Coca-cola and what it stands to lose in the price war it is waging with competition

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It is safe to say that most Nigerians have had their fair share of the ongoing recession in the country, brands inclusive. This economic down turn has led to some brands going under while some have curiously grown stronger. Worthy of note are the brands that have stayed true to their core values and has put the consumers first amidst the stifling economy.

Other brands have had to reduce the quality of service & products and still increased prices with the inapt mindset that the consumer is obviously aware of the situation of the country.

Getting to the top position is one thing; maintaining that spot is another because a myriad of factors has to be put in check to stay above. You become a visible target to competitors, it is easy to spot your foibles and even super easy to feast on your weaknesses. One of such is captured in an article I wrote last year about how a new entrant forced the market leaders in the carbonated drinks industry, Coke and Pepsi to dance to its tune.

The threat Big Cola posed to both Coca Cola and Pepsi might have reduced now and the battle seems to have been won. Little wonder, the transition of both brands from 60cl to the classic 50cl. While one might have gotten it right, the other seemed to have just goofed.

Recently I stepped into a restaurant to have lunch and for a moment it seemed my eyes were playing tricks on me until I moved closer to the refrigerator only to discover that there was a smaller PET Coca Cola there. Curious, I asked the price and I was told 35cl cost N100 while 50cl cost N150.

My first impression was that of chagrin and mixed feelings, we know there’s a recession but it shouldn’t really be rubbed in our faces. Taste might have been the difference between competing brands but “the less is more” that the bottle was preaching wasn’t just working ‘for me’.

I was still ruminating on this ill-advised move when Pepsi commenced its #NoShakingCarryGo campaign which was/is geared at informing its consumers of its price revert to N100 and yes at 50cl quantity.

This creates an imbalance for competition and obviously an opportunity that Pepsi is definitely not going to let slide. For while CocaCola’s 35cl sells for N100, Pepsi thrives at 50cl for the same price. This move might have been ignored by the not-too discerning consumer if it were a monopoly but that’s not so. Taste is not just the difference, Price is too. Especially in a recession when people angle for value.

Pepsi as a brand, have mastered the art of what Al Ries and Jack Trout calls the Law of the Opposite, predicated on the thinking that “in the strength of the leader there’s weakness, find it and do what it can’t.”

This has made Pepsi not to strive to be better but different, appealing to the ‘alternatives’ and younger generation.

Pricing is a crucial element in the marketing mix which has the capacity to ruin a company’s business strategy if done badly. Some schools of thought are still of the opinion that the reason Etisalat (now 9mobile) had a rough ride was because it priced itself above its competitor but that’s a conversation for another day.

In a fast paced, competitive climate, brands need to be quite thoughtful on the choices it makes and the time and season it makes them. Truth is CocaCola is a strong brand with a remarkable equity but for every one consumer it loses due to a wrong decision, there are one thousand others queuing to be lost.

Written by:  Emmanuel Olutokun (Brandish)

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