Coca-Cola soft drinks case study
Between 1976 and 1978, the growth rate of Coca-Cola soft drinks dropped from 13 percent annually to a meager 2 percent. As the giant stumbled, Pepsi Cola was finding heady triumphs. First came the “Pepsi Generation.
” This advertising campaign captured the imagination of the baby boomers with its idealism and youth. This association with youth and vitality greatly enhanced the image of Pepsi and firmly associated it with the largest consumer market for soft drinks.
Then came another management coup, the “Pepsi Challenge,” In which com- erratic taste tests with consumers showed a clear preference for Pepsi. This campaign led too rapid increase In Pepsin’s market share, from 6 to 14 percent of total U. S.
Soft-drink sales. Coca-Cola, in defense, conducted its own taste tests. Alas, these tests had the same result?people liked the taste of Pepsi better, and market share changes reflected this. As Table 5. 1 shows, by 1979 Pepsi was closing the gap on Coca-Cola, having 17.
9 percent of the soft-drink market, to Coke’s 23. Percent. By the end of 1984, Coke had only a 2. Percent lead, while In the grocery store market It was now trailing by 1. 7 percent.
Further Indication of the diminishing position of Coke relative to Pepsi was a study done by Coca-Cola’s own marketing research department. The study showed that In 1972, 18 percent of soft-drink users drank Coke exclusively, while only 4 percent drank only Pepsi. In ten years the picture had changed greatly: In the new Coke fiasco, how could Coca-Cola’s marketing research have been Improved?
Be specific. 2. When a firm faces a negative press?as Coca-Cola did with the new Coke, and almost 15 years later In Europe?what recourse does a firm have? Support your conclusions. 3.
“If It’s not broken, don’t fix It. ” Evaluate this statement. 4. Do you think Coca-Cola engineered the whole scenario with the new Coke, Including fanning Initial protests, In order to get a bonanza of free publicity? Defend your position. 5. Critique Pepsin’s handling of Bases.
Could It have prevented the South American disaster? If so, how? 6.
With hindsight, how might Enrich, CEO of Pepsico, have kept Concerns, his principal bottler In Venezuela, In the fold Instead of defecting to Coke? . How could Coca-Cola have lessened the chances of antitrust and regulatory scrutiny In Europe? 8. Do you think Pepsi can ever make big Inroads In Coke’s market share In Europe? Why or why not? 9.
A big stockholder complains, “All this fuss over a few kids getting sick to their stomach. The media have blown this all out of proportion. ” Discuss. 10. Do you think Coca-Cola Is still a growth company? Why or why not? Defend your reasoning.
Then came another management coup, the “Pepsi Challenge,” in which com- naming led to a rapid increase in Pepsin’s market share, from 6 to 14 percent of total end of 1984, Coke had only a 2. 9 percent lead, while in the grocery store market it was now trailing by 1. 7 percent. Further indication of the diminishing position of department.
The study showed that in 1972, 18 percent of soft-drink users drank have been improved? Be specific. Almost 15 years later in Europe?what recourse does a firm have? Support your conclusions. 3. “If it’s not broken, don’t fix it.