http://www.gameswala.

com/

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 !P"s of marketing. The major players in the soft drink industry in India are Coke and Pepsi. Pepsi holds the major market share followed by Coke. They have a cut throat competition between themselves. #hatever strategy is followed by one company, it is copied by the other.

$ne of the selected brands is %$& brand in their respective product categories the other one brand is close competitor of the %o & brands. Total sample of si'e of ()) respondents selected on the basic of convenience was surveyed which include consumers. *ata was collected from secondary as well as primary sources. +tructure ,uestionnaire was use to collect primary data

http://www.gameswala.com/

. exe i

INTRODUCTION:
In the modern urban culture consumption of soft drinks particularly among younger generation has become very popular. +oft drinks in various flavors and tastes are widely patroni'ed 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.

#ith 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. -ass 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.

SO T DRIN! INDUSTRY: AN OVERVIE"

It all began in &001, when a tree legged brass kettle in 2ohn +tyth pemberton"s backyard in 3tlanta was brewing the first P of marketing legeent 4naware the pharmacist has given birth to a caramel colored syrup, which is now the chief ingredient of the world"s 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. 5,ually oblivious to the historic value of his actions was 6rank Ix. 7obinson, his partner and book keeper. Pemberton 8 7obinson laid the first foundation of this beverage when an average nine drinks per day to begin with, upping volumes as sales grew. In &09!, this beverage got into bottle, courtesy a candy merchant from -ississippi. :y the &9;)"s Colas was a daily consumption item, stored in house hold fridges. +oon were born other non cola variants of this product like orange 8 <emon. %ow, the soft drink industry has been dominated by three major player = >&? The %ew @ork based Pepsi co. Inc.>(? The 3tlanta based coca cola co. >/? The united Aingdom based Cadbury +chweppes. Though out the glove these major players have been battling it. $ut for a bigger chunk of the ever growing cold drink market. %ow this battle has begun in India too. India is now the part of cold drink war. Bone are days of 7amesh Chauhan, India"s one time cola king and his bouts of pistol shooting. 5xpect now to hear the boon of cannons when the Coca Cola 8 Pepsi co. battles it out for, as the Cordon goes a bigger share of throat. :y buying $ver local competition, the two 3merican 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. :oth players seen an enormous potential in his country where swigging a carbonated beverage is still considered a treat, virtually a luxury. Conse,uently, by world standards India"s per capita consumption of cold drinks as going by survey results is rock bottom, less than over %eighbors Pakistan 8 :angladesh, where it is four times as much. :ehind the hype, in an effort invisible to consumer Pepsi pumps in 7s /))) crores >&99!? to add muscle to its infrastructure in bottling and distribution. This is apart from money that company"s franchised bottles spend in upgrading their plants all this has contributed to substantial gains in the market. In colas, Pepsi is already market leader and in certain

cities like :anaras, Pepsi outlets are on one side 8 all the other colas put together on the other. #hile coke executive scruff at Pepsi"s claims as well as targets, industry observers are of the view that Pepsi has definitely stolen a march over its competitor coke. 3part from numbers, Pepsi has made ,ualitative gains. The foremost is its image. This image turnaround is no small achievements, considering that since it was established in &909, taking the hardship route prior to liberali'ation and weighed down by export commitments. %ow, 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 fre,uent consumer promotion campaigns. 3s 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. <ike Pepsi, coke is picking up e,uity in its bottles to guarantee their financial supportD one side coke is trying to increase its popularity through. 5at 6ood, enjoy 6ood. *rink only coca cola. 5at cricket, sleep cricket. *rink only coca cola. 5at movies, sleep movies. *rink only coca cola. $n the other side of coin Pepsi has introduced 3-IT3:2 :3C223% for capturing the lemon market through -I7I%*3 = <emon with E'or ka jhatka dhere se lageF.

:ut no doubt" that 4A based Cadbury is also recogni'ing its presence. +o there is a real crush in the soft drink market. with launch of the carbonated organi'e drink Crush, few year ago in :anaras ., the first in a series of a launches , Cadbury +chweppes beverage India >C+:I? 23+ P<3%%5*G The world third largest soft drink marketers all over the country.C+:I o wholly owned subsidiary of the <ondon based H 1.;(billion. Cadbury +chweppes is hoping that crush is going well and well not suffer the same fate as the 7s. &I; crore Cadbury India"s apple drink 3pella. C+:I is now with orange >crush?, and +chweppes soda in the market.

3s orange drinks are the smallest of non cola categories that is 7s. &&)) crore markets with &)J market share and cola heaving ;)J is followed by <emon segment with (;J. The success of soft drink industry depends upon ! major factors vi'. 3vailability Kisibility Cooling 7ange

COCA #CO$A COM%ANY %RO I$E

Aeeping 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 organi'ations which is 2.C.C 8 :.C.C with a capital of /;) 4.+.H each by virtue of sellout decision of the passed managing director +h. +. C. 3ggarwal. 2industan Coca Cola bottling >% #? Pvt. <td. %ajibabad took the complete possession of this plant, land, machinery, 8 intellectuals on 6ebruary &!" &990 and since then 2.C.C, looking after all its affairs under company owned bottling plant to establish integrated marketing system in the area.

CORE &RANDS:
Coca ColaG *eveloped in a brass pot in &001, coca cola is the most admired trademark around the globe. %ot to mention the best selling soft drink in the world. recogni'ed and

+priteG In &91&, a citrus flavored drink made its 4.+ debut, using

E+prite :oy

Eas inspiration for its name. This elf with silver hair and a big smile was used in &9!)s advertising for Coca Cola. +prite is now the fastest growing major soft drink in 4.+ and the world"s most popular lemon lime soft drink.

6anta G The name Efanta E was first registered as a trademark in Bermany in &9!& ,when it was used for a few year for a soft drink created from available materials and flavors . The name was then revived in &9;; in %aples, Italy, when it was used for theGF fanta Eorange drink we know today. It is now the trademark name for a line of flavored drinks around the world. *iet cokeG The extension of the coca cola name began in &90( with the introduction of diet coke >also called coca cola light in some countries?. *iet coke ,uickly becomes the number = one selling low =calorie soft drink in the world.

'ISTORY IN INDIA

Coca(cola )* I*+)a

Coca Cola, the corporation nourishing the global community with the world"s largest selling soft drink concentrates since &001, returned to India in &99/ after a &1 year hiatus, giving new thumbs up to the Indian soft drink market. In the same year, the Company took over ownership of the nation"s top soft drink brand and bottling network. It"s no wondering our brands assumed an iconic status in minds of world"s consumers.

&)

A 'ealth, -.owth to the I*+)a* Eco*om,

5ver since, Coca Cola India has made significant investments to build and continually consolidate its business in the country, including new production facilities, waste water treatment plants, distribution systems, and marketing channels. Coca Cola India is among the country"s top international investors, having invested more than 4+H & billion in India in the first decade, and further pledged another 4+H&)) million in ())/ for its operations.

A %/.e Comm)tme*t to the I*+)a* Eco*om,

The Company has shaken up the Indian carbonated drinks market greatly, giving consumers the pleasure of world class drinks to fill up their hydration, refreshment, and nutrition needs. It has also been instrumental in giving an exponential growth to the

country"s job listings.

C.eat)*g E*o.mo/s 0o1 Oppo.t/*)t)es

&&

#ith virtually all the goods and services re,uired to produce and market Coca Cola being made in India, the business system of the Company directly employs approximately 1,))) people, and indirectly creates employment for more than &(;,))) people in related

industries through its vast procurement, supply, and distribution system. The Indian operations comprises of ;) bottling operations, (; owned by the Company, with another (; being owned by franchisees. That apart, a network of (& contract packers manufactures a range of products for the Company. $n the distribution front, &) tonne trucks = open bay three wheelers that can navigate the narrow alleyways of Indian cities = constantly keep our brands available in every nook and corner of the country"s remotest areas. These are only some of the facts that speak about our commitment to the growth of the Indian 5conomy

&(

%ROMISE &Y COCA(CO$A

The coca cola company exists to benefits and refreshes every one it touches. The basic proposition of our business is simple, solid and timeless. #hen 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.

-ore then a billion times every day, thirsty people around the world reach for coca cola products for refreshment. They deserve the highest Luality = every time. $ur promise to deliver that ,uality 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. $ur investment in local communities in over ()) countries totals billions of dollars in jobs, facilities, marketing, the purchase of local good and services, and local business partnership. 3lways 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 .

&/

&RANDS IN INDIA

&!

&RAND IN INDIAN ORI-IN

B$<* +P$TG this orange carbonate soft drink was introduced in the early &9;)c, and ac,uired by the Coca Cola company in &99/, its tangy taste has been popular with Indian teenagers

<I-C3G It is thirst ,uenching beverage features a fresh and light lemon lime taste and lighthearted attitude. The limca brand was introduced in &9I& and ac,uired by the coca cola company in &99/.

&;

-33M3G -aa'a, launched in &90! and ac,uired by the coca cola company in &99/, is a non carbonated mango soft drink with a rich, juice 8 natural mango taste.

T24-P+ 4PG in &99/, the Coca Cola company ac,uired this brand, which was originally introduced in &9II. Its strong and fi''y taste makes it uni,ue carbonated Indian cola.

%E%SICO

&1

PepsiCo is one the largest companies in the 4.+. It figures amongst the largest &; companies worldwide according to the number of employees hired. It has a 4.+. 6ortune rank of ;).The company profits for &99I were H(.&! billion on revenues of H().9( billion and Pepsi is bottled in nearly &9) countries. PepsiCo is a world leader in convenient snacks, foods and beverages with revenues of more than H!/ billion and over &90,))) 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, 6rito <ay and Pepsi 6ood 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 &;) countries across the globe. The group has established for itself once of the strongest brands in various segments of its operations.

&I

The beverages segment primarily markets its Pepsi, *iet Pepsi, -ountain *ew and other brands worldwide and I 4P outside the 4.+. markets. These are positioned in close competition with Coca Cola Inc. of 4+3. 3 point which is worth a mention is that Coca Cola gets 0)J of its profits for International operations while the same figure for PepsiCo stands at 1J. The segment is also in the bottling plants and distribution facilities and also distributes the ready to drink tea products of <ipton in %orth 3merica. 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 -exico, the 4A and Canada. 6rito <ay represents this segment of PepsiCo. The restaurant segment earlier primarily consists of the operations of the worldwide Pi''a 2ut, Taco :ell and A6C chains. P6+. Pepsi company"s restaurant distribution operation, supplies company owned and franchise restaurants in the 4.+. The company ventured into restaurant business with Taco :ell, A6C, Pi''a 2ut ended last year when they were spanned off from the company. 3 packaged goods company comprised of Pepsi Cola Company and 6rito <ay 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.

&0

%E%SICO IN INDIA

PepsiCo gained entry to India in &900 by creating a joint venture with the Punjab government owned Punjab 3gro Industrial Corporation >P3IC? and Koltas India <imited. This joint venture marketed and sold <ehar Pepsi until &99&, when the use of foreign brands was allowedD PepsiCo bought out its partners and ended the joint venture in &99!. $thers claim that firstly Pepsi was banned from import in India, in &9I), for having refused to release the list of its ingredients and in &99/, the ban was lifted, with Pepsi arriving on the market shortly afterwards. These controversies are a reminder of NIndiaOs sometimes acrimonious relationship with huge multinational companies.N Indeed, some argue that PepsiCo and The Coca Cola Company have Nbeen major targets in part because they are well known foreign companies that draw plenty of attention.N In ())/, the Centre for +cience and 5nvironment >C+5?, a non governmental organi'ation in %ew *elhi, said aerated waters produced by soft drinks manufacturers in India, including multinational giants PepsiCo and The Coca Cola Company, contained

&9

toxins, including lindane, **T, malathion and chlorpyrifos P pesticides that can contribute to cancer, a breakdown of the immune system and cause birth defects. Tested products included Coke, Pepsi, I 4p, -iranda, 6anta, Thumps 4p, <imca, and +prite. C+5 found that the Indian produced PepsiOs soft drink products had /1 times the level of pesticide residues permitted under 5uropean 4nion regulationsD Coca ColaOs /) times. C+5 said it had tested the same products in the 4+ and found no such residues. 2owever, this was the 5uropean standard for water, not for other drinks. %o 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. :ut an Indian parliamentary committee, in ())!, backed up C+5Os findings and a government appointed committee, is now trying to develop the worldOs first pesticides standards for soft drinks. Coke and PepsiCo opposed the move, arguing that lab tests arenOt reliable enough to detect minute traces of pesticides in complex drinks. 3s of ());, The Coca Cola Company and PepsiCo together hold 9;J market share of soft drink sales in India. PepsiCo has also been accused by the Puthussery panchayat in the Palakkad district in Aerala, India, of practicing Nwater piracyN 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 ())1, the C+5 again found that soda drinks, including both Pepsi and Coca Cola, had high levels of pesticides in their drinks. :oth 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 Aerala, sale and production of Pepsi Cola, along with other soft drinks, was banned by the state government in ())1, but this was reversed by the Aerala 2igh Court merely a month later. 6ive other Indian states have announced partial bans on the drinks in schools, colleges and hospitals

()

%E%SI CO INDIA: A ORTUNE 233 COM%ANY IN INDIA

PepsiCo, which ranks among the world"s five largest food and beverage companies with &1 brands, and its partners have invested more than 4+H I)) million in India building businesses, which today provide direct or indirect employment to more than 1),))) people. +ince Pepsi"s entry into the Indian market in &909, several brands from its portfolio have become established category leaders. :rand Pepsi is now the (nd biggest brand in the country. PepsiCo"s portfolio of beverage brands in India includes the flagship cola brand PepsiD *iet PepsiD two flavors of -irinda = $range and <emonD I4PD -ountain *ewD packaged drinking water 3,uafinaD variants of the fruit drink brand +liceD the &)) per cent fruit juice brand Tropicana in several variants and the world"s leading sports drink Batorade.

(&

%eps) ( Yeh 'a) Yo/*g)sta* Me.) 0aa*

&RAND 'ISTORY
Pepsi is a hundred year old brand loved by over ()) million people worldwide. The largest single selling soft drink brand in India is the ubi,uitousOsocialiserOat every occasion.

@oungistan loves it. ()) million people worldwide love it. :ut 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.

&001, 4nited +tates of 3merica. Caleb :rad man, the man with a plan, got on to formulate a blockbuster digestive drink and decided to call it :rad"s drink. It was this doctor"s potion that was to become Pepsi Cola in &090, and eventually, Pepsi in &9)/.

Pepsi has always played on the front foot and since its inception has come out with revolutionary concepts like *iet, (< bottles, recyclable plastic cola bottles and the enviable -y Can.

&RAND ADVANTA-E

Pepsi has become a friend to the youth and has led many youth cultures. @oungsters over the generations have grown up with Pepsi and share an emotional connect with it, unlike any other cola brand. :e it parties, hangouts, or just another day at home, a day is never complete without the fi'' of PepsiQ

((

Pepsi, Cricket and :ollywood have been joined at the hip since the beginning. +hah 7ukh Ahan, +achin Tendulkar, +aif 3li Ahan, 3mitabh :achchan, Aareena Aapoor, Priyanka Chopra, Kirender +ehwag, -. +. *honi, Cohn 3braham, 7anbir Aapoor and *eepika Padukone are a few celebrities who will go any length for a chilled Pepsi.

The Pepsi -y Can is undoubtedly the most popular cola pack of all times. It is not just a pack but a style statement for today"s youth.

T'E RIVAR$Y &E-INS:

Co4e Comes to I*+)a
Coca Cola comes to India with fanfare in the fifties. 6or a number of days, The 2industan Times and other newspapers of %ew :anaras 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. 3fter a few days, Coke was introduced. It was an entirely new drink which fascinated people. It soon became the national drink. 6or 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 +ardar Charanjit +ingh, +ardar -ohan +ingh. 3 practical man -ohan +ingh reali'ed that to populari'e Coca Cola, and make it a best seller it was necessary to Ecatch them young.F +o he focused on youngsters in the society. The company reali'ed 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. 6ew products appears to be more similar than soft drinks, yet the Cola wars that mark the competition between Coke and Pepsi show how even organi'ations with highly similar product can be differentiated by their business strategies. Then comes battles over the

(/

issue of bottle si'e standardi'ation. Coke the arch rival tried to offering more Cola at a lower price. Pepsi which had some of its early investment tied up in (;)ml bottles, went the fountain way. The Beneral bottle si'e freed has settled at /)) ml. &)) ml more than the pre -%C standard. 6ountain mix dispensers, carry home bottles, even &.;) plastic bottle with caps good enough to keep them lying down and still preserve the fi''.

MAR!ETIN- STATE-IES O CO!E AND %E%SI

a5 %RODUCT
Coke was launched in India in 3gra, $ctober (!, in O9/O, soon after its traditional all Indian launch of its Cola. 3t the sparking new bottling plants at 2athra, near 3gra. Coke was back with a bang after its exit in &9II. Coke was planning to launch in next summer the orange drink, 6anta 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 7amesh 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, CokeOs product line includes, Coca Cola, Thumps 4p, 6anta, Bold +pot, -aa'a, Citra, +prite, :isleri Club +oda and *iet Coke. %AC!A-INCoca Cola India <imited >CCI<? has bottled its Cola drink in different si'es and different packaging i.e., ()) ml bottle, /)) ml. :ottle, //) ml. Cans, ;)) ml. :ottle fountain Pepsi, and bottles of & and ( litre. %RODUCT %OSITIONIN$ne important thing must be noticed that Thumps 4p is a strong brand in western and southern India, while Coca Cola is strong in %orthern and 5astern India. #ith (!

volumes of Thumps 4p being low in the capital, there are likely chances of Coca Cola slashing the prices of Thumps 4p to 7s. ; and continue to sell Coca Cola at the same rate. 3nalysts feel that this strategy may help Coke since it has ( Cola brands in comparison to Pepsi which has just one. Thumps 4p accounts for !)J of Coca Cola companyOs turn over, followed by Coca Cola which has a (/J share and <imca which accounts for &IJ 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 -r. *onald short C5$, Coca Cola India, said that, N we will be absolutely comfortable if Thumps 4p is %o. & brand for us in India in the year ())). #e will sell whatever consumers want us toN. 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.

15

%RICE
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 +oft *rinks Industry, and the intense competition make it very difficult to change or alter the prices. The various costs incurred by the individual companyOs are almost unavoidable. These being the costs of concentrates, standard bottling operations, distributor and bottlers commissions, distribution expenses and the promotional and advertising expenditure >3s far as Coke is concerned, it had to incur a little more than Pepsi as Pepsi paved its way to India in &909 while Coke made a come back in &99/.? Currently a /)) ml. Coke bottle is available for 7s. 1 to0 The //) can was initially available for 7s. &/ and now, since the price has gave up to 7s. &0 per can. The prices of

(;

;)) m, & litre. 3nd (ltr being 7s. &; 7s. (/ and 7s. !) respectively >according to the current survey?. *ating back to R9/O, when Pepsi hiked the price of Pepsi Cola from 7s. ; to 7s. 1 per (;) ml. bottle in some parts of the country including 3gra. Coke penetrated the market with price of 7s. ; for a /)) ml. bottle, making it cheaper by 7s. & and ;) ml. than Pepsi. CokeOs strategy at that time being able to expand the availability of soft drinks even in rural India. CokeOs 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 si'es by Parle. :ut the prices of soft drinks have shot up since PepsiOs arrival and the current prices are being mentioned as under.

%.)ce l)st
Name Co4e %e. &ottle Co4e Co4e Co4e D)et Co4e 7Ca*5 Co4e 7Ca*5 &ottle S)6e 833 ml :33 ml 233 ml 7%last)c / -lass5 8 l)t.e ::3 ml Ca* ::3 ml Ca* MR% 7)* Rs.5 9 ;3 88 93 :2 :<

(1

2owever, the trends may have been in the early O9)Os, now the prices of Pepsi and Coke are the same making it difficult in future and present to compete on the basis of price.

c5

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

&99!. 2ence, it had ready access to over (, )),))) retailer outlets and 1) 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 (, ;),))) outlets >in contrast with PepsiOs (, )),)))?. Coke has a greater advantage in terms of geographical coverage. :ut Coke has had problems with its bottlers as the re,uired profits for the bottlers have not been forthcoming. This is more so because Coke has hiked the price of its concentrate by 7s. 0 6urther, CokeOs operations in India are &))J 6obs. %ow, it plans to convert then into C$:$s. 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. -r. +hort also reali'ed 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.

(I

Coke and Pepsi have devised strategies to get rid of middlemen in the distribution network. 2owever, ;)J of the industry unfortunately depends on these

middlemen. 3s of now, around &)) agents are present in :ananas. :ottlers of the ( multinationals have strongly felt the need to remove these middlemen from the distribution system, but very little success has been achieved in doing so.

D5 %ROMOTION
It must be remembered that soft drinks purchases are an Nimpulse buy low involvement productsN which makes promotion and advertising an important marketing tool. The ( 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 ,uality 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 ,uality relative to price. 3ccording to Paul +tobart, 3dvertising encourages customers to recogni'e the ,uality 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, :$*, company presidents but above all from the consumer.

(0

CokeOs red color catches attention easily and also the *iet Coke which it introduced was taking the Cake, as Pepsi has not come out with this in India. 5ver since CokeOs entry in India in &99/, Coke made a come back >after ,uitting in &9II?, in $ctober (! in 3gra, the city was flooded by trucks, there wheelers, tricycle cards all with huge red Coke embla'oned umbrellas. 7etailers 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.

STRATE-IES ADO%TED &Y CO!E AND %E%SI

The %eps) %.ocess: *espite being a global brand, Pepsi has built its success on
meeting the Indian consumer"s needs, particularly in terms of making the brand synchroni'e with locali'ed 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 *rink Pepsi, Bet +tuff scheme, which offers large discounts on other products to Pepsi buyers as well as local.

The Co4e Cop,: 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 #orld Cup Cricket, &991, and world cup football &990. :ut now

(9

coke is also entering into local actions. Coke is also trying to make their brand synchroni'e with locali'ed events traditions and festivals. Coca Cola new tag line in this advertisement is E7eal shopping, real refresherF. In this way Coke is copy Pepsi.

EM%O"ERMENT
The %eps) %.ocess: $nce of the strongest weapons in Pepsi"s armory is the flexibility
it has empowered its people with. 5very 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 Co4e Cop,: 6lexibility is the weapon that Coca Cola, fettered as it is by the need
for approvals from 3tlanta for almost everything. In the past, this has shown up in its stubborn insistence on junking the franchisee network it had ac,uired from ParleD in its dependence on its own feedback mechanism over that of its bottlersD" and on its head,uarters led approach.

%RICE
The %eps) p.ocess: Pepsi has consistently wielded its pricing strategy as in invitation
to sample, aiming to turn trial into addiction. It launched the ;)) ml bottle in &99! at 7s. 0 versus Thumps 4p"s 7s. 9, in 3pril, &991, its &.; liters bottle followed Coke into the marketplace at 7s. /) = 7s ; less than Coke"s .:ut it couldn"t continue the lower price positioning for long.

/)

The Co4e Cop,: Initially, coke carbon copied the strategy by introducing its //)ml
cans in Canuary &991, at an invitation price of 7s. &; before raising it to 7s. &0. :y this time, it had reali'ed that the Coca Cola brand did not hold enough attraction for customers to fork out a premium. The ())ml Coke, launched so far in parts of eastern, western, and northernIndia, is priced at 7s. ;, lowering the entry barriers. Too really drive the market, as Coke wants to you must go down to 7s. /".

%E%SI AND CO!E MAR!ET S'ARE IN INDIA

/&

CO$A "ARS
Coca(cola =/s %eps)

OVER A CENTURY O CO$A S$O-ANS> COMMERCIA$S> &$UNDERS> AND COU%S

ThereOs little doubt that the most spirited and intense competition in the beverage world is between Coca Cola and Pepsi. These two 3merican 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 3merica has not become jaded about the cola wars. The memorabilia, the jingles, the trivia Pepsi thirst that is thriving on our planet. all still popular. +o I am offering this page in an attempt to assuage a wee bit of the Coke and

IT A$$ STARTED . . . .
Coca Cola was invented and first marketed in &001, followed by Pepsi in &090. Coca Cola was named after the coca leaves and kola nuts Cohn Pemberton used to make it, and Pepsi after the beneficial effects its creator, Caleb :rad ham, claimed it had on dyspepsia. 6or many years, Coca Cola had the cola market cornered. Pepsi was a distant, no threatening contender. :ut 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.

ADVERTISIN- 'ISTORY ? COMMERCIA$S

Pepsi has definitely leaned towards the appeal of celebrities, popular music, and young people in television commercials, while Coke relies more heavily on images of happiness and togetherness, tradition, and nationalism, perpetually trying to cash in on its original lead. In a simplified sense, you could sum up the strategies as Coke: Old, Pepsi: New. In fact, as we will see, when Coca Cola tried something new, it was disaster. The first maga'ine ad for Coca Cola appeared in Munsey's in &9)(. 3dvertisements began to appear on billboards, newspapers, and streetcars. +oon there were serving trays with images of people enjoying Coca Cola, and glasses with the colaOs name on them. 3t this time, Coca Cola and Pepsi were served in drugstore soda fountains. In &9)9, Pepsi used its first celebrity endorser, automobile race driver :arney $ld field, in newspaper ads. In &9(&, Pepsi went bankrupt, but continued to appear on the scene, although not nearly so successfully as Coca Cola. In &9/&, Pepsi went bankrupt again, but the new owner, 7oy -egargel, would hit upon an idea that would finally give Coca Cola some competition. In &9/!, he marketed Pepsi in a &( ounce bottle for a nickel. 3t the time, Coca Cola was sold in a 1 ounce bottle for ten cents. KoilaQ Profits for Pepsi. Pepsi racked up another first by airing the first radio jingle in &9/9. It was so popular that it was played in jukeboxes and became a hit record Coca Cola hit the airwaves in &9!&. In &9!1, inflation forced Pepsi to increase prices. 3nd in &9;), Pepsi offered a larger (1 ounce bottle to court the young 3merican housewife. In the &91)Os, the cola ad wars moved to television. Coca Cola employed a host of celebrity singers to promote the product, including Connie 6rancis , Tom Cones, The %ew //

:eats, %ancy +inatra, and The +upremes. 3s we moved through the years, both colas incorporated some of their best slogans >NPepsi BenerationN and Nthe 7eal ThingN? into subse,uent commercials. In the &9I)s, market research showed that consumers preferred the taste of Pepsi over Coke. The Pepsi Challenge is still being conducted today. :ut Coke came up with what is arguably the best of all cola commercials, the &9I& IOd like to buy the #orld coke ad.

This landmark was recalled in Christmas versions in &90/ and &90!, and a &99) +uper :owl ad, which was enough to make some :aby :oomers weep with nostalgia. In the &90)Os, Pepsi lined up the celebrities, starting with late -ichael Cackson, then -adonna, -ichael C. 6ox, :illy Crystal, <ionel 7itchie, Bloria +tefan, Coe -ontana, and others. Coke signed on -ichael Cordan, %ew Aids on the :lock, 3retha 6ranklin, 5lton Cohn, and Paula 3bdul. In &90;, responding to the pressure of the Pepsi Challenge taste tests, which Pepsi always won, Coca Cola decided to change its formula. :ill Cosby was the pitchman. This move set off a shock wave across 3merica. Consumers angrily demanded that the old formula be returned, and Coca Cola responded three months later with Classic Coke. 5ventually, %ew Coke ,uietly 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 >Mima, bottled water?. 3nd then there was Pepsi <ite with the lemony flavor and one calorie, introduced in &9I;. 7emember that oneS 3pparently they didnOt expect us to because later they gave us Pepsi $ne, using the same concept, but a completely different taste. 3nd, extending the idea even further, we are now getting Pepsi Twist, a new product with a twist of lemon flavor.

/!

In &99&, 7ay Charles sang, N@ou got the right one baby, uh huhQN 3lso in the &99)s, Cindy Crawford and the +pice Birls pitched Pepsi. 3nd then Pepsi aired commercials featuring the aggravating little girl >2alide 5isenberg? with her troubling male voice. In the new century, both colas continue to battle it out on the television screen. 3nd celebrities continue to be important promoters. 7ecently, Pepsi has had commercials by :ob *ole and 6aith 2ill, among others.

/;

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

/1

%eps) = Coca(Cola wa. t/.*s 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 chargeG 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 PepsiOs 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 do'en 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 ,uit Pepsi to join Coca Cola. Custice C - %air of the *elhi high court on 3pril &I issued notices and summons to Coca Cola and &; others for -ay 1. 2owever, Custice %ayar refused to grant the ex parte injunction sought by Pepsi India to stop the alleged inducements by Coke in offering employment to PepsiOs employees while the suit was pending in court. $n behalf of Pepsi, 3shok *esai and 3run Caitley contended that Coca Cola had been Nrattled by the huge success of Pepsi in India entered into a conspiracy during the last six months to cause loss and damage to PepsiOs business interests by adopting unfair and illegal means.N

/I

It added that Coca Cola had approached many key managers and had successfully lured a commercial manager of its bottling business Baurav *uggal, and a manager in +urat +ailesh Coshi, 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 9) day notice period and the one year confidentiality agreement. The latter deal bars employees joining its rivals for at least a year. *esai claimed CokeOs actions would directly harm the business interests of Pepsi, which had invested over H/)) 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. :esides, any effort by a company to restrict its employees from joining other companies might fall foul of the -onopolies and 7estrictive Trade Practices 3ct as an unfair trade practice. Pepsi has cited the instance of Coke snapping up cricketer Cavagal +rinath in spite of the latter signing a contract with PepsiOs sports consultant, (&st Century -edia. 2owever, media reports, ,uoting sources, said that +rinathOs contract had been only in the verbal stage. +imilarly, Pepsi has charged Coke with inducing the :oard of Control for Cricket in India to give the sponsorship of the recently concluded Pepsi Triangular Cricket +eries to Coke, as acknowledged in the :CCI submission before the :ombay high court, even while a contract was signed with Pepsi. Pepsi has listed the case of Coke trying to induce its music consultant *%3 %etworks Private <td, which organi'ed the @anni show, to snap its ties with Pepsi and join Coke.

/0

Incidentally, in results announced for the first three months of the year, Pepsi has swept Coca Cola aside. Pepsi has reported a growth of (I per cent compared to CokeOs (& per cent during the same period. In the first three months of last year, Pepsi grew by &0 per cent only. Coca Cola India chief executive *onald +hort had announced that Coke would grow by at least () per cent for the whole of &990. Coca Cola, along with the Parle brands it ac,uired when it came into India Thums 4p, <imca, and Bold +pot continue to dominate India with a ;; per cent market share to PepsiOs !/ per cent. :ut in the cola segment, Coke comes a poor third after Thumps 4p and Pepsi. The current summer season is the most important for the cola giants, with consumption at its peak.

/9

&ATT$E O T'E &EVERA-ES:

!)

%E%SI IS NOT AS %RICEY

7egardless of which soda you like better though, Pepsi seems the better value than Coke right now. Coke is trading at a nearly () percent premium to Pepsi based on ())( P.5s even though the two companiesO earnings growth rates are nearly identical. >PepsiOs are actually a shade higher.? 3nd when you look at revenues, the gap is even more dramatic. Coke is trading at I time"s estimated ())( sales while Pepsi is trading at /.; times ())( revenue estimates. :oth companies are expected to post slight declines in sales this year and an increase of about ! percent in ())/. *ue to this disparity in valuation, Ceff Aanter, an analyst with Prudential +ecurities, says he has a NbuyO rating on Pepsi and NholdN on Coke. Prudential does not do investment banking. To be sure, Coke is still the market share leader in soft drinks. $ne 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 ,uarter. 3nd 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, *asani and 3,uafina, respectively.? $n Tuesday, Coke announced that it was ac,uiring the +eagramOs line of mixers, tonic, ginger ale and selt'er from *iageo and per nod 7ichard. 3nd last month, Coke entered into an agreement with Broup *anone to distribute 5vian bottled water in %orth 3merica.

!&

Some p.et6els w)th that so+a@

:ut while Coke relies solely on beverages for growth, another factor in PepsiOs favor is its diversity. N#hat attracts me to Pepsi is I have more faith in their ability to grow earnings. %ot only are they successful on the beverage side but they are successful with salty snack foods,N says Crit Thomas, director of growth e,uity for %ational City Investment -anagement Co., the sub advisor for 3rmada 6unds. 3s of -arch /&, Pepsi was the seventh largest holding in the 3rmada Tax -anaged 5,uity 6und and the tenth largest holding in the 3rmada 5,uity Browth 6und. In fact, PepsiOs carbonated beverages are not even the biggest generator of sales and earnings for the company. PepsiOs 6rito <ay brand of snack foods, which include 6ritos, *oritos and 7old Bold, accounted for 1&.( percent of revenue and 1;./ percent of operating profits in the first ,uarter. PepsiOs soft drink business made up &9 percent of sales and (/.( percent of operating profit. Pepsi also owns Batorade and Luaker 6oods, having ac,uired Luaker $ats last year. $ne potential risk for both Pepsi and Coke is the economy. %o, 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 #ednesday during the Cisco induced market rally.

!(

+till, Thomas says signs that the dollar is starting to weaken compared to other currencies should prop up both stocks. ThatOs 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 CokeOs sales are from its international operations, with just /0 percent of revenue coming from the 4.+. last year. Pepsi is not as big globally but currency fluctuations are still a factor, as international sales accounted for (9 percent of revenue in ())&.

!/

Co4e a*+ %eps) )* I*+)a:

Coca Cola controlled the Indian market until &9II, when the Canata Party beat the Congress Party of then Prime -inister Indira Bandhi. To punish Coca ColaOs principal bottler, a Congress Party stalwart and longtime Bandhi supporter, the Canata 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, IndiaOs two largest soft drink producers have gotten rich and la'y while controlling 0)J of the Indian market. These domestic producers have little incentive to expand their plants or develop the countryOs potentially enormous market. +ome analysts reason that the Indian market may be more lucrative than the Chinese market. India has 0;) million potential customers, &;) million of whom comprise the middle class, with disposable income to spend on cars, KC7s, and computers. The Indian middle class is growing at &)J per year. To obtain the license for India, Pepsi had to export H; of locally made products for every H& 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 aheadG Pepsi gains access to a potentially enormous marketD Indian bottlers will get to serve a market that is expanding rapidly because of competitionD and the Indian consumer benefits from the competition from abroad and will pay lower prices. 5ven before the first bottle of Pepsi hit the shelves, local soft drink manufacturers increased the si'e of their bottles by (;J without raising costs.

!!

PREFERENCE OF SOFT DRINKS IN A DAY

O*ce a +a, Tw)ce a +a, O*ce a wee4 Othe.

82A 83A 2A 23A

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

50% 25% 20% 5%

Once a Tw ice a Once a day day w eek
)g/.e(;

Once a day Twice a day Once a week Other

Other

!;

%RE ERENCE TO T'E &RAND

%eps) Co4e

B3A 93A

80% 60% 40% 20% 0%

40% 60%

Pepsi Pepsi
)g/.e # 8

Coke Coke

!1

TO -IVE T'E %RE ERENCES

Mo.e %op/la. %ac4ag)*g Taste %.)ce ;3A ;3A C3A ;3A

80% 60% 40% 20% 0% !ore Pop"#ar Packa$in$ 10% 10%

0%

10% Taste Price

!ore Pop"#ar

Packa$in$
)g/.e # :

Taste

Price

!I

MAR!ETIN- STRA--$ES O COM%ANY E SA$ES

Yes No 22A B2A

ECTS T'E

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

55% 45%

%es %es
)g/.e # B

&o &o

!0

ORM O MAR!ETIN- STRATE-IES

Tele=)s)o* A+=e.t)s)*g Newspape. A+=e.t)s)*g O/t+oo. A+=e.t)s)*g Sales %.omot)o*

B2A 2A 83A :3A

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

45% 30% 20% 5%

Te#e'ision (d'. Te#e'ision (d'.

&ewspaper (d' &ewspaper (d'

O"tdoor (d' O"tdoor (d'

)a#es Pro*otion )a#es Pro*otion

)g/.e # 2

!9

C'AN-E &RAND ON T'E &ASIS O %RICE REDUCTION

Yes No 2;A BDA

%es 52% 51% 50% 4+% 48% %es

)g/.e # 9

&o

51%

4+%

&o

;)

MORE E

ECTIVE ADVERTISIN23A 23A

%eps) Co. Co4e Co.

AAA

80% 60% 40% 20% 0% 50 % % % % % Pepsi Co. Coke % Co. % % Pepsi Co. Coke Co. % % )g/.e # C % % % % % % % % ;& % % 50 %

% % % % CREATIVE AND A%%EA$IN- ADVERTISINO T'E % SO T DRIN! COM%ANY% % % %eps) Co. B2A % Co4e Co. B2A %

80% 60% 40% 20% 0%

45%

45%

Pepsi Co. Pepsi Co.

)g/.e # <

Coke Co. Coke Co.

;(

INNOVATIVE AND EXCITIN- O

%eps) Co. Co4e Co. 22A B2A

ERS

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

55% 45%

Pepsi Co. Pepsi Co.

)g/.e #D

Coke Co. Coke Co.

INDIN-S ? ANA$YSIS
The Indian soft drinks market is at &!) million cases per year. This is very low, even as compared to Pakistan and :angladesh. 3ll these factors together have contributed to a ;/

()J growth in the soft drinks industry.. If this demand continues to grow at ()J grow at ()J annually, within &) years the volumes could reach & billion cases. This kind of growth is the reason for the entry of the two giants of the soft drink industry of the world. Coca Cola Pepsi Coca Cola and Pepsi together control 9IJ of the ! entire Indian markets. The rest of the /J is shared by companies like Cadbury +chweppes and Campa Cola. The total no. of case sold is &!) million of these II million cases of Cola drinks are sold and 1/ million of non cola drink. There is a rapid increase in the sale of cola soft drinks. #hereas in &99), they accounted for a third of all soft drinks sold, now their share is well over half. 3lso cola sales are growing at a faster rate than non colas. $ne of the reasons for this could be the aggressive marketing strategies for Cola drinks by Pepsi and Coca Cola. The race to ,uench the great Indian thirst had deigned.

;!

%RESENT COM%ETITON &ET"EEN COCA CO$A AND %E%SI

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 67IT$ <3@+ and %I-:$$M which is giving tough competition to coca =cola which doesn"t target on these sectors.

+econd 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.

7ecently C$<3 C$<3 beverages 3CT$7+ I-73% A23% 3%* A3<AI for a new ad Dto reply back to this a new ad by P5P+I beverages featuring 3CT$7 73%:I7 A3P$$7 and KI%*24 *373 +I%B2 came up which is making waves at present.

Coke is served in -C *$%3<*+ and there we won"t find Pepsi products even the coffee served is of B5$7BI3 which is a coca cola brand, same is the case of PIMM3 24T and A6C which is owned by P5P+I C$ there only Pepsi products are served ,,,this had lead ( clear war in restaurant segment as wellT

;;

P5P+I 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 -irinda, %imboo' and snack industry where P5P+I is ruling thanks to its A47A475 ad that has led to great sales for P5P+I C$.

Though in packed drinking water AI%<5@ >C$C3 C$<3 :73%*? and 3CL36I%3 >P5P+I C$ :73%*? both are treated e,ually by customers. -oreover :I+<57I still rules in this segment.

;1

UTURE SCENERIO O COCA CO$A V/S %E%SI

The C$<3 #37+ between coca cola and Pepsi would further grow and in my view its never ending

:oth the companies would try to become %$& and there would 3* #37 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 *55PIA3 P3*4A$%5 and C$C3 C$<3 which had up till know only endorsed male actors for the & st time endorsed A3<AI of *5K* fame with I-73% A23% in its new ad.

#ith the coming up of C$--5%#53<T2 B3-5+ ()&) in %5# *5<2I , 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.

;I

RECOMMENDATIONS
+oft drinks are an impulse product. #hen a person is thirsty, he would first think of water or tea. +ome even would prefer R%imboo' EU 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 &!) million cases per year, this is very low. Thus the consumption of soft drink can go up. +inc&&0Ve the entry of Coca Cola into the country the industry is growing at a rate of ()J annually. If this rate is maintained, then by the year ()); the market of soft drink would be & billion cases annually. 2owever Coca Cola wants to accomplish this feat by them. To do this the industry has to take certain steps. 3ll 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. $n 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 followsG +oft drinks retail at prices between 7s. 1 and 7s. &). These are expensive when measured against purchasing power. 3ccording to one study, it takes Indian ;) 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. 3vailability is a major factor, which makes the consumer buy a soft drink. +oft drinks should be made available more readily than present. There are only /)), ))) retailers stocking soft drinks in India. Thus retailing outlets should be increased. 3lso 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 ;0

Tempt a person into buying the soft drink. +o if vending machines are put in strategic areas, it would definitely increase consumption of soft drinks. +oft drink cans which are very convenient, as the consumer can take them anywhere, unlike a bottle, are very expensive retailing from 7s. &; 7s. &0. To increase sale of cans, this price should be brought down. Innovations increase sales of company. 6or e.g. fountain Pepsi increased sales of Pepsi Cans increased sales of Coca Cola. Thus the companies hav constantly come out with innovative ideas.5xample /)) 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. 6or e.g. Coke knows that 3mericans see 19 of its commercials every years , put ;.( ice cubes in a glass and prefer cans to pop out of vending machines at a temperature of /; 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. 6or e.g.G a? <imca is recommended to patients by doctors. b? Cola drinks are known to be very fattening , :ut 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.

;9

Companies should try to build high brand e,uity. 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 ,uality. d? The company can more easily launch brand extension. e? 3bove all, the brand offers the company some defense against fierce price competition. The companies should go in for diversification $nce the brand is known, it is easier to sell more of its products. 6or e.g. Coca Cola clothes have sold about H&)) 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 +chweppes.

3dvertising is a way building brand image. It does not promote ,uick selling. Thus companies should used advertising only for long advertising can be used forG a? :rand image building b? 7eminder advertisingG reminding people to buy these drinks. c? 7einforcement advertising Telling people that they have made the right choice. Television advertising seems to make a impact on the consumers >based on ,uestionnaire answers? so companies should concentrate more on television advertisements.

1)

+ales promotion tools create a stronger and ,uicker response. Thus sales promotion tools such as coupons, contests, premiums and the like should be used to dramati'e product offers and to boost sales. +ales 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. 3ll kinds or events, whether big >#ills #orked cup? or small >college contests? have either Pepsi or Coke banners of sponsorship. The effectiveness of this can be ,uestioned. #hether these activities increase sales or not is a big huge ,uestion mark. PepsiCo and Coca Cola >I? <td. 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. 6or e.g. Pepsi"s new campaign EPepsi cool malF in which they are giving free gifts to their customers. The company should maintain a small group of Emissionary sales manF 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 ()) ml and &;) 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.

1&

&I&$IO-RA%'Y

Ma.4et)*g Ma*ageme*t( &, %h)l)p !otle.

""".%E%SICO.COM

""".COCA(CO$A.COM

""".CO$A("ARS.NET

ADVERTISIN- MANA-EMENT &Y 0ET'"ANEY AND 0AIN

1(

 CO$A "ARS &Y 0.C.$OUIS

1/