SCOPE
This plan outlines the marketing strategies for the Virgin Cola product line in Australia for the three-year period from 1 December 2012 to December 1 2015.
EXTERNAL ENVIRONMENT: REMOTE ENVIRO
This plan outlines the marketing strategies for the Virgin Cola product line in Australia for the three-year period from 1 December 2012 to December 1 2015.
The Australian soft drink market is in a steady position which leaves opportunities for new entrants. Competition is fierce however, niche markets are still available to introduce new products into.
Scenario: 1. The soft drink market is so influenced by the markets top 3 companies’ that any new entrant is immediately counter attacked.
2. The global financial crisis has had such an effect on the market that consumers’ are more hesitant to invest in Virgin’s new venture.
3. The global financial crisis has lead consumers to become more spending conscious, reduced spending, reducing the likelihood of consumers trying a new brand.
Implications:
Compared to the dominant competitors, our price point will not be as competitive which could influence consumer purchasing decisions however compared to other healthy alternatives within the product category. A slip in consumer confidence as a result of the Global Financial Crisis. This threatens entry into any market and considering the rise in the cost of living which affects the carbonated soft drink market as it is a luxury.
OPPORTUNITIES
THREATS
MARKET VALUE:
“The Australian soft drinks market grew by 3.3% in 2010 to reach a value of $10,953 million.”6
The growing market value of the soft drink industry in Australia is an opportunity for new entrants.
The top 3 players in the soft drink market (Coca-Cola, Pepsi and Asahi breweries) hold the largest market share in Australia (54.9%)
“Coca-Cola Company, is the leading player in the Australian soft drinks market, generating a 39.4% share of the market’s volume.”7
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.”8
The increasing market value forecast for the soft drinks market creates an opportunity for new entrants to enter a market with an increasing value forecast.
“Consumer confidence has slipped in the last quarter with more Australians apprehensive about economic uncertainty, financial security, and rising gas and electricity prices.”9
“The major economic issue facing PepsiCo is the rising input costs of their businesses due to structural inflation. Agricultural, energy, and some metal industries are going through periods of steady inflation.”10
The soft drinks segment recorded revenues of $4, 463.9 million in FY2010, an increase of 10.2% over FY2009.11
A 10.2% increase in revenue in 1 year again illustrates that the soft drinks industry in Australia is a valuable market to enter into.
SOCIO-CULTURAL FORCES
Socio-cultural forces heavily impact the carbonated soft drink market. The Australian populations expenditure on food and non-alcoholic beverages heavily impacts the carbonated soft drink market. Socio-cultural trends also have an impact on the market. The ‘health’ trend changes the way that competitors formulate new products and recreate their existing products.
The top 3 players each introduce brand new flavours to keep up with the health trend, which expands the market but makes it harder for new entrants to succeed.
The ‘healthy’ trend is moving into the later stages of maturity of the product life cycle and consumers’ become bored/skeptical of it.
A further population increase will expand the market and develop more opportunities for a niche market to be introduced.
An increase in the birth rate will increase the amount of children that are present during the late growth, early maturity stages of a new product.
Implications:
Marketing a carbonated soft drink as a healthy alternative consumers may be sceptical (consider vitamin water, was marketed as a healthy alternative, but is full of sugar.)
OPPORTUNITIES
THREATS
Since 1994, household spend on food and non-alcoholic beverages have increased by 14%, with the population spending over $16 a week more on these commodities.12
Coke is looking to introduce another product into its line of cola flavoured soft drinks: “Green Tea Coke”. This will appeal to women who are health-conscious and parallels with the increasing market for health products.13
“Meals out and fast foods” (which are both sufficient opportunities to purchase a carbonated beverage such as cola) is the highest-ranking expenditure for households in 1999. 14
