Question

In the US, Coca Cola enjoys market share dominance over Pepsi Cola in a ratio of 35:27. Overseas, Coke is even stronger, with Pepsi dominating about 5% of available markets. Coke’s advertising expenditures globally are $1.8 Billion per year, whereas Pepsi is spending less than half of that. Moreover, Coca Cola is a global brand, and can deploy all advertising expenses toward a single brand value statement. Pepsi must fragment its promotional spending against a multitude of culturally appropriate messages. Coke’s dominance has challenged and frustrated Peps for many decades and, at time, dominated Pepsi’s board discussions.

1. What steps must Pepsi Cola take to become dominant in its current markets? Please cite examples and be very specific in your recommendations

Answer 1

Pepsi is not able to compete with Coca Cola because of the huge amount that Coca Cola spends on the advertisement. This is one part of the story, but one must also acknowledge that Pepsi is also a renowned brand, that is able to reach a significant number of customers throughout the world and can hold on to the same customer base to increase its revenue. It is important to mention that it can form a tie-up with other companies with KFC, Taco Bell, and Pizza Hut to bundle Pepsi with their foodstuff. There are different food companies out there locally and Pepsi can tie-up with the local snacks and beverage companies to sell Pepsi to the customers. This way, there is a constant demand for Pepsi around the small and big food chains. This will highly increase Pepsi sales and revenue, elevating the brand value and recognition.

Note: If you liked the answer please give an Up-vote, this will be quite encouraging for me, thank you!