ASSIGNMENT

ON

COMPETATIVE ANALYSIS OF SOFT DRINK

AS COCA -COLA AND PEPSICO

MASTER OF BUSINESS ADMINISTRATION

Under the guidance of:
Mr. Anoop Kumar Singh
( Head of the Department MBA Int. Business)

Submitted by
Himanshi Gupta
Roll No.16
MBA (Corporate Management) 2015-17

INSTITUTE OF MANAGEMENT
SCIENCES
UNIVERSITY OF LUCKNOW, LUCKNOW

CONTENTS
TOPIC

PAGE NO:

1. INTRODUCTION
2. SOFT DRINK INDUSTRY :AN OVERVIEW
3. HISTORY OF COCA-COLA
4. COCA-COLA:COMPANY PROFILE
5. CORE BRANDS
6. FABULOUS FACTS ABOUT COCA-COLA
7. COCA-COLA INDIA
8. PROMISE BY COCA-COLA
9. BRANDS IN INDIA PICTURE
10. BRANDS IN INDIAN ORIGIN
11. THE RIVALRY BEGINS
12. MARKETING STARETEGIES OF COKE & PEPSI
13. GENERAL STRATEGIES BY COKE & PEPSI
14. PEPSI V/S COKE:DATA
15. COKE AND PEPSI MARKET SHARE IN INDIA
16. COLA WARS
17. ADVERTISING HISTORY & COMMERCIALS
18. SLOGANS : PEPSI V/S COKE
19. CELEBRITIES ENDORSED
20. PEPSI V/S COLA WARS TURNS HOT
21. BATTLE OF BEVERAGES:DATA
22. PEPSI IS NOT AS PRICEY
23. SOME PRETZELS WITH THAT SODA??
24. COKE AND PEPSI IN INDIA
25. DATA OF COKE AND PEPSI: PREFERENCE
26. FINDINGS AND ANALYSIS
27. PRESENT COMPETITION B/W THE TWO
28. FUTURE SCENERIO OF COLA WARS

INTRODUCTION:
In the modern urban culture consumption of soft drinks particularly among younger
generation has become very popular. Soft drinks in various flavors and tastes are widely
patronized by urbane population at various occasions like dinner parties, marriages, social get
together, birthday calibration etc. children of all ages and groups are especially attracted by
the mere mention of the word soft drinks.
With the growing popularity of soft drinks, the technology of its production, preservation,
transportation and or marketing in the recent years has witnessed phenomenal changes.
The so-called competition for this product in the market is from different other brands. Mass
media, particularly the emergence of television, has contribute to a large extent of the ever
growing demand for soft drinks the attractive jingles and sport make the large audience
remember this product at all times.
It is expected that with the sort of mass advertising, reaching almost the entire country and
offering various varieties annual demand for the product is expected to rise sharply in the
times to come.
In any marketing situation, the behavioral / environmental variables relating to consumers,
competition and environment are constantly influx. The competitors in a given industry may
be making many tactical maneuvers in market all the time. The may introduce or initiate an
aggressive promotion campaign or announce a price reduction. The marketing man of the
firm has to meet all these maneuver and care of competitive position of his firm and his brand
in the market. The only route open to him for achieving this is the manipulation of his
marketing tactics.
In todays highly competitive market place, three players have dominated the industry; The
New York based Pepsi Company Inc. The Atlanta based coca- cola and U.K. based Cadbury
Schweppes.
Through the globe, these major players have been battling it out for a bigger chunk of the
ever growing soft drink market. Now this battle has been evolved up to India too with the
arrival of these three giants.
Soft drink industry is on amazing growth; ultimately these are only one person who will
determine their fortunes. The Indian consumer the real
War to quench his thirst has just begun.

SOFT DRINK INDUSTRY: AN OVERVIEW

It all began in 1886, when a tree legged brass kettle in Hohn Styth pembertons backyard in
Atlanta was brewing the first P of marketing legeent Unaware the pharmacist has given birth
to a caramel colored syrup, which is now the chief ingredient of the worlds favorite drink.
The syrup combined with carbonated the soft drink market. It is estimated that this drink is
served more than one thousand million times in a day.
Equally oblivious to the historic value of his actions was Frank Ix. Robinson, his partner and
book keeper. Pemberton & Robinson laid the first foundation of this beverage when an
average nine drinks per day to begin with, upping volumes as sales grew.
In 1894, this beverage got into bottle, courtesy a candy merchant from Mississippi. By the
1950s Colas was a daily consumption item, stored in house hold fridges. Soon were born
other non- cola variants of this product like orange & Lemon.
Now, the soft drink industry has been dominated by three major player (1) The New York
based Pepsi co. Inc.(2) The Atlanta based coca cola co. (3) The united Kingdom based
Cadbury Schweppes.
Though out the glove these major players have been battling it. Out for a bigger chunk of the
ever-growing cold drink market. Now this battle has begun in India too. India is now the part
of cold drink war. Gone are days of Ramesh Chauhan, Indias one time cola king and his
bouts of pistol shooting. Expect now to hear the boon of cannons when the Coca Cola &
Pepsi co. battles it out for, as the Jordon goes a bigger share of throat. By buying

Over local competition, the two American Cola giants have cleared up the arena and are
packing all their power behind building the Indian franchisee of their globe girdling brands.
The huge amount invested in fracture has never been seen before. Both players seen an
enormous potential in his country where swigging a carbonated beverage is still considered a
treat, virtually a luxury. Consequently, by world standards Indias per capita consumption of
cold drinks as going by survey results is rock bottom, less than over Neighbors Pakistan &
Bangladesh, where it is four times as much.
Behind the hype, in an effort invisible to consumer Pepsi pumps in Rs 3000 crores (1994) to
add muscle to its infrastructure in bottling and distribution. This is apart from money that
companys franchised bottles spend in upgrading their plants all this has contributed to
substantial gains in the market. In colas, Pepsi is already market leader and in certain cities
like Banaras, Pepsi outlets are on one side & all the other colas put together on the other.
While coke executive scruff at Pepsis claims as well as targets, industry observers are of the
view that Pepsi has definitely stolen a march over its competitor coke.
Apart from numbers, Pepsi has made qualitative gains. The foremost is its image. This image
turnaround is no small achievements, considering that since it was established in 1989, taking
the hardship route prior to liberalization and weighed down by export commitments.
Now, at present as there are three major players coke, Pepsi and Cadbury and there is stiff
competition between first two, both Pepsi and coke have started, sponsoring local events and
staging frequent consumer promotion campaigns. As the mega event of this century has
started, and the marketers are using this event world cup football, cricket events and many
more other events.
Like Pepsi, coke is picking up equity in its bottles to guarantee their financial support; one
side coke is trying to increase its popularity through.
Eat Food, enjoy Food. Drink only coca cola. Eat cricket, sleep cricket. Drink only coca cola.
Eat movies, sleep movies. Drink only coca cola.
On the other side of coin Pepsi has introduced AMITABH BACHHAN for capturing the
lemon market through MIRINDA Lemon with zor ka jhatka dhere se lage.
But no doubt that UK based Cadbury is also recognizing its presence. So there is a real crush
in the soft drink market. with launch of the carbonated organize drink Crush, few year ago in
Banaras ., the first in a series of a launches , Cadbury Schweppes beverage India (CSBI) HAS

PLANNED:- The world third largest soft drink marketers all over the country.CSBI o wholly
owned subsidiary of the London based $ 6.52billion. Cadbury Schweppes is hoping that
crush is going well and well not suffer the same fate as the Rs. 175 crore Cadbury Indias
apple drink Apella. CSBI is now with orange (crush), and Schweppes soda in the market.
As orange drinks are the smallest of non-cola categories that is Rs. 1100 crore markets with
10% market share and cola heaving 50% is followed by Lemon segment with 25%. The
success of soft drink industry depends upon 4 major factors viz.
Availability
Visibility
Cooling
Range
AVAILABILITY
Availability means the presence of a particular brand at any outlet. If a product is now
available at any outlet and the competitor brand is available, the consumer will go for it
because generally the consumption of any soft drink is an impulse decision and not
predetermined one.
VISIBILITY
Visibility is the presence felt, if any outlet has a particular brand of soft drink say- Pepsi
cola and this brand is not displayed in the outlet, then its availability is of no use. The soft
drink must be shown off properly and attractively so as to catch the attention of the
consumer immediately Pepsi achieves visibility by providing glow signboards, hoarding,
calendars etc. to the outlets. It also includes various stands to display Pepsi and other
flavors of the company.
COOLING
As the soft drinks are consumed chilled so cooling them plays a vital role in boosting up the
sales. The brand, which is available chilled, gets more sales then the one which is not, even
if it is more preferred one.
RANGE
This is the last but not the least factor, which affects the sale of the products of a particular
company.

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

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 beverage called
Coca-Cola impressed the store's owner,
businesses. Some were open only during hot-weather months when demand was high.
1920s Bottling overtakes fountain sales
as the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the U.S. Their
ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after their 1923
introduction. A few years later, open-top metal coolers became the forerunners of automated
vending machines. By the end of the 1920s, bottle sales of Coca-Cola exceeded fountain
sales.
1920s and 30s International expansion
Led by longtime Company leader Robert W. Woodruff, chief executive officer and chairman
of the Board, the Company began a major push to establish bottling operations outside the
U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru,
Spain, Australia and South Africa. By the time World War II began, Coca-Cola was being
bottled in 44 countries.
1940s Post-war growth
During the war, 64 bottling plants were set up around the world to supply the troops. This
followed an urgent request for bottling equipment and materials from General Eisenhower's
base in North Africa. Many of these war-time plants were later converted to civilian use,
permanently enlarging the bottling system and accelerating the growth of the Company's
worldwide business.
1960s New brands introduced
Following Fanta in the 1950s, Sprite, Minute Maid, Fresca and TaB joined brand
Coca-Cola in the 1960s. Mr. Pibb and Mello Yello was added in the 1970s. The 1980s
brought diet Coke and Cherry Coke, followed by POWERADE and DASANI in the
1990s. Today hundreds of other brands are offered to meet consumer preferences in local
markets around the world.
1970s and 80s Consolidation to serve customers
As technology led to a global economy, the retailers who sold Coca-Cola merged and evolved
into international mega-chains. Such customers required a new approach. In response, many
small and medium-size bottlers consolidated to better serve giant international customers.
The Company encouraged and invested in a number of bottler consolidations to assure that its

largest bottling partners would have capacity to lead the system in working with global
retailers.

COCA COLA COMPANY PROFILE

Keeping in view of tapping the Indian soft drink market and also developing soft drinks as a
drinking product among Indians. The Coca-Cola in India has setup an independent
organizations which is H.C.C & B.C.C with a capital of 350 U.S.$ each by virtue of sellout
decision of the passed managing director Sh. S. C. Aggarwal.
Hindustan Coca-Cola bottling (N-W) Pvt. Ltd. Najibabad took the complete possession of
this plant, land, machinery, & intellectuals on February 14 1998 and since then H.C.C,
looking after all its affairs under company owned bottling plant to establish integrated
marketing system in the area.

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

recognized and admired

trademark around the globe. Not to mention the best selling soft drink in the world.
Sprite: In 1961, a citrus-flavored drink made its U.S debut, using

Sprite Boy

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

advertising for Coca-Cola. Sprite is now the fastest growing major soft drink in U.S and the
worlds most popular lemon-lime soft drink.
Fanta : The name fanta was first registered as a trademark in Germany in 1941 ,when it
was used for a few year for a soft drink created from available materials and flavors .
The name was then revived in 1955 in Naples, Italy, when it was used for the: fanta
orange drink we know today. It is now the trademark name for a line of flavored drinks
around the world.
Diet coke: The extension of the coca-cola name began in 1982 with the introduction of diet
coke (also called coca-cola light in some countries). Diet coke quickly becomes the number
one selling low calorie soft drink in the world.
FABULOUS FACTS ABOUT COCA-COLA
1.

The worlds largest spherical coca-cola sign is in Nagoya, Japan a top the dial
Nagoya building in front of the Nagoya railway station. The sing is a double sphere
constructed from more then 46 tone of steel, more 940meter of neon tubing, and
more then, 879 light bulbs. The outer shape features the coca-cola logo and contour
bottle, while the inner sphere portrays a comic scene with twinkling planets and
stars.

2.

One of the worlds largest signs for coca-cola is located on a hill called
ELHACHA in America, Chile. It is 400 feet wide and 131 feet high and is made
from 70,000, 26 ounce bottles.

3.

The first out door paint sign advertising coca-cola still exists. It was painted in
1894 in Cartersville, Georgia.

4.

Coca-cola is one of the worlds most recognizable trademarks recognized in

countries that account for 98 percent of the worlds population.

5.

If all the coca-cola ever produced were in 8- ounce bottles. And these bottles were
distributed to each person in the world. There would be 678 bottles or over 42
gallons for each person.

10

6.

If all the coca-cola ever produced were in 8 ounce bottles, placed side by side and
end to end to from a lane highway, it would wrap around the earth 82 times.

7.

If all the coca-cola ever produced were flowing over Niagara fall at its normal rate
of 105 million gallons per second instead of water, the falls would flow for about a
day and a half 38 hours and 46 minutes.

HISTORY IN INDIA
Coca-cola in India
Coca-Cola, the corporation nourishing the global community with the worlds largest selling
soft drink concentrates since 1886, returned to India in 1993 after a 16 year hiatus, giving
new thumbs up to the Indian soft drink market. In the same year, the Company took over
ownership of the nations top soft-drink brand and bottling network. Its no wondering our
brands assumed an iconic status in minds of worlds consumers.
A Healthy Growth to the Indian Economy
Ever since, Coca-Cola India has made significant investments to build and continually
consolidate its business in the country, including new production facilities, waste water
treatment plants, distribution systems, and marketing channels.
Coca-Cola India is among the countrys top international investors, having invested more
than US$ 1 billion in India in the first decade, and further pledged another US$100 million in
2003 for its operations.
A Pure Commitment to the Indian Economy
The Company has shaken up the Indian carbonated drinks market greatly, giving consumers
the pleasure of world-class drinks to fill up their hydration, refreshment, and nutrition needs.

11

It has alsobeen instrumental in giving an exponential growth to the countrys job listings.

Creating Enormous Job Opportunities

With virtually all the goods and services required to produce and market Coca-Cola being
made in India, the business system of the Company directly employs approximately 6,000
people, and indirectly creates employment for more than 125,000 people in related industries
through its vast procurement &supply.
COCA-COLA COMPANY IN LUCKNOW
This is the one of the biggest leading company in beverage sector in Lucknow also. In the
Lucknow the coca cola company is a manufacturing company. They are producing several
brands like Thumps up, Coca Cola, Sprite, Limca, Fanta, Maaza and they have come with
their new brand Minut Maid Pulpy Orange. Pulpy orange is the sixty year old brand in China
but for India it is new. Apart from this company also produces products like Kinley soda
&water and Bonaqua new water brand
PROMISE BY COCA-COLA
The coca-cola company exists to benefits and refreshes every one it touches. The basic
proposition of our business is simple, solid and timeless. When we bring refreshment, value,
joy and fun to our stakeholders then we successfully nurture and protect our brand,
particularly coca-cola. That is the key to fulfilling our ultimate obligation to provide
consistently attractive to the owner so four business.
More then a billion times every day, thirsty people around the world reach for coca-cola
products for refreshment. They deserve the highest
12

Quality every time. Our promise to deliver that quality is the most important promise we
make. and it involves a world-wide , yet distinctively local , network of bottling partner ,
supplier , distributor and retailers whose success is paramount to our own. Our investment in
local communities in over 200 countries totals billions of dollars in jobs, facilities, marketing,
the purchase of local good and services, and local business partnership. Always and every
where , we pursue continuous innovation in the products we offer the processes we use to
make them, the package we develop and the way we bring them to market .

BRANDS IN INDIA

13

BRAND IN INDIAN ORIGIN

GOLD SPOT: this orange carbonate soft drink was introduced in the early 1950c, and
acquired by the Coca-Cola company in 1993, its tangy taste has been popular with Indian
teenagers
LIMCA: It is thirst-quenching beverage features a fresh and light lemon-lime taste and
lighthearted attitude. The limca brand was introduced in 1971 and acquired by the cocacola company in 1993.
MAAZA: Maaza, launched in 1984 and acquired by the coca-cola company in 1993, is a non
carbonated mango soft drink with a rich, juice & natural mango taste.
THUMPS UP: in 1993, the Coca-Cola company acquired this brand, which was originally
introduced in 1977. Its strong and fizzy taste makes it unique carbonated Indian cola.
THE RIVARLY BEGINS:
Coke Comes to India

14

Coca-Cola comes to India with fanfare in the fifties. For a number of days, The Hindustan
Times and other newspapers of New Banaras carried full page advertisement showing a big
boy in uniform with a soft-drink crown as the cap. There was no indication of the product.
After a few days, Coke was introduced. It was an entirely new drink which fascinated people.
It soon became the national drink. For the first time, a soft-drink was available from one
corner of the country to another. The person who brought Coca-Cola to India was the father
of late Sardar Charanjit Singh, Sardar Mohan Singh. A practical man Mohan Singh realized
that to popularize Coca-Cola, and make it a best seller it was necessary to catch them
young. So he focused on youngsters in the society.
The company realized that to become a mass consumption product, one has to go to the
village. They gave much importance to the distributive network. The company trucks
supplied coke to even the remotest village.
Few products appears to be more similar than soft drinks, yet the Cola wars that mark the
competition between Coke and Pepsi show how even organizations with highly similar
product can be differentiated by their business strategies. Then comes battles over the issue of
bottle size standardization. Coke the arch rival tried to offering more Cola at a lower price.
Pepsi which had some of its early investment tied up in 250ml bottles, went the fountain way.
The General bottle size freed has settled at 300 ml. 100 ml more than the pre MNC standard.
Fountain mix dispensers, carry home bottles, even 1.50 plastic bottle with caps good enough
to keep them lying down and still preserve the fizz.
MARKETING STATEGIES OF COKE AND PEPSI
a)

PRODUCT
Coke was launched in India in Agra, October 24, in '93', soon after its traditional all

Indian launch of its Cola. At the sparking new bottling plants at Hathra, near Agra. Coke was
back with a bang after its exit in 1977.
Coke was planning to launch in next summer the orange drink, Fanta-with the clear
lemon drink, sprite, following later in the year.
Coke already owns more brands than it will over need, since it has bought out Ramesh
Chauhan. Coke just needs to juggle these brands around dextrously to meet its objectives, to
ensure that Pepsi does not gain market share in t Today, Coke's product line includes, CocaCola, Thumps Up, Fanta, Gold Spot, Maaza, Citra, Sprite, Bisleri Club Soda and Diet Coke.
PACKAGING

15

Coca-Cola India Limited (CCIL) has bottled its Cola drink in different sizes and
different packaging i.e., 200 ml bottle, 300 ml. Bottle, 330 ml. Cans, 500 ml. Bottle
fountain Pepsi, and bottles of 1 and 2 litre.
PRODUCT POSITIONING
One important thing must be noticed that Thumps Up is a strong brand in western and
southern

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

of Thumps Up being low in the capital, there are likely chances of Coca Cola slashing the
prices of Thumps Up to Rs. 5 and continue to sell Coca Cola at the same rate. Analysts feel
that this strategy may help Coke since it has 2 Cola brands in comparison to Pepsi which has
just one.
Thumps Up accounts for 40% of Coca Cola company's turn over, followed by Coca
Cola which has a 23% share and Limca which accounts for 17% of the turn over of the
company. (Thumps up being the local drink, its share in the market is intact, forcing the
company to service the brand, as it did last year Mr. Donald short CEO, Coca Cola India, said
that, " we will be absolutely comfortable if Thumps Up is No. 1 brand for us in India in the
year 2000. We will sell whatever consumers want us to". Coca Cola India has positioned
Thumps up as a beverage associated with adventure because of its strong taste and also
making it compete with Pepsi as even Pepsi is associated with adventure, youth.
b)

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

setting of the price, in turn making it difficult for competitors to compete on the basis of
price.
The fixed cost structure in Carbonated Soft Drinks Industry, and the intense
competition make it very difficult to change or alter the prices. The various costs incurred by
the individual company's are almost unavoidable. These being the costs of concentrates,
standard bottling operations, distributor and bottlers commissions, distribution expenses and
the promotional and advertising expenditure (As far as Coke is concerned, it had to incur a
little more than Pepsi as Pepsi paved its way to India in 1989 while Coke made a come back
in 1993.)
Currently a 300 ml. Coke bottle is available for Rs. 6 to8 The 330 can was initially available
for Rs. 13 and now, since the price has gave up to Rs. 18 per can. The prices of 500 m, 1
litre. And 2ltr being Rs. 15 Rs. 23 and Rs. 40 respectively (according to the current survey).

16

Dating back to 93', when Pepsi hiked the price of Pepsi - Cola from Rs. 5 to Rs. 6 per
250 ml. bottle in some parts of the country-including Agra. Coke penetrated the market with
price of Rs. 5 for a 300 ml. bottle, making it cheaper by Rs. 1 and 50 ml. than Pepsi. Coke's
strategy at that time being able to expand the availability of soft drinks even in rural India.
Coke's priority being to first increase the number of drinks per drinker, and then the number
of drinkers itself. Pepsi also tried this but was trapped by a series of competitive price
increase and changes in bottle sizes by Parle. But the prices of soft drinks have shot up since
Pepsi's arrival and the current prices are being mentioned as under.

Price list
Name

Bottle Size

MRP (in Rs.)

Coke Per Bottle

200 ml

Coke

300 ml

10

Coke

500 ml (Plastic / Glass)

22

Coke

2 litre

60

Diet Coke (Can)

330 ml Can

35

Coke (Can)

330 ml Can

38

However, the trends may have been in the early '90's, now the prices of Pepsi and
Coke are the same making it difficult in future and present to compete on the basis of price.
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.

17

Coke and its product were available in over 2, 50,000 outlets (in contrast with Pepsi's 2,
00,000). Coke has a greater advantage in terms of geographical coverage.
But Coke has had problems with its bottlers as the required profits for the bottlers
have not been forthcoming.

This is more so because Coke has hiked the price of its

concentrate by Rs. 8 Further, Coke's operations in India are 100% Fobs. Now, it plans to
convert then into COBOs. This is straining the relationship between the Coke and its
bottlers.
D) PROMOTION
It must be remembered that soft drinks purchases are an "impulse
buy low involvement products" which makes promotion and advertising an important
marketing tool. The 2 arch rivals have spent a lot on advertising and on promotional
activities.
To promote a brand and even to spend a lot on advertising, the company must be
aware of the perceived quality of the brand, its brand power (if at all there is) since
consumers make purchase decision based on their perceptions of value i.e., of quality relative
to price.
According to Paul Stobart, Advertising encourages customers to recognize the quality
the company offers. Price promotions often produce short-term sales increases.
Coke's red color catches attention easily and also the Diet Coke which it introduced
was taking the Cake, as Pepsi has not come out with this in India.
Ever since Coke's entry in India in 1993, Coke made a come back (after quitting in
1977), in October 24 in Agra, the city was flooded by trucks, there wheelers, tricycle cards-all
with huge red Coke-emblazoned umbrellas. Retailers were displaying their Coke bottles in
distinctive racks, also with specially-designed iceboxes to keep Coke bottles cold. This was
one big jolt to Pepsi.
STRATEGIES ADOPTED
BY COKE

AND PEPSI

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The Pepsi Process: Despite being a global brand, Pepsi has built its success on meeting the
Indian consumers needs, particularly in terms of making the brand synchronize with
localized events and traditions. Instead of harping on its global lineage, ergo, it tries to plug
into ethnic festivals, use the vernacular indifferent part of the country, and blend into the local
fabric. Pepsi is using both national campaigns-such as the Drink Pepsi, Get Stuff scheme,
which offers large discounts on other products to Pepsi-buyers as well as local.
The Coke Copy: Instead of creating a bond with the customers through small but highimpact events, Coca-Cola chose to associate itself with national and international mega
events like the World Cup Cricket, 1996, and world cup football 1998. But now coke is also
entering into local actions. Coke is also trying to make their brand synchronize with localized
events traditions and festivals.

Coca-Cola new tag line in this advertisement is Real

shopping, real refresher. In this way Coke is copy Pepsi.

EMPOWERMENT
The Pepsi Process: Once of the strongest weapons in Pepsis armory is the flexibility it has
empowered its people with. Every manager and salesperson has the authority to take
whatever steps he, or she, feels will make consumers aware of the brand and increase its
consumption.
The Coke Copy: Flexibility is the weapon that Coca-Cola, fettered as it is by the need for
approvals from Atlanta for almost everything. In the past, this has shown up in its stubborn
insistence on junking the franchisee network it had acquired from Parle; in its dependence on
its own feedback mechanism over that of its bottlers; and on its headquarters-led approach.
PRICE
The Pepsi process: Pepsi has consistently wielded its pricing strategy as in invitation to
sample, aiming to turn trial into addiction.

19

It launched the 500 ml bottle in 1994 at Rs. 8 versus Thumps Ups Rs. 9, in April, 1996, its
1.5 liters bottle followed Coke into the marketplace at Rs. 30 Rs 5 less than Cokes .But it
couldnt continue the lower price positioning for long.
The Coke Copy: Initially, coke carbon-copied the strategy by introducing its 330ml cans in
January 1996, at an invitation price of Rs. 15 before raising it to Rs. 18. By this time, it had
realized that the Coca-Cola brand did not hold enough attraction for customers to fork out a
premium. The 200ml Coke, launched so far in parts of eastern, western, and northernIndia, is
priced at Rs. 5, lowering the entry-barriers. Too really drive the market, as Coke wants to you
must go down to Rs. 3.

PEPSI VS. COKE

$28 BILLION

TURNOVER

32%

INT. SALES AS %
`

RS. 5OO CRORES

$16 BILLION
70%

OF TOTAL SALES
TOTAL INVESTMENT

RS. 250 C

IN INDIA
RS. 300 CRORES

PROPOSED

RS. 2,400C

INVESTMENTS
2400

NO. OF EMPLOYEES

13

NO. OF OWNED
BOTTLING PLANTS
20

140
NIL

18

NO. OF FRANCHISES

53

4000

NO. OF FOUNTAIN

1500

N.A.

TOTAL INVESTMENT

Rs 125 CR

BY BOTTLERS
6

NEW PLANTS PLANNED N.A.

PEPSI AND COKE MARKET SHARE IN INDIA

Competitive Comparisons
Advertising
Coke: $34.4 million (1975) to $211.5 million
(1993)
Pepsi: $25.3 million (1975) to $147.3
Million (1993)
Distribution
Coke stronger in fountain. But Pepsi
IS growing in supermarkets?

21

 Pricing
No differences
COLA WARS
Coca-cola v/s Pepsi
OVER A CENTURY OF COLA SLOGANS, COMMERCIALS, BLUNDERS, AND
COUPS
There's little doubt that the most spirited and intense competition in the beverage world is
between Coca-Cola and Pepsi. These two American companies long ago took their battle
worldwide, and although there are other colas in the market, these giants occupy this highstakes arena by themselves. The impact of Coke and Pepsi on popular culture is indisputable,
and I have observed in my time managing this web site that America has not become jaded
about the cola wars. The memorabilia, the jingles, the trivia - all still popular. So I am
offering this page in an attempt to assuage a wee bit of the Coke and Pepsi thirst that is
thriving on our planet.
IT ALL STARTED . . . .
Coca-Cola was invented and first marketed in 1886, followed by Pepsi in 1898. Coca-Cola
was named after the coca leaves and kola nuts John Pemberton used to make it, and Pepsi
after the beneficial effects its creator, Caleb Brad ham, claimed it had on dyspepsia. For many
years, Coca-Cola had the cola market cornered. Pepsi was a distant, no threatening contender.
But as the market got more and more lucrative, professional advertising became more and
more important. These soda companies have been leading the way in advertising ever since.
ADVERTISING HISTORY & COMMERCIALS
Pepsi has definitely leaned towards the appeal of celebrities, popular music, and young
people in television commercials, while Coke relies more heavily on images of happiness and
togetherness, tradition, and nationalism, perpetually trying to cash in on its original lead. In a
simplified sense, you could sum up the strategies as Coke: Old, Pepsi: New. In fact, as we
will see, when Coca-Cola tried something new, it was disaster.
The first magazine ad for Coca-Cola appeared in Munsey's in 1902. Advertisements began to
appear on billboards, newspapers, and streetcars. Soon there were serving trays with images
of people enjoying Coca-Cola, and glasses with the cola's name on them. At this time, CocaCola and Pepsi were served in drugstore soda fountains.

22

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, CocaCola was sold in a 6-ounce bottle for ten cents. Voila! Profits for Pepsi.
Pepsi racked up another first by airing the first radio jingle in 1939. It was so popular that it
was played in jukeboxes and became a hit record Coca-Cola hit the airwaves in 1941.
In 1946, inflation forced Pepsi to increase prices. And in 1950, Pepsi offered a larger 26ounce bottle to court the young American housewife.
In the 1960's, the cola ad wars moved to television. Coca-Cola employed a host of celebrity
singers to promote the product, including Connie Francis , Tom Jones, The New Beats, Nancy
Sinatra, and The Supremes. As we moved through the years, both colas incorporated some of
their best slogans ("Pepsi Generation" and "the Real Thing") into subsequent commercials.
In the 1970s, market research showed that consumers preferred the taste of Pepsi over Coke.
The Pepsi Challenge is still being conducted today. But Coke came up with what is arguably
the best of all cola commercials, the 1971 I'd like to buy the World coke ad.
This landmark was recalled in Christmas versions in 1983 and 1984, and a 1990 Super Bowl
ad, which was enough to make some Baby Boomers weep with nostalgia.
In the 1980's, Pepsi lined up the celebrities, starting with late Michael Jackson, then
Madonna, Michael J. Fox, Billy Crystal, Lionel Ritchie, Gloria Stefan, Joe Montana, and
others. Coke signed on Michael Jordan, New Kids on the Block, Aretha Franklin, Elton John,
and Paula Abdul.
In 1985, responding to the pressure of the Pepsi Challenge taste tests, which Pepsi always
won, Coca-Cola decided to change its formula. Bill Cosby was the pitchman. This move set
off a shock wave across America. Consumers angrily demanded that the old formula be
returned, and Coca-Cola responded three months later with Classic Coke. Eventually, New
Coke quietly disappeared.
Pepsi, meanwhile, had its own flop, Crystal Pepsi, which was supposed to catch the strange
wave of the times when everything colorless was clean and desirable (Zima, bottled water).
And then there was Pepsi Lite with the lemony flavor and one calorie, introduced in 1975.
Remember that one?
SLOGANS

23

It's clear in looking at the slogans over the years that Coke and Pepsi have very different
targeting strategies. Coke is touting itself as the original, the authentic, and appealing to a
sense of tradition, positioning itself as an integral part of daily American life. Pepsi, on the
other hand, is promoting itself as something new, young, and hip, which seems a little odd
after over 100 years. But Coke was first, after all. Pepsi has always targeted the youth market
more aggressively than Coke.

24

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

25

Pepsi v Coca-Cola war turns hot

The ongoing cola war between global rivals Pepsi and Coca-Cola has taken a weird twist in
India with the former dragging the latter to court. The charge: Coca-Cola has snatched
employees, bottlers, and agents, all of whom are bound to Pepsi by a contract.
Pepsi has charged Coke with having entered into a conspiracy to disrupt its business
operations by inducing key employees and associates to break existing contracts illegally.
Pepsi has sought a permanent injunction and an ex parte order against coke, restraining it
from taking away Pepsi's employees and business associates. Pepsi has also reserved the right
to seek financial damages from Coke at a later date if necessary.
Pepsi has claimed that a dozen middle-level managers and three territory managers broke
their contracts with Pepsi to join Coke in recent months, while during the last year and half,
seven managers quit Pepsi to join Coca-Cola.
Justice C M Nair of the Delhi high court on April 17 issued notices and summons to CocaCola and 15 others for May 6. However, Justice Nayar refused to grant the ex parte injunction
sought by Pepsi India to stop the alleged inducements by Coke in offering employment to
Pepsi's employees while the suit was pending in court.
On behalf of Pepsi, Ashok Desai and Arun Jaitley contended that Coca-Cola had been "rattled
by the huge success of Pepsi in India entered into a conspiracy during the last six months to
cause loss and damage to Pepsi's business interests by adopting unfair and illegal means."
It added that Coca-Cola had approached many key managers and had successfully lured a
commercial manager of its bottling business Gaurav Duggal, and a manager in Surat Sailesh
Joshi, besides others.
Pepsi charged that while initially these approaches were sporadic, over the last six months it
is clear that Coca-Cola has changed its strategy and has decided to consciously target and
approach key employees of Pepsi at various locations in India.
The company has alleged that in most cases, the employees have not been given time to
adhere to the 90-day notice period and the one-year confidentiality agreement. The latter deal
bars employees joining its rivals for at least a year.
Desai claimed Coke's actions would directly harm the business interests of Pepsi, which had
invested over $300 million in the country in establishing business infrastructure.
In its defense, Coke is expected to seek relief in the Indian Constitution which states that
there can be no restriction on the movement of labor. Besides, any effort by a company to

26

restrict its employees from joining other companies might fall foul of the Monopolies and
Restrictive Trade Practices Act as an unfair trade practice.
Pepsi has cited the instance of Coke snapping up cricketer Javagal Srinath in spite of the
latter signing a contract with Pepsi's sports consultant, 21st Century Media. However, media
reports, quoting sources, said that Srinath's contract had been only in the verbal stage.
Similarly, Pepsi has charged Coke with inducing the Board of Control for Cricket in India to
give the sponsorship of the recently concluded Pepsi Triangular Cricket Series to Coke, as
acknowledged in the BCCI submission before the Bombay high court, even while a contract
was signed with Pepsi.
Pepsi has listed the case of Coke trying to induce its music consultant DNA Networks Private
Ltd, which organized the Yanni show, to snap its ties with Pepsi and join Coke.
Incidentally, in results announced for the first three months of the year, Pepsi has swept CocaCola aside. Pepsi has reported a growth of 27 per cent compared to Coke's 21 per cent during
the same period. In the first three months of last year, Pepsi grew by 18 per cent only.
Coca-Cola India chief executive Donald Short had announced that Coke would grow by at
least 20 per cent for the whole of 1998. Coca-Cola, along with the Parle brands it acquired
when it came into India -- Thums Up, Limca, and Gold Spot -- continue to dominate India
with a 55 per cent market share to Pepsi's 43 per cent. But in the cola segment, Coke comes a
poor third after Thumps Up and Pepsi.
The current summer season is the most important for the cola giants, with consumption at its
peak.

BATTLE OF THE BEVERAGES:

27

28

PREFERENCE OF SOFT DRINKS IN A DAY

Once a day

25%

Twice a day

20%

Once a week

5%

Other

50%

Figure-1
PREFERENCE TO THE BRAND
Pepsi
Coke

80%
60%

40%
60%

40%
60%

40%
20%
0%
Pepsi

Coke
Pepsi
Figure 2

29

Coke

TO GIVE THE PREFERENCES

More Popular
Packaging
Taste
Price

10%
10%
70%
10%

Figure 3
MARKETING STRAGGLES OF COMPANY EFFECTS THE SALES
Yes
No

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

55%
45%

55%
45%

Yes

No
Yes
Figure 4

30

No

FORM OF MARKETING STRATEGIES

Television Advertising
Newspaper Advertising
Outdoor Advertising
Sales Promotion

45%
5%
20%
30%

45%

50%
40%

30%

30%

20%

20%
5%

10%
0%
Television Adv.
Television Adv.

Newspaper Adv
Newspaper Adv

Outdoor Adv
Outdoor Adv

Sales Promotion
Sales Promotion

Figure 5
CHANGE BRAND ON THE BASIS OF PRICE REDUCTION
Yes
No

51%
49%

Yes
52%
51%

No

51%

50%

49%

49%
48%
Yes

No
Figure 6

31

MORE EFFECTIVE ADVERTISING

Pepsi Co.
Coke Co.

50%
50%

80%
60%
40%

50
%

20%
0%
Pepsi Co.
Pepsi Co.
Figure 7

32

50
%
%
%
%
%
Coke
% Co.
%
%
Coke Co.
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%

CREATIVE AND APPEALING ADVERTISING OF THE SOFT DRINK COMPANY

Pepsi Co.
Coke Co.

80%
60%

45%
45%

45%

45%

40%
20%
0%
Pepsi Co.

Coke Co.

Pepsi Co.
Figure 8

33

Coke Co.

INNOVATIVE AND EXCITING OFFERS

Pepsi Co.
Coke Co.

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

55%
45%

55%
45%

Pepsi Co.

Coke Co.

Pepsi Co.

Coke Co.

Figure 9
MARKET PERCENTAGE SHARE IN ALL OVER INDIA 2010

Pepsi
Coke
Local Brand

31%
43%
26%

34

26%

31%

Pepsi
Coke
Local Brand

43%

Figure - 11
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

5h
4h

7th
9h

This shows that both the companies are paying more attention to the marketing of their
products. Pepsi is higher up on the scale than Coca-Cola. We can see that by the brilliant
advertising done by Pepsi, which can be seen on every hook and corner of metro cities
consumers, so prefer Pepsi advertisements and other activities of Pepsi, to that of Coca-Cola.

35

FINDINGS & ANALYSIS

The Indian soft drinks market is at 140 million cases per year. This is very low, even as
compared to Pakistan and Bangladesh. All these factors together have contributed to a 20%
growth in the soft drinks industry.. If this demand continues to grow at 20% grow at 20%
annually, within 10 years the volumes could reach 1 billion cases. This kind of growth is the
reason for the entry of the two giants of the soft drink industry of the world.
Coca-Cola
Pepsi
Coca-Cola and Pepsi together control 97% of the 4 entire Indian markets. The rest of the 3%
is shared by companies like Cadbury-Schweppes and Campa-Cola. The total no. of case sold
is 140 million of these 77 million cases of Cola drinks are sold and 63 million of non-cola
drink. There is a rapid increase in the sale of cola soft drinks. Whereas in 1990, they
accounted for a third of all soft drinks sold, now their share is well over half. Also cola sales
are growing at a faster rate than non-colas. One of the reasons for this could be the aggressive
marketing strategies for Cola drinks by Pepsi and Coca-Cola.
The race to quench the great Indian thirst had deigned.
PRESENT COMPETITON BETWEEN COCA COLA AND PEPSI

If we see the present scenario its hard to tell which brand is winning the cola wars as
Pepsi had extended its cola wars to other sectors like FRITO-LAYS and NIMBOOZ
which is giving tough competition to coca cola which doesnt target on these sectors.

Second aspect which is to be given in consideration is that, both the companies are
spending heavily on advertisement and more celebrities are roped in by both the
companies to fight the competition.

Recently COLA-COLA beverages ACTORS IMRAN KHAN AND KALKI for a new
ad ;to reply back to this a new ad by PEPSI beverages featuring ACTOR RANBIR
KAPOOR and VINDHU DARA SINGH came up which is making waves at present.

36

Coke is served in MC DONALDS and there we wont find Pepsi products even the
coffee served is of GEORGIA which is a coca-cola brand, same is the case of PIZZA
HUT and KFC which is owned by PEPSI CO there only Pepsi products are served
,,,this had lead 2 clear war in restaurant segment as well

PEPSI is targeting young generation and their ad campaigns are a clear example of that,
whereas coca-cola is targeting the family as a whole which has been its old formula from
ages.

Presently coca-cola may be leading in beverages like coke, but its facing severe
competition from Mirinda, Nimbooz and snack industry where PEPSI is ruling thanks
to its KURKURE ad that has led to great sales for PEPSI CO.

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

ACQAFINA (PEPSI CO BRAND) both are treated equally by customers. Moreover
BISLERI still rules in this segment.

FUTURE SCENERIO OF COCA COLA V/S PEPSI

The COLA WARS between coca-cola and Pepsi would further grow and in my view
its never ending

Both the companies would try to become NO1 and there would AD WAR between the
two which would prove to be beneficial for actors/actresses as they would earn more
through advertisements.

Pepsi have started advertisements with female actresses DEEPIKA PADUKONE and
COCA-COLA which had up till know only endorsed male actors for the 1 st time
endorsed KALKI of DEVD fame with IMRAN KHAN in its new ad.

37

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.
CONCLUSIONS

Soft drinks are an impulse product. When a person is thirsty, he would first think of water or
tea. Some even would prefer Nimbooz \
The Indian population is the largest in the world today, there can be no other country in the
world, which provides so much of an opportunity for the soft-drink manufacturers. The
Indian soft drink market is at 140 million cases per year, this is very low. Thus the
consumption of soft drink can go up.
Sinc118+e the entry of Coca-Cola into the country the industry is growing at a rate of 20%
annually. If this rate is maintained, then by the year 2005 the market of soft drink would be 1
billion cases annually.
However Coca-Cola wants to accomplish this feat by them. To do this the industry has to take
certain steps. All the companies are fighting to get a major share of this growing market.
They should all try to increase the total market along with their individual shares.
On the basis of all the field work and table work done, some suggestions can be made, which
may help the company in increasing the total market as well as the sale of the companies.
The various suggestions that can be made are as follows:Soft drinks retail at prices between Rs. 6 and Rs. 10. These are expensive when measured
against purchasing power.

38