Coca-Cola vs. PepsiCo: Which One Has the Best Marketing Strategy
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Define your target audience
- First and foremost
The increasing health awareness among the general public has put quite a dent into the cola-drink market. In fact, according to Brand Finance, the COVID-19 pandemic caused a 6% decline for the top 25 largest cola-drink brands in 2020. With more people than ever choosing drinks which classify as “healthier options”, Coca-Cola has managed to sustain their solid brand image through and through while PepsiCo sales steadily decline. The battle between the Cola giant and rival competitor continues, but by taking a dive into each brands’ marketing efforts we can compare the two strategies in relation to Integrated Marketing Solutions (IMS) along with branding and recognition to gain insight into Coca-Cola’s success.
IMS (Integrated Marketing Solutions)
PepsiCo had understood the value of influencer marketing well before influencers became a commodity. The brand has long relied on the power of the lover brand archetype to promote their products and drive brand engagement. The lover brand archetype signifies a relationship which appeals to emotions; brands that identify usually like to celebrate human emotion. Some of PepsiCo's largest examples which come to mind of this archetype being put into play are star-studded collaborations such as Britney Spears’ Super Bowl commercial or the incredible product placement decision of “PepsiCo Perfect” in the “Back to the Future” movies.
Although not very cost-effective, this proven strategy is sure to help marketing campaigns gain reliability and interest. A study conducted at the University of Michigan and University of Calgary and reported by Pacific Standard in 2015 suggested that when surveying young adults, 90% felt a simple attraction to an influential person, and over 65% felt strong attachments to multiple influential people. By appealing to audiences’ emotional enthusiasm, brands can inspire long-term loyalty from customers, furthermore, developing sales.
However, it is important to pay close attention to execution and messaging. Implementing extensive screening and editing processes can help brands avoid debacles such as the PepsiCo x Kandal Jenner campaign which sparked controversy following the Black Lives Matter movement.
PepsiCo also employs an extensive ‘Concept of Health’ strategy. As previously mentioned, the interest in healthy living has been on a steady rise for years, and as an increasing number of consumers are opting towards ‘healthier options’, adopting this changing consumer mindset was vital for PepsiCo to stay relevant in the rapidly changing market. According to a study done by Sure Dividend “Only 10 of the company’s largest brands are carbonated. PepsiCo long ago recognized the growth of still beverages over sparkling beverages. Even within the sparkling beverages category, PepsiCo has looked for growth outside soda, such as the $3.2 billion acquisition of SodaStream in 2015.” With more people choosing un-carbonated drinks over the contrary, PepsiCo’s has implemented strategies to invest in products that appeal to the changing market such as the SodaStream acquisition deal worth over $3.2 billion in 2015.
Coca-Cola’s tagline "Sharing" plays a significant role in the brand’s value, contributing immensely to its’ growth. Coca Cola's psychological application for marketing appeals to their widespread target consumers thanks to the emotional interaction with happiness. One renowned example of this strategy comes to mind: the “Share a Coke” campaign in which consumers were given the opportunity to personalize their coke bottles with their own names or the names of their chosen peers. Direct-to-consumer (D2C) marketing has proven itself to be a highly valuable asset for the company as it proves its effectiveness time and time again. By encouraging customers to build natural connections with the brand, the company created an entirely immersive brand experience aligning values amongst both parties.
Coca-Cola has a deep, rich advertising history, dating all the way back to 1866. It is difficult to identify which exact campaign could have been the one to set them on their road to dominating the Cola industry. Between 1971’s hit track “I’d Like to Buy the World a Coke”, to the “Share a Coke” campaign of modern day and all the iconic commercials and sponsorships in between, Coca-Cola has become a brand embedded in the DNA of global modern societal culture.
Branding & Recognition
Branding & Recognition: PepsiCo
PepsiCo’s branding strategy throughout the years has experienced many adjustments to this day. Since 1898 when PepsiCo decided on their logo and font the tri-color pattern has served as a powerful identifier for cola-drink consumers globally; yet for the 5th time since 1950, the company has chosen to re-design the attributes. The progression of the logo is shown in the below graphic by Logaster [figure 1]:
Each simplification was an attempt to make the brand name appear more legible to the consumer and therefore more memorable, but throughout the timeline of 1973 until 2008, the changes became increasingly minuscule and post-2008 the consumer perception of the brand had significantly changed. By frequently reinventing the brand image, PepsiCo has created a key ‘refresh quality’ in themselves, which can potentially satisfy the consumer perceptions of the ever-changing market. It is important for the company to pay careful attention as too many changes can cause a tribe to get confused.
Branding & Recognition: Coca-Cola
Coca-Cola’s logo design has become an iconic global language. In fact, according to Steel Media via Business Insider, 94% of the world population can recognize the iconic Coca-Cola’s red and white logo. Coca-Cola has also openly claimed that the logo may be the most understood term globally. With the sole exception of a single font change in 1890, Coca-Cola has maintained their design throughout the years, creating a sense of consistency, comfort and nostalgia.
Within marketing, the color red stands for power, energy, and passion – making it a great choice for brand communication integration. During a blind taste test conducted by Juicebox Interactive, a significantly higher number of people choose PepsiCo over Coca-Cola. However, when participants were shown which brand they were being presented, the majority were drawn towards Coca-Cola, reinforcing the company’s strong brand loyalty.
Both Coca-Cola and PepsiCo work hard to differentiate themselves from other soft drinks companies and boost their visibility. By digging into the respective combined efforts of IMS and branding, we can draw some conclusions on the results of each strategy based on worldly insights.
The use of brand archetypes to form a cultural or emotional connection with target audiences is a great way to generate a universally identifiable message. By creating this sort of ‘tribe’ and connecting personal, immersive experiences to potential customers, both brands attract a sense of belonging, which both PepsiCo and Coca-Cola have strived to achieve since the beginning of their respective journeys.
Certainly, in terms of market share, Coca-Cola is simply superior. When comparing Coca-Cola and PepsiCo’s interest over time chart via Google Trends [figure 2], measured between June 1st, 2021 to June 1st 2022, data shows the results for Coca-Cola being significantly higher than PepsiCo, solidifying the success of the brands’ marketing strategies.
Furthermore, Statistica’s PepsiCoCo - statistics & facts study from 2022 reported that “PepsiCo has been slowly losing market share in the carbonated soft drink category for years, standing at 8.7 percent in 2020.” The study also claims that within the beverage industry, Coca-Cola has always been PepsiCo's primary competition and as a company, Coca-Cola’s value is about 5 times that of PepsiCo.
However, as consumer mindsets shift towards a larger emphasis on a healthier lifestyle, top-tier sugary drinks are losing their competitive advantage in the beverage market. According to an IBisWorld study [figure 3] , after a spike in the late 90s, cola-drink consumption per capita has been at a steady decline every single year since.
The unpredictable nature of the shifting consumer mindsets and market trends for the beverage industry can provide obstacles for all soft drink competitors. By analyzing Coca-Cola and PepsiCo’s corresponding marketing strategies in relation to IMS and branding, we can conclude that although Coca-Cola’s image and sales are presently superior, it is unreasonable to assume PepsiCo’s future downfall. The company’s adaptive nature shows versatility which bodes well to stand the test of time in ever-changing environments.