Coca-Pepsi: the decisive battle on Vietnamese market continues

VietNamNet Bridge – Pepsi once witnessed the prosperous development in Vietnam with the advantage of the pioneer on the market. However, this does not mean that it has successfully dislodged Coca from its position in Vietnam.

The pioneer

One of the factors that gives big advantages to Pepsi was that Pepsi came to Vietnam first.

In early 1990s, when Vietnam began its market, there was nearly no famous soft drink brand except Tribeco and some small brands which had been existing prior to 1975. It was really the ideal time for Pepsi to conquer the Vietnamese market and immediately dominated the market, from the south to the north.

At that time, all Vietnamese small soft drink brands quickly disappeared from the market just after Pepsi carried out sale-off campaigns.

With the too low prices, plus the fame of “the leading soft drink manufacturer in the world,” Pepsi defeated all Vietnamese rivals just after a short time. Tribeco, a joint venture between a Vietnamese company and a German partner, had to stop making soft drink and has shifted to make soyabean milk, which allows it to avoid a confrontation with Pepsi.

After knocking out small production workshops in Vietnam, Pepsi began setting up its distribution network with retail braches located nationwide.

At the peak development period of Pepsi, foreign travelers to Vietnam could see a big billboard advertising Pepsi soft drink welcoming them right at the exit of the Tan Son Nhat airport.

The early birds can catch the worms

Meanwhile, only several years later, did Coca-cola obtain the license to enter the Vietnamese market. By that time, Coca-cola was a new comer, while the inherited rival Pepsi had developed well with high annual output and a large distribution network.

Right after landing in Vietnam, Coca-Cola decided to sell its products at very low prices in an effort to obtain the market share. However, the sale promotion campaigns carried out by Coca-Cola at that time did not bring the desired success, partially because the situation at that time was quite different from the time when Pepsi arrived in Vietnam. Besides, the Vietnamese laws, which had become more perfect, stipulated that manufacturers must not sell products at the prices below the production costs.

Global groups need to understand local consumers

On the global market, Coca-cola gains the upper hand over Pepsi thanks to its effective marketing and advertisement strategy. Meanwhile, in Vietnam, Pepsi not only has a good distribution network which reaches out to every corner of the streets, but also the good managers who well understand the “marketing technologies” and the feelings of local consumers. This has helped Pepsi effectively combat with Coca-Cola.

For example, Pepsi organized the "football day" through advertisement show on television, showing the image of the most favorite Vietnamese footballers performing the "juggle ball" with some other world’s leading footballers.

Pepsi persuaded consumers that while drinking Pepsi, consumers would support the Vietnamese national soccer squad. The concept then helped increase Pepsi’s sales greatly, especially in the soccer tournaments where Vietnam’s national squad attended

Pepsi entered Vietnam in 1993, when local residents in the north only knew ice tea or green tea, and local residents in the south were more generous and they spend more money than northern residents. Besides, there was a big difference in the taste of the northern and southern residents: the former like salty food, while the former like sweets.

That explains why the Pepsi’s products seem to be more suitable to Vietnamese people. Pepsi products make people believe that Pepsi’s bottles are bigger, while the soft drink is sweeter. Meanwhile, Coca-Cola, which has been favored in European and American markets, where consumers have got tired of too sweet and fatty drinks, is not the one favored by Vietnamese.

However, Coca-cola still has been making tenacious effects to conquer the Vietnamese market. Vendors are selling a bottle of Coca-cola at 2000 dong only, while a Pepsi is priced at 5000 dong at café, and 9000 dong at restaurant.

This has been described as an original way of Coca-cola to expand its market share, because vending is a familiar image in the life of Vietnamese people.

As such, the struggle between Coca-cola and Pepsi still continues.

Bao Linh