Preview

Korea

Powerful Essays
Open Document
Open Document
13101 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Korea
rP os t
9-711-462

REV: MAY 26, 2011

DAVID B. YOFFIE
RENEE KIM

op yo Cola Wars Continue: Coke and Pepsi in 2010

For more than a century, Coke and Pepsi vied for “th roat share” of the world’s beverage market.
The most intense battles in the so-called cola wars were fought over the $74 billion carbonated soft e drink (CSD) industry in the United States.1 In a “carefu lly waged competitive struggle” that lasted u from 1975 through the mid-1990s, both Coke and Pepsi a chieved average annual revenue growth of h e dil around 10%, as both U.S. and worldwide CSD consumpt ion rose stead y year after year.2 According to Roger Enrico, former CEO of Pepsi:

tC

The warfare must be perceived as a continuing ba ttle without blood. Without Coke, Pepsi would have a tough time being an original and lively c ompetitor. The more successful they are, the sharper we have to be. If the Coca-Cola company didn’t exist, we’d pray for someone to invent them. And on the other side of the fence, I’m sure the folks at Coke would say that nothing contributes as much to the present-day succ ess of the Coca-Cola company than . . .
Pepsi.3
That relationship began to fray in the early 2000s, ho wever, as U.S. per-capita CSD consumption started to decline. By 2009, the average American drank 4 6 gallons of CSDs per year, the lowest CSD consumption level since 1989.4 At the same time, the tw o companies experienced their own distinct w ups and downs; Coke suffered several operational setba cks while Pepsi charted a new, aggressive course in alternative beverages and snack acquisitions.

No

As the cola wars continued into the 21st century, Co ke and Pepsi faced new challenges: Could they boost flagging domestic CSD sales? How could they compete in the growing non-CSD category that demanded different bottling, pricing, and brand s trategies? What had to be done to ensure sustainable growth and profitability?

Economics of the U.S. CSD Industry

You May Also Find These Documents Helpful

  • Better Essays

    Xacc280 Financial Analysis

    • 1828 Words
    • 8 Pages

    The Coca-Cola company has been in business since its inventor began selling it in drug stores in 1886 (The Coca-Cola Company, 2009). Pepsi-Cola was invented a short time later in 1898, but at the time it was called “Brad’s drink.” It was later renamed Pepsi-Cola in 1902 (Butler, 2006). Since those early days when the sodas were invented, Coca-Cola and Pepsi have been in competition with each other for the domination of the world’s soda market. Over the course of more than a century, sales have continued to rise for both companies, and they both consistently earn a profit. Both companies have expanded into new product markets in more recent years. They have chosen to invest their earnings in new ventures like bottled water, snack foods, and iced tea, and they each strive to continue increasing their profits in many ways. In order to maintain this continued growth in the coming years, these companies are both in need of investors who will fund their efforts.…

    • 1828 Words
    • 8 Pages
    Better Essays
  • Powerful Essays

    Cola Wars

    • 1161 Words
    • 5 Pages

    Both Coke & Pepsi have segmented the soft drink industry into two divisions, via –…

    • 1161 Words
    • 5 Pages
    Powerful Essays
  • Best Essays

    Marketing Plan for Kickstart

    • 3527 Words
    • 15 Pages

    References: Bhasin, K. (2013, Jan 4.). Coke vs. Pepsi: The Story Behind the Neverending “Cola Wars.”…

    • 3527 Words
    • 15 Pages
    Best Essays
  • Powerful Essays

    Cola War

    • 9264 Words
    • 38 Pages

    For over a century, carbonated drink was introduced to mankind. Two major contenders in the industry stand Coca-Cola and PepsiCo. The two soar in the industry as they compete with each other. There were amazing monopolistic behaviors found in their doings. Have you ever wondered why such drink without any redeeming health benefits, but rather sublimely known as one of the causes to sugar and fat related diseases, can be so profitable? By setting the health benefits aside, have you ever wondered why such drinks are so popular yet a lot of competitors are unable to imitate and stand up to beat them? The secret lies…

    • 9264 Words
    • 38 Pages
    Powerful Essays
  • Powerful Essays

    References: Coca-Cola: The real story behind the real thing. (2009). Retrieved July 14, 2014, from…

    • 3117 Words
    • 13 Pages
    Powerful Essays
  • Powerful Essays

    FIN 534 Writing ASsignment 1

    • 4011 Words
    • 15 Pages

    Coca Cola has been a strong company for many decades, and has been able to innovate…

    • 4011 Words
    • 15 Pages
    Powerful Essays
  • Powerful Essays

    Favorite Brand Paper

    • 1366 Words
    • 5 Pages

    The Coca-Cola Company has offered consumers “delicious and refreshing” (The Coca-Cola Company, 2014) beverages for over 100 years, beginning at a soda fountain in 1886 located in Atlanta, Georgia (The Coca-Cola Company, 2014). Coca-Cola has since grown to over 100 brands, $48 billion dollars in net operating revenues, and $9 billion dollars in net income as of 2012 (The Coca-Cola Company, 2014). Their beverages are available in more than 200 countries around the globe and North American accounts for 21% of their unit case volume world-wide (The Coca-Cola Company, 2014).…

    • 1366 Words
    • 5 Pages
    Powerful Essays
  • Good Essays

    History of Pepsi-Cola

    • 2315 Words
    • 10 Pages

    Pepsi has marked more than the Hundred Years War with no decisive victory in sight. But then, perhaps victory would spoil all the fun -- not to mention the price wars that frequently let thirsty consumers load up at grocery chains for less than 17 cents a can. If it were just a matter of stuffing cola into an endless procession of cans, the days at Purchase and Somers, N.Y. (home of the Pepsi division) would hold no intrigue. (Ellis, 1979).…

    • 2315 Words
    • 10 Pages
    Good Essays
  • Best Essays

    Although Coca-Cola has made its global footprint as a leading competitor in this market and they continue strategizing for long-term sustainable growth, Coca-Cola is innovative in their methodology and application to maintain one-step ahead of their competitors and is aware of the market’s increasing demand of product substitution.…

    • 1379 Words
    • 6 Pages
    Best Essays
  • Powerful Essays

    Pepsi vs Coke

    • 1511 Words
    • 7 Pages

    For more than a century, Coca Cola and PepsiCo have been the major competitors within the soft drink market. By employing various advertising tactics, strategies such as blind taste tests, and reward initiatives for the consumer, they have grown to become oligopolistic rivals. In the soft-drink business, “The Coca-Cola Company” and “PepsiCo, Incorporated” hold most of the market shares in virtually every region of the world. They have brands that the consumers want, whether it be soft-drink brands or in PepsioCo’s case, snacks. With only one soft-drink market, the two competitors have no choice but to increase sales by stealing the other competitor’s clients. This led to the term, the “cola wars” which was first used to describe the “mutually-targeted” marketing campaigns in the 1980s and 1990s. A revival of the Cola wars is occurring now as PepsiCo remakes a well-known comparative commercial and resurfaces old tactics used in 1979. A closer look at their advertising styles and market shares will provide us with an idea of how the future will be for these two competitors.…

    • 1511 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    April 13th 1992, PepsiCo introduced an exciting change to its popular Pepsi product in the test cities of Providence, Denver, and Dallas and called it Crystal Pepsi. This is believed by many to have been one of the best ideas that PepsiCo had ever came out with, as they simply removed any and all coloring from Pepsi, creating a healthier and visually stimulating product. During the 1980's, Madison Avenue advertisers created one of our society's most aberrant spectacles yet, the pinnacle of decades of pop culture and advertising prowess, The Cola Wars. In our technological, media-driven, consumer-happy, and product-driven culture, selling and consuming soda has certainly become one of our biggest American pastimes. Coca-Cola and PepsiCo squared off for decades in various advertising coups trying to sell more soda to the already overly indulgent American public. A seemingly easy goal, but these companies have tried everything from using pop-stars, bold and daring challenges and most recently the chance to win a billion dollars on national television just for drinking their products. Throughout the…

    • 1403 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    Beginning of the Cola War: In 1950, newly appointed CEO Mr. Alfred Steele who was the marketing executive for Coca-Cola, began a new campaign for Pepsi named ‘Beat Coke’. Steele made bottlers to concentrate on take home sales through supermarkets and Pepsi introduced new 26 ounce bottle at the same time for family consumption. Later in 1963, new CEO Donald Kendall launched a new campaign for the young generation and the people who think themselves as ‘young at heart’, named “Pepsi generation”. Intense promotion were held to reach to the customers mind and thus Pepsi were able to narrow coke’s lead to 2-to-1 margin at that time. In this period, Pepsi sold concentrate to its bottlers at 20% less price than coke and also improved the existing store delivery services. Pepsi also promised to use more on promotion and advertisement to overcome the bottler’s opposition. On the other hand, Coke’s bottlers were still fragmented with more than 800 independent franchised bottlers all over US. In the late 1950s, Pepsi began offensive strategies to gain advantage over Coca-cola by starting “Americans Preferred Taste” campaign under CEO Robert Woodruff, and…

    • 938 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Coca Cola Case

    • 858 Words
    • 4 Pages

    Coca-Cola began working with franchised bottles to be made available wherever and whenever a consumer might want it. It also initiated “lifestyle” advertising, emphasizing the role of Coke in a consumer’s life. In the early 1970s, the US soft-drinks market was on the verge of maturity, and as the major players, Coke and Pepsi offered products that 'looked the same and tasted the same,’ substantial market share growth seemed unlikely. However, Coke and Pepsi kept revitalizing the market through product modifications and pricing/promotion/distribution tactics. The soft drink industry sold to consumers through five principal channels: food stores, convenience and gas, fountain, vending, and mass merchandisers.…

    • 858 Words
    • 4 Pages
    Good Essays
  • Better Essays

    MGT330 Final Paper

    • 2291 Words
    • 10 Pages

    Coca-Cola is one of the world’s biggest and most well-known beverage brands. During its heydays when the company was led by CEO Goizueta, Coca-Cola’s stock was on a steady rise. As late as the 1990s, Coca-Cola Co. was one of the most respected companies in America, a master of brand-building and management in the dawning global era (Carvens & Piercy, 2009). Over the last couple of years, however, Coca-Cola’s stocks have been falling and profits have been decreasing from quarter to quarter.…

    • 2291 Words
    • 10 Pages
    Better Essays
  • Powerful Essays

    Asma Shamshad – Junaid Manzoor – Sidra Manzoor – Warda Zubair – Zafar A. Khan…

    • 5836 Words
    • 24 Pages
    Powerful Essays