OPPapers.com

Cola Wars

A Tale of Two Colas: The Cola Wars
PepsiCo. Incorporated and The Coca-Cola Company are the two largest and oldest archrivals in the carbonated soft drink (CSD) industry. Coca-Cola was invented and first marketed in 1886, followed by Pepsi Cola in 1898. Coca-Cola was named after the coca leaves and kola nuts John Pemberton used to make it, and Pepsi Cola after the beneficial effects its creator, Caleb Bradham, claimed it had on dyspepsia. The rivalry between the soda giants, also known as the "Cola Wars", began in the 1960's when Coca-Cola's dominance was being increasingly challenged by Pepsi Cola. The competitive environment between the rivals was intense and well-publicized, forcing both companies to continuously establish and implement strategic variations as a means to create a competitive advantage. The competition fostered and stimulated continuing growth in an industry which many predicted in the early 1970's to be on the verge of maturity. Reasons for the prediction arose from the fact that further growth of per capita consumption of soft drinks is fairly static regarding how much people are able to consume on a daily basis. Furthermore, both Pepsi Cola and Coca-Cola offered a limited number of products that "looked the same, tasted the same, and bubble into foam the same", thus questioning whether further substantial growth in sales was possible.
Pepsi Cola and Coca-Cola's marketing strategies have been as indistinguishable as the products themselves. Relying on colorful images, lively words, beautiful people, interesting bottle designs, and contagious jingles, Pepsi and Coke propelled their respective products into the American and international mainstream. The changing faces of Pepsi and Coke's management, however, facilitated the brand image according to their own style and what they saw as an advantageous competitive approach. This style and approach is what makes Pepsi-Cola and Coca-Cola distinguishable.
The objective of Coca-Cola's...