Branding International Business
This essay seeks to explore the concept of international branding with a more specific focus on one of the brands of Coca-Cola Company. This company has been a well known international brand for quite some time. Moreover, with the recent concerns of the possible health effects its products could bring about, the company has developed a calories-free brand named Coca-Cola Zero. Figure I shows images of Coke Zero. The essay explains where the brand stands in the market, the stage of growth and its brand cycle.
Type of Brand and where it stands in the Market
The Coca-Cola brand to be discussed is Coca-Cola Zero. This is a brand of Coca-Cola that was developed as a result of rising demands of diet and health issues. This is called ‘cause branding’. One of the major characteristics of the brand is the fact that is has low-calories- the cause is health. It has also been popularly referred to as Coke Zero. Other than the fact that it has only 0.75 calories per liter, it is also important to note that the brand is almost free of caffeine. Although Coke Zero uses natural sweeteners, there has been claims that some sweeteners used in it are carcinogenic, the reason why the U.S. Food and Drug Administration (FDA). Moreover, the brand has continuously penetrated the world market in several variants such as Coke Cherry Zero, Coke Vanilla Zero and Coke Zero Caffeine Free. Due to its brand characteristics, Coke Zero has occupied an important place in the world market.
Perhaps the launch of Coke Zero was the biggest event of Coca-Cola brands in more than two decades. The global marketing of the brand targets men who usually associate ‘dieting’ with women. Instead of ‘diet Coke’, Coke Zero assumes the brand ‘calorie-free coke’. According to the company website, the launch of Coke Zero was the greatest in history. “In 2009, we sold more than 600 million cases globally. Put into perspective, that's roughly the same size as our total business in Germany, one of our top 6 markets. As of September 2010, Coca-Cola Zero is available in more than 130 countries”. In the U.K., Coke Zero has been popularly referred to as ‘Bloke Coke’ by its association with Cheryl Cole, a pop artist. Although health consciousness in North America has greatly affected the company, Coke Zero has boosted the company’s sales in China, Africa and Russia. It has also led to the increase in value of shares.
Stage of Growth of a Brand
There are several stages in the growth of a brand or a product. The main difference between the growth of a product and that of a brand is that the latter takes less time than the former. Moreover, the stages are the same. These include development, introduction, growth, decline and maturity. The development stage of a brand entails the incubation period in which there are no sales at all. Brand development is mainly the preparation that is done before the brand is introduced into the market. When the brand is introduced, the sales are initially low. This is because the clients are not yet aware of the brand. During this stage of brand development, advertising costs are usually high. In the same way, costs for initial distribution are also high. Moreover, in the case of Coke Zero, development, promotion and distribution were easy following the already existent channels of distribution and other brand loyalties. The marketing mix of introducing a brand includes the differentiated brand, its price which is strategically set, a clear plan of distribution and promotional efforts.
The growth stage is a period of rapid returns in revenue. As more customers become aware of the brand, there are more sales thus revenues increase. When more customers ask for the brand, the retailers request for it from wholesalers who ask for it from distributors leading to more production of the brand. The maturity stage is that in which the brand is most profitable. Although the sales may reduce, the awareness of the brand is very strong. As a result, advertising costs are reduced but market share may reduce due to competition. As the name suggests, the decline stage of a brand is characterized by reduces sales and consequently declining profits. In the same way, competition may still be high while customer taste preferences change. In the case of Coke Zero, the best strategy or remedy may be to rebrand it in a bid to increase sales and phase out competitors. The biggest competitor of Coke brands is Pepsi products and brands. Moreover, there is no possibility of discontinuing Coke Zero from the market in the near future.
Brand Cycle of Coca-Cola Zero
The Coke Zero brand cycle is at maturity stage. As indicated above, the maturity stage of a product is characterized by maximum sales and reduced advertising. It appears that Coke Zero sales are at their best the company having sold 600 million cases globally in 2009. At the time, it was the best brand sale. In addition, in 2011, the company reported an overall increase in global sales in all markets, something that has not happened in more than 5 years. This happened in the fourth quarter of 2011. It can only be attributed to the maturity of Coke Zero as the greatest of the brands that picked momentum in 2009. Figure II shows the brand cycle of Coke Zero.