Over the years, the advertising strategy of Coca Cola, an American corporation, manufacturer and retailer of soft beverages, has played a vital role in their growth. In 2014, the Coca Cola Company had officially sponsored the Olympics event in Sochi, Russia. They had also sponsored and aided other sporting events and campaigns where they connected with millions of sports fans. With their diverse and unique marketing strategies, the soft drinks producing giant over the years has remained competitive among its peers in the market, which include PepsiCo, Inc. (PEP), Dr Pepper Snapple Group, Inc. (DPS), and Monster Beverage Corporation (MSNT).
Coca Cola and Pepsi have been rivals since 1975. PepsiCo managed to diversify its brand in other domains, which enabled it to gain an upper hand over Coca Cola. Last year, PepsiCo reported a brand revenue of $64.7 billion; whereas, Coca Cola had raked up $31.9 billion in revenue. Let’s look closely into these two brands’ marketing and advertising strategies.
Think Beyond The Bottling
Coca Cola is entirely focused on their bottling business; its classic bottle has always been at the center of their defensive marketing and has worked to its benefit. Right from the shape of the bottle to the logo, Coca Cola has made a mark in people’s mind. Coca Cola’s ad expenses may be greater than PepsiCo’s, but their revenue is half of the latter’s. Experts say that refranchising of bottling operations is the main reason for CoCa Cola “losing” to PepsiCo.
On the other hand, PepsiCo is able to lead the revenue charts by focusing on health snacks and drinks.
Planning & Developing Marketing Strategies
In the past, the marketing strategies of Coca Cola had worked wonders in its pursuit of being ahead in the race. The brand was a sensation in advertising and had a profound impact on the American culture. From radio to television to print, Coca Cola had diversified their advertising and marketing campaigns. In the process, it limited itself to the bottling business. Additionally, the refranchising and excess expenditure in advertising and marketing caused its revenue to plummet
When we look at the marketing spend of Coca Cola for the fiscal year of 2018, the company had spent 18.3% of its revenue; whereas, PepsiCo spent only 6.5% of their gains. Cutting down the ad expenses, especially from print and television media, and diverting their advertising endeavors to digital marketing can provide succour to Coca Cola. Experts suggest that by reducing the cost expenditure in advertising and expanding its digital presence, Coca Cola can increase its net income margin to 22% by 2020.
Shifting In Approaches
By altering its marketing channels and cutting down on its advertising expenditure, Coca Cola can not only reclaim its position over PepsiCo in terms of revenue but also upturn stocks in its favor and increase the margins. If Coca Cola follows this, its compound Annual Growth Rate (CAGR) is estimated to increase by leaps and bounds and surpass that of Pepsico.
Connecting and expanding digital reach, diversifying, and shifting to the sale of non-carbonated products, and emphasizing on healthy products, Coca Cola can hit a masterstroke in its niche.