Cola wars

The Cola wars are the long-time rivalry between soft drink producers The Coca-Cola Company and PepsiCo, who have engaged in mutually targeted marketing campaigns for the direct competition between each company's product lines, especially their flagship colas, Coca-Cola and Pepsi. Beginning in the late 1970s and into the 1980s, the competition escalated until it became known as the cola wars.

In 1885, John Stith Pemberton, a pharmacist from Columbus, Georgia, developed the original recipe for Coca-Cola. By 1888, control of the recipe was acquired by Asa Griggs Candler, who founded the Coca-Cola Company in 1896. Two years later in 1898 in New Bern, North Carolina, Caleb Bradham renamed his "Brad's Drink" to "Pepsi-Cola," and founded the Pepsi-Cola Company in 1902.

The two companies introduced advertising techniques, such as Coke's first celebrity endorsement and its 1915 contour bottle. However, market instability following World War I forced Pepsi to declare bankruptcy in 1923. In 1931, Pepsi went bankrupt once more, but recovered and began selling its products at 5 cents per bottle, helping them remain competitive in the market. Pepsi approached Coca-Cola with an offer to sell following both bankruptcies, but Coca-Cola declined.

Joya Williams, a secretary to Coca-Cola's global brand director, conspired to sell the Coca-Cola formula in 2006. Williams, along with her accomplices Ibrahim Dimson and Edmund Duhaney, conspired to sell the confidential trade secret to Pepsi for $1.5 million USD. However, Pepsi did not buy and instead reported the illegal offer to Coca-Cola and the FBI. The FBI conducted a sting operation posing as Pepsi executives, leading to the arrest of Williams and her accomplices. U.S. attorney David Nahmias praised Pepsi for reporting Williams' actions, saying, "if their trade secrets are violated, they all suffer, the market suffers and the community suffers."

Coca-Cola advertising has often incorporated themes of wholesomeness and nostalgia, such as the Coca-Cola polar bears mascot and Santa Claus campaigns during Christmas.

Pepsi advertising strategy has prominently featured sponsorships and online marketing.

In 1975, Pepsi launched the Pepsi Challenge, in which people were asked which cola they preferred in blind taste tests. The campaign suggested that consumers favored Pepsi over Coca-Cola based solely on taste. This contributed to the competitive campaigns, and around this time, Coca-Cola introduced Diet Coke in 1982, and New Coke three years later. However, the Pepsi Challenge was a marketing campaign and not a scientific study. Subsequent studies with scientific controls found only modest differences between Pepsi and Coke. The campaign suggested that, when it came down to taste alone, consumers preferred Pepsi over Coca-Cola. Some researchers have suggested that the taste of the Coca-Cola and Pepsi Cola products were influenced by external factors, such as the temperature at which they were served.

During the cola wars, as Coca-Cola saw its flagship product losing market share to Pepsi as well as to Diet Coke and competitors' products, the company considered a change to the beverage's formula and flavor.^{[citation needed]} In April 1985, The Coca-Cola Company introduced its new formula for Coca-Cola, which became known as "New Coke". However, consumer backlash led to the company reintroducing the original formula as "Coca-Cola Classic" on July 11, 1985. Some analysts have speculated that the decision to replace the original flavor was actually a strategy to boost Coke sales once it came back on the market, which it did; however, the Coca-Cola Company denies the claim.