Pepsi vs Cola

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Topics: Pepsi, PepsiCo
Harvard Business School

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Rev. June 21, 1989

Coca-Cola Versus Pepsi-Cola (A)
Coca-Cola and Pepsi-Cola had been competing for 93 years in 1982, and the rivalry had intensified since the early 1950s. By the mid-1970s, business journalists had labeled this competition "The Cola Wars." The launching of the Pepsi Challenge in 1977 propelled the wars into the 1980s, considerably altering the landscape of the soft-drink industry.

History of Soft-Drink Concentrate Producers
Soft drinks had existed since the late 1800s, when many American druggists concocted blends of fruit syrups and carbonated soda water that they sold at their soda fountains. During the 1880s, the formulas for Coca-Cola, Pepsi-Cola, and Dr Pepper were developed in this way in the southern United States. Coca-Cola Company: History and Growth In 1886, Dr. John Pemberton, a pharmacist in Atlanta, Georgia, formulated Coca-Cola. The drink was sold as a refreshing elixir at the fountain counter of Jacobs' Pharmacy, of which Pemberton was part owner. Eventually, Asa Candler became sole owner of the pharmacy and the rights to the soft drink. Candler sold the Coca-Cola syrup to other pharmacies, established a sales force, and advertised the drink on signs placed in train stations and town squares. The advertising budget reached $100,000 in 1901. Candler granted the first bottling franchise for the drink in 1899 for $1, believing that the drink's future rested with fountain sales. Coca-Cola's franchise bottler network grew quickly, and a standard 61/2 -ounce "skirt" bottle was designed in 1916 to be used by all franchises. This bottle eventually became one of the bestknown images in the world. In 1920, Justice Oliver Wendell Holmes of the U.S. Supreme Court ruled that the nickname "Coke" could mean only Coca-Cola, because "it means a single thing coming from a single source, and is well known to the community. Coca-Cola probably means to most persons the plaintiff's familiar product to be had

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