Pepsi vs Coca-Cola Marketing Campaigns - Dissertation Example

?‘Comparison of the marketing campaigns of Pepsi versus Coca cola internationally’ Contents Introduction Literature Review 2 Research Aims and Objectives 3 Aim 3 Methodology 4 Research Philosophy 4 Research Approach 5 Non-Empirical research 5 Quantitative/Qualitative 5 Research Design 6 Purpose of study 6 Study settings 6 Time Horizon 6 Conclusion 6 References 6 Introduction The recent economic downturn has had severe impact on different type of industries ranging from consumer goods to financial products. This is because basically the buying and financing power of the consumer has greatly depreciated because of the slow economies. The initial hit was witnessed by the financial sector as can be expected with all economic downturns. The real estate sector and automobile sector followed because there was a lot of inflated demand and price in these two sectors. However the weakened buying power of the consumer has also affected the consumer goods and Fast Moving Consumer Goods (FRMCGs). This is because in general due to reduced jobs and lack of earning opportunities the consumers have reduced their spending on luxury items. This is even more evident in weaker economies and badly hit markets. As can be expected with an economic downturn, the reduced demand leads to more vigorous sales tactics. The companies try to increase sales or keep the sales levels on pre recession levels by introducing newer products. Many industries even face their worst nightmare of price wars. In order to increase sales the competitors try to reduce their gross profit margins. This strategy however mostly leads to suffering of the entire industry. The cola industry has evolved much over the last few decades. There was a time when the cola wars were in their full might. The competition between Coca Cola and Pepsi is an old rivalry. The battle for international dominance is now not being fought in United States or Europe. This was the case during the cola wars. The new turf for this battle is none other than the emerging markets with their large populations and booming economies. The two giants have deployed interesting and diversified marketing strategies to dominate global markets. The term diversified here describes the unique strategies adopted for each different region. A very interesting example is the diversified portfolio of Pepsi China which will be studied and analyzed in detail. Literature Review Pepsi and Coca Cola (Coke) have always been at war with each other and this war has made their numerous encounters known as The Cola Wars. Today, both brands are well recognized all over the world where everyone has heard of the both brands at least once in their life. Whether its intense penetration strategy by flooding the market with their drinks or branding the logo on events and even celebrities, these two cola drinks have made sure people never get tired of them. It’s interesting to see how the two launched themselves initially and later transformed themselves into global warriors. Both used different strategies for this purpose and even though both of them have had their ups and downs, they have remained persistent which has left the brand impression on the minds of the masses. The very first marketing campaign in 1969 that Pepsi launched was based on the idea to attract youth and the young generation so that the drink would have something “cool” to associate themselves with (Bachmeier, 2009). The slogan “You’re in the Pepsi Generation” led the brand itself later on as well when the company continued to associate itself with the media and the popular entertainment figures so that it can maintain its hip image. Pepsi’s association with Michael Jackson and his famous Billie Jean song was one of the best decisions that the brand made which led the drink to be propelled to unlimited heights. The slogans of 1984 till 1997 which played on the notions of being young and hip made the brand launch itself with the same theme outside its physical borders as well geographically. With the logo of the “globe” logo and the association with media figures thrust the brand internationally despite the fact that Pepsi committed its fair share of blunders as well. One of these blunders was the launch in Japan when the company didn’t consider the temperamental sensitivities of the international market and went head to head with comparative advertising with Coke and launched its Pepsi Taste Test Challenge which wasn’t well received. The advertising campaign mainly consisted of portraying a boring image of Coca Cola and a “cool” and amazing picture of Pepsi (Monye, 2000.). This happened in Argentina as well in the 70’s (White, 2002). The Taste Test Challenge was launched so that consumers can differentiate between the two drinks and the test favored Pepsi which aggressively pursued this strategy of comparisons to augment its notion of better quality. Even though it wasn’t well received in some areas of the world, in others, it got Pepsi a considerable market share. Coca Cola also known as Coke also pursued an aggressive strategy to make its name a common thing in the world. With the brand formula originally developed way back in 1886, the company has grown immensely since then and the formal group being established around 1986-1991 when the separate small companies merged to form the Coca Cola Enterprise. The company has always tried to associate itself with a being available to everyone and the fact that it’s what people need for a “good time”. The idea is very basic and simple: Have a good time with Coca Cola, or basically, Coca Cola will add a good flavor in a person’s life. The company has believed in a very aggressive distribution strategy so that Coke can be on every corner shop in every street in every city of any country. This has made Coca Cola one of the most recognizable logos in the world1. The company executives have always stressed the importance of acknowledging the local sensitivities so that no group is offended and more markets can be tapped. That’s why the image of coke in one country might be of a daily consumed drink whereas in others it can be of a drink for special occasions (Delphos, 1994). Moreover, in other areas, Coca Cola had to reinvent its serving size literally so that it could be affordable for the masses (India) and yet again in others; the company had to get its product on maximum stands to get the brand recognized and thus the aggressive distribution strategy (China) (Pride et.al, 2009). The company has basically relied on targeting all age groups and associating itself with good times with tag lines such as “Coke Adds Life” in the 70’s, “Coca-Cola Enjoy” in the Millennium2 or “Open Happiness3” which is the latest one, is the theme of sharing the most simplest of sources of bliss in a person’s life. Research Aims and Objectives Aim The aim of this research study is to analyze the different marketing strategies of the two largest beverage industries in the world. The research would aim to compare and contrast the marketing strategies adopted by these two giants. This is because analyzing these marketing strategies would not give the real and complete picture. As these are the two largest competitors in international beverages, thus they are major competitors for each other. Therefore it would be more conducive to analyze their strategies in contrast to each other because the strategies of marketing would depend on each other. Moreover the research would also explore the marketing deficiencies in this industry and how these companies can overcome these deficiencies. The following objective can define this research effort: To understand the marketing strategies adopted by Pepsi and Coca Cola To study and contrast the marketing strategies adopted for different regions To identify deficiencies in the marketing efforts and recommend methods to make improvements Methodology The cost is a major factor which determines the research methodology of any study. The research proposal and the research methodology therefore also work as feasibility for a research. The cost estimates of a research can be assessed using this information. The following aspect of research methodology has been identified as important to this research: Research Philosophy The research philosophy acts as the glue which holds a research together and integrates the entire research process. Thus it is important to have a sound research philosophy which can play an integral role in building an affective research. This research philosophy can act as a draft for other important aspects of the research which further increases the importance of research philosophy. There are two major categories of research philosophy relevant to this research. These are the phenomenological approach and the positivist research philosophy. To understand the difference the following table has been developed:   Positivist paradigm Phenomenological paradigm Basic Belief The world is external and objective The world is socially constructive and subjective   Observer is independent Observer is part of what observed   Science is value-free Science is driven by human interests Researcher should Focus on facts Focus on meaning   Look for causality and fundamental laws Try to understand what is happening   Reduce phenomenon to simplest elements Look at the totality of each situation   Formulate hypotheses and then test them Develop ideas through induction from data Preferred methods include Operationalising concepts so that they can measured Using multiple methods to establish different views of phenomena   Taking large samples Small samples investigated in depth or over time Figure: 1 (Source: Easterby-Smith et al., 1991:27) The review of the table shows us that the phenomenological approach would be a better choice for this research study. This is because the positivist research approach basically looks for definite and precise answers. The objective of this research is not to look for precise answers but in fact to study and subjectively analyze the data available thus the phenomenological approach is more conducive to research. Research Approach The research approach is determined by the research philosophy and the resources available to the researcher. There are two broad categories of research approach. The researcher first of all has to decide if an empirical or non-empirical research would be needed for the research. Moreover if the researcher believes that both empirical and non-empirical research is required than the level and direction of these should also be determined. Non-Empirical research The non-empirical research basically points towards secondary information. The markets of Pepsi and Coca Cola are spread over many different continents and numerous countries. Thus it would be impractical for the researcher to analyze and completely study empirical evidence, as it would not be easy to gather this empirical evidence in the first place. Thus the non-empirical research is the most important aspect of this research. The resources available on company reports and websites would be reviewed. Moreover all the previous research studies conducted on this topic would also be discussed in a comprehensive manner. Quantitative/Qualitative The quantitative and qualitative data would be gathered for this research. The researcher has the option of either conducting a quantitative, qualitative or mixed method study. The most comprehensive is a mixed method study. This approach to would also be helpful in giving a comprehensive analysis which is supported both by descriptive and quantitative data. Research Design Purpose of study There are different purposes of conducting a research. The researcher can conduct a correlation analysis to study the affect of movement of one variable on another. The researcher can also test a hypothesis using quantitative data. However both these types of purposes are not related to this research study. The purpose of this research study is exploratory in nature. This is because the research aims to explore the marketing techniques of two companies. Study settings The purpose of this study is exploratory in nature and data being gathered is mostly non-empirical in nature. Thus the study settings would be non-contrived as contrived study settings are more relevant in causal or correlation studies. Time Horizon The study would be conducted in a horizontal time frame this is because it’s a one shot study. As the study setting are non-contrived and variables are not likely to change over time. Conclusion The complex business environment in the international markets has increased the need for this research study. This study would be instrumental in being a road map for other companies and help them establish their own marketing plans in a tough economic environment. The research methodology is aimed at analyzing the different strategies adopted by the two companies therefore it can also be used to predict the future marketing strategies. References Sekaran, U (2004). Business Research Methodology: A skill building approach. Illinois: John Wiley& Sons. (2008).Types of Designs. Research Methods Knowledge base. (http://www.socialresearchmethods.net/kb/destypes.php) Brannen, J. (2006). Mixing Methods: The Entry of Qualitative and Quantitative Approaches into the Research Process. International Journal of Social Research Methodology. Bizcovering. 10 Instantly Recognized World Famous Logos. [online available] http://bizcovering.com/major-companies/10-instantly-recognized-world-famous-logos/2/ Bachmeier, K., 2009. Analysis of Marketing Strategies Used by PepsiCo Based on Ansoff's Theory. GRIN Verlag. Delphos, W. A., 1994. International Marketing Resource Guide. DIANE Publishing. Monye, S. O., 2000. The handbook of international marketing communications. Wiley-Blackwell Pride, W.M. Hughes, R. J. Kapoor, J. R., 2009. Business. Cengage Learning. White, M., 2002. A short course in international marketing blunders: mistakes made by companies that should have known better. World Trade Press. Read More