In 1886 Coca-Cola was first formulated and in 1893 Pepsi-Cola was invented. It was during the time of the Great Depression when the competition between these two products truly began. Pepsi cut the price of its 12-oz bottle to 5 cents ? which is what Coke was charging for their 6.5-oz bottle. During this time Pepsi competed directly with Coke and marketed to consumers that they were “twice as much for a nickel, too.” The most intense competition between the two CSD companies occurred during the years of 1975 - 1990s where Coke and Pepsi fought over the $66 billion industry. As CSD consumption rose steadily year after year, both Coke and Pepsi were achieving average annual revenue growth of 10%. The production and distribution of CSDs involved concentrate producers, bottlers, retail channels, and suppliers; concentrate producers and bottlers being the most prominent of these four participants. A concentrate producer’s most significant costs were for advertising, promotion, market research, and bottler support. The bottling process was capital-intensive and involved high-speed production lines that were interchangeable only for products of similar type and size.
The first success factor for the CSD industry started in 1893 with the idea that CSDs were “a potion for mental disorders”. Simply selling the product without attaching additional value for the customer may have been a complete failure for CSDs. Instead, it was marketed as something more than just satisfying thirst. This continued in the 1920’s when Coke initiated a “lifestyle” campaign linking the role that Coke played in a consumer’s life. In 1963, Pepsi launched their “Pepsi Generation” campaign targeting the young and “young at heart”. The ability to link a “lifestyle” to the CSD was a major success. ...