Coca olas Response to Changing Market Conditions Essay

Coca olas Response to Changing Market Conditions - Essay Example While Coca Cola was focusing too much on carbonated drinks, PepsiCo was responding to market changes in two important ways. To begin with, Pepsi chose diversification as its strategy to increase its customer base. By this time, they had already realised that they would be better access a bigger part of the market by offering complimenting products such as energy bars and other snack foods. Meeting emerging consumer concerns PepsiCo also realised one important thing about consumer needs. As people started to be more concerned about the health issues caused by cola drinks, PepsiCo was quick to launch healthy products such as diet code and other non-sugary products. This was a very good way to access the segment of the market which was tied in people who could not use the normal carbonated beverages. At the same time, the number of people with health issues such as diabetes was becoming very high and this made it possible to have a big market share for non-sugary beverages. Pepsis was q uick to respond to this rising marketing needs. Yet, at such a time when non carbonated drinks were becoming favourite for so many people who were either concerned about the health impacts of carbonated drinks or whose health issues could not allow them to use the same, Coca cola, under the leadership of Goizueta, continued to focus on its cola drinks. Roberto Goizueta believed that being able to efficiently produce carbonated drinks was the strategy that would help the firm to have a permanent grip on the market. This was both right and wrong. This is because although low production costs are a good strategy, they can only be helpful to a business if they are geared towards the right direction. In other words, Coca cola’s low cost strategies were good but were focused on the wrong product. This is a time when Coca cola should have been focusing on looking at how it could have been able to introduce new products which would fit the new and emerging consumer needs. This made C oca cola to remain behind PepsiCo and therefore giving PepsiCo the upper hand in the market. Coca cola not only failed to diversify like PepsiCo had done, but is also failed to consider new market needs. Q2 Coca Cola Coca Cola’s marketing orientation is geared towards affecting the way the buyer thinks about the product. A closer look at the way in which Coca Cola manages its marketing in the times of Goizueta indicates that Coca cola is not customer oriented. This is seen as the old-school marketing in which organisations did not look too much into what the customer wanted but rather only focused on developing a product and the presenting it to the consumer (Ireland, Hoskisson and Hitt 2010). In this regard, it means that Coca Cola only focused on producing the products which they thought best for customers and then delivering this product. In such an arrangement, marketing is done by massive branding campaigns which would be geared towards making the customer to believe tha t the product is best for them (Kenny 2009). This is what coca cola had used for a long time leading it to become the number one brand in the world. Coca Cola also seems to focus on specialising rather than diversification. In this regard, especially under the leadership of the charismatic leader Goizueta, Coca Cola focused too much on its main product which was its cash cow. In fact, Coca Cola’s diversification was only as a reaction to PepsiCo’s market success brought by PepsiCo’s diversification strategy. PepsiCo PepsiCo on the other hand had a different marketing orientation. Towards the end of the 20th century, PepsiCo seemed to have realised that aligning the business strategy to the needs of the customer was the next big thing. Unlike Coca Cola, PepsiCo started focusing on looki