Icon

CS-111 Cola Wars 1894 Coke Invents Coupons v05

[Case Studies] CS-111 Cola Wars 1894 Coke Invents Coupons
Competitive Story:Coca Cola was founded in 1886 and shortly thereafter started an extensivemarketing campaign - inventing free drink coupons to build product awareness.Between 1894 and 1913 (approximately 20 years) a total of 8,500,000 free drinkshad been consumed by about one-in-nine Americans.Pepsi was founded in 1898 - four years after Coke's campaign started. This MarketSimulation shows that, even had Pepsi been a virtually identical drink and adoptedthe exact same strategy, it would have remained the market laggard. Coke and Pepsi were bothinvented as patent medicines.Hence Customer WTP low andvaried. But WTP for both couldgrow to a Maximum level. Each year, Coke's Free DrinkCoupons raised awarenessincreased Customer WTP by 5%towards the maximum level. Coke (and later Pepsi) runs theirawareness campaigncontinuously for 20 years. Loopback each iteration with theimproved WTP values. Case Study (CS-111) - Cola Wars 1894 Coke Invents CouponsReconstructs the early rise of Coca Cola from an obscure patent medicine tothe world-dominating carbonated soft drink. The company's invention of theCoupon, entitling the holder to a free glass of Coca Cola, was instrumental inbuilding product awareness and brand trust that has yet to be surpassed bycompetitors like Pepsi. The Price of Coke was 5 cents abottle from 1886 to 1959 (over 70years). After 4 years Pepsi is founded.This Market Simulation testswhat would've happen if Pepsiadopted the exact same Couponstrategy as Coke (4 years late). Compare the Profit from eachyear with the Profit from theprevious year. Profit Growthrapidly increases before steadilydeclining. Pepsi's growth is late, slower,and longer than Coke's. Pepsi'sprofitability never catches up withCoke even though the Productsare nearly identical.Current WTPMaximum WTPCustomerWTP MatrixCoke and PepsiProduct ArrayPredictResultsRaise Coke WTPTo Maximum by 5%NextWTPNext WTPRaised AwarenessExclude 'No Sale'ResultsCompare ProfitLast IterationCoke ProfitGrowthProfit GrowthCoke vs PepsiCheck If PepsiIs AvailableRaise Pepsi WTPTo Maximum by 5%(After 4 Year Delay)Finished AdjustingCoke & Pepsi WTPTop = CokeBottom = PepsiTotal ProfitCoke vs PepsiPepsi ProfitGrowthCompare ProfitLast IterationRename"Coke"Rename"Pepsi"Headings+ DataCompare ResultsCoke vs Pepsi Table Creator CustomerDistributions Table Creator Simulate Market Scale Demographic RecursiveLoop Start Recursive Loop End Row Filter Lag Column Math Formula Line Chart(JFreeChart) Java IF (Table) Scale Demographic End IF Row Splitter Line Chart(JFreeChart) Math Formula Lag Column Column Rename(Regex) Column Rename(Regex) Copy andPaste Output Column Appender Competitive Story:Coca Cola was founded in 1886 and shortly thereafter started an extensivemarketing campaign - inventing free drink coupons to build product awareness.Between 1894 and 1913 (approximately 20 years) a total of 8,500,000 free drinkshad been consumed by about one-in-nine Americans.Pepsi was founded in 1898 - four years after Coke's campaign started. This MarketSimulation shows that, even had Pepsi been a virtually identical drink and adoptedthe exact same strategy, it would have remained the market laggard. Coke and Pepsi were bothinvented as patent medicines.Hence Customer WTP low andvaried. But WTP for both couldgrow to a Maximum level. Each year, Coke's Free DrinkCoupons raised awarenessincreased Customer WTP by 5%towards the maximum level. Coke (and later Pepsi) runs theirawareness campaigncontinuously for 20 years. Loopback each iteration with theimproved WTP values. Case Study (CS-111) - Cola Wars 1894 Coke Invents CouponsReconstructs the early rise of Coca Cola from an obscure patent medicine tothe world-dominating carbonated soft drink. The company's invention of theCoupon, entitling the holder to a free glass of Coca Cola, was instrumental inbuilding product awareness and brand trust that has yet to be surpassed bycompetitors like Pepsi. The Price of Coke was 5 cents abottle from 1886 to 1959 (over 70years). After 4 years Pepsi is founded.This Market Simulation testswhat would've happen if Pepsiadopted the exact same Couponstrategy as Coke (4 years late). Compare the Profit from eachyear with the Profit from theprevious year. Profit Growthrapidly increases before steadilydeclining. Pepsi's growth is late, slower,and longer than Coke's. Pepsi'sprofitability never catches up withCoke even though the Productsare nearly identical.Current WTPMaximum WTPCustomerWTP MatrixCoke and PepsiProduct ArrayPredictResultsRaise Coke WTPTo Maximum by 5%NextWTPNext WTPRaised AwarenessExclude 'No Sale'ResultsCompare ProfitLast IterationCoke ProfitGrowthProfit GrowthCoke vs PepsiCheck If PepsiIs AvailableRaise Pepsi WTPTo Maximum by 5%(After 4 Year Delay)Finished AdjustingCoke & Pepsi WTPTop = CokeBottom = PepsiTotal ProfitCoke vs PepsiPepsi ProfitGrowthCompare ProfitLast IterationRename"Coke"Rename"Pepsi"Headings+ DataCompare ResultsCoke vs PepsiTable Creator CustomerDistributions Table Creator Simulate Market Scale Demographic RecursiveLoop Start Recursive Loop End Row Filter Lag Column Math Formula Line Chart(JFreeChart) Java IF (Table) Scale Demographic End IF Row Splitter Line Chart(JFreeChart) Math Formula Lag Column Column Rename(Regex) Column Rename(Regex) Copy andPaste Output Column Appender

Nodes

Extensions

Links