Current Market Conditions Comparative Analysis
Coca Cola is one of the top leaders in the beverage company in Pakistan. Coca Cola dominate and covers a large market segment. Learning Team B reviewed reports which revealed and encouraging growth as mentioned in the SWOT analysis. The second largest usage in Pakistan is Coca Cola. Although reports already shows improvement, there is still great potential in the Pakistan market. Particular areas concerning potentials are deficiencies as well as resolution to overcome challenges. In addition, Coca Cola will definitely grow more than any other beverage company in Pakistan, so it has a large margin for growth.
In this analysis, Team B will discuss what factors can change the supply and demand curve, price and elasticity, as well as innovation. Coca Cola Growth Rate In Pakistan the market has a very lucrative growth rate which is 22%. Elasticity is not a concern in this growing market. In comparison to a similar market, Asia region, the revenue amount which the company earns is 5052 dollar. Coca Cola’s market share has doubled in Pakistan, and in recent years its market share was 16%. Reviewing a few years ago, in 2007, its market share increased up to 36%.
During the year of 2007, the competitors share is going down day by day. Coca Cola is world leader in beverages, and is on the way to success in Pakistan and has crossed the Pepsi last year. Major factors influencing the level of demand of the product There are a lot of factors that affect the demand of the product. The list of these factors is given below Price Price is one of the main drivers concerning the demand of the product. The price must coincide with the current demand. If the price isn’t suitable to the consumer, there is a risk for the consumer to choose competition..
Quality Quality and maintaining a standard is important to Coca Cola. If a company provides excellent quality services and or products, there will be a steady rise in the demand of the product. Maintaining excellent quality also helps in maintaining a positive brand. · Supply Supply and the demand of the product are the market forces and played the main role in the product demand. If the supply of the product decreased than in some cases the demand of the product increases due to limited available resources. In addition, the price of the product can also increase.
Taste of product is the major factor that affects the demand of the product. Like if the product is of good taste than the future demand of the product will increase and vice versa. If customers don’t find the taste of product according to their taste, than they will not buy that product in future. · Number of users In regards to the number of users, if the number of users increase in the market than the demand of the product also increases. · Income The income level of the customers has a direct impact on the demand of the product. The income of the consumer can determine the purchasing power.
If there is purchasing power and if the income is positive, the consumer can buy the product he or she wants or demands. · Competitors Competitors are the biggest threat to the demand of product. If competitors offer the same products as the company offers than the customers got more alternatives. So increased alternatives, increases the bargaining power of the customers and they can switch of to more suitable product. Can the market be deciphered in to segments? The coca Cola has a wide range of consumer base. Though its market is very large and almost all are a fit for customers regardless of age and gender.
When reviewing the criteria we discovered the youngsters are it’s the largest most favorable target audiences. This is the reason they choose the youth in their advertisement. Coca Cola can also largely focus on youngsters to set the target market. But their current strategy is most suitable because customers regardless of age factor like Coca Cola as soft drink. Product Life Cycle Products can go through numerous steps during their useful life. They are introduced, grow, mature and eventually decline. In the introduction phase of the life cycle, start-up expenses are high and sales are low.
This is the stage in which the product in placed in the market for consumer use. Sales begin to increase and expenses tend to decrease during the growth phase. This is the point in which the product becomes more known in the market and consumers begin purchasing. During the mature phase of the product life cycle, the company must re-examine the product and determine new ways to make it marketable. Consumers begin to take the product for granted and no longer necessarily choose it first. If a new product comes in at this point with new, more attractive features, it can force the product into the decline stage.
Eventually sales will begin to decline and the company must decide whether to continue with production or to part ways with the product. Coca-Cola has been in the industry since the nineteenth century, so if they continue with the same marketing strategy, then they will send themselves irrevocably into the decline stage. Coca-Cola (Coke) is in maturity stage but gradually moving towards the declining stage of the product life cycle. Management has to pay special attention to products during this stage of the product life-cycle.
The company must now determine whether they will stop producing Coca-Cola, change the soda, find new uses for it, seek new markets for the soft drink or if they will maintain their current strategy (Peter, 2006). At the moment, the soft drink company is attempting to effectively seek new markets. Coke’s core product, Coca-Cola, has received many criticisms because of the health issues that arise from its use of caffeine and high fructose corn syrup. Coke is cognizant that they must begin to acknowledge the shift in consumer tastes in order to remain competitive in the market.
They have done this successfully many times in the past, as can be seen with the introduction of their popular Diet Coke brand. Coke must break into the non-carbonated drink market in order to acknowledge consumer’s new interest in healthy drinks. Another option introduced was Coke Zero which still has zero calories but a sweeter taste. During the maturity stage, products usually go through a slowdown in sales growth. According to Coca-Cola’s 2001 annual report, sales have increased by 1. 02% compared to last year. This percentage has no comparison to the high level of growth Coca-Cola enjoyed during its growth stage.
Fluctuation in demand with cyclical factors Nothing remains constant or isolated in the current economy. The brands Coca Cola has must have personality. In addition, factors such as weather, occasions, events, and economic factors are consistent factors. Demand of the product does not remain consistent. This fact is due to the fact that it exists in the real world which is gradually changing. Coca Cola advertisement has a great affect in its demand. Its advertisement removes the risk of no use of brands on different extreme weathers like in winters.
Each ad stimulates its purchase regardless of weather or cyclic factors. Similarly on different events the buying patterns also changes. Company has a great strategy that they use those events as their strengths and advertise their product on right time which results in increase sale. Recommendations Upon reviewing the structure and history concerning Coca Cola, Team B uncovered areas of potential weaknesses. Our team developed some recommendations we feel will continue to strengthen the organization. One area that we feel could use improvement is the marketing.
It’s important to monitor the demand of the public. Different advertisement must be used to connect with people from different regions. As technology continues to advance, there must also be considerations into applications or other advertising methods that could be viewed from an IPad or smart phone. We would also recommend not to experiment too far from the original product. The original taste of Coca Cola is the brand. The flavor, the original flavor, is what creates the loyal customer base. As Coca Cola strives to attract new customers, the loyal customer base must be remembered as well.