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Coke vs. Pepsi 'cola war' loses fizz on Slovak turf

The great 'cola war' between international beverage behemoths Coke and Pepsi reached its zenith in the US during the late 1980s. Television and magazines became media battle grounds, as the companies looked to top the other with flashier adds, catchier slogans and more popular celebrity spokespeople.
But as consumer tastes diversified, the war between the two cola campanies fizzled out. Consumers are now looking beyond colas, a fact that has caused both firms to produce other products such as juices, teas, and sports drinks.
Pepsi arrived in Slovakia in 1973, with a bottling plant in Malacky, while Coca-Cola first set up operations in 1993 with its production facilities in Bratislava. While both firms have experienced growth here, they say future expansion lies in a diversified product line.

The great 'cola war' between international beverage behemoths Coke and Pepsi reached its zenith in the US during the late 1980s. Television and magazines became media battle grounds, as the companies looked to top the other with flashier adds, catchier slogans and more popular celebrity spokespeople.

But as consumer tastes diversified, the war between the two cola campanies fizzled out. Consumers are now looking beyond colas, a fact that has caused both firms to produce other products such as juices, teas, and sports drinks.

Pepsi arrived in Slovakia in 1973, with a bottling plant in Malacky, while Coca-Cola first set up operations in 1993 with its production facilities in Bratislava. While both firms have experienced growth here, they say future expansion lies in a diversified product line.

Rob Baskin, Coca-Cola spokesperson at the Atlanta, GA headquarters, said that 10 years ago, Coke's focus had been aimed at carbonated drinks, colas in particular. Today, he said, variety dictates the market.

"It's not just Coke versus Pepsi, it's much more than just two players," Baskin said. "The nature of the soft drink business has changed as consumer tastes have changed. Consumers want a greater variety, they are seeking non-carbonated drinks such as teas, waters and sports drinks. This is in the United States, but I think that it's also occurring in many other markets around the world."

Baskin said Coke had altered its global strategy towards focusing on all non-alcoholic beverages. Pepsi has adopted a similar strategy and can be seen competing across the board in the majority of non-alcoholic beverage categories.

Radovan Pekn'k, manager for external affairs for Coca-Cola Slovakia, explained that Coke enjoyed a local dominance which further hushed the cola war in Slovakia. Coca-Cola (the drink) currently outsells Pepsi two-to-one in Slovakia, while Coke-owned products outsell Pepsi products approximately three-to-one (in the US, Coke holds a 44% market share compared to Pepsi's 32%).

With over 100 different beverage manufacturers in Slovakia, Coke and Pepsi realise that in order to extend market share, they have to look beyond their old cola war foe.

"What happened in the U.S. 15 or 20 years ago is not the same as what is presently happening in Slovakia," Pekn'k said. "There's a bigger sales gap between the sales of the companies, and we do not want to generate an artificial 'cola war' here. There are other issues we're facing and different opportunities."

Pekn'k added: "If you're the market leader, you are not too concerned with what your followers are doing. You have to go ahead and build your own strategies."

Tatiana Hrivnáková, general manager of the Slovak branch office of the New York-based Ogilvy and Mather marketing firm, said another factor creating the 'nonrivalry' between Coke and Pepsi in Slovakia was simply that attacking the competition was an illegal advertising strategy.

"The advertising law here is different," she said. "In the states, they can pit one brand against the other, but that's not allowed in Slovakia. It's against the advertising law. Plus, I think that positive advertising is more effective in Slovakia. Maybe this is due to the nature of the Slovak people - we'd like to be more positive than to have bad feelings about brands."

With the market so untapped compared to the West, opportunities exist for both producers to expand in Slovakia. While in western Europe Coke and Pepsi hold market shares of between 70 and 80%, in Slovakia the combined figure falls to below 50%. Per capita consumption of all soft drinks in Slovakia is only about 60% that of Germany and France.

"For us, competing with Pepsi is not an issue," Pekn'k maintained. "What is an issue is the opportunity in the rest of the market and secondly, to look at the growth of the total market." Pekn'k added that while Coke did monitor the competition's movements, they never became overly involved.

A localised approach, aggressive advertising, promotional campaigns and the introduction of new products are a few of the ways Coke seeks to expand in Slovakia. Preferred partnerships with restaurants and small shops, for example, mean that Coke products are more prevalently displayed or in some cases, the only product available. Contracts including a Coke refrigerator means that consumers will not find competing manufacturer's products being chilled alongside Coke products.

Pepsi Slovakia spokeswoman Miroslava Remenárová was unavailable to contribute to this story.

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