Cola Wars

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Cola wars COLA WARS


Commercials and soft drinks have become a part of everyday life The combination of these pop-culture creations has made resisting the temptation of sugar based carbonated beverages virtually impossible for most.


A well-known soft drink war between Pepsi and Coca-Cola keeps new, edgy advertising techniques airing during commercial breaks of popular television viewing. Both companies have successfully sold their products despite different selling techniques used when it comes to advertising on television. The Pepsi Cola Corporation uses excellent marketing strategies, such as celebrity appearances, to sell their product, whereas Coca-Cola’s realistic approach has placed them at the top of the soft drink industry. Not only do these competitive companies use television advertising to sale their beverages, but they also attract their consumers with their distinctive product.


BRAND POSITIONING





Coca-Cola’s’ brand personality reflects the positioning of its brand. Positioning is in the mind of the consumer and can be described as how the product is considered by that consumer. When researching the positioning of a product, consumers are often asked how they would describe that product if it were a person. The purpose of this is to develop a character statement. This can ensure that consumers have a clear view of the brand values that make up the brand personality, just like the values and beliefs that make up a person. Many people see ‘Coca-Cola’ as a part of their daily life. This affinity between the brand and the consumer leads to a high degree of loyalty and makes the purchasing decision easier. Brand positioning guides ‘what’ will be communicated in the company’s advertising, while the character statement guides ‘how’ a message should be delivered or put across. Coca-Cola’s’ powerful brand personality has become a vehicle for promotion in its own right, sponsoring many events both on a global and local level. The company has long been associated with global events such as The Olympic Games, The FIFA World Cup, Rugby World Cup and Special Olympics. Coke has also been linked to world fairs and national exhibitions since 105.


Segmentation and Targeting


Pepsi has always promoted its soft drinks to young people and focused on gaining lifelong customers when they are young. This targeting is different than Coca-Cola who promotes the nostalgic aspect of the cola as well as its association with America. Pepsi has been successful with its strategy in the US because the demographics in the US favored advertising geared to young people. However, some of its failures in foreign markets had more to do with its use of bottlers than with its target market. The newer generations have grown up with Pepsi as the drink for young people and this has helped Pepsi gain market share in foreign markets.


Pricing


In the US, Pepsi prices its products similar to those of Coca-Cola. Competition in the US is based mainly on marketing skill rather than price to help avoid costly price wars and keep profits stable. Since neither of the major manufacturers would win aprice war, it is unwritten rule that the companies will follow the pricing structure of the market leader, which is Coca-Cola. While this amounts to price fixing, there has been has not been any major government actions to curtail the practice so it should continue in the future.However, in other countries the price between Pepsi and Coca-Cola can be substantially different. For example, Pepsi prices its cola in Russia much lower thanCoca-Cola since the country’s economy is doing poorly. This has contributed to thelarge lead in market share that Pepsi holds in Russia. However, Pepsi tries as much aspossible to price its cola the same as Coca-Cola in order to keep profits high. Unless the country is in economic trouble and sales could be improved by beating Coca-Cola on price, Pepsi will match Coca-Cola’s price.


Distribution





Distribution is an important aspect of success in the beverage industry. Since the cola companies want to focus on making syrup and marketing, they need to have strong, loyal bottlers. This is especially the case in foreign markets where the cola companies fiercely battle for good bottlers. In Venezuela, Coca-Cola managed to buy one of Pepsis largest and oldest foreign bottling franchises. It has become standard practice by Coca-Cola to attempt to take away bottlers from Pepsi. Unfortunately for Pepsi, these practices have been successful and have resulted in huge financial losses for its international business. The building of bottlers through joint ventures and the increased maintenance of current bottler relationship should be the main focus of Pepsi’s international marketing. One of Coca-Cola’s major strength’s is its ability to build relationships with its bottlers. Coca-Cola is very methodical in making sure that its bottlers are happy, while Pepsi has been known for neglecting its bottlers. This is one area that Pepsi must improve if it is going to take market share away from Coca-Cola.





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