Research Paper on Pepsi vs Coke Essay Example

York. To further promote Mug, Pepsi has increased its advertising budget from less than $1 million to $10 million. Coca-Cola also intends to increase their spending on Barq's from approximately $1 million to between $5 million and $10 million.

According to Yuqing Zheng (2002), Henry Kinnucan (2003), and Harry Kaiser (2007), advertising has the ability to cause demand curves to rotate, and such rotation effects have significant implications for making decisions about advertising budgets and evaluating programs. The results of a study testing curve rotation using five different demand specifications suggest that inferences about curve rotation are dependent on the specific functional form used. Two of the five models tested, including the popular Rotterdam model (Selvanthanan, 1989; Duffy, 1990, 2001; Brown and Lee, 1993; Brester and Schroeder, 1995; Nelson and Moran, 1995; Kinnucan et al., 1997, 2001), showed that price-advertising interaction terms were not statistically significant. Fortunately for the hypothesis being investigated, the Rotterdam model's main competitor - the linear approximate model - offers support.

According to Kent Philips (1979), there has been no local market decision making during his 35 years in the consumer food products industry, particularly in what is now known as LRB. The focus of discussion revolves around the cola wars.

According to a study conducted by Gary B. Wilcox, Sara Kamal, and Harsha Gangadharbatla (1984–2007), there is no significant correlation between overall advertising expenses and overall soft drink consumption in the United States from 1984 to 2007. The study also suggests that while advertising may impact brand selection, it is unlikely to be the primary factor influencing individuals' decision to consume soda. Other factors such as eating

habits and economic circumstances may play a more vital role. For many low-income and economically disadvantaged populations, inexpensive fast food and soda might be their only viable option.

The competition between Coca-Cola and PepsiCo is ongoing.

Coca-Cola and Pepsi-Cola, the prominent cola manufacturers known for their intense rivalry, emerged in the late 1800s when Southern pharmacists sought to develop soothing beverages for indigestion relief. The period from the early 1900s to the 1960s witnessed a fairly equal competition among beverage companies, with Coca-Cola and Pepsi-Cola competing for market dominance alongside juice and coffee brands.

According to Hoover, 2005, Coca-Cola and Pepsi-Cola both began their journey to market dominance within 12 years and 500 miles of each other. Coca-Cola was initially created by Atlanta pharmacist John S. Pemberton in 1886, while pharmacist Caleb D. Bradham invented Pepsi-Cola in New Bern, North Carolina in 1898.

According to Hoover (2005), the growth of Coca-Cola and Pepsi-Cola into well-known brands across the nation was achieved through the implementation of regional franchise bottling systems. From 1899 to 1929, Coca-Cola had successfully established over 1,000 bottlers, while Pepsi-Cola had created more than 300 bottlers before World War I.

U.S.-based Marketing Initiatives:

During the summer months, there is always a significant competition among high-profile promotional sweepstakes campaigns.

In 2004, Coca-Cola introduced its "Unexpected Summer" promotion to highlight its tradition and in-store merchandising. In response, Pepsi launched its own promotion called "Play for a Billion."

According to Benson, 1999, the "cola wars" have extended into different areas, such as forming sponsorships with public schools and municipalities, in the past ten years.

In 2004, Briggs noted

that the competition between Coca-Cola and Pepsi extended to the digital music sector. To tap into the expanding market of tech-savvy online consumers, Coca-Cola introduced www.mycokemusic. In response, Pepsi collaborated with Apple's iTunes to offer customers a joint promotion featuring access to 100 million songs.

The success of ambush marketing is being analyzed.

According to McDaniel ; Kinney (1998), Sandier ; Shani (1993, 1989), and Stotlar (1993), numerous research studies have been conducted to investigate the effectiveness of ambush marketing. These studies, with sometimes conflicting results, have primarily focused on consumer perceptions. The main area of research has been the comparison between ambush marketers and "official sponsors" in terms of levels of recall and recognition. Additionally, these studies have uncovered consumer confusion regarding sponsor classification.

• Shani and Sandier (1998) discovered that consumers' responses towards ambush marketing were mostly apathetic, which was connected to their familiarity with an event.

According to a survey of corporate decision makers by Mc Kelvey & Gladden in 2003, the effectiveness of ambush marketing has been evaluated. The study revealed that approximately 90% of the respondents believed that effective ambush marketing can lead consumers to mistakenly perceive a non-sponsor as an official sponsor. Additionally, around three-quarters of the respondents agreed that the average consumer does not distinguish between official sponsors and ambushers.

According to the survey, executives generally believed that sport properties were not effective in handling ambush marketing threats. Around 70% of the respondents agreed that although properties claim to combat ambush marketing when they sign contracts, they appear incapable of doing so when it actually happens. Additionally, most executives agreed that properties are

either indifferent or unwilling to address the concerns of their corporate sponsors regarding ambush marketing.