Coke is a carbonated soft drink drink produced by the Coca-Cola Company. The Coca- Cola Company is based in Atlanta and owns the hallmark coke. Coke is produced in several merchandise lines’ which include caffeine free Cola. diet coke. coke zero and coca-cola vanilla. Coke as a merchandise is available and besides targets all the 200 states in the universe therefore it is non restricted to any given part. It is besides the chief dominant merchandise in the world’s drink market. Coke is a differentiated merchandise with its chief close competitor/substitute being Pepsi. The two merchandises normally target the same client base and besides do fulfill the same demand but they are made to look different to consumers through merchandise distinction activities such as stigmatization and monolithic advertisement. Although coke is one of the taking trade names in the universe affair fact it is the most valuable trade name in the universe with a worth of one billion in the recent yesteryear there has been some wellness issues raised about the merchandise. The merchandise has been associated to diabetes. dental diseases. malignant neoplastic disease and other fleshiness related conditions originating from the ingredients used in the coke sirup expression.
Issues have besides been raised on the bisphenol A used in the run alonging the coke can which have been termed to be environmentally harmful. Basically issues sing the coke merchandise have been centered on wellness issues as many research workers have found that coke has some wellness deductions ( McGonigal 2012 ; Harrington 2010 ) . Coca-Cola places its merchandises depending on the mark market. competition. and besides depending on the types of the market construction it is in. Coke‘s mark market is chiefly the adolescents and the young person whose demographics are between the ages of 18 to 25 old ages. The section of the mark market constitutes 40 % of the coke mark market. Other mark sections include ; the people with busy life style. pupils. the immature. adventuresome and besides both upper and lower categories in footings of income ( Anon. 2012 ) . Coca-Cola Company has made certain they designed merchandises to accommodate the demands of each of these sections. For illustration the packaging of the merchandises in returnable bottles meant to pull the people in the lower income sections.
The 1 litre and two litre bottles for the households and the coke nothing and diet coke for wellness witting consumers. The company targets the audience utilizing different techniques. The chief tool is publicizing which the coca-cola company is known for. Coca Cola has one of the biggest advertisement budgets in the universe amounting to $ 2. 9 billion in the twelvemonth 2010. The carbonated drinks drink industry has many participants but there the major dominant forces in the industry. The supply of carbonated drinks is normally high due to the many participants in the market but the major participants are Coca-Cola Company and PepsiCo. The other participants include Nestle. Cadburys. Dr Snapple group and Buffalo Rock Company ( Business penetrations. 2012 ) . The coke merchandise therefore operates under oligopoly market construction and more specifically a duopoly. This market is characterized by non monetary value completion with the chief signifiers of competition being in signifier of advertisement. packaging and stigmatization.
There is besides mutuality between houses and merchandise distinction. Mutuality is shown by particularly the two major participants in the industry that is Coca Cola Company and PepsiCo. Any action taken by any of them must be retaliated by the other. An addition in advertisement outgo in this industry by any of the undermentioned company leads to an addition in the market portion of that company. For illustration with the decrease of PepsiCo advertisement outgo led to a autumn in its market portion in the drink industry. Coke as a merchandise is differentiated whereby it does non hold a perfect replacement to it. Besides the houses in this industry be given to be dependent on each other in determination devising intending a house has to see the actions of the other before doing and pricing and production decisions/policy ( Emami. 2003 ) . In this sector there are barriers to entry chiefly due the big economic systems of graduated table enjoyed by the already bing companies in the sector. For illustration the coke maker Coca Cola Company enjoys big economic systems of graduated table due to its expansive production ( Coca-cola. 2011 ) . The big capital spending required in come ining this industry in footings of fixed cost and advertisement outgo besides restricts entry into the sector.
Another barrier of entry into this industry is patenting of production methods for illustration coca Cola has patented the expression to the coke sirup which has ne’er been revealed. Due to the ferocious competition in this industry at that place has been competition at that place has been increased invention with the debut of sugar free and diet merchandises as wellness consciousness additions. Soft drinks company have besides chiefly in the U. K come up turbo fizz dial placed on the side of drink can intend to spread out the range of the carbonated soft drink sector. Through this application the consumers can be able to increase or cut down the figure of bubbles in their drinks and besides change the colour of the can ( Chouke. 2007 ; Mercer. 2007 ) . The soft drink industry is non extremely regulated but in the recent aftermath of wellness frights from the ingestion of soft drinks there have been increased attempts to modulate the industry. The ordinance has been chiefly focused on the schools and school traveling kids.
For illustration in the U. K they announced new minimal demands of nutrition content to be sold at schools. The schools tiffin is to be free from carbonated drinks and they are besides non to be sold in their tuck stores. In the U. S there has been increased protagonism to modulate the industry with wellness experts and consumers advocators forcing for higher revenue enhancements to be levied on these merchandises. This is aimed at modulating the ingestion of sodium carbonate. There is besides increased activism against the soft drink industry with for illustration the Center for Science in the Public Interest ( CSPI ) establishing a planetary run dubbed” Dump soda” . Market regulations and ordinance are expected to fasten as clip advancements by with authorities being put under force per unit area to make so by the populace ( Anon. . 2004 ) . The coke merchandise demand has non been shaken a spot even with the recent anti Coca-Cola runs. For illustration in Kenya coca Cola invested 1. 2 billion Kenya shilling on a new line to run into the increasing demand. The Coca-Cola Company is estimated to hold 1. 8 billion functioning per twenty-four hours with the most consumed Coca-Cola Company merchandise being the coke trade name ( Imap. 2010. appendix A-vi ) .
The chief factors that have been driving the demand for the coke trade name is first of all the conditions. The demand for coca Cola increases enormously during the hot conditions motivating the coca Cola company to present experimental peddling machines that can set their monetary values depending on the conditions ( Pondent. 2012 ) . If the temperature goes up the peddling machines automatically increases the monetary values. Another demographic factor that has been driving demand are the people between the age of 55- 65 who have besides been taking up coke trade names chiefly the diet coke and coke nothing due to the wellness deduction of the other coke merchandises in footings of the sugar content and nutritionary value. The coke nothing and coke diet has besides received positive responses from the other market sections as consumer gustatory sensations start to alter in favour of healthful picks hence they have besides taken up the healthier coke trade names ( Coleman 2004. p 11-12 ) Coca cola demand is elastic which is in contrast of the whole soft drink demand which tends to be inelastic.
The whole soft drink sector is monetary value inelastic visual perception that even when monetary values increase the demand will still be at that place as they merely chief alternate to soft drinks is H2O and people can non devour H2O all the clip. Coca Cola though has an elastic demand as at that place many replacements to the merchandise which have about a similar gustatory sensation and satisfy are the same demand. Therefore any addition in monetary value will take to a bead in gross revenues as consumers will travel to the alternate cheaper merchandises. Coca Cola trade name besides experience high cross snap of demand due to besides the many close replacements with is closest being Pepsi. This means that the merchandise is extremely antiphonal to the monetary value alterations of the replacement and any alteration in its monetary values or other merchandises monetary values will rapidly reflected in the sum gross revenues ( Anon. 2004. p 17-18 ) . Subsequently there has been a inquiry whether coke or all the soft imbibing general are necessities or luxuries. That will depend chiefly on the income of the consumer and the perceptual experience besides.
For illustration a individual in the low income section will see the merchandise as a luxury hence any monetary value addition will take to cut down gross revenues since coke is non perceived as an indispensable. For a individual in the higher income bracket monetary values alterations will non impact their ingestion of coke as the proportion of their income spent purchasing a coke is far much smaller comparison to the person’s income section. But by and large talking coca Cola is perceived as epicurean but a inexpensive luxury for that affair harmonizing to Bloomberg concern weekly ( Tedflow. 2012 ) . Coke trade name may non necessitate farther betterment in footings of quality as any alteration in the expression would turn out detrimental as it was the instance in 1985 at the tallness of Cola wars when the coca Cola company announced that it was altering the expression and therefore besides the gustatory sensation. This proven unwise as protests sparked from the coca Cola consumers coercing the company to return to the original expression. The unfavorable judgment was bad such that even the Cuban president Fidel Castro commented against the new formula/move.
The major betterment factor for the coke trade name is chiefly advertisement and late healthier coke trade names. Coca Cola Company spends monolithic sums in advertisement and selling activities. The selling budget is about 2. 9 billion and this has made coca cola the most valuable trade name in the universe. Recently besides the more diet and nutritionary oriented merchandises demand has been on the rise as more and more consumers switch to more healthy merchandises. Entry into this industry will be hard as the already existing houses mostly Coca-Cola Company and PepsiCo enjoy immense sums of economic systems of graduated table and trade name trueness from their consumers. Entry into this market would necessitate a really advanced merchandise to draw consumer from these two giants. The last century has seen entry of new participants but denumerable companies have survived. Exit besides will take to monolithic losingss in footings of the fixed costs. and advertisement disbursals spent as a company tries to make a strong trade name image. This makes entry and issue hard in this industry.
The strong barriers of entry and issue in this industry make it a immense gamble to seek and come in into the soft drink industry. Entry of new participants has no or small force per unit area to the already bing companies ( Ziegler. Ellenbaker. Klehr. Pesarchick and Deichert. 2006. pg 7- 8 ) . The future market mentality for the coke trade name is non every bit bright as perceived in the 1990s more and more people move along with the green motion. Coca Cola though has read the market future mentality good with the debut of more healthier and alimentary coke trade names as it seeks to protract the life of its ripening. over a century old trade name. Besides the company has invested to a great extent in the African market as it seeks to leverage its strong trade name name in the continent.
This will prolong the merchandises demand in the hereafter as Africa is supplying one of the fast growth economic systems and besides bring forthing a big in-between category base. This category is expected to drive the demand for the coke merchandises as more and more Africans adopt the western life style or what is now called Americanisation. This can be demonstrated by the heavy advertisement for illustration with the launch of runs such as a billion grounds to believe in Africa. The company has besides launched new content selling scheme which seeks to tap into the turning digital and societal web sites marketing ( Bullas. 2012 ) . The move has already has been a hit. These new attempts are aimed at protracting the trade name strength and life of the coke trade name therefore the trade name is expected to stay strong particularly if all these attempts are successful.
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