Coke Takes Pepsi's Olympics Challenge

21 August 2008

BEIJING: The sporting battles in Beijing for medal glory are mere skirmishes compared to the Cola wars being waged for the hearts, minds and tastebuds of China's consumers.

The Coca-Cola Company, the world's biggest soft drinks maker, has invested an estimated (but unconfirmed) $400 million (€271.8m; £215m) in marketing spend prior to and during the Olympiad to narrow arch-rival PepsiCo's market share lead – and it is starting to make ground.

The Atlanta-headquartered giant's strategy has been to teach 1.3 billion potential customers "how to drink Coke and how to love Coke", according to chief marketing and commercial officer Joseph Tripodi.

And this huge and potentially most important future market appears to be responding to Coke's coaxing. It began its ad and promo blitz in the People's Paradise early last year and claimed 22% of the market in 2007 - still behind Pepsi's 22.9% - but up half a percentage point on 2006.

In addition, a study by marketing consultancy R3 and CSM Media Research shows that around 47% of Chinese consumers identify Coke as a sponsor of the Olympic Games. Only three percent of respondents connected other top-tier sponsors to the event, including McDonald's and Adidas.

The same survey found that more than 10% of Chinese consumers thought Pepsi was an official Olympics sponsor - a measure of the firm's own Olympian efforts to tap into the nation's youth culture.

Coke has kept faith with the Beijing games, despite the ructions caused by the Tibet disturbances, the protests during the torch relay and the catastrophic earthquake in Sichuan province in May.

Says ceo Muhtar Kent: "We are a better company as a result of supporting the Olympics, and the Olympics are a better movement as a result of our support."

Data sourced from Wall Street Journal Online; additional content by WARC staff