3.

1 MARKETING MIX

WHAT IS A MARKETING MIX?

It is a set of controllable tactical marketing tools - product, price, place & promotion - that the

firm blends to produce the response it wants in the target market.

THE FOUR PS OF THE MKT’S MIX

PRODUCT PRICE
Product Variety List Price
Quality MRP
Designs Discounts
TARGET
Features Allowances
CUSTOMERS
Brand name
INTENDED
Packaging

PLACE
PROMOTION
Channels
Advertising
Coverage
Personal Selling
Assortments
Sales Promotion
Locations

Fig. 2

Effective marketing would be blending the marketing mix elements into a coordinated

programme designed to achieve the company’s marketing objective by delivering value to

consumers.
Cola - Cola has always worked upon their marketing mix tools since its entry into India and

Coke’s objective has been to strengthen their brand in important segments of the market and to

gain a competitive edge over Pepsi brands.

3.2 MARKETING MIX OF COKE

PRODUCT

Coke was launched in India in Agra, October 24, in '93', soon after its traditional all Indian

launch of its Cola. at the sparking new bottling plants at Hathra, near Agra. Coke was back with

a bang after its exit in 1977.

Coke was planning to launch in next summer the orange drink, Fanta-with the clear lemon drink,

sprite, following later in the year.

Coke already owns more brands than it will over need, since it has bought out Ramesh Chauhan.

Coke just needs to juggle these brands around dextrously to meet its objectives, to ensure that

Pepsi does not gain market share in the process.

For if a vacuum develops, it is Pepsi which has the brand muscle and the distribution network to

grab customers today-not Coke. But Coke could not reduce its marketing support for Thums Up

until its own Cola would hit the four major metros (Delhi. Bombay, Calcutta and Madras)

Therefore, Coke had to give its existing levels of support for Parle's brands and would push

Thums Up and Limca. Coke has plans to' use quality and hygiene as USPs. Their aim seems to

be to expand market by market, Learning from their mistakes.

In, 1998 Coke's product line includes, Coca-Cola, Thums Up, Fanta, Gold Spot, Maaza, Citra,

Sprite, Bisleri Club Soda and Diet Coke.

PACKAGING

Coca-Cola India Limited (CCIL) has bottled its Cola drink in different sizes and different

packaging i.e., 200 ml bottle, 300 ml. Bottle, 330 ml. Cans, 500 ml. Bottle fountain Pepsi, and

bottles of 1 and 1.5 ltr

PRODUCT POSITIONING

One important thing must be noticed that Thums Up is a strong brand in western and southern

India, while Coca Cola is strong in Northern and Eastern India. With volumes of Thums Up

being low in the capital, there are likely chances of Coca Cola slashing the prices of Thums Up

to Rs. 5 and continue to sell Coca Cola at the same rate. Analysts feel that this strategy may help

Coke since it has 2 Cola brands in comparison to Pepsi which has just one.

Thums Up accounts for 40% of Coca Cola company's turnover, followed by Coca Cola which

has a 23% share and Limca which accounts for 17% of the turnover of the company. (Thums up

being the local drink, its share in the market is intact, forcing the company to service the brand,

as it did last year Mr. Donald short CEO, Coca Cola India, said that, " we will be absolutely

comfortable if Thums Up is No. 1 brand for us in India in the year 2005. We will sell whatever

consumers wants us to". Coca Cola India has positioned Thums up as a beverage associated with

adventure because of its strong taste and also making it compete with Pepsi as even Pepsi is

associated with adventure, youth.

3.3 COKE IN INDIA

Coke gained an early advantage over Pepsi since it took over Parle in 1994. Thus it had ready

access to over 2,00,000 retailer outlets and 60 bottlers.

Thus Coke had greater than Pepsi because it had ready access to the Parle network. For example

in 1994 Pepsi had 20 bottlers to serve the entire country while Coke had Parle’s 60 bottlers. In

an important market like Delhi Pepsi had just one bottler while Coke had four. On the other

hand Pepsi had taken over the Dukes Mangola of Mumbai.

In 1993, Pepsi Foods Ltd. had control over the Rs. 1,100 - Crore Indian Soft Drinks market. At

that time, the soft drinks trycoon Ramesh Chauhan, was heading the Parle group and at that time

was deciding to explore the possibility of selling his best rolling brands to Coke, rather than to

Pepsi. Pepsi had entered the market 3 years before Coke did. Before the Coke-Parle tie-up in

'93- Ramesh Chauhan had 2 options before him- (1) to stick around, fight it out again and

hopefully, continue with his number one position. (2) to sell out to Coca-Cola for a good return.

This risk of losing out to one of the multinationals, eventually, seemed to be throwing up the

second alternative. Ramesh Chauhan told business world (India's most popular business
magazine) that "it is better to seek a compromise than to fight a lone battle". But he was wisely

simultaneously taking steps to safeguard his market share. In a few months, Parle's products will

be launched in 250 ml instead the current 200 ml. The indications are that the company will hold

the price line. Incidentally, both Pepsi and Coke (if it finally gets in) will cost more than local

brands because of the 300% duly on the imported ingredients. However, this scenario was

taking place pre-liberalization period and hence implied a very high duty on imported items.

Entry of Pepsi and Coke in India or their proposals were at that time being opposed because of

the impact of first - strike on the minds of consumers. If Coca-Cola is allowed an easy and quick

entry through a window established by the government, there can be no justification for denying

similar access to Pepsi Co.

Basically what was wrong at that time with the Coke proposal was that while the Pepsi deal

could go through under the camouflage of horticultures and agriculture development as their

proposal stated, a pure soft drinks project was not so politically palatable (as it would greatly

hamper the indigenous industry).

Coke had plans, to invest $ 20 million in India and Pepsi was going to pump in Rs. 300 crore

more. Ramesh Chauhan greatest compulsion, to 90 in for the 2nd option was that many of his

biggest bottlers were preparing to desert him for Coke, .since the bottlers accounted for nearly

one-third of Parle's sales. Parle's biggest bottles in the Easter region,. Goenka, accounted for

80% market share in Calcutta, felt that the future lay with Coca-Cola, no Indian company had the

financial muscle to take on Coke.

Also, there was the most convincing factor for the tie-up, that Parle's Position in the Indian soft

drinks market and Coca-Cola's marketing strengths and experience would make an unbeatable

combination. At that time according to the world’s most popular and well known magazine,

Fortune, had rated Coke as the world's best brand. Even Coke would greatly benefit from the tie-

up, as Coke with Parle’s wide spread bottling and distribution network, which was spread over

more than a thousand towns and cities and the gradual withdraw of Parle brand would ensure

Coke would be the king. Parle's best known brands include Thums Up, Limca, Citra and others

were GOLD SPOT and Maaza.

The biggest advantage to Parle from the tie-up would be an instant gain of $ 40 million, which

could be used profitably in other ventures.

According to a report the deal was that, Parle Exports had transferred the rights of all its reputed

soft drinks brands to Coca-Cola Company, USA. In short, Coca-Cola Company became the

exclusive owner of Thums Up, Limca, Gold Spot, Citra and Maaza and could therefore,

withdraw them from the market whenever it would want to.

Under the agreement, the existing bottlers of Parle Exports would continue to produce Parle

brands under the licence from the Coca-Cola Company.

The U.S. Multinational proposed to introduce its international brands -Coke, Fanta and Sprite at

an appropriate time. The Parle bottlers will be bottling these Coco - Cola brands also. The exact

nature of Parle, Coca-Cola tie-up is given below :

So, Ramesh Chauhan, sold his soft drink brands of the U.S. Multinatinal for ($ 40 million) and is

presently a major Coke bottler. Delhi - based Parle Chairman gave up his ownership of his soft

drinks brand (Thums Up, Limca, Citra and Gold Spot) and was awarded the bottling franchisee
for Delhi, Bombay, Surat and Ahmedabad. Coke depends on the 54 bottling plants which it was

inherited from the Parle by out.

So, logically all brands of Parle as well as Coca-Cola will be marketed together. The only

problem being that Parle bottlers would not be able to meet the peculiar quality requirements of

Coke.

Model of Brand Selection

 Customer buys on value

 Value equals quality relative to price

 Quality includes all non-price attributes that count in the purchase decision