Marketing Mix of Fanta

Topics: Company

A favorite in Europe since the 1940s, Fanta was acquired by the Coca-Cola Company in 1960. Fanta Orange is the core flavor, representing about 70% of sales, but other citrus and fruit flavors have their own solid fan base. Consumers around the world, particularly teens, fondly associate Fanta with happiness and special times with friends and family. This positive imagery is driven by the brand’s fun, playful personality, which goes hand in hand with the bright color (particularly orange), bold fruit taste, and tingly carbonation.

Fanta sells best in Brazil, Germany, Spain, Japan, Italy and Argentina. Fanta distribution was increased in the U. S. in 2001 with the return of four flavors: orange, strawberry, pineapple and grape. Orange, the biggest seller, is now available in most of the country. Product Fanta is available in 3 flavors namely Orange, green Apple and lime, green apple and lime were introduced only recently whereas the Fanta orange flavor has been prevalent in India for very long time now.

Fanta orange is distributed everywhere i. . throughout the country where as other two are distributed only in selected cities. New Flavors International soft drink companies such as Coca-Cola and Pepsi Co. are attempting to enter the Indian market by attempting to bottle their national drink, coconut water. Such companies face fierce competition from the traditional players and will focus their attempts to create a presence in the market by using their mass marketing skills, which have contributed to their worldwide success.

The companies reported interest in Kerala’s natural drink coincides with the struggle waged by certain radical groups against them and attempts by state sponsored coconut promotion agencies to increase the use of coconut products hurting their key products like Coke-Cola, Pepsi, Fanta and 7-up.

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Product Differentiation Coca Cola in orange and lime flavors i. e. with respect to Fanta faces sever competition from Pepsi Co’s Mirinda. Both the drinks can be differentiated on basis of two factors namely: Sweetness and Gas Contents.

Fanta on one hand is too sweet to handle whereas mirinda is disliked by many because of the reason of its gas contents. Quality In India no product which uses water as the major component as part of its product is granted ISO standards. As repute of the Coca Cola as the company is on stake, it organizes frequent surprise visits to its various bottling plants. A Coca-Cola factory has slowed down production and fired 40 workers even as a state government report found that sludge from the factory contained high levels of lead and cadmium.

Officials of the firm, however, said the layoffs had nothing to do with the quality control report or an earlier survey by the center for science and environment, which found high levels of pesticides in Coke and Pepsi beverages. The production slowdown took place at the Dankuni bottling plant near Kolkata a quality check on the sludge from Pepsi and coke’s bottling plants in west Bengal on Friday had revealed the presence of high levels of lead and cadmium. Dankuni plant official Joydeb Mukherjee described the workers as temporary hands, but did not elaborate by how much production had been reduced.

A company spokesperson claimed that the slowdown in production was “a normal move” in keeping with lower demands in “off-seasons” and was not prompted by a fall in sales after the adverse quality reports. However, some of the retrenched workers claimed this was the first instance of jobs-cut in the Dankuni bottling plant. India’s Rs 1. 2 billion soft drinks market was rattled by the CSE study this week claiming a dozen popular brands of Coca-Cola and Pepsi contained pesticides. The firms scurried to allay consumer fears and refute the study by the NGO.

Acting on CSE report, several state governments have carried tests of the sludge and beverage samples from the two companies plants. The West Bengal governments probe found that sludge from coca cola Dankuni plant contained about 80 mg/kg of cadmium when the permissible limit was only 50 mg/kg. Effluents from its two other bottling plants in West Bengal revealed 76 mg/kg and 50 mg/kg of cadmium respectively. Residues of these heavy metals had also been found in the sludge from coke’s bottling plants in Kerala state health authorities have asked the two companies to explain at what stage of production the two heavy metals were being used.

Test reports on the beverages are expected on Tuesday. Coca-Cola in India accused of leaving farms parched and land posined The largest Coca-Cola plant in India is being accused of putting thousands of farmers out of work by draining the water that feeds their wells, and poisoning the land with waste sludge that the company claims is fertilizer. The plant in the southern state of Kerala is designed to satisfy the demand for coke in what has become the multinational company’s fastest growing market.

But its huge demand for water is causing such damage to the local economy that the village council which had granted the company a license to operate is now demanding the plants closure. So desperate have the nearest villagers become for water since their wells dried up that Coca-Cola sends water tankers round every morning to supply minimum needs. The company denies the shortages have anything to do with its use of up to 1m liter of water a day from the underground aquifer that used to keep the wells topped up.

The charity action aid says the crisis facing the once prosperous farming area is an example of the worst kind of inward investment by multinational companies in developing countries. In a report to the world trade organization’s meeting in Cancun, Mexico, in September the charity says this kind of abuse must be controlled. The report says Plachimada was a thriving agricultural community until Coca-Cola set up the bottling plant in 1998. Coconut groves and vegetable crops have had to be abandoned because of the lack of water.

Action Aid says thousands of people worked on the land but now just 141 are employed at the plant, with a further 250 as casual laborers. Peaceful sit-in protests have been going on for more than four months. In a hut outside the plant a large Coca-cola bottle is kept in coffin. In a report today on Radio 4’s face the facts program details of the contaminants in the sludge Coca-Cola sells as fertilizer, gives away, or sometimes dumps in dry riverbeds are revealed for the first time. Samples taken in India and analysed by Exeter University show high levels of lead and cadmium in the sludge.

Lead is particularly bad for children, affecting their nervous system, and cadmium is taken up by plants, is toxic to the kidneys and liver and can cause cancer. The report by David Santillo says: “Repeated applications of sludge, containing these sorts of levels of cadmium and lead, to agricultural soils would undoubtedly lead to a build-up of these toxic metals in the soil, from where cadmium could then be transferred to plants – and therefore into the food chain. This contaminated sludge sample also contained a high component of phosphorus, presumably the reason for its promotion as a fertilizer.

However, the presence of high levels of cadmium and lead in the sludge make it completely unsuitable for use as a fertilizer. Sunil Gupta, vice-president of Coca-Cola India, says the company has been the target of a handful of extremist protesters and it is lack of rainfall that has caused local water supplies to be exhausted. The company claims to use a maximum of 600000 liters a day. Mr. Gupta also says Coca-cola undertook an environmental impact assessment before building the plant, but has declined to make one available.

He stood by the claim that the sludge waste from the plant was fertilizer and said the company complied with all local environmental laws and stood for the welfare of the community. So far attempts by the local council to shut the plant have failed. An order by the Perumatty village council canceling the company’s license to operate, on the grounds that the bottling plant was over-exploiting the water resources, was overruled by the Kerala high court last month. PRICING POLICY Since the success of the organization in achieving the market objectives is measured on a profit basis, pricing policy must be under strict strategic ontrol. Pricing is certainly not the last activity of the mix to be considered, nor is something which can be quickly solved on the back of an envelop on the way of meeting with the advertising agency. Most organizations find pricing policy a difficult area to manage. More often than not, this is because insufficient research has been carried out in the market place to find out the important parameters on pricing – the right price levels and the real flexibility open to organization in its pricing decision.

Often an organization is more than happy to spend a hundred thousand dollars or pounds on researching its new product concepts, but is loathe to spend one percent of that on researching the different customer perceptions to various price levels. There are number of factors which will probably influence organization’s pricing policy, factors such as the competitor’s price, the position of the product in the lifecycle, company positioning policy, perceived level of differentiation and perceived value, and so on. One factor which, should not have any influence on the pricing policy is the internal production cost of the product/ service.

Cost does not inform the organization about what price it should charge, that is the job of the marketplace. Cost only informs the organization about the levels of profit it will make from the sale. The most common mistakes in the pricing policy can easily be identified. First, organizations tend to be too cost oriented in the pricing. Second, price is often not revised enough to capitalize on market changes. Third, price is too often set independently of the rest of the marketing mix rather than as an intrinsic element of the market positioning strategy.

Fourth, price is often not varied enough for different product items and different product items and different market segments. The critical element in strategic pricing is to strike the elusive balance between the organization’s need for profit and the market’s desire to pay the right price for the right product. FIXING POLICY OF PRICE The 200 ml bottle which costs Rs. five to the consumers actually cost Rs. 4. 33 to retailers. This is the price at which it is sold to them by the company distributors. This price of Rs. 4. 3 includes the production cost plus 300% marketing cost plus 42% excise duty plus profit margin of company and also the margin to be given to the middle menchain of distributors. Thus the cost of drink is not decided on the basis of market’s desire to pay right price for the right product but the organization’s need for profit. PRICING OF THE PRODUCT Against the 300-ml glass bottles priced Rs 10, the 200-ml bottles carry price points of either Rs 6 or Rs 7, depending on the market conditions and distribution costs specific to the region the brand is available in.

Another move in this direction was lowering the prices of its 2 liter and 1. 5 liter PET bottles some months back with the objective of boosting in-home consumption. While the prices of 2 liter PET bottles were brought down from Rs 50 to Rs 43, prices of Coca-cola’s brand s available in 1. 5 liter bottles were scaled down from Rs 43 to Rs 38 around the same time. COMPETITOR’S PRICING Pepsi Foods, too, has 200 ml glass bottles for brand Pepsi, Mirinda orange and Mirinda lemon in select markets. The pricing strategy is similar- at Rs 6 and Rs 7 depending on the market the brand is present in.

FACTORS LEADING TO EFFECTIVE PRICING Coca-Cola has been minimizing investments across most processes such as manufacturing and distribution, leveraging freight rates and implementing and ERP system which has led to cost saving. Also ensuring cost-efficiencies across the value chain has helped in scaling down costs. A target of cutting costs by 10 per cent every year has been set by the organization. TERMS OF TRADE Usually their does not exists any credit period in this trade. The amount is collected as cash as and when any delivery is made.

But this is subject to change in case somebody wants to give credit to its buyer. Basically this depends from individual to individual. DISCOUNTS Generally discount of Rs. 2 Rs 4 per 24 bottles is allowed by the company to its distributors. FANTA MINI Coca-cola India announced a reduction in the retail prices of its carbonated soft drinks in the market. Accordingly, it will be priced at Rs. 5/ for 200 ml and Rs 8 for 300 ml bottles from their existing levels. The new prices have already come into effect. According to company sources, the prices have been cut by over 15 per cent.

This is in keeping with the company’s policy to dramatically enhance the affordability and to bring them within an arm’s reach of consumers. The low prices will provide an opportunity to a larger section of consumers to experience our world-class products on a regular basis. Soft drinks are mass consumption products like tea or coffee and to make this happen they are addressing affordability and also right sizing the product to a 200 ml pack size. Its pricing and distribution policy with focus on affordability and availability proved to be a big success last year.

The per capita consumption of soft drinks in India is very low even if compared to many third world countries. According to the company, the new price is expected to expand the consumer base and the market size of the soft drinks industry. To communicate this price drop in Tamil Nadu they have made a new TV commercial with actress Simran. The theme of this ad is innovative and tells the message in a unique way. Both the Fanta brand personality, as well as Simran’s attitude gels well and comes out strongly in this piece of advertisement. DISTRIBUTION PLACE POLICY

Distribution or place policy is another area where the marketing function can spend lots of time for ultimately very little return. Distribution is a major question for most organizations – manufacturers are concerned with how to distribute and deliver product to the customer and service providers are concerned with the location of service points and customer accessibility. While there are marketing question behind distribution policy is quite simple – where would our customer expect to find our product or service? – Most distribution channels tend to have grown historically to their present configuration.

There are two strategic questions to be answered before the distribution problem can be passed on. First, the distribution system should be accessed on a regular basis. If the organization were starting afresh, with a clean sheet of paper, what kind if distribution system or network would be required to meet our marketing objectives? Then, how would this ideal system compare with the system we currently have? Are there changes that the marketing tacticians need to look at here? The second strategic task is to ensure that the distribution policy marches, as far as possible, the needs of the overall marketing effort.

With the shift of power, in some industry sectors, from producer to the distribution channel manager, we are starting to see entire marketing strategies being modified to see entire marketing strategies being modified to ensure adequate product/ service coverage. Such modifications, while they may produce short-term market advantage, also produce a marketing strategy which is distribution led rather than market led. India is not from a consumer or from a business point of view, one country. Therefore, coca cola has shifted its management system to what is called federal system in the last three years.

That means instead of having, like in the US, a centralized government taking all the decisions, we have five, six or seven regions and get them to make a lot of the decisions on what is to be done about the business. So while a nodal strategy for India set for INDIA — could be affordably – we ask each of those local regional vice-presidents who run the business to go and execute their strategy. It has been found out that in the south, Fanta has got a great opportunity, because there’s a strong tradition of drinking orange flavored drinks. It’s known that the South has always been a flavor-base market.

While UP remains an 80 per cent cola market and Punjab is a 65 per cent cola market, carbonated soft drinks comprise about 40 percent of the Chennai market. Last year saw Pepsi Food’s Mirinda add a third apple variant to its orange and lime portfolio, and Fanta from Coca-cola being extended to three variants. Mirinda apple was rolled out in Bangalore last summers, and was taken to Chennai two days later. Last summer also saw Coca-cola India extending its orange carbonated soft drink brand, Fanta to green apple and watermelon variants in – you guessed it right – Chennai and Bangalore.

That Fanta orange grew by 30 percent last year in Tamil Nadu explains why the company chose this market for similar extensions. (That Fanta Watermelon has since bombed is another story. ) BOTTLING INFORMATION The coca cola company received approval from the government in July 1996 to set up a holding company to invest US$ 700 million in downstream operating subsidiaries to engage in the preparation, packaging, sale and distribution of beverages. In July 1997, the holding company was permitted by the government to operationalize its bottling subsidiaries.

The bottling subsidiary currently owns and operates twenty-six bottling plants and sixty distribution centers across India. In addition, it uses 20 contract packers to augment its production capacity and cater to the increasing demand for its wide portfolio of beverages. To reach India’s 300 million soft drink consumers, the company distributors its products in over 700000 retail outlets, serviced via trucks, converted three-wheelers, tricycles and pushcarts. PROMOTION Promotion is defined as the whole array of methods and procedures by which the organization communicates with its target markets.

Physical evidence also has a strong communication effect in the marketplace as does the price (a strong communicator of product quality and differentiation). Personal selling is also traditionally included in the promotional element of the mix since it is essentially a communication function in the same way as other activities. Promotion is considered as the last element of the marketing mix since it should be the final activity to be planned within the marketing strategy/ it is the final strategy because no promotion can really tale place (or promotional objectives and plans laid) until decisions have been made on the est of the mix, and the organization knows what product is on the offer, the target market to be addressed, the price levels to be set, the distribution channels to be used and so on. THE PROMOTION PROCESS Strategically, the entire promotional activity can be seen, very simply, as a set of six broad steps. 1. Set of promotional objectives 2. Identify the target audience 3. Select the message 4. Select the Media 5. Agree budgets 6. Monitor, test and control results.

Promotional Objectives: Like every promotion Fanta also has a focused objective of creating more and more customer base for itself and also sustaining the already created customer. With very thin line difference between Mirinda, a Pepsi Co. product it needs to promote itself extensively. Another focus of promotion should be product differentiation. Target Audience: Fanta comes in bright colors with the target customers as youngsters, teenagers and females. Message: Common feature in all its promotions is the fun, energy and boldness which is also represented by its tangy flavors and vibrant colors.

With the target customers being teenagers and females it works really well. Media: Fanta is advertised extensively on television and radio. As far as print media is concerned, Fanta is advertised only for sponsorships and cross selling. Budgets: As known to everybody coca cola is spending handsome amount on advertisements and promotion. But the exact amount is not disclosed. Monitor, Test and Control Results: After the advertisements is aired its practice of the company to take feedback from the viewers as to the appeal and convincing power of the advertisement.

A very nice drink Have always loved soft drinks mainly coca cola, lilt and Fanta orange. I tried several brands of lemon-flavored soft drinks but never liked them. I was talking to a friend about diet cola with lemon (which I did not like) and he told me to try Fanta icy lemon drink. I seem to have got hooked on it. This drink is not bitter which could explain why I have become addicted to it. If only I knew about it earlier, on the other hand it is better to have tried it late than never. The drink is so refreshing.

Like all soft drinks it always tastes better ice cold. The smell of the drink is good since the smell of lemon is not over powering. Some lemon drinks have very strong smell of lemon for my liking. When you look at the ingredients used to make the drink you may notice lemon juice is only 6%. It would be nice if they told us the amount (percentage) of sugar used. Ingredients: carbonated water, lemon juice (6%), sugar, critic acid, stabilizers (e414, e445) preservative (e211), antioxidant (e300), flavorings, color (quinoline yellow) Cost: 1. 2 for a 2-liter bottle. You can also buy the drink in a can, 500 ml or 1. 5 liter bottles. The packaging is good, it has got a yellow and lime green color background with the word Fanta in dark blue, the word lemon is in yellow with green background. This drink is bottled under the authority of the coca cola company by coca cola enterprises limited , uxbridge, ub8 lez, Customer care helpline: free phone 0800 227711 For does people who want a bitter lemon soft drink then this product is not for you.

On the other hand if you want your drink to be a little sweet with a touch of lemon then this is the one for you. Currently at tesco stores you can buy one 2-litter bottle and get second free, A real bargain. ADVERTISISNG AGENCY When coca cola is facing such stiff competition from Pepsi co. It cannot afford to compromise on advertising and promotion front which serves as the link between company and the general public. The quality and appeal of the advertisements depends upon the advertisements agency, which can contribute to great extent in making the product popular in the target segment.

Just over a month after the beverage giant appointed Lintas to handle the communications business of the Rs 35-crore coca cola brand in India, the company has once again moved the coke account to roster agency McCann-Erickson. O&M India has bagged the ad account of coca cola India brands Fanta and Sprite in India, estimated at Rs 25-crore. Prior to the shift, Leo Burnett was handling the advertising for sprite while McCann was designing creative for Fanta in India. It was only some time back that the coke account shifted to Leo Burnett from McCann Erickson. Leo Burnett continues to handle the ad account of Thums Up in India.

The shift in account seems to be the direct fallout of the global realignment of coca cola brands Fanta and sprite with O&M recently. Accordingly to Paul Simons, chairman, chief executive officer, Ogilvy UK, the billings on the sprite account are estimated at $ 85 million in the US alone. One major reason behind this move according to a senior marketing official at coca-cola India is “we have initiated all the concerned agencies about this realignment this morning itself. And we have made this move because we wanted to ensure that all our agencies had decent and sizeable portfolio”.

FIZZ FIGHTS ON AND OFF SCREEN The big war unfolds yet again this summer. This time, the battle has gone beyond the LoC. And there’s no stopping till the thirsty cola hawks down the other as the giants continue to fight each other behind enemy lines. It was very recent when we saw Fardeen Khan play a jobless cola cola salesman cheekly saying “Life Ho To Aisi” in a Pepsi commercial having a dig at the coke line. Coke soon changed its line with Aamir drilling into our heads that ‘Thanda matlab coca cola’ – roughly translated, ‘Cold (drink) means coca cola’.

In less than two days, Pepsi officials brag, they got Fardeen Khan shooting in Hyderabad to come up with an updated dig at Coke’s new line. This time, Fardeen’s pepsi- fetching assistant is heard saying “Unka business tanda hai” (their business is cold). Coke did not take the attack coolly at all. The company got hunk Salman to take a dig at Pwpsi’s new flavor Aha! Ever before the drink was launched all over the country. Salman is seen telling a kid, “first, it was plain sweet, now, they have put lime in to it.

Next, they will put salt, chilli, masala”. Perfect time for pepsi to bring two of its biggest ambassadors together – Amitabh and Sachin in a commercial directed by Prahlad Kakkar. The superstars are seen flying kites in the commercial urging its youth target audience “not to settle for what you have”, urging them “to create a life they want to live” – reinstating the ‘more’ philosophy of the brand (that translates to ambition and fun) in a direct contrast to Coke’s philosophy of celebrating life, the way it is and cherishing even the smaller moments.

Remember the Vijay series of coke commercials, directed by Rajiv Menon? If coke had an ambassador in Vijay, pepsi had one in maddy – the most recent being the commercial with the ‘Kannathil Muthamittal’ premier are the backdrop. Coke’s Fanta then roped in maddy’s kannathil co-star Simran to endorse the tangy soft drink. Well, that was just a recap. Pepsi and maddy were back in action in the city to launch Aha! , the new flavor with a hint of lime as pepsi officials describe it (the brand variant is called twist in other markets in the world – namely US, Mexico and Saudi Arabia).

During the launch, pepsi officials revealed their plans for the summer and the year ahead. The news for Chennai is that pepsi will be bringing down Bryan Adams later in the year! And there are negotiations on for in-film promotions with Rajnikant’s project ‘Baba’. Pepsi claims that it is undoubtedly the market leader in the country and that its market shares equals that of coke and thums up put together. Though there are conflicting versions in the statistics provided by coke and pepsi, the truth that lies in between these statistics is that the race etween the cola giants is a very close one. For coca-cola, Chennai is a Fanta drinking market. and Simran being introduced as an ambassador, obviously is targeted at more a larger male audience. Pepsi with heart-throb ambassador maddy (more popular with the female target group) insists that it is a cola drinking market and that Mirinda outsells Fanta here. Someone once said, “there are lies, and then there are statistics”. However, cracking this code does not require a beautiful mind or a mathematical genius such as John Nash. The market leader lies in the eyes of the bottle-holder.

Life is like that? Aha! MAKING IMPACT When coca cola and pepsi co are spending equally handsome amount to create and sustain a market for themselves through extensive advertising what matters is how well viewers are able to recall them and actually relate themselves to them. Recently, ad agency FCB ulka checked out viewer recall of the major world cup campaigns in Mumbai, Chennai, Bangalore, Hyderabad and Kochi. Sachin-Shah Rukh ad score a 61% recall rate among the 400 adults who were contacted, compared to 9% for coca cola’s refresh Ho Ja ad featuring Karishma Kapoor.

ATCH a cricketing icon, bundle in a brash movie star, add a dash of irreverence and pepsi co has got a nation hooked. For the past few years, the company’s men in blue have been churning out advertisements that are almost instant superhits. And pepsi co’s latest campaign featuring idols Shah Rukh Khan and Sachin Tendulkar has been a winner, despite India crashing out of the world cup. In fact, further research showed that all of pepsi’s ads put together enjoyed a recall of 72% versus 22% for coke. Gulp!

Catch coke agreeing with all this company official argues that pepsi ads are more popular because you see them once every hour or more. “At least that’s what happened during the world cup. It is sheer frequency and reflects the money they have spent on the world cup,” says a coke executive. Coke argues that the ‘Dil Mange More’ line does not go with all the disparate campaigns of pepsi. It was used with the Kajol ad, then again with the Sachin mask ad, and now with the Sachin-Shah Rukh one. What is the connection, asks coke, “just because it is a good line doesn’t mean it goes with everything.

For instance, look at our advertising – Pyar mohabbat coca cola’ cannot be used in the Karishma ad. Even our lines become a hit – ‘Pyar mohabbat coca cola’ was a hit; so was the ‘Peeti kya coca cola’ in the Aati kya khandala ad, says a coca cola executive. And, once the world cup is over, what will pepsi do? BRICKBATS…. Have you seen Fanta’s new tv commercial? How do you like it? Bad. And too loud. Isn’t it? Yes. You are right. The ad in question is not up to the mark. As you very well know that an ad represents a brand in the market. In fact, every small thing used in an ad – be it the background color.

The model, the type of clothes & makeup used, the music, the setting, the props – and other things, all construct a personality of that brand in the consumer’s mind. Now, if you look at the Fanta’s ad what image you’d associate this brand with? Childish. Immature, pompous… moreover, it’s a proven fact that whenever a brand is endorsed by a known personality, the personality, slowly and steady, becomes the brand itself. Take Sharukh Khan’s association with Santro in consideration. What does that reflect? Santro as a mature, intelligent and energetic personality, just like Mr. Khan. Or take closer loot at James Bond and Omega (or BMW).

Doesn’t the brand Omega become smart, suave, hi-flying, like the personality endorsing it? Yes, it’s true, by all means now, let’s talk about Ms. Rani Mukherjee’s association with the brand Fanta. First of all Rani doesn’t represent the generation that the brand Fanta is supposed to be targeting at. Secondly, Rani doesn’t possess any personality trait that matches with the brand’s intrinsic qualities or which can give the brand a new image. Rani as a personality can be summed up as a below-average-looking-film-star-with-oodles-of-luck-and-connections-type-and-nodistinct- personality.

By no means, she belongs to the class of role models our young generation would look up to (or follow for anything). Now, all this simply means that whenever any of the prospects of the brand Fanta look at the current com

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Marketing Mix of Fanta
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