The Pepsi Ultimate Taste Challenge 2012: Social Enough Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Threat of new entrants is low

The threat of new entrant is low because it is extremely expensive to enter in such industry in which you need to have extensive capital, exceptional branding and distribution expertise. Competitors like Pepsi and Coca Cola makes it difficult for others to enter in this industry across the globe. Many brands have been introduced in the market from time to time but they all have been wiped out by Pepsi and Coca Cola across the entire world.

Bargaining power of buyers is high

The bargaining power of the buyer in this industry is high because they have approximately same competitors available in the form of Coca Cola and Pepsi as a replacement for each other.They both possess exactly the same taste and can be easily taken as a replacement of each other. If Pepsi raises the price so it is a possibility that a consumer may go for Coca Cola. Therefore, worldwide price of both Pepsi and Coca Cola is approximately equivalent. Other than some promotions, they follow each other in price and do not increase the price unneccesarily across the globe.

Bargaining power of suppliers is low

The bargaining power of the supplier is low as a supplier of Pepsi or Coca Cola cannot afford to bargain a lot because if it loses a contract so it may be a huge loss for that supplier. For example, if Pepsi is supplied raw materials by a certain company so that supplier will try his level best to maintain excellent relationships with them and must not negotiate unnecessarily.In this industry, the formula matters which is kept hidden from all raw material suppliers and even employees. So raw material will not play a very important role as compared to the formula. Here in this industry, the quality of supplies does not matter a lot because the quantity of formula that is mixed has a real role to play in the development of taste.

Degree of competitive rivalry is high

The degree of competitive rivalry is high especially in a country like Canada that has a huge population and a competitive beverage market. Coca Cola and Pepsi that are huge player in the world are trying their level best to snatch each others’ shares by doing branding activities all over the year across the globe. They are fully involved in sponsoring sports, music and other flourishing industries, which increase the level of competition in this industry in an excellent manner.

Threat of substitution is high

Threat of substitute is high because a customer may switch to juices and other healthy drinks as a substitute. Sometimes, consumers may not go for carbonated drinks, which are comparatively more risky for health and may prefer juices along with other drinks as a substitute. But by using social media, the company can highlight the benefits of having Pepsi and can enhance the healthy brand image by using the social media promotion strategy.

Alternatives

BTL across the Canada in educational institution
Marketing through bulk emails, SMS and Blog Sponsoring
Sponsor Major Sports Events in Canada

Evaluation of Alternatives

v BTL across the Canada in educational institution

Canada comprises of large number of educational institutes that include: schools, colleges, universities and coaching institutes. In the ultimate taste challenge, Pepsi will target the age group of 16-25. This age group can be found in schools, colleges, universities and coaching institutes. Pepsi can come up with BTL activities in these institutions and can gain the optimistic attention of this age segment. By doing sampling, small quizzes and other such activities Pepsi can be at the achieving side. Canada is an educated country,where people aged between 16-25 likes to go schools, colleges and universities to gain education. By doing BTL activities in such places, Pepsi can gain desired results as expected by ultimate taste challenge. Pepsi can also make ultimate taste challenge a part of their campaigns at different schools, colleges and universities and grab more outstanding results.

v Marketing through bulk emails, SMS and Blog Sponsoring

Marketing through bulk emails, SMS and Blog Sponsoring can also be an alternative. This can be extremely less costly as compared to the ultimate taste challenge. Using this digital approach can also be an effective medium. This option can also be used in a way that Pepsi can sponsor a blog written to focus on its ultimate taste challenge. This will help to raise awareness regarding the ultimate taste challenge or even Pepsi as well.Bulk sms service can also help in promoting Pepsi in Canada but the company needs to design a promotion activity that should be announced through sms, bulk emailing and blogs sponsoring............................................

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