Consumers demand products and services in order to meet their needs. For example, consumers have the need to consume liquid to meet the needs of the body. This is the reason for businesses like Coca-Cola, also known as Coke. The picture below shows how the product looks like:
Based on this picture, Coke is a company that produces soft drink that is perishable and consumed. The product is packaged in different sizes and packaging materials in order to meet the different customers needs. Some customers have a preference to consume the drink through the soft can whilst other consumers have a preference for the plastic bottle. It is important to ensure that the company is able to adjust the different product offering to meet the customers’ needs. The drinks are tangible goods that can be touched and felt. Unlike a service, the products can be stored for future consumption. The Coke products are generally available in the retail store for the consumers to access and purchase those products.
The Coke is a very strong and valuable brand (Pitta & Prevel Katsanis, 1995). The brand of coke is the wording of Coca-Cola that is written in the specific type of font. The brand communicates certain meaning and information to the customers over time. Through the strong branding, consumers are able to identify the products from Coke against the product of other competitors. This brand recognition is important for Coke to differentiate the product offering with the competitors. Apart from that, the Coke brand projects the high quality product since the brand is well accepted amongst the consumers. This facilitates the ability of consumers to make the decision whether they are going to consume Coke or other brands. All these benefits of branding allow Coke to have customer loyalty.
Coke adopts the umbrella approach where all the products are marketed through the same brand. This is supported by an article that explains the umbrella approach according to this link below (Hepburn, 2015):
Coke is able to participate in extensions where the brand is able to increase the depth of the product offering. The picture below shows the different product lines for Coca-Cola:
The picture above shows that Coca Cola is able to offer four different products for different target markets. The target market that is more concerned about the content of calories and sugar shall go for the Diet Coke whilst those consumers that are after the full taste can go for the red packaging Coca Cola.
All these activities about the different product line and umbrella approach to brand allows Coca Cola to build a strong brand equity. This suggests that there is value within the Coca Cola brand against the competitors. To determine this brand equity, the value of the Coca Cola brand is measured and compared against the value of the general industry players in the provision of soft drinks product. This comparison can provide a measure of the brand equity of Coca Cola relative to the competitors.
Although Coca Cola is already a very successful company, Coca Cola is always looking for ways to improve the products. The reason behind this is because the improved products can increase sales and attract new customers. This is shown in the link below that explains Coca Cola has the plan to release new product in respond to the competitive market so that Coca Cola is able to be creative in the market place (Mitchell, 2014):
There are a few general approaches to develop new products such as the top down approach and the bottom up approach (Fromhold-Eisebith & Eisebith, 2005). In the case of Coca Cola, the top down approach is used because the product idea comes from the need to respond to the market competitive environment instead of a respond to the consumers’ demand.
Fromhold-Eisebith, M., & Eisebith, G. (2005). How to institutionalize innovative clusters? Comparing explicit top-down and implicit bottom-up approaches. Research policy, 34(8), 1250-1268.
Hepburn M. (2016). It’s simple! Our new ‘one brand’ strategy. The Coca Cola Company. Viewed on 01/05/2016. < http://www.coca-cola.co.uk/stories/health/choice-and-information/coca-cola-one-brand-marketing-strategy/>
Mitchell S., (2014). Coca-Cola to slash costs, launch new product in wake of review. The Sydney Morning Herald. Viewed on 01/05/2016, < http://www.smh.com.au/business/retail/cocacola-to-slash-costs-launch-new-product-in-wake-of-review-20141026-11bz27.html>
Pitta, D. A., & Prevel Katsanis, L. (1995). Understanding brand equity for successful brand extension. Journal of consumer marketing, 12(4), 51-64.