In assignment one we are asked to choose two competitive products to analyze how they address the 4 P’s of marketing. First, we must understand what the 4 P’s of marketing refers to. They are pricing, product, promotion, and placement of the product. We are asked to describe the products, their industry, their market shares, and their fluctuation in sales. Now that we understand what the 4 P’s of marketing means, we need to choose our two products.
I have chosen to use Coke and Pepsi. These are both products of the beverage industry, more specifically of the carbonated beverage industry. Coke has generally been the leader of this industry with Pepsi right behind it (see fig. 1). (Yoffie, 2010). Up until the mid 1990’s, both products seen substantial growth but when the consumers began a trend of being more health conscientious the growth of the two products slowed and actually started to decline. This trend is still apparent; as both companies have, lost sales over the past two years (see fig. ). (Yoffie, 2010). Fig. 1 | 2009Rank Brands| 2009MarketShare| 2008Market Share| Share Change| 2009 Cases(millions)| Volume %Change| 1| Coke| 17. 0| 17. 3| -0. 3| 1598. 0| -4. 0%| 2| Pepsi| 9. 9| 10. 3| -0. 4| 936. 4| -5. 5%| It is apparent that certain seasons such as football season and holidays these products do better than in other times that have no crowd gathering events. The next table is going to give a brief overview of the products and their comparison in reference to the 4 P’s of marketing. Product 1- Coca-Cola| Product 2 – Pepsi- Cola| Description of Product| Coca-Cola is the most popular and biggest-selling soft drink in history, as well as the best-known product in the world | Pepsi-Cola is a soft drink very similar to its rival Coca-Cola. It is ranked number 2 in the top ten for its industry| Place (Distribution)| Soda fountains in restaurants and convenience/gas stores, supermarkets, department stores, vending machines, concession stands, theaters, auditoriums, etc. Basically all the same places as Coca-Cola| Product Placement| End caps, shelves in the store, at registers, outside stores, in hospitals, courthouses, office buildings, break rooms, college dormitories, etc. | Again basically all the same places as Coca-Cola| Pricing Techniques| Coupons, by one get one deals, anniversary pricing, buy this and get something else for free (partnering with known combination products)| Same as Coca-Cola| Promotions| Billboards, sporting events, sponsorships/endorsements of special events, broadcastings, etc. television, radio, and newspaper ads, special signage in store windows and within the stores. | Same as Coca-Cola| Now that we know the basics of the two products, it it is time to dive into the products a little more deeply. In the next several sections, we are going to go more in-depth in each section of the table above and elaborate on the different techniques each product is known for using. To start with, we are going to take a deeper look into place or distribution of the products. Both products are found in a number of the same places. If a store of any kind carries one, in most cases they carry both.
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There are a few exceptions to this, one good example would be The Home Depot, which has an exclusive contract with Coca-Cola and only has their products in their stores. Unlike stores, though most restaurants only carry one or the other. Due to space and costs, most restaurants cannot accommodate both so there is a constant war between the two products to win the limited spots available. The next thing to look at is where the products are placed. When a product is sold in a store, they have to bid or negotiate with the storeowner where their product will be located.
They may give a higher profit margin to the storeowner if they get a front-end cap near the main entrance or coolers by the checkout registers. They also bid on which shelves on the main aisle they will get. All these factors are important and have been proven to affect their sales figures. Now that we have discussed distribution and placement, we need to look at how they price their products. Both products are normally the same price by the single bottles or cans, but when they are sold by six packs and larger, they become different in their pricing.
Both companies also distribute coupons in newspaper ads. Another pricing technique that they both use is in store special pricings. During holiday seasons and the summer time when people are having a large number of family get-togethers, both companies are known for running specials on their product to increase sales. Another pricing or promotional technique both companies use is the giveaway technique or the contest technique. The last of the 4 P’s is promotion. When one talks about promotion, one is referring to how a company utilizes all the different forms of media.
One of the largest promotional campaigns each year is during the holiday season. Most of the population has some sort of celebration from mid November thru mid January. The coke and pepsi companies both want to be a part of that action so they design elaborate eye catching and ear catching commercials for television, radio, and in store pa systems. Then they add to this campaign will signage from in store to billboards. The second largest annual event that increases sales actually encompasses some of the same period as the holidays. This event is tailgating.
During the football season which lasts until somewhere into mid January and then goes into the playoffs and the super bowl, both companies know it is very important to stay in the lime light so they have price wars and everything else. The final thing we want to compare between the two products is how they uphold their social responsibilities and ethics. This is a new area of concern among consumers and producers, but it is one that could easily be the destruction of a company if not taken seriously. Both companies have made commitments to society as a whole to conserve our precious natural esources, to recycle as much as possible, and to provide a diverse work place. To support these promises Coke has made a formal proposal entitled, “Living Positively: Our Commitment to making a positive difference in the world. ” In this proposal, they promise to reduce their carbon footprint from their manufacturing operations, minimize their impact on local water supplies, promote recycling, and to provide a diverse and inclusive cultural environment to work in by the year 2020. On the same note, Pepsi has also made a proposal entitled, “Performance with Purpose: Investing in Sustainable Growth. The Pepsi proposal is along the same lines but they have a closer deadline of the year 2015. They also added their plans for research and development of programs and technology to help achieve consistent improvements in these same areas. Overall Coke and Pepsi are both about the same. They have very similar taste, their companies are interested in assuring the communities that they understand the concerns in relationship to being green and clean, and that it is important to be diversified amongst the employees. REFERENCES
Living Positively: Our commitment to making a positive difference in the world. (2010). Retrieved October 10, 2010, from http://www. thecoca-colacompany. com/citizenship/pdf/2008 2009_sustainability_review. pdf Nooyi, I. K. (2010). Performance with Purpose: Investing in Sustainable Growth. Retrieved October 10, 2010, from http://www. pepsico. com/Download/PepsiCo_2009_Sustainability_Report_Overview. pdf Yoffie, D. B. (2002). Cola Wars Continue: Coke and Pepsi in the Twenty-First Century. In Harvard Business School. Retrieved October 7, 2010 from SlideShare