Pepsi is pushed into third place in US as its marketing strategy is questioned
The Cola wars have been going on for years and it wasn't so long ago that Pepsi was wiping the floor with Coke. Now it seems, things have changed
Pepsi lost 0.4 of its market share in 2010, down to 9.5%, according to Beverage Digest. Diet Coke controls 9.9% of the market, while the main brand Coke holds a 17% share. The change had been coming for a while. Pepsi just scraped by Diet Coke in 2009 -- and the tide couldn't be turned.
The shift "calls into question Pepsi's ambitious Refresh Project strategy", according to John Sicher, editor and publisher of Beverage Digest. Launched in early 2010, the idea is to dole out $20 million in grants to consumers, rather than run Pepsi's traditional celebrity-studded marketing campaigns.
In 2010 Pepsi ignored the Super Bowl, with no ads for the first time in 23 years. In this year's Super Bowl, PepsiCo pitched its Pepsi Max brand. Coke, by contrast, has advertised during the last five Super Bowls. Diet Pepsi did however, advertise during the last five Oscars.
Although Pepsi insists that the Refresh Project has been a success, particularly on the local level,"In the cola wars, it by itself isn't enough to market Pepsi's cola brands," said Mr. Sicher. "They need, in addition, more product-oriented advertising and marketing. I think that the 2010 results are probably a wake-up call for Pepsi."
The Refresh Project is being tweaked in the U.S. and is launching in additional countries this year.
"It has provided an unbelievable response," said Joe Jacuzzi, a Pepsi spokesman. "The fact of the matter is that it's a long-term play."
Mr. Jacuzzi said the company would be upping ad spending in the US across its beverage portfolio by 30% this year.
The company is also sinking $60 million into its sponsorship and integration with X Factor, the Simon Cowell-created TV contest which will compete with American Idol, sponsored by Coke.
"I don't think that we'd view this as a blow," Mr. Jacuzzi said, of Pepsi sliding to the No. 3 slot. "We're looking at our total position. Consumers want a wide range of products for a wide range of occasions. Today we're fighting a totally different battle on a much bigger battlefield than just colas, though we are completely committed to carbonated soft drinks."
In 1986, then-Pepsi CEO Roger Enrico wrote a book entitled "The Other Guy Blinked: How Pepsi Won the Cola Wars." The question now, says Beverage Digest, is : has the "other" other guy blinked.
In Britain neither Coke nor Pepsi has so far responded as to what the league positions in the UK are.