Business Question: Why does Coca Cola still advertise?

[mrmitchell]

I'm no economics expert but I'll try what I can to break my line of thought down for y'all.

Advertising exists either to create a desire to buy, or to tell the customer where to buy, right?

Coke doesn't need to be advertised in the first world. Not even in the remotest Siberian snowdrift or the deepest West Virgina valley will you find someone who hasn't tasted Coke before, unless they're a health nut and they're not going to drink it anyway, but everyone who would ever want to know about Coke and can afford it semi regularly knows about it.

"Where to buy"? All I know is, it's in every restaurant and supermarket plus millions of vending machines in America; and probably every restaurant and supermarket in Europe too. Only people in the poorest regions of the world can't have a can every now and then.

Therefore--why do I see Coke (and Pepsi) commercials on every American TV channel?

[Provost Harrison]

I presume it is as a reminder to people, puts the thought fresh in their mind...

[BlackCat]

Re: Business Question: Why does Coca Cola still advertise?

Originally posted by mrmitchell
Therefore--why do I see Coke (and Pepsi) commercials on every American TV channel?

That's the answer to your question.

[General Ludd]

Thousands of suckers are born everyday. Many advertising campaigns are directed at future generations that don't yet exist as a market. Impress the brand on someone when they are young and then use it as a symbol of youth when they are old, for instance.

[Zopperoni]

I'm not sure what you mean by "Coca Cola". Do you mean the regular Coke, or also line extensions like Vanilla Coke and Coke Lemon?

For the latter, Coke needs to advertise to create awareness for its products. Advertising is, in general, necessary to maintain overall awareness, as PH mentioned. Spontaneous awareness, in particular top-of-mind awareness, is very important to firms. Hence, advertising as a response to Pepsico is important.

Furthermore, advertising is done to promote positive associations of the brand. Sponsorships of sports events promote an association with an active and energetic lifestyle. Pepsi did something similar for their Pepsi-X, with the dance commercial.
Coke is also very good at communicating its image of "being the original". Advertising helps maintain that brand image; it forces competitors (Pepsi) to always seek a different approach.

Advertising gives Coke the upper hand in continuously promoting itself the way it wants to in a consistent fashion.

[Kuciwalker]

BlackCat is correct.

[Jaguar]

Ming, your attention is required.

[Flubber]

Why advertise? Brand preference. There are still millions of existing or potential customers that will drink one of coke/pepsi based on what they think is cooler and a lot of the advertising is aimed at maintaining market share.

Its pretty much the same reason that cars are advertised. I don't think advertising cerates a demand for "cars" but it does create demand for a particular car

[JohnT]

Re: Business Question: Why does Coca Cola still advertise?

Originally posted by mrmitchell
I'm no economics expert but I'll try what I can to break my line of thought down for y'all.

Advertising exists either to create a desire to buy, or to tell the customer where to buy, right?

Coke doesn't need to be advertised in the first world. Not even in the remotest Siberian snowdrift or the deepest West Virgina valley will you find someone who hasn't tasted Coke before, unless they're a health nut and they're not going to drink it anyway, but everyone who would ever want to know about Coke and can afford it semi regularly knows about it.

"Where to buy"? All I know is, it's in every restaurant and supermarket plus millions of vending machines in America; and probably every restaurant and supermarket in Europe too. Only people in the poorest regions of the world can't have a can every now and then.

Therefore--why do I see Coke (and Pepsi) commercials on every American TV channel?

For a lot of reasons, but essentially Coke is well-known because they advertise, not in spite of it.

[BlackCat]

Originally posted by Kuciwalker
BlackCat is correct.

QFT.


Since there are a lot of different brands of cola, they fight for their share of the market - coca cola may be the big one, but they still compete with other brands.

[Urban Ranger]

Re: Business Question: Why does Coca Cola still advertise?

Originally posted by mrmitchell
Therefore--why do I see Coke (and Pepsi) commercials on every American TV channel?

That's called "corporate image" in marketing.

That's why you see companies such as Texaco supporting an environmental cause, then tell everybody in the world about it.

[Guynemer]

Get 'em while they're young.

The same reason why they're making chocolate-flavored cigarettes now.

[MrFun]

Originally posted by Zopperoni
I'm not sure what you mean by "Coca Cola". Do you mean the regular Coke, or also line extensions like Vanilla Coke and Coke Lemon?

For the latter, Coke needs to advertise to create awareness for its products.

beat me

[Boris Godunov]

Originally posted by MrFun
beat me

Shall we take numbers? I'm sure it will be a long queue.

[Barinthus]

Also to 'remind' you of the product. We all are familiar with Coca Cola's products but if they don't keep reminding us we might actually *gasp* reduce our consumpation.

By keeping up the advertising, they are keeping product sales up by creating moments where we go 'ooh that looks good right now' 'hey I'm thirsty.'