How coke is kicking Pepsi’s can

Table of contents

The marketing warfare between Pepsi and Coke is quite interesting thus making people believe that they are one, they are not. Pepsi has diversified its business into restaurants and snacks while coke has put its focus on soft drinks. Coke uses basically two measures, return on investment and stock prices.  Coke generally refers to Pepsi as less relevant because it uses strategic devises in its overseas operations and develops new talent in ways virtually adversative to Pepsi. Pepsi is generally a labor intensive company since it has employed 480,000 people but coke on the other hand is capital intensive since it doubles the market an only employs 33,000 people in the US. Pepsi rewards its shareholders through the stocks and return on equity consistently exceeded 20%, whereas the coke stocks are insanely high with 17% growth rate selling at a price/earnings ratio of 36. Not many companies can crow about a 55% return on equity. Pepsi marketing campaigns uses potatoes chips, fried chicken and pizza (Luis, 2006). Coke invests billions of dollars in soft-drink infrastructure. Coke devises strategies, oversees operations, and develops talent in ways virtually adversative to PepsiCo’s

I do agree to this strategies because coke’s marketing strategies are superior to Pepsi’s in the context that coke has invested heavily on one line of business hence have total concentration on it unlike Pepsi which have invested on multiple products causing them to frequently change marketing tactics and products.

Pepsi target markets

Pepsi has always taken the lead in developing new products , taken more risks, acted rapidly, and was always developing new advertising ideas. It has relied on a barter system that proved to fail though, in certain countries that allow direct comparison. One solution to increasing market share is to carefully follow consumer wants in each country and take fast action to develop a product that meets the requirements for that particular region. It targets people of all ages because of their wide range of products. Their target market is diverse having targeted people of all ages because of their wide range of products

Coke target markets

Coke hires marketing executives with good track records and implements cross training of managers so it would be more difficult for cliques to form within the company. The company has followed the marketing concept by offering products that meet consumer needs in order to gain market share. For instance, in certain countries, consumers wanted a soft drink that was low in sugar, yet did not have a diet taste or image

The cola wars are good for business since they allow room for healthy competition hence leading to the production and development of high quality and new market products. It has increased development of new marketing strategies, and the employment of international chief executives with good track records to run the companies business (Luis, 2006). These keeps the two company on toes.

The impact of changes in the ever increasing population on Pepsi and coke has enabled them to target people of all ages by producing their wide range of products so as to carter for the population demand. They have also increased their processing and distribution plants internationally to carter for the demand in supply. Coke is better positioned to deal with these changes than Pepsi because it has heavily invested in soft-drinks infrastructures allover the world as compared to Pepsi.

References

  1. Luis, M. (2006). Marketing Strategies in Pepsi and Coca cola. New York: McGraw-Hill. P 34-89.

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Case Study: Coke India

Please read it carefully and weigh the important of the information as you try to advise Coke Indian’s President, Sansei Guppy. Organizing your paper – use these steps to complete your paper. The requirements include a number of “worksheets” designed to help you write a great case. The worksheets should be attached to the end of the case. Worksheets: The case ends on page 13 (before the extra and supporting material) with a series of decisions that Coke India President Sansei Guppy needs to make.

First, putting yourself in President Septa’s shoes, identify the key decisions that he needs to make and make a list. What basic choices are possible? Attach it to your completed paper. Next, create a stakeholders analysis Identifying the parties who have an Interest In this case. Evaluate whether you need to add or subtract from this list. Attach it to your completed paper. (See “How to Construct a Stakeholder Analysis”) Case Analysis: Examine your “decision list” and analyze your decision options from an ethical standpoint.

Keep the stakeholders In mind. Apply each of the three perspectives for making an ethical decision featured In the Decked chapter and the class readings: utilitarianism, profit minimization, and universalism. You are free to apply additional decision-making models from the Decked chapter. Indicate what each of the three perspectives you would choose as the ethical course of action and why. Utilitarian Analysis: Following the Instructions provided in the handout “How to construct a utilitarian stakeholder analysis. Please make sure you use the lists of stakeholders and decisions to check your work to make sure you are thorough. Attach the utilitarian analysis to your completed paper. Support your reasoning by using any of the appropriate readings, from honesty and integrity to corporate social responsibility ideas from Friedman, Stout and Ma (as irruption to be useful. [When in doubt, Just look at the course calendar] Decisions and Conclusions: Clearly indicate final decision(s) that you would make, and the degree to which each decision is consistent with each ethical perspective.

Be as detailed in possible in describing the decision(s) you would make and/or the action(s) you would take. If one or more of the perspectives disagrees with your decision, indicate why you do not choose to follow the guidance of that perspective(s). State what is wrong with the perspective for you, either in the context of the decision, ND/or simply for you as the decision maker. Again, back up your reasoning don’t Just state your opinion or hope I will guess what you are referring to – try using the PAP citation method, such as: (Friedman, p. 9) Length: Approximately 4-6 double-spaced pages, 12-point font and I-inch margins. It will be difficult to present an analysis of sufficient depth in less than 4 pages. The upload link allows for you to upload your essay as an attachment. Please do not cut and paste it into the Submission part of the form. Your grade will be based on the Analysis Paper Rubric provided with the Course Expectations and the Course Calendar. In short: Analytical rigor: depth and complexity in analysis using class readings. To get good grade on this paper (I. . , A or B), you need to apply the ethical perspectives (I. E. , utilitarianism, profit minimization, universalism) in depth. This will require a thorough understanding of the ethical perspectives. If after reviewing the assigned readings (especially the Decked chapter) you do not feel you possess this depth of understanding, you should contact me so that we can go over the ethical perspectives to enhance your understanding. Proofreading and Writing: spelling, grammar, sentence construction as well as clarity, and cohesion.

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Pepsi vs Coke Brand Positioning

The brand, particularly through its commercials, creates intimacy with its consumers by evoking memories and experiences with the brand and their unique selling proposition “live the Coke side of life” is a prime example of this. It’s an invitation to live on the positive side of life, with Coke. It invites people to create their own positive reality and overall says, only Coke will do because essentially, Coke is happiness in a bottle. Importantly, from a global marketing perspective, it allows each country the opportunity to interpret their own moments of happiness and the brand’s role in those moments.

Pepsi’s new global brand positioning (announced this year) is reflected in their caption “Live for Now” which invites and inspires Pepsi fans to live each moment to the fullest through a breadth of global, pop-culture platforms, including relationships with music and entertainment brand evangelists, digital innovation, epic events and unique partnerships. This positioning enables the brand to pursue new partnerships with some of the world’s leading artists and entertainment properties.

Do you believe the global positioning is different from the positioning these brands are utilizing in your home country? If yes, please provide the positioning in your home country and explain why you think it is different. The global positioning of Coke and Pepsi is the same around the world by way of general theme and overall message, however, due to the differences in culture and society across the globe, the execution of the company’s respective positionings must be different for each of the markets that they serve.

As each country/region of the world is quite different, it is imperative that the message is tailored in a way that is relevant and best captures the target market. For example, the recent Coke advertisement in Australia depicts a group of friends playing around on a boat off the coast (presumably of Australia) which clearly taps into the Australian beach culture. This message of joy and happiness is still carried but it’s made more relevant to the particular market which it is serving by the way in which the message is constructed and contextualised.

The Interbrand report indicates that the Coke brand is much more valuable as an asset than the Pepsi brand. Please explain why you believe this is true, being sure to comment on: Strength of positioning – Coke has positioned itself more emotively than Pepsi as is evident in many of Coke‘s advertisements over the years which moreso depict the human experience through a strong emphasis on families and the community.

Key points of parity and points of difference – both emotive in their message, but different in that Coke really taps into the general consumer’s with the brand, whereas Pepsi I believe is more targeted (particularly to the youth market) and has the image of being high-energy and action-oriented, and I think a large part of their target audience associate themselves with the brand because of that image. They are similar in that both brands consider themselves to be bold and refreshing.

Whether any of these points of difference are competitive advantages – Coke’s positioning, with its strong association to feelings of joy and happiness, I believe gives it a competitive advantage in that these feelings and positive connections with happiness give it timeless appeal, whereas Pepsi seems to be more in-the-moment and almost “timely” by comparison. Coke, I feel, represents a state of permanent happiness whereas Pepsi is all about excitement, which we all know, is an emotion that is often fleeting. This position of happiness/longevity, I believe, is more attractive to consumers. . Line extension strategy Having a strong brand that consumers are loyal to allows an organization to extend its line of products and bring to market new products more easily.

If Coke’s brand is stronger and better positioned (which I believe it is), then by extension, it will be of greater value since the introduction of new products can more easily be made, and therefore, new revenue streams open up for the company. There are, of course, risks associated with line extension, however if managed well, leveraging an existing brand can be of enormous financial benefit to a company. . International presence – I think Coke’s broader appeal to such human states as joy and happiness allows the brand to resonate more strongly across cultures whereas Pepsi, with its greater reliance on pop-culture and entertainment artists makes it more restricted in its global reach. Clearly, Michael Jackson will have less appeal in a developing country than in the United States, however Coke’s association with feelings of joy, family and life more generally can, as a message, be more easily carried across borders and into countries.

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Diet Coke Brand

An increase in awareness on health has led to the development of a health drinks segment that most organisations in the soft drink and food sectors are trying to harness. The potential presented by the health drinks sector is unlimited considering the effect that fashion and educational attainment have on it. Moreover, an increase in awareness on the effects of sugar and the number of diabetic cases makes health food and drink some of the most profitable segments in modern business.

Soft drinks and Coca Cola are synonymous as the company has a rich history of success in the soft drinks industry that will play a large role in determining the levels of success that can be attained by Diet Coke in developing a reputation that though dependent on Coca Cola will be able to distinctively establish it as a unique brand. With the aid of primary and secondary research it has been established that fashion, reputation and sociological factors are critical in development of a marketing approach to Diet Coke in the different markets it harnesses.

Diet Coke must be able to establish itself as a leading brand name in both the soft and health drink segments which will require consideration on societies being targeted and development of approaches that display conformance to Coca Cola’s and others based on the nature of Diet Coke. Dependence on the reputation developed by Coca Cola may not be enough to develop a reputation but with the inclusion of measures that are largely aimed at increasing the presence of Diet Coke in interaction between people and in issues revolving around healthy living, Diet coke can be made one of the leading Coca Cola products.

Success may be beckoning but it will take appreciation of the laxity by health drinks manufacturers to harness the power that is in fashion, innovation, research and generally strategic marketing to be able to attain every brand’s dream of being a leading product or brand name. Introduction to Brand Coca Cola which started out in the late 19th century has grown to be one of the leading brand names in the present generation (Smith, 2006 p. 19).

The company has over the year succeeded in churning out different brands that captured the tastes and preferences of different user groups; this innovation and relevance to the needs of the markets are cited as some of the key strengths of the soft drink manufacturing giant. A notable brand that first came out of its bottling franchise to consumers on Independence Day in 1982 is Diet Coke (Ries & Trout, 2009). The fact that the product came out of a Coca Cola’s bottling plant leaves no doubt on its being a soft drink. The key difference between Diet Coke and other brands under the belt of Coca Cola is the fact that it is sugar free.

Another feature is the fact that the product uses different brand names and is often referred to as Coca Cola Light, Cola, Cola Light and Coke Diète in France (Ries & Trout, 2009). There is however no question on the market segment that the product seeks for it is clearly made for all those who are aware of risk that sugar has on their health. An increase in awareness on health issues is considered a key inspiration to the development of products which can even be used by diabetics (Anderson, Freeman,Williams & Shoesmith, 2007).

Furthermore, health and fashion appear to be largely intertwined in that there are seasons within which it is largely fashionable to eat healthy; this should not be mistaken for the need to live healthy. The current generation and those that are largely affected by the global trends especially within their early mid life are the key target group for Diet Coke. A recent increase in awareness on the relationship between weights which is largely affected by levels of sugar intake and health risk places Diet Coke as one of the Coca Cola products that has infinite potential for expansion.

Factors Influencing Consumer behaviour At its point of entry into the soft drinks market Diet Coke has come out as a drink that seeks to address the health risks that sugar places on the market segment. The ‘Diet’ in the brand name seeks to bring out a consciousness on the health aspect of the drink; the same can be said of ‘light’ (Anderson, Freeman,Williams & Shoesmith, 2007). The market penetration of the drink is thus largely affected by the levels of awareness that a segment has on issues that affect their health and how ready they are to address their dependence on sugar.

This is one of the factors that have played a critical role in the levels of success that the brand has attained in developed nations relative to developing nations. Level of educational attainment play an important part in determining the levels of success that Diet Coke can attain as a health or soft drink. It is worth noting that awareness on issues that affect individual health is largely affected by levels of awareness that the society has on issues that affect their general health.

Furthermore, the general belief and the values that define a society are likely to affect the levels of market penetration that Diet Coke can attain (Ries & Trout, 2009 p. 93). In America, the levels of penetration of Diet Coke among Whites are far larger than in African Americans. Research shows that this is mainly due to the perception of health consciousness being an uptown issue among African Americans who mostly dwell in inner city neighbourhoods (Smith, 2006).

It is however clear that culture and educational attainment are largely correlated with respect to tastes in that learned African American have a larger propensity for using diet coke than those with low levels of educational attainment. In UK there is a large correlation between the levels of appreciation of Coke Light and educational attainment across different races (Anderson, Freeman, Williams & Shoesmith, 2007 p. 53). The role played by fashion and health in determining what people let into their bodies cannot be ignored by marketing experts.

Having developed its market profile as a drink that is free of sugar, Coke Diet is largely dependent on awareness on health risks associated with high sugar use. Information availability and fashion influence play an important role in defining the perception of the society with regard to use of health drinks. An increase in obesity and diabetes and development of awareness programs also play an important part in developing a large market potential for Diet Coke. In general fashion and health are the key factors that any marketing manager would consider is seeking a market segment for Diet Coke.

The levels of success that can be attained in such an endeavour are largely affected by the levels of information awareness that the society has and appreciation of health issues. Fashion has developed as one of the most important variables in determining the trends is consumption and this will play an important role in defining the strategies that have to be employed to harness opportunities presented by any society. Analysis of the Behaviour Models Behaviour has for a long time been an area of key interest in management sciences.

Understanding the behaviour of the market and therefore having a clear definition of the trends that affect their expectation and needs is a position that every organisation seeks in its operations. It is important to note that organisation are in place to address the unmet needs of the society or the market and without a proper understanding of the theories all operations would be in vain (Schiffman, Hansen & Kanuk, 2008 p, 62). In general, the theories developed are not complete and just seek to develop an understanding or in some instances develop a framework for understanding the behaviour of a given market segment.

Sociological theories of consumer behaviour are based on experiences that one has in interaction with the environment that he is in (Sandhusen, 2008 p. 11). In fact the behaviours of an individual under this basis is largely affected by the people he interact with and therefore the same effect will be reflected in the perception that he has on ideas, events and even products. The theory is largely reliant on the effect that the society has on an individuals and trends within the society which are definitive of perception that individuals within the said society have of a product or a service.

Psychological theories are based on human cognition which is largely affected by experiences, motivation and personal expectation. Under psychological theories of consumer behaviour, the decision to choose a product is largely based on individual perception of the value that the product will add and his perception of value with respect to its costs and needs that he has (Wilson & Gilligan, 2005). Personal theories or model of consumer behaviour are based on the cognitive aspect of individual being which include the lifestyle, occupation, economic circumstance, personality and conception that one has developed of himself.

These are the major theories that have been developed to try and create an understanding of the factors that affect the behaviour of consumers by affecting the perception that the consumer has of his needs and expectations. Though not conclusive, the theories play an important part in defining the variables that have to be considered in developing an understanding of factors that affect the nature of the market segment. Sociological theories appear to be well suited for marketing of Diet Coke due to its definition as a soft drink that seeks to market itself as a health drink.

Soft drinks are consumed as extras and rarely stocked as main meals; in most cases soft drinks are consumed in social meeting and gatherings (Swarbrooke & Horner, 2007 p. 74). Simply, the society is largely involved in use of soft drinks and is therefore influential in the perception that will be developed of a drink. On the other hand, the sociological theory appears to canvas all other theories. Human perception is largely affected by people one interacts with and the fashion code that one identifies with is largely affected by the one to one interaction between people or interaction through information system interfaces.

In either case, interaction plays an important part in defining the behaviour and perception of individuals and is a critical factor that every theory appreciates (Sandhusen, 2008). Health in the society is taken as an issue of social concern. Consideration of health institutions as social entities is largely informed on social aspects of health. Issues relating to health are generally address at a social level thus the entry of Diet Coke into any segment should be appreciative of this fact by employing a sociological approach to marketing.

Under a sociological approach to analysing a market segment issues relating to class, culture, educational attainment, and resource ability are analysed to determine their relevance to the need and expectations of individuals. Fashion which though considered a personal issue is largely affected by the society should be analysed and its relevance in defining expectation and needs of the society determined. Recommendations a) Primary Research There appear to be a close correlation between awareness on the effects of sugar and health risk.

Most health drink manufacturers have harnessed this relationship to develop awareness on issues that affect health to increase their product penetration. However, the role of fashion in developing awareness on health drinks is yet to be harnessed though it has widely been adopted by soft drinks manufacturers. By using the well developed brand name of Coke and the reputation that has been developed by Coca Cola to soar Diet Coke as a soft drink, fashion can be used in developing awareness and appreciation of Diet Coke as a health drink. b) Objective

To determine the efficiency that will be attained in using fashion in marketing Diet Coke as a health drink. c) Research Questions The following questions will aid the attainment of the research objectives: i. Are health drink manufacturers using fashion as a tool to develop awareness on their products? ii. Is the reputation of Coca Cola and Diet Coke capable of sustaining it as a soft drink? d) Methodology The main approach used in the research is questionnaires that are used in collection of data that is analysed with the aid of graphs.

A sampling approach is taken in data collection and analysis where twenty marketing experts are randomly selected and administered with questionnaires that seek to address the key research question. The questionnaires which have closed question make it easy to analyse their response and quantify the findings. The results are inferred to the population which is the perception of experts on the position of Diet Coke in the different segments it operates in. e) Results Question Results Yes No Are health drink manufacturers using fashion as a tool to develop awareness on their products?

3 17 Is the reputation of Coca Cola and Diet Coke capable of sustaining it as a soft drink? 14 6 f) Analysis From the primary research it is evident that the reputation Diet Coke has as a soft drink from Coca Cola is enough to soar it above the rather competitive soft drink industry. It is worth noting that Coca Cola is the leading soft drink brand in all areas that it operates in except the Middle East. Furthermore, the research findings show that health drinks are generally not appreciative of the role played by fashion in marketing their products.

This presents an opportunity for Diet Coke to strongly establish itself as a health drink while using the reputation that Coca Cola has established in the over 100 years that it has been operational in developing awareness on its being a soft drink. The experience that Coca Cola has had in using fashion as a marketing tool will play an important part in gaining advantage over the rather inexperienced health drink manufacturers in marketing Diet Coke. Diet Coke has established itself as a health drink and a soft drink thus both segments have to be equally addressed.

From research on consumer behaviour, it is evident that the sociological approaches are more relevant to understanding the behaviour of the market segment Diet Coke harnesses. Awareness on trends in health, disease conditions, educational attainment and events which include sports and fashion galas can be used in spreading awareness and appreciation of Diet Coke. Different approaches depending on the values and beliefs that define the community in question; emphasis on research; community participation and awareness on issues that affect societal health would all play an important part in increasing awareness on the presence of Diet Coke.

The interaction between individuals is central to development of awareness and Diet coke strategies should ensure that its brand is developed in any area that involves interaction. Celebrities, public forums and sports personalities should all be used in ensuring that Diet Coke soars within the waves of a ‘fun drink’ that is definitive of Coca Cola product while developing a different approach with regards to its being a health drink.

These strategies have been developed in consideration of the need to continually renovate to develop systems that are largely robust and build on past success. Diet Coke has a strong basis as a Coca Cola product and the potential of the market with regards to educational and health awareness is unlimited. This knowledge is important in developing a comprehensive marketing strategy that will help Diet Coke develop as one of the most important name of the greatest success story in corporate history: Coca Cola.

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New Coke Case Study

When Ted Levitt posed the question, “What business is it in?” he was blurring the distinction between “industry” and “market.”  Rather than limiting corporate scope, this question challenges companies to look beyond their immediate material product or service and examine the spectrum of ways they can (and should) target the greater public appeal. Coca-Cola is […]

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Cola Wars Continue: Coke and Pepsi in 2010

Cola Wars Continue: Coke and Pepsi in 2010 A case discussion note January 17, 2012 1. Historically, why has the soft drink industry been so profitable? Historically, the soft carbonated soft drink (CSD) industry has been valued at $74 billion in the United States. In order to understand the reasons why the industry has been […]

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Rum and Coke by Julia O’faolain

The short story “Rum and Coke” (1996) written by Julia O’Faolain takes place in Ireland in the higher catholic environment. Our narrator is the son of a catholic Irish senator, who is trying to preserve Ireland as a state in the teaching of the Irish Catholic Church. As the story continues, our narrator discovers that […]

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