Product Mix: Key to Winning the Cola War Pepsi and Coca-Cola have stood the test of time through one of the strongest competition rivalries ever seen in the business world. Each time that one of these beverage giants makes an innovative move to conquer a new or existing beverage market, the other is quick to respond with even better innovations or products. Through the years, each of these companies have heralded fabulous discoveries and absolute flops as they continued their endless search for the right mix of products that might someday give them the largest market share in an ever-growing and ever-needed market. The results so far have been increased competitiveness and long product lines for both companies. In this essay, I …show more content…
Pepsi and Coke have also been targeting this growing consumer market in their soda lines with new innovations of low or no-carb drinks such as Pepsi Edge3 and Coke's C24, as well as reinvigorations of their already-no-carb diet drinks. So where do the sports drinks fit into this low-carb craze? The answer is they don't. Each of these sports drinks is packed with enough carbohydrates to equal a liquid potato, making them nothing but a memory for people whose daily carb intake is down to 20-60 grams.5 Thus, we have a void in the beverage market that is not being filled. Further deepening this void is the fact that people losing weight tend to be more active, craving something besides water or diet soda after their workouts. This is a perfect example of how a shift in product mix for either company could give them distinct competitive advantage. By simply creating a no-carb line of Gatorade or PowerAde sports drinks, the company will have altered its product mix and filled the market void with brand-loyal users, adding to the overall market resiliency and strength of the parent company.6 Further analysis of this product line could also reveal strong needs for having different strengths of sports drinks for different levels of activity (i.e. zero carbs for slightly active, 15 grams of carbs for moderately active, and up to 120 grams for marathon runners) enabling a kind of mass customization to ensure that the product line can suit any and all
In the early 1980’s, there was a close rival between Coca-Cola and Pepsi making COca-cola envious of the attention Pepsi was gaining on them, which made them puzzled when COca-Cola modified their formula to catch up with Pepsi in the taste
The existing concentrate business is largely controlled by Coca-Cola Company (Coca-Cola) and PepsiCo (Pepsi), together claiming a combined 72% of the U.S. carbonated soft drink (CSD) market sales volume in 2009. Refer to Exhibit 1 for an illustration of the CSD industry value chain. For more than a century, Coca-Cola and Pepsi have maintained growth and large market shares through mastering five competitive forces, shown in Exhibit 2, that drive profitability and shape the industry structure.
Energy drinks and sport drinks are two segments in the larger market of soft drinks. Contrary to popular belief, energy drinks and sport drinks do not compete against each other due to their targeting of different consumer needs. Sport drinks are mainly used for nutritional needs that arise before, during and after physical activity. Sport drinks are based on the oral rehydration therapy, which requires drinking a concoction of water, sugar, and salt for the purposes of rehydration (Cohen, 2013). Although a niche product, sport drinks are beginning to enter into the mass market, where consumers are now purchasing sport drinks for regular consumption unassociated with physical activity. Experts project that the sport drink industry could grow to more than 9.3 billion dollars by the end of 2017 (Cohen, 2013). However, consumers are becoming to a small degree unsatisfied with the recycling of old formulas when it comes to sports drink. Consumers now want sport drinks to have a low calorie count as well as infusion of vitamins and protein. Gatorade recently launched a product line that incorporated whey protein into their drink formula, however, the product extension launch was deemed as unsuccessful due to lack of product awareness.
Firstly, the author introduces the history of the Coca-Cola; and how the brand is successfully developing into the most popular brand and ruling the soft drink world by outstanding products, good leadership, correct strategic decisions, completely distribution system, significant culture accomplishment, impressive marketing campaigns and publicities. But, they also had several problems in the 70s, which result in losing the market position at retail. At the same time, Pepsi, as the main competitor of Coca-Cola, started to make inroads by successfully launching the “Pepsi Generation” and “Pepsi Challenge”. Those kinds of efforts led to a rapid increase in Pepsi market share and strongly hit the brand image of Coca-Cola. Because of the severe situation, the leaders of Coca-Cola decided to change the formula of old Coke with marketing research supporting. So, the New Coke with a smoother and sweeter taste had been launched in April 1985. But out of expected, after launching the new taste soon, many customers boycotted the New Coke, and the market share of the company still decline. The company had to re-launch classic
They are always attempting to gain market share, by consuming many compact beverage companies to appeal to the people. This paper will discuss the history over time between these two industry giants and how they are economically at this point, and how supply and demand effects this industry. There are two extremely famous beverage companies, Coca-Cola and Pepsi, have competed fiercely for the beverage market profit for many decades. In the free market, it is complicated to perfectly tell which drink is the winner within the ideal competition, because both companies use unalike style of commercials and merchandise to expand their markets. Personally, I believe that Coca-Cola earns a
For the first 12 years after Coke’s creation, it reigned supreme, having no competition until Pepsi’s creation in 1898. As Pepsi was taking its first steps as a company, Coca-Cola was already selling a million gallons of Coke a year (Bhasin 2013). Despite the late start into the soft drink market and filing for bankruptcy in the 1920’s and 1930’s; Pepsi has managed to keep up with Coca-Cola. 90 years after the creation of Coca-Cola and Pepsi, the 1980’s came around and was the period that started the cola wars. The cola wars were a period in which both companies targeted television advertisements to drive their profits up at the expense of attacking the other.
The Coca Cola company is perceived to be the most famous trademark on the globe, and it is equally so. The company claims more than 400 brands that appeal to a wide range of individuals throughout the world. They are in a position to fulfill needs of every one of their buyers making their experience with their beverages a better one. The entity’s drinks entice a lot of people across all races, age, and gender. Coca Cola is outstanding for its overall popularity as its items are sold in over four hundred countries in the world, while major contenders like Pepsi are just available in very few countries. Such a competitive advantage has placed
Global Domination: Establishment and product sales all over the globe show that the future for Coca-Cola will only keep growing in sales and supremacy of the soft drink market
The 2 companies already strong brand equity, increasing marketing budget for their flagship brands and constant innovation (e.g. freestyle soda machine) should retain customers’ loyalty. By diversifying their product portfolio through new acquisitions and introduction of a variety of new CSDs such as diet products that already proved their profitability and non CSDs, the two companies should be able to respond and adapt to the customers changing demand and preferences such as increasing health concerns, rising interest in sports and nutritional drinks. The international market remains a key opportunity for Coca cola and Pepsi to sustain and increase their profitability. Even though Coca Cola is already a leader on the international level with 80% of sales in contrast with roughly 50% of sales for Pepsi, many foreign untapped markets are still far from being saturated and constitute a good profitable business, especially within the rising economies in Asia, Africa and the Middle East as growth means higher purchasing power. Finally, the two companies’ consolidation of their bottling system again in 2009 should cut down operating costs and increase
Coca-Cola is the largest non-alcohol beverage manufacturer in the world, which holds approximate 43% market share. The firm is also ranked in top 20 in the Fortune 500 in terms of the largest capital with over 100 billion dollars in assets. John Stith Pemberton is the founder of the firm, which is headquartered in Atlanta, Georgia. During its 100 years of history, Coca-Cola has grown its businesses substantially in the globe. Currently, the firm presents over 160 countries, including China, India, Japan, and South East Asia countries. The main objectives of the firm that is it can serve its products to all consumers in the globe, and expands its businesses to the majority of strategic regions. In order to grow and expand its present to the other major markets, Coca-Cola executes its marketing strategies based on three different categories, including price, place, partnerships, and core products. These marketing methods have supported Coca-Cola to sustain, and grow in the soft drink industry.
These two-company’s economic characteristic include their market size and growth rate from the early 2000’s to 2010. Coke and Pepsi have struggled for years in the carbonated and non-alcoholic sector. According to Barbara Murray (2006c) "But as the pop fight has topped out, the industry 's giants have begun relying on new product flavors and looking to noncarbonated beverages for growth.” (Murry, 2006). For instance, Coke boasts in the advertisement as the king of the soft drink; as a consumer of both products, I agree. About 15 years ago, I was selected to participate in a critiquing of Coke and Pepsi products. Additionally, my travel to Africa in 2007 and 2010 provided the same raving review for the Coke Cola products. Apparently, Coke and Pepsi have been rivals for ages locally, regionally, nationally, multinational, and globally, therefore, one expects them to have an on-going rivalry when marketing the high-energy beverages.
For more than a century, Coca Cola and PepsiCo have been the major competitors within the soft drink market. By employing various advertising tactics, strategies such as blind taste tests, and reward initiatives for the consumer, they have grown to become oligopolistic rivals. In the soft-drink business, “The Coca-Cola Company” and “PepsiCo, Incorporated” hold most of the market shares in virtually every region of the world. They have brands that the consumers want, whether it be soft-drink brands or in PepsioCo’s case, snacks. With only one soft-drink market, the two competitors have no choice but to increase sales by stealing the other competitor’s clients. This led to the term, the “cola wars” which was first used
Coca-Cola is the result of a patent medicine formulated in a small southern pharmacy over a hundred years ago. It has grown into a multibillion dollar international company. It also owns one of the most valuable brands in the world. Their Coca-Cola banner has won the world’s top brand 13 times on brand c-consulting firm Interbrand’s annual list (Fraser, 2012). In addition to its main product, Coke, the company owns over 3500 beverages. One of its core competencies is brand building. They have built their brand to have respectability and dependability. Their brand and logo are recognized all around the globe. It has actually become a new known on almost all households worldwide (RNWILKIN, 2009).
As the titans of the soft drink industry, Coca-Cola Enterprises Inc. (Coca-Cola) and PepsiCo, Inc. (PepsiCo) battle daily for consumers’ tastes buds. Each day, consumers choose to enjoy brands from one of these two companies. So much so, that Coca-Cola states, “There are nearly 10,450 soft drinks from Coca-Cola consumed every second of every day including Diet Coke, Fanta and Sprite” (Coca-Cola). This ability to capture the market has also fueled Coca-Cola and PepsiCo’s longevity for over 100 years. To put this in perspective, Fox News illuminates that PepsiCo was, “One of the first companies in the U.S. to do away with the horse-drawn carriage method of transporting product…” (Tierney).
A great question arose in the 80’s as a constant innovation and aggressive behavior arose towards brand building. Pepsi, a brand that suffered two bankruptcies, pushed forwards towards their growth as the company by expanding their portfolio as a Food and Beverage Company. As it became a food and beverage company, Pepsi was able to become the Coca-Cola’s main competitor. Each company constantly competed and tried to outdo each other with their campaigns. While both brands competed with each other, Pepsi began to target Coca-Cola’s commercials causing Coca-Cola to respond with the same aggressive behavior creating the beginning of the Cola Wars. The Cola-Wars brought forth a great question that made one wonder if either Coke was better than Pepsi or if Pepsi was better than Coke? Based off the Cola Wars, the best soft drink producer is the Coca-Cola Company.