Category: Beverage

Overview

The market for soft drinks in the country is competitive and is mainly made up of two manufacturing systems, one being the flavoring and concentrate companies while the other is the soft drink manufacturing companies. The industry is majorly dependent on the syrup produce, with analysts observing that it is the driver of several downstream operations.

The companies operating in the industry tend to follow a similar product life cycle that starts with a syrup producer then moving on to bottling before developing to distributors of products. The company finally grows to manufacture the product in large-scale, something that characterizes a merchant.

Finally, the organization turns out to be a consumer of manufactured goods. Regarding geographical location, many soft drink companies are found near the source of raw materials and the market meaning that they are situated in densely populated locations. Several distribution channels are followed when supplying the products to the consumer.

Recently, the industry is facing several challenges due to the slumping economy, as well as changes in the consumer consumption patterns, as many people are concerned with their health. Regarding the international market, all major companies operating in the industry are focused on the African and Hispanic markets, as they are viewed as the potential markets for growth given the fact that they have a stable consumer base. Another challenge facing the industry is the growing policy debate as regards to taxation of sugar beverages.

NAICs Classification

The industry name for soft drinks is manufacturing and the code is 31211. The category of industries under this classification should purely engage in the production of soft drinks, ice, and bottled water, including the carbonated drinks.

Market Segmentation

First, the industry players should understand the demands of the brand conscious consumers, which include those customers who are in their early twenties comprising of mainly the university students, the working class, and those who have the ability to join their friends in parties.

This category of consumers is carefree and exhibits a special character suggesting that they are freestyle. Therefore, they always want to be associated with the high-end products and their purchasing is based on the quality of the product. In other words, they always buy the image that signifies a stylish product, which exudes buoyancy.

The market is dominated by the average consumers as well and includes individuals who are prone to buying products out of tedious habit. These consumers acquire products because of the media influence, as they are brainwashed to believe that certain goods bring satisfaction. The teenagers dominate this category of the market, even though some university students fall under the class.

The third group of consumers is composed of peer-pressured individuals since they simply follow their friends in buying the products. The last type of customers is the soft drink addicts and this comprises of those individuals who follow the product without considering its substitutes or supplements (Gupta and Lehmann 89).

Periodicals Covering the Soft Drinks Industry

Several articles producing companies and magazines publish news and events related to the soft drinks and the entire industry. One such company is the national association of soft drinks manufactures, which is based in London, publishing Twickenham magazine since 1982.

The same organization publishes a journal article referred to as the soft drinks trade journal, which is an international journal on soft drinks industry. The periodical was published from 1947 to 1982. The British soft drinks association publishes the soft drinks management international, which is a global journal on beverages. In the US, food magazines, the global outlook, and the Poughkeepsie journal deal are some of the publications that talk about soft drinks.

Competitive Structure

The industry has a market structure that is two-tiered meaning that small group syrup producers give territorial franchises to bottling companies whereby they are made the only distributors of products. The Coca Cola was the first company to do this in early 20^th century, but others followed the same channel when they entered the market in the subsequent years. Based on this, the type of market exhibited in the soft drinks industry is an oligopoly because small groups of companies control the industry.

A close study of the market suggests that it is more of a monopoly since small firms that are not in direct competition with the distributing companies dictate policies and determine what should enter the market. Market power is defined as the ability of the company to raise the market price with an aim of increasing its profit margin (Lau 127). Companies operating in perfectly competitive markets do not have the power to increase prices without losing a substantial segment of the market.

However, the soft drinks industry is different since corporations can easily raise prices without losing any of their clienteles to opponents. Companies in the industry, including Pepsi and Coca Cola, have the capability of affecting the total quantity, as well as the prices of products in the market. The major companies operating in this industry are Coca Cola, Pepsi, Cadbury Schweppes, and the Dr. Pepper Snapple Group.

Future Prospects

An analysis of the microenvironment reveals that the soft drinks industry is expected to perform better in the future mainly because of the steady product innovation. Companies are known to identify consumer demands and needs while at the same time aspiring to adjust by adopting the new technologies in order to survive in the competitive market.

The recent trend whereby the soft drink companies are winning exclusive rights to supply products in schools and stadiums is an advantage to the industry, as this will help them in developing faster. In the industry, clients are dedicated to a variety of brands since studies show that consumers of carbonated beverages are always enthusiastic to certain foodstuffs meaning that they seldom acquire any other from the market.

The sales of many companies in the industry are expected to go up and this will facilitate profitability. Even though competition is expected to be stiff in the future, companies are already seeking markets oversees and this will ensure that they survive in the highly competitive market (Warf, Frederick and Stutz 16).

Works Cited

Gupta, Sunil, and Lehmann, Donald. Managing Customers as Investments: The Strategic Value of Customers in the end. Upper Saddle River: Pearson Education/Wharton School Publishing, 2005. Print.

Lau, Ronald. “Competitive factors and their relative importance in the US electronics and computer industries”. International Journal of Operations & Production Management, 22.1 (2002): 125–135. Print.

Warf, Frederick, and Stutz, Barney. The world economy: resources, location, trade, and development. Upper Saddle River: Pearson, 2007. Print.

Introduction

The soft drink industry is among the most profitable industries in the market. This is based on the fact that the market demand for soft drink is very relatively high and the suppliers for the product are few. Soft drinks are complimented with a variety of other food products ranging from fast foods to other beverages. In addition, the soft drink operators have integrated their business with that of the bottlers, giving it a competitive advantage.

For instance, the soft drink companies do not produce bottles for their beverages. The bottles are produced by the bottlers, thus cutting down on the manufacturing costs of operating soft drink companies. Over the years, soft drink companies such as Coke and Pepsi have established their brands in the market.

Strengths

Their trade marks are reputable in the market and this gives them an added advantage. Coke and Pepsi have a vast experience in the market and enjoy the benefits of first entry in the market. These two companies have signed agreements with the major bottlers not to sell bottles to companies offering similar products.

These agreements have made it very difficult for new operators to penetrate into the market, thus putting Pepsi and Coke at an advantage. Research indicates that soft drink operators have been focusing on Rapid Continuous Improvements (RCI) which has enabled them improve their product significantly.

Operations of soft drink companies are integrated with the ideals of Corporate Social Responsibility (CSR), thus winning the confidence of their customers.

In terms of strengths, Coke and Pepsi are better placed than the other soft drink operators. For instance, these two companies have been leading in the provision of flavored carbonated soft drinks and have thus won the confidence of their consumers over the years.

Soft drink companies have variety the quality of their products to meet the specific health needs of their companies. The market for soft drinks has the potential of growing especially with the growth of fast foods.

Weakness

Despite the above strengths, the soft drink industry has also been faced with several weaknesses. To begin with, there is a move to liberalize the market. The interpretation of these is that many operators will have their way into the market, thus making it less profitable. Secondly, fast foods, which are a major booster ton the demand for soft drinks has been found to be unhealthy.

The diminishing demand for soft drinks will in turn lower the demand for soft drinks, thus reducing its profits. Political unrest in some parts of the world is limiting the international market for soft drinks. The economic go slow in the world causing fluctuations in the foreign exchange markets is among the factors limiting the future growth of the soft drink industry.

Opportunities and Threats

The opportunities left at the disposal of the soft drink industry includes venturing into more healthier drinks and venturing into developing countries where competition has not reached its maximum. The current world campaigns for health eating is among the threats facing the soft drink industry. This campaign is expected to lower the demand for soft drinks and consequently reduce the profitability of the industry.

With liberalization of the market, many operators are expected to venture into the market and increase the competition for customers. The entry of new operators is expected to increase the supply of soft drinks, which will already be faced with a diminishing demand. These factors are expected to reduce the profitability of this industry.

Introduction

Supply chain management refers to the whole process of producing alongside delivering a service or a product, from the initial stage of sourcing the raw materials to the last stage of delivering the product or service to the final consumers.

It starts with sourcing and extraction of the raw material. Followed by a Logistics provider taking the raw materials to a supplier, who then takes them to a manufacturer, who processes materials into a finished good. After that, the product goes to a distributor, then to a retailer, who sells it to the consumers. The moment the consumer purchases the good, the cycle is complete.

History of Mango Juice (Maaza Drink)

Around 4000 years ago, Mangoes originated in Southern Asia, particularly in Eastern India and Burma. Indians believe that mangoes signify life, and it is a national fruit of India. In 1976, the union beverages factory started selling Maaza in Africa and the Middle East as a franchise. In India, it was launched in 1976 and acquired by Coca-Cola. Maaza is obtained from mango’s natural pulp, and its constituent is the mango pulp of the alphonso variety, known as the “King of Mangoes” in India.

Ingredients of Mango Juice

The mango fruit contains a higher nutritional value and is beneficial health-wise due to its vital ingredients. It is composed of macronutrients such as carbohydrates, proteins, lipids, and amino acids; micronutrients, vitamins, and minerals; and finally, phytochemicals such as polyphenols and volatile phenolic compounds. According to Muslim et al. (2021). mango juice is a human diet due to its energy value. It remains a crucial fruit for the manly diet due to its energy value for 100 grams of pulp which ranges between 60-190 kilocalories. The water constituent, nutritional plus non-nutritional elements of mangoes vary depending on the type of mango cultivated and several pre-harvest and postharvest factors.

Competition

Competition comes in if there is a contest between companies selling the same product or service. There are three known mango drinks brands, frooti, maaza, and slice, in the mango drink industry. Maaza competes against these two brands, Pepsi and Frooti (Kothari, 2017). In the campaign, Frooti did a brand makeover after thirty years, having a new logo and visual avatar. Furthermore, a campaign was launched and promoted broadly across print and digital media to address this change to its consumers. Maaza and slice also developed other different strategies for the campaign. While facing competition, firms should strategize on pricing, adventuring into new markets, good packaging, and conducting digital marketing.

Supply Chain Strategy

Maaza mango drink is a beverage from the Coca-Cola company.

Coca-Cola adopted a new supply chain strategy known as DOIP, which stands for Demand, Operations, and Inventory Planning.

This new strategy is much more flexible than the old SOP model (sales and operations planning).

This model has four main benefits, which include the following:

1. Elevating production through quality service
2. Predicting the current and future sales volume
3. Identifying complementary promotions and potential sales volumes
4. Reducing operating costs by balancing the scale of supply and demand

This generally boosts business agility.

Infographic of Product Supply Chain

This is a simplified chart for a processed mango moving from the farm to the consumers (Kruijssen, 2022). From the farm, mangoes are handpicked, loaded into lorries by the logistics providers or pre-harvest contractors, and taken to the wholesalers or direct to the factories for processing. In the factories, they are brought into the ripening chambers. The damaged ones are removed. After ripening, the process begins with washing with chlorinated water and follows a series of procedures until the final product is obtained. This end product is then sold to retailers and exporters by manufacturers. The end-users finally buy the juices from the retailers for consumption.

Infographic of Information Systems

Sharing of information increases the efficiency of the supply chain by limiting inventories and smoothing production. A hundred percent efficiency of a supply chain is critical as competition is no longer between companies but between supply chains.

Adopting good information systems increases the efficiency of the supply chain by limiting inventories and smoothing production.

The table displays the classification of production information. Sharing such information helps the suppliers, logistics producers, and even the consumers.

For instance, when maaza shares its production schedules with a group of its suppliers, this will positively impact the company by lowering part inventories with zero risking stock-outs. Besides, customer service levels also improve when logistics producers give shipping information.

Pricing of Maaza

Pricing is an element that scales up profits in the supply chain through a relevant supply and demand match. Maaza is the number 3 brand in the overall beverage category for Coca-Cola India and made significant gains in market share in 2021 (Coca-Cola, 2022). According to the company, Maaza reported sales of Rs 2,826 score in the year 2021 despite the overwhelming circumstances due to the Coronavirus (Coca-Cola, 2022).

Promotion

Maaza, known as the number one noncarbonated drink in the market of India, has several activities related to the promotion of its mango juice to maintain its status quo. In endorsing their mango juice, maaza has used well-known celebrities within the film industry, the actors like Varun Dhawa, among others (Singaram et al., 2019). This has led to mass fans liking this product due to its attractive and witty commercials displayed on news media and billboards. Furthermore, it incorporates direct dealings via conducting roadshows and experimental sampling.

Future Issues

Maaza is there to refresh the world and make a difference. Maaza is emerging with a lot of vigor to do business the right and pose development in the future. Looking at the loopholes in Maaza production, the company should strategize and close such gaps to better the mango drink. Maaza needs to revise the following issues:

1. Method/ kind/ cost of packaging
2. Distribution of their finished products within a limited geographic location
3. Manufacturing capacity is too low.

Conclusion: Future Developments and Recommendations

Maaza’s marketing aims at propelling the product to be the world’s first one billion dollar juice drink brand by sales coming out of India. In 2016, the market size of Maaza was around 50 percent of the total mango fruit drink market (Dollar Business Bureau, 2017).

Coca-cola and its bottlers need to bring enhancement by coming up with new, pocket-friendly, and quality juice packs. Additionally, this Coca-Cola needs to expand its distribution in new markets, stop concentrating in India alone, and increase the manufacturing capacity to double the sales of Maaza by 2020.

References

BluePrint. (2020). Overview: What is wholesale? Web.

Coca-Cola Company. (2022). Financials. Web.

Dollar Business Bureau. (2017). Coca-Cola targets Maaza to become $1 billion brand by 2020. Web.

Kothari, C. (2017). Retailer’s perception about Non-Carbonated Drinks in selected cities of Gujarat. In 6th International Conference on Trade, Business, Economics and Law (p. 64).

Kruijssen, F. (2022). Simplified market chain of fresh and processed mango. Web.