Strategic marketing plan

APPENDIX B

Manchester, UK, pp: 133-143.

Available: http://www.emerald-library.com/ft

Global position of Virgin Cola within soft drinks industry

Virgin brand successful for virgin cold regarding competitors

Service divisions operate autonomously

Brand is emotional association, with Branson as the brand’s most effective PR weapon

Virgin cola adopted strategy to culturally suit different markets

Soft drinks industry = promotion, brand image, packaging (even more so than actual product particularly in USA and UK)  promo type depends on target market, package for differentiation

Leading brands hold onto market via promo strategies and product diversification, innovation and brand image

Disadvantage = 2 market leaders (Pepsi and coke)  decrease market share and increase market growth = new product (requires increased funding through promo to increase market)

Launch of existing product in existing market requires increased recognition of brand and improved productivity

Constantly innovate to remain competitive (?)

Virgin cola must be competitively priced. Media and selling through distribution channels = virgin cola promo. Difficult to secure retail outlets

Advertising: coke focuses on product, Pepsi focuses on user, virgin focus on….???

Consumers are interested in brand name and image portrayed by drinking a brand. Pepsi and coke have merged to other snack food industries enabling them to achieve economies of scale in advertising, marketing and distribution

Important to continuously establish/implement strategic changes as means of creating competitive advantage in such a competitive industry

Product is less important compared to the importance of advertising/brand recognition. Create promo technique that appeals to the global consumer

Merge with complimentary business (diversify into new products in existing markets ) = cost saving/synergy

Coke and Pepsi have strong distribution (overcome by merging with a well established branded product) = ENABLE PRICE DISCOUNTING

Strengths = Virgin is branding and quality Brand, promo, innovative image and packaging. Product, package and tastes the same across competitors, it is brand recognition that is significant = virgin advantage with established brand

Weakness = global brand recognition and appeal to older generations (Richard as a brand), placing too much emphasis on brand name as promo weapon however he is a unique world wide image. WANT= image that a brand brings to consumer, quality and competitive price

Brand name dependence, incongruence between strategic/tactical levels, too reliant on to few distribution channels

Opportunities = diversification of range, increase soft drink consumption, ability to gain more market

Threats = intense competition, saturated market failure = domino effect

APPENDIX C

Available: http://360.datamonitor.com.ipacez.nd.edu.au/Product?pid=889413C8-178F-43C0-8BD7-4FD8C32C0B1F.

Accessed: 05 March 12.
MARKET VALUE

The Australian Soft drink market grew by 3.3% in 2010 to reach a valye of $10,953 million

Market value forecast

In 2015, the Australian soft drinks market is forecast to have a value of $12,721.8 million, an increase of 16.1% since 2010

MARKET SHARE

Coke is the leading player in the Australian soft drinks market, generating a 39.4% share of the markets volume

FIVE FORCES ANALYSIS

The soft drinks market will be analyzed taking manufacturers of soft drinks as player. The key buys will be taken as distributors and retailers of soft drinks, and producers of packaging, soft drinks ingredients and other raw materials as the key suppliers.

The top 3 players (Pepsi Co., Coca-Cola company and Asahi breweries) hold 54.9% of the total market volume. The buyer power of retailers in this market is moderate. Supplier power is not great, as most inputs are readily available commodities. New entrants must contend with the reach and strong brands of incumbents, although niche catergories such as smoothes present opportunities to new entrants. Not a great threat imposed by the soft drink substitues except from traditional coffee and tea or homemade juices, along with the tendancy of consumers switching towards the fruit juices. Although major players are fighting for the dominant position, the rivalty level is moderate and there is scope for growth in niche catergories.

Buyer power: in Aus, the main distribution channels for the soft drinks market are supermarkets, which account for 48.5% of the total market volume, followed closely by on-trade retailers (32.5%) the leading players generate most of their revenue from the production of concentrates, which are sold to bottling companies.

New entrants: players in the Australian soft drinks market try to distinguish their products to some extent by stressing their health benefits and taste. Although it would be difficult for a new entrant to compete with the brand strength and reach of existing players it may be possible to achieve small-scale success stressing a unique production method or nutritional benefits. However, niche catergories can be exploited by new entrants.

COCA-COLA

The Coca-Cola Company (TCCC) engages in the manufacture, distribution and marketing of non- alcoholic beverage concentrates and syrups. The company owns the world’s most valuable brand: Coca- Cola. Furthermore, TCCC markets four of the world's top five non-alcoholic sparkling brands, including Diet Coke, Fanta and Sprite. The company's finished beverage products are sold in more than 200 countries worldwide. TCCC is headquartered in Atlanta, US and employs around 139,600 people.

Most of TCCC's products are manufactured and sold by bottling partners, who convert them into finished packaged products for sale to distributors and other customers. The company sells the concentrates and syrups for bottled and canned beverages to authorized bottling and canning operations. Authorized bottlers and canners either combine syrups with sparkling water or combine concentrates with sweeteners (depending on the product), still water and sparkling water to produce finished sparkling beverages. These sparkling beverages are packaged in cans, glass and plastic bottles, and sold to wholesalers and retailers.

Coca-Cola is the biggest-selling soft drink of TCCC. Other popular soft drinks brands marketed by the company includes Beat, Canada Dry, Canning’s, Cheers, Cherry Coke, Citra, Diet Barq’s, Diet Coke, Fanta, Limca, Sprite and Vault. In addition, TCCC produces, distributes and markets a broad portfolio of energy drinks and sports drinks across the globe. Its energy drinks are marketed under brands such as Burn, Buzz, Full Throttle, Full Throttle Blue Demon, Full Throttle Fury, Full Throttle Sugar Free, glaceau vitaminenergy, Powerplay, Rehab, Samurai and TaB energy. TCCC’s sports drinks portfolio include brands such as Aquana, Aquarius, Aquarius Active Diet, Aquarius Freestyle, Powerade, Powerade aqua+, Powerade balance, Powerade Option and Powerade Zero.

KEY METRICS

The Coca-Cola Company generated revenues of $35.1 billion in the financial year (FY) ended December 2010, an increase of 13.3% over 2009. The company's net income totaled $11.8 billion in FY2010, an increase of 73.1% over FY2009.

PEPSICO.

PepsiCo operates through four business units: PepsiCo Americas Foods (PAF); PepsiCo Americas Beverages (PAB); PepsiCo Europe, which includes all beverage, food and snack businesses in Europe; and PepsiCo Asia, Middle East and Africa (AMEA), which includes all beverage, food and snack businesses in AMEA. The company's four business units are further divided into six reportable segments: Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), Latin America Foods (LAF), PepsiCo Americas Beverages (PAB), Europe, and Asia, Middle East and Africa (AMEA).

PepsiCo AMEA manufactures and markets salty and sweet snack brands including Lay's, Kurkure, Chipsy, Red Rock Deli, Cheetos, Doritos, Ruffles and Smith’s. The division also manufactures, markets, and sells beverage concentrates, fountain syrups and finished goods under the brands Pepsi, 7UP, Mirinda and Mountain Dew. These brands are sold to authorized bottlers, independent distributors and retailers. PepsiCo AMEA owns or leases approximately 80 plants and 1,175 warehouses, distribution centers and offices. It also utilizes approximately 40 properties owned by contract manufacturers or co- packers.

KEY METRICS

PepsiCo generated revenues of $57.8 billion in the financial year (FY) ended December 2010, an increase of 33.8% as compared to 2009. The company's net income totaled $6.3 billion in FY2010, an increase of 6.3% over 2009.
MARKET DISTRIBUTION

Supermarkets / hypermarkets form the leading distribution channel in the Australian soft drinks market, accounting for a 48.5% share of the total market's volume.

On-trade accounts for a further 32.5% of the market.

MARKET FORECASTS

MARKET VALUE FORECAST

In 2015, the Australian soft drinks market is forecast to have a value of $12,721.8 million, an increase of 16.1% since 2010.

The compound annual growth rate of the market in the period 2010–15 is predicted to be 3%.

MARKET VOLUME FORECAST

In 2015, the Australian soft drinks market is forecast to have a volume of 5,308.1 million liters, an increase of 14.2% since 2010. The compound annual growth rate of the market in the period 2010–15 is predicted to be 2.7%.