3. AGENDA IntroductionBart Economic ForcesTorrey Social, Cultural, and Demographic ForcesChad Demographic ForcesChad Technological ForcesBart Global SegmentsEdward Competitive Forces Leslie ConclusionEdward

4. Introduction + $154 Billion Industry

5. 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

6. Worldwide Beverage Consumption

7. Growth Rates : 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%

8. 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

9. Economic Forces n Growth rate n GDP n GDP per capita n Inflation n Unemployment

10. Economics Around the Globe

11. Discretionary Income in the U.S. n Income is increasing in American households n Consumers are spending more n Consumers are saving less

12. Impact of Economic Factors n Demand on beverages should remain stable n Brand label beverages should do well n Low interest rates and low inflation provide new business opportunities

13. Other Economic Factors to Consider n 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

14. Markets for the Industry n 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

15. Social, Cultural, and Demographic Forces

16. Ethnic/Age Demographics n Hispanics-33% n African-Americans- 14% n Asian-American- 49% n Baby Boomers –health –convenience n Younger generation

17. Target Market n Focus on tradition n Stress convenience

18. Marketing Strategies/ Expenditures Sports Tradition

19. Beverage Technology Product Labeler Product LabelerCH I C Pressure Sensor L A L N

20. Life Top Package Injects Probiotic Bacteria ( Reuteri ) Bacteria lives 5 to 6 Days Extended Shelf Life “Good Bacteria”

21. Superior Plastics Keep beverages from going flat Increased Shelf Life Gas-Tight Barriers Liquid Crystal Polymers

22. “Chill Can” Bad Idea? Heat the Whole World with Greenhouse Effect Same Effect on Global Warming as Driving Car 200 Miles Not EPA Approved

23. Synthetic Cork Guards against Cork Contamination Affinity Polyoleifin Plastomer Natural Cork 8% Failure

24. Research/Survey Taste is one of top Determining Factors Desire for “Adult Sophisticated and Complex Taste” Strategy Implemented by Ocean Spray

25. World Segment World Segment

26. Coverage Area

27. Important Factors n Mergers n Currency rates n Health and Stability of economies n World Cup Soccer

28. North America n Highest per capita consumption in the world n Largest market sales n Growth potential relatively small

29. Latin America n Population 481 million n Young population n Many individual cultures and tastes

30. Europe n Population of 866 million n Strong increase with new governments in Eastern Europe n Potential growth very high

31. Middle and Far East n Population of 3.6 billion n Largest potential for growth n Largest population concentration on Earth n +29 billion 8 ounce servings per day

32. Africa n Population of 594 million n Introduction of bottled drinks into everyday life n increase amount of exposure on individual communities

33. Competitive Forces Porter’s Five Forces Model

34. Rivalry Among Competing Firms n Level of intensity n Implications

35. Implications of Intensity n New Product Introductions n Sales Promotion Offers n Price Wars n Media Spending

36. Media Expenditures

37. Media Spending Fact n Soft drink companies spent more than $530 million to promote their brands in 1998.

38. Potential Entry of New Competitors

39. Substitute Products n Wine/Spirits n Milk n Juices n Fruit Drinks n Coffee/Tea n Gourmet Drinks n Water

40. Bargaining Power of Suppliers n Competitive Prices n Dependable Service n Product Quality n Supplier Reliability n Turnaround Time

41. Bargaining Power of Consumers n Buying Private Label Brands n Product Loyalty n Changing Demands

42. 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.

43. Mergers n The Coca-Cola Company merges with Cadbury Schweppes

44. Complements n Snack Food Industry –potato chips –chocolate –peanuts

45. Conclusion n $154 Billion Dollar Industry n Thriving World Market with High Growth Potential n More “Health Conscious” World n Intense Competition with Barriers to Entry Entry

46. Thank You