The Foundations Of Royal Crown Cola

In 1904, a young pharmacist graduate from Georgia began making soft drinks besides from his family business of bakery wholesale. What he knew at that time was little experiments will enhance and lead him to open a huge soft drink company that is still in work today.

History: In 1905, Royal Crown cola introduced its first product names as Chero Cola and Royal Crown Ginger Ale, Royal Crown Root Beer and strawberry. In 1925, ROYAL CROWN Cola Company renamed as Chero-Cola and started name Nehi Corporation due to its coloured and flavoured drinks. Afterward a Chemist Rufus Kamm reformulated Chero-cola in 1934 and named it Royal Crown Cola. In 1950s the mixture of Moonpies and Royal Crown cola became famous as the “working man’s lunch” in the South America. Royal Crown cola is the first to sell drink in aluminium can.

In 1958 Royal Crown Cola Company launched the first diet Rite and diet cola and caffeine-free cola, Royal Crown 100 in mid of 1980s. ROYAL CROWN cola introduced Royal Crown Draft Cola in 1990 as a premium cola. Later on company also introduced Cherry ROYAL CROWN, a Flavor of Cherry to stand beside the Pepsi Wild Cherry and Coca Cola Cherry.

Acquisition of Royal Crown Cola was happened in 2000 by Cadbury Schweppes plc. In 2001 Cott Beverages of Canada purchased Royal Crown Royal Crown Cola all international brands and started operating as Royal Crown Cola International.

ROYAL CROWN Cola in Pakistan:

Royal Crown is working in Pakistan since 1970s. It launched many brands there like Dr. Pepper, Salute Orange and Salute cola etc. In the start Royal Crown cola sales were considerably good. It made profits since 1990 but after that its position in the market started decline gradually. Now at this era ROYAL CROWN cola is having no values for the people of Pakistan and is going in loses so we can say that Royal Crown cola is badly flopped and failed in Pakistan.

Royal Crown Cola Products:

Royal Crown Cola

Cherry ROYAL CROWN cola

Diet Rite Cola

ROYAL CROWN

Royal Crown Draft Cola

Kick

Diet ROYAL CROWN cola

Situation Analysis:

Industry Analysis:

Strength:

Cold drink market in Pakistan is having a great time now days. Market of drink is above in terms of volume and income of this industry. Multinational companies have been providing quality products of carbonated drink to the consumers over the years according to the norms and values of an Islamic country. So it is enhancing the growth of economy of Pakistan in terms of soft drinks.

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Weakness:

Cold drink market faces a fall down in full summer days as people starts using the traditional drinks like “Rooh Afza, Jam-e-Shirin, Sandalwood” etc which are highly appreciated by the Pakistani people. In rural areas especially these drinks are used very much.

Opportunity:

Beverages industry is growing day by day in Pakistan as the new comers like Gourmet Bakers made a huge entry in market but it is only in Lahore city in spite of this Bakery is making profits by reducing the sales of Pepsi and Coke because of its cheap prices. So government is encouraging the new comers to come in the market.

Threats:

Health and hygiene awareness among Pakistani is becoming more so they prefer to drink fruit juices products over the carbonated drink. The main reason for this awareness is the media who has started campaigns to make the people realize about the fruit products and benefits.

Royal Crown Cola SWOT Analysis:

Strength:

In Pakistan the strength of this cola is its cheap prices.

It’s operating worldwide for more than 100 years.

Weaknesses:

International suits for law.

Low Advertisement.

Budget for promotion is also so low.

Opportunities:

Building equity for its brands.

Hot weather in Pakistan

Production of more suitable products to satisfy consumer needs

Re launching in new market

Threats:

Very strong competitors in the market like Pepsi and Coke

More competitors are looking to enter in the market

Govt. Policies

High tax rate on beverages

PESTLE Analysis:

Political Factor:

Infect Pakistan is a democratic country but political condition now days is very worst. Investment in private sector is equal to none. Tax is levied heavily on beverages industry. Certain ratio of tax goes directly to the account of President of Pakistan. Trade agreement is supported but there are also strict restrictions following these. There is no regulation in the favour of the labour community. They are not even paid equivalent to their work.

Economical Factor:

It is a second largest element of PESTLE analysis. It involves economy conditions, inflation rate, employment level, spending power etc. In Pakistan unemployment is up above the sky. People are searching for jobs even after getting 16-18 years of education. Unemployment level reduces the buying power of consumers and in the end economy starts declining. The big threat of Royal Crown Cola re launch in Pakistan is what prices they set to get the attention of people in limited buying power.

Social Factor:

ROYAL CROWN was first launched in Pakistan by keeping a religious and social status of Pakistani people and it worked. They offered low quantity of gas in it. Current situation is that media is also on top of the list so if ROYAL CROWN cola re launches in Pakistan then advertisement campaign could be run on high level. So ROYAL CROWN should be able to offer those products which aims to benefit people lifestyle and behaviour. If it doesn’t then the re launching of this organization will be in vain once again.

Technological Factor:

The current era is running in lot of pace. Everybody wants to leave the other person back. Technological changes aims to get the instant results and it does happen. Technology is all about the quick and accurate outcomes. Research and development department of Pakistan is not less than the others. ROYAL CROWN should launch the product by keeping in view the technological changes and development.

Legal Factors:

Legal factors include trading policies, regulatory bodies, future legislation changes etc. So Royal Crown Cola must keep all the points in mind to re launch their product in Pakistan.

Environmental Factors:

Royal Crown Cola production industries should be in such areas where people can’t get affected by pollution. There should be rules relating to the recycling of tin bottles and other materials used by the company.

Porter’s five forces Model:

Applying five forces to the beverages industry of Pakistan allows us to create a view of potential attractiveness in the sense of profitability in the related industry.

Bargaining Power of Buyers:

The buyers of this industry are in extremely large numbers and buyers want to purchase this industry’s products on relatively low prices, impulse, and convenience basis so making is beneficial for the industry.

Bargaining power of Suppliers:

In beverages industry most of the raw material is used in which there are no specialized people of such commodities like sugar, syrup, glass, plastic, tins and water etc so bargaining power of the supplier is high because shifting to another company takes a time and initially there will also be a bargaining of prices. When the suppliers are not specialized then losing them is not a big issue for the organizations.

Threat of New Entrants:

In this industry the threat of new entrants is relatively low because it needs a huge investment and specially when the giants like pepsi and coca cola are in the market. It is also very difficult to set up industries for bottling plant specially for new entrants.

Threats of Substitute:

Threat of substitutes in this industry is high whether it comes to the health issue or some other issues. People can move easily from one company to others because they have choices if company of their choice is not offering good products in terms of health, quality and money.

Rivalry among existing players:

In Pakistan market is heavily dominated by to giants of beverages industry Pepsi and Coca Cola with a share of 75% and 18% relatively leaving less room for others but Royal Crown Cola is an existing industry still they can make profits by making it more attractive for the customers.

Objective Setting:

It is very important to set the objective for every company when starting anything new or making the changes. Royal Crown Cola is already in phase of declining in Pakistan so it should set SMART objectives for its re launch and survival.

Mission Statement:

Our mission is to be the leading manufacturer and distributor of juices, dairy and related food products that best satisfy the growing needs of the customers.

Specific: Royal Crown Cola should make specific goals to launch new products. Their goals must be according to the current position of the market of their product and and what the company wants to achieve.

Measurable: being specific to the point company should be able to measure whether it is working according to the plan or not.

Attainable: after that they should analyze whether the goals they set are achievable or not.

Realistic: it means that the goals should not be as strict that if it is not making profit that it cannot be changed. Goals must be flexible so they could be changed when not giving output.

Time bound: Royal Crown Cola should set a time frame to achieve their specific goal. They should set goals for limited time but not for longer time. Form short objectives and work on and increase the level gradually.

Strategy Development:

Growth strategy:

Strategies are the ways to achieve the stated objectives of the organizations. There are two types of strategies which are “Growth Strategy and competitive strategy”.

Growth Strategy includes:

Ansoff matrix

BCG matrix

Gap Analysis

GE matrix

Selection of Growth Strategy for Royal Crown Cola:

As we analyzed from the above situation of Royal Crown Cola position in the market the strategy which is most favorable is Ansoff matrix.

Market penetration:

Royal Crown Cola should sell their products to its existing users more by convincing them. They should also make such an advertisement to attract the new or non user of their product to use it. Market penetration also includes attracting the customer from the competitors and it can only happen by giving consumers such benefits which they are not provided by the competitors like discounts, buy 2 get 1 for half price, BOGOF etc. by doing market penetration Royal Crown Cola can achieve its objectives quiet effectively because they don’t have enough customers so they need to penetrate the market.

Market Development:

Royal Crown Cola can make a development in their market like introducing in some new areas and new users by segmenting the products for different age and gender. By doing this people will attract to the product and they will buy more.

Product Development:

Royal Crown Cola should make some new products to let the customer now that we are offering something different comparing to our competitors. This could be done by having a look at the competitive advantage of the competitor’s products.

Diversification:

Infect it is a risky development and RC is not in the position to take more risk but they should do it in such a manner where there is less chance of risk of failure. Because when the market will be new then only the advertisement works and they should think damn seriously about the advertisement which is the main reason of their declining sales and failure.

Competitive Strategy:

Competitive strategy includes further 3 strategies which are Cost Leadership Strategy. Differentiation Strategy, Focus Strategy. For Royal Crown Cola the best strategy will be Focus Strategy.

Focus Strategy:

Focus strategy relates to the narrow competition in industry. In this strategy Royal Crown Cola will make the segments in industry. It involves two variants, Cost Focus and Differentiation Focus.

In cost focus Royal Crown Cola will produce low cost products but with effective quality as compare to the other competitors and try to attract the customers with the low cost products. As the purchase power of people is very low in Pakistan now days due to economic crisis so it will be huge advantage for Royal Crown Cola.

In differentiation strategy Royal Crown Cola should seek a difference of their product in their targeted segment. They can enhance their segmentation but don’t make huge segmentation just start from a little one.

Tactics for achievement of strategies:

Tactics normally includes the 7 Ps which are as follow:

Product

Price

Place

Promotion

People

Process

Physical evidence

Product:

Royal Crown Cola no doubt is an international brand working for more than 100 years but due to some reasons it failed in Pakistan so new they should need to develop a new product with meet the requirements of the consumer. To develop a new product there should be an idea which can be taken by the survey of asking to customers, employees and other stake holders. Then form all the ideas and select the best one.

Product stage of Royal Crown Cola:

People already know about the name because people have used it before. At initial stage there will be:

High cost of production

Slow Growth in terms of sales

Take time to find acceptance

Royal Crown Cola is also in loss now days so they should provide people with great taste and quality.

Gradually the product starts making profits and grows sharply. Then the unit cost will decrease, people ask for more etc.

Branding:

People don’t buy products they buy brands. Keeping this in view Royal Crown Cola brand should be attractive in terms of logo, symbol and slogan which must be different from others.

The slogan which I suggest is

Sssshhhh….Comin again with new style and taste

Logo:

Branding Strategy:

Royal Crown Cola is an international brand so its strategy will be own label branding.

Style and Design:

When it comes to the design and style of the product then it must be full of attraction and acceptance of people.

Packaging:

Packaging of Royal Crown Cola should represent protection, advertisement, informative.

The comparison of the product among giants is as follow:

Royal Crown Cola

Pepsi Cola

Coca Cola

No Such Product

No Such Product

The comparison above is that Royal Crown cola should produce more products which its competitors are offering. RC should launch its mineral water in Pakistan to get the attraction of the people. They launch it with their own label attractive branding. Packaging of the product must be protected, informative, convenience.

Price:

Pricing strategy for Royal Crown Cola should be market penetration strategy. In which Royal Crown Cola offer cheap prices as compare to other competitors to get the attention of the customers and afterwards increasing the prices. This strategy will also discourage the new entrants.

Royal Crown cola pricing strategy will be competition based strategy because Royal Crown Cola must offer fewer prices from its competitors to get the attention of customers. And for new products the strategy will be market penetration because by offering low prices people will come to buy. There should be incentives given to the retailers like chillers, tours on extra buying etc. different offers must be offered on special occasions like Ramadan and Eid.

Royal Crown Cola should use the push strategy for their product by using different promotional tactics and through media. Distribution will be divided according to the number of areas and the nature of customer according to the literacy rate. Because if the company offers online buying than it would not be affective in rural areas of Pakistan. Representative of the company should directly go the retailers to offer them facilities like bonuses and incentives. In Lahore they should try to ask international Royal Crown Cola to give them franchise in a tax free zone and provide plants for both glass and PET bottles.

Distribution Strategy:

Distribution strategy which I suggest for RC is Intensive distribution because beverages are the FMCGs and these types of products need more outlets as much possible.

Promotion:

Promotion is the main reason of Royal Crown Cola failure in Pakistan. They did not make it well so the promotions strategies for re launching must be according to the market.

Objectives of the promotion can be achieved by DRIPE Model.

D iffrentiate = analyze the Pepsi and Coke Competitive advantage and create a difference.

R emind = surveying the customers who have used RC and reminding them about the product.

I nform = offering the products to new customers who have not used the rc products before.

P ersuade = give the benefits to customers to convince them like reducing the prices.

E ngage = offering such prices and quality to maintain a long term relation with customers.

Promotion Tools:

Advertising:

AIDA model is an affective model for advertising

A wareness = making television commercials, bill boards, media

I nterst = adding fun to commercials

D esire = creating a desire to buy product like Red Bull when customer wants to refresh.

A ction = leave the home to purchase product

Advertising Media:

Broadcasting on tv and radio which will increase the awareness among people

Creating advertisement short messages service by collecting the data from cellular companies and offering customers to buy the product

Bill boards and posters will be applied on high ways, centre points, on buses and cabs.

On internet little ads will be displayed to tell the product information

Offering free cards with famous magazines for first month.

Sales Promotion:

Free vouchers will be given to retailers for the customers who buy in quantity for dine in like in McDonalds, KFC and other restaurants.

For first month there will be an offer for regular pack to get 3 cans for the price of 2.

Free samples will be distributed in markets and in grounds on mobile vans and opening outlets outside the public parks.

Price discounts will be given to customers.

Direct Marketing:

SMS will be sent to customers taking data base from cellular companies

Direct mails will be sent to customers

Personal Selling:

Marketing managers will go directly to retailers and take the orders because it will save the time of involving whole sellers.

Appointing persons to go house to house and offer attractive prices to households if they buy huge quantity.

Offers will be made to customers to retain them for a long time with the company.

People:

When it comes to the selection of employees Royal Crown Cola must appoint people with professional attitude, behavior and skills towards the operation of Royal Crown Cola in all fields. There should be careful job selection and policies of selection. Because the employees are the main stake holders of any organization.

Process:

Rc should make company policies affective. Rc brands must do a joint venture with public place like cinemas, parks, grounds etc to sell on Rc brands there. It will need a huge amount but it is beneficial for the company.

Physical Evidence:

Royal Crown Cola’s physical evidence must be something like attractive so the people get attracted towards the product. Logos must create colorful scheme, company vehicles could be run to make the people know something new. Company should distribute things like stationary, uniforms, equipments with RC logos.

Total

18,600,000 Rs.

The method which I suggest to RC is all you can afford. Because RC Cola is re launching in Pakistan it still has a risk of lost so they don’t need to apply more resources according to their worth.

Controlling and Monitoring:

As soon as the marketing plan gets started the next ob of management is to control and monitor what is going on now. Is everything according to the plan if it is not than taking corrective actions to sort the problem out?

Segmentation:

We are going to segment the Royal Crown Cola market in 2 different segments

Demographic Factor:

Age: 10 – 25 years

Class: Upper, Upper Middle, Middle

Gender: Male and Female

Geographic Factor:

Country: Pakistan

City: Lahore

Province: Punjab

Targeting:

We are going to apply differentiated targeting in which different products will be offered according to the customer targeted and segmented.

Critical Reflection:

Why Royal Crown failed in Pakistan:

ROYAL CROWN cola launched in Pakistan when there were no big competitors like coca cola and Pepsi. ROYAL CROWN cola earned lot of money in that tenure. But when Pepsi co. came into Pakistan than it started decline. Because Pepsi co. made a huge difference in terms of advertisement and promotion of their product. They launched it and then captured the whole market in a short time. Launching of Pepsi didn’t make a huge difference but Coca Cola made it a huge one when it started working in Pakistan. This was the tenure when ROYAL CROWN cola started decline in real meaning. After the launching of these two giants in market ROYAL CROWN cola fall likes the tomb of cards. In started people used ROYAL CROWN a lot because they enjoyed this drink but Pepsi cola and Coca cola made a huge difference in terms of advertising and promotion only. They got the people attention towards their brand so people attracted towards them and left ROYAL CROWN brand. Any product is all about the presentation what it looks like what it is offering by its look. Pepsi cola and Coca Cola presentation was so good and they captured the market and left Royal Crown Cola a far behind. In spite of the fact that Royal Crown is declining in Pakistan infect it is ignored by the people so they need to be re launch it with some different looks and attraction. They have the potential to come in the market strongly. It takes time but it happens. The only difference which I felt was only the advertising and promotion. So if they want to re launch the product then they should make a difference in terms of advertisement.

At the start of module I did not know it would be as interesting as I thought it before. I have a finance background but after studying marketing management I’ve chosen marketing electives in my next semester. I experienced a lot of things in the start till the end of the whole course like how things go in market, how company market its product, how they apply marketing techniques, what are their goals and how they going to work on it etc. I think it’s all about marketing in our environment.

The main thing which I learnt by this module is that I’ve come to know the strategies related to marketing the product and running them in an efficient way so they get going an making profits.

I can now understand how market, marketing mix and how to plan for any new and existing products which are available or about to launch in the market and specially the products which are in declining stage.

Marketing gives us experience what the customers expecting from you and what u should do to satisfy their needs infect more than they want. Its now, not difficult for me to understand the models in terms of putting them into the practical life that I will be having in future, marketing has a lot to do with the businesses, these concepts which were taught to me in this course are worth more than enough for me to understand the factors which different businesses apply to gain the advantages of marketing and to gain the sophistication of their businesses.

The experience was very good while I was learning this course of marketing management as it was taught to me very deeply and very finely, which helped me to get the idea of everything include in this course. It was though not as easy as it seemed to get everything in my mind for the subject that is very vast in it, but once when it was started I got the idea that it is going to be very useful and beneficial for me, in present and also in future. This is the once in a life time experience I believe which you get once in your life and you get advantages of it the whole life.

This was the experience which is I don’t think I will forget ever, as it was very interestingly taught and it had a lot much practical knowledge which enhanced my knowledge as well as my skills to put the respective information in my practical life, it is now easy to talk to anyone related to the market without any hesitation and with a lot of knowledge and skills to show now what I am.

I have done many things in marketing, including marketing mix of products, marketing plan, and other many models of marketing such as Ansoff’s model, PESTLE analysis, situational analysis and many other analyses which have been taught to me during the lectures. In the starting it was about marketing itself as an introduction, but when it went on and on, it showed up with many models and different concepts related t other market, what is happening in the market and what is the market all about, it is not easy to just go to visit the market and get what you want, a proper time is required for this kind of research, while I can easily say that during these few weeks I have learnt the experience of many months which is not easy to gain, it is actually something that you earn, it is not something that you gain without any struggle, though I also tried a lot to understand the concepts which were not easy for me to understand. Btu as the time passed I became used to of these teachings and then I found that it was not as difficult as I presumed in the beginning, it was a lot more easy and easy to understand, easy to read, easy to write and of course easy to apply whenever needed, just a little research is required inc on text of the market’s current condition at that time.

Previously I was not aware of many concepts and things which has been taught to me now, I was lacking in many things, when I was studying this concept I found that I left behind many things which are really required by the market now, which have become a necessity for the marketing activities of any company and which are the core issues of any company for the activities which are related to the marketing activities and marketing plans of a company or a business. All the things which were not known by me in many contexts such as in the context of learning, in the context of skills, in the context of knowledge and in the context of practical application of these concepts, knowledge, skills and putting these all in together.

I am definitely have learned too much to understand everything that has been taught in this course, I can talk to anyone regarding these concepts and I am more acknowledged than I was previously. I have changed a lot, I am more practical now, I am now able to understand which company is using what marketing strategies and what plans and implementations, it is now easy to watch the market with my perspective now, and also how market is running, how it was in the past and how it may run in the future. I am able to judge and conclude different perspectives regarding different companies and regarding the market as a whole, it is not much difficult to understand what the market is all about.

I was feeling like I’m being renewed, I was getting something that I was not able to think about the benefits, when the learning outcomes were undergoing, I was undergoing too, I was undergoing the process of getting acknowledged and of course it was great, it was feeling very good, when you get something new in yourself you feel new, I was feeling like I am having what I actually needed and what I have not learned so far. It was feeling as I am now being honored by having the knowledge that not everyone has.

As I went through this learning process, I found that many new questions are generating in my mind about the market, these questions are related to different things related to the market, such as, marketing concepts which are used in different companies present in different segments of the market and which are present for different segments of the market, not just nationally but globally, marketing concepts are he same all over the globe, just the timing and the requirements of the people of different countries and regions.