Coca Cola is the largest firm that produces carbonated soft drinks; it has a 59% share in the entire CSD market. Although coca cola has the same target market segments as Pepsi because they are competitors within the same industry, the Coke brand is much bigger (Coke, 2009). In the early days Coke used to target the baby boomers and wanted to establish a solid consumer base. Later, after it saw its market share decreasing Coke decided to devise a new strategy and that was to target the youth. Byadvertisementthat is highly focused on teenagers and youth.
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Although Coke has not been ignorant about the adults, it takes into account that adults also contribute a lot to the entire Coke sales and hence they take adults as their co target market. Like Pepsi, Coke has different brands that are targeted towards different audiences. For example, Sprite 3G is a brand that has become synonymous to free and outgoing individuals. The advertisements show teenagers doing what they are passionate about and it shows the feeling of rebellion that is common to the youth.
Famous personalities are also endorse the brand. Coke also sponsors athletic and sports events so that they are able to reach out to their target markets effectively. They even make it better by sponsoring musical sensations like Avril Lavigne, so that the advertisements and promotions in her concerts portray Coke as the brand for youngsters. Similarly, sales promotion activities also play a vital role in developing a market for the brand. Advertisement is the most important tool today that is being to used to differentiate products.
Advertising can be done by using a variety of means like electronic media, print media, bill boards and promotional selling. An excellent example of effective advertisement would be the “ Brrrr” campaign by Coke (Ahmed, 2009). The out of the box thinking of the campaign again signifies that Coke is not a beverage that represents dullness but rather it signifies action, strength and the willingness to do things. MarketingCommunicationPlan: Context Analysis: The carbonated soft drink industry as we know is dominated by large firms with brand names that have been around for centuries.
Under such circumstances a firm that decides to launch a new beverage has to do a lot of stuff in order to compete against the market leaders. The primary goal of a firm before launching its product is to deicide effectively what segments it will choose and how will it target those segments. Secondly, how would the firm be able to differentiate its product from the existing products and then convince people to shift from the brands that they have had for years to a new brand. There several other barriers to entry for an upcoming firm.
One of the most important one’s is the supply chain management. If large organizations maintain good relationships with their distributors a small/upcoming firm can be easily outnumbered in terms of distribution channels. Another reason is that some retailers might not want to promote or keep brands that have a low volume. The shelf space is an important constraint, even though firms are willing to pay the retailers more in the initial stages of their operations. The bargaining power of large stores/chains is also an important factor to consider.
Large retail stores are able to dictate terms to the manufacturers because to the large quantities of items that they buy. A large retail may ask a new firm to give him a larger share of the revenue as compared to a well established brand that sees high turnover ratio. The suppliers also play an important role in marketing a product. In the CSD industry there are a few suppliers and it is safe to assume that they would be on Coke or Pepsi’s payroll. An upcoming beverage manufacturer might find it hard to convince the suppliers to carry his beverage along with other beverages.
Suppliers would generally want to do business where there are high turnovers (Pepsico Financial Statements, 2008. Another important issue is the pricing of the product. The product must have to be priced on a level that is consistent with the prices of Coke and Pepsi. Consumers would not pay a higher price to try out a new brand. Even though the brand is positioned to be superior to the existing beverages, it cannot be priced higher than Coke and Pepsi (Strategic Marketing: Coca Cola Company Versus Pepsico, 2002)