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MAJOR PROJECT REPORT

ON

COMPETITIVE ANALYSIS ET!EEN CO"E AN# PEPSI$

POST %RA#&ATE #IPLOMA IN

'MAR"ETIN% AN# SALES(
S& MITTE# TO YMCA NE! #EL)I IN PARTIAL *&L*ILLMENT O* T)E RE+&IREMENT *OR T)E A!AR# O*

S& MITTE# Y

&RVAS)I "APOOR
S&PERVISOR

MS,A,-.

Ms NEELAM C)A#)A

INSTIT&TE O* MANA%EMENT ST&#IES http://www.gameswala.com/

YMCA/ NE! #EL)I

.-0-

CAN#I#ATE1S #ECLARATION
I he2e34 5ecla2e that the ma6o2 p2o6ect wh7ch 7s p2ese8te5 78 th7s 2epo2t e8t7tle5

COMPETITIVE ANALYSIS ET!EEN CO"E AN# PEPSI s93m7tte5

78 the pa2t7al :9l:7llme8t o: the 2e;972eme8ts :o2 the awa25 o: the Post %2a59ate #7ploma 78 Ma2<et78g a85 Sales to the YMCA NE! #EL)I 7s a8 a9the8t7c 2eco25 o: m4 ow8 wo2< ca227e5 o9t at IMS YMCA camp9s. The mate27al em3o57e5 78 th7s p2o6ect wo2< has 8ot 3ee8 s93m7tte5 to a84 othe2 987=e2s7t4 o2 78st7t9t7o8 :o2 the awa25 o: a84 5eg2ee. &RVAS)I "APOOR MS,A,-.

Place: #ate:

Th7s 7s to ce2t7:4 that a3o=e stateme8t ma5e 34 the ca8575ates a2e co22ect to 3est o: m4 <8owle5ge.

S&PERVISOR NEELAM C)A#)A App2o=e5 34:

NEELAM C)A#)A

AC"NO!LE#%EMENT

I e>p2ess o92 g2at7t95e to the YMCA/ NE! #EL)I :o2 g7=78g me the oppo2t987t4 to wo2< o8 the ma6o2 p2o6ect 59278g o92 :78al semeste2 o: post g2a59ate 57ploma 78 ma2<et78g a85 sales. The2e a2e ma84 who helpe5 me 59278g th7s p2o6ect wo2</ a85 I wa8t to tha8< them all. !e wo9l5 l7<e to tha8< #2. S& AS) %&PTA/ P278c7pal/ I8st7t9te o: ma8ageme8t st957es YMCA/ NE! #EL)I :o2 h7s <785 s9ppo2t. O92 spec7al tha8<s to Ms NEELAM C)A#)A m4 p2o6ect g975e :o2 h7s 78=al9a3le g975a8ce th2o9gho9t m4 p2o6ect wo2< a85 e85ea=o2 pe27o5 has p2o=75e5 me w7th the 2e;97s7te mot7=at7o8 to complete m4 p2o6ect s9ccess:9ll4. I spec7all4 app2ec7ate the help a85 g975a8ce o: all those teache2s who ha=e 572ectl4 o2 78572ectl4 helpe5 me ma<78g m4 p2o6ect a s9ccess.

&RVAS)I "APOOR

PRE*ACE
Marketing is too important to be left to the marketing department. David Packard of Hewlett Packed. The Indian market is getting to be cons mer!led. This is the reason behind the nprecedented boom in advertising. "elow the line marketing activities# fast distrib tion s$stem and more sophisticated cons mer research. %n the media front# satellite proliferation has trigged of a new genre of media research# which is highl$ viewer ship based. &ons mer satisfaction has become research worthil$ M ltinationals are po ring in precisel$ beca se of this new chapter in Indian cons merism. The dilemma that all marketers are facing is getting the ma'im m done in the minim m possible time. (nd with brand lo$alt$ becoming a thing of the past# given the choice available to the cons mer p ll. The cons mer co ld be a p rchaser of end prod cts# or a financial investor# or even an ind strial p rchaser. )ver$where# there is a new thr st on marketing and advertising. The h$per activit$ in the market place is seeing a boom in s pport services# with a n mber of independent agencies m shrooming to provide them. &o!related to the market book# services are well on their to becoming a ma*or ind str$. The creative leap is increasingl$ being governed b$ market realities and cons mer research. (nd &lint interface is no longer limited to the &lint service people# b t incl ding all specialists in agencies. The entr$ m ltinational prod cts in to the co ntr$ are seeing more emphasis aid world! class + alit$. This along with the loosening of reg lations is seeing e'port gaining gro nd. ,rom thinking along the lines of merel$ e'porting spares and raw material the e'porters and now looking towards finished prod cts. ( m ltiplier to this is the *oint vent re companies looking at becoming e'port man fact ring bases.

CONTENTS TOPIC 0. CAN#I#ATE1S #ECLERATION .. AC"NO!EL%EMENT ?. PRE*ACE @. TA LE O* CONTENTS A. ECEC&TIVE S&MMARY E. INTRO#&CTION B. SO*T #RIN" IN#&STRY :AN OVERVIE! D. )ISTORY O* COCA,COLA F. COCA,COLA:COMPANY PRO*ILE 0-.CORE RAN#S 00.*A &LO&S *ACTS A O&T COCA,COLA 0..COCA,COLA IN#IA 0?.PROMISE Y COCA,COLA 0@. RAN#S IN IN#IA PICT&RE 0A. RAN#S IN IN#IAN ORI%IN PA%E NO: . ? @ A,B D F,000,0A 0E,0F ..0 ..,.? .@,.E .B .D .F

0E.PEPSI CO 0B.PEPSI CO IN IN#IA 0D. RAN# *ACTS/ EVER%A%ES AN# *OO#S

??0,?? ?@,?E

0F.PEPSI CO IN#IA:A *ORT&NE A-- COMPANY .-. RAN# )ISTORY AN# RAN# A#VANTA%E .0.PEPSI PRO#&CTS IN IN#IA ...SLO%ANS &SE# Y PEPSI COMPANY .?.T)E RIVALRY E%INS

?B ?D ?F @-,@. @?,@@

.@.MAR"ETIN% STARETE%IES O* CO"E G PEPSI @A,@F .A.%ENERAL STRATE%IES Y CO"E G PEPSI .E.PEPSI V/S CO"E:#ATA .B.CO"E AN# PEPSI MAR"ET S)ARE IN IN#IA .D.COLA !ARS .F.A#VERTISIN% )ISTORY G COMMERCIALS ?-.SLO%ANS : PEPSI V/S CO"E ?0.CELE RITIES EN#ORSE# ?..PEPSI V/S COLA !ARS T&RNS )OT ??. ATTLE O* EVERA%ES:#ATA ?@. PEPSI IS NOT AS PRICEY A-,A0 A.,A@ AA AE AB,AF E-,EA EE EB,EF BB0

?A.SOME PRETHELS !IT) T)AT SO#AII ?E.CO"E AN# PEPSI IN IN#IA

B.,B? B@,BA

?B.#ATA O* CO"E AN# PEPSI: PRE*ERENCE ?D.*IN#IN%S AN# ANALYSIS ?F.PRESENT COMPETITION /! T)E T!O @-.*&T&RE SCENERIO O* COLA !ARS @0.+&ESTANNAIRE G TAR%ET A&#IENCE @..ANALYSIS O* +&ESTANNAIRE RESPONSE @?.RECOMMEN#ATIONS @@. I LIO%RAP)Y

BE,DD DF,F0 F.,F? F@ FA,FF 0-0-0,0-@ 0-A

ECEC&TIVE S&MMARY
This pro*ect is an e'tensive research on the marketing strategies of the two &ola giants Pepsi and &oca &ola. It covers an e'tensive s rve$ and depicts all graphs# fact and fig res of two companies. It begins with the introd ction of soft drink ind str$ and introd ction of these two companies of soft drink ind str$. It covers some of the ma*or strategies adopted b$ Pepsi and &oca!&ola like their pricing polic$# sales promotion and advertising polic$# distrib tion polic$ etc. The pro*ect has been made interesting with the incl sion of the topics# which covers the -P1s of marketing. The ma*or pla$ers in the soft drink ind str$ in India are &oke and Pepsi. Pepsi holds the ma*or market share followed b$ &oke. The$ have a c t throat competition between themselves. 2hatever strateg$ is followed b$ one compan$# it is copied b$ the other. 3ample of to brands were selected on the basis of there ses and noticeciabilit$.

%ne of the selected brands is 4%5 brand in their respective prod ct categories the other one brand is close competitor of the 4o 5 brands. Total sample of si6e of 277 respondents selected on the basic of convenience was s rve$ed which incl de cons mers. Data was collected from secondar$ as well as primar$ so rces. 3tr ct re + estionnaire was se to collect primar$ data

i . ex e

INTRO#&CTION:
In the modern rban c lt re cons mption of soft drinks partic larl$ among $o nger generation has become ver$ pop lar. 3oft drinks in vario s flavors and tastes are widel$ patroni6ed b$ rbane pop lation at vario s occasions like dinner parties# marriages# social get together# birthda$ calibration etc. children of all ages and gro ps are especiall$ attracted b$ the mere mention of the word soft drinks.

2ith the growing pop larit$ of soft drinks# the technolog$ of its prod ction# preservation# transportation and or marketing in the recent $ears has witnessed phenomenal changes.

The so!called competition for this prod ct in the market is from different other brands. Mass media# partic larl$ the emergence of television# has contrib te to a large e'tent of the ever growing demand for soft drinks the attractive *ingles and sport make the large a dience remember this prod ct at all times.

It is e'pected that with the sort of mass advertising# reaching almost the entire co ntr$ and offering vario s varieties ann al demand for the prod ct is e'pected to rise sharpl$ in the times to come.

In an$ marketing sit ation# the behavioral 9 environmental variables relating to cons mers# competition and environment are constantl$ infl '. The competitors in a

given ind str$ ma$ be making man$ tactical mane vers in market all the time. The ma$ introd ce or initiate an aggressive promotion campaign or anno nce a price red ction. The marketing man of the firm has to meet all these mane ver and care of competitive position of his firm and his brand in the market. The onl$ ro te open to him for achieving this is the manip lation of his marketing tactics. In toda$1s highl$ competitive market place# three pla$ers have dominated the ind str$; The 4ew <ork based Pepsi &ompan$ Inc. The (tlanta based coca! cola and =.>. based &adb r$ 3chweppes. Thro gh the globe# these ma*or pla$ers have been battling it o t for a bigger ch nk of the ever ?growing soft drink market. 4ow this battle has been evolved p to India too with the arrival of these three giants. 3oft drink ind str$ is on ama6ing growth; ltimatel$ these are onl$ one person who will determine their fort nes. The Indian cons mer the real 2ar to + ench his thirst has * st beg n.

57

SO*T #RIN" IN#&STRY: AN OVERVIE!

55

It all began in 588/# when a tree legged brass kettle in Hohn 3t$th pemberton1s back$ard in (tlanta was brewing the first P of marketing legeent =naware the pharmacist has given birth to a caramel colored s$r p# which is now the chief ingredient of the world1s favorite drink. The s$r p combined with carbonated the soft drink market. It is estimated that this drink is served more than one tho sand million times in a da$. )+ all$ oblivio s to the historic val e of his actions was ,rank I'. @obinson# his partner and book keeper. Pemberton A @obinson laid the first fo ndation of this beverage when an average nine drinks per da$ to begin with# pping vol mes as sales grew. In 58:-# this beverage got into bottle# co rtes$ a cand$ merchant from Mississippi. "$ the 5:.71s &olas was a dail$ cons mption item# stored in ho se hold fridges. 3oon were born other non! cola variants of this prod ct like orange A Bemon. 4ow# the soft drink ind str$ has been dominated b$ three ma*or pla$er ? C5D The 4ew <ork based Pepsi co. Inc.C2D The (tlanta based coca cola co. C3D The nited >ingdom based &adb r$ 3chweppes. Tho gh o t the glove these ma*or pla$ers have been battling it. % t for a bigger ch nk of the ever!growing cold drink market. 4ow this battle has beg n in India too. India is now the part of cold drink war. Eone are da$s of @amesh &ha han# India1s one time cola king and his bo ts of pistol shooting. )'pect now to hear the boon of cannons when the &oca &ola A Pepsi co. battles it o t for# as the Fordon goes a bigger share of throat. "$ b $ing %ver local competition# the two (merican &ola giants have cleared p the arena and are packing all their power behind b ilding the Indian franchisee of their globe girdling brands. The h ge amo nt invested in fract re has never been seen before. "oth pla$ers seen an enormo s potential in his co ntr$ where swigging a carbonated beverage is still considered a treat# virt all$ a l ' r$. &onse+ entl$# b$ world standards India1s per capita cons mption of cold drinks as going b$ s rve$ res lts is rock bottom# less than over 4eighbors Pakistan A "angladesh# where it is fo r times as m ch. "ehind the h$pe# in an effort invisible to cons mer Pepsi p mps in @s 3777 crores C5::-D to add m scle to its infrastr ct re in bottling and distrib tion. This is apart from mone$

52

that compan$1s franchised bottles spend in pgrading their plants all this has contrib ted to s bstantial gains in the market. In colas# Pepsi is alread$ market leader and in certain cities like "anaras# Pepsi o tlets are on one side A all the other colas p t together on the other. 2hile coke e'ec tive scr ff at Pepsi1s claims as well as targets# ind str$ observers are of the view that Pepsi has definitel$ stolen a march over its competitor coke. (part from n mbers# Pepsi has made + alitative gains. The foremost is its image. This image t rnaro nd is no small achievements# considering that since it was established in 5:8:# taking the hardship ro te prior to liberali6ation and weighed down b$ e'port commitments. 4ow# at present as there are three ma*or pla$ers coke# Pepsi and &adb r$ and there is stiff competition between first two# both Pepsi and coke have started# sponsoring local events and staging fre+ ent cons mer promotion campaigns. (s the mega event of this cent r$ has started# and the marketers are sing this event ? world c p football# cricket events and man$ more other events. Bike Pepsi# coke is picking p e+ it$ in its bottles to g arantee their financial s pport; one side coke is tr$ing to increase its pop larit$ thro gh. )at ,ood# en*o$ ,ood. Drink onl$ coca cola. )at cricket# sleep cricket. Drink onl$ coca cola. )at movies# sleep movies. Drink onl$ coca cola. %n the other side of coin Pepsi has introd ced (MIT("H "(&HH(4 for capt ring the lemon market thro gh MI@I4D( ? Bemon with 6or ka *hatka dhere se lageG.

" t no do bt1 that => based &adb r$ is also recogni6ing its presence. 3o there is a real cr sh in the soft drink market. with la nch of the carbonated organi6e drink &r sh# few $ear ago in "anaras .# the first in a series of a la nches # &adb r$ 3chweppes beverage India C&3"ID H(3 PB(44)DH! The world third largest soft drink marketers all over the co ntr$.&3"I o wholl$ owned s bsidiar$ of the Bondon based I /..2billion. &adb r$ 3chweppes is hoping that cr sh is going well and well not s ffer the same fate as the @s. 50. crore &adb r$ India1s apple drink (pella. &3"I is now with orange Ccr shD# and 3chweppes soda in the market.

53

(s orange drinks are the smallest of non!cola categories that is @s. 5577 crore markets with 57J market share and cola heaving .7J is followed b$ Bemon segment with 2.J. The s ccess of soft drink ind str$ depends pon - ma*or factors vi6. (vailabilit$ Kisibilit$ &ooling @ange

AVAILA ILITY
(vailabilit$ means the presence of a partic lar brand at an$ o tlet. If a prod ct is now available at an$ o tlet and the competitor brand is available# the cons mer will go for it beca se generall$ the cons mption of an$ soft drink is an imp lse decision and not predetermined one.

VISI ILITY
Kisibilit$ is the presence felt# if an$ o tlet has a partic lar brand of soft drink sa$! Pepsi cola and this brand is not displa$ed in the o tlet# then its availabilit$ is of no se. The soft drink m st be shown off properl$ and attractivel$ so as to catch the attention of the cons mer immediatel$ Pepsi achieves visibilit$ b$ providing glow signboards# hoarding# calendars etc. to the o tlets. It also incl des vario s stands to displa$ Pepsi and other flavors of the compan$.

COOLIN%

5-

(s the soft drinks are cons med chilled so cooling them pla$s a vital role in boosting p 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 b t not the least factor# which affects the sale of the prod cts of a partic lar compan$. @ange availabilit$ means the availabilit$ of all flavors in all si6es.

5.

)ISTORY O* COCA,COLA
Fon 3t$th Pemberton first introd ced the refreshing taste of &oca!&ola in (tlanta# Eeorgia it was Ma$ 58/5 when the pharmacist concocted caramel colored s$r p in three? legged brass kettle in his back$ard. He first distrib ted the new prod ct b$ carr$ing &oca!&ola in a * g coin en*o$s in a glass of &oca!&ola at the soda fo ntain. 2hether b$ design or accident# carbonated water was teamed with the new s$r p# prod cing a drink that was proclaimed Delicio s and @efreshingG. Dr. Pemberton1s Partner and bookkeeper# Mr. ,rank @obinson# s ggested the name and penned as &oca!&olaG in the worldwide toda$. Dr. Pemberton1s sold 2. gallons of s$r p# shipped in bright @ed wooden kegs. @ed has been a distinctive color associated with the 4o.5 soft drink brand ever since. ,or his efforts# Dr. Pemberton b siness. He p rchases it from the Dr.Pemberton famil$ for I 2377. 2ith in - $ear his merchandising flair helped to e'pand the cons mption of &oca!&ola to over I2. million. @obert 2. woodr ff become the president of the &oca!&ola compan$ in 5:23 and his more than si' decades of leadership took the b siness of commercial s ccess making grossed I .7 and spent I 03.:/ on advertising# b$ 58:5# (tlanta chemist as a E.&anler had ac+ ired complete ownership of the &oca!&ola ni+ e flowing script that is still famo s

5/

&oca!&ola an instit tion the world over. &oca!&ola begins as a never tonic# b t cand$ merchant Foseph (. "iedenharn of Mississippi was looking for awr$ to serve refreshing beverages. He responded to this demand began offering bottle &oca!&ola sing s$r p shipped from (tlanta# d ring a hot s mmer in 58:-. 58:- L ( modest start for a bold idea In a cand$ store in Kicksb rg# Mississippi# brisk sales of the new fo ntain beverage called &oca!&ola impressed the storeMs owner# Foseph (. "iedenharn. He began bottling &oca!&ola to sell# sing a common glass bottle called a H tchinson. "iedenharn sent a case to (sa Eriggs &andler# who owned the &ompan$. &andler thanked him b t took no action. %ne of his nephews alread$ had rged that &oca!&ola be bottled# b t &andler foc sed on fo ntain sales. 58:: L The first bottling agreement Two $o ng attorne$s from &hattanooga# Tennessee believed the$ co ld b ild a b siness aro nd bottling &oca!&ola. In a meeting with &andler# "en*amin ,. Thomas and Foseph ". 2hitehead obtained e'cl sive rights to bottle &oca!&ola across most of the =nited 3tates Cspecificall$ e'cl ding Kicksb rgD !! for the s m of one dollar. ( third &hattanooga law$er# Fohn T. B pton# soon *oined their vent re. 5:77!5:7: L @apid growth the three pioneer bottlers divided the co ntr$ into territories and sold bottling rights to local entreprene rs. Their efforts were boosted b$ ma*or progress in bottling technolog$# which improved efficienc$ and prod ct + alit$. "$ 5:7:# nearl$ -77 &oca!&ola bottling plants were operating# most of them famil$!owned b sinesses. 3ome were open onl$ d ring hot!weather months when demand was high.

50

5:27s L "ottling overtakes fo ntain sales as the 5:27s dawned# more than 5#777 &oca!&ola bottlers were operating in the =.3. Their ideas and 6eal f eled stead$ growth. 3i'!bottle cartons were a h ge hit after their 5:23 introd ction. ( few $ears later# open!top metal coolers became the forer nners of a tomated vending machines. "$ the end of the 5:27s# bottle sales of &oca!&ola e'ceeded fo ntain sales. 5:27s and 37s L International e'pansion Bed b$ longtime &ompan$ leader @obert 2. 2oodr ff# chief e'ec tive officer and chairman of the "oard# the &ompan$ began a ma*or p sh to establish bottling operations o tside the =.3. Plants were opened in ,rance# E atemala# Hond ras# Me'ico# "elgi m# Ital$# Per # 3pain# ( stralia and 3o th (frica. "$ the time 2orld 2ar II began# &oca! &ola was being bottled in -- co ntries. 5:-7s L Post!war growth D ring the war# /- bottling plants were set p aro nd the world to s ppl$ the troops. This followed an rgent re+ est for bottling e+ ipment and materials from Eeneral )isenhowerMs base in 4orth (frica. Man$ of these war!time plants were later converted to civilian se# permanentl$ enlarging the bottling s$stem and accelerating the growth of the &ompan$Ms worldwide b siness. 5:/7s L 4ew brands introd ced ,ollowing ,antaN in the 5:.7s# 3priteN# Min te MaidN# ,rescaN and Ta"N *oined brand &oca!&ola in the 5:/7s. Mr. PibbN and Mello <elloN was added in the 5:07s. The 5:87s bro ght diet &okeN and &herr$ &okeN# followed b$ P%2)@(D)N and D(3(4IN in the 5::7s. Toda$ h ndreds of other brands are offered to meet cons mer preferences in local markets aro nd the world.

58

5:07s and 87s L &onsolidation to serve c stomers (s technolog$ led to a global econom$# the retailers who sold &oca!&ola merged and evolved into international mega!chains. 3 ch c stomers re+ ired a new approach. In response# man$ small and medi m!si6e bottlers consolidated to better serve giant international c stomers. The &ompan$ enco raged and invested in a n mber of bottler consolidations to ass re that its largest bottling partners wo ld have capacit$ to lead the s$stem in working with global retailers. 5::7s L 4ew and growing markets Political and economic changes opened vast markets that were closed or nderdeveloped for decades. (fter the fall of the "erlin 2all# the &ompan$ invested heavil$ to b ild plants in )astern ) rope. (nd as the cent r$ closed# more than I5.. billion was committed to new bottling facilities in (frica. 25st &ent r$ L The &oca!&ola bottling s$stem grew p with roots deepl$ planted in local comm nities. This heritage serves the &ompan$ well toda$ as people seek brands that honor local identit$ and the distinctiveness of local markets. (s was tr e a cent r$ ago# strong locall$ based relationships between &oca!&ola bottlers# c stomers and comm nities are the fo ndation on which the entire b siness grows.

5:

COCA JCOLA COMPANY PRO*ILE

>eeping in view of tapping the Indian soft drink market and also developing soft drinks as a drinking prod ct among Indians. The &oca!&ola in India has set p an independent organi6ations which is H.&.& A ".&.& with a capital of 3.7 =.3.I each b$ virt e of sello t decision of the passed managing director 3h. 3. &. (ggarwal. Hind stan &oca!&ola bottling C4!2D Pvt. Btd. 4a*ibabad took the complete possession of this plant# land# machiner$# A intellect als on ,ebr ar$ 5-1 5::8 and since then H.&.&# looking after all its affairs nder compan$ owned bottling plant to establish integrated marketing s$stem in the area.

27

CORE RAN#S:
&oca!&olaH Developed in a brass pot in 588/# coca!cola is the most admired trademark aro nd the globe. 4ot to mention the best selling soft drink in the world. recogni6ed and

3priteH In 5:/5# a citr s!flavored drink made its =.3 deb t# sing

3prite "o$

as inspiration for its name. This elf with silver hair and a big smile was sed in 5:-7s advertising for &oca!&ola. 3prite is now the fastest growing ma*or soft drink in =.3 and the world1s most pop lar lemon!lime soft drink.

,anta H The name fanta was first registered as a trademark in Eerman$ in 5:-5 #when it was sed for a few $ear for a soft drink created from available materials and flavors . The name was then revived in 5:.. in 4aples# Ital$# when it was sed for theHG fanta orange drink we know toda$. It is now the trademark name for a line of flavored drinks aro nd the world. Diet cokeH The e'tension of the coca!cola name began in 5:82 with the introd ction of diet coke Calso called coca!cola light in some co ntriesD. Diet coke + ickl$ becomes the n mber ? one selling low ?calorie soft drink in the world.

25

*A &LO&S *ACTS A O&T COCA,COLA

5. The world1s largest spherical coca!cola sign is in 4ago$a# Fapan a top the dial ? 4ago$a b ilding in front of the 4ago$a railwa$ station. The sing is a do ble sphere constr cted from more then -/ tone of steel# more :-7meter of neon t bing# and more then# 80: light b lbs. The o ter shape feat res the coca!cola logo and conto r bottle# while the inner sphere portra$s a comic scene with twinkling planets and stars. 2. %ne of the world1s largest signs for coca!cola is located on a hill called )BH(&H(G in (merica# &hile. It is -77 feet wide and 535 feet high and is made from 07#777# 2/ o nce bottles. 3. The first o t door paint sign advertising coca!cola still e'ists. It was painted in 58:- in &artersville# Eeorgia. -. &oca!cola is one of the world1s most recogni6able trademarks recogni6ed in co ntries that acco nt for :8 percent of the world1s pop lation.

22

..

If all the coca!cola ever prod ced were in 8! o nce bottles. (nd these bottles were distrib ted to each person in the world. There wo ld be /08 bottles or over -2 gallons for each person.

/.

If all the coca!cola ever prod ced were in 8 ? o nce bottles# placed side b$ side and end to end to from a lane highwa$# it wo ld wrap aro nd the earth 82 times.

0.

If all the coca!cola ever prod ced were flowing over 4iagara fall at its normal rate of 57. million gallons per second instead of water# the falls wo ld flow for abo t a da$ and a half 38 ho rs and -/ min tes.

8.

The largest representation of the world1s best known package 577 foot tall glass conto r bottle is located at world of coca!cola# B(3 K)E(3

23

)ISTORY IN IN#IA

Coca,cola 78 I857a

&oca!&ola# the corporation no rishing the global comm nit$ with the world1s largest selling soft drink concentrates since 588/# ret rned to India in 5::3 after a 5/ $ear hiat s# giving new th mbs p to the Indian soft drink market. In the same $ear# the &ompan$ took over ownership of the nation1s top soft!drink brand and bottling network. It1s no wondering o r brands ass med an iconic stat s in minds of world1s cons mers.

2-

A )ealth4 %2owth to the I857a8 Eco8om4

)ver since# &oca!&ola India has made significant investments to b ild and contin all$ consolidate its b siness in the co ntr$# incl ding new prod ction facilities# waste water treatment plants# distrib tion s$stems# and marketing channels. &oca!&ola India is among the co ntr$1s top international investors# having invested more than =3I 5 billion in India in the first decade# and f rther pledged another =3I577 million in 2773 for its operations.

A P92e Comm7tme8t to the I857a8 Eco8om4

The &ompan$ has shaken p the Indian carbonated drinks market greatl$# giving cons mers the pleas re of world!class drinks to fill p their h$dration# refreshment# and n trition needs. It has also been instr mental in giving an e'ponential growth to the

co ntr$1s *ob listings.

C2eat78g E8o2mo9s Jo3 Oppo2t987t7es

2.

2ith virt all$ all the goods and services re+ ired to prod ce and market &oca!&ola being made in India# the b siness s$stem of the &ompan$ directl$ emplo$s appro'imatel$ /#777 people# and indirectl$ creates emplo$ment for more than 52.#777 people in related ind stries thro gh its vast proc rement# s ppl$# and distrib tion s$stem. The Indian operations comprises of .7 bottling operations# 2. owned b$ the &ompan$# with another 2. being owned b$ franchisees. That apart# a network of 25 contract packers man fact res a range of prod cts for the &ompan$. %n the distrib tion front# 57!tonne tr cks ? open ba$ three!wheelers that can navigate the narrow alle$wa$s of Indian cities ? constantl$ keep o r brands available in ever$ nook and corner of the co ntr$1s remotest areas. These are onl$ some of the facts that speak abo t o r commitment to the growth of the Indian )conom$

2/

PROMISE Y COCA,COLA
The coca!cola compan$ e'ists to benefits and refreshes ever$ one it to ches. The basic proposition of o r b siness is simple# solid and timeless. 2hen we bring refreshment# val e# *o$ and f n to o r stakeholders then we s ccessf ll$ n rt re and protect o r brand# partic larl$ coca!cola. That is the ke$ to f lfilling o r ltimate obligation to provide consistentl$ attractive to the owner so fo r b siness.

More then a billion times ever$ da$# thirst$ people aro nd the world reach for coca!cola prod cts for refreshment. The$ deserve the highest O alit$ ? ever$ time. % r promise to deliver that + alit$ is the most important promise we make. and it involves a world!wide # $et distinctivel$ local # network of bottling partner # s pplier # distrib tor and retailers whose s ccess is paramo nt to o r own. % r investment in local comm nities in over 277 co ntries totals billions of dollars in *obs# facilities# marketing# the p rchase of local good and services# and local b siness partnership. (lwa$s and ever$ where # we p rs e contin o s innovation in the prod cts we offer the processes we se to make them# the package we develop and the wa$ we bring them to market .

20

RAN#S IN IN#IA

28

RAN# IN IN#IAN ORI%IN

E%BD 3P%TH this orange carbonate soft drink was introd ced in the earl$ 5:.7c# and ac+ ired b$ the &oca!&ola compan$ in 5::3# its tang$ taste has been pop lar with Indian teenagers

BIM&(H It is thirst!+ enching beverage feat res a fresh and light lemon!lime taste and lighthearted attit de. The limca brand was introd ced in 5:05 and ac+ ired b$ the coca!cola compan$ in 5::3.

2:

M((P(H Maa6a# la nched in 5:8- and ac+ ired b$ the coca!cola compan$ in 5::3# is a non carbonated mango soft drink with a rich# * ice A nat ral mango taste.

TH=MP3 =PH in 5::3# the &oca!&ola compan$ ac+ ired this brand# which was originall$ introd ced in 5:00. Its strong and fi66$ taste makes it ni+ e carbonated Indian cola.

PEPSICO

37

Pepsi&o is one the largest companies in the =.3. It fig res amongst the largest 5. companies worldwide according to the n mber of emplo$ees hired. It has a =.3. ,ort ne rank of .7.The compan$ profits for 5::0 were I2.5- billion on reven es of I27.:2 billion and Pepsi is bottled in nearl$ 5:7 co ntries. Pepsi&o is a world leader in convenient snacks# foods and beverages with reven es of more than I-3 billion and over 5:8#777 emplo$ees. Take a *o rne$ thro gh o r past and see the ke$ milestones that define Pepsi&o. Pepsi&o is a world leader in the food chain b siness. It consists of man$ companies amongst which the prominent once are Pepsi!&ola# ,rito!Ba$ and Pepsi ,ood International. The gro p is presentl$ into two of the most profitable and profitable and growing ind stries namel$# beverages and snack foods. It has scores of big brands available in nearl$ 5.7 co ntries across the globe. The gro p has established for itself once of the strongest brands in vario s segments of its operations.

35

The beverages segment primaril$ markets its Pepsi# Diet Pepsi# Mo ntain Dew and other brands worldwide and 0!=P o tside the =.3. markets. These are positioned in close competition with &oca!&ola Inc. of =3(. ( point which is worth a mention is that &oca! &ola gets 87J of its profits for International operations while the same fig re for Pepsi&o stands at /J. The segment is also in the bottling plants and distrib tion facilities and also distrib tes the read$ to drink tea prod cts of Bipton in 4orth (merica. In a *oint vent re with orient spra$ * ice prod cts Pepsi&o also man fact res and distrib tes fr it * ices. The snack food division man fact res and distrib tes and markets chips and other snacks worldwide. The international operations of this segment e'tend to the markets of Me'ico# the => and &anada. ,rito!Ba$ represents this segment of Pepsi&o. The resta rant segment earlier primaril$ consists of the operations of the worldwide Pi66a H t# Taco "ell and >,& chains. P,3. Pepsi compan$1s resta rant distrib tion operation# s pplies compan$ owned and franchise resta rants in the =.3. The compan$ vent red into resta rant b siness with Taco "ell# >,&# Pi66a H t ended last $ear when the$ were spanned off from the compan$. ( packaged goods compan$ comprised of Pepsi!&ola &ompan$ and ,rito!Ba$ will contin e to bear the Pepsi&o name. The move sho ld enhance both corporations abilit$ to prosper with their own f ll$ dedicated str ct re and management team.

32

PEPSICO IN IN#IA

Pepsi&o gained entr$ to India in 5:88 b$ creating a *oint vent re with the P n*ab government!owned P n*ab (gro Ind strial &orporation CP(I&D and Koltas India Bimited. This *oint vent re marketed and sold Behar Pepsi ntil 5::5# when the se of foreign brands was allowed; Pepsi&o bo ght o t its partners and ended the *oint vent re in 5::-. %thers claim that firstl$ Pepsi was banned from import in India# in 5:07# for having ref sed to release the list of its ingredients and in 5::3# the ban was lifted# with Pepsi arriving on the market shortl$ afterwards. These controversies are a reminder of QIndiaMs sometimes acrimonio s relationship with h ge m ltinational companies.Q Indeed# some arg e that Pepsi&o and The &oca!&ola &ompan$ have Qbeen ma*or targets in part beca se the$ are well!known foreign companies that draw plent$ of attention.Q In 2773# the &entre for 3cience and )nvironment C&3)D# a non!governmental organi6ation in 4ew Delhi# said aerated waters prod ced b$ soft drinks man fact rers in India# incl ding m ltinational giants Pepsi&o and The &oca!&ola &ompan$# contained

33

to'ins# incl ding lindane# DDT# malathion and chlorp$rifos R pesticides that can contrib te to cancer# a breakdown of the imm ne s$stem and ca se birth defects. Tested prod cts incl ded &oke# Pepsi# 0 =p# Miranda# ,anta# Th mps =p# Bimca# and 3prite. &3) fo nd that the Indian!prod ced PepsiMs soft drink prod cts had 3/ times the level of pesticide resid es permitted nder ) ropean =nion reg lations; &oca &olaMs 37 times. &3) said it had tested the same prod cts in the =3 and fo nd no s ch resid es. However# this was the ) ropean standard for water# not for other drinks. 4o law bans the presence of pesticides in drinks in India. The &oca!&ola &ompan$ and Pepsi&o angril$ denied allegations that their prod cts man fact red in India contained to'in levels far above the norms permitted in the developed world. " t an Indian parliamentar$ committee# in 277-# backed p &3)Ms findings and a government!appointed committee# is now tr$ing to develop the worldMs first pesticides standards for soft drinks. &oke and Pepsi&o opposed the move# arg ing that lab tests arenMt reliable eno gh to detect min te traces of pesticides in comple' drinks. (s of 277.# The &oca!&ola &ompan$ and Pepsi&o together hold :.J market share of soft!drink sales in India. Pepsi&o has also been acc sed b$ the P th sser$ pancha$at in the Palakkad district in >erala# India# of practicing Qwater pirac$Q d e to its role in e'ploitation of gro nd water reso rces res lting in scarcit$ of drinking water for the pancha$at residents# who have been press ring the government to close down the Pepsi&o nit in the village. In 277/# the &3) again fo nd that soda drinks# incl ding both Pepsi and &oca!&ola# had high levels of pesticides in their drinks. "oth Pepsi&o and The &oca!&ola &ompan$ maintain that their drinks are safe for cons mption and have p blished newspaper advertisements that sa$ pesticide levels in their prod cts are less than those in other foods s ch as tea# fr it and dair$ prod cts. In the Indian state of >erala# sale and prod ction of Pepsi!&ola# along with other soft drinks# was banned b$ the state government in 277/# b t this was reversed b$ the >erala High &o rt merel$ a month later. ,ive other Indian states have anno nced partial bans on the drinks in schools# colleges and hospitals

3-

2a85 *acts
Pepsi&o no rishes cons mers with a range of prod cts from tast$ treats to health$ eats that deliver en*o$ment# n trition# convenience as well as affordabilit$ The gro p has b ilt an e'pansive beverage and foods b siness. To s pport its operations# Pepsi&o has -2 bottling plants in India# of which 53 are compan$ owned and 2: are franchisee owned. In addition to this# Pepsi&o1s ,rito Ba$ division has 3 state!of!the!art plants. Pepsi&o1s b siness is based on its s stainabilit$ vision of making tomorrow better than toda$. Pepsi&o1s commitment to living b$ this vision ever$ da$ is visible in its contrib tion to the co ntr$# cons mers and farmers.

e=e2ages

Pepsi&o India1s e'pansive portfolio incl des iconic refreshment beverages Pepsi# 0 =P# 4imboo6# Miranda and Mo ntain Dew# in addition to low calorie options s ch as Diet

3.

Pepsi# h$drating and n tritional beverages s ch as (+ afina drinking water# isotonic sports drinks ! Eatorade# Tropicana577J fr it * ices# and * ice based

Drinks ? Tropicana 4ectars# Tropicana Twister and 3lice. Bocal brands ? Behar )vervess 3oda# D kes Bemonade and Mangola add to the diverse range of brands

*oo5s

Pepsi&o1s food division# ,rito!Ba$# is the leader in the branded salt$ snack market and all ,rito Ba$ prod cts are free of trans!fat and M3E. It man fact res Ba$1s Potato &hips; &heetos e'tr ded snacks# =ncle &hips and traditional snacks nder the > rk re and Behar brands. The compan$1s high fiber breakfast cereal# O aker %ats# and low fat and roasted snack options enhance the healthf l choices available to cons mers. ,rito Ba$1s core prod cts# Ba$1s# > rk re# =ncle &hipps and &heetos are cooked in @ice "ran %il to

3/

significantl$ red ce sat rated fats and all of its prod cts contain vol ntar$ n tritional labeling on their packets

+&IC" *ACTS

Pepsi&o established itMs b siness operations in India in 5:8: Invested more than =3D 5 "illion since inception 2ell known and loved global brands that delight and no rish cons mers

It provides direct and indirect emplo$ment to 5.7#777 people in India It has more than -2 bottling plants in India# of which 53 are compan$ owned A 2: franchisee owned 3 3tate!of!the!art food plants in P n*ab# Maharashtra and 2est "engal

30

PEPSI CO IN#IA: A *ORT&NE A-- COMPANY IN IN#IA

Pepsi&o# which ranks among the world1s five largest food and beverage companies with 5/ brands# and its partners have invested more than =3I 077 million in India ! b ilding b sinesses# which toda$ provide direct or indirect emplo$ment to more than /7#777 people. 3ince Pepsi1s entr$ into the Indian market in 5:8:# several brands from its portfolio have become established categor$ leaders. "rand Pepsi is now the 2nd biggest brand in the co ntr$. Pepsi&o1s portfolio of beverage brands in India incl des the flagship cola brand Pepsi; Diet Pepsi; two flavors of Mirinda ? %range and Bemon; 0=P; Mo ntain Dew; packaged drinking water ! (+ afina; variants of the fr it drink brand 3lice; the 577 per cent fr it * ice brand Tropicana in several variants and the world1s leading sports drink Eatorade.

38

Peps7 , Yeh )a7 Yo98g7sta8 Me27 Jaa8

RAN# )ISTORY
Pepsi is a h ndred $ear old brand loved b$ over 277 million people worldwide. The largest single selling soft drink brand in India is the bi+ ito sMsocialiserMat ever$ occasion.

<o ngistan loves it. 277 million people worldwide love it. " t what has made Pepsi the single largest selling soft drink brand in India is act all$ a form la concocted a cent r$ ago in a far awa$ continent.

588/# =nited 3tates of (merica. &aleb "rad man# the man with a plan# got on to form late a blockb ster digestive drink and decided to call it "rad1s drink. It was this doctor1s potion that was to become Pepsi &ola in 58:8# and event all$# Pepsi in 5:73.

Pepsi has alwa$s pla$ed on the front foot and since its inception has come o t with revol tionar$ concepts like Diet# 2B bottles# rec$clable plastic cola bottles and the enviable M$ &an.

RAN# A#VANTA%E

Pepsi has become a friend to the $o th and has led man$ $o th c lt res. <o ngsters over the generations have grown p with Pepsi and share an emotional connect with it# nlike an$ other cola brand. "e it parties# hango ts# or * st another da$ at home# a da$ is never complete witho t the fi66 of PepsiS

Pepsi# &ricket and "oll$wood have been *oined at the hip since the beginning. 3hah @ kh >han# 3achin Tend lkar# 3aif (li >han# (mitabh "achchan# >areena >apoor# Pri$anka &hopra# Kirender 3ehwag# M. 3. Dhoni# Fohn (braham# @anbir

3:

>apoor and Deepika Pad kone are a few celebrities who will go an$ length for a chilled Pepsi.

The Pepsi M$ &an is ndo btedl$ the most pop lar cola pack of all times. It is not * st a pack b t a st$le statement for toda$1s $o th.

-7

-5

PEPSI PRO#&CTS IN IN#IA

SLO%ANS &SE# Y PEPSI COMPANY

58:8 "radMs Drink 5:73 )'hilarating# Invigorating# (ids Digestion 5:7/ %riginal P re ,ood Drink 5:78 Delicio s and Healthf l 5:5. ,or (ll Thirsts ! PepsiH &ola 5:5: PepsiH &ola ! It makes $o 3cintillate 5:27 Drink PepsiH &ola ! It 2ill 3atisf$ <o

-2

5:28 Peps <o =pS 5:2: HereMs HealthS 5:32 3parkling# Delicio s 5:33 ItMs the "est &ola Drink 5:3- Do ble 3i6e @efreshing and Healthf l 5:38 Foin the 3wing to Pepsi 5:3: Twice as M ch for a 4ickel 5:-3 "igger Drink# "etter Taste 5:-0 ItMs a Ereat (merican & stom 5:-: 2h$ Take Bess 2hen PepsiMs "estT 5:.7 More "o nce to the % nce 5:.- The Bight @efreshment @efreshing 2itho t ,illing 5:.8 "e 3ociable# Have a Pepsi 5:/5 4ow ItMs Pepsi for Those 2ho Think <o ng 5:/3 &ome (liveS <o Mre in the Pepsi Eeneration 5:/0 Taste that "eats the %thers &old# Pepsi Po rs It %n. 5:/: <o Mve got a Bot to Bive; PepsiMs got a Bot to Eive

-3

5:03 Foin the Pepsi People ,eelingM ,ree 5:0/ Have a Pepsi Da$S 5:0: &atch That Pepsi 3pirit Take the Pepsi &hallenge 5:85 PepsiMs Eot <o r Taste for Bife 5:83 Pepsi 4owS 5:8- The &hoice of a 4ew Eeneration 5:80 (mericaMs &hoice 5:8: ( Eeneration (head 5::2 Eotta Have It 5::3 "e <o ng# Have , n# Drink Pepsi 5::. 4othing )lse is a Pepsi 5::0 Eeneration 4e't 5::8 3ame Ereat Taste 5::: The Fo$ of &ola 2777 The Fo$ of Pepsi 2773 Pepsi. ItMs the &ola 2777!2773H Q(a6adi dil kiQ CHindi! meaning Q,reedom of the HeartQDCIndiaD 2773H QItMs the &olaQ9QDare for MoreQ CPepsi &ommercialD 2773!277.H Q<eh P$as Hai "adiQ CHindi meaning QThis thirst is too m chQD CIndiaD

--

277.!277/H Q(n ice cold Pepsi. ItMs better than se'SQ 277/!2770H Q2h$ <o DoggingM MeQ9QTaste the one thatMs forever $o ngQ 2770!2778H QMore Happ$Q9QTaste the once thatMs forever $o ngQ 2778H Q<eh Hai <o ngistan Meri FaanSQ Hindi ! meaning QThis is the <o ng era m$ dearQ CIndia and PakistanD 2778H QPepsi 3t ffQ 3 per "owl &ommercial 2778H QPepsi is U5Q TK commercial 2778H QPepsif$ karo gaiSQ &ommercial CHindi meaning Q2anna Pepsif$SQD 2778!277:H Q3omething for )ver$one.Q 277:!presentH Q@efresh ever$thingQ and Cd ring man$ commercialsD Q)ver$ Eeneration @efreshes the 2orldQ

T)E RIVARLY E%INS:

Co<e Comes to I857a
&oca!&ola comes to India with fanfare in the fifties. ,or a n mber of da$s# The Hind stan Times and other newspapers of 4ew "anaras carried f ll page advertisement showing a big bo$ in niform with a soft!drink crown as the cap. There was no indication of the prod ct. (fter a few da$s# &oke was introd ced. It was an entirel$ new drink which fascinated people. It soon became the national drink. ,or the first time# a soft!drink was available from one corner of the co ntr$ to another. The person who bro ght &oca! &ola to India was the father of late 3ardar &haran*it 3ingh# 3ardar Mohan 3ingh. (

-.

practical man Mohan 3ingh reali6ed that to pop lari6e &oca!&ola# and make it a best seller it was necessar$ to catch them $o ng.G 3o he foc sed on $o ngsters in the societ$. The compan$ reali6ed that to become a mass cons mption prod ct# one has to go to the village. The$ gave m ch importance to the distrib tive network. The compan$ tr cks s pplied coke to even the remotest village. ,ew prod cts appears to be more similar than soft drinks# $et the &ola wars that mark the competition between &oke and Pepsi show how even organi6ations with highl$ similar prod ct can be differentiated b$ their b siness strategies. Then comes battles over the iss e of bottle si6e standardi6ation. &oke the arch rival tried to offering more &ola at a lower price. Pepsi which had some of its earl$ investment tied p in 2.7ml bottles# went the fo ntain wa$. The Eeneral bottle si6e freed has settled at 377 ml. 577 ml more than the pre M4& standard. ,o ntain mi' dispensers# carr$ home bottles# even 5..7 plastic bottle with caps good eno gh to keep them l$ing down and still preserve the fi66.

It po red in vast s ms to whip p its visibilit$ at the retail level# so that cons mers were greeted virt all$ at ever$ street corner b$ Pepsi1s bl e# red and white colors# beca se the$ have perception the thing on displa$ 3ells more.G &oca!&ola is# finall$# redoing the real thing to the replicate the s ccess that it1s arch!rival# Pepsi&o. Has achieved with its fast and f rio s marketing. " t to win them# &oke is cop$ing Pepsi.

-/

MAR"ETIN% STATE%IES O* CO"E AN# PEPSI

a( PRO#&CT
&oke was la nched in India in (gra# %ctober 2-# in M:3M# soon after its traditional all Indian la nch of its &ola. (t the sparking new bottling plants at Hathra# near (gra. &oke was back with a bang after its e'it in 5:00. &oke was planning to la nch in ne't s mmer the orange drink# ,anta!with the clear lemon drink# sprite# following later in the $ear.

-0

&oke alread$ owns more brands than it will over need# since it has bo ght o t @amesh &ha han. &oke * st needs to * ggle these brands aro nd de'tro sl$ to meet its ob*ectives# to ens re that Pepsi does not gain market share in t Toda$# &okeMs prod ct line incl des# &oca!&ola# Th mps =p# ,anta# Eold 3pot# Maa6a# &itra# 3prite# "isleri &l b 3oda and Diet &oke. PAC"A%IN% &oca!&ola India Bimited C&&IBD has bottled its &ola drink in different si6es and different packaging i.e.# 277 ml bottle# 377 ml. "ottle# 337 ml. &ans# .77 ml. "ottle fo ntain Pepsi# and bottles of 5 and 2 litre. PRO#&CT POSITIONIN% %ne important thing m st be noticed that Th mps =p is a strong brand in western and so thern India# while &oca &ola is strong in 4orthern and )astern India. 2ith vol mes of Th mps =p being low in the capital# there are likel$ chances of &oca &ola slashing the prices of Th mps =p to @s. . and contin e to sell &oca &ola at the same rate. (nal$sts feel that this strateg$ ma$ help &oke since it has 2 &ola brands in comparison to Pepsi which has * st one. Th mps =p acco nts for -7J of &oca &ola compan$Ms t rn over# followed b$ &oca &ola which has a 23J share and Bimca which acco nts for 50J of the t rn over of the compan$. CTh mps p being the local drink# its share in the market is intact# forcing the compan$ to service the brand# as it did last $ear Mr. Donald short &)%# &oca &ola India# said that# Q we will be absol tel$ comfortable if Th mps =p is 4o. 5 brand for s in India in the $ear 2777. 2e will sell whatever cons mers want s toQ. &oca &ola India has positioned Th mps p as a beverage associated with advent re beca se of its strong taste and also making it compete with Pepsi as even Pepsi is associated with advent re# $o th.

-8

3(

PRICE
The price being fi'ed b$ ind str$# leaving ver$ little role for the pla$ers to pla$ in

the setting of the price# in t rn making it diffic lt for competitors to compete on the basis of price. The fi'ed cost str ct re in &arbonated 3oft Drinks Ind str$# and the intense competition make it ver$ diffic lt to change or alter the prices. The vario s costs inc rred b$ the individ al compan$Ms are almost navoidable. These being the costs of concentrates# standard bottling operations# distrib tor and bottlers commissions# distrib tion e'penses and the promotional and advertising e'pendit re C(s far as &oke is concerned# it had to inc r a little more than Pepsi as Pepsi paved its wa$ to India in 5:8: while &oke made a come back in 5::3.D & rrentl$ a 377 ml. &oke bottle is available for @s. / to8 The 337 can was initiall$ available for @s. 53 and now# since the price has gave p to @s. 58 per can. The prices of .77 m# 5 litre. (nd 2ltr being @s. 5. @s. 23 and @s. -7 respectivel$ Caccording to the c rrent s rve$D. Dating back to V:3M# when Pepsi hiked the price of Pepsi ! &ola from @s. . to @s. / per 2.7 ml. bottle in some parts of the co ntr$!incl ding (gra. &oke penetrated the market with price of @s. . for a 377 ml. bottle# making it cheaper b$ @s. 5 and .7 ml. than Pepsi. &okeMs strateg$ at that time being able to e'pand the availabilit$ of soft drinks even in r ral India. &okeMs priorit$ being to first increase the n mber of drinks per drinker# and then the n mber of drinkers itself. Pepsi also tried this b t was trapped b$ a series of competitive price increase and changes in bottle si6es b$ Parle. " t the prices of soft drinks have shot p since PepsiMs arrival and the c rrent prices are being mentioned as nder.

-:

P27ce l7st
Name Co<e Pe2 ottle Co<e Co<e Co<e #7et Co<e 'Ca8( Co<e 'Ca8( ottle S7Ke .-- ml ?-- ml A-- ml 'Plast7c / %lass( . l7t2e ??- ml Ca8 ??- ml Ca8 MRP '78 Rs.( E 0.. E?A ?D

However# the trends ma$ have been in the earl$ M:7Ms# now the prices of Pepsi and &oke are the same making it diffic lt in f t re and present to compete on the basis of price.

c(

PLACE
&oke ma$ have gained an earl$ advantage over Pepsi since it took over Parle in

5::-. Hence# it had read$ access to over 2# 77#777 retailer o tlets and /7 bottlers. &oke was had a better distrib tion network# owing to the wide network of Parle drinks all over India. &oke has f rther e'panded its distrib tion network. .7

&oke and its prod ct were available in over 2# .7#777 o tlets Cin contrast with PepsiMs 2# 77#777D. &oke has a greater advantage in terms of geographical coverage. " t &oke has had problems with its bottlers as the re+ ired profits for the bottlers have not been forthcoming. This is more so beca se &oke has hiked the price of its concentrate b$ @s. 8 , rther# &okeMs operations in India are 577J ,obs. 4ow# it plans to convert then into &%"%s. This is straining the relationship between the &oke and its bottlers. The compan$ had decided to create a f nd to reimb rse performing bottlers for the e'tra costs inc rred on acco nt of the hike in prices of soft drink concentrates. Mr. 3hort also reali6ed that India is a price sensitive market and the compan$ wo ld have to absorb in the increase in e'cise d t$ and said that in the long r n &oke will have to slash prices for the benefit of the cons mers and said that the$ were considering a c t in the prices of their fo ntain soft drinks. &oke and Pepsi have devised strategies to get rid of middlemen in the distrib tion network. However# .7J of the ind str$ nfort natel$ depends on these middlemen. (s of now# aro nd 577 agents are present in "ananas. "ottlers of the 2 m ltinationals have strongl$ felt the need to remove these middlemen from the distrib tion s$stem# b t ver$ little s ccess has been achieved in doing so.

#( PROMOTION
It m st be remembered that soft drinks p rchases are an Qimp lse b $ low involvement prod ctsQ which makes promotion and advertising an important marketing tool. The 2 arch rivals have spent a lot on advertising and on promotional activities.

.5

To promote a brand and even to spend a lot on advertising# the compan$ m st be aware of the perceived + alit$ of the brand# its brand power Cif at all there isD since cons mers make p rchase decision based on their perceptions of val e i.e.# of + alit$ relative to price. (ccording to Pa l 3tobart# (dvertising enco rages c stomers to recogni6e the + alit$ the compan$ offers. Price promotions often prod ce short!term sales increases. &oca &ola has entered new markets and also developing market economics Clike IndiaD with m ch!needed *obs. &oke attrib tes its s ccess to bottlers# the &oca &ola s$stem itself# i.e.# its e'ec tive committees# emplo$ees# "%D# compan$ presidents b t above all from the cons mer. &okeMs red color catches attention easil$ and also the Diet &oke which it introd ced was taking the &ake# as Pepsi has not come o t with this in India. )ver since &okeMs entr$ in India in 5::3# &oke made a come back Cafter + itting in 5:00D# in %ctober 2- in (gra# the cit$ was flooded b$ tr cks# there wheelers# tric$cle cards!all with h ge red &oke!embla6oned bottles cold. This was one big *olt to Pepsi. mbrellas. @etailers were displa$ing their &oke bottles in distinctive racks# also with speciall$!designed icebo'es to keep &oke

STRATE%IES A#OPTE# Y CO"E AN# PEPSI

.2

The Peps7 P2ocess: Despite being a global brand# Pepsi has b ilt its s ccess on
meeting the Indian cons mer1s needs# partic larl$ in terms of making the brand s$nchroni6e with locali6ed events and traditions. Instead of harping on its global lineage# ergo# it tries to pl g into ethnic festivals# se the vernac lar indifferent part of the co ntr$# and blend into the local fabric. Pepsi is sing both national campaigns!s ch as the Drink Pepsi# Eet 3t ff scheme# which offers large disco nts on other prod cts to Pepsi!b $ers as well as local.

The Co<e Cop4: Instead of creating a bond with the c stomers thro gh small b t
high!impact events# &oca!&ola chose to associate itself with national and international mega events like the 2orld & p &ricket# 5::/# and world c p football 5::8. " t now coke is also entering into local actions. &oke is also tr$ing to make their brand s$nchroni6e with locali6ed events traditions and festivals. &oca!&ola new tag line in this advertisement is @eal shopping# real refresherG. In this wa$ &oke is cop$ Pepsi.

EMPO!ERMENT
The Peps7 P2ocess: %nce of the strongest weapons in Pepsi1s armor$ is the fle'ibilit$
it has empowered its people with. )ver$ manager and salesperson has the a thorit$ to take whatever steps he# or she# feels will make cons mers aware of the brand and increase its cons mption.

.3

The Co<e Cop4: ,le'ibilit$ is the weapon that &oca!&ola# fettered as it is b$ the need
for approvals from (tlanta for almost ever$thing. In the past# this has shown p in its st bborn insistence on * nking the franchisee network it had ac+ ired from Parle; in its dependence on its own feedback mechanism over that of its bottlers;1 and on its head+ arters!led approach.

PRICE
The Peps7 p2ocess: Pepsi has consistentl$ wielded its pricing strateg$ as in invitation
to sample# aiming to t rn trial into addiction. It la nched the .77 ml bottle in 5::- at @s. 8 vers s Th mps =p1s @s. :# in (pril# 5::/# its 5.. liters bottle followed &oke into the marketplace at @s. 37 ? @s . less than &oke1s ." t it co ldn1t contin e the lower price positioning for long.

The Co<e Cop4: Initiall$# coke carbon!copied the strateg$ b$ introd cing its 337ml
cans in Fan ar$ 5::/# at an invitation price of @s. 5. before raising it to @s. 58. "$ this time# it had reali6ed that the &oca!&ola brand did not hold eno gh attraction for c stomers to fork o t a premi m. The 277ml &oke# la nched so far in parts of eastern# western# and northernIndia# is priced at @s. .# lowering the entr$!barriers. Too reall$ drive the market# as &oke wants to $o m st go down to @s. 31.

PEPSI VS. CO"E

.-

L.D ILLION ?.M N RS. AOO CRORES

T&RNOVER INT. SALES AS M O* TOTAL SALES TOTAL INVESTMENT IN IN#IA B-M

L0E ILLION

RS. .A- C

RS. ?-- CRORES

PROPOSE# INVESTMENTS

RS. ./@--C

.@--

NO. O* EMPLOYEES

0@-

0?

NO. O* O!NE# OTTLIN% PLANTS

NIL

..

0D @--N.A.

NO. O* *RANC)ISES NO. O* *O&NTAIN TOTAL INVESTMENT Y OTTLERS 0A--

A?

Rs 0.A CR

NE! PLANTS PLANNE# N.A.

PEPSI AN# CO"E MAR"ET S)ARE IN IN#IA

./

Compet7t7=e Compa27so8s
O A5=e2t7s78g

.0

O Co<e: L?@.@ m7ll7o8 '0FBA( to L.00.A m7ll7o8 '0FF?( O Peps7: L.A.? m7ll7o8 '0FBA( to L0@B.? M7ll7o8 '0FF?( O #7st2739t7o8 O Co<e st2o8ge2 78 :o98ta78. 9t Peps7 IS g2ow78g 78 s9pe2ma2<etsI O P27c78g O No 57::e2e8ces

.8

COLA !ARS
Coca,cola =/s Peps7

OVER A CENT&RY O* COLA SLO%ANS/ COMMERCIALS/ L&N#ERS/ AN# CO&PS

ThereMs little do bt that the most spirited and intense competition in the beverage world is between &oca!&ola and Pepsi. These two (merican companies long ago took their battle worldwide# and altho gh there are other colas in the market# these giants occ p$ this high!stakes arena b$ themselves. The impact of &oke and Pepsi on pop lar c lt re is indisp table# and I have observed in m$ time managing this web site that (merica has not become *aded abo t the cola wars. The memorabilia# the *ingles# the trivia ! all still pop lar. 3o I am offering this page in an attempt to ass age a wee bit of the &oke and Pepsi thirst that is thriving on o r planet.

IT ALL STARTE# . . . .
&oca!&ola was invented and first marketed in 588/# followed b$ Pepsi in 58:8. &oca! &ola was named after the coca leaves and kola n ts Fohn Pemberton sed to make it# and Pepsi after the beneficial effects its creator# &aleb "rad ham# claimed it had on d$spepsia. ,or man$ $ears# &oca!&ola had the cola market cornered. Pepsi was a distant# no threatening contender. " t as the market got more and more l crative# professional advertising became more and more important. These soda companies have been leading the wa$ in advertising ever since.

.:

A#VERTISIN% )ISTORY G COMMERCIALS

Pepsi has definitel$ leaned towards the appeal of celebrities# pop lar m sic# and $o ng people in television commercials# while &oke relies more heavil$ on images of happiness and togetherness# tradition# and nationalism# perpet all$ tr$ing to cash in on its original lead. In a simplified sense# $o co ld s m p the strategies as Coke: Old, Pepsi: New. In fact# as we will see# when &oca!&ola tried something new# it was disaster. The first maga6ine ad for &oca!&ola appeared in Munsey's in 5:72. (dvertisements began to appear on billboards# newspapers# and streetcars. 3oon there were serving tra$s with images of people en*o$ing &oca!&ola# and glasses with the colaMs name on them. (t this time# &oca!&ola and Pepsi were served in dr gstore soda fo ntains. In 5:7:# Pepsi sed its first celebrit$ endorser# a tomobile race driver "arne$ %ld!field# in newspaper ads. In 5:25# Pepsi went bankr pt# b t contin ed to appear on the scene# altho gh not nearl$ so s ccessf ll$ as &oca!&ola. In 5:35# Pepsi went bankr pt again# b t the new owner# @o$ Megargel# wo ld hit pon an idea that wo ld finall$ give &oca! &ola some competition. In 5:3-# he marketed Pepsi in a 52!o nce bottle for a nickel. (t the time# &oca!&ola was sold in a /!o nce bottle for ten cents. KoilaS Profits for Pepsi. Pepsi racked p another first b$ airing the first radio *ingle in 5:3:. It was so pop lar that it was pla$ed in * kebo'es and became a hit record &oca!&ola hit the airwaves in 5:-5. In 5:-/# inflation forced Pepsi to increase prices. (nd in 5:.7# Pepsi offered a larger 2/! o nce bottle to co rt the $o ng (merican ho sewife. In the 5:/7Ms# the cola ad wars moved to television. &oca!&ola emplo$ed a host of celebrit$ singers to promote the prod ct# incl ding &onnie ,rancis # Tom Fones# The 4ew "eats# 4anc$ 3inatra# and The 3 premes. (s we moved thro gh the $ears# both colas

/7

incorporated some of their best slogans CQPepsi EenerationQ and Qthe @eal ThingQD into s bse+ ent commercials. In the 5:07s# market research showed that cons mers preferred the taste of Pepsi over &oke. The Pepsi &hallenge is still being cond cted toda$. " t &oke came p with what is arg abl$ the best of all cola commercials# the 5:05 IMd like to b $ the 2orld coke ad.

This landmark was recalled in &hristmas versions in 5:83 and 5:8-# and a 5::7 3 per "owl ad# which was eno gh to make some "ab$ "oomers weep with nostalgia. In the 5:87Ms# Pepsi lined p the celebrities# starting with late Michael Fackson# then Madonna# Michael F. ,o'# "ill$ &r$stal# Bionel @itchie# Eloria 3tefan# Foe Montana# and others. &oke signed on Michael Fordan# 4ew >ids on the "lock# (retha ,ranklin# )lton Fohn# and Pa la (bd l. In 5:8.# responding to the press re of the Pepsi &hallenge taste tests# which Pepsi alwa$s won# &oca!&ola decided to change its form la. "ill &osb$ was the pitchman. This move set off a shock wave across (merica. &ons mers angril$ demanded that the old form la be ret rned# and &oca!&ola responded three months later with Classic Coke. )vent all$# 4ew &oke + ietl$ disappeared. Pepsi# meanwhile# had its own flop# &r$stal Pepsi# which was s pposed to catch the strange wave of the times when ever$thing colorless was clean and desirable CPima# bottled waterD. (nd then there was Pepsi Bite with the lemon$ flavor and one calorie# introd ced in 5:0.. @emember that oneT (pparentl$ the$ didnMt e'pect s to beca se later the$ gave s Pepsi %ne# sing the same concept# b t a completel$ different taste. (nd# e'tending the idea even f rther# we are now getting Pepsi Twist# a new prod ct with a twist of lemon flavor.

/5

In 5::5# @a$ &harles sang# Q<o got the right one bab$# h!h hSQ (lso in the 5::7s# &ind$ &rawford and the 3pice Eirls pitched Pepsi. (nd then Pepsi aired commercials feat ring the aggravating little girl CHalide )isenbergD with her tro bling male voice. In the new cent r$# both colas contin e to battle it o t on the television screen. (nd celebrities contin e to be important promoters. @ecentl$# Pepsi has had commercials b$ "ob Dole and ,aith Hill# among others.

/2

SLO%ANS
ItMs clear in looking at the slogans over the $ears that &oke and Pepsi have ver$ different targeting strategies. &oke is to ting itself as the original# the a thentic# and appealing to a sense of tradition# positioning itself as an integral part of dail$ (merican life. Pepsi# on the other hand# is promoting itself as something new# $o ng# and hip# which seems a little odd after over 577 $ears. " t &oke was first# after all. Pepsi has alwa$s targeted the $o th market more aggressivel$ than &oke.

COCA,COLA
588/ ! Drink &oca!&ola 5:7- ! &oca!&ola 3atisfies 5:7- ! Delicio s and @efreshing 5:7. ! &oca!&ola @evives and 3 stains 5:7. ! Eood (ll the 2a$ Down 5:7/ ! The Drink of O alit$ 5:7/ ! The Ereat 4ational Temperance 5:70 ! Delicio s &oca!&ola# 3 stains# @efreshes# Invigorates 5:70 ! &ooling . . . @efreshing . . . Delicio s 5:78 ! 3parkling ! Harmless as 2ater# and &risp as ,rost 5:7: ! Delicio s# 2holesome# @efreshing 5:57 ! It 3atisfies 5:57 ! O enches Thirst as 4othing )lse &an 5:55 ! Its Time to Drink &oca!&ola 5:55 ! @eal 3atisfaction in )ver$ Elass 5:52 ! Demand the Een ine ! @ef se 3 bstit tes 5:53 ! The "est "everage nder the 3 n 5:53 ! ( 2elcome (ddition to (n$ Part$ ! (n$time ! (n$where /3

5:5- ! )'hilarating# @efreshing 5:5- ! Demand the Een ine b$ , ll 4ame 5:5- ! P re and 2holesome 5:5/ ! F st %ne Elass 2ill Tell <o 5:50 ! Three Million ( Da$ 5:5: ! O alit$ Tells the Difference 5:27 ! Drink &oca!&ola with 3oda 5:22 ! Thirst >nows 4o 3eason 5:22 ! Thirst &anMt "e Denied 5:22 ! Thirst @eminds <o ! Drink &oca!&ola 5:23 ! @efresh <o rself 5:2- ! Pa se and @efresh <o rself 5:2. ! 3i' Million ( Da$ 5:2. ! The 3ociable Drink 5:2/ ! 3top at the @ed 3ign 5:20 ! (ro nd the &orner from (n$where 5:28 ! ( P re Drink of 4at ral ,lavors 5:2: ! The Pa se that @efreshes 5:37 ! Meet Me at the 3oda ,o ntain 5:32 ! Ice!&old 3 nshine 5:33 ! DonMt 2ear a Tired# Thirst$ ,ace 5:3- ! &arr$ a 3mile "ack to 2ork 5:3. ! (ll Trails Bead to Ice!&old &oca!&ola 5:3/ ! 2hat @efreshment % ght to "e 5:3/ ! The @efreshing Thing to Do 5:30 ! (mericaMs ,avorite Moment 5:30 ! 3o )as$ to 3erve and 3o Ine'pensive 5:38 ! The "est ,riend Thirst )ver Had 5:38 ! P re 3 nlight 5:38 ! (n$time is the @ight Time to Pa se and @efresh

/-

5:3: ! &oca!&ola Eoes (long 5:3: ! Make B nch Time @efreshment Time 5:3: ! Makes Travel More Pleasant 5:3: ! The Drink )ver$bod$ >nows 5:3: ! Thirst 3tops Here 5:-7 ! "ring in <o r Thirst and Eo (wa$ 2itho t It 5:-5 ! &ompletel$ @efreshing 5:-2 ! @efreshment That &anMt "e D plicated 5:-2 ! 2hoever <o (re# 2hatever <o Do# 2herever <o Ma$ "e# 2hen <o Think of @efreshment# Think of Ice!&old &oca!&ola. 5:-3 ! The %nl$ Thing like &oca!&ola is &oca!&ola Itself. ItMs the @eal Thing 5:-3 ! ( Taste (ll Its %wn 5:-3 ! That )'tra 3omething 5:-- ! How (bo t a &oke 5:-. ! Passport to @efreshment 5:-. ! 2henever <o Hear QHave a &oke#Q <o Hear the Koice of (merica 5:-0 ! &oke >nows 4o 3eason 5:-0 ! 3erving &oca!&ola 3erves Hospitalit$ 5:-8 ! 2here ThereMs &oke# ThereMs Hospitalit$ 5:-: ! &oca!&ola . . . (long the Highwa$ to (n$where 5:.7 ! Help <o rself to @efreshment 5:.5 ! Eood ,ood and &oca!&ola F st 4at rall$ Eo Together 5:.2 ! 2hat <o 2ant Is a &oke 5:.3 ! Dependable as 3 nrise 5:.- ! ,or People on the Eo 5:.. ! (mericaMs Preferred Taste 5:./ ! &oca!&ola ! Making Eood Things Taste "etter 5:./ ! ,eel the Difference 5:.0 ! 3ign of a Eood Taste 5:.8 ! The &old# &risp Taste of &oke 5:.: ! "e @eall$ @efreshed

/.

5:/7 ! @ela' 2ith &oke 5:/5 ! &oke and ,ood ! @efreshing 4ew ,eeling 5:/2 ! &oca!&ola @efreshes <o "est 5:/3 ! Things Eo "etter 2ith &oke 5:/. ! 3omething More Than a 3oft Drink 5:// ! &oke . . . (fter &oke . . . (fter &oke 5:07 ! Its the @eal Thing 5:05 ! IMd like to b $ the 2orld a &oke 5:0- ! Book =p# (merica 5:0/ ! &oke (dds Bife 5:0: ! Have a &oke and a 3mile 5:82 ! &oke Is ItS 5:8- ! F st ,or the Taste of It CDiet &okeD 5:8. ! F st ,or the ,ree of It C&affeine ,ree &okeD 5:8. ! 2eMve Eot a Taste ,or <o C4ew &okeD 5:8. ! (mericaMs @eal &hoice C&oca!&ola &lassicD 5:8/ ! &atch the 2ave C4ew &okeD 5:8/ ! @ed# 2hite and <o C&oca!&ola &lassicD 5:80 ! <o &anMt "eat the @eal Thing 5:8: ! &anMt "eat the ,eeling 5::7 ! &anMt "eat the @eal Thing 5::3 ! (lwa$s &oca!&ola 5::3 ! Taste it (ll

PEPSI,COLA
5:73 ! )'hilarating# Invigorating# (ids Digestion 5:70 ! %riginal P re ,ood Drink 5:7: ! Delicio s and Healthf l 5:5. ! ,or (ll Thirsts ! Pepsi!&ola 5:5: ! Pepsi!&ola ! It Makes <o 3cintillate 5:27 ! Drink Pepsi &ola. It will satisf$ $o . //

5:28 ! Peps <o =pS 5:32 ! 3parkling# Delicio s 5:3- ! @efreshing and Healthf l 5:3: ! Twice (s M ch ,or ( 4ickel Too 5:-3 ! "igger Drink# "etter Taste 5:-: ! 2h$ take less when PepsiMs bestT 5:.7 ! More "o nce to the % nce 5:.7 ! The Bight @efreshment 5:.- ! @efreshing 2itho t ,illing 5:.8 ! "e sociable# have a Pepsi 5:/5 ! 4ow ItMs Pepsi# ,or Those 2ho Think <o ng 5:/3 ! &ome (liveS <o Mre In the Pepsi Eeneration 5:/0 ! Taste That "eats the %thers &old 5:/0 ! Pepsi Po rs It %n 5:/: ! <o Mve Eot a Bot to Bive and PepsiMs Eot a Bot to Eive 5:03 ! People ,eelinM ,ree 5:0. ! Have a Pepsi Da$ 5:08 ! &atch That Pepsi 3pirit 5:85 ! PepsiMs Eot <o r Taste ,or BifeS 5:83 ! Pepsi 4owS 5:8- ! Pepsi# the &hoice of a 4ew Eeneration 5::2 ! Eotta Have It 5::3 ! "e <o ng# Have , n# Drink Pepsi5::. 4othing )lse is a Pepsi 5::0 Eeneration 4e't 5::8 3ame Ereat Taste 5::: The Fo$ of &ola 2777 The Fo$ of Pepsi Foin the Pepsi

/0

2773 Pepsi. ItMs the &ola 2777!2773H Q(a6adi dil kiQ CHindi! meaning Q,reedom of the HeartQDCIndiaD 2773H QItMs the &olaQ9QDare for MoreQ CPepsi &ommercialD 2773!277.H Q<eh P$as Hai "adiQ CHindi meaning QThis thirst is too m chQD CIndiaD 277.!277/H Q(n ice cold Pepsi. ItMs better than se'SQ 277/!2770H Q2h$ <o DoggingM meQ9QTaste the one thatMs forever $o ngQ 2770!2778H QMore Happ$Q9QTaste the once thatMs forever $o ngQ 2778H Q<eh Hai <o ngistan Meri FaanSQ Hindi ! meaning QThis is the <o ng era m$ dearQ CIndia and PakistanD 2778H QPepsi 3t ffQ 3 per "owl &ommercial 2778H QPepsi is U5Q TK commercial 2778H QPepsif$ karo gaiSQ &ommercial CHindi meaning Q2anna Pepsif$SQD 2778!277:H Q3omething for )ver$one.Q 277:!presentH Q@efresh ever$thingQ and Cd ring man$ commercialsD Q)ver$ Eeneration @efreshes the 2orldQ

/8

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

/:

Peps7 = Coca,Cola wa2 t928s hot

The ongoing cola war between global rivals Pepsi and &oca!&ola has taken a weird twist in India with the former dragging the latter to co rt. The chargeH &oca!&ola has snatched emplo$ees# bottlers# and agents# all of whom are bo nd to Pepsi b$ a contract. Pepsi has charged &oke with having entered into a conspirac$ to disr pt its b siness operations b$ ind cing ke$ emplo$ees and associates to break e'isting contracts illegall$. Pepsi has so ght a permanent in* nction and an e' parte order against coke# restraining it from taking awa$ PepsiMs emplo$ees and b siness associates. Pepsi has also reserved the right to seek financial damages from &oke at a later date if necessar$. Pepsi has claimed that a do6en middle!level managers and three territor$ managers broke their contracts with Pepsi to *oin &oke in recent months# while d ring the last $ear and half# seven managers + it Pepsi to *oin &oca!&ola. F stice & M 4air of the Delhi high co rt on (pril 50 iss ed notices and s mmons to &oca!&ola and 5. others for Ma$ /. However# F stice 4a$ar ref sed to grant the e' parte in* nction so ght b$ Pepsi India to stop the alleged ind cements b$ &oke in offering emplo$ment to PepsiMs emplo$ees while the s it was pending in co rt. %n behalf of Pepsi# (shok Desai and (r n Faitle$ contended that &oca!&ola had been Qrattled b$ the h ge s ccess of Pepsi in India entered into a conspirac$ d ring the last si' months to ca se loss and damage to PepsiMs b siness interests b$ adopting nfair and illegal means.Q It added that &oca!&ola had approached man$ ke$ managers and had s ccessf ll$ l red a commercial manager of its bottling b siness Ea rav D ggal# and a manager in 3 rat 3ailesh Foshi# besides others.

07

Pepsi charged that while initiall$ these approaches were sporadic# over the last si' months it is clear that &oca!&ola has changed its strateg$ and has decided to conscio sl$ target and approach ke$ emplo$ees of Pepsi at vario s locations in India. The compan$ has alleged that in most cases# the emplo$ees have not been given time to adhere to the :7!da$ notice period and the one!$ear confidentialit$ agreement. The latter deal bars emplo$ees *oining its rivals for at least a $ear. Desai claimed &okeMs actions wo ld directl$ harm the b siness interests of Pepsi# which had invested over I377 million in the co ntr$ in establishing b siness infrastr ct re. In its defense# &oke is e'pected to seek relief in the Indian &onstit tion which states that there can be no restriction on the movement of labor. "esides# an$ effort b$ a compan$ to restrict its emplo$ees from *oining other companies might fall fo l of the Monopolies and @estrictive Trade Practices (ct as an nfair trade practice. Pepsi has cited the instance of &oke snapping p cricketer Favagal 3rinath in spite of the latter signing a contract with PepsiMs sports cons ltant# 25st &ent r$ Media. However# media reports# + oting so rces# said that 3rinathMs contract had been onl$ in the verbal stage. 3imilarl$# Pepsi has charged &oke with ind cing the "oard of &ontrol for &ricket in India to give the sponsorship of the recentl$ concl ded Pepsi Triang lar &ricket 3eries to &oke# as acknowledged in the "&&I s bmission before the "omba$ high co rt# even while a contract was signed with Pepsi. Pepsi has listed the case of &oke tr$ing to ind ce its m sic cons ltant D4( 4etworks Private Btd# which organi6ed the <anni show# to snap its ties with Pepsi and *oin &oke. Incidentall$# in res lts anno nced for the first three months of the $ear# Pepsi has swept &oca!&ola aside. Pepsi has reported a growth of 20 per cent compared to &okeMs 25 per cent d ring the same period. In the first three months of last $ear# Pepsi grew b$ 58 per cent onl$.

05

&oca!&ola India chief e'ec tive Donald 3hort had anno nced that &oke wo ld grow b$ at least 27 per cent for the whole of 5::8. &oca!&ola# along with the Parle brands it ac+ ired when it came into India !! Th ms =p# Bimca# and Eold 3pot !! contin e to dominate India with a .. per cent market share to PepsiMs -3 per cent. " t in the cola segment# &oke comes a poor third after Th mps =p and Pepsi. The c rrent s mmer season is the most important for the cola giants# with cons mption at its peak.

02

ATTLE O* T)E EVERA%ES:

03

PEPSI IS NOT AS PRICEY

@egardless of which soda $o like better tho gh# Pepsi seems the better val e than &oke right now. &oke is trading at a nearl$ 27 percent premi m to Pepsi based on 2772 P9)s even tho gh the two companiesM earnings growth rates are nearl$ identical. CPepsiMs are act all$ a shade higher.D (nd when $o look at reven es# the gap is even more dramatic. &oke is trading at 0 time1s estimated 2772 sales while Pepsi is trading at 3.. times 2772 reven e estimates. "oth companies are e'pected to post slight declines in sales this $ear and an increase of abo t - percent in 2773. D e to this disparit$ in val ation# Feff >anter# an anal$st with Pr dential 3ec rities# sa$s he has a Qb $M rating on Pepsi and QholdQ on &oke. Pr dential does not do investment banking. To be s re# &oke is still the market share leader in soft drinks. %ne of the main reasons the stock has o tperformed Pepsi this $ear was beca se it reported a better than e'pected gain in nit vol me in the first + arter. (nd the compan$ has taken steps to cement its carbonated beverage lead as well gain gro nd in the bottled water market. C&oke and Pepsi both have their own brands of water# Dasani and (+ afina# respectivel$.D %n T esda$# &oke anno nced that it was ac+ iring the 3eagramMs line of mi'ers# tonic# ginger ale and selt6er from Diageo and per nod @ichard. (nd last month# &oke entered into an agreement with Ero p Danone to distrib te )vian bottled water in 4orth (merica.

0-

Some p2etKels w7th that so5aI

" t while &oke relies solel$ on beverages for growth# another factor in PepsiMs favor is its diversit$. Q2hat attracts me to Pepsi is I have more faith in their abilit$ to grow earnings. 4ot onl$ are the$ s ccessf l on the beverage side b t the$ are s ccessf l with salt$ snack foods#Q sa$s &rit Thomas# director of growth e+ it$ for 4ational &it$ Investment Management &o.# the s b advisor for (rmada , nds. (s of March 35# Pepsi was the seventh!largest holding in the (rmada Ta' Managed )+ it$ , nd and the tenth!largest holding in the (rmada )+ it$ Erowth , nd. In fact# PepsiMs carbonated beverages are not even the biggest generator of sales and earnings for the compan$. PepsiMs ,rito!Ba$ brand of snack foods# which incl de ,ritos# Doritos and @old Eold# acco nted for /5.2 percent of reven e and /..3 percent of operating profits in the first + arter. PepsiMs soft drink b siness made p 5: percent of sales and 23.2 percent of operating profit. Pepsi also owns Eatorade and O aker ,oods# having ac+ ired O aker %ats last $ear. %ne potential risk for both Pepsi and &oke is the econom$. 4o# not if it goes back into a recession. If the econom$ contin es to improve# the stocks co ld fall victim to what is known as sector rotation# the selling of defensive companies like food and beverages in order to b $ more economicall$ sensitive companies in the financial services and technolog$ sectors. To that end# shares of Pepsi and &oke fell slightl$ on 2ednesda$ d ring the &isco!ind ced market rall$.

0.

3till# Thomas sa$s signs that the dollar is starting to weaken compared to other c rrencies sho ld prop p both stocks. ThatMs beca se a weaker dollar helps boost the profits of international s bsidiaries# since profits made in a foreign c rrenc$ are converted back to dollars. The ma*orit$ of &okeMs sales are from its international operations# with * st 38 percent of reven e coming from the =.3. last $ear. Pepsi is not as big globall$ b t c rrenc$ fl ct ations are still a factor# as international sales acco nted for 2: percent of reven e in 2775.

0/

Co<e a85 Peps7 78 I857a:

&oca!&ola controlled the Indian market ntil 5:00# when the Fanata Part$ beat the &ongress Part$ of then Prime Minister Indira Eandhi. To p nish &oca!&olaMs principal bottler# a &ongress Part$ stalwart and longtime Eandhi s pporter# the Fanata government demanded that &oca!&ola transfer its s$r p form la to an Indian s bsidiar$. &oca!&ola balked and withdrew from the co ntr$. India# now left witho t both &oca!&ola and Pepsi# became a protected market. In the meantime# IndiaMs two largest soft!drink prod cers have gotten rich and la6$ while controlling 87J of the Indian market. These domestic prod cers have little incentive to e'pand their plants or develop the co ntr$Ms potentiall$ enormo s market. 3ome anal$sts reason that the Indian market ma$ be more l crative than the &hinese market. India has 8.7 million potential c stomers# 5.7 million of whom comprise the middle class# with disposable income to spend on cars# K&@s# and comp ters. The Indian middle class is growing at 57J per $ear. To obtain the license for India# Pepsi had to e'port I. of locall$ made prod cts for ever$ I5 of materials it imported# and it had to agree to help the Indian government to initiate a second agric lt ral revol tion. Pepsi has also had to take on Indian partners. In the end# all parties involved seem to come o t aheadH Pepsi gains access to a potentiall$ enormo s market; Indian bottlers will get to serve a market that is e'panding rapidl$ beca se of competition; and the Indian cons mer benefits from the competition from abroad and will pa$ lower prices. )ven before the first bottle of Pepsi hit the shelves# local soft drink man fact rers increased the si6e of their bottles b$ 2.J witho t raising costs.

00

PRICE
Ma'im m retail price of 377 ml bottles is controlled b$ the &entral Eovernment. The other si6e and packs are priced keeping factors like competition# internal costs# e'ternal costs# and the corporate ob*ective of the compan$ in the mind.

PRO#&CT ?-- ml 3ottles A-- ml 3ottles 0 L7te2 3ottles So5a ?-- ml Ca8s 0.A L7te2 PET 3ottles

SELLIN% PRICE 'Pe2 c2ate( .@?E@ A-0E@ ??. A-P

MAC.RETAIL PRICE 'Pe2 c2ate( .E@ ?DD A.0DD ?A. AAP

Price per bottles the empt$ bottles are priced at @s 527 per crate and the shell at @s 577.

08

PRE*ERENCE O* SO*T #RIN"S IN A #AY

O8ce a 5a4 Tw7ce a 5a4 O8ce a wee< Othe2 .AM .-M AM A-M

60% 50% 40% 30% 20% 10% 0%

50% 25% 20% 5%

Once a Tw ice a Once a day day w eek
*7g92e,0

Once a day Twice a day Once a week Other

Other

0:

PRE*ERENCE TO T)E RAN#

Peps7 Co<e

@-M E-M

80% 60% 40% 20% 0%

40% 60%

Pepsi Pepsi
*7g92e J .

Coke Coke

87

TO %IVE T)E PRE*ERENCES

Mo2e Pop9la2 Pac<ag78g Taste P27ce 0-M 0-M B-M 0-M

80% 60% 40% 20% 0% More Pop !ar Packa"in" 10% 10%

70%

10% Taste Price

More Pop !ar

Packa"in"

Taste

Price

*7g92e J ?

85

MAR"ETIN% STRA%%LES O* COMPANY E**ECTS T)E SALES

Yes No AAM @AM

60% 50% 40% 30% 20% 10% 0%

55% 45%

#es #es
*7g92e J @

$o $o

82

*ORM O* MAR"ETIN% STRATE%IES

Tele=7s7o8 A5=e2t7s78g Newspape2 A5=e2t7s78g O9t5oo2 A5=e2t7s78g Sales P2omot7o8

@AM AM .-M ?-M

50% 40% 30% 20% 10% 0%

45% 30% 20% 5%

Te!e%ision &d%' Te!e%ision &d%'

$ewspaper &d% $ewspaper &d%

O tdoor &d% O tdoor &d%

(a!es Pro)otion (a!es Pro)otion

*7g92e J A

83

C)AN%E RAN# ON T)E ASIS O* PRICE RE#&CTION

Yes No A0M @FM

#es 52% 51% 50% 4*% 48% #es

*7g92e J E

$o

51%

4*%

$o

8-

MORE E**ECTIVE A#VERTISIN%

Peps7 Co. Co<e Co. A-M A-M

MMM

80% 60% 40% 20% 0% 50 % % % % % Pepsi Co' Coke % Co' % % Pepsi Co' Coke Co' % % *7g92e J B % % % % % % % % 8. % % 50 %

% % % % CREATIVE AN# APPEALIN% A#VERTISIN% O* T)E % SO*T #RIN" COMPANY% % % Peps7 Co. @AM % Co<e Co. @AM %

80% 60% 40% 20% 0%

45%

45%

Pepsi Co' Pepsi Co'

*7g92e J D

Coke Co' Coke Co'

8/

INNOVATIVE AN# ECCITIN% O**ERS

Peps7 Co. Co<e Co. AAM @AM

60% 50% 40% 30% 20% 10% 0%

55% 45%

Pepsi Co' Pepsi Co'

*7g92e JF

Coke Co' Coke Co'

80

P& LIC RELATIONS AN%LE

I88o=at7=e a85 e>c7t78g o::e2s
The respondents were asked to compare between Pepsi&o and &oca!&ola WIX Btd. in terms of who comes p with innovative and e'citing offers# or rather things which are livel$ and interesting to participate. .7J of the respondents replied in favor of P&I while 37J responded in favor of &&I. 50J of the respondents tho ght that both were e+ all$ good and it varied with time# place and occasions. 3J of the respondents were not aware of all the activities and were modest to admit it. O ick and responsive to different occasions and events. &omparing Pepsi&o and &oca!&ola WIX Btd# ..J of the respondents replied that it was ndo btedl$ Pepsi&o. The$ s pported their statement with reasoning# sa$ing so that Pepsi&o was first to associate with India1s .7 $ears of independence. %n the other hand 22J of the respondents felt that &oca!&ola WIX Btd. is not trailing back. It sponsors mega events like different &ricket to rnaments# %l$mpic Eames# 2orld & p ,ootball etc.5:J of the respondents came p with a more balanced answer. The$ said if one of the companies sponsors

%ne event it1s s re that the other will definitel$ go on for the ne't. It1s a to gh t ssle and is reall$ diffic lt to demarcate toda$ 88

MAR"ET S)ARE PERCENTA%E IN NE! #EL)I

CO"E PEPSI P92e #278<s AEM ?AM FM

*%

35% Pepsi Coke P re +rinks

56%

*7g92e , 0-

8:

MAR"ET PERCENTA%E S)ARE IN ALL OVER IN#IA .--D

Peps7 Co<e Local 2a85

@@M A0M AM

5%

44%

51%

Pepsi Coke ,oca! -rand

*7g92e , 00

:7

RAN# PRE*ERENCES

In a s rve$ done b$ ( A M maga6ines on the best marketing companies in India. Pepsi and &oca!&ola were also entered. The res lts were as followsH Peps7 Coca,Cola The 2es9lts o: FA we2e : Peps7 Coca,Cola , , Bth Fh , , Ah @h

This shows that both the companies are pa$ing more attention to the marketing of their prod cts. Pepsi is higher p on the scale than &oca!&ola. 2e can see that b$ the brilliant advertising done b$ Pepsi# which can be seen on ever$ hook and corner of metro cities cons mers# so prefer Pepsi advertisements and other activities of Pepsi# to that of &oca! &ola.

:5

*IN#IN%S G ANALYSIS
The Indian soft drinks market is at 5-7 million cases per $ear. This is ver$ low# even as compared to Pakistan and "angladesh. (ll these factors together have contrib ted to a 27J growth in the soft drinks ind str$.. If this demand contin es to grow at 27J grow at 27J ann all$# within 57 $ears the vol mes co ld reach 5 billion cases. This kind of growth is the reason for the entr$ of the two giants of the soft drink ind str$ of the world. &oca!&ola Pepsi &oca!&ola and Pepsi together control :0J of the - entire Indian markets. The rest of the 3J is shared b$ companies like &adb r$!3chweppes and &ampa!&ola. The total no. of case sold is 5-7 million of these 00 million cases of &ola drinks are sold and /3 million of non!cola drink. There is a rapid increase in the sale of cola soft drinks. 2hereas in 5::7# the$ acco nted 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. %ne of the reasons for this co ld be the aggressive marketing strategies for &ola drinks b$ Pepsi and &oca!&ola. The race to + ench the great Indian thirst had deigned.

:2

Peps7 :78578gs:
Pepsi is the 24D largest selling soft drink in India toda$. In D)BHI it has 3.J of the market share. In India it has --J of the market share making it the largest selling soft drink# b t the second largest compan$ in terms of sales. The sales of Pepsi is appro'imatel$ @s. 5#777 crore ann all$ in India of this onl$ abo t @s. 37 crore ann all$ is credited to the foods section of Pepsi. The rest is all earned b$ the soft drinks. The soft drinks in Pepsi ,oods BTD incl deH 5. Pepsi &ola 2. Mirinda %range 3. 0!=p -. Mirinda Bemon

The main advantage the Pepsi has over its nearest competitor i.e.# &oca!&ola is that of it1s was the first m ltinational to enter India# in the soft drinks sector. Pepsi officials and VDial!a!Pepsi1 scheme to grow the market# instead of giving disco nts at the retail level. (nother point which attrib ted to Pepsi1s s ccess is the bottling operations. Pepsi does most of its bottling on its own. (nother significant investment of Pepsi has been fo ntains. ,o ntains have considerabl$ increased sales of Pepsi# as the$ have offered cons mers a whole new wa$ to e'perience soft drink. (ccording to a st d$ done# 87J of all soft drinks are cons med on premise# at the point of p rchase# rather than at home; th s the fo ntain initiative has paid off.

:3

Th s we see that Pepsi has followed aggressive marketing strategies making the$ get into the minds of the cons mer b$ being visible inside and o tside the cons mers home b$ wa$ of television# radio 4ewspapers# hoarding# sales!promotion schemes# etc. Pepsi has been voted the n mber one c stomer service compan$ across categories in terms of reg larit$# availabilit$ responsiveness and initiative.

:-

PRESENT COMPETITON ET!EEN COCA COLA AN# PEPSI

If we see the present scenario its hard to tell which brand is winning the cola wars as Pepsi had e'tended its cola wars to other sectors like ,@IT%!B(<3 and 4IM"%%P which is giving to gh competition to coca ?cola which doesn1t target on these sectors.

3econd aspect which is to be given in consideration is that# both the companies are spending heavil$ on advertisement and more celebrities are roped in b$ both the companies to fight the competition.

@ecentl$ &%B(!&%B( beverages (&T%@3 IM@(4 >H(4 (4D >(B>I for a new ad ;to repl$ back to this a new ad b$ P)P3I beverages feat ring (&T%@ @(4"I@ >(P%%@ and KI4DH= D(@( 3I4EH came waves at present. p which is making

&oke is served in M& D%4(BD3 and there we won1t find Pepsi prod cts even the coffee served is of E)%@EI( which is a coca!cola brand# same is the case of PIPP( H=T and >,& which is owned b$ P)P3I &% there onl$ Pepsi prod cts are served ###this had lead 2 clear war in resta rant segment as wellL

:.

P)P3I is targeting $o ng generation and their ad campaigns are a clear e'ample of that# whereas coca!cola is targeting the famil$ as a whole which has been its old form la from ages.

Presentl$ coca!cola ma$ be leading in beverages like coke# b t its facing severe competition from Mirinda# 4imboo6 and snack ind str$ where P)P3I is r ling thanks to its >=@>=@) ad that has led to great sales for P)P3I &%.

Tho gh in packed drinking water >I4B)< C&%&(!&%B( "@(4DD and (&O(,I4( CP)P3I &% "@(4DD both are treated e+ all$ b$ c stomers. Moreover "I3B)@I still r les in this segment.

:/

*&T&RE SCENERIO O* COCA COLA V/S PEPSI

The &%B( 2(@3 between coca!cola and Pepsi wo ld f rther grow and in m$ view its never ending

"oth the companies wo ld tr$ to become 4%5 and there wo ld (D 2(@ between the two which wo ld prove to be beneficial for actors9actresses as the$ wo ld earn more thro gh advertisements.

Pepsi have started advertisements with female actresses D))PI>( P(D=>%4) and &%&(!&%B( which had p till know onl$ endorsed male actors for the 5 st time endorsed >(B>I of D)KD fame with IM@(4 >H(4 in its new ad.

2ith the coming p of &%MM)42)(BTH E(M)3 2757 in 4)2 D)BHI # both the brands wo ld tr$ to attract c stomers towards itself with heav$ promotion and ad campaigns to b ild new c stomers and increase there share in market as well as strengthen their brand val e and earn profits.

:0

+&ESTIONNAIRE
+.0. !)IC) RAN# !ILL YO& PRE*ERENCE O* SO*T #RIN"S IN A #AYI

O8ce a 5a4 Tw7ce a 5a4 O8ce a wee< Othe2 +... !)IC) RAN# ARE YO& PRE*ERENCE TO T)E RAN#I Peps7 Co<e +.?. !)IC) PARTIC&ALAR RATE TO %IVE T)E PRE*ERENCESI Mo2e Pop9la2 Pac<ag78g Taste P27ce +.@. ARE T)E MAR"ETIN% STRATE%IES O* A COMPANY A**ECT ITS SALESI Yes No +.A. !)IC) *ORM O* MAR"ETIN% STRATE%IES IS MOST E**ECTIVE IN T)E MAR"ETI Tele=7s7o8 A5=e2t7s78g Newspape2 A5=e2t7s78g O9t5oo2 A5=e2t7s78g

:8

Sales P2omot7o8

::

+.E. !ILL YO& C)AN%E T)E RAN# ON T)E ASIS O* PRICE RE#&CTIONI Yes No +.B. !)IC) RAN# MORE E**ECTIVE IN A#VERTISIN%I Peps7 Co. Co<e Co. +.D. !)IC) RAN# )AS CREATIVE AN# APPEALIN% A#VERTISIN% O* T)E SO*T #RIN" COMPANYI Peps7 Co. Co<e Co. +.F. !)IC) RAN# )AVIN% T)E INNOVATIVE AN# ECCITIN% O**ERSI Peps7 Co. Co<e Co.

+.0- #o 4o9 th78< that coca,cola a85 Peps7 3oth a2e la=7shl4 spe8578g o8 the72 a5 campa7g8s to att2act c9stome2s. YES NO

577

Co8s9me2s
,or the p rpose of the st d$# + estionnaires were prepared for the &ons mers. &are was taken to interview all t$pes of cons mers# i.e.# H a. Different age gro ps b. Males and females c. People from different localities# etc. In all abo t /7 cons mers were interviewed. The concl sions that one can draw from these answers provided b$ the cons mers showed that marketing activities do form a ma*or part of the decision. %ne thing that was common amongst all the cons mers who were once a da$ or once a week. The n mber one factors the infl ences a c stomer while b $ing a soft!drink was taste. This was tr e for all the cons mers who were interviewed. The rest of the concl sions as ded cted from the + estionnaires are as followsH The $o nger generation preferred soft drinks to the older generation. a. &hildren p to 5. $ears of age liked to have soft drinks p to 2!3 times a da$. b. <o ng ad lts liked to have soft drinks p to 5!2 times a da$. c. (d lts liked to have soft drinks abo t once or twice a week. &hildren preferred &oca!&ola ,anta# Mirinda orange. <o ng ad lts liked Pepsi. The older generation preferred &oca!&ola# Bimca A Mirinda Bemon. The reason given for choice of favorite1s soft drink was taste and eas$ availabilit$. %nl$ if the cons mer liked the taste of drink# he wo ld have it again.:.J of the cons mers felt that marketing strategies of the compan$ did affect the sales of their soft!drink. Marketing strategies made the cons mer tr$ a drink for the first time. The second time ro nd it was the cons mers choice himself and not strateg$ co ld affect that. <o ngsters were more acceptable to change. The$ tried different drinks# &ola and non!&ola. (d lts stick to one and the$ prefer drinks that do not affect their health# like Bimca.

575

Ma*or n mber of people fo nd television advertising to be the most effective. <o ng and the old liked to watch the advertisements on television. 3ponsoring events# o tdoor advertising and sales promotion schemes were second choice of the cons mers. =nder television advertising# Pepsi came in as the n mber 5 favorite of the people the advertisement of 3hah!@ kh >han and the dog was the favorite of the cons mers. Their new advertisement of Mirinda Bemon is also lifted b$ the people. The advertisement that came in second was the &oca!&ola advertisement of the people &ricket and the song M st!>alander going on at the back. These# advertisement remained most in the minds of the people. Most of the cons mers felt that Pepsi was the market leader in the soft!drink ind str$# in Delhi well as in India.

::J of the cons mers interviewed felt that the marketing strategies of the &oca!&ola and Pepsi have helped them in attaining the h ge market share that the$ possess. 2omen and children prefer cans as compared to men. These are the ma*or concl sion that can be drawn abo t a cons mers1 behavior. &ompanies m st take the initiative of finding o t the habits of the cons mers and then changing them# in their favor.

572

ANALYSIS O* +&ESTANNAIRE
A- 2espo85e8ts we2e chose8 amo8g 57::e2e8t age g2o9ps :o2 co859ct78g the s92=e4

*IN#IN%S:

5. <%=4E3)T@3 prefer P)P3I &%B( over &%>) 2. %lder age gro p prefer Mirinda lemon and limca over coke and Pepsi cola 3. (D3 pla$ a ma*or role in choosing of brand -. &elebrities have a great effect on people cons ming cold drinks .. People prefer 4imboo6 CPepsi coDover Pepsi cola and coke. /. In terms of innovative and e'citing offers Pepsi co leads coca!cola. 0. 2hen the + estion of more effective advertisements was asked mi'ed reactions came with .7!.7 response for both &oke and Pepsi. 8. Price pla$s an effective role for choosing of prod ct among I4DI(4 &%43=M)@3. :. T(3T) came o t to be most important for the cons mers in preferring for a partic lar brand. 57. T)B)KI3I%4 came o t to be most effective for ad campaigns as respondents of all age gro ps watch tv.

573

RECOMMEN#ATIONS
3oft drinks are an imp lse prod ct. 2hen a person is thirst$# he wo ld first think of water or tea. 3ome even wo ld prefer V4imboo6 Y The Indian pop lation is the largest in the world toda$# there can be no other co ntr$ in the world# which provides so m ch of an opport nit$ for the soft!drink man fact rers. The Indian soft drink market is at 5-7 million cases per $ear# this is ver$ low. Th s the cons mption of soft drink can go p. 3inc558Ze the entr$ of &oca!&ola into the co ntr$ the ind str$ is growing at a rate of 27J ann all$. If this rate is maintained# then b$ the $ear 277. the market of soft drink wo ld be 5 billion cases ann all$. However &oca!&ola wants to accomplish this feat b$ them. To do this the ind str$ has to take certain steps. (ll the companies are fighting to get a ma*or share of this growing market. The$ sho ld all tr$ to increase the total market along with their individ al shares. %n the basis of all the field work and table work done# some s ggestions can be made# which ma$ help the compan$ in increasing the total market as well as the sale of the companies. The vario s s ggestions that can be made are as followsH! 3oft drinks retail at prices between @s. / and @s. 57. These are e'pensive when meas red against p rchasing power. (ccording to one st d$# it takes Indian .7 min tes of work to be able to b $ a bottle in other co ntries# the norm is five min tes. Th s to increase the total market of soft drinks# man fact res sho ld tr$ and decrease the prices# so as to increase sales. (vailabilit$ is a ma*or factor# which makes the cons mer b $ a soft drink. 3oft drinks sho ld be made available more readil$ than present. There are onl$ 377# 777 retailers stocking soft drinks in India. Th s retailing o tlets sho ld be increased. (lso related to this point# is vending machines. In developed machines# vending machines are kept in all cons mer areas# like s per markets# schools# am sement parks# local markets# etc. These

57-

Tempt a person into b $ing the soft drink. 3o if vending machines are p t in strategic areas# it wo ld definitel$ increase cons mption of soft drinks. 3oft drink cans which are ver$ convenient# as the cons mer can take them an$where# nlike a bottle# are ver$ e'pensive retailing from @s. 5.!@s. 58. To increase sale of cans# this price sho ld be bro ght down. Innovations increase sales of compan$. ,or e.g. fo ntain Pepsi increased sales of Pepsi &ans increased sales of &oca!&ola. Th s the companies hav constantl$ come o t with innovative ideas.)'ample!377 ml plastic bottles# which the cons mer can take with him# nlike the glass bottles# which he has to ret rn. Plastic bottles can even be sed again b$ ho seholds for vario s p rposes. The companies sho ld cond ct st dies to get to know abo t cons mer habits. ,or e.g. &oke knows that (mericans see /: of its commercials ever$ $ears # p t ..2 ice c bes in a glass and prefer cans to pop o t of vending machines at a temperat re of 3. degrees. If the companies know all this and more abo t Indian cons mer behavior# it co ld tell them how to sell their drinks# so as to increase sales. It is seen In India# that people prefer having their drinks with or after food. &ompanies co ld have commercials which show people en*o$ing their drink with a good meal# so that cons mers associate drinking soft drinks while having food. &ompanies sho ld tr$ to ed cate the cons mer abo t the health related s b*ect. ,or e.g.H! aD Bimca is recommended to patients b$ doctors. bD &ola drinks are known to be ver$ fattening # " t in fact cola drinks contain no calories from fat the$ contain calories from s gar which can be easil$ b rned off. The soft drink cans and plastic bottles sho ld mention the calories and other related information on the packing. &ompanies sho ld tr$ to b ild high brand e+ it$. This provides a n mber of advantages to the compan$. aD The compan$ en*o$s red ced marketing costs beca se of high level of cons mer brand awareness and lo$alt$.

57.

bD The compan$ will have more trade leverage in bargaining with distrib tors and retailers since the c stomer e'pects them to carr$ the brand. cD The compan$ can change a higher price than its competitors beca se the brand has higher perceived + alit$. dD The compan$ can more easil$ la nch brand e'tension. eD (bove all# the brand offers the compan$ some defense against fierce price competition. The companies sho ld go in for diversification %nce the brand is known# it is easier to sell more of its prod cts. ,or e.g. &oca!&ola clothes have sold abo t I577 million worth of clothes and accessories. This wo ld increase reven es of the compan$. The companies sho ld not have competitor m$opia. It is more often the latent compan$ than the c rrent competitor who b sies the compan$. Pepsi and &oca!&ola are so b s$ fighting with each other# that the$ have left the non!cola sector open for &adb r$! 3chweppes.

(dvertising is a wa$ b ilding brand image. It does not promote + ick selling. Th s companies sho ld sed advertising onl$ for long advertising can be sed forH aD "rand image b ilding bD @eminder advertisingH reminding people to b $ these drinks. cD @einforcement advertising!Telling people that the$ have made the right choice. Television advertising seems to make a impact on the cons mers Cbased on + estionnaire answersD so companies sho ld concentrate more on television advertisements. 3ales promotion tools create a stronger and + icker response. Th s sales promotion tools s ch as co pons# contests# premi ms and the like sho ld be sed to dramati6e prod ct offers and to boost sales. 3ales!promotion effects are s all$ short r n and ind ce the people to p rchase soft drinks# now.

57/

&oca!&ola and Pepsi have taken p sponsoring of events on a ma*or scale. (ll kinds or events# whether big C2ills 2orked c pD or small Ccollege contestsD have either Pepsi or &oke banners of sponsorship. The effectiveness of this can be + estioned. 2hether these activities increase sales or not is a big h ge + estion mark. Pepsi&o and &oca &ola CID Btd. sho ld red ce their massive spending on sponsoring events and tr$ and channel this mone$ into more prod ctive activities# like innovative packaging etc. It is recommended that compan$ sho ld introd ce more and more c stomer oriented schemes and conte'ts. ,or e.g. Pepsi1s new campaign Pepsi cool malG in which the$ are giving free gifts to their c stomers. The compan$ sho ld maintain a small gro p of missionar$ sales manG whose f nctions sho ld be to g ide distrib tors and retailers# keep a constant watch over the prevailing sit ation to provide the contin o s feedback to the compan$. It is also recommended that companies sho ld la nch soft drink in small pack 277 ml and 5.7 ml. Th s we see that there vario s steps which can be taken b$ the companies to increase their sales and to increase the total market share.

570

I LIO%RAP)Y

Ma2<et78g Ma8ageme8t,

4 Ph7l7p "otle2

!!!.PEPSICO.COM

!!!.COCA,COLA.COM

!!!.COLA,!ARS.NET

A#VERTISIN% MANA%EMENT JAIN

Y JET)!ANEY AN#

COLA !ARS

Y J.C.LO&IS

578