Due to obesity issue that has become progressively serious in America, public, authorities and many anti-obesity associations realizes that sugary drink is the most important factor. All of them want to cut down or command fleshiness among assorted groups particularly juvenile fleshiness.
This proposal was commissioned to explicate why Coca Cola should switch market focal point on advancing healthy life style and how to accomplish this. The research draws attending to four grounds. First an addition in consumer wellness consciousness was accompanied with a shrinkage in the sugar drinks market. Obviously consumer demands have been changed. Second the market of sugary drinks is be givening towards impregnation. Third governmental ordinance and prohibitions will restrict the development of company. Last, unhealthy advertizement scheme has led to public inquiring and discontent.
Based on the current state of affairs of Coca Cola, this proposal gives some suggestions to assist Coca Cola maintain the dominant function in drink industry. Increasing the non-sugar DINKs ‘ merchandising can and will catch up with the altering consumer demands. Company should follow the authorities ordinance and prohibitions by cut downing the sugar content of bing products.it besides will better company image and derive the support from authorities. Meanwhile the acceptance of a promotional scheme that focuses on non-sugary drinks can increase trade name influence and consumer trueness.
The research evidently shows that the market chances of non-sugary drinks will give Coca Cola a rare chance.
Coca Cola has been paying attending to sugary drinks for more than 50 old ages. Nowadays Coca Cola played the dominant function in drink industry. At the same clip, sugary drink has become the chief merchandise of drink. The company is besides gaining from sugary drinks. But now the external environment is changed, Grynbaum ( 2012 ) pointed out that the addition in metropolis fleshiness rate over the past 30 old ages has been attributed to sugary drinks. Jules Hirsch of Rockefeller University in New York besides asserts that people immoderately intake sugary drinks will take to altering of fleshiness cistrons. The cistrons will do serious fleshiness ( Marchione, 2012 ) . Therefore populace has realized that sugary drinks are harmful for their wellness and tends to purchase non-sugary drinks. With the populace ‘s discontent and oppugning over sugared drinks, authorities and anti-obesity protagonism groups make attempts towards new ordinances that efficaciously ban sugary drinks ‘ gross revenues every bit good as advertizement in public countries. For blink of an eye, the New York City has banned sale of large sized of sugary drinks ( Grynbaum, 2012 ) .
As the leader of drink companies, it is clip to switch our focal point towards advancing healthy life style. The company can switch chief selling from sugary drink to non-sugary drinks and cut downing the sugar content of bing merchandises every bit good as altering the current advertizement scheme.
3. Discussion of factors
3.1 Changing consumer demands
Consumer demands is the average factor that affects gross revenues. In recent old ages, the disadvantages of sugary drinks are more and more obvious. Sugar drinks have been proven to incorporate a batch of sugar and hence Calories. Excessive consumption can and will take to fleshiness and other more serious diseases in the hereafter ( Grynbaum, 2012 ; Marchione, 2012 ) . Two-third of Americans is confronting obesity issue. This is non a secret any more.
Consequently many people have started to actively pull off their weight and alter their life styles. The consumer needs has been changed by the rise in people ‘s consciousness about the negative effects of sugary drinks. The analysis for Coca Cola on Trefis ( 2012 ) besides pointed that “ increased focal point on the negative wellness impacts of carbonated drinks might gnaw some market portion ” ( p. 6 ) .
For adolescents ‘ market, the state of affairs is worse than grownups, because kids fleshiness has become the one of the top societal issues in America. Parents realized that adolescents should be off from sugary drinks every bit far as possible. At the same clip, “ schools are taking sugary drinks from peddling machines at a faster gait ” ( Strom, 2012 ) .
Although there is yet to be monolithic alteration in consumer disbursement wonts, this is the beginning of tendency that must be impacting the future profitableness of the company. PepsiCo, the first rival of Coca Cola, has used a blend of sweetenings to present half Calories of standard Pepsi to follow the altering consumer demands. Coca Cola should be cognizant that consumer demands is the way of each drink company. Meanwhile, Coco Cola should remain at a prima place. Thus the company must more closely follow the consumer demands than other rivals.
3.2 Saturated market for sugary drinks
Coca Cola Company is the company that foremost entered of sugary drinks industry. Coca Cola has been concentrating on market of sugary drinks for a long clip. Due to enormous success of Coca Cola, a batch of drink companies decided to come in sugary drinks market one after another. Due to statistics, the entire figure of drink companies has doubled from 1991 to 2001. The competitory force per unit area is higher than earlier.
At the beginning, sugary drinks were luxury goods. But now consumers have higher buying power and more picks, the monetary value war is ineluctable. Worsening soft drinks monetary values will take to loss of net incomes, meanwhile profitableness can merely be increased through greater efficiency in the supply concatenation or through more-effective merchandise publicities, which normally require considerable outgos. There is a good ground to be concerned with the current state of affairs.
Traditional advertizement is the chief promotional scheme for all the drink companies. However, sugary drinks are dominant merchandises in drink industry. In kernel, Coca Cola pays more attending to advancing sugary drinks. The figure evidently shows that the advertisement costs of Coca Cola are higher than all other companies combined.
But the pie chart shows that the spreads between Coca Cola and rivals are non proportionate with the difference in advertisement disbursement. Coca Cola has invested astronomical amount of money into the sugary drinks market but the increasing of market portion is non significant. In other words, the effectivity of sugary drinks ‘ promotional scheme is non every bit nice as expected. The rivals have impacted the function of Coca Cola in sugary drinks market.
3.3 New ordinance and prohibitions & A ; high revenue enhancement of sugary drinks impact company net income
With the populace ‘s discontent and oppugning over sugared drinks, Walt Disney Co. and authorities of New York City have enacted the prohibition on the gross revenues and advertizement of debris nutrient and drink to undertake fleshiness job ( Chmielewski, 2012 ; Grynbaum, 2012 ) .
These new ordinances introduce a minimal conformity criterion in footings of the highest allowable sugar content. Meanwhile, because sugary drinks have been identified as unhealthy merchandises, soft drinks companies are easy marks for authoritiess to raise revenue enhancement from. For instant, at the beginning of 2012, France imposed a sodium carbonate revenue enhancement. But I should indicate out that France is non the lone state to enforce such a revenue enhancement. In 2011, Hungary legislated high revenue enhancements upon points with high fat, salt and sugar contents ( Analysis for Coca Cola, 2012 ) . Until now, a big figure of developed counties authorities have implemented new revenue enhancement policy of sugary drinks. They think that revenue enhancement policy of sugary drink is an effectual manner that solves obesity issue. It is non improbable that US authorities would enforce a similar revenue enhancement in the hereafter as good.
Due to Coca Cola ‘s current merchandise construction, most of merchandises belong to the class sugary drinks. The high revenue enhancement of unhealthy drinks would be heavy load for Coca Cola. By cut downing the sugar content of bing merchandises, the company will follow the authorities new ordinance and prohibitions. In this manner, Coca Cola can besides avoid the high revenue enhancement of unhealthy merchandises. Therefore the net income of company will be increased.
3.4 Corporate image
Nowadays kids fleshiness has become more and more serious in America. But sugary drinks are still to a great extent promoted to immature people on telecasting and wireless.
Although the per centums of non-sugary drinks ‘ advertizements have been increased, it still can non be compared with sugary drinks and energy drinks. The spread is still really obvious. “ Coca Coal and other soft drink companies have increase targeting of immature people in merchandises advertisement ” ( LoGiurato, 2011 ) . For Coca Cola, this statistics will straight take to public inquiring and discontent. It will damage the company image. It is clip to alter advertisement scheme. The current advertisement scheme is oriented towards good gustatory sensation. But healthy advertizement can and will allow the consumers believe that our merchandises are so healthy and incapable of taking to fleshiness and other diseases.
Coca Cola is the largest company in sugary drink market. The alterations of Coca Cola, the market leader in the drink industry, will take to the new promotional way for all companies to follow. After that authorities will back the new concern scheme of Coca Cola. Therefore this is a rare chance for Coca Cola to maintain the dominant function in drink market. This alteration will take to Coca Cola remain off from the negative intelligence. Meanwhile it will assist Coca Cola to increase the trade name influence.
Coca Cola should deeply understand the significance of consumer demands and can non maintain concentrating the concentrated market. Promoting non-sugar drinks is a sustainable manner to maintain the dominant function in drink industry. A company with good corporate image can non merely acquire higher consumer trueness, but besides gain the support from authorities. In decision, these facets will construct the nucleus fight of Coca Cola.
4.1 New selling portion
The company can non instantly switch marketing portion to non-sugary drinks. First, Coca Cola can take some of provinces in America that are regarded as experimental markets to transport out pilot trials. To diminish merchandising of sugary drinks and increase merchandising of non-sugary drinks, after that staffs of Coca Cola market section should randomly sample gross revenues position of these provinces and do a elaborate study. If the decision is acceptable, subsequently Coca Cola can advance this scheme to all provinces of America.
4.2 Proper sugar content of bing merchandise
With cut downing the sugar content of bing merchandises, Coca Cola should make a study about tasting of “ new merchandises ” in order to happen a proper sugar content that ne’er impact gustatory sensation of current merchandises and ne’er travel against governmental ordinance.
4.3 Supportive policy from authorities
After following the new authorities ordinance, Coca Cola should closely co-operate with authorities every bit far as possible to achieve relevant government-approved wellness enfranchisement. At the same clip, discriminatory revenue enhancement policy that aims to advance non-sugary drinks and low-sugar drinks should be applied. Although altering the concern scheme, Coca Cola should have support from authorities every bit far as possible.
4.4 Promotional scheme
Coca Cola should make new advertizements to foreground natural and alimentary characteristics of our merchandises and smartly advance non-sugar merchandises and low-sugar content drinks through new promotional runs. Meanwhile, the company should concentrate on kids obesity issue and actively back up programmes about contending against kids fleshiness.
Word count: 1794