Top Dog Versus Underdog

When it comes to business rivalries, perhaps none are as big as Coca-Cola versus Pepsi. They’ve been relentless at each other’s market share since Pepsi came to market over 130 years ago. Coca-Cola has traditionally held the Top Dog status while Pepsi has slowly gained market share over the years and in 2020 surpassed Coca-Cola at $188.6 billion as of May 2020 while Coca-Cola had a market cap of $185.8 billion. (Maverick, 2020).

What is the brand strategy being used by the top dog?

Coca-Cola enjoyed the reign of being first to market and quickly reached dominance in the US. and took to gain a global market share. In their early days, they were quick to align with several food chains and such. For the last few decades Coca-Cola has turned it’s focus globally. Coca-Cola has a 9X concentration in South America, Asia, and Africa compared to competitors. (Pereira, 2019) Coca-Cola at times seems to be the king of aggregation, often running successful ads that cross all global boundaries, languages, and cultures. They being said, Coca-Cola bases its marketing strategy on the well-known marketing mix of the “4Ps”: Product, Price, Promotion, and Place. (Seabrook, 2019)

Coca-Cola touts, simple slogans such as “Enjoy,” “You Can’t Beat the Feeling,” and “Happiness” simply never go out of style and are easily translated across the globe. (Seabrook, 2019) Also making use of characters Such as Santa Clause or the popular polar bear. Coca-Cola used visual imagery with bright red as their main color, and the iconic Coke bottle.

What is the brand strategy being used by the underdog?

Pepsi on the other hand being the underdog, focused mainly on the US market for years slowly chipping away at the Top Dog Coca-Cola’s market share. As far as Wall Street is concerned, in 2020, Pepsi-Co's shares have gained 19.45% for the last twelve months and 49.20% for the last five years, compared to 15.75% and 22.13% for Coca-Cola. Pepsi-Co had a market cap of $188.6 billion as of May 2020 while Coca-Cola had a market cap of $185.8 billion. (Maverick, 2020)

How did Pepsi pull this off? What was their marketing strategy? Pepsi always believed in positioning and investing in the right channels. While the Big Dog has locked some big restaurants and chains, this also required them to choose side with their established channels, while this let Pepsi free to join forces with companies Coke could not. Pepsi has positioned itself as one that embodies young energy, and this can be seen throughout their marketing and advertising campaigns. Pepsi’s customers are mainly aged between 13 and 35 years old. (Koon, 2020) Over the years this has paid dividends in market share gains.

Pepsi also set focus on all the right channels. According to Pepsi’s annual report, though, they increased their global marketing and advertising budget by more than 12% for 2019. (Koon, 2020) Since they were focused on the US market, and they were quick to utilize social media, even in the early years before social media is what it is today.

How can the underdog improve its strategy so that it can gain more market share and surpass the top dog? Provide three recommendations.

Pepsi is right on point, and with their positioning, and proper channels they are doing everything that they need to do to earn their market share in the soda industry.

Why do you believe consumers prefer the top dog over the underdog? Which do you prefer, and why?

Coca-Cola is iconic. They’ve build their brand to be that way, though Pepsi with strong focus and taking the youthful market share (13-35), they have successfully taken the number 1 spot here in the US. Now will they keep it? Time will tell. As to my favorite, I’m honestly indifferent. I don’t have a brand I’m loyal to. I don’t drink soda often, but I will say that Coca-Cola as an icon, has a place in my heart and I recently was gifted a model.   

Citations:

Pereira, P (2019). Pepsi vs. Coca-Cola -A Global Interest Report Retrieved February 04, 2021, from https://www.kalinax.com/pepsi-coca-cola.html

Mayureshnikam1 , Vishal V. Patil (2018) Marketing Strategy Of Coca Cola . Retrieved February 04, 2021, from http://www.iosrjournals.org/iosr-jbm/papers/Conf.ADMIFMS1808-2018/Volume-1/12.%2077-85.pdf

Maverick, J. (2020). Much of the GLOBAL beverage industry is controlled by Coca Cola and Pepsi. Retrieved February 04, 2021, from https://www.investopedia.com/ask/answers/060415/how-much-global-beverage-industry-controlled-coca-cola-and-pepsi.asp#:~:text=Market%20Share%20and%20Market%20Cap,market%20cap%20of%20%24185.8%20billion.

Seabrook, E. (2019). What you can learn FROM coca-cola's marketing Strategy: Merca2.0. Retrieved February 04, 2021, from https://www.merca20.com/what-you-can-learn-from-coca-colas-marketing-strategy/

Flanagan, P (2013) How PepsiCo and Coca-Cola's shares have performed Retrieved February 04, 2021, from https://www.independent.ie/business/world/soft-drinks-take-a-healthy-beating-but-remain-prized-brands-29497092.html

Koon, S. (2020, August 30). 5 marketing strategies we can learn from Pepsi. Retrieved February 05, 2021, from https://amcollective.sg/reads/5-marketing-strategies-we-can-learn-from-pepsi