In Derin’s Blog about Coca-cola, he emphasizes the successful marketing strategy and the global recognition of this company. I do agree that marketing is necessary for all companies, especially the ones that have close rivalries. However, is their abundant marketing really necessary?
In my opinion, a large portion of their marketing cost is spent because of rivalry. Pepsi and Coca-cola have been close substitutes for a long period of time, and they have been competing with each other since the begining. Marketing, for example, is a way for these two companies to compete. It is similar to a sequential game: if Pepsi expand its marketing budget, then Coca-cola will increase its budget in response, and the pattern goes on. They continue raising their marketing cost, which means that consequently, they are lowering their profit.
I believe that if the two companies are able to sign an agreement stating that no one should raise its marketing budget until it reaches a specific point, both of these two companies can save a huge load of money from advertisement.
Referene: (Derin’s Blog)
