Continente

Continente: The relaunch of Private Label Soft Drinks

In mid- January 1994, reviewing the marketing plan to be presented to marketing director. The Cott product is good but there were still a lot of uncertainties regarding the marketing mix and change of supplier. How make the Continente brand competitive with the extablished brands such as coca and pepsi. It is delicate problem because failure of launching can result in jeopardize other private brand products.

1. What explains the results obtained by the Continente brand in the soft drink line

Customer already has some preferences about soft drink. Customer's perception is difficult to change. It hinder to

Advantages of Private Label(PL) are even as good quality as National Brand(NB), price is less expensive because of cost structure. However, in soft drink case, Coke and Pepsi, two big NB with good consumer's perception, are in price competition and both of them offer reasonable price. Therefore, PL is difficult to appeal better price than NB. At the same time, it is hard for PL to appeal quality difference from Price leader.

As a result Continente brand could not differentiate both of them, could not meet the expectation of customers, and failed to win share.

2. Should continente pursue the goal of increasing its private label share? What does the private label do for Continente? What does it do for the consumer?

In terms of soft drink, not only release of PL, but also promotion is required to win a share. If the cost of promotion will be lower than other advantages below, Continente should pursue the goal.

PL's advantage for Continente

- differentiate from their competitor (For example Dia)

- increase profitability (Retail margin is higher than other product)

- flexibility and independence from supplier

- apply Continente' marketing policy

- encourage loyalty to point of sale

PL's advantage for customer

- reasonable price

- more choice

3. What are the drivers of success...