Membership No.

40002127 Strategic Marketing (2200) | July 2016

1. ORG. NAME - CEYLON COLD STORES PLC | F&B INDUSTRY

Ceylon Cold Stores (CCS) or better known as Elephant House (EH), is a public limited
company that was established in Sri Lanka in the year 1866 under the name “Colombo
Ice Company”. CCS came under the diverse umbrella of John Keells Holdings PLC; the
largest listed Sri Lankan conglomerate, with the acquisition of the Whittalls Group in
1991 (CCS Annual Report, 2015).
TYPE & SIZE - CCS is a profit maximizing manufacturing company in the F&B
industry, which was listed on the Colombo Stock Exchange in 1970. For a public listed company of around 900
employees, CCS promotes a safe and empowered working environment that is more than just a workplace. EH has
established itself as a prestigious brand with a strong heritage amongst the Sri Lankan community with the promise of
delivering quality products. Brand development, brand awareness, brand loyalty, corporate reputation, market leadership
(sub-segments), distribution network and its formulas are considered as EH’s marketing assets.
PRODUCT RANGE - EH is the trademark and brand used in all CCS products that include beverages, ice creams, and
processed meats (However, its processed meat operations are handled by a sister company called Keells Food Products
PLC). EH’s main beverage segment consists of carbonated soft drinks (CSD) and caffeine based beverages. Recently,
EH introduced a line of healthy fruit drinks and isotonic drinks in order to satisfy evolving customer preferences and
lifestyles. The organisation also manufactures and markets a unique brand of ice cream, which is the market leader for
confectionary brands in both Sri Lanka and the Maldives ([Link], 2015). However, this report will only focus
on the beverage segment of the organisation, which is also the larger and more lucrative segment of the business.
Non Alcoholic Ready ICE CREAM LEMON & BLACK
COLA ORANGE CHASERS GINGER APPLE
to Drink (NARTD) SODA LIME CURRENT
-KIK -Orange Crush -Cream Soda -Lemonade -Necto -Soda -Ginger Beer -Apple
Carbonated Soft
Cola -Orange Barly -Bitter Lemon -Tonic -Dry Ginger Soda
Drinks (CSD)
-Lime Crush Ale
Energy Drinks -Wild Elephant -F5 (Isotonic Drink) | 2 Flavors – Citrus and Orange
Fruit based RTD -Twistee (Fruit Juice with Green Tea Extract) | 2 Tantalizing Flavors – Peach and Apple

CUSTOMER BASE - EH has a wide customer base and reach across the country consisting of both B2B and B2C
segments ranging from local distributors, modern trade/general trade outlets, and restaurants. Most of its primary
customers are in the youth segment of the county. EH exports certain brands to 20 countries globally, positioning itself as
a growing brand amongst the international community along with 3 NCE export awards for the years 2006, 2007, and
2009. The brand Cream Soda has been recognized as the “people’s beverage brand of the year” at the 2016 Sri Lanka
Institute of Marketing Nielson’s people awards, for the tenth consecutive year (Financial Times, 2016), highlighting
EH’s proficiency in brand development.
COMPETITORS - The main competitor for EH is the global beverage pioneer; Coca Cola (CC). The intense
competition between CC and EH keeps them switching between the position for market leader (Nielson, 2015). EH is
one of the only companies in the world to dominate a local beverage market with CC as a competitor. Other competitor
brands include Pepsi and Ole, where Ole falls under the umbrella of the Pepsi brand in Sri Lanka. EH is the market
leader for the sub segments of orange, ginger, black current, apple, chasers, and ice cream soda. Whereas CC is the
market leader for the cola and lemon/lime sub segments that are dominated by the brands Coca Cola and Sprite
respectively.
Beverages Market Share 2015

5% Pepsi
Revenue – Rs. 27.7 billion  17%
Financial PBT – Rs. 2.15 billion  39% 14%
Highlights Earnings per share – Rs. 16.05  25% Elephant
– Rs. 11.00 175% House
FY 2014-15 Dividend per share
Shareholders’ Funds – Rs. 10.66  7% 42% Coca Cola
Source – CCS Annual Report 2015 39%
Others

Source– Nielson 2015

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 Membership No. 40002127 Strategic Marketing (2200) | July 2016

2. STRATEGIC AUDIT | WHERE ARE WE NOW?

Figure 2.1 – TOWS Analysis (Weihrich, 1982)
Internal Strengths Internal Weaknesses
Internal S1- Brand Development W1- Limited global brand awareness
Elements S2- Brand Awareness W2- Insufficient digital presence and
S3- Brand Loyalty engagement
S4- Island-wide Distribution reaching W3- Too financially oriented, compromises
External 74,000 outlets marketing goals
Elements S5- Corporate Reputation given EH’s strong W4- Insufficient data on customer metrics
heritage and reputation of holding company
External Opportunities S-O Strategy W-O Strategy
O1- Exporting to more global SO1- Develop brands and export to WO1- Enhance digital communications and
markets untapped foreign markets use various platforms to increase presence
O2- New trends/products SO2- Create new products for new trends and consumer engagement
O3- Opening up of Northern and customer desires WO2- Measure customer metrics and
geographical market in Sri Lanka SO3- Penetrate trade outlets in the North improve CRM, and use data for strategic
O4- New communication by stretching/widening distribution decision making
mechanism network WO3- Implement a Business Intelligence
O5- Business Intelligence (BI) system and a Big Data system for quick
System and Big Data analytics analytics, dynamic responsiveness, and
identification of trends and patterns.
External Threats S-T Strategy W-T Strategy
T1- Global awareness of Coca ST1- A major marketing campaign to WT1- Promote relevant EH brands in
Cola increase consumer awareness and foreign markets (POSM, Discounts, & PR)
T2- Regulation of sugar based engagement via promotional packaging WT2- Benchmark Coca Cola’s marketing
beverages and products campaigns and create campaigns relevant
T3- Competition from global ST2- Develop a premium product to for EH
players and high quality imports compete with high quality imports
Figure 2.2 – Marketing Assets of Elephant House (Hooley et al, 2007) (SMA – Strategic Marketing Asset)
Marketing Asset Description
EH has a strong portfolio of brand names that consumers perceive to be genuine and unique. Generic
Brand Development beverage brands like Soda and Lemonade are always associated to be Elephant House products as the
(SMA) company has set high standards in the market.
With over a century of history and heritage in Sri Lanka, EH has instilled itself as a prestigious national brand
Brand Awareness
among local consumers.
EH consumers are extremely brand loyal given the high quality of EH products coupled with the satisfaction
Brand Loyalty
and pride of a local organisation delivering superior value.
Corporate Reputation The company has a strong reputation given its heritage and prominence in the industry, its holding company,
(SMA) and its accountability in creating value to all its stakeholders.
Sub Segment Market EH is the market leader in 6 CSD sub-segments which include Ice Cream Soda, Orange, Black Current,
Leadership Chasers, Ginger, and Apple Soda.
Distribution Network Superior island-wide distribution network and logistics via 4 channels, reaching the highest number of outlets
(SMA) in comparison to its competitors (outlet penetration – 74,000).
EH has a number of unique recipes that have set standards in the Sri Lankan beverage industry, especially in
Formulas
the Ginger, Ice Cream Soda, Black Current, and Soda CSD sub segments.
 Brand development, corporate reputation, and the distribution network are considered as EH’s strategic marketing
assets as it provides the organisation with a significant competitive edge in comparison to its competitors,
supporting EH to sustain its competitive advantage and optimize their performance in the market.
Figure 2.3 – Unique Selling Propositions
Product USP Brand Essence
EH Cream Soda So refreshing that it really revitalizes the free spirit in you “Pop up your life always”
EH Ginger Beer Made with the finest natural Sri Lankan ginger “Makes life tasty”
EH Orange Crush The vibrant color and nostalgic taste to quench your thirst “Add color to your life”
EH Lemonade Sri Lanka’s only Lemonade in the market “Refreshingly cool”
Twistee Made out of real fruit juices and Ceylon green tea “Cultivate the goodness in life”
F5 Proven & certified formulation designed to rehydrate your body “Fuel to keep going”
 A USP is an explicit, testable claim a company makes about its products/services to effectually differentiate one
offering from another. Each EH beverage has its own unique USP for higher relevance, suitability and effectiveness.
Nevertheless, the general USP of EH beverages are based on the corporate brand of the company that revolves
around its heritage, natural goodness, and high quality of products that are all based on a local concept, along with
over a century of dedicated loyalty by its consumers.
 USP | Coca Cola - The number one beverage brand in terms of sales with more than 500 products at offer
 USP | Pepsi - One of the most popular global brands in the foods and beverages sector targeting the youth

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Membership No. 40002127 Strategic Marketing (2200) | July 2016

Figure 2.4 – PESTEL Analysis (Indications: O/T – Opportunity/Threat, LOI – Level of Impact)
FACTOR DESCRIPTION IMPACT ON CCS O/T LOI
Political Recently elected national government has increased Lower investor relations and FDI prospects
T L
political and business uncertainty
Google Project Loon plans to increase the Higher number of internet users, increasing the
availability and affordability of internet to users magnitude of reaching, acting, converting and O M
island-wide engaging customers via online channels
Economical Personal Disposable Income (PDI) - Rise in PDI Increased consumption of beverages leading to
O M
due to price cuts in essential goods higher revenue and profits
Changes in Value Added Tax (VAT) - 11% Fluctuations that affect business performance,
(Dec’15) to 8% (Jan’16), 8% to 11% (Jan’16), along with system/process changes (SAP, T M
again changed to 15% (May) finance), which incur time and cost for the firm
Social Proliferation of global media has changed customer Growth in health concerns higher demand for
behavior due to higher access to information and Twistee.
exposure to foreign behavior patterns Growth in recreational activities  growth in O M
out-of-home consumption  higher glass bottle
sales  higher per dealer off take.
Increase in health consciousness has led to Lowers demand for carbonated beverages,
T H
consumers pursuing healthier food and beverages which is EH’s primary segment
Technological Technology has enhanced communication, Posts via social media (owned, shared and
connectivity and access to information via social earned media) can influence consumers and
O H
media platforms have a positive impact on brand image and
reputation
Ecological Business operations affecting climate change and Compliance increases costs while negligence
T M
environmental pollution will harm brand image
Legal NATA bill regulates all marketing based activities Restricts advertising for alcohol complementary
for alcohol and other associated brand beverages products like EH Soda (chaser) to communicate T L
core product use/benefit

Figure 2.5 – Industry Analysis using Porter’s Five Forces (Porter, 1985)
FORCE DESCRIPTION IMPACT
Bargaining power of Intense competition from Coca Cola, high number of substitutes for beverages, especially
Moderate
customers natural local substitutes like King coconut water/Kurumba  High customer choice
Bargaining power of High volumes ordered from raw material suppliers – low bargaining power
Low
suppliers Local distributors are highly dependent on EH for business continuity– low bargaining power
High number of substitutes due to direct competitor products in the local market and high
Threat of substitutes High
quality imports
Entry to the Carbonated Soft Drink (CSD) segment is challenging due to market dominance
Threat of new entrants Moderate
and entry barriers. However, entry to the dairy, water, and fruit segment is high
Rivalry among
Intense competition from Coca Cola. And considerable competition from Pepsi Co. High
existing firms
Figure 2.6 – Competitor Analysis (Piercy et al, 2008) (Indications: 1-Weak, 5-Strong)
Key Success Factors CCS / Elephant House Coca-Cola (Sri Lanka) Pepsi Co./Ole (Sri Lanka)
Taste 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Quality 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Price 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Distribution Network 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Corporate Reputation 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Brand Development 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Brand Awareness 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Brand Loyalty 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
TOTAL 39 37 31

 The competitor analysis shows EH and Figure 2.7 – Stakeholder Analysis (Mandelow, 1991)
Coca Cola as strong players in the market, INTEREST
High Low
though EH has a minor advantage. EH Key Players Keep Satisfied
scores higher for their distribution *Shareholders *Customers
network and corporate reputation mainly High
*Principals *Business partners
POWER

because they were early movers to the *Government

industry. However, EH scores lower for Keep Informed Minimal Effort
brand awareness, given Coca Cola’s Low
*Suppliers *Pressure groups
extensive brand awareness and visibility *Staff *Public
*Community
across global markets as a renowned
multinational corporation.
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Membership No. 40002127 Strategic Marketing (2200) | July 2016

Figure 2.8 – Brand Fingerprint Model (Vyse, 1999) for EH Cream Soda

BRAND PERSONALITY / VALUES BRAND REASONS TO BELIEVE

Youth, Trendy, and Entertaining ESSENCE First of its kind, Youth beverage brand of the
Pop up your year, People’s beverage brand for 10 years
DISCRIMINATOR life always!
The coolest way to pop up dull boring F
CONSUMER INSIGHTS
moments
I’m a bit on the fun side, I need something to
really get me going, LIKE MY DANCING
COMPETITION SHOES!
Directly competes with Fanta Cream Soda,
Ole, & My Cream Soda. And also with Coke
and Pepsi on functional platforms - CSD TARGET CONSUMER
Hip teens, born extroverts, the youth who are
exposed to emerging lifestyle trends
PROPOSITION
EH Cream Soda is so refreshing that it
revitalizes the free spirit in you BENEFITS
FUNCTIONAL – Unique refreshing taste
BRAND ROLE EMOTIONAL – Gives a punch to stay
Youth’s entertainer entertained

Figure 2.9 – Distribution Network Analysis

Distribution Channel Description % of Output
General trade outlets (GT) Groceries, shops, vendors, and others 40%
Modern trade outlets (MT) Supermarket chains and hypermarkets 36%
Hotels, restaurants & catering (HORECA) Hotels, diners, cafes, caterers, and restaurants 22%
Exports Currently exports to 20 countries 2%

 CCS uses an extensive distribution strategy with a one level distribution (CCS  Retailer  Customer), which
covers all parts of the island. In 2014-15, 49% of its sales were generated only from the Colombo Western
province. CCS uses 82 distributors (of which 81 are outsourced) for its logistics operations and has a reach of
around 74,000 outlets island-wide, which is a higher outlet penetration in comparison to Coca Cola, who has a
reach of around 65,000 outlets in Sri Lanka.
Figure 2.10 – Porter’s Value Chain (1985)
Manufacturing plant and warehouse. Head office commercial building.
Infrastructure Glass bottle and PET bottle lines for manufacturing (high quality German machinery) 82 distributors that
SECONDARY ACTIVITIES

penetrate trade outlets.

Trains and develops employees on new technology, innovation, efficiency techniques and other required
HRM technical trainings with minimum 4 per person annually. Increases involvement with customers to create a
nature of autonomy.
Forward contract agreements with raw material suppliers. Pricing and planning of new products and budgets.
Finance
Management of CCS assets and listing of Keells Super (subsidiary of EH) supermarket assets.
Monitors technological advancements and updates systems. Uses SAP systems for business processes and
IT
operational management. Utilizes a distributor management system (DMS) to monitor inventory in outlets.
Negotiates with current key suppliers for higher margins. Looks for new sustainable suppliers with high quality
Procurement
raw materials at an affordable price for product development.
Outbound Sales &
Inbound Logistics Operations R&D Services
PRIMARY ACTIVITIES

Logistics Marketing
Receiving and Process of utilizing Warehousing of Heavy investments ATL, BTL, & Stalls at
storing of raw inputs/raw materials to finished products. on R&D. Initiatives TTL activities to events,
materials at produce the end product. Distribution via on New Product increase presence Customer
warehouse Quality assurance, trucks based on Development and use in the market. service
located within the sampling, inspections, routes to MT, GT, of natural Dealer hotline, and
factory. packaging, & storing. HORECA, and flavors/colors when conventions, social media
export channels. creating/re-inventing exhibitions, and engagement.
products. promotions.

Competitive advantage (CA) refers to the superiority held by a firm when it effectively leverages its core
competencies to deliver superior value to its customers (via low cost/differentiation) better than its competitors, while
generating disproportionate supernormal profits (Porter, 1985).
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Membership No. 40002127 Strategic Marketing (2200) | July 2016

Figure 2.11 – Resources, Capabilities, and Core Competencies Analysis

Classification of Resources at CCS
General Resources Financial Resources Physical Resources Human Resources
+ Reputation of EH and + Developing share price in + Head office based in Vauxhall + 120 Admin staff at head office
development of business over Colombo Stock Exchange Street, Colombo. and around 800 staff in the factory.
150 years of excellence. + Dividends per share at 11 + Factory and warehouse located + Highly skilled and semi-skilled
+ Standards – ISO 9000, ISO LKR, a 176% growth from in Ranala (Kaduwela) workers in factory.
22000, ISO 18001 (OHSAS), and previous year + High Quality German beverage + Highly experienced management
SLS certified. + Financial support from parent technology and plant machinery professionals in administration.
+ Exclusive partnerships and company John Keells Holdings (PET lines, bottle cleaner
accessibility via Keells super PLC, which operates in 7 major machinery, reach trucks etc.)
outlets (subsidiary) sectors.
Capabilities of CCS Core Competencies of CCS
+ Advanced R&D + Brand development/management
+ Superior knowledge and expertise + Corporate reputation
+ Long standing ties with the community and stakeholders + Superior distribution network and logistics
+ New product development + Dynamic sales force
+ Strong business relationships

Figure 2.12 – Corporate Reputation Framework (Abratt & Shee, 1989)

ELEMENTS DESCRIPTION
Elephant House is an active, mature, & progressive organisation that dynamically shapes itself to fit with the present
Corporate
trend of the evolving market environment. EH is a vibrant organisation where integrity, excellence, care for employees
Personality & customers are considered to be core values that drive the organisation towards development and innovation.
Symbolism Behavior Communication
Contemporary logo & empathetic packaging. Brand activations, event Top-down, bottom-up, and lateral
Brand Logo Corporate Logo sponsorships, point of communications gaining employee
Corporate sale material, commitment to corporate goals. EH
Identity television/radio communicated as a family of brands, a
commercials, and dealer corporate endorser and a Masterbrand.
conventions. Integrated brand communications to
leverage brand positions.
Relational Management Product
A value adding and responsible organisation A contemporary Based on superior quality and value for
that assist with the development of organisation. Strategy money. Strong heritage and enduring
Corporate
communities, farmers, and suppliers via CSR formulation and decision values. Driver values and residual values
Image
activities and sustainable sourcing. making process, on products are based on “natural
effective and transparent goodness”
communication.
Figure 2.13 – Justified conclusion as to how EH’s marketing assets contribute (prevent) CA
Marketing
Conclusion Justification CA
Asset
The corporate reputation of EH is a key variable in
CCS / EH has earned itself an enviable
improving its attractiveness and capacity for retention of
Corporate reputation as a trail blazer in the industry, and High
both clients and investors. Thus, it contributes
Reputation also as a responsible, ethical, and prestigious
significantly towards the CA of the firm, given its long
organization.
heritage, values, and dominance.
The development of many successful brands Being a core competency of the firm, brand development
Brand High
has enabled EH to dominate the beverage contributes greatly to its CA due to sub segment market
Development market and position itself as a prominent brand. leadership.
EH’s distribution network contributes immensely to its
EH has the largest outlet penetration in the
Distribution CA through higher sales, volume offtakes, and share High
country (74,000) with strong business
Network among handlers (SAH), unlike Coca Cola, who has a
relationships.
lower outlet penetration (65,000 outlets).
EH consumers are highly brand loyal due to the Brand loyalty too contributes to the CA as EH consumers
Brand pride, relationship and relevancy it holds with are highly unlikely to switch to similar competitor brands Medium
Loyalty the company, along with its service excellence as they perceive EH products to be the real, original, and
and promise of quality and value. genuine brand/product.
EH is a well-known and famous company
Brand However, awareness does not contribute significantly to
where all Sri Lankans are mindful of its Low
Awareness its CA given the global awareness of Coca Cola.
products and its value.
Being the leader in 6 CSD sub segments as it Therefore they are able to dominate those segments with
Sub-segment
has more brands that are leaders in the market higher scales and more control, contributing significantly Medium
Leadership in comparison to its competition. to the company’s CA.
EH formulas increase their CA as no one else can
The 2 brands Ginger beer and Soda are more
Formulas replicate these unique products and satisfy consumer Medium
than a century old.
expectations to the degree that EH does.

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 Membership No. 40002127 Strategic Marketing (2200) | July 2016

3. OBJECTIVES | WHERE DO WE WANT TO BE?

Figure 3.1 – Components of Mission (Hooley et al, 2008)
Vision Values Distinctive Competencies Competitive Positioning Market Definition
“Our passion is to deliver
Strong intellectual capital, EH positions itself on the
pleasure and nutrition Excellence EH operates in the
superior knowledge and lines of “feel good”
throughout people’s lives, Innovation FMCG market
expertise, R&D, and branding &“natural goodness”
through exciting and Integrity targeting users from
are unique to EH, providing through pure/natural/less
superior products, whenever Caring ages 15-40 in all
the development of a unique artificial products and
and wherever they choose to Trust geographical areas
value proposition empathetic packaging
eat or drink”

Figure 3.2 – Corporate and Marketing Objectives of CCS

Corporate Objectives
 Bottom line expectations to reach Rs. 3 billion PBT by April 2017
 Increase production capacity by 20% by installing a new PET line (Exit March 2017)
 Promote Corporate Reputation via sponsorships, conventions, sustainable business operations, CSR & digital communications
Marketing Objectives
1. Achieve a 45% Market Share to strengthen Market Leadership (current at 39.4%) by mid-2017
2. Enhance Distribution Network by increasing outlet penetration to 84,000 (currently at 74,000) by July 2017
3. Develop digital communications to improve consumer engagement by 25% to drive Brand Loyalty by mid-2017
4. Create new product variants (existing brands by mid-2017) and a new range of premium products (by 2018) to
fortify Brand Development/Formulas
 By increasing production capacity, EH will be able to meet the excess demand which will increase their
volume/market share, thereby strengthening its position as the market leader, which will enhance its competitive
advantage (CA). Increasing outlet penetration via more distributors will grow the share among handlers (SAH) and
volume offtake, enhancing its distribution network and strengthening its CA. By improving consumer engagement
via digital platforms, EH will be able to increase their visibility in the market, attract new customers, and convert
unsatisfied customers of the competition. Furthermore, the creation of new products and a premium range will not
only help compete with imports, but also develop EH’s visibility as a premium and high quality brand.
Figure 3.3 – Customer Segmentation
Profile Youngsters (A) Adults (B) Elders (C)
Demographic SEC A B C1 C2 A B C1 C2 A B C1 C2
Age Group 15-28 years 29-39 years 40 and above
Occupation / Students, Graduates, Post- Senior management, Wealthy Professionals,
Designation graduates, New employees Employees, Professionals CEOs, Retirees
Geographic Area Urban, Sub-urban, Rural Urban, Sub-urban, Rural Urban, Sub-urban, Rural
Psychographic Makers, Achievers,
Lifestyle Dreamers, Strivers, Variety seekers Experiencers, Survivors
Innovators
Behavioral Rate of usage Very high Medium Low
At school, parties, events, meals, as At home, social events,
Parties, as a chaser (Soda),
Occasions a Chaser (Soda), sports (F5), on the as a Chaser (Soda), on
on the go
go the go
Product Size/Volume 200ml, 400ml, 500ml, 1.5L 400ml, 500ml, 1.5L 500ml, 1.5L
Aspects FOP High Medium Low
Figure 3.4 – Segment Ranking
Rating Aspects
Segments  Targeting - According to figure 3.4, CCS can successfully achieve its
A B C marketing objectives via a differentiated targeting strategy to segments
Opportunity 9 8 6 A and B. Segments A and B should be grown primarily via the Market
Reach and response 8 7 4 Development and Market Penetration strategies, as mentioned in figure
Environment 7 6 5
4.2. Segment C has little potential to grow. However, new product
Development potential 8 7 5
Internal consideration 9 7 5 development will be able to identify potential products for all segments.
Total 41 35 25
Positioning – As mentioned in the company vision, CCS should position its products as a catalyst that delivers
pleasure and nutrition throughout people’s lives. Furthermore, its residual values and driver values should focus on
the ‘natural goodness” of products. EH products should be expressed to consumers as “feel good”, “never out of
place”, “occasional; for the good times in life”, “material/spiritual; for the good things in life”.

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 Membership No. 40002127 Strategic Marketing (2200) | July 2016

4. STRATEGIC OPTIONS | WHICH WAY IS BEST?  Elephant House must adopt Porter’s
Figure 4.1 – Porter’s Generic Strategy (1985) Differentiation strategy as it should cater
to the broader market by providing unique
Competitive Advantage
and high quality products. Each product
Low Cost Differentiator should have its own distinctive brand
personality, target group, USP, platform
Broad Cost Leadership Differentiation
Market
Scope

and values which are crafted specifically

and accordingly, in alignment with the
Narrow Cost Focus Differentiation Focus
product nature.
Figure 4.2 – Ansoff Matrix (1988)
Existing Products New Products
MARKET PENETRATION NEW PRODUCT  Elephant House should operate in all 4
Existing Markets

Products - Cream Soda, Necto, DEVELOPMENT quadrants of the Ansoff Matrix. However,
Orange Crush + Create new product(s) for the the growth strategy should focus primarily
+ Increase usage rate of existing premium range on the Market Penetration and Market
customers + Develop product based on Development sections (Objective 1).
+ Gain customers from competition customer needs and trends
+ Increase outlet penetration
Nevertheless, efforts must also be placed
MARKET DEVELOPMENT DIVERSIFICATION
towards New Product Development in
order to effectively create a successful and
New Markets

Product - Twistee + Increase product range

+ Cater to health conscious + Cater to new customers, innovative product for the premium
consumers (Green Tea based desires, and evolving trends segment (refer figure 3.2).
beverage)
+ Create awareness on health
benefits

Figure 4.3 – Branding Strategies  Product Line Extension - Introduction of promotional PET
bottle sizes of 400ml, 750ml, and 2l. The price of 750ml and 2l
Product Category
should be the same price as the 500ml and 1.5l bottles
Existing New respectively. The increase in quantity for the same price will add
value to consumers, thereby improving consumer satisfaction
Existing

Product Line Brand and brand loyalty, and thus increasing competitive advantage.
Extension Extension Additionally, EH must also introduce “Light” ranges (diet, or
Brand Name

zero calories) for Orange Crush, Lemonade, and Bitter Lemon to

satisfy health conscious consumers.
 New Brand – A premium brand should be developed to compete
New

Multi-branding New Brand with imports, cater to upper market, and portray EH as a
premium high quality brand (Objective 4). The premium brand
should be healthy, nutritious, and packed with an exquisite taste,
along with minimalistic symbolism and artwork.
Figure 4.4 – Digital Marketing Mix
Digital Marketing Mix
Figure 4.5 – Customer Relationship Model via
IDIC Model

Social Media Mobile Content Digital • Identify top priority/most profitable customers
Marketing Marketing Marketing Marketing individually and understand their needs & requirements.
Identify
Web
Facebook SMS Website banners
• Seggregate customers on the basis of their needs and
Instagram Mobile Youtube value to company to formulate customer specific
Pop Ups Differentia strategies.
Search Ads Channels
te
Twitter Mobile Floating
Online PR Ads
Apps
• Increase effectiveness of priority customer interactions
Rich Media Expanding via planning to gain better insights and foster
Display Ads Ads relationships. Use digital channels to interact with
Interact consumers and drive satisfaction, loyalty and advocacy.
 EH should operate on the above digital platforms
to enhance their visibility and brand awareness. • Customize offerings, deals & communications to ensure
Furthermore, these platforms enable EH to that the needs of each customer is properly met and
communicate with customers, improve customer Customize fulfilled.
engagement and improve customer relationship
management (Objective 3). 7
Membership No. 40002127 Strategic Marketing (2200) | July 2016

5. TACTICS | HOW DO WE GET THERE?

Figure 5.1 – 7P’s Marketing Mix (Kotler, 1996)

FACTORS IMPLEMENTATION PROCESS
Create value based products based on customer desires and fine-tune products according to feedback and market
Product research. Introduce value additions and limited edition ranges to increase hype, engagement and choice to customer.
Highlight USP, brand essence and benefits to influence customer purchase decisions.
Maintain price index = 100 for regular CSD products. Adopt premium pricing for premium products at price index =
Price
160 to compete with high quality imports.
Spread dealer points to untouched areas, especially in the Northern and Eastern provinces to increase outlet
penetration (Objective 2). Exclusive shelf spaces in MT outlets with branded shelves, gondolas, & impulse counters
Place
to increase visibility and attractiveness in order to drive consumer purchases and achieve higher sales. Brand name
boards for GT outlets to increase brand visibility in Northern and Eastern provinces.
Specified ATL, BTL, TTL promotions for each brand in relevant platforms and outlets. Bundle offers with new
Promotion products and limited range products. Exclusive shelf spaces (MT), POSM (MT), and trade discounts. Promote
products/brands on social media platforms via a content marketing approach using attractive and liquid content.
Physical Attractive and high quality packaging along with promotional packaging and tie-ins for seasons, global events, and
evidence limited range items. Offer bottles, bottle openers, glasses and other complements with promotional items.
Implement a business intelligence system for market analytics. Establish a big data system to identify trends/patterns
Process and collate important information that can be used to optimize performance. Measure customer metrics to be utilized
in order to enhance CRM and the brand itself.
Train and develop staff on new product development, innovation, and sales. Provide trainings and workshops for the
People marketing team on brand development, digital marketing, and the exploitation of marketing assets in order to get the
knowledge required to optimize marketing assets to sustain EH’s competitive advantage.

Figure 5.2 – McKinsey’s 7S Framework (Waterman et al, 1980)

FACTORS DESCRIPTION
CCS should adopt a differentiation strategy that distinguishes itself from competitors on the lines of natural goodness,
Strategy feel good, material/spiritual, credibility, best of today’s tastes, and based on occasion; for all the good times in life. These
differentiators will help sustain EH’s competitive advantage via optimized marketing assets (especially reputation of EH).
Currently highly bureaucratic and tall structure with many internal governance mechanisms. Marketing/Branding team
Structure
should have more empowerment and for brand managers to have skip level meetings with top management.
Implementation of a business intelligence system for quick analysis of market trends/data for higher/dynamic
responsiveness. Devise a system to measure customer metrics to increase data collection to be utilized for strategies.
Systems
Engage customers via a mobile app with interactive features and brand communications. Mobile app for sales staff to
monitor their activity/targets and to gather market information for all staff
Train and develop employees on the areas of efficiency, innovation, and team management. Innovation workshops for
Staff marketing staff as well as R&D/operational staff. Innovation scheme for all staff to generate new ideas and create a
culture of creativity and autonomy.
Practice a situational leadership approach. Create a culture of goodness and sustainability and increase cohesion between
Style operational staff and admin staff to spark synergies. Improve working conditions and facilities to rejuvenate and
revitalize the working environment.
Train operational staff and marketing staff on international standards based on industry and job role. Trainings on R&D,
Skills marketing, total quality management, supply chain management, and innovation are required for staff to acquire skills
and knowledge needed to optimize marketing assets and achieve the specified objectives.
Shared Create a culture of knowledge sharing and innovation. Set KPI’s to sales and marketing teams to share valuable market
Values information with production and R&D staff via the sales application.

Figure 5.3 – Marketing Budget (03 years)

Million LKR
Activity Remarks
2016 2017 2018
Trade discounts (Excluding Exclusive outlets) 260 250 250 To influence customer purchases
Consumer Sales Promotions 17 18 18 To increase Top of Mind Awareness
Trade Sales Promotions 35 35 35
Marketing Campaigns 70 80 70 ATL, BTL,TTL, and other activities
Public Relations / Publicity 15 15 15 Magazine/newspaper articles
Branding Costs 90 70 60 New products, packaging, and other mat.
Advertisement Local TV 20 15 12 TV/Radio ad spending being diverted to
Advertisement Local Radio 15 10 8 online/digital channels such as FB, YouTube,
Advertisement Local Print Media 4 4 3 etc.
Online advertising, social media, & digital media 30 38 44 Digital channel effectiveness/ROMI is growing
Research & Development 60 50 35 NPD, process streamlining, market research
Total 616 585 550 A total of 1,751 million LKR for 3 years

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Membership No. 40002127 Strategic Marketing (2200) | July 2016

6. CONTROLS & MEASUREMENT | HOW CAN WE ENSURE ARRIVAL?

Figure 6.1 – Critical Success Factors (CSF) & Key Performance Indicators (KPI)
Frequency of
CSF KPI
Monitoring
Customer satisfaction index (CSI), customer acquisition & retention,
Customer satisfaction Quarterly
Willingness to recommend
Value creation Rate of usage, purchase frequency, conversion ratio Bi-annually
Click through rate (CTR), cost per thousand (CPT), engagement rates,
Brand visibility Monthly
Digital Listening (DL) metrics, Top-of-mind-awareness (TOMA)
New product development (NPD) / No. of new ideas, success rate of new products, Return of investment in
Annually
Innovation innovation (ROII)
Optimization of marketing assets ROMI, rate of visibility, positive word of mouth, brand equity Bi-annually
Purchasing availability No. of distributors, outlet penetration, SAH, volume offtake Monthly

Figure 6.2 – Balanced Scorecard (Kaplan and Norton, 1992)

Factors/View Objectives Measurement Target
Grow revenue via existing customer base Sales revenue +10% annually
Financial Achieve Rs. 3 billion PBT Profit margins By 2017 April
Gain a 45% market share Volume share By mid-2017
Enhance customer engagement and satisfaction CSI, no. of complaints, DL metrics 20% annually
Convert customers from competition Trail rates 5% annually
Customer
Increase value/utility to customers Purchase frequency, CSI +10%
Increase outlet sales SAH, volume offtake, outlet penetration +17%
Internal Develop new products ROII, success rate of new products +20%
Business Improve quality of service Customer effort score (CES) +10%
Process Enhance brand visibility CTR, CPT, DL metrics, google analytics +15% annually
No. of trainings per employee, employee Minimum 4
Training and development
productivity, performance evaluation sessions annually
Absenteeism, employee
Learning &
Employee motivation and commitment involvement/participation rates, no. of +10%
Growth
employee suggestions
No. of trends/patterns, value added per
Big data and business intelligence analytics +12%
employee, ROI

Figure 6.3 – Continuous Improvement Plan via Deming Cycle

Stages Action EH context
Clarifies who is involved, the purpose of the project, what needs to be Coca Cola’s marketing campaigns, digital
Plan
changed, the data available and how this data will be used marketing, and drinkable advertisements
Do Based on the plan, small change is made Collect data to identify required standards
Check The outcome of the change is monitored Identify the gaps in performance and their reasons
Results of the study are applied to generate improvements in Apply the techniques/ideas required via a context
Act
performance and used to inform future decisions that fits best the with the EH brand and recreate

Benchmarking
Enables an organisation to compare itself with leading performers in order to improve, adapt, and sustain its own
ideas, practices and the way of operating. Benchmarking has evolved to help businesses judge performance standards,
best practices and competitive analysis.
 Process Benchmarking – Benchmark the quality management, new product development and supply chain
management techniques of reputed beverage companies (Coca Cola, Pepsi Co., Nestle SA, and FNBM).
 Performance Benchmarking – Benchmark Coca Cola’s marketing campaigns (offline & online), consumer
engagement mechanisms, and mobile applications.
 Competitor Benchmarking – Compare EH’s performance with Coca Cola in South Asian and South East Asian
markets. Benchmark companies where Coca Cola is not the market leader, to gain valuable insights.