Product

Chapter 26

ESTPepsi was in a joint venture with SermSuk. SermSuk bottled Pepsi and also distributed in all over Thailand. In late November the two companies ‘divorced’ each other, and SermSuk decided to go it alone, producing their own cola drink. Leaving Pepsi with no one to bottle or distribute their drinks. However, fear not, Pepsi are working on bottling their own drinks and creating their own distribution, so Pepsi will soon be back on the shelves in Thailand.

ESTEST have to create a brand image, they have one of the world’s biggest businesses as a

competitor and Pepsi will soon be back so time is running out for EST to establish a

loyal customer base.

To establish a loyal customer base, EST must consider:

•Quality

•Durability

•Performance

•Appearance

New Product Development

1. Generating new ideas - EST have not done this, they have copied an already successful drink (cola)

2. Concept testing – EST have not done this, they did not carry out any market research prior to making EST. they are taking on the world’s biggest companies without careful planning.

3. Development – EST, are correctly aiming to minimise costs in the hope to maximise profits. However this is at the expense of developing a quality drink that is comparable to its rivals. EST

4. Targets – EST aim to have a 25% market share of cola drinks in Thailand by November 2013, is this realistic?

ESTEST have stated that 40% of Thais are brand loyal (they will not be willing to change the product they buy). They believe the other 60% would be willing to change brands. EST are basing their predicted success on the fact that they are a Thai company and believe Thai people are loyal to Thai products, this they hope, will guarantee them sales! ผม ชอบ เอ

สทั เพราะ เป็น ไทย

Question – Is EST product orientated or Market orientated? Why? [2]

TV advertising

Celebrity endorsemen

t(Bie Tono Mike)

Product life cycleSA

LES

Introduction Growth Maturity DeclineTIME

Draw a PLC on your white boards, show where EST is, and its rivals. Show the effects of an extension strategy

Product Life CycleWhat pricing strategy should be used?

What type of promotion should be used (informative / persuasive / what media etc)

Introduction

Growth

Maturity

Decline

QuestionExplain the relationship between Cash flow and the product life cycle. Use a diagram to help you explain. [4]

SALE

S

Introduction Growth Maturity DeclineTIME