Friday, November 15, 2019
Comparison Between Coca Cola And Pepsi Marketing Essay
Comparison Between Coca Cola And Pepsi Marketing Essay For over the past substantial number of years, the Coca-Cola and Pepsi companies have been the two leading and competing companies as far as the selling of beverages is concerned. In respect to this, the two companies have been in a constant battle concerning the control of soft drinks market share. The present situation has been that each of the two companies has been competing to outshine the other by gaining the largest market share in the beverage market with an annual value ranging at over 30 billion dollars. This paper will explore ranging fight that the two companies have engaged in by critically analyzing their marketing campaigns. Though both companies have been inventing new ideas and products in an effort to boost their shares in the beverage market each year, the effectiveness and creativity of the marketing strategies that each of the two companies employs stands out to be the ultimate determiner of who will emerge the winner in respect to profits sales and consumer loya lty. Both Coca-cola and Pepsi companies have employed a wide variety of campaigns in their competition to gain more shares in the beverage market, some of which include sports sponsorship as well as mass media (Hitt, 2009). For Coca-Cola, the two most popular advertisement campaigns that have boosted its sales have been the Holidays are Coming Campaigns as well as the sports sponsorship both of which have been in use for a very long time. For instance, the Holidays are Coming Home advert features a convoy of delivery trucks, bearing the Coca-Cola name. The trucks which are lighted with electric bulbs drive through snowy landscapes lighting up everything they come across. The advert was intended to ensure that everybody on earth took Coca- Cola as their favorite drink by creating the impression that it lights up life especially during the winter season. However, this advertisement campaign has been criticized in that it is solely based centrally in the Southern parts of the U.S, especial ly in Atlanta The other advertisement campaign is the featuring of Coca-Cola as the official sponsor of some of the popular sporting activities. These sporting activities range from athletic, soccer, basket ball, hockey, and baseball. Perhaps the most popular sporting activities that have enabled Coca-Cola to market its product are soccer. Since 1978, Coca-Cola has been the official sponsor of the FIFA World cup along with other soccer competitions that it organizes. In addition, Coca-Cola has in the past featured as the sole official sponsor of the Football League in England a title given to the first three qualifiers in the English Premier league. By targeting the sports arena, Coca-Cola is assured of gaining access to a large number of sports fans regardless of their age or race since sports is an activity th at attracts the largest number of people. Coca-Cola has not been the only company that has derived its success from the sports arena. Other competing beverage companies including Pepsi in this case have also utilized this field in grabbing their share in the beverage market. For instance, just recently, Pepsi announced its launching of its integrated digital ad campaign with Microsoft in celebration of the 2010 football summer (Hitt, 2009). The campaign which will be organized in 14 different places worldwide targets international football fanatics. The campaign features eight of the international soccer stars including Drogba, Messi, Kaka, and Arshavin among others. With a move like this, Pepsi will be able to reach quite a large number of the worlds population, especially the youth who are great soccer fanatics. Moreover, Pepsi has been recently partnering with TV networks that it deems popular and has been placing commercials strategically in order to try and improve their relationship with its audience (Hitt, 2009). The key common ideology that links all of the above sets of advertisement campaigns together is that they represents the companies agenda to fetch a good market share in the beverage market. In respect to this, the strategies that each of the companies utilizes to achieve their common goal now becomes the underlying issue. Each company has been busy inventing ideas and new products to outshine the other in their harvesting of market shares. But whoever that will emerge the champion is the one who will employ the most effective and creative marketing strategies in terms of increasing it sales and the loyalty of the customer. Though the goals of the two companies are similar, the company utilizes marketing strategies that are somehow different an s outlined below (Hitt, 2009). Initially Pepsi had always outshone Coke in their development of new products; however, Coke learnt some of Pepsis secrets and started applying the same innovative approaches to rolling out novel products. In addition to the hiring of highly qualified marketing executives, Coke also introduced a cross training for its management in order to ensure that the upgraded the quality of their soft drinks to match with that of their competitors. Pepsi, on the other hand being a risk taker rapidly reacted to this by creating a culture of developing new ideas in advertisement every now and then. Finding of new markets in the foreign world has become a new strategy for both companies. But Coke in this field has emerged as the most successful company. The concept of offering products that satisfy the consumers requirements in foreign regions has also been an area that both companies have tried much to exploit. For example, the introduction of Pepsi Max in some countries was in response to consumers requirement of a drink with low sugars and which targeted individuals who were diabetic (Hitt, 2009). The development of new products to attract more shares has caused some of the the products from these companies to fail while others have been successful. For instance, the introduction of New Coke formula proved a total failure since consumers protested for the return of the Classic Coke. But Pepsi tops with the number of failures in products such as, Pepsi Free, Crystal, Light and Pepsi AM. For Coke and Pepsi companies, their achievements as well as their sustained retention in the market has been propagated by the increased customer base. Here the Coca-Cola Company has recently been using a single word to describe their target markets very one. The argument has been that Coke is a popular beverage manufacturing company can be attributed to the long period it has been the dominant market player. This has made it became popular among all classes of people regardless of age, religion, race or financial status (Hitt, 2009). Since its customer loyalty is great, and at the present, Coca Cola is fighting to retain most of its customers currently at Pepsi. Through its campaigns, Coke intends to formulate different media advertisements that will capture audiences from every age category. For example, adverts targeting the youth are mostly associated with enticing colors and cartoons. For the youth, the company intends to make TV commercials and other advertisements that will pr omote the drinking of Coke instead of liquor in parties. hence show them that they can still have their fun and a good time in the absence of liquor. (Hitt, 2009). Pepsi, on the other hand targets the young adults especially students between the ages of 14 years to 30. This group is mostly comprises of students in Universities, colleges as well as high school. For instance, the newly integrated digital campaign with Microsoft will mostly target the young generation, which comprise of the highest number of soccer fans. This campaign will give Pepsi a point of contact in accessing this young generation. But due, to their wide variety of products PepsiCo targets people of all ages though it has not specifically been prepared for this. The commercials and adverts employed by both companies have proved to be effective since both of the companies have managed to amass a large number of consumers. Such adverts as well as commercials have in the past utilized funny as well as enticing colors of which have been so effective among children (Hitt, 2009). Children are much attracted to flashy colors and funny items that appeal to their interests. Capturing the interest of children at a tender age promises that these kids will convert to being their customers in adulthood since they learn to identify with the brand when young. On the part of the adults and the elderly, the strategy might also be effective. This involves designing adverts that make them remember their youthful days. In addition, another effective mode of marketing the soft drinks is by convincing the youth that fun can also be realized in the absence of beers and liquor (Hitt, 2009). In the present age liquor companies have maximized on the connection betwee n drinking liquor and having a good time, such that they associate fun and merry making with consuming hard drinks. In respect to the arguments that both companies make towards one another, rivalry has always existed in trying to win more market share. Pepsi Challenge is one of the activities that clearly demonstrated this rivalry in the 1970s. in this Challenge, Pepsi organized a blind taste test to determine which brand between Coca-Cola and Pepsi contained less orange, more lemon oil, as well as makes use of vanillin instead of vanilla. These tests have always been aimed at Coke as the results indicated that customers prefer the taste of Pepsi rather than Coke. This project made Pepsis sales rise at a very high rate. This in turn gave rise to the Cola Wars. In 1985 Coke by coming up with a new formula, New Coke. However, this resulted to a total failure as customers demanded back the Coca-Cola Classic thus forcing the company to reintroduce it (Hitt, 2009). According to the 2008 report by Beverage Digest on carbonated soft drinks Coca-Cola outshines Pepsi in terms of demographics since its market shares range at 42.2% while Pepsi ranges at 30.8%. In most of regions especially in the United States, Coca-Cola outsells Pepsi except in some regions like Utah, North Dakota and Appalachia. In New York and Buffalo, Pepsi outshines Coca-Cola in sale by a ratio of two is to one. Internationally Coca-Cola commands a substantially large market share compared to Pepsi with the only exceptions being Saudi Arabia, Pakistan, India Guatemala, the Dominican Republic and the Canadian provinces. In relation to demographics across different ages, both products compare fairly with respect to consumption. Children can be rated as the highest consumers of soft drinks from both companies with the youth trailing closely. However, when it comes to adults and the older generation, Coca-Cola becomes more popular and hence outsells Pepsi.