Cola war: The greatest marketing rivalry
Coca-Cola versus Pepsi stands out in the history of marketing. It’s one of the greatest rivalries between the two companies. 130 years of the feud between the two companies with over billions spent by each on marketing. Both Pepsi and coke always tried to outsmart the other in the marketing field. Marketing strategies like “Pepsi challenge” in 1975 or Coca-Cola associating with the American army in world war 2. Saw them both in the cola war for over decades.
So how did Coca-Cola from being the monopoly leader after world war 2 in the 1950s changed to them being in a neck-to-neck competition with Pepsi?
Decades after Coca-Cola was launched, they stayed the monopolist leader in the soft drink industry with their secret recipe. They never saw Pepsi as a real threat or a competitor to their product as Pepsi was in bankruptcy, and this is where Coca-Cola got it wrong. After the world war, In the 1950s Coca-Cola became a clear market leader when they were associated with the American army. Pepsi couldn’t compete with this strategy but in the 1970s they tried to focus their attention on the youth, the millennials, who were previously overlooked by Coca-Cola and came out with advertising campaigns like the “join the Pepsi people, feeling free” and the “Pepsi challenge” saw them rising to challenge Coca-Cola.
For coke, it worsened in the 1980s when they got it wrong with the “new coke” campaign when they changed the original taste of Coca-cola to stay at the top of the market, but the people didn't feel it had the Americaness in the “New Coke”. Pepsi saw this as a real opportunity and introduced the “Choice of new generation” campaign. This created an equal playing field for both Coca-Cola and Pepsi. Since then, the world saw the fierce competition between them, with new campaigns being launched like the “mafia girl” by Pepsi in 1999 and the “Coke side of life” campaign by Coca-Cola in the 2000s.
The market saw a turn when a new “health concerned population” grew. Cocacola saw it as a real concern when their sugar cola saw very less demand compared to the 1980s, where both the cola companies could sell almost 7000 cans per person a year in 1980s are now selling just over 500 cans per person a year. But forecasting the future Pepsi already had diversified their market by introducing healthy drinks in the 1980s, forcing even Coca-Cola to change their strategy by someone for them, were not even in the competition.
Over the decades, Pepsi diversified into a variety of drinks owning Aquafine,7up, Gatorade, Cheetos, etc. Cocacola diversified its brand to products like Minute maid, Fanta, Sprite, etc.
In today’s market, Cocacola holds a 42% share of the market with annual revenue of 35.2billion dollars and spending over 2 Billion on advertising. Pepsi on the other hand holds 31% of the market share with annual revenue of 57.8billion dollars and spending over 1.1 Billion dollars in spending.
Here we can see how Pepsi steadily and gradually rose to Coca-cola. Decades later both companies don’t just sell a cola can to a customer but a lifestyle and a brand that comes with it.
