Problem:
Assume that you are the top marketing manager for the Pepsi-Cola Co. You are engaged in an intense battle for market share in domestic beverage market with Coca-Cola Co. You initially think that the one who captures most of the market share will be the one who spends the most on advertising and promotion. You have to decide how much of your budget you should allocate for advertisement and promotion.
1. Use online search to find out the domestic market share by Coke and Pepsi in 2005 and 2006.
2. Is US beverage market a Oligopoly or Monopolistic Competition? Explain.
2. Go to Advertising Age, www.adage.com, and go to "Data Center", and then click "Market Profile Yearbook" to find out the total U.S. advertising spending by Coke and Pepsi Co. in 2006 and 2005.
3. Review online to analyze consumer demands/tastes, marketing, and prices of major soft drinks by Pepsi-Cola Co and Coca-Cola Co. Provide your explanation in detail why Pepsi-Cola Co. with a higher advertising spending has a smaller market share than Coca-Cola Co. What are your recommendations (product, marketing, price, and nonprice strategy) to increase market share by Pepsi-Cola?
4. What challenges/uncertainties do you think there are in your recommendations?
5. Write a formal memo (to the CEO) that include a) objective of your analysis; b) Your data, analysis, and conclusion; c) challenges and uncertainties; and d) references/citations.
Response should be at least 2-3 pages