ECONOMIC ANALYSIS OF AN OLIGOPOLY MARKET STRUCTURE
They’re refocusing on pop as Americans are spending less, looking for value
Date updated: 11:59 p.m. ET Feb. 1, 2009
Source: Msnbc, Business, Food Inc.
NEW YORK - Feeling bad about the economy? Indulge a little, have a soda. Marketers at Coca-Cola Co. and PepsiCo Inc. are counting on that sentiment to appeal to consumers overwhelmed with a drumbeat of bad economic news. "What people want to do is pause and refresh," said Coca-Cola chief marketing officer Joe Tripodi. Pepsi, the world's second-largest soft drink maker, launched a new marketing campaign at the beginning of the year, while No. 1 Coke launched its campaign three weeks later.
Soda makers, who have seen their highest-profile products lose ground to energy drinks and pricey bottled water in recent years, are turning away from the lifestyle marketing that has dominated the soda wars. Now, they hope to draw customers back to the old favorites with a simple lure: they're cheaper — or at least a better value. Coke's campaign includes 16-ounce plastic bottles of Coke, Coke Zero, Diet Coke, Sprite and Fanta for 99 cents. The new size could draw people looking for a bargain, in that a 20-ounce bottle costs $1.25 to $1.50.
An ad campaign called "Open Happiness" and tied to the "Coke Side of Life" ads launched on "American Idol" last week. One spot features two students sitting across from each other in a library and flirting by drawing competing images of Coke bottles and on their arms. "A lot of people have left the category," Beverage Digest editor John Sicher said last week. "Also, a lot of young people have not entered the category, so these ads may help Coke both recruit new young consumers and re-recruit some lapsed ones." Coke plans to run three ads during Sunday's broadcast of the Super Bowl football championship on NBC.
PepsiCo spokeswoman Nicole Bradley said PepsiCo would air five to six minutes of commercials for bottled drinks