Marketing Strategy For Relaunching Minute Maid

Marketing strategy for Re-launching Minute Maid in India

IIPM TOWER, SATBARI, CHANDAN HAULA, CHATTARPUR-BHATIMINES ROAD NEW DELHI Submitted to – Prof. Jayant Bose BY -

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Name Anurag Huria Navdeep Khurana Ashish Bhambani Tabish

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History of Minute Maid Minute Maid is a product line of beverages, usually associated with lemonade or orange juice, but now extends to soft drinks of many kinds, including Hi-C. Minute Maid is sold under Cappy brand in Central Europe and under Fruitopia in Germany. Minute Maid was the first company to market orange juice concentrate, allowing it to be distributed throughout the United States and served yearround. The Minute Maid company is now owned by The Coca-Cola Company, and is the world's largest marketer of fruit juices and drinks. It is headquartered in Houston, Texas, and employs 2,200 people The National Research Corporation (NRC) of Boston, Massachusetts, developed a method of concentrating orange juice into a powder using a "high-vacuum process" in 1945. The US Army had a need for 500,000 lb (227,000 kg) for the war, so NRC created a new branch, the Florida Food Corporation. Led by John M. Fox, the company won the government contract for $750,000. The war ended and the contract was canceled before the factory could be built, but with investment, the company moved forward with a product. Rather than selling powder to the public market, the company decided to create frozen orange juice concentrate. A Boston marketing firm came up with the name Minute Maid, like Minutemen, implying the juice was quick and easy to prepare. With limited funds for advertising, Fox himself went door to door giving free samples, until demand skyrocketed. The ability to purchase fresh-tasting orange juice at any time of year, far from where oranges are grown, proved popular, and led to the company's national success.

The Minute Maid Company was purchased by Coca-Cola in 1960. In 1973, the company released the first ready-to-drink, chilled orange juice product in the United States.

History of Minute Maid in India

The Coca-Cola Company launched its orange juice drink and brand Minute Maid in India, as part of its strategy to extend its leadership in the juice drink segment on 20th January 2007. Hindustan coke wanted to tap the juice markets which were already dominated by Real juice, Tropicana and various other local players. It was a major decision that was taken by coke India to step into the market for health drinks and hence entering the health products after the allegation against them. Everyone knows about the pesticide case that took place and gave set back to all the cola makers in the country. Coca-Cola India said Minute Maid Pulpy Orange, which has been advertised with the slogan "refreshingly orange, surprisingly pulpy", was made available in two PET bottle sizes: On-the-go 400ml and 1liter.

Coca-Cola said its focus initially would target young adults in key cities and then move into the rest of India. As part of the same strategy, Minute Maid Pulpy Orange is being launched in a phased manner, starting first with the southern states of Andhra Pradesh, Tamil Nadu and Karnataka. Coca-Cola said over the two months following the launch in Hyderabad, it expects the drink will be retailed across 25,000 outlets in the three Southern states. Coca-Cola in India currently enjoys market leadership in the juice drink segment with the Maaza brand. With the launch of Minute Maid Pulpy Orange, Coca-Cola expects to further extend its leadership in this fast growing segment The introduction of the brand Minute Maid was In line with consumer preferences which are increasingly getting skewed towards health and wellness products, both soft drink companies have been pushing their noncarbonated portfolios aggressively. In contrast to carbonated beverages which have been growing at 10-12%, healthier beverages such as fruit-based drinks and sports drinks have been registering a healthy 30-40% growth. The fruit-based drink market is estimated at about Rs 500 crore. Leading brands in this category include Maaza from the Coke stable which leads the pack with a market share of over 30%, followed by Frooti from Parle, and PepsiCo’s Slice and Gatorade. So it is evident that the market is becoming more consumers based as the products which are intended if not to benefit but not to harm the health of the consumer.

Mission, Vision & Values Our mission, vision and values outline who we are, what we seek to achieve, and how we want to achieve it. They provide a clear direction for our Company and help ensure that we are all working toward the same goals.

Our Mission

Our mission declares our purpose as a company. It serves as the standard against which we weigh our actions and decisions. It is the foundation of our Manifesto. •

To refresh the world in body, mind and spirit.

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To inspire moments of optimism through our brands and our actions.

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To create value and make a difference everywhere we engage.

Our Vision Our vision guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable growth. •

People: Being a great place to work where people are inspired to be the best they can be.

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Portfolio: Bringing to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs.

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Partners: Nurturing a winning network of customers and suppliers, together we create mutual, enduring value.

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Planet: Being a responsible citizen that makes a difference by helping build and support sustainable communities.

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Profit: Maximizing long-term return to shareowners while being mindful of our overall responsibilities.

Our Values Our values serve as a compass for our actions and describe how we behave in the world. •

Leadership: The courage to shape a better future

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Collaboration: Leverage collective genius

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Integrity: Be real

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Accountability: If it is to be, it's up to me

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Passion: Committed in heart and mind

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Diversity: As inclusive as our brands

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Quality: What we do, we do well

Another important Thing was this statement that I came across. “I thought that Coke was the only universally understood word after OK”. Fascinating indeed.

The problem The product that we are talking about is Minute Maid. “PULPY” as masses generally call it was an immediate success, since it was the first of its kind to enter the Indian market. Sure, the market had products like Real Juice and Tropicana. But these were just simple players. Fruity with its fancy add campaigns and sales had the market by its throat. Minute Maid captured the hearts and taste buds of everyone. The sales of the product were off the charts and people only wanted more and more. Juice was really healthy and people realized that because of the ad campaign and the advertising that was in the market. People started focusing on the product and forgot about the competition. Now this in itself was a major problem that Hindustan Coke faced. The sales of its products were going except for minute maid that is. Drinks like Limca,

Fanta, Coke etc… were facing the problem. It turned out that sales of the products were going down for Coke as well as Pepsi and only minute maid sales were hitting the roof. So slowly and gradually, Hindustan Coke slowed the production and the supply was sawed off. It was because of minute maid that sales declined and the company had to bare losses even though that the juice was quite profitable.

The Plan Coke India now plans to introduce minute maid again but only in a bigger way. It plans to come back into the market though the product has not been totally faced out whatsoever. New tastes are going to be introduced for the masses. Everything is going to be the same but only in a bigger way.

New flavors would include Apple Cranberry, and Minute Maid Lemonade. These products are already available in the foreign markets but not yet in India due to the above mentioned problems. Launching the product again with its new variants is definitely going to help the sales go off the roof. Now “pulpy” when it gets back into the market; it would have to do a lot of gaining over the lost time. So the target segment and everything for the product is going to be the same for this one as well.

The Starting

To enter any market Coke has a standard Procedure. It consists of 5 steps, which are known as product development process.

Coca-Cola's 5 P Strategic Framework for India: People The Coca-Cola System to turn to India to provide global services in areas such as Engineering, Finance, Marketing & Technical R & D Setting up Coca-Cola University in India- a global corporate university, representing a one-stop shop for all learning and capability building activities across The Coca-Cola Company to be set up in the country. The vision of the Coca-Cola University is 'to become the "Number One" global benchmark in "learning to enhance business performance" by providing experiences that equip people with practical skills and knowledge to win in the market. In India, the Coca-Cola University will stretch across the traditional boundaries

of building employee capability and also work on building capability for the company bottlers and key customers. The entire initiative has been designed to contribute to the economic opportunity in the country. Coca-Cola to set up an equipment testing facility at Hyderabad. This facility being set up, will test and certify coolers to ensure that they conform to the company's stringent quality standards. The facility will test coolers from India and also from Asia pacific region.

Planet Coca-Cola in India to reach zero water balance with respect to ground water usage by 2009- The Company continues to find efficiencies in all areas through an approach to water management that involves reducing, reusing, recycling, and recharging (4R program). Some examples include: In 2006, the Coca-Cola system in India saved more than 100,000 kilolitres (0.1 MCM) of water through its water conservation efforts i.e. - the first 3R's (Reduce, Reuse, Recycle). Over the last seven years, Coca-Cola has improved its water use efficiency by more than 30% in its operations in India. It is the direct result of large investments in the efficiency of company operations. On the Recharge front i.e. (the 4th R) at both the plant level and the community level, the company has installed over 300 rainwater harvesting structures spread across 17 states, including locations at schools and farms. Plan is to have 320 rainwater harvesting systems operational in India this year. During the year 2006, the Company added RWH potential of 0.5 MCM, taking the overall design RWH potential to more than 2 MCM in 2006. Provide Drinking water solutions in 1000 schools by 2010- Coca-Cola India has partnered with Rotary International to launch the path-breaking Elixir of Life project in Chennai, covering nearly 30,000 students in the first phase to provide potable water to underprivileged children. Commission Study on 10 watersheds by 2009 and implement interventions accordingly The Coca-Cola Foundation partnered with CII and ICRISAT on two watershed projects in five villages in Dungarpur, Rajasthan and two villages in

Tirunelveli District, Tamil Nadu in order to improve rural livelihoods and contribute to poverty alleviation.

Portfolio Coca-Cola in India is exploring a wide variety of beverage opportunities like energy drinks, sports drinks, flavored water and juices. The company is planning to further expand its portfolio in the country in due course of time, most of which would be developed in India. The launch of bolder tasting Fanta in South India is a prime example of the same strategy. The second example being the phased launch of Minute Maid Pulpy Orange, a refreshing juice drink with natural orange pulp. The orange juice drink has already been launched in South India (Tamil Nadu, Andhra Pradesh, Karnataka) followed by its launch in select markets in North (Punjab, Haryana and Himachal Pradesh). The company is now planning to "nationally" launch the juice drink, best explained by its tagline- "Refreshingly Orange, Surprisingly Pulpy".

Partners Coca-Cola to set up Retail University to train Indian retailers to compete in the fast changing retail environment- With the changing face of the retail trade in India, the objective of setting up the Coca-Cola Retail University would be to expose the Indian retailers including their staff, sales team and distributors of Coca-Cola to the global best practices. This would include training them with the right techniques, tools and knowledge to operate in the new retail environment.

Performance Coca-Cola system in India has invested over US$ 1.2 billion. As part of its commitment, Coca-Cola in India has already announced an investment of US$ 250 million over the next 3 years. These investments would enable the Coca-Cola system to create bottling capacities for new product offerings, execute marketing strategies, devise innovation distribution models to meet consumer demand and also ensure value creation for all its business partners. This exercise will also result in the creation of new jobs for the entire value chain. In India, unit case volume increased 12 % in the second quarter of 2007, cycling a decline of 12 % in the same quarter of the previous year. Continued investments in building organizational capabilities and focus on improved execution by the consolidated bottling operations resulted in four consecutive quarters of solid growth backed by share gains in sparkling and still beverages.

SWOT (Strengths and weaknesses, opportunities and threats) Strengths Weaknesses Opportunities Threats

Strengths 1.Brand strength

2.Effective stride in new markets

3.Results of operations

4.Strong existing distribution channels

Weakness 1.Reliant upon line extensions 2.Reliant upon particular carbonated drinks

Opportunity 1.New product introductions

Threats 1.Strong competition

2.Brand is attractive to global partners

2.Potential health issues

3.Brand dilution 4.Entrance into difficult non-core categories 5.Saturation of carbonated soft drink segment

Doing and intense SWOT analysis of the whole market situation is also necessary again because of the time that minute maid has already spend out of the racks. This is also important because of the new products that were launched after Minute Maid. Pepsi got down in this segment with twister which I personally feel is in no ways as good as pulpy orange, but that’s only subjective.

Minute maid on being re launched with new flavors would capture the health drink segment again, except for the energy drink segment. .

STP (Segmenting, Targeting and Positioning)

Minute Maid was launched in India in February 2007.The brand assumes significance in the plans of Coke because of the scare it had in the pesticide issue. By launching Minute Maid , Coke is moving towards health drinks. According to Financial Express, the market for Packaged Fruit Juices is expected to be around Rs 350 crore. The market leader is Dabur Real with a share of 57% and Pepsi Tropicana with a share of 30

This was the scenario before minute maid was entering the market in India. But after the launch, Minute maid was able to get a substantial share of the market. Threat to the competitors is evident and with the introduction of more natural flavors in the market would definitely threaten the existing players.

The target audience that was supposed to be addressed was people from 20 – 35 years which are young adults but the response that Coke got was exceptional and astonishing in its own way. House wives and children also preferred drinking this.

The strategy

The initial strategy was that the company’s Minute Maid is the second fruit drink, the first being Maaza the mango drink. "The launch of Minute Maid is a two step initiative- towards fulfilling consumer needs and meeting their preferences, and an effort to extend Hindustan Coca-Cola's market leadership in the Indian juice drink market," remarks Kochhar, person incharge. According to him the overall Indian juice market is estimated to be approximately Rs 1,200 crore. "In volume terms, this is roughly equivalent to a 500 million case market that includes juices, nectars and fruit drinks etc. The packaged juice industry is however, just about 50 million cases." At a time when competition has products in 200 ml Tetra Pak, Hindustan Coca-Cola decided to be different by launching the drink in 400 ml and one litre pet bottle priced Rs25 and Rs60 respectively. "Based on consumer research, we identified the 400 ml pet bottle as an optimal value proposition both from a serve and price point of view. The offering also reflects innovation in price point of Rs25 the lowest entry point for an orange based juice drink in India," Kochhar claims.

Kochhar does not rule out the possibility of 200 ml Tetra Pak in the near future. The pricing of the same will be interesting to note as at the market place the minimum price of such 200ml is Rs10.

While the entry price may be lower in this category when compared to 100 per cent fruit juice products available in the Rs70-90 pricing band, the price of Minute Maid that has a 12 per cent fruit juice and pulp content is quite steep. Speaking about the product campaign strategy he says, "The 360-degree marketing communication plan involves organizing road shows including extensive experiential sampling sessions in markets, offices, malls, and colleges, all backed by a range of exciting contests. Complimenting the on ground initiatives, TV commercials bringing out the "Refreshingly Orange, Surprisingly Pulpy" proposition of the Minute Maid brand would also be aired on all leading channels in the south. The entire brand campaign has been developed and executed by Leo Burnett." This was the original press release for Minute Maid; the strategy decided at the initial stage was flawless, so this time around the strategy will not be tempered with, except for a better network. Coke has got the most amazing and the most competent network in India after HUL.

Conclusion

Since its launch, Minute Maid has made everyone felt its presence in the Indian market, be it competitors or customers. We have even heard of shop keepers running behind the coke trucks to get cartons of Minute Maid so that they could get Rs 20 off. Due to certain problems Hindustan Coke had to pull back from the market. The reasons have been mentioned earlier in this paper.

With the introduction of new flavors in this fabulous product, no one would be able to compete with it. The product is bound to be the market leader within one year. Coke has a little hand off right now from the brand, but since its going to rethink about entering the market in the segment with the same price. Nothing is going to be altered from the original strategy and distribution channels. Leaving alone the fact that Coke had the market by its throat when they introduced Minute Maid, now the competitive products are going to find it difficult to compete and come up with a different price band or a different strategy, because it would be hard under the current conditions to beat this plan that Coke has for Minute Maid.