Evolution of advertisements in a dynamic environment: a case study of soft drinks

Abstract

The Product’s life cycle usually consists of five major steps or phases : Product development, Product introduction, Product growth, Product maturity and finally Product decline. The PLC shows projected or historical sales patterns product for a product and has a major impact on how a firm thinks about its marketing strategy options. The understanding of the product life cycle (PLC) helps a company to understand and realize when it is time to introduce and withdraw a product from a market, its position in the market compared to competitors, and the product’s success or failure. In addition to adjusting strategies to stages in the PLC, fine tuning of strategy can be enhanced by an explicit recognition of the variations on the standard PLC pattern. Advertising objectives differ in order to meet different objectives at each stage of the PLC. Accordingly, the advertising spends also increase or decrease in each phase of PLC. The objective of this project is to study the evolution of communication strategies of a product in a dynamic environment. In other words, we plan to study the changes that take place in the method of delivery of the message through television advertisement as the product gains maturity. We have taken up the soft drink industry as a case study of the evolution of communication strategy in a dynamic environment. The constant retaliatory communication campaigns run by the two soft drink giant Coca-Cola and Pepsi have led to the coining of a new term the “Cola Wars”. We have studied this aspect of communication strategy for the dynamics in the soft drink industry by comparing the advertisements of these two Cola giants. We have first undertaken a detailed literature review to gain an understanding of concepts like Product Life Cycle and various advertising frameworks and theories. We have then analyzed the television commercials of Coke and Pepsi in the Indian market 1992 onwards. In our study, we would have ideally liked to understand the impact of the various communication campaigns on customer buying behavior by analyzing the sequence of communication effects on an individual (from brand Ignorance/awareness to Purchase).But it is difficult to study the journey from ignorance to purchase in the soft drink market where the brands Coke and Pepsi already have a high level of awareness. Despite this limitation, we had chosen this industry as the basis for our case study because of the inherent dynamism of its environment not seen in any other industry. We have restricted our study of the advertisements of these two brands to the Indian Market only. This is due to two reasons: Firstly the scope of such a study would have been impossible to undertake on an international scale taking into consideration the number of markets that these two brands operate in, and secondly the non-availability of information on the advertisement aired by these companies internationally. We also realize that the soft drink industry is still in the growth phase in India and hence the study undertaken may not capture all the stages of the hierarchy of communications effects. This project will help to analyze what theme of advertising works for a soft drink and thereafter devise appropriate advertising strategies either by these companies or other established or new entrants into the industry. The soft drink industry is very dynamic in nature, so this study can be carried forward in later years of how the communication via advertising has evolved for these companies.