Rethinking Brand Architecture In The Industry: A Case Study Of Coke Zero In Australia

8 Marketing Mix Concepts and Their Application on Coke Zero

Discuss About The Rethinking Brand Architecture On Industry.

Coca-Cola first launched its coke zero in Australia in 2006. The coke zero was launched with a TV ad that was received negatively lasting for only a month and a half when it was withdrawn due to complaints that it was a model of bad behaviour (Cox, 2009). The ad was removed from the TVs completely and does not appear on Australia online today (Lambooy, 2011). The eight marketing mix used by the Coca-Cola Company in its Coke Zero are price, product, promotion, people, place, packaging, processes and physical evidence (Lambooy, 2011). The direct Coca-Cola zero competitors are the soft drinks and energy drinks (Uddin, 2011). They include Pepsi which just like Coke Zero has powerful marketing and sales policies making the two fight tooth to nail. The two has a wide distribution and share the highest market share despite the country being sold (Trudel& Argo, 2013). The ads on each of these brands show heightened rivalry between the two. Coke Zero is a male drink while women would prefer using Coke Diet. This report will focus on Coke Zero in Australia and give recommendations on the same brand.

In the marketing mix, the product is categorised into two aspects which are core product and known to be the benefits offered by the products to its consumers. The additional features such like branding, positioning and packaging also are the benefit a customer receives from the product (Thain& Bradley, 2012). Product positioning refers to as a form of marketing presenting the benefit of that particular product to the customer in target (Trudel& Argo, 2013). Focus groups and researches help to know which features would be more appealing to the target audience.

Branding is the other feature used on products to help differentiate the product from those of competitors. Brand is identifiable through its products’ logo and name (Lam et al., 2013). For instance, Coke Zero has an original logo with features in red Coca-Cola’s logo positioned on a black background, and Zero appears written underneath lower case (Davis, 2017). Coke zero has a high standard and quality as it mother company Coke Zero Company would give it the highest attention (Davis, 2017). Customers buy this product due to a high quality and high standards from the Coke Zero Company previous products.

The third feature of a product advantageous to a target customer is packaging. It is useful in targeting a market through informing and promoting the existence of the products to the customers (Nobel, 2013). Coke Zero was designed to attract young men with its classy packaging with red and black to which men would not see anything ‘girlish’ in it (Nobel, 2013). This product has a helpline for complaints which dissatisfied customers may use to give feedback on features they don’t like add something to it.

Promotion

Coke’s products also appear in varieties for the customer conviction that it caters for their needs. And these varieties include: product size, for example, Coca-Cola Zero Can 375ml, Coca Cola Zero Bottle 2L etc. (Trudel& Argo, 2013).

Promotion is simply a design creating awareness of the product existence, its benefits and telling prospective customers where they can get it from. Promotion also aims at persuading customers to try the new product or continue using the existing company’s products (Thain& Bradley, 2012). Promotion in marketing mix used by Coke Zero includes Sales promotion which is the process of persuading the potential customers to buy a product(s). This is a short-term design a company uses to increase sales.

Advertising is the most expensive but the best in increasing sales through reminding customers of the product’s existence. It is a means of communication designed to persuade customers in buying the products (Drewniany, &Jewler, 2013). Coke Zero uses various types of advertising to promote its product, and they are Television, radio, newspaper advertisement, internet and billboards (Drewniany&Jewler, 2013). These types of advertisement are meant to portray Coke Zero image positively in public.

People

Below the line promotion is another form of advertising which Coke used in the past in first days of Coke Zero entry into the market. Coca-Cola offered four million free samples within four weeks to promote coke zero which was an expensive way of winning new and already existing customers(Hua et al., 2017).  

Pricing

The demand and supply of products highly depend on this important aspect of market mix. The price of a product influences consumer’s decision to purchase or not. It also determines the profit the company will make as well as the number of sales in the company (Thain& Bradley, 2012). Coke Zero, for this reason, has prices suited to all types of their customers. There are methods which determine the price of a product, and they are cost and competition based.

Coca-Cola applies psychological pricing strategy where they lower amount in ones or decimal point e.g. from $2.60-2.59 and make client think the price is below, promotional pricing strategy, Segment pricing strategy and discriminatory pricing strategy(Esteves, R. B. (2009), when customers are paying for the product(Luis Méndez, Oubina, & Rubio, 2011). Promotion of the product, advertising and transportation are all inclusive in the final price in Coke Zero.

Competition based pricing method looks at Coca-Cola’s product competitor(Taylor, Satija, Khurana, Singh, & Ebrahim, 2011). Pepsi has ever been the main competitor of Coke Zero though Coke Zero came later and the competition. Pepsi price has been used by Coca-Cola to determine its Coke Zero prices.

People

Increased demand in Coke Zero has enabled Coca-Cola to determine a readily and honest prices accepted by all its customers. Coke Zero is always aware of the importance of pricing as it determines the amount of sales and profits it makes. Coke tries to set a price acceptable by all as well as making sure profits will not be affected(Strebinger, 2014).

Coke Zero also used penetration pricing strategy through setting extreme lower prices for their products compared to those of competitor Pepsi Max to gain market share. Price point strategy was/is also used by Coke Zero to make customers aware of their products’ prices and even today.

Product size has also been used to determine the price of the Coke Zero product. For instance, depending on the size as follows Coke sells each size at its price. Coca Cola Zero Can 375mlCoca Cola Zero Can 375ml 1.08, Coca Cola Zero Bottle 600mlCoca Cola Zero Bottle 600ml 3.67, Coca Cola Zero Bottle 1.25LCoca Cola Zero Bottle 1.25L 2.68, Coca Cola Zero Bottle 2L, Coca Cola Zero Bottle 2L 3.90 etc.

Place

Place is the distribution and the way of distribution of products to the market. Coke Zero has been made available worldwide due to it belonging to Coca-Cola Company. The intermediaries are used in the distribution of products to different places to link the product and the final customer (Thain& Bradley, 2012). Products reach final customers through various distribution channels (Strebinger, 2014).

The channels which are mostly used by Coke Zero to reach customers are producer to consumer, producer to retailer to consumer and producer to wholesaler to retailer to consumer (Noel, 2009). Coke zero minimises its cost of production while maximising sales through the use of intermediaries (Cox, 2009). With intermediaries, Coke Zero has been made available in shops, petrol stations, gym places, etc. which Coca-Cola itself would not be able to do as it cannot operate small shops (Thain& Bradley, 2012).

Physical evidence is a marketing mix. Physical evidence means, that product which customer can evaluate and assess through touching or seeing so that they can buy it. Physical evidence can only be limited to product and not applicable in service. Coke Zero is packed in a can which helps customers to evaluate it before they make decision to buy as a result of how they get attracted(Noel, 2009). Physical evidence in Coke Zero is presented through: physical environment- where the customer would go and get to buy and drink the product(Strebinger, 2014). Ambient condition is comprised of temperature, smell and sound, color, music and noise(Strebinger, 2014). The Coke zero ambient condition isits color(Muller, & Shachar, 2009). It is mostly black since it is men’s drink. The figures below shows the attractiveness of women drinks in white color compared to men’s drinks that only paints black and unappealing(Avery, 2012).

Pricing

The figures below represents the colors of coke diet and coke zero packaging.

Fig.1The figures here represent different packaging of coke zero and coke diet

Coke Zero is the product of Coca-Cola manufacturer in Westmead, a company which has more significant advancement in machinery and improvement in their factories which bottles 800 Coke Zero bottle in a minute by use of specialised “Air Veyor” belts which maximises efficiency. While there are 800 Coke Zero bottles done in one minute, there are other 1700 in process per minute (Karthik et al., 2013, June).  These types of warehouses help the company reduce employment cost since very few workers are needed to supervise the machine as they work (Karthik et al., 2013, June). Through the use of automatic “roll on roll off” conveyor belt technology to trucks this process the company reduces its wages and increases profits because the driver can load or unload Coke Zero without other laborers.  

Partnership

Partnership is as good as other marketing strategies Coca-Cola uses to increase their competitive advantage in the local and global market. The need for Coca-Cola to exercise corporate social responsibility has made it partner with a number of other organisations to help give back to society and the planet(Panzavolta, 2016). The Company believes that partnership helps it achieve what they cannot achieve singly(Noel, 2009). In Australia for instance, Coca-Cola partners with “The Song Room”, an Australian leading education arts provider. “When I first came across the Coca-Cola Australia Foundation and its grant opportunities what really resonated with me was their mission: to inspire moments of happiness in the lives of young adults,” Caroline said. “It aligns perfectly with the work of The Song Room – it’s what we’re all about.”(Panzavolta, 2016).

Coca-Cola serves over 200 territories and countries worldwide, and they practice corporate social responsibility in each of them. Coke CSR activities are meant to establish sustainable communities. The company spends its 1% of the operating income to various initiatives, programs and causes (Lambooy, 2011). For example, in 2014 Coca-Cola gave $126 million which was equivalent to 1.3% of their operating income (Social, & as a Global, 2014). The money was used to invest in women’s empowerment, education, water stewardship programs, humanitarian and disaster relief programs, active and healthy living initiatives etc. (Lambooy, 2011).

The important aspect of CSR can be traced back to 1960s (Stores &Carryouts, 2016).  Carroll’s 1991 idea of CSR multi-layered into four interrelated viewpoints which were comprised of: economic, legal, ethical, and philanthropic responsibilities.

Pricing Policies

He stated that primary goals of CSR is to help business increase profits and by providing goods and services and all the other three viewpoints lies behind this viewpoint(Social, & as a Global, 2014). The second point comprises of legal responsibility a company has on the society (Liu, Lopez & Zhu, 2014). Ethical responsibility has not been categorised into the law only the company is expected to do the right thing reasonably. The year 2000 was multinational’s operations begun to be investigated by the sections of society which made CSR even more complex and source of many companies decision making (Gardner, Dukes III, & Patel, 2014).

Environmental issues, campaigns, scandals etc. that was reported by the said investigations saw a lot of undesirable media attention, which brings questions whether the companies would adopt CSR to repair damage caused by negative publicity (Noel, 2009).

An Indian NGO reported the presence of pesticides exceeding European standard in Coca-Cola in the year 2003 and asked the government to enforce water standards, and the report gained a lot of media coverage and public attention which in turn dropped the company’s revenues. Coca-Cola, in addition, was reported to have polluted water sources, extract a large amount of groundwater, and containing unacceptable levels of pesticides (Pourrezaei et al., 2014).  

The release of 2003 CSE report, led to Coca-Cola losing the consumer trust and reputation as it went through a most extended legal process (Gardner, Dukes III, & Patel, 2014). This led to drop by 40% sales in India and a total annual decline of 15% in sales compared to the previous year which had reported a growth of between 25-30% in sales (Dutta, 2012). The company was very as not interested in peoples’ health welfare rather than just making profit (Liu, Lopez & Zhu, 2014). Due to the repeated publications, the attention caught consumers in the US where the students protested of using Coca-Cola products in 10 universities.

From this explanation, Coca-Cola would try to rebuild its name again through the adoption of CSR. The company would later come up with strategic philanthropy to get intangible paybacks in terms of brand awareness and improved social capital translating into huge profits which is against the principles of CSR (Stores &Carryouts, 2016). Philanthropic or charitable CSR is typically cost the company incurs as it tries to prove to the society of its priority in charitable work (Barnea& Rubin, 2010). The primary goal of CSR is that Company’s managers are purely not tied to the business as they practice the charitable work (Sarich, Zaman&Misra). This means that the sole goal of corporate social responsibility is not intended to increase profits rather than improving peoples’ lives.

Place

Good understanding of CSR is only when the company comes with voluntary CSR with good intents and not making profit. Social pressures at times have led Coca-Cola breach this philosophy to practice CSR instead of doing it willingly (Barnea& Rubin, 2010). For instance, activist, civil, social organisation and journalists pressure Coca-Cola to try and improve the environment or have social consequences (Stores &Carryouts, 2016). After companies have been fined or penalised for malpractices, they launch philanthropic campaigns to repair their reputation (Stores &Carryouts, 2016). In conclusion, the CSR is practised in two ways reactive and active practices (Boelsen-Robinson, Backholer&Peeters, 2015). In active practice, the company CSR practice is tied on value and purpose of the people while reactive will only be a response meant to silence protesting voices.

Coca-Cola involved itself with Aqueduct Alliance was showcasing moves to gain back its’ reputation and evade personal liability while preventing future claims on ground waters. This was a reactive CSR against the Indian NGO that claimed excessive consumption of groundwater (Cox, 2009). However, Coca-Cola aqueduct alliance reflects how society can benefit from the rise of corporate movements focusing on addressing ecological concerns (Cox, 2009). This, however, becomes the benefit of Coca-Cola as well. The Coca-Cola Company asserts that businesses and humanitarian organisations help families and children in the developing worlds and as they improve their lives in return the company gains huge profits (Barnea& Rubin, 2010). And since the Coca-Cola Company alone cannot expand business overseas it works together to alleviate illiteracy, poor health (Hua et al., 2017) and poverty is the essential building blocks for families and societies that are stable (Stores &Carryouts, 2016). This is achieved through partnership with other individual donors, a corporate partner like Coca-Cola and its partner from U.S. foreign assistance which allows it to carry its work as it saves children.

In recent times, Coca-Cola has come up with different dialogue on the business role in society which combines “profit and purpose” (Schnall, Zadra&Proffitt, 2010). Their dialogue suggests that 86% of the current and future leaders have a feeling that the company will gain a competitive advantage today and in future by focusing on environmental, societal, and economic value.

a).Internet scenario assessment

Coca-Cola Company should do internet scenario assessment to be aware of the potential it has in the next 5-10 years (Schnall, Zadra&Proffitt, 2010). This will help to determine the growth of the internet in coming years enabling the company to know how they will determine their prices, promotion and placement of their products in the market (Stores &Carryouts, 2016). This also will help in globalisation goals.

Physical Evidence

b).Online presence

For better promotion of Coke Zero Coca-Cola should increase its online existence and postings to allow customers interaction with the company. This will help in getting feedback on their products usages and areas of improvement (Stores &Carryouts, 2016). If other brands like RedBull and Pepsi continues their persistence online has been witnessed some customers may shift to their products disadvantaging it (Davis, 2017). Also by doing so, the company will continue winning more customers online (Drewniany&Jewler, 2013).

c).Activeness on online

The company should continue using online interaction and using helpline for complaints which dissatisfied customers may use in giving feedback on features they don’t like add something to it. This will help the Coke Zero continue getting enough information they need (Lam et al., 2013). This will boost the Company’s knowledge of areas that will need to improve to increase consumer experiences including branding, packaging, product size, etc. (Davis, 2017).

d).Pricing strategies

The company’s pricing strategies have been a big booster to its market penetration, and they should continue inventing more appropriate ways to increase their products awareness which in turn will increase their profits (Stoyanov, 2015).

e).Partnership

The company should partner with organizations that have similar CSR goals to reach more members of the public with quality life enhancing experience (Dutta, 2012). Coca-Cola prides itself with CSR making it important to partner with company with similar goals like The Song Room.

f).Life enhancement

Customers, employees and all the stakeholders should feel the connection with the Coca-Cola brand by the company trying everything in its power to produce products which cater for their needs.

Conclusion

The essential marketing mixes applied by coke zero include promotion, pricing, packaging, people, physical/evidence distribution, process, products and place. These are fundamental Ps the coke zero has used and enabled itself to penetrate a competitive world becoming a globally recognised brand. All the Ps are applied independently to bring better results for the products in regards to customers preferences, benefits and value brought about by the product in their lives. Coca-Cola like other companies has faced challenges of harmful publication which has led the company losing a significant amount of revenue as well as losing customers trust and reputation. The real intent of CSR has sometimes been compromised on the way as the Company would carry it to silence the voices of the people through carrying out charitable work. This paper has provided with the 8ps used by the Coca-Cola to remain intact in the market and whether CSR has well been applied by Coca-Cola for the peoples’ benefits or itself. Corporate social responsibility (CSR) is the company’s approach used to contribute to development sustainability by delivering social economic and environmental benefits for all the stakeholders. Its central role is to promote community welfare and boost peoples’ life.  Coca-Cola is one of the companies that have greatest following globally with over 50 million followers on social media even though its posts may only appear once per week.

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