As a local distributor of Coca-Cola, Maung Qian has been very distressed recently because sales of Coca-Cola have plummeted in the past month.
You must know that Yangon in July is the hottest month of the year, and it is also the time when sales of carbonated drinks are at their best.
However, Coke sales have recently declined instead of rising, which made Maang Qian unable to sit still. He quickly asked his subordinates to investigate the matter.
Within half a day, several subordinates came running back panting.
The panting subordinate quickly said: "Boss, we found the reason."
"Tell me, what happened?" Maang Qian looked anxious.
"Huh...it's because a low-priced Coke is on the market, and the other person's 500ml bottle of Coke only costs 300 yuan."
300 kyat is approximately equivalent to 1 yuan.
"What? Are you kidding!" Maang Qian was shocked.
One of the subordinates took out a dozen bottles of different drinks from the bag and placed them on the table: "These are all drinks produced by that company, and the prices are much lower than the market price. Only some of the real juice drinks are more expensive, but they are also
Lower than similar products.”
Maang Qian picked up a 500ml bottle of Qingye Coke and looked at his subordinate with a confused look on his face: "Glass bottle? 300 yuan a bottle?"
"Yes." The subordinates were also in disbelief.
But facts speak louder than words, and these glass bottled drinks are right in front of you.
With the last glimmer of hope, Maang Qian unscrewed the cap of the glass bottle and took a sip. His face became even worse. The taste of this Coke was similar to that of Coca-Cola and Pepsi-Cola.
In fact, the Coke formula may have been a trade secret a few decades ago, but now basically a beverage factory can come up with a similar taste.
After all, the technology of various component testing equipment is advancing by leaps and bounds. If you want to keep it secret, it is fanciful. Unless it is not sold on the market, the basic ingredients will come out as soon as the product is sent to the laboratory, and then it will be tested several times, without saying that it is 100% replicable.
It's hard to engrave, but 90% of it can definitely be imitated.
After all, Coke only has a few ingredients.
Coca-Cola and Pepsi-Cola can dominate the market by relying on their huge sales channels, raw material supply system, and marketing.
Qingye Cola has no sales channels and marketing, so it relies on production costs and low-price dumping.
Anyway, the raw materials are chemical products, such as aspartame, fructose syrup, phosphoric acid, carbon dioxide, vitamin C, citric acid, caramel color, etc., which can all be synthesized through industry.
Some time ago, Liu Zhifan also purchased a saccharification technology patent from a company in China. This technology can convert various starches into syrup through mold fermentation.
Li Qingye in Luzon has upgraded this technology to maximize its cost-effectiveness. The production costs of various syrups have been minimized. Plants such as branches and grass leaves can even be used as raw materials for the production of syrups.
Than production cost?
Qingye Group can kill other companies.
Now in the Yangon market, the flavored juice drinks and carbonated drinks produced by Qingye Group are killing local beverage companies.
Mao Qian had to face this situation at this time.
Since the Coca-Cola Company controls beverage pricing, Maung Qian himself has no way to significantly adjust the wholesale price. After all, the price is bound by the contract. As a distributor in Yangon, he also has a regional general distributor.
In order not to be pushed into bankruptcy, Maung Qian quickly reported the matter to the general distributor of Hongsawady.
The Hongsawady branch of the Coca-Cola Company quickly received complaints and reports from dealers in Hongsawady.
Branch manager Shia put down the documents in her hands and looked at the dozen bottles of drinks on the table with a solemn expression.
"Manager, according to the latest statistics, our company's market share has dropped to 11%. The situation of Pepsi, Luxi, and Venus is similar." The person in charge of the marketing department also had a solemn expression.
Shia picked up a bottle of Qingye Coke with an expression as if she had seen a savage beast: "It's too scary. If this continues, we will be kicked out of the market in Hongsawady."
Previously, in Hongsawady's beverage market, Coca-Cola occupied 37%, Pepsi occupied 28%, and the two local companies together accounted for about 20%.
Now it is only 11%, and the downward trend continues.
The person in charge of the marketing department said helplessly: "Manager, please report it to the head office! We don't have a filling factory in Hongsawady, and the products are all shipped from South Asia. The other party can lower the price to one-third of ours.
We can't do it!"
Transportation costs, warehousing costs, plus the profits of distributors and retailers, it will be too difficult for Coca-Cola to equalize its retail price with its counterparties.
After all, the ex-factory price of Coke's branch in Hongsawady is about 50% of the retail price, and the wholesale price of the dealer will be about 70 to 80% of the retail price.
Now they want to reduce the retail price to one-third, and Shia doesn’t know magic, so is she going to run a loss-making business?
Take the 500 ml plastic bottle of Coke as an example. The cost of each bottle is about 280 kyats when shipped from a factory in South Asia. The ex-factory price to dealers is between 450 and 500 kyats, and the wholesale price from dealers to retailers is
Then it will be between 700 and 800 kyats, and the final retail price at retailers will be between 900 and 1,000 kyats.
Even if a factory is opened locally, by importing cola puree, the factory cost can only be reduced to about 25% of the current retail price at most.
After thinking about it, Shia had no choice but to report it to the head office quickly and let the head office have a headache.
America.
Atlanta.
The Coca-Cola Company's headquarters is here.
It is a sunny noon in Southeast Asia in the Eastern Hemisphere, while the bright moon is hanging high over North America in the Western Hemisphere.
Due to the time difference, although the Coca-Cola headquarters building is still brightly lit, not many employees are actually working.
Until the next day, around ten o'clock in the morning.
The president's secretary just received the report from the Hongsawady branch. Although the head office is relatively comfortable, they still have the keen sense of smell that a commercial company should have.
After all, as the world's second largest beverage company, if it didn't even have this business sense, it would have gone bankrupt long ago.
After listening to the report, President Keen's face suddenly became serious: "Qingye Group? The retail price is only one-third of ours, and they all use glass bottles. Can they bear this cost? Even if they have local advantages, it will be very difficult.
Bar?"
The secretary remained silent.
Keen raised his head: "Ms. Hannah, ask Caesar and Frank to come over."
"OK."
After a while.
Caesar, who was in charge of cost control, arrived first, followed closely by Frank, who was in charge of global market research.
Keane didn't say anything, and directly handed the document to the two of them: "Let's take a look!"
The confused two people quickly looked through the document.
After a while, Caesar exclaimed: "Impossible! This is impossible! Are they crazy? Even if glass bottles can be recycled and reused, there is no way to reduce the cost to one-third."
Frank also agreed very much with Caesar's words: "This company probably wants to use low-price promotions to first increase market share, and then slowly increase prices."
But Keane shook his head: "No, I don't think so. If you look carefully at the photo above, the packaging of those glass bottles has a designated retail price of 300 kyats, which means they plan to sell it like this for a long time.
"
"But can they really make money by doing this?" Caesar racked his brains and didn't think the other party could make money from it.
Keane said seriously: "This is a very important matter, Caesar, Frank, you should go to Honsawady immediately to investigate this matter. I want to know how this company reduces costs."
Although they felt that the CEO was making a fuss, the two of them did not refuse. After all, isn't a business trip a trip at public expense?
Thank you for your support (ω｀), and thank you book friend "Qiqi Qiqiqi777" for the reward!