Comparison between Marketing Strategy of Coca Cola and Pepsi
Coca cola, which is involved in the production of different types of sparkling and still beverages, is the world’s leading soft drink maker with its branches in around 200 countries of the world. Around 60% of the revenue and 80% of its profits are generated from countries other than the United States. The company’s brand shares a good reputation globally. Around 94% of people across the world are familiar with the logo of Coca Cola.
- Segmentation – A tool to successful marketing strategy
Defining suitable products for appropriate group of customers is achieved by the segmentation strategy. The company utilizes a mixture of undifferentiated and mass marketing strategies along with niche marketing. Niche marketing is used to provide a boost to the sales of the products in the competitive market. The company’s most popular drink Cola is highly appreciated and liked by people of varied age groups all around the world. However, the diet coke can be considered as a niche specific product as only people who are conscious about their diet prefer to take the diet coke.
With highest brand equity, a huge amount of hard work and efforts have been done by the company to attain the highest position in the market. All this has become possible only by adopting certain strategies by the company which ensures its success in the today’s competitive market. The marketing strategies of coca cola are highly flexible and the company changes its marketing strategies with changing times.
Competitive positioning strategy is utilised by Coca Cola in order to achieve great success in the market in the selling of non-alcoholic beverages.
- A wide variety of brands and products for targeting a wide range of customers which can ensure company’s success is a significant component of its marketing strategy.
The company produces around 3300 products and therefore has a wide portfolio in the industry of beverages. The beverages produced by Coca cola can be divided into different categories viz. diet category, energy drinks, fruit juices, tea and coffee etc. There are around 200 countries where Coca cola products are sold globally. The different brands of Coca cola are Limca, Fanta, Thumbs up, sprite, Nimbu fresh etc.
- Setting appropriate prices is the another component of marketing strategy of Coca Cola
As the products of Coca Cola have wide availability, the prices of the products are set in accordance with the market and geographic segment. Different marketing strategies are employed by the different sub-brands of the company. The main criteria behind setting prices are “price of the competitors in the market’. Being an oligopoly market, the beverage market employs cartel contract so as to maintain a mutual balance in price setting among different sellers.
- Covering wide range of places with effective distribution pattern of its products is another means of its successful marketing strategy
FMCG pattern of distribution is employed by Coca Cola for distributing its products to the customers. The highly efficient and effective network of distribution of the company has resulted in the elimination of small and middle companies from the market. Coca Cola is not just limited to urban markets, it extends its products to the rural markets in the country as well which eventually results in the reduced market share of other small companies.
- Promotions as one of the most effective component of the marketing strategy of Coca Cola
A wide range of promotional and advertising strategies are employed by the company to ensure wide circulation of its products. It creates advertisements which are related with the life style of the people and are able to ensure value to the people’s lives. The ads of Coke have always been seen to be specific for a particular festival celebration or the ads which spread a positive message for the people.
In order to make the best use of emotions of the people, the company makes use of the CSR strategy as one of the marketing tools. “Support my school” campaign with NDTV is one of the current promotional strategy used by Coca Cola. Moreover, distributors and retailers are provided with allowances and discounts for better promotions. Variety of sales promotions are utilized by the company for pushing more products into the market. The company makes use of both the push (via promotions) and pull strategy (via promotions and campaigns) for the wide purchase of its products.
Pepsi is a strong competitor of Coca Cola which fights neck-on the neck with Coca Cola. The parent company of Pepsi is PespsiCo which has been the leading company in the food and beverage industry. The company has its circulation in around 200 countries across the world. Moreover, the company has a strong market experience of 100 years which makes it a strong competent in the beverage industry. Pepsi has been found to live up to the expectations of the people by providing low price, favourable taste, convenient purchasing and wide availability.
- Mass marketing strategy like Coca Cola is used by the company for targeting the customers belonging to varied demographies and geographies. Further, for targeting the customers with the specific needs and demands, segmentation forms an inevitable part of the marketing strategy of Pepsi. Being a mass market product, the company employs the use of undifferentiated targeting strategies for being competitive and to ensure high value of its sales.
- Production of food products along with beverages is a key strategy of Pepsi to diversify its business
For improving the turnover and its profits, the company has implemented numerous strategies. With the production of Cheetos, Kurkure, Lays and Quaker, the company is giving a tough competition to its counterpart Coca Cola in the market. Although Coca cola is the number one brand in the beverage industry, but by the introduction of different class of products, Pepsi has resulted in the reduction of its dependency on soft drinks only. Further, the great demand of Lays, Kurkure and Cheetos adds advantage to the company’s business and popularity.
- Appropriate price setting- a significant component of a successful marketing strategy
The prices set by the Pepsi for its products are largely determined by the prices set by its competitor Coca Cola. If both the brands will enter into a price war, no one is going to win as the manufacturing cost and transportation charges are very high. Hence, the companies prefer to enter into a brand war and not the price war. Pepsi lures its customers by providing them with promotional discounts and bulk discounts. Bulk discounts means whenever the size of the product purchase by a consumer increases, the discount also increases. For the top retailers and bulk buyers also, the company has lowered the price because of the negotiation of the bulk buyers with soft drink companies. The main basis for the negotiation of bulk buyers for low prices is that they sell huge quantity of the soft drink product to the customers. Therefore, as operating margin of the company can get affected, the company decides to reduce the price for bulk buyers.
- Place and distribution pattern is an inevitable component of an effective marketing strategy
The distribution network of pepsi is very much similar with its competitor Coca Cola. With an immensely huge network, the brand has its existence in every nook and corner of the country for providing a boost to the sales of the products of the company. Distributors comprise a primary mode of its distribution who then further provide the product to the retailers, convenience stores and restaurants. The product delivery to bulk buyers comprises the secondary distribution route of the product distribution by Pepsi.
- Promotions as another important component of an effective market strategy
The strongest marketing strategy which helps the company to maintain its brand image is promotions and advertisements just like Coca Cola. However, unlike coca cola, Pepsi ads are usually centred around the youngsters. The company has various brand ambassadors for such promotions e.g. M S Dhoni, Ranbir Kapoor and Sachin Tendulkar. Moreover, Pepsi employs all the media channels for its promotions. Further, in addition to media promotions, the company also uses sales and trade promotions for enhancing its sales. Being in the FMCG market, it is highly crucial for the company to promote its product as if the company does not promote its product, it is more likely to perish.
Pepsi has always been found to change its marketing strategy with time in order to thrive better in the food and beverage industry so that it can maintain its position consistently in the market.
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