Product Mix and New Product Development Strategies Essay

The Coca-Cola versus Pepsi competition is mayhap the decisionly well known rivalry in the history of marting. setback has long enjoyed the home field advantage, having become entrenched as the most popular and identifiable sess throughout the world. Although it has carved itself a whole portion of the marketplace, Pepsi has strugg conduct to match the sales revenue of Coca-Cola until recently. Although Pepsi has neer come close to equaling cytosine cola market shargon, they abide become more raptorial and adept than turn in cornering the non-carbonated beverage market. It is in this market that Pepsi is desire to obtain a obtainable competitive advantage all oer degree centigrade.It their take to acquire and develop saucy harvest-homes, go out the use of the PTSTP rule financial aid Pepsi develop revolutionary intersections in discover to obtain a sustainable competitive advantage?A harvesting is defined in tierce levels core, actual, and augmented. The cor e of the product is the benefit it offers the consumer. For the example of colas, it could be refreshment, energy (sugar and caffeine), alertness, or just pleasure. The sodium carbonate itself is the actual product. The augmented product for a cola could be the recognition and status gains perceived by drinking that detail instigator. Or it could even be the weight loss from sticking to viands colas.For the development of parvenu products, we foremost need to identify what consists of a new product. There argon six categories of new products1.New-To-The-World. This is a product that has no like product offered elsewhere. For example, when the first personal computer was offered to the public, this would be a new product.2.New proceeds Lines. This is when similar products exist, possibly even under the homogeneous brand, but a new stress of the product offers some palpable difference to those products already offered. For example, offering diet colas in addition to regular colas under the same brand.3.Product Line Additions. This is the addition of a product that is directly related to one offered. For example, offering Vanilla Coke for sale on base Coke.4.Improvements/Revisions. This is a product which has already been offered, but some change or revision has been do to the products properties. For example New Coke, or any involvement labeled new and improved.5.Repositioned Products. The same product offered in a new market or directed towards a new target market. For example Pepsi bringing Sabritas chips into the US to target the Hispanic market.6.Lower-Priced Products. This is simply reducing the price of an existing product to stimulate sales.New products affect the product mix of a company. Product mix is generally defined as the total composite of products offered by a particular organization. The product mix includes twain individual products and product lines. A product line is a group of products which are intimately related by functi on, customer base, distribution, or price range. To use Pepsi as an example, Pepsis product mix includes beverages and potato chips. The beverage product line consists of carbonated, non-carbonated, and water. Pepsi, Gatorade, and Aquafina all are individual products.PTSTP is a mnemonic for the five measure process underlying Target Marketing and Positioning. The five steps are as follows1.Identify competitive Products.2.Define the Target market.3.Determine the basis for Segmentation.4.Determine if any Target markets are underserved.5.Develop a Product for the underserved market.By using this method, a company merchant ship identify a gap in a particular market segment. This gap may be present because there is no product to fill it, or because the current product is reaching the end of its life-cycle, and so creating an opportunity for new growth. To answer the previous question, we will contrast the PTSTP method to Coca-Cola and Pespis development of the non-carbonated beverage m arket.Pepsi has continually struggled to match Cokes market share in colas and other carbonated beverages. Coke enjoys a 44% slice of the market compared to Pepsis 32%. During their 108 year rivalry, Pepsi has never come close to selling as much soda as Coke. Much of this is collectable to Cokes brand recognition. Although in 2006 Pepsi, for the first time, beat Coke in beverages sold. This was due to Pepsis embracement of the non-carbonated beverage market, where it led the market with a 24% share over Cokes 16%. Pepsi was able to recognize and take advantage of the growing non-carbonized market much earlier than Coca-Cola.Although cola sales have recently stagnated to less(prenominal) than 1% growth, non-carbonated beverages grew 8% in 2004. Much of the failure of Coke to aggrandise into this market can be traced back to the stubbornness of Coke executives to blow up beyond the soda market. Coke had an opportunity to acquire champion Oats in the 1990s, but passed on the opport unity. Instead, Pepsi acquired Quaker Oats in 2001. Among Quaker Oats assets were Gatorade and Snapple, both leadership in their markets. Although these product lines were already established, they correspond new products to Pepsi, as they represented Pepsis introduction into the non-carbonated beverage market. As a entrust, Pepsi owns a coercive lead in the sports drink market, with Gatorade holding an 80% share to Cokes Powerade at 15%.Until 2001, Coca-Cola had been reluctant to embrace new products. They were non willing to extend their company and take the chance in the non-carbonated market, until they byword the success Pepsi was having. In addition to passing up on Quaker Oats, Coke lost a bidding war for the Sobe line of intensify juices, and their bid for the Planet Java line of coffees and teas was not embraced by their free bottlers. However, since 2000 Coke has been actively seeking new products in this market, including the acquisition of the sure-fire Minute M aid juice line.The difference in philosophy has made the difference for Pepsi. In fact, losing the cola wars may have been the best thing for Pepsi. This forced Pepsi to look outside the soda realm in order to increase profits. As Pepsis CEO, Steven Reinemund believes that his companys growth is due to their constant quest for change, that Innovation is what consumers are looking for, particularly in the small, routine things of their life. Pepsis willingness to embrace new product lines has given them the bank over Coke for the first time in history. Their offerings of Quaker Oats beverages, Sobe, and Aquafina have all been firsts for a soda company. As a result, they have gained the brand recognition over Cokes subsequent offerings, leading to an change magnitude market share.In order for Pepsi to maintain their competitive advantage over Coke, they need to follow the advice of Reinemund, by remaining innovative. PTSTP can help them sustain this advantage. By identifying pot ential markets, and developing products for these markets, they can continue to capture new market shares. The beverage market is saturated with options for the consumer, with new products appearing e genuinelyday. umpteen of these products are variations on existing products. For example, energy drinks have become very popular in the past few years. As a result the market has become flooded with options. It will become increasingly uncontrollable to introduce new products in this category.By using PTSTP, Pepsi can identify a new niche in this market, or a dissimilar market to exploit. Using the energy drinks as an example, the competitors range from Fuze, Red Bull, and many others. By defining the target market, they can identify that the same demographics both tend to buy sodas and energy drinks. Pepsi can then segment the market into young males (18-30). They then determine that the target market of combined soda energy drinks is underserved. They then develop a product to ser ve this market. therefrom Pepsi Max is born.By using PTSTP, Pepsi has created a new product in soda energy drinks, Pepsi Max. It is this type of creativity and innovation that is embraced by Reinemund, and will serve to keep Pepsi with a sustained competitive advantage over Coke. Only by using a method such as PTSTP, can underserved markets be identified and exploited.References1. http//business.enotes.com/business-finance-encyclopedia/product-mix2. Brady, Diane (). A Thousand and One Noshes How Pepsi dexterously adapts products to changing consumer tastes.Business Week. 14 Jun 20043. Foust, Dean. Things Go Better With Juice Cokes new CEO will have to move pronto to catch up in noncarbonated drinks.Business Week. 17 whitethorn 20044. Brooker, Katrina. How Pepsi outgunned Coke Losing the cola wars was the best thing that ever happened to Pepsi while Coke was celebrating, PEP took over a much larger market.FORTUNE 1 Feb 2006http//money.cnn.com/2006/02/01/news/companies/pepsi_fortu ne/index.htm5. http//www.marketingteacher.com/Lessons/lesson_three_levels_of_a_product.htm