Their main market of action is obviously the US one but they currently drive their strategy worldwide as it represents a huge reserve of profits. What kind of competition? Both Pepsi and Coke understood that it was better off not to erode their gross profit by playing on prices, even if the customers have showed price sensitiveness in the past history. They have no incentives to fight on prices as long as • there are not many other sellers in the market • prices can be adjusted quickly • there is a history of cooperative pricing (except punctually) Preservation of overall industry profits by Entry Enter the soft drink market is quite risky given the high dominant position of Pepsi and Coke. Hence, there is no real threat to see a new comer eroding the whole market profits by heating up internal rivalry.
According to Bloomberg Business Week, Coca-Cola remains the best globally recognized brand across all industries for years, while Pepsi’s brand ranked number 25 in the year 2008. Thus, Coca-Cola is able to charge premiums for its syrup concentrates due to its larger market shares and better brand name recognition. In order to compete against Coca-Cola and increase revenue, Pepsi has diversified its businesses as I stated above into other markets such as snacks, chips, and breakfast foods, with its core business focusing on soft drinks. Undoubtedly, the company’s strongest and most identifiable brand is indeed Pepsi but it has a certain advantage over Coca-Cola since it is more diversified. On April 9, 2009, Coca-Cola Company reported cash and cash equivalent to be $6,816,000,000 and on December 26, 2009, Pepsi reported cash and cash equivalent to be $3,943,000,000.
Red Bull Company Culture Much of Red Bull’s competitive advantage comes from its marketing and culture. Red Bull was founded in Austria, an area known for skiing and lesser known extreme sports like hang-gliding. It found an early niche with extreme sports and has dominated and cultivated them into very profitable markets. Red Bull is marketed towards “Generation Y,” or those born in the 1990s that are often in college or a similar situation where there is a strong demand for a functional energy drink. Currently they are 18-34 years old, so Red Bull at some point will need to begin attracting consumers of the next generation.
The marketing of energy drinks, sport drinks, and vitamin-enhanced beverages targets many segments, so much so that Coke and Pepsi now own or distribute many of the labels vying against their mainstay brands. This case deals with the competition within the alternative beverage segment by exploring the strategic components, competitive forces, changes in the market, group map, and success factors. In addition this case focuses on key recommendations that will be needed to navigate the complex arena of the alternative beverage segment. Strategic Components of Alternative beverage segment The US beverage market grew by 0.9 percent in 2011 and although this marked the second year of growth for the beverage industry, after two consecutive declines in 2008 and 2009, the pace of growth slowed from 2010 (Berk, CNBC, 2012). This study emphasizes a point of a societal shift of Americans being more health conscious and not consuming as much carbonated beverages as in years past.
Red Bull Gives You Wings One of the fastest growing companies in the world, market dominator in its category,a producer of magazines,TV programs and movies,an innovator, participant and sponsor of many major worldwide events, a company that continues to develop and grow after almost 30 years of excellence, and most importantly -the top energy drink producer in the market – Red Bull.Even though the creator of this massive brand,the Austrian Dietrich Mateschitz,is not very famous, he is one of the most successful entrepreneurs, who laid the foundations of a company worth billions.With his persistence and knowledge he managed to change the landscape of the beverage industry. The success of a company or a brand is dependent on a great number of things.Communication, finance, strategy, contacts, trust, innovation, dynamics etc.should be perfectly balanced in order to achieve something big.But one of the most important concepts needed in this business is marketing- “The achievement of corporate goals through meeting and exceeding needs and expectations better than the competition” (Jobber and Ellis –Chadwick, 2013:5) or “The process of determining consumer demand for a product or service, motivating its sale and distributing it into ultimate consumption at a profit”(Baker, 1971:19) To find out more about Red Bull’s great accomplishments we need to see in more detail the marketing side of the company. Mateschitz did not only introduce a new brand into the market,but a whole new category- the energy drink.The launching of a new product generates much attention and makes it interesting for people to try it.This explains Red Bull’s success in the early years. However,there are certain factors that have a great impact upon the decision-making process.The understanding of how people make their choices is important for the perfect marketing mix.Through a more detailed
The red became a signature look for the beverage and it soon spread globally despite its major competitor, Pepsi. Coca-Cola is the second most globally known term other than OK. The main thesis of A History of the World in 6 Glasses is that beverages helped shape the world as we know it today. The book goes into detail about how each drink shaped politics, affected religion, and started social classes. Standage’s thesis was well written but even better proved.
In 2010, Gatorade was placed as the biggest non-carbonated soft drinks trademark in the U.S. * It has brand recognition for being the first to enter this market (“first to market” status), which has made consumers relate Gatorade with sports drinks. This is supported by the great consumer loyalty to its products. * Through Gatorade’s Sport Science Institute (GSSI), the brand has a constant product innovation, which gives Gatorade a competitive advantage. All its products show innovative formulas and ingredients, in contrast with most of the sports drinks that are in the market. * Gatorade uses marketing campaigns supported by well-known athletes.
Coffee Roasters operates in the niche market of Fair Trade Coffees. Just Us! Coffee Roasters is wishing to expand their company, thus profits, which means that they face more competition from outside their niche market. As a result, Just Us! Coffee Roasters now must compete on a large scale against strong mainstream competition and well established local and international brands.
Peter and Donnelly (2009), state” some of the most successful business organizations are here today because many years ago they offered the right product at the right time to a rapidly growing market (p.6)”. Clearly Miller Coors is trying to do this by offering the product at the right time (lemonade) beer, in the summer when their sales are the highest. The main points of this article is to inform management and readers that the company is recognizing that the current trend in beer sales have declined and
This paper gives a SWOT analysis on MMBC and discusses why it should expand its product line. Strength MMBC’s is differentiated from its competitors due to its brand equity which is based on its distinctive taste and reputable quality. This helped the company to create an “aura of authenticity” and a “culture” carried from generation to generation amongst its dedicated customers. In addition to this brand distinctiveness, MMBC’s access to the U.S beer market (largest in the world) gives it a competitive advantage since it shields it from the harshness of shipping costs, weak distribution networks, inability to control product freshness and margin reduction due to weakening of the U.S dollar unlike its import beer competitors. The fact that it was compared to leading names like Chevrolet and John Deere in other industries also gave an ascribed status in the region and as such an edge over its competitors.