Coca-Cola And Pepsi And Brand Awareness

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Brand Awareness is the extent to which a brand is recognized by consumers, and creating brand awareness is one of the key steps in promoting a product especially commodity-related things like soft drinks. The Coca-Cola Company (KO) and PepsiCo, Inc. (PEP), are dominant players in the soft drinks market. Both companies own a strong portfolio of liquid refreshments and several brands that generate more than $1 billion in revenues. Cola is the feature product for both companies; Pepsi-cola and Coca-cola (coke) are the perfect substitution for each other since these two essentially taste the same and have similar pricing. However, the demand for coke is much higher than Pepsi-cola, and the drink is reportedly recognized by 94 percent of the world’s …show more content…
Coca-cola and Pepsi have been rivals for years, which has resulted in high advertising costs for both companies. While Coca-Cola has clearly exceeded its competitor in the form of advertisements, Pepsi still spends over $1 billion per year, on average, on advertising and coca-cola $2 billion per year. From 1993 until 2006 Coca Cola spent $ 26.7 billion on advertising, and it is one of the first companies ever to spend more money on marketing than on the product itself. One can say that it is not the product itself that made Coca Cola one of the most recognizable brands in the world; it is the exceptional marketing around …show more content…
Many major food outlets like McDonald 's, Subway, and Burger King all sell Coke rather than Pepsi. Thus, if you want to buy a drink, you will likely to find a coca-cola product. Suppose you have no specific preference between the two and you wanted a cola soft drink. As a rational consumer you would choose Coke, saving time and money to minimize your travel costs. Hence Coke has a convenience advantage. Due to this advantage, a consumer would purchase Coke more often and thus leads to brand loyalty and continued consumption of Coke. In addition, food outlets typically only hold one of the two brands. For example, when you walk into a McDonalds, normally only Coke is available to the consumer rather than both brands competing against each other. This results in an in-store monopoly effect. As Coke is the only option in most food retailers and restaurants, we tend to drink it more and thus forms the brand loyalty effect. As brand loyalty leads to higher demand for Coke, food outlets would rather purchase Coke for their inventories, rather than Pepsi. Therefore as more businesses stock Coke instead of Pepsi it amplifies the convenience advantage, and thus creates Coke’s Dominance

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