Cola wars case study

1.Why is that soft drink industry so profitable? (From Exhibit 1, it is observed that, assuming unchanged annual liquid consumption per capita, soft drink consumption, which can be extrapolated by deducted beer & wine consumption from total annual liquid consumption, is actually slightly lowered during 1970 to 2000 period. So we assumed the question is actually asking about CSD industry instead of aggregate soft drink industry.) First of all, the soft drink industry is an profitable industry …

…overall market. The marketing campaign can be tailored to these markets. Different regional market may have different flavor preference, and as both Coke and Pepsi strongly stand for American culture in varied degree, it is recommended that Coke and Pepsi partner with local soft drink firms and customize soft drinks with local tastes. Then they can leverage their operation and branding expertise to increase the operation efficiency and brand awareness to capture more local market.