Chapter 835 – Fire in the backyard
How do you make two beverage manufacturing giants join hands? Only when they have a strong common competitor that threatened their positions. The enemy of my enemy is my friend!
Coca-Cola’s North America Sales Director, Bren, and Pepsi’s North America Sales Director, Okafor, were sitting together today. If the reporters saw them, there might be reporters that both cola companies are merging.
“I received news that the contracts signed between the Chinese beverages and the supermarket chains are the same as us!”
Bren was frustrated. He does not understand what the supermarket chains were thinking. How can those Chinese beverages compete with them? Why are the supermarket chains giving Chinese beverage companies such as lucrative terms?
“Based on the data I received, those Chinese beverages’ sales had hit 8% of non-alcoholic beverages in the supermarkets!” Okafor said. He did not expect those Chinese beverages to rise up so fast.
8% might not be a lot compared to them, but that is only the first month!
Both cola companies own 85% of the market share and it had dropped to 81%. It is only one month since the Chinese beverages entered the supermarket, and their market share dropped by 4%. Although this is only the figures from the supermarket chains, supermarket sales make up a significant proportion of their overall sales.
They also discover that other than supermarkets, some smaller retail shops also start selling Chinese beverages, and this will have an impact on their profits!
The cake is only so big, and if someone took a slice, they would receive smaller slices. Both beverage giants were still planning to join hands in China to compete with Chinese beverages. But before they can do anything, the Chinese drinks had entered their domestic markets!
“Have you all found out the reason for those Chinese beverages to grow rapidly?” Bren asked.
Both sales directors had tried those Chinese beverages and felt they taste nothing special compared to their products. Of course, there are some exceptional whom they can learn from.
But even if some of those beverages taste good, their sales should not increase so fast! Just because of that lucky draw promotion? Just because of the Another Can promotion? Or is it because of the grand prize?
“Other than their lucky draw promotion, I cannot think of any other reason. Errr… there seems to be another reason. Some reporters saw Bill Gates buying China’s Qili in the supermarket. There are rumors that Microsoft software engineers love to drink Qili. This drink can boost their energy and is more effective than coffee. These were reported in the papers.”
Okafor did not believe these reports at first, but there were pictures of Bill Gates placing a few cans of Qili into his shopping cart in the supermarket. When the reporters interviewed Microsoft Deputy CEO, Ballmer, there were a few cans of Qili on his desk.
This Chinese energy drink is said to reduce fatigue and increase energy levels. Those people who work late or overnight needs to drink such beverages.
These were all Feng Yu’s tricks. He recommended Chinese beverages, especially Qili, to Microsoft and ‘generously’ sponsored some for the engineers to try. Bill Gates had gone to the supermarket to buy Qili because of Feng Yu’s recommendations. But at that time, Feng Yu still have not sponsor Qili to Microsoft yet. The reporters could get the picture of Bill Gates buying Chinese beverages was also arranged by Feng Yu.
Bill Gates was tricked into becoming the endorser of Qili.
Microsoft had also become the endorser of this product.
The newspaper reports this beverage is another magical beverage like Jianlibao. For software engineers, Qili is like Jianlibao to sportsmen. Both had magical effects.
When Feng Yu gave Qili to Microsoft engineers, Paul Alan was full of disdain for him. A Microsoft director selling soft drinks? He felt this was a disgrace.
The proud Paul Allen had looked down on Coca-Cola, Pepsi, and other beverage companies. He felt only technology companies like Microsoft is the future of mankind
Microsoft’s profits and share prices had been rising, and it enforced this belief.
In Paul Allen’s eyes, if the CEO of Pepsi join Microsoft, he can only be one of the managers in the middle management. But Feng Yu, one of the directors of Microsoft, is selling soft drinks! This is a disgrace to Microsoft! He still wants to use his drinks to bribe Microsoft engineers? What a joke!
But Paul Allen had never thought why Pepsi and Coca-Cola’s profits were so high. No matter how fast technology companies grow, people still need to eat and drink. There are definitely more people buying Coca-Cola than PCs!
Of course, Paul Allen also did not know Feng Yu was not bribing the engineers by giving them his beverages. He is only making use of the engineers to market his products.
Feng Yu was making use of Microsoft to increase Qili’s brand awareness!
“I heard the person behind these Chinese Beverages is that Chinese Director of Microsoft.” Bren had heard about this but did not believe it. Software and beverages were totally different industries!
“It is that mysterious Chinese tycoon. If not, why will there be news of Microsoft engineers drinking Chinese beverages? Also, their lucky draw prizes are too good. Other than electronic products, they are giving out cars. Now, a total of 8 cars are given out, and the papers have been reporting about this.”
“What are you all going to do?” Bren looked at Okafor. By right, Coca-Cola and Pepsi do not need to have promotions on their products as they have a significant customer base.
Even if both beverage giants were to start a sales promotion, they would not copy those Chinese beverages. At most, they will give out one free drink and will not give out electronic devices and cars.
Both companies were waiting for each other to start some sales promotions to compete with Chinese beverages. Actually, both companies can lower their retail prices to force those Chinese beverages out of the US. But this is considered monopolizing the market and they might be fine by the authorities. It will also be bad for their reputation and might be barred from entering China.
Both men discussed and concluded…… Wait! They will wait for the craze over the Chinese beverage’s lucky draw to be over. These Chinese beverage companies were not strong and cannot afford to do sales promotions for extended periods. Also, both cola companies will be investing a significant sum on advertising during the Olympic Games.
But they received a piece of bad news. The Chinese beverages had entered many European countries’ markets through the supermarket chains there.
Both beverage giants start to feel the pressure from Chinese beverages. That Microsoft Director should not have any influence in Europe and yet, he can bring his Chinese drinks into those European supermarket chains. This is too scary.
Both cola companies knew they must retaliate now!
