Last but not least: The victims of the Pepsi offensive
Pepsi is pouring more money into advertising to fend off its archrival, Coca-Cola. However, the advertising campaign is also part of a restructuring of the entire company, which will result in the loss of 8,700 jobs.
That is around 3 percent of the entire workforce. At the same time, the US food multinational invested 25 percent more money in advertising in its home market in the first quarter than in the same period last year. The reorganization that has been initiated is showing "good results, is on track and will have an even better impact as the year progresses", explained company boss Indra Nooyi on Thursday, according to SDA. She announced the plans in February. One of the reasons: Coca-Cola had recently grown faster, in the first quarter, for example, by 6
percent.
In the same period, Pepsi increased by 4 percent to a turnover of 12.4 billion dollars. "The first quarter shows how strong our brands are," said Nooyi according to SDA. Now, however, Pepsi not only has to fend off Coca-Cola, but also digest higher raw material costs. The company has passed on some of these costs to customers through higher prices. In order to simplify their business, both Pepsi and Coca-Cola have taken over large bottling plants in the recent past.
So a company that can afford to increase its advertising budget by 25 percent is cutting 8,700 jobs. Does that say anything about the quality of the products? The fact that Coca Cola simply tastes better cannot be attributed to the reorganization - but the thought of it leaves a bad aftertaste.
