Soft Drinks Vs. Smartphone Apps

Written Assignment Unit 4

Soft Drinks Vs. Smartphone Apps

BUS 5112: Marketing Management

University of the People

Introduction

      According to the latest beverage forecasts from Canadean, the carbonated soft drinks (CSD) market currently amounts to 228 billion liters of consumed volume globally and will grow to 243 billion liters by 2018. It is the second most abundant market after water (www.pci-mag.com).

       According to the Mobile Apps market report, one of the major drivers for this market is Growth in the use of mobile devices which is increasing across the world. In 2016, the smartphone market expanded to 1.59 billion units from 1.44 billion units in 2015. The availability of inexpensive mobile devices plays a major role for the increase in the adoption of mobile devices. (www.prnewswire.com).

Soft drinks; Consumers and Competitors

        Soda is a unique product because it has no explicit purpose, mostly dominated by the Americas, which account for nearly half the consumption. Europe and Asia each has about 20% share. Outside Asia, which is set to see modest growth and Latin America, global consumption is beginning to plateau as consumers continue to be driven by motivations of health, which is often at odds with the high sugar content of some of the market leaders. The market faces challenges beyond sugar content, such as demographics change and consumers age, they move into the alcohol, water or juice markets and away from standard soft drinks (www.pci-mag.com)

        According to the 2017 FORBES Global 2000, the world’s most powerful public companies as measured by a composite score of revenue, profit, assets and market value; Nestle, Pepsi and Coca-Cola are the top three food and drink companies in the world. Competitors include other products such as non-carbonated beverages; Lemonade, Iced tea, Coolatta, Cocktails, energy drinks, protein shakes and drinks and others (McGrath, 2018).

Price; Three leading companies have the prominent presence in the soft drink industry. The leaders include the Coca-Cola Company, PepsiCo, and Cadbury Schweppes. The main pricing strategies depends on;

• Packing; Plastic, glass or can
• Size; price/oz in the bottle
• Cold/Warm; seasonal demands
• Dietary/Regular/Zero/Decaf
• Promotional & saving deals
• Individual/Bulk purchases; a pack of 8, 12, 24 or 40 cans
• Bundle beverage; with supermarket fresh-prepared foods
• Brand loyalty; strong competitive pressure

Advertising; Soft drink marketing is all about presenting images of fun. Soda is presented as something that is permissible and natural to drink all day long. It is framed as a drink that will make any situation better whether it is a before work or a refreshing addition to dinner. Specialists design ads to run on Facebook, Twitter, and Youtube. These are an integral component of any modern ad campaign and go a long way with traditional ads to create the identity of a brand (www.marketing-schools.org)

Distribution channels are; large grocers, discount stores, restaurants, convenience stores, vending machines and gas stations (www.statista.com)

Smartphone Apps; Consumers and Competitor

         Apps are now an integral part of our daily life with people spending an average of 30 hours per month in them. Apps play a vital role in those I-want-to-know, I-want-to-go, I-want-to-do, I-want-to-buy moments (Tiongson, 2015).

      Verto Analytics data shows that consumers have an average of 89 apps installed on their smartphones, they use 25 of them each week and only eight apps daily. And this daily app count represents an increase: an average of seven apps per day. Together with mobile websites, mobile apps have become valuable to both consumers and marketers.

        On average in 2016, 85% of the time consumers spent on smartphones was in apps, while mobile web usage accounted for only 15% of the time (Hwong, 2017). App customers include all age groups. Verto Analytics data shows that American adults (ages 18 and above) today own an average of five devices between PCs, smartphones, tablets, and wearables (Hwong, 2017).

Price; According to (www.businessofapps.com), Mobile app pricing is one of the problematic and crucial elements of mobile app development. Important factors that may influence price decision are;

• Value of the product should be higher than the price
• Price should be reasonable and affordable
• Understanding the market demand
• Users expect more options from paid apps
• Well-designed and user-friendly

And there are four types of pricing strategies;

• Free; entirely free for download and use
• Freemium; free to download but will have limited functionality and features
• Paid; users are asked to pay once for the app to download and use it.
• Paidmium; users are asked to pay for the app but have the option to unlock additional features by spending more. Paidmium is not yet a compelling pricing strategy.

Advertising; Advertising; for a new app is a tough job, but the best marketing strategies include;

• Research target market.
• Perform competitor research; Knowing about your competitors will help you to communicate with your target audience.
• Create a landing page that sells; be creative, attractive and unexpected
• Spread on App stores
• Start a blog
• Create viral video content
• Social media
• Social networks

(www.forbes.com)

Distribution channels; According to (Watson, L. 2015) the five worldwide distribution channels for Mobile Apps are;

• Google Play & the App Store – the Google Play Store for Android and the Apple App Store for iOS, are the two most prominent distribution channels for mobile apps.
• Other app stores; like Amazon or GetJar
• Ad Networks
• mobile web version
• social media (ex. Facebook, Twitter, Google+, etc.), blog

Conclusion

       Soft drinks and Smartphone apps are entirely different products with two distinctive production life cycle. The former had been more mature and will continue to be a primary product with the traditional form of pricing and distribution channels. With huge budgets, they virtually control the advertisement environment everywhere around us. The smartphone era is gaining grounds and getting more and more popular especially when offered at a “freemium.” But with any product, the marketing strategy has to be creative, attractive and unexpected.