Cola Wars

Inception
 Coca-Cola was first marketed as “Potion to mental and physical
disorder”, formulated by John Pemberton in 1886. Asa Candler
acquired the formula and had the vision to see that the future
would hold a big place for soda drinks and hence he even gave
the first bottling franchise in 1899 for a nominal 1dollar.
 Pepsi- Cola was invented around seven years later by another
pharmacist Caleb Bradham. By 1910 it had also acquired a
franchise bottling system.
 Initial years both companies had a lot to fight from imitations
and counterfeits in coca-colas’ case to Bankruptcy in Pepsi’s.
 1919 was the year when coca-cola went public and in 1923
Robert Woodruff began to head it consequently changing and
evolving the brand.
 “In Arms Reach of Desire” was how he wanted Coca-Cola to be.
1. Pioneering the open Top coolers
2. Automatic Fountain Dispensers
3. Making Cola synonymous to anew “LIFESTYLE”
through advertising.
4. During war promising “a uniformed man will get
coca-cola wherever, whenever in 5 cents .....earning
a sugar rationing exemption in 1942.
Were few on Course changing ideas of Woodruff.
 During the initial Pepsi years it made sure it had a very good
Bottling network laying foundation to a sound company.
ECONOMICS

 Americans consumed 23 gallons of CSDs annually in 1970 which

has increased to 52 gallons in 2004.
 An immense increase and an immense change in the industry
too
1. Entry of various new flavours, varieties.
2. Inflation-Adjusted prices.
3. Entry of the health savvy audiences.
4. More alternatives.
Have immensely affected and changed the industry.
 Soda still remains the most consumed drink of the Americans.

4 PARTICIPANTS
 CONCENTRATE PRODUCERS
 BOTTLERS
 RETAIL CHANNELS
 SUPPLIERS
 CONCENTRATE PRODUCERS
 Blending the Raw materials
 Packaging the concentrates in Plastic bottles
 Shipping to the bottler
 Advertising, Market Research, promotion, bottle
support.
 Bottlers
 Adding the carbonated water
 High fructose corn syrup
  Bottling or canning the CSDs and shipping to various
outlets
 Setting up end of the aisle and point of purchase
display
 Coca-cola had various controversial contracts with
the bottlers including the 1921,1978,1987,2003
contracts.
 Retail channels
 Distributing the CSDs to the customers
 Supermarkets, fountain outlets, vending machines,
mass merchandisers, gas stations, drug stores,
grocery stores....etc.
 Pepsi concentrated on the retail outlets while Coke
was the uncrowned king of the fountain outlets.
 Supplying to the restaurants, pizza hut, taco bell,
kentucy fried chicken and many more.
 Suppliers
 Supplying raw materials to the bottlers and the
concentrate producers
 Caramel coloring
 Phosphoric acid and citric acid
 Natural flavours
 Caffeine
 Cans
 Plastic canisters
 Glass bottles
 Packaging material were a few of the raw materials
supplied

Cola wars: Pepsi challenge, cold war

  In 1950’s cola acknowledged the existence of the competitors
“Americas Preferred taste” was how cola was marketed
 After great depression Pepsi came up with “twice as much for a
nickel too”
 Pepsi focused on the supermarkets which grew from 10,000 in
1945 to 32,000 in 1962.
 “Pepsi generation”, “young at heart”...were a few taglines used
by Pepsi.
 THE PEPSI CHALLENGE
1.Running a campaign which told people preferred Pepsi
in a blind taste
2. Coke had to give price reductions and a lot of
advertisements to lay the effects off of this campaign.
 COLD WAR HEATS UP
 Coke started using a low priced alternative to sugar, Pepsi
followed suit.
 Coke intensified the marketing, Pepsi doubled the
advertising.
 Coke changing the formula, Pepsi accusing it of changing
it to make it similar to Pepsi.
 Adding Caffeine free Coke, cherry ke to the list by cola
was counteracted by Pepsi by introducing 13 more
flavours.
 Coke stated acquiring the shambly run bottling companies and
selling them to the better performing bottlers
 Coke purchased the best bottlers when they sold.
 Pepsi followed the trend

ADAPTING TO TIMES
  The CSD market was still more than any other beverage but it
still did not show a big growth hence the need to get to new
markets emerged.
 Coke was already suffering due a lot of internal difficulties and
thus Pepsi flourished during this time.
 Coke literally had a reversal of fortune-losing a racial
discrimination case to financial shocks all hampered the Coke
legacy.

ALTERNATIVES
Health savvy audiences started questing use of high calorie sugars in
the drinks, new federal guidelines exposed the sullen truth making it
imperative for the CSDs to find a new alternative in form of diet
drinks

 Diet Pepsi, diet cola, diet sprite......adding juices.

 Diet sodas were what revived the sales
 Treating the diet products as a separate flagship product saved
a lot of loss.

INTERNATIONALISING
Targeting Europe and the Middle East Asia and around was one of
the steps that companies took after the flat growth of the CSDs

 Europe had a strong Coke presence while Middle East had a

Pepsi ground.
 But the companies still faced a lot of difficulties in trust,
guidelines factors
 Adding the mineral water to the list was a smart move that
reflected in the sales figures.

WAR
The war has been going since the inception and has no reason to
stop. Both companies knowingly or unknowingly have contributed to
the growth of each other and the war shows no signs of even
decreasing in the intensity. But is it still just about the drinks or more
is still the question? COKE-PEPSI=A
rivalry that
changed the way completion is perceived.