Playing the same game leads to competitions among companies. Each one wants more customers and they want more profit. They work hard to compete each other in the market with a (lower – costs) products, better services and qualities. In case of losing the competition and if it was strong rival, the industry will leave the market and normal to face bankruptcy. 3- Threat of substitute products or services: the substitute products or services become high in the presence of similarity between different brand such as Coca-Cola and its competitor Pepsi that are indistinguishable from each other.
In Starbucks’s case, price increases throughout the company’s history have already deterred the most price sensitive customers, leaving a loyal, higher-income consumer base that perceives these coffee beverages as an affordable luxury. In order to compensate for the customers lost to cheaper alternatives like Dunkin Donuts, Starbucks raises prices to maximize profits from these price insensitive customers who now depend on their strong gourmet coffee. Rather than trying to compete with cheaper chains like Dunkin, Starbucks uses price hikes to separate itself from the pack and reinforce the premium image of their brand and products. Since their loyal following isn’t especially price sensitive, Starbucks coffee maintains a fairly elastic demand curve, and a small price increase can have a huge positive impact on their margins without decreasing demand for beverages. In addition, only certain regions are targeted for each price increase, and prices vary across the U.S. depending on the current markets in those areas (the most recent hike affects the Northeast and Sunbelt regions, but Florida and California prices remain the
Advertisements flood our society, not one day goes by that you aren’t bombarded with different advertisements and product labels. This is now a part of our society that we can not change. Two of the biggest competitors in the soft drink industry, Coke and Pepsi, always have very powerful advertisements. Marketing companies on both sides use some strong techniques to persuade the consumer to buy one product over the other. The lesser common method is known as the copy.
Those are publicized as healthier beverages. However, coca cola is attempting to beat this risk as it over take the Rani Pulp juice couple of years prior. 4. Moderate Bargaining Power of Buyers: Consumers of other soft drinks and Coca Cola are essentially extensive merchants, mega markets, and hotels. These companies provide drinks to them for resale to the buyer.
The individual consumer has no pressure on the Coca – Cola Company. Large retailers have bargaining power because they have large order quantities. However, general bargaining power is lessened because of the end consumer brand loyalty. The Bargaining Power of Suppliers The bargaining power of supplies have a low pressure on the Carbonated Soft Drinks Sector. The main ingredients for carbonated soft drink are carbonated water, sweetener, flavor phosphoric acid and caffeine.
And these are the threats of new entrants Advertising and marketing Customer loyalty Retail distribution Fear of retaliation Bottling network Supplier bargaining power The bargaining power of suppliers is also defined as the market of inputs. Suppliers bargaining power influence the cost of the product. Power is payable to high brand image The individual buyer no pressure on Coca-Cola Majority of the population prefers soft drinks therefore buying power is higher Brand loyalty need to time development Segment rivalry between industry competitors The competitors of coca cola are Pepsi kik cola other brands Threats of substitute products Other new product keep coming the markets Price performance Water with gas Customers bargaining power Lot of choice between different brands Equal price so coca cola needs to have the superior quality Consumers are brand loyal to the company product Market Segmentation of coca cola Our coca cola company has segmented customer according to some categories as stated below Geographic
Market Segmentation of FMCG chosen product Coca Cola: Segmentation: Coca-Cola is known for its great taste of drink, its one of the biggest companies that produce soft drinks. Coca Cola Company use market techniques that falls in undifferentiated marketing which means no segmentation but it has some important facts: A) Geographic Segmentation: - Coke is an international brand product, where you can find it all across countries and regions. Its well known for its taste and quality it varies according to it taste and income level of people in each country, at the end the product is affordable and many people enjoy the taste of it in many occasions. B) Climate: When it comes to coca cola Company marketing the main product idea is to serve the drink cold and chilling for people to enjoy the taste and coldness of the drink. That’s reason the company focuses more in hot areas for example: Middle East in summer time where each season it sale goes
There are many other soft drinks like coca cola, Pepsi, etc. which is giving customer their product in low price to gain the mass market. All of these strategies have small effect on Red Bull. However, it is gaining more revenue compared to its competitor. It has competitive advantage from its competitor because of its international marketing strategy (publicity/endorsements).
Although these brands have already established in the marketplace, the company still needs to have an effective marketing approach to increase the sale of these brands or brands. Accordingly, question mark category means that these products have a low share of a possible high growth market and may become a star product because of the positive response of the customers. The services that fall in star category are is the pay-is Pepsi brands. The star category shows the products with a high share of a gradual growth of market and these products have a tendency to produce high amount of profits. The next category that can be seen in the figure is the cash cows.
After routing the low price store brands, coke has chosen to reposition itself as a “Premium” brand and raise prices.”. When people purchase Coca-Cola, they do not only purchase the beverage but also the image that goes with it, therefore having the price inflated restates the fact that the product is absolutely of better quality than its competitors. This is referred to as value-based pricing. Over a decade ago, Coca-Cola launched a 200ml bottle that costs R5- an affordable amount for the low income audience. Earlier Coke used Cost based pricing.