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Product Mix And New Product Development Strategies

1216 words - 5 pages

In the intensely competitive business of carbonated drinks, two powerhouses are finding themselves in a world where their products are losing their fizz. Coca-Cola and PepsiCo have enjoyed phenomenal profits on their main events for years, but are now finding that growth opportunities are elsewhere in the beverage industry. The status of the two soda makers is not good enough anymore, with negative sales growth for these companies carbonated drinks segments. Both have begun the process of investing in a more diverse product line, but PepsiCo has largely beaten Coca-Cola to the punch. While Coke has largely tried to stay the course, PepsiCo is "defining its mission as serving the customer rather than protecting its venerable brands, and is hoping to stave off a stagnant middle age." It is clear that changes must be made in the strategies of both these companies, but with Pepsi already so far ahead in the emerging markets of non-carbonated drinks, Coke may go flat long before its competitor.Before we jump into the details about consumer preferences and how they are now affecting sales of drinks, we should consider for a moment how Pepsi managed to snatch up many of the large-growth beverages while Coke sat idly by not giving them a chance. To try and narrow down this argument, we will concentrate on Sports Drinks, Pepsi's Gatorade and Coke's PowerAde. Why the huge disparity in sales? Pepsi's Gatorade dominates the market. History has much to do with it. Gatorade was first produced for the 2007 National Champions, University of Florida Gators (hence Gatorade) in 1965 when coaches wanted a way to keep their players from dehydrating under the intense Florida sun. With the success of Gatorade for College Football, it spread for the most part unchallenged to become the official sports drink of virtually every major sporting venue. PowerAde was then introduced some 25 years later in 1990 as a competitor to Gatorade that would provide essentially the same benefits to athletes. Being a huge latecomer to the sports drinks business, it appears that PowerAde has been unable to seize control away from the major market of Gatorade fans. Unfortunately for Coke, PowerAde is a drink that was introduced into an almost saturated market with a product that gives nothing new to the customer except choice. Without changing the product to make it better then Gatorade, which will be extremely difficult, considering the vast experience since 1965 of Gatorade's Sports Science Institute (GSSI), the consumer will have no reason to switch in any significant way.The demand for sports drinks grew through the late 1980's and 90's and Coke and Pepsi both wanted on board. They most likely used some sort of PTSTP to formulate their decisions. First, they examined their existing Products and saw how they met the needs of the markets they served. In this regard, Coke was doing very well even though blind taste tests confirmed that Pepsi was the preferred drink, Coke continually...

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