Market segment profiles have shown that the majority of carbonated beverage drinkers are youth and middle age people. Pepsi continually targets the Schools, Colleges, Universities, restaurants, hotels, and fast food Stores. For this they always spend huge amounts of money to compete with Coca Cola in acquiring contracts with universities to have sold representation of their product distribution. Pepsi customers are mostly teenagers and young adults between the ages of 14 to 29. Objectives Pepsi Marketing objective is to ensure they never: • Overstate or misrepresent the quality of their products or packaging.
The objective of both is to maximize their profit. Hence, we can say that these 2 players are involved in a non-cooperative game, the objective being to garner the most profit, and capturing market share being the most effective way to do so. Since Coke and Pepsi are perfect substitutes, the price elasticity of demand should be perfect elastic. However, there are some factors that results in a fairly elastic demand. When Coke increases its price, most of its customers that are highly sensitive to price changes will switch to Pepsi due to the similarity of the taste.
During 1960’s Coca-Cola market share has been stagnant but the market share of Pepsi turned out to be increasing fast. Pepsi had rebrand as the brand of youth and had received well responses from the consumers. Pepsi was more popular in stores where consumers were given a choice to choose from. While in places like restaurants and clubs, consumers had limitation of decision but to drink Coca-Cola. Later on Pepsi introduced the Pepsi Challenge where the consumers were blinded to taste between Coca-Cola and Pepsi and everyone seems to prefer the taste of Pepsi to Coca-Cola.
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.
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.
Thumbs up, Maaza and Kinley are consider as the star product of the Coca Cola Company. This is because the refreshment sold to customers are mainly from India and United Arab Emirates, which contributes the most cash to the company as people consider this as their first choice of carbonated soft drink. The Coca Cola company believes that these three beverages have high growth and a market share. Cash Cows: A product that generates more money than they require are considered as a cash cow. This is because the product is known as the leaders of an organisation in the marketplace and company take out little fund when investing .
Especially, chemicals have been misused to add on processing products – not only on food, but also on drinks. Soda is the most popular drinks in the world. It appears in over 200 countries. However, not many users know how much sugar and carbonate they consume after drinking a can of those, which has strong affection on their health. This paper will discuss the issue of soda’s influences on people health in the United State and propose
Running Head: PEPSI COLA COMPANY 1 PEPSI COLA COMPANY 16 Strategic Plan of Pepsi Cola Company Jacqueline C. Tuncap American Military University BUSN 620: Strategic Management September 25, 2016 Executive summary This paper analyzing the Pepsi Cola Company, its strategic plan and the products the company provides. The company is known as one of the top competitors in the market. We will go through and try to understand the separate areas within the company that collectively work together towards creating a successful company. We will be going through the company values, identifying how their values and their mission statement coincide with one another. We want to identify what their their mission is, the culture the company promotes, identify their competition, see where and how they are doing financially, etc.
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.
They have joined in hand with the International Food and Beverage Alliance (IFBA), a non-governmental organization to advertise products that only meet specific criterion to children under the age of 12. PepsiCo managed to make significant implementation by adapting diversified marketing strategies to promote their policy. They have managed to achieve 99 percent compliance globally on Advertising to Children Policy and a 100 percent complicane in the US and Canada. ECONOMIC The economy doesn’t always run smooth,there are times where there will be economic downturn and organizations are badly affected, where they have to restructure their business strategies. The economic factor plays an important role in any business.