135383954-coke-vs-pepsi

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EXECUTIVE SUMMARY

This project is an extensive research on the marketing strategies of the two Cola giants

Pepsi and Coca Cola. It covers an extensive survey and depicts all graphs,

fact and figures of two companies. It begins with the introduction of soft

drink industry and introduction of these two companies of soft drink industry.

It covers some of the major strategies adopted by Pepsi and CocaCola like

their pricing policy, sales promotion and advertising policy, distribution

policy etc. The project has been made interesting with the inclusion of the

topics, which covers the !P"s of marketing.

The major players in the soft drink industry in India are Coke and Pepsi. Pepsi holds the

major market share followed by Coke. They have a cut throat competition

between themselves. #hatever strategy is followed by one company, it is

copied by the other.

$ne of the selected brands is %$& brand in their respective product categories the other

one brand is close competitor of the %o & brands. Total sample of si'e of ())

respondents selected on the basic of convenience was surveyed which include

consumers.

*ata was collected from secondary as well as primary sources. +tructure uestionnaire

was use to collect primary data

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INTRODUCTION:

In the modern urban culture consumption of soft drinks particularly among younger

generation has become very popular. +oft drinks in various flavors and tastes are widely

patroni'ed by urbane population at various occasions like dinner parties, marriages,

social get together, birthday calibration etc. children of all ages and groups are especially

attracted by the mere mention of the word soft drinks.

#ith the growing popularity of soft drinks, the technology of its production, preservation,

transportation and or marketing in the recent years has witnessed phenomenal changes.

The socalled competition for this product in the market is from different other brands.

-ass media, particularly the emergence of television, has contribute to a large extent of

the ever growing demand for soft drinks the attractive jingles and sport make the largeaudience remember this product at all times.

It is expected that with the sort of mass advertising, reaching almost the entire country

and offering various varieties annual demand for the product is expected to rise sharply in

the times to come.

In any marketing situation, the behavioral environmental variables relating to

consumers, competition and environment are constantly influx. The competitors in a

given industry may be making many tactical maneuvers in market all the time. The may

introduce or initiate an aggressive promotion campaign or announce a price reduction.

The marketing man of the firm has to meet all these maneuver and care of competitive

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position of his firm and his brand in the market. The only route open to him for achieving

this is the manipulation of his marketing tactics.

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SOT DRIN! INDUSTRY: AN OVERVIE"

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It all began in &001, when a tree legged brass kettle in 2ohn +tyth pemberton"s backyard

in 3tlanta was brewing the first P of marketing legeent 4naware the pharmacist has given

birth to a caramel colored syrup, which is now the chief ingredient of the world"s favorite

drink. The syrup combined with carbonated the soft drink market. It is estimated that this

drink is served more than one thousand million times in a day.

5ually oblivious to the historic value of his actions was 6rank Ix. 7obinson, his partner

and book keeper. Pemberton 8 7obinson laid the first foundation of this beverage when

an average nine drinks per day to begin with, upping volumes as sales grew.

In &09!, this beverage got into bottle, courtesy a candy merchant from -ississippi. :y

the &9;)"s Colas was a daily consumption item, stored in house hold fridges. +oon were

born other non cola variants of this product like orange 8 <emon.

%ow, the soft drink industry has been dominated by three major player = >&? The %ew

@ork based Pepsi co. Inc.>(? The 3tlanta based coca cola co. >/? The united Aingdom

based Cadbury +chweppes.

Though out the glove these major players have been battling it. $ut for a bigger chunk of

the evergrowing cold drink market. %ow this battle has begun in India too. India is now

the part of cold drink war. Bone are days of 7amesh Chauhan, India"s one time cola king

and his bouts of pistol shooting. 5xpect now to hear the boon of cannons when the Coca

Cola 8 Pepsi co. battles it out for, as the ordon goes a bigger share of throat. :y buying

$ver local competition, the two 3merican Cola giants have cleared up the arena and are

packing all their power behind building the Indian franchisee of their globe girdling

brands. The huge amount invested in fracture has never been seen before. :oth players

seen an enormous potential in his country where swigging a carbonated beverage is still

considered a treat, virtually a luxury. Conseuently, by world standards India"s per capita

consumption of cold drinks as going by survey results is rock bottom, less than over

%eighbors Pakistan 8 :angladesh, where it is four times as much.

:ehind the hype, in an effort invisible to consumer Pepsi pumps in 7s /))) crores >&99!?

to add muscle to its infrastructure in bottling and distribution. This is apart from money

that company"s franchised bottles spend in upgrading their plants all this has contributed

to substantial gains in the market. In colas, Pepsi is already market leader and in certain

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cities like :anaras, Pepsi outlets are on one side 8 all the other colas put together on the

other. #hile coke executive scruff at Pepsi"s claims as well as targets, industry observers

are of the view that Pepsi has definitely stolen a march over its competitor coke.

3part from numbers, Pepsi has made ualitative gains. The foremost is its image. This

image turnaround is no small achievements, considering that since it was established in

&909, taking the hardship route prior to liberali'ation and weighed down by export

commitments.

%ow, at present as there are three major players coke, Pepsi and Cadbury and there is stiff

competition between first two, both Pepsi and coke have started, sponsoring local events

and staging freuent consumer promotion campaigns. 3s the mega event of this century

has started, and the marketers are using this event = world cup football, cricket events and

many more other events.

<ike Pepsi, coke is picking up euity in its bottles to guarantee their financial supportD

one side coke is trying to increase its popularity through.

5at 6ood, enjoy 6ood. *rink only coca cola. 5at cricket, sleep cricket. *rink only coca

cola. 5at movies, sleep movies. *rink only coca cola.

$n the other side of coin Pepsi has introduced 3-IT3:2 :3C223% for capturing the

lemon market through -I7I%*3 = <emon with E'or ka jhatka dhere se lageF.

:ut no doubt" that 4A based Cadbury is also recogni'ing its presence. +o there is a real

crush in the soft drink market. with launch of the carbonated organi'e drink Crush, few

year ago in :anaras ., the first in a series of a launches , Cadbury +chweppes beverage

India >C+:I? 23+ P<3%%5*G The world third largest soft drink marketers all over the

country.C+:I o wholly owned subsidiary of the <ondon based H 1.;(billion. Cadbury

+chweppes is hoping that crush is going well and well not suffer the same fate as the 7s.

&; crore Cadbury India"s apple drink 3pella. C+:I is now with orange >crush?, and

+chweppes soda in the market.

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3s orange drinks are the smallest of noncola categories that is 7s. &&)) crore markets

with &)J market share and cola heaving ;)J is followed by <emon segment with (;J.

The success of soft drink industry depends upon ! major factors vi'.

3vailability

Kisibility

Cooling

7ange

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COCA #CO$A COM%ANY %ROI$E

Aeeping in view of tapping the Indian soft drink market and also developing soft drinks

as a drinking product among Indians. The CocaCola in India has setup an independent

organi'ations which is 2.C.C 8 :.C.C with a capital of /;) 4.+.H each by virtue of

sellout decision of the passed managing director +h. +. C. 3ggarwal.

2industan CocaCola bottling >%#? Pvt. <td. %ajibabad took the complete possession

of this plant, land, machinery, 8 intellectuals on 6ebruary &!" &990 and since then

2.C.C, looking after all its affairs under company owned bottling plant to establish

integrated marketing system in the area.

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CORE &RANDS:

CocaColaG *eveloped in a brass pot in &001, cocacola is the most recogni'ed and

admired trademark around the globe. %ot to mention the

best selling soft drink in the world.

+priteG In &91&, a citrusflavored drink made its 4.+ debut, using E+prite :oy

Eas inspiration for its name. This elf with silver hair and a big smile was used in

&9!)s advertising for CocaCola. +prite is now the fastest growing major soft drink

in 4.+ and the world"s most popular lemonlime soft drink.

6anta G The name Efanta E was first registered as a trademark in Bermany in &9!& ,when

it was used for a few year for a soft drink created from available materials and

flavors . The name was then revived in &9;; in %aples, Italy, when it was used for

theGF fanta Eorange drink we know today. It is now the trademark name for a line of

flavored drinks around the world.

*iet cokeG The extension of the cocacola name began in &90( with the introduction of

diet coke >also called cocacola light in some countries?. *iet coke uickly becomes the

number = one selling low =calorie soft drink in the world.

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'ISTORY IN INDIA

Coca(cola )* I*+)a

CocaCola, the corporation nourishing the global community with the world"s largest

selling soft drink concentrates since &001, returned to India in &99/ after a &1 year hiatus,

giving new thumbs up to the Indian soft drink market. In the same year, the Company

took over ownership of the nation"s top softdrink brand and bottling network. It"s no

wondering our brands assumed an iconic status in minds of world"s consumers.

&)

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A 'ealth, -owth to the I*+)a* Eco*om,

5ver since, CocaCola India has made significant investments to build and continually

consolidate its business in the country, including new production facilities, waste water

treatment plants, distribution systems, and marketing channels.

CocaCola India is among the country"s top international investors, having invested more

than 4+H & billion in India in the first decade, and further pledged another 4+H&))million in ())/ for its operations.

A %e Comm)tme*t to the I*+)a* Eco*om,

The Company has shaken up the Indian carbonated drinks market greatly, giving

consumers the pleasure of worldclass drinks to fill up their hydration, refreshment, and

nutrition needs. It has also been instrumental in giving an exponential growth to the

country"s job listings.

Ceat)*g E*omos 0o1 Oppot*)t)es

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#ith virtually all the goods and services reuired to produce and market CocaCola being

made in India, the business system of the Company directly employs approximately

1,))) people, and indirectly creates employment for more than &(;,))) people in related

industries through its vast procurement, supply, and distribution system.

The Indian operations comprises of ;) bottling operations, (; owned by the Company,

with another (; being owned by franchisees. That apart, a network of (& contract packers

manufactures a range of products for the Company.

$n the distribution front, &)tonne trucks = open bay threewheelers that can navigate the

narrow alleyways of Indian cities = constantly keep our brands available in every nook

and corner of the country"s remotest areas.

These are only some of the facts that speak about our commitment to the growth of the

Indian 5conomy

&(

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%ROMISE &Y COCA(CO$A

The cocacola company exists to benefits and refreshes every one it touches. The basic

proposition of our business is simple, solid and timeless. #hen we bring refreshment,

value, joy and fun to our stakeholders then we successfully nurture and protect our brand,

particularly cocacola. That is the key to fulfilling our ultimate obligation to provide

consistently attractive to the owner so four business.

-ore then a billion times every day, thirsty people around the world reach for cocacola

products for refreshment. They deserve the highest

Luality = every time. $ur promise to deliver that uality is the most important promise

we make. and it involves a worldwide , yet distinctively local , network of bottling partner , supplier , distributor and retailers whose success is paramount to our own. $ur

investment in local communities in over ()) countries totals billions of dollars in jobs,

facilities, marketing, the purchase of local good and services, and local business

partnership. 3lways and every where , we pursue continuous innovation in the products

we offer the processes we use to make them, the package we develop and the way we

bring them to market .

&/

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&RANDS IN INDIA

R

&!

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&RAND IN INDIAN ORI-IN

B$<* +P$TG this orange carbonate soft drink was introduced in the early &9;)c, and

acuired by the CocaCola company in &99/, its tangy taste has been popular with

Indian teenagers

<I-C3G It is thirstuenching beverage features a fresh and light lemonlime taste and

lighthearted attitude. The limca brand was introduced in &9& and acuired by the

cocacola company in &99/.

&;

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-33M3G -aa'a, launched in &90! and acuired by the cocacola company in &99/, is a

non carbonated mango soft drink with a rich, juice 8 natural mango taste.

T24-P+ 4PG in &99/, the CocaCola company acuired this brand, which was

originally introduced in &9. Its strong and fi''y taste makes it uniue carbonated

Indian cola.

%E%SICO

&1

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PepsiCo is one the largest companies in the 4.+. It figures amongst the largest &;

companies worldwide according to the number of employees hired. It has a 4.+. 6ortune

rank of ;).The company profits for &99 were H(.&! billion on revenues of H().9( billion

and Pepsi is bottled in nearly &9) countries. PepsiCo is a world leader in convenient

snacks, foods and beverages with revenues of more than H!/ billion and over &90,)))

employees. Take a journey through our past and see the key milestones that define

PepsiCo.

PepsiCo is a world leader in the food chain business. It consists of many companies

amongst which the prominent once are PepsiCola, 6rito<ay and Pepsi 6ood

International. The group is presently into two of the most profitable and profitable and

growing industries namely, beverages and snack foods. It has scores of big brands

available in nearly &;) countries across the globe. The group has established for itself

once of the strongest brands in various segments of its operations.

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The beverages segment primarily markets its Pepsi, *iet Pepsi, -ountain *ew and other

brands worldwide and 4P outside the 4.+. markets. These are positioned in close

competition with CocaCola Inc. of 4+3. 3 point which is worth a mention is that Coca

Cola gets 0)J of its profits for International operations while the same figure for

PepsiCo stands at 1J. The segment is also in the bottling plants and distribution facilities

and also distributes the ready to drink tea products of <ipton in %orth 3merica. In a joint

venture with orient spray juice products PepsiCo also manufactures and distributes fruit

juices.

The snack food division manufactures and distributes and markets chips and other snacks

worldwide. The international operations of this segment extend to the markets of -exico,

the 4A and Canada. 6rito<ay represents this segment of PepsiCo.

The restaurant segment earlier primarily consists of the operations of the worldwide Pi''a

2ut, Taco :ell and A6C chains. P6+. Pepsi company"s restaurant distribution operation,

supplies company owned and franchise restaurants in the 4.+. The company ventured

into restaurant business with Taco :ell, A6C, Pi''a 2ut ended last year when they were

spanned off from the company. 3 packaged goods company comprised of PepsiCola

Company and 6rito<ay will continue to bear the PepsiCo name. The move shouldenhance both corporations ability to prosper with their own fully dedicated structure and

management team.

&0

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%E%SICO IN INDIA

PepsiCo gained entry to India in &900 by creating a joint venture with the Punjab

governmentowned Punjab 3gro Industrial Corporation >P3IC? and Koltas India <imited.This joint venture marketed and sold <ehar Pepsi until &99&, when the use of foreign

brands was allowedD PepsiCo bought out its partners and ended the joint venture in &99!.

$thers claim that firstly Pepsi was banned from import in India, in &9), for having

refused to release the list of its ingredients and in &99/, the ban was lifted, with Pepsi

arriving on the market shortly afterwards. These controversies are a reminder of NIndiaOs

sometimes acrimonious relationship with huge multinational companies.N Indeed, some

argue that PepsiCo and The CocaCola Company have Nbeen major targets in part

because they are wellknown foreign companies that draw plenty of attention.N

In ())/, the Centre for +cience and 5nvironment >C+5?, a nongovernmental

organi'ation in %ew *elhi, said aerated waters produced by soft drinks manufacturers in

India, including multinational giants PepsiCo and The CocaCola Company, contained

&9

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toxins, including lindane, **T, malathion and chlorpyrifos pesticides that can

contribute to cancer, a breakdown of the immune system and cause birth defects. Tested

products included Coke, Pepsi, 4p, -iranda, 6anta, Thumps 4p, <imca, and +prite.

C+5 found that the Indianproduced PepsiOs soft drink products had /1 times the level of

pesticide residues permitted under 5uropean 4nion regulationsD Coca ColaOs /) times.

C+5 said it had tested the same products in the 4+ and found no such residues. 2owever,

this was the 5uropean standard for water, not for other drinks. %o law bans the presence

of pesticides in drinks in India.

The CocaCola Company and PepsiCo angrily denied allegations that their products

manufactured in India contained toxin levels far above the norms permitted in the

developed world. :ut an Indian parliamentary committee, in ())!, backed up C+5Os

findings and a governmentappointed committee, is now trying to develop the worldOs

first pesticides standards for soft drinks. Coke and PepsiCo opposed the move, arguing

that lab tests arenOt reliable enough to detect minute traces of pesticides in complex

drinks.

3s of ());, The CocaCola Company and PepsiCo together hold 9;J market share of

softdrink sales in India. PepsiCo has also been accused by the Puthussery panchayat in

the Palakkad district in Aerala, India, of practicing Nwater piracyN due to its role in

exploitation of ground water resources resulting in scarcity of drinking water for the

panchayat residents, who have been pressuring the government to close down the

PepsiCo unit in the village.

In ())1, the C+5 again found that soda drinks, including both Pepsi and CocaCola, had

high levels of pesticides in their drinks. :oth PepsiCo and The CocaCola Company

maintain that their drinks are safe for consumption and have published newspaper

advertisements that say pesticide levels in their products are less than those in other foods

such as tea, fruit and dairy products. In the Indian state of Aerala, sale and production of

PepsiCola, along with other soft drinks, was banned by the state government in ())1,

but this was reversed by the Aerala 2igh Court merely a month later. 6ive other Indian

states have announced partial bans on the drinks in schools, colleges and hospitals

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%E%SI CO INDIA: A ORTUNE 233 COM%ANY IN INDIA

PepsiCo, which ranks among the world"s five largest food and beverage

companies with &1 brands, and its partners have invested more than

4+H )) million in India building businesses, which today provide

direct or indirect employment to more than 1),))) people. +ince

Pepsi"s entry into the Indian market in &909, several brands from its

portfolio have become established category leaders. :rand Pepsi is

now the (nd biggest brand in the country. PepsiCo"s portfolio of

beverage brands in India includes the flagship cola brand PepsiD *iet

PepsiD two flavors of -irinda = $range and <emonD 4PD -ountain

*ewD packaged drinking water 3uafinaD variants of the fruit drink

brand +liceD the &)) per cent fruit juice brand Tropicana in several

variants and the world"s leading sports drink Batorade.

(&

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.

%eps) ( Yeh 'a) Yo*g)sta* Me) 0aa*

&RAND 'ISTORY

Pepsi is a hundred year old brand loved by over ()) million people worldwide. The

largest single selling soft drink brand in India is the ubiuitousOsocialiserOat every

occasion.

• @oungistan loves it. ()) million people worldwide love it. :ut what has made

Pepsi the single largest selling soft drink brand in India is actually a formula

concocted a century ago in a far away continent.

• &001, 4nited +tates of 3merica. Caleb :rad man, the man with a plan, got on to

formulate a blockbuster digestive drink and decided to call it :rad"s drink. It wasthis doctor"s potion that was to become Pepsi Cola in &090, and eventually, Pepsi

in &9)/.

• Pepsi has always played on the front foot and since its inception has come out

with revolutionary concepts like *iet, (< bottles, recyclable plastic cola bottles

and the enviable -y Can.

&RAND ADVANTA-E

• Pepsi has become a friend to the youth and has led many youth cultures.

@oungsters over the generations have grown up with Pepsi and share an

emotional connect with it, unlike any other cola brand. :e it parties, hangouts, or

just another day at home, a day is never complete without the fi'' of PepsiQ

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• Pepsi, Cricket and :ollywood have been joined at the hip since the beginning.

+hah 7ukh Ahan, +achin Tendulkar, +aif 3li Ahan, 3mitabh :achchan, Aareena

Aapoor, Priyanka Chopra, Kirender +ehwag, -. +. *honi, ohn 3braham, 7anbir

Aapoor and *eepika Padukone are a few celebrities who will go any length for a

chilled Pepsi.

• The Pepsi -y Can is undoubtedly the most popular cola pack of all times. It is not

just a pack but a style statement for today"s youth.

T'E RIVAR$Y &E-INS:

Co4e Comes to I*+)a

CocaCola comes to India with fanfare in the fifties. 6or a number of days, The

2industan Times and other newspapers of %ew :anaras carried full page advertisement

showing a big boy in uniform with a softdrink crown as the cap. There was no indication

of the product. 3fter a few days, Coke was introduced. It was an entirely new drinkwhich fascinated people. It soon became the national drink. 6or the first time, a softdrink

was available from one corner of the country to another. The person who brought Coca

Cola to India was the father of late +ardar Charanjit +ingh, +ardar -ohan +ingh. 3

practical man -ohan +ingh reali'ed that to populari'e CocaCola, and make it a best

seller it was necessary to Ecatch them young.F +o he focused on youngsters in the society.

The company reali'ed that to become a mass consumption product, one has to go to the

village. They gave much importance to the distributive network. The company truckssupplied coke to even the remotest village.

6ew products appears to be more similar than soft drinks, yet the Cola wars that mark the

competition between Coke and Pepsi show how even organi'ations with highly similar

product can be differentiated by their business strategies. Then comes battles over the

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issue of bottle si'e standardi'ation. Coke the arch rival tried to offering more Cola at a

lower price. Pepsi which had some of its early investment tied up in (;)ml bottles, went

the fountain way. The Beneral bottle si'e freed has settled at /)) ml. &)) ml more than

the pre -%C standard. 6ountain mix dispensers, carry home bottles, even &.;) plastic

bottle with caps good enough to keep them lying down and still preserve the fi''.

MAR!ETIN- STATE-IES O CO!E AND %E%SI

a5 %RODUCT

Coke was launched in India in 3gra, $ctober (!, in O9/O, soon after its traditional

all Indian launch of its Cola. 3t the sparking new bottling plants at 2athra, near 3gra.

Coke was back with a bang after its exit in &9.

Coke was planning to launch in next summer the orange drink, 6antawith the

clear lemon drink, sprite, following later in the year.

Coke already owns more brands than it will over need, since it has bought out

7amesh Chauhan. Coke just needs to juggle these brands around dextrously to meet its

objectives, to ensure that Pepsi does not gain market share in t Today, CokeOs product

line includes, CocaCola, Thumps 4p, 6anta, Bold +pot, -aa'a, Citra, +prite, :isleri

Club +oda and *iet Coke.

%AC!A-IN-

CocaCola India <imited >CCI<? has bottled its Cola drink in different si'es and

different packaging i.e., ()) ml bottle, /)) ml. :ottle, //) ml. Cans, ;)) ml. :ottlefountain Pepsi, and bottles of & and ( litre.

%RODUCT %OSITIONIN-

$ne important thing must be noticed that Thumps 4p is a strong brand in western

and southern India, while Coca Cola is strong in %orthern and 5astern India. #ith

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volumes of Thumps 4p being low in the capital, there are likely chances of Coca Cola

slashing the prices of Thumps 4p to 7s. ; and continue to sell Coca Cola at the same

rate. 3nalysts feel that this strategy may help Coke since it has ( Cola brands in

comparison to Pepsi which has just one.

Thumps 4p accounts for !)J of Coca Cola companyOs turn over, followed by

Coca Cola which has a (/J share and <imca which accounts for &J of the turn over of

the company. >Thumps up being the local drink, its share in the market is intact, forcing

the company to service the brand, as it did last year -r. *onald short C5$, Coca Cola

India, said that, N we will be absolutely comfortable if Thumps 4p is %o. & brand for us

in India in the year ())). #e will sell whatever consumers want us toN. Coca Cola India

has positioned Thumps up as a beverage associated with adventure because of its strongtaste and also making it compete with Pepsi as even Pepsi is associated with adventure,

youth.

15 %RICE

The price being fixed by industry, leaving very little role for the players to play in

the setting of the price, in turn making it difficult for competitors to compete on the basis

of price.

The fixed cost structure in Carbonated +oft *rinks Industry, and the intense

competition make it very difficult to change or alter the prices. The various costs

incurred by the individual companyOs are almost unavoidable. These being the costs of

concentrates, standard bottling operations, distributor and bottlers commissions,

distribution expenses and the promotional and advertising expenditure >3s far as Coke is

concerned, it had to incur a little more than Pepsi as Pepsi paved its way to India in &909

while Coke made a come back in &99/.?

Currently a /)) ml. Coke bottle is available for 7s. 1 to0 The //) can was initially

available for 7s. &/ and now, since the price has gave up to 7s. &0 per can. The prices of

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;)) m, & litre. 3nd (ltr being 7s. &; 7s. (/ and 7s. !) respectively >according to the

current survey?.

*ating back to R9/O, when Pepsi hiked the price of Pepsi Cola from 7s. ; to 7s. 1

per (;) ml. bottle in some parts of the countryincluding 3gra. Coke penetrated the

market with price of 7s. ; for a /)) ml. bottle, making it cheaper by 7s. & and ;) ml.

than Pepsi. CokeOs strategy at that time being able to expand the availability of soft

drinks even in rural India. CokeOs priority being to first increase the number of drinks per

drinker, and then the number of drinkers itself. Pepsi also tried this but was trapped by a

series of competitive price increase and changes in bottle si'es by Parle. :ut the prices of

soft drinks have shot up since PepsiOs arrival and the current prices are being mentioned

as under.

%)ce l)st

Name &ottle S)6e MR% 7)* Rs.5

Co4e %e &ottle 833 ml 9

Co4e 33 ml ;3

Co4e 233 ml 7%last)c / -lass5 88

Co4e 8 l)te 93

D)et Co4e 7Ca*5 3 ml Ca* 2

Co4e 7Ca*5 3 ml Ca* <

(1

8/12/2019 135383954-Coke-vs-Pepsi


2owever, the trends may have been in the early O9)Os, now the prices of Pepsi and Coke

are the same making it difficult in future and present to compete on the basis of price.

c5 %$ACE

Coke may have gained an early advantage over Pepsi since it took over Parle in

&99!. 2ence, it had ready access to over (, )),))) retailer outlets and 1) bottlers. Coke

was had a better distribution network, owing to the wide network of Parle drinks all over

India. Coke has further expanded its distribution network.

Coke and its product were available in over (, ;),))) outlets >in contrast with PepsiOs (,

)),)))?. Coke has a greater advantage in terms of geographical coverage.

:ut Coke has had problems with its bottlers as the reuired profits for the bottlers

have not been forthcoming. This is more so because Coke has hiked the price of its

concentrate by 7s. 0 6urther, CokeOs operations in India are &))J 6obs. %ow, it plans to

convert then into C$:$s. This is straining the relationship between the Coke and its

bottlers.

The company had decided to create a fund to reimburse performing bottlers for the extra

costs incurred on account of the hike in prices of soft drink concentrates. -r. +hort also

reali'ed that India is a price sensitive market and the company would have to absorb in

the increase in excise duty and said that in the long run Coke will have to slash prices for

the benefit of the consumers and said that they were considering a cut in the prices of

their fountain soft drinks.

(

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Coke and Pepsi have devised strategies to get rid of middlemen in the

distribution network. 2owever, ;)J of the industry unfortunately depends on these

middlemen. 3s of now, around &)) agents are present in :ananas. :ottlers of the (

multinationals have strongly felt the need to remove these middlemen from the

distribution system, but very little success has been achieved in doing so.

D5 %ROMOTION

It must be remembered that soft drinks purchases are an

Nimpulse buy low involvement productsN which makes promotion and advertising an

important marketing tool. The ( arch rivals have spent a lot on advertising and on

promotional activities.

To promote a brand and even to spend a lot on advertising, the company must be

aware of the perceived uality of the brand, its brand power >if at all there is? since

consumers make purchase decision based on their perceptions of value i.e., of uality

relative to price.

3ccording to Paul +tobart, 3dvertising encourages customers to recogni'e the

uality the company offers. Price promotions often produce shortterm sales increases.

Coca Cola has entered new markets and also developing market economics >like India?

with muchneeded jobs.

Coke attributes its success to bottlers, the Coca Cola system itself, i.e., its

executive committees, employees, :$*, company presidents but above all from the

consumer.

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CokeOs red color catches attention easily and also the *iet Coke which it

introduced was taking the Cake, as Pepsi has not come out with this in India.

5ver since CokeOs entry in India in &99/, Coke made a come back >after uitting

in &9?, in $ctober (! in 3gra, the city was flooded by trucks, there wheelers, tricycle

cardsall with huge red Cokeembla'oned umbrellas. 7etailers were displaying their

Coke bottles in distinctive racks, also with speciallydesigned iceboxes to keep Coke

bottles cold. This was one big jolt to Pepsi.

STRATE-IES ADO%TED

&Y CO!E AND %E%SI

The %eps) %ocess: *espite being a global brand, Pepsi has built its success on

meeting the Indian consumer"s needs, particularly in terms of making the brand

synchroni'e with locali'ed events and traditions. Instead of harping on its global lineage,

ergo, it tries to plug into ethnic festivals, use the vernacular indifferent part of the

country, and blend into the local fabric. Pepsi is using both national campaignssuch as

the *rink Pepsi, Bet +tuff scheme, which offers large discounts on other products to

Pepsibuyers as well as local.

The Co4e Cop,: Instead of creating a bond with the customers through small but

highimpact events, CocaCola chose to associate itself with national and international

mega events like the #orld Cup Cricket, &991, and world cup football &990. :ut now

(9

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coke is also entering into local actions. Coke is also trying to make their brand

synchroni'e with locali'ed events traditions and festivals. CocaCola new tag line in this

advertisement is E7eal shopping, real refresherF. In this way Coke is copy Pepsi.

EM%O"ERMENT

The %eps) %ocess: $nce of the strongest weapons in Pepsi"s armory is the flexibility

it has empowered its people with. 5very manager and salesperson has the authority to

take whatever steps he, or she, feels will make consumers aware of the brand and

increase its consumption.

The Co4e Cop, : 6lexibility is the weapon that CocaCola, fettered as it is by the need

for approvals from 3tlanta for almost everything. In the past, this has shown up in its

stubborn insistence on junking the franchisee network it had acuired from ParleD in its

dependence on its own feedback mechanism over that of its bottlersD" and on its

headuartersled approach.

%RICE

The %eps) pocess: Pepsi has consistently wielded its pricing strategy as in invitation

to sample, aiming to turn trial into addiction.

It launched the ;)) ml bottle in &99! at 7s. 0 versus Thumps 4p"s 7s. 9, in 3pril, &991,

its &.; liters bottle followed Coke into the marketplace at 7s. /) = 7s ; less than

Coke"s .:ut it couldn"t continue the lower price positioning for long.

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The Co4e Cop,: Initially, coke carboncopied the strategy by introducing its //)ml

cans in anuary &991, at an invitation price of 7s. &; before raising it to 7s. &0. :y this

time, it had reali'ed that the CocaCola brand did not hold enough attraction for

customers to fork out a premium. The ())ml Coke, launched so far in parts of eastern,western, and northernIndia, is priced at 7s. ;, lowering the entrybarriers. Too really

drive the market, as Coke wants to you must go down to 7s. /".

%E%SI AND CO!E MAR!ET S'ARE IN INDIA

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CO$A "ARS

Coca(cola =/s %eps)

OVER A CENTURY O CO$A S$O-ANS>

COMMERCIA$S> &$UNDERS> AND COU%S

ThereOs little doubt that the most spirited and intense competition in the beverage world is

between CocaCola and Pepsi. These two 3merican companies long ago took their battle

worldwide, and although there are other colas in the market, these giants occupy this

highstakes arena by themselves. The impact of Coke and Pepsi on popular culture is

indisputable, and I have observed in my time managing this web site that 3merica has not

become jaded about the cola wars. The memorabilia, the jingles, the trivia all still

popular. +o I am offering this page in an attempt to assuage a wee bit of the Coke and

Pepsi thirst that is thriving on our planet.

IT A$$ STARTED . . . .

CocaCola was invented and first marketed in &001, followed by Pepsi in &090. Coca

Cola was named after the coca leaves and kola nuts ohn Pemberton used to make it, and

Pepsi after the beneficial effects its creator, Caleb :rad ham, claimed it had on dyspepsia.

6or many years, CocaCola had the cola market cornered. Pepsi was a distant, no

threatening contender. :ut as the market got more and more lucrative, professional

/(

8/12/2019 135383954-Coke-vs-Pepsi


advertising became more and more important. These soda companies have been leading

the way in advertising ever since.

ADVERTISIN- 'ISTORY ? COMMERCIA$S

Pepsi has definitely leaned towards the appeal of celebrities, popular music, and young

people in television commercials, while Coke relies more heavily on images of happiness

and togetherness, tradition, and nationalism, perpetually trying to cash in on its original

lead. In a simplified sense, you could sum up the strategies as Coke: Old, Pepsi: New. In

fact, as we will see, when CocaCola tried something new, it was disaster.

The first maga'ine ad for CocaCola appeared in Munsey's in &9)(. 3dvertisements

began to appear on billboards, newspapers, and streetcars. +oon there were serving trays

with images of people enjoying CocaCola, and glasses with the colaOs name on them. 3t

this time, CocaCola and Pepsi were served in drugstore soda fountains.

In &9)9, Pepsi used its first celebrity endorser, automobile race driver :arney $ldfield,

in newspaper ads. In &9(&, Pepsi went bankrupt, but continued to appear on the scene,

although not nearly so successfully as CocaCola. In &9/&, Pepsi went bankrupt again,

but the new owner, 7oy -egargel, would hit upon an idea that would finally give Coca

Cola some competition. In &9/!, he marketed Pepsi in a &(ounce bottle for a nickel. 3t

the time, CocaCola was sold in a 1ounce bottle for ten cents. KoilaQ Profits for Pepsi.

Pepsi racked up another first by airing the first radio jingle in &9/9. It was so popular that

it was played in jukeboxes and became a hit record CocaCola hit the airwaves in &9!&.

In &9!1, inflation forced Pepsi to increase prices. 3nd in &9;), Pepsi offered a larger (1

ounce bottle to court the young 3merican housewife.

In the &91)Os, the cola ad wars moved to television. CocaCola employed a host of

celebrity singers to promote the product, including Connie 6rancis , Tom ones, The %ew

//

8/12/2019 135383954-Coke-vs-Pepsi


:eats, %ancy +inatra, and The +upremes. 3s we moved through the years, both colas

incorporated some of their best slogans >NPepsi BenerationN and Nthe 7eal ThingN? into

subseuent commercials.

In the &9)s, market research showed that consumers preferred the taste of Pepsi over

Coke. The Pepsi Challenge is still being conducted today. :ut Coke came up with what is

arguably the best of all cola commercials, the &9& IOd like to buy the #orld coke ad.

This landmark was recalled in Christmas versions in &90/ and &90!, and a &99) +uper

:owl ad, which was enough to make some :aby :oomers weep with nostalgia.

In the &90)Os, Pepsi lined up the celebrities, starting with late -ichael ackson, then

-adonna, -ichael . 6ox, :illy Crystal, <ionel 7itchie, Bloria +tefan, oe -ontana, and

others. Coke signed on -ichael ordan, %ew Aids on the :lock, 3retha 6ranklin, 5lton

ohn, and Paula 3bdul.

In &90;, responding to the pressure of the Pepsi Challenge taste tests, which Pepsi always

won, CocaCola decided to change its formula. :ill Cosby was the pitchman. This move

set off a shock wave across 3merica. Consumers angrily demanded that the old formula

be returned, and CocaCola responded three months later with Classic Coke. 5ventually,

%ew Coke uietly disappeared.

Pepsi, meanwhile, had its own flop, Crystal Pepsi, which was supposed to catch the

strange wave of the times when everything colorless was clean and desirable >Mima,

bottled water?. 3nd then there was Pepsi <ite with the lemony flavor and one calorie,

introduced in &9;. 7emember that oneS 3pparently they didnOt expect us to because later

they gave us Pepsi $ne, using the same concept, but a completely different taste. 3nd,

extending the idea even further, we are now getting Pepsi Twist, a new product with a

twist of lemon flavor.

/!

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In &99&, 7ay Charles sang, N@ou got the right one baby, uhhuhQN 3lso in the &99)s,

Cindy Crawford and the +pice Birls pitched Pepsi. 3nd then Pepsi aired commercials

featuring the aggravating little girl >2alide 5isenberg? with her troubling male voice.

In the new century, both colas continue to battle it out on the television screen. 3nd

celebrities continue to be important promoters. 7ecently, Pepsi has had commercials by

:ob *ole and 6aith 2ill, among others.

/;

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CELIBRITIES PLAYING PART IN TO THE SALES

PROMOTION OF THE PRODUCT:

CELIBRITIES OF PEPSI:

AMITABH BACHHAN

SHAHRUKH KHAN

PRIETY ZINTA

SACHIN TENDULKAR

SAIF ALI KHAN

SOURAV GANGULY

RAHUL DRAVID

MOHD. KAIF

ZAHEER KHAN

HARBHAJAN SINGH

YUVRAJ SINGH

RANBIR KAPOOR

VINDHU DARA SUNGJ

DEEPIKA PADUKONE

CELIBRITIES OF COKE:

SALMAN KHAN

AISHWARYA RAI

AAMIR KHAN

VIVEK OBEROI

BIPASHA BASU AKSHAY KUMAR

IMRAN KHAN

KALKI

/1

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%eps) = Coca(Cola wa t*s hot

The ongoing cola war between global rivals Pepsi and CocaCola has taken a weird twist

in India with the former dragging the latter to court. The chargeG CocaCola has snatched

employees, bottlers, and agents, all of whom are bound to Pepsi by a contract.

Pepsi has charged Coke with having entered into a conspiracy to disrupt its business

operations by inducing key employees and associates to break existing contracts illegally.

Pepsi has sought a permanent injunction and an ex parte order against coke, restraining it

from taking away PepsiOs employees and business associates. Pepsi has also reserved the

right to seek financial damages from Coke at a later date if necessary.

Pepsi has claimed that a do'en middlelevel managers and three territory managers broke

their contracts with Pepsi to join Coke in recent months, while during the last year and

half, seven managers uit Pepsi to join CocaCola.

ustice C - %air of the *elhi high court on 3pril & issued notices and summons to

CocaCola and &; others for -ay 1. 2owever, ustice %ayar refused to grant the ex parte

injunction sought by Pepsi India to stop the alleged inducements by Coke in offering

employment to PepsiOs employees while the suit was pending in court.

$n behalf of Pepsi, 3shok *esai and 3run aitley contended that CocaCola had been

Nrattled by the huge success of Pepsi in India entered into a conspiracy during the last six

months to cause loss and damage to PepsiOs business interests by adopting unfair and

illegal means.N

/

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It added that CocaCola had approached many key managers and had successfully lured a

commercial manager of its bottling business Baurav *uggal, and a manager in +urat

+ailesh oshi, besides others.

Pepsi charged that while initially these approaches were sporadic, over the last six

months it is clear that CocaCola has changed its strategy and has decided to consciously

target and approach key employees of Pepsi at various locations in India.

The company has alleged that in most cases, the employees have not been given time to

adhere to the 9)day notice period and the oneyear confidentiality agreement. The latter

deal bars employees joining its rivals for at least a year.

*esai claimed CokeOs actions would directly harm the business interests of Pepsi, which

had invested over H/)) million in the country in establishing business infrastructure.

In its defense, Coke is expected to seek relief in the Indian Constitution which states that

there can be no restriction on the movement of labor. :esides, any effort by a company to

restrict its employees from joining other companies might fall foul of the -onopolies and

7estrictive Trade Practices 3ct as an unfair trade practice.

Pepsi has cited the instance of Coke snapping up cricketer avagal +rinath in spite of the

latter signing a contract with PepsiOs sports consultant, (&st Century -edia. 2owever,

media reports, uoting sources, said that +rinathOs contract had been only in the verbal

stage.

+imilarly, Pepsi has charged Coke with inducing the :oard of Control for Cricket in

India to give the sponsorship of the recently concluded Pepsi Triangular Cricket +eries to

Coke, as acknowledged in the :CCI submission before the :ombay high court, even

while a contract was signed with Pepsi.

Pepsi has listed the case of Coke trying to induce its music consultant *%3 %etworks

Private <td, which organi'ed the @anni show, to snap its ties with Pepsi and join Coke.

/0

8/12/2019 135383954-Coke-vs-Pepsi


Incidentally, in results announced for the first three months of the year, Pepsi has swept

CocaCola aside. Pepsi has reported a growth of ( per cent compared to CokeOs (& per

cent during the same period. In the first three months of last year, Pepsi grew by &0 per

cent only.

CocaCola India chief executive *onald +hort had announced that Coke would grow by

at least () per cent for the whole of &990. CocaCola, along with the Parle brands it

acuired when it came into India Thums 4p, <imca, and Bold +pot continue to

dominate India with a ;; per cent market share to PepsiOs !/ per cent. :ut in the cola

segment, Coke comes a poor third after Thumps 4p and Pepsi.

The current summer season is the most important for the cola giants, with consumption at

its peak.

/9

8/12/2019 135383954-Coke-vs-Pepsi


&ATT$E O T'E &EVERA-ES:

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%E%SI IS NOT AS %RICEY

7egardless of which soda you like better though, Pepsi seems the better value than Cokeright now. Coke is trading at a nearly () percent premium to Pepsi based on ())( P5s

even though the two companiesO earnings growth rates are nearly identical. >PepsiOs are

actually a shade higher.?

3nd when you look at revenues, the gap is even more dramatic. Coke is trading at

time"s estimated ())( sales while Pepsi is trading at /.; times ())( revenue estimates.

:oth companies are expected to post slight declines in sales this year and an increase of

about ! percent in ())/. *ue to this disparity in valuation, eff Aanter, an analyst with

Prudential +ecurities, says he has a NbuyO rating on Pepsi and NholdN on Coke. Prudential

does not do investment banking.

To be sure, Coke is still the market share leader in soft drinks. $ne of the main reasons

the stock has outperformed Pepsi this year was because it reported a better than expected

gain in unit volume in the first uarter. 3nd the company has taken steps to cement its

carbonated beverage lead as well gain ground in the bottled water market. >Coke and

Pepsi both have their own brands of water, *asani and 3uafina, respectively.?

$n Tuesday, Coke announced that it was acuiring the +eagramOs line of mixers, tonic,

ginger ale and selt'er from *iageo and per nod 7ichard. 3nd last month, Coke entered

into an agreement with Broup *anone to distribute 5vian bottled water in %orth

3merica.

!&

8/12/2019 135383954-Coke-vs-Pepsi


Some pet6els w)th that so+a@

:ut while Coke relies solely on beverages for growth, another factor in PepsiOs favor is its

diversity. N#hat attracts me to Pepsi is I have more faith in their ability to grow earnings.

%ot only are they successful on the beverage side but they are successful with salty snack

foods,N says Crit Thomas, director of growth euity for %ational City Investment

-anagement Co., the sub advisor for 3rmada 6unds. 3s of -arch /&, Pepsi was the

seventhlargest holding in the 3rmada Tax -anaged 5uity 6und and the tenthlargest

holding in the 3rmada 5uity Browth 6und.

In fact, PepsiOs carbonated beverages are not even the biggest generator of sales and

earnings for the company. PepsiOs 6rito<ay brand of snack foods, which include 6ritos,

*oritos and 7old Bold, accounted for 1&.( percent of revenue and 1;./ percent of

operating profits in the first uarter.

PepsiOs soft drink business made up &9 percent of sales and (/.( percent of operating

profit. Pepsi also owns Batorade and Luaker 6oods, having acuired Luaker $ats last

year.

$ne potential risk for both Pepsi and Coke is the economy. %o, not if it goes back into a

recession. If the economy continues to improve, the stocks could fall victim to what is

known as sector rotation, the selling of defensive companies like food and beverages in

order to buy more economically sensitive companies in the financial services and

technology sectors. To that end, shares of Pepsi and Coke fell slightly on #ednesday

during the Ciscoinduced market rally.

!(

8/12/2019 135383954-Coke-vs-Pepsi


+till, Thomas says signs that the dollar is starting to weaken compared to other currencies

should prop up both stocks. ThatOs because a weaker dollar helps boost the profits of

international subsidiaries, since profits made in a foreign currency are converted back to

dollars. The majority of CokeOs sales are from its international operations, with just /0

percent of revenue coming from the 4.+. last year. Pepsi is not as big globally but

currency fluctuations are still a factor, as international sales accounted for (9 percent of

revenue in ())&.

!/

8/12/2019 135383954-Coke-vs-Pepsi


Co4e a*+ %eps) )* I*+)a:

CocaCola controlled the Indian market until &9, when the anata Party beat the

Congress Party of then Prime -inister Indira Bandhi. To punish CocaColaOs principal

bottler, a Congress Party stalwart and longtime Bandhi supporter, the anata government

demanded that CocaCola transfer its syrup formula to an Indian subsidiary. CocaCola

balked and withdrew from the country. India, now left without both CocaCola and Pepsi,

became a protected market. In the meantime, IndiaOs two largest softdrink producers

have gotten rich and la'y while controlling 0)J of the Indian market. These domestic

producers have little incentive to expand their plants or develop the countryOs potentially

enormous market. +ome analysts reason that the Indian market may be more lucrative

than the Chinese market. India has 0;) million potential customers, &;) million of whom

comprise the middle class, with disposable income to spend on cars, KC7s, and

computers. The Indian middle class is growing at &)J per year. To obtain the license for

India, Pepsi had to export H; of locally made products for every H& of materials it

imported, and it had to agree to help the Indian government to initiate a second

agricultural revolution. Pepsi has also had to take on Indian partners. In the end, all

parties involved seem to come out aheadG Pepsi gains access to a potentially enormous

marketD Indian bottlers will get to serve a market that is expanding rapidly because of

competitionD and the Indian consumer benefits from the competition from abroad and will

pay lower prices. 5ven before the first bottle of Pepsi hit the shelves, local soft drink

manufacturers increased the si'e of their bottles by (;J without raising costs.

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PREFERENCE OF SOFT DRINKS IN A DAY

O*ce a +a, 82Tw)ce a +a, 83

O*ce a wee4 2

Othe 23

25%20%

5%

50%

0%

10%

20%

30%

40%

50%60%

Once a

day

Tw ice a

day

Once a

week

Other

Once a dayTwice a dayOnce a weekOther

)ge(;

!;

8/12/2019 135383954-Coke-vs-Pepsi


%REERENCE TO T'E &RAND

%eps) B3

Co4e 93

)ge # 8

40%

60%

0%

20%

40%

60%

80%

Pepsi Coke

Pepsi Coke

!1

8/12/2019 135383954-Coke-vs-Pepsi


TO -IVE T'E %REERENCES

Moe %opla ;3

%ac4ag)*g ;3Taste 3

%)ce ;3

10% 10%

0%

10%

0%

20%

40%

60%

80%

!ore

Pop"#ar

Packa$in$ Taste Price

!ore Pop"#ar Packa$in$ Taste Price

)ge #

!

8/12/2019 135383954-Coke-vs-Pepsi


MAR!ETIN- STRA--$ES O COM%ANY EECTS T'E

SA$ES

Yes 22

No B2

)ge # B

55%

45%

0%

10%

20%

30%40%

50%

60%

es &o

es &o

!0

8/12/2019 135383954-Coke-vs-Pepsi


ORM O MAR!ETIN- STRATE-IES

Tele=)s)o* A+=et)s)*g B2

Newspape A+=et)s)*g 2

Ot+oo A+=et)s)*g 83

Sales %omot)o* 3

)ge # 2

45%

5%

20%

30%

0%

10%

20%

30%

40%

50%

Te#e'ision (d'. &ewspaper (d' O"tdoor (d' )a#es Pro*otion

Te#e'ision (d'. &ewspaper (d' O"tdoor (d' )a#es Pro*otion

!9

8/12/2019 135383954-Coke-vs-Pepsi


C'AN-E &RAND ON T'E &ASIS O %RICE REDUCTION

Yes 2;

No B

)ge # 9

51%

4+%

48%

4+%

50%

51%

52%

es &o

es &o

;)

8/12/2019 135383954-Coke-vs-Pepsi


MORE EECTIVE ADVERTISIN-

%eps) Co. 23

Co4e Co. 23

)ge #

50%

50%%%%%%%%%%

%%%%%%%%

%%

0%

20%

40%

60%

80%

Pepsi Co. Coke Co.

Pepsi Co. Coke Co.

;&

8/12/2019 135383954-Coke-vs-Pepsi


CREATIVE AND A%%EA$IN- ADVERTISIN- O T'E

SOT DRIN! COM%ANY

%eps) Co. B2

Co4e Co. B2

)ge # <

%%%%%%%

%%%

45% 45%

0%

20%

40%

60%

80%

Pepsi Co. Coke Co.

Pepsi Co. Coke Co.

;(

8/12/2019 135383954-Coke-vs-Pepsi


INNOVATIVE AND EXCITIN- OERS

%eps) Co. 22

Co4e Co. B2

)ge #

INDIN-S ? ANA$YSIS

The Indian soft drinks market is at &!) million cases per year. This is very low, even as

compared to Pakistan and :angladesh. 3ll these factors together have contributed to a

55%

45%

0%

10%20%

30%

40%

50%

60%

Pepsi Co. Coke Co.

Pepsi Co. Coke Co.

;/

8/12/2019 135383954-Coke-vs-Pepsi


()J growth in the soft drinks industry.. If this demand continues to grow at ()J grow at

()J annually, within &) years the volumes could reach & billion cases. This kind of

growth is the reason for the entry of the two giants of the soft drink industry of the world.

• CocaCola

• Pepsi

CocaCola and Pepsi together control 9J of the ! entire Indian markets. The rest of the

/J is shared by companies like Cadbury+chweppes and CampaCola. The total no. of

case sold is &!) million of these million cases of Cola drinks are sold and 1/ million

of noncola drink. There is a rapid increase in the sale of cola soft drinks. #hereas in

&99), they accounted for a third of all soft drinks sold, now their share is well over half.

3lso cola sales are growing at a faster rate than noncolas. $ne of the reasons for this

could be the aggressive marketing strategies for Cola drinks by Pepsi and CocaCola.

The race to uench the great Indian thirst had deigned.

;!

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%RESENT COM%ETITON &ET"EEN COCA CO$A AND

%E%SI

• If we see the present scenario its hard to tell which brand is winning the cola wars

as Pepsi had extended its cola wars to other sectors like 67IT$<3@+ and

%I-:$$M which is giving tough competition to coca =cola which doesn"t target

on these sectors.

• +econd aspect which is to be given in consideration is that, both the companies are

spending heavily on advertisement and more celebrities are roped in by both the

companies to fight the competition.

• 7ecently C$<3C$<3 beverages 3CT$7+ I-73% A23% 3%* A3<AI for a

new ad Dto reply back to this a new ad by P5P+I beverages featuring 3CT$7

73%:I7 A3P$$7 and KI%*24 *373 +I%B2 came up which is making

waves at present.

• Coke is served in -C *$%3<*+ and there we won"t find Pepsi products even the

coffee served is of B5$7BI3 which is a cocacola brand, same is the case of

PIMM3 24T and A6C which is owned by P5P+I C$ there only Pepsi products

are served ,,,this had lead ( clear war in restaurant segment as well

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• P5P+I is targeting young generation and their ad campaigns are a clear example

of that, whereas cocacola is targeting the family as a whole which has been its

old formula from ages.

• Presently cocacola may be leading in beverages like coke, but its facing severe

competition from -irinda, %imboo' and snack industry where P5P+I is ruling

thanks to its A47A475 ad that has led to great sales for P5P+I C$.

• Though in packed drinking water AI%<5@ >C$C3C$<3 :73%*? and

3CL36I%3 >P5P+I C$ :73%*? both are treated eually by customers.

-oreover :I+<57I still rules in this segment.

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UTURE SCENERIO O COCA CO$A V/S %E%SI

• The C$<3 #37+ between cocacola and Pepsi would further grow and in my

view its never ending

• :oth the companies would try to become %$& and there would 3* #37

between the two which would prove to be beneficial for actorsactresses as they

would earn more through advertisements.

• Pepsi have started advertisements with female actresses *55PIA3 P3*4A$%5

and C$C3C$<3 which had up till know only endorsed male actors for the & st

time endorsed A3<AI of *5K* fame with I-73% A23% in its new ad.

• #ith the coming up of C$--5%#53<T2 B3-5+ ()&) in %5# *5<2I ,

both the brands would try to attract customers towards itself with heavy

promotion and ad campaigns to build new customers and increase there share in

market as well as strengthen their brand value and earn profits.

;

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RECOMMENDATIONS

+oft drinks are an impulse product. #hen a person is thirsty, he would first think of water

or tea. +ome even would prefer R%imboo' EU

The Indian population is the largest in the world today, there can be no other country in

the world, which provides so much of an opportunity for the softdrink manufacturers.

The Indian soft drink market is at &!) million cases per year, this is very low. Thus the

consumption of soft drink can go up.

+inc&&0Ve the entry of CocaCola into the country the industry is growing at a rate of

()J annually. If this rate is maintained, then by the year ()); the market of soft drink

would be & billion cases annually.

2owever CocaCola wants to accomplish this feat by them. To do this the industry has to

take certain steps. 3ll the companies are fighting to get a major share of this growing

market. They should all try to increase the total market along with their individual shares.

$n the basis of all the field work and table work done, some suggestions can be made,

which may help the company in increasing the total market as well as the sale of the

companies. The various suggestions that can be made are as followsG

+oft drinks retail at prices between 7s. 1 and 7s. &). These are expensive when

measured against purchasing power.

3ccording to one study, it takes Indian ;) minutes of work to be able to buy a bottle in

other countries, the norm is five minutes. Thus to increase the total market of soft drinks,

manufactures should try and decrease the prices, so as to increase sales.

3vailability is a major factor, which makes the consumer buy a soft drink. +oft drinks

should be made available more readily than present. There are only /)), ))) retailers

stocking soft drinks in India. Thus retailing outlets should be increased. 3lso related to

this point, is vending machines. In developed machines, vending machines are kept in all

consumer areas, like super markets, schools, amusement parks, local markets, etc. These

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Tempt a person into buying the soft drink. +o if vending machines are put in strategic

areas, it would definitely increase consumption of soft drinks.

+oft drink cans which are very convenient, as the consumer can take them anywhere,

unlike a bottle, are very expensive retailing from 7s. &;7s. &0. To increase sale of cans,

this price should be brought down.

Innovations increase sales of company. 6or e.g. fountain Pepsi increased sales of Pepsi

Cans increased sales of CocaCola. Thus the companies hav constantly come out with

innovative ideas.5xample/)) ml plastic bottles, which the consumer can take with him,

unlike the glass bottles, which he has to return. Plastic bottles can even be used again by

households for various purposes.

The companies should conduct studies to get to know about consumer habits. 6or e.g.

Coke knows that 3mericans see 19 of its commercials every years , put ;.( ice cubes in a

glass and prefer cans to pop out of vending machines at a temperature of /; degrees.

If the companies know all this and more about Indian consumer behavior, it could tell

them how to sell their drinks, so as to increase sales.

It is seen In India, that people prefer having their drinks with or after food. Companies

could have commercials which show people enjoying their drink with a good meal, so

that consumers associate drinking soft drinks while having food.

Companies should try to educate the consumer about the health related subject. 6or e.g.G

a? <imca is recommended to patients by doctors.

b? Cola drinks are known to be very fattening ,

:ut in fact cola drinks contain no calories from fat they contain calories from sugar

which can be easily burned off. The soft drink cans and plastic bottles should mention the

calories and other related information on the packing.

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Companies should try to build high brand euity. This provides a number of advantages

to the company.

a? The company enjoys reduced marketing costs because of high level of consumer

brand awareness and loyalty.

b? The company will have more trade leverage in bargaining with distributors and

retailers since the customer expects them to carry the brand.

c? The company can change a higher price than its competitors because the brand has

higher perceived uality.

d? The company can more easily launch brand extension.

e? 3bove all, the brand offers the company some defense against fierce price

competition.

The companies should go in for diversification

$nce the brand is known, it is easier to sell more of its products. 6or e.g. CocaCola

clothes have sold about H&)) million worth of clothes and accessories. This would

increase revenues of the company.

The companies should not have competitor myopia. It is more often the latent company

than the current competitor who busies the company. Pepsi and CocaCola are so busy

fighting with each other, that they have left the noncola sector open for Cadbury

+chweppes.

3dvertising is a way building brand image. It does not promote uick selling. Thus

companies should used advertising only for long advertising can be used forG

a? :rand image building

b? 7eminder advertisingG reminding people to buy these drinks.

c? 7einforcement advertisingTelling people that they have made the right choice.

Television advertising seems to make a impact on the consumers >based on uestionnaire

answers? so companies should concentrate more on television advertisements.

1)

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+ales promotion tools create a stronger and uicker response. Thus sales promotion tools

such as coupons, contests, premiums and the like should be used to dramati'e product

offers and to boost sales. +alespromotion effects are usually short run and induce the

people to purchase soft drinks, now.

CocaCola and Pepsi have taken up sponsoring of events on a major scale.

3ll kinds or events, whether big >#ills #orked cup? or small >college contests? have

either Pepsi or Coke banners of sponsorship. The effectiveness of this can be uestioned.

#hether these activities increase sales or not is a big huge uestion mark.

PepsiCo and Coca Cola >I? <td. should reduce their massive spending on sponsoring

events and try and channel this money into more productive activities, like innovative

packaging etc.

It is recommended that company should introduce more and more customer oriented

schemes and contexts. 6or e.g. Pepsi"s new campaign EPepsi cool malF in which they are

giving free gifts to their customers.

The company should maintain a small group of Emissionary sales manF whose functions

should be to guide distributors and retailers, keep a constant watch over the prevailing

situation to provide the continuous feedback to the company.

It is also recommended that companies should launch soft drink in small pack ()) ml and

&;) ml.

Thus we see that there various steps which can be taken by the companies to increase

their sales and to increase the total market share.

1&

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