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Product Mix and New Product Development Strategy It is a matter of fact that two major companies producing soft drinks are Coca-Cola and Pepsi. Both companies are trying to gain greater market share in soft drinks market. It is admitted that market is valued at about 30$billions per year. Coca-Cola and Pepsi are coming up with their new production lines and new ideas with the purpose to increase their market share. It is necessary to point out that effectiveness and creativity of both companies marketing strategies is the decisive element in wining respect in profits, sales and loyalty of customers. (Brady 2004) These companies are not only constructing new ways how to develop new products and sell Pepsi and Coke, they are also thinking how to increase market share in additional beverages categories. The goals of coca and Pepsi are the same, but they have different marketing strategies. For example, Pepsi was always the first in developing mew production lines ad Coca-Coca soon began to follow Pepsis strategy and started the same marketing policy developing new production lines.
Coke always hires marketing executives whose track records are good. The company also introduced cross trainings of managers. Concerning Pepsi it has always took more risks and acted rapidly compared with Coke. Pepsi was always developing new advertising ideas. (Brady 2004) Pepsi and Coke also relied on finding new markets in foreign countries and within the country. It is known that in foreign markets Coca-Cola appeared to be more successful than Pepsi.
In Eastern Europe Pepsi decided to rely on barter system that turned out to fail. However in certain countries Pepsi is more successful than Coke. Pepsi and Coke follow the marketing concept in foreign markets and offer products that are aimed to meet customers needs. For example, in some countries consumers want a diet soft drink, but there are no such products. In respond Pepsi developed Pepsi Max. (Brady 2004) Pepsi and Coke in order to get larger market share relied on the strategy of new products development. In most cases the products appeared t be successful, although sometimes production lines have failed. The major failure of Coke was changing its original formula and introducing its new brand New Coke.
It is mentioned that new formula hurt Coca-Cola, because customers demanded for Classic coke. Pepsi also failed several times. For example: Pepsi Light, Pepsi Free, Pepsi AM, and Crystal Pepsi. (Brady 2004) Both companies decided to follow consumers wants and needs. The next step taken is development of such a product that meets the requirements of customers for the particular country or region. Companies cant sell the only product if they want to succeed. Pepsi and coke are constantly creating ad updating their production lines and marketing plans in order to attract more customers.
Pepsi and coke have accommodated their targeted markets. (Brady 2004) Coca-Cola is one of the reigning manufacturers of soft drinks in the whole world is the most widely used and best-known brand product. Coca-Cola introduced several distinctive production lines and they led to companys financial stability and strong market standing. It is a matter of fact that Coke is focusing its investment opportunities on the market of soft drinks, because this market offers high rates of return and low capital requirements. Coca-cola developed such specific production lines as Diet Coke, Decaffeinated Diet Coke, Vanilla Coke and Cherry Coke. Nowadays the demand on soft drinks increased and accounts for 27-30% of soft drink market.
(Foust 2004) Rather successful line was Diet Coke which is expected to account 30% of the soft drink industry. Coke underlined that such soft drink is useful for health and diet. Coke recognized such idea and has altered its soft drink producing to accommodate this change in attitude. The image of the product is loaded with too much romantics and many people took this image deeply to heart. The image of coke is displayed on hats, T-shirts and collectible memorabilia. That is the main idea of promoting new products.
Such recognizable branding is the greatest strength of Coca-Cola. Enjoyed more than 685 million times a day around the world Coca-Cola stands as a simple, yet powerful symbol of quality and enjoyment. (Foust 2004) The Cokes target market is very wide and satisfies needs of many different customers. The target market ranges from healthy diet drinks to the average classic soft drinks. Cokes diet production line satisfies all age groups. It is proved that people of different ages consume Cokes diet line without any problems and side effects.
The targeted market is very large and allows diversification of products. (Foust 2004) The standard product life line of coke embraces five phases: Development, Introduction, Growth, Maturity and Decline. It is known that Coca-Cola is in the maturity stage, because the company has large and loyal group of constant customers. As growth slows the company focuses attention on cost management and product differentiation. It is admitted that in foreign countries the product life cycle is establishment of strong branding. (Foust 2004) Cokes marketing mix is the most crucial stage of the planning process, because companys customers buy a wide range of soft drinks. Consumers buy Cokes products, because they are of high quality and high standards.
It si mentioned that the augmented product is the extra consumer benefits and services provided to customers. Coca offers a help line and phone service for its customers who are not satisfied with product quality or want to give feedback. (Foust 2004) During many years Coca-Cola has been spending millions of dollars to develop new production lines and to promote existing ones. In the result the company has won world wide recognition. It is necessary to say that the company uses Individual brand strategy and its main products are given with their own brand names such as Sprite, Fanta, Coca Cola. References Brady, Diane. (2004, June 14).
A Thousand and One Noshes: How Pepsi deftly adapts products to changing consumer tastes. Business Week. Foust, Dean. (2004, May 17). Things Go Better With Juice. Business Week..
Research essay sample on Product Mix And New Product Development Strategy