Coca-Cola Company - Evaluation of the Coke Soft Drink Design and Development Process - Assignment Example

Product design and development) Assignment Name: Student ID: Due Date: Title: Analysis and evaluation of the coke soft drink design and development process. A product of a Coca-Cola multinational Company. (2012) INTRODUCTION This project will highlight the basic principal of product design and development with a clear focus on the design and production of the Coke soft drink, a product of the Coca-Cola Company. Various stages of product design and development at the Coca-Cola Company will be discussed at large. Each stage of the project will be explained with examples on how the Coca-Cola Company does it. In concept development, the paper will look at how the Coca-Cola Company identifies customer needs, establish target specification, analyze competitive products and generate product concept. It will also elaborate on how the company refine product specifications and perform economic analysis. There will also be a clear explanation of system-Level Design, Detail Design Testing and Refinement and the Production Ramp-up where the paper will show how the company train the work force and align them in the production setup and also identify any remain problems. DEFINITION OF TERMS i) Product development This refers to a process of making a new product to be marketed by a business organization to its clients. ii) Design Design refers to the processes involved in making the distinctiveness or general image of the product. It gives the product a shape or architecture that makes the product what it should be. iii) Development Development on the other hand refers to the overall collection of processes of identifying the market openings, creating products that conform to the market needs of the identified customers, testing and modifying the product until it meets the intended customers. iv) Product A product is basically an item produced by an organization for the purpose of marketing to a given identified niche. Examples include engineering products, computers, washing machine, books and musical instruments among others. BACKGROUND INFORMATION The Coca-Cola Company is one of the beverage companies that manufacture, distribute, and market the soft drink that is non-alcoholic. The Coca-Cola drink was invented by a pharmacist called John Stith Pemberton in the year 1886. it has more than 200 bottling franchises worldwide; the company’s headquarters in Atlanta, Georgia. Thomas and Whitehead in 1899 acquired a license to put on the market a product called Coca-Cola. In the year 1901, having no capital to launch their own manufacturing plant, the two hatched a better solution which was to award Coca-Cola product to franchises with massive techniques and plants for production. Though the Thomas-Whitehead collaboration broke within one year, their prudent idea of franchises was a massive success. By the year 1919 there were more than one thousand franchised Coca-Cola bottling companies. The franchise bottling prototype created by Thomas and Whitehead conveyed Coca-Cola to an enormous market. The company hence fully uses franchised distribution system where the Coca-Cola Company only produces syrup concentrate which is sold to various bottlers throughout the world. The company also enjoys trademark that is recognized worldwide, irrespective of the language printed on the bottle. The Coca-Cola Company logo for 1940 Being the best beverage producing and distributing company, the Coca-Cola company has been very successful in the global market. Market analysts have associated the success to variation and diversification of product market. Product development However much the company enjoys market monopoly, there must be continuous tailoring of mark plan and development of products to ensure customer needs, tastes, expectations and believes are met. According to Sudharshan, D. (1995), Product development is the process of harmonizing assorted functions within a project to develop, design, and markets a new thriving product. The term product refers to an artifact produced and sold by a company to its consumers. It is basically that which can be offered in the market to the consumers because of its ability to give them the benefits and all the satisfaction they need. Why product development? To initiate a new product to the market especially that which was being sold by another competitor. Add a new feature, quality or technology to the existing product that has been improved, enhanced or certain ingredients added and retains the name, To introduce a new brand name with separate identity or a company can have a new brand name as a brand extension. To create a new product by adding or subtracting an element from an existing product For instance the Coca Cola Company subtracted the calories when it created a brand extension entitled Diet Coke. It also added vanilla taste to produce Vanilla Coke. When a company is improving a current brand, there can be changes to its product in some way to increase sales to the current customers. Product development is thus applied to the existing customer base by inquiring if there are any areas of that market that can be healthier provided with a new brand. Product development has a series of activities that transforms the product idea into end product. New brands are conveyed to consumers via product development processes. There are several product development processes proposed by different scholars. Ulrich & Eppinger (2000) highlighted product development processes in six phases. These are:- Planning, Concept development, System-level design, Detail design, Testing and refinement, and Production ramp-up. PHASE ZERO: PLANNING: This is done before the project approval and launch of project development process, it deals with:- Mission approval At the Coca-Cola Company a product idea is selected by a team of staff, the staff members generates the first product conceptproduct conceptDescription of what a new product will look like and how it will work. that depicts how the new product will be like. Corporate strategy Coca-Cola Company employs a formal management process based on a stage-gate model where there is a string of project gates in the course of the product development project. In this model the stage is a time which work is carried out whereas a gate is the point at which decision is made. Therefore every gate is preceded by a stage. For a project to enter in to the next stage a gate has to close or open. Therefore gates in the product development process act as quality control points. At the gate there are various options that can be taken. This includes:- Gates open to allow for proceeding. This is a positive decision. There can be suspension; Gates can return the project to the same stage; There can also be termination especially when the gate keeper do not make a decision; Information gathering When the company observed that the coffee consumption was going up worldwide at all levels, it decided to enter the same market. It was through this research that enabled the discovery that there was a niche on the global level hence Coca-Cola Company decided to partner with Illy company; the Italian coffee producer. Identification of Market Competition Coca-Cola Company identified the previous and present competing products and through research it positioned its product by plotting all related products in both internal and external markets. Research shows that most people have so far favored other products such as tea, bottled water and some energy drinks more than soft drinks. This is a great threat to Coca Cola Company given that the challenges are increasing hence the number of industry competitors increases. The major competitors therefore are PepsiCo, Unilever and Nestle. Assessments of technology development Coca-Cola Company has state of the heart technology where processes are homogeneous with standardized products and manufacturing processes. This has enabled the company to have and maintain the vision of the coke drink retained at its original taste allover the world. Assessments of customer needs and preferences The success of every organization will depend on its capability to recognize the customer needs that have not been met and to develop products that will be able to meet the identified needs at a lowest possible cost. At this company, the product development team discusses with both employees within the company and potential customers to come up with the customer needs and expectations. The company has been able to maintain customer preferences because the soft drink design has not significantly changed in history, these ranges from the company logo to the contour bottle. The exclusive and consistent distinctiveness have maintained a sturdy product icon which has broader global appeal. Therefore efficient product development will lead to quality product that will be profitable and exceed customer expectation in any company. PHASE 1: CONCEPT DEVELOPMENT Coca-Cola Company product development team at this phase generates and evaluates the product concepts and identifies the target market. Idea generation and concept evaluation The product development team brainstorms the different designs of the proposed product looking at the specification, production process, general appearance and acceptable quality standards to be met. Identification of target market needs Here the product development team will also have to research on the product market to identify competitors and competing products already in place. The target market of Coca-Cola Company is all the consumers in various nations worldwide. People that have need to quench thirst with a high quality drink from recognized brand. Though the company product Coke branding and strategy is world wide, the execution depends on what each local market needs and is deemed to be the best. The advertisement in 1886 on “Drink Coca-Cola" and the ‘Live on the Coke Side of Life’ in 2006 made use of the elements from the local market. Similarly on the product aspect, Coke bottles shape and packaging cans contains the target nation local language and also the size has been matched with the other drinks bottles in the target nation. Alternative product concepts generation and evaluation The data gathered during this process results in product concept with several alternative models pinpointed. The several concepts are then subjected to potential customers with a view to get feedback on the concepts and best alternative. The team will finally decide on the overall product concept for further development and testing. PHASE 2: SYSTEM-LEVEL DESIGN: At this phase there is system specification review which involves analysis and experimentation. It includes definition of the product architecture, break the product into subsystems and components, completion of initial feasibility evaluation of key subsystems an finally completion of staffing requirements and assignments. Definition of the product architecture In the Coke formula and processing, the real formula for the Coca-Cola natural flavor is a top company trade secrete. The product formula document is in the custody of SunTrust Bank's vault in Atlanta. It is also designated that only two directors have access to the formula, where each director has only half the formula. The product formula produces syrup that is sold to the bottling companies worldwide. The various Bottlers Companies will then produce the ultimate Coke drink by combining the syrup with filtered water and sugar, the mixture is then carbonated and bottled. Break the product into subsystems and components The company has over 400 products worldwide with more than 200 bottling companies distributed all over the globe. Some of the product major subsystems and components include concentrated syrup, filtered water, sugar, carbon and the famous contour bottle. The Coca-cola contour bottle grammar Coca-Cola as a multinational company has successfully developed a packaging product for the worldwide market. This is the Coca-Cola bottle. According to Chau et al. (2004) An Integrated Architecture was used to manufacture a feasible product shape that matched the Coca-Cola brand distinctiveness. The evolutionary algorithm was a result of a combination of customized sub-functions of evolutionary algorithm which includes recombination, mutation and selection procedures. The Coca-Cola Company contour bottle Representation was a rule numbers combination that is reference number in integers and their allied parameters. This lead to the configuration of the Coca-Cola bottle shape grammar that gives information on precise bottle segments, uniqueness of the figure and outline in each segment, and the associations between segments. The evolutionary algorithms therefore spawned a product design that matched the rules and met the functional requirement of the Coca-Cola bottle. Completion of initial feasibility evaluation of key subsystems Since developing a product needs much time and money, there is a lot of pressure always to ensure the project brings successful product and also get the new product to the market at its prime time. If this is not done the whole process will cost the company a lot of money. Thomas and Whitehead in 1899 got the license to start Coca-Cola product. Since there capacity to run the company was not possible due to starting capital problem in the year 1901, the two hatched a solution to award Coca-Cola product to franchises with massive techniques and plants for production. It is for this reason that Coca-Cola Company enjoys large economies of scale by running competent franchising system all over the world for bottling function. Complete staffing requirements and assignments In the Coca-Cola Company, for every stage in the product development process, there is proper coordination, this will help to provide a master plan for the processing team members to understand the actions to take at every level of production especially on whom to exchange data and materials. PHASE 3: DETAIL DESIGN: At this phase there is development of marketing plan, choice of materials and the full specifications of all components development. Marketing plan development The real production and distribution of the Coke product adopts a franchising model. Here the Coca-Cola Company just produces a syrup concentrate, this syrup is then sold to bottlers worldwide, and the bottling companies hold Coca-Cola franchises for one or several geographical region. The various Bottlers Companies produce the ultimate drink by amalgamating the syrup with filtered water and sugar, the mixture is then carbonated a put in bottles and cans. The bottled product is then sold to distributors, retailers, restaurants and food joints and vending machines. Choice of materials As the company chooses materials for production, there are instances where certain ideas can be left out not because they are not good but because they are too costly. This is trading off. There is also the aspect of time pressure; since developing a product needs so many crucial decisions made within the shortest time possible, the company sometimes makes fast decisions in order to meet market demands. Full specifications of all components development For uniformity and reliability of the Coke product, the Coca-Cola Operating Requirements (KORE) has been put in place to govern the Coca-Cola system. This is a management system that enables the Coca-Cola system to tackle the shifting business scenery and support the Company's planned growth by generating an integrated quality management program which holds all the company’s function and set the same standards for manufacturing and supply of the Coke product. Test Plans and Quality Objectives Development Coca-Cola Company takes a kin look at quality assurance by ensuring production process follows the prescribed process. The company does not actually control the whole distribution channel but instead it has put in place firm governing principles for the entire distribution channel. PHASE 4: TESTING AND REFINEMENT: At this phase the company does the production approval and test and evaluation. This involves facilitation pf field testing getting feedback to refine the product concept and finally build-test-fix-document cycles until the product meets the predetermined specifications. The coke brand has had a series of testing and changes for the las 150 years. First there was the New Coke, this was reformulated from Coca-Cola and introduced in 1985 by Coca-Cola Company to replace the old Coca-Cola. Then it came the Coca-Cola II which came as a result of the New Coke not having met customer expectations. The brand was simply called The New Taste of Coca-Cola but in 1992 it was renamed Coca-Cola II. There are also other changes that have occurred. In 2007 Vanilla Coke replaced the Coca-Cola Black Cherry Vanilla. PHASE 5: PRODUCTION RAMP-UP: This phase involves the refine functional specifications where the production team makes the product using the intended production system, workforce is well trained to handle the same and finally the team works out any remaining problems in the production processes. Coca-Cola company product development has some threats, for instance when the company employ product development strategy for a new brand name, the brand can result in the trouncing the whole meaning for the original product hence cannibalizing the original brand. It is therefore very crucial to understand the customer needs and perceptions. The American market of the new coca cola brand called Coca-Cola classic was a market failure, this leading to the return of the original coca-cola formula. CONCLUSION Product design and development is a very significant exercise in any organization that values its customers. Customers are all over the world demanding for high-quality products that are diverse. The clients needs are also shifting so fast due to the state-of-the-art technology. At the Coca-Cola Company the stage-gate model has been adopted to implement the product design and development process. It is for this reason that the Coke product has been in the market for the last one hundred and fifty years. The company using franchise bottling companies is now able to serve a global market that is expanding so fast. Any company that needs to succeed in consistently maintaining its customers and exceeding their needs has to implement an efficient product design and development process. References Chau, HH, Chen, X, McKay, A and de Pennington, A: 2004, Evaluation of a 3D shape grammar implementation, in Gero JS (ed.), Design Computing and Cognition '04, Kluwer, Dordrecht, pp. 357-376. "Coke A Cola." 123HelpMe.com. 13 Apr 2012 accessed from http://www.123HelpMe.com/ Gale Encyclopedia of US History Encyclopedia of American History 2006 by The Gale Group, Inc. Karl Ulrich and Steven Eppinger, Product Design and Development, 2nd ed. (New York: Irwin McGraw-Hill, 2000), 3. Oxford Dictionary of Modern Design A Dictionary of Modern Design. 2004 Oxford University Press. Sudharshan, D. (1995), Marketing Strategy: Relationships, Offerings, Timing, & Resource Allocation. Englewood Cliffs, NJ: Prentice-Hall, Inc. 1995. The Coca-Cola Company. (2006). Retrieved April 14, 2012, from http://www.thecoca-colacompany.com and http://www2.coca-cola.com/ Xue, Haifeng. (2001). The Multinational corporation whole world study. Nankai manages comments, Vol. 6, No. 12. Read More