Cola Wars An Example Of Analytics Meeting Design

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Some people are Coca Cola junkies, others lean on Pepsi for their refreshment.  The interesting thing about this on-going retail war is that analytics are involved heavily in the marketing, distribution, branding and design of these two cola giants.  If you don’t think soft drinks are “designed”, look at Coca Cola’s disastrous introduction of “New Coke” a few years ago.  I’m not sure what numbers Coca Cola executives were looking at, but what they did was “sweeten” their product to make it more like Pepsi.  The change went over like the proverbial lead balloon and New Coke died an ignominious death.

 

What is interesting about analytics in the soft drink market is that it continually shows geographic differentiation.  That is, certain parts of the U.S., indeed the rest of the world, are “Coke” territories and others are Pepsi.  Both products do sell in all geographies, but one or the other tends to dominate.  For example, the U.S. South is primarily Coke territory, while the western states tend to lean toward Pepsi.
You can bet that executives at both firms are pouring over big data—they generate so much information from sales, production, inventory and delivery—trying to find a way to get an “edge” on their primary competitor.  We aren’t likely to see another “New Coke” in the near future, but they will be tweaking their advertising, distribution and other elements of their business to try to gain an edge.  Wonder what analytics systems they’re using?  Like most things in that business, that’s a fairly closely held secret, neither can afford to give the other a hint about anything; it was only recently did we find out what the actual recipe for Coca-Cola!  Analytics can be and are on both sides of many competitive battles—they have to be to keep the competition competitive.
–Warren B. Causey

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