There are 2 types of war that never stops: information war and rivalry. They always argue what is better, Canon or Nikon, Visa or MasterCard, BMW or Mercedes, Samsung or Apple, Pepsi or Coca-Cola…
Pepsi and Coca-Cola have been competing over 100 years for the right to be called the world’s most popular non-alcoholic beverage.
So, in this article we will try to find out whether Pepsi has a chance to outpace Coca-Cola and what weak and strong points of both the giants have.
Vise Marketing – Secret of Coca-Cola’s Victories?
Why does Coca-Cola beat its rival in nearly every single aspect? The most interesting thing is that there is almost no difference in the quality of their products. Moreover, experts say when you taste both the beverages with your eyes closed, it is very difficult to tell one from the other. Some people even like the taste of Pepsi more than the one of Cola. Therefore, we can conclude that the key aspect is the way the companies promote their brands.
Most people choose Coca-Cola. You can find this beverage in every single food store, bar, café, restaurant. This only confirms the idea that the major weapons of the eternal war between the two rivals are PR campaigns and marketing solutions.
So who is the real king of non-alcoholic beverages? How did Coca-Cola and Pepsi manage to win the hearts and minds of millions of people around the globe?
Coca-Cola and Pepsi: Reasons for Unprecedented Success
Those common traits shared by Coca-Cola and Pepsi have literally made those two companies the monopolists of the global market of non-alcoholic beverages.
Both the beverages were created by pharmacists and were sold in drugstores as a tonic and a medicine for better digestion.
The products are nearly identical in terms of taste and ingredients. Previously, the ingredients were different but later Coca-Cola stopped using coca leaves.
There are many myths about both the beverages. Some ill-wishers say these beverages can be used to get rid of rust and scale. In reality, any liquid containing citric acid can do it.
Both the giants conduct technological research. They promise to produce eco-friendly containers for their beverages.
The eternal struggle between them has turned into a PR and advertizing show. Nobody even knows who comes 3rd and 4th…
PR Battle between Coca Cola and Pepsi
So, why is Coca-Cola always one step ahead of Pepsi? Obviously, it has nothing (or little) to do with ingredients or taste.
Let’s have a look at the strong sides of Coca-Cola:
Historically, Coca-Cola was founded 12 earlier than Pepsi. This is a serious period in trading. By the time Pepsi was created, Coca-Cola had already managed to conquer the niche. In other words, Pepsi was doomed to become an runner-up.
Coca-Cola is the most recognizable brand in the world (98%)! It means that nearly every single human around the globe knows what Coca-Cola is.
In 2011, Coca-Cola was recognized the most expensive brand for the 12th time in a row (Interbrand 2011).
Creative and catchy commercials. The company’s PR managers are the world’s best in creating and promoting the atmosphere of a festive occasion, which is always associated with the famous beverage.
According to , Coca-Cola commercials speculate on eternal values like leadership, family values, friends, wisdom etc.
What About Pepsi?
Sometimes it seems that Pepsi’s only goal is to compete with Coca-Cola. Does Pepsi have any competitive edge over Coca-Cola?
Previously, it was price. Pepsi used to be cheaper. Now the prices are nearly equal, so this is not a competitive edge anymore.
Conquering new markets. For example, Pepsi was first to enter the USSR market in the 1970s. Coca-Cola came to the Soviet market only in 1988. Later Coca-Cola won back the leadership in China, Russia and other post-Soviet countries.
Aggressive advertisement. Pepsi is forced to attack Coca-Cola to win the battle. It tries to speculate on contrasts. For example, while Coca-Cola is associated with Christmas and Santa Claus, Pepsi commercials try to persuade us that “Summer Time is Pepsi Time”.
Pepsi’s strong point is celebrities. No company has ever invited so many celebrities to advertise its product as Pepsi: Britney Spears, Christina Aguilera, Pink, David Beckham, Lionel Messi (football stars are especially popular with Pepsi). Millions are spend to turn their fans into Pepsi lovers.
Pepsi bets on the youth. Earlier, Pepsi was an attribute of the “next generation” (Remember the famous Pepsi commercial with Michael Jackson).
Pepsi is also famous for its promos and challenges. It is sufficient to mention the famous Pepsi Challenge when Pepsi often beats Coca-Cola.
Therefore, we can see that Pepsi has been trying to outpace Coca-Cola for decades but has failed so far.
Coca-Cola is fond of creating mysterious environment around itself (mysterious formula with mysterious ingredients).
Coca-Cola is associated with traditions. While Pepsi has changed its logo a couple of times since the very creation, Coca-Cola has been relatively stable in this aspect (only some minor changes).
As we have mentioned, Coca-Cola bets on eternal or widespread values (family, friends, Christmas, Santa Claus, America, freedom etc). Unlike Coca-Cola, Pepsi bets on the youth, the tastes of which are changeable.
Will Pepsi Eventually Outpace Coca-Cola?
According to Eugene Olkhovsky, ’s leading expert, Pepsi won’t be able to outpace Coca-Cola but for major changes in marketing, PR and advertising approach. 100 years of history show these efforts are vain.
· It is useless to copy the rival. It is necessary to conquer thoseniches that are free. In this aspect, Pepsi is right when speculating on contrasts (Santa Claus - summer time, next generation - middle-aged people).
· The battle between the 2 giants is reduced to commercials, billboards, slogans, logos and celebrities. Who will break this vicious circle? It is time to remember that consumers may have more intimate reasons to buy their products. If Pepsi finds these keys to potential clients’ hearts and minds, it has all chances to win the battle.
· The Coca-Cola brand is much more expensive than the one of Pepsi ($73,8 bn versus $12.9 bn)
· Coca-Cola is mention in mass media more frequently.
But don’t’ be fooled by advertisers’ tricks. Let’s have a look at how do investors and speculators value the stocks of both the companies.
The charts below, courtesy of , reflect the current state of affairs in those markets of Coca-Cola and Pepsi’s stocks:
According to , if both the stocks show equal dynamics and are priced in the same range ($78.15 and $70.22) while most respected experts and ratings support Coca-Cola, it means that PepsiCo Inc. has a larger margin of safety and potential.
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Will Pepsi outpace Coca-Cola? Would invest in Coca-Cola or Pepsi?
