Technology, R & D, and Efficiency. You are a business manager for Coca Cola and

Question

   Technology, R & D, and Efficiency.
You are a business manager for Coca Cola and some new competitive soft drinks are being introduced with great customer acceptance.
a.   Explain to your boss the fast second strategy.
b.   Why and how Coke would use the fast second strategy to increase its economic profit i.   Discuss the why
ii. Discuss the how
iii. List and discuss 2 examples.
c.   Explain to your boss how Coke can use the protection provided by patents, copyrights, and trademarks to increase their economic profits.
i.   Discuss what each of the 3 protections apply to, and
ii. Discuss how each will help a firm achieve economic profits.
d.   Explain to your boss how Coke can use their Brand to increase their economic profits.
i.   Discuss the following and each can be used to increase a firms economic profit:
1.   Brand-name recognition
2.   Brand equity
3.   Brand promise
4.   Brand personality
e.   Explain to your boss how technological advance increases productive efficiency and allocative efficiency.
i.   Discuss the impact of technological advancements on productive and allocative efficiency.

Explanation / Answer

a.

Fast second strategy:

It is a type of strategy in which a market entrant should wait for the dominant player to give the dominant strategy and then the new entrant should innovate the dominant strategy to make a stand in the market. This strategy is favorable for the new entrant as the consumers never always stick to an existing product. They always demand for something new.

b.

i.

Market is full of products which leads to competition. No product can sustain for lifetime without making the innovations. A product has a lifecycle in which a product enters a market with the introduction stage. Then slowly it comes to growth stage when it gets popular in the market. Then it enters the third and a very crucial stage of maturity where the sales of the product are high and becomes stagnant and then the stage of decline where the product exits the market. If an organization wants to sustain in the market, then it should innovate the product at the maturity stage to offer some new features to the consumers.

The above-mentioned explanation is the reason why company C should use the fast second strategy in order to provide innovative products to the consumer to maintain a position in the market and to earn economic profits.

ii.

It is not difficult for company C to use the fast second strategy as it is already having established grounds in the market. There other companies which are enjoying the same position as company C. if those companies launch the new product in the market, company C can follow the fast second strategy. Also, if a local product gains recognition in the market, the company C can launch a substitute in order to capture the market share and economic profits.

iii.

One of the biggest example of fast second strategy followed by company C is the launch of its product as Sprite which was followed by the 7up of another brand. Company C launched its product with innovative taste in order to capture the market of 7up.

Another biggest example is the launch of Minute maid by company C in order to capture the share of Tropicana which is a product of company P. through minute maid, company C entered the market of fruit juices.

c.

Companies use trademarks, copyrights and patents in order to restrict the others to use the same technology or the process to produce the products. This is because, the benefit which the company could have enjoyed with its innovation gets sunk by the piracy of the product.

i and ii.

Several benefits of trademarks, copyrights and patents are mentioned below:

Patent is the right awarded to the inventor by which the inventor can preserve the process of production. A patent restricts another producer to use the same process to product the same or similar product. Company C can use patent to restrict the other manufacturers in the market to secure the method of production.

Copyright is a right as per which a manufacturer gets right to produce a product or a service. Copyright helps to preserve the original work of the manufacturer. Company C can use copyright to preserve the formula which is used to produce their product.

Trademark is a right given to the company as per which the symbols, or the words used by the company cannot be used by any other company to sell its products. Company C can use trademarks in order to define its products different from others and no other company can use the catchy taglines or the words used by the company.

d.

A brand is an identity which is created by the company in order to differentiate itself from other brands in the market. If a brand is faithful i.e. if a brand delivers what it promises, it becomes popular among the consumers. A brand is a promise which gets delivered in the form of products and services from a seller to the consumer.

Following terms related to brand are mentioned below:

1.

Brand name recognition:

Brand name recognition means to define a unique brand name which differentiate itself from the other brands from other brands. A brand name should be defined in such a way so that it directly links with the product which makes it easy for the consumer to relate themselves with the product. A well-recognized brand becomes gateway to enter the new market segments. This creates the a positive image of new product of the current well recognized brand.

2.

Brand equity:

It is the value which is delivered to the consumer. This can be evaluated as per the satisfaction of the consumer. When the consumers are satisfied from the product and services being delivered to them, then a band is said to have a positive brand value and vice a versa. A better brand name recognition leads to a higher brand equity. If a brand has a well-established brand equity, then it becomes easy to launch the new product in the market as a positive brand equity increases number of customers for the company.

3.

Brand promise:

It is the actual value which is delivered to the consumer as promised by the manufacturer.

It is always important for a brand to deliver the promise to the consumers. If a brand fails to do so, the interest of the consumers shifts from the current brand to the other brands. If and brand delivers more than expected then the consumers stick to that brand. This helps to increase the market of the brand through positive word of mouth. This ultimately leads to higher earnings.

4.

Brand personality:

It is one of the attribute by which a consumer relates himself or herself from the brand. It is the humanly gesture which a consumer feels after using the brand. It is like enjoying a superiority by using the band. If a company becomes capable enough to create a better and a tough brand personality, that brand can enjoy a greater share market profits.

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