In the late years of the 19 th century, a new industry was getting born. An industry that was to become established as a major player in the market later in the next century - the Soft Drink industry. Today it is dominated by two main competitors Coca-Cola Co. and PepsiCo, Inc.
, and a number of small soft drink producers. The Coca-Cola company rapidly evolved to a giant soft drink producer in the beginning and mid-20 th century using a successful marketing strategy. Being the first to introduce and popularize the Coca-Cola drink among the US population, the company succeeded to establish its product as part of the American life style. The management of the company strategically used the ongoing political and social events of the time to further spread the popularity of its drink. A major role in this campaign played the company s involvement in making the Coca-Cola drink available at a fixed cost to every American soldier during World War II, thus incorporating its product as part of the American culture.
The soft drink industry had three branches: concentrate producers, bottlers, and retailers. The Coca-Cola company specialized in producing the coca-cola concentrate, which was sold to bottlers and later distributed to retailers. The relatively lower cost of production needed to obtain the concentrate allowed the company to spend a large amount of its capital in advertising and promotion of its product. It worked closely with bottlers and retailers to ensure the successful completion of its marketing efforts.
The Pepsi company went into business not long after the introduction of the coca-cola drink. It used a similar tasting soft drink. , and like the Coca-Cola company followed the same production-distribution chain. Being the second entrant in the market, it was falling behind Coca-Cola in popularity of its drink, but it benefited from the general acceptance by the public of the coca-col drink. It also engaged heavily in advertising and marketing, developed its distinct image, targeting mostly the young and young-spirited population. Its image was well supported by the actions of the company.
Pepsi was always a step ahead form Coca-Cola in innovations and introducing new drinks to the market, which allowed it to gain enough strength in the market and challenge the leadership of Coca-Cola. Pepsi was also the first to introduce new sizes of bottles to the market, thus allowing for reduction in the cost of the drink per ounce. Coca-Cola followed closely with its own version of innovations, thus ensuring its position as a leader at the market. Both firms followed closely the evolution of the American society, such as the changes of health concerns they introduced the Diet Pepsi and Diet Coke in order to capture the health-conscious part of consumers.
In order to further increase the popularity of their drinks both firms purchased fast-food chains, which served their drinks along with the fast food products. In the 1980 s both companies started to emphasize into expanding their operations internationally, with Coca-Cola again being the leader by far. Also in the 1980 s the two companies started to acquire most of the bottling franchisees that bottled their products in order to achieve synergies and reduce the cost of the soft drinks production. Both companies have built their strategies in consensus with the changes in the surrounding environment. Issues like health awareness and value seeking have been incorporated in the two companies line of response.
Economic trends, such as globalization, have also been reflected in the two firms strategies.