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New Campaigns from Coke, Pepsi Reignite Cola Wars
By Martinne Geller
Reuters
January 21, 2009
NEW YORK - Coca-Cola Co (KO.N) and PepsiCo Inc (PEP.N) are reigniting
the long-smoldering "cola wars" with new marketing, hoping to stem
a 3-year U.S. sales decline of carbonated drinks.
Coke is launching a global marketing campaign this week for its iconic
cola brand, weeks after Pepsi introduced new marketing and overhauled
the logos of its soft drinks, including its flagship cola.
"I don't think we've seen this kind of head-to-head competition from
the cola giants for probably a decade or so," said John Sicher, publisher
of industry newsletter Beverage Digest. "In my view, the cola wars
are back on in a very intense and dramatic way."
Coke will air new U.S. commercials on Wednesday during "American Idol"
on News Corp's (NWSA.O) Fox network. Others will follow in coming
weeks, including during broadcasts of the Super Bowl on NBC, owned
by General Electric Co (GE.N), and the Academy Awards on ABC, owned
by Walt Disney Co (DIS.N).
Coke's campaign introduces the slogan "Open Happiness" and is its
biggest marketing move since March 2006, when it launched its "Coke
Side of Life" ads. The campaign includes in-store posters, promotions,
outdoor and print advertising as well as digital and music components.
The world's biggest soft-drink maker is hoping the new message will
appeal to consumers who are financially and emotionally pressured
by the recession.
It aims to help consumers "discover life's simple pleasures," said
Coke Chief Marketing Officer Joe Tripodi on Wednesday. "Difficult
times call for honesty and simplicity."
Rival PepsiCo launched a new U.S. marketing campaign for Pepsi-Cola
on New Year's Eve, and began shipping Pepsi-Cola, Mountain Dew and
Sierra Mist beverages with updated graphics and logos in December.
REDISCOVERING THE FIZZ
Sicher said the intensified competition could reignite growth for
both companies and the U.S. soft drink market as a whole. After decades
of growth, U.S. carbonated soft drink sales have fallen for the past
three years as some consumers opt for bottled teas, coffees, juices
or energy drinks, and many others cut back altogether.
According to Beverage Digest, sales of Coca-Cola fell 4.4 percent
in the first nine months of 2008, while Pepsi-Cola sales fell 6.6
percent. Category sales fell 4.8 percent.
Beverage Digest tracks sales at convenience, grocery and drug stores
but does not include sales from Wal-Mart Stores Inc (WMT.N).
Pepsi CEO Indra Nooyi said in October that in a normal economy, the
revamp of Pepsi's soft drinks' marketing could help stem the sales
decline and slowly bring trends "back to flat."
Coca-Cola North America's chief marketing officer, Katie Bayne, said
on Wednesday she shared a similar hope, but declined to be specific
since Coke has not yet reported earnings for its fourth quarter, which
began on Sept. 27.
"Our plan is to grow. This is a growth business and there's huge growth
available in sparkling (beverages)," Bayne said.
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