Competitor's Approach: Evaluating Successes and Setbacks
In the competitive world of soft drinks, PepsiCo is making a bold move to overtake Coca-Cola's market share. Pepsi is a prime example of a market challenger, a company aiming to displace a market leader and claim its position.
Market challengers, like Pepsi, aim to capitalise on the leaders' mistakes and replace them. However, if they fail, they must be prepared to become market followers. To achieve their goal, challengers employ various strategies to attack and potentially replace market leaders.
One such strategy is the feisty maverick approach, which relies on communications rather than technology as the primary weapon. Brands like Virgin, BrewDog, and Red Bull thrive on being provocative and challenging the status quo. In the soft drinks industry, this strategy is evident in Pepsi's edgy advertising campaigns and its focus on being a rebel brand.
Another strategy is presenting a new or unconventional way of thinking about the industry. Challenger brands use this novelty to challenge existing conventions and gain market share by appealing to customers seeking something different. Pepsi's emphasis on sustainability and healthier drink options is a clear example of this strategy.
Exceptional marketing strategies also play a crucial role in a challenger's success. Pepsi's creative marketing tactics, including PR and innovative advertising, have helped build a strong brand identity and attract customers away from Coca-Cola.
Identifying and challenging the status quo is another key strategy. Pepsi has taken creative risks and presented alternative solutions, such as its focus on natural flavours and reduced sugar content, to differentiate itself from Coca-Cola.
Cost and pricing strategies are another weapon in a challenger's arsenal. Pepsi may adjust its pricing to undercut Coca-Cola, offering similar products at more competitive prices. Pepsi might also focus on cost-effectiveness to maintain profitability while growing market share.
Innovation and nimbleness are also essential for challengers. Pepsi's ability to quickly introduce new products, such as its cannabis-infused drinks, demonstrates its agility and capacity to disrupt the market.
As a market challenger, Pepsi has a relatively strong position in the market, allowing it to enhance what Coca-Cola has to offer and allocate more effort to product marketing. However, customers may be reluctant to switch to Pepsi, perceiving it as inferior to Coca-Cola.
To overcome this perception, Pepsi must continue to innovate, introduce new products, and maintain its marketing efforts. If successful, Pepsi could potentially replace Coca-Cola as the market leader in the soft drink industry.
[1] Source: "Marketing Management" by Philip Kotler, Kevin Lane Keller, and Gary Armstrong, 15th Edition. [2] Source: "Competitive Strategy: Techniques for Analysing Industries and Competitors" by Michael E. Porter, 3rd Edition. [3] Source: "The Challenger Sale: Taking Control of the Customer Conversation" by Matthew Dixon and Brent Adamson. [4] Source: "Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant" by W. Chan Kim and Renée Mauborgne. [5] Source: "Positioning: The Battle for Your Mind" by Al Ries and Jack Trout.
PepsiCo, in its role as a market challenger, is utilizing innovative marketing strategies and product development to potentially overtake Coca-Cola's market share. Moreover, they are posing a threat to Coca-Cola's dominance by challenging the status quo with their focus on sustainability, healthier drink options, and edgy advertising campaigns.
