Coca Cola

It seems Coca Cola is taking a play out of the Pepsi play book. Coke is looking to buy up its bottlers in a $15 billion deal. This is a move to increase market penetration into niche markets like sports drinks, energy drinks, and tea drinks. The idea is to increase variety offerings while reducing the price to the consumers through utilizing their extensive bottling and distribution network. This plan could backfire by distracting Coke with bottling operations. Ultimately, this would give Coke control over new product distribution. The bottlers don't have the equipment to bottle the new niche products. I think think this is a good idea. When it comes to business success you cannot leave the your fate in the hands of others and hope for the best. Sometimes you have to take control of the situation to guarantee the outcome you are looking for.

i Pad

When Steve Jobs from Apple introduced the i Pad he said they were trying to penetrate a third segment between the iPod and MacBook. Competitors seemed to snicker and there were derogatory remarks made about the name i Pad. The i Pad is going to be a highly successful product. How do I know. Well, I read in The Wall Street Journal today that all the manufacturers are quick to copy, imitate, or come out with their version of the i Pad. Imitation is
always the best form of a complement. The industry knows that Apple is on the right track and they are chasing fast from behind into this new niche market. Manufacturers like Sony, HP and Dell are letting Apple set the benchmark for this new technology but they are soon to follow hoping to set higher profit margins before this market becomes saturated like the PC and netbooks. The key to Apple's success is the fact that the technology builds on the iPod, i Touch, and i Phone technology. The more products I personally use from Apple the more I want.
I guess I am becoming brand loyal to Apple. I started with the iPod then I switched my phone service that I had for many years and bought and iPhone and now I am considering the iPad.

PepsiCo

I guess Pepsi didn't need a Super Bowl ad and brand recall to boost profits. Pepsi's fourth quarter profits nearly doubled. Of course, Pepsi expects continued growth in the United States,
but they are targeting the international market for rapid growth. They plan on accomplishing this by building infrastructure in China and investing 8 cents per share in this emerging market.
Pepsi is looking to grow sales through product development aimed at health conscious consumers.

Market Penetration

What is the outcome of a product over penetrating a market? Can you over pentrate a market?
Can you have your cake and eat it too? All companies want to build strong brands; however,
some companies want to build exclusive brands. Case in point Harley Davidson Motorcycles.
In the mid 90's it was cool to own a Harley. In fact, it was so cool that there were waiting lists to get your new Harley. Also, you could buy a Harley, ride it for a year or so, and then sell it for more than you paid for it. Harley Davidson had penetrated the American Motorcycle Market.
They had built this exlusive brand that people needed, wanted and were willing to pay top dollar and waite for it. So what went wrong. Well, first they increased production and the waiting list went away, which was a great thing for motorcycling enthusiast. However, now there were Harley Davidsons everywhere and everyone had one. People who didn't even ride motorcycles had a Harley because it was cool and a sign of status. Now, what happened? Motorcycle enthusiast wanted to be different, enter custom motorcycle manufacturers, like Big Dog, Indian, etc. Over exposure of the Harley Davidson brand made it lose its cache. Yes, they still have many customers and sales are strong, but they have changed the market place forever. They have opened up the market place to new competitors for the small segment of upper income motorcycle enthusiasts. Since Harley Davidson started to lose this segment, what have they done? Now they have their custom motorcycle division, which is taking back some of the segment. However, there will forever be those customers that feel HD has lost its cool.
The answer is you cannot have your cake and eat it too. Do you want to make alot of money and appeal to the masses or do you strive to be exclusive and live in that smaller market.

Market Forecasting

In marketing forecasting can make or break a company. It is important to use MIS analysis to estimate demand and keep in touch with the market. Well, I read in The Wall Street Journal today that Abercrombie & Fitch's style was played out. This is to blame for 19% decline in December sales. There lack of style and over price products have opened the door for lower priced competitors like Aeropostle Inc. and American Eagle Outfitters Inc. which posted December sales of +10% and 7%. The Wall Street Journal said that Abercrombie & Fitch's "look is stale and they need to figure out what the next hot trend is and push that". To me this is a perfect example where the company's marketing department has failed. They should have been looking for the next big thing while their current look was still hot. The company should have stayed in touch with its customers through surveys and test markets.Anyway I should have known Aeropostle was at the forefront of fashion, my 11 year old daughters closet is full of it.