1) Coca-Cola was invented in 1886 by pharmacist John Pemberton as a patent medicine containing cocaine and caffeine. It was later modified to remove the cocaine. 2) In the 1930s and 1940s, Pepsi gained market share by offering larger bottles for the same nickel price as Coca-Cola. This highlighted a weakness in Coca-Cola's iconic 6.5 ounce bottle size. 3) Throughout the 20th century, Coca-Cola and Pepsi engaged in competitive marketing strategies and campaigns. Both brands introduced new products like diet and caffeine-free options, which sometimes led to consumer confusion over the brands.

1. “Historical examples provide the best
kind of proof in the empirical sciences.”

2. 100 yr old soft drink
Invented by pharmacist JS Pemberton
Introduced as a exotic patent medicine
Containing both cocaine from Coca leaves that were chewed by
Bolivian Indians to keep them high & caffeine from Kola nuts
that were used by west African natives (called it “Hell Seed”)

3. Earliest Advertisements !

4. The COMFORTABLE DAYS !!!
• Ad Budget of $ 120000
1902 • Best known brand in America
• Took cocaine out
1903 • Used „SPENT‟ Leaves
• Launched the new 61/2 ounce Georgia green bottle
1915 • Bottle captured the uniqueness of Coke
• 153 COKE IMPOSTERS (Fig Cola, Candy
1916 Cola, Cold Cola, Cay Ola, Koca nola etc)
• No real competition
• Only needed to increase consumption lingering at
1920 2.4 gallons per capita (Today it is approx. 40
gallons!!!)

6.  The great depression of 30s helped competitors,
especially Pepsi Cola & Royal Crown gain some ground
Main Concept!!!
A 12 ounce bottle In 1939, the idea
that would sell for was brought to life
same nickel as a by a radio
61/2 ounce of COKE! commercial
"Pepsi Cola hits the spot / twelve full ounces, that's
a lot / twice as much for a nickle, too / pepsi cola is
the drink for you!"

7. The ad really hit the spot. Children went for quantity rather than quality.
And it was done on a minimal ad budget as compared to Coke
It could not increase
quantity, as it had a
huge inventory of
Coke was really in 61/2 ounce bottles
a tight spot
Couldn‟t reduce price
as hundreds of nickel
soft drink dispensing
machines were there
in market !!!
What was this strategy???

8. Offensive Principle No. 2:
“Find a weakness in the leader’s strength & attack
at that point”
Coke‟s greatest This strength was Eventually during WW 2
strength was their turned into weakness, Pepsi passed Royal
bottle, it was used in as the bottle could not crown & Dr. pepper to
every ad & even be scaled to 12 ounces be no. 2 brand
trademarked it

9. Defensive Principle No. 2:
“The best defensive strategy is the
courage to attack yourself!”
Should have attacked themselves
by introducing a lower cost
brand, before Pepsi did!
That too in the beginning of
THE GREAT DEPRESSION !!!

10. After the war, Pepsi decided to shift focus from public
consumption in vending machines & soda fountains to private
consumption @ home
Introduced larger bottle & a campaign “Be Sociable”

11. In 1954, Coke sales fell 3% against Pepsi‟s increase of 12%
Coke went into frenzy, launched 10, 12 & 26 ounce bottles. The 61/2
trademark bottle slowly vanished.

12. Advertising themes kept on changing !!!

13. Coke‟s basic strengths were first cola drink, oldest cola drink…….
But it also meant that older people drank Coke & younger people
went for Pepsi & for large sized containers
Pepsi went for the kill…

14. Pepsi used music in its advertising, used Michael
Jackson & Lionel Richie as brand ambassadors
But also lost focus sometimes focusing on taste etc.
You should never change strategy unless you
are entering a new marketing warfare!!!

15.  Coke was just selling soft drinks,
Pepsi was selling “PEPSI”
 In 1970, Coke came out with the
strategy of a market leader
 “It‟s the real thing”
 However they lost focus & could not
capitalize on this idea

16.  Royal Crown outsold Pepsi in thirties.
 But it fizzled out eventually
 What it should have done?
Find a
It should
segment You can‟t
have
of market fight head
adopted
small on with
Guerilla
enough to no. 1 & 2
strategy.
defend
And there was another option…..

17.  In 1960s Royal Crown came out with Diet Rite & was
a huge hit
 Coke & Pepsi took 3 yrs to come out with Tab & Diet
Pepsi
 By the end of decade, Diet Rite was the largest
selling Diet Cola
Flanking Principle No. 3
“The pursuit is just as critical as the attack
itself”
• RC should have focused on winner instead of feeding RC
Cola
• However they continued & lost market share in both
• Colas used their profits to feed diet brands, RC used Diet rite
to feed Cola!!!!

18. 1968  Company positioned 7UP as the
“UNCOLA” Sales went up by 15%.
After 10 yrs, company was sold & ad focus
changed to “America‟s turning 7UP”
Also strategy shifted to singing & dancing.
Sales started dropping
What could they have done???

19. Let‟s see the UNCOLA STRATEGY !!!
After having taken business from ginger
ale, root beer, orange drinks etc., they should
have gone on offensive…
Cola nut was the They should
strength of Cola Caffeine is have stuck
drinks and a stimulant to UNCOLA/
incidentally, also to heart & NO Caffeine
their weakness!! CNS strategy
Soft drinks contain Parents
caffeine & are would never
consumed by kids want to
stimulate
their kids

20. • Eventually in 1982, they had to introduce a
“NO-CAFFEINE” strategy
• Sales improved.
• But again made some strategic errors
Also launched „LIKE‟ the •Split forces & caused consumer confusion
decaffeinated Cola
•It was necessary to remind customer that 7UP
Forgot the UNCOLA
was the UNCOLA
Bent the strategy to include •Artificial colors was not a big issue, as nearly
“NO ARTIFICIAL COLORS” every packed food item already had it.
The marketing war should create confusion in
enemy ranks, not your own!!!

21.  Caused chaos & confusion in Cola camp
 Pepsico formally condemned 7UP for misguiding
public
 Less than 6 months later, Pepsi introduced
Pepsifree
 Everyone suddenly became caffeine conscious
 RC100 was the first decaffeinated cola
 Introduced in 1980, took off nicely
 But got smothered by caffeine products
“IT‟S NOT ENOUGH TO BE FIRST. YOU HAVE TO BE
THE FIRSTEST WITH THE MOSTEST”

22.  In 1982, Coke came out with DIET COKE.
 It was a huge marketing success.
 Settled in 3rd place after Coke & Pepsi
But at what price???
Diet Coke = Tab +Coke
 Both Tab & Coke lost market share following
the introduction of Diet Coke 

23.  In 70s, Pepsi came up with Pepsi taste challenge
 In blind taste test, people liked Pepsi over Coke
in 3:2 ratio
How would you rate this strategy?

24. Offensive Principle No. 3
“Launch the attack on as narrow a front as
possible”
As a response to Pepsi
challenge, Coke did
something that a leader
should never do !!!
It changed the formula, to
match Pepsi!!!
As a result, it undermined
its position as “The Real
Thing” & also publicized
it!!!!

25.  Less than 3 months after introduction of
new Coke, the real thing returned with a
new name : Classic Coke
 In fact new coke had fared better in taste
tests than the classic coke
 Why was the new Coke
rejected ??

26. PERCEPTION
 There are no facts in minds, only perceptions.
 Popular perception was that nothing could taste
better than the “Real thing”
 Whenever you go against the perception, you are
bound to lose.

27.  To protect itself from 7UP‟s NO – CAFFEINE
attacks, Coke launched decaffeinated versions of
three of its cola brands
 Now Cola has 8 versions:
◦ Classic,
◦ New,
◦ Cherry,
◦ Diet,
◦ Tab,
◦ Caffeine free New coke,
◦ Caffeine free Diet coke &
◦ Caffeine free Tab.
What is the underlying danger????

28. After a while People won’t drink Coke,
as it contains caffeine &
they won’t drink caffeine free Coke,
as it is not the “Real Thing” !!!
The formula changes & the horde of decaffeinated
versions have confused the consumer further.
Let‟s see how!!!

29. Consumer: “ Give me a coke”
“ Would you like Classic, New, Cherry or Diet?”
“ I‟d like a Diet Coke”
“ Would you like a regular diet coke or a caffeine free
diet coke?”
“ The hell with it. Give me a 7UP”

30. Dr. Ritesh Mahajan
Product Manager
Nectar Lifesciences Ltd.