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The 4 Ps in Marketing:C2 Green Tea RegularApple Flavor (355 ml)

Submitted by:Alexyss Anne P. Alip ~25%Dale Danielle M. Javier ~25%Kristy Mae Lim ~25%Sasha Paz ~25%

MARKET1 |K31

3rd Term of School Year 2009-2010March 18, 2010

Submitted to:Asst. Professor Milette Zamora

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THE MARKETING MIX

A marketing strategy must be created in order to determine the

means by which a set of clear objectives may be met. Objectives

communicate what marketers want to achieve, guide marketing actions

and are used to measure how well a plan is working. They can be related

to market share, sales, reaching the target audience and creating

awareness in the marketplace.

Once marketing objectives have been established, the next stage is

to define how they will be achieved. The marketing strategy is the

statement of how objectives will be delivered. It explains what marketing

actions and resources will be used and how they will work together.

By analyzing detailed information about their customers, as derived

from ongoing market research, Universal Robina Corporation can

ascertain information key to determining the correct marketing mix.

First, the company must determine which products are well

received; next, the company should determine the price that consumers

are willing to pay. As for the promotion, the company should decide on

which TV programmes, newspapers and advertising methods consumers

read and view and lastly, URC should be able to determine the places

where the customers will purchase and utilize a product.

Accurate research is essential in creating the right marketing mix

which will help to win customer loyalty and increase sales. As the

economy and social attitudes change, so do buying patterns. Universal

Robina Corporation needs to identify whether the number of target

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customers is growing or shrinking and whether their buying habits will

change in the future.

Universal Robina Corporation & C2 history

The Universal Robina Corporation was founded in 1954 by John

Gokongwei, Jr. through the establishment of the Universal Corn

Products, which was a cornstarch manufacturing plant in Pasig City. The

company expanded and became involved in a wide range of food

businesses and eventually ventured in raising animals and the

manufacture of animal and fish feeds, and other veterinary compounds.

The company’s businesses are operated through divisions and

subsidiaries that were organized in three core business segments: (a)

branded consumer foods, (b) agro-industrial products and (c) commodity

food products (Antolin, 2008).

John Gokongwei, the owner of Universal Robina Corporation,

decided to add another product to its line of consumer goods. These

products are distributed to 42,000 supermarkets, groceries and sari-sari

stores in the Philippines. Its products are also being exported to

Singapore, Malaysia, Indonesia, Taiwan and China. In 2003, he noticed

the massive popularity of bottled iced tea in China. Having observed this,

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Universal Robina created a product and positioned it “as a ‘spa’ in a

bottle, a drink that cools and cleans” (Gokongwei, 2007). Albeit the lack

of expertise in this area, since the only beverage product that they had

was the instant coffee, URC challenged itself and decided to carry out

and create C2 despite a rather daunting task of competing with

international brands, such as Coca~Cola.

By the year 2004, a new innovative product was launched in the

market. Having admitted that Gokongwei himself has grown tired of the

regular colas, juices and iced teas in the Philippines, C2 immediately

caught on with the customers. Some were even transformed into patrons,

having consumed an immeasurably huge number of the said drinks every

day. From the first month since its launch, C2 was already able to sell

over 100,000 bottles despite its initial sales forecast of merely 10,000

cases per month (Schafer Asia, 2007). Three years later, Filipinos drink

around 30 million bottles of C2 per month (Gokongwei, 2007). It is a

healthy drink, a thirst quencher and it comes in different flavors. It’s

open information, it is affecting the sale s of carbonated cola,” (Quintos,

2007).

Flavors such as lemon, apple and peach have made the usually

bitter taste of green tea more acceptable to the Filipinos, who do not

have the tradition of drinking tea. Currently, C2 has 11 flavors and is

continually expanding. As the demand grows, new plants are being set up

and existing plants expanded. Today, URC has eleven plants, nine in

Luzon, one in Visayas and in Mindanao.

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The Product Defined

The first market mix element is Product. A company or an

individual must have a product to market and to offer to the people. A

product is anything that can be offered to a market for attention,

acquisition, use or consumption that might satisfy a need or want.

(Armstrong and Kotler). Also, according to Armstrong and Kotler, a

company’s offer to the market often includes both tangible goods and

services. Product decision is normally based on brand name,

functionality, styling, quality, safety, packaging, repairs and support,

warranty, accessories and services. These product attributes can be

manipulated depending on what the target market wants. Also,

customers always look for new and improved things, which are why

marketers should improve existing products, develop new ones, and

discontinue old ones that are no longer needed or wanted by the

customer.

Cool & Clean or C2 Green Tea Apple Flavor Regular (355 ml) is

part of the product line of Universal Robina Corporation (URC) of the

Ready-To-Drink-Tea (RTDT) C2. Unlike soft drinks or sports drinks, it is a

‘Spa’ in a bottle (Gokongwei, 2007). While it refreshes (cools), it also

gives health benefits (cleans) of green tea. It contains brewed green tea

leaves of Camellia sinesis, which contain antioxidants that help prevent

high cholesterol and certain cancers, such as prostate cancer and breast

cancer. All these made C2 unique compared to the plain sugared iced tea

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usually served in restaurants, thus revolutionizing the beverage industry

and competing with top international corporations in the Philippines.

While it does satisfy the physiological level of Abraham Maslow’s

hierarchy of needs, C2 also satisfies the social level. This is evident in a

study that showed that among brands in the beverage industry, even in

the product line it belongs to, C2 Apple Flavor Regular is among the first

to run out of stock, which reflects how clients consume or purchase it

more than most brands. Thus, C2 Apple Flavor can be considered as a

shopping good. It goes beyond the characteristics of a consumer

convenience good since consumers exert more effort and time in

choosing it, something lacking when they buy just consumer convenience

goods. Also observable is how its commercials present the product. In

every commercial of C2, some form of socializing is evident. The 2009

commercial of ‘The C2 Life,’ in particular, shows several scenes of people

getting together and enjoying a bottle of C2. The tag line of C2 for 2009 -

‘Sing about the good things, the C2 life,’ also assimilates that C2 makes

the things their consumers do everyday become more special. Even the

song performed by the local band, Sinosikat, insinuates that C2 can play

a role in socialization and even enhancing it. Watching the commercials,

one can almost see the speech bubbles of the models saying, ‘Hey, I’m

drinking C2 too!’

Aforementioned, C2 is part of the beverage industry where an

increasing number of brands are competing in. This competition posed by

the variety of products customers can choose from is another

characteristic of a shopping good. Even more specific, C2 is a

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heterogeneous shopping good since the health benefits offered are what

most consumers are searching for and something which some brands

might not offer.

Indicative of it being a shopping good, the product’s behavior can

be classified under the star category of the Boston Consulting Group

(BCG) matrix. Products in the star category enjoy a rapid increase in

growth and market share. The increase of market share and growth of C2

is reflected in the difference of the initial sales forecast of C2 (2004)

selling 10,000 cases per month to its performance three years (2007)

later of an average of 1,000,000 cases per month. Also, the launch of C2

has also affected other brands in the beverage industry, including the

international industry giant, Coca~Cola that lost two-thirds (2/3) of its

market to C2. Universal Robina Corporation (URC) was able to

substantially penetrate the already growing market of the beverage

industry with its product line of C2. The strategy now being implemented

by Universal Robina is focused on expanding their market to Southern

Asia like in Vietnam and Thailand, which is also in accordance with the

star classification of their C2 product line.

Product Life Cycle

Consistent with the star classification of C2 in the Boston

Consulting Group (BCG) Matrix, C2 is in its market growth stage. For C2

to come to be among the country’s top Ready-To-Drink-Tea (RTDT)

brand, it either had to be the first of the few of its kind or to be a brand

that is most appealing and with refined offerings to its target market,

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differentiating it from others. C2 Green Tea falls under the former. C2 is

one of the first Ready-To-Drink-Tea brands made available to a market

previously ignored or unsatisfied by the beverage industry. John

Gokongwei, founder of Universal Robina Corporation, was in China in

2003 where he had observed the popularity of bottled iced tea.

Recognizing its potential, especially that it would be the first in the

Philippines where Filipinos are accustomed to colas and glass bottles

with deposits, Universal Robina launched C2 in 2004. The records of

sales in the first month were more than its optimistic projected forecast

of 10,000 cases. Three years later, Filipinos, on average, drink around

30,000,000 bottles of C2 a month. Industry profits from C2 are certainly

growing still, a sign of it being in its market growth stage.

However, being the pioneer of Ready-To-Drink-Tea (RTDT) in the

Philippines did not stop competitors from noticing the opportunity that

Universal Robina has first held onto. The steady emergence of several

other brands of Ready-To-Drink-Tea also is evidence of the market

growth of C2 and an effect of its popularity in the market. Nonetheless,

being the first of the many has given Universal Robina a head start.

While C2 is still enjoying its market growth stage in the Philippines,

Universal Robina has also definitely made a head start in addressing the

international market as well. Expanding their distributions as well as

manufacturing to Vietnam and Thailand, C2 is on its way on penetrating

market untapped by other competitors who have only begun the race in

the beverage industry.

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Target Market

a. According to Demographics

Demographics Rationale

Age

21 – 30 years of

age

These young adults consume C2 as an

instant thirst quencher and carry the

compact C2 around for accessibility.

Thus, leaving time for their other

priorities, such as work. And to unwind

from the stress of work, they consume C2

amidst socializing.

As portrayed by the models in the

commercials of C2, especially the

commercial aired in 2007, the product’s

target market are the young adults (21 to

30 years of age).

Also according to Isabel B. Dumandan, a

representative of C2, their initial target

market is between 21 to 30 years of age.

14 – 20 years of

age

This younger and initially inadvertent

market segment of C2 and their needs

are more addressed in the occupation

demographics. However, for the age

demographics, they have relatively

similar product usage as the initial

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intended target market of C2. They are

likely to consume C2 as an immediate

thirst quencher, which they could also

carry around and easily dispose of

without consuming time that could be

devoted to their academics. In addition,

they, too, could use C2 as part of

unwinding from the academic stress and

socializing.

While this market segment was initially

inadvertent, a commercial of C2 released

in the summer of 2009 shows that C2 is

also starting to consider this market

segment as a target.

Sex Females C2 contains antioxidants that prevent

health benefits provided by C2 are

initially equally beneficial to both

genders, even with the different physical

and physiological attributes of the

genders. Take the benefit of preventing

breast cancer and the benefit of

preventing prostate cancer; both are

unique to each gender. But since that is

one additional benefit against another

additional benefit, it can be considered

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cancelled out. However, further research

indicates that females are more likely to

receive an additional benefit that does

not apply to males. This is with regard to

females receiving the additional benefit

of the prevention of colorectal cancer.

Clinical studies have shown that while

the intake of green tea shows a

decreased risk for females to develop

colorectal cancer but it has no effect in

males. Thus the additional benefit to

females.

In addition, the size of C2 Green Tea

Apple Flavor (355 ml) makes easier for

females carry them wherever they may

need to and since females are less likely

to finish a bottle of C2 in one sitting, this

makes the packaging of C2 convenient

for them.

Education College Well within its initial target market for

age demographics, the initial target

market has attained a tertiary level of

education. With this level of ability in

comprehension as well as maturity, they

are likely to understand the necessity of

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balance between work and social life,

which is something that C2 insinuates to

address.

Their use of scientific words and more

nutritional information in their

commercials as well as packaging

indicates that the target market has

attained college level education to

understand and interpret what C2 is

trying to communicate.

The use of allegories in their promotion

also requires a tertiary level of

education, such as the maze in their 2007

commercial or the seesaw in their

commercial aired in the summer of 2009,

for their target market to comprehend

and for it to immediately register in the

target market’s minds.

High School

Target market having only attained

secondary education is less likely to fully

analyze what the product offers.

However, they can still comprehend the

health benefits and social needs C2

addresses at least in part.

Occupation White collared Most workers desire promotion and to

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workers

them, wanting a promotion mean

working hard for it consuming most of

their time, which eventually may cut to

their time for socialization. To address

this aspiration for a promotion and to

maintain their social life, C2 presents

what may be a suitable mix for the

aspiring workers: a thirst quenching,

reducing time consumed and socializing

while unwinding with a bottle of C2.

Unemployed:

Students

Most students aspire to be part of the

work force and earning money for

themselves, which for them is important

for further establishing their

independence. This aspiration moves

them to consume C2 as well, which is an

imitation of what they may have seen in

the commercials of C2, which featuring

models who appear to be in the primary

target market’s age bracket.

Income or

Allowance

(Monthly

Basis)

Php 12,000 –

Php. 30,000

(Income)

Their purchasing priority would be less

likely for food, especially those that

would take time to consume. However,

since C2 is a Ready-To-Drink-Tea, they

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are likely to buy this with little analysis

based on its price in comparison to their

salary. This level of income is the norm

bracket for white collared workers and

would likely allow them to buy C2

frequently, even if it is intermittently.

Php 2,000 – Php.

4,000

(Allowance)

Considering the priority of the target

market of this demographic, which may

be the newest iPod variation or

something of same, this allowance

bracket is likely to be saved at least

around 90%. But since impulses, such as

quenching their thirst immediately, can

move the target market in this

demographic to buy C2 still.

Location Malls, groceries,

food

establishments,

canteens and

other

commercial

areas

The primary target market spends most

of its time in places near or in their

workplace where they could immediately

rush back to work if necessary. Thus,

these are the places where they can base

how best to advertise C2 in a manner

suitable to the possible routine the target

market may be doing in a specific place.

As for the extended target market (14-20

years of age, high school attainment,

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etc.), they spend most of their time at the

mall, food establishments and canteens,

the last two of which are usually near

their school. However, the same basic

strategy is applied, that is to have the

product adapt to the culture present in

the location the target market is in.

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b. Psychographics

Media Itinerary

A media itinerary, coined by Dr. Leonardo Garcia Jr.,

guides a marketing manager by answering the questions

of how, where and when to advertise a product. These

answers are based on the observed schedule of the target

market.

1. Where to advertise:

a. Television, newspaper, radio, billboards, magazines

and websites

2. How to advertise:

a. Models in the age range of 21 to 30 years of age

b. Scenes of socializing and those symbolic of wellness

and balance

3. When to advertise:

a. Summer

b. Holidays

By having identified the schedule of the target market, the

firm can better understand how to inform the target

market of their offer of marketing mix as well as know

when and where to advertise, also reducing the probability

of committing error in planning as well as implementing a

strategy.

Purchase Itinerary

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A purchase itinerary, coined by Assistant Professor Milette L.

Zamora, also serves as a guide to a marketing manager by

addressing the questions of when do customers buy and what

they will buy with their income. The effectiveness of a firm’s

purchase itinerary can be reflected in how often their product

is sold.

1. How often it is sold:

Almost always: Considering that in an average

month, Filipinos consume 30 million bottles of C2

(Gokongwei, 2007), it can be correlated that the

target market almost always purchases C2.

2. Where it is sold: Cafeterias, food establishments,

malls, groceries

With a purchase itinerary, a firm is better equipped to

forecast the quantity to be produced and when should this

quantity be produced. This helps reduce the probability of

disposing excess inventory, which can be costly.

SWOT Analysis

In order to create a marketing strategy that will enable the needs

of the key market to be met, the strengths and weaknesses of the

product, in this case, must first be identified and analyzed. Once the

strengths and weaknesses are determined, they are combined with the

opportunities and threats in the market place. This is known as SWOT

analysis - strengths, weaknesses, opportunities, threats. The business can

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then determine what it needs to do in order to increase its chances of

marketing successfully.

The first acronym, S, which stands for strength, is the company’s

internal factor wherein it performs and excels its best. Here in the

researchers’ paper, the word company should then be reiterated as the

product. Further, in determining the strength of the product, it will

provide an auxiliary as to determine the product’s pricing strategy that

was used. The weakness, opportunity and threat, which correspond to

the remaining acronyms, will also provide information to assess if the

pricing strategy is correctly implemented and determined.

Since the drink was only released in 2004 and has now sold

millions of bottles worldwide, the innovative distinctiveness of the whole

C2 product line – its flavors, the concept of tea in a bottle, and the ability

to quench one’s thirst – serves as its advantage. Ever since C2 gained its

success, various companies have copied the tea in a bottle concept,

putting several twists on their products. However, according to a Nielsen

survey, C2 remains in the top beverages being consumed in the Filipino

society today, particularly, number 7 on the list, catching up with Coca-

Cola on the 6th position (Nielsen, 2007). Not to mention also, that URC

has indeed, pioneered and established a stage for RTDT drinks.

Another strength is the product’s ability to cater not only to its

target market (21-30), but also in other age groups, both younger and

older. C2 green tea’s ability to easily adapt in different environments and

age groups illustrate the strength of the product.

On the other hand, a lot of skeptics, especially the health conscious

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ones, are questioning the drink’s ability to effectively be a health drink.

One of the weakness of the C2 Green tea is that its nutritional value is

almost at level with that of a soft drink’s calorie content. Upon observing

in local supermarkets, it is indeed true. According to Coke, each can

consists of “41 calories per 100ml” (coke.com) which probably means,

that for every 355ml, it has 145.6 calories. C2 Apple however, shows its

calorie count of 120. Given the definition of weakness in the SWOT

analysis, this is something that C2 can accomplish (see the effectiveness

of a healthy drink), but cannot strengthen.

For the opportunities, nonetheless, the product’s affordability in

comparison with other RTDT drinks can be seen as a competitive

advantage for C2 Green tea. The less costly a product is the more sales it

would likely generate. Another competitive advantage of C2 is being the

first Ready-To-Drink-Tea in the Philippines, giving it a substantial head

start against other Ready-To-Drink-Tea and taking market share from

other non-tea beverages in the market. This head start is reflective in

their expanding international market consisting already of 32 countries.

Since Universal Robina is highly engaged with the exportation of

the product, tariffs and taxes can pose as a threat for C2 Green Tea.

Certain rules with regards to trade, such as tariff barriers and quotas

dictate and limit the quantity of the product that can enter a certain

country. The European Union, for example, is very strict with regards to

these kinds of policies, since this specific International Organization

would want to promote their own, European products, making the

products from various continents go through certain tests and would

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have to meet certain standards such as the SPS or the Sanitary and

Phytosanitary (SPS) Agreement (Robles, 2004).

The Placing of the Product

Channels of Distribution

The next of the 4P’s in a marketing mix focuses on how to get the

product to the target market or consumers. Place involves the building

of, usually several, channels of distribution, which is a path or route

where goods move from production to consumption. It is a distribution

network where the producer basically puts its product in the hands of the

consumers. A marketing channel is composed of producers, consumers,

and various middlemen (i.e. wholesaler, retailer, agents, distributors,

etc.) who intervene or rather mediate between the two (Zeisg, 2008).

Through bridging the gap between the producers and consumers, not

only will the product reach the target segments of the market but

exchanges of marketing information also occur. This happens when

producers inform the consumers of their new product or new uses of

their existing products while consumers can give feedback of their

suggestions and complaints regarding the products. Having an effective

channel or several channels of marketing intermediaries is very

important to ensure that the product will reach their target markets or

consumers at the right place and at the right time, that is where and

when the consumers want and need it. It is difficult and costly to change

once distribution channels are established, thus it is best to carefully

plan on how to distribute products effectively.

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True to its characteristics as a shopping good, C2 Green Tea Apple

Flavor drink uses an indirect distribution channel where majority of the

resellers will stock then sell the product until it reaches the target end

consumers. Universal Robina screens several potential distributors from

which a number of wholesalers with reliable and good track record are

chosen to sell and dispatch C2 Green Tea nationwide. From Universal

Robina’s eleven manufacturing plants, cases of C2 Green Tea are

distributed to wholesalers, then to retailers and to the target end

consumers. This type of distribution is not only less expensive than direct

distribution but also enables the firm to reach significantly larger market

coverage. The firm ensures that C2 is maximizing benefits and

opportunities from its market growth stage by selling through as many

outlets as possible to guarantee that consumers encounter the product

virtually wherever they go. The broader distribution of C2 also takes

advantage of its initially advertent market segment, which are those who

are 14-20 years of age as aforementioned in the demographics. However,

it is important to note that a broader distribution does not immediately

follow an increase in sales and/or profit. It is possible that from these

outlets, there would be those that do not reach the target market at all

but instead caters to some other market segment not covered by the

target market demographics of the firm. Hence, having paid for the costs

of the use of these outlets may lead to a loss. To avoid this, as well as to

ensure the efficiency of distribution, placing strategies should also be

based on the target market’s purchase itinerary, which determines when

and where to sell, as discussed earlier.

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Though C2 is classified as a shopping good; C2 can deviate from a

shopping good’s usual behavior in the market depending on its location.

Consider 355 ml bottles of C2 in convenience stores where the product

can behave as an impulse or emergency good would due to the

characteristic of convenience stores being open twenty-four hours a day

and seven days a week.

Since buying C2 can also be based on impulse or customer’s habits

and preferences on where to buy, it is important to make sure that C2 is

distributed in more than one channel and uses all of the possible outlets

that are available for the product to reach its consumers. The same is

also being applied for its outlets in thirty-one countries other than the

Philippines.

Distribution of the C2 Green Tea Apple Flavor, along with C2’s other

product line, is through regional distributors and independent business

managers or agents to over 42,000 supermarkets, grocery and sari-sari

store outlets, gasoline stations, to name a few of its retailers nationwide.

One can now also find C2 drinks in vending machines placed in canteens,

hospitals, and campuses, which is very convenient and cost-effective,

especially when the lack of direct labor involved is considered, a cost

which usually adds up to the selling price. Aside from outside

intermediaries, the firm also does direct distribution wherein they

dispatch C2 drinks in Robinson’s Supermarket, which is also a subsidiary

alongside Universal Robina Corporation of the John Gokongwei (JG)

Summit Holdings Incorporated. With this, the firm has the control on

how C2 can be distributed in the market and is able to maintain at the

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same time its image by providing convenience and accessibility to its

large market. Cost, control, safety of inventory and coverage are among

the important things to consider when deciding the ideal mix of direct

and indirect distribution channels.

Effect on Pricing

How a product is distributed is an added cost in selling C2 Green

Tea Apple Flavor (355ml). Thus, distribution must be taken into

consideration by deciding which type of channels to use and create an

appropriate mix when coming up with a pricing strategy. The retail price

of a C2 Green Tea Apple Flavor is relatively different from the nature and

virtual locations of the shops or outlets where it sells. Also due to a

number of middlemen in the channels of distribution, price varies and

thus applies different types of pricing strategy. Zone pricing is used

especially with regional distributors wherein they transport C2 drinks

from the manufacturing plant to their warehouses nationwide. In special

circumstances, such as emergency or impulse buying, especially during

at night where retailers are less, consumers tend to buy C2 drinks at

convenience stores such as 711, Mini Stop and gasoline stations, which

offer a higher price reflecting the cost of convenience of having the good

closer and available round-the-clock.

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Pricing Strategy

Areas considered for Pricing

By observation, price is the element in the marketing mix that is

easiest to adjust or change. Nonetheless, this does not make this element

any less important than the other three P’s and much thought is still

necessary for creating a pricing strategy. Firms modify the price to be

able to reach an optimal mix between market share that generates

revenue and profit, which is the primary objective of a business – profit

maximization. It is important to set ample amount of time to discuss and

choose the “right” price and right pricing strategy for it is very crucial in

the marketing process. The right price should equal the benefit a

customer will obtain from the offered marketing mix. That is, the price

includes also the product, place and promotion elements of the

marketing mix. From here, the formula for sales would be, according to

Dr. Eduardo Roberto, PhD,

Sales = f(Marketing Mix)

A customer must see the price set for a product as equal, if not

less, to the benefit he expects from the product. A set price triggers a

response based on first impression, especially when consumers are price-

conscious and would not bother to know more about the entire value of

the product because of its price. Thus, marketing managers should adjust

the price depending on demand as well as the response of customers to

certain price changes.

The price of the product is something that is not fixed but rather it

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depends on several other factors, most of which are dynamic except for

the fixed cost. Aside from the price being affected by the product, it is

also a way of attracting target customers to buy the product. There are

several areas to be considered before coming up and deciding which

strategy to use.

First of is the raw materials or ingredients used in making a C2

Green Tea Apple Flavor. It is “brewed from natural green tree leaves”

and not just in powdered formula, which was the only available iced tea

in the beverage industry long before C2 was launched in the market.

Another cost that must be considered is the type of packaging used to

ensure that the product is well contained as to minimize and/or prevent

from damage and spoilage. Transportation and shipping costs must be

considered as well. Deciding on mark-up price or percentage of mark-up

and discounting strategies are equally important and must not be taken

for granted to yield a successful pricing strategy. Other factors to be

considered to determine an optimal pricing strategy are: competitors,

suppliers, availability of substitute products, and your customers.

Positioning on how the producer wants the product to be perceived by

the consumers must also be taken into consideration (Kyle, n.d.). One

must be careful not to price a premium item too low, as customers may

not believe that the product is of good quality but neither too high as

customers might purchase an alternative or substitute product.

Type of Pricing Principles Applied

C2 Green Tea was the first among to come up with a Ready-To-

C 2 G r e e n T e a | 26

Drink-Tea-based beverage. This concept was relatively new to the

Philippine consumers, thus deciding what price strategy to use is even

more crucial than usual. This is because most are likely to veer away

from a product since it is different from what has always been available

from the market or from the status quo. It has yet to be tried, tested and

recommended. This is especially true of the target market falls under the

category of the late majority and the laggards, the former need much

persuading and the latter may not be persuaded at all.

Market penetration pricing is implemented to introduce and

promote C2 in a market teeming with choices for the consumers in the

beverage industry. This type of pricing strategy sets a price at a low level

to gain consumer’s interest and establishes foothold in the market, thus

enticing consumers to buy the product. Also, this pricing strategy affirms

the classification of C2 as a shopping product. With the birth of a new

product that focuses on health conscious people, a previously neglected

market in the beverage industry, Universal Robina decided to use this

strategy to increase its market share, hence generating sales. Market

penetration strategy is very effective not only because it is a new product

but is also useful, especially in a market where there are vast array of

different beverages to choose, all of which are competitors of C2. The

efficient production of C2 led to economies of scale, hence lower

production costs. The success of this market penetration strategy was

reflected in the significant rise to a 72.6% market share in 2006 (Muralla,

2010). This type of pricing strategy enables C2 to penetrate in the

market. In addition, utilizing market penetration strategy helps in

C 2 G r e e n T e a | 27

expanding the sales of C2 in the market by cutting prices, increasing

advertising, obtaining better store and shelf position in grocery stores

and supermarkets, and innovative way to distributing the products

(Answer.com, n.d.). Thus eventually producing higher profit from the

same amount of bottled Ready-To-Drink-Tea produced.

Since there is a strong relationship between price and quantity

demanded, it is important to understand the effects of pricing on sales by

estimating the demand curve of the product. Market penetration strategy

has the objective of maximizing quantity by means of a low price. Aside

from being an innovative drink, C2 in general has an elastic demand

wherein, customers are price sensitive and the quantity demanded will

significantly increase as price declines. Also as aforementioned, a large

decrease in cost is expected to have a cumulative increase in volume

production. When C2 was launched, a number of people were intrigued

thus gaining mass appeal fairly quickly. Because of these, more and more

competitors of the ready-to-drink-tea variety are coming out in the

market to compete with C2. However, now that C2 has already expanded

its market being the pioneer of ready-to-drink-tea, it has captured a fair

share of loyal customers that will still buy C2 even if there is price

change.

There are several pricing strategies available to be used in the

marketing mix. It is to understand each pricing strategy; in the same

way, the price should be aligned with the other P’s of the marketing mix

and analyze which one will yield to a better profit in the long run.

C 2 G r e e n T e a | 28

Promotion

Promotional Objectives

C2 Green Tea was launched in 2004, approximately two centuries

after the birth of several known multinational beverage giants in the

beverage industry, among which are Coca-Cola and Pepsi. Competing

with such deeply entrenched products in the industry cannot be fully

realized with an innovative product, effective price and place strategy

alone if there is mediocre promotion involved. A successful introduction

is required for a new product to penetrate a market that is centuries old,

but for it to be a long run success it must also have effective promotion

that adapts and evolves along with the dynamic market and environment

it competes in.

Criteria for choosing a promotion method

Product Definition

C2 as a ready-to-drink-tea offers not only a better health but a

better life as well. It is a good that is specifically sought by the

consumers in the beverage industry. A shopping good that offers health

benefits not offered by some of its competitors. It is a heterogeneous

shopping good in its growth stage and falls under the star category in the

Boston Consulting Group Matrix.

Target Market

C 2 G r e e n T e a | 29

The target market of C2 are those who fall between the ages of 21

to 30 years of age, white collar female workers and have achieved a

college degree, with an income of Php. 12,000 to Php. 30,000 and often

found in commercial areas.

Message to be conveyed (Copy Thrust)

As a refreshment and a health drink, C2 ‘cools and cleans’ the

body. It is the “’Spa’ in a bottle” that rejuvenates and refreshes. It gives

you the best of life, the C2 life.

Language of the target market

Beyond the presumption that the target market understands the

English language and its syntax, is also the presumption of the lifestyle

that the target market leads. Based on the target market segmented by

demographics as well as psychographics, the target market of C2 has the

lifestyle that can be summarized by the word ‘self-discovery.’ The target

end consumers are liberated from the anchor of academic and parental

supervision. This liberation allows them to explore what it is to be older

and independent. They are old enough to be free from juvenile

restrictions but young enough to enjoy the freedom of having only oneself

as one’s responsibility. They are free from the required academic

pursuits and free to pursue a life they want to lead.

With this lifestyle, the target market is likely to be responsive to

words, signs, symbolisms and body movement—all of which belongs to

language—that is parallel to their lifestyle and they can relate to.

C 2 G r e e n T e a | 30

Advertising

Advertising Cycle and Advertising Style

As a star type in the Boston Consulting Matrix, C2 as a shopping

good is now in its market growth stage of its product life cycle. In the

market growth stage, competitors have followed the lead of C2 in the

ready-to-drink beverage industry. In order to maintain Universal Robina’s

lead in the competition and, ideally, to increase its breadth between its

C2 product and that of the competition’s, the firm must assert that its C2

Green Tea is the best in the variety of ready-to-drink-tea available in the

market. This assertion of product superiority is the objective in the

growth stage of the advertising cycle where the goal is to rouse a

selective demand from its target market that would not only move them

to purchasing but also to repeat their purchase. Selective demand is

brand insistence. This is the ideal demand when so many brands have

entered the competition. To rouse selective demand, the firm must

maintain as well as cement a healthy relationship not only with its

customers but as well as the channel members so as to keep them from

brand shifting.

C2, being a pioneer product in the beverage industry, has the lead

in the market share. Having already developed a primary demand by

advertising and selling C2 by way of product advertising and some

pioneering advertising—their tagline of ‘Tea for better life’ directed at

the non-traditional tea drinking market, they needed to anchor the

product further into the market to keep ahead of the impending

competition after their formal launching of the product. For C2 to keep

C 2 G r e e n T e a | 31

ahead of the others in the field, it must develop good relations with its

market as well as its channel members to incite selective demand. The

firm has utilized a combination of institutional advertising and

competitive advertising to achieve this objective.

For its institutional advertising, which is the selling of an intangible

or abstract product (idea, reputation, etc.), the firm has affixed to its C2

product the philosophy of the C2 Life. The C2 Life advocated by

Universal Robina is a life philosophy that transcends from pursuing a life

one wants to lead to pursuing a life lived to the fullest. This involves the

promotion of over all well being and finding a balance for the body, mind

and soul—the key elements of being.

With the entry of competitors for the Ready-To-Drink-Tea industry,

the firm has employed an indirect strategy of competitive advertising.

They emphasize the quality of the benefits C2 can give as well as subtlety

differentiating C2 from other Ready-To-Drink-Tea by focusing on the

intangible product affixed to the C2 Green Tea—the C2 Life.

In the following presentation of the promotion strategies of C2, its

stage in the product and advertising life cycle as well as the advertising

strategy can be theoretically found in other means of promotion other

than advertising as well.

Print Media

C 2 G r e e n T e a | 32

1. Hard Print Media

Universal Robina employs the Renaissance for its advertising

genre, which is well aligned to C2’s product definition. The Renaissance

is the advertising genre most applicable to food, which C2 is. In this

particular print advertisement Artvisuels for Universal Robina, the C2

bottles are centered but the background of splashing water and the bits

of fruits and tea leaves gives the image a certain depth and perspective,

which is characteristic of Renaissance.

The print advertisement uses symbol as its advertising execution

style. The splash of water behind the variants of C2 Green Tea is

symbolic of the rejuvenation that C2 can give to its consumers.

C 2 G r e e n T e a | 33

The advertising genre for this particular print advertisement is

Classical. This is apparent as the advertisement shows only a single

message that is ‘cool and clean inside and out.’

The wisps of icy cool fog surrounding the bottle of C2 Green Tea

Apple is indicative of the use of symbol as an advertising execution style

in this print advertisement. These wisps symbolize the quality of C2 that

cools its consumers and refreshes them.

C 2 G r e e n T e a | 34

Soft Print Media (Electronic print media or the Internet)

From the official website of C2, their institutional advertising of the

C2 life uses the Tribal advertising genre. This is evident with the pictures

of the models at the heading of the page, some of whom are baring their

skin, with wisps of leaves being blown around them, symbolic of a

C 2 G r e e n T e a | 35

commune with nature. In addition, the pictures between the copy also

shows a celebration of life, which is an attribute of the Tribal advertising

genre.

This electronic print media uses a Lifestyle advertising execution

style. In the copy, the phrase below points out that C2 enhances the

lifestyle of its customers—a telltale evidence of the use of Lifestyle

advertising execution style.

Considering that most of the testimonials found on the page are

detailed, it could be argued that the advertising genre used is Rococo—

characterized by clutter of too many testimonials that seem to be

C 2 G r e e n T e a | 36

unedited by the webmaster. Upon reading the testimonials, however, it

can be deduced that the genre used could also, again, be Tribal as most

of the ordinary consumers have mentioned the consumption of C2 in

relation to celebrations and the simple stories of life.

This particular page of the official The C2 Life website employs

testimonials as their advertising execution style.

C 2 G r e e n T e a | 37

The advertising genre used for this product advertisement is

Hellenic based on the symmetry of the alignment of the variants in the

picture placed at the center of the page and the copy.

This product advertisement employs the Scientific advertising

execution style. Within the copy is the scientific name of green tea as

well as the health benefits of consuming green tea.

Non-Print Media

1. C2 Life 30s

a. Advertising Genre

Based on the

background music of this

particular C2 commercial,

the advertising genre is

Tribal due to the

percussion instruments

used and the cadence of

the music. Also, the

commercial had a montage

Screen Captures of C2 Life 30s

C 2 G r e e n T e a | 38

of scenes that tells of experiences in life, such as socializing and being

commune with nature—both of which are characteristics of the Tribal

genre.

It could also be argued,

however, that the genre could

also be considered as Ethnic. The voice over relates the scenes to

the identification of the philosophy of the C2 Life—the simple

things in life made even more special with a bottle of C2 and

paving the way for a life lived to the fullest.

b. Advertising Style

The commercial uses the Lifestyle advertising execution style

for the montage of scenes show that C2 highlights even the most

mundane and routine things one does. In addition, the parts of the

montage where only one model is on screen is symbolic of the

improvement on a consumer’s well-being C2 could be, especially

emphasized with use of a maze and a swing set.

2. The Best About Life

a. Advertising Genre

The music

used in the

Screen Captures of The Best About Life

C 2 G r e e n T e a | 39

commercial, performed by the local band

Sinosikat, is of the Tribal genre since it has

a particular cadence that gives a section of

the song a distinct ending. Also, the lyrics

of the song speak of the celebration of life,

even in the most routine things one does

(refer to next page for the lyrics of the

song).

Other than the music, the montage of

scenes is also indicative of the use of Tribal

as it mostly shows groups of people

socializing (some of whom are also half-

naked) and, in some parts of the montage,

are captured with nature in the

background.

As with the previous commercial, it could

be argued that this advertisement can be

considered Ethnic as well due to its

recognition of what makes one’s life the C2

life.

b. Advertising Style

The Best About Life commercial utilizes the

Lifestyle advertising execution as it shows

that C2 enhances a consumer’s lifestyle and

can be integrated within one’s lifestyle.

C 2 G r e e n T e a | 40

Best About C2 Life lyrics

Performed by Sinosikat

Sing about the good things

The best about life

The little joys and smiles you

catch each day

The goodness that you feel,

the life you create

Sing about the good things

The best about life

La(10x)

La(10x)

Talk about the good things

Feel the goodness inside

The world is cool

When you view it through your

eyes

So many things to see

discover and love

Sing about the good things

The best about life

These days are good

These days are cool

Quiet the noise and feel the joys

Life is like an ocean

Dive right in

It's C2 cool, C2 clean

Sing about the good things

The best about life

The little joys and smiles you

catch each day

The goodness that you feel,

the life you create

Sing about the good things

The best about life

Sing about the good things

The C2 life

La(10x)

La(10x)

C 2 G r e e n T e a | 41

These days are good

These days are cool

Quiet the noise and feel the joys

Life is like an ocean

Dive right in

It's C2 cool, C2 clean

La(10x)

La(10x)

La(10x)

Lyrics to Best About C2 Life

Sales Promotion, Advocacies and Events

1. Best About Summer 2009

In the summer of 2009, C2 launched the Best About Summer

2009. The Best About Summer 2009 were a series of events held at

the several vacation hot spots in the Philippines, including Baguio,

Boracay and Puerto Galera. At these events, activities that promoted

the optimization of overall well-being were conducted, such as yoga.

C 2 G r e e n T e a | 42

2. Back to School 2009

Best About Summer 2009 Baguio

Best About Summer 2009 Puerto Galera

C 2 G r e e n T e a | 43

As earlier discussed, C2 was also able to cater to an

unintentional younger target market segment, those whose age is

between fourteen to twenty years old. Taking advantage of this

opportunity, Back to School 2009 was launched. The Back to School

series of events was held in several schools and universities, including

University of the Philippines and Silliman University. As with Best

About Summer 2009 series of events, activities as well as contests

that promoted the C2 Life philosophy were conducted, such as the

Rubik Cube contest in Silliman University.

3. Create Your Own Music Video Contest

Last August 2009, Universal Robina launched a music video

making contest. Entries were to use the carrier commercial single

of C2, Best About Life, by Sinosikat and must feature the variants

of C2 Green Tea.

Back to School Silliman University2009

Back to School University of the Philippines 2009

Awarding of winner for Create Your Own Music Video Contest

C 2 G r e e n T e a | 44

The entries submitted were similar to the ideas of the official

commercials of C2. The winning entry in particular, declared two

months after the beginning of the promotion (October 2009), also

used a Tribal genre, which was evident in the montage of scenes

showing groups of people socializing. The director of the winning

entry, Peter Ian Mancao, also used the Lifestyle advertising

execution

style. The style

was reflected in scenes as well where C2 highlights the good things

about life.

Conclusion

While being a pioneer for ready-to-drink-tea beverages, the

successful introduction of C2 Green Tea into the beverage industry,

effective place and price strategy are not enough alone to ensure that the

C 2 G r e e n T e a | 45

competitive advantage it has over its competitors would last. Neither is it

enough for C2 to become a long run success unless it is coupled with

effective promotion strategy that changes as the dynamic environment

warrants it.

The 4 P’s are interrelated to each other. They are correlated to

each other in such a way that a failure of one of the strategies in the 4

P’s may lead to the failure of the rest. Thus, careful planning of the 4 P’s

must be done and it must be based on a central marketing objective to

ensure that each element can play an effective role for the achievement

of the central marketing goal.

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