Coca-Cola vs Pepsi: Competitive Strategies

This assignment examines the competitive strategies employed by Coca-Cola and Pepsi. It delves into various methods used by both companies to build brand awareness, such as free associations and comparative brand approaches. The analysis also explores brand equity audits and tracking techniques used to assess market position and customer perceptions. Specific examples of each company's tactics are provided, highlighting their focus on achieving a strong brand image and maintaining a competitive edge in the beverage industry.

Brand Management

Table of Contents
INTROUCTION..............................................................................................................................1
TASK 1............................................................................................................................................1
P1. Significance of branding as a marketing tool.......................................................................1
P2. Key components of a successful brand strategy...................................................................2
TASK 2............................................................................................................................................4
P3. Various strategies of portfolio management, brand hierarchy and brand equity
management................................................................................................................................4
TASK 3............................................................................................................................................6
P4. Brands are managed collaboratively and in partnership.......................................................6
TASK 4............................................................................................................................................7
P5. Various types of techniques for measuring brand value.......................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTROUCTION
Brand management refers to an important activity which is performed by company in
order to maintain and improve their actual brand image in the competitive market world. For
this, the manager are required to manage all tangible as well as intangible features present in
market place. Under tangible, elements include packaging, costs and different factors which are
helpful in analysing the customer's behaviour and preferences towards their brand image. It is
required for company to maintain healthy relations with their customers so that their overall sales
figures will not get affected. This project assignment is based on Coca-Cola which deals in
selling soft-drinks across worldwide and has attains strong brand image and capture almost 40%
in UK. Project covers the importance of brand and various techniques to measure value of brand
which help company in generating high revenue. There are various strategies of brand, portfolio
management and equity management mentioned in this report as well.
TASK 1
P1. Significance of branding as a marketing tool
Branding is defined as an effective process in which the company named its product
which help in recognising all over the world. It is considered as valuable asset which help
company in attracting large number of customers. As per the Philip Kotler, if the products is not
a brand then it means it is not a commodity. The main target of company is to achieve good
brand image in market which brings positive image in customer's mind so that they can prefer to
buy their product rather than their rivals products. For this, company need to improve their
quality by implementing some changes on the basis of the taste and preferences of targeted
customers.
In competitive environment, it is important for company to attain strong brand image in
market so that they can easily influence the customer's interest to buy their product. All these
steps will help company in competing with their rivals. Branding will bring difference among
their competitor relating to the price, quality and features they offered. In case of Coca-Cola is
attained strong brand image which help them in defeating their competitors in market. The
importance of branding as a marketing tool are discussed as under:
It gives competitive advantage: Branding is an essentially required for every business
organisation irrespective of the size whether small or medium or large. The company who have
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attain good brand image can easily attract large number of customers and also capture huge
market share in competitive environment. Company can also raise various resources from market
with the help of their brand image which help them in achieving competitive advantage. For
example: Coca-Cola has already attained a strong brand image by offering good quality products
and services in the market.
Generate new customers: The brand affects and influences the interest and buying
behaviour of customers to purchase their company's products and services. Brand is an intangible
asset which cannot be seen or touched but it makes a huge impact on the sales figures of
company. It has been estimated that the value of Coca-Cola Company is 67 million. Brand value
of company can easily attract the behaviour of customers to prefer their company's products than
their rivals products which ensure them in maximising their level of satisfaction.
Provides stable assets: If the business want to survive in competitive market world and
attained stable and strong brand image then the company may expand their business in different
countries as well in order to capture large market share. Any decrease in sales of their product
will not make that much impact on their brand image of company. For example Coca-Cola
introduces the Coca-Cola C2 in the Japanese, Canadian in the year 2004 but due to low sales
figure it was discontinue in the year 2007. From this, the brand image of Coca-Cola did not
affect so much and running successfully.
Brand Pyramid:
It is a structure which is developed by five elements from top to bottom. It includes
attributes and characteristic, brand persona, functional benefits, emotional benefits and also
brand ideas. This will help in formulating strategies to make a strong brand image in the
competitive market.
P2. Key components of a successful brand strategy
Brand Equity: It can be defined as the value of brand which is determined by evaluating
the experience and perception of customers in market. If the customers feels satisfied after
consuming company's product the it will make positive impact on the company's brand image in
market. Therefore it is required for company to fulfil the needs and demands of targeted
customers through which they can make positive impact on the interest and buying behaviour of
the customers.
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Ways under which firm make and develop brand equity: It is important for every
organisation to important their brand image so as to achieve loyalty and trust of the customers for
longer period (Buil, De Chernatony and Martínez, 2013). There are various steps which need to
be followed to develop brand equity. Such steps includes:
Step 1. Building Awareness: In this, the company need to adopt strategies which help
customers in identifying their brand in the market.
Step 2. Communication meaning of Brand: Under this, the company can provide
meaning of their brand to its targeted customers such as performance.
Step 3. Getting consumer's response towards brand: The management of company focus
on identifying the customer's reactions and behaviour towards their brand and accordingly
implement corrective strategies to develop their brand image. For example the customers are
satisfied or not with the products Coca-Cola offered are carefully examined.
Step 4. Making Bond with buyers: It will be beneficial for company if they tried to
maintain good relationship with their targeted customers which help them in retaining loyal
customers.
Role of marketing in developing brand equity, awareness and brand positioning
Brand awareness: It is important for every company to provide sufficient information
about the products and service they offered in the market so that the customers may show their
willingness to purchase. The company should also focus on reaching their products to their
targeted customers through supply products to various stores. As Coca-Cola is already a big
company which offers quality drink products all over the world. This will help them in attracting
large number of customers (Christiaans, 2012).
Perceived quality: Through this, the company can able to identify the perception of
customers after consuming their quality products. Coca-Cola is providing a product having a
good taste due to which they are loved by everyone. For this the company first need to conduct
research and accordingly made changes in the quality of product ion the basis of getting result.
Brand association: It consists of symbol or image of company exist in market which help
in recognising by the customers. If the company are much very much active in the market and
communicating with their targeted customers which brings positive image in customer's mind.
Managing the Brand:
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There are various challenges the company face while managing brand in the
market:
Health and wellness trends: At present, the people are more conscious about their
health which restricts them to consume calorie products. As soft-drinks provided by Coca-Cola
contains more calories due to which their sales figures may affected and also its market position.
Therefore it is important for company to come up with new and innovative ideas to attain loyal
customers. For this Coca-Cola introduces products such as Coke Zero or Diet Coke which
contain 0% calories.
Emerging market performance: There are huge number of competitors in the market
which brings difficulties and challenges for the company to survive in competitive environment.
Coca-Cola and Pepsi are such two companies which engaged in providing similar services and
gives tough competition to each other. Therefore it is necessarily required for both of the
companies to implement corrective and competitive strategies in order to compete with each
other and attain highest market share (Dempsey and Gruver, 2012).
TASK 2
P3. Various strategies of portfolio management, brand hierarchy and brand equity management
Brand Management play an important role in improving brand image of company in
customer's mind and this can be possible only when the company can build and maintain healthy
relationship with their targeted customers. The brand of company will directly make impact on
the goodwill of the company. Thus it is important for Coca-cola company to develop awareness
about the new products they launched in the market through which they can influence the interest
and behaviour of customers towards their new product.
For this, Brand Equity is an important concept which help them in building good
relationship with the customers as well as an organisation. It will bring loyalty and reliability of
customer towards an organisation.
Brand Portfolio Strategy
This type of strategy which help company in operating more than one brand goods in
order to capture large market share. In the context to coca-cola, it has many products in the
market with same brand name which is running more successfully (Esch and et. al., 2014). There
are various strategies which need to be adopted by Coca-Cola are mentioned as below:
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Profit growth and driving revenue: It is essentially required for company to manage
their products in such a manner that will easily reach to their targeted customers. It will help
company in getting positive image and generating huge profits.
Enhancing efficiency: In this, the company should contribute its efforts in enhancing
quality of their products which helps in influencing buying behaviour to targeted customers
towards their products rather than their rivals product. It is also required ton use cost effective
technique while producing products so that they can able to offer quality products at an effective
price to customers.
Investment in business and brand: It is important for company to invest in developing
their brand image through adopting marketing and other strategies which can attract large
number of customers.
Management Hierarchy:
Coca-Cola:
Umbrella brand: It is determined as branding of family under which food items of
similar brands are involved. Under this brand, Coca-Cola company brings Coke Zero and also
Diet Coke into market with their own brand name.
Endorsed Sub Brand: This is the contract signed between the company and its promoter
to improve their brand image in competitive market. Coca-cola assign different celebrities to
promote their brand name so that it attracts large number of customers (Gratwohl and et. al.,
2011).
Pepsi:
Umbrella Brand: The umbrella products of this brand are Pepsi Max, Diet Pepsi etc. but
failed to capture large market share bit it all comes under umbrella brand.
Endorsed Sub Brands: Pepsi also assign different celebrities with a motive of developing
their brand name through out the world.
CONSUMER BASED BRAND EQUITY (CBBE Model)
Step 1: Brand Identity: Under this, Coca-Cola has assured its customers that the quality
products they offered to them will not available in any of their competitors.
Step 2: Brand Meaning: In context to this, company put their efforts in understanding the
real meaning of brands to its targeted customers.
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Step 3: Brand Response: By this, the company can able to identify the behaviour and
response of customers towards their brand name which help them in eliminating problem that
affects their brand image.
Step 4: Brand Resonance: The company make efforts in building their image better than
their rivals so that it will help them in attaining large number of customers (Hanna and Rowley,
2011).
TASK 3
P4. Brands are managed collaboratively and in partnership
It is considered as an important aspect of company in order to manage the Brand both at
national and international level. Through this the company can able to generate huge profits and
large huge customers strength. As the company Coca-Cola and Pepsi already attained good brand
image in market but instead they need to implement best and effective techniques and strategies
in order to maintain their exist brand image and improves overall performance of company.
Brand extension and leverage:
It is considered as an effective method which is used while launching new product in
market using existing brand name on a new product in a different category. Thus it involves huge
risk because if the extension are unsuccessful then it will make a negative impact on then
company's brand name as well as also losing trust of their loyal customers as well (Hollebeek,
2011). For example Brand extensions of Pepsi are Pepsi Next, Diet Pepsi etc. On the other side
Brand extensions of Coca-Cola are Coca-Cola Vanilla, Diet coke etc.
Brand extension strategies: This strategy is required to be adopted by company which
help them in managing the brand in national and international level. Ansoff's matrix strategy is
one which is helpful for improving brand image of company which are classified as under:
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Source: Ansoff Matrix, 2013
Market Penetration: The main objective of using this strategy is to improve sales of their
product and services of company so as to gain large market share in competitive environment.
For this, the company should offer discounts, vouchers and make advertisements etc. which
grabs attention of large number of customers through out the world (Ansoff matrix, 2013).
Market development: Under this, the company decide to reach their product to new
market through which they can earn huge profits. For example Coca-Cola company launched its
existing product such as Diet Coke in new market which will help them in generate good amount
of profit.
Diversification: In this, the company decide to launch new product into new market in
order to attract different groups of people. For example consumption of soda has been minimised
in UK and US. Therefore it is required that Top listed companies such as Pepsi and Coca-Cola
should focus on diversification. Pepsi has already diversified into snack division whereas Coca-
cola will also focus on entering into RTD tea and coffee market (Hwang and Kandampully,
2012).
Product development: In this, the company aims to bring new products in to existing
products through which they need to make changes and modification in their existing products so
that they can compete with their competitors and attract large number of targetted customers.
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Illustration 1: Ansoff matrix, 2013

TASK 4
P5. Various types of techniques for measuring brand value
At present, there is huge competition in the market through which company may find
difficulties in sustaining in competitive world. It is an obligation of an organisation to identify
the needs and demands of targeted customers which help them in retaining loyal customers and
attaining a strong brand image. Pepsi and Coca Cola; both are well developed brands and already
capture a large market share. But there are number of competitors that give s tough competition
with each other by their effective plans and strategies. Therefore, it is required for both
companies to measure their actual brand value on regular basis so that they can contribute their
maximum efforts in improving their brand image in competitive market.
Need for measuring value of brand arise when:
 It is essentially required to prepare financial statement of firm
 Product administrator need to allot an effective price for their product.
Evaluation of different methods used by Pepsi and Coca Cola are:
It is important for an organisation to adopt various methods and techniques which help
them in measuring their true brand image in competitive market world so that they are able to
know their actual position as compared to their competitors. Such techniques are described as
below:
Qualitative technique: Under this method, the managers are selected particular group of
people for the purpose of taking interview and ask question from them related with their brand
products and after that feedbacks should be collected carefully and accordingly implement
corrective measures and actions.
Quantitative technique: In this approach, the results can be made in numerical from and
scale questions so that company can easily find out their actual brand image without consuming
much time.
Comparative technique: Using this technique, company is able to identify the perception
and behaviour of customers towards their brand products and accordingly analysed carefully so
the company can implement an effective plans and polices which direct their employees to
perform in right direction.
For Coca-Cola For Pepsi
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This is a company which has attained a strong
brand image in the competitive world. This
company should be required to use diverse
modern marketing in order to get benefits in
market.
Various methods used by Coca-Cola are:
Brand awareness: It is useful in attaining
strong brand image in targeted customer's mind
so that they prefer to buy company's products
rather than rivals products.
Free associations: By this, company analysed
the perception and thought of customers while
purchasing their company's product.
It is also one of the top listed companies which
offers same services of Coca-Cola. It gives
tough competition to their competitors by
adopting various strategies and competitive
plans.
Techniques used by Pepsi:
Brand based comparative approach: Through
this, company can be able to identify the
interest and behaviour of customers towards
new products and services in market.
Tracking Techniques and Brand Equity Audit:
Company should be required to conduct brand audit on timely basis which help them to
know their actual brand position in market so that they can contribute their maximum efforts and
implement competitive strategy to maintain and improve their brand image. There are some steps
which are needed to be followed for conducting brand audit:
Market context: In this step, company put efforts in finding out the components which
makes negative or positive impact on brand equity.
Weaknesses and Strengths of Brand equity: In this step, company discusses about their
market share, brand loyalty and image attributes of both companies.
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Brand equity description: In this step, company reaches to their targeted customers and
collect their views and perceptions regarding brand.
Competitive tactics and strategies: In this step, the audit is designed on the basis of the
tactics and strategies the companies such as Coca-Cola and Pepsi and other competitors follow to
achieve strong brand image in market.
Brand tracking: It refers to the way of tracking actual brand position and focus on
developing brand after analysing the attitude, preferences and perceptions, etc. of targeted
customers.
CONCLUSION
It has been concluded from the above report that a strong brand image is required to
achieve by company if they want to sustain in competitive market for longer period. Therefore
every company need to focus on attained good brand image through adopting various techniques
and strategies which helps in attracting large number of customers. Coca-Cola company is taken
for preparing this project which also need to make proper brand management which increases
market share and value of asset. Various methods of measuring brand value has also been
discussed under this report.
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REFERENCES
Books and Journals
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Online
Ansoff matrix, 2013 [Online]. Available through.<https://www.smartinsights.com/marketing-
planning/create-a-marketing-plan/ansoff-model/attachment/ansoff-matrix/>.
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