What’s A Cola Product Manager To Do When Your Product Goes Flat?

by drjim on May 8, 2017

People are concerned about their health and it's hurting sales of Coke

People are concerned about their health and it’s hurting sales of Coke
Image Credit: Hanna Pritchett

When it’s hot out and you are thirsty, what do you want to drink? No, I’m not talking about a beer – let’s talk non-alcoholic drinks. Due to years and years of spending on enormous advertising campaigns, many of us instantly think of drinking a Coke when we want something cold and sweet. For years the Coke-Cola product managers have been riding a very successful product. However, now things are starting to change and their sales are decreasing. What’s a Coke product manager to do?

What Went Wrong At Coke?

One of the interesting things about being a product manager at Coke is that you are responsible for a product that is sold all over the world. Coke is truly a global company. This is both good news because a slowdown in one country should not affect your bottom line too much, but it’s also bad news because a global slowdown can have a big impact on you. For a little bit over a year, sales of Coke’s main product, Coke, have been increasing and that’s been good business. However, lately, their sales have gone flat – no growth. Sounds like it might be time to change the Coke product development definition.

This leveling out of sales is happening everywhere around the globe with the exception of Asia. It is believed that there are probably many different reasons for this loss of sales. One issue is that the global economy has become weaker due to issues like falling oil prices, etc. As the global economy goes down, so does the global sales of Coke. Additionally, in more and more developing countries people are becoming concerned over health issues such as obesity. Unfortunately for Coke, their product is associated with helping people to become obese.

The impact on Coke’s earning don’t just come from a decrease in Coke sales, although that is a big factor. The global company also has to deal with issues such as weakening foreign currencies. At the same time, the company is in the process of trying to get out of the business of actually placing Coke into bottles and delivering it to stores. It’s selling off these parts of the business and that can hurt profits as the company diversifies itself of some non-strategic money making operations. Just to make things a bit tougher for Coke, there were also fewer calendar days in the past fiscal quarter and so that hurt their numbers also.

What Should Coke’s Product Managers Be Doing?

As a product manager at Coke, there are some things that you can do and some things that you can’t do. You can’t really do anything about the value of global currencies and so you’re going to have to focus elsewhere. The good news for Coke product managers is that although Coke volumes are down, the volumes of noncarbonated drinks is going up by 7%. Now that’s something to put on a product manager resume! This is good news, but the sales of Coke represents roughly 75% of the company’s sales.

In North America, one of Coke’s biggest markets, the product managers are seeing double digit growth in a number of different non-Coke areas. These areas include the SmartWater brand and the Gold Peak tea brand. Realizing that in order to boost the bottom line, they will have to sell more Coke, the product managers have been busy. They’ve repackaged Coke into new 7.5-ounce cans and they are now selling them and charging more per ounce.

If your sales are down and you want to boost your bottom line, then one way to go about fixing things is to boost your product’s price. This is exactly what Coke has done. In the past quarter, Coke has raised product prices by 3% in their home markets. A big challenge that the Coke product managers are going to have to deal with is the possibility that in the U.K. a new tax may be imposed on sugar-added drinks in order to generate funds to deal with a rising number of cases of diabetes and obesity. Coke hopes to shift attention to their zero-calorie and diet brands during a new global advertising campaign that they are just getting ready to launch.

What All Of This Means For You

Being a product manager who was in charge of a global brand like Coke would be a real challenge. Clearly this is a popular product and a lot of people buy it every day. However, recently the sales of Coke-Cola’s flagship product, Coke, has gone flat. Sounds like it’s time to take a closer look at the Coke product manager job description. This situation is going to have to be fixed by Coke’s product managers, what should they do?

Coke is a global brand. What this means is that the product can be affected by changes in the global economy. Right now the global economy is slowing down and this has negatively affected the sales of Coke. Additionally, people are becoming concerned over health issues such as obesity and they are starting to drink less Coke. One of the big challenges that the Coke product managers are facing is that the reasons for the downturn in Coke sales are complex. Currency changes, global health issues, etc. can all have an impact on sales. In order to boost their bottom line the Coke product managers are doing a number of things. They have raised prices, repackaged the product, and they are getting ready to kick off a new global adverting campaign.

The good news for Coke’s product managers is that they have a highly desirable product on their hands. Everyone wants a Coke. Now what they are going to have to do is to get people to want more Coke than they do now+. The advertising campaign is probably a good idea in order to plant the idea of having a Coke in our heads. As the global economy improves, so too should Coke sales. Now if they could only find a way to help us drop those few extra pounds that we are dealing with…!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that Coke should shift its attention to noncarbonated products and away from Coke?

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What We’ll Be Talking About Next Time

As a product manager, one of the things that we like the best is taking on a challenge. However, there has to be a least a chance that we can be successful. If someone came to you and asked you to make a book store become successful in this day and age, would you take on the challenge? I mean, are bookstores even still around?

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