Coke and Pepsi: from Global to Indian Advertising
3016 WordsMay 17th, 201313 Pages
Coca-Cola and Pepsi-Cola vied for a “throat share” of the soft drinks market for more than a century. Carbonated soft drinks (CSD) contributed to majority of the revenues in soft drinks. 丁he core market was Ihc United States which had high per capita consumption (see Exhibit 1 for per capita consumption of carbonates in select countries). The Americas accounted for 54% of the global CSD market. Europe for 34.5%, and Asia-Pacific for 1 \%.] The industry was characterized by the presence of strong brands - with three brands ㅡ Coca-Cola, Pepsi, and Sprite ranked 1, 23，and 61 globally and valued1 $70 billion. $14 billion, and S5.8 billion, respectively by Interbrand a leading brand valuation and consultancy firm.2 Advertising had played a…show more content…
Similar to the rest of the world, in India also，carbonated drinks contributed the maximum to the sales of soft drinks (Exhibit 2). Non-carbonates however grew faster than carbonates. During 2004ㅡ2009, while total CSD market had a compounded annual growth rate of 4.5%, cola carbonates grew by 2% and non-cola by 6.5%.5 Sales of cola carbonates was Rs. 18 billion in 2009 (1$ = Rs. 48.50. in December 2009)，while that of non-cola carbonates was Rs. 26 million. Within non-cola segment, sales of lemon flavor was Rs. 12.8 million, whereas that of orange was Rs. 8.4 million (Exhibit 3).
THE COCA-COLA COMPANY
Coca-Cola was created in Atlanta in 1886 by pharmacist John Pemberton. His partner Frank Robinson named the drink as Coca-Cola and designed the now famous trademark.0 During World War II，at the request of General Eisenhower, Coca-Cola promised to deliver a bottle of Coke for five cents to every soldier wherever he was and whatever it cost the company.' Coca-Cola bottling plants followed the US military world over which contributed to Coke’s dominant post-war presence in many European and Asian countries.
In the 1960s，Coke launched Fanta (I960), Sprite (1961)，and the low calorie cola Tab (1963). It diversified into non-carbonates by purchasing “Minute Maid” (fruit juice), “Duncan Foods” (coffee, tea，and hot chocolate), and “Belmont Springs Water?” In 1982, the company launched Diet Coke, the first
Coke vs. Pepsi
Coke vs. Pepsi
Among the leading beverage producers in the world, the Coca-Cola brand is iconic and has achieved a wide range of brand identity. As one study indicates,
Coca-Cola has been an intricate part of American culture for over a century. The product's image is laden with sentimentality, and this is an image many people have taken deeply to heart. The Coca-Cola image is displayed on T-shirts, hats, and collectible memorabilia. (Coca-Cola Case Study)
One of the company's greatest strengths is its brand name and this plays a crucial role in its marketing strategy and marketing "mix." The Coca-Cola brand and logo are recognized internationally and are "Enjoyed more than 685 million times a day around the world… Coca-Cola stands as a simple, yet powerful symbol of quality and enjoyment" (Case Study Coca Cola strategy. Strategies for Americas, Asia and Africa).
In other words, the company's brand name and the images, values and ethos projected, are perceived via advertizing and the media. This forms an essential part of the company's marketing strategy. As Mittal et al. ( 2008) state, "Brand is defined as a name, term, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors" (Mittal et al. 2008). In this regard the Coca-Cola brand very clearly identifies specific emotional, symbolic, cultural and other aspects of the products of the company.
Another company in the beverage industry is Pepsi. Like Coca-Cola, Pepsi is a brand name that projects certain values and perceptions as part of its marketing campaign and strategy. Their brand name is also included in the overall marketing campaigns that include aspects such as targeting certain demographics and identifying various cultural and social desires and trends. Both Coca-Cola and Pepsi will be discussed and compared in terms of their branding and marketing objectives and achievements.
The Coca-Cola Brand and Marketing Strategy
Coca Cola is the world's largest beverage company and with the most widespread distribution. It owns over 400 brands internationally. These include diet, light beverages, water, juices, energy and sports drinks. The company operates in more than 200 countries (THE COCA-COLA COMPANY ENGAGES IN MORE THAN 50 COUNTRIES TO "TURN OUT" SUPPORT FOR EARTH HOUR ).
The Coca-Cola Company had very small beginnings as a one-man business begun by Dr. John Perberton, a pharmacist from Atlanta. His mixture of lime, cinnamon, coca leaves and seeds from certain Brazilian shrubs originated in the beverage that we know as Coca-Cola (Yogi). The extent of the growth of the product and the recognition of the brand name can be seen in the fact that in the 1970s, '…more than half Coca-Cola sold was outside of the U.S.… " (Mittal et al. 2008). The company also outsells its closest competitor by more than two to one" ( Mittal et al. 2008).
It has arguably the best known brand name of any product marketed today. As one report on the marketing of the product notes; "One in every two cola and one in every three soft drinks is a Coca-Cola product. The best-known trademark in the world is sold in about one hundred and forty countries to 5.8 billion people in eighty different languages" (Mittal et al. 2008).
This ubiquitous brand name has become more than a product indicator but has become assimilated into contemporary culture; as can be seen in the way that it has been adopted in modern art and design. It has become symbolic of certain values, such as 'zest for life' and modernity as part of the mystique of the branding. The brand name is the 'promise' of aspects of the product that form an important part of the overall 'marketing-mix' of the company. This includes its promoted link to concepts such as "well-being" and "health" (Business PROFILE).
In the past the company and the brand have had to face many marketing challenges as a result of competition and changing social trends and conditions. However, the brand has been able to retain its basic meaning and promise; "The Company remained focus on the basic promise of Coca-Cola, which has not only endured, but also indeed carried Coke. Coca-Cola has been Coke's consistent theme throughout the 115-year history" (Mittal et al. 2008).
A central facet to their marketing strategy which has been largely responsible for the continued dominance of the Coca-Cola brand is the company's bottling and distribution system. This allowed the company to export and make their brand name known internationally. At the same time they also succeeded in maintaining a local approach to the demographic or market in which the distribution points are situated -- which in turn has allowed for greater inclusiveness and flexibility in their advertizing and marketing. This has been achieved by the fact that,
The bottling companies are locally owned and operated by independent business people who are authorized to sell products of the Coca-Cola Company. Because Coke does not have outright ownership of its bottling network, its main source of revenue is the sale of concentrate to its bottlers. (Coca-Cola Case Study)
This refers to the fact that while in the past the entire world was seen as a single market place for the products, now "…the trend is changing and different marketing campaigns are being designed for different regions of the world" (Coca Cola 78 ). This strategy provides the opportunity to service large geographical and diverse areas (Coca Cola 78). In short, through the uniqueness and persistence of its brand has developed a mystique around the products; "For Coke, the real formula for success is the product's "brand equity," developed over the last century (Yogi).
An illustration of the importance of brand name and how it is linked to marketing in the various demographics is the following. When Coca-Cola was introduced to China in 1920, the name was similar or the Chinese "kou-kekou-la" which means "a thirsty mouth and a mouth of candle wax" (Mittal et al. 2008). Therefore, the phonetic translation of the brand was changed to "ke-kou-ke-le" which means "a joyful taste and happiness," which succeeded in attracting customers (Mittal et al. 2008).
3. Pepsi Brand Name and Marketing
Pepsi-Cola also has a long and successful history. A pharmacist and drugstore owner, Caleb Bradham created the beverage in 1989 in New Bern, North Carolina (A Brief Pepsi History). The brand name, Pepsi-Cola, was officially registered in 1903. The marketing and expansion of the brand name began when franchises were sold. The central themes that Pepsi has used as an endemic part to its brand name and marketing campaign include concepts linked to both enjoyment and health; for example, "Exhilarating, Invigorating, Aids Digestion" ( A Brief Pepsi History).
The advertizing and marketing trajectory of the company has also included culturally and socially intriguing and desirable images and ideas, including sport; for example, a news paper advertisement which read, "A bully drink...refreshing, invigorating, a fine bracer before a race" ( A Brief Pepsi History).
It should also be noted that Pepsi includes a number of different products, each with a different target demographic. Furthermore, these beverages are available in approximately 170 countries. The international markets associated with Pepsi products include Argentina, Brazil, china, India, Mexico, Philippines, Saudi Arabia, Spain, Thailand, and the United Kingdom ( Comparative Analysis of Pepsi and Coke).
( Source: http://www.scribd.com/doc/18282216/Coparative-Analysis-of-Pepsi-and-Coke)
The marketing and advertizing battle between these two industry leaders is well- known. Both are subject to variables which effect their brand equity and turnover. These include aspects such as local tastes, packaging preferences and market accessibility (Brand Equity: Coke vs. Pepsi). As noted above, Coca-Cola has perfected its globalized marketing strategy, which takes cognizance of local tastes and predilections.
In general there is a consensus among many pundits that Coca-Cola has higher brand equity than Pepsi -- but the two companies are in fact very close in terms of marketing ratings. "An online Tribune poll revealed a virtual dead heat in the great Coke vs. Pepsi debate. Of the 346 votes cast, 50.87% took Coke and 49.13% went with Pepsi. Pepsi has demanded a recount" (Brand Equity: Coke vs. Pepsi).
Figure 2. Comparative survey graph
( Source: http://www.jimmythegun.com/2008/09/pepsi-vs.-coke-follow-up.html)
There are a number of important differences that should be noted in the branding and marketing strategies of the two companies. One obvious difference is Coca-Cola's adherence to the original ideas and ethos that constituted its branding image and projections; "…it is clear that Coke has held tighter to its original concept" (Brand Equity: Coke vs. Pepsi). Pepsi on the other hand has been more flexible in its marketing strategies and has changed various aspects of its products and image to obtain greater market leverage over the years. Coke, on the other hand, "… is strikingly similar to what it was in 1887" (Brand Equity: Coke vs. Pepsi).
There are also different approaches in branding and marketing in terms of the various demographics and regions between the two companies. For example,…