The soft drink industry is dominated by Coca-Cola and Pepsi, which combined control over 70% of the market. Coca-Cola uses all aspects of the marketing mix to influence consumer behavior. The industry faces threats from health concerns, substitute beverages, and changing consumer attitudes. However, opportunities exist through new products, expanding markets, and addressing consumers' health and lifestyle needs. The document analyzes the industry using Porter's Five Forces and provides recommendations to improve consumer segmentation and overcome limitations.

1. Soft Drink IndustrySoft Drink Industry
Sethaphat P.
GSBS 6021 Consumer Behavior

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. PART IPART I

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. 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. 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. Porter’s Five Forces
So urce : wikipe dia.o rg

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. 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. 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. 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. Limitation – Environmental Issues
• Recycling of used-packs
• Waste water
Recommendation :
• Waste water treatment and re-use of process water
• “Recycle It Now” Campaign

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. 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. PART IIPART II

16. Consumer Behavior Influenced
Product
Price
Place
(Distribution Channel)
Promotions
Consumer behavior can be influenced by marketing mix

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. Consumer Behavior Influenced

19. Consumer Behavior Influenced

20. Consumer Behavior Influenced
Price:
• create consumer perceptions and values
• high price = better quality

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. Consumer Behavior Influenced

23. Consumer Behavior Influenced

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. Consumer Behavior Influenced
“PULL STRATEGY” is when the consumer request the product
and pull in through the delivery channel. -wikipe dia/o rg

26. Consumer Behavior Influenced
Coke – “The side of Life”

27. PART IIIPART III

28. Consumer Segmentation
Use-situation
Psychographic
Demographic

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. Psychographic Segmentation
Psychographic Segment
- Lifestyle
- personality (individual/group)
- Attitudes
- “self-expression”
image associated with product
- “cool”

31. Use-situation Segmentation
Use-situation Segment
- Christmas
- Chinese New Year
- Olympic

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. Limitation – Unstable attitude
• Youth always change their interests
• Easy to be influenced
Recommendation :
• Be aware of teens’ trends
• Pay attention to different tribes

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. Limitation – Health concern
• Calorie reduction
• Avoidance of sugar
• Suspicion of additives
Recommendation :
• Promote low or no calorie drinks
• Labeling ingredients

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. Limitation – Other beverages
• Juice
• Alcohol drinks
• Bottled Water
Recommendation :
• Variety of products
• Promotion campaigns

38. PART IVPART IV

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. References
• cocacola.com
• pepsi.com
• foresight.gov.uk
• wikipedia.org
• beverage-digest.com
• knowledgenetworks.com
• ameribev.org