Coca-Cola launches Fuze Tea in India (Research Paper Sample)

Coca-Cola launches Fuze Tea in India

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Executive Summary
The report Highlights the international marketing plan of the company Coca-Cola. Its sub-category brand Fuze Tea is entering the Indian market for bottled tea manufacturing. The report consists of the background of the company, Current strategic objectives, International market entry strategies which include market segmentation, marketing mix, Market Entry, and mode and implementation plans. It is further concluded by the analysis of the results and future recommendations are given.
Introduction of the Report
Purpose: The purpose of this report is to research the international expansion marketing plan, Identifying the marketing mix plan and valuable strategies to expand the company’s product or service into a new market. It aims to better reach the customers. The process of market expansion is critical sometimes but it helps the company to grow internationally.
Structure: Company needs to analyse some marketing objectives and strategies to successfully enter the market. Moreover, Company needs to research the country in which it is entering and the global trends regarding the product to attract customers. It starts with analysing the market in which the company wants to enter and analysing the expansion strategies implementing in the country.
Methodology: The study is based on research design. Primary data is collected to conduct the study. The data is collected from various academic journals, company reports, and Articles. The content of the study and the collection of data is qualitative.
Background of the Company
Coca-Cola was found in 1886 in, Atlanta USA by Dr. Pemberton who was a pharmacist. Coca-cola made efforts in expanding into the new markets and now it is presented in almost 20 countries worldwide. Coca-Cola has many product lines and one of them is “Fuze Tea” (Coca Cola, 2018). Coca-Cola is growing fast in brand expansion, Fuze tea is made to offer iced tea. It was first launched in 2012 in, Europe and now the brand is suggested to expand in the Indian Market. They made a successful launch in Europe and earned billion dollars in just 2 years. (Mokhov, 2018).
Fuze Tea has mixed flavours of Tea Extract, Fresh fruits, and other ingredients. It is now presented in 30 countries including the US and Australia but in India, they sell Fuze Tea online through the Amazon Platform. Coca-Cola is suggested to expand the product line by manufacturing the bottled tea to satisfy the consumer's taste buds.
Coca-Cola’s current strategic objectives
According to the international market expansion plan some objectives are analysed mentioned below:
* The main objective of the company is to expand internationally for growth, high sales, and profitability.
* To implement the various marketing methods and strategies for international marketing.
* To Implement an effective product strategy.
* To adopt the international trends and make marketing plans according to them.
* To gain a high market share and competitive advantage.
* To monitor and control the product marketing strategy.
Local and global operations
Coca-Cola operates in multiple local and global markets. These products are reached in the market by the bottling partners who manufacture the products, package, and distribute the product in the market through retail stores and wholesalers who further distribute to the consumers. Coca-Cola company bottling partners distribute the products in restaurants, Cinemas, Amusement parks, and other places as well. Coca-Cola is operating by bottling operations in 250 countries worldwide. They are also responsible for making efforts in marketing plans and expansion (Holstein, 2011). The daily operations of the company serve around 1.9 billion dollars. The key to success is finding the right market globally or locally and operate in it. The Coca-Cola Company focuses on local and global strength and its operations. It operates in various beverage products (figure, 1) includes soft drinks, cold tea and coffee, juices, and water bottles. In other countries, Fuze Tea is winning customers from its strong flavors offered to the market. In Italy, the market share got doubled and they offered new flavors to attract more customers. They need to have active marketing strategies, plans, and collaboration with customers to meet their needs and satisfy them. In 2005, Fuze sales were about 65 million dollars. The sales arouse from previous years by 45%. They sold 5.5 billion beverages in North America in a year (Buchanan, 2014).
International Competitiveness
Fuze Tea brand by Coca-Cola has intense competition in the Indian Market which can impact its growth. The Iced-Tea market in India is expected to grow which will increase the competition even more. It is due to the increasing population in India. The Tea market in India Values around 404 million dollars in 2017. The iced tea market is growing as well with different variants in flavors such as herbal and fruits, it has many health benefits. India is considered to be the biggest tea-drinking country whereas hot tea is most used and its market value is around 73.4% (Market Line, 2019).
Due to the biggest Tea market in India competition is increasing, so marketing strategies must be analysed by the company for effective performance and to gain a large market share by competing with other tea companies (Coca-Cola, 2016). Coca-Cola can get high market share than other competitors as it is leading in the soft-drink market and the Tea market is quite similar to it. It will be easier for them to target the audience and deliver the products. Some of the major competitors operating in the Indian Tea market are Nestle, Lipton by Pepsi, Unilever, Teas Tea, Templar, BOS, and Arizona (Mokhov, 2018).
International Market Entry Strategies
India is chosen to be the start point for entering Asia with the new product line Fuze Tea, after successfully implementing the idea Coca-Cola can spend into other markets such as Russia, China, Sri Lanka, and Pakistan. These countries are top in consuming Tea drinks with the volume of 70% globally from Tea production (Anon, 2017)
India is a huge market for serving Iced-Tea by Coca-Cola. To increase the profitability Coca-Cola needs to expand its market and gain positive results from customers. They need to understand similar marketing technique doesn’t work in every country. Coca-Cola has to adopt a new market entry strategy for the Indian Market by understanding the culture, distribution market, customers' interests, and economic opportunities. Currently, Coca-Cola has an investment of $5 Billion for operating in India till 2020 (Buchanan, 2014). They will invest more in entering in new market with the new product line for successful international market entry.
The entry approach used for Fuze Tea could be the incremental approach for testing the market by experience. It will help the company to avoid risk and to showcase the market entry opportunities. They should target the high populated cities such as Mumbai, Karnataka, Andhra Pradesh, and Delhi. In these areas’ tea consumption is double with sales of over INR 8000 billion. As Coca-Cola is already serving an Iced Tea brand "Nestea" they won't be having problems in distributing the products and targeting the right market (brand equity, 2015). As the entry approach is waterfall Fuze Tea will be launched in the big city first than others. It will be distributed in supermarkets and general stores in keeping in mind the target customers.
Entry Mode
There are 6 Entry modes for a company to internationally expand the brand (figure, 2) it includes:
* Franchising
* Direct Export
* Indirect Export
* Joint Ventures
* Manufacturing Abroad
* Licensing
Coca-Cola expands the company in other countries by Franchising various bottlers. They have implemented this to five bottle companies in 2020 known as Coca-Cola bottling company, Swire Coca-Cola, Corinth bottling, and others. Franchising has been a system that they have always adopted for international expansion and to gain a competitive edge (Coca Cola, 2016).
For Entering the Indian Market Coca-Cola will adopt a Franchising entry mode for bottled tea manufacturing. It works well for repeated business as Coca-Cola has already entered the market with a different product line. They can easily transform while considering the franchising model. It will give them a strong brand image in the international market.
Fuze Tea is famous for its fruit flavor, glass bottles and promotes an active lifestyle. Coca-Cola has already gained a large market share from franchising and it is another source of income for them. Whereas, there are some challenges as well such as the risk of ruining trade names, allocating capital and resources, risk of revealing close information. To conclude the entry mode strategy company needs to make attempt on influencers marketing strategies as an entry mode and to capture the large market share promotions and social activities will be done. Other factors can be Macroeconomic analysis, Stability analysis, and factors to overcome the challenges must be considered (MW, 2017).
Market Strategies in the new Market
Coca-Cola will focus on targeting the mass market. They will spend on customer research and observation for better competitive performance. The target market includes age groups, Income and family size, Geographical factors, Sociographic and psychographics. As they have a good brand name globally th...