CaseStudybyLauraAlfonso

EXECUTIVESUMMARY Im the new Marketing Director for PepsiCo, Inc. I will conduct a case review on PepsiCos maincompetitorCocaColatopresentittoourExecutiveCommittee,inordertodevelop analyticandproblemsolvingstrategiesforourcompany. PepsiCo,Inc.isoneofthemostsuccessfulconsumerproductscompaniesintheworld,with revenues of over $20 billion. However, the top brand in the U.S. and global soft drink industriesisstillCocaCola.ThiscasestudywillhelpPepsiCotoadoptaplanforgrowthand increasesalesgloballytocompeteeffectivelywithCocaCola. Company Competitor UNDERSTANDINGTHEBRAND NameofBrand HistoricalOverview InMay,1886,CocaColawasinventedbyDoctorJohnPembertonapharmacistfromAtlanta, Georgia.ThenamewasasuggestiongivenbyJohnPemberton'sbookkeeperFrankRobinson. Who also, first scripted "CocaCola" into the flowing letters which has become the famous logooftoday. ThesoftdrinkwasfirstsoldtothepublicatthesodafountaininJacob'sPharmacyinAtlanta onMay8,1886.Until1905,thesoftdrink,marketedasatonic,containedextractsofcocaine aswellasthecaffeinerichkolanut.In1887,anotherAtlantapharmacistandbusinessman, AsaCandlerboughttheformulaforCocaColafrominventorJohnPembertonfor$2,300.By thelate1890s,CocaColawasoneofAmerica'smostpopularfountaindrinks,largelydueto Candler'saggressivemarketingoftheproduct.TheCocaColaCompanyincreasedsyrupsales byover4000%between1890and1900.

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AdvertisingwasanimportantfactorinJohnPembertonandAsaCandler'ssuccessandbythe turnofthecentury,thedrinkwassoldacrosstheUnitedStatesandCanada.Aroundthesame time,thecompanybegansellingsyruptoindependentbottlingcompanieslicensedtosellthe drink. On April 23, 1985, the trade secret "New CocaCola" formula was released. Today, productsoftheCocaColaCompanyareconsumedattherateofmorethanonebilliondrinks perday. MajorCompetitors PepsiCo,Inc.(ourcompany) NestleSA. Dr.PepperSnappleGroup,Inc. AnnualRevenues Estimatesof$4.3billions AnnualMarketingBudget $350400million AdditionalInformationBrandOverview StrugglingwithNegativeMediaAttentionInternationalcoverageofincidentsinIndiaand Colombiaisaffectingthebrandimage.IntheU.S.,adversepublicityaboutobesityinchildren alsocontributestodecliningpublicperceptionofCSDbrands. NegativeHealthPerceptionsIn2005,regularsodasbegandisappearingfromU.S.schoolsin accordancewithanagreementbythethreelargestbeveragecompaniestopromoteahealth smartlifestyle. PublicResponsetoTheCocaColaSideofLifeCocaColasuccessfullyintegratesitself intothedailylivesofitsconsumerinanactive,mobileanddigitalworld.Thougheachday1.3 billionglobalCocaColacustomersquenchtheirthirstswithaCocaColaproduct,salesofits flagshipbrandcontinuetofall. TraditionalBrandingTacticsCocaColaClassicsdecadelong(19972009)absencefromthe 2006SuperBowlisindicativeofthebrandsrecentavoidanceofmajorbrandingopportunities, especiallyinnontraditionalplacements.

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BRANDFOUNDATION MISSION Torefreshtheworld... Toinspiremomentsofoptimismandhappiness... Tocreatevalueandmakeadifference. VISION People:Beagreatplacetoworkwherepeopleareinspiredtobethebesttheycanbe. Portfolio:Bringtotheworldaportfolioofqualitybeveragebrandsthatanticipateand satisfypeople'sdesiresandneeds. Partners:Nurtureawinningnetworkofcustomersandsuppliers,togetherwecreate mutual,enduringvalue. Planet:Bearesponsiblecitizenthatmakesadifferencebyhelpingbuildandsupport sustainablecommunities. Profit:Maximizelongtermreturntoshareownerswhilebeingmindfulofouroverall responsibilities. Productivity:Beahighlyeffective,leanandfastmovingorganization. COMPETITION DirectCompetition: Cola flavored sodas: Pepsi, RC Cola, store brand colas. Other brands of colaflavored soda providethesameexperienceasCocaColaClassic.Nonloyalcoladrinkerscannoteventaste thedifferencebetweenbrands. IndirectCompetition: Other carbonated drinks: Dr.Pepper, Mountain Dew, 7up, Diet Sodas, other flavors of carbonated drinks can substitute CocaCola Classic. They have the same texture and are consumed with similar foods: pizzas, burgers, snacks. All of these sodas provide the same benefittotheconsumer:aneasilyaccessibledrinkthatwillcomplementanyfood. Functionaldrinks:EnergyDrinks,EnhancedWater/SportsDrinks,teas.Functionaldrinksare rapidly growing in popularity among teenagers and young adults. They provide a more concentrateddoseofcaffeine,vitaminsornutrientsforthestudentsandathleteswhoarein need of energy. With an overlapping of target market and similar key benefits of providing energy,functionaldrinksaretakingmarketsharefromCocaColaClassic. NonSodaCompetition: Otherbeverages:Anybrandofunfortifiedjuice,waterormilk.Thereisawiderangeofdrinks availabletoquenchthirstortocomplementamealorsnack.Water,milkandallotherdrinks competetosatisfytheconsumersnextwaveofthirst.

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CURRENTSITUATIONSNAPSHOT CocaCola is standing on the edge of a crisis. In spite of health concerns, current public opinion about soda, an aging loyal customer base, and new limits of marketing to children, thecompanyhasanopportunitytocapturetheattentionofanewtargetaudience. Theyneedtofocusonconsumersbetween1324yearsoldthathasyettomakeupitsminds astoitssoftdrinkbrandloyaltyandforwhomhealthhasmoreofacosmeticthanmedical nature.CocaColaneedstoutilizecuttingedge,nontraditionalmediainadditiontoafocus ontechnologytocapturethemindsofitstargetaudience. INDEPTHRESEARCH ADVERTISEMENT This is a CocaCola bottle designed especially for Royal Caribbean Cruise line. This kind of bottles is not sold at regular CocaCola retailers. CocaCola is a partner of Royal Caribbean Cruise line, therefore CocaCola products and souvenirs are sold everywhere in the ship. This is one of the hundred examples of CocaCola product placement andpartnership. http://www.youtube.com/ watch?v=Ljf9RoQCbRg TVCOMMERCIALVIDEO DESCRIPTION WHEN&WHEREISAWIT I saw this bottle at my recent cruise vacation with Royal Caribbean. I found this bottle so cutethatIeventookapictureof it.Thebottlereallylooksmodern andoutoftheordinary.

This2010SuperBowladfeatured the sleepwalker going out in the African night walking through the dangersandchallengesforaCoca Cola.Thisshowsbrandloyaltyand how CocaCola drinkers will go above and beyond to get their favoritedrinkCocaCola

I saw this commercial at the Super Bowl. It was part of their TVcampaignfortheSuperBowl.I liked the ad, however, some peoplethinkthismightbeacopy from the Yotvata chocolate milk TVad

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http://www.youtube.com/ watch?v=EnUKurl7Fog TVCOMMERCIALVIDEO

http://www.youtube.com/ watch?v=R1NnyE6DDnQ&f eature=related TVCOMMERCIALVIDEO

In the CocaCola Simpson's commercial, Mr. Burns loses his "entire fortune" and is forced to sellhis"TreasuresofaLifetime2 for99cents."Afterallhisbelongs are hauled away, Mr. Burns finds joyinasimpleCocaCola.ThisAd showsthevaluesofCocaColaand their mission, of inspiring moments of optimism and happiness... The CocaCola Side of Life commercial. This ad is beautiful; theyusedanimationandmusicto create an effect of joy and refreshment. When you see this ad it makes you want to go and drinkaCocaCola.

I saw this commercial during the SuperBowl,oneofmyfavorites.I love the music, the tone and the way CocaCola showed their brandvalues.

IhaveseenthisadainFox,ABC, CBS and HGTV. I find it very creative and original. They put a lot into it, what I like from Coca Colas commercials is that they puttheirheartonit.

CocaColaSuccess CocaColaisseenasoneofthefoundingfathersofthemoderndaymarketingmodel.Theywere among the pioneers of advertising techniques and styles used to capture an audience. They werealsooneofthefirstcompaniestoofferagimmickwiththeirproduct,thisbeingaminiyo yo.Itwasaround1900whenCocaColabeganpresentingtheirsignaturedrinkasadeliciousand refreshingformula.Thissloganhasbeenrepeatedforoverthelast100yearssellingCocaCola allovertheworld.Throughitsintensemarketingcampaigns,CocaColahasdevelopedanimage that is reflected in what we think of when we buy CocaCola and what we associate with drinkingCocaCola.Thisimagehasbeensubconsciouslyinstalledinourbrainbytheadvertising campaigns that show CocaCola associated with "good times, giving the old formula even strongerstatusinthemarketplace. PepsisSuccess ItisclearthatPepsihasmadeseveralrightchoices.Pepsitookadvantageoftheirlateentryinto the market by lowering their prices. Before it entered the international market, it first familiarizeditscustomerswithitsproductthoroughlyinitshomebase.BythetimePepsiwas readytoentertheinternationalmarket,ithadagoodgraspofwhatitstargetaudiencereallyis. Pepsismarketingstrategies,frompasttopresentincluded:enhancingtheirdistributionsystem, knowingtheenvironmentoftheforeignmarketandfindingthethingstheirtargetbuyershadin

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common, adding new innovations and products while improving the old products, imaginative advertising, use of advanced technology, assertive promotions, trendy, sociallyaware campaigns, alliances with major corporations and expansion into other industries such as restaurants. CocaColaFailure OnebigfailureofCocaColawastheirNewCocaColaCampaign.Theywantedtoreplaceits oldformulawithasweetervariation,dubbedtheNewCocaCola.CocaColaspent$4million on market research; but the launch of New CocaCola provoked a national uproar. Market researchers had measured the taste but had failed to measure the emotional attachment consumers had to CocaCola. There were angry letters, formal protests and even lawsuit threats,toforcetheretentionofTheRealThing.Tenweekslater,thecompanywithdrewNew CocaColaandReintroduceditscenturyoldformulaasClassicalCocaCola PepsisFailure Just like CocaCola, Pepsi had an equally absurd ad campaign to accompany a new product Crystal Pepsi. Although Crystal Pepsi was indeed clear in color, it tasted pretty much like original Pepsi. The concept in itself was ridiculous; no one was claiming Sprite or 7UP to be particularly pure in comparison to its darkersyruped soda peers. Regardless of the obvious fallibility of this advertising claim, PepsiCo pushed ahead with quintessential 90s commercials. While Crystal Pepsi had done well in initial test markets, the actual substance of the product failed to live up to the hype. The campaign was a complete failure and Crystal Pepsi was removedfromthemarket. STATEMENTOFPROPOSEDRECOMMENDATIONS HowPepsineedstorespondtoCocaColasmarketingstrategies Pepsi needs to be innovative and creative with future campaigns. Whenever CocaCola does somethingnew,Pepsigoesstraightbehind.Pepsineedstocreateanemotionalconnectionwith theirconsumersjustlikeCocaColadoes.InafewoccasionsIhaveaskedforaCocaColaandthe waiter would bring me a Pepsi, arent they supposed to tell you that they have Pepsi not CocaCola, maybe getting consumers used to the word Pepsi would be a good tactic to create product differentiation. Pepsi needs to create memories, emotional connections that wouldattachtheirconsumerstothebrand.Theyneedtochangetheirtargetaudienceandfocus inthenewgenerationofconsumers.

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Whyitsimportanttounderstandyourcompetitor. Tobesuccessfulyouwillneedtounderstandwhoyourcompetitoris,whattheydoandwhat youneedtodotomuscleinontheparty.Itsveryimportanttoanalyzetheeffortsthatyour competitorhasbeenmakingtoretaintoppositionsinthemarket.Analyzingyourcompetitors willhelpyoutrackwhattheyaredoing.Thisnotonlyenablesyoutodiscoverareaswhereyou needtofocusontostartimproving,butalsohelpsyouexplorenewmethodsandstrategies.

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RESOURCES http://inventors.about.com/od/cstartinventions/a/coca_cola.htm http://www.dailyfinance.com/company/thecocacolacompany/ko/nys/topcompetitors http://www.thecocacolacompany.com/investors/pdfs/form_10K_2009.pdf http://www.ameribev.org http://www.thecocacolacompany.com/ourcompany/mission_vision_values.html http://www.thecocacolacompany.com/ourcompany/awards_recognition.html http://www.beveragedigest.com/pdf/top102007.pdf http://wiki.answers.com/Q/What_are_the_key_success_factors_of_coca_cola

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