Table of Content

Details Page

1. Introduction 1
2. Competitor Analysis 2-4
3. Customer Analysis 5-6
4. Marketing Strategy :
4.1. Product Decision Strategy 7-8
4.2. Pricing Decision Strategy 9-10
4.3. Advertising Decision Strategy 11-12
4.4. Promotion Strategy 13-15
4.5. Distribution Channel Decision Strategy 16-18
5. Sales Forecast and Potential Budget 19-24
6. Conclusion 25-26
7. References 27-28






















1

1. Introduction

Coca-Cola is a type of carbonated soft drink that sold world-widely at most of the
restaurant, stores and vending machines. Coca-Cola also known as Coke is a common
drinks that being served at any party, dinner or even gathering. It is a must have item
for parties except for alcoholic drinks. Coca-Cola is originally invented as a type of
medicine, with filtered water and sweetener, in the late 19
th
century by John Pemberton.
When a businessman by the name Asa Griggs Candler find out that Coca-Cola can be a
good potential product to be selling as soft drink, he bought over Coca-Cola. With his
marketing tactics, Coca-Cola has now dominant the world as the best-selling soft drink
throughout the 20
th
century.
Coca-Cola Company then come out with few products such as Diet Coke,
Caffeine-Free Coca-Cola, Diet Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero,
Vanilla Coke and special versions with lemon and lime flavour. On top of all the
subsidiary products, the original Coca-Cola stills the best seller among them. In this
assessment, we will focus more on Coca-Cola Zero as this product is not available in
most of the countries.
The launch of Caffeine Free Coke Zero is part of a broader strategy designed to
make the fast-growing brand even more ubiquitous and available to consumers at any
time throughout the day. Coke Zero has become increasingly visible in recent years
through a variety of high-profile marketing initiatives.
Problem Statement
We found that there are 3 problems that we need to put under consideration as this
product is facing difficulties in generating substantial profits to the company. We need to
identify the problems so that we can improve and make modifications on the product to
change the consumers perception on it. The 3 problems that occurred are from the
ingredients used, advertising activities and through the distribution channel.


2

2. Competitor Analysis
How do we identify Coca-Cola Companys competitor? There are two methods
which we can use to identify the competitor. The two methods consist of primary sources
and secondary sources of information collection. These two analyses are dependent to
each other especially for secondary sources. Most of the secondary data collected were
originated from primary sources.
There are six ways of collecting primary sources which are through investment
bankers, sales force, suppliers, customers, employees and consultants but we only focus
on a few of them. Customers are the most important entity in an organization as they are
the sources of profit to an organization. Their valuable comments are important for an
organization to keep track of their preferences and because of that we will know who is
catching up right behind us. Furthermore, employees also play a heavy role in measuring
the closest competitor to our product. This is because the employees know very well
about their own product and with that, they could observe the changes in price, packaging
and shelf display of the competitors products in the market.
On the other side, secondary sources consist of fifteen ways to collect data, which
are internal sources, local newspaper, annual reports, patent filings, 10Ks, business press,
government, electronic databases, news release, trade associations, promotional literature,
internet, trade press, consultants and customer communications. From local newspaper
data collection, we can see how the other organizations advertise their products and are
they similar to what we advertise on our products. If they are the same, how about the
price they can offer? By collecting brochures from the competitor, we can trace the
competitor of the same product on their promotional strategies. With such information,
we can have the details about how the product is being positioned. Most common use of
way is through the electronic data services or websites. This is a convenient way to
search on the latest updates on the competitors product and promotional activities as
nowadays, anyone could online at anywhere and anytime.


3

Through these two ways, we can know that the highest potential competitor to
Coca-Cola Company is the PepsiCo. This is because their product, Pepsi, is almost the
same product that Coca-Cola Company is selling only with a different brand name. By
using secondary data collection, we can see that PepsiCo has come out with a product
with the name Pepsi Max to compete with Coca-Colas product, Coke Zero. Here is a
part of article retrieved from NBC News:
Coke Zero sales grew by 11 percent in 2011, the fifth year in a row the product
pulled down double-digit growth figures. Pepsi Max debuted in 2007 as Diet Pepsi Max.
Two years later, PepsiCo dropped the word "diet" from the name and the drink hit a
billion dollars in annual sales.
Both companies are targeting men in an effort to keep this momentum going, with
ads like the Pepsi Max Super Bowl commercial, and Coke Zero's tongue-in-cheek
campaign to make the day after the Super Bowl a national holiday. (C.W. Martha, 2012)
Besides that, we also found that, under PepsiCo, there is another product by the
name Diet Mountain Dew that also competing with Coca-Cola Zero. With this addition
product, Coca-Cola Zero now faces another competitor from the same company but
another product to compete in the diet drinks industries.
Assessing Competitors Current Objectives
Assessing competitors objectives is an assessment of current objectives
providing valuable information concerning the intended aggressiveness of the
competitors in the market in the future. What we can see from PepsiCo is that, they are
keeping up the pace to be the closest competitor to Coca-Cola Company in hope that they
can overtake Coca-Cola Company one day. There are 3 product objectives can be
identified:
Growth usually implies to increase the market share of a certain product and
profits are placed on the second place. In which PepsiCo is promoting its name through
sponsorship event and community services to bring up its name rather than just focus in
generating profits. Brand name is important for a product to sustain in the market.
4

Hold is also termed a consolidation objective. To prevent any losses of the
product as its market share value is dropping; a company must stop to promote the
product any further. It might cause a reverse effect. For example, Diet Pepsi Max is
losing its market share because of the word Diet. When they drop the word Diet from
the product, its sales increases greatly.
Harvest is also been called milking. It describe a situation in which profits is
paramount relative to market share. Harvesting at the right time boosts the market share
so as the profits. These two elements are relevant to each other, by improving one of this
will also bring up the other.
Assessing Competitors Strategy Employed
Fulfilling this step includes doing research in competitor analysis to determine
how competitors attempting of meeting their objectives. By assessing competitors
strategy, there are 2 components of marketing strategy can be used:
Target market selection is also meant by segmentation. It is important to know
who your competitor is targeting. Coca-Cola Company needs to know the target market
for PepsiCo in order to have proper positioning for their product. If the target market
selected for PepsiCo is intense, Coca-Cola Company has to come out with better idea to
compete.
Core strategy also involves differential advantage. There are 2 types of
differential advantage, price/cost and product features. Price or cost is discussing about
when to give out a discount price and when to mark up their prices. For example, Coca-
Cola often has such promotion that, Buy 2 bottles for 1 bottle price scheme. Whenever
customers remember of this promotion they will be remind of Coca-Cola. This is a good
way to position its product in customers mind. Product features touches on the quality of
the product. So, it is important to maintain the quality of the Coke Zero and make sure
every can or bottles taste the same. If the taste is better, in customer opinion, they will
always go back to the same product rather than other products. This is the human nature.

5

3. Customer Analysis
Coca-Cola Zero is a low-calorie (0.50 kilocalories per 150ml) variation of Coca-
Cola specifically marketed to young adults and teens. "Real Coke taste, zero calories" is a
message that created by Coca-Cola Zero in order to spread the concept of Coca-Cola
Zero is the taste of Coca Cola but with no calories.
In today's society, people are looking to lead better; healthier lives are gradually
increasing. Therefore, we promote the Coca-Cola Zero, which gives an additional
selection to consumers. In addition, young people today do not want to compromise on
flavor or calories and we think Coca-Cola Zeros taste and personality will attractive to
them. A real Coca-Cola taste, zero calories and a new brand they can call their own is
what young adults wanted today.
Coca-Cola Zero is exactly what young adults told us they wantedreal Coca-
Cola taste, zero calories and a new brand they can call their own, said Dan Dillon, vice-
president, Diet Portfolio, Coca-Cola North America. Young people today do not want to
compromise on flavor or calories and we think Coca-Cola Zeros taste and personality
will appeal to them.
Coca-Cola Zeros personality will be different than any of our other brands,
and our marketing will reflect that with some fresh ideas we havent tried before, said
Christine Holland, director of marketing.
Therefore, we focused on a target market, based on specific psycho-graphic
characteristics, consumers that are health conscious and interested in buying products to
support their overall wellness.
For the Coca-Cola Zero, we concentrate on certain demographic characteristics of
the population. The characteristics we consider include age and family. For other
demographic considerations such as, education and ethnicity, we are less concern, since
this does not affect the popularity of Coca-Cola Zero. Coca-Cola Zero is affordable for
most people who want a healthier alternative to carbonated beverages.

6

The target group of Coca-Cola Zero focuses on young people between the ages of
12 and 19 years old, adults between the ages of 19 and 29 years old, and consumers
whom pursue a healthy lifestyle. The reason we focus on young people which also named
teens is because around this age's consumers have more interest and willing to try a new
product, at the same time once they accept the Coca-Cola Zero they will spread the news
to their friends.
Next, adults and consumers whom pursue a healthy lifestyle also our target
customers because when consumers during this age, they are concerned about their health,
which may lead to their diet have fewer choices. Therefor Coca-Cola Zero, a carbonated
beverage with no calories not just increases their choices and also their joy of life.
Furthermore, under targeting different family type, since the range of age is large,
family differences should not hurt the sales of Coca-Cola Zero, but only help it because
of the appeal to most people. It does not matter if consumers are single, married with no
children, or even married with children. Coca-Cola Zero is suit for all people.
In addition, we also use geographical considerations, psychographic details and,
behavioral to deciding a market for Coca-Cola Zero. Coca-Cola Zero targets people
throughout the world and many different cultures. Because of this, the scope of a
geographic area is very broad.
Lastly, there are behavioral characteristics to consider. The popularity of Coca-
Cola Zero may cause deciding if customers purchase Coca-Cola Zero one time or many
times. Therefore, in order to keep the consumers purchasing many times, coca cola zero
must maintain the quality so that consumers will purchase it again next time.





7

4. Marketing Strategy
4.1. Product Decision Strategy
Successful product decision strategy enables an organization to enhance
coordination among its functional areas, defines how resources will be allocated and
leads to a superior market position.
Product modification will be used as the product decision strategy due to the
product that we had chosen had a low level of sale. Product modification contains three
categories, which are clearly better, different and inferior. We are going to use different
modification in modifying the existing Coca-Cola Zero. Different modification means
styling and or ingredient change that is likely to appeal to some customers and less to
others.
From the research, we found out that Coca-Cola had used one of the most toxic
ingredients in Coca-Cola Zero which was called as Aspartame. Aspartame has been given
the go signal as an artificial sweetener. Studies of aspartame have been linked with birth
defects, anxiety, depression, methanol toxicity, memory loss, headaches, blindness and
death. In order to gain back customers trust in buying Coca-Cola Zero, Coca-Cola
Company has to replace Aspartame with Sucralose. Sucralose (Splenda) is the latest
artificial sweetener. Approved for use in the United States in 1998, sucralose has now
been approved for use in over 80 different countries. According to the Centre of Science
in the Public Interest study, sucralose is classified as safe. None of the study participants
complained of bad side effects, and the rate at which this sweetener has been approved by
other countries appears to suggest the sucralose is safe for human consumption. In
addition, the taste of Aspartame is same with Sucralose. Hence this change of ingredient
does not affect the taste of Coke.
Besides removing the toxic ingredient, Coca-Cola Company should add some
values to its Coca-Cola Zero, due to the competition for diet drinks become condense.
For example, add some supplements that could increase energy supply into Coca-Cola
Zero, such as sodium bicarbonate. Sodium bicarbonate can reduce the pain caused by the
lactic acid accumulation after hard exercise.
8

Furthermore, Coca-Cola Company can also redesign the packaging of Coca-Cola
Zero. By changing the design of the bottle to a smaller size, it would be easier to be
carrying around. In addition, this small size of Coca-cola Zero will reduce the cost and be
perceived as cute and attractive. By removing the toxic ingredient, add in supplement that
able to increase energy level, and redesign of packaging, Coca-Cola Zero will become a
newly modified diet and isotonic drink. Hence, during the introduction phase, we need to
position a new image of Coca-Cola Zero as a safer diet and isotonic drink. Advertising
and promotion are necessary for creating awareness of customers towards modified
Coca-Cola Zero. Hence, Coca-Cola Company should give the new samples of Coca-Cola
Zero for customers to taste and advertise it through different media channels.
Besides, there are two well-known options: skimming and penetration. A
skimming strategy is useful when the cost structure of the product is largely variable
costs. However, the penetration strategy is more appropriate when fixed costs are high.
Coca-Cola Company could use skimming strategy since the entry barrier is high.
Skimming strategy also means charging a high and reasonable initial price for Coca-Cola
Zero to the customers. Since this modified Coca-Cola Zero is seen as a first-mover
product for Coca-Cola Company in the soft drinks market. For example, a tin of 330ml
Coke Zero can be charged 5% higher to RM4.10. Hence, the high margins can then be
used to fund investment in research and development.
Early growth is the phase just following the introductory phase. Late growth is the
phase in which the rapid increase in sales begins to flatten out. The options relate to the
products position in the market are to be a leader or a follower. The follower could
choose to exit quickly or content to be a strong number two or three by fortifying its
position. As a leader in the market of soft drinks, Coca-Cola Company could choose to
fight and keep enhancing the value of Coca-Cola Zero such as improve its ingredients.
During the maturity phase, the sales flatten out and relatively few new buyers
enter the market. The general strategies are similar with those in growth markets. Another
alternative is to harvest the product. For example, Coca-Cola Company can harvest
Coca-Cola Zero by setting an objective of gradual share decline with minimal investment
to maximize short-run profits.
9

4.2. Pricing Decision Strategy
The decision about how much of the customer value minus cost gap to keep or
give away is manifested first in the general pricing policy the product manager pursues.
Customers (e.g., their value for the product and your brand), competitors (e.g., cost, their
pricing action) and category conditions (e.g., stage of the product life cycle) all impact
the product mangers selection of what price to charge.
Like brand or product objectives, a price objective is a guide for more precise
decision making. Skimming is appropriate to be used for Coca-Cola Zero. In other words,
Coca-Cola Zero could be charged at the highest initial price that customers will pay since
Coca-Cola Zero is a newly modified diet and isotonic drink. For example, a tin of 330ml
Coke Zero can be charged 5% higher to RM4.10. As the demand of the first customers is
satisfied, Coca-Cola Company can lower the price to attract another, more price-sensitive
segment. This is because Coca-Cola Zero as a newly modified diet and isotonic drink,
there is a little chance of competition in the near future. In addition, the cost is not related
to volume and managers thus are less concerned about building significant market share.
However, the higher the price is set, the higher the margins, thus the greater chance that
competition will occur.
Since Coca-Cola Zero is a newly modified diet and isotonic drink, during the
introduction phase, there are three pricing tactics that could be used to increase the sales
of Coca-Cola Zero. First approach is price bundling, which takes a set of products, offers
them to customers. This usually prices the package lower than the sum of the individual
components. An alternative approach takes the opposite view such as sometimes the
bundle can be priced higher than the sum of the components. For example, customers
who computed the sum of Coca-Cola Zero with gym towel could find that he or she is
paying a reasonable sum for the package. Clearly, such a bundle provides extra value to
customers and can be priced accordingly.


10

Second tactic will be the periodic discounting. In short, this pricing strategy varies
price over time. Periodic pricing is appropriate when some customers are willing to pay a
higher price to have a product during a specific time period. Coca-Cola Company can
change Coca-Cola Zeros price at different period of time. If there is a festival coming, a
special discount of Coca-Cola Zero could be given to the consumers. This is because
customer will tend to purchase no-calorie drinks, even better choice for a diet and
isotonic drink like Coca-Cola Zero, since they will consume a lots of calories food during
the festival. This pricing strategy can stimulate the sales at that particular period of time
and earn a large amount of revenue in return.
Third tactic that we applied is the hidden price increases. Whether due to the
increase of competition which keeping the lid on prices or restricted customer budgets,
during periods of recession, it is often hard for a product manager to raise the price of the
product. In order to maintain the profit earned, a manager often look for ways to raise
prices without explicitly increasing the posted price. For example, Coca-Cola Zero can be
designed to a smaller size. Its image can be enhanced by perceiving as cute and reduce
cost.











11

4.3. Advertising Decision Strategy
One of the products under The Coca-Cola Company, Coca-Cola Zero is a sugar-
free beverage and its target audience is targeted for those young adults and teens that
want to have a taste of the Coca-Cola but do not want to get the calories that come with
the normal Coca-Cola. They can only get sugar free from the drink which is sweetened
with Sucralose and the Coke taste. There are several types of objectives but the objective
for the Coca-Cola Zero is customer-focused objectives which are used to increase sales
and profits since the product is facing difficulty in generating profits to the company.
Therefore, we plan to spend a large amount of money on advertising segment. Besides
that, we also expect that we able to get a return of increased customer demand for our
product through advertising. We believe that this action able to gain attraction from the
target audience and makes them aware of the particular product among various products
that available in the market. As a result, the customer demand will be increase as the
increase in awareness of customer. This may lead them to purchase the Coca-Cola Zero
for their own after approached to those advertisements which will cause an increase in
sales and profits for the company.
. In media selection, we recommend that we should advertise in many forms of
vehicle like television, radio, internet, and print media. This is because not every form of
vehicle can fully deliver the messages to the desirable audience. We found out that
advertising through radio cannot let our desirable audience to see the people how they
enjoy the drink or more details about the modified drink due to the limited time for the
radio broadcasting. Therefore, we need to advertise in other forms such as run a
commercial on TV channels commercial break and advertise on those print media that
most read by desirable audience to fulfill these deficiencies. Besides that, we also get
some information that nowadays young generation spends a lot of time on surfing the
internet. We also can approach to our target audience by using this way.
Young generation watch to television programs during their free time. So, we can
give some relative information to the target audience about what we have modified to our
product by using this form of vehicles. We have selected 8TV and Astro as television
channels for advertising our modified Coca-Cola Zero. As we observed, these two
12

television channels are kind of popular among young generation in Malaysia. Therefore,
we have higher chance to approach to our target audience if we promote our modified
Coca- Cola Zero in these two television channels. We may able to create awareness from
them. We realized that our target audience is likely to listen to the radio channel during
on the way to school, campus, or even work. Therefore, we have selected My FM and
Hitz FM which are one of the popular radio channels in Malaysia to promote our newly
modified Coca-Cola Zero to the target audience. By using radio channels, we can create
an imagination of opening sound of Coca-Cola Zero glass bottle and the people who
drink will release a satisfied sound after drank it for the audience. They may interest to it
after listened to the radio broadcasting and lead them to make a purchase to try.
Besides that, our modified product will be promoting on Facebook, Twitter,
Youtube, and also Instagram these popular social network websites through create an
interaction with target audience by using internet since we knew our target audience also
use this media. Therefore, we will create official fans page or official account on these
social network websites. We can promote our product on these websites without a single
charge on it which means it is free. We also can build relationship with our target
audience and gain some feedback about this modified product from them directly. The
audience can get to know of our lately promotion or events for this product if they had
liked or followed our fans page or account on these websites.
Lastly, we also promote our product on print media which include local
newspaper and magazines. Through the print media, we can put images along with words
inside our advertisement to advertise our product. This can increase the attractiveness of
advertisement from the audience and create awareness from them. We can highlight our
modified product with change from Aspartame to Sucralose in advertisement in order to
make audience to be aware of this change. Audience can go through more detailed
information that related our product, it could be included promotion or even contests
information. In the advertisement, we will show a group of young people drink Coca-
Cola Zero with a satisfied look and joyful facial expression which may attract to our
target audience to purchase our modified product. We are selected to advertise in TheStar
and China Press of local newspaper, and Mens Health magazine and Female magazine.
13

4.4. Promotion Strategy
Under promotion objectives, there are two different categories which are
objective of final customer promotion and objective of trade promotion. For final
customer promotion, our objective is to generate awareness from our target audience. We
need to change and improve the customers attitudes in order to make them try and
purchase our modified Coca-Cola Zero. While for trade promotion, the objective is to
increase the stocking levels and the sales efforts of the Coca-Cola Zero from the retailers.
Besides that, we also hope that we can build a good relationship with the retailers.
In final customer promotion, we plan to include the customer promotion like
product-based promotion, price-based promotion, premiums, sponsorships, and games.
For product-based promotion, we plan to put additional volume of 20% in 325ml and 25%
in 1.5L of Coca-Cola Zero to attract and stimulate existing Coca-Cola customers and
target audience to purchase and have a try for this product. As we know, many customers
are tend to purchase a certain product if they know there are some extra for that product.
Besides that, we also plan to give Coca-Cola Zero sample at the supermarkets, drug
stores, discount stores, convenience stores, and variety stores to let the customers to have
a taste on it. It may help to stimulate some intermediate sales if they found out that they
actually like the product after having the first taste of it.
Another customer promotion which is price-based promotion, we try to distribute
coupons to our target audience, existing customers, and also other potential customers by
attaching the coupons at the products which under The Coca-Cola Company. With the
coupons, they can claim a free can with 325ml of Coca-Cola Zero at the nearby
supermarkets, drug stores, discount stores, convenience stores, and variety stores. So,
when they go again to these stores, they can claim the drink conveniently from the
counters after they done purchasing and made payment at checkout point. So, they can
purchase the Coca-Cola Zero next time at the stores if they like the drink after tried that
can of drink.

14

Premiums are another type of customer promotion. We plan to launch some
special and limited edition of glass bottle of Coca-Cola Zero. This action may attract the
attention and create awareness not only from target audience but also the public. They
may stimulate to purchase the drinks and some of them might collect this special glass
bottle in his or her collection. We also can promote our beverage via word-of-mouth of
public because of this special and limited edition of glass bottle of the drink.
We also plan to doing some sponsorships to some sport events which able to
reach to our target audience effectively. The sport events that we plan to sponsor are
StarWalk and International Run and these two sport events have many young adults and
teens to participate in. We provide our drinks to those participants and it can be reach to
them directly. Besides that, we also plan to provide some cash prizes in order to attract
more young adults and teens to join the events. Games, contests, and sweepstakes are
also other types of promotion. Customers can join these activities after purchase the
drinks and showed the proofs to the relative parties. If we can create some creativity and
innovation games and contests for the customers, we may earn some extra publicity and
exposures which is related to our products with free of charge on magazines, newspapers
or even TV news because of this.
In trade promotion, we plan to provide our retailers the promotions like product-
based promotion, price-based promotion, advertising and promotion-based promotion,
and sales-based promotion. For product-based promotion, we provide free goods to the
retailers. If they take every 100 boxes of Coca-Cola Zero as their stocks, we will free
another 3 boxes of drinks as free goods for them. This promotion able to encourage them
to take more stocks and this is lead to increase our sales. Besides that, we also provide
generous return policies to the retailers to attract them to take large amount of Coca-Cola
Zero to sell in their stores. They are promised to fully refund for their unsold drinks. The
return policies help them in reducing the risks and costs of carrying the stocks.

15

Another promotion which is price-based promotion, we are give discounts of 8%
to the retailers if they buy every 50 boxes of Coca-Cola Zero in one time. We also
provide them a longer time period to clear the payment which extends to 1 month. This
will help them to reduce financial burdens and we also able to attract them to sell our
products in their stores.
Under advertising and promotion-based promotion, there is includes the providing
of selling aids to the retailers. We will provide the beverage display refrigerators with the
Coca-Cola Zero logo for the retailers to let them sell our drinks in their stores. With the
beverage display refrigerators, the retailers are able to reduce the costs of buying the
refrigerators to store the drinks and they can easily to sell them to ultimate customers.
Lastly, we also plan to have sales-based promotions to our retailers which are
bonuses and incentives are provided to the retailers. If retailers able to meet or exceed the
sales quota of Coca-Cola Zero with every 200 boxes, then we will give them RM 150 as
rewards. Through this reward system, we can motivate the retailers to put efforts in
promoting and selling our drinks to the ultimate customers. We also can build a good
relationship with retailers through these trade promotions.








16

4.5. Distribution Channel Decision Strategy
The Coca-Cola Companys major strength aside from its product features and
benefits is the large-scale operation it possesses that is widely distributed across 200
countries worldwide. Because Coca-Cola aims to be the number one when it comes
through product choice around the world, the company is very keen in developing its
system of distribution to keep satisfying customers. As Coca-Cola Zero being a part of
the Coca-Cola Company, this makes it easily reach to all marketers worldwide. A
channel of distribution is the path or route along which goods move from producers to
ultimate consumers or industrial users. In other words, it is the distribution network
through which Coca-Cola puts their product in the hands of actual users. Their channel of
distribution includes the original producer, the final buyer and any middlemen-either
wholesaler or retailer.
The availability of Coca Cola's products is second to none. Coca Cola's brands
can be found almost everywhere where consumers need a drink such as in fast food
companies found all over the world (e.g. McDonalds), in all supermarkets, convenience
stores, public houses, restaurants, bars and night clubs, sports stadiums, airlines and many
more. But as for our product which is the Coca-Cola Zero had been missing in their
normal product line in Malaysia. Product availability is an important objective for all
distribution channels. The appropriate degree of availability varies with the
characteristics of the product and the target customers, particularly the products
importance to those customers and the amount of time and effort they will expend to
obtain it. For example, consumer convenience goods, such as Coca-Cola Zeros demand
immediate availability since most customers are unwilling to devote much effort to
obtaining a particular brand.



17

Furthermore, given its vast size and poor infrastructure for this product, the
Malaysian market does not support conventional distribution and retail networks used in
the more advanced economies for Coca-Cola Zero. The retail vending outlets tend to be
small and are decentralized, and Coco-Cola has had to evolve a more innovative
approach to support its operations. For instance, as we know Coca-Cola is packaged in
plastic bottles and can but as for the least vending of Coca-Cola Zero are packaged in
glass bottle which is prone to break during distribution, thus we should synchronize the
packaging method.
Coca Cola Zero is suggested to be used in two distribution channels that are direct
and indirect selling method. Direct marketing allows consumers to buy products by
interacting with various advertising media without a face-to-face meeting with a
salesperson. They provide the products to shops by using their own distributing means.
They have many vehicles for transport. In Malaysia they have almost 450 vehicles to
supply their bottles and cans, but they target more on the other type of product which is
Vanilla Coke and Diet Coke. Retailers here include grocery stores, hotels, universities,
and other large institutions .In this type of selling company have more profit margin.
They should give Coca-Cola Zero an equal target to obtain successful marketing
outbreak.
On the other hand, the indirect selling, the company has distributors. This happens
when intermediaries are inserted between the producer and consumers and perform
numerous channel functions. The fact that we have distributors is because it is hard to
cover the entire world by their own. Coca Cola Zeros distribution channels should
include in vending machines, retail outlets, fountain retailers and wholesalers, and other
distribution channels that supplies home and immediate consumptions. As per vending
machine, we should increase the number of vending machine into various locations, such
as healthcare center, gym and sport complex and all other public interest places. This will
not only create awareness about our product but will also boost the sales.


18

Coca-Cola Zero should distribute their schemes according to area. Coca-Cola
uses full range of distribution methods depending on the sub-market requirements. Coca-
Cola Zero should use small retailers spread across the Malaysian landscape to generate its
sales volumes. It has substantial reach in the urban areas, however does not have the
same reach towards rural and this once again establishes the potential for Coca-Cola
Zeros expansion into a vastly untapped market.
In the remaining urban and Semi-urban areas, where the large proportion of retail
outlets are small neighborhood restaurants or bars, corner stores, one-person kiosks,
Coca-Cola Zero have to adopt a manual delivery approach working with small-scale
distributors to deliver products to small-scale retailers. This approach is called the Micro
Distribution Center (MDC) model. This model is largely used in Africa and it should be
brought to Malaysia and particularly for Coca-Cola Zero. Area or place where soft drinks
sold in a large manner, on those place company gives good schemes to shopkeeper and
retailer. Place like railway station bus stand are consider in this category and place which
have low selling where company gives small schemes to shopkeepers. All the soda
brands are marketed in the common channels of distribution except in the exclusive retail
venues that companies bid to have.
In supermarkets, Coca-Cola Zero should be sold side by side in the display shelf
not giving a single brand any edge relative to the buyer. The rivalry over the channels of
distribution was elevated to obtain exclusive selling contracts in restaurants, places for
vending machines, recreation areas, and popular events. This will boost up the sales of
Coca-Cola Zero.
For logistics support, delivery trucks numbering around large cities should be
increase in the sales centers to cater to retail orders. This will create efficiency in dealing
with the large amount of Coca-Coca Zero stock needed in stores. Apart from its own
distribution centers, Coca-Cola Zero could make partnership deals with large wholesalers
with valuable experience in the area of retailing and independent wholesalers able to
reach out to local communities.

19

5. Sales Forecast and Potential Budget
Potential Budget
No. Types of budget Budget amount (RM in
thousand)
1. Production budget
-Research cost (15%)
-Direct materials cost (35%)
-Direct labor cost (30%)
-Manufacturing overhead (20%)
1100

2. Advertising budget
-Radio advertisement (RM27,800)
-TV advertisement (RM850,000)
-Newspaper advertisement (RM5,000)
-Magazine advertisement (RM21,000)
903.8
3. Promotion budget
-Final customer promotion (48%)
-Trade promotion (48%)
- Sponsorship (4%)
920
4. Distribution budget
-Transportation cost (35%)
-Storage cost (20%)
-Delivery cost (30%)
-Tracking distribution cost (15%)
850
5. Operation budget
-Fixed cost (60%)
-Variable cost (40%)
1250
Total 5023.8


20

The table above shows the potential budgets we estimated for the cost of
implementing the strategies which we mentioned before. There are five types of budget
we have formed, which are production budget, advertising budget, promotion budget,
distribution budget, and operation budget. As what we mentioned in the product strategy,
we are going to replace the toxic ingredient of the existing Coca-Cola Zero, Aspartame to
Sucralose, which is the latest artificial sweetener. We estimated that the production
budget for this strategy to be RM1.1 million, the total expenses include 15% of product
research cost, 35% of direct material cost, 30% of direct labor cost, and 20% of
manufacturing overhead. We increased the budget of product research cost by 10%
because we need to pay the research team from Coca-Cola Company in UK to conduct
the research to improve the product quality so that we can produce a better product that
will attract Malaysian consumer.
The second type of budgets is advertising budget. We planned to promote our new
version of Coca-Cola Zero through radio advertisement, television advertisement,
newspaper advertisement, magazine advertisement, and sponsorship. The radio
advertisement cost can be divided into two parts, which are advertising strategy and
creative development, and media planning and media buying. Our budget for radio
advertisement development is RM800 while the budget for media planning and media
buying is RM27,000 as the market rate for radio advertisement is RM6000 per week for
first week and the charges for following weeks will be half of the first week price. We
decided to make the duration for radio advertisement in 2 months. The total budget for
radio advertisement is RM27,800. The budget we made for television advertisement is
RM350,000 for cost of advertisement production and RM500,000 for cost of airing it.
Therefore, the total budget for television advertisement is RM850,000. We planned to put
our product advertisement on newspaper as well, such as The Star newspaper. The budget
for this newspaper advertisement is RM5000 in full page. Besides, another advertisement
we will use is magazine advertisement. We will advertise our product at Mens Health
magazine and Female magazine which are the magazines that most of our target customer
read. The budget for this advertisement is RM1000 for designing cost and RM20000 for
the fees of advertising in these two magazines. Therefore, the total budget for
advertisement strategy of Coca-Cola Zero is RM903,800.
21

The third type of budget we set is promotion budget. We planned to offer many
types of promotion to our customers and retailers in order to increase the sales of Coca-
Cola Zero. There are two types of promotion we are going to provide, which are final
customer promotion and trade promotion. The total budget for promotion strategy is
RM920,000. The budget of final customer promotion is the 48% of the total promotion
budget, which includes the budgets for product-based promotion, price-based promotion,
premium and games. The 48% of the total promotion budget is the budget for trade
promotion. It is also including the budget for product-based promotion, price-based
promotion, advertising and promotion based promotion, and sales based promotion.
Lastly, the sponsorship for events like StarWalk and International Run we estimated the
budget to be the 4% of the total promotion budget.
The forth type of budget we formed is distribution budget. Our distribution budget
includes transportation cost, storage cost, delivery cost, and tracking distribution cost.
Our total distribution budget is RM850,000 which contains 35% of transportation cost, 20%
of storage cost, 30% of delivery cost and 15% of tracking distribution cost. We increased
the transportation cost by 8% and delivery cost by 10% because we decided to increase
the number of trucks and distribute our product to more places so that we can reach more
customers in different places.
The last budget of our strategies is operation budget. The operation budget is set
at RM1250,000 which consists of 60% of fixed cost and 40% of variable cost. The fixed
cost includes the rent, bills, utilities, staffs salaries, office equipment and suppliers,
insurance and cleaning suppliers. While the variable cost includes indirect overhead cost
such as uniforms, cell phone services, express mail and hiring temporary worker.





22

Sales Forecast
According to Tim (2005), sales forecast is the backbone of a business plan.
People use sales to measure a business and its growth, and the sales forecast sets the
standard for expenses, profits and growth. There is no perfect way to forecast sales, what
we need is common sense, research of the factors, and motivation to make an educated
guess. Our forecast will show sales for the next 12 months in Malaysia.
Table 1.0 Sales forecast of Coca-Cola Zero in 2014
Months Unit sales forecast Price forecast (RM) Sales Forecast (RM)
January 2000 2.50 5000
February 3500 2.50 8750
March 5000 2.50 12500
April 6800 2.50 17000
May 7500 2.50 18750
June 9000 2.50 22500
July 10000 2.50 25000
August 12000 2.50 30000
September 12000 2.50 30000
October 11000 2.50 27500
November 10500 2.50 26250
December 12500 2.50 31250
Total 101800 254,500






23


Table 1.0 shows the sales forecast of Coca-Cola Zero in year 2014 in Malaysia.
As you can see, the sales forecast for January is gradually increasing from RM5000 until
RM25000 in July. This is because the first two months is the period of new launching of
our product and also the new release period of our advertisement. During this
introductory stage, there is a type of customer who would most likely buy the new
product, they are innovators, who willing to try and purchase the product early in the life
cycle. The advertisements are only able to raise awareness among consumer, they still not
able encourage people to take action to buy it. Therefore, the sales at the first two months
are expected to be lower. After the advertisement has launched for two months, they start
to influence the consumers to think of Coca-Cola Zero when they are looking for a drink,
and consumers would rely on word of mouth from other purchaser and are more willing
to give a try on this new product. Hence, the sales start to increase until July and reach
the peak sales in August and September. This is called growth stage. However, the sales
after September were forecasted to drop because there are many customers have tried the
Coca-Cola Zero, some of them may repeat purchase but some of them will not repeat
purchase. We forecasted that the sales on December will reach another peak level due to
seasonal factor which is Christmas. Many people will purchase drinks to celebrate this
special day with friends and family and there are many parties will be organized during
this season. Therefore, the sales of Coca-Cola Zero will increase on December.
0
5000
10000
15000
20000
25000
30000
35000
J
a
n
u
a
r
y
F
e
b
r
u
a
r
y
M
a
r
c
h
A
p
r
i
l
M
a
y
J
u
n
e
J
u
l
y
A
u
g
u
s
t
S
e
p
t
e
m
b
e
r
O
c
t
o
b
e
r
N
o
v
e
m
b
e
r
D
e
c
e
m
b
e
r
Sales Forecast (RM)
Sales Forecast (RM)
24

Market potential estimates are also a very important part in business planning
because it can help company to improve sales performance better in future. In fact,
market potential estimates have many different uses. The first major use of doing market
potential estimates is to make resource level decisions. Company can make proper
allocation decision and prepare enough resources to cope with future customer demand.
For example, UTAR president has forecasted there will be a large amount of students
studies in UTAR in future, therefore he decided to build more buildings in campus so that
UTAR can cope with the large number of students in future. This can prevent company
from losing sales due to insufficient resources. The second use of doing market potential
estimates is to set objective and evaluate performance. Market potential estimates
provide a standard to try to achieve. When the actual sales fall below the forecast sales,
company can try to find out the reasons and seek ways to fix the problems like change in
market strategy and programs. For example, sales managers use market potential in two
ways. First, sales territories are often designed to have equal market potential so that
different salespersons can be better judged on the basis of actual sales. Second, sales
quotas are often set based on the potential sales in a territory.










25

6. Conclusion
As the conclusion, we can conclude that Coca-Cola Zero or also known as Coke
Zero is facing difficulty in generating profits for its company. The problem that occurred
is the ingredients used in the drink, which is the toxic artificial sweetener with the
scientific name, Aspartame. The solution to this problem is by changing this toxic
ingredient to a substance called Sucralose. With this change, healthier drinks can be
created and more customers will be attracted to this selling point.
Besides that, the second problem is the advertising activities. There are
insufficient exposures to many developing countries and only certain countries get to
enjoy this product. Although how good is this product, we still doesnt have the chance to
taste or even try the product because we cant access to it.
The third and the last problem will be the distribution channel. Coca-Cola Zero
should be available in not just superstores but also in most of the urban area. This is to
increase the exposure to those who dont know the existence of this product. Well, Coca-
Cola is already a famous brand world-widely but not Coke Zero. Coke Zero can be
distributed to gym and health centres to increase the consumers quantity as now this
product is concern about health.
On the other hand, we found that the closest competitor to Coca-Cola Company is
the PepsiCo through competitor analysis with first and secondary data collection method.
PepsiCo also have diet drinks which are Pepsi Max and Diet Mountain Dew but with
those changes of Coke Zero, we believe we can overcome the sales of the competitor as
Coca-Cola is always the number one best seller in that industry.
Overall, through customer analysis, we have research and set on our target market
for Coke Zero. Coke Zero is a low-calorie and caffeine free product best sell for diet
purposes. Especially for men, this product is designed with the combination of black and
red colour makes it to look elegant suiting the preference of young men. This is the best
drinks to whom who pursue healthy lifestyle such as those who prefer working out. Coke
Zero also targeted to older generation and this drink is absolutely diabetes-free.
26

In that case, on the advertising side, Coca-Cola Company has to increase their
advertising budget on the advertising activities for Coke Zero. Their total budget has to
divide more on this product rather than continuously advertising the other Coca-Cola
drinks. Moreover, they can add on sponsorships, commercials and funds to advertise the
product so that more customers will get to know about the benefits of having Coke Zero.
From this assignment, after all the researching and understanding, we all learnt
that Coca-Cola Zero is a very good product from Coca-Cola Company. It only needs
some touch up to enhance the product and it will be the top seller in the carbonated drinks
industry and health concerned industry. Moving on through 21
st
century, many
consumers are more concerned about healthy lifestyle and they are chasing after health
and safety products. Nothing is worth more than health, not even wealth. As the elder
said, although you gain all the wealth in the world but if you dont have the health, you
wont be able to enjoy the rest of your wealth.
Coca-Cola Zeros designation and packaging is beautiful. Its combination of
colours on its packaging is a love-on-first-sight product which is really magnificent and
elegant. Not only young men will be attracted to this product but young women as well.
Not to mention, it is a healthcare product, people will be rushing and queuing to grab a
can of it. With such development, we learnt that first sight impression is very important
to leave a good image of the product.
Furthermore, distribution channel is also one of the important issues that we learnt
about Coca-Cola Zero. The access the buyers or customers, we need a suitable strategy. If
Coke Zero is failed to distribute to these under-developed regions, they will not know
about this product maybe forever. These black areas, are not accessible through internet,
televisions advertising and rarely to see a radio as well. To increase the sales, it is
important that this product is distributed evenly to all the countries in the world. By
changing the channel of distribution is one of the ways we can promote Coke Zero. We
must stay efficient and alert all the time to unable the competitor to forecast our
movement in the market.

27

7. References
Babasab, P. (n.d.). Effectiveness of Distribution Channel of Coca-Cola Project Report.
Retrieved February 21, 2014, from
http://www.academia.edu/1259972/EFFECTIVENESS_OF_DISTRIBUTION_C
HANNEL_OF_COCA_COLA_PROJECT_REPORT
Coca-Cola Atlanta. (n.d.). Coca-Cola History. Retrieved February 21, 2014, from
http://www.worldofcoca-cola.com/coca-cola-facts/coca-cola-history/
Coca-Cola Enterprises. Inc. (2012). Annual Report. Retrieved February 26, 2014, from
http://www.cokecce.com/system/content_panels/22/pdf/CCE_2012_AR_FINAL.
pdf
Coca-Cola Journey. (n.d.). Our Company. Retrieved February 20, 2014, from
http://www.coca-colacompany.com/our-company/
Coca-Cola Zero. (2007). Coca-Cola Zero. Retrieved February 28, 2014, from
http://wps.prenhall.com/wps/media/objects/3357/3438371/chapter%20cases/tuck
well_case01.pdf
Coke Zero. (2010). Ingredients: Nutrition GDA-Coca-Cola GB. Retrieved February 23,
2014, from http://www.coca-cola.co.uk/brands/coke-zero.html
Jane, W. (2013). Teens Tune Out TV, Log On Instead. Retrieved February 27, 2014,
from http://www.nbcnews.com/id/3078614/ns/technology_and_science-
tech_and_gadgets/t/teens-tune-out-tv-log-instead/#.UyQzA84_CAQ
Lehmann, D. R. & Winer, R. S. (2005), Product management. (4
th
ed.). New York:
McGraw-Hill.
Martha, C. W. (2012, February 14). Coke and Pepsi May Be Readying Another Cola
War. Retrieved February 28, 2014, from
http://business.nbcnews.com/_news/2012/02/14/10383732-coke-and-pepsi-may-
be-readying-another-cola-war
28

Mayo Clinic. (2012). Artificial Sweeteners and Other Sugar Substitutes. Retrieved March
1, 2014, from http://www.mayoclinic.org/healthy-living/nutrition-and-healthy-
eating/in-depth/artificial-sweeteners/art-20046936?footprints=mine
PepsiCo. (2013, October 21). Inside PepsiCos One For All, All For One Sponsorship
Strategy. Retrieved February 28, 2014, from
http://www.sponsorship.com/iegsr/2013/10/21/Inside-PepsiCo-s--One-For-All,-
All-For-One--Sponso.aspx
Simon, B. (2010, December 19). How Coca-Colas Distribution System Works.
Retrieved February 27, 2014, from http://www.colalife.org/2010/12/19/how-coca-
colas-distribution-system-works/
The Coca-Cola Company. (2013, December 31). Annual Report. Retrieved February 24,
2014, from http://assets.coca-
colacompany.com/d0/c1/7afc6e6949c8adf1168a3328b2ad/2013-annual-report-
on-form-10-k.pdf
Tim, B. (2005, May 1). Creating a Sales Forecast. Retrieved February 21, 2014, from
http://www.entrepreneur.com/article/77674
UTS: Library. (2007). Coca-Cola Zero Launch. Retrieved February 23, 2014, from
http://www.lib.uts.edu.au/gta/14154/coca-cola-zero-launch
Vanessa, L. (2010, April 4). Coca-Cola Company Marketing Plan. Retrieved February 28,
2014, from http://www.slideshare.net/vanessalyle19/coca-cola-marketing-plan-
7698518
Zeeshan A. (2010, July 19). Coca-Cola Company Competitive Strategies. Retrieved
February 28, 2014, from http://www.allvoices.com/contributed-news/6341674-
cocacola-company-competitive-strategies-br
100Plus. (2011). Sport Foods and Supplements. Retrieved March 1, 2014, from
http://www.100plus.co.za/site/sports-foods-and-supplements