Introduction
The companies demonstrated effective marketing strategies, such as delivering direct store doors (DSD) by Coke and Pepsi bottlers. Route delivery salespeople controlled the CSD brand in shops by reserving shelf space, stocking CSD items, placing the brand’s trademarked label, and erecting point-of-sale or end-of-aisle displays (Kim and Yoffie 2).
Discussion
Another important component of soft drink sales was cooperative merchandising agreements, in which merchants committed to particular promotional activities and discount levels in exchange for payment from a bottler. In the past, Coke dominated sales at fountains, while Pepsi concentrated on sales via retail locations. Bottlers often handled local fountain accounts and were far more profitable than national ones (Kim and Yoffie 4). Coke and Pepsi invested in creating service dispensers and other equipment to support the fountain channel. They also offered point-of-sale advertisements and other in-store promotional materials to fountain consumers.
Another aspect is that cans are made for appealing packaging since they are lightweight, easy to handle and display, sturdy, and recyclable. The concentrate producers’ approach to the can-makers was indicative of how they dealt with their suppliers. Both businesses took over some of their own produce in the 1960s and 1970s, but by 1990 they had mostly left that industry (Kim and Yoffie 5). Coke and Pepsi were among the biggest clients of the metal can sector and bargained on behalf of their bottling networks. Most of Coca-goods Cola’s are not finished or packaged. The business makes money by supplying syrups and concentrates to bottling plants worldwide and completed goods to retailers and other distributors. Additionally, Coca-Cola franchised its bottling operations (high-revenue, low-margin sector), decreasing sales while increasing profitability (Trefis Team). In contrast, Pepsi has been making acquisitions to broaden its customer base.
Conclusion
Although Coke and Pepsi’s rivalry can be detrimental to newcomers to the CSD industry, both businesses have succeeded by recognizing and responding quickly to their customers’ wants. Threats from the other pushed both parties to plan marketing campaigns, create product innovations, and cultivate strong relationships with their bottlers and suppliers to obtain the upper hand. Due to increased rivalry between the two businesses due to external circumstances, more original and creative solutions were required. The two largest beverage companies that negotiated on behalf of their bottling networks were Coca-Cola and Pepsi. Coca-Cola reduced sales while boosting profitability when it franchised its bottling operations.
Works Cited
Kim, Renee and Yoffie, D.B. “Cola Wars Continue: Coke and Pepsi in 2010.” Harvard Business School.
Trefis Team. “Coca-Cola Or PepsiCo?” Forbes, Web.