BEVERAGE INDUSTRY

Presented by:Ruchika chakradhari - 07Pradeep choudhary - 10Kunal jagotra - 20Vijay gopalakrishnan - 57Manisha yadav - 60

Evolution of Beverages and Carbonates

• Prior to twentieth century, European cities were highly affected from cholera, dysentery and other waterborne illnesses. Contaminated with several micro-organisms, water was hazardous. Therefore Barley waters, Lemonades and orangeades were used to fulfill body’s hydration requirement.

• Scientific development and considerable investigations on gases paved way towards carbonated drinks. Joseph Priestley (who is widely credited for discovery of oxygen) dissolved carbon dioxide in water under pressures to produce carbonated waters artificially. Commercially, mineral waters were the first beverage product to hit market followed by carbonated drinks synonymous with “aerated mineral water”.

CONTIN…….

• The first commercial artificially carbonated water product dates back to late eighteenth century, latter Recommended for the consumption of lemon juice and soda water for stomach, it was sold in tightly corked glass bottles.

• Early effervescent drinks were manufactured by mixing sodium bicarbonate solution with lemon juice or lime juice. This mixture can cure scurvy and therefore became a very strong reason for its use in on board a ship. Thus were used for medicinal pedigree to a greater or lesser extent. Examples include quinine tonic water, used as a cure for malaria in tropicalregions.

THE TYPES OF BEVERAGESTypes of Beverages Examples

Alcoholic Beer, Champagne etc

Non Alcoholic Low Low Alcohol beer, non-alcoholic wine, apple cider etc

Soft Drinks Carbonated Drinks, Lemonade, Squash, fruit juices, squashes etc

Cold Beverages Milkshakes, Iced Tea, Cold Coffee etc

Hot Beverages Tea, Coffee, Hot Chocolate etc

Others Buttermilk, Soup, Yogurt etc

Consumption Patterns of Beverages

Annual Beverage ConsumptionBeverage

Percentage

Carbonated Soft Drinks 26.22

Bottled Water 14.36

Tap Water 13

Beer 11.34

Coffee 11.24

Milk 10.87

Fruit Beverages 6.97

Tea 4.11

Wine 1.14

Distilled Spirits 0.73

Unethical Practices

• Beverage Companies Continue to Air their faulty Advertisement by Positioning it as a Healthy drink

• Energy drink which Contains high caffeine are marketed to improve energy, weight loss, stamina, athletic performance, and concentration

• Caffeine information often misleading on Energy drink label’s

• Excessive water usage in Beverage Industries leads to acute shortage

Top brands of beverage industry

Market share

5 C ANALYSIS

company• Beverage industry were there are specific number of products, like

coca cola classic, coca cola, Pepsi, blue Pepsi, energy drink Ciel, Nestea, minute maid etc. 

• This industry spreads good messages with their t.v. or radio spots, such as peace messages, that everyone can be a super hero, to enjoy life, be in family, etc.

• Because of the variety of their products all the companies sells to all the people, since little kids with minute maid, to adults with coca cola, Pepsi, blue Pepsi etc.

• Company have the mission not only with a lot of sells, but also to have a really good influence in the people.

Customers

• All companies in the world, is offers a lot of discounts or promotions all year long, in order to make the customers buy, it is also a company that offers a lot of facilities to buy the product, because it is easy to find it.

• All company takes into consideration what is going on in the world in order to sell products, which are going to have a big impact in the society, and also this company applies this in their marketing strategy.

• It is really easy to find information abut the company and the products, because coca cola is present in web sites, social networks, events, and in general in the media.

•  The prices are always the same no matters, the season, it only changes depending the grade

Collaborators: 

• All the industries has a lot of distributors all around the world, so it is really easy to find their products, in the school in little shops, malls, supermarkets, restaurants, etc.

• The companies are always working in order to have suppliers, because this product has a very high demand. Coca cola has a lot of alliances because a lot of times this company sponsors a lot of events, so it is a way of getting alliances and make a good marketing.

• All these beverage are making the alliance with the fast food chain all over the globe.

• All the giant companies are merging with some of the big industries

Competitors:

• There lot of competitors because there are a lot of products, their main or direct competitor Coca cola and PEPSI, because it is also a soda and is the other biggest company on sodas. But also as an indirect way there are a lot of other big companies of other drinks or food that have a very good position in the market.

• Is has a lot of strengths because of the variety of products but is also true that is not the most healthy product  so many people can't drink it, because it may be harmful and it may cause an addiction.

• But other companies have another strengths  for example Mac products combine quality, design, functionality, among other thing; but a weakness may be that it is not accessible for everyone because of their high price.

Climate:

• Because of all the products in this industry has it has no problem with the climate context, because even when it is not as cheap as other products we can see people with all types of economical status buying any kind of product.

• It also approaches in a very good way the technology in order to spread their marketing strategy. 

Pricing strategy

• Pricing is a big part of the marketing mix.• Choosing the right price and the right pricing strategy is

crucial to the marketing process. • The price of the product is not something that is fixed.• The price may act as a way to attract target customers. • The price of the product is decided keeping many things

in mind. These things include factors like cost incurred on the product, target market, competitors, consumer buying capacity etc.

Pricing Attributes

You have to take everything into consideration when pricing your product, here are some things to look after:

PackagingMassive media marketing supportMarketing collateralExperience and quality of the sales teamSimilar products (competition or not)Product featuresFunctionality

Pricing strategy for Buyer and Suppliers

Suppliers:• The soft drink industry have a negotiating advantage

from its suppliers as most of the raw materials needed to produce concentrate are basic commodities like Color, flavor, caffeine or additives, sugar, packaging.

• The producers of these products have no power over the pricing hence the suppliers in this industry are weak.

• This makes the soft drink industry a cheap input industry which helps in increasing their gross margin.

Buyers:• The major channels for the Soft Drink industry are food

stores, Fast food fountain, vending, convenience stores and others in the order of market share.

• The profitability in each of these segments clearly illustrate the buyer power and how different buyers pay different prices based on their power to negotiate.

Penetration Pricing

• Most of the beverage industries follow penetrating pricing.

• For ex: Coke launched smaller bottle priced almost 50% of the traditional package. The accessibility campaign introduced a new 200ml bottle, smaller than the traditional 300ml bottle found in urban market, concurrently cutting the price to half to Rs 5. This closed the gap between coke basic refreshments like lemonade, sugarcane juice and tea, making soft drinks really accessible for the first time.

• In the past (in 2002-03), Coke had already targeted rural consumers by bringing down the entry price (Rs 5 a bottle) for its product. Now, it has stepped up distribution of its 200-ml (priced at Rs 7 and Rs 8) returnable-glass-bottles.

• To surmount the penetration policy of Coke, Pepsi too came up with the same Price penetration policy by launching products like “Chota Pepsi” with the price of Rs 5 to challenge the coke product. The small size was basically used to target rural market to make new customer habitual to it.

EPRG MODEL

• This framework identifies four types of orientations towards internationalization as the company expands into international markets. They are:

Ethnocentrism – orientation towards home country

Polycentrism – orientation towards host country

Regiocentrism – regional orientation and,

Geocentrism – world orientation

ETNOCENTRIC• In the ethnocentric stage, the top management views domestic

techniques and personnel as superior to foreign and as the most effective in overseas markets. The company sees its domestic business as its priority and views foreign sales as a profitable extension of its domestic sales.

POLYCENTRIC• A polycentric attitude emerges once the company begins to

recognize the importance of the inherent differences in offshore markets. A company guided by this concept is of the view that country markets are vastly different and that, market requires an almost independent program for each country.

REGIOCENTRIC & GEOCENTRIC:

• In the regiocentric and geocentric stages, the company recognizes the regional commonalities and undertakes regional strategies by considering the region or the entire world as a potential market, ignoring national boundaries.

• The firm develops policies and organizes activities on a regional or worldwide basis. Firms using this global marketing concept design product lines, pricing decisions, promotions and the channels of distribution for regional or worldwide markets.

REGIOCENTRIC APPROACH

• Most Of The Beverage Industries Follow Regiocentric Approach Because:

• Operations Are Geared Towards A Particular Continental Region With Similar Economies And Cultures

• Global marketing concept: World regions that share economic, political, and/or cultural traits are perceived as distinct markets

• Divisions are organized based on location • Regional offices • coordinate marketing activities

CONCLUSION

• By studying the strategies of top most companies, we found that there is not much variation in there price.

• Being most of the soft drink market is covered by coke an brands Pepsi, it’s a duopoly market. The price data of last few years of various brands of these two giants shows that instead of moving into the price war by reducing the price, they try to launch the parallel product to compete with the others product.

• In several pockets of the country, the bruising cola wars between Coca-Cola India and Pepsi has seen a rollback in prices of colas and other flavored drinks.

• According to industry analysts, the current prices of these soft drinks in select markets are the same as what it was way back in 1997. Thus giving the customers the best value.

• Vijay -1 to 6

• Pradeep -7 to 10

• Ruchika -11 to15

• manisha -16 to 19

• Kunal - 20 to 23