A case study: DASANI in the UK

1. Introduction

Coca Cola is one of the most famous companies in the world. Now that this

spectacular growth had leveled out, the company is striving for future growth

opportunities for their drinks businesses. Bottled water was earmarked as the next big

event in the beverage industry, and the avenue for future growth.

Dasani, one of the Coca Cola’ brands, had initially developed in the United States in

an effort to capture the lucrative bottled water market. In less than twenty years, the

bottled water market has undergone a remarkable transformation. Previously people

only drank bottled water because of the fear of contaminated tap water. Now people

are consuming large volumes of bottled water as the drive towards a healthier lifestyle

continues (Anonymous, 2008). The marked success behind these bottled water brands

is due to the links with absolute purity, and the association with an active and healthy

lifestyle. Since its inception, the brand had achieved tremendous sales growth in its

domestic US market, fully utilizing Coca Cola’s powerful distribution system. Based

on this success, Coca Cola decided to launch the brand in continental Europe, firstly

in the UK, and then rolling it out to other countries. Dasani, a “pure” still water was

launched in the United Kingdom in February 2004, with a huge promotional budget.

But when it hit the British market, it promptly suffered a major public-relations

disaster. Therefore, it failed in the UK market in 2004. Four years later, the Coca Cola

Company intends to enter into the UK market again (Anonymous, 2007).

So, in this essay, we are determined to analyze the essential situation of the case study

of Dasani. On base of the analysis of Dasani and its target market in the UK. We will

utilize useful global marketing strategy theories, concepts and market entry strategies

to refer to our some available recommendations and suggestions to Coca Cola, and

they will offer some references to the entrance into the UK market for Dasani.

2. The strategic analysis of Dasani and the opportunity in the UK

2.1 The strategic analysis of Dasani in the UK

Dasani, as a brand of Coca Cola, in the US has achieved enormous success for a

relatively new brand. Coca Cola’s huge marketing muscle and extensive distribution

network ensured this success. In the US, this brand of purified “tap” water with added

minerals, sat beside natural spring waters from mountain peaks on shelves, and still

won over customers(Vomits, Demetrius; Sharp, Iain., 2003). The UK was chosen as

the launch pad for Dasani in Europe. The big players in bottled water see the UK

market as still ripe for exploitation. The annual consumption of bottled water per

capita in several nations as follows (Figure 1).

Figure 1 the annual consumption

Source: (Conor Carroll 2008)

From the histogram, we can see that the annual consumption of bottled water per

capita in the UK is smaller than other nations, therefore, there are many opportunities

for Dasani’ access to the UK market.

2.2 The opportunities for Dasani in the UK

Before Decani’s expansion in Europe, Coca Cola Co. has achieved massive success in

the USA, so according its experience, there must be many opportunities and will

make a great success in the world market.

2.2.1 Opportunity one: The influential international brand recognition and

strong overseas expansion skills.

In the world, Coca-Cola is the strongest soft drink company, almost every people

drunker are drinking Coca-Cola, and thanks to its good quantity it wins widespread

praise. At the same time, Coca-Cola has a strong financial strength; it will provide a

good economic base for the expansion of its overseas market. For it keeps an increase

of sales growth and net income growth form 2004 to 2006(Figure 2).

Figure 2 the sales income and net income (2004-2006) Unit: millions of dollars

Source: Hoover's Company

Records. Austin: Mar 1, 2008. p. 10359

2.2.2 Opportunity two: Rich international business experience and good

marketing skills.

Coca-Cola play an important roil in the international market, and occupies an

important position in the beverage field, the company starts to produce beverages

mainly, and we can see its products in all over the world countries, and through the

cross-marketing management, it has accumulated rich experience, thus, it is a

international corporation with rich experience in overseas management (Anonymous,

2007). At the same time, the Coca-Cola Co. has a good marketing tools and marketing

skills, and that is why it can make a leading position in the international market. On

base of the rich globule business experience and good marketing tools, it is feasible

for Dasani’entrance into the UK market

2.2.3 Opportunity three: The good purchasing power and the huge potential

market

In the UK, the water beverage market has not saturated, compared with other

countries, there is a big gap between the UK and other nations in its per capita

consumption. In addition, the UK is a developed country, and because Dasani water is

a higher price product, it requires a higher purchasing power for the customers, and

the purchasing power of the UK people can be satisfied for the requirements (Conor

Carroll, 2008).

2.2.4 Opportunity four: More attention to the health

In the present time, many people pay more attention to their own health, and with the

improvement of people’s life quality, people concern their body health, life quality

and mental health. Eating and drinking is the necessary process in their life. Water

drink is a crucial thing for people’s bodies, and people can’t live without water.

Because the Dasani water includes a lot of nutrients and so they will do well for

people’ bodies and growth.

3. Analysis of Decani’s entry into the UK market.

3.1 SWOT analysis of Dasani

SWOT analysis is a simple framework for generating strategic alternatives from a

situation analysis. It is a good method and a basic, straightforward model to provide

direction for a firm to make reasonable marketing plans and analysis. Strength,

weakness, opportunity and threats are four environmental elements of SWOT

analysis. Generally speaking, external environment analysis usually means to analyze

opportunity and threats while internal environment analysis include both strength and

weakness. (Philips, 2005)

Dasani’access to the UK market, we can analysis it’globle marketing strategy through

SWOT analysis shown as flows (figure 3).

Figure 3: the SWOT analysis of Dasani

Strength: Weakness:

Long-term business experience

famous beverage brand

abundant finance

Lack of reorganization of the UK

market

Neglect the price, material origin that

people pay attention

Opportunity: Threat:

Strong overseas expansion skills

The good purchasing power and the

huge potential market

Rich international business experience

and good marketing skills

The rivals from other nations

The local protection for the market

Source: from this study and from http://www.netmba.com/strategy/swot/

From the matrix chat, we can see that the quality strength and opportunity are more

than weakness and threat. Therefore, the Dasani will have more chance to enter into

the UK market. If the decision makers of Coca Cola Co. had made a deep evaluation,

maybe they would manage the Decani’s global marketing better and make a good

performance. Therefore, if they would like to attempt to launch Dasani, the SWOT

analysis can be a useful marketing environmental evaluation model.

3.2 PEST analysis of Dasani

A PEST analysis is an analysis of the external macro-environment that affects all

firms.P.E.S.T. Is an acronym for the Political, Economic, Social, and Technological

factors of the external macro-environment? Such external factors usually are beyond

the firm’s control and sometimes present themselves as threats. But we can effectively

analysis the target market through the PEST skill.

3.2.1 Political Analysis:

The UK and the United States has always been friendly, they have always maintained

friendly contacts, they have consistency both in political stability, trade regulation

tariffs, and in anti-trust laws. So Dasani’entrance to the UK market is feasible.

3.2.2 Economics analysis:

The United States and the UK are both the powerful economic and developed

countries in the world, the two countries have a solid economic base, thus, when

Dasani accesses to the UK market, it can have a good economic environment, people

have some purchasing desires and consumption capacity, this provides a good

foundation to Dasani’entrance to the market .

3.2.3 Social analysis:

The two countries speak the same language, there is no obstacle in the exchange, and

the two country's cultural background is almost identical, the factors will remove the

cultural barriers for Dasani’entrance into the UK market. Besides, with the increase of

the people's consumption concept and the people's awareness of environmental

protection, Dasani will comply with the requirements of the local people (Strauss

Judy, Frost Raymond, 2003).

3.2.4 Technological analysis:

Coca Cola Co. is a great corporation in the world, in the field of drinks it has

advanced technological capabilities, it’s advanced production lines will provide good

equipments for the Dasani production.

3.3 Diversification analysis of Dasani

Corporate management’ first course of action should be a review of whether any

opponent exists for improving its existing boniness’ performance. The company first

considers whether it could gain more market share with its current products in their

current markets (market-penetration strategy). Next it considers where it can find or

develop new market for its current products (market-development strategy). Then it

considers whether it cans development new products of potential interest to its current

markets (product-development strategy). Later it will also review opportunities to

develop new products for new markets (diversification strategy).

Figure 4 Strategy for diversification

Current product New product

Current

Markets

New markets

Source:” Strategy for diversification,” by glory ansoff, september-october 1957.

First of all, Coca-Cola sells its products in the United States, and in the domestic

market. It achieved great success. Next, Coca-Cola began to develop new products, its

new products--DASANI initially get the satisfied results in the United States market,

in order to expand its new product market and improve its international

competitiveness, DASANI begun to enter a new market -- the UK.

4. Recommendations and justifications of market entry strategies.

1.Market-penetration

strategy

3.Product-development

strategy

2.Market-development

strategy

Diversification

strategy

4.1. Product positioning strategy

Product positioning strategy is essential for a company to enter into a new market. It will provide an accurate direction to a firm. From the figure 5 we can find that the people in the UK are looking for a higher quality water to drink. This demands that Coca Cola Co. should devote more resources and energies to the products’ higher quality so as to meet the requirement. Although the higher quality will attract many people to buy it, this means the Coca Cola Co. will devote more investment to achieve higher value. From the figure 6 we can see that the differentiation and brand management

strategy are also important for the product positioning. Therefore, on the basis of the higher

investment to the Dasani, it must enter into the UK market successfully by the higher quality and

differentiation.

Figure 5 Product Positioning

Source: PPT

Figure 6 Product Positioning Strategy

Low Quality Products

High Quality Products

Low value

High value

USA

UK

Source: Roger j. Best Market-based Management, Strategies for growing

customer value and profitability. Peking University press P 207

4.2 Differentiation

Differentiation means making the product quite different from competitors’ products

or making the product quite unique.

For example, by marketing what is new, exclusive, lowest-priced, etc. , a company

can differentiate itself from the competition. In a sense, this is “avoidance behavior”-

the company is avoiding a direct competition.

There are a number of differentiation variables which are listed below in Figure

7(Kotler, 2003).

Product Personnel Channel Image

Form Competence Coverage EventsFeature Credibility Performance MediaPerformance Communication Expertise AtmosphereConformance ReliabilityReliability StyleDesign

Product positioning strategy

Differentiation and product positioning

Branding and brand management strategy

Product differentiationService differentiationBrand differentiation

Brand identityBrand encodingBrand assets & liabilities

4.3 AIDA strategy of Dasani

AIDA stands for “Attention, Interest, Desire, and Action”. Markers should always

keep AIDA in mind in marketing.

4.3.1 Attention: In a market where similar products of the competitors are lying side

by side with yours, attention can be drawn by, holding a demonstration of the

product. Just for the product of Dasani, with the exquisite packaging, it will attract

more attention from the UK person, and then, the people will also be attracted by its

promotion vigorously. In addition, because the Dasani belongs to the Coca Cola, and

the Coca Cola have been admired by many people all over the world, the Dasani is

able to penetrate into the UK market smoothly.

4.3.2 Interest: It is not enough to successfully draw customer’s attention. It is an

important step to arouse the customer’s interest in the product or service. Only when

the customer’s feels interested in the product or service is it likely that he is inclined

to buy the product (Conor Carroll, 2008). Coca Cola should focus on the

improvement of product’s quality. And it had better pay more attention to Dasani’s

research and development in order to restore people’s trust and attract people’

interest. It can also ally with the local water company so as to make use of the local

product brand to enter into the UK market. Also, the necessary advertisements will

be helpful.

4.3.3 Desire: When the customer starts to feel interested in the product or service,

the marketer must lose no time in leading the customer to have a strong desire to buy

the product or accept the service. Coca Cola ought to make more reasonable price to

facilitate consumers to purchase Dasani. The reasonable price will make people to

have a desire to buy it.

4.3.4 Action: When the customer takes action—takes out his money to buy the

product or places an order for the product, the sales promotion can be said to have

been concluded. Advertisement is a good way to help firms to promote consumers

(Zinkhan, George M.; Carlson, Les, 1995). Therefore, in order to achieve good

propaganda, Coca Cola can make use of various media to promote the new product.

Previous failure arouses Coca Cola to think about its product quality. Nowadays, in

order to make success in the UK in 2008, it should re-establish new good impression

on the public.

5. Conclusion

From the case study of Dasani in the UK, we can learn that if a company wants to

development its global marking strategy, it must analyze many factors including

opportunities, threat, weakness, strength, etc. It is difficult to enter into a new

market, but there are many opportunities. With the difference (technology, economy,

culture, socialist, etc) of market segments, companies should adapt their strategic

marketing management. However, the most importance and the first thing are not to

make customers disappointed but to keep products healthy. In order to enter into

the market of the UK this year, it’d better spare no effort to improve products’

quality.

Reference

[1] Anonymous (2008), Coca-Cola Enterprises Inc. Reports Fourth-Quarter and Full-

Year 2007 Results. Business Wire, New York

[2] Anonymous (2007). Beverage World. Vol. 126, Is. 1775; p. 16, New York:

[3] Vomits, Demetrius; Sharp, Iain (2003), the Strategic Positioning of Coca-Cola in

their Global Marketing Operation. Marketing Review, Vol. 3 Issue 3, p289-309, 21p

[4] Zinkhan an, George M. (1994), Advertising Ethics-Emerging Methods and

Trends. Journal of Advertising, Vol. 23 Issue 3, pp1-4

[5] Philip, K. (2005), Marketing Management (Eleven Edition), Prentice Hall

[6] Jones C P. Investment: Analysis and Management.8th Ed. New York: John

Wiley&Sons, Inc., 2002

[7] John R. Globule Business Strategy. London: International Thomson Business

Press, 1997

[8] Hill, 2005, International Business (Fifth Edition), The McGraw-Hill Companies,

Inc.: US

[9] Frain J. Introduction to Marketing. 4th ed. London: International Thomson

Business Press, 1999

[10] [Online] Available at: http://www.netmba.com/strategy/swot/

[11] Roger j. Best Market-based, Management strategies for growing customer value

and profitability. Peking University press P207