r/explainlikeimfive • u/bigdubsy • Dec 16 '12

ELI5: Why does Coca-cola still advertise? Explained

Why do companies that have seemingly maxed out on brand recognition still spend so much money on advertising? There is not a person watching TV who doesn't know about Pepsi/Coke. So it occurs to me that they cannot increase the awareness of their product or bring new customers to the product. Without creating new customers, isn't advertisement a waste of money?

I understand that they need to advertise new products, but oftentimes, it's not a new product featured in a TV commercial.

The big soda companies are the best example I can think of.

Edit: Answered. Thanks everyone!

Edit 2: Thanks again to everybody for the discussions! I learned alot more than I expected. If we weren't all strangers on the internet, I'd buy everyone a Pepsi.

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u/bigdubsy Dec 16 '12

I think this "filling in the gap" is the factor I didn't think of. Just because there are only 2 dominant brands, does not mean that others cannot get a share. So if Coke stopped advertising, Faygo (shoutout to my favorite regional brand) might be able to increase their ad budget and grab a higher market share. Given infinite time and money, perhaps there would eventually be as high of a demand for Faygo on store shelves as Coke.

I still doubt the ability to "convert" people away from their preferred soda. I know for a fact that I drink Pepsi because its what my parents bought my whole life. This is far more powerful than polar bears.

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u/eine_person Dec 16 '12

To me things I have heard so many times about Coca Cola as an employer in third world countries make up for quite a lot of polar bears. But I guess, this doesn't belong here.

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u/apollo888 Dec 17 '12

he was talking about the coke polar bear ads

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u/twdalbeck Dec 17 '12

I love those ads! I wonder if that bear moonlights for Klondike too?

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u/livinlavidal0ca Dec 17 '12

Faygo already got to the Juggalos of the world

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u/Malfeasant Dec 17 '12

another thing to keep in mind- while many of us do have our brand preference that will never change, there are (i think more) people who don't care either way, but might be in a position to buy for some other group of people- the ads aren't for you as much as for those people- when they're buying for others, they're going to lean toward whatever seems more popular. (which unfortunately is rarely dr pepper)

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u/bigdubsy Dec 17 '12

I've honestly never met a "don't care either way" person. Unless they just don't drink pop. Cola is completely polarized in my experience.

I'm sure there are fence sitters, I really don't think they're a majority. Not a big enough market to be worth targeting.

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u/HawkEyeTS Dec 17 '12

Ironically my parents to this day continue to buy Pepsi, but my taste buds have changed over the years to prefer Coke to the point that when I go somewhere with Pepsi as the only option, I'll drink Mt. Dew instead.

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u/bigdubsy Dec 17 '12

For what it's worth, Mountain Dew is a Pepsi product. Why do you like that over Mello Yello?

I don't drink cola often. So I often get mountain dew or sierra mist even if they do have Pepsi. Which brings to mind the fact that I have no preference between sierra mist and sprite. This is even further evidence that the cola war is only in our heads.

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u/HawkEyeTS Dec 17 '12

To be perfectly honest, I haven't had the option of drinking Mellow Yellow in most situations. The scenario I described before was with a choice of the standard Pepsi products, even if I might have wanted a cola, I'd drink Mountain Dew instead because I dislike Pepsi in comparison to Coke. Unfortunately Mellow Yellow isn't often found in restaurant/fast food soda machines, and when I buy bottles, I usually go for things I'm sure I'll like rather than experimenting.

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u/Barbarossa6969 Dec 17 '12

eyes you suspiciously "You ain't one o' dem juggalos are ya?"

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u/bigdubsy Dec 17 '12

nope. just a michigander on a budget who likes delicious beverages loaded with corn syrup.

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u/onsos Dec 17 '12

It's not an all or nothing proposition. I love Coke, and have it maybe once a week. Okay, a little more than that. Why not get me to have it everyday? Instead of coffee? I could be drinking two or three times as much Coke, easy. Or I might get some pork scratchings, an energy drink, a bottle of water.