Running Head: COKE’S NEW PRODUCT Coke’s New Product Jaclyn Hurley Southern New Hampshire University 4/20/2018 1 COKE’S NEW PRODUCT Introduction Coca-Cola Company is world’s largest producer of carbonated soft drinks and captures about 50% of the global market share. Although it began as a pharmaceutical drink, it has evolved over the years due to the consumer taste and preferences. The company operates in more than 200 countries worldwide. Being the world’s largest beverage producer, it focuses on creating a green environment, promotes healthy living, and create a conducive environment for the associates hence promoting the economic boundaries of the regions of its operation. The company has a significant share in the top-five distributors of soft drinks brands globally, Coca-Cola, Diet Coke, Fanta and Sprite. The drive of the company is to refresh the world, inspire moments of optimism and joy as well as building value and make a difference in the market. The first mission statement of the company has seen it develop over the years and outweigh its competitors to the extent of becoming the world’s leading company in beverage production. Brand Idea and concept. In anticipation to fill the gap in the milk business, Coca-Cola launched FairLife Milk that is rich in proteins and lactose-free. The milk is estimated to contain extra 50% proteins, and 30% Calcium and reduced low sugars. The milk costs twice as much as regular milk and has no fat compressed and available in chocolate varieties. The Fiarlife milk brand was initially known as Fair Oaks, but after facing some challenging in production, the founders partnered with CocaCola in 2017 to facilitate faster distillation and distribution of the milk to large consumers. During the initial stages and idea conceptualization, the stakeholders were actively involved in brand building, by collecting ideas from consumers and bringing them into reality. The views 2 COKE’S NEW PRODUCT were encoded into a brand. The stakeholder thus resolved to make a highly nutritious, great tasting innovative dairy brands that grant customers the vitality they deserve in life and live to fullest. The new brand matches the Company’s mission in that; it provides a refreshing product which guarantees consumers a good living experience. Features of FairLife Milk The new brand, the Fairlife Milk is characterized by high nutrition than the usual milk, high cost of purchase, low sugar levels, high proteins and calcium and it is available in three varieties, the 2% variety, chocolate and the skim (Millington et al., 2018). Milk coming from family-owned farms will produce it. The milk is of high standards, promotes farming sustainability and ensures cattle comfort. It will be manufactured purely from raw material, n protein supplements or addition of growth hormones. It is produced by use of cold filtration that filters out fats and sugars leaving a lactose free milk. Marketing strategy for Fairlife Milk To market the new brand milk , the company need to deploy different strategies for marketing, both internal and external strategies. This could include advertisement and promotion, the company could use its unique marketing strategy by formulating an outstand message to create awareness to the target market segment. To certify brand usage, Coca-Cola would use direct distribution, advertising, and even collaborative engagements with the brand to motivate and remind consumers about the existence of FairLife milk. The company could also be keen on packaging graphics and visual identity systems, VIS (Company and Moye, 2017). The partnership between Coca-Cola and Fair Oak to form FairLife lead design of appealing appearance of the brand. Other forms of marketing to consider could be deploying four Ps of 3 COKE’S NEW PRODUCT marketing, product, price, place, and promotion. Now that the brand, the product was ready, the marketing team could further gather more information from the customers regarding the improvement of the product. For the price, the company could ensure even though their price is a bit higher than that of regular milk, it is also reasonable to every customer. To identify the most convenient client is the most vital marketing strategy that could be used by the corporate. Since FairLife was rich in nutrient and low in sugars, it was better if they could target on people with diabetic customer although it is of no harm to non-diabetic consumers. Finally, the company could focus on promoting the brand either through the social media or holding camps to create awareness about the existence of the Fairlife milk. How the company is differentiating from competition Alignment of pricing with market position and corporate mission Despite the existence of regular milk in the market, the company has to strategize on the issue of pricing the brand product. It could consider competitive pricing strategy by setting prices based on the rates of the opponents and the current market. Although the market was very competitive, the company established a higher price than the competitors because the brand is of a higher value. Since the firm is well known to many consumers, they could find it easy to purchase from Coca-Cola and thus to give it an opportunity to capture a considerable market share despite the existence of milk production in the market. In the beginning, the company could set a higher price than its opponents since the supply of the FairLife milk was low in the market and the demand was too high. But with time, the product will be in the market, and thus, demand declines and customers might not be willing to pay ready to pay the set price. Due to decline in order, the company could consider setting comparatively stable costs over time and device a promotion mechanism when needed (Wickford, 2018). 4 COKE’S NEW PRODUCT The effectiveness of existing branding, Fair Oak efforts, including implications for new product, FairLife. Fair Oak existed before regular milk, after challenges in production by Fair Oak Company and failure to cover milk production by Coca-Cola corporate, the two merged their weaknesses to form a strength. After combining, the two corporates decided to reinvent more regular milk rich in nutrients and good for the health of humans. They resolved to produce FairLife LLC, ultrafiltered milk. The new milk brand is perceived to be 50% extra protein and 30% additional of Calcium than the regularly manufactured milk. The new brand targets a wide range of consumers. The huge to produce the new brand was geared by the fact that customers have shifted to significantly healthful, low sugar products hence the Coca-Cola being the world’s greatest beverage corporates has expanded its collection, like selling minute maid and now wanted to venture into milk production. The existence of Fair Oak significantly affected the formation of the new brand in that, the raw material was readily available, and the labour force was in place. Critical demographic features of target market by FairLife Milk brand After design, a product, the next step a corporate embarks on, is the target market. An excellent choice of the target market translates to a lucrative return. For the Fairlife milk, the company chose a niche of the market to be the youth active in social media (Jaekel, n.d.). Through the social media, the company will manage to reach broad clients, mostly youths, youths and young adults who spend most of their time on social media platforms. The company targets youth demographics and the content developed by the advertisement team suit every single channel. The promotion strategy is somehow comedic because it encourages customers to set a part-time to be idle and enjoy being on the social media platforms. 5 COKE’S NEW PRODUCT Since the FairLife’s target customers spend time on the internet, the promotion team could channel their marketing skills to them and show them how the best is the new brand. They could upload video clips on social media like facebook, twitter, Instagram and all other channels and the youth would watch them, like and buy the product and make referrals to their friends and parents. That the best way to describe the target market for the brand is that, say that they are youth who are more energetic, like experiencing new thing and ideas, spends some of their time on social media, and are very interactive. Thus making the product well known readily over the shortest period. This is the best target group for the company because the other market segments, like the aged people, might be reluctant to purchase the FairLife milk in the claim that it’s just milk like any other. Other behavioural or psychographic characteristics of the target market Youths are very significant and influential customer to the entrance of the new product. If the product promoters can learn their psychological and behavioural characteristics, it could be straightforward to capture a huge market share on the market entrance. They acutely perceive things differently and their behaviour changes as well. Most of them actively participate in sports and that they need a lot of energy to remain active (Trott, n.d.). And since FairLife milk is rich in nutrients, it therefore good to target them. They also have different demographic behaviour, socio-economic characteristics. The target market for this brand is actively involved in various activities, and thus they need a lot of energy to carry on their duties and to grow as well making it an excellent venue for the marketing team to concentrate on them with a guarantee of success into the market. How FairLife milk meets a specific want or need of target market 6 COKE’S NEW PRODUCT The goal of any company to produce a new product is to meet the needs of the target market segment as well as making profits out of it. FairLife milk has filled the gap of their relevant consumers by ensuring that they benefit from improved nutrients in the product. The milk produced is of high standards and cold-filtered making it more suitable for consumption by human life (Kucharski, 2018). The composition of the milk also makes it more ideal for the people who are health conscious in that it has high percentages of Calcium and proteins and low in sugar. This altogether improves standards of livings due to its authenticity, naturally produced and genuinely produced. Hence the product has closed the gap that was in the market for diehard Coca-Cola consumers who wished to have a blend of milk from the company. Defends choice of target market relative to product success, based on analysis of target market’s characteristics, needs, and wants. The success of any product to the market depends on the choice of the target market, the characteristics, needs and wants of the market segment. The success of the FairLife milk is attributed to the fact that there was a readily available market and the channels of marketing were available as well making it possible for the product to flourish in the market. The presence of social media has contributed a lot toward the success of fairlife milk because the information and marketing were posted to the press and available to target consumer to view it and make the immediate action. This actions could be going to buy the milk or passing the information to the friends. And in most cases, if the data is delivered to the mothers, then they could include the milk on their shopping list since they do most of the shopping in the house. Judges how much target market is willing and able to pay for product or service, using target market analysis and research on close competitors’ prices to justify a response 7 COKE’S NEW PRODUCT Based on prevailing market prices of the milk the target market for the FairLife milk are willing to pay have the proposed price because they think that Coca-Cola brand is overcharging them. For example, the current price is $4.29 for a bottle of 52 oz which is as twice as the regular milk costing $2 for b4 oz bottle. If the amount is reduced, the customers would be more than willing to purchase the new product in the market. Evaluates whether targeted consumers are willing and able to pay more for product or service if it aligns with their preferences for socially responsible and ethical behaviour, justifying response with evidence The customers are willing to spend more on the FairLife milk provided it meets their preferences and is ethically manufactured. Three customers conducted a taste on between the three brands of FailLife milk, and they all agreed that they could be willing to spend some extra coins on the brand provided it does not violate the ethics. 8 COKE’S NEW PRODUCT References 1. Code of Ethics - Strategic and Competitive Intelligence Professionals (SCIP). (2017). Retrieved from https://www.scip.org/page/CodeofEthics? 2. Company, O., & Moye, J. (2017). New Look, Same Great Taste for Nutritious fairlife Milk #CocaColaRenew. Retrieved from https://www.coca-colacompany.com/stories/dairy-disruptors-fast-growing-fairlife-milk-adds-new-varieties3. Kucharski, M. (2018). Coca-Cola’s Fairlife Milk – A New Cash Cow or an Udder Branding Disaster? - The Buzz Bin. Retrieved from https://buzzbinpadillaco.com/coca-colas-fairlife-milka-new-cash-cow-or-an-udder-branding-disaster/ 4. Jaekel, B. TBS' largest-ever social campaign spoofs common tropes | Mobile Marketer. Retrieved from https://www.mobilemarketer.com/ex/mobilemarketer/cms/news/socialnetworks/22956.html 5. Millington, A., Hobbs, T., Joseph, S., Parsons, R., Bacon, J., & Woollen, P. et al. (2018). Coca-Cola tapping into high-protein product trend with Fairlife milk launch - Marketing Week. Retrieved from https://www.marketingweek.com/2015/02/09/coca-cola-tapping-into-highprotein-product-trend-with-fairlife-milk-launch/ 9 COKE’S NEW PRODUCT 6. Trott, O. Behavioral & Psychographic Segmentation: How To Develop Buyer Personas. Retrieved from https://medium.com/data-dump/behavioral-psychographic-segmentation-how-todevelop-buyer-personas-17498dde968f 7. Wickford, H. @018).Factors Influencing Pricing Strategy. Retrieved from http://smallbusiness.chron.com/factors-influencing-pricing-strategy-54489.html 8. We Tried Coca-Cola's New "Premium" Milk So You Don't Have To. (2018). Retrieved from https://www.buzzfeed.com/rachelysanders/fairlife-milk-tastetest?utm_term=.fk6dA3le3#.liz8EJOlJ 10
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