Coke vs Pepsi: Business Strategies

Birth of Coca ColaIn May, 1886, Coca Cola was invented by Doctor John Pemberton a pharmacist from Atlanta, Georgia. John Pemberton concocted the Coca Cola formula in a three legged brass kettle in his backyard. The name was a suggestion given by John Pemberton’s bookkeeper Frank Robinson (Anonymous, 2001).Being a bookkeeper, Frank Robinson also had excellent penmanship. It was he who first scripted “Coca Cola into the flowing letters which has become the famous logo of today. The soft drink was first sold to the public at the soda fountain in Jacob’s Pharmacy in Atlanta on May 8, 1886.About nine servings of the soft drink were sold each day. Sales for that first year added up to a total of about $50. The funny thing was that it cost John Pemberton over $70 in expanses, so the first year of sales were a loss.Until 1905, the soft drink, marketed as a tonic, contained extracts of cocaine as well as the caffeine-rich kola nut.Advertising was an important factor in John Pemberton and Asa Candler’s success and by the turn of the century, the drink was sold across the United States and Canada.Around the same time, the company began selling syrup to independent bottling companies licensed to sell the drink. Even today, the US soft drink industry is organized on this principle Robinson (Anonymous, 2001).Somehow, Coke has created a brand that its fans believe in and identify with. The brand unlocks a treasure trove of brand reinforcements that have little to do with the taste or quality of the product. And it was this effect that Coke turned its back on in the introduction of New Coke in 1985. It’s this untapping of brand beliefs we have to keep in mind when we talk about branding and search. With search interactions, the appearance of a brand can unlock belief structures just as strong as Coke’s (Anonymous, 2011). Absent a brand, consumers will choose on price.When a known brand is included, consumers will add their perception of the brand to the decision-making process and judge accordingly. So to increase the chances that your product or service is selected, make sure you have a strong brand with which people can identify themselves. Coke is a brand which has been endorsing brand personalities since its birth, indeed the brand personality most of the people run after. Its slogan says, “opens happiness” which is something that makes people think that they can actually have a good time sitting with friends and family while having coke through get together (Anonymous, 2001).Coke is known for its exceptional quality and superiority in product value, the Company possesses quality certification from various local and international standards.Many of the big Coke ad campaigns involve warm and fuzzy imagery: A jolly Santa Claus, adorable polar bears and nostalgic paintings. Studies have shown that these types of images cause people to feel more warmly toward Coke and thus be more likely to reach for the red cans instead of the blue ones at the store (Delany, 2012).With highly visible spots on top-rated shows like “American Idol” and the Super bowl, Coke gets its brand in front of more people. In the last few years, Pepsi has opted for less traditional campaigns that have not had huge payoffs. People would definitely go for the product sponsoring their favorite TV shows when there’s a choice and competition between 2 products (Delany, 2012).Categories of advertisement coca cola uses to promote sales and benefits:Throughout 2012, Coca-Cola contributed $1,700,500 to a $46 million dollar political campaign known as “The Coalition Against The Costly Food Labeling Proposition, sponsored by Farmers and Food Producers”. This organization was set up to oppose a citizen’s initiative, known as Proposition 37, demanding mandatory labeling of foods containing genetically modified ingredients. As a result, there is a growing boycott of their products across North America. People started following the brand and it benefitted the company (Anonymous, 2011).Coca cola company provides its employs with a wide range of feasibility which keeps them entangled into loyalty towards the company and to work in transformational terms rather than transactional. For example employee working in coca cola gets amount on which they started the job* no of years of his service, when they leave the company irrespective of whether they have been fired or given the resignation. For example an employee who worked for 10 years and with a starting salary of 80,000 rupees would get 8 lakh rupees when he would step out of the company along with his working experience.KO graduate gets an experience based degree in supply chain which can only be attained while working in the coca cola company. It is an experience base degree not yet accessible in Pakistan’s any institute or university, so working in coca cola not only provides its employees with monetarily benefits but also some experience based skills which are beyond the level of skills and accomplishments that other companies provides.Since KO graduate’s degree is inaccessible in Pakistan’s any university yet, so employees holding it through coca cola company would have a upper hand on all the other graduates and likewise are preferred more in other organizations as compared to those who doesn’t have it. These benefits opens doors into the big corporate world for employees. This is one strategy used by coca cola to keep the productive employees bound to the company and take the company far ahead toward the mission of the organization (Anonymous, 2011).Participation marketing has witnessed tremendous growth in recent years as marketers are leveraging new media to build their brands through user-generated-content at a time when budgets are constrained (Anonymous, 2001). It is a thought not lost on Coke, which is turning to fans to help it double the size of its business by 2020. The soft drinks brand is looking to launch more collaborative product innovation projects with its customers, franchisees and bottlers as part of its ambition to become a less “secretive” company. Additionally, the brand is using its 50-million strong Facebook community to identify and support ideas that make people happy, a move the business is dubbing “the next step in fan culture.”Coca-Cola has gone through a number of different advertising slogans in its long history, including “The pause that refreshes,” “I’d like to buy the world a Coke,” and “Coke is it.” COCA COLA in Pakistan claim in its slogan “ OPENS HAPPINESS” is indeed true and fulfilled as it opens a way for family to sit in real time and chat while having coke. Children adore coke so they sit stacked for it. So do teenagers. The lyrics of the slogan are outstanding and so is the overall presentation! It charges you up in a charming, vigorous and vibrant way infusing positive emotions in your being with family and friends. People love coke (Delany, 2012).One of the world’s most iconic brands, Coca-Cola intimately understands consumer sentiment and how to influence their decision to buy, employing a combination of game-changing marketing savvy and retailer collaboration. Those winning in today’s marketplace understand the path to purchase can be influenced successfully through a deeper consideration of evolving consumer trends, and by working in partnership to make their brands relevant to shoppers (Anonymous, 2001).Coca-Cola has been prominently featured in countless films and television programs. Since its creation, it remains as one of the most important elements of the popular culture. It was a major plot element in films such as One, Two, Three, The Coca-Cola Kid, and The Gods Must Be Crazy among many others. It provides a setting for comical corporate shenanigans in the novel Syrup by Maxx Barry. And in music, in The Beatles’ song, “Come Together”, the lyrics said, “He shoot Coca-Cola, he say…”The Beach Boys also referenced Coca-Cola in their 1964 song “All Summer Long” (i.e. ‘Member when you spilled Coke all over your blouse?) Also, the best selling artist of all time and worldwide cultural icon Elvis Presley, promoted Coca-Cola during his last tour of 1977. The Coca-Cola Company used Elvis’ image to promote the product. For example, the company used a song performed by Presley, A Little Less Conversation, in a Japanese Coca-Cola commercial (Anonymous, 2001).According to the 2005 Annual Report, the company sells beverage products in more than 200 countries. The report further states that of the more than 50 billion beverage servings of all types consumed worldwide every day, beverages bearing the trademarks owned by or licensed to Coca-Cola account for approximately 1.5 billion (the latest figure in 2010 shows that now they serve 1.6 billion drinks every day). Of these, beverages bearing the trademark “Coca-Cola” or “Coke” accounted for approximately 78% of the company’s total gallon sales. Also according to the 2007 Annual Report, Coca-Cola had gallon sales distributed as follows: 42% in the United States37% in Mexico, India, Brazil, Japan and the People’s Republic of China 20% spread throughout the rest of the world
In 2010, it was announced that Coca-Cola had become the first brand to top £1 billion in annual UK grocery sales (Anonymous, 2001). SALES CHART OF COCA COLA FROM 2001 TO 2010:Today, products of the Coca Cola Company are consumed at the rate of more than one billion drinks per day. Coca-Cola (KO) has more than 500 non-alcoholic brands, which the company is selling worldwide. The company primarily sells sparkling beverages; however, its portfolio of products is not limited to these beverages.STRENGTHS AND MARKETING STRATEGIES THAT ACCOUNTS FOR ITS SUCCESS:Coca-Cola also sells water, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. Coca-Cola is one of the most widely recognizable brands in the world, and the company is mature. Like any other mature company, Coca-Cola pays a substantial percentage of its earnings to its shareholders in shape of cash dividends. Prospect of healthy income stream and stable growth makes Coca-Cola an ideal investment for income investors (Anonymous, 2011).