In both overall soda and soda category and the greater specific cola arena, Coca-Cola and Pepsi maintained their dominant standing as the main drinks in DSN's total annual Top Brands Survey of consumers. Both colas were also the only real beverages to qualify as Power Brands. Coke ranked fifth and Pepsi seventh in this listing of leading brands. Coke was developed in 1886 and its own too old brand and down the road bottlers are increased in 1910 to 370. Initially it had problems with duplicate brands with similar names and after court barred then Coke introduced its patent. The Robert Woodruff CEO of Coke caused franchised bottlers to make coke available whenever consumers want to buy. He also initiated life style advertising for coca-cola emphasizing the role of Coke in consumer's life. Coke also expanded its business at the international levels. Coke in world war 2 at the request of General, he promised that "every man in the uniform gets a bottle of Coke for five cents whenever he's and whatever it costs to the business. Coca Cola bottling plants followed the movements of the American troops, 64 bottling plants were setup through the war. This plays a part in the Coke's dominant market shares in Europe countries and Asian countries like India, China, Indonesia, Japan, and Vietnam. Coke first entered in to international market and growing shares in market at international level. Coke spend huge amount of money in the advertisement of these products down the road it became the taste of whole America. Coke entered directly into non carbonated drink industry to improve the growth of the company after reduction in the consumption of the carbonated soft drinks like minute maid. Down the road coke develop different flavors like diet coke, cherry coke sprite products and caffeine. Coke purchases the weaker bottlers and sold those to the CCE (Coca Cola Enterprise) and strengthen the bottling network.
Pepsi was developed in 1893 in New Burn. Like Coke Pepsi adopted Franchise bottling system, and by 1910 it had built network of 270 franchise bottlers. Pepsi struggled too much because of bankruptcy in 1023 and again in 1932. Pepsi lowered the price tag on its 12 ounce bottle then of Coke. When Pepsi tried to expand its bottling network in late 1930, its choices were small bottlers striving to contend with wealthy coke franchises. Pepsi also spends huge amount of money in advertisement following to the Coke also merged with company of treats giant Frito-Lay at exactly the same time coke purchased Minute Maid, Duncan foods, Belmont Spring Water.
Coke and Pepsi began to test out new cola and non-cola flavors and variety of packaging options. Before then, both companies had adopted an individual product strategy selling only their flagship brand. Coke introduced Fanta, Sprite and Low Calories tab. Pepsi countered with Teem, Mountain Dew and Diet Pepsi. Each introduced non returnable glass bottles and 12 ounce metal canes in various packages. Thus Pepsi and Coke are working hard since last 100 years to attract their consumers with advertising and serving high quality. They also developed new non CSD to increase popularity in the company name. So do you feel that anybody has dared to overtake two biggest soft drink industries!!
Who do you consider has been winning the cola wars?
Of course Coke
The soda industry is very competitive for all corporations involved, with the best competition being that from rival sellers within the industry. All soft drink companies have to think about the pressures; that from rival sellers within the industry, new entrants to the industry,
Substitute products, suppliers, and buyers. The competitive pressure from rival sellers is the foremost competition that Coca-Cola faces in the soft drink industry. Coca-Cola, Pepsi Co. , and Cadbury Schweppes are the largest Competitors in this industry, and they are all globally established which creates a great amount of Competition. Though Coca-Cola owns four of the most notable five soft drink brands (Coca-Cola, Diet Coke, Fanta, and Sprite), it had lower sales in 2005 than did PepsiCo according to survey. However, Coca-Cola has higher sales in the global market than PepsiCo. In 2004, PepsiCo dominated North America with sales of $22 billion, whereas Coca-Cola only had about $6. 6 billion, with more with their sales coming from overseas. PepsiCo is the key competitor for Coca-Cola and these two brands have been around in a power struggle for a long time. Substitute products are those competitors that aren't in the soft drink industry. Such substitutes for Coca-Cola products are water in bottles, sports drinks, coffee, and tea. Water in bottles and sports drinks are ever more popular with the trend to be always a more health conscious consumer. You will find progressively more varieties in the water and sports drinks that appeal to different consumers' tastes, but also appear healthier than carbonated drinks. In addition, coffee and tea are competitive substitutes because they provide caffeine. The consumers who buy a lot of soft drinks may substitute coffee if indeed they want to keep carefully the caffeine and lose the sugar and carbonation. Specialty blend coffees are also becoming more popular with the increasing variety of stores offering many different flavors to appeal to all or any consumer markets.
Coke was more successful internationally in comparison to Pepsi due to its early lead as Pepsi had failed to concentrate on its international business following the world war and prior to the 70's. Pepsi however sought to correct this mistake by entering emerging markets where it was not at a competitive disadvantage regarding Coke as it didn't make any heady way in the European market.
On the bases of soft drink market analysis Coke have better bottling network then any brands of soft drinks. Spending on advertisement is more than some other brands. Brand quality and loyalty also affect the selling. Coca-Cola's bottling system also allows the business to take advantage of infinite growth opportunities across the world. This strategy gives Coke the opportunity to service a big geographic, diverse, area. Brand recognition is the significant factor affecting Coke's competitive position. Coca-Cola's brand is well known well throughout 90% of the world today. The primary concern over the past couple of years has gone to get this brand name to be better still known. Packaging changes have also damaged sales and industry positioning, however in general, the public has tended never to be damaged by new products Additionally, according Coca-Cola's bottling system is one of these greatest strengths. It allows them to conduct business on a global scale while at the same time maintain an area approach. The bottling companies are locally owned and operated by independent people who are authorized to sell products of the Coca-Cola Company. Because Coke doesn't have outright ownership of its bottling network, its main source of revenue is the sale of concentrate to its bottlers.
Other factors which are important for success of Coke are very high market share both nationally and internationally, strong market campaign, a unique and globally appreciated product and apart from Pepsi there is no strong competitor. Coke have high profit percentage by shifting some cost to the bottlers. Coke have expanded manufacturing and distribution system that keeps prices low and available when it is needed.
What strategies are appropriate for Coke and Pepsi in the 21st century?
There is no doubt that both company will not have any problems to sustain profit through next decade but important question is whether they can sustain their historical growth. To do so they need to find new markets and increasing production and distribution and consumption in developing markets of Asian countries like China, India, Japan. Looking towards the future, the most crucial recommendation to Coca-Cola is continuing product innovation and expansion of the products. Coke should focus on its developing international market and expand their offering. The soft-drinks industry is fully saturated with competitors. Also, the industry is no more expanding, and market share is in fact decreasing as more individuals are looking to healthier options. By continually introducing new products, Coca-Cola will be able to increase their profits and invite the company to continue to grow. Also, possessing a diverse products will make the organization very stable, which is appealing to investors and creditors. A second recommendation is always to sustain or raise the global market share. Coca-Cola is very well-established globally, and is the global soft-drinks leader. That is very important to sustain because it is the source of the majority of their profits. If indeed they lose global market share, their profits will decline dramatically. Your final recommendation for Coca-Cola is to keep and try to increase their brand loyalty. Diet Coke has the second highest brand loyalty of all the soft-drink competitors' brands, and solid promotional initiatives will help keep up with the brand loyalty. They are able to also make an effort to obtain higher brand loyalty in all other brands, not solely Diet Coke. The brand loyalty is important since it allows Coca-Cola to sustain profits and maintain their market share. Various kinds of beverages will keep the Coke's overall profit when there is shift in consumer choice such as shift from soft drinks to healthier alternatives and other products. Product development, improve research and development, market development and create awareness among customers about hygiene are essential suggestions to Coke.
Like identical to Coke, my recommendation for Pepsi is to grow up their international market in several countries. They have to focus on market and product development, market penetration, Continuous campaign and advertisement for product quality and brand name. Pepsi should revise their price strategy due to strong competition the rivals are focusing more on pricing and so they are leading the marketplace. Lowering down the operational cost and diversifying directly into other foods and beverages are another strategy that I would suggest to Pepsi since it owns Gatorade, Frito-Lay, Tropicana and Quaker.
So they are the tips for both Coke and Pepsi to sustain their growth and popularity within the next decade.
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