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Food and Beverage industry Analysis Term Paper

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Updated: May 15th, 2020

Beverage Industry analysis

Pepsi Cola was established in the late 19th century by Caleb Bradham, a druggist who invented the first Pepsi-Cola formula. Today, the company is divided into four main segments: PepsiCo Americas Beverages, PepsiCo Middle East and Africa, PepsiCo Europe, Pepsi Co Americas Foods.

Currently, the company’s portfolio brands is made up of isotonic sports drinks, enhanced water, coffee drinks, carbonated soft drinks and ready-to-drink teas. Some of the popular brands produced by PepsiCo Americas Beverages are Propel, Aquafina water, Diet Pepsi, Sierra Mist, Tropicana juice drinks, Tropicana Season’s Best, Slice and Tropicana Twister (PepsiCo Family 2).

The Coca-Cola Company and Pepsi Cola are among the biggest and most profitable firms in the world. The world head quarter of the Coca-Cola Company is located in Atlanta, Georgia while the head office of Pepsi Cola is in New York.

The global operations of the two firms are as a result of the enormous investments they have made in their worldwide marketing strategies. Although both companies target the same market, their marketing policies are quite diverse (InfoRefuge 1).

Coca-Cola and Pepsi Cola have implemented several business strategies to maintain a competitive edge in the market. For example, the Coca-Cola FEMSA is a joint venture that seeks to implement multi-segmentation policies in the firm’s critical markets.

The partnership also seeks to introduce pricing and packaging strategies via channel distribution and attaining operational competencies throughout the firm (Coca-Cola FEMSA 1).

Coca-Cola and PEPSI are currently collaborating to develop an innovative business model that will enable them capitalize on growth opportunities (such as the apparent prospects in the non carbonated beverage sector in Latin America).

Through the joint venture, Coca-Cola Company and Coca-Cola FEMSA acquired Jugos de Valle, a prominent juice producer firm in Brazil and Mexico. The acquisition of this company will undoubtedly increase the firm’s presence in the Latin America’s beverage market which is currently non-carbonated (Coca-Cola FEMSA 6).

As a joint venture, the firm seeks to enhance its relationship with consumers. For instance, in Mexico, the Coca-Cola FEMSA company is collaborating with some of its partners to improve its relationships with consumers from diverse cultures.

Some of the firm’s programs include modifying its pricing model and repackaging its portfolio products – on the basis of the socio-economic features of the local market (Coca-Cola FEMSA 7).

In order to satisfy consumers’ diverse tastes, Coca-Cola FEMSA has introduced one-stop retail stores for its consumers in Brazil by presenting an entire set of beverage assortment that include bottled water, carbonated soft drinks, beer and juices (Coca-Cola FEMSA 8).

One of the early problems that Coca-cola and Pepsi Cola faced was the declining demand for sugar-laced beverages. As a result, the volume of sales for their brands began to shrink in the United States, their largest and most profitable market.

Faced with numerous challenges, PepsiCo decided to acquire two biggest anchor bottlers: PepsiAmericas, based in Minneapolis; and Pepsi Bottling group, based in New York.

The merger will thus enable PepsiCo Company to implement its much publicized Power of One business plan to achieve competitive advantages in the market (Kaplan 4).

Over the years, PepsiCo has been experiencing inconsistencies in consumer demands occasioned by the economic crisis in 2008. The firm’s direct store delivery scheme may be appropriate when moving beverages with a limited shelf life.

However, warehouse delivery is more suitable for the purposes of introducing new categories. The presence of combined beverage system will thus enable PepsiCo attain flexibility in its business operations and satisfy its low-end consumers (Kaplan 18).

PepsiCo and Coca-Cola are currently using internet to market their products. Consumer relationship management (CRM) is one of the business strategies that both firms have adopted in their websites.

The CRM concept is used by these companies to create and sustain long-term associations with consumers by offering exceptional customer products and services.

Telephone numbers and e-mail links are provided to enable their costumers to make inquiries about the company’s products. Moreover, both websites have a Frequently Asked Question (FAQ) page where customers can access answers to many queries about the company.

This strategy aims to expand the customer base and boost sales revenues of the two companies in the future (InfoRefuge 12). Demand management is also another crucial strategy employed by Coca-Cola and PepsiCo in their websites.

The strategy entails creating demand for their beverage merchandises by allowing customers to modify the website page after registering. While modifying the site, the customer is allowed to select and save icons that are available on the web page.

As a result, this method enables both firms to advertise their merchandise to a particular segment of its customers, thereby increasing demand for their products (InfoRefuge 13).

Social media offers a new platform of communication between customers and marketers. Given that advertisers are in dire need of inventing ways to track their target market, social media thus offers an ideal opportunity to markers to achieve their goal (Miller & Lammas 1).

According to current statistics, the number of advertisers using the social media to promote their products is on the rise. This is due to the fact that many consumers, especially the youth, use social media as a platform for communication.

For example, over 140 million in the United States, about 30 million Brazilians and approximately 45 million Japanese used blogs and social networks to communicate (Miller & Lammas 2).

Indeed, it has been suggested that the conversion of social media to a major advertising platform is as a result of a combination of several factors.

These include: economic factors for example users’ ability to create User Generated Content; technological factors such as bandwidth; and social factors for example the recent emergence of techno savvy youth consumers with considerable financial powers.

It is thus evident that marketers such as Coca-cola and PepsiCo have employed social media to track consumers and market their products successfully.

As a matter of fact, the impact of social media promises to bring about a revolution in the marketing strategies. For example, PepsiCo did not market its Pepsi merchandize during the 2010 Super Bowl but rather opted to use a digital social media platform.

Thus, when customers browse the internet for information about a brand, they are also able to read opinions and reviews about a product from other customers (Miller & Lammas 3).

The significance of social network to marketing strategies is one that cannot be ignored. Since many consumers are using social network as a platform for communication, it is critical that Coca-Cola and Pepsi Cola employ this new mode of communication to woo more consumers.

One major advantage of using social media in marketing strategies is that it is more affordable if compared to the conventional means of advertising. Furthermore, the marketers are able to assess and respond to consumers’ feedbacks about a product.

Works Cited

Coca-Cola FEMSA. “Competitive Advantages”. Company Strategy and Competitive Advantages. Web.

InfoRefuge. “Coca-Cola and Pepsi Cola”. A Web Marketing Comparison. Web.

Kaplan, Andrew. “The Power of One. With the merger of its two largest bottlers behind it, PepsiCo sets its sights on reaping the benefits from the deal”. PepsiCo Inc. 2010. Web.

Miller, Rohan and Lammas, Natalie. “Social Media and its implications for viral marketing”. Asia Pacific Public Relations Journal 11 (2010): 1-9.

PepsiCo Family. “The PepsiCo Americas Beverages.” PepsiCo Inc. Web.

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