March 3, 2014
Internationalizing the Cola Wars: The Battle for China and Asian Markets
Coke was formulated in 1866 by John Pemberton, a pharmacist in Atlanta who sold it at drug store fountains as a “potion for mental and physical disorders.” Since then, it has grown and spread in the world as one of best Soft Drink in the world with an intense competition against Pepsi. It has started this competition in 1950s and continues until now. Coke is facing different challenges to how to overcome this competition to reach to safety in market. In the U.S., Coke is taking over the market share compared to Pepsi-Cola. 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.
As the competition was intense, the companies had to frequently implement strategic changes in order to gain competitive advantage. The only way to do this, apart from introducing product innovations, was to fight it out in the marketplace. In 1974, Pepsi launched the “Pepsi Challenge” in Texas. In blind taste tests hosted by Pepsi’s bottler, the company tried to demonstrate that consumers in fact preferred Pepsi to Coke. Coke countered with rebates, rival claims, retail price cuts, and a series of advertisements questioning the tests’ validity. The Pepsi Challenge was quite successful and in 1979, Pepsi...
Please join StudyMode to read the full document