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PRODUCT RE-LAUNCH

PRODUCT RE-LAUNCH

MARKETING MANAGEMENT REPORT

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Acknowledgement
First of all, we would like to express our gratitude to IQRA University
for giving us an opportunity to pursue Masters in our field of studies.
We are heartily thankful to our teacher, Atif Shahab Butt, whose
encouragement, guidance and support from the initial to the final level
enabled us understand the various steps involved in conducting a
research report.
Furthermore, we would like to thank all my friends for their kind
cooperation and efforts to assist us in every helpful way they can. We
must admit that this semester we had the best studying experience and
will always cherish this year of our academic life.

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project report of failed product


re-launch (rc cola)
SUBMITTED TO:
Atif Shahab Butt

Individual:

Signatures

Ushair Fareed

(20988)

Junaid Naeem

(21545)

MARKETING MANAGEMENT
THURSDAY 6:30 PM TO 9:00 PM

DATE OF SUBMISSION
12-DEC-2013

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Table of Contents
Executive Summary ................................................................................................................................................................... 7
Company Description ................................................................................................................................................................ 8
Reasons Of Failure .................................................................................................................................................................... 9
Strategic Focus And Plan .........................................................................................................................................................10
Mission ................................................................................................................................................................................10
Goals ...................................................................................................................................................................................10
Core Competency................................................................................................................................................................11
Ansoff matrix.......................................................................................................................................................................11
Porter Generic Strategies ....................................................................................................................................................12
Situation Analysis ....................................................................................................................................................................13
SWOT analyses ....................................................................................................................................................................13
Strengths; ........................................................................................................................................................................13
Weaknesses: ...................................................................................................................................................................13
Opportunities: .................................................................................................................................................................13
Threats: ...........................................................................................................................................................................13
PEST ANALYSES ...................................................................................................................................................................14
Political Factor:................................................................................................................................................................14
Economical Factor: ..........................................................................................................................................................14
Social Factor: ...................................................................................................................................................................15
Technological Factor: ......................................................................................................................................................15
industry analyses.....................................................................................................................................................................16
Porters five forces Model...................................................................................................................................................16
Bargaining Power of Buyers: ...........................................................................................................................................16
Bargaining power of Suppliers: .......................................................................................................................................16
Threat of New Entrants: ..................................................................................................................................................16
Threats of Substitute:......................................................................................................................................................17
Rivalry among existing players: .......................................................................................................................................17
Attack strategy ....................................................................................................................................................................17
Frontal attack ..................................................................................................................................................................17
Bypass attack...................................................................................................................................................................17
Defense strategy .................................................................................................................................................................18
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Preemptive (blocking) defense: ......................................................................................................................................18
Customer Analyses ..............................................................................................................................................................18
Segmentation of Target market: .....................................................................................................................................18
Demographic Factor:.......................................................................................................................................................18
Geographic ......................................................................................................................................................................18
Psychographic .................................................................................................................................................................18
Behavioral .......................................................................................................................................................................19
Market-Product Focus ............................................................................................................................................................19
Point of parity: ................................................................................................................................................................19
Point of difference: .........................................................................................................................................................19
Positioning: .....................................................................................................................................................................20
Marketing Program .................................................................................................................................................................20
Product ................................................................................................................................................................................20
Branding: .........................................................................................................................................................................20
Sssshhhh.Coming again with new style and taste ....................................................................................................20
Logo: ................................................................................................................................................................................21
Branding Strategy:...........................................................................................................................................................21
Style and Design: .............................................................................................................................................................21
Packaging: .......................................................................................................................................................................21
Price: ...................................................................................................................................................................................21
Promotion ...........................................................................................................................................................................23
Advertising Media: ..........................................................................................................................................................23
Sales Promotion: .............................................................................................................................................................23
Direct Marketing: ............................................................................................................................................................23
Personal Selling: ..............................................................................................................................................................24
Place ....................................................................................................................................................................................24
Plant location ..................................................................................................................................................................24
Distribution Strategy: ......................................................................................................................................................24
Marketing expenditure ...........................................................................................................................................................25
Electronic Media .................................................................................................................................................................25
Print Media .........................................................................................................................................................................26
Billboards ............................................................................................................................................................................27
Budgeting ............................................................................................................................................................................27
conclusion ...............................................................................................................................................................................29
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Executive Summary
RC cola ones the top among many in the field of
beverages in Pakistan in 1970's is coming back through
our project re-launch to gain yet again which was
gained in the era of 1970. through our product relaunch we will try to cope all the basics of project
launch such as reasons of failure, strategies ,SWOT,
marketing mix , segmentations etc.
The offering of RC cola is soft drink to the targeted
consumers starting from the age of 14-40 with the
income more than 15000. They are mostly experiences
and strivers. The product fulfills the need of thirst. RC
cola is striving to achieve favorable sales figure and
trying to reduce expenses but most of the expenditures
are done on marketing the product.

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Company Description
INTRODUCTION AND HISTORY OF RC COLA:
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.
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 byTaste Test".
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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.

Reasons Of Failure
RC cola was a very famous drink in Pakistan. It was widely known all over
the Pakistan since the time of its arrival in the sub- continent which was the
70s having the same popularity like Coca Cola and Pepsi today. RC Cola
was being sued by different organizations internationally so it lowered its
investment in the sub-continent and in 90s, RC cola started to fade away
due to some issues and stopped its production in Pakistan. the following
are the basic reasons for failure of RC cola;
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.

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RC finally stopped production somewhere in the early 90's.
RC Cola's bottle is not appealing and the regular one specially looks
so thin, it seems as if it has less drink inside
RC Cola is currently not operating in Pakistan and if RC Cola wants to relaunch in Pakistan, it may face strong competitors like Coca Cola and
Pepsi who are ruling the cola market in Pakistan.

Strategic Focus And Plan


Mission
"To fulfill the basic need of customers by providing them a nice choice
among big brands, within affordable price range and maintaining
sustainable profitable growth

Goals
To increase profit
To satisfy Customer
To increase and capture the market share

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Core Competency
The core competency which RC cola posses is its international image and
its history of over 100 years in the beverages market with the knowledge of
failure and success as they have learned it through market experience.

Ansoff matrix
Under the Ansoff matrix RC cola would fall into the category of market
penetration and product development.
As an existence product in terms of international market RC cola would
use market penetration as it falls in present market and present product.
whereas if we see in aspect of Pakistani local market the re-launch will
place RC cola under the dynamics of product development as it would be
coming into the market yet again but having an stage of development.

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Porter Generic Strategies


To gain a competitive advantage over our compotator in a broad market
scope RC cola would be following Porter generic strategy of overall cost
leadership through;
Increasing profits by reducing costs, while charging industry-average
prices.
Increasing market share through charging lower prices, while still
making a reasonable profit on each sale because of reduced costs.

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Situation Analysis
SWOT analyses
Strengths;
RC Cola is the cola which is more than a100 years old.
In Pakistan the image of the brand is already been made 30 years back.
Consumers ability to recall.
low prices.

Weaknesses:
International suits for law.
Low Advertisement.
Budget for promotion is also so low.

Opportunities:
Building equity for its brands.
Hot weather in Pakistan
Production of more suitable products to satisfy consumer
needs.
Re launching in new market.

Threats:
Very strong competitors in the market like Pepsi and Coke.
More competitors are looking to enter in the market.
Govt. Policies.
High tax rate on beverages.
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PEST ANALYSES

Political Factor:
Infect Pakistan is a democratic country but political condition now
days is very worst. Investment in private sector is equal to none.
Tax is levied heavily on beverages industry. Trade agreement is
supported but there are also strict restrictions following these. There
is no regulation in the favor of the labor community. They are not
even paid equivalent to their work.

Economical Factor:
It is a second largest element of PEST analysis. It involves economy
conditions, inflation rate, employment level, spending power etc. In
Pakistan unemployment is up above the sky. People are searching
for jobs even after getting 16-18 years of education. Unemployment
level reduces the buying power of consumers and in the end
economy starts declining. The big threat of Royal Crown Cola re
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launch in Pakistan is what prices they set to get the attention of
people in limited buying power.

Social Factor:
ROYAL CROWN was first launched in Pakistan by keeping a
religious and social status of Pakistani people and it worked. They
offered low quantity of gas in it. Current situation is that media is
also on top of the list so if ROYAL CROWN cola re launches in
Pakistan then advertisement campaign could be run on high level.
So ROYAL CROWN should be able to offer those products which
aims to benefit people lifestyle and behavior. If it doesnt then the re
launching of this organization will be in vain once again.

Technological Factor:
The current era is running in lot of pace. Everybody wants to leave
the other person back. Technological changes aims to get the
instant results and it does happen. Technology is all about the quick
and accurate outcomes. Research and development department of
Pakistan is not less than the others. ROYAL CROWN should launch
the product by keeping in view the technological changes and
development.

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industry analyses
Porters five forces Model
Applying five forces to the beverages industry of Pakistan allows us
to create a view of potential attractiveness in the sense of
profitability in the related industry.

Bargaining Power of Buyers:


The buyers of this industry are in extremely large numbers and
buyers want to purchase this industrys products on relatively low
prices, impulse, and convenience basis so making is beneficial for
the industry.

Bargaining power of Suppliers:


In beverages industry most of the raw material is used in which
there are no specialized people of such commodities like sugar,
syrup, glass, plastic, tins and water etc so bargaining power of the
supplier is high because shifting to another company takes a time
and initially there will also be a bargaining of prices. When the
suppliers are not specialized then losing them is not a big issue for
the organizations.

Threat of New Entrants:


In this industry the threat of new entrants is relatively low because it
needs a huge investment and specially when the giants like Pepsi
and coca cola are in the market. It is also very difficult to set up
industries for bottling plant specially for new entrants.

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Threats of Substitute:
Threat of substitutes in this industry is high whether it comes to the
health issue or some other issues. People can move easily from one
company to others because they have choices if company of their
choice is not offering good products in terms of health, quality and
money.

Rivalry among existing players:


In Pakistan market is heavily dominated by to giants of beverages
industry Pepsi and Coca Cola with a share of 75% and 18%
relatively leaving less room for others but Royal Crown Cola is an
existing industry still they can make profits by making it more
attractive for the customers.

Attack strategy
RC cola will be following 2 attack strategy which are as follows;

Frontal attack
Through media war to show our existence in the market
and to take a sweet revenge for what coke and Pepsi did to RC cola
in the late 1970's.

Bypass attack
RC cola didn't come Pakistan directly as they are coming
after capturing the Bangladeshi market which proves it to be a
bypass attack.

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Defense strategy
Under defense strategy RC cola would be using;

Preemptive (blocking) defense:


The entrance of RC cola into the market would itself an
attack for its competitors as now RC has to wait to see the
retaliation of it.

Customer Analyses
Segmentation of Target market:
Demographic Factor:
Age: 10 25 years
Class: Upper, Upper Middle, Middle
Gender: Male and Female

Geographic
A Zone (N.Nazimabad,Nazimabad,Gulshan
B Zone (Defence,PECHS,Saddar,)
C Zone (North Karachi,Gulzar e Hijri,Lyari)

Psychographic
Social class: Middle class, upper class
Lifestyle: Actualizes, fulfilled, Believers, Achievers
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Behavioral
Occasions:

Parties, Birthdays, Sports

User status:

Carbonated drink user

Market-Product Focus
Point of parity:
The point of parity for RC cola is its different flavors like;
RC Cola
Diet RC Cola
Cherry RC Cola
RC Edge Cola
Diet Rite Cola
RCQ
Royal Crown Draft Cola
Kick

Point of difference:
Although there is no such point of difference as
compared with the competitors but the only slight difference could
be its price as RC cola offers its product at low prices.

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Positioning:
Positioning should be done on its unique looks and
different taste as well as at low price which will act as a USP for the
target market

Marketing Program
Product
Royal Crown Cola no doubt is an international brand working for
more than 100 years but due to some reasons it failed in Pakistan
so new they should need to develop a new product with meet the
requirements of the consumer. To develop a new product there
should be an idea which can be taken by the survey of asking to
customers, employees and other stake holders. Then form all the
ideas and select the best one.

Branding:
People dont buy products they buy brands. Keeping this in view
Royal Crown Cola brand should be attractive in terms of logo,
symbol and slogan which must be different from others.
The slogan which we have suggest is

Sssshhhh.Coming again
with new style and taste
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Logo:

Branding Strategy:
Royal Crown Cola is an international brand so its strategy will be
own label branding.

Style and Design:


When it comes to the design and style of the product then it must be
full of attraction and acceptance of people.

Packaging:
Packaging of Royal Crown Cola should represent protection,
advertisement, and should be informative.

Price:
Pricing strategy for Royal Crown Cola should be market penetration
strategy. In which Royal Crown Cola offer cheap prices as compare
to other competitors to get the attention of the customers and
afterwards increasing the prices. This strategy will also discourage
the new entrants.
Royal Crown cola pricing strategy will be competition based strategy
because Royal Crown Cola must offer fewer prices from its
competitors to get the attention of customers. And for new products
the strategy will be market price penetration because by offering
low prices people will come to buy and another strategy would be
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price skimming furthermore there should be incentives given to the
retailers like chillers, tours on extra buying etc. different offers must
be offered on special occasions like Ramadan and Eid.

Prices of different bottles


Quantity

Price in Rupees

Jumbo

80

1.5 Liters

65

1 Liter

37

500ml

30

250ml

16

Tin

25

PRICING STRATEGIES:
Market Penetration Pricing Policy
Price skimming
Discounts
Quality Discount:
1/10 Discount
2/20 Discount
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Promotion
Advertising Media:
Broadcasting on TV and radio which will increase the awareness
among people
Creating advertisement short messages service by collecting the
data from cellular companies and offering customers to buy the
product
Bill boards and posters will be applied on high ways, centre points,
on buses and cabs.
On internet little ads will be displayed to tell the product information
Offering free cards with famous magazines for first month.

Sales Promotion:
Free vouchers will be given to retailers for the customers who buy in
quantity for dine in like in McDonalds, KFC and other restaurants.
For first month there will be an offer for regular pack to get 3 cans
for the price of 2.
Free samples will be distributed in markets and in grounds on
mobile vans and opening outlets outside the public parks.
Price discounts will be given to customers.

Direct Marketing:
SMS will be sent to customers taking data base from cellular
companies.
Direct mails will be sent to customers.

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Personal Selling:
Marketing managers will go directly to retailers and take the orders
because it will save the time of involving whole sellers.
Appointing persons to go house to house and offer attractive prices
to households if they buy huge quantity.
Offers will be made to customers to retain them for a long time with
the company.

Place
Plant location
The plant of RC cola is located at D-210, state Avenue,
SITE, Karachi.
Royal Crown Cola should use the push strategy for their product
by using different promotional tactics and through media.
Distribution will be divided according to the number of areas and the
nature of customer according to the literacy rate. Because if the
company offers online buying than it would not be affective in rural
areas of Pakistan. Representative of the company should directly go
the retailers to offer them facilities like bonuses and incentives. In
Lahore they should try to ask international Royal Crown Cola to give
them franchise in a tax free zone and provide plants for both glass
and PET bottles.

Distribution Strategy:
Distribution strategy which we suggest for RC is Intensive
distribution because beverages are the FMCGs and these types of
products need more outlets as much possible.
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Marketing expenditure
Electronic Media
CHANNEL

TIME

DURATION TOTAL

GEO

PRIME TIME &


POST PRIME
TIME

1 MIN

22,00000

DUNIYA TV

PRIME TIME &


EARLY DAY

1 MIN

2050,000

AJJ NEWS

PRIME TIME &


EARLY DAY

1 MIN

15,00000

SAMAA
NEWS

EARLY DAY &


PRIME TIME

1 MIN

14,00000

Total

7150000

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Print Media
NEWS

PAGER

PAPER

COLOR
OR

SIZE

DAILY
BASIS

WEEKLY CHARGES
BASIS

BLACK &
WHITE
JANG

FRONT COLORED STANDARD DAILY


SIZE

EXPRESS MID

COLORED STANDARD DAILY


SIZE

18,000

14,000

DIN

FRONT COLORED STANDARD


SIZE

15,000

DAWN

MID

COLORED STANDARD
SIZE

20,000

DAILY
TIME

BACK

COLORED STANDARD
SIZE

12,000

COLORED STANDARD WEEKLY


SIZE

20,000

AKHBAR BACK
E-JAHAN

Total

99000

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Billboards
LOCATIONS

SIZE

DURATION

TOTAL COST

DEFENCE

2060

1 MONTH

2,00000

NORTH NAZIMABAD

2060

1 MONTH

2,50,000

SHAHR-E-FAISAL

2060

1 MONTH

2,15,000

GULSHAN

2060

1 MONTH

1,15,000

SADDAR

2060

1 MONTH

1,50,000

TOTAL

9,30,000

Budgeting
S.NO

DESCRIPTION

AMOUNT

1.

COST OF LAND

5,0000000

2.

RAW MATERIAL

40,00000

3.

STATIONARY

5,00000

4.

OFFICE EXPENSE

1,00000

5.

FURNITURE

5,00000

6.

STAFF SALARIES

5,00000

7.

FREIGHT INWARD CHARGES

6,00000

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8.

REPAIR & MAINTENANCE

1,50,000

9.

RESEARCH & DEVELOPMENT

1,00000

10.

TECHNOLOGY

10,00000

11.

MARKETING & MEDIA EXPENSES

1,13,59,000

TOTAL

6,88,09,000

BREAK EVEN ANALYSIS:


filtration plant2= (10,000,000*2) =

20,000,000

sterilization plant 2 = 8,000,000*2=

16,000,000

packaging and labeling plant 2=

16,000,000

Factory size 3500 feet height 16 yearly rent= 6,000,000


Sum of Salaries of employees=

7,200,000

Other supplies =

5,000,000

Total fixed cost

70,200,000

Electronic media cost

7,150,000

Print media cost

99,000

Billboards costs

930,000

Total cost

78,379,000

Average Variable cost per unit

11
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BREAK EVEN SALES POINT:
Revenue = 25+30+35/3=30*Q
Cost=78,379,000+11*Q
Revenue = fixed cost + variable cost
30Q=78,379,000+11Q

Q=4,125,210units must be sold each year to reach to


breakeven point.

conclusion
Well, according to our knowledge about marketing, we conclude that
RC Cola failed in Pakistan because of its poor attention given
towards the ad campaign. Even in Pakistan people used to drink RC
Cola and they really liked it, but it's all about many years ago in
1970's n 80's may be because there was no other cola at that time.
When other colas came they advertised and they did it so well that
people were attracted towards them. It's also about how you present
it, the looks of the product. RC Cola's bottle is not appealing and the
regular one specially looks so thin, it seems as if it has less drink
inside, that's why the drink has reached its decline and rejection. It
is possible for them to rise again through the proper attention
towards the advertising and the outlook of the product. It should
need to be appealing and beautiful, it should be trendy. That's what
it needs and right advertising at the right time can do a lot, It needs
to know the important about how can we market a product in a way
that it can give fashionable and trendy impact on the people.

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