Competing Companies Coca-Cola vs Pepsi

The following sample essay is about Competition between two competing companies. Read the introduction, body and conclusion of the essay, scroll down.

Competition between two rival companies can certainly be violent and aggressive, however it is also a positive-sum game. When looking at the situation as an economist, one can see that competition is the driving force behind the business to cut costs, innovate, and advertise efficiently. And as a result of this rivalry, consumers are able to consume better quality goods and services at a negligible price.

If we see competition as a game of chess, we are only able to see one side of the game which overlooks consumers. It is indeed evident that when the Coca-Cola Company lowers their market prices, it wins customers who are interested in a cheaper deal. It is the same when Pepsi Corporation hires Kendall Jenner for an advertising video campaign. For both the companies, it is a zero or negative sum game when the competition forms and campaigns the same strategy of negligible prices or advertisement spending.

However, this is only true when we see competition in a static view. Competition presents a positive, effective vision of rivalry that stimulates both cola-flavoured soda companies. The rivalry between the competing firms is not a form of warfare, rather it is a competitive oligopoly and duopoly, as both companies control the entire market for soda colas.

A duopolistic competition, wherein another supplier rivals the leading supplier to dominate the market, in the context of the soda market, there isn’t much impact on the price compared to other aspects.

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Based on duopolistic substitutional goods like Coca Cola and Pepsi, the competition mainly relies on the brand advertisement and promotional activities. However, consumer preferences still varies on any mention of brands. A neuroscience journal that showed an experiment about a part of the brain was activated when a participant in a blind test drank Coke or Pepsi. MRI, magnetic-resonance imagery, has proved this experiment to be true. Brand awareness leaves a mark on our minds which is why shoppers buy Coke than Pepsi in supermarkets when two brands always appear side by side. Shoppers’ preference towards coke is most likely due to its advertising. According to an article, the firm based on Atlanta spends more than 2 billion dollars a year on publicity, surpassing Pepsi more. And for this reason, Coca Cola and Pepsi do not compete on price but on promotional drives connected specifically on tackling another area or engaging in new packaging. Let us take a detailed look of this:

When looking at the website of both competing soda-companies, one can see the difference in the layout, color scheme, and form of advertisement presented. With Coca Cola, their signature color of red is branded all throughout the website. Presently, it is conferred with a competition-based advertisement that draws consumers in purchasing their product using the current season; summer. With the use of the various summer moments and must-see events, they are able to draw the attention of various audiences, from young to old, as the summer events that were advertised targets different age groups. On the other hand, the trademarked blue color of PepsiCo is spread throughout the layout of their website. Various tabs are present which indicate the company’s information, goals, other brands, and news. The website itself only has information regarding their products and latest stories tackling innovations that can impact the contemporary world. This form of advertisement merely shows product placement. However, one key difference between the websites of Coca Cola and PepsiCo is that Coca Cola only shows their soda-flavoured drink while PepsiCo shows their drink and other products that they are trying to sell. PepsiCo does not only market soda-flavoured drinks, they also advertise fruit juices, oats, protein drinks, smoothies and such. PepsiCo has taken the lead with regards to diversification into other beverages and products.

In the aspect of promotional video campaigns of both companies, Coca Cola is seen to garner more views and attention compared to Pepsi’s promotional campaign due to the ethical differences. Coca Cola gained 53 million views and counting on their video campaign, using only regular actors, due to its positive and moral message. On the other hand, Pepsi’s promotional video wherein they used an A-list celebrity, Kendall Jenner, to acquire more views backfired against them. Pepsi’s video campaign got taken down due to its ineffectiveness to connect with the viewers and the method they had used which was unethical. People viewed it as downplaying the issues of real world social justice movements. Basically, it commodifies real world political struggles for personal gain. Moreover, it does not help that there are strong allusions to Black Lives Matter in the ad and yet the conflict is resolved by Kendall Jenner, a wealthy white woman with a Pepsi can. The ad itself capitalizes on the racial tensions within the country, as a result, Pepsi’s sales dropped drastically because of the video. As the modern day activists are in the youth age group, Pepsi’s brand perception with millenials has dropped, with the age group’s purchasing level at its lowest level in the three years according to YouGov BrandIndex. Coca Cola’s video tackled the globalization of cultures using their bottles- this shows positive cause and as a result, brought relevance and beneficial change in the world. Pepsi’s video did none of these things. They merely relied on a famous celebrity to capitalise on current real world problems which makes the ad so abhorrent and inexcusable.

Lastly, competition is what urges innov Competition is still very much on-going though it takes in various forms. Whether it is to promote, and create and maintain loyalty to the brand through the use of hiring celebrities and stars like Olympic boxer Marlen Esperanza for Coke and amateur wrestler Henry Cejudo for Pepsi; or in the form of packaging and presence of their products in supermarkets, there is a steady rivalry between Coca Cola and Pepsi to achieve exclusive partnerships with such retailers as it had become a method to generate sales. Products like Coca Light, Pepsi Light, Coca-Cola Zero, Pepsi Max, Coke Life and Next Pepsi has not always existed and just later came on. PepsiCo had initiated the challenge with using artificial sweeteners instead of saccharine in 1964. Regular consumers of Coca Cola will never forget the fail of a product that is New Coke which is slightly sweeter version of the original Coke in 1985 to celebrate the brand’s hundredth anniversary.