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institute of engineering and technology IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION In Gujarat Technological University UNDER THE GUIDANCE OF Faculty Guide Indra Meghrajani Submitted by Name Foram Bhatt Tripti kumari Thakur Batch : 2011-13
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MBA SEMESTER III/IV L.J.IET MBA PROGRAMME Affiliated to Gujarat Technological University Ahmedabad November, 2012
INSTITUTES CERTIFICATE
Certified that this Comprehensive Project Report Titled A comparative research analysis of consumer behavior between coca-cola and pepsi is the bonafide work of Tripti kumari thakur Foram Bhatt (Enrollment No.117280592019) &
research under my supervision. I also certify further, that to the best of my knowledge the work reported herein does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate.
DECLARATION
We hereby declare that the comprehensive project which is presented in this report entitled A comparative research analysis of consumer behavior between coca-cola and pepsi submitted for the degree of Master of Business Administration, is our original work and the project report has not formed the basis for the award of any diploma, degree, fellowship or similar other titles. It has not been submitted to any other university or institution for the award of any degree or diploma.
PREFACE
India with a population of more than 1.22 billion is potentially one of the largest consumer markets in the world. With urbanization and development of economy, tastes and interests of the people changes according to the advance nation. Marketing is all about winning this new environment. It is about understanding what consumers want and supplying it more conveniently. Marketing deals with identifying and meeting human needs and social needs. One of the shortest definitions of marketing is meeting needs profitably. Soft drink is a typical consumer product purchased by individual primarily quench their thirst and also for refreshment. Different types of soft drinks are available in the market and more or less content of all soft drinks are same. The market of soft drink products is facing a cutthroat competition. The purpose of this research is to have in-depth awareness and understanding of consumer behavior tenets as one the major determinants of consumer preference when it comes to product imaging and impact. Thus, to provide readers with direct as well as first hand information of beverage choices and find out if Pepsi is dominated by Coca Cola or vice-versa as according to consumers/buyers perceptions and level of preference. You are welcomed with your valuable suggestions.
Thanks and regards, Yours sincerely, Foram Bhatt Tripti kumari Thakur
ACKNOWLEDGEMENT
We express our gratitude to the LJIET, Ahmedabad for giving us the opportunity to work on the major project during our final year of post graduate diploma in marketing and sales.
We would like to thank Mr. Siddhartha Bist, Training & Placement Officer, L.J.I.M.S for giving us an opportunity to do this project.
We would like to thank Mr. P. K. MEHTA our director of L.J.I.M.S for providing such an opportunity for undergoing a comprehensive project.
We thank our humble project guide Prof. Indra Meghrajani for providing us guidance constantly throughout the project.
We express our sincere thanks to all the college professors for helping us throughout the project by giving their valuable time and information.
Table of contents
Sr.no.
Topic Name
Page no.
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Main page Declaration Preface Acknowledgement Executive summary Introduction History of coca-cola History of pepsi Cola war Literature review Research objectives Research methodology Data collection method Biblography
1 3 4 5 7 9 14 20 28 32 33 34 36 38
EXECUTIVE SUMMARY
This project is an extensive research on the consumer behavior of the two Cola giants Pepsi and Coca Cola. It will cover 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. 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 Coca cola 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. One of the selected brands is NO.1 brand in their respective product categories the other one brand is close competitor of the No.1 brands. Total sample size of 150 respondents will be selected for convenience survey which includes consumers. Data will be collected from secondary as well as primary sources. Structure questionnaire will be used to collect primary data.
GENERAL INFORMATION
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, functions, birthday calibration etc. children of all ages and groups are especially attracted by the mere mention of the word soft drinks.
The so-called competition for this type of 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.
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. They may introduce 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.
In todays highly competitive market place, three players have dominated the soft drink industry; The New York based Pepsi Company Inc. The Atlanta based coca- cola and U.K. based Cadbury Schweppes.
Through the globe, these 3 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 giant companies.
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The Soft drink industry is on amazing growth; ultimately there is only one person who will determine their fortunes-The Indian consumer, the real War to quench his thirst has just begun.
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 a book keeper. Pemberton & Robinson laid the first foundation 11
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 globe, 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. 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,
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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 introduced AMITABH BACHHAN for capturing the lemon market through MIRINDA Lemon with zor ka jhatka dhere se lage.
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
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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.
RANGE This is the last but not the least factor, which affects the sale of the products of a particular company.
Company Cola Drinks: Thums Up Coca Cola Pepsi Non Cola Drinks: Gold Spot
Share (%)
29 25 18
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Fanta Mirinda Limca Overall Colas Lemon: Cloudy Clear Orange Mango Soda
9 8 9 62
7 3 17 3 8
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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 threelegged 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. Pembertons 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. Pembertons 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 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 16
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 CocaCola 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 familyowned businesses. Some were open only during hot-weather months when demand was high. 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 17
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. 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 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.
Mission
To refresh the world... 18
To inspire moments of optimism and happiness... To create value and make a difference
Vision
People: Be a great place to work where people are inspired to be the best they can be Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy peoples desires and needs Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities Profit: Maximize long-term return to share owners while being mindful of our overall responsibilities Productivity: Be a highly effective, lean and fast-moving organization
Values
Leadership: The courage to shape a better future
Integrity: Be real
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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.
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Coca-Cola
Thums-Up people. Limca Fanta Kids. Maaza people. Sprite Kinley Soda
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HISTORY OF PEPSI
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. 22
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.
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 23
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." 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, PepsiCos Frito Lay division has 3 state-of-the-art plants. PepsiCos business is based on its sustainability vision of making tomorrow better than today. PepsiCos commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers. Beverages
PepsiCo Indias 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 Drinks Tropicana Nectars, Tropicana Twister and Slice. Local brands Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands
Foods 24
PepsiCos 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 Lays Potato Chips; Cheetos extruded snacks, Uncle C hips and traditional snacks under the Kurkure and Lehar brands. The companys high fiber breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lays core products, Lays, 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. 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.
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. 25
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.
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. 26
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. 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 Pepsis 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 its arch-rival, PepsiCo has achieved with its fast and furious marketing. But to win them, Coke is copying 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. Today, Coke's product line includes, Coca-Cola, Thumps Up, Fanta, Gold Spot, Maaza, Citra, Sprite, Bisleri Club Soda and Diet Coke. PACKAGING 27
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. 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
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to incur a little more than Pepsi as Pepsi paved its way to India in 1989 while Coke made a come back in 1993.) Today the prices of Pepsi and Coke are the same making it difficult in future and present to compete on the basis of price.
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. 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
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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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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 memorabilia, the jingles, the trivia - all are still popular. 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.
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.
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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. 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.
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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.
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Introduction of study
This study is conducted between two global giants Coca Cola & Pepsi. This research is basically a comparative study of two well known competitors in beverage industry of India which are Pepsi Cola & Coca Cola. The primary purpose of this research is to find out which company is leading the market. This research required us to conduct the consumer research on why they chose the drink. To find out the factors & reasons those influence the consumers to choose their preferred drink.
The world's soft drinks market is totally subject by just two players Coke & Pepsi. Coke, 'The genuine thing' other than a century old was born eleven years more on of its competitor & a century later on, still maintains the original lead. Pepsi, 'The challenger', even now poses as the hurried, young upstart & is struggle the cola was as the drink for the younger age group.
To know consumer buying behavior and preference towards coca-cola and pepsi, the comparative methodology and approach will be used in this study, which is both quantitative and qualitative measure, investigating
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LITERATURE REVIEW
According to Ramanuj Majumdar, Consumer behavior is the study of how, why and what people do when they buy products or avail of some services. It attempts to understand the buyer decision making process, both individual and in groups. Preference is influenced by various factors related to product.
According to this study many factors were find out for preferring a brand like Brand persona, Brand constancy, Brand loftiness, Brand value etc. In the identification of factors affecting the brand preference, it was concluded that brand Persona is the most effective factor that affects the brand preference. This brand persona deals with the personality aspects or the external attributes of brand, thus it can be said that consumer prefer any brand by looking at the external attributes of a brand. The intensity of the colour and the flavour are the key drivers behind consumer acceptance of beverages, says a new study involving DANONE. But packaging and labeling are not as important for winning over consumers, according to findings published in the journal Food Quality and Preference, The study involved consumers at different stages of development and highlights the importance of adopting a sensory marketing approach, said the researchers from French research organization Adrian, the University of Rennes 1, DANONE R&D. The finding of various studies reveals that there is low degree of brand awareness in rural areas, whereas there is a moderate degree of brand awareness in urban India. The highly educated rural and urban respondents have high degree of brand awareness for many food products, and the less educated rural and urban respondents have low degree of brand awareness for many food products.
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Research Objectives
To compare and contrast consumer buying behavior and knowledge of Pepsi versus Coca Cola. Comparative study to find out the market share of the Products in india. To study the effect of Advertisement on the buying decision of the Consumer. To study the Consumer Perception about the taste and availability of the product. To examine how brand image influences consumer behavior.
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RESEARCH METHODOLOGY
1. Research Methodology
It is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by researchers, in studying our research problem along with the logic behind it. It is essential for the researchers to know not only the research method technique but also the methodology.
2. Research Process
It consists of a series of action necessary to effectively carry out research and the desired sequence of these steps.
Collection of data
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3. Research Design A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. Descriptive research is used in the preparation of the project.
4 Sample Design
For sample the feedback is taken from 150 customers. The feedbacks are collected from different malls in Ahmedabad.
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2. Secondary Data
Secondary data is also used to find some facts regarding company through Internet, Journals, Books, and Newspapers.
3. Primary Data
Through:-
Questionnaire,
Personal interview
Observation
4. Secondary Data
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5. Research Apparatus
Survey Method
6. Research Instruments
7. Sample Universe
8. Sample Size
The sample size for the research is 150. The data will be collected from 150 customers from the 4 different malls in the Ahmedabad which includes both male and female.
9. Tools Adopted
For the project study the tools adopted is questionnaire having scale type questions in which it is measure Excellent, Good, satisfactory, Fair, Poor. The questionnaire will be close-end and open-end in which Rating scale Semantic differential are used.
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Statistical tools:-
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Pepsi Coke
40% 60%
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70%
More Popular
Packaging
Taste
Price
45
Yes No
55% 45%
55% 45%
Yes Yes No
No
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20% 10% 0%
Television Adv. Newspaper Adv Television Adv. Newspaper Adv Outdoor Adv Outdoor Adv Sales Promotion Sales Promotion
5%
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Yes No
51% 49%
No
51%
49%
No
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50% 50%
80% 60% 40% 20% 0% Pepsi Co. Pepsi Co. 50 % 50 % % % % % Coke % Co. % % Coke Co. % % % % % % % % % % % % % % % % % % %
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45% 45%
45%
45%
50
55% 45%
55% 45%
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Innovative and exciting offers The consumers 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 Indias 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.
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56% 35% 9%
9%
56%
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44% 51% 5%
5%
44%
51%
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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 Coca-Cola The results of 95 were : Pepsi Coca-Cola 7th 9h 5h 4h
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.
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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 its 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 Pepsis succ ess 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 57
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. 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, salespromotion schemes, etc. Pepsi has been voted the number one customer service company across categories in terms of regularity, availability responsiveness and initiative.
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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.
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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.
The COLA WARS between coca-cola and Pepsi would further grow and in my view its never ending
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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.
QUESTIONNAIRE
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Pepsi Coke
Q.3. WHICH PARTICUALAR RATE TO GIVE THE PREFERENCES? More Popular Packaging Taste Price
Yes No
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Q.6. WILL YOU CHANGE THE BRAND ON THE BASIS OF PRICE REDUCTION?
Yes No
Q.8. WHICH BRAND HAS CREATIVE AND APPEALING ADVERTISING OF THE SOFT DRINK COMPANY?
Pepsi Co.
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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
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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 150 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: 65
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 favorites 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 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 66
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
150 consumers 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 cocacola. 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.
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BIBLIOGRAPHY
The followings have proved to be valuable and helpful to us while preparing the report.
WWW.PEPSICO.COM
WWW.COCA-COLA.COM
WWW.COLA-WARS.NET
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