Product Mix and New Product Development Strategies Essay

The Coca-Cola versus Pepsi competition is by chance the most well known tilt in the history of commercializeing. blast has coarse enjoyed the home field advantage, having sustain fasten as the most prevalent and recognisable pinhead throughout the world. Although it has carved itself a substantial portion of the trade, Pepsi has struggled to accord the gross sales r neverthelessue of Coca-Cola until recently. Although Pepsi has never come contiguous to equaling setback grass grocery store sh are, they extradite become more aggressive and sense experience than ampere-second in cornering the non-carbonated drink market place. It is in this market that Pepsi is seeking to obtain a sustainable emulous advantage everyplace deoxycytidine monophosphate.It their quest to acquire and develop brisk reapings, impart the use of the PTSTP system process Pepsi develop late wares in indian lodge to obtain a sustainable competitive advantage?A returnion is defin ed in three levels core, positive, and augmented. The core of the convergence is the benefit it offers the consumer. For the simulation of colas, it could be refreshment, ability (sugar and caffeine), alertness, or just pleasure. The soda itself is the actual ware. The augmented product for a cola could be the recognition and status gains perceive by drinking that particular soil. Or it could even be the weight outrage from sticking to diet colas.For the development of rising products, we first want to spot what consists of a parvenue product. There are sise categories of current products1.New-To-The-World. This is a product that has no like product offered elsewhere. For spokesperson, when the first own(prenominal) computer was offered to the public, this would be a new product.2.New convergence Lines. This is when similar products exist, possibly even under the kindred brand, hardly a new line of the product offers more or less tangible difference to those prod ucts already offered. For example, fling diet colas in step-up to incessant colas under the same brand.3.Product Line Additions. This is the appendix of a product that is directly connect to one offered. For example, offering Vanilla coulomb for sale alongside one C.4.Improvements/Revisions. This is a product which has already been offered,but some shift or revision has been make to the products properties. For example New Coke, or anything labeled new and improved.5.Repositioned Products. The same product offered in a new market or enjoin towards a new organise market. For example Pepsi bringing Sabritas chips into the US to target the Latino market.6.Lower-Priced Products. This is simply reducing the price of an real product to stimulate sales.New products require the product mix of a company. Product mix is gener everyy defined as the total composite of products offered by a particular organization. The product mix includes some(prenominal) individual products and pr oduct lines. A product line is a group of products which are closely related by function, guest base, distribution, or price sick. To use Pepsi as an example, Pepsis product mix includes deglutitions and white potato chips. The beverage product line consists of carbonated, non-carbonated, and water. Pepsi, Gatorade, and Aquafina all are individual products.PTSTP is a mnemotechnic for the five step process primal maneuver Marketing and Positioning. The five locomote 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 exploitation this method, a company tramp hear a gap in a particular market segment. This gap whitethorn be present because there is no product to fill it, or because the on-going product is reaching the end of its life-cycle, hence creating an hazard for new harvest-tide. To answer the antecedent question, we volition contrast the PTSTP method to Coca-Cola and Pespis development of the non-carbonated beverage market.Pepsi has continually struggled to match Cokes market make out 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 oft soda as Coke. oftentimes of this is due to Cokes brand recognition. Although in 2006 Pepsi, for the first time, beat Coke in beverages sold. This was due to Pepsis hidement of the non-carbonated beverage market, where it led the market with a 24% share over Cokes 16%. Pepsi was able to recognize and lend advantage of the growing non-carbonized market much earlier than Coca-Cola.Although cola sales surrender recently stagnated to less than 1% growth, non-carbonated beverages grew 8% in 2004. Much of the failure of Coke to go into this market can be traced back to the stubbornness of Coke executives to expand beyond the soda market. Coke had an opportunity to acquire protagonist Oats in the 1990s, but passed on the opportunity. Instead, Pepsi acquired quaker Oats in 2001. Among Quaker Oats assets were Gatorade and Snapple, both leaders in their markets. Although these product lines were already established, they represented new products to Pepsi, as they represented Pepsis introduction into the non-carbonated beverage market. As a result, Pepsi owns a coercive lead in the sports drink market, with Gatorade retentivity an 80% share to Cokes Powerade at 15%.Until 2001, Coca-Cola had been reluctant to embrace new products. They were not willing to release their company and take the chance in the non-carbonated market, until they saw the success Pepsi was having. In addition to passing up on Quaker Oats, Coke lost a dictation war for the Sobe line of enhanced succuss, and their telephone for the Planet Java line of coffees and teas was not embraced by their independent bottlers. However, since 2000 Coke has been actively seeking new products in this market, including the eruditeness of the successful Minute Maid juice line.The difference in philosophy has made the difference for Pepsi. In fact, losing the cola wars may waste been the best thing for Pepsi. This obligate Pepsi to look outside the soda domain in order to increase profits. As Pepsis CEO, Steven Reinemund believes that his companys growth is due to their constant quest for change, that construct is what consumers arelooking for, particularly in the small, routine things of their life. Pepsis willingness to embrace new product lines has given them the edge 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 increase market share.In order for Pepsi to hold their competitive advantage over Coke, they need to follow the a dvice of Reinemund, by remaining innovative. PTSTP can help them sustain this advantage. By identifying latent markets, and developing products for these markets, they can continue to mystify new market shares. The beverage market is saturated with options for the consumer, with new products appearing everyday. some(prenominal) of these products are variations on existing products. For example, susceptibility drinks have become very popular in the past few years. As a result the market has become flooded with options. It will become more and more difficult to introduce new products in this category.By using PTSTP, Pepsi can identify a new niche in this market, or a different market to exploit. Using the faculty drinks as an example, the competitors range from Fuze, Red Bull, and many others. By define the target market, they can identify that the same demographics both tend to buy sodas and zip drinks. Pepsi can then segment the market into young males (18-30). They then det ermine that the target market of combined soda energy drinks is underserved. They then develop a product to serve this market. Thus Pepsi Max is born.By using PTSTP, Pepsi has created a new product in soda energy drinks, Pepsi Max. It is this flake of creativity and innovation that is embraced by Reinemund, and will serve to keep Pepsi with a keep up competitive advantage over Coke. save 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 maven Noshes How Pepsi deftly adapts products to changing consumer tastes. argument Week. 14 Jun 20043. Foust, Dean. Things Go Better With Juice Cokes new CEO will have to move quickly to tweak up in noncarbonated drinks.Business Week. 17 May 20044. Brooker, Katrina. How Pepsi outgunned Coke Losing the cola wars was the best thing that ever happened to Pepsi date Coke was celebrating, PEP took o ver a much larger market.FORTUNE 1 Feb 2006http//money.cnn.com/2006/02/01/news/companies/pepsi_fortune/index.htm5. http//www.marketingteacher.com/Lessons/lesson_three_levels_of_a_product.htm