Q1 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.
Q2 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
Q3 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.
Q4 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.
Luis, M. (2006). Marketing Strategies in Pepsi and Coca cola. New York: McGraw-Hill. P 34-89.
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