Competitive Strategies adopted by leading brands in aerated beverages industry

Mayank Agrawal – E004Arushi Kalara – E022Prasad Nambiar – E036Akriti Rastogi – E043Prathamesh Shetty E052

Sector Analysis – Major players

Combined market share

95%In India

Sector Analysis - Stats

12%

38%

50%

Market Size of Soft Drinks market (in crores INR)

Juice/FruitDrinkCarbonated drinksBottled water/ other drinks

Poised to grow at an annual rate of 28-30% for 30 years

India’s per capita consumption is 3 liters.

If the per capita consumption doubles, demand will not be met. Thus huge market potential

Porters Five ForceThreat of new entrants VERY LOW

Threat o

f S

ub

st

itu

tesH

IGH

Bargaining power of SuppliersLOW TO MODERATE

Bargaining power of BuyersMODERATE

Degree of RivalryMODERATE

Competitive StrategiesExpand the total market demand

Protect its current market share

Get new customers• Who can use but do not use• Who have never used or lives elsewhere

Find avenues for more usage• Increase amount of usage• Increase frequency of usage

Proactive marketing• Through product and services• Through process efficiency and cost saving

Defensive Marketing• Position Defense• Flanking Defense• Pre-emptive Defense• Counter Offensive Defense• Mobile Defense• Contraction Defense

Who can use but do not useCalorie conscious and diabetic people refrain from drinking carbonated soft drinks. Pepsi found the solution:• PepsiCo introduced Patio Diet Cola in

1963 using aspartame as alternate sweetener. Finally launched as Diet Pepsi in 1964.

• Coca Cola launched Tab. Tab was relaunched as Diet Coke in 1984.

• Royal crown came up with Diet Rite Soda in the 1960s and 1970s.

Who have never used or lives elsewhere• Coca Cola’s rural marketing strategy

was based on 3A’s:1. Availability2. Affordability3. Acceptability

• Customer Insight - 300ml bottle were not that popular in rural markets and they found it expensive. People used to share a 300ml bottle.

• Action - Coke launched 200ml variant of its products to target rural market.

Increase amount of usage• Insight – People tend to consume more

when they have more a beverage stocked in their refrigerator

• Action - Bigger unit size in Tier 2 and Tier 1 Cities. Price conscious customers would buy bigger bottles for cost saving with discount offers on 2 Liter bottles

• Insight – different occasion calls for a different usage need.

• Action - Size variants 200ml, 300ml, 500ml, 2Litre

Increase frequency of usage

Insight: Price conscious customers prefer soft drinks over bottled water when out of home/workplaceAction: Limca was associated with thirst to plant a brand recall.

Insight: Housewives have to spend more time in kitchen to prepare coffee and tea when guests arrive. Guest also hesitate to accept hot beveragesAction: Coca Cola was advertised as a substitute to Tea/coffee to reduce formalities from relations

Through products and servicesInsight: Soda helps with the junk food and is a refreshing drinkAction: Fountain carbonated soft drinks available at restaurants, cinemas, take-aways through exclusive tie ups.

Through process efficiency & cost savingInsight: Existing central distribution system used by Coca Cola India in cities was not sustainable in rural market due to poor infrastructure and segregation of consumer.Action: Used hub and spoke distribution system.Bottli

ng plant

Hubs

Spokes

Retailers

Position DefenseInsight: In India cold drinks is synonymous to aerated drinks in general. Action: Coca Cola came up with ‘Thanda matlab Coca Cola’ advertisement with Amir Khan endorsing the brand. Through this campaign they occupied that very comfortable position in their consumer’s mind.

Flanking Defense• Between 1996-98, Coke doubled

its reach to a reported 5 lakh outlets

• To reach out to smaller markets, interceptor units in the form of mobile vans were also launched by Coke in 1998

• In many shops in Uttar Pradesh, Coke ran out of stock.

• Tie up with Indian oil

• When Pepsi was present at only 3.5 lakh outlets

• Pepsi served retail shops on daily basis and had full stock

• Tie up with Bharat Petroleum for dispensing units at petrol pumps

Pre-emptive defense• Bottling was the biggest area of conflict between PepsiCo and Coca Cola• Bottling operations held the key to distribution• Coca cola had conflict with Ramesh Chauhan of Parle• Pepsi made a bid to gain from the feud• Pepsi won over Goa bottling company and others• Also, Pepsi beat coca cola in diet cola segment by launching Diet Pepsi much before

Contraction Defense• Coke had entered the Indian soft drinks market way back in the 1970s. • The company was the market leader till 1977, when it had to exit the country

following policy changes regarding MNCs operating in India. • Over the next few years, a host of local brands emerged such as Campa Cola,

Thumps Up, Gold Spot and Limca etc.• With the entry of Pepsi and Coke in the 1990s, almost the entire market went

under their control.

Mobile Defense• Coke re-entered India in 1993• Entered into a deal with Parle, which had

a 60% market share in the soft drinks segment with its brands Limca, Thums Up and Gold Spot.

• Coke turned into the absolute market leader overnight.

• The company also acquired Cadbury Schweppes' soft drink brands Crush, Canada Dry and Sport Cola in early 1999

Mobile DefenseProduct portfolio Beverages only

Product portfolio Beverages and snacks

Miscellaneous – Logo evolution

Miscellaneous – Limelight

Thank You