(A) List specific economic, social, political, legal and technological factors that could affect the success of flavored iced teas. There are many factors that can affect the success of this company. To begin with economic factors, one should observe whether or not the company has a competitive advantage over the larger beverage/tea makers that dominate the tea industry. This will be telling as to whether or not it is economically feasible to be successful. Production must also be taken into account; will it be domestic or outsourced to reduce costs? In terms of social factors, the company branding plays a large role in the perception of the business. This can sway a consumer’s preference in flavored iced tea drinks. Politically, flavored iced teas can face issues dependent on the product. If the drink is high in sugar and caffeine, a sin tax may be placed on it to persuade the company to make a healthier alternative. The business also faces environmental issues, one prime example of which is the drought in California, which has led bottling services to be observed more closely. With Legal factors, flavored iced tea doesn’t face too many unprecedented issues, yet there are certain standard rules and …show more content…
First, as with many goods, it is affected by the general state of the economy. In a recession where individuals have less disposable income, sales can drop if the product is too pricey, which flavored iced teas can be. There are also a few health factors that can both positively and negatively affect the market size. As of late, public opinions on caffeine and sugar have been shifting towards a negative light. Both of these ingredients are commonly found in flavored iced teas, and can negatively affect the consumer’s propensity to purchase the good. At the same time, the growing trend of organic lifestyles can prove to be a lucrative opportunity for organically produced
Coke continuously out-stands Pepsi, even though they share a very similar taste and colour, however Coke should not be the drink that receives all the love and attention for what it offers. Despite their similar soda colour, the drinks actually contain some different ingredients, which produce a different taste, and affect the body differently. Furthermore, the way the companies markets their drinks makes a huge contribution to how successful their products will become. The major element for success however stems from their impact on society and how the companies utilize their social power to evolve. The two major soda companies are constantly head to head with one another, yet it is what they do that sets them apart.
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten brands sold. Colas are the dominant flavor in the U.S carbonated soft drink industry; however, popularity for flavored soft drinks has grown in recent years. The changing demographics of the U.S population have been an important factor in the growing popularity of these flavored soft drinks. The possible impact of this factor will be addressed later in the case.
The Porter’s model of competitive advantage of nations is based on four key elements including factor endowments, demand conditions, related and supporting industries and firm strategy, structure and rivalry. This makes it suitable in understanding the competition existing in the soft drinks industry in the Asian markets. The factor conditions identify the natural resources, climate, location, and demographics. Coca cola and Pepsi enjoy the growing population in the Asian markets (Yoffie, 2002). A higher population guarantees the two companies adequate revenues. Other factors include communication infrastructure and availability of skilled workers. Most of the Asian countries are embracing new technologies that grow much knowledge of the diverse beverage drinks. Secondly, the demand conditions play a significant role in enhancing competitiveness for the firms. Both Coca cola and Pepsi are an
The political environment in India proved critical in that their government was unfavorable to foreign investors. They prohibited the import of soft drinks since they felt it could be gotten anywhere. They also prohibited the foreign brand name and wanted the name Lehar Pepsi and Coca-Cola India, an indigenous name. These effects couldn’t have be anticipated prior to entering the market because the trade policies, rules and regulations of India were difficult and unpredictable. Development in the political arena would have been handled well if Coke would have evaded having to sell 49% of its equity by approving to start new bottling plants.
American Soft Drink and the Company That Makes It. 3rd ed. New York: Basic, 2013.
In short, the industry extremely focused on preventing and testing the presence of bacteria. Therefore, bottled water often represented “somewhat of a novelty or prestige product” in the United States, and it gave a perception to their consumers that they need to purchase bottled water in order to stay young and healthy. Because the bottled water industry seemed very attractive and profitable, as mentioned above, there were many competitors, too. Total nine bottled water producers were mentioned in the case study, but four key major rivals were Coca-Cola, PepsiCo, Nestle, and Groupe Danone. However, there was no one buyer that accounts for a significant fraction of overall market demand. Distribution varied depending on the producer, but most distribution channels included food stores, supercenters, supermarkets, discount stores, and wholesale clubs. Because bottled water had an easy availability, consumers in the United States were able to find it anywhere the food was also
Weaknesses – Coca-Cola is a very successful company with an impeccable social media following. Word of mouth is probably a strength, but only when feedback from consumers is positive, but there are people who are against Coca-Cola and their products. Even though Coca-Cola produces over 200 brand products, Coca-Cola lacks the social media popularity of other brands that they produce (Moth, 2013). Many drinks that they produce are extremely popular such as Coke or Sprite, but there are a lot of Coca-Cola products that are unknown, unseen, and unavailable for
Talbott Teas is a company which produces and sells uniquely created teas that are meant to pamper a person just by one sip. This company provides extraordinary teas that are packed full of premium flavor. Talbott offers an array of gourmet teas with distinct flavor combinations for a diverse group of consumers to enjoy. This tea company uses high quality ingredients including a wide range of tea leaves, herbs, fruits, and spices to blend into an exclusive flavor experience (Talbottteas.com). Talbott sells their premium quality teas for a varying amount depending on the quantity of tea you buy. You can purchase a 12 pack sachet cube box for around $10.50 and a bulk box containing 100 count sachet cubes for $55.00.
Pepsi Blue was first test-marketed in Bahrain for three reasons: first, the majority of residents drank Pepsi; second, regional marketers and bottlers had already begun re-evaluating the effectiveness of the company's white logo (which didn't work well in their market); and third, the city was a small test market with a tightly controlled sample population. The Pepsi Blue logo, tagline and new marketing materials were rolled out in half the market and its results were highly successful. Purchasers liked the new logo design and the majority believed that the packaging had improved and the taste remained the same. For those who believed that both the taste and packaging were different, the majority enjoyed the "new" taste.
Experimentation with the new market for carbonated beverages on the decline coke has done experiments in new flavors and healthier alternatives to try to stay competitive. As well as investing in “Keurig Green Mountain is a K-Cup maker but has a new Keurig Cold that can deliver Coca-Cola through the new system.” (Cooper, 2014)
External environmental analysis of US carbonated soft drink (CSD) industry allows concluding that declining CSD sales call for changes in industry operations whereby market players can benefit from the fundamental shift in the industry development and maintain its leadership positions in beverage market. Analyses of macrolevel, industry, and competitive environments suggest that expansion, strong brand recognition, and changes in value chain will be key success factors in the future industry development.
The soft drinks industry has evolved over the last 50 years. At the end of the fifties households were consuming more wine than any other beverages. By the beginning of the seventies households were diminishing their wine consumption for appellation wine, not to mention that strong alcohols saw a significant increase during this period with mineral water. Other soft drinks such as fruit drinks, sodas and colas became popular by the end of the eighties. Soft drinks sells became steeper during the nineties probably correlated with the fact that this period is situated during the raise of generation Y. This generation was highly influenced by television and Internet, thus commercials. Generation Y has been a golden pool for marketers at that time and allowed companies to progress a lot concerning their marketing research techniques.
Depending on the price of raw materials, profits can either go up or down. It is better for the soft drink industry if the raw materials are cheaper because the industry will make more of a profit. This is also a good thing for the consumer because there is not a rise in price.
As previously mentioned, Coca-Cola’s product strategy of developing healthy beverages is influenced by the need to meet the changing tastes and preferences of consumers towards alternative beverages. As part of its product strategy of developing healthy beverages, Coca-Cola launched 18 clinical trials to examine the health benefits of various new ingredients for future drinks. The transformation of Coca-Cola’s beverages has played a crucial role in transformation of the firm following a turbulent period that was characterized by significant success of its major
Coca Cola is now available in all the continents of the world and recognized by most of the world's population. In the beverage industry, global Coca Cola has an important role. Asa Griggs Candle had transformed people to the new image of Coca Cola. His success to make the consumers understands “Coke medication” is a delicious fresh drink. In 1886, Coca Cola was first introduced to the public in Atlanta, Georgia and it really attracted the attention of most people, who enjoyed the great aroma and attractiveness of Coke. Later on, Coca Cola soft drink became a global celebrity. Coca Cola was attractive...