Why does a company like Coca-cola (or Pepsi for that matter) spend so much money on advertising? In the USA at least, everyone has tried Coca-Cola and decided if they like it or not.
I suspect one reason is that if sales decline and they are not advertising much, then the stockholders would clamor for efforts to increase sales and that means more advertising. But I would bet that a scientific study would show that advertising had no significant effect on sales for them at this stage of the game.
Because there is basically no difference between any of the colas. They aren’t selling a softdrink, they are selling an image. And that takes advertising.
Right, Coke is advertising to take market share away from Pepsi and vice versa. Even a tenth of a point of market share can be worth an enormous amount of money.
And if you think that advertising doesn’t work, watch what would happen to the first company that abandoned it.
Plus there are always new consumers that still haven’t made a “final choice”. Think of the grade school kids that are just beginning to become real consumers as they begin to make their own money and more of their own choices.
It’s all about market share, the advertising and image all contributes to that. Pepsi/Coke are always trying to take market share from the other to satisfy shareholders.
In the last chapter of the authorized book on the history of Coke, one of the executives offered the author the “secret” recipe for Coke. The exec did so to prove a point: even if you could market the exact same product, you would never be a threat to Coke. Their market share is firmly established. “Coke” is a name known 'round the world. In a recent study, more people in foreign countries knew the Coke logo than could recognize the Christian cross.
Coke is number one, and spends its advertising dollar to ensure that it will stay that way.
[aside] In my hometown, Coke has become a generic name for soda. “Pick me up some Coke at the store,” is often replied to by saying, “Which brand?” [/aside]
I think that is everywhere on the planet, Lissa. Pepsi’s latest adverts are stressing, basically, a guy asking his friends to pass him a coke when they are breaking out the refreshments. They pass around the Pepsi, and he is left standing there without anything. Bernie Mac then says, “If you don’t ask for a Pepsi, you aren’t getting a Pepsi” or some rubbish.
The goal is for the name to stick to your mind like the syrup sticks to your teeth. Coca-Cola most often fails taste tests, but persists in being the most popular beverage. I’ve seen RC Cola beat the schmuck out of Coca-Cola in blind tests, but people just go out and buy Coke. They are one of the few companies to enjoy that kind of market recall… along with some other now-generic names (Kleenex, IBM PC up until the late '90s, Walkman, Post-It Notes, etc).
In the end, it is “Yea, can I have a coke?” “We only serve Pepsi here.” “Yea, whatever.” But a lot of that marketting money goes towards those stores carrying one type or the other.