The raw material refers to the basic substance in its natural state that is used as an input to a production process, such as water, metal, coal and etc. In present days, the prices of these raw materials have undoubtedly risen.

  Why the raw materials’ prices are keeping increasing in these years? For example, when it comes to the water resources, as mentioned in limnos’s blog “Privatizing water: Governance failure and the world’s urban water crisis”: “privatization emerged as an increasingly widespread mode of resource management”, which creates the crisis of water resources to some extent. The privatization water decreases the supply while the demand maintains at the same level, therefore the prices increases. (This is the comment on Limnos’s blog“Privatizing water: Governance failure and the world’s urban water crisis”)The supply of raw materials has been a significant cause of price rising.

  In addition to the tight of supply, the demand in raw material market is another major cause of climbing price trend, especially for the metal market. The increased demand from the developed country, like China, is a fundamental factor has underpinned the high prices over last two years. The developing countries are focusing on the industrial production, so they have been the main importer of metal materials. The governments in these countries play an active role to encourage the raw materials’ importing and tightening the exporting policy, such as China in particular. The reason they do so is to make sure the enough supply of raw materials for its own countries. This does makes the demand increase dramatically.

  To take both the supply and the demand into account, the raw material price must keep rising.

When mentioning soft drinks, people easily bethink of Pepsi Cola! Why it is so prevalent? What does Pepsi Company do to attract a host of loyal customers, especially when it is facing strong competitors like Coke Company.

First of all, Pepsi notices the cultural impact on customers. Pepsi spends more on advertisement preparation, so it has fascinating advertisements when compared to the Coke Company. Pepsi Company is using the famous celebrities and this increases the influence of the advertising on the customers. This is Pepsi’s approach to use pop culture in order to attract customers, especially young people. It can successfully expand in approximately 200 countries all over the world because it is adept in combining the local culture to its own product promotion as well. Like in China, they uses Chinese celebrities as its brand’s mouthpiece to win customers’ attention. In India, Pepsi meets consumers’ needs as well through synchronizing the brand with local tradition. Pepsi also has changed its logo since 1898, which makes the logo keep up with the pop culture.

For the product itself, Pepsi has launched a variety of types of cola like Diet Pepsi , Caffeine-free Pepsi and etc. In such a intense competition, to diversify its products is a way to make Pepsi outstanding in this industry.

In addition to the product, Pepsi uses the product line pricing strategy. It offers different quality products with different price. When the competitor reduces its price, Pepsi will change its price as well. Otherwise it will lose customers in such a competitive industry.

The comment on Haoran Jiang‘s blog ” Coca Cola’s Packaging Seduction“:

Coca Cola always dose a good job at attractive packaging. The company uses different materials in packaging, such as plastic and glass. The good package design is useful to build the image of the brand among customers. As Haoran stated, packaging has a strong situational influence on consumer behavior. Coca Cola even introduce special packages that match to special events like Olympic Games and Christmas. This dose remind the customers of the brand especially in special times.

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