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A

PROJECT REPORT

ON

“COMPARISON BETWEEN PEPSI & COKE.”

Submitted for prti! fu!fi!me"t of re#uireme"t for t$e %rd of deree

of “BAC'E(OR O) MANA*EMENT ST+,IES”

Of Mumbi +"i-erit/01Mumbi2

Seio" 13456734582

PREPARE, & S+BMITTE, B9

MONIS' P *ORE

SEAT NO.53:;4ONE0 SA*AR(I

,OMBI?I(I 1EAST2

ACA,EMIC 9EAR 345@73458

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,EC(ARATION

I MONIS' P *ORE declare that the report of the project work entitledCOMPARISON BETWEEN PEPSI & COKE is based on my own workcarried out during the course of my study under the supervision of Mr.BOOMA 'A(PET'. The information submitted in this project work istrue and original to the best of my knowledge and belief.

MONIS' P *ORE

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CERTIFICATE

T$i i to ertif/ t$t Mr. MONISH P GORE Stude"t of BMS 1B$e!or of m"eme"t tudie2 emeter - 1345:7345@2 Seat no.12!"#" '

uefu!!/ omp!eted $i proet %or o" “$O%&'(ISO) *+T,++)&+&SI - $O+/ +"der t$e uid"e of Prof. BOOMA 'A(PET'

per Mumbi +"i-erit/ /!!bu.

CO+RSE CO. OR,INATOR PROJECT *+I,E

EDTERNA( EDAMINAR PRINCIPA(

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Sr No. Co"te"t P "o.

5 Eeuti-e ummr/ 6

3 I"trodutio" :7@

6 O-er-ie%1Soft dri" i" I"di2 87<

: Coe1Comp"/ Profi!e2 54753

@ 'itor/ 1Coe i" I"di2 56758

8 Br"d i" I"di" Orii" 5;

; PepiCo i" I"di 5=736

= Coe i" I"di 3:765

< Mreti" Strteie 1Coe & Pepi2 6376;

54 Coe -F Pepi 6=7@=

55 )i"di" & A"!/i @


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EDEC+TI?E S+MMAR9

This project is an etensive research on the marketing strategies of the two

$ola giants &epsi and $oca $ola. It covers an etensive 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 &epsi and $oca3

$ola 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 &4s

of marketing.

The major players in the soft drink industry in India are $oke and &epsi.&epsi holds the major market share followed by $oke. They have

a cut throat competition between themselves. ,hatever strategy is

followed by one company it is copied by the other.

Sample of to brands were selected on the basis of there uses and

noticeciability.

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One of the selected brands is )O1 brand in their respective product

categories the other one brand is close competitor of the )o 1

brands. Total sample of si6e of 2"" respondents selected on the

basic of convenience was surveyed which include consumers.

7ata was collected from secondary as well as primary sources. Structure

8uestionnaire was use to collect primary data

INTRO,+CTIONH

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 patroni6ed 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 so3called competition for this product in the market is from different

other brands. %ass media particularly the emergence of television hascontribute to a large etent of the ever growing demand for soft drinks the

attractive jingles and sport make the large audience remember this product at

all times.

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It is epected that with the sort of mass advertising reaching almost the

entire country and offering various varieties annual demand for the product

is epected 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 today4s highly competitive market place three players have dominated

the industry; The )ew


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SO)T ,RINK IN,+STR9H AN O?ER?IEW

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It all began in 1??9 when a tree legged brass kettle in @ohn Styth

pemberton4s 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 world4s 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.

+8ually oblivious to the historic value of his actions was Arank I.

(obinson his partner and book keeper. &emberton - (obinson laid the first

foundation of this beverage when an average nine drinks per day to begin

with upping volumes as sales grew.

In 1?# this beverage got into bottle courtesy a candy merchant from

%ississippi. *y the 1#5"4s $olas was a daily consumption item stored in

house hold fridges. Soon were born other non3 cola variants of this product

like orange - Bemon.

)ow the soft drink industry has been dominated by three major player > C1D

The )ew


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Over local competition the two 'merican $ola 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 luury. $onse8uently by world standards India4s per capita

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

than over )eighbors &akistan - *angladesh where it is four times as much.

*ehind the hype in an effort invisible to consumer &epsi pumps in (s 0"""

crores C1##D to add muscle to its infrastructure in bottling and distribution.

This is apart from money that company4s franchised bottles spend in

upgrading their plants all this has contributed to substantial gains in the

market. In colas &epsi is already market leader and in certain cities like

*anaras &epsi outlets are on one side - all the other colas put together on

the other. ,hile coke eecutive scruff at &epsi4s claims as well as targets

industry observers are of the view that &epsi has definitely stolen a march

over its competitor coke.

'part from numbers &epsi has made 8ualitative gains. The foremost is its

image. This image turnaround is no small achievements considering that

since it was established in 1#?# taking the hardship route prior to

liberali6ation and weighed down by eport commitments.

)ow at present as there are three major players coke &epsi and $adbury

and there is stiff competition between first two both &epsi and coke have

started sponsoring local events and staging fre8uent consumer promotion

campaigns. 's 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.

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Bike &epsi coke is picking up e8uity in its bottles to guarantee their

financial support; one side coke is trying to increase its popularity through.

+at Aood enjoy Aood. 7rink only coca cola. +at cricket sleep cricket. 7rink

only coca cola. +at movies sleep movies. 7rink only coca cola.

On the other side of coin &epsi has introduced '%IT'*@ *'$@@') for

capturing the lemon market through %I(I)7' > Bemon with G6or ka jhatka

dhere se lage/.

A?AI(ABI(IT9

'vailability means the presence of a particular brand at any outlet. If a

product is now available at any outlet and the competitor brand is

available the consumer will go for it because generally the consumption of

any soft drink is an impulse decision and not predetermined one.

?ISIBI(IT9

Hisibility is the presence felt if any outlet has a particular brand of soft

drink say3 &epsi cola and this brand is not displayed in the outlet then its

availability is of no use. The soft drink must be shown off properly and

attractively so as to catch the attention of the consumer immediately &epsi

achieves visibility by providing glow signboards hoarding calendars etc.

to the outlets. It also includes various stands to display &epsi and other

flavors of the company.

COO(IN*

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's the soft drinks are consumed chilled so cooling them plays a vital role

in boosting up the sales. The brand which is available chilled gets more

sales then the one which is not even if it is more preferred one.

RAN*E

This is the last but not the least factor which affects the sale of the

products of a particular company.

(ange availability means the availability of all flavors in all si6es.

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$O$' >$OB' $O%&')< &(OAIB+

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

soft drinks as a drinking product among Indians. The $oca3$ola in India has

setup an independent organi6ations which is @.$.$ - *.$.$ with a capital

of 05" =.S. each by virtue of sellout decision of the passed managing

director Sh. S. $. 'ggarwal.

@industan $oca3$ola bottling C)3,D &vt. Btd. )ajibabad took the complete

possession of this plant land machinery - intellectuals on Aebruary 14

1##? and since then @.$.$ looking after all its affairs under company

owned bottling plant to establish integrated marketing system in the area.

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)AB+(O+S )ACTS ABO+T COCA7CO(A

1. The world4s largest spherical coca3cola sign is in )agoya Fapan a

top the dial > )agoya building in front of the )agoya railway station.

The sing is a double sphere constructed from more then 9 tone of

steel more #"meter of neon tubing and more then ?!# light bulbs.

The outer shape features the coca3cola logo and contour bottle while

the inner sphere portrays a comic scene with twinkling planets and

stars.

2. One of the world4s largest signs for coca3cola is located on a hill

called G+B@'$@'/ in 'merica $hile. It is "" feet wide and 101

feet high and is made from !"""" 29 ounce bottles.

0. The first out door paint sign advertising coca3cola still eists. It was

painted in 1?# in $artersville Eeorgia.

. $oca3cola is one of the world4s most recogni6able trademarks

recogni6ed in countries that account for #? percent of the world4s

population.

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5. If all the coca3cola ever produced were in ?3 ounce bottles. 'nd these

bottles were distributed to each person in the world. There would be

9!? bottles or over 2 gallons for each person.

9. If all the coca3cola ever produced were in ? > ounce bottles placed

side by side and end to end to from a lane highway it would wrap

around the earth ?2 times.

!. If all the coca3cola ever produced were flowing over )iagara fall at

its normal rate of 1"5 million gallons per second instead of water

the falls would flow for about a day and a half 0? hours and 9

minutes.

?. The largest representation of the world4s best known package 1""

foot tall glass contour bottle is located at world of coca3cola B'S

H+E'S

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'ISTOR9 IN IN,IA

Co7o! i" I"di

$oca3$ola the corporation nourishing the global community with the

world4s largest selling soft drink concentrates since 1??9 returned to India

in 1##0 after a 19 year hiatus giving new thumbs up to the Indian soft drink

market. In the same year the $ompany took over ownership of the nation4s

top soft3drink brand and bottling network. It4s no wondering our brands

assumed an iconic status in minds of world4s consumers.

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A 'e!t$/ *ro%t$ to t$e I"di" Eo"om/

+ver since $oca3$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.

$oca3$ola India is among the country4s top international investors having

invested more than =S 1 billion in India in the first decade and further

pledged another =S1"" million in 2""0 for its operations.

A Pure Commitme"t to t$e I"di" Eo"om/

The $ompany has shaken up the Indian carbonated drinks market greatly

giving consumers the pleasure of world3class drinks to fill up their

hydration refreshment and nutrition needs. It has also been instrumental in

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giving an eponential growth to t$e country4s job listings.

Creti" E"ormou Job Opportu"itie

,ith virtually all the goods and services re8uired to produce and market

$oca3$ola being made in India the business system of the $ompany

directly employs approimately 9""" people and indirectly creates

employment for more than 125""" people in related industries through its

vast procurement supply and distribution system.

The Indian operations comprises of 5" bottling operations 25 owned by the

$ompany with another 25 being owned by franchisees. That apart a

network of 21 contract packers manufactures a range of products for the

$ompany.

On the distribution front 1"3tonne trucks > open bay three3wheelers that can

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navigate the narrow alleyways of Indian cities > constantly keep our brands

available in every nook and corner of the country4s remotest areas.

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

growth of the Indian +conomy

BRAN,S IN IN,IA

R

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BRAN, IN IN,IAN ORI*IN

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EOB7 S&OTJ this orange carbonate soft drink was introduced in the early

1#5"c and ac8uired by the $oca3$ola company in 1##0 its tangy taste

has been popular with Indian teenagers

BI%$'J It is thirst38uenching beverage features a fresh and light lemon3

lime taste and lighthearted attitude. The limca brand was introduced in

1#!1 and ac8uired by the coca3cola company in 1##0.

%''K'J %aa6a launched in 1#? and ac8uired by the coca3cola company

in 1##0 is a non carbonated mango soft drink with a rich juice -

natural mango taste.

T@=%&S =&J in 1##0 the $oca3$ola company ac8uired this brand which

was originally introduced in 1#!!. Its strong and fi66y taste makes it uni8ue

carbonated Indian cola.

PEPSICO

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&epsi$o is one the largest companies in the =.S. It figures amongst the

largest 15 companies worldwide according to the number of employees

hired. It has a =.S. Aortune rank of 5".The company profits for 1##! were

2.1 billion on revenues of 2".#2 billion and &epsi is bottled in nearly 1#"

countries. &epsi$o is a world leader in convenient snacks foods and

beverages with revenues of more than 0 billion and over 1#?"""

employees. Take a journey 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 &epsi3$ola Arito3Bay and

&epsi Aood International. The group is presently into two of the most

profitable and profitable and growing industries namely beverages and

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snack foods. It has scores of big brands available in nearly 15" countries

across the globe. The group has established for itself once of the strongest

brands in various segments of its operations.

The beverages segment primarily markets its &epsi 7iet &epsi %ountain

7ew and other brands worldwide and !3=& outside the =.S. markets. These

are positioned in close competition with $oca3$ola Inc. of =S'. ' point

which is worth a mention is that $oca3$ola gets ?"L of its profits for

International operations while the same figure for &epsi$o stands at 9L. The

segment is also in the bottling plants and distribution facilities and also

distributes the ready to drink tea products of Bipton in )orth 'merica. In a

joint venture with orient spray juice products &epsi$o 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 etend

to the markets of %eico the = and $anada. Arito3Bay represents this

segment of &epsi$o.

The restaurant segment earlier primarily consists of the operations of the

worldwide &i66a @ut Taco *ell and A$ chains. &AS. &epsi company4s

restaurant distribution operation supplies company owned and franchise

restaurants in the =.S. The company ventured into restaurant business with

Taco *ell A$ &i66a @ut ended last year when they were spanned off

from the company. ' packaged goods company comprised of &epsi3$ola

$ompany and Arito3Bay will continue to bear the &epsi$o name. The move

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should enhance both corporations ability to prosper with their own fully

dedicated structure and management team.

PEPSICO IN IN,IA

&epsi$o gained entry to India in 1#?? by creating a joint venture with the

&unjab government3owned &unjab 'gro Industrial $orporation C&'I$D and

Holtas India Bimited. This joint venture marketed and sold Behar &epsi until

1##1 when the use of foreign brands was allowed; &epsi$o bought out its

partners and ended the joint venture in 1##. Others claim that firstly &epsiwas banned from import in India in 1#!" for having refused to release the

list of its ingredients and in 1##0 the ban was lifted with &epsi arriving on

the market shortly afterwards. These controversies are a reminder of MIndiaNs

sometimes acrimonious relationship with huge multinational companies.M

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Indeed some argue that &epsi$o and The $oca3$ola $ompany have Mbeen

major targets in part because they are well3known foreign companies that

draw plenty of attention.M

In 2""0 the $entre for Science and +nvironment C$S+D a non3

governmental organi6ation in )ew 7elhi said aerated waters produced by

soft drinks manufacturers in India including multinational giants &epsi$o

and The $oca3$ola $ompany contained toins including lindane 77T

malathion and chlorpyrifos pesticides that can contribute to cancer a

breakdown of the immune system and cause birth defects. Tested products

included $oke &epsi ! =p %iranda Aanta Thumps =p Bimca and Sprite.

$S+ found that the Indian3produced &epsiNs soft drink products had 09 times

the level of pesticide residues permitted under +uropean =nion regulations;

$oca $olaNs 0" times. $S+ said it had tested the same products in the =S

and found no such residues. @owever this was the +uropean standard for

water not for other drinks. )o law bans the presence of pesticides in drinks

in India.

The $oca3$ola $ompany and &epsi$o angrily denied allegations that their

products manufactured in India contained toin levels far above the norms

permitted in the developed world. *ut an Indian parliamentary committee in

2"" backed up $S+Ns findings and a government3appointed committee is

now trying to develop the worldNs first pesticides standards for soft drinks.

$oke and &epsi$o opposed the move arguing that lab tests arenNt reliable

enough to detect minute traces of pesticides in comple drinks.

's of 2""5 The $oca3$ola $ompany and &epsi$o together hold #5L

market share of soft3drink sales in India. &epsi$o has also been accused by

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the &uthussery panchayat in the &alakkad district in erala India of

practicing Mwater piracyM due to its role in eploitation of ground water

resources resulting in scarcity of drinking water for the panchayat residents

who have been pressuring the government to close down the &epsi$o unit in

the village.

In 2""9 the $S+ again found that soda drinks including both &epsi and

$oca3$ola had high levels of pesticides in their drinks. *oth &epsi$o and

The $oca3$ola $ompany 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 erala sale and production of &epsi3$ola

along with other soft drinks was banned by the state government in 2""9

but this was reversed by the erala @igh $ourt merely a month later. Aive

other Indian states have announced partial bans on the drinks in schools

colleges and hospitals

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Pepi 7 9e$ 'i 9ou"it" Meri J"

BRAN, 'ISTOR9

&epsi is a hundred year old brand loved by over 2"" million peopleworldwide. The largest single selling soft drink brand in India is the

ubi8uitousNsocialiserNat every occasion.

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Sehwag %. S. 7honi Fohn 'braham (anbir apoor and 7eepika

&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 just a pack but a style statement for today4s youth.

T'E RI?AR(9 BE*INSH

Coe Come to I"di

$oca3$ola comes to India with fanfare in the fifties. Aor a number of days

The @industan Times and other newspapers of )ew *anaras carried full

page advertisement showing a big boy in uniform with a soft3drink 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. Aor the first time a soft3drink was available from

one corner of the country to another. The person who brought $oca3$ola to

India was the father of late Sardar $haranjit Singh Sardar %ohan Singh. '

practical man %ohan Singh reali6ed that to populari6e $oca3$ola and make

it a best seller it was necessary to Gcatch them young./ So he focused on

youngsters in the society.

The company reali6ed 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.

Aew products appears to be more similar than soft drinks yet the $ola wars

that mark the competition between $oke and &epsi show how even

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organi6ations with highly similar product can be differentiated by their

business strategies. Then comes battles over the issue of bottle si6e

standardi6ation. $oke the arch rival tried to offering more $ola at a lower

price. &epsi which had some of its early investment tied up in 25"ml bottles

went the fountain way. The Eeneral bottle si6e freed has settled at 0"" ml.

1"" ml more than the pre %)$ standard. Aountain mi dispensers carry

home bottles even 1.5" plastic bottle with caps good enough to keep them

lying down and still preserve the fi66.

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 &epsi4s blue red

and white colors because they have perception Gthe thing on display Sells

more./ $oca3$ola is finally redoing the real thing to the replicate the

success that it4s arch3rival &epsi$o. @as achieved with its fast and furious

marketing. *ut to win them $oke is copying &epsi.

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MARKETIN* STATE*IES O) COKE AN, PEPSI

2 PRO,+CT

$oke was launched in India in 'gra October 2 in N#0N soon after its

traditional all Indian launch of its $ola. 't the sparking new bottling plants

at @athra near 'gra. $oke was back with a bang after its eit in 1#!!.

$oke was planning to launch in net summer the orange drink Aanta3

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

$oke already owns more brands than it will over need since it has

bought out (amesh $hauhan. $oke just needs to juggle these brands around

detrously to meet its objectives to ensure that &epsi does not gain market

share in t Today $okeNs product line includes $oca3$ola Thumps =p

Aanta Eold Spot %aa6a $itra Sprite *isleri $lub Soda and 7iet $oke.

PACKA*IN*

$oca3$ola India Bimited C$$IBD has bottled its $ola drink in different

si6es and different packaging i.e. 2"" ml bottle 0"" ml. *ottle 00" ml.

$ans 5"" ml. *ottle fountain &epsi and bottles of 1 and 2 litre.

PRO,+CT POSITIONIN*

One important thing must be noticed that Thumps =p is a strong

brand in western and southern India while $oca $ola is strong in )orthern

and +astern India. ,ith volumes of Thumps =p being low in the capital

there are likely chances of $oca $ola slashing the prices of Thumps =p to

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(s. 5 and continue to sell $oca $ola at the same rate. 'nalysts feel that this

strategy may help $oke since it has 2 $ola brands in comparison to &epsi

which has just one.

Thumps =p accounts for "L of $oca $ola companyNs turn over

followed by $oca $ola which has a 20L share and Bimca which accounts

for 1!L of the turn over of the company. CThumps 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. 7onald short $+O $oca $ola India said that M we will

be absolutely comfortable if Thumps =p is )o. 1 brand for us in India in the

year 2""". ,e will sell whatever consumers want us toM. $oca $ola India

has positioned Thumps up as a beverage associated with adventure because

of its strong taste and also making it compete with &epsi as even &epsi is

associated with adventure youth.

b2 PRICE

The price being fied 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 fied cost structure in $arbonated Soft 7rinks Industry and the

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

various costs incurred by the individual companyNs are almost unavoidable.

These being the costs of concentrates standard bottling operations

distributor and bottlers commissions distribution epenses and the

promotional and advertising ependiture C's far as $oke is concerned it had

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to incur a little more than &epsi as &epsi paved its way to India in 1#?#

while $oke made a come back in 1##0.D

$urrently a 0"" ml. $oke bottle is available for (s. 9 to? The 00" can was

initially available for (s. 10 and now since the price has gave up to (s. 1?

per can. The prices of 5"" m 1 litre. 'nd 2ltr being (s. 15 (s. 20 and (s.

" respectively Caccording to the current surveyD.

7ating back to Q#0N when &epsi hiked the price of &epsi 3 $ola from

(s. 5 to (s. 9 per 25" ml. bottle in some parts of the country3including 'gra.

$oke penetrated the market with price of (s. 5 for a 0"" ml. bottle making

it cheaper by (s. 1 and 5" ml. than &epsi. $okeNs strategy at that time being

able to epand the availability of soft drinks even in rural India. $okeNs

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 si6es by &arle. *ut the

prices of soft drinks have shot up since &epsiNs arrival and the current prices

are being mentioned as under.

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Prie !it

Nme Bott!e Sie MRP 1i" R.2

Coe Per Bott!e 344 m! 8

Coe 644 m! 54

Coe @44 m! 1P!ti F

*!2

33

Coe 3 !itre 84

,iet Coe 1C"2 664 m! C" 6@

Coe 1C"2 664 m! C" 6=

@owever the trends may have been in the early N#"Ns now the

prices of &epsi and $oke are the same making it difficult in future and

present to compete on the basis of price.

2 P(ACE

$oke may have gained an early advantage over &epsi since it took

over &arle in 1##. @ence it had ready access to over 2 """"" retailer

outlets and 9" bottlers. $oke was had a better distribution network owing

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to the wide network of &arle drinks all over India. $oke has further

epanded its distribution network.

$oke and its product were available in over 2 5"""" outlets Cin contrast

with &epsiNs 2 """""D. $oke has a greater advantage in terms of

geographical coverage.

*ut $oke has had problems with its bottlers as the re8uired profits for

the bottlers have not been forthcoming. This is more so because $oke has

hiked the price of its concentrate by (s. ? Aurther $okeNs operations in India

are 1""L Aobs. )ow it plans to convert then into $O*Os. 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 etra costs incurred on account of the hike in prices of soft drink

concentrates. %r. Short also reali6ed that India is a price sensitive market

and the company would have to absorb in the increase in ecise 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.

$oke and &epsi have devised strategies to get rid of middlemen

in the distribution network. @owever 5"L of the industry unfortunately

depends on these middlemen. 's of now around 1"" agents are present in

*ananas. *ottlers of the 2 multinationals have strongly felt the need to

remove these middlemen from the distribution system but very little success

has been achieved in doing so.

0


35/76

,2 PROMOTION

It must be remembered that soft drinks purchasesare an Mimpulse buy low involvement productsM which makes promotion and

advertising an important marketing tool. The 2 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 8uality of the brand its brand

power Cif at all there isD since consumers make purchase decision based on

their perceptions of value i.e. of 8uality relative to price.

'ccording to &aul Stobart 'dvertising encourages customers to

recogni6e the 8uality the company offers. &rice promotions often produce

short3term sales increases.

$oca $ola has entered new markets and also developing market economics

Clike IndiaD with much3needed jobs.

$oke attributes its success to bottlers the $oca $ola system itself i.e.

its eecutive committees employees *O7 company presidents but above

all from the consumer.

$okeNs red color catches attention easily and also the 7iet $oke which

it introduced was taking the $ake as &epsi has not come out with this in

India.

+ver since $okeNs entry in India in 1##0 $oke made a come back

Cafter 8uitting in 1#!!D in October 2 in 'gra the city was flooded by

05


36/76

trucks there wheelers tricycle cards3all with huge red $oke3embla6oned

umbrellas. (etailers were displaying their $oke bottles in distinctive racks

also with specially3designed iceboes to keep $oke bottles cold. This was

one big jolt to &epsi.

STRATE*IES A,OPTE,

B9 COKE AN, PEPSI

T$e Pepi ProeH 7espite being a global brand &epsi has built its success

on meeting the Indian consumer4s needs particularly in terms of making the

brand synchroni6e with locali6ed 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 campaigns3such as the 7rink &epsi Eet Stuff

scheme which offers large discounts on other products to &epsi3buyers as

well as local.

T$e Coe Cop/H Instead of creating a bond with the customers through

small but high3impact events $oca3$ola chose to associate itself with

09


37/76

national and international mega events like the ,orld $up $ricket 1##9

and world cup football 1##?. *ut now coke is also entering into local

actions. $oke is also trying to make their brand synchroni6e with locali6ed

events traditions and festivals. $oca3$ola new tag line in this advertisement

is G(eal shopping real refresher/. In this way $oke is copy &epsi.

EMPOWERMENT

T$e Pepi ProeH Once of the strongest weapons in &epsi4s armory is the

fleibility it has empowered its people with. +very 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$e Coe Cop/H Aleibility is the weapon that $oca3$ola fettered as it is

by the need for approvals from 'tlanta for almost everything. In the pastthis has shown up in its stubborn insistence on junking the franchisee

network it had ac8uired from &arle; in its dependence on its own feedback

mechanism over that of its bottlers;4 and on its head8uarters3led approach.

PRICE

T$e Pepi proeH &epsi has consistently wielded its pricing strategy as in

invitation to sample aiming to turn trial into addiction.

It launched the 5"" ml bottle in 1## at (s. ? versus Thumps =p4s (s. # in

'pril 1##9 its 1.5 liters bottle followed $oke into the marketplace at (s. 0"

0!


38/76

> (s 5 less than $oke4s .*ut it couldn4t continue the lower price positioning

for long.

T$e Coe Cop/H Initially coke carbon3copied the strategy by introducing

its 00"ml cans in Fanuary 1##9 at an invitation price of (s. 15 before raising

it to (s. 1?. *y this time it had reali6ed that the $oca3$ola brand did not

hold enough attraction for customers to fork out a premium. The 2""ml

$oke launched so far in parts of eastern western and northernIndia is

priced at (s. 5 lowering the entry3barriers. Too really drive the market as

$oke wants to you must go down to (s. 04.

PEPSI ?S. COKE

3= BI((ION T+RNO?ER 58

BI((ION

63 INT. SA(ES AS ;4

L O) TOTA( SA(ES

0?


39/76

RS. @OO CRORES TOTA( IN?ESTMENT RS.

3@4 C

IN IN,IA

RS. 644 CRORES PROPOSE, RS. 30:44C

IN?ESTMENTS

3:44 NO. O) EMP(O9EES 5:4

56 NO. O) OWNE, NI(

BOTT(IN* P(ANTS

5= NO. O) )RANC'ISES @6

:444 NO. O) )O+NTAIN 5@44

N.A. TOTA( IN?ESTMENT R 53@ CR

B9 BOTT(ERS

8 NEW P(ANTS P(ANNE, N.A.

0#


40/76

PEPSI AN, COKE MARKET S'ARE IN IN,IA

"


41/76

Competiti-e Comprio"

Ad-ertii"

CoeH 6:.: mi!!io" 15


42/76

CO(A WARS

Co7o! -F Pepi

O?ER A CENT+R9 O) CO(A S(O*ANS0 COMMERCIA(S0

B(+N,ERS0 AN, CO+PS

ThereNs little doubt that the most spirited and intense competition in the

beverage world is between $oca3$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 high3stakes 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 jaded about the cola wars. The memorabilia the

jingles the trivia 3 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 A(( STARTE, . . . .

$oca3$ola was invented and first marketed in 1??9 followed by &epsi in

1?#?. $oca3$ola was named after the coca leaves and kola nuts Fohn

&emberton used to make it and &epsi after the beneficial effects its creator

$aleb *rad ham claimed it had on dyspepsia. Aor many years $oca3$ola

had the cola market cornered. &epsi was a distant no threatening contender.

*ut as the market got more and more lucrative professional advertising

2


43/76

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

the way in advertising ever since.

A,?ERTISIN* 'ISTOR9 & COMMERCIA(S

&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 $oca3$ola tried something new it was disaster.

The first maga6ine ad for $oca3$ola appeared in Munsey's in 1#"2.

'dvertisements began to appear on billboards newspapers and streetcars.

Soon there were serving trays with images of people enjoying $oca3$ola

and glasses with the colaNs name on them. 't this time $oca3$ola and &epsi

were served in drugstore soda fountains.

In 1#"# &epsi used its first celebrity endorser automobile race driver

*arney Old3field in newspaper ads. In 1#21 &epsi went bankrupt but

continued to appear on the scene although not nearly so successfully as

$oca3$ola. In 1#01 &epsi went bankrupt again but the new owner (oy

%egargel would hit upon an idea that would finally give $oca3$ola some

competition. In 1#0 he marketed &epsi in a 123ounce bottle for a nickel. 't

the time $oca3$ola was sold in a 93ounce bottle for ten cents. HoilaP &rofits

for &epsi.

0


44/76

&epsi racked up another first by airing the first radio jingle in 1#0#. It was so

popular that it was played in jukeboes and became a hit record $oca3$ola

hit the airwaves in 1#1.

In 1#9 inflation forced &epsi to increase prices. 'nd in 1#5" &epsi offered

a larger 293ounce bottle to court the young 'merican housewife.

In the 1#9"Ns the cola ad wars moved to television. $oca3$ola employed a

host of celebrity singers to promote the product including $onnie Arancis

Tom Fones The )ew *eats )ancy Sinatra and The Supremes. 's we

moved through the years both colas incorporated some of their best slogansCM&epsi EenerationM and Mthe (eal ThingMD into subse8uent commercials.

In the 1#!"s market research showed that consumers preferred the taste of

&epsi over $oke. The &epsi $hallenge is still being conducted today. *ut

$oke came up with what is arguably the best of all cola commercials the

1#!1 INd like to buy the ,orld coke ad.

This landmark was recalled in $hristmas versions in 1#?0 and 1#? and a

1##" Super *owl ad which was enough to make some *aby *oomers weep

with nostalgia.

In the 1#?"Ns &epsi lined up the celebrities starting with late %ichael

Fackson then %adonna %ichael F. Ao *illy $rystal Bionel (itchie Eloria

Stefan Foe %ontana and others. $oke signed on %ichael Fordan )ew ids

on the *lock 'retha Aranklin +lton Fohn and &aula 'bdul.


45/76

In 1#?5 responding to the pressure of the &epsi $hallenge taste tests which

&epsi always won $oca3$ola decided to change its formula. *ill $osby was

the pitchman. This move set off a shock wave across 'merica. $onsumers

angrily demanded that the old formula be returned and $oca3$ola

responded three months later with Classic Coke. +ventually )ew $oke

8uietly disappeared.

&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 CKima bottled waterD. 'nd then there was &epsi Bite with the

lemony flavor and one calorie introduced in 1#!5. (emember that oneR

'pparently they didnNt epect us to because later they gave us &epsi One

using the same concept but a completely different taste. 'nd etending the

idea even further we are now getting &epsi Twist a new product with a twist

of lemon flavor.

In 1##1 (ay $harles sang M


46/76

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

9


47/76

Pepi - Co7Co! %r tur" $ot

The ongoing cola war between global rivals &epsi and $oca3$ola has taken

a weird twist in India with the former dragging the latter to court. The

chargeJ $oca3$ola has snatched employees bottlers and agents all of

whom are bound to &epsi by a contract.

&epsi has charged $oke with having entered into a conspiracy to disrupt its

business operations by inducing key employees and associates to break

eisting contracts illegally.

&epsi has sought a permanent injunction and an e parte order against coke

restraining it from taking away &epsiNs employees and business associates.

&epsi has also reserved the right to seek financial damages from $oke at a

later date if necessary.

&epsi has claimed that a do6en middle3level managers and three territory

managers broke their contracts with &epsi to join $oke in recent months

while during the last year and half seven managers 8uit &epsi to join $oca3

$ola.

Fustice $ % )air of the 7elhi high court on 'pril 1! issued notices and

summons to $oca3$ola and 15 others for %ay 9. @owever Fustice )ayar

refused to grant the e parte injunction sought by &epsi India to stop the

alleged inducements by $oke in offering employment to &epsiNs employees

while the suit was pending in court.

!


48/76

On behalf of &epsi 'shok 7esai and 'run Faitley contended that $oca3$ola

had been Mrattled by the huge success of &epsi in India entered into a

conspiracy during the last si months to cause loss and damage to &epsiNs

business interests by adopting unfair and illegal means.M

It added that $oca3$ola had approached many key managers and had

successfully lured a commercial manager of its bottling business Eaurav

7uggal and a manager in Surat Sailesh Foshi besides others.

&epsi charged that while initially these approaches were sporadic over the

last si months it is clear that $oca3$ola has changed its strategy and hasdecided to consciously target and approach key employees of &epsi at

various locations in India.

The company has alleged that in most cases the employees have not been

given time to adhere to the #"3day notice period and the one3year

confidentiality agreement. The latter deal bars employees joining its rivals

for at least a year.

7esai claimed $okeNs actions would directly harm the business interests of

&epsi which had invested over 0"" million in the country in establishing

business infrastructure.

In its defense $oke is epected to seek relief in the Indian $onstitution

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 (estrictive Trade &ractices

'ct as an unfair trade practice.

?


49/76

&epsi has cited the instance of $oke snapping up cricketer Favagal Srinath in

spite of the latter signing a contract with &epsiNs sports consultant 21st

$entury %edia. @owever media reports 8uoting sources said that SrinathNs

contract had been only in the verbal stage.

Similarly &epsi has charged $oke with inducing the *oard of $ontrol for

$ricket in India to give the sponsorship of the recently concluded &epsi

Triangular $ricket Series to $oke as acknowledged in the *$$I submission

before the *ombay high court even while a contract was signed with &epsi.

&epsi has listed the case of $oke trying to induce its music consultant 7)' )etworks &rivate Btd which organi6ed the


50/76

BATT(E O) T'E BE?ERA*ESH

5"


51/76

PEPSI IS NOT AS PRICE9

(egardless of which soda you like better though &epsi seems the better

value than $oke right now. $oke is trading at a nearly 2" percent premium

to &epsi based on 2""2 &:+s even though the two companiesN earnings

growth rates are nearly identical. C&epsiNs are actually a shade higher.D

'nd when you look at revenues the gap is even more dramatic. $oke is

trading at ! time4s estimated 2""2 sales while &epsi is trading at 0.5 times

2""2 revenue estimates. *oth companies are epected to post slight declinesin sales this year and an increase of about percent in 2""0. 7ue to this

disparity in valuation Feff anter an analyst with &rudential Securities says

he has a MbuyN rating on &epsi and MholdM on $oke. &rudential does not do

investment banking.

To be sure $oke is still the market share leader in soft drinks. One of the

main reasons the stock has outperformed &epsi this year was because it

reported a better than epected gain in unit volume in the first 8uarter. 'nd

the company has taken steps to cement its carbonated beverage lead as well

gain ground in the bottled water market. C$oke and &epsi both have their

own brands of water 7asani and '8uafina respectively.D

On Tuesday $oke announced that it was ac8uiring the SeagramNs line of

miers tonic ginger ale and selt6er from 7iageo and per nod (ichard. 'nd

last month $oke entered into an agreement with Eroup 7anone to distribute

+vian bottled water in )orth 'merica.

51


52/76

Coe "d Pepi i" I"diH

$oca3$ola controlled the Indian market until 1#!! when the Fanata &arty

beat the $ongress &arty of then &rime %inister Indira Eandhi. To punish

$oca3$olaNs principal bottler a $ongress &arty stalwart and longtime

Eandhi supporter the Fanata government demanded that $oca3$ola transfer

its syrup formula to an Indian subsidiary. $oca3$ola balked and withdrew

from the country. India now left without both $oca3$ola and &epsi became

a protected market. In the meantime IndiaNs two largest soft3drink producers

have gotten rich and la6y while controlling ?"L of the Indian market. Thesedomestic producers have little incentive to epand their plants or develop the

countryNs potentially enormous market. Some analysts reason that the Indian

market may be more lucrative than the $hinese market. India has ?5"

million potential customers 15" million of whom comprise the middle class

with disposable income to spend on cars H$(s and computers. The Indian

middle class is growing at 1"L per year. To obtain the license for India

&epsi had to eport 5 of locally made products for every 1 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 aheadJ &epsi gains access

to a potentially enormous market; Indian bottlers will get to serve a market

that is epanding rapidly because of competition; and the Indian consumer

benefits from the competition from abroad and will pay lower prices. +ven

before the first bottle of &epsi hit the shelves local soft drink manufacturers

increased the si6e of their bottles by 25L without raising costs.

52


53/76

PRICE

%aimum retail price of 0"" ml bottles is controlled by the $entral

Eovernment. The other si6e and packs are priced keeping factors like

competition internal costs eternal costs and the corporate objective of the

company in the mind.

PRO,+CT SE((IN* PRICE MAD.RETAI( PRICE

1Per rte2 1Per rte2644 m! bott!e 3:4 38:

@44 m! bott!e 68: 6==

5 (iter bott!e @44 @34

Sod 644 m! 58: 5==

C" 663 6@3

5.@ (iter PET @4 @@

bott!e

• &rice per bottles the empty bottles are priced at (s 12" per crate and

the shell at (s 1"".

50


54/76

PRE)ERENCE O) SO)T ,RINKS IN A ,A9

O"e d/ 3@

T%ie d/ 34

O"e %ee @

Ot$er @4

)iure75

5


55/76

PRE)ERENCE TO T'E BRAN,

Pepi :4

Coe 84

)iure 3

40%

60%

0%

20%

40%

60%

80%

Pepsi Coke

Pepsi Coke

55


56/76

MARKETIN* STRA**(ES O) COMPAN9 E))ECTS T'E SA(ES

9e @@No :@

)iure :

55%

45%

0%

10%

20%

30%

40%

50%

60%

Yes No

Yes No

59


57/76

)ORM O) MARKETIN* STRATE*IES

Te!e-iio" Ad-ertii" :@Ne%pper Ad-ertii" @

Outdoor Ad-ertii" 34

S!e Promotio" 64

)iure @

45%

5%

20%

30%

0%

10%

20%

30%

40%

50%

Television Adv. Newspaper Adv O!door Adv "ales Pro#o!ion

Television Adv. Newspaper Adv O!door Adv "ales Pro#o!ion

5!


58/76

MORE E))ECTI?E A,?ERTISIN*

Pepi Co. @4

Coe Co. @4

)iure ;

50%

50%%%

%%%%%%%%

%%%%%%%%%

0%

20%

40%

60%

80%

Pepsi Co. Coke Co.

Pepsi Co. Coke Co.

5?


59/76

P+B(IC RE(ATIONS AN*(E

I""o-ti-e "d eiti" offer

The respondents were asked to compare between &epsi$o and $oca3$ola I

Btd. in terms of who comes up with innovative and eciting offers or rather

things which are lively and interesting to participate.

5"L of the respondents replied in favor of &$I while 0"L responded in

favor of $$I. 1!L of the respondents thought that both were e8ually good

and it varied with time place and occasions. 0L of the respondents were not

aware of all the activities and were modest to admit it.

Uuick and responsive to different occasions and events.

$omparing &epsi$o and $oca3$ola I Btd 55L of the respondents replied

that it was undoubtedly &epsi$o. They supported their statement with

reasoning saying so that &epsi$o was first to associate with India4s 5" years

of independence.

On the other hand 22L of the respondents felt that $oca3$ola I Btd. is not

trailing back. It sponsors mega events like different $ricket tournaments

Olympic Eames ,orld $up Aootball etc.1#L of the respondents came up

with a more balanced answer. They said if one of the companies sponsors

One event it4s sure that the other will definitely go on for the net. It4s a

tough tussle and is really difficult to demarcate today

%%%%%%%%%

5#


60/76

MARKET S'ARE PERCENTA*E IN NEW ,E('I

COKE @8

PEPSI 6@Pure ,ri"


61/76

MARKET PERCENTA*E S'ARE IN A(( O?ER IN,IA 344=

Pepi ::Coe @5

(o! Br"d @

)iure 7 55

BRAN, PRE)ERENCES

5%

51%

44%

PepsiCoke&o'al (rand

91


62/76

In a survey done by ' - % maga6ines on the best marketing companies in

India. &epsi and $oca3$ola were also entered. The results were as followsJ

Pepi 7 @$

Co7Co! 7 :$

T$e reu!t of


63/76

)IN,IN*S & ANA(9SIS

The Indian soft drinks market is at 1" million cases per year. This is very

low even as compared to &akistan and *angladesh. 'll these factors

together have contributed to a 2"L growth in the soft drinks industry.. If this

demand continues to grow at 2"L grow at 2"L annually within 1" years the

volumes could reach 1 billion cases. This kind of growth is the reason for the

entry of the two giants of the soft drink industry of the world.

• $oca3$ola

•

&epsi

$oca3$ola and &epsi together control #!L of the entire Indian markets.

The rest of the 0L is shared by companies like $adbury3Schweppes and

$ampa3$ola. The total no. of case sold is 1" million of these !! million

cases of $ola drinks are sold and 90 million of non3cola drink. There is a

rapid increase in the sale of cola soft drinks. ,hereas in 1##" 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 non3colas. One of the

reasons for this could be the aggressive marketing strategies for $ola drinks

by &epsi and $oca3$ola.

The race to 8uench the great Indian thirst had deigned.

90


64/76

Pepi fi"di"H

&epsi is the 2)7 largest selling soft drink in India today. In 7+B@I it has

05L of the market share. In India it has L of the market share making it

the largest selling soft drink but the second largest company in terms of

sales.

The sales of &epsi is approimately (s. 1""" crore annually in India of this

only about (s. 0" crore annually is credited to the foods section of &epsi.

The rest is all earned by the soft drinks.

The soft drinks in &epsi Aoods BT7 includeJ

1. &epsi $ola

2. %irinda Orange

0. !3=p

. %irinda Bemon

The main advantage the &epsi has over its nearest competitor i.e. $oca3$ola

is that of it4s was the first multinational to enter India in the soft drinks

sector. &epsi officials and Q7ial3a3&epsi4 scheme to grow the market instead

of giving discounts at the retail level. 'nother point which attributed to

&epsi4s success is the bottling operations. &epsi does most of its bottling on

its own. 'nother significant investment of &epsi has been fountains.

Aountains have considerably increased sales of &epsi as they have offered

consumers a whole new way to eperience soft drink. 'ccording to a study

done ?"L of all soft drinks are consumed on premise at the point of

purchase rather than at home; thus the fountain initiative has paid off.

9


65/76

Thus we see that &epsi has followed aggressive marketing strategies making

they get into the minds of the consumer by being visible inside and outside

the consumers home by way of television radio )ewspapers hoarding

sales3promotion schemes etc. &epsi has been voted the number one

customer service company across categories in terms of regularity

availability responsiveness and initiative.

95


66/76

PRESENT COMPETITON BETWEEN COCA CO(A AN, PEPSI

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

the cola wars as &epsi had etended its cola wars to other sectors like

A(ITO3B'cola which doesn4t target on these sectors.

• Second aspect which is to be given in consideration is that both the

companies are spending heavily on advertisement and more celebritiesare roped in by both the companies to fight the competition.

• (ecently $OB'3$OB' beverages '$TO(S I%(') @') ')7

'BI for a new ad ;to reply back to this a new ad by &+&SI

beverages featuring '$TO( (')*I( '&OO( and HI)7@=

7'(' SI)E@ came up which is making waves at present.

• $oke is served in %$ 7O)'B7S and there we won4t find &epsi

products even the coffee served is of E+O(EI' which is a coca3cola

brand same is the case of &IKK' @=T and A$ which is owned by

&+&SI $O there only &epsi products are served this had lead 2 clear

war in restaurant segment as wellV

99


67/76

• &+&SI is targeting young generation and their ad campaigns are a

clear eample of that whereas coca3cola is targeting the family as a

whole which has been its old formula from ages.

• &resently coca3cola may be leading in beverages like coke but its

facing severe competition from %irinda )imboo6 and snack industry

where &+&SI is ruling thanks to its =(=(+ ad that has led to

great sales for &+&SI $O.

• Though in packed drinking water I)B+< C$O$'3$OB' *(')7D

and '$U'AI)' C&+&SI $O *(')7D both are treated e8ually by

customers. %oreover *ISB+(I still rules in this segment.

9!


68/76

G+ESTIONNAIRE

G.5. W'IC' BRAN, ARE 9O+ PRE)ERENCE TO T'E BRAN,

Pepi

Coe

G.3. W'IC' PARTIC+A(AR RATE TO *I?E T'E

PRE)ERENCES

More Popu!r

Pi"

Tte

Prie

G.6. ARE T'E MARKETIN* STRATE*IES O) A COMPAN9

A))ECT ITS SA(ES

9e

No

G.:. W'IC' )ORM O) MARKETIN* STRATE*IES IS MOST

E))ECTI?E IN T'E MARKET

Te!e-iio" Ad-ertii"

Ne%pper Ad-ertii"

Outdoor Ad-ertii"

S!e Promotio"

9?


69/76

G.:. WI(( 9O+ C'AN*E T'E BRAN, ON T'E BASIS O) PRICE

RE,+CTION

9eNo

G.8. W'IC' BRAN, MORE E))ECTI?E IN A,?ERTISIN*

Pepi Co.

Coe Co.

G.;. W'IC' BRAN, 'AS CREATI?E AN, APPEA(IN*

A,?ERTISIN* O) T'E SO)T ,RINK COMPAN9

Pepi Co.

Coe Co.

Co"umer

Aor the purpose of the study 8uestionnaires were prepared for the

$onsumers. $are was taken to interview all types of consumers i.e. J

a. 7ifferent age groups

b. %ales and females

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c. &eople from different localities etc.

In all about 9" consumers were interviewed. The conclusions that one can

draw from these answers provided by the consumers showed that marketing

activities do form a major part of the decision.

One 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 soft3drink was taste. This was true for all the consumers who were

interviewed. The rest of the conclusions as deducted from the 8uestionnaires

are as followsJ

The younger generation preferred soft drinks to the older generation.

a. $hildren up to 15 years of age liked to have soft drinks up to 230 times a

day.

b.


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different drinks $ola and non3$ola. 'dults stick to one and they prefer

drinks that do not affect their health like Bimca.

%ajor number of people found television advertising to be the most

effective.


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Sinc11?Xe the entry of $oca3$ola into the country the industry is growing at

a rate of 2"L annually. If this rate is maintained then by the year 2""5 the

market of soft drink would be 1 billion cases annually.

@owever $oca3$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

major share of this growing market. They should all try to increase the total

market along with their individual shares.

On 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 followsJ3

Soft drinks retail at prices between (s. 9 and (s. 1". These are epensive

when measured against purchasing power.

'ccording to one study it takes Indian 5" 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 major factor which makes the consumer buy a soft drink.

Soft drinks should be made available more readily than present. There are

only 0"" """ 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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Tempt a person into buying the soft drink. So if vending machines are put in

strategic areas it would definitely increase consumption of soft drinks.

Soft drink cans which are very convenient as the consumer can take them

anywhere unlike a bottle are very epensive retailing from (s. 153(s. 1?.

To increase sale of cans this price should be brought down.

Innovations increase sales of company. Aor e.g. fountain &epsi increased

sales of &epsi $ans increased sales of $oca3$ola. Thus the companies hav

constantly come out with innovative ideas.+ample30"" ml plastic bottles

which the consumer can take with him unlike the glass bottles which he has

to return. &lastic bottles can even be used again by households for various

purposes.

The companies should conduct studies to get to know about consumer

habits. Aor e.g. $oke knows that 'mericans see 9# of its commercials every

years put 5.2 ice cubes in a glass and prefer cans to pop out of vending

machines at a temperature of 05 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.

$ompanies could have commercials which show people enjoying 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

subject. Aor e.g.J3

aD Bimca is recommended to patients by doctors.

bD $ola drinks are known to be very fattening

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*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.

$ompanies should try to build high brand e8uity. This provides a number of

advantages to the company.

aD The company enjoys reduced marketing costs because of high level of

consumer brand awareness and loyalty.

bD The company will have more trade leverage in bargaining with

distributors and retailers since the customer epects them to carry the

brand.

cD The company can change a higher price than its competitors because the

brand has higher perceived 8uality.

dD The company can more easily launch brand etension.

eD 'bove all the brand offers the company some defense against fierce

price competition.

The companies should go in for diversification

Once the brand is known it is easier to sell more of its products. Aor e.g.

$oca3$ola clothes have sold about 1"" 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 $oca3$ola are so busy fighting with each other that they have left the

non3cola sector open for $adbury3Schweppes.

!


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BIB(IO*RAP'9

Mreti" M"eme"t7 B/ P$i!ip Kot!er

WWW.PEPSICO.COM

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WWW.COCA7CO(A.COM

WWW.CO(A7WARS.NET

A,?ERTISIN* MANA*EMENT B9 JET'WANE9 AN,

JAIN

CO(A WARS B9 J.C.(O+IS

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