There’s an age-old question we’ve all been asked: Pepsi or Coke? Coca-Cola Company uses Differentiation Strategy Coca-Cola Company utilizes the differential method to gain competitive advantage. Coke was the first soda ever created back in 1886. Get instant access to my Marketing Library and all of its ebooks for FREE right now, Join the first Marketing community in The answer is very logical: it is all about branding and creating images in people’s minds. In spite of the fact that the products of Coca-Cola and PepsiCo are similar in taste … The current slogan of Coca-Cola is “Share a Coke, Open Happiness”. The target markets of energy drinks, Red Bull and Gatorade. Coca-Cola and Pepsi are the leaders of the cola industry, with a similar product, however they have quite different competitive strategies in terms of structure, marketing, production and delivery. Hello readers! In this case, the value of the cola in Pepsi’s larger bottle is higher for Customers (but not twice as high), and the increased Strange Differentiation (Niche) is representative of the additional appeal Pepsi has to some Customer Demographics. Pricing Strategy used by Pepsi v/s Coca Cola. Cognitive Biases in marketing are key to make marketing campaigns successful and are strategically applied by firms at various consumer touch-points to directly influence consumer decisions while interacting with products. Pepsi has undergone significant change since it was introduced to the American market in 1898 and in India in 1989. 12 years later to this, Pepsi aka Pepsi Cola was established in the year 1898 by Caleb Bradham in North Carolina and that is where the struggle to … Why this definition, Coca-Cola has unquestionably chosen a differentiation strategy. I also talked about how Cialis came about and did a fantastic job of creating a great product backed up by a unique positioning. In early 2010 PepsiCo underlined with a much-noticed acquisition of its two biggest bottlers, The Pepsi Bottling Group and PepsiAmericas, a change in strategy. I rest my case. And their marketing strategy is based on this rivalry by making delicious tastes that are different from coca-cola and they claim that 51 percent of people chose Pepsi. In the battle between Coke versus Pepsi, there are many factors to consider when choosing a winner. It uses mass marketing strategy to target the groups of the customers of different demographics and geographic regions. However, Coca-Cola is the leader of the cola market, people’s favorite and its brand is worth much more than that of Pepsi. In the last article I discussed Positioning, the need for it and how does it really work to create a product that is unique. Company has successfully positioned itself on the following standards: – Pepsi Business Growth Strategy – Pepsi’s soft drinks are popular because of their diverse flavors. Product Differentiation is the Secret Ingredient (Pepsi vs. Coca-Cola), Cognitive Biases in Marketing – Games EdTech Companies Play. In general, Coca-Cola follows a differentiation strategy. Coca-Cola emphasizes relationships while Pepsi focuses on entertainment like sports and music. This generic strategy focuses on cost minimization as a way to improve PepsiCos financial performance and overall competitiveness. Pepsi, which only entered China in 1982, is trying to be the leading soft-drink producer in … How then does Coca-Cola differentiate itself from the Pepsi drinks? This is an unbiased comparison of the two of the most popular carbonated beverages in the world -- Coke and Pepsi. This generic str… It will make you adjust fast to the dynamic business environment. Get in touch with us at darpan (at) superheuristics (dot) com. Coke vs. Pepsi: Product Differences When you taste Coca-Cola, you cannot immediately tell how it is different to Pepsi. In this regard, you have to ensure that you provide your customers with a reason to constantly seek your offerings. For example, in 2012 Coca-Cola reported $2.06 billion profit equivalent to 88% a share, which amounted to $1.9 billion of profit (81% a share) as reported in 2011. Read on. PepsiCo is a company known for a highly diversified product portfolio, both within the beverage industry and in other industries such as the consumer packaged goods industry… But often times your product does end up being just another forgettable substitute for a product already out there in the market, doesn’t it? Coca Cola products are sold in many different types of packages and sizes displaying the Coca Cola logo on all. In this way, Coca-Cola has differentiated its drinks from that of Pepsi to ensure it serves the needs of its consumers. The organizations target one market segment or the entire market by using this strategy. [Case Study]. The public strongly prefers one or the other; you generally won’t find someone who enjoys both. In 2014, Coke’s “Share a Coke” campaign enjoyed popular success with fans, and the company continued to capitalize on its success in 2015, when it rolled out “Share a Coke 2.0.” When creating a new product your aim, generally, is to not be yet another similar product on the market like your competitors’ products. Hello readers! Pepsi and Coca-Cola are great while referring to the segmentation strategies of all the companies in the world. Its snacks and beverages are popular in more than 200 countries. Coca-Cola Co. and PepsiCo, Inc. are very similar businesses in terms of industry, ideal consumers, and flagship products.Both Coca-Cola … Here are just 2 interesting examples of segmentation strategies. In 1979, it returned with a shipment of 30,000 cases from Hong Kong. When you assure customers of the value they obtain from your offerings, then you tend to encourage brand loyalty. Much proof would indicate that Coca-Cola has definitely chosen a differentiation strategy since its early days. The current marketing strategy adopted by PepsiCo Inc. is definitely one that caters to its global standing. Coca-Cola and PepsiCo are therefore upstream manufacturing firms, which sell their products to downstream bottling and distributing firms. It has an almost similar content composition thus people have a behavioral preference for one of the drinks over the other. Differentiation – Coca-Cola or Pepsi. Since Pepsi came out at a time when Coca Cola already had a head start in the market, its market strategy began with differentiation - an attempt to establish its product as one that is unique in taste and quality. They are aware that there are substitutes that are cheaper or of higher quality than what you provide. 2012). When I talk about product differentiation, I would like you to think of the product not just as the tangible product that we are hardwired to think about. That book is a must read whenever you find the time. What is Transnational Strategy in International Business? The differentiation is in the story that they tell you. Chapter 7, Product Differentiation, really had a lot of good information regarding this strategy. SWOT Analysis Thus, a differentiation strategy helps create barriers to entry that protect the firm and its … If you feel this article was beneficial, you can share it through the links on the left. The current CEO of Pepsico is Indra Nooyi under whose leadership, the brand has continued to expand its business and transform its product portfolio. The local brands are also in the market to compete Pepsi. Pepsi has 48.9% share of market & it is situated in an environment that is ever changing and dynamic because coca cola is holding 30.9% share & Cadbury Schweppes 8%. Both of these well-known brands belong to famous Forbes list: “The World’s Most Valuable Brands”, Coca-Cola is on 4th place and Pepsi is 28th. The advertising slogan of Pepsi in India is “Youngistaan ka Wow”. The intense rivalry between carbonated soft drinks (CSD) giants, Coca Cola and Pepsi is the stuff of legends. Target Markets of Subway, Pizza Hut and Dunkin Donuts, Positioning strategies of Hyundai and Honda, Positioning Strategies of Himalaya and Johnson & Johnson, Target Markets of Greenwich Pizza and Yellow Cab Pizza. All Rights Reserved. Coca Cola aka Coke was established in the year 1886 in Atlanta by a pharmacist named Dr John S. Pemberton. While cost leadership is the main generic strategy sued by Coca Cola, it has also used differentiation to gain an advantage over the competitors. This decline has largely been contributed by a growing number of local beverage companies. This is the kind of differentiation that I want you to think about in your organization’s offerings. Focuses on the competitive interaction between Coca-Cola and Pepsi-Cola specifically and the effect their dominance has on the other industry participants. Find out interesting articles about many different marketing tactics in the blog thesocialgrabber.com. Here, I share with you my study of what makes the Zoho Marketing Strategy, probably the best marketing strategy that I saw in the field of CRMs. Study tried to identify the impact of coke and pepsi differentiation strategy strategies for a Post-COVID world value drink. An Overview interesting articles about many different types of differentiation that you make and did a fantastic of... – Coca-Cola and Pepsi serve up new strategies for a Post-COVID world to guide your organization ’ s History 7. 0.6 % Zamzam Cola organization on how coke and pepsi differentiation strategy has a high level of product differentiation IIM ), Biases... 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