Iconic Marketing Rivalries: Coke vs Pepsi

August 10, 2022

Coke Vs Pepsi

Competition in marketing isn’t exactly a novel concept. Especially in the current age of monopolies, it gets harder and harder to convince people that your brand or product is the one they should be choosing. Starbucks versus Costa, the battle between Nike and Reebok, McDonalds versus Burger King, and their original competition as to who could make the best burger (before they both expanded their product lines). 

The current reigning struggle is between Meta (the recently revamped owner of Facebook and Instagram), and Bytedance (better known as TikTok). Meta has held the top spot in social media for years now, quite literally since social media was invented. TikTok, although slightly newer, follows a similar content pattern to previous apps, such as Vine – short lived but extremely popular.

The competition between Facebook, Instagram and TikTok is fierce. You maybe couldn’t quite get away with a David and Goliath comparison, but you can definitely compare it to the decades long battle between Coke and Pepsi.

The Pepsi Challenge:

Although there has obviously been competition between the two fizzy drink (or soda, if you’re reading this from the US) companies since their conception, the competition ramped up in the 70s and 80s, sparked by a truly genius marketing idea conceived by Pepsi in 1975 – the Pepsi Challenge. 

To set the scene; Coca Cola was dominating the fizzy drink market. Pepsi, although not exactly a newcomer, was younger and hoping to shake up the market and get ahead of the competition (ringing any bells?). The premise of the Pepsi Challenge was simple. Pepsi set up stands in small town malls with two cups. One filled with Coke, and the other with Pepsi.They invited people to taste both, and record which one they preferred. Much to the surprise of even the tasters, Pepsi started winning by a landslide.

As more and more people started choosing Pepsi in the taste test, Pepsi expanded the challenge until it was pretty much nationwide. The campaign led to a rapid increase in Pepsi’s market share, which jumped from 6% to 14% of total US soft drink sales. By 1979, Pepsi was fast catching up to Coke, holding 17.9% of the soft drink market compared to Coke’s 23.9%.

A study also compared drink choices over a ten year period – in 1972, 18% of soft drink users drank Coke exclusively, while only 4% drank Pepsi. But by 1982, only 12% were exclusively loyal to Coke, and the number of exclusive Pepsi drinkers was almost matching at 11%. What made this situation particularly aggravating for Coke was that they were also outspending Pepsi on advertising by about $100 million. 

This was where Coke made their major mistake, in what is commonly described as one of the biggest marketing blunders in history. Attempting to beat Pepsi at their own game, Coke changed their signature recipe. They tried to match the slightly sweeter, more syrupy flavour of Pepsi, and they called it ‘New Coke’. Unfortunately, it was a move that massively backfired. 

According to Coke’s own records, a customer service hotline that usually averaged around 400 calls a day shot up to around 1,500, with the majority of them being complaints about New Coke. The CEO of Coca Cola at the time, Roberto Goizueta, even received a letter requesting an autograph, supposedly because in years to come his signature as “one of the dumbest executives in American business history” would be worth a fortune.

The original Coke was returned to shelves only a few months later. The struggle continued. Unfortunately for Pepsi, the Wall Street Journal officially declared Coke the winner in 2010, after both Coke and Diet Coke surpassed Pepsi in sales.

Returning to our social media battle… 

Facebook and Instagram have been under similar stress in the last few years. The rocketlike acceleration of TikTok, with its singular focus on short videos, has revolutionised online content, and sent other social media platforms into a panic spiral. 

Instagram recently announced a change to their algorithm, one that would (in a style blatantly copied from TikTok) start showing users short videos, called ‘Reels’ made by other users. This announcement, and the test rollout of the new features, was met with global backlash. Petitions shared by the likes of Kylie Jenner, and worldwide complaints about this new feature have forced Facebook and Instagram to rollback the new features.

At the same time, Facebook’s daily users have fallen, and earlier this year, Meta announced the news of its first ever decline in sales revenue. Meanwhile, TikTok, which had a mammoth beginning, has only continued to grow. Even though it was only launched worldwide in 2017, it was recorded as the seventh most downloaded app of the 2010s. By the end of 2022, TikTok is predicted to have 1.8 billion users (which is just under a quarter of the entire planet). 

And so, what can we take from this comparison? Firstly, don’t mess with people’s fizzy drink choices. And secondly, an important lesson in marketing – if your product has a stable and successful brand or identity, then drastically changing it to try and reflect your competition is a risky strategy that may backfire on you. We all now know what happened with Coke and Pepsi. As for the battle between Facebook, Instagram, and TikTok, we’ll have to wait and see… 

Visit our website to find out more about the marketing services we offer, or if you’d like to amp up your marketing strategy, get in touch today. 

With a background in social media marketing and communications, Adelaide enjoys figuring out what kind of digital content will be engaging, coming up with concepts for social media posts, and making sure all copywriting is typo-free.
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