ELI5: Why does Coca-cola still advertise?

[u/bigdubsy]

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.

[u/[deleted]]

Recipe-wise, it's almost identical to Pepsi

Bullshit.

[u/p7r → u/[deleted]]

I meant that Pepsi is clearly not Dr Pepper, or 7up, or Cheesecake, or a small pigeon pan-fried and served with a red wine jus.

They're colas. If you aren't brand loyal, they are for the most part interchangeable products. You think they taste far more different than they do, because when you drink it you are also associating all sorts of brand issues with it.

On blind taste tests, Pepsi wins out over Coke. When it's not blind? Coke wins. Those blind taste tests is what led them to come up with "New Coke". I barely remember the fuss over that, but the story behind it is worth reading if you want to see what happens when you mess with brand values.

I get what you're saying, but I hope you also understand that essentially they're almost the same, and a lot of the "difference" is actually in the colour of the can/bottle you're drinking it out of.

[u/helix19 → u/p7r]

I can't remember the official name, but companies prefer to use "regular situation" testing. So instead if putting a cup in front of a person in a lab, they send them home with a six pack. The results of these tests can be very different, and obviously the second one is more reliable. Source: Malcolm Gladwell book, can't remember which one. Edit: it was Blink. A very interesting read.

[u/[deleted] → u/helix19]

Blink

[u/helix19 → u/[deleted]]

That's what I thought. Thank you.