Soft Drink Industry

91,448 views

Published on

22 Comments
91 Likes
Statistics
Notes
No Downloads
Views
Total views
91,448
On SlideShare
0
From Embeds
0
Number of Embeds
352
Actions
Shares
0
Downloads
0
Comments
22
Likes
91
Embeds 0
No embeds

No notes for slide

Soft Drink Industry

  1. 1. Soft Drink IndustrySoft Drink Industry Sethaphat P. GSBS 6021 Consumer Behavior
  2. 2. Outline Part I • Industry Overview • Applying Porter’s Five Forces to the soft drink industry • Industry S.W.O.T Analysis • Limitations and Recommendations (Industry) Part II • Consumer Behaviour Influenced ( Marketing Mix) Part III • Consumer Segmentations • Segmentation S.W.O.T Analysis • Limitations and Recommendations (Segmentation) Part IV • Conclusion • References
  3. 3. PART IPART I
  4. 4. What is Soft Drink ? Soft drinks are enormously popular beverages consisting primarily of carbonated water, sugar, and flavouring. – wikipedia.org A nonalcoholic, flavored, carbonated beverage, usually commercial prepared and sold in bottles or cans. - American Heritage Dictionary
  5. 5. Soft Drink Industry Market Share - Companies 42% 32% 15% 11% Coca-Cola Pepsi Cadbury Schweppes Others So urce : so ft drink m arke t in the U.S.-www.be ve rag e -dig e st.co m
  6. 6. Soft Drink Industry Market Share - Brands 31% 20%17% 11% 11% 10% Coke Classic Pepsi-Cola Diet Coke Mt.Dew (Pepsi) Diet Pepsi Sprite (Coke) So urce : so ft drink m arke t in the U.S.-www.be ve rag e -dig e st.co m
  7. 7. Porter’s Five Forces So urce : wikipe dia.o rg
  8. 8. 1. A fierce competition exists among very few players: - Duopoly industry - Intense rivalry between Coke and Pepsi 2. The threat of substitutes is reduced by the expansion of products portfolio: - Many alternative beverages e.g. juice, tea 3. Suppliers have less bargaining power: - Many substitutes for sugar and packaging e.g. sugar - corn syrup, sweeteners packaging - glass, plastic, metal cans Applying Porter’s Five Forces to the soft drink industry
  9. 9. Applying Porter’s Five Forces to the soft drink industry 4. Different levels of bargaining power exist among the groups of buyers: - Vending Machine – no buyer bargaining power - Fast Food chain – more bargaining power 5. Strong barriers to new entrants: - Amount of capital investment require - Exclusive territories in distribution channel - The access to retail channels
  10. 10. Industry S.W.O.T Analysis Strengths • Basic Consumer Need • Large and growing market • Different flavors and packages • Low Costs • Non-Alcoholic Weaknesses • Negative Claim • Traditional Preservation • Narrow range of material Opportunities • Establish facts and use potential PR • New Packaging materials • Replace alcoholic drinks • Further replace tea and coffee Threats • Healthy Issues • Soft Drink in School Guideline • Environmentalism • Distribution costs
  11. 11. Limitation – Healthy Issues • Obesity / Weight Gain • Oral Health • Diabetes Type 2 Recommendation : • Drinking through a straw • Should not consume too much • Low-calorie or No-calorie beverage So urce : Am e ribe v.o rg
  12. 12. Limitation – Environmental Issues • Recycling of used-packs • Waste water Recommendation : • Waste water treatment and re-use of process water • “Recycle It Now” Campaign
  13. 13. Limitation – Distribution Costs • The costs of transportation Recommendation : • Developed JIT System • Improved efficiency of production in response to changing retailing and distribution patterns
  14. 14. Limitation – Soft drink in school • School Beverage Guidelines (only high school) Recommendation : • No or low calorie beverage with up to 10 calorie/ 8 ounces
  15. 15. PART IIPART II
  16. 16. Consumer Behavior Influenced Product Price Place (Distribution Channel) Promotions Consumer behavior can be influenced by marketing mix
  17. 17. Consumer Behavior Influenced Product: • not just the liquid inside but also packaging • many sizes • many flavors • many brands e.g.: • eye catching appearance with red color
  18. 18. Consumer Behavior Influenced
  19. 19. Consumer Behavior Influenced
  20. 20. Consumer Behavior Influenced Price: • create consumer perceptions and values • high price = better quality
  21. 21. Consumer Behavior Influenced Distribution Channel: • easy to identify in retailing stores • make up the greater proportion of options to buy • vending machine in many sports stadiums and malls
  22. 22. Consumer Behavior Influenced
  23. 23. Consumer Behavior Influenced
  24. 24. Consumer Behavior Influenced Promotions: • Pull Strategy e.g. coca-cola fridge in the supermarket • create attractiveness from advertising • sponsor to many events e.g.: sports and recreational activities • competition e.g.: check the lid for an instant prize
  25. 25. Consumer Behavior Influenced “PULL STRATEGY” is when the consumer request the product and pull in through the delivery channel. -wikipe dia/o rg
  26. 26. Consumer Behavior Influenced Coke – “The side of Life”
  27. 27. PART IIIPART III
  28. 28. Consumer Segmentation Use-situation Psychographic Demographic
  29. 29. Demographic Segmentation Demographic Segment - Youth (10-19 years old) - majority of consumers - spending power - brand loyalties develop through adult-hood - Young adult (20-24 years old) - for diet product - Adult ( 25-35 years old) - for diet and caffeine free products
  30. 30. Psychographic Segmentation Psychographic Segment - Lifestyle - personality (individual/group) - Attitudes - “self-expression” image associated with product - “cool”
  31. 31. Use-situation Segmentation Use-situation Segment - Christmas - Chinese New Year - Olympic
  32. 32. Segmentation S.W.O.T Analysis Strengths • Purchasing Powers • Large number of consumers • Large profitability • High in brand awareness Weaknesses • Unstable in attitude/lifestyle • Less brand loyalty • Health concern • Ageing population Opportunities • Economic • Social occasions • New markets in developing countries • Climate – Hot Weather Threats • Juice, Alcohol Drinks, Bottled Water • Fashion Trends • Consumer perception of health • Law and government
  33. 33. Limitation – Unstable attitude • Youth always change their interests • Easy to be influenced Recommendation : • Be aware of teens’ trends • Pay attention to different tribes
  34. 34. Limitation – Less brand loyalty • Always changing in brands • Price sensitive • Easy to be motivated by certain type of group e.g.: celebrities Recommendation : • Brand extension • Create many marketing campaigns
  35. 35. Limitation – Health concern • Calorie reduction • Avoidance of sugar • Suspicion of additives Recommendation : • Promote low or no calorie drinks • Labeling ingredients
  36. 36. Limitation – Ageing population • Changing in consumer’s life stage e.g.: teens become adults • Different group of people e.g.: young adult, adult, old people • Life status e.g.: single, married, single parents Recommendation : • Focusing to the new markets e.g.: old people • Developed in R&D
  37. 37. Limitation – Other beverages • Juice • Alcohol drinks • Bottled Water Recommendation : • Variety of products • Promotion campaigns
  38. 38. PART IVPART IV
  39. 39. Conclusion To sum up, the soft drink industry has increased 25% annually. For the U.S. market, Coca-Cola and Pepsi are the biggest companies in this industry. Coca-Cola use marketing mix to influence consumers to purchase more products. Consumer segments are divided into 3 segments; demographic, psychographic and use-situation. After we do the S.W.O.T analysis, we see that there are limitations for these segments such as unstable in attitude and lifestyle, less brand loyalty, health concern and ageing population. However, these limitations can be solved as we have recommended.
  40. 40. References • cocacola.com • pepsi.com • foresight.gov.uk • wikipedia.org • beverage-digest.com • knowledgenetworks.com • ameribev.org

×