Tuesday, May 1, 2012

Coke and Pepsi - Signifying the Intensity of Competition(Porter's Five Forces Model)

Anytime a marketer or a manager is asked by the top management to conduct the competitive analysis of the Industry, then most of the times only one toll comes to the mind--Michael Porter's Five Forces Model of Industry analysis. And among this model if one has to study the point of Intensity of rivalry then the one example that comes to the mind of most of the marketers in any industry is - The Coke and Pepsi Rivalry.



Coca Cola and Pepsi have always been on the forefront in terms of the level at which the compete with each other in terms of price, product and distribution reach and even the promotional efforts and spending they are doing in the market. They have always been trying as best as they can to undermine the other through their better marketing mix. And this rivalry has been going on for ages, but still the kind of interest their rivalry arouses in the industry watchers is amazing. A lot of case studies have been written on the competitive rivalry between both the firms and they both have taken so many breathtaking competitive steps which sometimes have led to defining on how the whole industry behaves and responds to certain situations.
Marketers can learn on how to operate in a intensely competitive situation by watching how the marketers from both the firms are responding to the steps of the other. The fight at the distribution level is known to everybody where each company is trying to fight with retailer's for maintaining purity(i.e. the refrigerator of Coke and Pepsi will store their brands only and not of competitor) in the refrigerator's that they provide to the retailers. Though Pepsi and Coke's flagship brands Pepsi and Coke have been targeting the same audience that is the youngster's somewhat differently, but their other brands are  taking each other on directly in the promotional world. 

These high intensity competitive marketing efforts are being used by both Thumbs Up and Mountain Dew  to again beat the other but this time by focusing on their own strengths and not trying to show others in bad light.
Coke recently came up with its latest commercials for Thumbs up where youth are shown doing dare devil stunts with a background statement running as "Aaj Kuch Toofani Karte hain" meaning Let's do something that is Storms the world, to take on Mountain Dew's positioning status "Ab Darr ko Maaro Dew" (Dar ke aagey Jeet Hai) as a brand which portrays itself as a brand for people who love adventure. The level and difficulty level of stunts is increasing as the brands are trying to show to the target audience that more daring a person is, he/she is likely to use their brand, with Thumbs up even roping in female models to attract the females to this stronger version of the soft drinks which is traditionally less preferred by female conusmers.
To watch the ad for Thumbs up Latest commercial - Click Here
To watch the ad for Mountain Dew Latest commercial - Click Here

The same has been the case in case of their Mango flavored drink brands - Maaza from Coke and Slice from Pepsi. The Maaza ad is trying to focus on targeting the consumers by positioning its brand as an alternative to consumers who want to have Mango any time of the year, as an alternative available to consumers in all seasons. Where as the Slice has always been taking a more sensuous route by roping in Katrina Kaif as the brand ambassador and using the Punch line "Aamsutra" by portraying that people who love mangoes or have a lust to enjoy mangoes will go for a Slice by showing Katrina Kaif in sensuous mood while enjoying the Slice bottle, and in the other commercial showing Katrina enjoying Slice with a background score running as "Ab Ras Barsega"
To watch the ad for Maaza Latest commercial - Click Here
To watch the ad for Slice Latest commercials - Ad No 1                    Ad No 2
Similar is the case for the brands like Fanta and Mirinda, Sprite and 7up, Minute maid Nimbu Fresh and Nimbooz, Minute Maid Juices and Tropicana, and the likes.

Coke has again taken a move on the pricing front which can lead to price wars once again in soft drinks market, where it has slashed the Price of its 200 ml bottle to Rs. 8, which can be followed by Pepsi too and that in turn can come as a boon to customers. This initiative is on the same lines when Coke slashed the 200 ml bottle prices to Rs. 5 to follow a affordable pricing strategy in the year 2003 which was then followed by its biggest competitor Pepsi.

So all in all we can conclude from the above examples that this point is beyond doubt that Coke and Pepsi, clearly help in explaining the Intensity of Rivalry point from the Porter's Five Forces Model of Industry analysis and which in turn leads to the ultimate consumer getting benefited because of the competition forcing the players to take aggressive stances to attract the consumers to their stable.

2 comments:

  1. Ya sir very true
    Porter's five-forces model basically looks at the strength of five distinct competitive forces, which, when taken together, determine long-term profitability and competition.
    Excellent job done by u..
    Sir ab shortly Education industry pe bhi ek strategy likh dijiye so that people like us can take advantage

    ReplyDelete
  2. Sure Neena, I will give it a try.............

    ReplyDelete