In the carbonated soft drinks industry, Coke Cola and Pepsi Co are the biggest players in the market for aerated beverages. Both the companies have been competing strongly against each other for decades. The market is dominated by these two industry leaders with a total market share of 72%; Coke’s market share is 42% and Pepsi’s 30%. This is known as an oligopoly market; where there are few large firms competing with each other in the industry. Since both the company’s market share so large, the market is very close to a duopoly (other players having a very small impact on the market).
¬¬-Corporate ethics comes at a price- one that either businesses have to absorb or consumers have to pay for. Too often consumers complain about big business, but then shop at Walmart because the small, family owned stores are more expensive. However, people still drink it. Not only do businesses need to be held responsible, consumers do as well. If there was not a demand, Coke would discontinue the supply.
That is why The Coca-Cola Company came up with the diet coke as a new idea. The consumers react positively on this new idea and it became one of the biggest brands of the company. Another example is when they tried to refine the Coca Cola recipe with “New Coke”. They want to refine the process because of the competition with Pepsi. However the consumers reaction was negatively so they went back to the original recipe after the idea was selected out in the selection phase.
They are classified as an oligopoly concentration as the two firms control the vast majority of the market share and therefore requires the two companies to compete on prices as well as non-price related aspects. This can be considered a negative impact on both companies as due to the similarity in their products, price wars are often triggered as consumers will tend to purchase the cheap option. With lowering the prices both PepsiCo and Coca-Cola are losing potential sale revenues and thus profits. Once the price wars come to a stand still, the businesses look for alternative marketing strategies to get an upperhand, such as products. To respond to this rivalry, PepsiCo has recently expanded their beverage
This is because the product is known as the leaders of an organisation in the marketplace and company take out little fund when investing . Limca and Coca Cola are the cash cows of Coca Cola, which has low growth and high share in the market. These products may not be dominant in the marketplace but is able to grow with the support of loyal customers or those who are a fan of
Fligstein explains the four threats to a firm's stability. The first threat is a supplier. THey can control a lot of aspects like “inputs, raise prices, and make firms who require their inputs unprofitable” (17). The second, competitors, engage in price competition. For example Coke and Pepsi, they are both really popular companies and have a wide range of consumers.
In this industry, customer have got lots different choices of soft drinks, so customer retention is a very different subject in the industry. The only way to retain customer is innovative thinking and creating the product that customer wants. Positioning is basically creating the image of product that is constant in the mind of consumers. Positioning helps customers understand what is different about the product when compared with other competitors. Coca Cola desires creating positions that will give their products the greatest benefits in their target markets.
PepsiCo is a world pioneer in helpful snacks, sustenances, and drinks. Pepsi Cola International is one of the main soda pop organization working around the world. As its US multinational organization, it 's working in more than two hundred nations around the globe. The vision of the
In their constant battle with Pepsi over market share, Coca Cola puts a lot of emphasis on brand recognition in and attempt to increase the sales of existing products in existing markets. Finally, the use of the market development model is evident by the fact that Coca Cola is the world’s most recognized brand. Coca Cola, unlike Ruth’s Chris, enters into markets that are undeveloped. They provide a highly commoditized product for a very low price. This allows them to have a larger geographical footprint than Ruth’s Chris.
Their advertising often seen as the “family friendly” bran with the use of their cute characters. But Pepsi on the other hand, have always had a more youthful approach. Some examples of the company’s feuds are; The Pepsi Challenge, this test took place all around the world, the staff would ask the public to blind-taste two drinks, one being Pepsi and one being Coca-Cola. As a spiteful response Coca-Cola then later decided to run a very similar promotion much like the the ‘Pepsi Challenge’ with it’s Vault drink and Pepsi Co’s Mountain Dew. (Bold,