The marketing decisions and processes attributed to the launch of a new product have historically been identified as one of the most challenging tasks faced by marketing managers of most business enterprises, where Coca Cola is a subset. This report provides a critical analysis, evaluation and assessment of the launch of Coca Cola’s new product, Tumult into the European adult beverage market. The report starts by presenting an overview of the target market and an assessment of the level of competition. Moreover, the report outlines four key communication objectives connected to the launch of Tumult in the market. After a critical analysis of the campaign, this report reveals European adults in their 30s as the key target group for Coca Cola’s Tumult beverage. According to the report, the brand position of Tumult is strengthened through the use of POS promotion as the key media tool for the campaign, which is integrated with other marketing elements. However, since POS promotion is less cost effectively, the report recommends for the use of online marketing as the product key media tool.
Background on the market and competition
Geared by the increasing demand for non-alcoholic drinks, Coca Cola Company recently launched a new non-alcoholic drink (Tumult) into the European adult beverage market (Shayon 2012). Tumult is an adult fermented alcohol free drink, which is usually served with food.
The European market for non-alcoholic beverages is said to cover approximately 16 countries by 2009. According to UNESDA (2010), European market for non-alcoholic beverages amounts to approximately 123 billion litres annually. The industry consist of approximately 1000 non-beverage drinks production plants across the continent. Moreover, evidence from the market reveals that non-alcoholic beverage with low and no-sugar varieties account for up to 30% of the aggregate sales from non-alcoholic beverage sales Europe. Ideally, non-alcoholic beverages form a critical component of most European’s daily diet (UNESDA 2010). This is because; most of these beverages are considered as highly refreshing and aids in preserving hydration levels. Majority of the ingredients use in the production of beverages, within the context of this industry, are sourced locally. However, the production plants are located relatively close to consumers and markets. In general, non-alcoholic drinks contribute approximately 3% of calories to the daily average diet in Europe. Moreover, on average, a non-alcoholic drink of about 330ml consists of approximately 139 calories (UNESDA 2010).
Currently, the European market for non-alcoholic beverages comprises of about 784 companies. However, about 50% of the market share is concentrated among top-10 companies. By 2009, the Coca Cola Company was ranked the largest market player having an approximate market share of 21.5%. Coca Cola’s key main competitors in the European non-alcoholic beverage industry are PepsiCo and Nestlé, with a market share of 7.9 % and 4.8% respectively in 2009 (Food For Thought 2010). Other competitors include Orangina Group, GlaxoSmithKline and the Gerber Emig Group (Montague-Jones 2010). A SWOT analysis of Tumult reveals the existence of potential threats of Tumult’s substitute products that are likely to be introduced by Coca Cola’s close competitors into the market.
Communication objectives refer to the incorporated goals of a promotion or advertising program (Dahlén and Lange 2008). The Coca Cola Company acknowledges the significance of formulating communication objectives for its new product launch campaign. In general, marketing objectives may be short-term or long term. However, most communication objectives are long-term goals aimed at driving the value of a company’s brand over time.
Research identifies the following as the key communication objectives for Coca Cola Company’s marketing campaign attributed to the launching of Tumult into the European non-alcoholic market. First, the company intends to increase product awareness among its target group. This objective is crucial in fueling product penetration into the existing market. Besides, this objective has been found to be beneficial not only in revealing the existence of the product in the market but also demonstrating product use. Second, given that some of Coca Cola’s products such as Sodas have been criticized of being connected with the cause of chronic diseases such as obesity, the company saw it necessary to introduce a low calorie drink. This is intended to change the attitudes or misconceptions that have been developed regarding the company’s products.
Third, as research populates, the intent to influence purchase price is another key implied communication objective of Coca Cola Company. For instance, Coca Cola’s emphasis on the benefits of its low calorie non-alcoholic beverage, Tumult, is aimed at persuading them to buy the product, and encourage them to purchase the product repeatedly. Finally, closely tied to objective three is another communication objective geared towards facilitating brand switching from the competing brands to Tumult. This objective has largely been nourished by Coca Cola’s enormous constant promotion efforts.
Owing to both marketing theory and practice, it is precise that a successful new product launch campaign must always commence with the identification or definition of an organization’s target market (Pride and Ferrell 2012). This is because; the formulation and implementation of a product’s marketing strategies as significantly based on the unique characteristics attached to the company’s target group or market. Ferrell and Hartline (2011) define a target market as a consumer segment, which a business organization has decided to aim with marketing efforts and eventually its products and services. A target group is often chosen to help the organization customize products that meets the specific needs of customers.
Tumult’s primary target group consists of consumers in the European adult beverage market. Specifically, Tumult targets the urban stylish European consumers in their 30s (Weston 2013). Difference sources reveal that the product’s target is more directed to weight-conscious consumers (Bouckley 2012). According to Spencer Buck, a Taxi Studio creative director, opening up the brand to a wide audience was merely coupled with packaging redesigning in order to bring joy and progress to reveal Tumult’s tumultuous character (Gosling 2012). The rationale for targeting adult consumers is not only based on the uniqueness of their needs but also on the digital marketing guidelines imposed by the Union of European Beverages Associations (UNESDA). According the Montague-Jones (2010), UNESDA had established a code in 2006 which prevented brands (including Tumult) from targeting children under the age of 12 years. This implied that 50% of the company’s audience was to be consumers of over 12 years (Montague-Jones 2010).
Based on a number of marketing literatures, it can rationally be argued by that the success of a new product in the market considerably depend on its brand positioning statement or strategy. By definition, a product positioning statement refers to the objectives of a positioning strategy for a brand or product (Holt et al, 2004). This statement tends to describe how the organization distinguishes its products from those of its rivals, and clearly illustrates how consumers can benefit from the associated product features. Tumult’s brand positioning statement is cycled around the fact that the product brightens up and decorates social moments, perchance as a beverage to be enjoyed as an aperitif before dinner.
Promotion is an essential element in successful brand positioning, especially when introducing new products into the market (Yeshin 2006). Sources reveal that the Coca-Cola Company falls among one of the first firms to appreciate the benefits attributed to investing in promotion efforts. The choice of media tools to be utilized in product’s promotional campaign is, however, crucial. The key media vehicle utilized in the promotion of Tumult essentially the Point Of Sale display (POS) (Bouckley 2012). Also referred to as the Point of Purchase (POP) display, POS display is a type of sales promotion, which is usually found next or near a checkout counter. POS display of usually aimed at attracting shoppers’ attention to the product. Ideally, the chief objective of POS promotion is to develop short-term effect maintaining the long-term brand name and short-term increase of selling products.
Tumult’s POS communication is not only intended to influence consumers’ buying decisions but also geared towards conveying the principal brand benefits to the new customers. The promotion campaign of Coca Cola’s Tumult has entirely been left on the hands of Taxi Studio. Shayon (2012) reveals that Taxi Studio has been charged with the responsibility of designing product packaging and the development of point of sale materials and promotional. In general, it can arguably be said that the launch of Coca Cola’s new product, Tumult, has largely incorporated all the four elements of its marketing mix strategy. Smith (2003) defines a marketing strategy as a framework that aids an organization to structure an effective approach each of its target market. In this case, Coca Cola’s marketing mix strategy connected to Tumult consists of 4Ps, which include product, place, promotion and price (Smith 2003).
In order to optimize the use of scarce marketing resources, Taxi Studio’s has developed an integrated marketing mix strategy, combining all the 4Ps in Tumult’s product launch campaign. For instance, the promotion campaign is said to have emphasized on the three primary benefits of product (Tumult), which include 0% sugar content, 100% freshness, and the presence of two flavors. The two flavors, included as part of Tumult’s basic ingredients, are ‘malty’ and ‘fruity’. ‘Malty’ is a blend of Apple and Malt Barley while ‘fruity’ implies a combination of Apricot and Pear. In terms of place or distribution, evidence indicates that the product’s point of sale promotions for the main distribution channels to Tumult’s potential customers. Moreover, being a new product in the market, the campaign utilizes premium-pricing strategy. Tumult’s price is pitched at the market’s premium end in order to extract maximum consumer surplus and increase profits. At its introduction, Tumult was priced at €3.50 for every 4 x 250 ml bottle.
The main key reason for utilizing this form of sales promotion as a media tool for Tumult is based on the product’s low customer awareness, since the product is new in the market. In addition, POS is said to benefit the brand in a number ways. First, the use of point of sales promotion enabled the product’s sales managers to make appropriate price adjustments to fit the prevailing market conditions (Shah and D'Souza 2009). Moreover, Altstiel and Grow (2006) assert that this technique aids in streamlining operations between the company’s sales locations. Third, this strategy has been found to be effective as it allows the company to get immediate customer feedback by entering promotional codes for customer discounts (Mullin 2010).
Although considered as one of the most applicable medial tool for Coca Cola’s Tumult launch campaign, this approach may be costly in long-run. For instance, the costs attributable to point of sale marketing are arguably far higher compared to other media tools such as online marketing (Silverstein 2001). These costs can be linked to items such as the salaries and commissions of sales persons, cost of equipments used at POSs and costs of establishing physical stores.
Conclusion and Recommendations
Based on the above discussions, it is clear that the use of POS as the main media tool for Tumult is less cost effectively, and may to result to a decline in the product’s profitability in the future. This situation calls for the Coca Cola to adopt a different more cost effectively media tool such as online marketing campaign. However, for Coca Cola’s online media tool to be effective, the company must take into account specific requirements. First, Coca Cola needs to maximize their search engine visibility. This is because; most people use the search engines when searching for products online. Moreover, search engines are the first place an organization can find new customers. Since marketing is all about being at the appropriate place at the right time, search engine visibility is crucial. Second, setting the right online marketing goals will mean much to marketers. For online marketing campaign to be effective, the goals should be attainable and reasonable and not overambitious (Neuman 2007). Such goals may take the form of targeted online sales for Tumult, or increase in user coverage.
Another key element online marketing campaign is to study and understand an organization’s target market. Ideally, there is no point of developing an online marketing campaign if you have no idea of who you are targeting (Hiam 2009). Given that one of the benefits of online marketing is accessibility to a large target market, marketers need to equip them with adequate knowledge of their potential online customers. Here, it is crucial to analyze how customers interact on the internet. This will make it easy to locate and persuade them. In addition, no matter how smart marketers are, having inappropriate online marketing mediums may be frustrating (Hiam 2009). Today, there are various outlets for conveying marketing messages that are available to business organizations. Commonly applied promotional media include web videos, email marketing, online article, among others.
Research reveals creating a remarkable content as one of the key requirements of developing successful online marketing. There is need to tailor Tumult’s online campaign content to suit the needs for various target groups. Here, use of pertinent keywords and search engine optimization (SEO) are indispensable (Potts 2007). Once a remarkable content is created, it is important to promote it and develop a way to reach customers. This can be achieved by developing an online following and leveraging platform through the use of social media. Finally, Coca Cola needs to set benchmarks, and monitor and evaluate the results at various stages of online marketing campaign.
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