There is a global shift in favour of healthy living especially in the industrialised countries which is spurred by an increase in consumer’s awareness of the relationship between the health and lifestyle. Also, a spike in lifestyle-related illnesses has lead people to search for healthier alternatives to their usual foods and drinks. The health beverage market has embraced the change and is one of the fastest growing sectors in the Australian economy, and by entering the market, Coca-Cola aims at leveraging its huge presence in the country to bring a variety of healthier beverages to the consumers.
Company Background
The Coca-Cola Company started in Atlanta by a pharmacist John Pemberton. From the humble beginnings of selling nine glasses of the drink to a few of his friends, Pemberton grew the company to become a household beverage brand across the globe. The Coca-Cola Company is a beverage business dealing with the production and sale of a variety of soft drinks including Coca-Cola, Fanta and even drinking water.
History of the company
Asa Griggs Candler acquired the rights to the Coca-Cola brand three years after the company started producing the beverage. He was able to turn the bottling company to a multibillionaire enterprise with footprints in most parts of the world. Asa Candler turned out to be an adept salesperson and marketer and through various marketing strategies to position his business in such a way that people noticed it everywhere.
He was aggressive in promoting the brand including issuing out coupons to people who could taste his drinks to ensuring that every scale, clock calendar distributed by pharmacists bore the Coca-Cola brand. People paid attention as the company’s name was everywhere making its products the most consumed in the area. The Coca-Cola Company gained momentum and was able to expand to other US territories and later to other countries across the world (Pendergrast 2013).
The idea to start Coca-Cola, Australia took root in 1917 when an accountant in Perth applied for rights to start a Coca-Cola company, but the dream came true with the establishment of the first bottling plant in Sydney. In 1937. The breakthrough for the company happened when the Woodruff, the Firm’s president decided to supply the US troops with Coca-Cola products. After the world war, the company issued franchises and became the gradually became the behemoth it is with over 240 varieties of beverages and a huge revenue base (Journey Australia Staff 2017).
Situation Analysis
Market Analysis
<Indicate what is happening in the marketplace – use statistics as well>
The US market for the Kombucha health beverage in 2017 was estimated to be worth USD 1.5 billion, and it was expected to grow with at least 17.5% between the periods 2018 to 2023. The market is competitive following the increased consumer awareness and preference for healthy living. People across the industrialised world have realised that unhealthy lifestyles including consumption of junk food and dependence on chemicals to treat ailments are some of the factors contributing to a spike in the prevalence of lifestyle diseases.
The increase in demand for healthy products like Kombucha has seen the entrance of various producers and marketers of the products to supply the products making the market for these products very competitive. Japan and China are the leading lights in the production and consumption of probiotics such as Kombucha, raking in the lion’s share of the USD 14.1 billion worth of revenues from the products (Whithead 2018).
In Australia, the market for Kombucha has grown in leaps and bounds chiefly because Australia is one of the most health-conscious cultures in the industrialised world. Due to the Australians’ obsession with all things health and wellness, the market for probiotics and healthy tea like Kombucha has expanded rapidly. The same love for a healthy living has contributed to the development of a complex and sophisticated health system with top of the range technology.
The first company to produce Kombucha commercially was MOJO followed closely by other companies selling their brands of the product. Kombucha Remedy is a household brand name in the Australian Kombucha market. It is a product by a couple, Emmet and Sarah, who ran into the product while fermenting their daily provisions and took it to the global market. From hawking one bottle a day to local health shops, the product is now sold in most of the major retail outlets in Australia and has even found its way into the UK (Avery 2016).
Macro Environment Analysis
Political Analysis
<Identify major political influences on the marketplace, if any. Use bullet points and make sure to reference your facts>
<Identify major economic influences on the marketplace, if any. Use bullet points and make sure to reference your facts>
Social Analysis
<Identify major economic influences on the marketplace, if any. Use bullet points and make sure to reference your facts>
<Identify major technological influences on the marketplace, if any. Use bullet points and make sure to reference your facts>
Technology affects the way a business communicates with the world, and it is one of the touchpoints with the consumers (Mcdaniel, Lamb, & Hair 2013).
<Identify major legal influences on the marketplace, if any. Use bullet points and make sure to reference your facts>
Company Analysis
<What are three major positives regarding the company/brand. Use bullet points>
<What are three major negatives regarding the company/brand >
<One-two sentence summary of the company> The Coca-Cola Company is one of the biggest beverage companies in the world with presence in many countries across the globe. The company specialises in the production of and distribution of soft drinks across the world, and it would be easy to incorporate healthy beverages like Kombucha in its ranks. Using its presence in the Australian market, the company would use its existent distribution network to reach the prospective consumers.
Competitor Analysis (Armstrong 2019)
The market for Kombucha has grown in recent mainly because Australia is one of the most health-conscious cultures in the industrialised world (Evans, 2018). Due to the Australians’ obsession with all things health and wellness, the market for probiotics and healthy tea like Kombucha has expanded rapidly. The same love for a healthy living has contributed to the development of a complex and sophisticated health system with top of the range technology.
The first company to produce Kombucha commercially was MOJO followed closely by other companies selling their brands of the product. Kombucha Remedy is a household brand name in the Australian Kombucha market. It is a product by a couple, Emmet and Sarah, who ran into the product while fermenting their daily provisions and took it to the global market. From hawking one bottle a day to local health shops, the product is now sold in most of the major retail outlets in Australia and has even found its way into the UK.
The two companies, MOJO and Kombucha Remedy are current indirect competitors to the Coca-Cola Company beverage products, but once it decides to get in the Healthy beverage products niche, they will turn to be direct competitors.
Competitive market Summary
|
Competitor |
Target Market |
Product |
Price |
Promotional |
Distribution |
Strength/ |
|
Competitor A MOJO |
Primary Target Market Kombucha beverages |
Primary Product Attribute Healthy beverage products |
Price |
Primary Promotional Strategy Online Word of mouth Traditional media |
Distribution Strategy… Through retail outlets including Walmart |
Main Strength Early head start in the beverage market Main Weakness/s It does not have a big budget to spend on advertising |
|
Competitor B Kombucha Remedy |
Primary Target Market Healthy beverage market |
Primary Product Attribute Healthy alternatives to carbonated and sweetened drinks |
Price |
Primary Promotional Strategy Social media Word of mouth Traditional media |
Distribution Strategy… Through retailers like Walmart |
Main Strength Has made a breakthrough in the health beverages sector Has been able to venture abroad Main Weakness/s Has only one line of products |
|
Competitor C |
Primary Target Market |
Primary Product Attribute |
Price |
Primary Promotional Strategy |
Distribution Strategy… |
Main Strength Main Weakness/s |
|
Competitor D |
Primary Target Market |
Primary Product Attribute |
Price |
Primary Promotional Strategy |
Distribution Strategy… |
Main Strength Main Weakness/s |
|
Competitor E |
Primary Target Market |
Primary Product Attribute |
Price |
Primary Promotional Strategy |
Distribution Strategy… |
Main Strength Main Weakness/s |
Consumer Analysis
The main consumers of Kombucha tea are the vegetarians and other health-conscious individuals. Kombucha tea is one of the health products touted to have many benefits to the consumers including treatment of some ailments and boosting the immune system. Other groups that consume the product are the older generation and people who are unwell. The old and the ailing use the tea as medication and for boosting their immune system. The young consumers mainly purchase the Kombucha tea both as natural remedies for their ailments or as stimulants. Most of the consumers browse the internet to search for the availability of the product and may also order for the products online. The older generation mainly purchases the tea through the various retail outlets such as Walmart (Boag 2008).
SWOT Analysis (Pickton, Masterson, & Kavanagh 2003).
What are the key recommendations you would make for this company or brand after analysing the market, competitors and consumer? What are the key opportunities you have identified?
The Coca-Cola Company has various Strengths which it can leverage to have a firm foothold in the healthy beverage market in Australia. First, the company has a dormant market share in the beverage market. Out of the 600 billion consumed daily across the world, it supplies 3.2% of it. Secondly, the firm has a diversified Product portfolio and produces and distributes over 500 different products including drinking water, carbonated drinks, Tea and coffee and energy drinks. Third, it has the largest advertising budget in the beverage industry. In 2017.
the Coca-Cola Company spent USD 3.958 billion which was more than any other beverage company. Weaknesses. With all these strengths, the company can easily overcome its weaknesses including the fact that it depends on beverages alone which essentially means that it lacks in diversification. The one weakness that the company can struggle to overcome is the fact that it mainly produces sweet carbonated drinks and it is yet to find healthy alternatives. At the same time, the company is in a position to exploit the opportunities available to push its health beverages. Coca-Cola Company global presence and brand identity give it a good platform for introducing new products in its ranks. Also, the company is highly profitable allowing it to maintain its market share through advertising.
On balance, the Coca-Cola Company is well positioned to enter the healthy beverage industry in Australia either by producing its variety of Kombucha tea or partnering with the firms already producing the same in Australia. It would be advisable for the company to get into a business arrangement with an existing beverage company rather than producing its brand, which would be viewed with suspicion as the company is not known for producing healthy products.
Reference List
Aaker, D. A. (2014). Strategic market management. Hoboken, New Jersey : Wiley
Armstrong, G. (2019). Marketing: an introduction. Harlow, England ; New York : Pearson
Australia. (1989). Composition of foods, Australia. Canberra: Australian Government Pub. Service.
Avery, L. (2016). Living tea: healthy recipes for naturally probiotic kombucha. London : Ryland, Peters & Small.
Baines, P., Fill, C., & Rosengren, S. (2017). Marketing. Oxford : Oxford University Press,
Boag, S. (2008). Personality down under: perspectives from Australia. New York, Nova Science Publishers. https://public.eblib.com/choice/publicfullrecord.aspx?p=3018290.
Evans, F. (2018). Fermented probiotic drinks at home: make your own kombucha, kefir, ginger bug, jun, pineapple tepache, honey mead, beet kvass, and more.
Fleisher, C. S., & Bensoussan, B. E. (2015)Business and competitive analysis: effective application of new and classic methods. Upper Saddle River, New Jersey: Pearson
Journey Australia Staff. (2017). One Small Idea: How Coca-Cola Became an Aussie Phenomenon. [Online] The Coca-Cola Company.
Leeds Metropolitan University. (2010). PESTEL
Mcdaniel, C., Lamb, C. W., & Hair, J. F. (2013). Introduction to marketing. Australia, South-Western/Cengage Learning.
Palmer, A. (2012). Introduction to marketing: theory and practice. Oxford : Oxford University Press
Pendergrast, M. (2013). For God, country and Coca-Cola the definitive history of the great American soft drink and the company that makes it. New York, NY, Basic Books.
Pickton, D., Masterson, R., & Kavanagh, M. (2003). Introduction to marketing. Maidenhead, McGraw-Hill Education.
Russo, I., & Confente, I. (2018). Customer loyalty and supply chain management business-to-business customer loyalty analysis. New York: Routledge.
Schaefer, A. (2011). An introduction to business studies. Book 4,
Whitehead, R.J. (2018). Brands queue to enter Australia’s Kombucha crazy market but where are the globals? [Online] Food Navigator
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