Marketing strategies: CoolDrink Beverage case study

Individual Project Report

This assignment is worth 100% of the marks for this module. Please read the CoolDrink Beverage Case study and answer Question 1 provided on page 2.

How marks are awarded:

Your report should have all the main sections of a marketing report, which could include:

1. EXECUTIVE SUMMARY (approximately 5% of marks)

2. INTRODUCTION (approximately 4% of marks)

3. MARKETING AUDIT (approximately 30% of marks)

• Macro-environment (PESTEL analysis)

• Micro-environment analysis (customers, competitors)

• SWOT analysis

4. STRATEGIC RECOMMENDATIONS (approximately 54% of marks)

a) Marketing objectives

b) Strategy

• Target market(s) focus

c) Marketing mix decisions

• Product, Promotion, Price, Place or the mix from the simulation Brand, Choice, Price, Green Image, Convenience, Promotion and People

d) Marketing control (see Jobber and Ellis-Chadwick, 2016, Chapter 22, pp. 766-774)

5. Conclusion (approximately 4% OF MARKS)

6. Reference list (approximately 3% OF MARKS)

The 3,000 word count excludes:

Executive summary,

• Tables,

• Figures,

• Cover page,

• Reference list,

• Appendices (maximum 5 pages – remember your manager is unlikely to read all the information in the appendix, so make sure all the important details to develop a justification for your recommendations are included in the body of the report).

*Please note: Your report does not have to follow this exact structure. You may think of other potential headings to structure your report.

Make sure you do not go over the 3,000 word count, as your manager is extremely busy and prefers reports that are concise. Your promotion will depend on the success of your proposed marketing strategy.

There are strict penalties for exceeding the word limit (5% mark deduction for every 100 words over the limit, or part thereof, and that starts at 1word over)

The appendix can be no longer than 5 pages. As the examiner may not refer to all of the appendices, you should not include any essential material in the appendices needed to understand your report.

Individual Assignment – Question 1 is COMPULSORY and must be attempted.

This question is based on the CoolDrink Beverage case study given below.

1. You have been asked by the Chief Marketing Officer of CoolDrink Beverage, Eric Watts, in your role as an external marketing consultant, to propose a marketing plan (Marketing audit, Marketing Strategy, Marketing Objectives, Implementation and Control; all sections carry equal marks) for CoolDrink Beverages new product VitaWater. (100%)

Clearly indicate any assumptions you make to supplement the case material where necessary.

(100% of marks)

CoolDrink Beverage Case Study

CoolDrink Beverage – founded in 2001 – is a London-based company that markets niche products in the beverage industry. Rather than directly challenging established beverage giants like the Coca-Cola Company and PepsiCo, the CoolDrinkhas focused on the fringes of the industry. Its CoolDrink Soda brand hit the market with six unique flavours in glass bottles. The company now markets dozens of CoolDrink flavours, many unique to the brand. Over the past few years, CoolDrink has successfully introduced new lines including energy drinks, natural juice drinks and iced teas.

CoolDrink Beverage has grown its business revenue every year since it was founded. In the most recent year, it achieved £200 million in revenue and net profit of £15 million. It currently employs more than 500 employees. The current market for the company is highly competitive with established multinationals on one side and small regional brands with niche products and unique flavours on another. In this competitive situation, the performance of the company in last five years are as below:

CoolDrink’s Performance over the last 5 years (in millions)

2014

2015

2016

2017

2018

Sales Revenue

143

165

181

192

200

Cost of Goods Sold

75

91

98

103

122

Fixed Cost

7

8

9

10

10

Advertising/Promotion Spend

35

38

45

49

53

Net Profit

26

28

29

30

15

As part of its future growth strategy, CoolDrinkBeverage has plans to introduce new lines of beverages to continue to take advantage of emerging trends in the industry. Currently, it is preparing to launch a line of vitamin-enhanced waters called VitaWater. Although the bottled water market is maturing, the functional water category – and more specifically the vitamin-enhanced water category – is still growing. VitaWater will be positioned by the slogan “Live Healthy” indicating that the brand offers more in the way of desirable product features and benefits at a competitive price. CoolDrink Beverage is taking advantage of its existing experience and brand equity among its loyal customers base of millennials who consume its Chill Soda soft drink. VitaWater will target similar millennials who are maturing and looking for an alternative to soft drinks and high-calorie sugared beverages.

For years, developed countries have preferred more carbonated soft drinks than any other bottled non-alcoholic beverages. However, concerns over health and obesity have taken the fizz out of the soda market and sales have either stagnated or declined in few markets for the past few years, UK market being no different. Meanwhile, bottled water consumption is on a growth trajectory that shows no sign of slowing down. Currently, the average person in the United Kingdom consumers more than 40 litres of bottled water every year compared with 53 litres for carbonated soft drinks. The market is growing 7 per cent year-over-year and more than doubled in last 12 years. A £11 billion market, bottled water sales in the UK is expected to increase by 35 percent over the next five years. Already ahead of milk and coffee, experts predict that bottled water sales will surpass carbonated soft drink sales within next few years.

Competition is more intense now that ever as the industry consolidates and new types of bottled water emerge. The UK market is dominated by three global corporations and one local company. With more than 50 well-known brands, the top five UK plain water brands are Highland Spring, Evian, Buxton, Nestle Pure Life and Volvic. They are collectively responsible for 30% of total water drink sales. While top 5 water plus brands – Volvic Touch of Furit, Calypso Clear, Tredrwen Essence, Drench Juicy and Perfectly Clear – account for 5%. Flavoured, functional and juicy waters are forecast to expand the market.

While bottled water as a whole is strong but maturing slowly, the market for the subcategory of functional water is even stronger, growing by 14 percent for the most recent year. In the current market environment, functional waters have thrived based on the promise of incremental benefits for health-conscious consumers based on the infusion of ingredients such as vitamins, minerals (including electrolytes), herbs and other additives. Functional waters, therefore, carry the standard benefits of taste and convenience with an increased appeal to lifestyle and well-being. Most functional waters are sweetened and flavoured and are distinguished from sports drinks that have the primary purpose of maximizing hydration by replenishing electrolytes.

The Chief Marketing Officer, Eric Watts, currently handles the marketing strategy backed by a small team of 7 people looking at market-product expansion efforts of CoolDrink. It is more than 4 years since last new successful product was launched by CoolDrink and slowly the contribution of new products to total revenue at CoolDrink is decreasing. This has detrimental effect as the core TG is moving to new types of nice non-alcoholic drinks not served by the company.

In recent months, Eric has been giving serious thoughts to the strategic avenues open to the company and especially to the possibilities that might exist in the newly emerging functional drink category. He believes that the company needs to move away from dependence on the current products and have bold plan for organic growth. At the same time, he knows the challenges ahead and realizes a need for strong marketing plan to forge ahead. To break into this market, dominated by huge global corporations and littered with dozens of other small players, CoolDrink Beverages must carefully target specific market segments with features and benefits valued by those segments. It should also focus on product development, distribution, pricingand launch plan to establish itself as an emerging player in this niche segment.
just one more thing all of the work should be in Harvard style writing

 

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