http://www.gameswala.com/

MAJOR PROJECT REPORT

ON

“ COMPETITIVE ANALYSIS BETWEEN COKE AND PEPSI”

SUBMITTED TO YMCA NEW DELHI IN

PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF

POST GRADUATE DIPLOMA IN

(MARKETING AND SALES)

SUBMITTED BY

URVASHI KAPOOR MS-A-02

SUPERVISOR

Ms NEELAM CHADHA

INSTITUTE OF MANAGEMENT STUDIES

YMCA, NEW DELHI

http://www.gameswala.com/

2010

CANDIDATE’S DECLARATION

I hereby declare that the major project which is presented in this report entitled

COMPETITIVE ANALYSIS BETWEEN COKE AND PEPSI submitted

in the partial fulfillment of the requirements for the award of the Post Graduate

Diploma in Marketing and Sales to the YMCA NEW DELHI is an authentic record

of my own work carried out at IMS YMCA campus. The material embodied in this

project work has not been submitted to any other university or institution for the

award of any degree.

URVASHI KAPOOR MS-A-02

Place:

Date:

This is to certify that above statement made by the candidates are correct to best of

my knowledge.

SUPERVISOR

NEELAM CHADHA

Approved by:

NEELAM CHADHA

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ACKNOWLEDGEMENT

I express our gratitude to the YMCA, NEW DELHI for giving me the opportunity

to work on the major project during our final semester of post graduate diploma in

marketing and sales. There are many who helped me during this project work, and

I want to thank them all.

We would like to thank Dr. SUBASH GUPTA, Principal, Institute of management

studies YMCA, NEW DELHI for his kind support. Our special thanks to Ms

NEELAM CHADHA my project guide for his invaluable guidance throughout my

project work and endeavor period has provided me with the requisite motivation to

complete my project successfully.

I specially appreciate the help and guidance of all those teachers who have directly

or indirectly helped me making my project a success.

URVASHI KAPOOR

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PREFACE

Marketing is too important to be left to the marketing department. David Packard of

Hewlett Packed. The Indian market is getting to be consumer-led. This is the reason

behind the unprecedented boom in advertising. Below the line marketing activities, fast

distribution system and more sophisticated consumer research.

On the media front, satellite proliferation has trigged of a new genre of media research,

which is highly viewer ship based. Consumer satisfaction has become research worthily

Multinationals are pouring in precisely because of this new chapter in Indian

consumerism.

The dilemma that all marketers are facing is getting the maximum done in the minimum

possible time. And with brand loyalty becoming a thing of the past, given the choice

available to the consumer pull. The consumer could be a purchaser of end products, or a

financial investor, or even an industrial purchaser. Everywhere, there is a new thrust on

marketing and advertising.

The hyper activity in the market place is seeing a boom in support services, with a

number of independent agencies mushrooming to provide them. Co-related to the market

book, services are well on their to becoming a major industry.

The creative leap is increasingly being governed by market realities and consumer

research. And Clint interface is no longer limited to the Clint service people, but

including all specialists in agencies.

The entry multinational products in to the country are seeing more emphasis aid world-

class quality. This along with the loosening of regulations is seeing export gaining

ground. From thinking along the lines of merely exporting spares and raw material the

exporters and now looking towards finished products. A multiplier to this is the joint

venture companies looking at becoming export manufacturing bases.

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CONTENTS TOPIC PAGE NO:

1. CANDIDATE’S DECLERATION 2

2. ACKNOWELGEMENT 3

3. PREFACE 4

4. TABLE OF CONTENTS 5-7

5. EXECUTIVE SUMMARY 8

6. INTRODUCTION 9-10

7. SOFT DRINK INDUSTRY :AN OVERVIEW 11-15

8. HISTORY OF COCA-COLA 16-19

9. COCA-COLA:COMPANY PROFILE 20

10.CORE BRANDS 21

11.FABULOUS FACTS ABOUT COCA-COLA 22-23

12.COCA-COLA INDIA 24-26

13.PROMISE BY COCA-COLA 27

14.BRANDS IN INDIA PICTURE 28

15.BRANDS IN INDIAN ORIGIN 29

16.PEPSI CO 30

17.PEPSI CO IN INDIA 31-33

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18.BRAND FACTS,BEVERGAGES AND FOODS 34-36

19.PEPSI CO INDIA:A FORTUNE 500 COMPANY 37

20.BRAND HISTORY AND BRAND ADVANTAGE 38

21.PEPSI PRODUCTS IN INDIA 39

22.SLOGANS USED BY PEPSI COMPANY 40-42

23.THE RIVALRY BEGINS 43-44

24.MARKETING STARETEGIES OF COKE & PEPSI 45-49

25.GENERAL STRATEGIES BY COKE & PEPSI 50-51

26.PEPSI V/S COKE:DATA 52-54

27.COKE AND PEPSI MARKET SHARE IN INDIA 55

28.COLA WARS 56

29.ADVERTISING HISTORY & COMMERCIALS 57-59

30.SLOGANS : PEPSI V/S COKE 60-65

31.CELEBRITIES ENDORSED 66

32.PEPSI V/S COLA WARS TURNS HOT 67-69

33.BATTLE OF BEVERAGES:DATA 70

34. PEPSI IS NOT AS PRICEY 71

35.SOME PRETZELS WITH THAT SODA?? 72-73

36.COKE AND PEPSI IN INDIA 74-75

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37.DATA OF COKE AND PEPSI: PREFERENCE 76-88

38.FINDINGS AND ANALYSIS 89-91

39.PRESENT COMPETITION B/W THE TWO 92-93

40.FUTURE SCENERIO OF COLA WARS 94

41.QUESTANNAIRE & TARGET AUDIENCE 95-99

42.ANALYSIS OF QUESTANNAIRE RESPONSE 100

43.RECOMMENDATIONS 101-104

44.BIBLIOGRAPHY 105

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EXECUTIVE SUMMARY

This project is an extensive research on the marketing strategies of the two Cola giants

Pepsi and Coca Cola. It covers an extensive survey and depicts all graphs, fact and

figures of two companies. It begins with the introduction of soft drink industry and

introduction of these two companies of soft drink industry. It covers some of the major

strategies adopted by Pepsi and Coca-Cola like their pricing policy, sales promotion and

advertising policy, distribution policy etc. The project has been made interesting with the

inclusion of the topics, which covers the 4P’s of marketing.

The major players in the soft drink industry in India are Coke and Pepsi. Pepsi holds the

major market share followed by Coke. They have a cut throat competition between

themselves. Whatever strategy is followed by one company, it is copied by the other.

Sample of to brands were selected on the basis of there uses and noticeciability.

One of the selected brands is NO1 brand in their respective product categories the other

one brand is close competitor of the No 1 brands. Total sample of size of 200 respondents

selected on the basic of convenience was surveyed which include consumers.

Data was collected from secondary as well as primary sources. Structure questionnaire

was use to collect primary data

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INTRODUCTION:

In the modern urban culture consumption of soft drinks particularly among younger

generation has become very popular. Soft drinks in various flavors and tastes are widely

patronized by urbane population at various occasions like dinner parties, marriages,

social get together, birthday calibration etc. children of all ages and groups are especially

attracted by the mere mention of the word soft drinks.

With the growing popularity of soft drinks, the technology of its production, preservation,

transportation and or marketing in the recent years has witnessed phenomenal changes.

The so-called competition for this product in the market is from different other brands.

Mass media, particularly the emergence of television, has contribute to a large extent of

the ever growing demand for soft drinks the attractive jingles and sport make the large

audience remember this product at all times.

It is expected that with the sort of mass advertising, reaching almost the entire country

and offering various varieties annual demand for the product is expected to rise sharply in

the times to come.

In any marketing situation, the behavioral / environmental variables relating to

consumers, competition and environment are constantly influx. The competitors in a

given industry may be making many tactical maneuvers in market all the time. The may

introduce or initiate an aggressive promotion campaign or announce a price reduction.

The marketing man of the firm has to meet all these maneuver and care of competitive

position of his firm and his brand in the market. The only route open to him for achieving

this is the manipulation of his marketing tactics.

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In today’s highly competitive market place, three players have dominated the industry;

The New York based Pepsi Company Inc. The Atlanta based coca- cola and U.K. based

Cadbury Schweppes.

Through the globe, these major players have been battling it out for a bigger chunk of the

ever –growing soft drink market. Now this battle has been evolved up to India too with

the arrival of these three giants.

Soft drink industry is on amazing growth; ultimately these are only one person who will

determine their fortunes. The Indian consumer the real

War to quench his thirst has just begun.

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SOFT DRINK INDUSTRY: AN OVERVIEW

It all began in 1886, when a tree legged brass kettle in Hohn Styth pemberton’s backyard

in Atlanta was brewing the first P of marketing legeent Unaware the pharmacist has given

birth to a caramel colored syrup, which is now the chief ingredient of the world’s favorite

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drink. The syrup combined with carbonated the soft drink market. It is estimated that this

drink is served more than one thousand million times in a day.

Equally oblivious to the historic value of his actions was Frank Ix. Robinson, his partner

and book keeper. Pemberton & Robinson laid the first foundation of this beverage when

an average nine drinks per day to begin with, upping volumes as sales grew.

In 1894, this beverage got into bottle, courtesy a candy merchant from Mississippi. By

the 1950’s Colas was a daily consumption item, stored in house hold fridges. Soon were

born other non- cola variants of this product like orange & Lemon.

Now, the soft drink industry has been dominated by three major player – (1) The New

York based Pepsi co. Inc.(2) The Atlanta based coca cola co. (3) The united Kingdom

based Cadbury Schweppes.

Though out the glove these major players have been battling it. Out for a bigger chunk of

the ever-growing cold drink market. Now this battle has begun in India too. India is now

the part of cold drink war. Gone are days of Ramesh Chauhan, India’s one time cola king

and his bouts of pistol shooting. Expect now to hear the boon of cannons when the Coca

Cola & Pepsi co. battles it out for, as the Jordon goes a bigger share of throat. By buying

Over local competition, the two American Cola giants have cleared up the arena and are

packing all their power behind building the Indian franchisee of their globe girdling

brands. The huge amount invested in fracture has never been seen before. Both players

seen an enormous potential in his country where swigging a carbonated beverage is still

considered a treat, virtually a luxury. Consequently, by world standards India’s per capita

consumption of cold drinks as going by survey results is rock bottom, less than over

Neighbors Pakistan & Bangladesh, where it is four times as much.

Behind the hype, in an effort invisible to consumer Pepsi pumps in Rs 3000 crores (1994)

to add muscle to its infrastructure in bottling and distribution. This is apart from money

that company’s franchised bottles spend in upgrading their plants all this has contributed

to substantial gains in the market. In colas, Pepsi is already market leader and in certain

cities like Banaras, Pepsi outlets are on one side & all the other colas put together on the

other. While coke executive scruff at Pepsi’s claims as well as targets, industry observers

are of the view that Pepsi has definitely stolen a march over its competitor coke.

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Apart from numbers, Pepsi has made qualitative gains. The foremost is its image. This

image turnaround is no small achievements, considering that since it was established in

1989, taking the hardship route prior to liberalization and weighed down by export

commitments.

Now, at present as there are three major players coke, Pepsi and Cadbury and there is stiff

competition between first two, both Pepsi and coke have started, sponsoring local events

and staging frequent consumer promotion campaigns. As the mega event of this century

has started, and the marketers are using this event – world cup football, cricket events and

many more other events.

Like Pepsi, coke is picking up equity in its bottles to guarantee their financial support;

one side coke is trying to increase its popularity through.

Eat Food, enjoy Food. Drink only coca cola. Eat cricket, sleep cricket. Drink only coca

cola. Eat movies, sleep movies. Drink only coca cola.

On the other side of coin Pepsi has introduced AMITABH BACHHAN for capturing the

lemon market through MIRINDA – Lemon with “zor ka jhatka dhere se lage”.

But no doubt’ that UK based Cadbury is also recognizing its presence. So there is a real

crush in the soft drink market. with launch of the carbonated organize drink Crush, few

year ago in Banaras ., the first in a series of a launches , Cadbury Schweppes beverage

India (CSBI) HAS PLANNED:- The world third largest soft drink marketers all over the

country.CSBI o wholly owned subsidiary of the London based $ 6.52billion. Cadbury

Schweppes is hoping that crush is going well and well not suffer the same fate as the Rs.

175 crore Cadbury India’s apple drink Apella. CSBI is now with orange (crush), and

Schweppes soda in the market.

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As orange drinks are the smallest of non-cola categories that is Rs. 1100 crore markets

with 10% market share and cola heaving 50% is followed by Lemon segment with 25%.

The success of soft drink industry depends upon 4 major factors viz.

Availability

Visibility

Cooling

Range

AVAILABILITY

Availability means the presence of a particular brand at any outlet. If a product is now

available at any outlet and the competitor brand is available, the consumer will go for it

because generally the consumption of any soft drink is an impulse decision and not

predetermined one.

VISIBILITY

Visibility is the presence felt, if any outlet has a particular brand of soft drink say- Pepsi

cola and this brand is not displayed in the outlet, then its availability is of no use. The

soft drink must be shown off properly and attractively so as to catch the attention of the

consumer immediately Pepsi achieves visibility by providing glow signboards,

hoarding, calendars etc. to the outlets. It also includes various stands to display Pepsi

and other flavors of the company.

COOLING

As the soft drinks are consumed chilled so cooling them plays a vital role in boosting

up the sales. The brand, which is available chilled, gets more sales then the one which

is not, even if it is more preferred one.

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RANGE

This is the last but not the least factor, which affects the sale of the products of a

particular company.

Range availability means the availability of all flavors in all sizes.

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HISTORY OF COCA-COLA

Jon Styth Pemberton first introduced the refreshing taste of Coca-Cola in Atlanta,

Georgia it was May 1861 when the pharmacist concocted caramel colored syrup in three–

legged brass kettle in his backyard. He first distributed the new product by carrying

Coca-Cola in a jug coin enjoys in a glass of Coca-Cola at the soda fountain. Whether by

design or accident, carbonated water was teamed with the new syrup, producing a drink

that was proclaimed “Delicious and Refreshing”.

Dr. Pemberton’s Partner and bookkeeper, Mr. Frank Robinson, suggested the

name and penned as “Coca-Cola” in the unique flowing script that is still famous

worldwide today.

Dr. Pemberton’s sold 25 gallons of syrup, shipped in bright Red wooden kegs.

Red has been a distinctive color associated with the No.1 soft drink brand ever since. For

his efforts, Dr. Pemberton grossed $ 50 and spent $ 73.96 on advertising, by 1891,

Atlanta chemist as a G.Canler had acquired complete ownership of the Coca-Cola

business.

He purchases it from the Dr.Pemberton family for $ 2300. With in 4 year his

merchandising flair helped to expand the consumption of Coca-Cola to over $25 million.

Robert W. woodruff become the president of the Coca-Cola company in 1923 and his

more than six decades of leadership took the business of commercial success making

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Coca-Cola an institution the world over. Coca-Cola begins as a never tonic, but candy

merchant Joseph A. Biedenharn of Mississippi was looking for awry to serve refreshing

beverages. He responded to this demand began offering bottle Coca-Cola using syrup

shipped from Atlanta, during a hot summer in 1894.

1894 … A modest start for a bold idea

In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage

called Coca-Cola impressed the store's owner, Joseph A. Biedenharn. He began bottling

Coca-Cola to sell, using a common glass bottle called a Hutchinson.

Biedenharn sent a case to Asa Griggs Candler, who owned the Company. Candler

thanked him but took no action. One of his nephews already had urged that Coca-Cola be

bottled, but Candler focused on fountain sales.

1899 … The first bottling agreement

Two young attorneys from Chattanooga, Tennessee believed they could build a business

around bottling Coca-Cola. In a meeting with Candler, Benjamin F. Thomas and Joseph

B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United

States (specifically excluding Vicksburg) -- for the sum of one dollar. A third

Chattanooga lawyer, John T. Lupton, soon joined their venture.

1900-1909 … Rapid growth

the three pioneer bottlers divided the country into territories and sold bottling rights to

local entrepreneurs. Their efforts were boosted by major progress in bottling technology,

which improved efficiency and product quality. By 1909, nearly 400 Coca-Cola bottling

plants were operating, most of them family-owned businesses. Some were open only

during hot-weather months when demand was high.

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1920s … Bottling overtakes fountain sales

as the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the U.S.

Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after their

1923 introduction. A few years later, open-top metal coolers became the forerunners of

automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola

exceeded fountain sales.

1920s and 30s … International expansion

Led by longtime Company leader Robert W. Woodruff, chief executive officer and

chairman of the Board, the Company began a major push to establish bottling operations

outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium,

Italy, Peru, Spain, Australia and South Africa. By the time World War II began, Coca-

Cola was being bottled in 44 countries.

1940s … Post-war growth

During the war, 64 bottling plants were set up around the world to supply the troops. This

followed an urgent request for bottling equipment and materials from General

Eisenhower's base in North Africa. Many of these war-time plants were later converted to

civilian use, permanently enlarging the bottling system and accelerating the growth of the

Company's worldwide business.

1960s … New brands introduced

Following Fanta® in the 1950s, Sprite®, Minute Maid®, Fresca® and TaB® joined

brand Coca-Cola in the 1960s. Mr. Pibb® and Mello Yello® was added in the 1970s. The

1980s brought diet Coke® and Cherry Coke®, followed by POWERADE® and

DASANI® in the 1990s. Today hundreds of other brands are offered to meet consumer

preferences in local markets around the world.

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1970s and 80s … Consolidation to serve customers

As technology led to a global economy, the retailers who sold Coca-Cola merged and

evolved into international mega-chains. Such customers required a new approach. In

response, many small and medium-size bottlers consolidated to better serve giant

international customers. The Company encouraged and invested in a number of bottler

consolidations to assure that its largest bottling partners would have capacity to lead the

system in working with global retailers.

1990s … New and growing markets

Political and economic changes opened vast markets that were closed or underdeveloped

for decades. After the fall of the Berlin Wall, the Company invested heavily to build

plants in Eastern Europe. And as the century closed, more than $1.5 billion was

committed to new bottling facilities in Africa.

21st Century …

The Coca-Cola bottling system grew up with roots deeply planted in local communities.

This heritage serves the Company well today as people seek brands that honor local

identity and the distinctiveness of local markets. As was true a century ago, strong locally

based relationships between Coca-Cola bottlers, customers and communities are the

foundation on which the entire business grows.

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COCA –COLA COMPANY PROFILE

Keeping in view of tapping the Indian soft drink market and also developing soft drinks

as a drinking product among Indians. The Coca-Cola in India has setup an independent

organizations which is H.C.C & B.C.C with a capital of 350 U.S.$ each by virtue of

sellout decision of the passed managing director Sh. S. C. Aggarwal.

Hindustan Coca-Cola bottling (N-W) Pvt. Ltd. Najibabad took the complete possession

of this plant, land, machinery, & intellectuals on February 14’ 1998 and since then

H.C.C, looking after all its affairs under company owned bottling plant to establish

integrated marketing system in the area.

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CORE BRANDS:

Coca-Cola: Developed in a brass pot in 1886, coca-cola is the most recognized and

admired trademark around the globe. Not to mention the

best selling soft drink in the world.

Sprite: In 1961, a citrus-flavored drink made its U.S debut, using “Sprite Boy

“as inspiration for its name. This elf with silver hair and a big smile was used in 1940s

advertising for Coca-Cola. Sprite is now the fastest growing major soft drink in U.S and

the world’s most popular lemon-lime soft drink.

Fanta : The name “fanta “ was first registered as a trademark in Germany in 1941 ,when

it was used for a few year for a soft drink created from available materials and flavors .

The name was then revived in 1955 in Naples, Italy, when it was used for the:” fanta

“orange drink we know today. It is now the trademark name for a line of flavored drinks

around the world.

Diet coke: The extension of the coca-cola name began in 1982 with the introduction of

diet coke (also called coca-cola light in some countries). Diet coke quickly becomes the

number – one selling low –calorie soft drink in the world.

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FABULOUS FACTS ABOUT COCA-COLA

1. The world’s largest spherical coca-cola sign is in Nagoya, Japan a top the dial –

Nagoya building in front of the Nagoya railway station. The sing is a double

sphere constructed from more then 46 tone of steel, more 940meter of neon

tubing, and more then, 879 light bulbs. The outer shape features the coca-cola

logo and contour bottle, while the inner sphere portrays a comic scene with

twinkling planets and stars.

2. One of the world’s largest signs for coca-cola is located on a hill called

“ELHACHA” in America, Chile. It is 400 feet wide and 131 feet high and is

made from 70,000, 26 ounce bottles.

3. The first out door paint sign advertising coca-cola still exists. It was painted in

1894 in Cartersville, Georgia.

4. Coca-cola is one of the world’s most recognizable trademarks recognized in

countries that account for 98 percent of the world’s population.

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5. If all the coca-cola ever produced were in 8- ounce bottles. And these bottles

were distributed to each person in the world. There would be 678 bottles or over

42 gallons for each person.

6. If all the coca-cola ever produced were in 8 – ounce bottles, placed side by side

and end to end to from a lane highway, it would wrap around the earth 82 times.

7. If all the coca-cola ever produced were flowing over Niagara fall at its normal

rate of 105 million gallons per second instead of water, the falls would flow for

about a day and a half 38 hours and 46 minutes.

8. The largest representation of the world’s best known package 100 foot tall glass

contour bottle is located at world of coca-cola, LAS VEGAS

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HISTORY IN INDIA

Coca-cola in India

Coca-Cola, the corporation nourishing the global community with the world’s largest

selling soft drink concentrates since 1886, returned to India in 1993 after a 16 year hiatus,

giving new thumbs up to the Indian soft drink market. In the same year, the Company

took over ownership of the nation’s top soft-drink brand and bottling network. It’s no

wondering our brands assumed an iconic status in minds of world’s consumers.

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A Healthy Growth to the Indian Economy

Ever since, Coca-Cola India has made significant investments to build and continually

consolidate its business in the country, including new production facilities, waste water

treatment plants, distribution systems, and marketing channels.

Coca-Cola India is among the country’s top international investors, having invested more

than US$ 1 billion in India in the first decade, and further pledged another US$100

million in 2003 for its operations.

A Pure Commitment to the Indian Economy

The Company has shaken up the Indian carbonated drinks market greatly, giving

consumers the pleasure of world-class drinks to fill up their hydration, refreshment, and

nutrition needs. It has also been instrumental in giving an exponential growth to the

country’s job listings.

Creating Enormous Job Opportunities

With virtually all the goods and services required to produce and market Coca-Cola being

made in India, the business system of the Company directly employs approximately

6,000 people, and indirectly creates employment for more than 125,000 people in related

industries through its vast procurement, supply, and distribution system.

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The Indian operations comprises of 50 bottling operations, 25 owned by the Company,

with another 25 being owned by franchisees. That apart, a network of 21 contract packers

manufactures a range of products for the Company.

On the distribution front, 10-tonne trucks – open bay three-wheelers that can navigate the

narrow alleyways of Indian cities – constantly keep our brands available in every nook

and corner of the country’s remotest areas.

These are only some of the facts that speak about our commitment to the growth of the

Indian Economy

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PROMISE BY COCA-COLA

The coca-cola company exists to benefits and refreshes every one it touches. The basic

proposition of our business is simple, solid and timeless. When we bring refreshment,

value, joy and fun to our stakeholders then we successfully nurture and protect our brand,

particularly coca-cola. That is the key to fulfilling our ultimate obligation to provide

consistently attractive to the owner so four business.

More then a billion times every day, thirsty people around the world reach for coca-cola

products for refreshment. They deserve the highest

Quality – every time. Our promise to deliver that quality is the most important promise

we make. and it involves a world-wide , yet distinctively local , network of bottling

partner , supplier , distributor and retailers whose success is paramount to our own. Our

investment in local communities in over 200 countries totals billions of dollars in jobs,

facilities, marketing, the purchase of local good and services, and local business

partnership. Always and every where , we pursue continuous innovation in the products

we offer the processes we use to make them, the package we develop and the way we

bring them to market .

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BRANDS IN INDIA

R

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BRAND IN INDIAN ORIGIN

GOLD SPOT: this orange carbonate soft drink was introduced in the early 1950c, and

acquired by the Coca-Cola company in 1993, its tangy taste has been popular with Indian

teenagers

LIMCA: It is thirst-quenching beverage features a fresh and light lemon-lime taste and

lighthearted attitude. The limca brand was introduced in 1971 and acquired by the coca-

cola company in 1993.

MAAZA: Maaza, launched in 1984 and acquired by the coca-cola company in 1993, is a

non carbonated mango soft drink with a rich, juice & natural mango taste.

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THUMPS UP: in 1993, the Coca-Cola company acquired this brand, which was

originally introduced in 1977. Its strong and fizzy taste makes it unique carbonated Indian

cola.

PEPSICO

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PepsiCo is one the largest companies in the U.S. It figures amongst the largest 15

companies worldwide according to the number of employees hired. It has a U.S. Fortune

rank of 50.The company profits for 1997 were $2.14 billion on revenues of $20.92 billion

and Pepsi is bottled in nearly 190 countries. PepsiCo is a world leader in convenient

snacks, foods and beverages with revenues of more than $43 billion and over 198,000

employees. Take a journey through our past and see the key milestones that define

PepsiCo.

PepsiCo is a world leader in the food chain business. It consists of many companies

amongst which the prominent once are Pepsi-Cola, Frito-Lay and Pepsi Food

International. The group is presently into two of the most profitable and profitable and

growing industries namely, beverages and snack foods. It has scores of big brands

available in nearly 150 countries across the globe. The group has established for itself

once of the strongest brands in various segments of its operations.

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The beverages segment primarily markets its Pepsi, Diet Pepsi, Mountain Dew and other

brands worldwide and 7-UP outside the U.S. markets. These are positioned in close

competition with Coca-Cola Inc. of USA. A point which is worth a mention is that Coca-

Cola gets 80% of its profits for International operations while the same figure for

PepsiCo stands at 6%. The segment is also in the bottling plants and distribution facilities

and also distributes the ready to drink tea products of Lipton in North America. In a joint

venture with orient spray juice products PepsiCo also manufactures and distributes fruit

juices.

The snack food division manufactures and distributes and markets chips and other snacks

worldwide. The international operations of this segment extend to the markets of Mexico,

the UK and Canada. Frito-Lay represents this segment of PepsiCo.

The restaurant segment earlier primarily consists of the operations of the worldwide Pizza

Hut, Taco Bell and KFC chains. PFS. Pepsi company’s restaurant distribution operation,

supplies company owned and franchise restaurants in the U.S. The company ventured

into restaurant business with Taco Bell, KFC, Pizza Hut ended last year when they were

spanned off from the company. A packaged goods company comprised of Pepsi-Cola

Company and Frito-Lay will continue to bear the PepsiCo name. The move should

enhance both corporations ability to prosper with their own fully dedicated structure and

management team.

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PEPSICO IN INDIA

PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab

government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited.

This joint venture marketed and sold Lehar Pepsi until 1991, when the use of foreign

brands was allowed; PepsiCo bought out its partners and ended the joint venture in 1994.

Others claim that firstly Pepsi was banned from import in India, in 1970, for having

refused to release the list of its ingredients and in 1993, the ban was lifted, with Pepsi

arriving on the market shortly afterwards. These controversies are a reminder of "India's

sometimes acrimonious relationship with huge multinational companies." Indeed, some

argue that PepsiCo and The Coca-Cola Company have "been major targets in part

because they are well-known foreign companies that draw plenty of attention."

In 2003, the Centre for Science and Environment (CSE), a non-governmental

organization in New Delhi, said aerated waters produced by soft drinks manufacturers in

India, including multinational giants PepsiCo and The Coca-Cola Company, contained

toxins, including lindane, DDT, malathion and chlorpyrifos — pesticides that can

contribute to cancer, a breakdown of the immune system and cause birth defects. Tested

products included Coke, Pepsi, 7 Up, Miranda, Fanta, Thumps Up, Limca, and Sprite.

CSE found that the Indian-produced Pepsi's soft drink products had 36 times the level of

33

pesticide residues permitted under European Union regulations; Coca Cola's 30 times.

CSE said it had tested the same products in the US and found no such residues. However,

this was the European standard for water, not for other drinks. No law bans the presence

of pesticides in drinks in India.

The Coca-Cola Company and PepsiCo angrily denied allegations that their products

manufactured in India contained toxin levels far above the norms permitted in the

developed world. But an Indian parliamentary committee, in 2004, backed up CSE's

findings and a government-appointed committee, is now trying to develop the world's

first pesticides standards for soft drinks. Coke and PepsiCo opposed the move, arguing

that lab tests aren't reliable enough to detect minute traces of pesticides in complex

drinks.

As of 2005, The Coca-Cola Company and PepsiCo together hold 95% market share of

soft-drink sales in India. PepsiCo has also been accused by the Puthussery panchayat in

the Palakkad district in Kerala, India, of practicing "water piracy" due to its role in

exploitation of ground water resources resulting in scarcity of drinking water for the

panchayat residents, who have been pressuring the government to close down the

PepsiCo unit in the village.

In 2006, the CSE again found that soda drinks, including both Pepsi and Coca-Cola, had

high levels of pesticides in their drinks. Both PepsiCo and The Coca-Cola Company

maintain that their drinks are safe for consumption and have published newspaper

advertisements that say pesticide levels in their products are less than those in other foods

such as tea, fruit and dairy products. In the Indian state of Kerala, sale and production of

Pepsi-Cola, along with other soft drinks, was banned by the state government in 2006,

but this was reversed by the Kerala High Court merely a month later. Five other Indian

states have announced partial bans on the drinks in schools, colleges and hospitals

34

Brand Facts

PepsiCo nourishes consumers with a range of products from tasty treats to healthy eats

that deliver enjoyment, nutrition, convenience as well as affordability

The group has built an expansive beverage and foods business. To support its operations,

PepsiCo has 42 bottling plants in India, of which 13 are company owned and 29 are

franchisee owned. In addition to this, PepsiCo’s Frito Lay division has 3 state-of-the-art

plants. PepsiCo’s business is based on its sustainability vision of making tomorrow better

than today. PepsiCo’s commitment to living by this vision every day is visible in its

contribution to the country, consumers and farmers.

Beverages

PepsiCo India’s expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP,

Nimbooz, Miranda and Mountain Dew, in addition to low calorie options such as Diet

Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic

sports drinks - Gatorade, Tropicana100% fruit juices, and juice based

35

Drinks – Tropicana Nectars, Tropicana Twister and Slice. Local brands – Lehar Evervess

Soda, Dukes Lemonade and Mangola add to the diverse range of brands

Foods

PepsiCo’s food division, Frito-Lay, is the leader in the branded salty snack market and all

Frito Lay products are free of trans-fat and MSG. It manufactures Lay’s Potato Chips;

Cheetos extruded snacks, Uncle Chips and traditional snacks under the Kurkure and

Lehar brands. The company’s high fiber breakfast cereal, Quaker Oats, and low fat and

roasted snack options enhance the healthful choices available to consumers. Frito Lay’s

core products, Lay’s, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to

significantly reduce saturated fats and all of its products contain voluntary nutritional

labeling on their packets

36

QUICK FACTS

PepsiCo established it's business operations in India in 1989

Invested more than USD 1 Billion since inception

Well known and loved global brands that delight and nourish consumers

 

It provides direct and indirect employment to 150,000 people in India

It has more than 42 bottling plants in India, of which 13 are company owned & 29

franchisee owned

3 State-of-the-art food plants in Punjab, Maharashtra and West Bengal

PEPSI CO INDIA: A FORTUNE 500 COMPANY IN INDIA

37

PepsiCo, which ranks among the world’s five largest food and beverage

companies with 16 brands, and its partners have invested more than US$

700 million in India - building businesses, which today provide direct or

indirect employment to more than 60,000 people. Since Pepsi’s entry into

the Indian market in 1989, several brands from its portfolio have become

established category leaders. Brand Pepsi is now the 2nd biggest brand in

the country. PepsiCo’s portfolio of beverage brands in India includes the

flagship cola brand Pepsi; Diet Pepsi; two flavors of Mirinda – Orange and

Lemon; 7UP; Mountain Dew; packaged drinking water - Aquafina; variants

of the fruit drink brand Slice; the 100 per cent fruit juice brand Tropicana in

several variants and the world’s leading sports drink Gatorade.

.

38

Pepsi - Yeh Hai Youngistan Meri Jaan

BRAND HISTORY

Pepsi is a hundred year old brand loved by over 200 million people worldwide. The

largest single selling soft drink brand in India is the ubiquitous'socialiser'at every

occasion.

Youngistan loves it. 200 million people worldwide love it. But what has made

Pepsi the single largest selling soft drink brand in India is actually a formula

concocted a century ago in a far away continent.

1886, United States of America. Caleb Brad man, the man with a plan, got on to

formulate a blockbuster digestive drink and decided to call it Brad’s drink. It was

this doctor’s potion that was to become Pepsi Cola in 1898, and eventually, Pepsi

in 1903.

Pepsi has always played on the front foot and since its inception has come out

with revolutionary concepts like Diet, 2L bottles, recyclable plastic cola bottles

and the enviable My Can.

BRAND ADVANTAGE

Pepsi has become a friend to the youth and has led many youth cultures.

Youngsters over the generations have grown up with Pepsi and share an

emotional connect with it, unlike any other cola brand. Be it parties, hangouts, or

just another day at home, a day is never complete without the fizz of Pepsi!

Pepsi, Cricket and Bollywood have been joined at the hip since the beginning.

Shah Rukh Khan, Sachin Tendulkar, Saif Ali Khan, Amitabh Bachchan, Kareena

Kapoor, Priyanka Chopra, Virender Sehwag, M. S. Dhoni, John Abraham, Ranbir

Kapoor and Deepika Padukone are a few celebrities who will go any length for a

chilled Pepsi.

The Pepsi My Can is undoubtedly the most popular cola pack of all times. It is not

just a pack but a style statement for today’s youth.

39

PEPSI PRODUCTS IN INDIA

40

SLOGANS USED BY PEPSI COMPANY

1898 Brad's Drink

1903 Exhilarating, Invigorating, Aids Digestion

1906 Original Pure Food Drink

1908 Delicious and Healthful

1915 For All Thirsts - Pepsi: Cola

1919 Pepsi: Cola - It makes you Scintillate

1920 Drink Pepsi: Cola - It Will Satisfy You

1928 Peps You Up!

1929 Here's Health!

1932 Sparkling, Delicious

1933 It's the Best Cola Drink

1934 Double Size

Refreshing and Healthful

1938 Join the Swing to Pepsi

1939 Twice as Much for a Nickel

1943 Bigger Drink, Better Taste

1947 It's a Great American Custom

1949 Why Take Less When Pepsi's Best?

41

1950 More Bounce to the Ounce

1954 The Light Refreshment

Refreshing Without Filling

1958 Be Sociable, Have a Pepsi

1961 Now It's Pepsi for Those Who Think Young

1963 Come Alive! You're in the Pepsi Generation

1967 Taste that Beats the Others Cold, Pepsi Pours It On.

1969 You've got a Lot to Live; Pepsi's got a Lot to Give

1973 Join the Pepsi People Feeling' Free

1976 Have a Pepsi Day!

1979 Catch That Pepsi Spirit

Take the Pepsi Challenge

1981 Pepsi's Got Your Taste for Life

1983 Pepsi Now! 1984 The Choice of a New Generation

1987 America's Choice

1989 A Generation Ahead

1992 Gotta Have It

1993 Be Young, Have Fun, Drink Pepsi

1995 Nothing Else is a Pepsi

42

1997 Generation Next

1998 Same Great Taste 1999

The Joy of Cola

2000 The Joy of Pepsi

2003 Pepsi. It's the Cola

2000-2003: "Aazadi dil ki" (Hindi- meaning "Freedom of the Heart")(India)

2003: "It's the Cola"/"Dare for More" (Pepsi Commercial)

2003-2005: "Yeh Pyas Hai Badi" (Hindi meaning "This thirst is too much") (India)

2005-2006: "An ice cold Pepsi. It's better than sex!"

2006-2007: "Why You Dogging' Me"/"Taste the one that's forever young"

2007-2008: "More Happy"/"Taste the once that's forever young"

2008: "Yeh Hai Youngistan Meri Jaan!" Hindi - meaning "This is the Young era my

dear" (India and Pakistan)

2008: "Pepsi Stuff" Super Bowl Commercial

2008: "Pepsi is #1" TV commercial

2008: "Pepsify karo gai!" Commercial (Hindi meaning "Wanna Pepsify!")

2008-2009: "Something for Everyone."

2009-present: "Refresh everything" and (during many commercials) "Every Generation

Refreshes the World"

43

THE RIVARLY BEGINS:

Coke Comes to India

Coca-Cola comes to India with fanfare in the fifties. For a number of days, The

Hindustan Times and other newspapers of New Banaras carried full page advertisement

showing a big boy in uniform with a soft-drink crown as the cap. There was no indication

of the product. After a few days, Coke was introduced. It was an entirely new drink

which fascinated people. It soon became the national drink. For the first time, a soft-drink

was available from one corner of the country to another. The person who brought Coca-

Cola to India was the father of late Sardar Charanjit Singh, Sardar Mohan Singh. A

practical man Mohan Singh realized that to popularize Coca-Cola, and make it a best

seller it was necessary to “catch them young.” So he focused on youngsters in the society.

The company realized that to become a mass consumption product, one has to go to the

village. They gave much importance to the distributive network. The company trucks

supplied coke to even the remotest village.

Few products appears to be more similar than soft drinks, yet the Cola wars that mark the

competition between Coke and Pepsi show how even organizations with highly similar

product can be differentiated by their business strategies. Then comes battles over the

issue of bottle size standardization. Coke the arch rival tried to offering more Cola at a

lower price. Pepsi which had some of its early investment tied up in 250ml bottles, went

the fountain way. The General bottle size freed has settled at 300 ml. 100 ml more than

the pre MNC standard. Fountain mix dispensers, carry home bottles, even 1.50 plastic

bottle with caps good enough to keep them lying down and still preserve the fizz.

44

It poured in vast sums to whip up its visibility at the retail level, so that consumers were

greeted virtually at every street corner by Pepsi’s blue, red and white colors, because they

have perception “the thing on display Sells more.” Coca-Cola is, finally, redoing the real

thing to the replicate the success that it’s arch-rival, PepsiCo. Has achieved with its fast

and furious marketing. But to win them, Coke is copying Pepsi.

45

MARKETING STATEGIES OF COKE AND PEPSI

a) 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 t Today, Coke's product

line includes, Coca-Cola, Thumps 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 2 litre.

PRODUCT POSITIONING

One important thing must be noticed that Thumps Up is a strong brand in western

and southern India, while Coca Cola is strong in Northern and Eastern India. With

volumes of Thumps Up being low in the capital, there are likely chances of Coca Cola

slashing the prices of Thumps 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.

46

Thumps Up accounts for 40% of Coca Cola company's turn over, followed by

Coca Cola which has a 23% share and Limca which accounts for 17% of the turn over of

the company. (Thumps 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 Thumps Up is No. 1 brand for us

in India in the year 2000. We will sell whatever consumers want us to". Coca Cola India

has positioned Thumps 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.

b) PRICE

The price being fixed by industry, leaving very little role for the players to play in

the setting of the price, in turn making it difficult for competitors to compete on the basis

of price.

The fixed cost structure in Carbonated Soft Drinks Industry, and the intense

competition make it very difficult to change or alter the prices. The various costs

incurred by the individual company's are almost unavoidable. These being the costs of

concentrates, standard bottling operations, distributor and bottlers commissions,

distribution expenses and the promotional and advertising expenditure (As far as Coke is

concerned, it had to incur a little more than Pepsi as Pepsi paved its way to India in 1989

while Coke made a come back in 1993.)

Currently a 300 ml. Coke bottle is available for Rs. 6 to8 The 330 can was initially

available for Rs. 13 and now, since the price has gave up to Rs. 18 per can. The prices of

500 m, 1 litre. And 2ltr being Rs. 15 Rs. 23 and Rs. 40 respectively (according to the

current survey).

Dating back to ‘93', when Pepsi hiked the price of Pepsi - Cola from Rs. 5 to Rs. 6

per 250 ml. bottle in some parts of the country-including Agra. Coke penetrated the

market with price of Rs. 5 for a 300 ml. bottle, making it cheaper by Rs. 1 and 50 ml.

47

than Pepsi. Coke's strategy at that time being able to expand the availability of soft

drinks even in rural India. Coke's priority being to first increase the number of drinks per

drinker, and then the number of drinkers itself. Pepsi also tried this but was trapped by a

series of competitive price increase and changes in bottle sizes by Parle. But the prices of

soft drinks have shot up since Pepsi's arrival and the current prices are being mentioned

as under.

Price list

Name Bottle Size MRP (in Rs.)

Coke Per Bottle 200 ml 6

Coke 300 ml 10

Coke 500 ml (Plastic / Glass) 22

Coke 2 litre 60

Diet Coke (Can) 330 ml Can 35

Coke (Can) 330 ml Can 38

However, the trends may have been in the early '90's, now the prices of Pepsi

and Coke are the same making it difficult in future and present to compete on the basis of

price.

48

c) PLACE

Coke may have gained an early advantage over Pepsi since it took over Parle in

1994. Hence, it had ready access to over 2, 00,000 retailer outlets and 60 bottlers. Coke

was had a better distribution network, owing to the wide network of Parle drinks all over

India. Coke has further expanded its distribution network.

Coke and its product were available in over 2, 50,000 outlets (in contrast with Pepsi's 2,

00,000). Coke has a greater advantage in terms of geographical coverage.

But Coke has had problems with its bottlers as the required profits for the bottlers

have not been forthcoming. This is more so because Coke has hiked the price of its

concentrate by Rs. 8 Further, Coke's operations in India are 100% Fobs. Now, it plans to

convert then into COBOs. This is straining the relationship between the Coke and its

bottlers.

The company had decided to create a fund to reimburse performing bottlers for the extra

costs incurred on account of the hike in prices of soft drink concentrates. Mr. Short also

realized that India is a price sensitive market and the company would have to absorb in

the increase in excise duty and said that in the long run Coke will have to slash prices for

the benefit of the consumers and said that they were considering a cut in the prices of

their fountain soft drinks.

Coke and Pepsi have devised strategies to get rid of middlemen in the

distribution network. However, 50% of the industry unfortunately depends on these

middlemen. As of now, around 100 agents are present in Bananas. Bottlers of the 2

multinationals have strongly felt the need to remove these middlemen from the

distribution system, but very little success has been achieved in doing so.

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D) PROMOTION

It must be remembered that soft drinks purchases are an

"impulse buy low involvement products" which makes promotion and advertising an

important marketing tool. The 2 arch rivals have spent a lot on advertising and on

promotional activities.

To promote a brand and even to spend a lot on advertising, the company must be

aware of the perceived quality of the brand, its brand power (if at all there is) since

consumers make purchase decision based on their perceptions of value i.e., of quality

relative to price.

According to Paul Stobart, Advertising encourages customers to recognize the

quality the company offers. Price promotions often produce short-term sales increases.

Coca Cola has entered new markets and also developing market economics (like India)

with much-needed jobs.

Coke attributes its success to bottlers, the Coca Cola system itself, i.e., its

executive committees, employees, BOD, company presidents but above all from the

consumer.

Coke's red color catches attention easily and also the Diet Coke which it

introduced was taking the Cake, as Pepsi has not come out with this in India.

Ever since Coke's entry in India in 1993, Coke made a come back (after quitting

in 1977), in October 24 in Agra, the city was flooded by trucks, there wheelers, tricycle

cards-all with huge red Coke-emblazoned umbrellas. Retailers were displaying their

Coke bottles in distinctive racks, also with specially-designed iceboxes to keep Coke

bottles cold. This was one big jolt to Pepsi.

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STRATEGIES ADOPTED

BY COKE AND PEPSI

The Pepsi Process: Despite being a global brand, Pepsi has built its success on

meeting the Indian consumer’s needs, particularly in terms of making the brand

synchronize with localized events and traditions. Instead of harping on its global lineage,

ergo, it tries to plug into ethnic festivals, use the vernacular indifferent part of the

country, and blend into the local fabric. Pepsi is using both national campaigns-such as

the Drink Pepsi, Get Stuff scheme, which offers large discounts on other products to

Pepsi-buyers as well as local.

The Coke Copy: Instead of creating a bond with the customers through small but

high-impact events, Coca-Cola chose to associate itself with national and international

mega events like the World Cup Cricket, 1996, and world cup football 1998. But now

coke is also entering into local actions. Coke is also trying to make their brand

synchronize with localized events traditions and festivals. Coca-Cola new tag line in this

advertisement is “Real shopping, real refresher”. In this way Coke is copy Pepsi.

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EMPOWERMENT

The Pepsi Process: Once of the strongest weapons in Pepsi’s armory is the flexibility

it has empowered its people with. Every manager and salesperson has the authority to

take whatever steps he, or she, feels will make consumers aware of the brand and

increase its consumption.

The Coke Copy : Flexibility is the weapon that Coca-Cola, fettered as it is by the need

for approvals from Atlanta for almost everything. In the past, this has shown up in its

stubborn insistence on junking the franchisee network it had acquired from Parle; in its

dependence on its own feedback mechanism over that of its bottlers;’ and on its

headquarters-led approach.

PRICE

The Pepsi process: Pepsi has consistently wielded its pricing strategy as in invitation

to sample, aiming to turn trial into addiction.

It launched the 500 ml bottle in 1994 at Rs. 8 versus Thumps Up’s Rs. 9, in April, 1996,

its 1.5 liters bottle followed Coke into the marketplace at Rs. 30 – Rs 5 less than

Coke’s .But it couldn’t continue the lower price positioning for long.

The Coke Copy: Initially, coke carbon-copied the strategy by introducing its 330ml

cans in January 1996, at an invitation price of Rs. 15 before raising it to Rs. 18. By this

time, it had realized that the Coca-Cola brand did not hold enough attraction for

customers to fork out a premium. The 200ml Coke, launched so far in parts of eastern,

western, and northernIndia, is priced at Rs. 5, lowering the entry-barriers. Too really

drive the market, as Coke wants to you must go down to Rs. 3’.

52

PEPSI VS. COKE

$28 BILLION TURNOVER $16 BILLION

32% INT. SALES AS % 70%

` OF TOTAL SALES

RS. 5OO CRORES TOTAL INVESTMENT RS. 250 C

IN INDIA

RS. 300 CRORES PROPOSED RS. 2,400C

INVESTMENTS

2400 NO. OF EMPLOYEES 140

53

13 NO. OF OWNED NIL

BOTTLING PLANTS

18 NO. OF FRANCHISES 53

4000 NO. OF FOUNTAIN 1500

N.A. TOTAL INVESTMENT Rs 125 CR

BY BOTTLERS

6 NEW PLANTS PLANNED N.A.

54

PEPSI AND COKE MARKET SHARE IN INDIA

55

Competitive Comparisons

• Advertising

• Coke: $34.4 million (1975) to $211.5 million

(1993)

• Pepsi: $25.3 million (1975) to $147.3

Million (1993)

• Distribution

• Coke stronger in fountain. But Pepsi

IS growing in supermarkets?

• Pricing

• No differences

56

COLA WARS

Coca-cola v/s Pepsi

OVER A CENTURY OF COLA SLOGANS,

COMMERCIALS, BLUNDERS, AND COUPS

There's little doubt that the most spirited and intense competition in the beverage world is

between Coca-Cola and Pepsi. These two American companies long ago took their battle

worldwide, and although there are other colas in the market, these giants occupy this

high-stakes arena by themselves. The impact of Coke and Pepsi on popular culture is

indisputable, and I have observed in my time managing this web site that America has not

become jaded about the cola wars. The memorabilia, the jingles, the trivia - all still

popular. So I am offering this page in an attempt to assuage a wee bit of the Coke and

Pepsi thirst that is thriving on our planet.

IT ALL STARTED . . . .

Coca-Cola was invented and first marketed in 1886, followed by Pepsi in 1898. Coca-

Cola was named after the coca leaves and kola nuts John Pemberton used to make it, and

Pepsi after the beneficial effects its creator, Caleb Brad ham, claimed it had on dyspepsia.

For many years, Coca-Cola had the cola market cornered. Pepsi was a distant, no

threatening contender. But as the market got more and more lucrative, professional

advertising became more and more important. These soda companies have been leading

the way in advertising ever since.

57

ADVERTISING HISTORY & COMMERCIALS

Pepsi has definitely leaned towards the appeal of celebrities, popular music, and young

people in television commercials, while Coke relies more heavily on images of happiness

and togetherness, tradition, and nationalism, perpetually trying to cash in on its original

lead. In a simplified sense, you could sum up the strategies as Coke: Old, Pepsi: New. In

fact, as we will see, when Coca-Cola tried something new, it was disaster.

The first magazine ad for Coca-Cola appeared in Munsey's in 1902. Advertisements

began to appear on billboards, newspapers, and streetcars. Soon there were serving trays

with images of people enjoying Coca-Cola, and glasses with the cola's name on them. At

this time, Coca-Cola and Pepsi were served in drugstore soda fountains.

In 1909, Pepsi used its first celebrity endorser, automobile race driver Barney Old-field,

in newspaper ads. In 1921, Pepsi went bankrupt, but continued to appear on the scene,

although not nearly so successfully as Coca-Cola. In 1931, Pepsi went bankrupt again,

but the new owner, Roy Megargel, would hit upon an idea that would finally give Coca-

Cola some competition. In 1934, he marketed Pepsi in a 12-ounce bottle for a nickel. At

the time, Coca-Cola was sold in a 6-ounce bottle for ten cents. Voila! Profits for Pepsi.

Pepsi racked up another first by airing the first radio jingle in 1939. It was so popular that

it was played in jukeboxes and became a hit record Coca-Cola hit the airwaves in 1941.

In 1946, inflation forced Pepsi to increase prices. And in 1950, Pepsi offered a larger 26-

ounce bottle to court the young American housewife.

In the 1960's, the cola ad wars moved to television. Coca-Cola employed a host of

celebrity singers to promote the product, including Connie Francis , Tom Jones, The New

Beats, Nancy Sinatra, and The Supremes. As we moved through the years, both colas

58

incorporated some of their best slogans ("Pepsi Generation" and "the Real Thing") into

subsequent commercials.

In the 1970s, market research showed that consumers preferred the taste of Pepsi over

Coke. The Pepsi Challenge is still being conducted today. But Coke came up with what is

arguably the best of all cola commercials, the 1971 I'd like to buy the World coke ad.

This landmark was recalled in Christmas versions in 1983 and 1984, and a 1990 Super

Bowl ad, which was enough to make some Baby Boomers weep with nostalgia.

In the 1980's, Pepsi lined up the celebrities, starting with late Michael Jackson, then

Madonna, Michael J. Fox, Billy Crystal, Lionel Ritchie, Gloria Stefan, Joe Montana, and

others. Coke signed on Michael Jordan, New Kids on the Block, Aretha Franklin, Elton

John, and Paula Abdul.

In 1985, responding to the pressure of the Pepsi Challenge taste tests, which Pepsi always

won, Coca-Cola decided to change its formula. Bill Cosby was the pitchman. This move

set off a shock wave across America. Consumers angrily demanded that the old formula

be returned, and Coca-Cola responded three months later with Classic Coke. Eventually,

New Coke quietly disappeared.

Pepsi, meanwhile, had its own flop, Crystal Pepsi, which was supposed to catch the

strange wave of the times when everything colorless was clean and desirable (Zima,

bottled water). And then there was Pepsi Lite with the lemony flavor and one calorie,

introduced in 1975. Remember that one? Apparently they didn't expect us to because later

they gave us Pepsi One, using the same concept, but a completely different taste. And,

extending the idea even further, we are now getting Pepsi Twist, a new product with a

twist of lemon flavor.

59

In 1991, Ray Charles sang, "You got the right one baby, uh-huh!" Also in the 1990s,

Cindy Crawford and the Spice Girls pitched Pepsi. And then Pepsi aired commercials

featuring the aggravating little girl (Halide Eisenberg) with her troubling male voice.

In the new century, both colas continue to battle it out on the television screen. And

celebrities continue to be important promoters. Recently, Pepsi has had commercials by

Bob Dole and Faith Hill, among others.

60

SLOGANS

It's clear in looking at the slogans over the years that Coke and Pepsi have very different

targeting strategies. Coke is touting itself as the original, the authentic, and appealing to a

sense of tradition, positioning itself as an integral part of daily American life. Pepsi, on

the other hand, is promoting itself as something new, young, and hip, which seems a little

odd after over 100 years. But Coke was first, after all. Pepsi has always targeted the

youth market more aggressively than Coke.

COCA-COLA

1886 - Drink Coca-Cola

1904 - Coca-Cola Satisfies

1904 - Delicious and Refreshing

1905 - Coca-Cola Revives and Sustains

1905 - Good All the Way Down

1906 - The Drink of Quality

1906 - The Great National Temperance

1907 - Delicious Coca-Cola, Sustains, Refreshes, Invigorates

1907 - Cooling . . . Refreshing . . . Delicious

1908 - Sparkling - Harmless as Water, and Crisp as Frost

1909 - Delicious, Wholesome, Refreshing

1910 - It Satisfies

1910 - Quenches Thirst as Nothing Else Can

1911 - Its Time to Drink Coca-Cola

1911 - Real Satisfaction in Every Glass

1912 - Demand the Genuine - Refuse Substitutes

1913 - The Best Beverage under the Sun

1913 - A Welcome Addition to Any Party - Anytime - Anywhere

61

1914 - Exhilarating, Refreshing

1914 - Demand the Genuine by Full Name

1914 - Pure and Wholesome

1916 - Just One Glass Will Tell You

1917 - Three Million A Day

1919 - Quality Tells the Difference

1920 - Drink Coca-Cola with Soda

1922 - Thirst Knows No Season

1922 - Thirst Can't Be Denied

1922 - Thirst Reminds You - Drink Coca-Cola

1923 - Refresh Yourself

1924 - Pause and Refresh Yourself

1925 - Six Million A Day

1925 - The Sociable Drink

1926 - Stop at the Red Sign

1927 - Around the Corner from Anywhere

1928 - A Pure Drink of Natural Flavors

1929 - The Pause that Refreshes

1930 - Meet Me at the Soda Fountain

1932 - Ice-Cold Sunshine

1933 - Don't Wear a Tired, Thirsty Face

1934 - Carry a Smile Back to Work

1935 - All Trails Lead to Ice-Cold Coca-Cola

1936 - What Refreshment Ought to Be

1936 - The Refreshing Thing to Do

1937 - America's Favorite Moment

1937 - So Easy to Serve and So Inexpensive

1938 - The Best Friend Thirst Ever Had

1938 - Pure Sunlight

1938 - Anytime is the Right Time to Pause and Refresh

62

1939 - Coca-Cola Goes Along

1939 - Make Lunch Time Refreshment Time

1939 - Makes Travel More Pleasant

1939 - The Drink Everybody Knows

1939 - Thirst Stops Here

1940 - Bring in Your Thirst and Go Away Without It

1941 - Completely Refreshing

1942 - Refreshment That Can't Be Duplicated

1942 - Whoever You Are, Whatever You Do, Wherever You May Be, When You Think

of Refreshment, Think of Ice-Cold Coca-Cola.

1943 - The Only Thing like Coca-Cola is Coca-Cola Itself. It's the Real Thing

1943 - A Taste All Its Own

1943 - That Extra Something

1944 - How About a Coke

1945 - Passport to Refreshment

1945 - Whenever You Hear "Have a Coke," You Hear the Voice of America

1947 - Coke Knows No Season

1947 - Serving Coca-Cola Serves Hospitality

1948 - Where There's Coke, There's Hospitality

1949 - Coca-Cola . . . Along the Highway to Anywhere

1950 - Help Yourself to Refreshment

1951 - Good Food and Coca-Cola Just Naturally Go Together

1952 - What You Want Is a Coke

1953 - Dependable as Sunrise

1954 - For People on the Go

1955 - America's Preferred Taste

1956 - Coca-Cola - Making Good Things Taste Better

1956 - Feel the Difference

1957 - Sign of a Good Taste

1958 - The Cold, Crisp Taste of Coke

1959 - Be Really Refreshed

63

1960 - Relax With Coke

1961 - Coke and Food - Refreshing New Feeling

1962 - Coca-Cola Refreshes You Best

1963 - Things Go Better With Coke

1965 - Something More Than a Soft Drink

1966 - Coke . . . After Coke . . . After Coke

1970 - Its the Real Thing

1971 - I'd like to buy the World a Coke 1974 - Look Up, America

1976 - Coke Adds Life

1979 - Have a Coke and a Smile

1982 - Coke Is It!

1984 - Just For the Taste of It (Diet Coke)

1985 - Just For the Free of It (Caffeine Free Coke)

1985 - We've Got a Taste For You (New Coke)

1985 - America's Real Choice (Coca-Cola Classic)

1986 - Catch the Wave (New Coke)

1986 - Red, White and You (Coca-Cola Classic)

1987 - You Can't Beat the Real Thing

1989 - Can't Beat the Feeling

1990 - Can't Beat the Real Thing

1993 - Always Coca-Cola

1993 - Taste it All

PEPSI-COLA

1903 - Exhilarating, Invigorating, Aids Digestion

1907 - Original Pure Food Drink

1909 - Delicious and Healthful

1915 - For All Thirsts - Pepsi-Cola

1919 - Pepsi-Cola - It Makes You Scintillate

1920 - Drink Pepsi Cola. It will satisfy you.

64

1928 - Peps You Up!

1932 - Sparkling, Delicious

1934 - Refreshing and Healthful

1939 - Twice As Much For A Nickel Too

1943 - Bigger Drink, Better Taste

1949 - Why take less when Pepsi's best?

1950 - More Bounce to the Ounce

1950 - The Light Refreshment

1954 - Refreshing Without Filling

1958 - Be sociable, have a Pepsi

1961 - Now It's Pepsi, For Those Who Think Young

1963 - Come Alive! You're In the Pepsi Generation

1967 - Taste That Beats the Others Cold

1967 - Pepsi Pours It On

1969 - You've Got a Lot to Live and Pepsi's Got a Lot to Give 1973 - Join the Pepsi

People Feelin' Free

1975 - Have a Pepsi Day

1978 - Catch That Pepsi Spirit

1981 - Pepsi's Got Your Taste For Life!

1983 - Pepsi Now!

1984 - Pepsi, the Choice of a New Generation

1992 - Gotta Have It

1993 - Be Young, Have Fun, Drink Pepsi1995 Nothing Else is a Pepsi

1997 Generation Next

1998 Same Great Taste 1999

The Joy of Cola

2000 The Joy of Pepsi

65

2003 Pepsi. It's the Cola

2000-2003: "Aazadi dil ki" (Hindi- meaning "Freedom of the Heart")(India)

2003: "It's the Cola"/"Dare for More" (Pepsi Commercial)

2003-2005: "Yeh Pyas Hai Badi" (Hindi meaning "This thirst is too much") (India)

2005-2006: "An ice cold Pepsi. It's better than sex!"

2006-2007: "Why You Dogging' me"/"Taste the one that's forever young"

2007-2008: "More Happy"/"Taste the once that's forever young"

2008: "Yeh Hai Youngistan Meri Jaan!" Hindi - meaning "This is the Young era my

dear" (India and Pakistan)

2008: "Pepsi Stuff" Super Bowl Commercial

2008: "Pepsi is #1" TV commercial

2008: "Pepsify karo gai!" Commercial (Hindi meaning "Wanna Pepsify!")

2008-2009: "Something for Everyone."

2009-present: "Refresh everything" and (during many commercials) "Every Generation

Refreshes the World"

66

67

Pepsi v Coca-Cola war turns hot

The ongoing cola war between global rivals Pepsi and Coca-Cola has taken a weird twist

in India with the former dragging the latter to court. The charge: Coca-Cola has snatched

employees, bottlers, and agents, all of whom are bound to Pepsi by a contract.

Pepsi has charged Coke with having entered into a conspiracy to disrupt its business

operations by inducing key employees and associates to break existing contracts illegally.

Pepsi has sought a permanent injunction and an ex parte order against coke, restraining it

from taking away Pepsi's employees and business associates. Pepsi has also reserved the

right to seek financial damages from Coke at a later date if necessary.

Pepsi has claimed that a dozen middle-level managers and three territory managers broke

their contracts with Pepsi to join Coke in recent months, while during the last year and

half, seven managers quit Pepsi to join Coca-Cola.

Justice C M Nair of the Delhi high court on April 17 issued notices and summons to

Coca-Cola and 15 others for May 6. However, Justice Nayar refused to grant the ex parte

injunction sought by Pepsi India to stop the alleged inducements by Coke in offering

employment to Pepsi's employees while the suit was pending in court.

On behalf of Pepsi, Ashok Desai and Arun Jaitley contended that Coca-Cola had been

"rattled by the huge success of Pepsi in India entered into a conspiracy during the last six

months to cause loss and damage to Pepsi's business interests by adopting unfair and

illegal means."

It added that Coca-Cola had approached many key managers and had successfully lured a

commercial manager of its bottling business Gaurav Duggal, and a manager in Surat

Sailesh Joshi, besides others.

68

Pepsi charged that while initially these approaches were sporadic, over the last six

months it is clear that Coca-Cola has changed its strategy and has decided to consciously

target and approach key employees of Pepsi at various locations in India.

The company has alleged that in most cases, the employees have not been given time to

adhere to the 90-day notice period and the one-year confidentiality agreement. The latter

deal bars employees joining its rivals for at least a year.

Desai claimed Coke's actions would directly harm the business interests of Pepsi, which

had invested over $300 million in the country in establishing business infrastructure.

In its defense, Coke is expected to seek relief in the Indian Constitution which states that

there can be no restriction on the movement of labor. Besides, any effort by a company to

restrict its employees from joining other companies might fall foul of the Monopolies and

Restrictive Trade Practices Act as an unfair trade practice.

Pepsi has cited the instance of Coke snapping up cricketer Javagal Srinath in spite of the

latter signing a contract with Pepsi's sports consultant, 21st Century Media. However,

media reports, quoting sources, said that Srinath's contract had been only in the verbal

stage.

Similarly, Pepsi has charged Coke with inducing the Board of Control for Cricket in

India to give the sponsorship of the recently concluded Pepsi Triangular Cricket Series to

Coke, as acknowledged in the BCCI submission before the Bombay high court, even

while a contract was signed with Pepsi.

Pepsi has listed the case of Coke trying to induce its music consultant DNA Networks

Private Ltd, which organized the Yanni show, to snap its ties with Pepsi and join Coke.

Incidentally, in results announced for the first three months of the year, Pepsi has swept

Coca-Cola aside. Pepsi has reported a growth of 27 per cent compared to Coke's 21 per

cent during the same period. In the first three months of last year, Pepsi grew by 18 per

cent only.

69

Coca-Cola India chief executive Donald Short had announced that Coke would grow by

at least 20 per cent for the whole of 1998. Coca-Cola, along with the Parle brands it

acquired when it came into India -- Thums Up, Limca, and Gold Spot -- continue to

dominate India with a 55 per cent market share to Pepsi's 43 per cent. But in the cola

segment, Coke comes a poor third after Thumps Up and Pepsi.

The current summer season is the most important for the cola giants, with consumption at

its peak.

70

BATTLE OF THE BEVERAGES:

71

PEPSI IS NOT AS PRICEY

Regardless of which soda you like better though, Pepsi seems the better value than Coke

right now. Coke is trading at a nearly 20 percent premium to Pepsi based on 2002 P/Es

even though the two companies' earnings growth rates are nearly identical. (Pepsi's are

actually a shade higher.)

And when you look at revenues, the gap is even more dramatic. Coke is trading at 7

time’s estimated 2002 sales while Pepsi is trading at 3.5 times 2002 revenue estimates.

Both companies are expected to post slight declines in sales this year and an increase of

about 4 percent in 2003. Due to this disparity in valuation, Jeff Kanter, an analyst with

Prudential Securities, says he has a "buy' rating on Pepsi and "hold" on Coke. Prudential

does not do investment banking.

To be sure, Coke is still the market share leader in soft drinks. One of the main reasons

the stock has outperformed Pepsi this year was because it reported a better than expected

gain in unit volume in the first quarter. And the company has taken steps to cement its

carbonated beverage lead as well gain ground in the bottled water market. (Coke and

Pepsi both have their own brands of water, Dasani and Aquafina, respectively.)

On Tuesday, Coke announced that it was acquiring the Seagram's line of mixers, tonic,

ginger ale and seltzer from Diageo and per nod Richard. And last month, Coke entered

into an agreement with Group Danone to distribute Evian bottled water in North

America.

72

Some pretzels with that soda?

But while Coke relies solely on beverages for growth, another factor in Pepsi's favor is its

diversity. "What attracts me to Pepsi is I have more faith in their ability to grow earnings.

Not only are they successful on the beverage side but they are successful with salty snack

foods," says Crit Thomas, director of growth equity for National City Investment

Management Co., the sub advisor for Armada Funds. As of March 31, Pepsi was the

seventh-largest holding in the Armada Tax Managed Equity Fund and the tenth-largest

holding in the Armada Equity Growth Fund.

In fact, Pepsi's carbonated beverages are not even the biggest generator of sales and

earnings for the company. Pepsi's Frito-Lay brand of snack foods, which include Fritos,

Doritos and Rold Gold, accounted for 61.2 percent of revenue and 65.3 percent of

operating profits in the first quarter.

Pepsi's soft drink business made up 19 percent of sales and 23.2 percent of operating

profit. Pepsi also owns Gatorade and Quaker Foods, having acquired Quaker Oats last

year.

One potential risk for both Pepsi and Coke is the economy. No, not if it goes back into a

recession. If the economy continues to improve, the stocks could fall victim to what is

known as sector rotation, the selling of defensive companies like food and beverages in

order to buy more economically sensitive companies in the financial services and

technology sectors. To that end, shares of Pepsi and Coke fell slightly on Wednesday

during the Cisco-induced market rally.

73

Still, Thomas says signs that the dollar is starting to weaken compared to other currencies

should prop up both stocks. That's because a weaker dollar helps boost the profits of

international subsidiaries, since profits made in a foreign currency are converted back to

dollars. The majority of Coke's sales are from its international operations, with just 38

percent of revenue coming from the U.S. last year. Pepsi is not as big globally but

currency fluctuations are still a factor, as international sales accounted for 29 percent of

revenue in 2001.

74

Coke and Pepsi in India:

Coca-Cola controlled the Indian market until 1977, when the Janata Party beat the

Congress Party of then Prime Minister Indira Gandhi. To punish Coca-Cola's principal

bottler, a Congress Party stalwart and longtime Gandhi supporter, the Janata government

demanded that Coca-Cola transfer its syrup formula to an Indian subsidiary. Coca-Cola

balked and withdrew from the country. India, now left without both Coca-Cola and Pepsi,

became a protected market. In the meantime, India's two largest soft-drink producers

have gotten rich and lazy while controlling 80% of the Indian market. These domestic

producers have little incentive to expand their plants or develop the country's potentially

enormous market. Some analysts reason that the Indian market may be more lucrative

than the Chinese market. India has 850 million potential customers, 150 million of whom

comprise the middle class, with disposable income to spend on cars, VCRs, and

computers. The Indian middle class is growing at 10% per year. To obtain the license for

India, Pepsi had to export $5 of locally made products for every $1 of materials it

imported, and it had to agree to help the Indian government to initiate a second

agricultural revolution. Pepsi has also had to take on Indian partners. In the end, all

parties involved seem to come out ahead: Pepsi gains access to a potentially enormous

market; Indian bottlers will get to serve a market that is expanding rapidly because of

competition; and the Indian consumer benefits from the competition from abroad and will

pay lower prices. Even before the first bottle of Pepsi hit the shelves, local soft drink

manufacturers increased the size of their bottles by 25% without raising costs.

75

PRICE

Maximum retail price of 300 ml bottles is controlled by the Central Government. The

other size and packs are priced keeping factors like competition, internal costs, external

costs, and the corporate objective of the company in the mind.

PRODUCT SELLING PRICE MAX.RETAIL PRICE

(Per crate) (Per crate)

300 ml bottles 240 264

500 ml bottles 364 388

1 Liter bottles 500 520

Soda 300 ml 164 188

Cans 332 352

1.5 Liter PET 50* 55*

bottles

Price per bottles the empty bottles are priced at Rs 120 per crate and the shell at

Rs 100.

76

PREFERENCE OF SOFT DRINKS IN A DAY

Once a day 25%

Twice a day 20%

Once a week 5%

Other 50%

2 5 %2 0 %

5 %

5 0 %

0 %1 0 %2 0 %3 0 %

4 0 %5 0 %6 0 %

O n c e ad a y

T w ic e ad a y

O n c e aw e e k

O t h e r

O n c e a d a yT w i c e a d a yO n c e a w e e kO t h e r

Figure-1

77

PREFERENCE TO THE BRAND

Pepsi 40%

Coke 60%

Figure – 2

40%

60%

0%

20%

40%

60%

80%

Pepsi Coke

Pepsi Coke

78

TO GIVE THE PREFERENCES

More Popular 10%

Packaging 10%

Taste 70%

Price 10%

1 0 % 1 0 %

7 0 %

1 0 %

0 %

2 0 %

4 0 %

6 0 %

8 0 %

M o r eP o p u l a r

P a c k a g i n g T a s t e P r i c e

M o r e P o p u l a r P a c k a g i n g T a s t e P r i c e

Figure – 3

79

MARKETING STRAGGLES OF COMPANY EFFECTS THE

SALES

Yes 55%

No 45%

Figure – 4

55%45%

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

Yes No

Yes No

80

FORM OF MARKETING STRATEGIES

Television Advertising 45%

Newspaper Advertising 5%

Outdoor Advertising 20%

Sales Promotion 30%

Figure – 5

45%

5%

20%

30%

0%

10%

20%

30%

40%

50%

Television Adv. Newspaper Adv Outdoor Adv Sales Promotion

Television Adv. Newspaper Adv Outdoor Adv Sales Promotion

81

CHANGE BRAND ON THE BASIS OF PRICE REDUCTION

Yes 51%

No 49%

Figure – 6

51%

49%

48%

49%

50%

51%

52%

Yes No

Yes No

82

MORE EFFECTIVE ADVERTISING

Pepsi Co. 50%

Coke Co. 50%

%%%

Figure – 7

50%

50%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%

0%

20%

40%

60%

80%

Pepsi Co. Coke Co.

Pepsi Co. Coke Co.

83

CREATIVE AND APPEALING ADVERTISING OF THE

SOFT DRINK COMPANY

Pepsi Co. 45%

Coke Co. 45%

Figure – 8

45% 45%

0%

20%

40%

60%

80%

Pepsi Co. Coke Co.

Pepsi Co. Coke Co.

84

INNOVATIVE AND EXCITING OFFERS

Pepsi Co. 55%

Coke Co. 45%

Figure –9

55%45%

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

Pepsi Co. Coke Co.

Pepsi Co. Coke Co.

85

PUBLIC RELATIONS ANGLE

Innovative and exciting offers

The respondents were asked to compare between PepsiCo and Coca-Cola [I] Ltd. in

terms of who comes up with innovative and exciting offers, or rather things which are

lively and interesting to participate.

50% of the respondents replied in favor of PCI while 30% responded in favor of CCI.

17% of the respondents thought that both were equally good and it varied with time,

place and occasions. 3% of the respondents were not aware of all the activities and were

modest to admit it.

Quick and responsive to different occasions and events.

Comparing PepsiCo and Coca-Cola [I] Ltd, 55% of the respondents replied that it was

undoubtedly PepsiCo. They supported their statement with reasoning, saying so that

PepsiCo was first to associate with India’s 50 years of independence.

On the other hand 22% of the respondents felt that Coca-Cola [I] Ltd. is not trailing back.

It sponsors mega events like different Cricket tournaments, Olympic Games, World Cup

Football etc.19% of the respondents came up with a more balanced answer. They said if

one of the companies sponsors

One event it’s sure that the other will definitely go on for the next. It’s a tough tussle and

is really difficult to demarcate today

86

MARKET SHARE PERCENTAGE IN NEW DELHI

COKE 56%

PEPSI 35%

Pure Drinks 9%

Figure - 10

56%35%

9%

Pepsi Coke Pure Drinks

87

MARKET PERCENTAGE SHARE IN ALL OVER INDIA

2008

Pepsi 44%

Coke 51%

Local Brand 5%

Figure - 11

5%

51%

44%

PepsiCokeLocal Brand

88

BRAND PREFERENCES

In a survey done by A & M magazines on the best marketing companies in India. Pepsi

and Coca-Cola were also entered. The results were as follows:

Pepsi - 5h

Coca-Cola - 4h

The results of 95 were :

Pepsi - 7th

Coca-Cola - 9h

This shows that both the companies are paying more attention to the marketing of their

products. Pepsi is higher up on the scale than Coca-Cola. We can see that by the brilliant

advertising done by Pepsi, which can be seen on every hook and corner of metro cities

consumers, so prefer Pepsi advertisements and other activities of Pepsi, to that of Coca-

Cola.

89

FINDINGS & ANALYSIS

The Indian soft drinks market is at 140 million cases per year. This is very low, even as

compared to Pakistan and Bangladesh. All these factors together have contributed to a

20% growth in the soft drinks industry.. If this demand continues to grow at 20% grow at

20% annually, within 10 years the volumes could reach 1 billion cases. This kind of

growth is the reason for the entry of the two giants of the soft drink industry of the world.

Coca-Cola

Pepsi

Coca-Cola and Pepsi together control 97% of the 4 entire Indian markets. The rest of the

3% is shared by companies like Cadbury-Schweppes and Campa-Cola. The total no. of

case sold is 140 million of these 77 million cases of Cola drinks are sold and 63 million

of non-cola drink. There is a rapid increase in the sale of cola soft drinks. Whereas in

1990, they accounted for a third of all soft drinks sold, now their share is well over half.

Also cola sales are growing at a faster rate than non-colas. One of the reasons for this

could be the aggressive marketing strategies for Cola drinks by Pepsi and Coca-Cola.

The race to quench the great Indian thirst had deigned.

90

Pepsi findings:

Pepsi is the 2ND largest selling soft drink in India today. In DELHI it has 35% of the

market share. In India it has 44% of the market share making it the largest selling soft

drink, but the second largest company in terms of sales.

The sales of Pepsi is approximately Rs. 1,000 crore annually in India of this only about

Rs. 30 crore annually is credited to the foods section of Pepsi. The rest is all earned by

the soft drinks.

The soft drinks in Pepsi Foods LTD include:

1. Pepsi Cola

2. Mirinda Orange

3. 7-Up

4. Mirinda Lemon

The main advantage the Pepsi has over its nearest competitor i.e., Coca-Cola is that of it’s

was the first multinational to enter India, in the soft drinks sector. Pepsi officials and

‘Dial-a-Pepsi’ scheme to grow the market, instead of giving discounts at the retail level.

Another point which attributed to Pepsi’s success is the bottling operations. Pepsi does

most of its bottling on its own. Another significant investment of Pepsi has been

fountains. Fountains have considerably increased sales of Pepsi, as they have offered

consumers a whole new way to experience soft drink. According to a study done, 80% of

all soft drinks are consumed on premise, at the point of purchase, rather than at home;

thus the fountain initiative has paid off.

91

Thus we see that Pepsi has followed aggressive marketing strategies making they get into

the minds of the consumer by being visible inside and outside the consumers home by

way of television, radio Newspapers, hoarding, sales-promotion schemes, etc. Pepsi has

been voted the number one customer service company across categories in terms of

regularity, availability responsiveness and initiative.

92

PRESENT COMPETITON BETWEEN COCA COLA AND

PEPSI

If we see the present scenario its hard to tell which brand is winning the cola wars

as Pepsi had extended its cola wars to other sectors like FRITO-LAYS and

NIMBOOZ which is giving tough competition to coca –cola which doesn’t target

on these sectors.

Second aspect which is to be given in consideration is that, both the companies are

spending heavily on advertisement and more celebrities are roped in by both the

companies to fight the competition.

Recently COLA-COLA beverages ACTORS IMRAN KHAN AND KALKI for a

new ad ;to reply back to this a new ad by PEPSI beverages featuring ACTOR

RANBIR KAPOOR and VINDHU DARA SINGH came up which is making

waves at present.

Coke is served in MC DONALDS and there we won’t find Pepsi products even the

coffee served is of GEORGIA which is a coca-cola brand, same is the case of

PIZZA HUT and KFC which is owned by PEPSI CO there only Pepsi products

are served ,,,this had lead 2 clear war in restaurant segment as well…

93

PEPSI is targeting young generation and their ad campaigns are a clear example

of that, whereas coca-cola is targeting the family as a whole which has been its

old formula from ages.

Presently coca-cola may be leading in beverages like coke, but its facing severe

competition from Mirinda, Nimbooz and snack industry where PEPSI is ruling

thanks to its KURKURE ad that has led to great sales for PEPSI CO.

Though in packed drinking water KINLEY (COCA-COLA BRAND) and

ACQAFINA (PEPSI CO BRAND) both are treated equally by customers.

Moreover BISLERI still rules in this segment.

94

FUTURE SCENERIO OF COCA COLA V/S PEPSI

The COLA WARS between coca-cola and Pepsi would further grow and in my

view its never ending

Both the companies would try to become NO1 and there would AD WAR

between the two which would prove to be beneficial for actors/actresses as they

would earn more through advertisements.

Pepsi have started advertisements with female actresses DEEPIKA PADUKONE

and COCA-COLA which had up till know only endorsed male actors for the 1st

time endorsed KALKI of DEVD fame with IMRAN KHAN in its new ad.

With the coming up of COMMENWEALTH GAMES 2010 in NEW DELHI ,

both the brands would try to attract customers towards itself with heavy

promotion and ad campaigns to build new customers and increase there share in

market as well as strengthen their brand value and earn profits.

95

QUESTIONNAIRE

Q.1. WHICH BRAND WILL YOU PREFERENCE OF SOFT DRINKS IN A DAY?

Once a day

Twice a day

Once a week

Other

Q.2. WHICH BRAND ARE YOU PREFERENCE TO THE BRAND?

Pepsi

Coke

Q.3. WHICH PARTICUALAR RATE TO GIVE THE PREFERENCES?

More Popular

Packaging

Taste

Price

Q.4. ARE THE MARKETING STRATEGIES OF A COMPANY AFFECT ITS

SALES?

Yes

No

Q.5. WHICH FORM OF MARKETING STRATEGIES IS MOST EFFECTIVE IN

THE MARKET?

96

Television Advertising

Newspaper Advertising

Outdoor Advertising

Sales Promotion

97

Q.6. WILL YOU CHANGE THE BRAND ON THE BASIS OF PRICE

REDUCTION?

Yes

No

Q.7. WHICH BRAND MORE EFFECTIVE IN ADVERTISING?

Pepsi Co.

Coke Co.

Q.8. WHICH BRAND HAS CREATIVE AND APPEALING ADVERTISING OF

THE SOFT DRINK COMPANY?

Pepsi Co.

Coke Co.

Q.9. WHICH BRAND HAVING THE INNOVATIVE AND EXCITING OFFERS?

Pepsi Co.

Coke Co.

Q.10 Do you think that coca-cola and Pepsi both are lavishly spending on their ad

campaigns to attract customers.

YES

NO

98

Consumers

For the purpose of the study, questionnaires were prepared for the Consumers. Care was

taken to interview all types of consumers, i.e., :

a. Different age groups

b. Males and females

c. People from different localities, etc.

In all about 60 consumers were interviewed. The conclusions that one can draw from

these answers provided by the consumers showed that marketing activities do form a

major part of the decision.

One thing that was common amongst all the consumers who were once a day or once a

week. The number one factors the influences a customer while buying a soft-drink was

taste. This was true for all the consumers who were interviewed. The rest of the

conclusions as deducted from the questionnaires are as follows:

The younger generation preferred soft drinks to the older generation.

a. Children up to 15 years of age liked to have soft drinks up to 2-3 times a day.

b. Young adults liked to have soft drinks up to 1-2 times a day.

c. Adults liked to have soft drinks about once or twice a week.

Children preferred Coca-Cola Fanta, Mirinda orange. Young adults liked Pepsi. The older

generation preferred Coca-Cola, Limca & Mirinda Lemon.

The reason given for choice of favorite’s soft drink was taste and easy availability. Only

if the consumer liked the taste of drink, he would have it again.95% of the consumers felt

that marketing strategies of the company did affect the sales of their soft-drink.

Marketing strategies made the consumer try a drink for the first time. The second time

round it was the consumers choice himself and not strategy could affect that. Youngsters

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were more acceptable to change. They tried different drinks, Cola and non-Cola. Adults

stick to one and they prefer drinks that do not affect their health, like Limca.

Major number of people found television advertising to be the most effective. Young and

the old liked to watch the advertisements on television.

Sponsoring events, outdoor advertising and sales promotion schemes were second choice

of the consumers. Under television advertising, Pepsi came in as the number 1 favorite of

the people the advertisement of Shah-Rukh Khan and the dog was the favorite of the

consumers. Their new advertisement of Mirinda Lemon is also lifted by the people. The

advertisement that came in second was the Coca-Cola advertisement of the people

Cricket and the song Must-Kalander going on at the back. These, advertisement remained

most in the minds of the people. Most of the consumers felt that Pepsi was the market

leader in the soft-drink industry, in Delhi well as in India.

99% of the consumers interviewed felt that the marketing strategies of the Coca-Cola and

Pepsi have helped them in attaining the huge market share that they possess. Women and

children prefer cans as compared to men. These are the major conclusion that can be

drawn about a consumers’ behavior. Companies must take the initiative of finding out the

habits of the consumers and then changing them, in their favor.

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ANALYSIS OF QUESTANNAIRE

50 respondents were chosen among different age groups for conducting

the survey

FINDINGS:

1. YOUNGSETRS prefer PEPSI COLA over COKE

2. Older age group prefer Mirinda lemon and limca over coke and Pepsi cola

3. ADS play a major role in choosing of brand

4. Celebrities have a great effect on people consuming cold drinks

5. People prefer Nimbooz (Pepsi co)over Pepsi cola and coke.

6. In terms of innovative and exciting offers Pepsi co leads coca-cola.

7. When the question of more effective advertisements was asked mixed

reactions came with 50-50 response for both Coke and Pepsi.

8. Price plays an effective role for choosing of product among INDIAN

CONSUMERS.

9. TASTE came out to be most important for the consumers in preferring for

a particular brand.

10. TELEVISION came out to be most effective for ad campaigns as

respondents of all age groups watch tv.

RECOMMENDATIONS

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Soft drinks are an impulse product. When a person is thirsty, he would first think of water

or tea. Some even would prefer ‘Nimbooz “\

The Indian population is the largest in the world today, there can be no other country in

the world, which provides so much of an opportunity for the soft-drink manufacturers.

The Indian soft drink market is at 140 million cases per year, this is very low. Thus the

consumption of soft drink can go up.

Sinc118+e the entry of Coca-Cola into the country the industry is growing at a rate of

20% annually. If this rate is maintained, then by the year 2005 the market of soft drink

would be 1 billion cases annually.

However Coca-Cola wants to accomplish this feat by them. To do this the industry has to

take certain steps. All the companies are fighting to get a major share of this growing

market. They should all try to increase the total market along with their individual shares.

On the basis of all the field work and table work done, some suggestions can be made,

which may help the company in increasing the total market as well as the sale of the

companies. The various suggestions that can be made are as follows:-

Soft drinks retail at prices between Rs. 6 and Rs. 10. These are expensive when

measured against purchasing power.

According to one study, it takes Indian 50 minutes of work to be able to buy a bottle in

other countries, the norm is five minutes. Thus to increase the total market of soft drinks,

manufactures should try and decrease the prices, so as to increase sales.

Availability is a major factor, which makes the consumer buy a soft drink. Soft drinks

should be made available more readily than present. There are only 300, 000 retailers

stocking soft drinks in India. Thus retailing outlets should be increased. Also related to

this point, is vending machines. In developed machines, vending machines are kept in all

consumer areas, like super markets, schools, amusement parks, local markets, etc. These

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Tempt a person into buying the soft drink. So if vending machines are put in strategic

areas, it would definitely increase consumption of soft drinks.

Soft drink cans which are very convenient, as the consumer can take them anywhere,

unlike a bottle, are very expensive retailing from Rs. 15-Rs. 18. To increase sale of cans,

this price should be brought down.

Innovations increase sales of company. For e.g. fountain Pepsi increased sales of Pepsi

Cans increased sales of Coca-Cola. Thus the companies hav constantly come out with

innovative ideas.Example-300 ml plastic bottles, which the consumer can take with him,

unlike the glass bottles, which he has to return. Plastic bottles can even be used again by

households for various purposes.

The companies should conduct studies to get to know about consumer habits. For e.g.

Coke knows that Americans see 69 of its commercials every years , put 5.2 ice cubes in a

glass and prefer cans to pop out of vending machines at a temperature of 35 degrees.

If the companies know all this and more about Indian consumer behavior, it could 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. Companies

could have commercials which show people enjoying their drink with a good meal, so

that consumers associate drinking soft drinks while having food.

Companies should try to educate the consumer about the health related subject. For e.g.:-

a) Limca is recommended to patients by doctors.

b) Cola drinks are known to be very fattening ,

But in fact cola drinks contain no calories from fat they contain calories from sugar

which can be easily burned off. The soft drink cans and plastic bottles should mention the

calories and other related information on the packing.

Companies should try to build high brand equity. This provides a number of advantages

to the company.

a) The company enjoys reduced marketing costs because of high level of consumer

brand awareness and loyalty.

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b) The company will have more trade leverage in bargaining with distributors and

retailers since the customer expects them to carry the brand.

c) The company can change a higher price than its competitors because the brand has

higher perceived quality.

d) The company can more easily launch brand extension.

e) Above all, the brand offers the company some defense against fierce price

competition.

The companies should go in for diversification

Once the brand is known, it is easier to sell more of its products. For e.g. Coca-Cola

clothes have sold about $100 million worth of clothes and accessories. This would

increase revenues of the company.

The companies should not have competitor myopia. It is more often the latent company

than the current competitor who busies the company. Pepsi and Coca-Cola are so busy

fighting with each other, that they have left the non-cola sector open for Cadbury-

Schweppes.

Advertising is a way building brand image. It does not promote quick selling. Thus

companies should used advertising only for long advertising can be used for:

a) Brand image building

b) Reminder advertising: reminding people to buy these drinks.

c) Reinforcement advertising-Telling people that they have made the right choice.

Television advertising seems to make a impact on the consumers (based on questionnaire

answers) so companies should concentrate more on television advertisements.

Sales promotion tools create a stronger and quicker response. Thus sales promotion tools

such as coupons, contests, premiums and the like should be used to dramatize product

offers and to boost sales. Sales-promotion effects are usually short run and induce the

people to purchase soft drinks, now.

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Coca-Cola and Pepsi have taken up sponsoring of events on a major scale.

All kinds or events, whether big (Wills Worked cup) or small (college contests) have

either Pepsi or Coke banners of sponsorship. The effectiveness of this can be questioned.

Whether these activities increase sales or not is a big huge question mark.

PepsiCo and Coca Cola (I) Ltd. should reduce their massive spending on sponsoring

events and try and channel this money into more productive activities, like innovative

packaging etc.

It is recommended that company should introduce more and more customer oriented

schemes and contexts. For e.g. Pepsi’s new campaign “Pepsi cool mal” in which they are

giving free gifts to their customers.

The company should maintain a small group of “missionary sales man” whose functions

should be to guide distributors and retailers, keep a constant watch over the prevailing

situation to provide the continuous feedback to the company.

It is also recommended that companies should launch soft drink in small pack 200 ml and

150 ml.

Thus we see that there various steps which can be taken by the companies to increase

their sales and to increase the total market share.

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BIBLIOGRAPHY

Marketing Management- By Philip Kotler

WWW.PEPSICO.COM

WWW.COCA-COLA.COM

WWW.COLA-WARS.NET

ADVERTISING MANAGEMENT BY JETHWANEY AND

JAIN

COLA WARS BY J.C.LOUIS

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