Cola Wars Anastasia Nikityuk Max Polishyk Vlad Savchuk

Cola Wars Anastasia Nikityuk Max Polishyk Vlad Savchuk Tega Ogwhe Maryna Yudenko Date: 16. 11. 2011 1

Content § Activities the CSD producer is responsible for § Activities the bottler is responsible for § Value chain of CSD producer & bottler § Differences for Coca Cola / Pepsi? § Strategy used by Pepsi / Coca Cola? 2 WIUU Business Policy, 2012. N. Syrotiuk

Activities the CSD producer is responsible for: § Advertising § Promotion § Market research § Product planning § Bottlers relation Production process: § Blend Raw Materials § Packaging in Plastic Canisters § Shipping to Bottler § Add artificial sweetener 3 WIUU Business Policy, 2012. N. Syrotiuk

Activities the bottler is responsible for Production process: § Purchasing the concentrate § Add carbonated water and high fructose corn syrup § Bottle or can the CSD § Deliver it to customer accounts DSD delivery (Direct store door) includes: § Route delivery § Physically placing Managing the CSD brand in the store: § Managing the shelf space by stacking the product § Positioning the trademarked label § Cleaning the packages and shelves § Setting up point-of-purchase displays and end-of-aisle displays § Promotion of soft drink sales 4 WIUU Business Policy, 2012. N. Syrotiuk

Value chain of CSD producer & bottler Primary activities: Production Distribution Marketing Profit Secondary activities and costs: § R&D § HR management § Technology § Supply 5 WIUU Business Policy, 2012. N. Syrotiuk

Differences for Coca Cola / Pepsi § While both are called “cola” they both attempt to address the same target tastes but from the different approaches coke was the first on market with what is still a secrete formula and Pepsi followed with as similar (not exact) taste. It is very much a factor of your personal likes, either or neither may appeal to you. Seem sweeter. § However, the two market their products with an attempt to exclude the other wherever they are sold. They are truly different but that difference is a matter of individual taste. So only you can know the difference because even a chemical analysis won’t give you something to truly differential the taste. § Also Coca-cola is larger, has larger control of soda market with 44% while Pepsi soda market is 31. 8%. in terms of popularity, coca cola 18. 6% shares and Pepsi has 11. 9% and in advertising and marketing coca cola is $1. 9 billion and Pepsi is $1. 6 billion. 6 WIUU Business Policy, 2012. N. Syrotiuk

Strategy Coca cola and Pepsi use broad-differentiation strategy § Coca-Cola and Pepsi are not low-price products, but strong brands which try to differentiate one from another. Though the product is similar, both companies create totally different images. Coca-Cola is focused more about partying, friendship, holydays, while Pepsi’s motto is challenging and non-stop. But both say that it’s for everyone. Brand images are strong and last for many years. Coca-Cola stated: “Coke is a classic and one should not change a classic only the scenario around it”. So Coca-Cola and Pepsi try to keep the original product but differentiate scenario of it. 7 WIUU Business Policy, 2012. N. Syrotiuk