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Cola wars continue: coke and pepsi in the 21st century summary
Cola wars continue: coke and pepsi in the 21st century summary
Cola Wars Continue: Coke and Pepsi in 2010 case solution
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Our American market when it comes to snack foods and soda have ballooned into a billion dollar business with more choices than there are consumers. The problem is it is only a few different manufacturers who are making all of these different brands and flavors. Throughout the 80’s we had a very entertaining marketing ploy where Pepsi and Coke slugged it out in what was called the cola wars. Although these two soft drink giants have claimed most of this market there are other smaller companies who pop up every now and then with new products and unique marketing strategies. New drinks such as Fanta, Gatorade, and Snapple showed promise only to have them scooped up by Coca-Cola, PepsiCo, and Dr. Pepper respectively which pretty much speaks for itself. Its either be …show more content…
Jones Soda started out with a strong cult following with American youth, especially alternative driven teens who liked specific activates like music and skating. The company sold its product bottle by bottle and offered unique bottles with sent in photos of its customers which targeted a popular marketing strategy which I like to call the “ME” market. By getting its unique flavors out into a more alternative market like Seattle and offering free bottle and other prizes, Jones was able to slowly pick up sales by finding its niche in a specialty soda market. With success comes ambition to grow and I feel like Jones wanted to be more than a specialty item so the company decided it was going to go national and try to compete with the big boys. By doing this the company had to redesign its marketing as well as its products to offer price breaks in bulk sales. To make product placement more common with big box stores Jones had to go from glass bottles to cans and pray on the fact that a lot of consumers had heard of them. It didn’t go well as indeed consumers had heard of the product but that didn’t mean they tried or liked the product. The reasoning behind this marketing and production change
Coca-Cola and PepsiCo, for example, are the leading companies in the soft drink sector highly outselling the competition. With an ‘ever-new-launching’ strategy of actually very little differentiating products they try to touch many different target groups – the ‘size’ itself, makes them ‘main-stream’.
Coca- Cola has always been popular with America and in the 1950s; it became the main soda to drink during the 1950s and also the golden age for the product. One glass of Coca- Cola was only five cents. The soda was a symbol of social status. If you wanted to be refreshed and satisfied, then you have to drink Coca- Cola. Celebrities, actors, athletes, workers, kids and even Santa Claus had to have Coca- Cola in their hand. With the boom of television in households, Coca-Cola became more popular because of the advertisements contain relaxing and being comfortable with the soda in their hand. It became so appealing that Time’s Magazine stated that, “It is simpler, sharper evidence than the Marshall Plan, or a voice ...
Coke continuously out-stands Pepsi, even though they share a very similar taste and colour, however Coke should not be the drink that receives all the love and attention for what it offers. Despite their similar soda colour, the drinks actually contain some different ingredients, which produce a different taste, and affect the body differently. Furthermore, the way the companies markets their drinks makes a huge contribution to how successful their products will become. The major element for success however stems from their impact on society and how the companies utilize their social power to evolve. The two major soda companies are constantly head to head with one another, yet it is what they do that sets them apart.
The beverage industry is highly competitive and presents many alternative products to satisfy a need from within. The principal areas of competition are in pricing, packaging, product innovation, the development of new products and flavours as well as promotional and marketing strategies. Companies can be grouped into two categories: global operations such as PepsiCo, Coca-Cola Company, Monster Beverage Corp. and Red Bull and regional operations such as Ro...
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten brands sold. Colas are the dominant flavor in the U.S carbonated soft drink industry; however, popularity for flavored soft drinks has grown in recent years. The changing demographics of the U.S population have been an important factor in the growing popularity of these flavored soft drinks. The possible impact of this factor will be addressed later in the case.
Coke isn't doing away with its soda cans or plastic bottles. Rather, its test-marketing the aluminum containers as a new packaging option. The beverage marketer also hopes the new, sleek look will attract more younger consumers who are always looking for the next new thing, along with more higher-income, upscale consumers who are into style.
Although produced by main market players, soft carbonated drinks cost more than similar products from local and private label manufacturers, consumers are willing to pay an extra price for the name, particular taste, and image. Fierce competition in the CSD industry forces Coca-Cola and PepsiCo to expand into new and emerging markets which present high potential for the company’s development. However, some foreign markets proved to be highly competitive. Coca-Cola Company’s operations in China faced antitrust regulations, advertising restrictions, and foreign exchange controls. iii.
The “rock and roller cola wars” refers to the battle for supremacy in the market share between the Coca-Cola Company and PepsiCo since the 1980s. Both of the companies hired musicians and celebrities to promote their drinks in TV commercials. Paula Abdul, a 18-year-old girl who is rising to prominence as a highly sought-after choreographer at the height of the music video era, appeared on the face of Coke. While Pepsi had Michael Jackson, who became a dominant figure in popular culture for over four decades.
Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share.
Pepsi Blue was first test-marketed in Bahrain for three reasons: first, the majority of residents drank Pepsi; second, regional marketers and bottlers had already begun re-evaluating the effectiveness of the company's white logo (which didn't work well in their market); and third, the city was a small test market with a tightly controlled sample population. The Pepsi Blue logo, tagline and new marketing materials were rolled out in half the market and its results were highly successful. Purchasers liked the new logo design and the majority believed that the packaging had improved and the taste remained the same. For those who believed that both the taste and packaging were different, the majority enjoyed the "new" taste.
How has the competition between Coke and Pepsi affected the industry’s profits? Can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-carbonated drinks? The soft drink industry is a highly profitable industry and its success is due to the large consumption of non-alcoholic beverages through which both concentrate producers and bottlers are profitable. Given the U.S. Industry Consumption Statistics, Exhibit 1, it is clear that, after deducting beer and wine, soft drinks account for about 90 % of the total liquid consumption, while Coke and Pepsi account for about 75 % of the soft drink industry. The high consumption of CSDs is related to the soft drink industry selling to consumers through five principal channels: food stores, convenience stores, vending, fountains and others.
PepsiCo is one of the most recognized names in the snack and beverage industry, with brands like Frito-lay, Gatorade, Tropicana, and Quaker, however, it is best known for its flagship soft drink brand - Pepsi and its rivalry with Coca-Cola. To begin, PepsiCo first caught my Interest in the way it manages its business and markets its products. PepsiCo being a relatively young company compared to its rival Coke, has proven to be a formidable opponent going “head to head” with one of the biggest companies in the world (Coca-Cola). Now, when I notice PepsiCo’s growth, the first thing that came to my mind was that it is thanks to its great marketing campaigns, that Pepsi has grown to become the globally recognized brand that it is today. I also admire PepsiCo because I think the there is a high level of entrepreneurship in the way they acquired smaller brands like Gatorade thereby eliminating their competition before they become competition.
By successfully introducing Diet Coke the Coca Cola company extended its parent product i.e. Coca Cola through secondary brand association. The parent product Coca Cola was familiar with the consumers and they were really interested in something new that was offered by the company which was an extended version of the existing product. The most beneficial aspect of this extension was the company was promoting its new product along with its existing product with minimal additional expenses on the marketing campaigns. The company already had a vast distribution network which made easier for the company to reach maximum number of consumers across the globe (Pendergrast
The “Top Challenge Trend” is likely that of “Faster Pace of Innovation” causing increased competition due to lower barrier of entry. (Carpenter, Bauer, & Erdogan, 2012) With the increase competitors from both major competitors like PepsiCo vs generic branding of sodas at cheaper rates. The market is flooded with new flavors and new competitors all the time.
Coke and Pepsi have been raging war for over a century now, turning their sodas into a multi-billion-dollar industry. Coke has been able to drive more earnings for its bottom line, and while Coke’s net income has been trending downward in recent years, it manages to stay ahead thanks to superior margins. Pepsi, on the other hand, has produced consistent net profit margins of around 10%, while Coke margins have been in the 15-18% range for the past several years (O’Brien). Every company has a Market Cap, which is basically a fancy way of saying how much the company is worth, and Coca-Cola’s market cap is a whopping $180 billion. Pepsi’s Market Cap is $150 billion, which may not seem like a big difference, but $30 billion is a lot of cheddar. Therefore, Coca-Cola owns 51% of the soft drink market, whereas Pepsi only owns 22% of it. Coke claims to own a total of 35 different brands, including Fanta, Sprite, Powerade, Vitaminwater, and many others. Pepsi owns 22 different brands, including 7up, Gatorade, and Mountain Dew “Coke (Coca-Cola) vs Pepsi - Soda