Cola Wars Page 6-10 Summary

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Establishment of the two brands: Coca-Cola was formulated in 1886 by pharmacist John Pemperton who sold the product at drug stores as “potion for mental and physical disorders.” In 1891, Asa Candler acquired the formula, established a sales force and began brand advertising of Coca-Cola. In 1919, went public under control of Robert Woodruff expanded and developed in national and international markets. Coca-cola was remarkably successful during WWII with the high CSD consumption from the U.S soldiers. Pepsi was created in 1893 in North Carolina by Pharmacist Caleb Bradham. By 1910 Pepsi had built a network of 270 bottlers. Pepsi struggled and declared bankruptcy twice. During great depression grew in popularity due to price decrease to a nickel. In 1938, Coke sued Pepsi-Cola brand for infringement on Coca-Cola’s trademark. Beginning of the Cola War: In 1950, newly appointed CEO Mr. Alfred Steele who was the marketing executive for Coca-Cola, began a new campaign for Pepsi named ‘Beat Coke’. Steele made bottlers to concentrate on take home sales through supermarkets and Pepsi introduced new 26 ounce bottle at the same time for family consumption. Later in 1963, new CEO Donald Kendall launched a new campaign for the young generation and the people who think themselves as ‘young at heart’, named “Pepsi generation”. Intense promotion were held to reach to the customers mind and thus Pepsi were able to narrow coke’s lead to 2-to-1 margin at that time. In this period, Pepsi sold concentrate to its bottlers at 20% less price than coke and also improved the existing store delivery services. Pepsi also promised to use more on promotion and advertisement to overcome the bottler’s opposition. On the other hand, Coke’s bottlers were still fragmented with more than 800 independent franchised bottlers all over US. In the late 1950s, Pepsi began offensive strategies to gain advantage over Coca-cola by starting “Americans Preferred Taste” campaign under CEO Robert Woodruff, and...
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