Product

Chapter 26

ESTPepsi was in a joint venture with SermSuk. SermSuk bottled Pepsi and

also distributed in all over Thailand. In late November the two companies

‘divorced’ each other, and SermSuk decided to go it alone, producing

their own cola drink. Leaving Pepsi with no one to bottle or distribute

their drinks. However, fear not, Pepsi are working on bottling their own

drinks and creating their own distribution, so Pepsi will soon be back on

the shelves in Thailand.

ESTEST have to create a brand image, they have one of the world’s biggest businesses as a

competitor and Pepsi will soon be back so time is running out for EST to establish a

loyal customer base.

To establish a loyal customer base, EST must consider:

•Quality

•Durability

•Performance

•Appearance

New Product Development

1. Generating new ideas - EST have not done this, they have copied

an already successful drink (cola)

2. Concept testing – EST have not done this, they did not carry out any

market research prior to making EST. they are taking on the world’s

biggest companies without careful planning.

3. Development – EST, are correctly aiming to minimise costs in the

hope to maximise profits. However this is at the expense of

developing a quality drink that is comparable to its rivals. EST

4. Targets – EST aim to have a 25% market share of cola drinks in

Thailand by November 2013, is this realistic?

ESTEST have stated that 40% of Thais are brand loyal (they will not be

willing to change the product they buy). They believe the other 60%

would be willing to change brands. EST are basing their predicted

success on the fact that they are a Thai company and believe Thai

people are loyal to Thai products, this they hope, will guarantee them

sales! ผม ชอบ เอสทั เพราะ เป็�น ไทัย

Question – Is EST product orientated or Market orientated? Why? [2]

TV advertising

Celebrity endorsemen

t(Bie Tono Mike)

Product life cycleSA

LES

Introduction Growth Maturity Decline

TIME

Draw a PLC on your white boards, show where EST is, and its rivals. Show the effects of an extension strategy

Product Life CycleWhat pricing strategy should be used?

What type of promotion should be used (informative / persuasive / what media etc)

Introduction

Growth

Maturity

Decline

QuestionExplain the relationship between Cash flow and the product life cycle. Use a diagram to help you explain. [4]

SALE

S

Introduction Growth Maturity Decline

TIME