Market Research Assignment #1
AC 272-03 Friday 9:10-12
The Fashion Institute of Technology
September 4th 2018
The brand, Coca Cola has been around for 126 years. They are top competitors in their market for soda, however, the leading brand did face some problems that resulted in the need for market research. Coca Cola was invented in 1886 by a pharmacist named John Pemberton. At this time, the soda fountain became very popular, and that’s what inspired him to create a delicious tasting soft drink. He got the name “Coca Cola” from the ingredients in the drink such as, the coca leaf and the kola nut. After Pemberton died, Asa Candler took over the business, and hired traveling salesmen to market and promote the drink. Aside from handing out many coupons, word of mouth traveled fast, and Coca Cola soon became a national dominant brand.
One of the best ways to describe the Coca-Cola brand, and their image to the world is through the words of the artist, Andy Warhol, who once said, “What’s great about this country is that America started the tradition where the richest consumers buy essentially the same things as the poorest. You can be watching TV and see Coca-Cola, and you can know that the President drinks Coke. Liz Taylor drinks Coke, and just think, you can drink Coke, too.” (Warhol). This depicts Coca Cola as a very well respected brand that promotes unity, love, and also a major piece in the shaping of American culture.
Today, Coca Cola is in over 200 countries worldwide, and have over 700,000 system employees. This shows that Coca Cola is more than a brand, rather they are a huge family connected from all over the world. Besides from the leading drink, Coke, the brand Coca Cola owns and sells many other beverages. They also own, Sprite, Fanta, Coca-Cola Zero, Diet Coke, Dasani, Vitamin Water, Smart Water, Powerade, Fresca, and Minute Maid. They have so many different types of drinks, packaging, and nutrition facts, that it makes the Coca-Cola brand appealing to every kind of person. Coca Cola’s competitors include other soft drink brands such as, Pepsi, Red Bull, Gatorade, Dr. Pepper, Mountain Dew, Lipton, and Tropicana. Although Coca-Cola is doing very well, and they remain a dominant figure in the beverage industry, the brand did go through some hard times which resulted in a decline of sales. Through extensive market research, they were able to pick themselves back up and fix the problems they faced.
In 2013, Coca-Cola announced the launch of a new bottle of coke called “Coke Life.” Coke Life is a green bottle of coke that was launched as the healthier, more natural version of Coca-Cola. This bottle was released at a time when people were beginning to become more health conscious, and Coke saw that trend and wanted to take part. Coke Life is made with natural sugars and is 89 calories, which is more calories than Coke Zero but less calories than regular Coke. Unfortunately, Coke Life missed the mark, and failed resulting in a major decrease in revenue. From the year 2013 to 2017, Coke Life’s sales dropped 73.1%, which is huge. The company was confused why their new innovative beverage was doing so poorly, since they were targeting towards the right consumers, and saw an opportunity in the market.
One major critic of Coke Life was journalist, Mark Ritson, who said Coke Life was “the harbinger of death for Coca-Cola” (Ritson). Many consumers complained that Coke Life was still a lot of calories, and too much sugar. The loss of sales from Coke Life greatly affected the Coca-Cola brand, it’s employees, and consumers negatively. Marketing researchers began monitoring Coke Life sales, and did many different tests to bring the profits up. They started by cancelling all ads for Coke Life, and only marketing the product along with the other Coke drinks, kind of like a package deal. When that didn’t work, the brand began taking Coke Life off the shelves, and decided to preform proper market research as to why their product was failing.
Market Research Benefits
In the case of Coke Life, it was very important for the brand to preform market research and not ignore the issue because the product was failing and leading to a loss of profit, and Coca-Cola couldn’t figure out why. After preforming market research, the brand gained many answers to their issue. Marketing consultant, Michael Callaghan, stated “Coke Life was a failure because most consumers deal with binary choices: sugar or no sugar, low fat or not, alcoholic or non-alcoholic” (Callaghan). Coke Life was neither healthy or not healthy, it was a weird in between that didn’t appeal to consumers, and made them unhappy with the product.
Many people were interviewed and took surveys, along with researchers analyzing and collecting data on sales, pricing, purchase habits, and consumer lifestyles. Internal databases and database marketing was used as well in order to collect patterns of targeted customers of Coca Cola. Researchers used both primary and secondary information, and collected data on Coke consumers for months, and came to the conclusion that Coke Life was a failure, and it would only continue to damage the Coca-Cola image and their sales. As a result, the drink was discontinued in June 2017. The benefit of market research outweighed the cost because Coke Life was hurting the revenue of the company, and if they didn’t do market research they wouldn’t have figured out that removing the product was the best option.
Since the discontinuation of Coke Life, sales and revenue have started to increase again for Coca-Cola. In 2018, Coca-Cola’s goal is to pick up the momentum they lost from Coke Life’s reduction in sales and profit by moving their focus on revamping Diet Coke. Jim Dinkins, the president of Coca-Cola, said “We are working to build on last year’s momentum with even more exciting innovation for consumers in 2018, such as the recent relaunch of Diet Coke, the continued success of Coke Zero Sugar and the introduction of many other new products throughout our portfolio” (Dickins). Coke is aware that they failed with Coke Life, but since they conducted extensive market research, they knew how to fix the issue, and now they are only continuing to move forwards.
The Invention of Coca-Cola. (n.d.). Retrieved from http://iml.jou.ufl.edu/projects/spring08/Cantwell/invention.html
Bellis, M. (n.d.). The Song That Sold the World on Coke. Retrieved from https://www.thoughtco.com/history-of-coca-cola-1991477
Bhasin, H., BhasinI, H., Onyango, A. O., ; Facebook. (2018, June 14). 11 Top Coca cola competitors – Competitor analysis of Coca cola. Retrieved from https://www.marketing91.com/coca-cola-competitors/
Andy Warhol Quotes. (n.d.). Retrieved from https://www.brainyquote.com/quotes/andy_warhol_597858?src=t_coca-cola
Roderick, L., Ritson, M., Tupper, H., Woollen, P., Fleming, M., Barta, T., . . . Charlotte Rogers ; Jonathan Bacon. (2017, April 07). ‘Coca-Cola Life’s demise always felt inevitable’. Retrieved from https://www.marketingweek.com/2017/04/06/coke-lifes-demise/
Not even Coles staff would buy ‘terrible’ Coke Life. (2017, May 01). Retrieved from https://thenewdaily.com.au/life/eat-drink/2017/05/01/coke-life-coca-cola-stevia-sugar/
Report: U.S. Sales of Non-Alcoholic Beverages Grow More than $2 Billion in 2017. (2018, May 07). Retrieved from https://www.coca-colacompany.com/stories/report-u-s-sales-of-non-alcoholic-beverages-grow-more-than-2-billion-in-2017-carbonated-soft-drinks-bottled-water-each-account-for-about-half-of-industry-s-growth