FREE ESSAY ON COKE VS. PEPSI CASE STUDY

COKE VS. PEPSI CASE STUDY

Control of market share is the key issue in this case study. The situation is both Coke
and Pepsi are trying to gain market share in this beverage market, which is valued at
over $30 billion a year (98). Just how is this done in such a competitive market is the
underlying issue.
The facts are that each company is coming up with new products and ideas in order to
increase their market share. The creativity and effectiveness of each company's marketing
strategy will ultimately determine the winner with respect to sales, profits, and
customer loyalty (98). Not only are these two companies constructing new ways to sell
Coke and Pepsi, but they are also thinking of ways in which to increase market share in
other beverage categories. Although the goal of both companies are exactly the same, the
two companies rely on somewhat different marketing strategies (98). Pepsi has always
taken the lead in developing new products, but Coke soon learned their lesson and started
to do the same. Coke hired marketing executives with good track records (98). Coke also
implemented cross training of managers so it would be more difficult for cliques to form
within the company (98). On the other hand, Pepsi has always taken more risks, acted
rapidly, and was always developing new advertising ideas.
Both companies have also relied on finding new markets, especially in foreign countries.
In the foreign markets, Coke has been more successful than Pepsi. For example, in Eastern
Europe, Pepsi has relied on a barter system that proved to fail. However, in certain
countries that allow direct comparison, Pepsi has beat Coke. In foreign markets, both
companies have followed the marketing concept by offering products that meet consumer
needs (99) 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 (99).
Pepsi responded by developing Pepsi Max.
These companies in trying to capture market share have relied on the development of new
products. In some cases the products have been successful. However, at other times the
new products have failed. For Coke, changing their original formula and introducing it as
"New Coke" was a major failure. The new formula hurt Coke as consumers requested Classic
Cokes' return. Pepsi has also had its share of failures. Some of their failures included:
Pepsi Light, Pepsi Free, Pepsi AM, and Crystal Pepsi.
One solution to increasing market share is to carefully follow consumer wants in each
country. The next step is to take fast action to develop a product that meets the
requirements for that particular region. Both companies cannot just sell one product; if
they do they will not succeed. They have to always be creating and updating their
marketing plans and products. The companies must be willing to accommodate their "target
markets".
Gaining market share occurs when a company stays one-step ahead of the competition by
knowing what the consumer wants. My recommendation is to make sure the company is always
doing market research. This way they are able to get as much feedback as possible from
consumers. Next, analyze this data as fast as possible, and then develop the new product
based upon this data. Once the product is developed, get it to the marketplace quickly.
Time is a very critical factor. In my opinion, with all of these factors taken into
consideration any company should give any company a good jump on market share.