EXECUTIVE SUMMARY
Introduction
Coca-Cola and Pepsi are the two greatest competitors in the soft drink industry. A brief introduction and history of the two companies will provide a basis for understanding how the companies have come to be where they are today and how they run their companies. The company structure of each will also be briefly explained to provide an understanding of how management style is impacted.
Marketing and Advertising
The marketing skills that these companies possess are the reason both Coca-Cola and Pepsi are so successful. Our research will provide an in-depth look at the marketing tactics that these companies use and how they compare to each other. The use of new technologies, forecasting, advertising,
In response to Pepsi's challenge, Coke did its own taste tests and found out that Pepsi was preferred. This led Coca-Cola to do the one thing a leader should never do – change a product people consume a lot of. The new formula was introduced to the entire market without any test marketing. Now the "real thing" was no longer the real thing; and in one stroke, Coca-Cola had undermined its own position.
The "New Coke" led to an outburst from the public with their loyalties to the original formula. Management listened. The original formula was reintroduced as "Coca-Cola Classic," giving Coke a new life cycle.
It is important for Pepsi to create an image that could never be confused with Coke's. For twenty years, Pepsi positioned itself as the "leading edge" soft drink and called their consumers the "Pepsi generation". The overall effect of Pepsi's efforts was to steadily erode Coke's leadership. Coke still currently leads Pepsi in sales, but no one knows for how long. We do know two things: both companies have always targeted youth and both portray their products as providing pleasure.
Political Environment
World War II changed everything. The Coca-Cola Company promised to put a Coke in the hands of every American soldier. This inspired the government to exempt Coke – but not Pepsi – from sugar rationing. The government also built almost a hundred Coke bottling plants overseas. Then,