Group :2Rahul Goswami Anshun Gosalia Chesta Badjatiya Utkaarsh Yogesh Sharma Vivek Churiwala
Beverages marketSince the early 1900s beverage companies have evolved from regional firms that mainly produced goods for local markets, to todays corporate giants that make products for international markets. In 2014, US liquid refreshment beverage market volumes rose 2.2% to 30.9 billion gallons. According to Beverage Marketing Corporation data, the top four brands in the US liquid refreshment beverage market in 2014 belonged to the carbonated soft drink category.
Beverage MarketCold drinks such as soft drinks and fruit drinks are becoming more common in the country. Coca-cola and PepsiCo dominate this category. Packaged water is increasingly prevalent Corporate manufacturers of non-alcoholic beverages are expected to grow at an annual rate of 16.5% and non-corporate manufacturers at 19%, according to the report titled Unleashing the Potential of the Non-alcoholic Beverage Sector.
Coca-Cola CompanyHeadquartered in Atlanta, Georgia The Coca-Cola formula and brand were bought in 1889 by Asa Griggs Candler The company has gone on to establish an unmatched portfolio of beverages; refreshing consumers with its leading beverage brands like Coca-Cola, Coca-Cola Zero, Diet Coke, Thums Up, Fanta, Fanta Green Mango, Limca, Sprite, Sprite Zero, VIO Flavored Milk, Maaza, Minute Maid range of juices, Georgia and Georgia Gold range of hot and cold tea and coffee options, Kinley and Bonaqua packaged drinking water, Kinley Club Soda and burn energy drink.
Pepsi Co.PepsiCo generated more than US $63 billion dollars in net revenue in 2015, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana.PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages, including 22 brands that generate more than US $1 billion dollars each in estimated annual retail sales. PepsiCo entered India in 1989 and in a short period, has grown into one of the largest MNC food and beverage businesses in the country According to Consumer Reports, in the 1970s, the rivalry continued to heat up the market. Pepsi conducted blind taste tests in stores, in what was called the "Pepsi Challenge"
Challenges faced by Coca Cola & PepsiGOVT. REGULATIONS AS BARRIERSThey received alien status upon entry in the Indian market.Coca Cola had to agree to sell 49% of its equity as a condition of entering.Sales of Pepsi's soft drink concentrate to local bottlers could not exceed 25% of total sales while fruits and vegetables by Pepsi Foods Ltd. had to be processed. Inconsistency in legal environment led to increased lobbying and to corruption which was a great threat.According to Indian law it was forbidden to promote products under foreign brand names if sold within India and thus Coca Cola became 'Coca Cola India'& Pepsi became 'Lehar Pepsi'.
Challenges faced by Coca Cola & PepsiCoca-Cola had to face many issues regarding its quality, resource exploitation and market exploitation along with price-quality trade-offs.Coca-Cola was criticized for polluting the nearby fresh water and ground water and soil; because of this issue, farmers are suffering from water scarcityThey entered the market with products close to those already available in India such as lime beverages, fruit drinks as well as water.The segmentation of different areas of India allowed for the differentiation and division of rural and urban Indian youth into categories, 'India A' and 'India B' respectively. Doing so they were able to advertise and promote their products differently so as to target and appeal to these markets individually.
Challenges faced by Coca Cola & PepsiBecause of the attacks by the CSE and NGOs (Non-Governmental Organizations) on Coca-Cola, the brand faced many challenges. First, being the worlds most valuable brand whose value is greatly influenced by the image of the company and its products, their primary problem was trying to rebuilding their image to the Indian public and regaining Indian consumers trust.
Challenges faced by Coca Cola & Pepsi
PEPSI is getting beaten up in its flagship product category, drinks, in the worlds largest market, North America and got displaced to no.2 position.
Due to increasing concerns among American regarding use of excessive sugar and increasing concern of obesity rises resulted in decreasing consumption of carbonated drinks
FindingsPEPSIIt is beneficial to pay attention to market trends in order to position your product accordingly.A very important point for Pepsi in India was the pricing policy and bottle sizes.Adapting communication mix as well as distribution methods to the market is also a key point.Local celebrity appeals made for exceptional advertising for PepsiCo.
FindingsCOCA COLAThe importance of timing of entry should not be overlooked.Coca Cola entered the market at a poor time because they had to agree to abide by all of the Foreign Investment Laws of that year.Defining your target audiences more specifically than what Coca Cola did in India could have helped for better targeting/positioning and thus advertising of products.
FindingsWhile realizing the importance of paying attention to market trends; Coca Cola surely realizes the importance of investing in local products. While not investing in Thumps Up brand for the first couple of years, decreasing market share from 60% of total carbonated beverage sales to 15%, after a substantial investment, Thumps Up ranked second nationwide within a year.
Establishing a good business relationship with the host country's government and/or any other governmental or non-governmental groups present in the country is also vital as these could act either as a source of advantage or could impede your success.
RecommendationsConcentrate on the brands perception - As there is a saying that marketing is a battle of perceptions, not products.Dont clone your rivals - In creating New Coke, Coca-Cola was reversing itsbrand imageto overlap with that of Pepsi. Dont be scared to U-turn - By going back on decision to scrap original product, the company ended up creating an even stronger bond between the product and the consumer.Do the right market research -Despite the thousands of taste tests carried out on new formula, company failed to conduct adequate research into the public perception of the original brand.