Beijing Olympics

coke, pepsi, olympics
Coca Cola China, HO/AP

Coke Taking Fight to Pepsi in Beijing

August 21, 2008 06:03 AM
by Anne Szustek
Pepsi is the most-consumed soft drink in China. But Coca-Cola’s Olympics advertising campaigns in the country are upping its product visibility.

Coca-Cola Gains on Pepsi

Worldwide, Coca-Cola is the No. 1 soft drink. In the world’s most populous country, however, its 2007 share of the market stood at 22 percent, compared to Pepsi’s 22.9 percent. Coke did gain a half a percentage point against its rival in China from the year before.

But 2008 is the year Coca-Cola hopes the tables are turned for it in China. The Atlanta-based soft drink manufacturer is not disclosing how much it is spending on its marketing drives in the country, although The Wall Street Journal cites an estimate from corporate marketing tracking firm IEG LLC that puts Cola-Cola’s 2008 Olympics spending at as much as $400 million, including $80 million for four-year status as an official Olympics sponsor.

Along with Chinese marketing company Pioco, Coca-Cola is sponsoring a Bluetooth-based ad campaign at several hotspots throughout Beijing. Passersby with Bluetooth-enabled phones receive prompts asking if they would like content from Coke. If they accept, they receive Coca-Cola marketing messages.

Coca-Cola is using Chinese sports heroes in its local ads such as basketball player Yao Ming and 2004 Olympic gold hurdler Liu Xiang. Despite the latter’s fall and withdrawal from this year’s Olympic Games, the soft drink manufacturer is sticking by the track athlete, considered by the Chinese to be their greatest national sports hero. And getting Yao to sign on with Coke last year was a major triumph—he previously starred in Pepsi spots.

A Coca-Cola jingle, “Red Around the World” has gained currency as a pop music tune in it own right. After Coke-sponsored diver Guo Jingjing pulled off a gold medal-winning performance, the tune was pumped out of the Water Cube, instead of the typical techno or pop hits.

On the ground, Coke is sponsoring the “Shuang” Zone, an exhibition area in downtown Beijing. “Shuang,” according to David Brooks, a fluent Mandarin speaker and the head of Coke’s Beijing Olympic project, is roughly analogous to American English’s “awesome” or “cool,” but as The Wall Street Journal describes, “with a bit more of an edge.” Inside of the Zone, red-suited employees offer passersby free Cokes chilled to precisely 37.4 degrees Fahrenheit.

Coca-Cola chief marketing and commercial officer Joseph Tripodi told the Journal that the goal of the promotion is “to teach consumers how to drink Coke and how to love Coke” in a country where cultural superstitions advise against cold beverages.

See Beijing Coca-Cola ad on The Wall Street Journal

Background: China’s tiger economy means corporate Olympics gold

Coca-Cola is not the only company looking to tap into the 1.3 billion potential consumers in this emerging market nation. Chinese government figures project 2008 computer sales to reach $1.8 billion, and tech firms are using the Games to make their imprint.

Computer manufacturer Lenovo, which is a partially Chinese-state owned company, supplied Olympic timers with more than 10,000 of its computers and technology equipment, many of them festooned with the company’s logo in large letters. South Korean technology giant Samsung sponsored giant billboards and ads in Beijing subway stations, as well as eye exams in rural Chinese villages. Both tech companies and Coca-Cola sponsored the Olympic torch relay, which passed 111 Chinese cities on its tour.

Coca-Cola’s efforts seem to be paying off. The Journal reports that marketing consulting firm R3 in partnership with CSM Media Research showed that around 47 percent of Chinese knew Coke is an official sponsor of this year’s Olympics. Other official backers of the Games, such as Adidas and McDonald’s, did not carry the same recognition as a sponsor.

Official sponsors are also fighting against local brands trying to piggyback off the Olympics’ marketing power.

Historical Context: The Cola Wars

Sponsorships notwithstanding, China’s cola market offers ample room for Coke and Pepsi to expand their consumer base. In 2007, the average per-capita consumption of soft drinks in China was 35 eight-ounce servings, the Journal writes, citing a Beverage Digest Study. In the United States last year, this figure stood at 789.

Pepsi is holding its own during Coke’s heavy Olympic marketing. In a bid to appeal to Chinese nationalism, the company began to sell soda in red cans instead of its trademark blue, and Coke complained that local Pepsi distributors tried to hand out Pepsi shirts in at least two torch route cities. More than 10 percent of Chinese consumers polled by R3 and CSM thought Pepsi is an official Olympics sponsor—faring better in the survey than did official sponsors Adidas and McDonald’s.

National tradition is a recurring theme in cola wars marketing. When Coca-Cola debuted “New Coke” in April 1985, Time Magazine wrote, “Fiddling with the formula for the 99-year-old beverage was an affront to patriotic pride and perhaps more.”

Related Topic: Fear of cold and wind

Matters of taste present a cultural obstacle in China as well. In much of Asia, there is a prevailing pathological fear of wind and cold, known in Mandarin Chinese as “pa-leng.” This includes the consumption of chilled beverages. At Bejing’s “Shuang” Zone, many were holding their refrigerated Cokes, waiting for them to warm before drinking them. Wang Wei, who stopped by a station offering free Coke samples at a Chinese Wal-Mart, told The Wall Street Journal that he “cannot drink cold Coca-Cola—it’s not good for my stomach.” Coke executives, however, suggest colas be served at a cool temperature for a better “mouthfeel.”

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