Right now, there is a big battle going on between Pepsi & Coke. And it is a real price war. Before now, Coke seemed to have an upperhand in the market. For many years it dominated the soft drink sector. So, Coca-Cola looked to be dominating the market until Pepsi restrategised and gave more for less, a venture that had proven effective over time.
In 2017, Coca-Cola stormed the market with a new pricing strategy that it hoped would increase sales after it re-introduced its new small bottles but Pepsi was equal to the task with its counter-attack approach.
Pepsi came into the market about 13 years after Coca-Cola and it took just a few years for the new comer to temporarily upstage Coca-Cola in terms of market share. Pepsi came in and poached key staffers and players from Coca-Cola. It wasn’t long before it beat Coke in taste. In 1975, “blind taste opinion poll” carried out, and showed ordinary people, who participated in the exercise, preferring the taste of Pepsi. Also, remember that Pepsi comes in a slightly bigger container, indicating more quantity. In spite of these instances, Coca-Cola has consistently beaten Pepsi in almost all business statistics. The question is, why? Maybe we can find the answer from the taste analogy. Tasting a product as soda, for instance, needs relatively modest sips. But Nigerians don’t sample tiny sips of soda. They drink whole can or bottle’s content.
PRICE CONTROL STRATEGY
Research has revealed that whoever controls the price of the soft drink market, without content reduction, would always have a stronger hold on consumers and the ability to induce them to switch brand loyalty. Price-conscious consumers of Coca-Cola are switching to Pepsi because Nigerian Bottling Company (NBC), producers of Coca-Cola and its variants increased prices of its 50cl per bottles drinks including its 150cl Eva water to N150 from N120, sometimes in 2017.
BusinessDay’s survey in April 2017 at different retail shops across Lagos metropolis in Apapa, Ikeja, Oshodi, Gbagada, Ikoyi and on Victoria Island, revealed that some consumers have ditched Coke for the cheaper substitutes.
‘‘A few months ago, Coca-Cola was the most preferred brand, but not anymore. The drink on the lips of most of my customers who usually buy coke is Pepsi. Pepsi is the new Coca-Cola,’’ said the manager of a big supermarket in Lagos, who spoke on the condition of anonymity. Some consumers have reacted to the hike in the price of Coca-Cola products, saying that it’s an opportunity for Nigerians to opt for healthier drinks.
‘‘I think it is a good thing for the masses. After all, intake of too much sugar is not good for our health. It’s a way of telling Nigerians to live healthy, drink plenty of water and save your money,’’ said Edozie Umejim, a Lagos-based engineer.
City People Brands and Products spoke with few Nigerians on their preferred soft drink considering their pockets and many who said they were lovers of the Coke brand have switched allegiance to Pepsi, Seven-up and Mirinda.
Here are excerpts from the interview:
Segun Aderibigbe, a site engineer, said: “I’ve always loved coke because it’s always refreshing especially in hot sun. But at the moment, I have switched to Pepsi because I need to save some cash from the same quality and quantity.
“Coca Cola has come to stay though, but I’m no longer its consumer because I can’t afford N150 when I can get Pepsi at N100.” Nnamdi Chikodi, a Lagos-based business man, said: “For me, I enjoy both because they are the same but right now, I will go for the cheapest, which is Pepsi.” Funmilola Adebayo, who is also based in Lagos said.
“I sell sausage roll with soft drinks and people have been asking for Pepsi and Seven Up instead of Coke and Sprite because coke is still N150 and Pepsi is N100,” said a trader in Oshodi, who preferred to remain anonymous. “My brother, I cannot lie to you, I will not see cheap Pepsi and go and buy coke for N150, I am a business man now…” Ifeanyi Andrew, another Lagos based trader said.
THE COCA-COLA’S COUNTER ATTACK
Coke has also responded to the jab, which is almost resulting to its being technically knocked out by Pepsi by creating a market for its consumers who cannot afford the 50cl bottle at N150. A bottle of “Solo Coke” now goes for N100. This bottle is 35cl unlike other competitors, who sell 50cl and above at the same price.
Although NBC, expressed hope to retain their consumers, they are obviously still afraid of the dwindling value of naira and are, therefore, playing safe, so as to be able to maximize their profit and still remain on top of the soft drink market.
Pepsi on the other hand, understands the power in numbers and are looking at capturing majority consumers by breaking the line and enforcing a reduction in the price of soft drinks. This strategy looks good and working at the moment as market survey has already revealed that there is an upward swing in the demand for its products. Time will tell if the strategy would yield the most desired results.
– Damilare Salami