Soft Drink and Coca Cola

The product will appear custom made for the market segment that we have mentioned. The next step will involve carrying out advertisements, with proper marketing, ad’s, local coupons and advertisements everywhere that sells a soda. The advertisements should be mostly in fashion and entertainment magazines, not to mention facebook advertisements and other social outlets that have pop up ad’s. This is because most of our target clients prefer such magazines as opposed to Wall Street Journal. The next step will involve positioning the product in the market. Customers should be able to access the product with ease and convience. The products should be stocked in shopping malls and departmental stores in the market. Better yet lets construct an

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

The industry is predominantly led by three companies; Coca Cola, Pepsi, and Dr. Pepper Snapple Group (also commonly referred to as RC or 7 UP by consumers). Each of these companies has strong players in multiple beverage categories. Furthermore, there is numerous other store, local, and regional owned brands depending on where you are. This creates a high number of substitute products throughout the beverage industry in all its categories. For example, in a typical carbonated soft drink aisle at Walmart you might find up to nine different brands of each beverage flavor. Interestingly, at Walmart each brand will tend to have a different price point. However, if you go to Target you may only find three brands per flavor and typically they are priced in line with one another. The high number of available substitutes often leads to a pricing war. When companies compete on price, often the consumer wins. The result of interpreting that competition is a learned behavior by consumers to be sensitive to temporary promotional pricing. Ultimately, the high number of available substitutes makes the beverage industry elastic in short bursts throughout the

Since there are a wide range of products available, the pricing for both Coca Cola and Pepsi is done according to the Market demands and the geographic segment and thus both the products pricing are set around the same level. Neither of the brands can win if they enter into a price war, simply because the cost of manufacturing and transportation is huge. The advantage to either of the companies was if they enter into a brand war. Since, Coca Cola always had competitors constantly driving them to be smarter, better and faster and since they were successfully been existing for more than a century, they have had to remain consistent with their pricing strategy. Throughout the years, Coca Cola has made many pricing decisions, but eventually the ultimate goal is to maximize the shareholder value. Coca Cola uses lower price point to penetrate new markets to face competition and also to raise brand awareness. This strategy is strongly implemented till it repositions itself as the Premium beverage as compared to its competitors.

As we all go about our day, we rush to place to place. Around us there are things for sale, people everywhere trying to make money. As we are rushing around, we all tend to get thirsty as we have a thousand things going on. In America we have dozens of choices when it comes to soft drinks, although the two most widely known are Coca-Cola and Pepsi. Many are often stuck between choosing Coke or Pepsi; even though they are slightly different in appearance, taste, and price it makes a world of difference to the customer.

The Concentrate Producer industry can be classified as a Duopoly with Pepsi and Coke as the firms competing. The market share of the rest of the competition is too small to cause any upheaval of pricing or industry structure. Pepsi and Coke mainly over the years competed on differentiation and advertising rather than on pricing except for a period in the 1990’s. This prevented a huge dent in profits. Pricing wars are however a feature in their international expansion strategies.

One of the external factors that have an effect on Coca-Cola is the newer technology. People know that Coca-Cola first provide their product in a form of a fountain drink. It has a fixed ingredient ready for people to get some ice and get Coke from their fountain. But with the advances in the technology today, Coke has invented a new Freestyle soda machine that allows people to create a custom beverage for themselves. Their new machine benefits Coca-Cola because it can shake up the market. It gets people to become curious and want to try it out the new machine. This is an opportunity that could boost the sales for coke and their other fountain drink products.

Coca Cola has differentiated its product and services that are valued by its customer. Its product are based on customer’s preferences, with affordable price and made easily accessible.

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

Along with streamlining their procurement and supply chain processes. (http://www.informationweek.com/news/global-cio/showArticle.jhtml?articleID=17700199) One of the biggest benefits to this will be that Coca Cola Enterprises will be able to enhance the support they provide to associates in the marketplace and ultimately the customer directly. Another benefit is that Coca Cola Enterprises will more easily be able to use the information from everyday logistics activities and not only enhance the supply chain, but customer service also. COCA COLA ENTERPRISES will also be able to more actively interact between the back end and front end of their bottling company without any difficulty. (http://www.crm2day.com/content/t6_librarynews_1.php?news_id=109461)

Coca Cola choose the Product Line Pricing, which sets the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors’ prices.

The pricing technique of Coca-Cola has supported the firm to compete and grow in the soft drink effectively. The volume discount and pricing penetration are the vital aspects to provide the firm generates its sales in the market. For instance, Coca-Cola partners with large supply chains such as Costco, Sam’s Club, and Walmart to provide great discount pricing in order to generate its sales substantially in the U.S and the global market. Equally, the firm also distributes its

Coca-Cola is the number one non-alcoholic beverage in the world and is also the golden standard in the beverage industry. Over the pass decade carbonated beverage sales has decrease which has lead Coca-Cola to seek for new opportunity and investor. Contribution of US soda sales in Coca-Cola’s revenue could decline to less than 15% by 2020. By the end of 2017 Coca-Cola is looking to refranchise two-thirds of its bottling territories in North America. The outcome of Coca-Cola refranchise two-third of its bottling territories will reduce the revenue to Coca-Cola sales of its products, however the operating margin will increase. Also, this could reduce the percentage contribution by the U.S to Coca-Cola overall revenue.

Coke was a company ruling the markets before Pepsi entered. Earlier the price of coke was cost based i.e. it was decided on the cost which was spent on making the product plus the profit and other expenses. But after the emergence of other companies especially the likes of Pepsi, Coca-Cola started with pricing strategy based on the basis of competition. Nowadays more expenses are spent on advertising rather than on manufacturing.

The global beverages industry is currently a low-growth market, with an expected compound annual growth rate of 5.7% between 2017 and 2025 (Grand View Research 2017). Additionally, the industry is quite saturated with firms that offer increasingly differentiated products. However, due to this low growth rate, companies have been engaging in price competition to gain competitive advantage and increase their market share. Nevertheless, Coca Cola is a dominant force in this market, controlling 40% of the industry, and is therefore at a low risk of losing its position.