Monday, November 26, 2012

Advertising and the Cola Wars

In Inger L. Stole's chapter "Advertising", she discusses the idea that in oligopolistic markets, advertising that gives consumers information by comparing products does not work if there are no differences between the dominant brands in a market (page 86). She writes, "To tell the truth about a product - that it costs the same as its competition and is basically identical in quality - would hardly develop brand loyalty or secure new users". Stole uses this fact to explain why modern advertising uses imagery, emotional claims, or irrelevant claims in advertising messages. The point, she argues, is to create a difference in consumers' minds even if there is little or no difference between the product and its direct competitors.

When I read this paragraph, I immediately thought of the ongoing advertising battle between the Pepsi and Coca-Cola soft drinks. Appropriately named the "Cola Wars", both brands have engaged in a campaign of television advertisements and marketing campaigns that target the other.


These fizzy, dark, sugary drinks are both extremely similar in taste and appearance, making them parity products that have no major differences between either of the two brands. Thus, the firms in those markets must spend more money of advertising to convince the public that they are in fact different. Annually, both brands spend billions of dollars on advertising around the globe. 
While Coca-Cola does not seem to directly attack Pepsi as obviously in their advertisements, the battle between the two brands of soda is well-known and continuously ongoing. Despite their differences, both soft drinks have become increasingly dependent on advertising to secure "brand loyalty" in order to sell their products (Stole 88). Consumer brand loyalty is especially illustrated through social media like Facebook page likes and comments. For example, Coca-Cola's Facebook page has 51 million likes versus Pepsi's 9 million likes. 










Despite these Facebook numbers, both companies have spend enormous amounts of time and money to conquer one of the toughest advertising strategies in Stole's chapter: creating a belief that their products are different despite being inherently equal. 

6 comments:

  1. Advertising battle between Coca and Pepsi is always a classical case to be covered in marketing and advertising courses. It's so true that "there are no differences between the dominant brands in a market". In order not to be manipulated by advertisement, I always choose Coca if I bought a Pepsi for the last time, and vice versa.
    It is also mentioned in the recent readings that advertising works on consumers' emotion rather than rationality,which reminds me of the following advertising campaign:
    http://www.youtube.com/watch?v=bPsNE7lxl_k
    Though I knew it was an advertising campaign, I was still deeply moved the first time I watched it. I still like it now, after finishing all these readings. Maybe I'm just too emotional...

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  2. I completely agree, Lauren. Your example of Coca Cola and Pepsi is a classic one and both products are well-known to everyone in America. The use value of all soda is equal. The purpose of all of these products is to provide consumers with a refreshing carbonated drink; however, it is the exchange value that gives a monetary price and attaches a message, whether it is promising women satisfaction about their bodies, or promising life long wealth and happiness to men. The message is the money for companies, and that is all dealt with in the advertising department. Also, it's funny how your first picture doesn't exactly label the red can as "coca cola" but the can logo is almost exactly same, making it obvious who they are referring to.

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  3. Reading this reminds me of working at my parents restaurant. Coca Cola and Pepsi have done a great job at creating differences for consumers, even if they don't really exist. It seems to be something more psychological than the actual taste of the beverage. --But back to my original story, we serve Pepsi products at the restaurant but in certain occasions people as for Coke. I usually ask if Pepsi is fine but many customers reject the Pepsi. They're actually only willing to drink coke, even though the products taste so similar. Customers are appear to be a little offended that one might actually consider the other brand as an option. People take their colas seriously. I think this can be partly attributed to the brand that advertisers have created. Like Lauren points out advertisers depend on brand loyalty and I think this is a good example. People will simply not drink a cola unless it's the one they like and in many cases have grown up drinking!

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  4. I consider Coke like Apple to be a master in advertisements. Like Apple I think of it more like a religion. People who like their products are devoted to them and they're is entire websites or chat rooms about people stating their love for pepsi over coke. It is also a logo we can remember and recognized all over the world. Similarly to McDonalds. Which makes me think of the competition between McDonalds and Burger King.
    What is amazing to me is they are both as unhealthy which makes me think about the concept we talked about in readings regarding the idea that if we do something we will feel like part of some generation. I think is what happens with this products they literally get passed down from generations because we often do what our parents do. Of they talk about drinking coke that their kids will probably do the same thing.
    The bottom and most facisnating thing is the degree to which a product affects the way we think and what we do and even to the point were it affects children and the way we think. It comes to prove the little knowledge we put into ads and the little efforts we put into listening.

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  5. Thanks for giving us this exemplar of parity products, Lauren (though I admit that I generally prefer Coke, because it seems less sweet... not that I've ever actually looked at the nutrition facts side by side). Another wrinkle that comes to mind is the apparent singularity of Coke/Pepsi (seems to be one thing), versus the actual variety in formulas from world region to region. If you've ever tried Coke/Pepsi in other countries, you're probably aware that they can taste quite different. So what are these companies doing? Catering to whatever seems to be the general "national" taste?

    Helpful comments, too! It is a bit scary to think that we will pass our brand preferences on to our kids, consciously or no.

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