Cola Wars: Guerilla Marketing

Today, the United States cola market is reportedly worth over $300 billion annually with each share point encompassing millions of dollars. The two major players in the beverage industry are Coca-Cola Co. and Pepsi-Cola Co.; each company is locked in combat with each other to vie for the loyalty of millions of American beverage drinkers. This “cola war” uses a constant bombardment of radio, magazine, newspaper, and television advertisements as its main weapon with a seemingly endless cache of advertising dollars as the ammunition. (3) With the two beverage behemoths throwing $309 million in 2001 and $272 million in 2002 into exposure time, an estimated total of $500 million seems only appropriate for 2003. (6)

According to Information Resources Inc., six out of the top 10 new pace-setting food and beverage products that “have gained critical mass since 2000 and have kept growing…were beverages”. (2) Four out of the six beverages were new soft drinks created by Coca-Cola and Pepsi-Cola. In the midst of a period of rapid innovation unlike any this country has ever seen, these two companies have had to keep up the pace for ingenuity for new flavors and also for the creation

Creativity is the order of the day when attempting guerilla marketing. A new concept called the “anti-ad” was employed by the Pepsi-Cola Co. when it introduced the beverage market to Mountain Dew Code Red. Early marketing for the brand included “pitching it to hip-hop celebrities, who then spread the word, and record[ed] a rap jingle. Code Red became cool, particularly among urban audiences, because Pepsi encouraged them to discover it for themselves”. (1) It was this same casual approach that led Pepsi to create one of the most understated soft drink ads ever made. There were no jingles, no elaborate production set; instead Pepsi used 10 hidden cameras at a West 3rd street basketball court in New York City, a hangout for better pick-up players. The commercial shows what was caught on film, a delighted crowd watching local basketball legends playing against two NBA stars. The only product shot was at the very end when the two stars handed out the drinks from a cooler. The ad succeeded in making the new soda the fifth-best-selling soft drink in convenience stores in just a few months. The low-key approach of introducing potential customers to Code Red by allowing it to be seen with stars in public events created a widely successful word-of-mouth buzz. (1)

Over $2 billion has been spent at colleges and universities for negotiated contract rights the last three years. It is such a lucrative business that some states, such as New Mexico, are willing to combine all community colleges and numerous public school districts to negotiate beverage contracts simultaneously for a new form of state revenue. Though these exclusive deals seem high priced, the beverage companies have been pulling in profit margins of 60 percent or more during these three years. Not only does the bottom line increase, but exclusivity of campuses force students to consume only their products and reinforce product loyalty. (7)

of new forms of advertisement. The old marketing approach of customer-relations management has been effectively replaced by guerilla marketing approaches in today’s soft drink market. (5) Gue

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