APROJECT ON

Measurement of Advertising Impact

On Coca Cola

EXECUTIVE SUMMARY

The problem statement under consideration is “to study the impact of chota coke

ads on its sales”. Coke is a product very commonly consumed by us. Coke’s

advertising has always been very popular and important point is how much has

this advertisement aided in improving its sales. This is the basic aim for taking up

this project.

Recently coke has adopted more indianisation to its ads with “paanch matlab

chota coke” and introduction of chota coke (Rs 5). Therefore this study is based

on finding the impact of these ads on the company sales. The project is important

with respect to advertising agencies, students for future research and companies

(in terms of importance of an ad in bringing sales to the company).

The literature survey includes official coke statistics, newspaper and magazine

articles and the websites. I have used books on research and advertising

management by authors like Roger Barton, Frank Jefkins and Philip Kolter. The

target population has been that of students (age 15-25 yrs) of Mira road. Pilot

studies, followed by survey method (self-administered questionnaire) have been

used to collect the data.

The analysis has been done using SPSS. The important findings of the survey

are:

1. The maximum coke consumers drink coke 1-5 times in a month.

2. 97% of the respondents consumed coke.

3. All the respondents have seen the ad.

4. Advertisements of chota coke have been viewed maximum on TV and

hoardings

5. Aamir khan is the most preferred brand ambassador

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6. 69% of the people felt like buying coke after watching the Aamir khan

chota coke commercial.

7. 200 ml (Chota Coke) is the most preferred quantity of consumption.

8. Loyal customers constitute 32% of the respondents

9. We have accepted our null hypothesis.( the proportion of coke consuming

population has increased after watching the commercial)

Thus i can conclude that my study has been successful and the ads have made

a definite impact on its sales and people have indeed started consuming more of

coke after watching the commercial.

The coke ad therefore has the ingredients of successful advertising. It has the

creativity to attract and win the attention, interest and eventually the action of

consumers by using innumerable media leading to higher sales and customer

value.

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CONTENTS

Particulars Page no.

Problem statement 7

Research objective 8

Literature review 11

Sampling design 24

Research design 25

Data analysis 29

Conclusion 40

Appendix 41

Bibliography 44

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PROBLEM STATEMENT

To find out if the Chota coke advertisement had an

impact on the sales of coke.

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RESEARCH OBJECTIVE

TO STUDY THE IMPACT OF THE NEW “CHOTA COKE ADS”

ON ITS SALES

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IMPORTANCE OF THIS PROJECT

This project has grave importance in terms of learning as well as being a

base for future research endeavors. First of all it is the introduction to the world of

advertising, its impact, its relation to sales and overall contribution to marketing.

Secondly, it teaches various methodologies used by MNCs like Coca-Cola for

growth of its sales. Third, it shows how a company needs to change its strategy

when it enters a foreign market.

The project is a learning for me in my development towards becoming masters

in business management. The various hurdles as well as supporting pillars

display a valuable opportunity to learn from it and apply it in my practical life for a

bright future. Lastly it teaches me the importance of the advertising.

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REASONS FOR SELECTING THIS PROJECT :

Coke is a product very commonly consumed by us. Coke’s advertising has

been always very interesting but the important point is how much has this ad

aided in improving its sales. This is the basic aim for taking out this project.

Secondly, it makes me aware about various steps of research

methodologies. Experience is the best teacher and i will know about the

intricacies of data collection, conducting research and presenting the findings in a

lucid manner.

I can very easily relate to the product since we I myself is a consumer of

coke and as a MNC its policies have always been innovative and differentiating.

This prompted me to take a company like Coke.

Being marketing students, advertising is one of the important sections in

marketing. I am genuinely interested in advertising and i would like to know how

much role advertising plays in the sales generation of the company.

The advertisement “Paanch matlab Chota Coke” has been very popular

among the masses and the classes alike. This was the reason why i selected this

ad because it covered two factors: The price of Rs. 5 and introduction of 200ml

bottle with Amir Khan to promote it.

Recently, coke has adopted more indianisation with its “thanda matlab

Coca-Cola “ad campaigns and the introduction of Chota coke (Rs. 5/-).

Therefore, the study is based on finding the impact of these ads on the company

sales.

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LITERATURE SURVEY

PRIMARY SOURCES:

Official coke statistics

Periodicals

Internet web-sites

SECONDARY SOURCES:

BOOKS:

1. Handbook of advertising management by Roger

Barton

2. Advertising by Frank Jefkins

3. Marketing management by Philip Kotler

NEWSPAPERS:

1. The Times of India

2. The Economic Times

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LITERATURE SURVEY

There is no doubt that any one would have missed the ’’Paanch matlab

coca cola’’ punch line by AAMIR Khan or ’’Thanda Matlab Coca Cola’’. The Coke

people have popularized their product with these wonderful punch lines.

Now in the remotes of India people actually are asking for THANDA of Rs.

5/-. This punch line is used everywhere nowadays as it is very catchy. The line

“Yeh kitne ke bara bar hoga” is used a lot with teenagers for fun among

themselves.

But in spite of this absolutely cool commercials is the sale of Coke rising in

the market is the question right! With these pesticides problem the demand for

cold drinks have decreased. And it should! People should start thinking about

their health. Initially it was discovered that these cold drinks have some thing that

dissolves a blade and many more thing.

All said and done people are still drinking these drinks and will keep on

drinking. And the commercial is very cool.

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BASIC INTRODUCTION TO ADVERTISING:

Advertising belongs to the modern industrial world, and to those

countries which are developing and becoming industrialized. In the past the shop

keepers or stall holders had only to show and shout their goods to passer-by,

advertising as we know it now hardly existed.

The need for advertising developed with the expansion of population and the

growth of towns, mass production in factories, transportation development, and

popular newspapers in which to advertise. Advertising grew with the

development of media, such as the coffee-house newspapers of the seventeenth

century. The large quantities of goods being produced were made known by the

way of advertisements to customers who lived far from the placed of

manufacture.

The modern world depends upon advertising. Mass production

requires mass consumption which in turn requires advertising to the mass market

through the mass media. The Institute of Practitioners in advertising definition

says:’ advertising presents the most persuasive possible selling message to the

right prospects for the product or service at the lowest possible cost.’

HEART OF ADVERTISING: These two reasons provide an insight into the heart

of advertising and the special skills involved. Creativity to attract and win the

attention, the interest and eventually the action of consumers, and the most cost-

effective choice and use of innumerable media, are the characteristics of

successful advertising.

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TYPES OF ADVERTISEMENTS:

Advertising serves many purposes and many advertisers, from the

individual who places a small classified advertisement in the local newspaper to

the big spender who uses networked TV to sell popular brands across the globe.

There are primarily seven main categories of advertising, namely consumer,

business-to-business, trade, retail, financial, direct response and recruitment.

The FMCGs (fast moving consumer goods) advertising is called the ‘consumer

advertising type’. Thus, Coca-cola ads are an example of consumer advertising.

When planning an advertising campaign it is necessary to define

the social grade or grades of likely buyers, and to select the media which will

reach them in the largest numbers at the lowest cost. In case of consumer

advertising the primary media are the presses, radio, television, outdoor and to a

limited extent cinema, supported by sales literature, exhibitions and sales

promotions.

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HOW TO MEASURE SALES EFFECTIVENESS OF ADVERTISING

Advertising effectiveness means different things to the groups responsible

for different effects. To the writers or artist effective advertising is that which

reaches prospective buyers a sufficient number of times. To the advertising or

marketing managers effective advertising is that which, together with other

marketing forces, sells his brand or product. To the general manager, effective

advertising produces a return on his firm’s expenditure.

In fact, advertising must achieve a sufficient combination of all the four

goals, delivering message to the right audience, thereby creating sales at a profit.

Some advertisers have set communication and audience goals, and measured

copy and media effects, but few advertisers have set rupee goals and measured

sales and profit effects.

Management’s belief that advertising measurement is difficult or

impossible is also changing, largely as the result of increasing number of studies

which have obtained relatively unambiguous and actionable measures of

advertising, not only in terms of audience and communication, but also in terms

of sales and profit.

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THE DILEMMA: COMMUNICATION OR SALES?

The most debatable issue in advertising is whether advertising should be

evaluated according to its effect upon communication (awareness of brand,

attitude towards the brand, knowledge of the advertising message) or in terms of

sales. Communication message have been largely defended largely by agencies,

accustomed as they have been to using these measures to make rapid decision,

alternative forms of copy or media. Sales measures have been advocated by

large advertisers for whom small percent increase in advertising sales

efficiency would more than pay for the research required. There are objections

that sales are a result of many factors over which they have no control: price,

distribution or product quality. They fail to note that communication also results

from such factors.

While the argument still simmers, many advertisers and agencies have

agreed that measures of both communication and sales are necessary. Without

the sales measure, no guidance can be had to adjust the budget and its locations

towards demonstrably more profitable combinations. Without communication

measures, no guidance can be had to improve the advertising itself towards

provably motivating copy and media. Thus agencies measure communication

effects in the hope of improving the copy and media decisions, while advertisers

measure sales in the hope of improving their budgetary decisions.

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TECHNIQUES FOR MEASURING ADVERTISING

EFFECTIVENESS

There are four methods for measuring advertising effectiveness

1. Theme or platform research

2. Copy research

3. Media research

4. Sales research

We have selected sales research for measuring advertising effectiveness

because:

Knowledge of motives, copy or media will not tell the advertiser what, if

anything, his advertising has done to influence the sales of his product. For

this information he must conduct sales research, which isolates the

contribution his advertising expenditures, makes to sales.

Sales research

Three kinds of evidence are cited to link sales to advertising expenditures.

1. The most frequently practiced is the correlation of expenditure with sales.

This is important for those companies for whom sales are wholly

dependent on advertising

2. Also widely employed are correlations of reports of advertising exposure

with reports of purchase. This approach is accepted by most segments of

the advertising fraternity, but it is also questionable how well cause and

effect are measured.

Experimental method: a third approach and one that is currently in limited but

growing use in advertising-sales research is the experimental method. It requires,

among other things, that extraneous influences on sales be dealt with; that

controllable factors be controlled; uncontrollable but measurable factors be

measured and accounted for statistically; and enough experimental units be in

each treatment to permit accurate estimates of their variability.

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SALES REPORT OF COKE FROM THE OFFICIAL STATISTICS

Coca-Cola India said on Wednesday it has reduced overall costs by up to

40 per cent per case over the last three years and that the launch of smaller Rs 5

pack has reaped rich dividends in terms of sales.

The launch of Chota Coke was in line with the strategy of reducing costs

and aggressively targeting the vast Indian rural market, Coca-Cola president

Sanjiv Gupta said here, adding this strategy has increased sales.

“Our rural market focus has resulted in 68 per cent increase in rural

consumers. In fact, in 2003 over the previous year, 80 per cent of all new

consumers of the company are from rural markets," he said.

Gupta said the company had been working to reduce input costs that lay

largely in transportation and supply chain management, especially for the rural

markets.

"We have reduced costs by 30-40 per cent per soft drink case over the

last three years. Part of the cost reduction exercise included light-weight bottle

and crate introduction, which helped cut down freight costs... Otherwise the five

rupee price point would not have been successful."

Mr.Gupta said currently almost 30 per cent of Coca-Cola's sales in India

were in rural market.

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The Chota coke ads were launched in 2003 in India. The ads were an instant hit

with the media and the consumers. The key feature of this ad were

1) Projecting AAMIR Khan as the brand Ambassador.

2) Emphasis on Paanch (Price of Chota coke)

3) Ad covering the different regions and interiors of India. There were Mumbai,

Punjabi, Hyderabadi, Nepali and Bengali versions of this ad to generate general

appeal across the country.

4) The ad also stressed on “Thanda matlab Coca-Cola” so that the majority,

Hindi speaking population could relate to the ad. In India “thanda” is a generic

term for soft drinks. Through this punch-line the company meant that whenever

the consumer thinks of a soft drink, he thinks of Coca- Cola.

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HIGHLIGHTS IN THE HISTORY OF COCA-COLA TELEVISION ADVERTISING

The first television ad created for The Coca-cola Company was produced in conjunction with a television special in 1950. The sponsorship of this program and its advertising were both by the D’Arcy Agency. D’Arcy had been the advertising agency for the Coca-Cola Company since 906, when it first persuaded the company to begin a newspaper campaign. It created memorable slogans for the company like ‘the pause that refreshes’.

Television advertising was initially an experimental medium for Coca-Cola and D’Arcy. Both struggled to develop a strategy to reach consumers effectively at a time when few cities had television stations. One approach was through sponsored programs that offered the opportunity for the company to expand relationships with performers from its radio programming. In 953, D’Arcy developed three basic types of television ads. In one type, the company offered station-identification slides that aired for up to twenty seconds. These generally featured a piece of advertising art with the station call letters, accompanied by a voice-over announcement. D’Arcy also created its first live-action motion-picture films and one-minute versions.

THE McCann Ads: In 1956, the company’s advertising account was transferred to McCann-Erickson. The number of ads and their production values rose dramatically from 1956-1963. In 1963, McCann hit its stride with a campaign that proved to have worldwide appeal, ‘Things GO Better With Coke’. By design, these words also translated readily into almost any language allowing the slogan to generate global appeal.

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Things Go Better With CokeMcCann also began experimenting with a new television technology, colour advertisimg. The first colour television ad for the company was introduced in 1964 and was called the ‘refrigerator man’.

Throughout the 1960s, advertising for Coca-Cola on both radio and television reflected the changing forces in society. The ‘Things go Better With Coke’ campaign was adapted to the youth market by allowing a number of popular-music artists to modify and perform the song.

In 1976, the company also introduced the new Coke campaign, touting the brand as the soft drink for all occasions. Aimed at the young and young-at-heart, the new campaign, ‘Coke adds Life to’ was designed to show viewers that Coca-Cola added simple enjoyment to life. It emphasized on refreshment and tried to show Coke as the perfect accompaniment to food, fun and leisure. The campaign highlighted the soft drinks’ role in many situations common to consumers around the globe and the ad’s theme was adapted to appeal to a worldwide audience.

After the ‘Coke adds Life’, another campaign was created that further emphasized there reliability and reward in drinking coca-cola. It was called ‘Have a Coke and a Smile’. In 1979, one of the most famous Coke commercials, Mean Joe Greene was created. This ad won the 1979, CLIO award in the world’s largest advertising awards competition.

The New Coke:In early 1982, Coca-Cola launched a new ad campaign ‘Coke is It!’ with the emphasis on the product’s qualities of taste and refreshment. It played on themes of previous ad campaigns stressing the quality, the enjoyment, and especially the anticipation of drinking a coca-cola.

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Two tastes & two campaignsIn 1985, the company brought out a ‘new coke’ along with the old one, being called the traditional “Coca-cola classic’. They needed two distinct ad campaigns for the two products. In 1986, the ‘Catch the Wave’ campaign for the new taste of Coke strove to be youthful, leading-edge and competitive. For the Coca-Cola classic, the ‘Red, White and You’ campaign emphasized the brand’s broad appeal and the emotional attachment it generated. The campaigns were aimed at a broad audience: all soft drink consumers aged twelve and above, with an emphasis on the 18-34 age groups. The ‘Catch the Wave’ campaign for new Coke, created by McCann-Erickson, aimed to connect with an emerging youth-oriented target audience. The contemporary nature of the ad sent the message: to drink the ‘in’ taste, to identify with the ‘in’ image, drink Coca-Cola.

988 saw a new advertising campaign, “can’t Beat the Feeling”, which aimed to show Coca-Cola as an integral and natural part of people’s lives in everything from family to youthful fun. The ads featured upbeat music and played on broadly appealing themes such as music, love and family. The campaign was launched in nearly 100 countries marking the first ad campaign for the company outside USA in six years.

THE 1990’sIn 1993, the company made a dramatic shift in its advertising by introducing the ‘Always Coca-Cola’ campaign. The campaign was a diverse one, with an initial run of twenty-seven commercials designed to appeal to specific audiences. The ads ran around the world and included a variety of technical innovative approaches, such as computer animation.

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The polar bear was a considerable success and went on to star in six commercials for Coca-Cola including two ads for the 1994 Olympic Games.

INTERNATIONAL approaches at the MillenniumNumerous other ads in the ‘Always Coca-Cola’ campaign were introduced over the next few years. Appealing to people’s enjoyment of the cola taste and the refreshment it provides, the commercials, used a variety of approaches-humour, music, stories, animation and even personalities to build an emotional connection between Coca-Cola and its consumers.

The company launched its new international ad campaign in Jan 2000. Using the slogan’ Coca-Cola Enjoy’ the campaign was designed to appeal to people all over the world by persuading them that Coke adds a touch of magic to the special moments in their lives .Believing that Coke is one of life’s most common and affordable pleasures in many countries, the company conceived of the new slogan as an invitation to consumers throughout the world to enjoy Coke and life’s simple pleasures. The theme was global, but the campaign used local resources in different countries to create individual commercials relevant to local tastes and culture. Its creators also developed a melody adaptable to a wide range of musical styles. Even as the campaign began there were 40 versions of the tune set in forty languages.

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SAMPLING DESIGN

Target population

Age: 15-25 years

Occupation: students

Location: Mira Road

Sample design

Sampling frame: attendance list from office

Sampling method: probability sampling systematic sampling

Actual sampling units:

1. Students of NLDIMSR

2. Students of Dalmia School

3. Students of Royal College

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RESEARCH DESIGN

Exploratory research:

Pilot studies

Type of research used for the project:

Causal research

Basic research:

Survey method

Research instrument:

Self administered questionnaire

Contact method:

Direct/ personal

Sample size:

65 respondents

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DATA COLLECTION

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Break-up of sample

49%

31%

20%

NLDIMSR

ROYAL

DALMIA

HYPOTHESIS STATEMENT

HO: After watching the Ad, people have bought “Chota Coke”

H1: After watching the Ad, people didn’t buy”Chota Coke”

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Calculation of sample size

Let

p= probability of people who bought Chota coke after watching the ad

q= probability of people who didn’t buy after watching the ad

n= number of people surveyed for the pilot study

E=error rate (we are taking 90% confidence interval)

After conducting a survey among 10 prospects following was the result

n=10

p=0.6

q=0.4

Using the formula

N = Z 2 x p x q

E2

N = 1.642 x 0.6 x 0.4

0.12

N = 65

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Thus the sample size is 65 respondents

DATA ANALYSIS

1. Representation of data using graphical tools like bar charts and pie charts

2. Statistical analysis of data using SPSS 10.0

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DATA ANALYSIS

ANALYSIS OF MEDIA USED FOR ADVERTISING CHOTA COKE

The above bar chart shows the importance of TV and hoardings as an effective

media for communication of the advertising in the most effective way.

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PREFERNECE OF COKE AMBASSADORS

The above bar chart shows that people have accepted Aamir khan as well as

Aishwarya Rai as the most preferred ambassadors. Infact Aamir has

outnumbered all the other potentional ambassadors.

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FREQUENCY OF COKE CONSUMED IN A MONTH

Frequency Percent Valid Percent Cumulative Percent

Valid 0 14 21.5 21.5 21.5

1-5 24 36.9 36.9 58.5

6-10 6 9.2 9.2 67.7

10-20 17 26.2 26.2 93.8

>20 4 6.2 6.2 100.0

Total 65 100.0 100.0

I have found from the survey that largely people consume coke 1-5 times in a

month. Thus if coke has reduced the bottle quantity it can definitely increase the

frequency of consumption.

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FELT LIKE BUYING CHOTA COKE AFTER WATCHING THE AD

Frequency Percent Valid Percent

Cumulative Percent

Valid yes 45 69.2 69.2 69.2

no 20 30.8 30.8 100.0

Total 65 100.0 100.0

The above bar chart shows the impact of the ad on minds of people as this

shows how strongly has it clicked with the public who have watched the ad and

have been influenced to buy coke.

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BUY COKE

Frequency Percent Valid Percent

Cumulative Percent

Valid Yes 43 66.2 66.2 66.2

No 22 33.8 33.8 100.0

Total 65 100.0 100.0

This is very important factor because it actually shows if the ad has been

successful in bringing sales to the company.

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CONSUME COKE

Frequency Percent Valid Percent

Cumulative Percent

Valid yes 63 96.9 96.9 96.9

no 2 3.1 3.1 100.0Total 65 100.0 100.0

CONSUME COKE

This shows that the respondents consume coke.

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QUANTITIES IN WHICH COKE IS CONSUMED

This pie shows that people prefer to consume more in 200ml

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PERCENTAGE OF LOYAL CUSTOMERS

20, 32%

43, 68%

NOT AFFECTED

AFFECTED

There have been many respondents who have been consuming coke and it does

not matter to them if they watch the ad or not, they are loyal customers who stay

with the product irrespective of the ad and the company will definitely like to bring

more and more customers into this bracket.

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IMPRESSION LEFT IN THE MINDS OF CONSUMERS OFTHE AD

There are many things that remain in a persons mind after watching the ad. This

shows how many desired effects have been successful.

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Chi-Square Test

BUY COKE

Observed N Expected N Residual

Yes 43 41.2 1.8

No 22 23.8 -1.8

Total 65

TEST STATISTICS

BUY COKE Chi-Square .215

Degree of freedom 1

Asymp. Sig. .643

Note: 0.215 < 0.643. Thus we are accepting our NULL HYPOTHESIS that the

consumption has indeed increased after the advertisement

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CONCLUSION

1. Our study has been a successful one. There has been a definite impact

of Chota Coke ads on its sales.

2. Coke has made a right choice by selecting Aamir Khan as its brand

ambassador as it has clicked a right chord with the target consumers of

age group 15-25.

3. The media has been successful in creating awareness about Chota Coke

and this will have a long term effect on its future sales.

4. Advertisements can be effective medium if it is used with the proper tools

and made keeping in mind target audience.

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APPENDIX

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Questionnaire1. Do u drink soft drinks?

YES NO

2. Do you consume coke?

YES NO

3. Where have you seen the coke ads?

TELEVISION NEWSPAPER

HOARDINGS INTERNET

MAGAZINES

4. Which coke ads are your favourites?

AAMIR KHAN AISHWARYA RAI

HRITHIK ROSHAN VIVEK OBEROI

5. Have you seen the new Aamir khan ads?

Yes No

6. What is the first thing that comes to your mind when you see those ads?

PAANCH PRICE

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AAMIR KHAN HUMOUR

DIALOGUES OTHERS

7. After watching the ads, did you feel like going out and buying the chota coke?

YES NO

8. How often do you consume coke?

0 8-10 TIMES 11-20 TIMES

1-5 TIMES GREATER THAN 20

9. In what quantity do you consume coke?

200 ML 300 M

1.5 L 2L

10. Have you started buying chota coke after watching the Aamir Khan ads?

YES NO

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BIBLIOGRAPHY

1. Advertising hand book – By Roger Barton

2. Advertising – By Frank Jefkins

3. Marketing management -By Philip Kotler

4. Websites visited: www.cocacola.com

www.indiainfoline.com

www.economictimes.com

5.SPSS for Beginners – Vinod Gupta

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