A case study: DASANI in the UK

1. Introduction
Coca Cola is one of the most famous companies in the world. Now that this spectacular growth had leveled out, the company is striving for future growth opportunities for their drinks businesses. Bottled water was earmarked as the next big event in the beverage industry, and the avenue for future growth. Dasani, one of the Coca Cola brands, had initially developed in the United States in an effort to capture the lucrative bottled water market. In less than twenty years, the bottled water market has undergone a remarkable transformation. Previously people only drank bottled water because of the fear of contaminated tap water. Now people are consuming large volumes of bottled water as the drive towards a healthier lifestyle continues (Anonymous, 2008). The marked success behind these bottled water brands is due to the links with absolute purity, and the association with an active and healthy lifestyle. Since its inception, the brand had achieved tremendous sales growth in its domestic US market, fully utilizing Coca Colas powerful distribution system. Based on this success, Coca Cola decided to launch the brand in continental Europe, firstly in the UK, and then rolling it out to other countries. Dasani, a pure still water was launched in the United Kingdom in February 2004, with a huge promotional budget. But when it hit the British market, it promptly suffered a major public-relations disaster. Therefore, it failed in the UK market in 2004. Four years later, the Coca Cola Company intends to enter into the UK market again (Anonymous, 2007). So, in this essay, we are determined to analyze the essential situation of the case study of Dasani. On base of the analysis of Dasani and its target market in the UK. We will utilize useful global marketing strategy theories, concepts and market entry strategies to refer to our some available recommendations and suggestions to Coca Cola, and they will offer some references to the entrance into the UK market for Dasani.

2. The strategic analysis of Dasani and the opportunity in the UK

2.1 The strategic analysis of Dasani in the UK
Dasani, as a brand of Coca Cola, in the US has achieved enormous success for a relatively new brand. Coca Colas huge marketing muscle and extensive distribution network ensured this success. In the US, this brand of purified tap water with added minerals, sat beside natural spring waters from mountain peaks on shelves, and still won over customers(Vomits, Demetrius; Sharp, Iain., 2003). The UK was chosen as the launch pad for Dasani in Europe. The big players in bottled water see the UK market as still ripe for exploitation. The annual consumption of bottled water per capita in several nations as follows (Figure 1). Figure 1 the annual consumption

250 200 150 100 50 0 U K G any erm Spai n France I t al y

Per capi t a consum i on( l i t er ) pt

Source: (Conor Carroll 2008) From the histogram, we can see that the annual consumption of bottled water per capita in the UK is smaller than other nations, therefore, there are many opportunities for Dasani access to the UK market.

2.2 The opportunities for Dasani in the UK

Before Decanis expansion in Europe, Coca Cola Co. has achieved massive success in the USA, so according its experience, there must be many opportunities and will make a great success in the world market. 2.2.1 Opportunity one: The influential international brand recognition and strong overseas expansion skills. In the world, Coca-Cola is the strongest soft drink company, almost every people drunker are drinking Coca-Cola, and thanks to its good quantity it wins widespread praise. At the same time, Coca-Cola has a strong financial strength; it will provide a good economic base for the expansion of its overseas market. For it keeps an increase of sales growth and net income growth form 2004 to 2006(Figure 2). Figure 2 the sales income and net income (2004-2006) Unit: millions of dollars

25000 24000 23000 22000 21000 20000 I ncom e 2004 21742 2005 23104 2006 24088

6400 6200 6000 5800 5600 5400 5200 Prof i t 2004 5698 2005 6085 2006 6308

Source: Hoover's Company

Records. Austin: Mar 1, 2008. p. 10359

2.2.2 Opportunity two: Rich international business experience and good marketing skills. Coca-Cola play an important roil in the international market, and occupies an important position in the beverage field, the company starts to produce beverages mainly, and we can see its products in all over the world countries, and through the cross-marketing management, it has accumulated rich experience, thus, it is a international corporation with rich experience in overseas management (Anonymous, 2007). At the same time, the Coca-Cola Co. has a good marketing tools and marketing skills, and that is why it can make a leading position in the international market. On base of the rich globule business experience and good marketing tools, it is feasible for Dasanientrance into the UK market 2.2.3 Opportunity three: The good purchasing power and the huge potential market In the UK, the water beverage market has not saturated, compared with other countries, there is a big gap between the UK and other nations in its per capita consumption. In addition, the UK is a developed country, and because Dasani water is a higher price product, it requires a higher purchasing power for the customers, and the purchasing power of the UK people can be satisfied for the requirements (Conor Carroll, 2008). 2.2.4 Opportunity four: More attention to the health In the present time, many people pay more attention to their own health, and with the improvement of peoples life quality, people concern their body health, life quality and mental health. Eating and drinking is the necessary process in their life. Water drink is a crucial thing for peoples bodies, and people cant live without water. Because the Dasani water includes a lot of nutrients and so they will do well for people bodies and growth.

3. Analysis of Decanis entry into the UK market.

3.1 SWOT analysis of Dasani

SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. It is a good method and a basic, straightforward model to provide direction for a firm to make reasonable marketing plans and analysis. Strength, weakness, opportunity and threats are four environmental elements of SWOT analysis. Generally speaking, external environment analysis usually means to analyze opportunity and threats while internal environment analysis include both strength and weakness. (Philips, 2005) Dasaniaccess to the UK market, we can analysis itgloble marketing strategy through SWOT analysis shown as flows (figure 3). Figure 3: the SWOT analysis of Dasani

Strength: Long-term business experience famous beverage brand abundant finance

Weakness: Lack of reorganization of the UK market Neglect the price, material origin that people pay attention

Opportunity: Strong overseas expansion skills

Threat: The rivals from other nations

The good purchasing power and the The local protection for the market huge potential market Rich international business experience and good marketing skills Source: from this study and from http://www.netmba.com/strategy/swot/ From the matrix chat, we can see that the quality strength and opportunity are more than weakness and threat. Therefore, the Dasani will have more chance to enter into

the UK market. If the decision makers of Coca Cola Co. had made a deep evaluation, maybe they would manage the Decanis global marketing better and make a good performance. Therefore, if they would like to attempt to launch Dasani, the SWOT analysis can be a useful marketing environmental evaluation model.

3.2 PEST analysis of Dasani

A PEST analysis is an analysis of the external macro-environment that affects all firms.P.E.S.T. Is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment? Such external factors usually are beyond the firms control and sometimes present themselves as threats. But we can effectively analysis the target market through the PEST skill. 3.2.1 Political Analysis: The UK and the United States has always been friendly, they have always maintained friendly contacts, they have consistency both in political stability, trade regulation tariffs, and in anti-trust laws. So Dasanientrance to the UK market is feasible. 3.2.2 Economics analysis: The United States and the UK are both the powerful economic and developed countries in the world, the two countries have a solid economic base, thus, when Dasani accesses to the UK market, it can have a good economic environment, people have some purchasing desires and consumption capacity, this provides a good foundation to Dasanientrance to the market . 3.2.3 Social analysis: The two countries speak the same language, there is no obstacle in the exchange, and the two country's cultural background is almost identical, the factors will remove the cultural barriers for Dasanientrance into the UK market. Besides, with the increase of the people's consumption concept and the people's awareness of environmental protection, Dasani will comply with the requirements of the local people (Strauss Judy, Frost Raymond, 2003). 3.2.4 Technological analysis:

Coca Cola Co. is a great corporation in the world, in the field of drinks it has advanced technological capabilities, its advanced production lines will provide good equipments for the Dasani production.

3.3 Diversification analysis of Dasani

Corporate management first course of action should be a review of whether any opponent exists for improving its existing boniness performance. The company first considers whether it could gain more market share with its current products in their current markets (market-penetration strategy). Next it considers where it can find or develop new market for its current products (market-development strategy). Then it considers whether it cans development new products of potential interest to its current markets (product-development strategy). Later it will also review opportunities to develop new products for new markets (diversification strategy). Figure 4 Strategy for diversification Current product New product 3.Product-development strategy Diversification strategy New markets Current Markets

1.Market-penetration strategy 2.Market-development strategy

Source: Strategy for diversification, by glory ansoff, september-october 1957. First of all, Coca-Cola sells its products in the United States, and in the domestic market. It achieved great success. Next, Coca-Cola began to develop new products, its new products--DASANI initially get the satisfied results in the United States market, in order to expand its new product market and improve its international competitiveness, DASANI begun to enter a new market -- the UK.

4. Recommendations and justifications of market entry strategies. 4.1. Product positioning strategy

Product positioning strategy is essential for a company to enter into a new market. It will provide an accurate direction to a firm. From the figure 5 we can find that the people in the UK are looking for a higher quality water to drink. This demands that Coca Cola Co. should devote more resources and energies to the products higher quality so as to meet the requirement. Although the higher quality will attract many people to buy it, this means the Coca Cola Co. will devote more investment to achieve higher value. From the figure 6 we can see that the differentiation and brand management
strategy are also important for the product positioning. Therefore, on the basis of the higher investment to the Dasani, it must enter into the UK market successfully by the higher quality and differentiation.

Figure 5 Product Positioning

High value
US A

U K

Low Quality Products

High Products

Quality

Low value

Source: PPT Figure 6 Product Positioning Strategy

Product positioning strategy

Differentiation positioning

and

product

Branding strategy

and

brand

management

Product differentiation Service differentiation Brand differentiation

Brand identity Brand encoding Brand assets & liabilities

Source: Roger j. Best Market-based Management, Strategies for growing customer value and profitability. Peking University press P 207

4.2 Differentiation
Differentiation means making the product quite different from competitors products or making the product quite unique. For example, by marketing what is new, exclusive, lowest-priced, etc. , a company can differentiate itself from the competition. In a sense, this is avoidance behaviorthe company is avoiding a direct competition. There are a number of differentiation variables which are listed below in Figure 7(Kotler, 2003).

Product

Personnel

Channel

Image

Form Competence Coverage Events Feature Credibility Performance Media Performance Communication Expertise Atmosphere Conformance Reliability Reliability Style Design

4.3 AIDA strategy of Dasani

AIDA stands for Attention, Interest, Desire, and Action. Markers should always keep AIDA in mind in marketing. 4.3.1 Attention: In a market where similar products of the competitors are lying side by side with yours, attention can be drawn by, holding a demonstration of the product. Just for the product of Dasani, with the exquisite packaging, it will attract more attention from the UK person, and then, the people will also be attracted by its promotion vigorously. In addition, because the Dasani belongs to the Coca Cola, and the Coca Cola have been admired by many people all over the world, the Dasani is able to penetrate into the UK market smoothly. 4.3.2 Interest: It is not enough to successfully draw customers attention. It is an important step to arouse the customers interest in the product or service. Only when the customers feels interested in the product or service is it likely that he is inclined to buy the product (Conor Carroll, 2008). Coca Cola should focus on the improvement of products quality. And it had better pay more attention to Dasanis research and development in order to restore peoples trust and attract people interest. It can also ally with the local water company so as to make use of the local product brand to enter into the UK market. Also, the necessary advertisements will be helpful. 4.3.3 Desire: When the customer starts to feel interested in the product or service, the marketer must lose no time in leading the customer to have a strong desire to buy the product or accept the service. Coca Cola ought to make more reasonable price to facilitate consumers to purchase Dasani. The reasonable price will make people to have a desire to buy it. 4.3.4 Action: When the customer takes actiontakes out his money to buy the product or places an order for the product, the sales promotion can be said to have been concluded. Advertisement is a good way to help firms to promote consumers (Zinkhan, George M.; Carlson, Les, 1995). Therefore, in order to achieve good propaganda, Coca Cola can make use of various media to promote the new product.

Previous failure arouses Coca Cola to think about its product quality. Nowadays, in order to make success in the UK in 2008, it should re-establish new good impression on the public.

5. Conclusion
From the case study of Dasani in the UK, we can learn that if a company wants to development its global marking strategy, it must analyze many factors including opportunities, threat, weakness, strength, etc. It is difficult to enter into a new market, but there are many opportunities. With the difference (technology, economy, culture, socialist, etc) of market segments, companies should adapt their strategic marketing management. However, the most importance and the first thing are not to make customers disappointed but to keep products healthy. In order to enter into the market of the UK this year, itd better spare no effort to improve products quality.

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