Monday, February 13, 2012

Coke and Pepsi to increase their marketing efforts in 2012

Coca Cola has recently announced an increase in their marketing budget in anticipation to a similar announcement from Pepsi (correct me if I am wrong but aren’t these two companies owned under the same umbrella corporation?). After announcing it’s fourth quarter results, Coca Cola plans to cut $550-650 million in annual costs by the end of 2015. This cost savings measure is expected to be reinvested into the company’s marketing and brand building.
Interestingly enough, Coca Cola set out 4 years ago to cut $500 million in costs from their company. This past week Coca Cola noted they were able to achieve their goals.
Pepsi is also expected to make an announcement this week pertaining to additional advertising dollars. It is estimated that Pepsi will pump in an extra $400-500 million in marketing and brand building this year alone.
Coca Cola’s CEO Muhtar Kent comments on the new marketing budget, “This program will further enable our efforts to strengthen our brands and reinvest our resources to drive long term profitable growth. We remain relentless in our efforts to become more efficient, leaner and adaptive to changing market conditions, while at the same time building a continuous improvement in cost management culture in keeping with our 2020 vision.”
One important note to take away from Kent’s comment here is the “We remain relentless in our efforts to become more efficient, leaner and adaptive to changing market conditions,” as we have all heard of the rent announcement of Kodak filing for bankruptcy, Canpages going under, and Sears closing more than 100 stores. It’s important for companies to adapt to changing market trends in order to survive in business.

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