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Pepsi
Pepsi
Pepsi
O FT
G S
L I N
K I L
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Facts of the case
THE INTERNATIONAL SCENARIO:
Rivalry between Coke and Pepsi and each was out to beat the
other.
In 1987 Coke & Pepsi have 40.3% & 30.2 % of the U.S market
respectively.
Had an image of soft drink manufacturer and marketer.
Apart from Pepsi cola co. and Pepsi cola International, it had six other
divisions which had given it a commanding presence in Food Business.
Pepsi Co. acquired Kentucky Fried Chicken chain in 1986, with this Pepsi
became the owner of the world’s largest restaurant chain which also includes
Pizza hut and Tacco Bell with a total of nearly 16500 outlets in 1987.
Pepsi had so far made inroads in 151 countries – 150 before India.
THE INDIAN SCENARIO:
Limca was the largest selling brand, cola was the largest selling flavor accounting for
40 % of the market share Lemon drinks followed cola with 31 % and orange drinks
had only 19 %.
Lemon drinks were more popular in Metros.
In 1977 a change at a centre led to the exit of the Coca cola.
The first national cola drink to pop up was Double Seven.
Pure drinks, Delhi switched over to Campa Cola after coke’s exit and by the end of
seventies, it was only Campa cola in the Indian cola market.
In 1980 another cola drink, Thumps Up was launched by Parle but was objected by
Pure Drinks to its being called a cola drink.
Thrill by Mc Dowell's in mid eighties and by the late eighties there was Double cola
which entered the market with the USP of an American Cola.
The Indian soft drinks industry was estimated to be worth Rs 900 crores.
In 1978 Parle led the Indian soft drinks market, in 1983 its market share was 43
percent, 44 percent in 1987 and in 1990 it reached to 70 percent whereas its chief
rivals Pure drinks’ share had been declining in 1978 it was 28 percent , in 1983, 22
percent and in 1987 it was 21 percent.
An additional dimension to the Indian soft drinks was fruit drinks. In 1988 it was
valued at Rs 40 crores and was growing at a rate of 20 percent which was faster then
ENTRY OF PEPSI IN INDIA – PHASE I:
2- Challenger –
Pure Drinks-Campa cola
Contd…
3- Followers –
Mc Dowell’s Thrill
Double Cola
Other Characteristics
Medium Competition
2% of Advertisement
Inexperienced and Apprehensive of Fighting
International Player .
Low Installation Cost and Equipment Value Relatively
Inferior
B-Partners/ Collaborations
Legal Environment
Economic Environment
Socio-Cultural Environment
Technological Environment
1-Political Environment
Development of Economy.
Intent of Development of Local Players Only.
Opposition to promotion of carbonated drinks.
Fear of invasion of foreign brand.
Opposition to reliance on foreign technology .
Desire to get best deal out of foreign collaboration.
Desire to increase exports .
Desire to earn foreign exchange.
2-Legal environment
Severe restrictions in equity through FERA
IDENTIFICATION
APPRAISAL
ANALYSIS
REACTION
Flexibility –in changing offers .
Operating on strength
Brand name
Soft drink
Ensuring self benefit in benefit of others .
Going beyond requirement making it look
like an initiative.
Issue-4-How do you see the emerging
environment in the Indian soft drinks
market ?
Production
Market
Competition
Promotion
Others
Production
Better & more efficient means of production
Introduction of variety of flavours
More choices available to the buyers in terms of
prodcuts, brands & flovors
Market
Growth in market size
Spread of market of Pepsi
Probable entry of Pepsi in fruit drinks
Competition
Increase in the degree of competition
Probable exit of Pure Drinks
Consolidation of small players
Incoming of more foreign players especially Coke
Promotion
Exposure to new forms of strategies & techniques
Increase in the budgetary allocation to advertisement
& sales promotion
More aggressive form of promotion to be observed in
the market
Others
Less political hostility towards entering of foreign
players
Relaxation of legal requirements
Better employment generation
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