Analysis of the Soft Drink Industry within the UK
As we have seen above soft drinks is a mature industry that in the years 1995-1999 has seen an increase in value by 10% taking the sector value to over 7 billion pounds. Due to advertisement and technological innovations amongst a change to eating habits there has been a trend towards an increased consumption of soft drinks. Although in Britain soft drink consumption is effected by the weather (there is a seasonal increase in consumption the summer months) underlying growth is fuelled innovation in packaging, flavours, competition in marketing, wide distribution, health consciousness fast food growth and strong brand images. Accessibility to venting machines and an increase to small snacks instead of meals has led Britain to a similar consumption trend to the U.S.A and the rest of Europe.
Considering the case of a smaller existing rival producer it would be very difficult to compete with the larger firms. Those firms due to economies of scale are a lot more cost effective and they also enjoy the privilege of consumer loyalty due to very strong brand image. The importance of the brand image can be seen in the 1985 fiasco of coca cola, when they announced that they would change the cola formula. Testing groups showed that the new formula tested better, but the consumers in America kept their loyalty in the old recipe. ). On July 10, 1985, eighty-seven days after the new Coke was introduced, the old Coke was brought
back in addition to the new one. This was greatly due to dropping market share and consumer protest.
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