AGENDA Introduction Bart Economic Forces Torrey Social Cultural
AGENDA Introduction Bart Economic Forces Torrey Social, Cultural, and Demographic Forces Chad Technological Forces Bart Global Segments Edward Competitive Forces Leslie Conclusion Edward
Introduction + $154 Billion Industry
Segments of the Industry n Soft Drinks-$53. 4 bill n Beer-$53. 28 bill n Sports Drinks-$1. 4 bill n Bottled Water-$4 bill n Fruit Drinks-$1. 4 bill
Worldwide Beverage Consumption
Growth Rates : n Fastest Growing – Water - 9. 5% – Sports Drinks - 8. 3% n Others – Soft Drinks-3. 4% – Fruit Drinks-1. 7% – Beer - 1. 4%
Driving Forces n Expanding Market Power n Desire to fill Consumer Need n Personalization of the Market Segments n Building Brand Recognition n Maximization of Growth Potential
Economic Forces Growth rate n GDP per capita n Inflation n Unemployment n
Economics Around the Globe
Discretionary Income in the U. S. Income is increasing in American households n Consumers are spending more n Consumers are saving less n
Impact of Economic Factors Demand on beverages should remain stable n Brand label beverages should do well n Low interest rates and low inflation provide new business opportunities n
Other Economic Factors to Consider Lower restrictions on trade and investment in foreign countries n Foreign currencies are weak against the U. S. dollar n Yen n German Mark n Mexican Peso n various Asian currencies n
Markets for the Industry Markets are becoming international n Latin American, Eastern European, and Asia-Pacific region countries are favorable n Japan n China n Brazil n Mexico n Lithuania n Thailand n United Kingdom n
Social, Cultural, and Demographic Forces
Ethnic/Age Demographics n n n Hispanics-33% African-Americans 14% Asian-American-49% Baby Boomers – health – convenience Younger generation
Target Market n Focus on tradition n Stress convenience
Marketing Strategies/ Expenditures • Sports • Tradition
Beverage Technology Product Labeler C H I L L C A N Pressure Sensor
Life Top Package Injects Probiotic Bacteria ( Reuteri ) Bacteria lives 5 to 6 Days Extended Shelf Life “Good Bacteria”
Superior Plastics Keep beverages from going flat Increased Shelf Life Gas-Tight Barriers Liquid Crystal Polymers
“Chill Can” Bad Idea? Heat the Whole World with Greenhouse Effect Same Effect on Global Warming as Driving Car 200 Miles Not EPA Approved
Synthetic Cork Guards against Cork Contamination Affinity Polyoleifin Plastomer Natural Cork 8% Failure
Research/Survey Taste is one of top Determining Factors Desire for “Adult Sophisticated and Complex Taste” Strategy Implemented by Ocean Spray
World Segment
Coverage Area
Important Factors n Mergers n Currency rates n n Health and Stability of economies World Cup Soccer
North America n n n Highest per capita consumption in the world Largest market sales Growth potential relatively small
Latin America n n n Population 481 million Young population Many individual cultures and tastes
Europe n n n Population of 866 million Strong increase with new governments in Eastern Europe Potential growth very high
Middle and Far East n n Population of 3. 6 billion Largest potential for growth Largest population concentration on Earth +29 billion 8 ounce servings per day
Africa n n n Population of 594 million Introduction of bottled drinks into everyday life increase amount of exposure on individual communities
Competitive Forces Porter’s Five Forces Model
Rivalry Among Competing Firms n Level of intensity n Implications
Implications of Intensity n New Product Introductions n Sales Promotion Offers n Price Wars n Media Spending
Media Expenditures
Media Spending Fact n Soft drink companies spent more than $530 million to promote their brands in 1998.
Potential Entry of New Competitors
Substitute Products Wine/Spirits n Milk n Juices n Fruit Drinks n Coffee/Tea n Gourmet Drinks n Water n
Bargaining Power of Suppliers n Competitive Prices n Dependable Service n Product Quality n Supplier Reliability n Turnaround Time
Bargaining Power of Consumers n n n Buying Private Label Brands Product Loyalty Changing Demands
Fact n One of every four beverages consumed in America is a soft drink n Average over 56 gallons of soft drinks per year per individual.
Mergers n The Coca-Cola Company merges with Cadbury Schweppes
Complements n Snack Food Industry – potato chips – chocolate – peanuts
Conclusion $154 Billion Dollar Industry n Thriving World Market with High Growth Potential n More “Health Conscious” World n Intense Competition with Barriers to Entry n
Thank You
- Slides: 45