Relaunching Rc Cola in Pakistan

PROJECTRE-LAUNCHING OF RC COLA

(A Cool.. Pakistani Taste)

STRATEGIC MARKETING MANAGEMENTMUHAMMAD NOMAN-2524

MBA- MARKETINGSPRING 2010

INTRODUCTION

1905: Mr. Claud Hatcher, Founder, Established the “Union Bottling Works” in Columbus, Georgia in the basement of the wholesale grocery business of his family.

1910: The first line of fruit flavored beverages was named Royal Crown and the first cola drink was called Chero-Cola.

1912: Started to manufacture a line of syrups and flavor concentrates and established a franchised system by licensing sales territories to its bottlers under trademarks of the now Chero-Cola Co.

1925: Over 300 bottlers were part of the bottling network producing Chero-Cola. 263 of these bottlers also produced the fruit flavored products under the new brand Nehi.

1928: The Company changes its name to The Nehi Corporation.

MAJOR MILESTONES

1933: Mr. Claud Hatcher died on December 31st.

1934: Chero-Cola is reformulated and the new product is named Royal Crown Cola.

1940: The Nehi Corporation is listed on the New York Stock Exchange.

1940: The Company first uses results of blind taste tests in the advertising campaign “Best by Taste Test”.

1946:The Company began to enhance its advertising by using entertainment celebrities like Bing Crosby, Joan Crawford, and Hedy Lamarr.

1958: Company changes name for the third time to Royal Crown Cola Company.

2000: Royal Crown Cola Co. is acquired by Cadbury Schweppes.

2001: Royal Crown Cola International is acquired by Cott Corporation.

2005:Royal Crown Cola Co. commemorated its 100th Anniversary.

MAJOR MILESTONES

RC Cola

Diet RC Cola

Cherry RC Cola

RC Edge Cola

Diet Rite Cola

RCQ

Royal Crown Draft Cola

Kick

RCCI BRANDS PORTFOLIO

RC cola was a very famous drink in Pakistan.

It was well known since the time of its arrival in the sub- continent which was the 70’s.

Internationally RC cola faded away by the early 90’s.

RC COLA IN PAKISTAN

Pepsi Cola and Coca Cola stormed into the market.

Advertising was minimal in Pakistan as compared to its competition.

RC Cola was being sued by different organizations internationally so it lowered its investment in the sub-continent.

RC finally stopped production somewhere in the early 90’s.

Reasons for RC Cola Loosing Market in Pakistan

The initiative to re-launch RC cola seems to be a great idea, as it is a cash crop for Royal Crown all over the world.

Before going to re-launch RC Cola in Pakistani market, several things should be analyzed.

NEED TO RELAUNCH

Market share of soft drinks in beverage industry

Age factor affecting the sales

Market Analysis of Soft drinks

75 million cases a year for Pepsi alone.

The total beverage market is about 120 million cases of which 65% per cent are Pepsi products.

20 to 22 %are Coca-Cola products and there are so many colas.　

Pakistani Soft Drink Industry

Strengths:

The soft drinks market in Pakistan enjoyed dynamic growth over the review period in both volume and current value terms.

Carbonates dominate the market in both the on-trade and off-trade with the lion's share of sales.

Carbonates have become part of the culture in Pakistan and multinational companies have maintained their standards over the years to provide consumers with high-quality carbonated drinks.

Off-trade sales of carbonates are higher than those of the on-trade but both achieved strong growth over the review period.

Industrial SWOT Analysis

Weaknesses:Liquid concentrates and powder concentrates are both

seasonal categories in the market and their sales peak in the summer in Pakistan.

Both Rooh Afza and Jam-e-Shirin are traditional sandalwood drinks in Pakistan which are highly regarded by consumers. These drinks can be found in every home in Pakistan, especially in rural areas, throughout the summer and are the mainstay of liquid concentrates.


Opportunities:The government of Pakistan has reduced excise taxes to encourage soft

drinks manufacturers and importers. The government also reduced other applicable taxes to promise more

profits not only for soft drinks manufacturers already in the market but also to attract potential soft drinks manufacturers to invest in Pakistan.

The government also decided to tax the beverage industry on capacity of production rather than on actual production and those brave move encouraged soft drinks manufacturers to maximize production and reduce prices.


Threats: Increasing health and hygiene awareness among Pakistanis has greatly increased

sales of fruit juice products. Both the government and the media have started health awareness campaigns to

make Pakistanis realize that consumption of fruit juice is as essential as eating food. Fruit juices are doing very well in both urban and rural areas. On the other hand,

health and hygiene awareness has also led to increased sales of bottled water in Pakistan.

Previously bottled water was targeted only at major cities where consumers are more health-conscious and aware of the difference between bottled water and tap water. Nowadays, health-conscious rural inhabitants also drink bottled water due to health concerns.


Strength:

RC Cola is the cola which is more than a 100 years old.

Weaknesses:

Low advertising budget.

International Law suits.

RC Cola SWOT Analysis

Opportunities:

To produce more concentrative and conglomerate products drinks.

The heat factor in the sub- continent.

To build a brand equity.

Threats:

Very strong established competitors.

This very fact that Royal Crown cola was faded away in the early 90’s.

RC Cola SWOT Analysis

HOW Internal and External Factors Affecting the Strategies

EXTERNAL ENVIRONMENTDEMOGRAPHIC FACTORS:Age Education Population DistributionPopulation Density


EXTERNAL ENVIRONMENTECONOMIC FACTORS:Income and Income per CapitaInflation Consumer BehaviorIncome DistributionPayment ModeEmployment Opportunities


EXTERNAL ENVIRONMENTECONOMIC FACTORS:Aggregate DemandAggregate SupplyEconomic Policies:

Fiscal PolicyMonitory PolicyPrice PolicyIncome Policy


EXTERNAL ENVIRONMENTPHYSICAL FACTOR:

RegionCity SizeClimateInfrastructure


EXTERNAL ENVIRONMENTTECHNOLOGICAL FACTORS:Research and Development

POLITICAL AND LEGAL FACTORS:Political StabilityMixed EconomyLaws FormulationSocial Responsibility


EXTERNAL ENVIRONMENTSOCIAL AND CULTURAL FACTORS:PsychographicReligious Social StatusMedia


INTERNAL ENVIRONMENTCUSTOMERSSUPPLIER:COMPETITOR:DISTRIBUTOR:

TARGET MARKET

Demographic Factor:Age – from 12-50 YearsSocial Class – Upper, Upper Middle., MiddleGender – Male and Female Geographic factor:Country – PakistanProvince—Sindh City – Karachi Population – about 20 million

PRE-MARKETING MIX

Mass MarketingPositioning StrategyDifferentiation Strategy

• Basis of Differentiation• Product Differentiation• Image Differentiation

MARKETING STRATEGIES

RC has a factory at SITE industrial Area near Sher Shah Market which covers an area of 5000 Yards.

The Project is located at D-210, Estate Avenue, S. I. T. E Industrial Area, Karachi.

Land - One Acre Land.On Prime Location of S.I.T.E on main Estate Avenue.Front Main Road 176 feet wide Double Roads (Both Ways).80 feet wide Road, along with entire Boundary wall of 500 feet CBL

Building.

PLANT LOCATION

Status of Property: Freehold-Self Occupied (CBL)

Property is an Industrial Unit at S.I.T.E Ltd.,Approved Plan by S.I.T.E Ltd.,SITE Plan Approved.Electricity - 168 KW Approved & Installed.Sui Gas - Industrial Connection Approved & Installed.Water Line (Two) 2" & 1" Industrial Connection Installed.8 Telephone Lines.Huge Sewerage system arranged.Under Ground Water Tank Capacity 75000 Gallons.Overhead Water Tank 5000 Gallons (continuous flow from underground tank).

PLANT LOCATION

DAILY PRODUCTION:-500,000 LITRES A DAY

DENONMINATIONS OF BOTTLES

250 ML 500 ML

PRODUCTION CAPACITY

COST RS.7.75/=SALE TO RETAILERS (250ML) RS.12.50/=COST RS.20.5/=SALE TO RETAILERS (500ML) RS.27.0/=

COST PER MANUFACTURE INCLUDING OVERHEADS

S.I.T.E. (WITHIN FACTORY)NORTH KARACHI.NAZIMABADMALIRP.E.C.H.S.

WAREHOUSES

RC Cola is the most popular brand in the international market and is consumed by children and adults alike.

Consumers enjoy RC in more than 60 countries worldwide. Royal Crown Cola International products are sold through

a global network of more than 100 franchised bottling plants and distributors.

MARKETING MIX STRATEGIESPRODUCT

Offered Products:RC Cola

Diet RC Cola

New Product Development


Offered Products:RC Cola

Diet RC Cola


RC’s Ingredients Carbonated Water High Fructose Corn Syrup Sugar Caramel Color Citric Acid Natural Flavor Caffeine.


QualityRC Cola has a unique crisp and clean taste and it’s consistent with its flavor no matter where you buy it. It has a refreshingly great taste even if it isn’t cold.Everything is tested from water samples to ingredients in order to achieve the Quality of our Product.


DEPTHThe variants that will be offered by RC Cola in terms of size and quantity:

175 ml Mini Bottle 250 ml Regular Bottle 500 ml Bottle1000 ml Regular Liter Bottle1500 ml Disposable Bottle 3000 ml Jumbo Bottle


LOGO:


Following factors RC Cola should keep in mind while determining the pricing strategy.

Price should be set according to the product demand of public. Price should be that which gives the company maximum revenue. Price should not be too low or too high than the price competitor is

charging from their customers otherwise nobody will buy their product.

Price must be keeping the view of their target market.

MARKETING MIX STRATEGIESPRICE

Prices of different bottles


Quantity Price in Rupees Jumbo 80

1.5 Liters 651 Liter 37500ml 30250ml 16

Tin 25

PRICING STRATEGIES:Competition based pricing approachPromotional Pricing PolicyMarket Penetration Pricing PolicyDiscountsQuality Discount:

o 1/10 Discounto 2/20 Discounto 3 B – F Discount


PRICING STRATEGIES:Incentives:Incentive to RetailersThese incentives are in the shape of: • Deep Freezers• Return Tickets• Free Transportation Services.Incentive to DealersThe best dealer of the year is awarded with a brand new Suzuki Pickup. The second best is awarded with Motor Cycle. The third best is awarded with Return Ticket to Middle East.


Special Offers

RC Cola will give special offers to consumers on special occasions like Ramadan and Eid days instead of decreasing the price of the products, some special packs like Pakkora Mix, Chat Massala, or Free Drinks with Liter Bottles are offered


There are various channels through which RC Cola distributes its output.

DISTRIBUTION CHANNELS:..

We will also use push strategy for our product by using various promotional tactics and through media. Distribution will be divided in zonal basis, which will be 5 in number.

We will directly approach retailer by providing credit facility and bonus in form of incentives.

We will also provide trade allowances to our distributors and retailer to further intensify usage of push strategy.

MARKETING MIX STRATEGIESPLACEMENT

Manufacturer ----- Distributor ------- Retailer------ Consumer.

PRODUCT OUTFLOWRC Cola International has given franchise in Karachi. Continental Beverages is the franchised bottler for RC Cola in Karachi Sindh. They have fully automatic German plants for both glass and P.E.T. lines.



MARKET LOCATION MARKET LOCATION

BLESSINGS SUPER STORE LALKOTI QT DEFENCE DEFENCE

BADSHAH NURSERY SUNNY DEFENCE DEFENCE

COLLECT NURSERY JABBAR DEFENCE DEFENCE

PARADISE SCHON CIRCLE

FAMOUS DEFENCE DEFENCE

AGHA’S CLIFTON SOHAILA DEFENCE

NOVELTY CLIFTON AL-GHANI STORE BLOCK A.

YOUSAF BAHADURABAD QUALITY STORE P.E.C.H.S.

LIST OF RETAILERS AND THEIR LOCATIONS

SPECIAL POINTSOther than these some special points are also being looked after by direct sales vehicles such hotels restaurants, public parks, big and reputed super stores etc. At Avari, Pearl continental, village, Seas magnificence etc. RC Cola directly distributes the products.


Following are the strategies: Comparative Parity Method: RC Cola ads are telecasted with the competition in Coca Cola and Pepsi which is its direct competitor.

MARKETING PROGRAMSPROMOTIONAL STRATEGIES

Seasonal advertisement: Frequency of the RC Cola ads will vary from time to time. When the season is on RC Cola will do heavy advertisement especially in Ramdan days or Eid occasions but this advertisement not remain consist. BTLATL



SAMPLING PROGRAMA successful sampling program can be their most effective means of increasing consumer awareness, trial, and actual product purchases in Pakistan.


MerchandisingRoyal Crown Cola International trains its bottlers in merchandising functions that

will ensure visually appealing beverage shelves, coolers, and vending machines.They work in assisting hand in hand to develop pricing, product rotation, back

stock control, display building, and proper P.O.S. procedures.With proper shelf management, the customer will soon recognize the quality and

value inherent in the Royal Crown Cola International brands in Pakistan.

Sales Support Royal Crown Cola International has developed intensive sales training programs. They

provide complete, in-depth training materials for both beginner and experienced sales people. To ensure their staff conveys the image of marketing a global brand, Royal Crown Cola

International will also provide assistance in developing a dress code and uniforms for their staff members.

They’ll help them to extend that image to the trucks, vans, and automobiles they drive. These "rolling billboards" are a roving reminder to the consumer of the Royal Crown Cola International brand identity.

Through their Fleet Graphics program, Royal Crown Cola International will help them develop proper fleet identification logos which enhance the brand value in their marketplace.



MediaThey will do this by working with local advertising agencies in Pakistan to develop ad campaigns and media strategies (television, radio, print publications, billboards, etc.) appropriate to their bottler's locations and budgets.

MARKETING PROGRAMSMARKETING PROGRAMS

RC cola will do a joint venture with all the cinema’s in Karachi, that only RC Cola will be the soft drink which will be available.

RC Cola will do a contract with Telenor that free airtime will be offered to the customer after typing a code which will be on the back of RC cola’s cap.

They will conduct BTL (below the line activities)

MARKETING PROGRAMSMARKETING PROGRAMS

ADVERTISING STRATEGY

Newspaper (DAWN, JANG)

Radio FM 96, FM 98, FM 107

T.V. Commercials (ARY digital, MTV, PLAY, WIKKID, CABLE CHANNELS)

Bill Boards

MARKETING PROGRAMSACTION PROGRAMS

On June 2nd the Product RC Cola will be launched at the venue Regent

Plaza. On June 6th, 13th, 20th, July 4th, 11th, 18th advertisements will be

published in leading newspapers. After six months of Launch, the company will commence a downward

stretch, and will launch a RC Diet Cola which will be targeted to diabetes people.

On alternate days advertisements will be launched in three different channels ( Geo, Ary One World and PTV) on the basis of two fixed spots, i.e 07:30pm and 09:30.

MARKETING PROGRAMSACTION PROGRAMS

Advertisements will placed on Magazines like Herald, Mag, Jung once every month.

One month end Distributor will visit each retailer and give the compensation on sales promotion schemes, company has chosen.

The company will participate in melas, trade shows, and exhibitions of all kind to increase the awareness of the new launch.

MARKETING PROGRAMSBUDGETED COMBINED EXPENSES INCURRED DURING FIRST THREE MONTHS

Particulars Cost

Television Cost Rs. 8,000,000

Newspaper Rs. 3,050,000

Magazines Rs.2,000,000

Outdoor Rs.5,700,000

Contingency Rs.1,000,000

Total Rs.19,750,000

CONTACT

D-210, Estate Avenue, SITE, KarachiPhone (9221) 2577000 , 2577001 , 2564380Fax (9221) 2577002Emails (General enquiry) [email protected] [email protected] [email protected]

mailto:[email protected]



Relaunching Rc Cola in Pakistan

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