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industry’s value has increased in 2004, the volume sales of carbonated soft drinks hasdeclined due to a large proportion of consumers who are the trend towards healthieralternatives in the functional drink segment (energy drinks, smoothies, milk and juice drinks,sports drinks) as well as bottle juices and water. Companies have been actively engaged innew product developments in order to counter the growing concerns about negative healthimpacts of high-fructose drinks, but also to increase the demand in a market where productofferings are quickly maturing. New flavour introductions and health-conscious formulationhave been launched in an attempt to offset the decline in carbonated soft drink sales. Thefunctional market expected to show sustained growth and consumer interest in the futureyears as consumption shifts to trendier, healthier and more sophisticated products.Profitability & future growth potential : In 1993, Concentrate Producers earned 29% pretextprofits on their sales, while bottlers earned 9% profits on their sales, for a total industry profitability of 14%. While the functional drinks sector only accounts for 3.7% of the total soft drinks sales in 2004, estimates are forecasting a growth 7.3% in sales and 11.0% in volume consumption by 2009.9
The markets where Coke is a dominant player are United States of America, Europe and Asia,Africa. There is a vast difference in terms of above given phases for example, in U.S.A &Europe it has reached maturity stage where it can’t expand its market more but if we considerAsia, it is still in the growth phase. Coca-Cola is currently going through the maturity stage inWestern countries. This maturity stage lasts longer than all other stages. Management has topay special attention to products during this stage of the product life-cycle. During the maturitystage, products usually go through a slowdown in sales growth. According to Coca- Cola's2001 annual report, sales have increased by 1.02% compared to last year. This percentagehas no comparison to the high level of growth Coca-Cola enjoyed during its growth stage. Toadd a little variation Coca-Cola took the Coca-Cola Classic and added variations to it,including Cherry Coke, Vanilla Coke and Diet Coke. Also Coca-Cola went from 6-oz. glassbottles to 8-oz. cans to plastic litter bottles, all helping increase consumption.Market Characteristic:Like any company who has successfully endured a century of existence, Coca- Cola Amatilhas had to remain tremendously fluent with their pricing strategy. They have had the privilegeof a worthy competitor constantly driving them to be smarter, faster, and better. A quote fromPepsi Co's CEO "The more successful they are, the sharper we have to be..This low price strategy was not unfamiliar to Coca-Col Amatil. Both Coke & Pepsi utilized a lowprice strategy in the early 1990s. After annihilating the low price store brands, Coke chose toreposition itself as a "Premium" brand and then raise prices. Coca-Cola products would appear,on the shelf, to have the most expensive range of soft drinks common to supermarkets, atalmost double the cost of no name brands. This can be for several reasons apart from just to