Final answer:
The Pepsi party candidate wins the election due to vote splitting among the four Coca-Cola candidates, illustrating how brand loyalty to Coca-Cola translates to lower marketing costs for the company.
Step-by-step explanation:
Understanding Election Dynamics in Marketing Context
The scenario presented involves an election for Soft Drink Commissioner with one candidate from the Pepsi party and four from the Coca-Cola party. This situation might initially suggest a strong preference for Coca-Cola among voters. However, the outcome was unexpected; the candidate from the Pepsi party wins by a landslide. The reason behind this is a classic example of the vote-splitting effect, also known as the spoiler effect. Here, the four candidates from the Coca-Cola party split the votes of Coca-Cola supporters among themselves, diluting their overall vote count. Meanwhile, Pepsi's lone candidate consolidated the support of Pepsi voters, securing a majority.
The Role of Brand Loyalty in Marketing Expenditures
Having loyal customers, like Harold, can significantly reduce the marketing expenditures for companies such as Coca-Cola. These customers continue to purchase the product without the need for extensive advertising or promotions, thanks to their brand loyalty. Hence, businesses can allocate their marketing resources more efficiently or focus on attracting new customers without jeopardizing their hold on the existing customer base.
The Global Impact of Coca-Cola
Coca-Cola is not only a powerful symbol of global trade but also reflects the challenges and interconnectedness of the contemporary world. Despite controversies, such as labor issues in South America and environmental concerns in India, Coca-Cola remains a dominant force in the global market. This dominance is partly due to their large promotional budgets, which can deter potential competitors from entering the market, thus maintaining their market position.