1 / 13

Cola Wars Continue: Coke and Pepsi in 2006

Cola Wars Continue: Coke and Pepsi in 2006. AGEC 4433 Group 7 Spring 2011. Background. John Pemberton creates Coca-Cola formula in 1886 Imitation brands followed, along with the creation of Pepsi-Cola in 1893

trixie
Download Presentation

Cola Wars Continue: Coke and Pepsi in 2006

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Cola Wars Continue: Coke and Pepsi in 2006 AGEC 4433 Group 7 Spring 2011

  2. Background • John Pemberton creates Coca-Cola formula in 1886 • Imitation brands followed, along with the creation of Pepsi-Cola in 1893 • Increased consumption and concentration in the Carbonated Soft Drink (CSD) market.

  3. Company Goals • Boost the domestic demand for CSD products • Increase Coke’s market share of non- carbonated products in the U.S. • Capture uncharted markets not catered to by CSD companies.

  4. Central Problem • Flat growth in Coca-Cola’s market share • Waning demand for CSDs in domestic market • Coca-Cola is less competitive in non-carb market due to Pepsi’s successful pursuit of that market

  5. Constraints • Increased health information concerning obesity deterring consumers • Market for non-carbonated beverages is dominated by Pepsi • Untapped market segments reluctant to associate with Coca-Cola

  6. Competitive Analysis • Barriers to Entry  Very High • Coke and Pepsi hold 75% of the market • Economies of Scale: Capital Intensive Industry • Limited bottling and distribution (all owned by existing concentrate producers) • Rivalry  High • Pepsi and Coke in direct competition, push smaller competitors out

  7. Competitive Analysis • Threat of Substitutes  Medium • Consumers tend to buy on price without differentiation • Coke and Pepsi market and price strategically to avoid that • Power of Buyers • Consumers  High; price increases lead to reduced consumption • Bottlers  Low; bottling contracts force them to take higher prices

  8. Competitive Analysis • Power of Suppliers  High • Bottlers unable to negotiate, concentrate produces get pricing power • Door-to-store format allows Coke to monitor processes from beginning to end, gives little room for negotiation

  9. Alternatives • Increase CSD demand • Alternative 1: Marketing Coca-Cola’s socially conscious initiatives • Alternative 2: Innovating carbonated products to fit in with health and wellness trends • Alternative 3: Combined marketing and innovation approach

  10. Alternatives • Compete more aggressively in non-carb market • Alternative 4: Reformulate and position PowerAde to better compete with Pepsi’s Gatorade • Alternative 5: Market PowerAde towards college and professional sports markets • Alternative 6: New product development

  11. Solution • Alternative 3: Combined Innovation and Marketing Approach in CSDs • Develop “green” or natural formula for flagships (Coca-Cola and Diet Coke) • Advertise with eco-drive marketing strategy

  12. Implementation • Invest in reformulation for “green” CSD line • Replace high fructose corn syrup with real sugar, aspartame with stevia (natural no-calorie sweetener) • Substitute artificial dyes, flavors • New packaging • ‘Planbottle’ and biodegradable can • More visible recycling symbol • Eco-friendly marketing strategy • Bottle deposit stations (get demographic data) • Product premier on Earth Day

More Related