Case Study
ASIA PACIFIC INTERNATIONAL COLLEGE
SBM3102
– Assignment 1 Case Study
The
relaunch of Mother
Coca-Cola Amatil (CCA) is one of the
largest bottlers of non-alcoholic ready-to-drink beverages in the Asia Pacific
region and one of the world’s top five Coca-Cola bottlers. The company employs
more than 15,000 people and has access to more than 265 million consumers
through over 700,000 active customers. CCA has operations in five countries –
Australia, New Zealand, Fiji, Indonesia and Papua New Guinea – manufacturing,
selling and distributing a diversified product portfolio including carbonated soft
drinks, water, sports and energy drinks, fruit juice, flavoured milk, coffee
and packaged ready-to-eat fruit and vegetable products. CCA’s major shareholder
– The Coca-Cola Company – owns 30% of CCA’s shares and has two directors on CCA’s
eight-member board of directors. With a market capitalization of over A$8
billion, CCA is one of the Australia’s ‘Top-50’ listed companies. The support
of the Coca-Cola Company provides major advantage for CCA over its competitors Since
the energy drink market has been the fastest growing segment within soft drinks
market and the company did not have any energy drink in its portfolio, in the
beginning of 2007, it introduced Mother to compete with the two leading energy
drinks in the market, V and Red Bull, which at that time dominated the A$151
million industry and accounted for 94 per cent of sales. The company was hoping
that Mother would finally become a successful energy drink in its portfolio. Since 2001, CCA
tried to launch several energy drinks such as Burn, Lift Plus or Recharge;
however, all of them have failed.
Mother was launched to a great
fanfare with a $15 million marketing budget, created by Publicist Mojo,
featuring animated animals describing the natural content and benefits of the
drink. But the campaign failed and sales dropped. CCA did not want to give up;
therefore they conducted extensive marketing research and learnt that consumers
did not like the taste, neither were attracted by the natural benefits of the
drink. Perhaps, with such energy drinks they should have targeted women to whom
the natural content of the drink as well as animals in the advertisement would
be more appealing.
However, the company aimed to target
‘red blooded’ 18–34-year old males who were, in general, more attracted by the
potent effect of energy drinks. As a result, in mid-2008, CCA altered the
formulation with respect to taste and addressed consumer dissatisfaction in
regard to the standard 250-ml can by doubling the size to 500 ml without
affecting the cost, thus exceeding V and Red Bull that remained at 250 ml.
Except for the size of the can, the company also changed the logo and selected
a message strategy for its relaunch. The key message was ‘New Mother – tastes
nothing like the old one’, which aimed to demonstrate in a humorous appeal that
the company had made a mistake about the taste of the previous version. Another
message was ‘New Mother – Double the Energy Hit’ aiming to point out the
powerful content of 500-ml cans.
In relation to this change in
strategy, in late 2008, V released a 500-ml can of its original product and a
new product called SAMEDI. In early 2009, Red Bull released their ‘XXL’ can, a
473-ml can, to compete with Mother. Other sizes of Mother started to appear on
the market in 2010, such as a 375-ml glass bottle, a 300-ml can as well as the ‘surge’
and ‘lemon’ flavour 500 ml variations.
Industry
and competitors
The energy drink segment is the
fastest growing within the A$2 billion (2006) carbonated soft drink market. The
energy drink segment is worth A$151 million and is growing by 47 per cent a
year since 2006. Energy drinks account for 22 per cent of total drink sales.
According to AC Nielsen data, Red Bull and V drink account for the majority (90
per cent) of sales within the Australian energy drink segment.
There are many new energy drinks
trying to enter the market every year as well as lots of brands trying to gain
at least minimal market share and compete with V drink and Red Bull, which
represent the main competition. The new energy drinks need to overcome the
powerful marketing of both drinks. Moreover, there is a great loyalty among the
users of both brands, and V and Red Bull have established intimate relationship
with their retail channels. Coffee and tea can represent substitute products;
however, the main advantage of energy drinks is that they deliver the same and
even better effect but in highly refreshing form, which is a good point
considering the Australian climate.
Marketing
communications
Marketing of the Coca-Cola Company
is known worldwide for its creativity and message consistency. The IMC campaign
of the first version of Mother energy drink was aiming to communicate a message
emphasising the natural content of the drink. The main IMC tools of the
campaign included TV ads, printed ads with animated animals and sampling.
However, the campaign did not appeal to the selected target market (18–24-year
old males).
The campaign for Mother’s relaunch
focuses on the same target market and was supported by extensive research. The
message strategy is based on admitting the company’s mistake about the taste of
the first version in a humorous style as well as on highlighting the potent
content that 500-ml cans offer. Besides the packaging, the company’s IMC agency
has decided to utilise the following IMC tools: TV and cinema ads, blogging and
sponsorship of V8 Ute driver, Layton Crambrook.
Discussion
questions
1. Discuss the marketing orientation
used by Coca Cola Amatil, in relaunching “Mother”
2.
Conduct strength and weakness
analysis of “Mother”
3. Describe the consumer decision
making process of “Mothers” based on the consumer decision making model (need
recognition, information search, evaluation of alternative, purchase and post
purchase evaluation)
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