Why large companies like coca cola spend on advertising

There are two main reasons why Coca Cola invests as much in marketing and promotions. First of all, it is the competition from Pepsi, its leading rival that Coca Cola invests so much in marketing. Next is brand recognition. Coca Cola continuously strives to drive its brand recognition higher which is also a source of competitive advantage for it. These are the two main reasons. Apart from that, the company runs seasonal campaigns and invests in advertising (both online and offline to drive sales and revenue). Moreover, advertising is important for branding purposes too and has helped Coca Cola establish itself as a distinct brand with a unique identity in the global market. In the case of both Coca Cola and Pepsi, advertising is not just to drive sales but to grow their overall influence in the global soda industry. The two spend comparable sums on marketing each year. Most of it is spent on advertising and promotions.