BB7026
FUNDAMENTALS OF BUSINESS
SUB: MARKETING
TOPIC: MARKETING AUDIT
OF
SOFT DRINK INDUSTRY
KUID: 1645652
DATE: 17/11/2016
1.0 Introduction:
Over the past years, soft drink production industry has been characterised by changing customer taste and increased product innovation. Industry has work hard since years to alter traditional product and introduce new soft drink and appeal to increasing health conscious to customer. Large competitions between low average temperatures and supermarkets have limit the growth of the industry’s revenues to 0.4% in 2016-17. To not get affected to this firms have to innovate in their drinks and provide variety of beverages choice, especially healthier in old traditional carbonated drinks. Introduction of new tax on soft drink in year 2018-19 will further show reduction in traditional drink’s demand and other related drinks. As overall result industry’s revenue is forecast to fall by 0.1% at a compound rate over five years to £4.3 billion.
2.0 Micro-Environment:
2.1 Market Analysis:
The industry over all shows the revenue of £4.3 billion with annual growth of 0.7% from 2011-16, and expected annual growth 0.2% and profit £513.5 million. The exports form this sector is estimated to £113.6 million.
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2.2 Cost structure:
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2.3 Customer segmentation:
Customers of soft drink industry can be segmented on basis of their need of consuming the soft drink available at the rack of a super market or at any off licence shop. On the following base we can segment them:
- Need to boost energy
- Focusing on heath
- Sporty
- Just feels like to consume
- Replacement of food
2.4 Customer motivation:
- Body needs hydration and energy after training or sports.
- Price affordability.
- A sweet treat.
- Best option other than alcohol
- Large youngster group
- Marketing through sports sponsors. Large group can be targeted.
2.5 Competitors Analysis:
Soft drinks as such do not have their competitors. Because of its vast boundaries of the term ‘soft drink’. This industry itself includes all the possible drink one can think of. Ranging from water to fruit juices and to energy drinks. But their market highly dominate if customers have shifted their taste in coffee or tea or any alcoholic beverages. According to recent trend, there are 100s of different flavour available in a normal coffee such as, cold coffee, raspberry coffee etc. this could shift customers preference.
3.0 Macro-Environment
3.1 Porters five-force
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3.2 PESTLE:
Political environment:
- FDA regulations on the ingredients to be used and which not to be.
- Potential penalty is imposed if not meeting law regarding Manufacturing, production, and distribution.
Economical environment:
- Recession (industry struggles since 2008)
- Cost of raw materials if economy of certain ingredient is week.
- Sugar and water make up most of the content but other acids and flavour costs more.
Socio-Cultural environment:
- Customer choice
- Diet Craze
- Influence of Social Media.
Technological environment:
- Advancement in manufacturing and quality.
- Improves efficiency
- Marketing through social media.
Legal environment:
- Consumer law, discrimination law, employment law, health and safety law.
- Firms must provide Nutrition info on product, Minimum wage to workers, must abide by OSHA standards.
Environmental:
- Waste management regulations
- Waste must be taken care of in legal manner by firm. It should not affect environment.
4.0 Environmental factors affecting the marketing strategy of Soft Drink industry:
The environmental factor which affect the industry’s marketing strategy are, (1) Political (2) Economical (3) Technological.
Reason being, there are always political instability in country, every tine a new member is elected, he/she try changing policies established by pervious member. For example, Mayor of London allowed Google to set up their unit in a place of Kings Cross, London, which will create 7000 jobs by 2018. This was not allowed when there was previous Mayor operating.