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The Coca-Cola Company and PepsiCo.

The Coca-Cola Company and PepsiCo. Kyle Webb Drew Wieland Ashley Whitehead. Introduction. The Coca-Cola Company: #1 soft drink company in the world Over 400 drinks Over 200 brands Does no bottling itself. Introduction. PepsiCo.: #2 soft drink company in the world Owns Frito-Lay

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The Coca-Cola Company and PepsiCo.

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  1. The Coca-Cola Company and PepsiCo. Kyle Webb Drew Wieland Ashley Whitehead

  2. Introduction • The Coca-Cola Company: • #1 soft drink company in the world • Over 400 drinks • Over 200 brands • Does no bottling itself

  3. Introduction • PepsiCo.: • #2 soft drink company in the world • Owns Frito-Lay • Owns Quaker Oats • Larger revenues than Coke • 3X the workers of Coke

  4. Strategies • The Coca-Cola Company: • Sustainable growth • Five P’s for long-term growth • Increased efficiency and effectiveness • Mission and values • Healthy products • Profit

  5. Strategies • PepsiCo.: • Sustained growth • Healthy products (“Human sustainability”) • “Environmental Sustainability” • “Talent Sustainability” • Profit

  6. THE DIFFERENCE • PepsiCo.: Diversification • The Coca-Cola Company: International Markets

  7. MarketingPepsi Cola First trademarked on June 16, 1903 Niche marketing in the 1940s specifically targeted African Americans Advertisements portrayed African Americans in a positive light Profiled 20 prominent African American leaders

  8. Major Campaigns • Pepsi Challenge, 1975 • Majority of participants chose Pepsi over rival Coca-Cola • “Pepsi Stuff,” 1996 • Earn points that can be used to purchase Pepsi merchandise • Pepsi has over 28 slogans • “Have a Pepsi Day!” • “Taste the one that’s forever young.” • Various celebrity endorsers • Tina Turner, Jennifer Lopez

  9. Pepsi Brands • Pepsi-Cola Brands • Pepsi colas, FruitWorks, Lipton Iced Teas, SoBe, Aquafina water • Frito-Lay Brands • Ruffles, Cheetos, Cracker Jack, Doritos • Gatorade Brands • Tropicana Brands • Quaker Brands • Quaker Oatmeal, Rice-A-Roni, Aunt Jemima • Partnerships with Starbucks and Ben & Jerry’s

  10. Originally intended at a patent medicine • Often credited with the creation of the modern image of Santa Claus in the • 1930s • Strict policy of avoiding • children under the age of • 12 in any of its advertising MarketingCoca-Cola

  11. Campaigns and Sponsorships • My Coke Rewards, 2006 • Earn points toward various prizes or sweepstakes entries • First ever sponsor of the Olympic Games. Amsterdam 1928 • Sports marketing • Major League Baseball • National Football League • National Hockey League • National Basketball Association • Coca-Cola 600 for the NASCAR Nextel Cup • FIFA World Cup

  12. Coca-Cola Brands • Soft drinks • Coke, Sprite, Mr. Pibb, Dr. Pepper • POWERade • Juices • Minute Maid, Fruitopia • Energy drinks • TaB, Full Throttle • Water • Dasani, vitaminwater

  13. Profitability • Risks: • Concerns over obesity • Scarce water • Fluctuations in exchange rates • Relationships with partners • Political and economic environments

  14. Profitability • Profit margins: • Net and gross margins favor Coke • Return on Equity (ROE): • PepsiCo.: 38.1% • Coke: 28.1% • Industry: 12.6%

  15. Profitability • Return on Assets (ROA): • PepsiCo.: 18.7% • Coke: 14.9% • Industry: 4.8% • Breaking it down: DuPont equation

  16. Profitability • 12-Month Revenue Growth: • Coke: 12.6% • PepsiCo.: 6.5% • Industry: 10.7% • 12-Month Net Income Growth: • Coke: 3.2% • PepsiCo.: 36.1% • Industry: 13.8%

  17. Current and Future Problems • U.S. growth is leveling off • Future growth must come from the portions of the world • Consumers are becoming more health conscious

  18. Solutions • Future growth must come from the portions of the world where drinking soft drinks is not a daily habit • Use of new artificial sweeteners • New “Nutritious Labeling” strategies • Focus on new target markets (India and China) • Utilizing new technology in vending machines • Success overseas • Enhanced communication between bottlers and distributors

  19. Vending Machine Technology • Vending machines are now able to accept credit and debit cards • Machines can also store ring tones that can be downloaded onto cell phones (European Study) • Machines are now able to communicate with distributors • Let’s distributors know when they are low on product • Also identifies when mechanical malfunctions need to be addressed

  20. Key to Future Success • PepsiCo. components and agreements • Coca-Cola components • Diversification • Better customer service • Sustain greater profit margins

  21. Conclusion • PepsiCo.: • More diversified • Slightly more vibrant marketing • Partially more profitable • The Coca-Cola Company: • Strong financial results • Recognizable brand • Greater global position***

  22. QUESTIONS?

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