Wednesday, April 5, 2017

Cola Strategy and the Aggressive Factor

In the excerpt of the “Marketer’s Toolkit: The 10 Strategies You Need to Succeed”, the author describes the use of an  “aggressive factor” when dealing with competitors. Companies who are trying to attack new markets or defending the one they are in from outsiders should think about how aggressive to be in their tactics.  The article presents a matrix of possible outcomes to aggressive moves by companies, and include a aggressive offense, aggressive defense, slow in defensive response, willing to cut prices to attack or defend, and will to match promotions. Companies can assess this matrix and ask themselves what will my competitor do if I am aggressive in the marketplace. Will they come back on the offensive? Or defend their share? The matrix is also useful to understand how your own company would react to an aggressive company, and if it is the right course of action.

This matrix can be applied to what has happened between Coke and Pepsi in recent weeks. With the start of the MLB season comes the reviving of a great American past time, and the start of new cooperate advertising initiatives.  Sports are saturated with companies trying to advertise, and show the masses that their products are worth buying. This fact was mentioned in the Cola Wars case study. As the amount of soft drinks consumed has decreased, companies have placed more money and effort into marketing their product. In the case they use the example of the $600 million spent by Coke to become a sponsor of the World Cup.

It was announced on Monday that Coke would be taking over as the league wide sponsor of the MLB. This move by Coke can be seen as an aggressive reaction to Pepsi’s actions from the previous year. Pepsi took over as sponsor of the NBA, which had been in a sponsorship deal with Coke for the previous 28 years.  Coke went on the aggressive offense in acquiring this deal with the MLB, and forced Pepsi out of the picture. Coke’s move to acquire this deal can also be explained because Pepsi has a strong hold on the majority of major sports leagues in the United States. Pepsi is a current sponsor of the NBA, NHL, and NFL. With this deal, Coke now has a larger presence in the American sports market.

Additionally, Coke has announced they are using a technology-based strategy in this deal with the MLB. The company said they will intergrade technology into most aspects of their marketing, including through the MLB website, team apps, and social media. The strategy is not wholly new, but is a strategy that Pepsi was not doing during their tenure as sponsor of the MLB.

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