Case study Coca Cola vs Pepsi: historical rivalry

The historical rivalry of Coca-Cola and Pepsi has its origin since both brands entered the market, at the end of the 19th century, and since then they have had their commercial plateaus among the audience. But the important thing is that, regardless of which of the two maintains its leadership, they remain very present today as the ideal options to accompany a fast meal at a meeting with friends.

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Coca-Cola is a company founded a few years before Pepsi, and it could be said that it was the pioneer in incorporating the refreshing drink with coca extracts and caffeine, which has stimulating or energizing effects for the body, in addition to a large amount of not-so-healthy sugar, but curiously addictive, in combination with the rest of the other properties.

In the case of Pepsi, it is a drink created by PepsiCo with characteristics similar to Coca, with a similar flavor but slightly less sweet and with more gas. Emerging after Coca-Cola was his biggest challenge because it was not easy for it to be at the same place on the podium of consumer preferences.

However, there is a very loyal public of Pepsi, and to this day it is a beverage that people continue to choose, perhaps not as massively as its historic rival, but it manages to maintain a comfortable second place, which at times takes away the first place.

In today's case study, we'll be breaking down the historical rivalry between Coca-Cola and Pepsi, who came first, which of the two brands has achieved greater success over time, and what we can expect from these two giants in the future.

Case Coca Cola vs. Pepsi: the origin of the two companies.

Both Coca-Cola and Pepsi are sugary soft drinks sold worldwide, whose formulas were created by pharmacists and distributed as energy drinks for a public that wanted to consume strong non-alcoholic beverages that were pleasant to the palate. Over time, both beverages achieved a large market share and became highly social drinks.

John Pemberton was the inventor of the Coca-Cola beverage in 1886, in a formula based on coca leaves and cola nuts, which in the early years contained cocaine and, from 1903, was replaced by caffeine. The pharmacist began to distribute the drink as syrup to combat digestive problems and also provide a little energy to the body.

Pemberton realized that his drink could become a big business, so he commissioned a logo and in 1891 The Coca-Cola Company was founded. From then on, the company expanded to the world with great success, even reaching the Asian market with a name adapted to Chinese ideograms meaning "delicious happiness".

On the other hand, Pepsi emerged in 1893 and was created by the pharmaceutical chemist Caleb Bradham, who just five years later baptized it with the name of Pepsi Cola. Like Coca-Cola, Pepsi began to gain relevance among consumers, especially among car racers, who considered it a very tasty, refreshing, and stimulating drink.

However, in 1927 the company declared bankruptcy after the sharp decline in the price of sugar, when its founder and other manufacturers bought the ingredient in large quantities, although the price did not stop constantly rising.

After the bankruptcy, Roy Megargel formed the Pepsi Cola company and bought all the assets and the trademark from the creditors, for a sum of 35,000 USD. Although Coca-Cola had the opportunity to buy Pepsi Cola three times, in the end, it declined the offer.

Charles Guth, president of Loft Inc, took over the company from that moment on, and it was from then on that the company began to compete vigorously against Coca, even seeking to partially modify the formula so that it would be more similar to its rival Coca-Cola.

The beginning of the eternal rivalry: Coca-Cola vs. Pepsi.

While Coca-Cola developed its famous curvy bottle, expanded to Europe, and signed contracts with big celebrities, Pepsi went bankrupt because of the First World War. In 1931, it went bankrupt again but managed to quickly get back on its feet. So much so that, during the Second World War the number of advertising actions increased, which allowed it to sell soft drinks in cans.

Starting in the 1950s, Coca-Cola began to promote itself on television, while Pepsi decided to bet on rebranding, to keep up with its rival.

In 1962, Coca-Cola launched Sprite, one of the company's largest soft drink brands. For its part, Pepsi merged with Frito Lay to create Pepsico. This merger brought great economic benefits to Pepsi, surpassing its rival in profitability, due to the wide range of snack products that the company came to market. Instead, Coca-Cola did not go beyond the soft drink industry.

While Coke's catalog of brands is broader than Pepsi's, the latter makes up for it with huge global sales of its snacks. In addition, although Coca continues to be the undisputed leader in the beverage and soft drinks market, Pepsi obtained higher revenues thanks to the great diversity of products.

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The advertising battles of Coca-Cola and Pepsi throughout history.

Coca-Cola, perhaps due to its comfortable leadership, used more stereotypical symbols, such as the polar bear and Santa Claus for Christmas advertisements, which pointed to illusion, magic, and family unity. Instead, Pepsi's campaigns were aimed at discrediting Coca and its symbols, trying to show that it does not deserve its leadership position.

During the 1940s, Walter Mack was at the helm of Pepsi-Cola, and at that time he stood out for supporting progressive causes, during an era marked by racism. Therefore, he considered that the advertising strategy was aimed at the general public, but that excluded or denigrated African Americans.

Thus, the company decided to invest in campaigns aimed at this racial sector to expand its market share. Despite the sugar crisis, Mack came to form a sales team solely to attract the public of color, for which they suffered a lot of discrimination, both from Pepsi employees themselves and from entities such as the Ku Klux Klan and the laws of racial segregation in force in the country.

Even so, the company increased its market share considerably and was able to take advantage of its inclusive policy to denounce the racism of Coca-Cola for promoting a drink for whites only.

It also outsold its rival in sales during that time in Chicago, but the company was concerned that it would increase that racial market segment among customers. Therefore, after repeated pressure, Walter Mack left Pepsi-Cola, and his sales team to attract the African-American collective was dissolved.

Already in the 1970s, the clearest example of making a marketing strategy against its main competitor is the controversial campaign launched in 1975, called "Pepsi challenge", where the firm defeated its competitor with a test of the two flavors of soda, totally blind, in which people had to try two unlabeled cups with each of the brand's contents inside.

Only in this way, he appealed to an honest test in which people, without knowing what they were drinking, chose the drink they liked. Thus, many people chose the taste of Pepsi over that of Coca-Cola, so PepsiCo invested large sums of money in advertising, hiring celebrities such as Michael Jackson, Tina Turner, and Michael J. Fox, among others, to promote the drink among young consumers.

Of course, Coca also carried out campaigns in response to Pepsi's hints, which sought to ridicule its constant siege to gain positioning. So it is that to this day Coca Cola remains the number one brand of beverages, while Pepsi remains in second place following in its footsteps, lurking and waiting for the moment to take the big leap that will take away the leadership.

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To conclude, in this case study Coca Cola vs. Pepsi, we've seen that these two companies fight since time immemorial and that few rivals have attacked each other so much throughout history to gain first place in the market of their industry.

For being the first to launch the drink and for incorporating that characteristic flavor, Coca is more popular and known among people worldwide, but we can't forecast anything in the brand war.

So, what beverage do you prefer, Coke or Pepsi?