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Transcript of 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:
Threat of new entrants
Threat of substitution
Joint venture between Coca Cola and selected milk producers
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
Horizontal integration (competitor from a beverage point of view)
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
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?
Premium milk = premium price
Customer based pricing
Value added pricing
More for more value proposition
License production to Arla /Licensing
NO direct competitors
o Super Best
o Health stores
o Fitness centres
o Magasin super market
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
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)