Cola Wars

With $30 billion in beverage sales between them, Coca-Cola Co. and Pepsico Inc. have long battled each other with multimillion dollar ad campaigns and country-by-country marketing coups. . . .

But to make sure all that marketing money translates into bottles sold, both Coke and Pepsi are intensifying their efforts at the local level. . . . And nowhere is the fighting more heated than in the intensely competitive, intensely difficult New York market. "Many soft-drink executives think New York is the toughest market in the country," says John Sicher, editor of industry newsletter Beverage Digest. "The traffic is huge, the population is dense, and the neighborhoods are complicated."

But it's also a huge price—and one PepsiCo, headquartered in Purchase, N.Y., would be loath to lose. Pepsi has always spent big to stay ahead on its home turf. New York is one of only four U.S. markets where Pepsi-Cola outsells Coca-Cola Classic. . . .

The showdown over the Big Apple began . . . when Coke's largest bottler, CocaCola Enterprises Inc. (CCE), moved into the New York market. CCE has since added 600 more marketing people and 60 new trucks to its delivery fleet. . . .

. . . Each marketing representative visits up to 120 small stores a week, [where they are] pushing for snazzier displays, better placement, and more promotions. . . .

. . . Pepsi is pushing its own New York campaign to the hilt. But rather than send out fresh new troops, Pepsi is relying heavily on its bottler's local distribution force to boost its presence in stores, with new racks, coolers, and giveaways. It is also making a big push to get the most from its sponsorships of Lincoln Center, Radio City Music Hall, and the Bronx Zoo with ticket giveaways and advertising tie-ins. . . .

... In this hard-fought battle, Coke and Pepsi are doing everything they can to come out on top.

—Reprinted from August 3, 1998 issue of Business Week, by special permission, copyright © 1998 by The McGraw-Hill Companies, Inc.


Examining the Newsclip

1. Finding the Main Idea Explain how the cola companies are trying to dominate the New York consumer markets.

2. Making Predictions What might you expect to happen to Pepsi and Coke prices as the companies try to dominate the New York City market?



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