Marketing plan of RC cola

7 July 2016

Limited group members 1. 4 Methodology: 1. Project Design: At first we got the project design and structure from our Course Instructor and move for the next steps. 2. Survey Instrument: In this study we collected information from the Marketing official of RC Beverage. We assigned him a questionnaire to meet the requirements of the report. The questionnaire was a useful method to collect data. 3. Data Collection: Due to lack of sources, it was required to analyze the structured questionnaire and interviewing method to collect data from primary sources.

We also collect some information from Internet, particularly from the website of RC Beverage. 4. Data Analysis: Finally we have analyzed all those cohesive information to prepare the project. 2. Company Profile: Partex Group is one of the largest private organizations in Bangladesh. The activities of this organization are based on manufacturing as well as services. Partex Group is doing many businesses in Bangladesh and RC Beverage is one of the parts of their business. RC Beverage Company is the official franchise of Royal Crown Cola of USA. This Royal Crown Cola Company was formed in 1905 and it was then named ‘Chero Cola Co’.

Marketing plan of RC cola Essay Example

In 1920 it became known as ‘Nehi Corporation’. In 1955, the company experienced huge growth and changed its corporate name to Royal Crown Cola International. In 1994, Mr. M. A. Hashem, chairman of Partex Group visited an international Trade Exhibition in the USA, where he met with the executives of Royal Crown Cola Co. International. Then he thought that RC Beverage would gain acceptability in Bangladeshi market because it has an international brand image, recognition and quality. When he returned, Partex Group as well as RC International carried out a wide range of marketing research.

After getting positive results, in 1996 the corporate head and the directors formed Partex Beverage Ltd. Mr. Abdul Aziz was given the position of Managing Director. He is considered as one of the pioneers of the concept of RC. The factory of RC Beverage was established in Rajendrapur, 40 kilometers away from Dhaka city. Initially their investment was about Tk 10 crore. The company started its commercial production on 6th October 1997, and RC launched in Dhaka on 20th October 1997. This company is the first which launched beverage in food grade pet bottles. The slogan of this company is “Trishnay Chai RC”.

This company offers carbonated beverage and pure drinking water. According to Partex Beverage Ltd is “To provide value at an economic cost, progress in diversity and continue to contribute to the growth of industrialization in Bangladesh by being market challenger”. Now they proudly profess that they have stuck to their mission and are now worth over 80 crore Tk. 3. Current Market Situation: The competition is very much high in soft drink industry. RC Beverage is operating in a oligopoly market where two or three large competitors control the lion share of that market.

The market size of soft drinks in Bangladesh is around TK. 800 Crore per year. Among all soft drinks company, Coca-Cola is the market leader for many years. It was popular in the past time and still it has popularity among the large population of Bangladesh. It obtains 31% market share. After Coca-Cola, Pepsi was the second one; but after emerging RC, the market share of Pepsi has been reduced to 22%. RC has been able to move its way up and for the last two years it has been holding the 2nd position with 26% of the total market. The others like Uro Cola, Virgin and Suncrest each have market shares equal to or below 10%.

There is another player Mojo who are taking a good number of market share in the beverage market. The major difference of RC with the other brands is that this company offers their product at different sizes and they have 6 flavors in their product. Other companies don’t have this large range of product like RC Beverage. RC Beverage also has very strong distribution network. These things are the competitive advantage of RC Beverage over the other competitors. 4. Product Profile: 4. 1 Products mission: The mission of RC Beverage is to provide the best quality beverage product within different size and flavor with reasonable price.

4. 1 Vision: RC’s vision is to make their product available to the ultimate consumers when it is needed. 4. 1 Objectives: The objective of RC Beverage is to maximize profit by increasing market share of beverage products. 4. 1 Goal: Their goal is to be the market leader in terms of quality and market share within 4 years in Bangladesh. RC Beverage have various kinds of products in their product line. Each single unit of their product is known as SKU (Stock Keeping Unit) they categorize this SKU according to flavor and pack size. 4. 2 Level of Product: For RC Beverage, different levels of this product are as follows:

Core Product: Beverage Actual Product: Different flavors of RC drinks Expected Product: Good Taste, Reasonable price Augmented Product: 25 percent extra with 1 liter pet bottle Potential Product: The Company is thinking for some special flavor or size For which customers are not thinking about right now. 4. 3 Variety: RC Beverage has a good variety in their product according to size and flavor. No other company has this advantage. They produces Cola, Lemon, Lemon lime soda, Orange, Diet cola and Club Soda. 4. 3 Quality: The Company is maintaining very high quality because most of the raw materials come from USA.

Basically Royal Crown Cola International, USA assigns their product design. As a franchise they are bound to maintain those instructions that are certified by USA. In case of designing they are suggested to bring the change not more than two to three percent. 4. 3 Design, Features & Packaging: Packaging and labeling also plays a vital role in product designing. The company uses the factory of Rajendrapur for packaging purpose. To make the container the company use ‘RASING’ – it is one kind of raw materials to make RC container on bottle. Others materials mainly comes USA.

Many trained chemist help the company to produce their product properly. RC labeling consists a great deal of information as well as maintains its brand name. For this they use tag which is imported from Switzerland. A chart of RC Product category is as follows: 250 ml Can- 6 flavors 250 ml Pet- 4 flavors 500 ml Pet- 5 flavors 1. 25 liter Pet- 3 Flavors 2 liter Pet- 2 flavors 4. 4 Products position according to BCG Growth Matrix: Partex Group has Strategic Business Unit of Partex Beverage {RC Beverage}, Partex Furniture’s, Partex Board and Doors, Trading and Shopping etc. Relative market Share HighLow High Market Growth

RateLow After analyzing the SBU’s of Partex Group we can say that in BCG Growth matrix RC Beverage falls into the category of stars, where market growth rate and relative market share both are high. Because it has already achieved a strong market position compare to other competitors. On the other hand the consumer’s demand for RC Beverage is also high in Bangladesh. That is why they are maintaining full market coverage in Bangladesh. 4. 5 Segmentation Process: Market segmentation can be done by four ways, Such as— Demographic segmentation, Geographic segmentation, Psychographic segmentation and Behavioral segmentation.

Though RC Beverage has strong competitors like Coca Cola, Pepsi it is performing tremendously because of its appropriate segmentation of the market. They have segmented their market into three categories under geographic segmentation heading. These are— 1. Urban areas 2. Semi urban areas 3. Rural areas In this way RC Beverage is differentiating its market according to the density, which indicates geographic segmentation where as giant groups are not available in semi urban and rural areas. They also segment their market according to the demographic features like different sizes for different class of people.

4. 6 Target Market Selection: From the very beginning RC Beverage is targeting the young generation aged from 15 to 20. But nowadays they are thinking to follow the full market coverage strategy because soft drink should not be launched for particular grouped peoples. 4. 7 Product life Cycle: RC Beverage has already achieved a higher marker acceptance and greater response. The sales of the RC Beverage rapidly rose in the year 2008 though the sales were declining in the year 2007. This company is maintaining average cost for its customers, which leads higher profit for them.

They also have huge number of distributor outlets. Now RC Beverage has reached at the ‘Growth’ level in the product life cycle in Bangladesh. 4. 8 Development Steps of the Product: If any product of RC Beverage fails in the market then they try to find out the reason behind that. To do this they mainly rely on their authorized distributor and retailers who generally get feedback directly from the consumers. Then according to the feedback the company tries to improve their product. Sometimes they also consider what their competitors are doing. Product Planning: RC Beverage follows a consecutive process of Product planning.

The product planning basically initiates with – Following the Governmental Rules and regulations. – Then making budgets for the whole process and going forward. Product Development: The product/land development process of RC Beverage is fixed by their parent company. It has developed its product in Bangladeshi market. Product modification: They have modified their product in the form of packaging. They have changed the packaging of their packaging of ‘Upper 10’. New product Development: The steps of the new product development of RC Beverage are as follows: Idea Generation Concept Testing

Marketing Strategy Development Business analysis Product Development Commercialization 4. 9 Consumer Behavior: Purchasing of RC Beverage falls under the category of ‘Variety-Seeking Behavior’. Because lower involvement is needed to buy this kind of product. Product price is low and consumers do not put special emphasis on product. Consumers always look for variety that is why customer switching rate is very high. 4. 10 Steps in consumer buying behavior: Consumer buying behavior has five stages, which are necessary when a consumer take the decision to buy a specific product.

So marketers have to keep this in mind while marketing their product. 1) Need Recognition: At of all, consumers identify their need for beverage. There are two factors, which can influence in this stage. Internal stimuli: If beverage is really needed for consumers, they should purchase beverage. External Stimuli: Friends, family, advertisement and different promotional activities can influence a customer to buy product. Ex: RC Beverage is influencing customers to create the need of beverage by using celebrities in their advertisement. 2) Information Search: Consumers should have the accurate information when the purchase a product.

Consumers may get information by following- Personal Sources: Family, friends and relatives Commercial Sources: Advertisement and promotional sources Examining the product: Consumers can have beverage practically. Ex: RC Beverage has made the information available by giving frequent advertisement. 3) Evaluation of Alternatives: At this stage consumers should have the sufficient information about different beverages. So it is now consumer’s duty to select the best alternative. Consumer should select that alternative which is best suited with their need. Marketers of RC beverage are providing products by analyzing consumer’s need and want.

4) Purchase Decision: In this stage consumers actually buy the product. They decide which brand to purchase and at what price they will purchase it. RC Beverage has made their product available in the different outlets both in rural areas and urban areas. 5) Post Purchase Decision: Consumers can be satisfied or dissatisfied after drinking RC beverage. It is company’s duty to find out the reasons behind consumer dissatisfaction. They have R&D department for this purpose. Their main duty is to research the current market. RC beverage is following hold strategy for satisfied customers. 4.

11 SWOT Analysis of RC Beverage: After consulting with executives of RC Beverage and analyzing this company we have made a SWOT analysis. Strength: Multi-dimensional organization Well-establish management Sophisticated technology Financial support from sister concern Quality product Efficient distribution network Weakness: Unable to attract the loyal consumers of Coca-Cola and Pepsi. No CSR planning. Opportunity: Consumer’s tendency to use Pet bottle. Value pricing: RC is able to produce high quality relatively lower cost. Wide market in Bangladesh. Threats: RC has to compete with the existing reputed companies

Political instability Problem arise dealing with distributor. (Credit facility) Fluctuation of price of raw materials The market is becoming saturated 5. Pricing: Price is the only element in the marketing mix that produces revenue for the organization. Because of this any firm must have to follow at least one pricing method for their product. It is also true for RC Beverage. The Marketing objective behind their pricing strategy at that time is Current Profit Maximization. Factors affecting pricing decisions: # Internal Factors: Cost of the raw materials can effect the pricing decisions.

Organizational consideration also affect the pricing, if they want to produce high quality product then they have to charge high price. # Market and Demand: The demand for beverage always exists as the number of population is increasing everyday. RC Beverage never has to think of or panic over market and demand because it is already established. # Competitors’ costs, prices and offers: The difference in size and flavor of RC Beverage and its nearest competitor is almost same. That’s why RC Beverage needs to consider its opponents strategy as a big issue for pricing its products.

# Other external factors: Among other external factors, economic condition of the country is very important because in these days of severe economic fluctuation, sales have reduced to a large degree. Government action also has a great impact on the soft drinks company. It has to deal with other social and environment concerned institution. Pricing approaches for RC Beverage: Initially RC Beverage follows the competitive based pricing strategy. As it was new brand in Bangladesh it had a mission to survive along with strong competitors. For that they have to take market share from other competitors.

So they are bound to follow the pricing what their competitors are charging. They run their business in loss for 3 years. After getting a good market share in Bangladesh they concentrate in recovering their product cost and it’s a time for them to make profit. Now they are following cost based pricing strategy. In pricing they are concerned about the fixed costs, variable costs, selling and administrative cost and government taxes. Price Adjustment Strategy: Previously we have told that RC Beverage follows the cost based pricing strategy for selling its products.

But now, it is now running its business by the huge profit and revenue. But sometimes their selling falls down due to some external reasons. At that time the company adjusts its prices. 1. Discount and Allowance Pricing: RC Beverage has the cash discount method, quantity discount method and seasonal discount. It gives special price rebate in particular occasions like Eid, Puja etc. 2. Segmented pricing: They charge different types of price for different types of products:- # According to the Product form: like different sizes (250 ml, 500 ml, 1. 25 liter, 2 liter) and flavors (cola, lemon, lemon lime soda, orange diet cola,

club soda). # According to Customer: For upper class, upper middle, and middle class to make their product affordable for all. # According to Location: In rural areas, sales of mini sizes of RC Beverage are greater compare to the urban areas. Some current price of RC Beverage is as follows: 250 ml Can- 6 flavors – Tk 25 250 ml Pet- 4 flavors – Tk 12 500 ml Pet- 5 flavors – Tk 20 1. 25 liter Pet- 3 Flavors – Tk 45 2 liter Pet- 2 flavors – Tk 65 6. Distribution: Distribution is more important to sell any product. To reach the target customer any organization must have strong distribution network.

6. 1 Level of Distribution: RC Beverage produces their product in their factory which is situated in Rajendrapur. From there they supply their product to their authorized distributor. To be authorized distributor of RC Beverage, the distributor must have to follow some rules and regulations. One of the rules is that distribution should have sufficient transports to distribute the product to the destination. From the distributor the product goes to the retailers and finally to the consumers. So we can say that RC Beverage is following Two Level distribution channel.

6. 2 Channel dynamics: As a matter of fact, RC Beverage has adopted the Conventional Marketing System as its channel dynamics. We know that Conventional Marketing system means all the intermediaries in marketing channel system work independently. Distribution channel system of RC Beverage is as follows: 6. 3 Marketing Intermediaries: As they are following Two Level marketing channel system, so they are using distributor and retailers as marketing intermediaries. They are following Intensive distribution so that they can sell their product all over the Bangladesh.

Due to the strong distribution network they have successfully been able to enter into the market of rural and semi urban areas as well as urban areas. By this time they have almost covered the whole Bangladesh and they are expanding day by day. They claimed themselves number one regarding the point of coverage. But they don’t have the access to export their product in overseas because it is a franchise company in Bangladesh. 7. Promotional Tools: Promotional activities can create a good position in the market and also in the consumer’s mind. As promotional activities RC Beverage normally uses advertisements.

7. 1 Objective of the advertisement: Advertising is the paid form of non-personal presentation by an individual organization to promote their products towards their customers. RC Beverage gives advertisement of their product through different media to promote their products towards their customers. Their main objective of their advertisement is attracting their customers towards their beverage. Sometimes they also change their advertising motto according to the market demands and wants. At the very beginning they used – “Me and My Choice” as advertising motto. But currently they are using – “Trishnay Chai RC”.

Their advertisement can be divided by— Persuasive Advertising Informative Advertising 7. 2 Choosing Media: Media selection is very important because the company is spending a lot of money on advertising to reach its target customers. Since the target customers of RC Beverage are teenagers and young people, it has chosen the electronic media to maximize its exposure. They also use bill boards in important places as their advertisements. As electronic media they usually use popular TV channels and also the prime time. 7. 3 Other promotional activities: RC Beverage also gives priority to their authorized dealers. As promotional

activity they offer one or two bottles free with one case and this opportunity is only for the authorized distributors. For the consumers currently RC Beverage is offering 1. 25 liter at the price of 1 liter. 7. 4 Media Budget: They have allocated a huge amount of money for electronic media for the promotion of the product in the market. They spend most of their budget for advertisements. In the electronic media, RC Beverage chooses the pick hour. Their media budget for a month is approximately Tk. 36380000. 7. 5 Media Vehicles: RC Beverage advertisements are telecasted in pick hours in between news of popular TV channels and famous TV shows.

We can conclude that RC Beverage is using the news and popular TV shows in as their media vehicle. They also use bill boards as their media vehicle. Sometimes distributors also performed as their media vehicles. 7. 6 Effect of Advertisements on Sales: Advertising is one of the most important and visible marketing tools. RC beverage spends huge amount of money in advertising. This has a good impact on their sales. Their promotional activities depend on their sales of beverage. RC Beverage is right now in the second position in the beverage market of Bangladesh in terms of market share.

Only Coca Cola, who is the global leader, is ahead of them. They surpassed big competitors like Pepsi, Virgin and Uro. 8. Action Program: After the defining of the strategies on the marketing mix, they were then needed to be implemented in the target market. The main responsibility goes to the top management. They get sufficient information and assistance from R&D department. R&D does their work by proper marketing research. Top management guides the organization to achieving its organizational goal. The executives of RC Beverage are formed with the representation of all departments.

They distributed the goals among themselves based on their particular departments. The production department has given the responsibility to interact with the supply chain for raw materials for starting the production. In this department there are managers, the technicians, quality control officers, cost management accountants and their subordinates workers and employees. The workings of distribution manager are with many retailers and wholesalers of the distribution channel. The amount of commission they would pay to the distributors once the target is achieved is determined by this department.

They have to make the product available to the ultimate users. The promotion department is spending its huge budget on the advertising in media. Their main focus is to aware the people about RC Beverage. This advertisement makes the product recognized to targeted people then consumer buy the product. After effective promotion program then comes the activities of the distribution channel to go for test marketing if there is any new product. The whole sellers and retailers make sure that the product is widely distributed. This is how RC Beverage is going toward its organizational objectives.

9. Problem Identification: RC Beverage doesn’t have loyal customers compare to Coca Cola and Pepsi. It is not known to everybody that it is an international brand. Packaging is not attractive enough. They only targeted the young generation. Company is not directly connected with the consumers Promotional activities are less than their competitors. It does not consider about consumer’s need and want in case of pricing. Mainly choosing the electronic media for advertising. No sponsorship in news media (in news Headlines or TV, Radio programs) and in sports NO CSR planning

10. Recommendation: Should create loyal customers: They can add some new features to attract the new customers and by doing so they can also increase their sales. It will also make loyal customers like other competitors. Should create more brand image: Most of the consumer does not know that it is an international brand. So they can sponsor in many events like sports. It will help them to create more brand image in our country. It will also reduce the switching rate of the consumers. Attractive packaging: Their packaging is mainly developed by the USA peoples.

In Bangladesh this company doesn’t have enough access to change the design of the products. So they should take the permission to design their product according to the choice of Bangladeshi people. Maintain fair price: Like other companies RC Beverage is following cost based pricing strategies and competition based pricing. They should consider the needs and wants of the consumers in case of pricing. So if they can maintain a fair price, it will be helpful to increase their sales. New product for children and old people: RC Beverage can launch some beverage items for children and old peoples.

Free samples: Company can give free samples to the students because young generations are one of the big portions of Beverage consumers. If the consumers feel the product good they will purchase it. Should collect more feedback regularly: They should collect feedback regularly from consumers more than presently what they are doing. It will help them to increase the product quality. Promotional activities: They should increase their promotional activities because RC Beverage has less promotional activities than competitors like Mojo and Virgin.

Advertising Media: currently they use only electronic media. But they should use print media as advertising. It will attract not only the young peoples but also the corporate user. CSR activities: CSR activities of RC Beverage are very less. They should have more CSR activities, which will help them in the corporate world. It will create goodwill to the consumers. 11. Contingency Plan: Though RC Beverage has got a good position in beverage market there are certain possibilities that anytime their sales can fall down.

Because there are many threats like strong competitors and changing patterns of consumer buying behavior, which can extremely affect its business. So they should always be ready to face the situation and for that RC Beverage has a contingency plan. The contingency plan of RC Beverage is to go to the production of fruit juice in the Bangladeshi market or they can modify their product at a great scale so that their sales can increase to cover the losses. RC Beverage can also go for Diversification strategy to gain extra profit.

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