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Fairlife Milk

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by

Sofie Andersen

on 2 March 2015

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Transcript of Fairlife Milk

Fairlife Milk
4. Analyze the pricing strategies of FairLife
1. Give a brief introduction to the SBU Fairlife and further account the company’s marketing strategies
2.Assess the reasons for Coca Cola to expand their product portfolio
3.Analyse and assess the competitive situation in the health beverage market.
Porter's Five Forces:

Supplier power

Buyer power

Threat of new entrants

Threat of substitution

Competitive rivalry
Joint venture between Coca Cola and selected milk producers
Ansoff's Matrix
Concentric diversification

New product to new market

Concentric = closely related to existing product

High risk involved (not a core competence market)

Reduce risk since product portfolio is widened

Knowledge on the soft drink market and milk market is two very different things
Integration Strategy
Horizontal integration (competitor from a beverage point of view)

Greenfield

Joint Venture with select milk producers

Boston Matrix + PLC
(why did Coca Cola pursue this SBU)
Coca Cola is cash cow on declining market + on the declining part on the PLC curve, therefore making sense for the company to pursue concentric diversification with Fairlife.

Fairlife question mark on growing market + on the introduction part on the PLC curve.

Are there any opportunities in this?
Increasing health concerns

Market for soft drink is in decline on the US market

Market for ordinary diary is in decline on the US market (Coca Cola is therefore challenging the current trend)

Market for protein milk/almond/soy is growing on the US market
expected growth of 7% annually

Value Proposition – more for more
Premium/upscale product at premium prices (approx. twice the price of standard milk)

More for more charging higher prices in order to cover the additional costs associated with the production

Pricing strategies
Coca Cola has adopted value added prices.

Rather than cutting prices to attack competitors they attach value added features and services to differentiate their offers, supporting their higher prices.
6. Set up suggestions for Fairlife’s future/potential marketing mix on the Scandinavian market.
Standardized or adapted/differentiated?
Product
Price
Standardized price

Premium milk = premium price

Customer based pricing
Value added pricing

More for more value proposition

Indirect distribution

License production to Arla /Licensing

NO direct competitors

Selective distribution

o Føtex
o Irma
o Super Best
o Health stores
o Fitness centres
o Magasin super market

Place
Product samples in stores and publicly – sales promotion

Tv commercial for awareness (along with master chef and other food programs, weight loss programs) - advertising

Competitions on social media – sales promotion

Sponsor events: alt for damerne run, iform kvindeløb etc

Vertical opinion leaders: Wozniacki

DO NOT mention Coca Cola

Promotion
Premium convenience

Possibility for organic product

Real cartons (more like Danish packaging- farms, the red barn, cows etc.)

More natural look (less milk on steroids)

Tone down the plastic

Recycled material or material that can be recycled

Focus advantages for carton – less fat, more calcium (all advantages on the back)
Full transcript