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Colin Johnson’s blog


Coke, Pepsi, and Universities

Why does Coca-Cola still advertise? For most people in most of the world, it is a universal product—everyone knows about it, and more advertising doesn’t give you more information to help you make a purchasing decision. After a while, advertising spend and marketing effort is primarily about maintaining public awareness, keeping the product in the public eye, rather than giving people more information on which to make a decision. There is something of the “Red Queen” effect here; if competitors are spending a certain amount to keep their product at the forefront of public attention, then you are obliged to do so, even though the best thing for all of the companies involved, and for the public, would be to scale it down. (This is explained nicely in an old documentary called Burp! Pepsi vs. Coke: the Ice Cold War.) There’s a certain threshold where advertising/marketing/promotion tips over from informative to merely awareness-raising.

This is true for Universities as much as other organisations. A certain amount of promotional material is useful for prospective students, giving a feel of the place and the courses that are available. But, after a while, a decent amount of both student’s own fee money, and public investment, goes into spend over this threshold; mere spend for the purpose of maintaining awareness. However, in this case, we do have some mechanism to stop it. Perhaps universities should have a cap on the proportion of their turnover that they can spend on marketing activities, enforced by the withdrawal of (say) loan entitlements if they exceed this threshold.

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