Coke and Pepsi are primarily considered substitutes. This means that consumers often choose one over the other based on personal preference, taste, or even price. When someone reaches for a cola beverage, they typically see Coke and Pepsi as alternative options that fulfill a similar need for a sweet, carbonated drink.
However, the nature of substitutes can vary. In the cola market, both brands compete for the same consumer base, and a change in the price or marketing of one can directly influence the sales of the other. For instance, if the price of Pepsi decreases, some Coke drinkers might switch to Pepsi, demonstrating the substitutive relationship.
On the other hand, Coke and Pepsi are not complements. Complementary goods are products that are consumed together, like burgers and fries. Since Coke and Pepsi compete against each other, they do not fit this definition. Finally, they are not unrelated goods either, as unrelated goods wouldn’t have any impact or relation to one another in consumer choice.
In summary, Coke and Pepsi are substitutes, meaning they serve similar functions and consumers often choose one over the other based on varying factors.