Question

MINI CASE STUDY - 6 marks In years gone by the soft drinks market was dominated by fizz, with Coca-Cola as the leading brand. Within UK sales of over £1 billion a year, Coke is stil massive, but in 2015 and 2016 sale fell. In recent years the big winners have been: Main water brands, e.g. Evian Energy drinks e.g. Red Bull/Monster Adult-focused drinks, such as Fever-Tree Drinks with a healthy ‘vibe’ such as Innocent Coconut water. Oddly, though in the UK no one has quite managed the trick pulled off by Oasis in America; a big selling, non-fizzy drink for adults. Answer the below questions: Q1. Outline one possible reasons why UK sale of Coca-Cola are declining (2 marks) Q2. a) Outline where you think Coconut Water is positioned on the soft drinks market map. (2 marks) b) Outline one benefit of that positioning for a business such as Innocent drinks. (2 marks)

Answer 1

Q1. Outline one possible reasons why UK sale of Coca-Cola are declining

Sales are declining because of two reasons, which are interrelated. The first, is that many competitors have entered the market: Red Bull, health drinks, and so on. The second is that Coca-Cola is seen as unhealthy by many people, and for the same reason, they opt for other drinks.

Q2. a) Outline where you think Coconut Water is positioned on the soft drinks market map.

Coconut Water would be positioned to the left of coke, as being both more traditional (it is a fruit juice after all), and a bit more expensive on average.

b) Outline one benefit of that positioning for a business such as Innocent drinks.

The label "traditional" provides these drinks with the idea that they are healthy. The fact that they are not that cheap means that producers obtain higher economic benefits for each unit sold.