Integrated Strategic Marketing Plan: Section Three
Shape of the Industry
Coca-Cola operates within one of the largest global industries, the soft drink industry. In fact, in the article titled “Market size of soft drinks in the United States from 2010 to 2014 (in million U.S. dollars)” it shows that the U.S. soft drink market has swelled to over $98 billion as of 2014. It has seen steady gains over this five year period.
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| Soft Drink Market Size |
This highly competitive market includes a variety of players fighting over market share. In the article titled “Soft Drinks: Investing Essentials” by Isaac Pino, he includes a graph that details individual market share within the soft drink industry.
This graphical representation shows that Coca-Cola dominates this market as they hold 42% of total market share with Pepsi and Dr. Pepper trailing behind at 30% and 15%, respectively (Pino, 2014). Each of these companies hold vast product portfolio that include a variety of popular soft drinks as evidenced by the visual representation found in the article “An Overview of the US Nonalcoholic Beverage Industry” by Sharon Bailey.
Seen clearly, Coke is by far the most popular soft drink brand in the United States, but Pepsi Corporation brands Pepsi and Mountain Dew hold the second and third places and Dr. Pepper the fourth (Bailey, 2016). This data shows that the shape of the industry continues to evolve as the market progresses forward and each of these companies battle for both industry and brand position.
Development of the Industry
The soft drink industry has experienced interesting developments in the recent past that has shifted the way companies in this market do business. While this industry has increased in value, the demand for sugary sodas has declined. In a market that has long been dominated by popular soda brands such as Coke, Pepsi, Mountain Dew, and Dr. Pepper, there has been a paradigm shift for alternative options. In the article “The 4 biggest ways American beverage consumption will change in 2016” by Kate Taylor, she explains that these companies are developing new healthy drink options as a result of changing consumer preferences. New products will include organic Gatorade, Aquafina flavored waters, sparkling Minute Maid, and sparkling Smartwater. This is due in large part to meet the needs of the target market who are now, more so than ever, focused on the health benefits of the beverages they consume. In line with the health initiatives established by the audience, soft drink companies will aim to redesign their products in both content and packaging. Whether it is reformulating their current products or developing new product lines, the aim will be to create products with fewer calories, sugar, and caffeine. Also, many have already begun to offer smaller cans and bottles that promote moderation. Isaac Pino backs up these statements with statistics that show that unsweetened variants in soft drink portfolios have seen the most growth in the past five years.
“According to IBISWorld, Dr. Pepper Snapple's Canada Dry brand was the only one of its five core drinks to achieve volume growth during the past half-decade, in part due to "unsweetened variants such as plain and tonic water." Expect Dr. Pepper and its rivals to increase their focus on a sparkling water category that's posting growth rates of 16.3% and 34% in 2011 and 2012, respectively” (IBISWorld as cited in Pino, para. 9, 2014).
All in all, these developments display a common trend away from traditional soda brands and an increase in healthier beverage alternatives. Research suggests that these changes will continue to be implemented as the industry develops to meet the needs of changing consumer preferences (Taylor, 2016).
References
Bailey, S. (2016, March 29). An Overview of the US Nonalcoholic Beverage Industry. Retrieved
April 18, 2017, from http://finance.yahoo.com/news/overview-us-nonalcoholic
-beverage-industry-134139317.html
Pino, I. (2014, August 25). Soft Drinks: Investing Essentials. Retrieved April 18, 2017, from
http://www.chron.com/business/fool/article/
Soft-Drinks-Investing-Essentials-5711301.php
Taylor, K. (2016, January 02). The 4 biggest ways American beverage consumption will change
in 2016. Retrieved April 18, 2017, from http://www.businessinsider.com
/4-big-beverage-industry-trends-in-2016-2015-12
United States: soft drink market size, 2014 | Statistic. (n.d.). Retrieved April 18, 2017, from
https://www.statista.com/statistics/422532/united-states-soft-drink-market-size/
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