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COCA COLA V/S PEPSI
INTRODUCTION:
In the modern urban culture consumption of soft drinks particularly among younger generation has
become very popular. Soft drinks in various flavors and tastes are widely patronized by urbanepopulation 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.
With 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 so-called competition for this product in the market is from different other brands. ass
media, particularly the emergence of television, has contribute to a large e!tent of the ever growing
demand for soft drinks the attractive "ingles and sport make the large audience remember this
product at all times.
It is e!pected that with the sort of mass advertising, reaching almost the entire country and offering
various varieties annual demand for the product is e!pected to rise sharply in the times to come.
In any marketing situation, the behavioral # environmental variables relating to consumers,
competition and environment are constantly influ!. 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 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.
In today$s highly competitive market place, three players have dominated the industry% The &ew
'ork based (epsi )ompany Inc. The *tlanta based coca- cola and +.. based )adbury Schweppes.
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Through the globe, these ma"or players have been battling it out for a bigger chunk of the ever
growing soft drink market. &ow this battle has been evolved up to India too with the arrival of
these three giants.
Soft drink industry is on amazing growth% ultimately these are only one person who will determine
their fortunes. The Indian consumer the real
War to /uench his thirst has "ust begun.
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SOFT DRINK INDUSTRY: AN OVERVIEW
It all began in 001, when a tree legged brass kettle in 2ohn Styth pemberton$s backyard in *tlanta
was brewing the first ( of marketing legeent +naware the pharmacist has given birth to a caramel
colored syrup, which is now the chief ingredient of the world$s favorite drink. The syrup combined
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with carbonated the soft drink market. It is estimated that this drink is served more than one
thousand million times in a day.
3/ually oblivious to the historic value of his actions was 4rank I!. 5obinson, his partner and book
keeper. (emberton 6 5obinson laid the first foundation of this beverage when an average ninedrinks per day to begin with, upping volumes as sales grew.
In 078, this beverage got into bottle, courtesy a candy merchant from ississippi. 9y the 7:;$s
)olas was a daily consumption item, stored in house hold fridges. Soon were born other non- cola
variants of this product like orange 6
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going well and well not suffer the same fate as the 5s. : crore )adbury India$s apple drink
*pella. )S9I is now with orange =crush>, and Schweppes soda in the market.
*s orange drinks are the smallest of non-cola categories that is 5s. ;; crore markets with ;J
market share and cola heaving :;J is followed by
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RANGE This is the last but not the least factor, which affects the sale of the products of a
particular company.5ange availability means the availability of all flavors in all sizes.
HISTORY OF COCA-COLA
Con Styth (emberton first introduced the refreshing taste of )oca-)ola in *tlanta, Beorgia it was
ay 01 when the pharmacist concocted caramel colored syrup in threelegged brass kettle in his
backyard. 2e first distributed the new product by carrying )oca-)ola in a "ug coin en"oys in a glass
of )oca-)ola at the soda fountain. Whether by design or accident, carbonated water was teamed
with the new syrup, producing a drink that was proclaimed EDelicious and 5efreshingF.
Dr. (emberton$s (artner and bookkeeper, r. 4rank 5obinson, suggested the name and
penned as E)oca-)olaF in the uni/ue flowing script that is still famous worldwide today.
Dr. (emberton$s sold ?: gallons of syrup, shipped in bright 5ed wooden kegs. 5ed has been a
distinctive color associated with the &o. soft drink brand ever since. 4or his efforts, Dr.
(emberton grossed H :; and spent H @.71 on advertising, by 07, *tlanta chemist as a B.)anler
had ac/uired complete ownership of the )oca-)ola business.
2e purchases it from the Dr.(emberton family for H ?@;;. With in 8 year his merchandising flair
helped to e!pand the consumption of )oca-)ola to over H?: million.
5obert W. woodruff become the president of the )oca-)ola company in 7?@ and his more than
si! decades of leadership took the business of commercial success making )oca-)ola an institution
the world over. )oca-)ola begins as a never tonic, but candy merchant Coseph *. 9iedenharn of
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ississippi was looking for awry to serve refreshing beverages. 2e responded to this demand
began offering bottle )oca-)ola using syrup shipped from *tlanta, during a hot summer in 078.
77;s L &ew and growing markets
(olitical and economic changes opened vast markets that were closed or underdeveloped for
decades. *fter the fall of the 9erlin Wall, the )ompany invested heavily to build plants in 3astern
3urope. *nd as the century closed, more than H.: billion was committed to new bottling facilities
in *frica.
?st )entury L
The )oca-)ola bottling system grew up with roots deeply planted in local communities. This
heritage serves the )ompany well today as people seek brands that honor local identity and thedistinctiveness of local markets. *s was true a century ago, strong locally based relationships
between )oca-)ola bottlers, customers and communities are the foundation on which the entire
business grows.
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COCA COLA COMPANY PROFILE
eeping in view of tapping the Indian soft drink market and also developing soft drinks as a
drinking product among Indians. The )oca-)ola in India has setup an independent organizations
which is 2.).) 6 9.).) with a capital of @:; +.S.H each by virtue of sellout decision of the
passed managing director Sh. S. ). *ggarwal.
2industan )oca-)ola bottling =&-W> (vt.
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CORE BRANDS:
)oca-)olaG Developed in a brass pot in 001, coca-cola is the most recognized and admired
trademark around the globe. &ot to mention the best selling soft
drink in the world.
SpriteG In 71, a citrus-flavored drink made its +.S debut, using ESprite 9oy Eas
inspiration for its name. This elf with silver hair and a big smile was used in 78;s advertising for
)oca-)ola. Sprite is now the fastest growing ma"or soft drink in +.S and the world$s most popular
lemon-lime soft drink.
4anta G The name Efanta E was first registered as a trademark in Bermany in 78 ,when it was
used for a few year for a soft drink created from available materials and flavors . The name was
then revived in 7:: 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.
Diet cokeG The e!tension of the coca-cola name began in 70? with the introduction of diet coke
=also called coca-cola light in some countries>. Diet coke /uickly becomes the number one selling
low calorie soft drink in the world.
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FABULOUS FACTS ABOUT COCA-COLA
. The world$s largest spherical coca-cola sign is in &agoya, Capan a top the dial &agoya
building in front of the &agoya railway station. The sing is a double sphere constructed from more
then 81 tone of steel, more 78;meter of neon tubing, and more then, 07 light bulbs. The outer
shape features the coca-cola logo and contour bottle, while the inner sphere portrays a comic scene
with twinkling planets and stars.
?. Ane of the world$s largest signs for coca-cola is located on a hill called E3
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:. If all the coca-cola ever produced were in 0- ounce bottles. *nd these bottles were
distributed to each person in the world. There would be 10 bottles or over 8? gallons for eachperson.
1. If all the coca-cola ever produced were in 0 ounce bottles, placed side by side and end
to end to from a lane highway, it would wrap around the earth 0? times.
. If all the coca-cola ever produced were flowing over &iagara fall at its normal rate of ;:
million gallons per second instead of water, the falls would flow for about a day and a half @0
hours and 81 minutes.
0. The largest representation of the world$s best known package ;; foot tall glass contour
bottle is located at world of coca-cola,
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HIST
ORY IN INDIA
Coca-cola ! I!"a
)oca-)ola, the corporation nourishing the global community with the world$s largest selling soft
drink concentrates since 001, returned to India in 77@ after a 1 year hiatus, giving new thumbs
up to the Indian soft drink market. In the same year, the )ompany took over ownership of the
nation$s top soft-drink brand and bottling network. It$s no wondering our brands assumed an iconic
status in minds of world$s consumers.
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A H#al$%& G'o($% $o $%# I!"a! Eco!o)&
3ver since, )oca-)ola India has made significant investments to build and continually consolidate
its business in the country, including new production facilities, waste water treatment plants,
distribution systems, and marketing channels.
)oca-)ola India is among the country$s top international investors, having invested more than +SH
billion in India in the first decade, and further pledged another +SH;; million in ?;;@ for itsoperations.
A P*'# Co))$)#!$ $o $%# I!"a! Eco!o)&
The )ompany has shaken up the Indian carbonated drinks market greatly, giving consumers the
pleasure of world-class drinks to fill up their hydration, refreshment, and nutrition needs. It has
also been instrumental in giving an e!ponential growth $o $%# country$s "ob listings.
C'#a$!+ E!o')o*, o. Oo'$*!$#,
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With virtually all the goods and services re/uired to produce and market )oca-)ola being made in
India, the business system of the )ompany directly employs appro!imately 1,;;; people, and
indirectly creates employment for more than ?:,;;; people in related industries through its vast
procurement, supply, and distribution system.
The Indian operations comprises of :; bottling operations, ?: owned by the )ompany, with
another ?: being owned by franchisees. That apart, a network of ? contract packers manufactures
a range of products for the )ompany.
An the distribution front, ;-tonne trucks open bay three-wheelers that can navigate the narrow
alleyways of Indian cities constantly keep our brands available in every nook and corner of the
country$s remotest areas.
These are only some of the facts that speak about our commitment to the growth of the Indian
3conomy
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PROMISE BY COCA-COLA
The coca-cola company e!ists to benefits and refreshes every one it touches. The basic proposition
of our business is simple, solid and timeless. When we bring refreshment, value, "oy and fun to our
stakeholders then we successfully nurture and protect our brand, particularly coca-cola. 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 coca-cola products
for refreshment. They deserve the highest
Muality every time. Aur promise to deliver that /uality is the most important promise we make.
and it involves a world-wide , yet distinctively local , network of bottling partner , supplier ,
distributor and retailers whose success is paramount to our own. Aur investment in local
communities in over ?;; countries totals billions of dollars in "obs, facilities, marketing, the
purchase of local good and services, and local business partnership. *lways 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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BRANDS IN INDIA
R
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BRAND IN INDIAN ORIGIN
BA
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**N*G aaza, launched in 708 and ac/uired by the coca-cola company in 77@, is a non
carbonated mango soft drink with a rich, "uice 6 natural mango taste.
T2+(S +(G in 77@, the )oca-)ola company ac/uired this brand, which was originally
introduced in 7. Its strong and fizzy taste makes it uni/ue carbonated Indian cola.
PEPSICO
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(epsi)o is one the largest companies in the +.S. It figures amongst the largest : companies
worldwide according to the number of employees hired. It has a +.S. 4ortune rank of :;.The
company profits for 77 were H?.8 billion on revenues of H?;.7? billion and (epsi is bottled in
nearly 7; countries. (epsi)o is a world leader in convenient snacks, foods and beverages with
revenues of more than H8@ billion and over 70,;;; employees. Take a "ourney through our past
and see the key milestones that define (epsi)o.
(epsi)o is a world leader in the food chain business. It consists of many companies amongst which
the prominent once are (epsi-)ola, 4rito-
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)oca-)ola Inc. of +S*. * point which is worth a mention is that )oca-)ola gets 0;J of its profits
for International operations while the same figure for (epsi)o stands at 1J. The segment is also in
the bottling plants and distribution facilities and also distributes the ready to drink tea products of
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PEPSICO IN INDIA
(epsi)o gained entry to India in 700 by creating a "oint venture with the (un"ab government-
owned (un"ab *gro Industrial )orporation =(*I)> and Koltas India
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and cause birth defects. Tested products included )oke, (epsi, +p, iranda, 4anta, Thumps +p,
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PEPSI CO INDIA: A FORTUNE 011 COMPANY IN INDIA
(epsi)o, which ranks among the world$s five largest food and beverage companies
with 1 brands, and its partners have invested more than +SH ;; million in India -
building businesses, which today provide direct or indirect employment to more than
1;,;;; people. Since (epsi$s entry into the Indian market in 707, several brands
from its portfolio have become established category leaders. 9rand (epsi is now the
?nd biggest brand in the country. (epsi)o$s portfolio of beverage brands in India
includes the flagship cola brand (epsi% Diet (epsi% two flavors of irinda Arange
and
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P#, - Y#% Ha Yo*!+,$a! M#' aa!
BRAND HISTORY
(epsi is a hundred year old brand loved by over ?;; million people worldwide. The largest single
selling soft drink brand in India is the ubi/uitousPsocialiserPat every occasion.
'oungistan loves it. ?;; million people worldwide love it. 9ut what has made (epsi
the single largest selling soft drink brand in India is actually a formula concocted a century ago in a
far away continent.
001, +nited States of *merica. )aleb 9rad man, the man with a plan, got on to
formulate a blockbuster digestive drink and decided to call it 9rad$s drink. It was this doctor$s
potion that was to become (epsi )ola in 070, and eventually, (epsi in 7;@.
(epsi has always played on the front foot and since its inception has come out with
revolutionary concepts like Diet, ?< bottles, recyclable plastic cola bottles and the enviable y
)an.
BRAND ADVANTAGE
(epsi has become a friend to the youth and has led many youth cultures. 'oungsters
over the generations have grown up with (epsi and share an emotional connect with it, unlike any
other cola brand. 9e it parties, hangouts, or "ust another day at home, a day is never complete
without the fizz of (epsiR
(epsi, )ricket and 9ollywood have been "oined at the hip since the beginning. Shah
5ukh han, Sachin Tendulkar, Saif *li han, *mitabh 9achchan, areena apoor, (riyanka
)hopra, Kirender Sehwag, . S. Dhoni, Cohn *braham, 5anbir apoor and Deepika (adukone are
a few celebrities who will go any length for a chilled (epsi.
The (epsi y )an is undoubtedly the most popular cola pack of all times. It is not "ust
a pack but a style statement for today$s youth.
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PEPSI PRODUCTS IN INDIA
SLOGANS USED BY PEPSI COMPANY
070 9radPs Drink
7;@ 3!hilarating, Invigorating, *ids Digestion
7;1 Ariginal (ure 4ood Drink
7;0 Delicious and 2ealthful
?;;@G OItPs the )olaO#ODare for oreO =(epsi )ommercial>
?;;@-?;;:G O'eh (yas 2ai 9adiO =2indi meaning OThis thirst is too muchO> =India>
?;;:-?;;1G O*n ice cold (epsi. ItPs better than se!RO
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?;;1-?;;G OWhy 'ou DoggingP eO#OTaste the one thatPs forever youngO
?;;-?;;0G Oore 2appyO#OTaste the once thatPs forever youngO
?;;0G O'eh 2ai 'oungistan eri CaanRO 2indi - meaning OThis is the 'oung era my dearO =India
and (akistan>
?;;0G O(epsi StuffO Super 9owl )ommercial
?;;0G O(epsi is O TK commercial
?;;0G O(epsify karo gaiRO )ommercial =2indi meaning OWanna (epsifyRO>
?;;0-?;;7G OSomething for 3veryone.O
?;;7-presentG O5efresh everythingO and =during many commercials> O3very Beneration 5efreshes
the WorldO
THE RIVARLY BEGINS:
Co3# Co)#, $o I!"a
)oca-)ola comes to India with fanfare in the fifties. 4or a number of days, The 2industan Times
and other newspapers of &ew 9anaras carried full page advertisement showing a big boy in
uniform with a soft-drink crown as the cap. There was no indication of the product. *fter a few
days, )oke was introduced. It was an entirely new drink which fascinated people. It soon became
the national drink. 4or the first time, a soft-drink was available from one corner of the country to
another. The person who brought )oca-)ola to India was the father of late Sardar )haran"it Singh,
Sardar ohan Singh. * practical man ohan Singh realized that to popularize )oca-)ola, and
make it a best seller it was necessary to Ecatch them young.F So he focused on youngsters in the
society.
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The company realized that to become a mass consumption product, one has to go to the village.
They gave much importance to the distributive network. The company trucks supplied coke to even
the remotest village.
4ew products appears to be more similar than soft drinks, yet the )ola wars that mark the
competition between )oke and (epsi show how even organizations with highly similar product can
be differentiated by their business strategies. Then comes battles over the issue of bottle size
standardization. )oke the arch rival tried to offering more )ola at a lower price. (epsi which had
some of its early investment tied up in ?:;ml bottles, went the fountain way. The Beneral bottle
size freed has settled at @;; ml. ;; ml more than the pre &) standard. 4ountain mi! dispensers,
carry home bottles, even .:; plastic bottle with caps good enough to keep them lying down and
still preserve the fizz.
It poured in vast sums to whip up its visibility at the retail level, so that consumers were greeted
virtually at every street corner by (epsi$s blue, red and white colors, because they have perception
Ethe thing on display Sells more.F )oca-)ola is, finally, redoing the real thing to the replicate the
success that it$s arch-rival, (epsi)o. 2as achieved with its fast and furious marketing. 9ut to win
them, )oke is copying (epsi.
MARKETING STATEGIES OF COKE AND PEPSI
PRODUCT
)oke was launched in India in *gra, Actober ?8, in P7@P, soon after its traditional all Indian
launch of its )ola. *t the sparking new bottling plants at 2athra, near *gra. )oke was back with a
bang after its e!it in 7.
)oke was planning to launch in ne!t summer the orange drink, 4anta-with the clear lemon
drink, sprite, following later in the year.
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)oke already owns more brands than it will over need, since it has bought out 5amesh
)hauhan. )oke "ust needs to "uggle these brands around de!trously to meet its ob"ectives, to
ensure that (epsi does not gain market share in t Today, )okePs product line includes, )oca-)ola,
Thumps +p, 4anta, Bold Spot, aaza, )itra, Sprite, 9isleri )lub Soda and Diet )oke.
PACKAGING
)oca-)ola India
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The fi!ed cost structure in )arbonated Soft Drinks Industry, and the intense competition make
it very difficult to change or alter the prices. The various costs incurred by the individual
companyPs are almost unavoidable. These being the costs of concentrates, standard bottling
operations, distributor and bottlers commissions, distribution e!penses and the promotional andadvertising e!penditure =*s far as )oke is concerned, it had to incur a little more than (epsi as
(epsi paved its way to India in 707 while )oke made a come back in 77@.>
)urrently a @;; ml. )oke bottle is available for 5s. 1 to0 The @@; can was initially available for
5s. @ and now, since the price has gave up to 5s. 0 per can. The prices of :;; m, litre. *nd
?ltr being 5s. : 5s. ?@ and 5s. 8; respectively =according to the current survey>.
Dating back to 7@P, when (epsi hiked the price of (epsi - )ola from 5s. : to 5s. 1 per ?:; ml.
bottle in some parts of the country-including *gra. )oke penetrated the market with price of 5s. :
for a @;; ml. bottle, making it cheaper by 5s. and :; ml. than (epsi. )okePs strategy at that time
being able to e!pand the availability of soft drinks even in rural India. )okePs priority being to first
increase the number of drinks per drinker, and then the number of drinkers itself. (epsi also tried
this but was trapped by a series of competitive price increase and changes in bottle sizes by (arle.
9ut the prices of soft drinks have shot up since (epsiPs arrival and the current prices are being
mentioned as under.
P'c# l,$
Na)# Bo$$l# S5# MRP 6! R,24
Co3# P#' Bo$$l# 711 )l
Co3# 811 )l 91
Co3# 011 )l 6Pla,$c / Gla,,4 77
Co3# 7 l$'# 1
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D#$ Co3# 6Ca!4 881 )l Ca! 80
Co3# 6Ca!4 881 )l Ca! 8;
2owever, the trends may have been in the early P7;Ps, now the prices of (epsi and
)oke are the same making it difficult in future and present to compete on the basis of price.
c4PLACE
)oke may have gained an early advantage over (epsi since it took over (arle in 778.
2ence, it had ready access to over ?, ;;,;;; retailer outlets and 1; bottlers. )oke was had a better
distribution network, owing to the wide network of (arle drinks all over India. )oke has further
e!panded its distribution network.
)oke and its product were available in over ?, :;,;;; outlets =in contrast with (epsiPs ?, ;;,;;;>.
)oke has a greater advantage in terms of geographical coverage.
9ut )oke has had problems with its bottlers as the re/uired profits for the bottlers have
not been forthcoming. This is more so because )oke has hiked the price of its concentrate by 5s. 0
4urther, )okePs operations in India are ;;J 4obs. &ow, it plans to convert then into )A9As.
This is straining the relationship between the )oke and its bottlers.
The company had decided to create a fund to reimburse performing bottlers for the e!tra costs
incurred on account of the hike in prices of soft drink concentrates. r. Short also realized that
India is a price sensitive market and the company would have to absorb in the increase in e!cise
duty and said that in the long run )oke 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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)oke and (epsi have devised strategies to get rid of middlemen in the distribution
network. 2owever, :;J of the industry unfortunately depends on these middlemen. *s of now,
around ;; agents are present in 9ananas. 9ottlers of the ? multinationals have strongly felt the
need to remove these middlemen from the distribution system, but very little success has beenachieved in doing so.
D4 PROMOTION
It must be remembered that soft drinks purchases are an Oimpulsebuy low involvement productsO 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.
*ccording to (aul Stobart, *dvertising encourages customers to recognize the /uality the
company offers. (rice promotions often produce short-term sales increases.
)oca )ola has entered new markets and also developing market economics =like India> with much-
needed "obs.
)oke attributes its success to bottlers, the )oca )ola system itself, i.e., its e!ecutive
committees, employees, 9AD, company presidents but above all from the consumer.
)okePs red color catches attention easily and also the Diet )oke which it introduced was taking
the )ake, as (epsi has not come out with this in India.
3ver since )okePs entry in India in 77@, )oke made a come back =after /uitting in 7>, in
Actober ?8 in *gra, the city was flooded by trucks, there wheelers, tricycle cards-all with huge red
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)oke-emblazoned umbrellas. 5etailers were displaying their )oke bottles in distinctive racks, also
with specially-designed icebo!es to keep )oke bottles cold. This was one big "olt to (epsi.
STRATEGIES ADOPTED
BY COKE AND PEPSI
T%# P#, P'oc#,,: Despite being a global brand, (epsi has built its success on meeting the
Indian consumer$s needs, particularly in terms of making the brand synchronize with localized
events and traditions. Instead of harping on its global lineage, ergo, it tries to plug into ethnic
festivals, use the vernacular indifferent part of the country, and blend into the local fabric. (epsi is
using both national campaigns-such as the Drink (epsi, Bet Stuff scheme, which offers large
discounts on other products to (epsi-buyers as well as local.
T%# Co3# Co&: Instead of creating a bond with the customers through small but high-impact
events, )oca-)ola chose to associate itself with national and international mega events like the
World )up )ricket, 771, and world cup football 770. 9ut now coke is also entering into local
actions. )oke is also trying to make their brand synchronize with localized events traditions and
festivals. )oca-)ola new tag line in this advertisement is E5eal shopping, real refresherF. In this
way )oke is copy (epsi.
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EMPOWERMENT
T%# P#, P'oc#,,: Ance of the strongest weapons in (epsi$s armory is the fle!ibility it has
empowered its people with. 3very 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.
T%# Co3# Co&:4le!ibility is the weapon that )oca-)ola, fettered as it is by the need for
approvals from *tlanta for almost everything. In the past, this has shown up in its stubborn
insistence on "unking the franchisee network it had ac/uired from (arle% in its dependence on its
own feedback mechanism over that of its bottlers%$ and on its head/uarters-led approach.
PRICE
T%# P#, 'oc#,,: (epsi has consistently wielded its pricing strategy as in invitation to
sample, aiming to turn trial into addiction.
It launched the :;; ml bottle in 778 at 5s. 0 versus Thumps +p$s 5s. 7, in *pril, 771, its .:
liters bottle followed )oke into the marketplace at 5s. @; 5s : less than )oke$s .9ut it couldn$t
continue the lower price positioning for long.
T%# Co3# Co&: Initially, coke carbon-copied the strategy by introducing its @@;ml cans in
Canuary 771, at an invitation price of 5s. : before raising it to 5s. 0. 9y this time, it had
realized that the )oca-)ola brand did not hold enough attraction for customers to fork out a
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premium. The ?;;ml )oke, launched so far in parts of eastern, western, and northernIndia, is
priced at 5s. :, lowering the entry-barriers. Too really drive the market, as )oke wants to you must
go down to 5s. @$.
PEPSI VS2 COKE
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98 NO2 OF OWNED NIL
BOTTLING PLANTS
9; NO2 OF FRANCHISES 08
111 NO2 OF FOUNTAIN 9011
N2A2 TOTAL INVESTMENT R, 970 CR
BY BOTTLERS
NEW PLANTS PLANNED N2A2
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PEPSI AND COKE MARKET SHARE IN INDIA
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COLA WARS
COCA-COLA V/S PEPSI
OVER A CENTURY OF COLA SLOGANS@ COMMERCIALS@
BLUNDERS@ AND COUPS
TherePs little doubt that the most spirited and intense competition in the beverage world is between
)oca-)ola and (epsi. These two *merican companies long ago took their battle worldwide, and
although there are other colas in the market, these giants occupy this high-stakes arena by
themselves. The impact of )oke and (epsi on popular culture is indisputable, and I have observed
in my time managing this web site that *merica has not become "aded about the cola wars. The
memorabilia, the "ingles, the trivia - all still popular. So I am offering this page in an attempt to
assuage a wee bit of the )oke and (epsi thirst that is thriving on our planet.
IT ALL STARTED 2 2 2 2
)oca-)ola was invented and first marketed in 001, followed by (epsi in 070. )oca-)ola was
named after the coca leaves and kola nuts Cohn (emberton used to make it, and (epsi after the
beneficial effects its creator, )aleb 9rad ham, claimed it had on dyspepsia. 4or many years, )oca-
)ola had the cola market cornered. (epsi was a distant, no threatening contender. 9ut as the market
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got more and more lucrative, professional advertising became more and more important. These
soda companies have been leading the way in advertising ever since.
ADVERTISING HISTORY COMMERCIALS
(epsi has definitely leaned towards the appeal of celebrities, popular music, and young people in
television commercials, while )oke 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 )oca-)ola
tried something new, it was disaster.
The first magazine ad for )oca-)ola appeared in Munsey's in 7;?. *dvertisements began to
appear on billboards, newspapers, and streetcars. Soon there were serving trays with images of
people en"oying )oca-)ola, and glasses with the colaPs name on them. *t this time, )oca-)ola and
(epsi were served in drugstore soda fountains.
In 7;7, (epsi used its first celebrity endorser, automobile race driver 9arney Ald-field, in
newspaper ads. In 7?, (epsi went bankrupt, but continued to appear on the scene, although not
nearly so successfully as )oca-)ola. In 7@, (epsi went bankrupt again, but the new owner, 5oy
egargel, would hit upon an idea that would finally give )oca-)ola some competition. In 7@8, he
marketed (epsi in a ?-ounce bottle for a nickel. *t the time, )oca-)ola was sold in a 1-ounce
bottle for ten cents. KoilaR (rofits for (epsi.
(epsi racked up another first by airing the first radio "ingle in 7@7. It was so popular that it was
played in "ukebo!es and became a hit record )oca-)ola hit the airwaves in 78.
In 781, inflation forced (epsi to increase prices. *nd in 7:;, (epsi offered a larger ?1-ounce
bottle to court the young *merican housewife.
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In the 71;Ps, the cola ad wars moved to television. )oca-)ola employed a host of celebrity singers
to promote the product, including )onnie 4rancis , Tom Cones, The &ew 9eats, &ancy Sinatra, and
The Supremes. *s we moved through the years, both colas incorporated some of their best slogans
=O(epsi BenerationO and Othe 5eal ThingO> into subse/uent commercials.
In the 7;s, market research showed that consumers preferred the taste of (epsi over )oke. The
(epsi )hallenge is still being conducted today. 9ut )oke came up with what is arguably the best of
all cola commercials, the 7 IPd like to buy the World coke ad.
This landmark was recalled in )hristmas versions in 70@ and 708, and a 77; Super 9owl ad,
which was enough to make some 9aby 9oomers weep with nostalgia.
(epsi, meanwhile, had its own flop, )rystal (epsi, which was supposed to catch the strange wave
of the times when everything colorless was clean and desirable =Nima, bottled water>. *nd then
there was (epsi
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SLOGANS
ItPs clear in looking at the slogans over the years that )oke and (epsi have very different targeting
strategies. )oke is touting itself as the original, the authentic, and appealing to a sense of tradition,
positioning itself as an integral part of daily *merican life. (epsi, on the other hand, is promoting
itself as something new, young, and hip, which seems a little odd after over ;; years. 9ut )okewas first, after all. (epsi has always targeted the youth market more aggressively than )oke.
COCA-COLA
001 - Drink )oca-)ola
7;8 - )oca-)ola Satisfies
7;8 - Delicious and 5efreshing
7;: - )oca-)ola 5evives and Sustains7;: - Bood *ll the Way Down
7;1 - The Drink of Muality
7;1 - The Breat &ational Temperance
7; - Delicious )oca-)ola, Sustains, 5efreshes, Invigorates
70: - *mericaPs 5eal )hoice =)oca-)ola )lassic>
701 - )atch the Wave =&ew )oke>
701 - 5ed, White and 'ou =)oca-)ola )lassic>
70 - 'ou )anPt 9eat the 5eal Thing
707 - )anPt 9eat the 4eeling
77; - )anPt 9eat the 5eal Thing
77@ - *lways )oca-)ola
77@ - Taste it *ll
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PEPSI-COLA
7;@ - 3!hilarating, Invigorating, *ids Digestion
7; - Ariginal (ure 4ood Drink
7;7 - Delicious and 2ealthful
7: - 4or *ll Thirsts - (epsi-)ola
77 - (epsi-)ola - It akes 'ou Scintillate
7?; - Drink (epsi )ola. It will satisfy you.
?;;-?;;0G Oore 2appyO#OTaste the once thatPs forever youngO
?;;0G O'eh 2ai 'oungistan eri CaanRO 2indi - meaning OThis is the 'oung era my dearO =India
and (akistan>
?;;0G O(epsi StuffO Super 9owl )ommercial
?;;0G O(epsi is O TK commercial
?;;0G O(epsify karo gaiRO )ommercial =2indi meaning OWanna (epsifyRO>
?;;0-?;;7G OSomething for 3veryone.O
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?;;7-presentG O5efresh everythingO and =during many commercials> O3very Beneration 5efreshes
the WorldO
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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 SINGHYUVRAJ 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
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PEPSI IS NOT AS PRICEY
5egardless of which soda you like better though, (epsi seems the better value than )oke right now.
)oke is trading at a nearly ?; percent premium to (epsi based on ?;;? (#3s even though the two
companiesP earnings growth rates are nearly identical. =(epsiPs are actually a shade higher.>
*nd when you look at revenues, the gap is even more dramatic. )oke is trading at time$s
estimated ?;;? sales while (epsi is trading at @.: times ?;;? revenue estimates. 9oth companies
are e!pected to post slight declines in sales this year and an increase of about 8 percent in ?;;@.
Due to this disparity in valuation, Ceff anter, an analyst with (rudential Securities, says he has aObuyP rating on (epsi and OholdO on )oke. (rudential does not do investment banking.
To be sure, )oke is still the market share leader in soft drinks. Ane of the main reasons the stock
has outperformed (epsi this year was because it reported a better than e!pected gain in unit volume
in the first /uarter. *nd the company has taken steps to cement its carbonated beverage lead as well
gain ground in the bottled water market. =)oke and (epsi both have their own brands of water,
Dasani and */uafina, respectively.>
An Tuesday, )oke announced that it was ac/uiring the SeagramPs line of mi!ers, tonic, ginger ale
and seltzer from Diageo and per nod 5ichard. *nd last month, )oke entered into an agreement
with Broup Danone to distribute 3vian bottled water in &orth *merica.
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Co3# a!" P#, ! I!"a:
)oca-)ola controlled the Indian market until 7, when the Canata (arty beat the )ongress (arty
of then (rime inister Indira Bandhi. To punish )oca-)olaPs principal bottler, a )ongress (arty
stalwart and longtime Bandhi supporter, the Canata government demanded that )oca-)ola transfer
its syrup formula to an Indian subsidiary. )oca-)ola balked and withdrew from the country. India,
now left without both )oca-)ola and (epsi, became a protected market. In the meantime, IndiaPs
two largest soft-drink producers have gotten rich and lazy while controlling 0;J of the Indian
market. These domestic producers have little incentive to e!pand their plants or develop the
countryPs potentially enormous market. Some analysts reason that the Indian market may be more
lucrative than the )hinese market. India has 0:; million potential customers, :; million of whom
comprise the middle class, with disposable income to spend on cars, K)5s, and computers. The
Indian middle class is growing at ;J per year. To obtain the license for India, (epsi had to e!port
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. (epsi has also had to take on Indian
partners. In the end, all parties involved seem to come out aheadG (epsi gains access to a potentially
enormous market% Indian bottlers will get to serve a market that is e!panding rapidly because of
competition% and the Indian consumer benefits from the competition from abroad and will paylower prices. 3ven before the first bottle of (epsi hit the shelves, local soft drink manufacturers
increased the size of their bottles by ?:J without raising costs.
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PRICE
a!imum retail price of @;; ml bottles is controlled by the )entral Bovernment. The other size
and packs are priced keeping factors like competition, internal costs, e!ternal costs, and the
corporate ob"ective of the company in the mind.
PRODUCT SELLING PRICE MA2RETAIL PRICE
6P#' c'a$#4 6P#' c'a$#4
811 )l .o$$l#, 71 7
011 )l .o$$l#, 8 8;;
9 L$#' .o$$l#, 011 071
So"a 811 )l 9 9;;
Ca!, 887 807
920 L$#' PET 01 00
.o$$l#,
(rice per bottles the empty bottles are priced at 5s ?; per crate and the shell at 5s
;;.
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PREFERENCE OF SOFT DRINKS IN A DAY
O!c# a "a& 70=
T(c# a "a& 71=
O!c# a (##3
O$%#' 01=
25%20%
5%
50%
0%10%
20%
30%
40%
50%
60%
Once a
day
Tw ice a
day
Once a
week
Other
Once a dayTwice a dayOnce a weekOther
F+*'#-9
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PREFERENCE TO THE BRAND
P#, 1=
Co3# 1=
F+*'# 7
40%
60%
0%
20%
40%
60%
80%
Pepsi Coke
Pepsi Coke
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TO GIVE THE PREFERENCES
Mo'# Po*la' 91=
Pac3a+!+ 91=Ta,$# >1=
P'c# 91=
10% 10%
70%
10%
0%
20%
40%
60%
80%
More
Pop!ar
Packa"in" Taste Price
More Pop!ar Packa"in" Taste Price
F+*'# 8
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MARKETING STRAGGLES OF COMPANY EFFECTS THE
SALES
Y#, 00=
No 0=
F+*'#
55%
45%
0%
10%
20%
30%40%
50%
60%
#es $o
#es $o
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FORM OF MARKETING STRATEGIES
T#l#,o! A"#'$,!+ 0=
N#(,a#' A"#'$,!+
O*$"oo' A"#'$,!+ 71=
Sal#, P'o)o$o! 81=
F+*'# 0
45%
5%
20%
30%
0%
10%
20%
30%
40%
50%
Te!eision &d' $ewspaper &d Otdoor &d (a!es Pro)otion
Te!eision &d' $ewspaper &d Otdoor &d (a!es Pro)otion
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CHANGE BRAND ON THE BASIS OF PRICE REDUCTION
Y#, 09=
No =
F+*'#
51%
4*%
48%
4*%
50%
51%
52%
#es $o
#es $o
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MORE EFFECTIVE ADVERTISING
P#, Co2 01=
Co3# Co2 01=
===
F+*'# >
50%
50%
%%%%%%%%
%%%%%%%%
%%%%%%%%
%
0%
20%
40%
60%
80%
Pepsi Co' Coke Co'
Pepsi Co' Coke Co'
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CREATIVE AND APPEALING ADVERTISING OF THE SOFT
DRINK COMPANY
P#, Co2 0=
Co3# Co2 0=
F+*'# ;
%%%
45% 45%
0%
20%
40%
60%
80%
Pepsi Co' Coke Co'
Pepsi Co' Coke Co'
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INNOVATIVE AND ECITING OFFERS
P#, Co2 00=
Co3# Co2 0=
F+*'#
PUBLIC RELATIONS ANGLE
I!!oa$# a!" #c$!+ o#',
The respondents were asked to compare between (epsi)o and )oca-)ola VI
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:;J of the respondents replied in favor of ()I while @;J responded in favor of ))I. J of the
respondents thought that both were e/ually good and it varied with time, place and occasions. @J
of the respondents were not aware of all the activities and were modest to admit it.
Muick and responsive to different occasions and events.
)omparing (epsi)o and )oca-)ola VI
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MARKET SHARE PERCENTAGE IN NEW DELHI
COKE 0=
PEPSI 80=P*'# D'!3,
F+*'# - 91
56%35%
*%
Pepsi Coke Pre +rinks
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MARKET PERCENTAGE SHARE IN ALL OVER INDIA 711;
P#, =
Co3# 09=
Local B'a!"
F+*'# - 99
BRAND PREFERENCES
5%
51%
44%
PepsiCoke,oca! -rand
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In a survey done by * 6 magazines on the best marketing companies in India. (epsi and )oca-
)ola were also entered. The results were as followsG
P#, - 0%
Coca-Cola - %
T%# '#,*l$, o 0 (#'# :
P#, - >$%
Coca-Cola - %
This shows that both the companies are paying more attention to the marketing of their products.
(epsi is higher up on the scale than )oca-)ola. We can see that by the brilliant advertising done by
(epsi, which can be seen on every hook and corner of metro cities consumers, so prefer (epsi
advertisements and other activities of (epsi, to that of )oca-)ola.
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FINDINGS ANALYSIS
The Indian soft drinks market is at 8; million cases per year. This is very low, even as compared
to (akistan and 9angladesh. *ll these factors together have contributed to a ?;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.
)oca-)ola
(epsi
)oca-)ola and (epsi together control 7J of the 8 entire Indian markets. The rest of the @J is
shared by companies like )adbury-Schweppes and )ampa-)ola. The total no. of case sold is 8;
million of these million cases of )ola drinks are sold and 1@ million of non-cola drink. There is
a rapid increase in the sale of cola soft drinks. Whereas in 77;, they accounted for a third of all
soft drinks sold, now their share is well over half. *lso cola sales are growing at a faster rate than
non-colas. Ane of the reasons for this could be the aggressive marketing strategies for )ola drinks
by (epsi and )oca-)ola.
The race to /uench the great Indian thirst had deigned.
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P#, !"!+,:
(epsi is the ?&D largest selling soft drink in India today. In D3
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If we see the present scenario its hard to tell which brand is winning the cola wars as (epsi
had e!tended its cola wars to other sectors like 45ITA- both are treated e/ually by customers. oreover 9IS
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9oth the companies would try to become &A and there would *D W*5 between the two
which would prove to be beneficial for actors#actresses as they would earn more through
advertisements.
(epsi have started advertisements with female actresses D33(I* (*D+A&3 and
)A)*-)A
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O!c# a "a&
T(c# a "a&
O!c# a (##3O$%#'
272 WHICH BRAND ARE YOU PREFERENCE TO THE BRANDJ
P#,
Co3#
282 WHICH PARTICUALAR RATE TO GIVE THE PREFERENCESJ
Mo'# Po*la'
Pac3a+!+
Ta,$#
P'c#
22 ARE THE MARKETING STRATEGIES OF A COMPANY AFFECT ITS SALESJ
Y#,
No
202 WHICH FORM OF MARKETING STRATEGIES IS MOST EFFECTIVE IN THE
MARKETJ
T#l#,o! A"#'$,!+
N#(,a#' A"#'$,!+
O*$"oo' A"#'$,!+
Sal#, P'o)o$o!
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22 WILL YOU CHANGE THE BRAND ON THE BASIS OF PRICE REDUCTIONJ
Y#,
No
2>2 WHICH BRAND MORE EFFECTIVE IN ADVERTISINGJ
P#, Co2
Co3# Co2
2;2 WHICH BRAND HAS CREATIVE AND APPEALING ADVERTISING OF THE
SOFT DRINK COMPANYJ
P#, Co2
Co3# Co2
22 WHICH BRAND HAVING THE INNOVATIVE AND ECITING OFFERSJ
P#, Co2
Co3# Co2
291 Do &o* $%!3 $%a$ coca-cola a!" P#, .o$% a'# la,%l& ,#!"!+ o! $%#' a" ca)a+!,
$o a$$'ac$ c*,$o)#',2
YES
NO
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Co!,*)#',
4or the purpose of the study, /uestionnaires were prepared for the )onsumers. )are was taken to
interview all types of consumers, i.e., G
a. Different age groups
b. ales and females
c. (eople from different localities, etc.
In all about 1; consumers were interviewed. The conclusions that one can draw from these answers
provided by the consumers showed that marketing activities do form a ma"or part of the decision.
Ane thing that was common amongst all the consumers who were once a day or once a week. The
number one factors the influences a customer while buying a soft-drink was taste. This was true for
all the consumers who were interviewed. The rest of the conclusions as deducted from the
/uestionnaires are as followsG
The younger generation preferred soft drinks to the older generation.
a. )hildren up to : years of age liked to have soft drinks up to ?-@ times a day.
b. 'oung adults liked to have soft drinks up to -? times a day.
c. *dults liked to have soft drinks about once or twice a week.
)hildren preferred )oca-)ola 4anta, irinda orange. 'oung adults liked (epsi. The older
generation preferred )oca-)ola,
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a"or number of people found television advertising to be the most effective. 'oung and the old
liked to watch the advertisements on television.
Sponsoring events, outdoor advertising and sales promotion schemes were second choice of the
consumers. +nder television advertising, (epsi came in as the number favorite of the people the
advertisement of Shah-5ukh han and the dog was the favorite of the consumers. Their new
advertisement of irinda
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ANALYSIS OF UESTANNAIRE
01 '#,o!"#!$, (#'# c%o,#! a)o!+ "#'#!$ a+# +'o*, o' co!"*c$!+ $%#
,*'#&
FINDINGS:
. 'A+&BS3T5S prefer (3(SI )A
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RECOMMENDATIONS
Soft drinks are an impulse product. When a person is thirsty, he would first think of water or tea.
Some even would prefer &imbooz EX
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 soft-drink manufacturers. The Indian soft drink
market is at 8; million cases per year, this is very low. Thus the consumption of soft drink can go
up.
Sinc0Ye the entry of )oca-)ola 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 )oca-)ola wants to accomplish this feat by them. To do this the industry has to take
certain steps. *ll the companies are fighting to get a ma"or share of this growing market. They
should all try to increase the total market along with their individual shares.
An 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-
Soft drinks retail at prices between 5s. 1 and 5s. ;. These are e!pensive when measured against
purchasing power.
*ccording 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.
*vailability is a ma"or factor, which makes the consumer buy a soft drink. Soft drinks should be
made available more readily than present. There are only @;;, ;;; retailers stocking soft drinks in
India. Thus retailing outlets should be increased. *lso 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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It is seen In India, that people prefer having their drinks with or after food. )ompanies could have
commercials which show people en"oying their drink with a good meal, so that consumers
associate drinking soft drinks while having food.
)ompanies should try to educate the consumer about the health related sub"ect. 4or e.g.G-
a> )ola drinks are known to be very fattening ,
9ut 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.
)ompanies should try to build high brand e/uity. This provides a number of advantages to thecompany.
a> The company en"oys 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 e!pects 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 e!tension.
e> *bove all, the brand offers the company some defense against fierce price competition.
The companies should go in for diversification
Ance the brand is known, it is easier to sell more of its products. 4or e.g. )oca-)ola 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. (epsi and )oca-)ola are so busy fighting with each
other, that they have left the non-cola sector open for )adbury-Schweppes.
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*dvertising 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> 9rand image building
b> 5eminder advertisingG reminding people to buy these drinks.
c> 5einforcement advertising-Telling 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.
Sales promotion tools create a stronger and /uicker response. Thus sales promotion tools such as
coupons, contests, premiums and the like should be used to dramatize product offers and to boost
sales. Sales-promotion effects are usually short run and induce the people to purchase soft drinks,
now.
)oca-)ola and (epsi have taken up sponsoring of events on a ma"or scale.
*ll kinds or events, whether big =Wills Worked cup> or small =college contests> have either (epsi
or )oke banners of sponsorship. The effectiveness of this can be /uestioned. Whether these
activities increase sales or not is a big huge /uestion mark.
It is recommended that company should introduce more and more customer oriented schemes and
conte!ts. 4or e.g. (epsi$s new campaign E(epsi cool malF in which they are giving free gifts totheir 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.
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