and more indulging into promotional activities that influence the buying behavior of the customer at the point of purchase. This includes increased promotion via displays through refrigerators, posters and hangers. Also they come up with Value offers like Cost Discount on bulk purchases or even free offers. • Naturally Healthy Soft Drinks are Benefiting from Growing Health Consciousness
There is a paradigm shift in consumption rationale of consumers. They are shifting more towards health conscious beverages.
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5. Competition analysis
The visual below indicates the most appreciated beverages in different parts of India.
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The comparison below emphasizes the difference in the consumption pattern of cold-drinks between Urban and Rural areas. The comparison is made around the prevailing trends and existing competition.
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The graphs below give a description of the global scenario of the cold-drinks market. This clearly indicates a huge scope of development in the sector. Also, amongst the various brands available in India, most of Coca-Cola brands lead their competitors in their respective markets.
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Competitors Competitors to our offering can be bifurcated into two sections: Primary Competitors and Secondary Competitors.
Primary
• Other Soft Drink Brands • Rasna, Tang etc • Local Flavored Drinks like Jaljira, Nimbu Paani etc
Secondary
• Water • Tea & Coffee • Fruit Juices
Our Primary competition comes from direct substitutes for Thums Up i.e. 1. Other Soft drinks brands like Pepsi, Sprite, 7Up, Mountain Dew, Lemonade, etc. 2. Flavoured, powdered, non-aerated drinks like Ransa, Tang, Glucon-D, etc. 3. Local flavoured drinks available at a road-side vendor viz. Nimbu Paani, Jaljira, etc.
We also face secondary competition from other substitutes for the soft drinks category. These include:1. Water (Packaged as well as locally available) 2. Tea & Coffee (available with local vendors as well as stores such as Cafe Coffee Day, Tea Lounge, etc. 3. Fresh fruit juices (available with local vendors, restaurants, specialty kiosks in malls, etc.)
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6. Product concept: Marketing Opportunity
Basic Problem Problems generally identified with cola beverages are Storage, De-fizzing and ill effects on health. Let us try to understand each problem. 1. Storage Colas are available in bottles which need to be served chilled for maximum effect. It can be very inconvenient in a market like India. Firstly let’s talk about cities, the cola companies need to generally provide a refrigerator to the retailers adding to their cost. Also larger bottles find no adequate storage space inside a consumer’s refrigerator. Secondly, In tier two cities there are abrupt power cuts which hamper the cooling process therefore cooling is done mainly by ice chunk boxes, if the retailer can afford it. Lastly In rural areas there is no mode of chilled storage available. Also disposable income of a rural individual is not enough to buy a big or even a medium sized bottle, he would generally prefer a smaller unit for one time consumption
2. De-fizzing Another major problem seen with larger bottles is De-fizzing. The cold drink loses its carbonation after a while of opening the bottle. The entire taste changes and since it’s a bigger bottle it has to be stored for further consumption and the consequent consumption is almost without any fizz. 3. Health effects One of the major ingredients in cola drinks is CO2. The entire onus of CO2 is to give fizz to the beverage. However, though a highly debatable issue, many studies indicate that ill-effect on health is caused due to CO2 staying in cola for some time. Constant consumption of carbonated drinks have known to cause health issues like tooth problems, bone demineralization and the development of metabolic syndrome and diabetes.
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7. Market Research
What is your gender?
MALE 131 64% FEMALE 75 36%
What Age Group do you fall in? 11-20 yrs 21-30 yrs 31-40 yrs 41-50 yrs above 50 47 77 36 29 20
11-20 yrs 21-30 yrs 31-40 yrs 22% 37% 41-50 yrs above 50
10% 14% 17%
Which city do you reside in?
NORTH
SOUTH
15%
EAST
WEST
11% 4% 70%
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Which is your favourite refreshing drink?
COLD DRINK FRESH JUICE COFFEE TEA WATER Other
25% 42% 21% 18% 20% 5%
Do you consume cold drinks? YES 188 90% NO 21 10%
Which is your favourite Cold-Drink? THUMS UP 74 42% COCA - COLA 24 13% PEPSI 38 21% FANTA 18 10% MIRINDA 17 10% SPRITE 47 26% DEW 15 8% 7UP 19 11% Other 17 10% People may select more than one checkbox, so percentages may add up to more than 100%.
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Are you brand loyal?
YES 79 41% NO 112 59%
How often do you consume cold drinks?
MORE THAN ONCE A 0 0% DAY ONCE A DAY 17 9% ONCE A WEEK 66 34% TWICE A WEEK 37 19% ONCE A MONTH 54 28% Other 20 10%
On what occasions do you consume cold drinks? WITH EVERY MEAL 15 8% AT PARTIES 133 69% AT MOVIES 75 39% ON VACATIONS 48 25% Other 37 19% People may select more than one checkbox, so percentages may add up to more than 100%.
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Where do you buy cold drinks from?
LOCAL GENERAL 158 81% STORE SUPERMARKETS 68 35% CHEMISTS 12 6% MALL 34 17% Other 18 9% People may select more than one checkbox, so percentages may add up to more than 100%.
Do you store cold drink at home for later use?
YES 50 26% NO 70 36% SOMETIMES 76 39%
If yes, you store it for how many days?
120 100 80 60 40 20 0 One Week One Month 3 Months 6 Months
One Week One Month 3 Months 6 Months
103 18 3 0
84% 15% 2% 0%
People may select more than one checkbox, so percentages may add up to more than 100%.
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If no, then what is reason for not storing cold drinks at home?
DE-FIZZING 22 25% PROBLEMS STORAGE 12 14% PROBLEMS NO REQUIREMENT 61 70% Other 3 3% People may select more than one checkbox, so percentages may add up to more than 100%. Would you like to try a powdered form of your beverage?
What kind of packaging do you prefer?
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Would you like to carry your powdered form of beverage while travelling?
Do you make/have a customised drink by adding your own flavour to your beverage?
Do you consume powdered drinks like Rasna, Tang etc?
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If yes, why do you consume powdered drinks?
How do you get to know about the upcoming brands or new ranges of the existing brand?
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8. Need Identification
After the survey conducted on cold-drinks we have identified the following need amongst the masses. 1. Consumers would like to have a cola drink at home but want to do away with the storing and de-fizzing hassles. 2. Consumers would in fact love to have their favorite cola drink anytime anywhere eg: while travelling etc. 3. Consumers would like to have their cola drink to have a longer consumption pattern when at home so a onetime buy would suffice for say a couple of months. 4. Consumers would also like their cola drink with differentiated flavors. 5. Retailers prefer stocking something that takes up less storage space, less storage cost and gives high profit margin.
9. Actual product: Product Description
Based on the Needs of the consumers that were indentified, our product will provide a cheap yet high-quality solution to its consumers. The product will be available in the powdered form as against the conventional bottled form. This would be the first time that a commercial product like this would be launched in India. This will essentially help in tackling major problems like Storage & De-fizzing faced by the consumers. Also the powdered form of the cold drink will provide ease and convenience of making the beverage anytime anywhere.
10. Advantages and Challenges
Advantages: 1. The cold-drinks, till now, faced the problem of de-fizzing when they were stored for a few days in the refrigerator. Using our product, the drink will be made only when required, thus will always be fresh. 2. Thums Up will now be available in Indian Flavors of Masala & Lime which will appeal to the Indian Consumer. 3. Storage of Powder boxes will be easier at home as compared to large volume bottles. Also, this box does not need to be stored in the refrigerator unlike the bottle. Local General Stores where most families buy their consumables refrain from storing cold-drinks because it forces them to allocate space for a refrigerator and also bear the cost of electricity for the same. For a powder-box, no such requirements would be necessary and thus, more distributors will be willing to sell the product.
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4. The new product will now be available in the remotest of places where you would have never dreamt of having any flavored drinks. This is possible because now all you would require is fresh, clean water and some ice-cubes and you could make your favorite beverage on the move. 5. The packaging cost will reduce drastically and transportation will become much easier.
Challenges: 1. Making people accept this new concept and encourage consumers to take more Thums Up home and consume it on a daily basis. 2. Packaging would require being air-tight else the carbon-dioxide molecules in the powder would get reacted with moisture in the air. 3. Rural Marketing of the drink considering the use of Hard Water in those regions. They could take up a social issue like this and create awareness about the use of clean water.
11. SWOT analysis of the company:
STRENGTHS
1. Established Brand 2. Financial and Technical resources 3. Indian-ness 4. Easy to prepare 5. Storage convenience 6. Different package sizes
WEAKNESSES
1. New concept - Acceptance Problem 2. Preparation on the move
SWOT
OPPORTUNITIES
1. New Market (Rural) 2. New Flavours 3. Elimination of fountain cold drink concept
THREAT
1. Quality of water used 2. Threat of water used
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STPD:
12. Segmentation
Our target market would be one where business focuses attention on & where marketing efforts are most productive & successful. Masala Thums Up would be marketed on the basis of differentiation. It would satisfy range of different markets thanks to its qualities, characteristics and properties. As our product is a completely new variant in form of powdered drink with Indian flavours, we can target more segments. 1. Geographic : • We will target different parts in the whole of India - the cities and the rural areas. We will start off with heavy marketing in the urban areas and rural marketing will be a part of Phase – II of the marketing plan. • In the cities more of party servings and big packs would be used, while in the villages more of sachets would be marketed. 2. Demographic: • Age group 15-30 years • The product can be consumed by both, males and females. • Families of any size can consume the product as it would be available in various packaging sizes. It would cater to all income groups as it is cheaper to the bottled one and it is available in various sizes. 3. Psychographic: • It could avail to various people of different lifestyle. It can be used by people who party frequently or have get- to gathers at their place. • People can carry it when they are travelling as it is easy & convenient to carry. • It would serve sports-oriented & outdoor-oriented people too. 4. Behavioural: • It is can be used at several occasions like parties, get-togethers or simply individually while having a meal, etc. • It will appeal to various categories of people who drink daily, weekly or regularly. • It will be for all readiness stage customers-unaware, interested, intending to buy, etc.
13. Targeting:
Our pattern of target market selection would be one of selective market specialization. It would serve different segments of people and the variety in flavors would add new customers
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to the existing ones. It basically targets young generation for the various flavors being served and encourages household consumption for the convenience of making and storing it.
14. Positioning:
• • • • • • Powdered form of cold-drink Convenience in storage Indian/desi taste Low-priced drink Best Quality as it’s an old renowned brand Drink for special occasions like unplanned get-to-gathers, travelling,etc..
15. Differentiation:
• • • • • No De-fizzing problem which is a crucial concept in storage of colas Customized flavours of Indian origin and taste. Easy, convenient and long term storage Extremely cost effective and affordable prices Easy travel drink with less storage space
16. Marketing Mix
Product: 1. The existing product “Thums Up” will be modified and offered in the powder form. This modification will help in dealing with the de-fizzing problem and storage problem. These are the major difficulties that consumers face and hence do not store cold-drinks at home for later use. We want people to now store cold-drinks beyond one week and consume it fresh whenever, wherever they want. 2. The product portfolio will be expanded by introducing different flavours of the cold drink in the form of “Masala Thums Up” and “Thums Up Lime”. These flavours will appeal to the younger generation as they would like to try a different version of the Thums Up as indicated by the results of the survey. 3. The core product is the cold drink itself which has been well established for several years and people consume it because of its taste and quality. The augmented product will provide
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the consumers with the option of consuming the cold drink whenever they want in different flavours.
Price: 1. The product will prove to be a cheaper substitute for the existing bottled cold-drinks. This will deliver value-proposition to the consumers who will have to now spend less for more. With the product available in various packaging sizes, a consumer has the freedom of selecting the appropriate size as per his own requirements and finances. 2. The aim is to make more number of people consume Thums Up every day. Hence it will be priced low as compared to the bottled packages. • Single Serving – Rs. 5 • 4 serving – Rs. 15 • 12 serving – Rs. 35 • 20 serving – Rs. 50 3. Since most of the people consume cold drinks once a week or less, a lower priced product might attract them to consume it more often.
Place: 1. Thums Up was available majorly at General Stores and Supermarkets and at a few Chemists, Malls, etc. The company already has a well established distribution system. However, with the new packaging sizes, the distribution will become easier. 2. There are few General Stores who do not store cold-drinks as it requires a Refrigerator for storing the cold-drink occupying space and consuming electricity. However, as the product will now be available in the powder form, a refrigerator will not be required for that. Only a hygienic place would be enough to store and sell the powdered cold-drink. We can use this property of the product to increase its distribution. 3. Several crowded places will be targeted where Purchase Centres will be established to increase sales.
Promotion: 1. We will try to increase the visibility of the product by increasing exhibition coverage. Purchase Points will be set up at strategic places which will target large crowds.
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2. Advertisements campaigns will try to generate curiosity amongst the consumers which will in-turn encourage “word-of-mouth” publicity. 3. A brand ambassador will be part of all advertising campaigns which will add a desirability value to the product. 4. Promotional campaigns will have themes which will be in sync with the product offerings and advertisements.
17. Product Life Cycle:1. Market Penetration: This would be the Introductory Phase in the PLC of the product. The drink will come in several Indian flavors which will generate the interest amongst the consumers. It will also enter the market as a cheap substitute for bottled beverages. This would prove to be a point on which we try to reach out to more number of people and eventually stress upon Rural Marketing.
2. Service / Program Development: This will be the Growth Phase in the PLC of the product. Here we introduce several contests for the consumers wherein they send us their recipes about tweaking their drinks. The best recipe will be selected by the company and printed on the labels of the next batch. This should generate the acceptance of flavored beverages amongst the consumers and make them willing to try new flavors.
3. New Market Development: This would be the Maturity Phase in the PLC of the product. In this phase, we try to consolidate our position in the existing markets and also explore new markets. These new markets can be identified based on age groups and geographical areas. We will also try to penetrate the rural market. Rural marketing can be coupled with the CSR activities of the company like emphasis on clean drinking water.
4. Diversification: This phase is to avoid the Decline Phase in the PLC of the product. Here, we intend to introduce new flavors with the existing range of flavors. These flavors can be identified by conducting market survey and also from the contests held for consumers. This will continue to keep the interest of the consumers in the brand.
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18. Advertising Strategy:
For advertising our product, we intend to use the AIDA model. The various stages of this model will be dealt with as follows:1. Attention: In this phase, we try to grab the attention of our consumers with the help of abstract images. These images will be displayed on hoardings, prints, etc. extensively. Followed by this, similar images will be displayed in TV Commercials aired at prime time. The product will not be available in stores as yet. 2. Interest: In this phase, TV commercials will be aired emphasizing on the PODs of the product. These commercials will try to make an emotional connect with the consumers through appropriate family-oriented advertisements. We also emphasize on the various advantages of the product including the ease of making the drink. 3. Desire: Advertisements will include a brand ambassador who will generate the desire amongst the consumers. These advertisements will be based on different situations in which the product will come in handy, for eg. Party, Trekking, etc. 4. Action: In this phase, we emphasize on the pricing of the product. It will be available as a cheaper substitute for bottled beverages. The product will also be available at more number of local general stores in residential areas. This will be conveyed through extensive “Point-ofPurchase” advertising.
19. Promotional Tools
We look forward to launching the product in 4th week of February 2011. Since the DLF IPL T20 Tournament is scheduled to commence around this time, this provides an excellent opportunity to create awareness about the product. For doing this, Coca-Cola would have to become one of the sponsors for the tournament. The promotional policies around this period would be as follows:1st week of February 2011: Begin with introductory campaign generating inquisitiveness amongst the consumers. These advertisements will be restricted to Hoardings and Newspapers.
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3rd week of February 2011: Begin with the TV commercials which go hand-in-hand with the initial print advertisements. These commercials will be aired at prime time. They will have the “Coming this Summer.” message continuing the inquisitiveness campaign.
4th week of February 2011: The product will be launched in 15-20 major cities in India. The product has to be made extensively available at every local general store with emphasis on “point-of-purchase” advertisements. In the same period, the TV commercials started in the previous week will be extended to finally reveal the product. 1st week of March 2011: Begin with the DLF IPL linked advertisements. Here, we use the “Desi Jhatka…” campaign. Here the advertisements will promote DLF IPL as well as new Thums Up flavors.
During IPL: Coca-Cola can set up stalls at venues of IPL matches where consumers will be exposed to the new product. A contest shall be organized in which participants will compete for who can make the fastest Thums-Up beverage and drink it. This will try to emphasize on the easiness of making the drink. Live coverage of the same will not only create awareness amongst the people present at the venue but also the large number of viewers of the telecast at home.
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May 2011: We include the “Gola-walas” in the promotional campaign for the product. Maximum number of Gola-walas will be a part of this campaign with each one given a ThumsUp banner to be put up at their stalls. They will be provided with sachets of the product from which they can make and serve the drink to their customers.
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Beyond that: Simultaneously, new advertisements will be aired on TV. These advertisements will be based on general themes in sync with the “Desi Jhatka..” theme. We will indulge in online marketing on social networking websites such as Orkut, Facebook, Twitter, etc. The commercials aired till now will be uploaded on Video Sharing websites such as Youtube, Metacafe, etc. We will also enter into Radio Advertisements at this point. We will book a slot with a Radio Channel at a prime time for an entire week. During this slot, only Thums-Up advertisements will be aired. We will organize a contest where people have to come up with Jingles for the new product and the Best Jingle will be given some Thums-Up goodies. As we move ahead in the product life cycle, emphasis will be shifted to targeting the lower income groups. In this phase, we will start off with advertising in BEST buses. This is the facility that is most used by lower income groups and large scale visibility in such places will generate a lot of awareness. Emphasis will be given on the low pricing of the product which should generate the desirability for the product. This promotion campaign will also be coupled with advertising at Local Bus Stops through banners.
Contests: In order to promote the new form of Thums Up in the powder form, we will arrange contests for consumers to participate in. In this contest, consumers can send in their recipes of tweaking their Thums Up drink by adding several flavors or masala or anything else. Their recipes will be collected either through email or post. The best recipe will be selected and printed on the labels of the next stock. Trekking Contests We also plan to come up with another campaign ‘Trek to Thums Up Hill’ campaign. In this promotional campaign consumers would have to buy a large pack of Lime/Masala Thums up and will have to fill a form that will be inside the package. They will have to answer just one question “What is your idea of Adventure?” Best Entries will be selected and they will be
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taken for a 1-day fully paid free trekking trip to ‘The Thums Up Hill’. Awareness about this will be created through TV & Print Media. Promotional Vehicles There will be intensive use of promotional Vehicles at selected college campuses and crowded places to create awareness and increase visibility. We also plan to have on the spot games and the prizes for which will be Thums up sippers, wrist watches, caps, bags etc. Website Promotion We plan to design an exclusive website for various activities during promotion phases the name will be www.tagline.com which will cater only to Lime and Masala Thums up. The website will promote through following avenues: o Games o Wallpapers & Screensavers o Mobile ringtones o Ad Videos o Chatrooms o Link to Social Networking forums dedicated to Thums Up o Information about contests.
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Financial estimates of expenditure
20. Pre-launch development budget
The pre-launch budget is spread across duration of six months Months Research and development Packaging Marketing research and testing: -Market research -Product testing Quality assurance Advertising Sales Force Manufacturing New equipment needed Discretionary funds Legal Costs Total 1st and 2nd 3rd and 4th 5th and 6th Total Percent
2,00,00,000 1,25,00,000 75,00,000 18,75,000 20,00,000 22,50,000
4,00,00,000 61,25,000
16.00% 2.45%
35,00,000 75,00,000 15,00,000 1,47,50,000 35,00,000 56,25,000
30,00,000 85,00,000 15,00,000 3,40,00,000 50,00,000 60,00,000
25,00,000 1,00,00,000 20,00,000 4,64,00,000 1,50,00,000 67,50,000
90,00,000 2,60,00,000 50,00,000 9,51,50,000 2,35,00,000 1,83,75,000
3.6% 10.4% 2.00% 38.06% 9.4% 7.35%
58,50,000 25,00,000 10,00,000 Rs. 676,00,000
50,00,000 25,00,000 15,00,000 Rs. 815,00,000
40,00,000 25,00,000 20,00,000
1,48,50,000
5.94%
75,00,000 3% 45,00,000 1.8% Rs. Rs.10,09,00,000 25,00,00,000
The budget is divided into three, two month periods. The majority of funding shifts from research and development to manufacturing and advertising as the launch date approaches. In the first two months the greater part of funds is allocated to research and development, market research, and new equipment purchases. Packaging is a branch of the research and development segment. Packaging of the new product is a key part of its success therefore extra funds are allotted specifically for this purpose. Packaging plays all of these roles: containment of the drink, protection from hot temperatures, a display for Thums up, and a provider of information. New equipment has the most funding during the first and last two months, this decision was made under the assumption that the majority of new types of equipment would be purchased during the first two months as product prototypes where being developed. The new equipment that would be purchased during the last two months is
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to aid in the manufacturing process. Marketing research has a relatively level amount of funding for the duration of product development. Marketing research will further define the target market as well as potential flavor combinations. Product testing will first cover the taste of the drink and shift into packet design modification. Discretionary funds are intended to control interdepartmental competition. For example, if more funding for research is needed instead of cutting the budget for another team, the project manager has Rs.25,00,000 available every two months to help the team stay on track. The various departments may not be informed that there is extra funding available on a first come first serve basis. Such a policy would support overspending. The section labeled “Legal costs” is intended to cover patents, copyrights, and general legal counsel. The funding for sales force teams grows tremendously as the launch date approaches. This is essentially intended to cover extensive training and salaries of the large sales team. After the launch date, the marketing budget will be in effect.
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21. Post launch marketing budget
Months Sales Force: -Sales Force training -Sales Force salaries Advertising: -T.V. Commercials -Radio Commercials -Print Ads Consumer Incentives: -Promotional events -Sampling Distribution Channel Support: -Wholesale discounts -In store displays -Co-operative Advertisements Total 1st to 4th 2,00,00,000 5,00,00,000 14,50,00,000 24,00,000 75,00,000 5th to 8th 4,50,00,000 9,00,00,000 18,00,000 50,00,000 9th to 12th 4,25,00,000 31,85,00,000 6,25,00,000 18,00,000 25,00,000 5,62,50,000 1,25,00,000 3,00,00,000 87,50,000 50,00,000 17,00,00,000 1,25,00,000 1,25,00,000 3,75,00,000 Rs. 32,99,00,000 1,25,00,000 50,00,000 3,75,00,000 Rs. 20,55,50,000 1,25,00,000 25,00,000 3,75,00,000 Rs. 16,68,00,000 Rs. 70,22,50,000 Total 15,75,00,000
The bulk of the budget is rationed for the four months, in order to support the rapid marketing launch. Consumer awareness is vital. Television, radio and print advertising are intended to increase awareness of the cold drink across all age demographics. Promotional events will be targeted at consumers who actively engage in outdoor activities and may have missed electronically transmitted advertisements. These BTL activities will help the company demonstrate the ease of preparing Thums Up to its customers now. In store displays and Cooperative advertisements are intended to influence consumers at point of purchase. In order to gain more trial ability free samples will be distributed. Wholesale discounts will encourage stores to be well stocked with both the new variants of Thums up.
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22. Profitability Analysis
1 serving Manufacturing Cost Distribution Cost Total Cost 0.75 0.05 0.8 4 servings 3 0.2 3.2 12 servings 12 0.6 12.6 20 servings 15 1 16
Retailer Margin
2
5
10
20
Profit Profit % Selling Price
2.2 44.00 5
6.8 45.33 15
12.4 35.43 35
14 28.00 50
On the basis of the Pricing mechanism as illustrated above, the product should enjoy a healthy profitability rate between 30-40%, depending on the SKU. As observed from the table above, 4 serving packs are the most profitable for the company and are the most likely SKUs to be purchased by the customers.
23. Sales Projections
In India, the total consumption of carbonated soft drinks recorded is 4 billion litres per year. This industry is dominated by two big companies viz. Coca Cola co. And PepsiCo with combined market share of 95%. Coca Cola enjoying the larger pie with 55% market share
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(2.37 billion litres per year) the highest contribution is due Coke and Thumbs up. Thumbs up accounts for about 20 % total revenue of Coca Cola Co. in India. In forecasting the sales, we have made the use of following information available to us. Total Consumption of CSD Total Consumption of Coca Cola products Total Consumption of Thumbs Up Initial Consumption of new drink introduced (2.5%) In the terms of Servings, Consumption of new drink introduced would be 4 billion litres per annum 2.37 billion litres per annum 400 million litres per annum 10 million litres per annum 50 million servings per annum
1 serving makes 200 ml of Soft Drink. Therefore, 10 million litres of S.D. can be obtained from 50 million servings
24. Future prospects
a. The concept provides the advantages of carrying your favourite cold-drink, Thums Up, anywhere you want, anytime you want. This is the major advantage which will be stressed upon in all communication activities as well as positioning and packaging activities. b. If the Indianized flavours of Masala Thums Up and Thums Up Lime enjoy success in the market, we will launch two more Indian flavours of Thums Up in the market in subsequent years. c. The concept of powdered cold-drinks can be extended to other brands under the Coca-Cola company i.e. Coca-Cola, Sprite,
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25. Conclusion
Considering the current trends in the beverages market, it is important for brands like Thums Up to retain the loyalty of its consumers. The changing consumption pattern of the consumers has poised a challenge in front of the market leaders. With these new products, Masala Thums Up and Thums Up Lime, the consumers will get their favourite cold-drink in a new form. The change in the physical form of the product provides a long list of functional advantages to the consumers. Since the consumption of cold drinks is very large outdoors, the aim is to increase the consumption of cold drinks indoors. This will be achieved with the new powder form of the product. Also, the Indian flavours offered with the powder will add a personal connection with the consumers in India as this will suit their taste and yet at the same time, provide them something new. With proper execution of the marketing plan, effective advertising and promotional campaigns, these two products can be successful in the market.
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