Coca-Cola: Why the brand still dominates the beverage market

Coca-Cola’s global brand marketing success comes as no gimmick for a brand that has been in existence for over a century. Coke brand is an industry leader and has utilized numerous marketing strategies to sustain its market share within the beverage industry.

One of such thriving strategies Coca-Cola has employed to maintain its leadership status for so long is the cost leadership strategy (Smartling, n.d).

Due to the fierce price competition from rivals (Pepsi), Coca-Cola’s product pricing concerns the market and geographic segment. The beverage market is an oligopoly market (few sellers and large buyers), so firms within the cartel use either a high price or low price strategy to maximize profit (Samploon, n.d.)

Coca-Cola’s utilizing this pricing strategy provides them with a major source of competitive advantage within the beverage industry. Even though the coca-cola brand is widely known, they price all their products competitively (Product mix). Though competition is the major reason the Coca-cola brand uses this strategy and other marketing dynamics, another key reason for employing this strategy is to make their products more accessible and affordable. They allow the brand access to a very large pool of customer base all around the world. (Pratap, 2019).

Another key reason Coca-cola uses the pricing strategy is to meet the competitive pricing. Coca-cola effectively uses a low pricing strategy a lot to penetrate new markets that are very price-conscious. They set the prices around the same level as the competitors to enable Coca-cola to be distinct but affordable. They do this to beat the competition on price and raise the awareness of the Coca-Cola brand. The moment (Coke) has established the brand in the market, Coca-cola repositions to assert itself as the premium brand compared to its numerous competitors (Pepsi, for example). They do this effectively by promoting the brand image through the intangible benefits in lifestyle, group affiliation, joy, and happiness but the marketing strategy still focuses on an affordable premium product (Lumen, n.d.).

Courtesy : BBC

Due to the simple ingredients and easy access or availability of the raw material, Coca-cola can easily switch over to another (supplier) and lower the price as the costs are low. Coca-cola has a huge distribution network that allows its product to be accessible globally, thereby increasing profits by reducing costs and increasing market share by lowering prices (Julia, 2011).

Anders, J. (2011). Coca-Cola’s Marketing Strategy: An Analysis of Price, Product, and Communication. https://www.grin.com/document/232661.

Putting It Together: Marketing Mix. lumen. (n.d.). Https://courses.lumenlearning.com/wmopen-introbusiness/chapter/putting-it-together-marketing-mix/.

Pratap, A. (2019, January 13). Coca-Cola Sources of Competitive Advantage. https://notesmatic.com/coca-cola-sources-of-competitive-advantage/.

Saloon. (n.d.). Coca Cola market structure. https://samploon.com/coca-cola-market-structure/.

Smartling. (n.d.). What Can We Learn from Coca-Cola’s Global Marketing Success? https://www.smartling.com/resources/101/what-can-we-learn-from-coca-cola’s-global-marketing-success/

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