Question

Coca-Cola and PepsiCo spent a total of $75 million to launch two sodas, banking on the low-carb trend. Carb-conscious consumers rejected the drinks en masse. The new brands grabbed a combined market share of less than 1 percent. Given that the objective of both soft drink manufacturers was to increase their market share, the introductions failed to achieve:

A. Profitability targets
B. Market penetration
C. Return on investment
D. Brand recognition goals

Answer 1

The introduction of the new low-carb sodas by Coca-Cola and PepsiCo failed to achieve market penetration, despite significant investment and the brands' large advertising budgets.

Step-by-step explanation:

The student question is focused on understanding why the new low-carb soft drinks introduced by Coca-Cola and PepsiCo were unsuccessful in increasing their market share. The failure of these products to capture a significant market share, despite the substantial investment made, indicates that they failed to achieve market penetration. This refers to the process of successfully entering a market and acquiring a sizable share of it. It does not necessarily imply profitability, return on investment, or brand recognition, although these elements may be intertwined with market share in the broader spectrum of business goals.

Leveraging large advertising budgets can work as a barrier for new entrants and help in establishing brand names. However, in this case, despite Coca-Cola and PepsiCo being established brands and likely having considerable advertising budgets, the new products did not resonate with carb-conscious consumers and thus did not achieve the desired market penetration.