Question

Coca-Cola Case T he explosion of the market for coffee beverages can be seen in the responses to the mere mention of the name Starbucks. Recent trends in the United States among consumers regarding beverages have notably included both coffee drinks and energy drinks. How do beverage companies that are not typically in the market of coffee beverages compete? Specialty coffee drinks are a $10 billion a year industry in the United States and are expected to continue growing at a rate of approximately 7%. Therefore, targeting those in the group that are the heaviest consumers of specialty coffee drinks would be logical. Coca-Cola has been a part of American culture for over a century. The product’s image is graven deeply in American hearts regardless of consumer segmentation. Using brand recognition, Coca-Cola introduced Coca-Cola BlãK in an attempt to gain a share of the coffee market. From the beginning in April of 2006, Coca-Cola BlãK has been available at supermarkets and convenience retail stores nationwide, in both individual bottles and four-packs. They target adult consumers. According to Coca-Cola North America, “There is no other beverage available today quite like Coca-Cola BlãK. Imagine the refreshing taste of an ice-cold Coca-Cola that finishes with a rich essence of coffee. Only Coca-Cola can deliver that distinct combination of flavors.” Coca-Cola BlãK has the texture of coffee and a cappuccino style that will compete against Pepsi Max Cino. By focusing on the innovative idea of combining coffee with the classic beverage, the company tries to appeal to the wider range of the market as a new category of soft drink. According to Brian Tracy, a business editor at MSNBC, the target market is the Starbucks and Red Bull consumers. Advertising messages with sophisticated and stylish graphics were employed to attract adult consumers. Marketing supports for the new brand began with a teaser television ad, which aired during the live Red Carpet preshow broadcast of the 78th Annual Academy Awards® on ABC. The 15-second commercial titled “POParazzi” presented Coca-Cola BlãK as a glamorous star appearing before throngs of media, complete with flashing camera lights. Beginning the following April in cities across the United States, additional support for the brand consisted of a fully integrated program featuring both traditional and nontraditional media, including television, print, and outdoor advertising, in-store displays, and targeted sampling programs designed to engage consumers and pique their interest in Coca-Cola BlãK. It is apparent that the product is advertised as a premium blend— something that is high-class but that can be purchased by anyone. If Coca-Cola gets high-class personalities to promote the product, it will be successful. In America, people don’t mind spending a few extra dollars to have what they believe is a quality product. If high-power celebrities endorse Coca-Cola BlãK, people’s attitudes can be positive toward the image of this unknown product. Coca-Cola Classic doesn’t have that many advertisements anymore because everyone knows what Classic tastes like and it has been a valued drink for several decades. However, Coke needs to make sure they start their new product off on the right foot with immense advertising efforts, showing in an ad how much BlãK helps the average person to stay awake and keeps him or her focused on the task at hand. Again, it all falls back on the belief that this product tastes good and that people don’t mind spending the extra cents on a beverage that actually will help them through the day. The biggest challenge Coca-Cola BlãK is going to face is that coffee and cola together might not sound very appealing to many consumers. Many people may prefer either the coffeehouse flavor or the flavor of original Coca-Cola alone, but not necessarily together. For example, cola/coffee drink mixes are not a new concept. In the mid-1990s, Pepsi Kona, Java Cola, and Café Cola were introduced, but they did not gain the attention of consumers and disappeared from the market. While incorporating the CocaCola brand name, Coca-Cola BlãK needs different positioning between the soft drink and coffee markets. As Coca-Cola instilled a fresh image to consumers in the past, Coca-Cola BlãK might need a new concept of drink in this new area

1. If you are in charge of the marketing strategy for Coca-Cola BlãK in America, who should your target consumers be? Why?

2. What kinds of advertising messages would appeal to the target consumer to cause an attitude change toward Coca-Cola BlãK?

3. Compared to ordinary Coca-Cola, Coca-Cola BlãK is expensive ($1.99). How should Coca-Cola BlãK be positioned?

Answer 1

1. I would target consumers who have enough money to spend on this beverage, people who don't mind spending a couple of extra dollars to enjoy a premium product. If you think about it, Starbucks or red bull are not cheap beverages and people still pay for them because they like the taste of it and the effect, so if we are giving them the best of both I need people who can afford it. People who work and need this kind of drink daily.

2. Messages that include famous people, like basketball players, NFL players or music super stars. Because this is a new product and people are not used to buying it every day yet, the publicity must be strong and constant. People need to hear about this product on their way to work, on the radio, on TV, the Internet, Facebook, Twitter. We need to mention that instead of spending money on Starbucks and Redbull they just need to buy our product which has higher quality and provides the best of both worlds.

3. The new product is more expensive but because it is a different market that we are looking for. The regular coca-cola we all know and love can be purchased anywhere in the world and it is something families drink at their meal or is something just buy on an important dinner; however this new product has more ingridients, flavors and provides a different effect, therefore prices are higher. I believe we need to sell this product with the following slogan: Quality has a price, people will be willing to pay it if they know its good.