Question

1. Why did TCCC (The Coca-Cola Company) make the decision to develop and launch Coke Life? What external and internal factors led to that decision? (10 pts) Do additional research into the success of this product, how has it performed?

Answer 1

Coca Cola was established in 1886. The Coca - Cola Company is the world's largest beverage company, refreshing consumers with nearly 500 sparkling brands. The company owns 4 of the world's top 5 non alcoholic sparkling beverage brands: Coca Cola, Fanta, Sprite and Diet Coke

Why did TCCC (The Coca-Cola Company Introduce Coke Life

The market for Non alcoholic drinks were increasing suddenly and people were going towards a healthy way. The market for drink sweetened with natural resources were increasing due to more health conscious consumers that followed a balanced lifestyle and had the need for a low calorie and tasty beverage option. Thus the launch of Coca-Cola Life was to create anew taste beverage drink that consisted of stevia leaf extract, in order to penetrate amarket of adults following a health concious lifestyle.

Product Life Cycle Product extension Sales Maturity Decline Growth Introduction Time

The internal factor were TCCC reaching maturity thus decreasing company revenues and tried experimenting with a new product to beat the product life cycle.Also it was a strategy to cope up with the 'sugar tax' equivalent levied in certain countries. External Sources of this decision was globally increasing scientific and legislativeissues regarding the side effects of consuming beverages, like obesity, diabetes, toothdecay, etc.

Target customer segment of Coca Cola Life were people that valued sweet taste asfar as their individual health, those who were looking for a no sugar drinks. CocaCola life was positioned as a unique drink consisting 100% of natural stevia leaf thatwas a safe alternative of sugar that was not harmful for one’s health.

Coca Cola Life Featured as

- Great tasting Cola with fewer calories , sweetness from natural resources

- 1st beverage sweetened with Stevia Plant Extract

- 36% less calories, 27 KCAL

- 38% less sugar than regular Coke

SWOT analysis of Coke Life

Strengths

- Healthier due to the addition of Stevia

- One of the first soda with Stevia

- Low calorie alternative to conventional Coca Cola

Weakness

- Coca Cola Life is in competition with other coca cola products

- Stevia products do have a peculiar taste. there are chances of a difference in taste and credibility loss due to presentation & design. as green is for life and red is for death

Opportunities

- Coverage of Mega trends like 'Health Conciousness, Healthier Life' with Stevia

- Expanding the target group on the basis of a new alternative to the previous Coca Cola products

- Image Enhancement

Threats

- Declining soft drink industry

- people are getting more health concious

Performance Issues

Problem with sales

At the time of the launch, the new product Coca Cola Life it was accepted very well, but a year after the launch, rapid fall of sales was observed. In the UK in September 2014 the product was well received when it launched. Since then however sales have headed downwards. According to the marketing insight company IRI just 1.1 million pounds of Coke Life was sold in November 2015 down from 2.6 million pounds in the same month in the previous year. Indeed, in every month of 2015 barring April and May Coke Life did was than in the month before.

Problems with branding

Acknowledging healthy preferences of people, the TCCC released Coca Cola Life with green label and the word “Life” written on it, little did they know, by doing this they are contradicting the whole point of Coca-Cola brand, reason being if green label means Life, in the contrary red means Death.

Another problem related with branding of Coke life is there is not enough information about stevia leaf on the label of it, except for the mention of “vegetable extract”. It is not enough for consumers who are health conscious to be satisfied with.

Problems with functionality of the product and target

In the beverage industry, it is important for drinks to have a certain function. For instance, green tea is for health, energy drinks for boost of energy, coffee for fatigue, but it is not clear what exactly Coke Life serves for. The target market of Coca Cola Life is mainly mature people who are health conscious. Coca Cola Classic is also targeted for young and mature people. So, in that case, new Coca Cola Light will become the opponent of Coca Cola Classic, and this will lead to cannibalization of products. Because people who are health conscious would never opt for drinks like coke, and those who don’t care about health would prefer the proper taste of coke which is in Coca Cola Classic. This would mean the further decrease of sales for Coca Cola Light.

Another problem of TCCC is staying behind the innovation and not foreseeing customer demand when compared to its competitors. While the main opponent of TCCC, Pepsi Co introduced its new low calorized product Pepsi Next in 2012, Coca Cola Company did it in a year, in 2013, and even had distributed it much sluggishly all over the world. So, until TCCC launching its new product to the market, the Pepsi Co will have already been occupied the market with its new product. The same mistake happened for Coke Zero, while Pepsi Co introduced its diet version Pepsi Max in 1993, the TCCC did it only in 2005.

Although it being branded as a healthy product, it is not very healthy considering the fact that aside from sugar it contains phosphoric acids just like every other product in Coke range. The problem with Coca Cola Life is that many people will see the green packaging and the pretty leaf artwork and might think they are choosing a product which is healthy. Whilst, yes, the ingredients in Coca Cola Life are derived from ‘natural’ sources, they’re not a great choice for the health-conscious people.

Bitter aftertaste

In humans, taste buds on the tongue contain receptors to identify sweet and bitter chemical compounds. There is only one receptor that identifies sweet tastes, but there are 25 different receptors for bitter tastes. Chemical compounds found in the stevia plant interact with both the sweet and bitter receptors, leading to its signature bitter aftertaste which is unpleasant.

Performance & Success

As it turned out, one of the major mistakes which the company had created, releasing this product, was following: consumers were not properly aware of the usefulness of extract - stevia. People reacted to this sweet very negatively and many preferred coke classic. One of the decisive factors that would change people's attitudes to this sweetner - informing customers about stevia. Coca cola life's marketing strategy as a healthy coca cola did not really fulfill its expected success, coca cola life would be benefitted if the brand image was changed from healthy to natural. Coca Cola Life was discontinued in few countries and in countries like New Zealand, Australia its name was changes to Coca Cola Stevia - No sugar.