Cola Wars Continued: Coke and Pepsi in the Twenty-First Century .
This minor case write-up is to analyze the marketing strategies involved in the battlefields between Coke and Pepsi on their CSD and non-CSD products in US and international markets. It focuses on the change of marketing strategies used by the two companies in different competition scenarios, as well as the comparison of Coke's marketing FTP (Segmentation, Target Market and Positioning) and the marketing mix with those of Pepsi's. The core objective is to evaluate influence of the marketing strategies to their market shares.
Situation Analysis.
The CSD industry experienced a vast growth during the 1970s to the middle of 20th century due to the continuous increase in cola assumptions of American people. The two big players of the industry, Coke and Pepsi, have dominated the markets by claiming a combined 76% market share. They are recognized by consumers as the top two brands in the beverage market. .
The challenges to the two rivals come from the shrinking consumption of OSD and the slowed-down of worldwide shipment for both Coke and Pepsi. The cola war will spread into the non-carbonated beverages and the emerging international market. The question is how to maintain and increase their market shares by introducing new marketing strategies.
Company Analysis:.
1) Strengths and Weakness.
1. Both Coke and Pepsi are marketing leaders, claiming a combined 76% of the US CSD market in term of sales volume in 2000. The brand awareness for both is very high.
2. Both companies utilize franchised bottling networks to keep competitive advantage in reducing distribution and marketing cost. This leads to the formulation of CCE for Coke and PBG for Pepsi, which handle the majority of the beverage distributions. The consolidated system is cost-effective and efficient for customer service.
3. Both companies retain long-term and stable relationships with their supplies to guarantee the supplies of raw materials and cans.