Strategic Management: Coca-Cola and Pepsi

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The soft drink industry has competitors and the main competitors are Coca-Cola and Pepsi Companies. This industry deals with the mass distribution of soft drinks to vast environments that pose marketing challenges that it has to deal with. Developing the soft drinks brands perhaps is the most important step in the success of the product because Coca-Cola and Pepsi were majorly emanated as a product that stood out of the crowd as distinct brands.

A good brand is the cornerstone of marketing and Coca-Cola and Pepsi are no exception. It is definitely a way of life. Coca-Cola is a brand that relies on entirely word of mouth or buzz marketing strategy when brand ambassadors or those who have used the product before making people come in and begin to use the product. Making a product to be accepted fully in the market takes a long time and requires long-term investment. Coca-Cola and Pepsi became a way of life when most people began to start their attachment to the brand. To do the companies started by targeting hot spots such as families, parties, communities, and pop star joints to create brand visibility and then made the product look hard to get brand so that people could have that urge to have it.

Coca-cola specifically had a specific set of features that made it look nice a way of life rather than a product it had good sets of features benefits and good consistent attributes to the buyers or target market and it had that quality. Good advertising through the use of sponsoring events and the youth culture like extreme events the product had a large following especially with the youth who longed to be associated with the brand young men from the age of 18 29 wanted a share of the fund and the Olympic.

Industry players, Coca-Cola and Pepsi through vigorous advertising realized that he had to develop a new culture by making the product available to most people who liked it in times. He made it a style rather than a product and made it part of the people. This was done through sponsoring youth events, pop culture events, and because he used the idea of participation where most of the participants had one on one experience with the products, there was their development of the brands that had great persuasive power and value in the marketplace. The industry players also concentrate on the packaging of soft drinks into cheaper means thus increasing profitability.

They have also improved in innovation and brand diversification as the key to beating product challenges and once Coca-Cola or Pepsi identified its major challenges it had to ascertain its characteristics and specify strategic, objectives look at its strengths and weaknesses, reaction patterns, and ways to react to these challenges to overcome them. For example, to keep profits, the two competitors monitored the competitors expansion plans, size, and other factors and decided to plan and game plan to counter the challenges. Coca-Cola and Pepsi continued to defend their market share by continuously expanding their total market size and defended their product against rival attacks. This competition has had a negative effect on the profitability of the competitors.

The quality of the product and the design are the same all around the world. The packaging and brand name are also similar so that everyone gets the same Coca-Cola or Pepsi experience. Because the quality of these products depends on the packaging, the competitors have decided to venture into bottling. They also produce the bottles to ensure safety. The distribution of Coca-Cola products is fast and efficient due to a good relationship with retailers, wholesalers, and distributors that have a large number of trucks to ferry the products from the factories to the consumers.

Automation of factory activities has made production easier and more in line with the demands of the customers. During high seasons there is more demand for the same products and the marketing team that has a close relationship with retailers will relay this message to the production team. The marketing mix of Coca-Cola also includes an offering mix of products, services, and prices and a promotional mix of sales promotion, advertising as well as a sales force to promote the product. The price of the product will depend on many variables but most importantly for the Coca-Cola marketing team is that the carbonated drink or bottled drink can be bought by the widest range of people all over the world.

All brands in a competitive market have various challenges that they have to adhere or adjust to. As in the case of Coca-Cola and Pepsi are to face various challenges and when discussing competitors. Just like other products, the major challenge that a product may face is the rise of competition. All companies in a competitive world have to accept real competition unless in a monopolistic type of market.

Competition can be defined as a group of firms, that offer a product, or class of products that substitute the products of a company. In the late 1990s, new drinks were introduced into the market and this was because some people realized that the success of Coca-Cola and Pepsi meant that there was an opportunity in the soft drinks market. The introduction of competition to the market meant that Coca-Cola and Pepsi had to face a number of brands that were trying to initiate similar techniques to get the market share that Coca-Cola and Pepsi had acquired over the years and marketing techniques.

To deal with this type of challenge, Coca-Cola and Pepsi had to challenge some of the competitors through challenging the products legally in court through them urging that the products had infringed their trademark rights because simple products poised a challenge by producing products that had products similar to those of Coca-Cola and Pepsi and this led to brand confusion some of this products were the softa that had a can that resembled that of coca-cola and which could confuse customers in the market. This was a great challenge that the companies had to deal with.

The second and perhaps the most serious challenge that Coca-Cola and Pepsi faced was the issue of legislature challenges because most people went to court to challenge their brands business. For example, people who went to court to challenge the coca-cola brand received a blow in Belgium. The Coca-Cola brand received a blow because as a result of this the product was at one point banned in this country because there was a health argument against the use of the product. This meant that Coca-Cola and Pepsi had to focus more on the research and development of new products. Other challenges that Coca-Cola and Pepsi faced were the reduction of the target market because as time went by most of the target market tended to reduce.

The other challenge that Coca-Cola and Pepsi faced was the entire focus on one product and this made it easy for a competitor to create a product that could easily counter them in the market and to deal with this challenge they had to produce a product that was low in sugar in 1990s and to deal with the issue of their customers growing and changing form the target market.

References

Armstrong G. & Kotler P. (2007). Consumer Markets: Influences on consumer behavior, Principles of Marketing.

Kotler, P. (2005) Principles of Marketing. New York.Melbourne Press.

Schaik J.L., (2002); The Task of Marketing Management; J.L. van Schaik (Pity) ltd.

Winer, R.S. (2007). Marketing Management, Prentice Hall, Upper Saddle River, NJ.

YOFFI E D.B. (2007); Cola Wars Continue: Coke and Pepsi in 2006; Harvard business school.

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Strategic Management: Coca-Cola and Pepsi

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