Pepsi dominated cola before World War I but cut marketing during the war and went bankrupt. Coca-Cola kept spending and expanded globally, seizing the lead. The story shows why brands that pull back ads in recessions often lose to competitors who don't.
Let me tell you a story. Before World War I, Pepsi was the number one cola brand in the world. But they made the grave mistake of cutting their marketing budget when the war hit. Meanwhile, Coke went all in, doubling down on their marketing efforts and expanding into Europe, Australia and South Africa. Pepsi ended up going bankrupt and offered to sell out to Coca Cola, but they declined. This blood feud between Coke and Pepsi was dubbed the Cola Wars. So although natural impulse is to cut back on advertising during a recession, the companies that don't prevail and win the market.
