The Cola drinks industry is a highly competitive market that relies on various methods of marketing communications in reaching its target audiences. As a newly appointed Industry Analyst in the Cola drinks industry, I will produce a comparative analysis of the marketing communications and mix of Coca-Cola, Pepsi and Virgin Cola. I will briefly mention the smaller companies, such as supermarket own brands.
I will research the different promotional tools, i.e. advertising, sales promotion, public relations, personal selling and direct marketing, each company uses. I will research to what extent they utilise these tools and how they use them in ‘fighting the battle’ for increased market share. I will explore the various media used, the message that the company is giving off, the image that is projected and how well the target audience is being hit.
The cola industry is worth millions worldwide. The major companies in the market are Coca-Cola, Pepsi, and Virgin Cola (Appendix 1). The turnover for 2001 reflects the market share of each company. Coca-Cola had almost 40% of the whole carbonated drinks market in the UK in 2001 (Appendix 3). In 2001 it was the #1 top FMCG good with Pepsi not far behind at #10 (www.hoovers.com).
Coca-Cola and Pepsi are American, while Virgin Cola is British. Millions each year are spent on advertising and promotions in order for the market leaders to keep their places at the top and to prevent colas such as Sainsbury’s Classic Cola and Marks and Spencer’s cola from increasing their market share.
An Atlanta pharmacist John S. Pemberton invented a syrup, cola, in 1886. It was first thought of as a cure for headaches and will continue to be advertised as a medicinal cure until 1903 (www.ciao.co.uk). Mr Pemberton’s bookkeeper Frank Robinson came up with the Brand name Coca-Cola, which it has stuck with because it’s easy to say whatever language you speak. The name may have contributed to its worldwide success as Coca-Cola operates in 200 countries. The brand also includes Fanta, Sprite, Lilt and Dr. Pepper, among other soft drinks.
Coca-Cola was first brought to Britain in 1900; it was sold through soda fountain outlets in Selfridges and the London Coliseum. Coca-Cola was registered in 1893. Its famous contour bottle being invented in 1915 is one of a handful of packages that is patented (www.coca-cola.co.uk). The brand name Diet Coke was introduced in 1982, and is the worlds most popular diet drink.
Coca-Cola is sold in supermarkets, convenience stores, vending machines and fast-food outlets. The Coca-Cola promise – Coke should “always be within an arm’s reach of desire” (Robert Woodruff former chairman 1923).
A pharmacist called Caleb Bradham, from North Carolina, in 1893 invented Pepsi. It was originally called “Brads Drink” and was named Pepsi in 1898 when it received its first logo. The logo is to change 9 times, each time giving a newer image. (See Appendix: The Evolution of the Pepsi-Cola logo). The ‘swirl’ bottle was introduced in 1958.
Pepsi sold in 195 countries, was the first consumer product to have a jingle, in 1940 “Nickel, Nickel” was broadcast nation wide on radio. Pepsi was the first consumer product to use a celebrity endorser, Barney Oldfield, who appears in ads in 1909. Pepsi began to use competitive advertising when it went head-to-head with Coca-Cola with the Pepsi challenge (1975), (See Appendix: The Pepsi Challenge). (www.pepsi.com).
Pepsi is well known for its celebrity endorsements, current pop stars include Gareth Gates, Britney Spears and Shakira. In 1984 Pepsi became “The Choice of a New Generation” fronted by Michael Jackson he returned in 1988 to star in a four part advertisement called “Chase”. It was hailed by the media as “the most watched commercial in advertising history.”
Virgin launched itself into the ‘cola war’ in November 1994. So far it has failed to overtake Pepsi in the UK as Richard Branson claimed it would, and unlike Pepsi or Coke it’s relatively hard to find cans of Virgin Cola on sale anywhere. Cross-promotion has been Virgin Cola’s main weapon, serving Virgin Cola on Virgin Atlantic flights and in Virgin Cinemas, until they closed down. For a while bottles were called ‘The Pammy’, an attempt to link their curvy nature to actress Pamela Anderson at the time of the small bottle’s launch. Virgin Cola has put in an occasional appearance on popular US sitcom ‘Friends’, but then so has Virgin Atlantic and Mr Branson himself. (www.bbc.co.uk)
Virgin Cola have developed ‘coin-less vending’ it’s a concept that allows for the consumer to dial a special number unique to the machine, and products are dispensed immediately with payment debited from the Virgin Mobile account. Initially the vending machine will be located in one of the company’s Megastores. This is the beginning of ‘m-Commerce’. There is much hype surrounding the opportunities that may be possible through WAP. (www.mobile-phone-guide.oc.uk)
All supermarkets make their own brands of cola, which vary in quality enormously. Many are only really good as mixers, some are too sweet, but a few manage to be acceptable. Sainsbury’s caused a commotion when they introduced their own-brand called ‘Classic Cola’, which had a vaguely Coke-like stripe under its somewhat boring logo. They removed the stripe after complaints from Coca-Cola, but the resulting publicity together with a surprisingly nice flavour made Classic Cola sell relatively well and become a minor brand in its own right. The British Basketball League continues to be sponsored by Classic Cola, for example. (See Appendix 4 for a full list of cola brands in the UK.)
I will obtain primary data through questionnaires to find the publics opinion on cola firms and which marketing communications have been successful. I will also travel to various supermarkets to see current promotions and displays. I will send off for student packs.
I will gain secondary data from the company’s websites, which have information on the latest promotions, sponsorship deals and company history. The Internet will provide me with additional up to date information on the soft drinks industry. Books will give me information on the different types of marketing communications.
All Coca-Cola’s adverts are developed centrally in Atlanta, they are offered to regional companies for use if they want (Chris Fill). Coca-Cola advertise on television, they also use radio, print media and outdoor advertising. Coca-Cola has used many slogans over the years when advertising (see Appendix 5). Coca-Cola uses an Awareness, Availability, Affordability and Acceptability approach (Adcock et al). They have already achieved Awareness with 94% global recognition.
Coke uses sales promotions to attract attention in the form of coupons, contests for example the Harry Potter promotion where you have a chance to win a range of prizes (Infotrac), gig tickets, price reductions, price packs, commemorative packaging. (See Appendix 6)
Coca-Cola’s public relations are excellent. There are countless news stories about Coke in the newspapers and on the Internet. (See Appendix 7). They invest in sport sponsorship heavily sponsoring a range of sports. (See Appendix 8). They also support the valued youth initiative, which helps 14-15 year old drop outs build self-confidence. They run a Sweeper Zone “Keep Britain Tidy Campaign” with banners, posters and bins supporting the environment since the sixties.
Coca-Cola uses direct marketing in the form of telemarketing (see Appendix 9). Coke uses on-line marketing by way of a website and the “cashless on-line marketing auction” when it teamed up with auction site (www.qxl.com). Ring pulls and labels were used as money to bid on-line.
Pepsi also advertise on television, radio, magazines and billboards. They use big stars in their advertising campaigns. In addition to the ones I have mentioned Lionel Ritchie, The Spice Girls and most recently Cindy Crawford. Pepsi has differentiated itself form Coca-Cola by staying young and trendy with the Pepsi Max adverts using extreme sports, an increasingly popular activity among younger generations.
Pepsi uses sales promotions in the form of buy one get one free, competitions and promotions linked with dance club ‘Cream’, music offers, price reductions, specially priced packs and bottles with their latest and most popular celebrity endorser.
Pepsi has good public relations there are plenty of news stories and web sites talking about Pepsi, it’s the world’s most famous #2 multi-billion dollar brand (www.adbrands.net). Pepsi sponsor football star and captain of the England team David Beckham. The Pepsi Chart show with Dr. Fox appears on capital radio. Pepsi own the Trocadero in London.
Pepsi uses Internet marketing by use of it’s website. It used a form of direct marketing by using the “collect and get” campaign where in exchange for ring pulls and labels you could purchase high-tech goods at cost price, when you return the ring pulls you will have to provide your address this is how Pepsi would build up profiles of the public in databases.
Virgin Cola used television to advertise near their launch with the Rollercola girl as their cartoon personality. They advertise in ‘teen’ magazines. Recently there hasn’t been much advertising from Virgin Cola or not any that I am aware of.
Virgin Cola offers sales promotions linked to Virgin Megastores, and cheap flight offers, with discounts on Virgin Phones too. Virgin brought out the ‘Pammy’ bottle because the ‘curvy’ bottle resembled Pamela Anderson’s figure.
Virgin has weak public relations, as there was little on the web about Virgin Cola. However, they do partake in sports sponsorship e.g. the Junior Squash Development Program launch tour of South Africa in Easter of 2002. Virgin Cola also raised ï¿½100,000 for Red Nose Day. It sold special Comic Relief cans and bottles and organised a host of exciting events.
Virgin Cola have their own website featuring the Rollercola girl. Where you can e-mail your thoughts and get downloads for your computer.