What Can Pepsi Teach You About Blogging? Part 1
Posted on December 4, 2007 - Filed Under Marketing Strategies
I realised last weekend that I have only written 2 posts for the whole of last week. There has been a lot happening on the job front, and my “reserve posts” were general ideas without researched content or thought flows - therefore, unusable. I will continue aiming to publish at least 4 -5 posts a week, and any feedback that you have regarding the number or type of post you will like to see on a weekly basis are welcome. I have found that by posting less, I have more time to let an article brew in my head and heart, and the articles I write contain more value and live experience weaved into them. However, I will experiment on short posts during the middle / end of the week to see if that works as well.
A short announcement before the beginning of the post - I have decided to add a little something for subscribers to my blog. I will be posting a weekly podcast where I journal the “latest news” read on the web that I may not blog about, and where I got the idea to blog on a particularly popular post of the week. Each podcast will be published as a single post, so that subscribers can comment and discuss on the content of the podcast. I will run it for a month, and if it is successful and my target percent of subscribers increase by 50%, I will put it as a permanent feature for my blog.
Now to my post for today. I have wanted to do an article on product diversity for some time now, how that can apply to Internet Marketing as a viable strategy for building a successful blog. First, let me give you a legendary example of product diversification, and how that has helped a secondary brand usurp a market leader.
The Cola Wars
Coca Cola started out as the market leader of Cola drinks in 1886 while Pepsi was only invented in 1898. Most of you will remember the cola wars, and today who really won resides in the minds of consumers and fans. However, Fortune quotes that
The great irony of Pepsi’s rise is this: It has never sold more soda than Coke, even today.
and
“Pepsi’s been on fire,” notes Robert van Brugge, beverage analyst with Sanford Bernstein. Over the past five years its stock has risen more than a third, while Coke’s has sunk 30 percent.
What led to Pepsi’s success over Coke, from the stock perspective? It was Pepsi’s ability to detect the rise of an emerging market. When you become a brand as big as Coke, it is easy to sit back, relax and think that because you have a stronger brand than other competitors in the same category, you only need to invest in brand maintenance to protect your market share. Coke failed to realize that the market changes as the world evolves. While a brand may go down in history as the greatest brand that ever lived, it does not necessary mean that it is always marketable / sale-able.
What Pepsi did, was capitalize on the tastes of this new emerging market that preferred non-carbonated drinks, and they quickly diversified themselves and manufactured other drinks besides cola. By the time Coke realized that they were losing good market share, they were already behind in the game. Give it another generation, and not many people will remember that Coke was actually the leading brand before Pepsi arrived on the scene. That is also because Pepsi has been doing a great job of targeting a clearly defined audience as the trendier, hippy and edgier youths of today.
The Benefits of Product Diversity
What was it about diversifying their products that caused Pepsi to win the market share war? Note it is no longer about the taste or how many bottles of cola sold, but where the market share and stock price of these 2 brands stand.
It Provides the Opportunity to Capture Emerging Audiences. Let’s relate it to your blog. If you have started a blog for Palm Treo users and realized with the launch of the iPhone, you are losing a huge chunk of your audience to blogs on apple gadgets and devices, what do you do? Put more money into advertising, rave about how buggy the iPhone is in forums, close your blog, or you can start another blog that compares the latest models of PDAs or PDA phones and recommending the best model to your readers. Remember, don’t focus on fighting the battle and losing the war. The focus here is your market share in a target niche and/or the profitability of your blog. Don’t lose out on that because of what I call Brand Pride. While you could still do a lot of promotional activities for your existing Palm Treo blog by running contests, giving free gifts, and so forth, it requires a lot more effort with smaller returns than choosing to move with the emerging trends and riding on it.
It Dips into Related Niche Markets Without Brand Deviation. As today’s competition gets keener, it is no longer enough to target the “broad audience”. While blogs on “How to Make Money Online” are popular, very few of them stand out except A list bloggers who have been dominating this niche category since 2005. How would you diversify your blog in capturing market share for this much desired niche? The couple of options at the top of my mind are geography and vertical markets. Everyone in this niche category seems to be going after the North American market, and that is understandable given that the technology, history, culture and social developments of blogging all started from there. However, if you are willing to just turn your head a little to look at other regions like Asia and Europe - the number of Internet users in these 2 regions supercede that of North America. A list of the top 20 countries in terms of Internet usage shows China having 162 million users while United States reports a total of 211 million users. The difference is that while the “Make Money Online” niche is already saturated for the American market, it hasn’t even begun to evolve in the China market. If you wished you were John Chow or Darren Rowse who penetrated this niche during the “golden era” of blogging, it may not be too late for you if you are willing to invest a little more money in translation or even picking up the mandarin language and putting your stake in China or Japan.
If language is not your forte and you dread the hassle of managing translations, another option for diversifying your blog is to look at vertical markets. While A list bloggers are still broadly targeting the “Make Money Online” audience, very few are diversifying into posts on how to make money online for the securities & banking sectors, or Internet service providers and online retailers. According to Fortune 500, these are among the top growth industries in 2007. If you tailor your articles to audiences involved in each of these industries, target private ad sales to specific advertisers, and participate in affiliate programs in these niche markets you stand a good chance at making some very decent money. You may not become as big a brand as John Chow in the general “make money online” niche, but you will be big in the individual niche markets and could end up with 80% market share in each niche rather than having 5%, 10% or 20% in each of the differing markets.
I will elaborate on further benefits of diversifying your blog in the next post. If you have had success in running blogs on how to make money online in specific niche markets, I would love to hear what you have learned.
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6 Responses to “What Can Pepsi Teach You About Blogging? Part 1”
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Nice article, you have a small typo though:
“Coca Cola started out as the market leader of Cola drinks in 1886 while Pepsi was only invented in 1998.”
Pepsi was invented in 1898, not 1998
Hi bakkouz, Thanks for the catch!
Hi Ivy,
I live in Coca Cola city, Atlanta, GA, USA. One of the reasons Coke has troubles is that it’s a hide bound bureaucratic mess internally. I’ve turned down 2 programming contracts there because I could tell from the initial interview there that the projects were doomed. Essentially they’ve been a mess since the 70’s when “professional management” came in and messed everything up, at least to some people I know who’ve worked there a long time.
Visiting the Coke Museum is fun though. I’ll have to blog about it sometime.
Frank, that’s a coincidence! Didn’t know that you lived in Coca Cola city. Do remember to put up some photos from the museum in your Coke post!
[…] Part 1 of this topic, I talked about how Pepsi usurped Coke by diversifying their products. As Internet Marketers, there […]
Hello!
Nice site
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