Before I begin this article, I just want to make it perfectly clear I am not going to delve into the actual product differences between Pepsi and Coke (i.e. which one has more carbonated water, which one has more sugar blah blah blah) and express my personal opinion on each product, rather to introduce some concepts regarding loyalty to the brands from a retail perspective. I do however truly believe that there is huge overloyalty to Coke in our arena and this post is here to challenge it!
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It’s the age old debate: can you tell the difference between Pepsi and Coke? Certainly, there are differences between the actual products and I do believe its true that most people can taste the difference between the two; but in a retail environment, does the difference really matter? I don’t believe it does.
Consider this. You are at a local bar for the evening and decide to order a “Vodka and Coke”. The bartend replies “Will Pepsi be ok?". I am sure you would be hard pressed to find someone who decides that the establishment in question is out of line and storms out to find a bar that explicitly serves Coca Cola. In fact, 41% of the time what you are being served IS Pepsi - while just 33% is Coke*, with Coke market share predicted to decline even further in 2011 onwards.
Brand loyalty is everything in today's media dominated culture, and Coke have a loyal following like no other. Although people may ask for a "XXXXX with Coke", they are really asking for a Cola-based product, but thanks to clever marketing, people instinctively ask for Coke. The red image of Santa Claus, and indeed the American mindset of Christmas seems to be born out of the marketing of Coca Cola, psychologically associating the red drink with feelings of happiness and joy.
Seymour Valentine recently became the Southern vending parnter for Britvic soft drinks, and are heavily pushing Pepsi and Britvic products against Coke. Often, I am found that there are "Coke dominated sites" that will not accept Pepsi over Coke, simply becaue its more popular - so I undertook a sales test.
Over a 13 week period at "Coke-loyal" site, we replaced all Coke with Pepsi, and monitored the sales. We then swapped back to Coke for 13 weeks and monitored those sales. Our results? No noticeable change in revenue. With the added benefit of Pepsi Max and Diet Pepsi now introducing a 600ml bottle at the same price, in some locations I have experienced increased demands over Coke.
Pepsi is driving the growth in the Cola category, and I believe that when it boils down to a purchase from a vending machine, consumers are not completely brand loyal. If you give them the choice, they'll go for brand loyalty or the drink they have been convinced they prefer. If you just offer one brand, even if you believe it is 'inferior' to the other, I don't think you'll notice a significant loss of revenue.
So the question is, are you up to the Pespi Challenge?
Kind Regards,
Dave
David Cocozza
* Source: Britvic Soft Drinks Indepdent Report (Data provided by CGA)
