COMMENT: Pepsi adding flavour to the cola war
Pepsi has announced plans to produce its own vanilla-flavored cola, following the success of Coca-Cola's Vanilla Coke. Copycat competition is coming from own brand colas as well. Soft drinks makers need to shorten the time it takes to get new products to market so they can make the most of any first mover advantage.
Pepsi is launching a vanilla-flavored cola drink to challenge Coca-Cola's rival product. The two companies are renowned for going head to head in the cola drink market where product imitations are commonplace and competition is aggressive. The recent introduction of Pepsi Twist competing directly against Lemon Coke further increased the stakes.
Coca-Cola launched Vanilla Coke in May last year. The product has proved successful - it has sold over 90 million cases in the US. There are also high hopes for the UK with predictions that Vanilla Coke will be worth £60m in two years time.
Pepsi and Coca-Cola are long-time adversaries but they are also facing competition from new fronts. In the UK, Asda has launched two litre bottles of vanilla cola, pre-empting both Coca-Cola and Pepsi. Similarly, Spar is also set to launch a two-litre bottle in May.
It is still unclear when Vanilla Pepsi will be available in Europe, although it is expected to be sometime in May. Pepsi is also pursuing other new initiatives this summer, including new packaging designs and numerous film and TV sponsorships. It seems certain that consumers will be bombarded with an intense promotional push early this summer.
These new developments in the soft drink market highlight the increasing threat of own label brands taking market share. Marketing practitioners are now faced with growing demands to show greater awareness and speed in planning product launches to reduce the threat of being pre-empted.
It is imperative for manufacturers to shorten the time to market so they can build their initial market share. Redbull's stranglehold in energy drinks is a prominent example of the benefits of first mover advantages. In the drinks industry, it is often the early bird that catches the worm.
Related research: Datamonitor, "Tweenagers" (DMCM0131)
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