For decades, Coca-Cola and Pepsi have been the go-to drink for parties, but one question has been around for more than a century: Coke or Pepsi? What’s the best cola?When we talk about perfect substitutes in microeconomics, the first thought that comes to mind is Coke and Pepsi, since these two taste very similar and have comparable pricing. However, until recently, the market share for Coca-Cola and Pepsi has heavily favoured Coca-Cola in Australia. Henry Lin mentions that “It is estimated that Coca-Cola outsells Pepsi Cola by around three times in Australia and New Zealand supermarkets, and around five to six times in the whole cola market.” on the Economics Student Society of Australia website.
“Coca Cola is consumed by 3,745,000 Australians and 898,000 Kiwis in any given seven days” according to Michele Levine, CEO, Roy Morgan Research, “with other Coke sub-brands also among the top five soft drinks in each country.”
Most people have a preference between Coke and Pepsi, even though a lot of people can’t really tell the difference. Although both drinks have a similar chemical composition, many people maintain strong behavioural preferences towards Coke. In terms of nutritional content, Coke has slightly more sodium, and Pepsi is slightly higher in sugar, calories, and caffeine.
Another reason why Coke wins the cola wars is because Coke’s brand is more valuable. Research by Samuel McClure and Read Montague showed that when “…administering double-blind taste tests. We found that subjects split equally in their preferences for Coke and Pepsi in the absence of brand information.” So even though people can’t really taste the difference, people connect more with Coke as a brand, and hence their preference for Coke wins when selecting the best cola.
“The latest figures from Roy Morgan Research show that consumption of soft drinks has increased year-on-year among a key segment of the Australian population: the under-25s.” You’ll also notice that Coke is more readily available compared to Pepsi. As with Coca-Cola, you’ll find Pepsi at most supermarkets, but Coke can also be bought at almost all major food outlets, food courts, and there are many more vending machines that are exclusive to Coke brands. Many major food outlets like McDonalds, Subway, Nando’s, etc. all sell Coke, but the numbers of major food outlets (like KFC) who sell Pepsi are much smaller. Since Coke is the only option in most food retailers and restaurants, we tend to drink it more, eventually becoming brand loyal.
There are also many other factors that make Coke dominant over Pepsi such as its pricing strategies, marketing, product design, etc.
Statis Beverages are soft drink suppliers in Brisbane, offering Coca Cola and its range of products at wholesale prices to businesses who want to spread the happiness to their customers.