As the cola war exploded again this week, Pepsi announced that international pop star and actress Madonna will be its newest celebrity spokesperson, following a tradition started by superstar Michael Jackson five years ago.
Pepsi officials said Wednesday that Madonna's one-year contract calls for her to star in a series of Pepsi commercials and perform in a worldwide concert tour. In March, Madonna will debut the title song from her new album in a Pepsi commercial broadcast worldwide.
Coke fired the first volley on Monday by announcing that for the first time in industry history, a diet cola is going to compete head on with a regular sugar cola. Coke's new president vowed that third-ranking Diet Coke will try to push sugar Pepsi out of its second-place slot in the $43.2-billion U.S. retail soft drink market. Coke Classic is No. 1, followed by regular Pepsi, Diet Coke and Diet Pepsi, according to beverage industry rankings.
Not to be outdone in the celebrity race, Diet Coke's new ad campaign features Los Angeles Kings hockey star Wayne Gretzky, actor Don Johnson and model Elle MacPherson. The Diet Coke ad blitz began last Friday and continued through Sunday's Super Bowl broadcast. Four new commercials, including one in 3-D, feature the theme: "The move is on to Diet Coke."
"Consumers have declared Coca-Cola Classic the winner in the sugar cola wars and marketplace attention has shifted to Diet Coke's assault on regular Pepsi-Cola's No. 2 spot," said Ira C. Herbert, who was named president of Coca-Cola USA four months ago.
Soft drink industry analysts said Herbert's move to pit a diet drink against a sugar soft drink is not only aggressive but unprecedented in the industry.
"It is ground breaking," said Larry Jabbonsky, associate editor of the Beverage Digest newsletter in Old Greenwich, Conn. "Coke is attempting to make Diet Coke a more mainstream product."
Jabbonsky said it is especially interesting since Diet Coke has been on the market only since 1982, while regular Pepsi has been around since 1888. Last year, Coke Classic topped all brands with 20.1% of domestic sales. Pepsi was second with 18.7%, followed by Diet Coke at 8.2% and Diet Pepsi at 5.2%, according to Beverage Digest's rankings.
Until the early 1980s, diet soda drinkers were primarily older, weight-conscious women. But with the introduction of NutraSweet in 1983, diet drinks began to appeal to a wider range of people, according to Coke spokesman Robert Baskin.
Baskin said industry surveys showed that in 1988, 2 million American households stopped buying regular Pepsi and about 25% of them switched to Diet Coke.
"The important thing is that they didn't drop sugar Pepsi and go to Diet Pepsi, they went to Diet Coke," he said.
Baskin said during the first three weeks of 1989, Diet Coke sales increased more than 30% over the first three weeks of last year.
Pepsi USA spokesman Tod MacKenzie said the real threat to Diet Coke is the growing popularity of Diet Pepsi, not regular Pepsi.
"In the last 18 months, according to food store surveys, Diet Pepsi sales have been growing at a faster rate than Diet Coke sales," said MacKenzie.
The rivals do agree that more Americans are switching to diet soft drinks because they are concerned about weight control and cutting down on sugar.
"It's true that the growth in the diet drink market is related to concerns about health," said Valerie Folkes, a University of Southern California marketing professor who specializes in consumer psychology.
Folkes said she was intrigued by Diet Coke's decision to compete directly against regular Pepsi.
"They probably can't say Diet Coke tastes as good as sugar Pepsi because it would undermine their own sales of sugar Coke," said Folkes.
Folkes said many cola drinkers frequently switch brands depending on what is on sale and what kind of entertaining they are planning to do that week.
"You may find people trying various kinds of colas, but it may not necessarily represent a change in brand loyalty," she said.
Meanwhile, Madonna will begin filming her new Pepsi commercial this week in Los Angeles. The commercials will be directed by Joe Pytka, who also directed Pepsi's 1984 Michael Jackson commercials. The Madonna campaign is being produced by BBDO, Pepsi's longtime New York City ad agency. The highlight of Madonna's ad campaign is an extra long commercial featuring the title cut from her upcoming album, "Like A Prayer." Pepsi is planning to broadcast that commercial worldwide.
"We believe it will be the largest, one-day media buy in history," said Ken Ross, spokesman for Pepsi International. Ross said Madonna joins entertainers Tina Turner, David Bowie, George Michael and Lionel Ritchie in promoting Pepsi.
TOP SELLING SOFT DRINKS Others: 47.8% Coke Classic: 20.1% Diet Coke: 8.2% Pepsi: 18.7% Diet Pepsi: 5.2% Diet drinks account for 25.2% of the $26 billion wholesale market.
Source: Beverage Digest