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 4Ps 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
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.
In todays 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.
SOFT DRINK INDUSTRY: AN OVERVIEW
It all began in 1886, when a tree legged brass kettle in Hohn
Styth pembertons 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
worlds favorite 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 1950s
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, Indias 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 Indias 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 companys 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 Pepsis
claims as well as targets, industry observers are of the view that
Pepsi has definitely stolen a march over its competitor coke.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 Indias apple drink Apella. CSBI is now with
orange (crush), and Schweppes soda in the market.
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
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.
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 worlds 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.
HISTORY in INDIA Coca-cola in India
Coca-Cola, the corporation nourishing the global community with
the worlds 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 nations top soft-drink brand and
bottling network. Its no wondering our brands assumed an iconic
status in minds of worlds consumers.
A Healthy Growth to the Indian EconomyEver 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 countrys 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 EconomyThe
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 countrys job
listings. Creating Enormous Job OpportunitiesWith 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.
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 countrys remotest areas.
These are only some of the facts that speak about our commitment
to the growth of the Indian Economy
promise BY COCA-colaThe 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 highestQuality 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 .
BRANDS IN INDIA
R
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. 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
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.
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 companys 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.
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 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
PEPSI CO INDIA: A FORTUNE 500 COMPANY IN INDIA
PepsiCo, which ranks among the worlds 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 Pepsis 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. PepsiCos
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 worlds leading sports drink
Gatorade.
.
Pepsi - Yeh Hai Youngistan Meri JaanBrand HistoryPepsi 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 Brads drink. It was this doctors 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 todays youth.
the rivarly begins:
Coke Comes to IndiaCoca-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.
MARKETING STATEGIES OF COKE AND PEPSIa)PRODUCTCoke 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. PACKAGINGCoca-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 POSITIONINGOne important thing must be noticed that
Thumps Up is a strong brand in western and southernIndia, 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.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)PRICEThe 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. 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 listNameBottle SizeMRP (in Rs.)
Coke Per Bottle200 ml6
Coke300 ml10
Coke500 ml (Plastic / Glass)22
Coke 2 litre60
Diet Coke (Can)330 ml Can35
Coke (Can)330 ml Can38
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.
c)PLACECoke 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.
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.
STRATEGIES ADOPTEDBY COKE AND PEPSI
The Pepsi Process: Despite being a global brand, Pepsi has built
its success on meeting the Indian consumers 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.
EmpowermentThe Pepsi Process: Once of the strongest weapons in
Pepsis 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.
PriceThe 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 Ups Rs. 9, in April, 1996, its 1.5 liters bottle
followed Coke into the marketplace at Rs. 30 Rs 5 less than Cokes
.But it couldnt 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.
PEPSI AND COKE MARKET SHARE IN INDIA
cola warsCoca-cola v/s Pepsi
Over a Century of Cola Slogans, Commercials, Blunders, and
CoupsThere'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.
ADVERTISING HISTORY & COMMERCIALSPepsi 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
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.
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.
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. 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. 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.
BATTLE OF THE BEVERAGES:
PEPSI IS NOT AS PRICEYRegardless 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
times 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.
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.
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.
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.
PREFERENCE OF SOFT DRINKS IN A DAY
Once a day25%
Twice a day20%
Once a week5%
Other50%
Figure-1PREFERENCE TO THE BRAND
Pepsi40%
Coke60%
40%60%0%20%40%60%80%PepsiCokePepsiCokeFigure 2 TO GIVE THE
PREFERENCES
More Popular10%
Packaging10%
Taste70%
Price10%
Figure 3
MARKETING STRAGGLES OF COMPANY EFFECTS THE SALES
Yes55%
No45%
55%45%0%10%20%30%40%50%60%YesNoYesNoFigure 4 FORM OF MARKETING
STRATEGIES
Television Advertising45%
Newspaper Advertising5%
Outdoor Advertising20%
Sales Promotion30%
45%5%20%30%0%10%20%30%40%50%Television Adv. Newspaper AdvOutdoor
AdvSales PromotionTelevision Adv. Newspaper AdvOutdoor AdvSales
PromotionFigure 5 CHANGE BRAND ON THE BASIS OF PRICE REDUCTION
Yes51%
No49%
51%49%48%49%50%51%52%YesNoYesNoFigure 6MORE EFFECTIVE
ADVERTISING
Pepsi Co.50%
Coke Co.50%
%%%50%50%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%0%20%40%60%80%Pepsi
Co.Coke Co.Pepsi Co.Coke Co.Figure 7 CREATIVE AND APPEALING
ADVERTISING OF THE SOFT DRINK COMPANY
Pepsi Co.45%
Coke Co.45%
45%45%0%20%40%60%80%Pepsi Co.Coke Co.Pepsi Co.Coke Co.Figure 8
INNOVATIVE AND EXCITING OFFERS
Pepsi Co.55%
Coke Co.45%
55%45%0%10%20%30%40%50%60%Pepsi Co.Coke Co.Pepsi Co.Coke
Co.Figure 9
Findings & analysisThe 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 PepsiCoca-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.
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 doesnt 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 wont 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
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.
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.
RECOMMENDATIONSSoft 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
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.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 diversificationOnce 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 buildingb) 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.
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. Pepsis 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.
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
CELIBRITIES PLAYING PART IN TO THE SALES
PROMOTION OF THE PRODUCT:
CELIBRITIES OF PEPSI: AMITABH BACHHAN
SHAHRUKH KHAN
PRIETY ZINTA
SACHIN TENDULKAR
SAIF ALI KHAN
SOURAV GANGULY
RAHUL DRAVID
MOHD. KAIF
ZAHEER KHAN
HARBHAJAN SINGH
YUVRAJ SINGH
RANBIR KAPOOR VINDHU DARA SUNGJ
DEEPIKA PADUKONE
CELIBRITIES OF COKE: SALMAN KHAN
AISHWARYA RAI
AAMIR KHAN
VIVEK OBEROI
BIPASHA BASU
AKSHAY KUMAR IMRAN KHAN
KALKI