Coke eyes Pepsi as cola wars go into overdrive

The Middle East cola wars are heating up after soft drink giant Coca-Cola claimed it would be the number one brand “within the next few years”.

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By  Tim Addington Published  October 30, 2005

The Middle East cola wars are heating up after soft drink giant Coca-Cola claimed it would be the number one brand “within the next few years”. Coke, which is trailing behind rival Pepsi in the region, last week announced double-digit sales growth for the third quarter in the Middle East. The company is finalising its budgets for next year and is expected to increase spending on marketing in an attempt to claw back market share. The Middle East is virtually the only market in the world where Pepsi is ahead, following two decades where Coke was not available in the region because it was considered to be linked to Israel. Both companies have turned to regional pop stars in a bid to promote their respective brands. Coke uses Lebanese singer Nancy Ajram, while Pepsi is using Egyptian Amr Diab as its brand ambassador. Jasim Wahab, public affairs and communications manager at Coca-Cola Middle East, claimed: “We anticipate that we will gain an overall market leadership position within the next few years. We do know that we lead in some markets and are leaders in some product categories but, overall, we are a strong number two throughout the region.” Richard Evans, Pepsi’s commercial vice president for the Middle East and Africa, rubbished Coke’s claims. “Coke said that they would be number one in 1993 when they first re-entered the market and they reiterated it again in 1997. Their claims lack credibility,” he said. The challenge coincides with new figures from research group Ipsos-Stat, which suggest that Pepsi has been the region’s biggest advertiser over the past year. According to the data, Pepsi outspent Coke by a massive 84% across the region in the 12 months to September this year. Pepsi spent an estimated US$59.6 million on advertising, compared to Coke’s US$32.5 million. But Coke says that the Pepsi figures include other drinks within its brand. Wahab said: “Pepsi’s portfolio includes products other than their carbonated soft drinks and non-carbonated drinks, which tends to skew the data. In bringing the brand to the number one position in this region, as it is globally, we set our marketing budget more according to our priorities rather than to Pepsi’s. “Pepsi has a strong objective of remaining the overall leader in the region, and will naturally spend large funds and efforts to maintain that position. Our decision on how much to spend on marketing, and where to spend it are more focussed on our customer research, and take into consideration our commitment to corporate social responsibility programmes and community relations activities that will not be reflected in the Ipsos-Stat numbers.” In Jordan, Coke has launched a new promotion where it is giving cans and bottles of the drink away to people who can then win prizes, in a bid to win market share. Wahab said: “We are confident that our market share will continue to grow, and that our marketing expenditure will continue to contribute this.” In response, Evans said: “When you have a popular brand you have to continue investing in it and supporting it. We will continue to do work in areas such as football and music in order to give consumer value.” Fortune Promoseven handles Coke’s advertising and PR, while Pepsi uses Impact BBDO for its creative work and Hill & Knowlton for its PR in the region.

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