New endorsers are coming on board, but new problems follow. How will the two companies' sugary drink businesses fare? "I can't think of anyone better than Buffett to promote Cherry Coke." Just before April Fools' Day, Coca-Cola China announced a real piece of news that sounded like a joke: they would print a cartoon image of Warren Buffett on the new Cherry Coke packaging. But this is a genuine marketing strategy, as Coca-Cola Chairman Muhtar Kent personally approached Buffett four or five months ago to make it happen. The 86-year-old, the largest shareholder of Coca-Cola, loves Cherry Coke the most and is the most famous fan of this drink in the world. "I'm one-quarter Coca-Cola," he once said. Cans with Buffett's image will appear on Cherry Coke packaging in the Chinese market for a limited time. This flavor, born in 1985, was just launched in China on March 10. This may also be the most unconventional endorsement in Coca-Cola's history. In fact, Coca-Cola almost never overemphasizes celebrities in its ads, let alone printing such a large image on the can—that's something Pepsi would do. When it comes to celebrity endorsements, Pepsi has always been much more enthusiastic than Coca-Cola. From the early张国荣, 刘德华, 郭富城, 王菲, 郑秀文, to later周杰伦, 蔡依林, 谢霆锋, F4, not to mention football stars led by Beckham, and a host of 90s Western pop music icons: Michael Jackson, Madonna, Britney Spears... On April 4, Pepsi launched an ad featuring its latest endorser, model Kendall Jenner. Born in 1995, the fourth daughter of the Kardashian family, who already has 77.8 million Instagram followers, became the second model to appear in a Pepsi ad since Cindy Crawford in 1992.
The Anxiety of the Sugary Drink Companies
Although Buffett often mentions that Coca-Cola has a "moat" that competitors cannot cross, whether it's defending Coke at shareholder meetings or contributing his likeness, Buffett's "help" hints that the cola companies now face not just rivals like Pepsi, but consumers whose tastes have shifted due to health trends. Coca-Cola's 2016 financial report showed a year-on-year revenue decline of 5.49%, marking the fourth consecutive year of declining performance. Incoming CEO James Quincey previously stated: "Cola will always be the soul of the company... but the company needs more than just the core brand." It's not just Coca-Cola feeling anxious; U.S. carbonated soft drink sales have fallen for 13 consecutive years, and Pepsi's performance is also poor. Carbonated drinks, a market that expanded over the past century through the struggles of beverage giants, is now shrinking. "We used to not think about what healthy food is, because we thought everything we ate was healthy." This is a quote from a respondent in the 2009 documentary "Food, Inc." It seems that overnight, the dietary trend reversed. People began to crave more information behind ingredient lists and the direct impact of various complex chemical terms on the human body. Panic over obesity (and fear of it) has almost fully permeated every aspect of urban life. The documentary "Food, Inc." also caused a sensation by exposing the truth behind the U.S. food processing industry. From 1998 to 2009, the number of times The New York Times mentioned "obese" tripled, and "diabetes," first mentioned in 1970, has increased tenfold. "Epidemic obesity" first appeared in The New York Times in 2002 and has since appeared repeatedly. Carbonated drinks became the primary culprit. Although in the plot of TV series like "Boston Legal," a cola company president could argue that consumers' self-control is the core indicator of health—the cola is on the shelf, and no one is pointing a gun at you to buy and drink it! But various widely circulated lab videos on YouTube will tell you how terrible this drink is: with several bottles of drinks on the table, if you replace the sugar content with an equal weight of white sugar, you'll find an incomparably large pile in front of the cola. These videos are all to remind you to see what you are doing to yourself. Such consumer sentiment fundamentally shakes the foundation of cola companies (whether Pepsi or Coca-Cola). People have begun to hate sugar, and even replacements like "aspartame" or "stevia" cannot reduce the concern, because "sweetness" itself has become a threat. Buffett's appearance is Coca-Cola's appeal for trust—not only with the old man's body but also with his wealth's persuasiveness; while Kendall's appearance can only be for coolness. In this regard, she and the previous supermodel endorser Cindy Crawford serve the same purpose. In the 90s, supermodels first transcended the runway and became national idols. For the first time in history, the two cola companies have come to the same mission—fighting the sales threat posed by health trends. At the same time, the open rivalry between the two companies still exists.
You Think They're Archrivals? No, They Built the Carbonated Drink Market Together
The global carbonated drink market of 200 billion liters today was almost entirely built by Coca-Cola and Pepsi. Coca-Cola was invented on May 8, 1886, by pharmacist John Pemberton in Atlanta, and its rise is closely linked to war. Shortly after the attack on Pearl Harbor, four Coca-Cola soda fountains appeared in Hawaii, and Woodruff declared that wherever troops were stationed, on land, sea, or air, they should be able to get a Coca-Cola. Pepsi was born in the 1890s and went through two bankruptcies. In the 1930s, Pepsi's rise meant a challenge to Coca-Cola. When Pepsi was born, Coca-Cola already had annual sales of one million gallons, and the former looked like a "copycat product" at the time. At that time, Coke targeted the mass market. But during the Great Depression, there was significant room for price cuts. Pepsi seized the opportunity and launched a strategy of "same price, double the pleasure" with half-price per case, taking away part of the market. Charles Guth, as chairman of the Loft Candy chain, became a key figure in Pepsi's competition. Loft was a distributor for Coca-Cola. Guth's basic view was: without self, Pepsi could never succeed. Coca-Cola was simply too powerful; if you needed to make a clear statement, what could be clearer than offering twice the product at the same price? The confrontation between the two companies began from then on. The real turning point came after World War II, when the baby boomer generation gradually entered society and became the main force in the U.S. consumer market. At that time, Pepsi's head, Alfred Steele, vaguely felt that whoever won the youth would succeed, because they "consume far more soft drinks than their proportion of the population." The strategy you see today, where Pepsi aligns everything with "cool," originates from this. Everyone thinks this open confrontation will inevitably lead to a zero-sum game between the two companies, but if you look at their financial reports, you'll find it's not a zero-sum game. There's a simple truth: the main purpose of all product extensions is to win more space on the shelf. No matter how well a product sells, supermarket managers will only place one product in one spot. Adding new products with various flavors and colors allows these products to occupy shelf space. The more times consumers see the brand, the more likely they are to buy. Coca-Cola and Pepsi use advertising battles to increase their voice, and also use product innovation to increase market presence. Whichever approach, they expand the big market of "carbonated drinks." Without their joint efforts, carbonated drinks might not have become a regular on dining tables and in living rooms, let alone a source of psychological comfort and emotional attachment. "Both sides must be winners. We need to provide fun for the market. The more fun we provide, the more people will buy our products, whatever they are. The trick is that it must be fun. If the war looks like one company is on the brink, doomed, and beyond recovery, the atmosphere of the game will quickly turn sour..." Harvard Business School professor Richard Tedlow summarized the competition between Pepsi and Coca-Cola in his famous book "Retail Marketing." Tedlow later became the head of Apple University, which was personally set up by Steve Jobs to explain famous battles and events in business history to Apple executives, hoping to inspire them in running Apple.
The Over 80-Year Advertising War Between the Two Cola Companies: What Are the Details?
The confrontation between Pepsi and Coke has never fallen into the mud of mutual defamation. Tedlow said the fun lies in the details and strategies. Starting in the 60s, Pepsi gradually abandoned its previous strategy of targeting everyone regardless of age or gender and focused on the youth. Look at these slogans:
- 1961: This is Pepsi, it belongs to young hearts
- 1963: Rise up, you belong to the Pepsi generation
- 1964: Get energized, you are the Pepsi generation
- 1975: Pepsi Challenge, let your taste decide
- 1998: The choice of a new generation, desire without limits As for who shouted these slogans, they had to be the coolest people in the eyes of the youth. This is why Pepsi later found Michael Jackson, signing the pop king for a record $5 million, breaking the celebrity endorsement fee record at the time. The signing took place in November 1983, a year after MJ's sixth studio album "Thriller" was released. "Coca-Cola offered a $1 million deal, but the Jackson family refused and went to Pepsi," Jackson family agent Jay Coleman later revealed. Pepsi's then-CEO Roger Enrico was scouting for someone to represent the brand's latest marketing campaign "New Generation." "The goal was to make Pepsi look young and Coca-Cola look old, and MJ was indeed the choice of the new generation." Before MJ, many black musicians had appeared in Pepsi ads, and their work represented a new wave. Timothy Taylor, author of "The Sounds of Capitalism," said, "Many of these musicians were African Americans, and when Pepsi started using black musicians in the late 60s, they were very happy to sign because for black musicians, it represented their eventual acceptance by mainstream society." In the late 90s Chinese market, Pepsi's endorsers almost gathered the pinnacle of pop music, which directly led to many consumers born in the 80s believing that blue Pepsi is "cooler" than Coca-Cola in today's market tests. This brilliant rebranding was reflected in every aspect, such as Pepsi dropping the word "Cola" from its logo, keeping only "Pepsi," and designing the font to look more fashionable and dynamic. Meanwhile, Coca-Cola was rapidly expanding globally. Its 1927 slogan "Coca-Cola everywhere" revealed its global ambitions. 1927 was also the first year Coca-Cola entered China, setting up a bottling plant in Shanghai. By 1942, Pepsi's rise could no longer be ignored, and Coca-Cola changed its slogan to "The only thing like Coca-Cola is Coca-Cola itself." The war between the two companies escalated to such an extent that the term "Cola War" was even used to describe their rivalry. In 1985, Coca-Cola launched the so-called "New Coke" with a new formula to compete with Pepsi, which became a "marketing nightmare" in Coca-Cola's history. Then-president Roberto Goizueta said at the time that he learned from this incident that "the Coca-Cola trademark is not owned by the Coca-Cola Company, but by the customers." Compared to Pepsi, Coca-Cola's advertising and marketing are relatively traditional, always focusing on family, childhood, and nostalgia. At the 2016 Olympics, Coca-Cola was still one of the sponsors, and their Chinese ad "This Is Gold" featured Sun Yang, Zhu Ting, Zhang Peimeng, and volleyball coach Lang Ping. At the 2015 NASCAR race, Coca-Cola replayed its classic 1979 ad "Mean Joe Greene," telling the story of football player Joe Greene and a little boy. Coca-Cola often does this kind of remake of old ads to evoke emotion. It also sponsors NASCAR, the NBA, the PGA Tour, the Olympics, the World Cup, and other major sporting events, and has endorsers like LeBron James. In 2016, polar bears reappeared in Coca-Cola's Christmas marketing ads; these white bears are memories of Christmas for many Americans from their childhood. Last year, Coca-Cola replaced its slogan "Open Happiness," which had been used for 7 years, with "Taste the Feeling," hoping to re-emphasize the product itself after talking about happiness for so long. This was also in response to declining sales since 2013. Along with the slogan change, Coca-Cola also launched its "One Brand" plan, bringing several of its drinks (Diet Coke, Coke Zero, etc.) under one brand. At the same time, Coca-Cola is actively seeking new categories to offset the poor performance of carbonated drinks, such as investing in plant-based milk and energy drinks. In the marketing campaign under the new slogan, the people in the ads are still ordinary Americans of different skin colors. But compared to the past, celebrities have become a regular feature in Coca-Cola ads. One ad, set in an elevator, tells the ambiguous story of a big star and a hotel attendant. In the Chinese version of this ad, the male lead was replaced by Lu Han. Typically, the endorsers in Coca-Cola ads are limited to two types: cute polar bears, the well-known Santa Claus, and athletes; musicians rarely appear. However, this rule has been broken in recent years, with the biggest example being Taylor Swift, who has been the face of Diet Coke since 2013. Facing today's youth who are extremely wary of sugar, the company has begun to understand that it needs a celebrity face beyond the Coke red and the smiley face. The only problem may be that today's endorsers are not just about taking a cool poster for the cola company. To grab attention and make headlines, Pepsi's latest ad with Kendall Jenner, launched on April 4, touched on sensitive social issues and was pulled after just one day due to widespread criticism. That's the unexpected part. Andrew Eborn and Richard J. Hillgrove VI, columnists for marketing site The Drum, said: "Pepsi's marketing department may be shaking their heads trying to figure out why they're trending on Twitter for all the wrong reasons. The answer is simple. Pepsi, you're not the real thing." Andrew and Richard are alluding to Coca-Cola's 1969 slogan, "It's the Real Thing." At that time, the Apollo mission successfully landed on the moon, achieving the craziest dream of the 20th century. Coca-Cola used this carnival atmosphere to launch a very simple yet solid slogan, telling everyone that dreams come true, and Coca-Cola celebrates with you. To this day, this phrase can still be used to mock competitors' mistakes. But these are just words. Coca-Cola is no longer what it used to be; it has become the "old man" at the Super Bowl, playing it safe, while Pepsi chases trends and still hopes to grab attention. They cannot ignore the "health" wave, nor can they openly oppose it; they can only find the most suitable path for themselves. The never-ending war will continue. As long as the sugary drink business exists, Richard Tedlow's words can apply to both companies: "Everyone's interest lies in maintaining public curiosity. 'Okay, Pepsi did this today, can you imagine what Coca-Cola will do tomorrow?'" Cover image: pixabay Source: Curiosity Daily -END-