Pepsi Cola produces Philippine Inc (PCPPI) grew its net income last year by 192 percent to 44 million on the back of double digit growth in volume and softer sugar prices. For the fourth quarter alone, net profit doubled to 147 million on gross sales of 6. 2 billion. Volume grew by 21 percent for the quarter; bringing full-year volume growth to an average of is percent across brands and categories. Gross sales for the full year rose percent to P22. 73 billion. This is a significant feat given the aggressive competition, marketplace challenges and heavy monsoon rains. We focused on driving growth of both the carbonated and non-carbonated drinks segments, in line with the strategy on ensuring affordability and availability across the Philippines, “said Jika Dalupan, PCPPI’s vice president for corporate affairs and communications. Cost of sales which consist primarily of raw and packaging materials, direct labor and manufacturing overhead, increase by 6 percent for a year ago, driven mainly by higher sales volume.
However, as a percentage of net sales, cost of sales decreased by 6 percentage points due to the price rollback of sugar, a major cost competent. As a result, the company’s gross profit reached P5. 29 billion, an increase of 44 percent from 2011. II. STATEMENT OF THE PROBLEM * Why the competition of PEPSI and COCA-COLA still existing? * Is the merger of PEPSI and COCA-COLA is possible? III. CAUSES OF THE PROBLEM * The war begins because a PHARMACIST forwards a soda drink and it was named “BRADHAM’S DRINK” and also known as PEPSI.
That time COCA-COLA has been selling the soda and exceeds 1 million gallons annual sales that’s why PEPSI and COCA-COLA become a rivalry, also that’s why the two soda company having a war because they having a competition to their soda product, because in every product the other soda company make a competitive product to beat the other product of the other company. * NO, because as we all know that the PEPSI and COCA-COLA is over 100 years now. Also the PEPSI and COCA-COLA is always competing to their new product so the merger of PEPSI and COCA-COLA is impossible IV. THEORITICAL FRAMEWORK OF THE CASE
ADVERTISMENT Advertising informs consumers about existence benefits of product and services and tries, and tries to persuade consumer to buy them claim that advertising aims at attaining target consumers to either think or react to the product or brand. As a method of achieving advertisement goals, advertisements as well as their content play a vital role in the process of commercial communication. More specifically, it is the advertised product and brand as well as the content of the advertisement to determine greater or lesser memory retention among the consumers. Objectives of advertising campaign:
To inform| To persuade| To remind| Telling the market about the new product| Building brand preference| Reminding buyers that the product will be needed in the near future| Suggesting new issues for a product| Encouraging switching to your brand| Reminding the buyers where to buy the products| Explaining how the product works| Changing buyer perception of product attributes| Keeping the product in buyers mind during off season| Informing the market for a price change| Persuading buyers to purchase now| Maintaining top-of-mind product awareness| STANDARDIZATION AND ADAPTION
International marketers and advertisers can approach the market in different ways when advertising a product or service internationally. They can either take a standardized advertising campaign is used for all markets, an adapted campaign consider the use of different advertisement that are adapted for different markets because of local conditions. However many different opinions exist about the best way to achieve success in advertising campaigns, and even though research has shown that advertisements of certain products can be standardized worldwide, both of the approaches provide their own unique benefits and weaknesses
THE LANGUAGE USE IN ADVERTISING CAMPAIGNS When advertising across borders, advertisers have to decide upon whether or not to use the language in the campaign. There are several reasons that drive companies to use foreign languages in advertisements, such as financial and image related reasons. Advertising cost is reducing when using existing foreign language television commercials rather than producing new commercials into the native language. Furthermore, in some situations, a product image benefits in using a foreign language as it more effective.
In non-speaking countries, English is the most frequently used foreign language in advertisement; a global marketing company can develop an English language advertisement in numerous countries worldwide seeing as most countries regard English as their first foreign language. Additionally, as a translation of English to local language is not absolute required, as money is saved when using English in a global campaign. V. RELEVANT THEORIES APPLICABLE AND DECISSIONS Marketing Mix Marketing Mix is the set of marketing tools that the firm uses to pursue its marketing objectives.
Marketing mix has a classification for these marketing tools. These marketing are classified and called as the Four Ps i. e. Product, Price, Place and Promotion. The most basic marketing tool is product which includes product design, quality, features, branding, and packaging. A critical marketing tool is price i. e. the amount of money that customers pay for the product. It also includes discounts, allowances, credit terms and payment period. Place is another key marketing mix tool. And it includes various activities the company undertakes to make the product accessible and available to the customer.
Some factors that decide the place are transport facilities, channels of distribution, coverage area, etc. Promotion is the fourth marketing mix tool which includes all the activities that the company undertakes to communicate and promote its product to target market. Promotion includes sales promotion, advertising, sales force, public relations, direct marketing, etc. Product In marketing, a product is anything that can be offered to a market that might satisfy a want or need. It is of two types: Tangible (physical) and Intangible (non-physical).
Since services have been at the forefront of all modern marketing strategies, some intangibility has become essential part of marketing offers. It is therefore the complete bundle of benefits or satisfactions that buyers perceive they will obtain if they purchase the product. It is the sum of all physical, psychological, symbolic, and service attributes, not just the physical merchandise. All products offered in a market can be placed between Tangible (Pure Product) and Intangible (Pure Service) spectrum. A product is similar to goods. In accounting, goods are physical objects that are available in the marketplace.
This differentiates them from a service, which is a non-material product. VI. DATA ANALYSIS HIGHLIGHTS Pepsi Cola produces Philippine Inc (PCPPI) grew its net income last year by 192 percent to 44 million on the back of double digit growth in volume and softer sugar prices. For the fourth quarter alone, net profit doubled to 147 million on gross sales of 6. 2 billion. Volume grew by 21 percent for the quarter; bringing full-year volume growth to an average of is percent across brands and categories. In Marketing A product is anything that can be offered to a market that might satisfy a want or need.
It is of two types: Tangible (physical) and Intangible (non-physical). Since services have been at the forefront of all modern marketing strategies, some intangibility has become essential part of marketing offers. It is therefore the complete bundle of benefits or satisfactions that buyers perceive they will obtain if they purchase the product VII. Decision Criteria and Alternative Solution As we all know that PEPSI and COCA-COLA are having a war in the soda industry. In this problem there was no alternative solution to avoid competing each other, but they must continue the battle between them.
The Pepsi must continue in making other products that can sell on the market to avoid people getting surfeit to the old product of the Pepsi because as we all know that all of us must be taste a new product every time if we are getting surfeit in one thing, so they must create a new product that can caught the attention of the people. In the COCA-COLA is the same strategy in the Pepsi, because how if the Pepsi release a new flavored soda drink that can caught by the attention of the people who drinks a coke, maybe they will taste and their opinion in the COCA-COLA drinks will fall, so that the COCA-COLA must make or produce a flavored soda.
Also to make sure that their consumers and buyers will not let go of them. VIII. MANAGERIAL ECONOMICS IMPLICATION DEMOGRAPHIC ENVIRONMENT * Explosive population in foreign countries like china translates into explosive growth potential for those markets. * Aging baby boomer population in United States may lead to a decrease in cola product demand. IX Question and Answer 1 The soft drink industry evolved with a franchised bottle system for most of the industry history the accurate procedures nurture and preserved the system why? 2 During the 1980’s both coke and Pepsi began to acquire bottles why? Why did coca-cola dominate the soft drink industry by the end of World War II? 4 How was Pepsi able to come back from near bankruptcy and gain market share at the expense of coke from the 1950’s to 1975? 5 During the 1950’s, 1960’s, and early 1970 being concentrate procedure yielded high returns? Why was this case? 6 How did the national launch of Pepsi challenge on 1979 chance the nature of competitive in the industry? 7 In respect did the Pepsi challenge any the competitor that followed in benefit or harm Pepsi and Coke? 8 During the 1990 Coca-Cola gained market share back from Pepsi and was significantly more profitable why?
Answer: 1. Because the bottle soda can bring any where that’s why they preserving the bottle system, also the people always use this to avoid littering anywhere. Also the people think that drinking in bottle is more safety than to drink in a bottled glass soda. 2. Because both Coca-Cola and Pepsi are attempted to streamline their bottlers by buying up loss-making or inefficient bottlers and reselling them to profitable franchisors. Eventually, all bottling franchisees were merged and new bottling companies were spun-off. 3. The new brand became a phenomenal success and became the third largest selling soft drink in US.
Coca-Cola attempted to imitate the taste of Pepsi, and introduced a new flagship product abandoning its 99-year old formula. And also because of coca-cola introduce diet coke. 4. Pepsi adopted aggressive tactics against Coca-Cola in terms of gaining market share. The company targeted family consumption by introducing new 26-ounce bottles, positioned itself as a product for youth or “young at heart” with catchy slogans and intense commercials, and persuaded its bottlers to modernize their plants, and improve store delivery services. 5.
Pepsi raised stakes further in 1972 by introducing the “Pepsi Challenge”. The company ran a marketing campaign in Dallas, Texas where people participated in blind taste tests. The marketing campaign was successful, and Pepsi used it to show that consumers preferred Pepsi over Coca-Cola. The marketing campaign led to sales rise in Dallas, and Pepsi eventually rolled out the campaign nationwide. 6. PepsiCo launched “Pepsi Challenge” in 1974 in Dallas, Texas. The campaign led to eroding of Coca-Cola’s market share, and making PepsiCo the dominant beverage company in food store sales. . The challenge led Pepsi to garner a market share of 20. 4% in 1980 compared to 17% in 1970. Coca-Cola on the other hand lost market share, from 28. 4% in 1970 to 25. 3% in 1980. 8. , Coca Cola became increasingly profitable, and gained significant market share at the expense of PepsiCo. Its flagship product controlled a steady market share of 20% while PepsiCo declined from 17. 3% in 1990 to 14. 5% in 1998. Coca-Cola had a global market share of 51% compared to Pepsi’s 21%.
IX. RECOMMENDATION FOR PEPSI: * Produce more soda that can catch the attention of the buyers. Improve the quality and taste of the Pepsi Cola. * Make a product of Pepsi that has a flavor that buyers will never forget. * Always be a good competitor everywhere product is landscape face to the Coca-cola FOR COCA-COLA: * Continue the good quality of Coca-cola. * Develop the good service of Coca-cola to their buyers and producer. * Produce those sodas that can be replaced to the old flavored soda. X. REFERNFCE www. Pepsico. com www. cocacola. com www. studymode. com “The Cola Wars” Pepsi cola vs. coca-cola Submitted by; Karl Louie Navarra Submitted to; Rene Gaor Delfino