Clash of the Titans: Coca Cola and Pepsi Cola - Case Study Example

Clash of the Titans: Coca Cola and Pepsi Cola. Fight for the consumer’s love Table of Contents Table of Contents 2 Area and Context of Research 3 Hypothesis 4 Theoretical Literature Review 5 Contextual Literature Review 5 Research Methodology 6 Data Collection 7 Result & Conclusion 9 Reference 10 Area and Context of Research In the 21st century business exists in an environment which is not at all concrete rather it can be accredited as unstable, dynamic and competitive. The organizations throughout the cosmos are trying to focus more on the overall business strategy to have an upper hand over the competitors. Organizations are therefore trying to get accustomed as swiftly as possible with the rapidly changing external environment. Pepsi and Coca Cola the world’s biggest soft drink giants also exist in this turbulent environment. Pepsi and Coca Cola both belong to the subsector of Foods and Drinks industry, which caters to a colossal population across the globe. A soft drink is a non-alcoholic drink and the word ‘soft’ is used as a contrary to hard drinks or alcoholic drinks. A soft drink may also contain alcohol but it should be less than 0.5 % of the total constituents. With the increasing awareness about health consciousness among peoples, soft-drinks are giving hard-drink a run for their money (International Labour Organization. Sectoral Activities Programme, 1989, p.22). The research will be conducted with its prime focus to find out the level of competition amongst the two giants Pepsi and Coca Cola and also some comparative analysis will be covered on the overall market share. However the primary objective of the research is to find out who holds the maximum market share and is a preferred choice of the consumers. The research will also provide brief information about the soft-drink variants of the specified companies. Pepsi holds brands like Frito-Lay, Tropicana, Pepsi-Cola, Quaker and Gatorade under its name. The different variants of Pepsi-Cola brand include Mountain dew, Pepsi, Slice, Sierra Mist, 7UP and Mirinda among others. It also caters to the packaged drinking water segment with its Aquafina brand (Pepsi-Cola Brands, n.d.). They also cater to other segments but the rivalry with Coca Cola lies primarily in the mentioned division. Coca Cola comprises more than 3,500 beverage item variants like Coca-cola, Thumps-Up, Sprite, Maaza, Qoo and Tadas among others. It also does compete in packaged water sector with its strong and powerful brand Kinley (The Coca-Cola Company, n.d). The direct category wise competitors among Pepsi and Coca-Cola can be shown below: Pepsi Coca-Cola Slice(mango-flavoured) Maaza(mango-flavoured) Fanta(Orange Flavoured) Mirinda(Orange Flavoured) 7 Up(Soda based) Sprite(Soda based) Aquafina (Packaged drinking water) Kinley (Packaged drinking water) (Source: Authors Creation) Hypothesis A research hypothesis is a statement which is formulated by the researcher on the context of the research topic. It is the prediction of the outcome of a study. The research topic in this case is the war between Coca Cola and Pepsi and their respective market share in beverage industry. The core question which will be answered through this research paper is the respective market share of the giants and who enjoys more market share in comparison to the other. In this context a hypothesis can be as follows: H0 (Null hypothesis) – Coca-Cola holds more market share than Pepsi in the beverage sector. H1- Coca-Cola does not hold more market share than Pepsi in the beverage sector and in-turn Pepsi holds more. Theoretical Literature Review A theoretical literature review is the explanation of theories which are relevant to the topic. It tells about the theories which have been used in order to complete the assignment. A literature review includes Scholarly Articles, books and other sources like dissertations, conference proceedings etc. which is relevant to the particular topic or the area of study. It provides a summary of the theories and the literature which has been exercised. The purpose is to provide an overview of the literature which got published earlier on the topic (Santa Cruz University Library, n.d.).The theories which have been used in this paper is’ Estimating Coke and Pepsi’s Price and Advertising Strategies’ by Amos Golan, Larry S. Karp, Jeffery M. Perloff. Apart from using this theory there is an additional theory from where references have been taken ‘Coke vs. Pepsi: The Pioneers’ by Miss Cellania in Food and Drink, Improbable Research. Contextual Literature Review A Contextual literature review is a summary of the sources which are used to complete the research process. The sources include books, electronic sources, journals etc. A literature review is an essential part of a research work. A well summarized literature review gives a nice blend of how the sources are being used in order to conduct the research. The secondary nature makes it a cost effective technique. In this context of the research it is expected that there will be vast need of literature like information of the Beverage industry, about soft drinks industry, numerical data of the market shares of Coca-Cola and Pepsi and information on their mutually related products. The key source of the above mentioned aspects will be books, previously done research paper about the topic both online and offline and electronic sources like the company websites of the researched companies, online journals and online newspapers may also help. However beverage sector is considered in this case but only the subsector of soft-drinks and packaged water segment will be considered. The only factors which will be considered are those which have a relevance to the topic. There are availability of large number of books about the beverage industry and market share of the players belongs to this industry, but mainly the book titled ‘Technology and Employment in the food and drink industries: report for discussion at the Tripartite meeting on Technology and employment in the Food and Drink Industry’ by the International Labour Organization will be followed. Research Methodology A research always suffers through the possibility of not accomplishing its task and reaching its desired objective if a proper methodology is not followed. However this particular research paper will be carried out by following an absolute pre-defined methodology. In order to go through a proper methodology the first step of the research will be to define the objective of the research or in other words what is the question that will be answered through the research paper. So the question is clearly defined as ‘who holds the majority of market share in beverage sector among Pepsi and Cola’. The next step is the most essential one i.e. collection of data, in this project the source of data is secondary, as the author of the book ‘Using secondary data in market research’ says that the use of secondary data for research has been prolific in history and continues in the present date and will be growing in the future. It adds more value to a research paper (Patzer, 1995, p.ix). The system is also very much cost effective as the information is readily available there is no need to collect raw data, just searching and proper structuring is all that is needed. The Secondary sources which will be used for the research purpose will be books, previous research done on the topic and also electronic sources like online journals, e-newspaper and company websites. Apart from these other sources will be used also. The step followed by this will be analysis of data which has been collected in the preceding step. The analysis will strictly be done on quantitative basis. The analysis will be concluded depending upon the statistical figures which will be obtained from authentic sources. Data Collection This section provides us with the data that has been collected from different secondary sources. While collecting data, not only the market shares of Pepsi and Coca Cola have been recorded but there were other important information also which has been recorded. Global sales of soft drinks surpass 327 billion litres and presently valued at $393 billion annually. Countries like North America, Japan and some part of Europe have more mature markets in global soft drink industry and countries like India, Brazil and China also started providing concrete revenues. The information that is gathered about the two companies can be summarized below Coca-Cola has the following market share in different parts of the world 42% share in the US market. 37 % share in countries like India, China, Brazil and Japan. 20% share in other parts of the world. Globally Coca-Cola holds 50% market share in the carbonated drinks sector whereas Pepsi holds 20% of the market share and rest 30 % is owned by other local players (Choudhury & Reddy, 2011, p.27). Figure 1 : Global Market share (Source: Choudhury & Reddy, 2011, p.27) Result & Conclusion After going thoroughly through the collected data from authentic sources it can be clearly stated that Coca-Cola holds half of the total market share in this industry and is the market leader. While on the other hand Pepsi has been able capture 20% of the total market shares globally. The rest 30% has been shared among the local players of different regions. So the reflection is absolutely clear on the Cola-war and can be easily stated that Coca Cola dominates over Pepsi by quite a large margin and also enjoys the acceptance of consumers globally. Therefore the null-hypothesis holds true after going through the research process and it can be concluded that Coca-Cola is the market leader in the industry and without a hint of doubt will also be there in the years to come. Reference International Labour Organisation. Sectoral Activities Programme. (1998). Technology and Employment in the food and drink industries: report for discussion at the Tripartite meeting on Technology and employment in the Food and Drink Industry. Geneva: International Labour Organisation. Pepsico. (No Date). Pepsi Cola brands. [Online]. Available at: http://www.pepsico.com/Brands/Pepsi_Cola-Brands.html. [Accessed on 08 April 2012]. Thecocacola Company. (No Date). Product list. [Online]. Available at: http://www.thecoca-colacompany.com/brands/product_list_t.html. [Accessed on 08 April 2012]. Patzer, G. L. (1995). Using Secondary data in Marketing Research: United States and Worldwide. US: Greenwood Publishing Group. Choudhury, R. G. & Reddy, N. K. (Dec 2011). Market analysis and brand preferences for Coca Cola Slim cans. International Journal of Research in IT & Management, 1(8). [Pdf]. Available at: http://www.mairec.org/IJRIM/Dec2011/3.pdf. [Accessed on 08 April 2012]. Santa Cruz University Library. (No Date). Write a literature review. [Online]. Available at: http://library.ucsc.edu/help/howto/write-a-literature-review. [Accessed on 08 April 2012]. Read More