Two of the largest and most profitable corporations in the United States are the Atlanta, Georgia based Coca-Cola Company and the Purchase, New York based Pepsi Cola Company, which is now referred to as PepsiCo by the company. Both Coca-Cola and PepsiCo invest tens-of-millions of dollars per year in worldwide marketing campaigns. By visiting their websites (www.cocacola.com and www.pepsi.com), one can see that the two rival companies are invested in very diverse products. Even though Coca-Cola and PepsiCo are targeting the same markets, they approach their marketing strategies in very different ways.
Throughout this report, I will show how these two organizations use key marketing concepts to attract consumers to their products. Also, I will compare and contrast the way that PepsiCo and Coca-Cola use the Internet as a planning tool and as a communication medium for advertising and promotions.
On first approach, one is struck with the obvious differences between the two companies’ web pages. Many companies follow the lead of their competitors and model their web pages after their rival’s. Coca-Cola and PepsiCo, however, did not follow this model. Their pages are very different in style, aesthetics, and content. When you arrive at Coca-Cola’s front page, you are greeted by three page links. These links connect to Coca-Cola company information, their worldwide site, and their U.S. site. By clicking the company information link, the user is transported to Coca-Cola’s official company website where one can find information for investors, job information, and a company history. The company information page is set out in an easy to navigate manner with “pull-down” menus for each of the links within the company page. The worldwide and the U.S. sites on www.cocacola.com are very similar in content. The worldwide site provides international users with a link to Coca-Cola’s country-specific sites that provides information on products and Coca-Cola themed games and downloads. The Coca-Cola in the U.S site provides many of the same marketing tools that the international sites provide. There are “pull-down” menus on the site for music downloads, product information, sports, message boards, as well as links to all Coca-Cola television advertisements.
Each of Coca-Cola’s web pages is easy to navigate. However, most of the pages are not aesthetically pleasing. With the exception of a few of the international sites (www.zambia.coca-cola.com), most Coca-Cola sites are mainly done in different shades of red and black. This provides a very dull experience for the user while searching the Coca-Cola website.
Coca-Cola’s website focuses on not only current customers, but it also focuses on building strong relationships with existing customers by providing large amounts of company and product information.
The Pepsi website (www.pepsi.com) offers users a very different experience than Coca-Cola’s website. The Pepsi site greets users with an animation and sounds of a glass being filled by ice and Pepsi, which is then paired with a food item such as onion rings or a fajita. There are four main links in Pepsi’s main page, two of which deal directly with Pepsi marketing campaigns. The first link is entitled “promotions.” By clicking this link, users of PepsiCo’s website are taken to a contest that involves consumers buying Pepsi and having a 1/3 chance of receiving a free music download courtesy of Apple’s iTunes. The second link, called “street motion” allows PepsiCo website users to enter a drawing where the winner will receive a free luxury automobile. The third link is for “Pepsi sports” where the NFL’s Rookie of the Year is named and consumers are reminded time and time again that Pepsi is the official drink sponsor of the NFL. This link also includes streaming video of every Pepsi Super Bowl ad. The final link is entitled “Pepsi music.” This link takes users to Pepsi’s website touting their sponsorship of a summer music tour that involves some of the biggest names in pop-music.
Pepsi’s sites are very easy to navigate if one is looking to find information about PepsiCo’s promotions or marketing campaigns. If a user is looking for company or product information, however, it can be difficult to find. At the bottom of the main page is a small link for company information. By clicking this link, users are taken to a different page called PepsiWorld.com. At PepsiWorld.com, users can find the company’s history, job information, and information on other brands that Pepsi owns such as Quaker Oats and Frito Lay.
Aesthetically, Pepsi’s websites are very nice. They use bright colors and large, animated links. The site can prove to be frustrating for those that are looking for company information, but for everyone else, they are very interactive and fun.
PepsiCo’s sites are geared much more towards customers that are already Pepsi drinkers and have an idea of PepsiCo’s marketing campaigns. The goal of PepsiCo’s sites are not to build new customers, rather they aim to reinforce current customers’ concepts of the organization.
Key Marketing Concepts and the Internet
Both Coca-Cola and PepsiCo use their company’s Internet webpage to promote some of the key marketing concepts that we have learned about in Environments of Business: Marketing.
The first of these key marketing concepts that both websites speak to is the concept of demographic data gathering. The idea of demographic data gathering is a tool that organizations use in order to find which specific consumer groups are using their products. These consumer groups can be divided and sub-divided based on such factors as age, sex, country of residence, ethnicity, and interests. Both Coca-Cola and PepsiCo’s websites offer ways for the two companies to gather demographic data. Both companies have e-mail based newsletters that customers can sign up for. When signing up for these newsletters, the user must enter their age group, sex, world location, interests (sports, music, etc.), type of company-specific product that they use (ex. PepsiCo: Mountain Dew, Diet Pepsi, etc. Coca-Cola: Diet Coke, Cherry Coke, etc.), and users also have the option of giving ethnic data. By filling out this survey before receiving the newsletter, Coca-Cola and PepsiCo are able to find out very important demographic data about their website users. This information will help the companies update their websites with information that is interesting to their consumers.
Another key marketing concept that both Coca-Cola and PepsiCo use with their websites is customer relationship management (CRM). Kotler and Armstrong ( pg. 16) define CRM as, “The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.” In other words, companies such as Coca-Cola and PepsiCo use the idea of CRM to build and maintain lasing relationships with customers by providing excellent customer service and keeping the customers satisfied with a high quality product. This will not only keep the customer base of the two businesses growing, but it will prove to be quite profitable for the companies. On their websites, both Coca-Cola and PepsiCo work hard to maintain high CRM standards. They both provide e-mail links and telephone numbers so that customers can contact the company with questions or complaints. Furthermore, both www.cocacola.com and www.pepsi.com provide FAQ (Frequently Asked Question) sections in which customers can find questions that are frequently asked about customer service issues. By providing these areas on the websites, both companies are working to create stronger, long-lasting relationships with their customers that will, inevitably, provide larger profits for the company in the future.
A third key concept that Coca-Cola and PepsiCo use on their websites is the idea of demand management. Demand management involves an organization taking steps to raise or lower the demand of its products. For Coca-Cola and PepsiCo, this generally involves creating more of a demand for their products. The two organizations go about this on the website by allowing users to customize the site once they register with the site. While customizing, the user can set which icons are seen on the site and which links are readily available. This process allows Coca-Cola and PepsiCo to market their products to specific groups, therefore increasing demand by those target markets. Also, PepsiCo’s website allows customers to download coupons for Pepsi products. Coca-Cola offers no such service.
A final marketing concept that both www.cocacola.com and www.pepsi.com present is product positioning. Kotler and Armstrong (pg. 259) define product positioning as, “The way the product is defined by consumers on important attributes-the place the product occupies in consumers’ minds relative to competing products.” The key phrase in this definition is defined by consumers. As Kotler and Armstrong point out, “To simplify the buying process, consumer organize products, services, and companies into categories and “position” them in their minds,” (pg. 259.) Coca-Cola and PepsiCo attempt to take advantage of this idea on their websites by working to promote the differences between their product and the other company’s product. By promoting the differences between the two companies’ products, and touting their products as superior, Coca-Cola and PepsiCo are working to position their products in consumers minds as being superior and, therefore, worth purchasing.
The Internet as a Planning Tool and Data Source
Both Coca-Cola and PepsiCo use the Internet in order to plan their marketing strategies and collect secondary data about their marketing campaigns and consumer information.
Coca-Cola and PepsiCo both use the Internet to plan marketing strategies using the information that they receive from web-based surveys, “hits” on certain products websites, and actual sales of their products. As an example, PepsiCo has a counter on the bottom of each product page that tells the user how many other users have been to the same page. By using these counters, PepsiCo can see which of their web-based marketing strategies work the best. Furthermore, by using online polls on the web pages, both companies can update their marketing strategies to suit their website users.
Both organizations are able to use the Internet in order to collect secondary data and use the data to formulate their web-marketing strategies. Kotler and Armstrong (pg. 148) define secondary data as, “Information that already exists somewhere, having been collected for another purpose.” An example of the use of secondary data can be found when the companies use online databases to search for customer and target market information. Furthermore, by using sales numbers, Coca-Cola and PepsiCo are able to feature high-selling products on their websites and in their online marketing campaigns.
Because Coca-Cola and PepsiCo is each others main rival, I have chosen to look at the number three soft drink manufacturer in the United States, Cadbury plc (www.cadbury.com), in order to compare the effectiveness of the web pages. The Plano, Texas based Cadbury plc manufactures such drinks as Dr. Pepper, 7-Up, Motts Apple Juice, and Snapple Iced Tea. Cadbury plc web page is not flashy, and is very straight forward. The website is full of company information, as well as brand information. However, unlike Coca-Cola and PepsiCo, Cadbury plc is not using their website as a marketing tool. They offer no downloads, newsletters, or online games to their site users. Rather, they use the site as and information center where users can receive company financial information and view employment opportunities.
There is no doubt that Coca-Cola and PepsiCo have nearly perfected the use of an Internet website as a marketing tool. Both organizations’ sites have been both innovative and have proven to be an example to many companies that want to use the Internet as a marketing tool. After viewing the website for Cadbury plc, there is no doubt that Coca-Cola and PepsiCo will be the number one and two soft-drink companies in the United States for a very long time. The way that the two organizations have used market research, demographic data, secondary data, and customer relationship management has put them far beyond the reach of most organizations. There are very few recommendations that can be given to Coca-Cola and PepsiCo based on their Internet websites. Both do an excellent job of marketing to specific target audiences as well as integrating their products into other forms of entertainment such as sports and music. Furthermore, they are able to do this in an entertaining, sometimes flashy manner.
By completing this project, I have had the opportunity to see the way that a relatively new technology, the Internet, is able to reach new and existing markets in such a way that the Internet can now be used as a major, and sometimes exclusive, marketing tool.