Marketing Analysis of the Carbonated Soft drink Industry in Thailand

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Carbonated Soft drink Industry in Thailand

Before 2006, carbonated soft drink was quite good because of the problem in domestic was still not too much and the growth rate was higher than now. After that until now, the industry was slowdown and caused the consumption of people was getting low also.  The carbonated soft drink industry in Thailand has the total market about 30,000,000,000 THB or 1,759.6 Million Liters sold. The industry can be divided into 3 different segments: 1. Cola carbonated soft drink market (Pepsi, Coca cola, Red bull cola).

                    2. Fruit flavored carbonated soft drink market (Fanta and Mirinda).

                    3. Lemon-lime carbonated soft drink market (Sprite and Seven up).

Carbonated Soft Drink Industry In 2008

From the pie charge above, it shows that most people prefer to drink cola carbonated soft drink than other kinds so, it gained the highest percentages in the industry equal to 22,200 Million Baht, fruit flavored gained 20% equal to 6,000 Million Baht, and Lemon-lime was 6% equal to 1,800 Million Baht.

So, Cola gained a lot of share in the market and most of it held by Sermsuk public company limited and Thainamthip limited. Color held by Thainamthip (Fanta) 77%, Sermsuk (Mirinda) 20% and others 3%.

Pepsi 63% (13,986 Million Baht), Coca cola 35% (7,770 Million Baht), Red Bull Cola 1% (222 Million Baht) and others 1% (222 Million Baht). It shows that Pepsi is gained the highest market share for black carbonated soft drink, it may come like this because the reputation, favors, and advertising that better than others and targets much on teenager that sensitive with trend, style, fashion under the slogan “More is better, Better is more” .

In 2006, the industry faced the sugar price increased problem (lacked of sugar) and caused the entrepreneur had to carry the cost of production that increased. From this the government had established policy that willing to help by letting producers increased the price of product for 1 Baht in every size. In volume sold continue decreasing from year to year, but fortunately that the price was already changed, market size was increased since 17 April, 2006. (See graph below)


Now 2009, trend for the market growth rate is very low continuing from the past 2 years. From 2007 to 2008, market growth rate was no move and from 2008 to 2009, market growth rate was just only 1 percentage. Segment growth rate for 3 different kinds are almost equal that it is just 1%.That it will affect to new brands that want to enter in the market because it’s hard to find the growth and to snatch market share from 2 big competitors that have strong power in the market. The trend in the future expect to be higher after Pepsi and Coca cola launched new products to the market to match with customer need, it will be move to 2% for market growth rate and market size will expand.  




  • Domestic political problem, the fighting between a few parties caused a lot of disadvantages for business sections e.g. in tourism and hospitality industry, foreigners come to Thailand less than past 2 years and lower rate of investors that would like to invest in Thailand.
  • Government policy about prohibiting to sell carbonated soft drink in schools because they concern more about kid’s health and Thai children have a risk for obesity.


  • The closure of Suvarnabhumi airport also caused a great impact to the economic in Thailand, a lot of people unemployed because the lay off from the companies that affected to the consumer consumption in this year.
  • Thailand economic from year 2008 until now is 2009 is in recession that also affects to the soft drink market. The gasoline price is an important problem now, people have to save more money to make their incomes balance with expenses and for the producers (industry) have to face the cost that increasing.
  •  In addition, the growth rate in carbonated soft drink industry is hard to increase because of the trend for health drink is coming.


  • Thai teenagers still has a value in drinking by seeing from the brands that popular and not open much for a new brand that enter to the market.
  • Consumer trend or life styles now is concerning more about their health and because of the soft drink market has a lot of substitutes so, they have many choices to choose like fruit juices, green tea, soybean milk and beauty drink.  


  • According to the economic slow down and customer’s trend changes, in each company have to try to make a new product development to compete with the competitors to gain more market share.
  • Thailand has a policy for IT development so, it will challenge each company to develop themselves and the increasing for distribution channel and faster transportation that build customer trust and more efficiency process.
  • For packaging, nowadays some segments of soft drink market try to use technology in changing to Polyethylene Terephthalate, (PET) for sterile bottle and also in containing process that make customers believe in their cleanliness and more convenient.


  • According to the hot weather in Thailand, it has more chance for people that they will   like to consume something cold to make them feel fresh and reduce thirst.  And the trend for climate changing is seemed to be hotter.
  • One  environmental  issue of concern is that the use of plastics adversely affects    

     the environment  due  to the unusually long time it takes for it to degrade. To         combat this, the major competitors have leaded in the recycling effort which          starting with aluminum. The only other adverse environmental impact is the         plastic straps that hold the cans together in 6 - packs. These straps have         been         blamed for the deaths of fish and mammals in both fresh and salt water.


  • Government regulation may concern about chemical in the food that will not affect in danger to consumer health by having Food and  Drug Administration to control  and  prove that it pass or not.

-   An increase in the minimum wage that company has to pay for employees affects

    to the cost to be higher and may have to reduce number of employees and cause  


Micro Environment

Carbonated soft drink industry

        Fundamentally, soft drink is a huge industry but growth rate is not rapid growth like 4-5 years before, but the competition still high because it has 2 big companies that gain almost market share in the market. Factors that make industry succeed are good quality product, respond to what customers want and know the trend that is going to change. Distribution channel is very important, it can expand the market to the hand of consumers easier and advertising is a key to let customers aware of new products.


Superior supplier relationship is very important to focus on because if they have a good supplier like a partner to work together, the problem will be least and negotiate easier. Carbonated soft drink industry has to maintain their quality to be the same in every can/bottle so they have to order in huge quantity of materials. E.g. sugar, citric acid, sodium bi-carbonated salt.

For packaging, most of big companies have their own production process for producing package to reduce the cost in long term although it’ll cost a lot of investment.


        Source: the population health care behaviors survey 2005, National Statistical office of Thailand

From the statistic above, ages between 6 to 59 years has high percentage in consuming carbonated soft drink and sweetened beverages both male and female. But the high rate of this makes government concern more about people health so; government was established some policy to reduce percentage in consuming carbonated soft drink especially in children and teenager. For now, people concern more about health and may switch to substitute product that has an ingredients from fruit or collagen. Caused to some companies want to stimulate the sales and follow consumer behaviors by launching low calorie and sugar free to penetrate market.

Carbonated soft drink is very popular than other kinds of drink but the rate was not too high when compare with other countries like USA.

In summer, the percentage of consuming will get higher than other seasons because weather in Thailand is really hot.


Detailed in section 3

Five force model analysis

Current rivalry among existing firm

The number of competitors is numerous but it has just 2 main companies in the industry that is Coca Cola and Pepsi that have high power to control the market. Equally balanced is low so it can be opportunity for Red Bull Cola to outstanding from the 2 big companies. Sale growth is quite low because of the economic situation so, it will be threat for industry that has so many entrepreneurs.

Fixed or inventory storage costs is high so that so it’ll be threat for company to buy new technology like produce faster and include sterile system. Differentiation is many and it can be opportunity for launching new product to add in company portfolio and follow consumer’s life style.

Need large capacity increments required and Red Bull Cola can use money from other segments (Red Bull Extra) to be a capital.

High strategic stakes because a lot of competitors to fight with and 2 big competitors give more important to the marketing activities in kinds of campaign along with advertising through any media to emphasize the strong position and create brand and new product awareness.

 Potential Entrants

As we have to said that Red Bull Company has a long company profile in energy drink, but it expand itself to launched cola to target new segment. When a new company need to enter to the market it requires high capital because it has to import machine for production and has enough budget to compete and fight in market but Red Bull may use machines almost the same in its product line. Economies of scale are high so Red Bull Cola gains opportunity in producing it in low cost. Strong product differentiation is an opportunity for the industry that is a barrier for new comer.

Thailand has a low government policy in protection the new entrants so, it’ll be a threat for the existed companies because easy to entrant. 

Substitute Products

In soft drink industry, substitute products are so many and it will be a threat for carbonated soft drink because consumer will have more choice to choose what they want and the trend now is healthy product although Red Bull Cola cares about consumers’ health but it still not good as fruit juice or any other things.

Bargaining Power of Suppliers

        There are many suppliers of the ingredients and many substitutes of supplies because the resources are not difficult to find. The importance of supplier’s product is less and not much different so, all of these are opportunities for Red Bull Cola to find resource easily and have lots of suppliers to choose.

Bargaining Power of Buyers

In this, we look in the point of B2B, large volumes of buyer’s purchase and buyer is very significant to company that causes the threat to company. Also buyers can’t manufacture products by themselves because it’s a big business that has to invest a lot so, it’s hard to imitate if they don’t want to waste their time.        

5 Forces Model Analysis

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EFE Matrix


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