Coca-Cola’s venture into the Chinese market with its new bubble tea product encapsulates a bold step into a beloved national beverage domain. This analysis delves deep into Coca-Cola’s strategic maneuver, leveraging qualitative insights to dissect the company’s approach in introducing a fusion of milk, fruit, and syrup to China’s vibrant beverage landscape. Highlighting the lack of formidable competitors and capitalizing on the burgeoning popularity of bubble tea, this essay outlines Coca-Cola’s meticulous market entry strategy, including taste tests and a medium pricing model, aimed at captivating the Chinese consumer base through local social media and mass media channels.
International Marketing Strategy: China Bubble Tea
Nowadays, the global companies are searching for the ways to expand their presence on the global market through the introduction of new products in different locations. The current work will provide the description of the international marketing strategy for the global beverage manufacturer and distributor as Coca-Cola. The organization will strengthen its presence on the market by the distribution of the bubble tea. This beverage will represent a nonalcoholic drink made of milk, fruit, and syrup. This choice will be supported by the figures from various statistical researches which reflect the demand and consumption in China. Much attention will be paid to the studying of the existing market of beverages in this country and the existing trends. The description of the objectives of the production, target audience, and ways of the presentation will enable to understand the steps, which should form the background of the successful international market strategy of the Coca-Cola Company for the introduction of the bubble tea on the Chinese market.
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Analysis and Discussion
Coca-Cola
The current work will provide the description of the international marketing strategy of the new product for one of the most recognized beverage companies in the world. This firm was formed in 1886 and currently it is headquartered in Georgia (Yahoo Finance, 2016). The Coca-Cola Corporation is engaged in the manufacturing and distribution of non-alcoholic drinks (Yahoo Finance, 2016). Its production is represented by carbonate and noncarbonated waters, sport drinks, juices, ready-to-drink teas, and etc. (Yahoo Finance, 2016). Moreover, it proposes a great variety of ingredients, like sweeteners and syrups. This production can be found on the market under the names of Coca-Cola, Sprite, Fanta, Del Value, Aquarius, Simply, Schweppes, and many others (Yahoo Finance, 2016). It is notable that the Coca-Cola Company represents its goods through independent international and local distributors and through its own distribution operators.
International Marketing Objectives and Strategy of the Coca-Cola Company
Objectives play a considerable role in the formation of the foundation of this firm. They provide the direction and purposes for the further development. Its major objective is to be globally known as a business that conducts business responsibility and ethically and to accelerate growth to operate in tomorrows world (The Coca-Cola Company, n. d.). The company directs its efforts on staying on the forefront of the world beverage industry by the constant creation of a value and market difference (The Coca-Cola Company, n. d.). The new products are presented in such a manner that they are recognized as a means of inspiration of optimism and happiness through refreshing the lives of its customers (The Coca-Cola Company, n. d.).
The described objectives are closely connected with the firms strategies. The international marketing strategy of Coca-Cola is to be globally known, they do this by targeting different areas across the globe with different products, gaining their brand name and popularity (The Coca-Cola Company, n. d.). This approach is realized through the cooperation with local companies which have a clear understanding concerning the perceptions of local customers, the existing trends, and specifics in their countries.
Bubble Tea
The current work will provide the depiction of the international marketing strategy for the distribution of bubble teas in China. This product represents a sweet nonalcoholic drink that contains bubbles in the bottom of a bottle (The Coca-Cola Company, n. d.). It usually consists of such components as fruit, milk, syrups, and ice. Firstly, it was introduced in the 1980s in Taiwan. Since that time, it has spread all over the whole world (The Coca-Cola Company, n. d.). Currently, this drink is very popular on the territory of Taiwan (The Coca-Cola Company, n. d.), South Korea, China, Japan, European countries, Australian, the USA, and South Africa (Chang, 2012). Thus, the proposition of this beverage in China will enable the chosen company to strengthen its position on this territory. This statement is also based on various statistical researches provided and analyzed below.
These studies have showed a considerable rise of popularity of soft drinks in the chosen country. The corresponding data are presented and visualized on the Figure 1 (Heaton, 2008).
Figure 1. The production of soft drinks in China from 1998 to 2007. This figure illustrates the tendency of the change in producing soft drinks in the chosen country.
Their consumption in China is also rather high, i.e. about 25 liters annually (Heaton, 2008). Cris Sholto Heaton in his article has noted that this tendency overstates the long-term potential a bit (Heaton, 2008). Currently, the Coca-Cola Company places a leading position on this market (Heaton, 2008). Thus, it has a high level of recognition and loyalty.
One more matter that supports the statement that the distribution of bubble tea will be successful is that currently the sales of tea and milk are rather high. It is shown on the Figure 2 (Heaton, 2008).
Figure 2. Sales analysis of Chinese market by categories. This figure shows the market shares of various beverages in the chosen state.
The additional attention should be paid to the growth of the demand on milk in China. The average increase in sales of dairy products is about 13 %. This figure tends to induce in the nearest years (Heaton, 2008). This trend is shown on the Figure 3 (Heaton, 2008).
Figure 3. Dairy consumption in China. This figure illustrates the tendency of the change in the consumption of various dairy products in the chosen country from 2003 to 2010.
In the same time, their consumption is still lower than the one of similar products in other Asian countries (42 grams / day compared to 140 grams / day) (Heaton, 2008). Thus, there exists the strong potential for the further growth.
The additional attention should be paid to the fact that the Chinese market of dairy products is rather fragmented. It is represented by a great variety of small manufacturers and several big companies, i.e. Inner Mongolia Yili Industrial, Shanghai Bright Dairy, China Mengniu Dairy, and Shijiazhuang Sanlu (Heaton, 2008). These big organizations hold about 40 % of the market share (Heaton, 2008). Thus, there is no big player that can show a considerable threat for the Coca-Cola Company. In the same time, the firm could face such a challenge as the imitation behavior of smaller players.
The above mentioned factors create the understanding that the distribution of the bubble tea based on milk will be rather successful. In this work, it will be proposed to distribute this drink that contains milk, fruit, and syrups. The proposed name of the ready-to-drink beverage is Bubble.
Local Company for the Acquisition
The current work proposes entering the market of bubble tea in China through the acquisition of one of local manufacturers. Foshan Happyplace Trade has been chosen as a local producer. This choice is based on several factors. This company has over a ten year history of the presence in the local market of nonalcoholic beverages (Weiku.com, 2011). Thus, it has a strong understanding of the wishes and needs of Chinese clients. Moreover, the strategy of Foshan Happyplace Trade aligns with Coca-Colas and the objectives noted above. This company directs its efforts on the development and introduction of innovative products to its clients. It is interested in the business expansion and cooperation with other firms all over the world.
Market Testing
The market testing of this production will contain several components. The first one will be testing of taste preferences of the audience. The limited amount of individuals will be proposed to drink bubble tea with different fruit tastes. Then, they will be offered to fill a special questionnaire and mark their preferences on the special scale from 1 to 7. Only Chinese people from 16 to 45 years old who live in China will participate in the experiment. This limitation is necessary because the testing has the aim to determine the preferences of the Chinese youth and middle age citizens only.
The second testing strategy will concern the testing of the appearance of the new product. It will be based on the approach introduced by Volkswagen in 2010 when the firm entered the Chinese market (Betser, 2013). The local community obtained the opportunity to display its ideas concerning the appearance of the new vehicle by using special design tools. Then, these concepts were shared through social media for their further testing of the most popular ones of them (Betser, 2013). Thus, the company obtained the understanding what image of the product was the most popular one. Moreover, these actions attracted attention of more than 200,000 of its potential customers (Betser, 2013).
It is proposed to introduce the similar testing strategy for the creation of the image of the Bubble. The Coca-Cola Company will enable the Chinese audience to develop the design of the new image, spread the propositions in the means of mass media for the further voting, and test the most popular ones.
Target Audience
As it has been mentioned above, testing of the new product was performed for the determination of perceptions of Chinese youth and representatives of the middle age. These people have an active lifestyle and are in a constant search for something new (like products and emotions). Hence, the Coca-Cola Company will offer them an unusual product that may fresh their life, bring new experience and happiness. These people like communication and exchanging of positive experience for the reflection of themselves, getting impressed, appreciating the experience of others, and searching for new inspiration. For these purposes, they actively use social media in their daily life. As it has been mentioned above, the company will incorporate the strategy for testing and promoting the new production through the means of social media in their overall strategy of the presentation of the Bubble.
International Marketing Strategy
The Coca-Cola Company will be engaged in the distribution of the drink that offers the unusual experience. The Bubble will grant a sweet and in the same time refreshing taste and represent an enjoyable alternative to average tea and beverages due to the use of fruit and syrups.
Objectives
The proposed strategy will be based on several objectives which fully align with the goals of the Coca-Cola Company and Foshan Happyplace Trade. The first one is the introduction of the unique production and constantly improving its appearance and marketing. The second objective is represented by the continuous strengthening of the firms position through attracting new clients and holding the existing ones as well as providing extraordinary and positive emotions. The last aim is the satisfaction of customers expectations and overcoming them.
Pricing Strategy
The proposed pricing strategy undermines the proposition of the Bubble on the medium level of prices affordable for the target audience. On the one hand, the customers will be willing to pay the price that is above the minimum one if the bubble tea has an unusual and hood taste, an interesting appearance, and a good marketing strategy. Moreover, the Bubble can be a little overpriced because it will be considered as a new beverage of the well-recognized corporation that can be associated with Coca-Colas prestige and loyalty. On the other hand, the demand on drink production is rather elastic, i.e. it depends greatly on the price. The reason is that there are many other beverages proposed by other firms. Thus, the customers attention can easily shift on them.
Distribution Strategy
The new product will be distributed by using both direct and indirect channels: the branches of the Coca-Cola Company and Foshan Happyplace Trade. The Bubble will be introduced at big shopping smalls and tiny shops for reaching the wider audience as soon as possible.
Marketing and Promotion
The Bubble will be represented as a completely innovative beverage. It will be displayed as a non-alcoholic product based on milk and fruity content with syrup the extraordinary taste of which gives many positive emotions. The major message of the campaign will be Refresh yourself. It will introduce the concept Be bright, be yourself.
The new drink will be widely displayed in the various means of mass media, like the Internet, social networks, and Chinese entertainment web-sites. The additional attention should be paid to the fact that such common search engines, like YouTube, Facebook, and others are not available in China (Betser, 2013). They are replaced by the local ones. Thus, the Bubble should be presented there as well as social networks.
Conclusion
To summarize, the current work presents the description of the international marketing company for one of the most popular global beverage manufacturers and distributors as the Coca-Cola Company. Its major objective is to offer the innovative production that brings positive emotions for attracting the audience and constant increasing the market share for staying on the forefront of the industry. Coca-Cola is proposed to introduce the bubble tea based on milk in China. This product is estimated to be popular because of a growing raise of the demand on beverages and on milk in this country. Currently, the market is represented by several big companies and numerous small manufacturers. Thus, there is no big and strong competitor that may be a competitor for the corporation. The additional attention should be paid to the fact that the Coca-Cola Company has been already well-recognized on the Chinese market. Thus, it can use its image and the already formed attitudes of customers for the presentation of the new drink under the name of the Bubble. It should be noted that Coca-Cola will act as a distributor that has purchased the local bubble tea manufacturer Foshan Happyplace Trade. This company has been chosen because it has a long history of its presence on the Chinese beverage market, established relationships, and the understanding of local clients. Moreover, its strategy and objectives align with Coca-Colas. The major marketing approach of the new product will be reflected in the representation of the unique and refreshing taste that can bring positive emotions to consumers. The company will constantly improve the image and marketing of its drink to meet and exceed the customers expectations and stay on the forefront of the industry. The Bubble will be promoted in the local means of mass media and social networks, as the global tools are unavailable in this country. The presented international marketing strategy of the Bubble tea introduced by the Coca-Cola Company is considered to be successful. The reason is that it is based on the precise analysis of the company-manufacturer and the company-distributor, studying the current marketing trends and strategies in China, determination of the target audience, and the ways of the presentation of the new product.
