The Cola Wars: Pepsi vs Coke Essay -- Pepsi-Cola and Coca-Cola

The Cola Wars: Pepsi vs Coke   Ã‚  Ã‚  Ã‚  Ã‚  PepsiCo. Incorporated and The Coca-Cola Company are the two largest and oldest archrivals in the carbonated soft drink (CSD) industry. Coca-Cola was invented and first marketed in 1886, followed by Pepsi Cola in 1898. Coca-Cola was named after the coca leaves and kola nuts John Pemberton used to make it, and Pepsi Cola after the beneficial effects its creator, Caleb Bradham, claimed it had on dyspepsia. The rivalry between the soda giants, also known as the "Cola Wars", began in the 1960’s when Coca-Cola's dominance was being increasingly challenged by Pepsi Cola. The competitive environment between the rivals was intense and well-publicized, forcing both companies to continuously establish and implement strategic variations as a means to create a competitive advantage. The competition fostered and stimulated continuing growth in an industry which many predicted in the early 1970’s to be on the verge of maturity. Reasons for the prediction arose from the fact that further growth of per capita consumption of soft drinks is fairly static regarding how much people are able to consume on a daily basis. Furthermore, both Pepsi Cola and Coca-Cola offered a limited number of products that "looked the same, tasted the same, and bubble into foam the same", thus questioning whether further substantial growth in sales was possible.   Ã‚  Ã‚  Ã‚  Ã‚  Pepsi Cola and Coca-Cola’s marketing strategies have been as indistinguishable as the products themselves. Relying on colorful images, lively words, beautiful people, interesting bottle designs, and contagious jingles, Pepsi and Coke propelled their respective products into the American and international mainstream. The changing faces of Pepsi and Coke’s management, however, facilitated the brand image according to their own style and what they saw as an advantageous competitive approach. This style and approach is what makes Pepsi-Cola and Coca-Cola distinguishable. The objective of Coca-Cola’s advertisements was to strategically position their product in people’s mind in order to maximize its acceptance. This strategy would in some way or another have a correlation to the changing social values of the period. â€Å"Trying to keep step with each generation and era has been an important factor in advertising for Coke. It strives not to be too far behind or too far ahead of its time; the product has ... ... strategies in order to increase their sales growth. The rivalry between the two soda giants required new strategies to be continuously implemented. The new strategies devised by Pepsi and Coke to deal with the changing environment could not have been effectively implemented without changing their distribution system from networks of independent bottlers to company-owned bottling systems. This transformation has been essential to both companies' introduction of new products and new forms of pricing, promotion, and advertising. The U.S. Department of Justice has brought many price-fixing cases against CSD bottlers, the vast majority of which led to guilty pleas. The FTC has conducted many investigations in the CSD industry, including investigations of horizontal and vertical acquisitions in the industry. Sources Cited 1. Enrico, Roger & Kornbluth, Jesse: (1986).The Other Guy Blinked. New York: The Free Press. 2. "Coke v Pepsi", The Economist, January 29, 1994, pp. 67-68. 3. http://www.pepsi.com 4. http://www.coca-cola/home1.com 5. PepsiCo. Inc. Annual Report Issued to Common Stock Shareholders 6. The Coca-Cola Company Annual Report Issued to Common Stock Shareholders