MAJOR PROJECT REPORT

ON

“COMPETITIVE ANALYSIS BETWEEN COKE AND PEPSI”

SUBMITTED TO YMCA NEW DELHI IN

PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR THE AWARD OF

POST GRADUATE DIPLOMA IN

(MARKETING AND SALES)

SUBMITTED BY

URVASHI KAPOOR MS-A-02

SUPERVISOR

Ms NEELAM CHADHA

INSTITUTE OF MANAGEMENT STUDIES

YMCA, NEW DELHI
 2010

CANDIDATE’S DECLARATION

I hereby declare that the major project which is presented in this report entitled
COMPETITIVE ANALYSIS BETWEEN COKE AND PEPSI submitted
in the partial fulfillment of the requirements for the award of the Post Graduate
Diploma in Marketing and Sales to the YMCA NEW DELHI is an authentic record
of my own work carried out at IMS YMCA campus. The material embodied in this
project work has not been submitted to any other university or institution for the
award of any degree.

URVASHI KAPOOR MS-A-02

Place:
Date:

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

SUPERVISOR

NEELAM CHADHA

Approved by:

NEELAM CHADHA

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 ACKNOWLEDGEMENT

I express our gratitude to the YMCA, NEW DELHI for giving me the opportunity
to work on the major project during our final semester of post graduate diploma in
marketing and sales. There are many who helped me during this project work, and
I want to thank them all.

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

studies YMCA, NEW DELHI for his kind support. Our special thanks to Ms
NEELAM CHADHA my project guide for his invaluable guidance throughout my
project work and endeavor period has provided me with the requisite motivation to
complete my project successfully.

I specially appreciate the help and guidance of all those teachers who have directly
or indirectly helped me making my project a success.

URVASHI KAPOOR

3
 PREFACE

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

Hewlett Packed. The Indian market is getting to be consumer-led. This is the reason
behind the unprecedented boom in advertising. Below the line marketing activities, fast
distribution system and more sophisticated consumer research.
On the media front, satellite proliferation has trigged of a new genre of media research,
which is highly viewer ship based. Consumer satisfaction has become research worthily
Multinationals are pouring in precisely because of this new chapter in Indian
consumerism.
The dilemma that all marketers are facing is getting the maximum done in the minimum
possible time. And with brand loyalty becoming a thing of the past, given the choice
available to the consumer pull. The consumer could be a purchaser of end products, or a
financial investor, or even an industrial purchaser. Everywhere, there is a new thrust on
marketing and advertising.
The hyper activity in the market place is seeing a boom in support services, with a
number of independent agencies mushrooming to provide them. Co-related to the market
book, services are well on their to becoming a major industry.
The creative leap is increasingly being governed by market realities and consumer
research. And Clint interface is no longer limited to the Clint service people, but
including all specialists in agencies.
The entry multinational products in to the country are seeing more emphasis aid world-
class quality. This along with the loosening of regulations is seeing export gaining
ground. From thinking along the lines of merely exporting spares and raw material the
exporters and now looking towards finished products. A multiplier to this is the joint
venture companies looking at becoming export manufacturing bases.

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 CONTENTS
TOPIC PAGE NO:

1. CANDIDATE’S DECLERATION 2

2. ACKNOWELGEMENT 3

3. PREFACE 4

4. TABLE OF CONTENTS 5-7

5. EXECUTIVE SUMMARY 8

6. INTRODUCTION 9-10

7. SOFT DRINK INDUSTRY :AN OVERVIEW 11-15

8. HISTORY OF COCA-COLA 16-19

9. COCA-COLA:COMPANY PROFILE 20

10. CORE BRANDS 21

11. FABULOUS FACTS ABOUT COCA-COLA 22-23

12. COCA-COLA INDIA 24-26

13. PROMISE BY COCA-COLA 27

14. BRANDS IN INDIA PICTURE 28

15. BRANDS IN INDIAN ORIGIN 29

16. PEPSI CO 30

17. PEPSI CO IN INDIA 31-33

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18. BRAND FACTS,BEVERGAGES AND FOODS 34-36

19. PEPSI CO INDIA:A FORTUNE 500 COMPANY 37

20. BRAND HISTORY AND BRAND ADVANTAGE 38

21. PEPSI PRODUCTS IN INDIA 39

22. SLOGANS USED BY PEPSI COMPANY 40-42

23. THE RIVALRY BEGINS 43-44

24. MARKETING STARETEGIES OF COKE & PEPSI 45-49

25. GENERAL STRATEGIES BY COKE & PEPSI 50-51

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

27. COKE AND PEPSI MARKET SHARE IN INDIA 55

28. COLA WARS 56

29. ADVERTISING HISTORY & COMMERCIALS 57-59

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

31. CELEBRITIES ENDORSED 66

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

33. BATTLE OF BEVERAGES:DATA 70

34. PEPSI IS NOT AS PRICEY 71

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

36. COKE AND PEPSI IN INDIA 74-75

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

38. FINDINGS AND ANALYSIS 89-91

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

40. FUTURE SCENERIO OF COLA WARS 94

41. QUESTANNAIRE & TARGET AUDIENCE 95-99

42. ANALYSIS OF QUESTANNAIRE RESPONSE 100

43. RECOMMENDATIONS 101-104

44. BIBLIOGRAPHY 105

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 EXECUTIVE SUMMARY

This project is an extensive research on the marketing strategies of the two Cola giants
Pepsi and Coca Cola. It covers an extensive survey and depicts all graphs,
fact and figures of two companies. It begins with the introduction of soft
drink industry and introduction of these two companies of soft drink industry.
It covers some of the major strategies adopted by Pepsi and Coca-Cola like
their pricing policy, sales promotion and advertising policy, distribution
policy etc. The project has been made interesting with the inclusion of the
topics, which covers the 4P’s of marketing.

The major players in the soft drink industry in India are Coke and Pepsi. Pepsi holds the
major market share followed by Coke. They have a cut throat competition
between themselves. Whatever strategy is followed by one company, it is
copied by the other.

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

One of the selected brands is NO1 brand in their respective product categories the other
one brand is close competitor of the No 1 brands. Total sample of size of 200
respondents selected on the basic of convenience was surveyed which include
consumers.

Data was collected from secondary as well as primary sources. Structure questionnaire
was use to collect primary data

i . ex e
 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

9
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 today’s highly competitive market place, three players have dominated the industry;
The New York based Pepsi Company Inc. The Atlanta based coca- cola and U.K. based
Cadbury Schweppes.

Through the globe, these major players have been battling it out for a bigger chunk of the
ever –growing soft drink market. Now this battle has been evolved up to India too with
the arrival of these three giants.

Soft drink industry is on amazing growth; ultimately these are only one person who will
determine their fortunes. The Indian consumer the real
War to quench his thirst has just begun.

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SOFT DRINK INDUSTRY: AN OVERVIEW

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

Over local competition, the two American Cola giants have cleared up the arena and are
packing all their power behind building the Indian franchisee of their globe girdling
brands. The huge amount invested in fracture has never been seen before. Both players
seen an enormous potential in his country where swigging a carbonated beverage is still
considered a treat, virtually a luxury. Consequently, by world standards India’s per capita
consumption of cold drinks as going by survey results is rock bottom, less than over
Neighbors Pakistan & Bangladesh, where it is four times as much.
Behind the hype, in an effort invisible to consumer Pepsi pumps in Rs 3000 crores (1994)
to add muscle to its infrastructure in bottling and distribution. This is apart from money

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that company’s franchised bottles spend in upgrading their plants all this has contributed
to substantial gains in the market. In colas, Pepsi is already market leader and in certain
cities like Banaras, Pepsi outlets are on one side & all the other colas put together on the
other. While coke executive scruff at Pepsi’s claims as well as targets, industry observers
are of the view that Pepsi has definitely stolen a march over its competitor coke.
Apart from numbers, Pepsi has made qualitative gains. The foremost is its image. This
image turnaround is no small achievements, considering that since it was established in
1989, taking the hardship route prior to liberalization and weighed down by export
commitments.
Now, at present as there are three major players coke, Pepsi and Cadbury and there is stiff
competition between first two, both Pepsi and coke have started, sponsoring local events
and staging frequent consumer promotion campaigns. As the mega event of this century
has started, and the marketers are using this event – world cup football, cricket events and
many more other events.
Like Pepsi, coke is picking up equity in its bottles to guarantee their financial support;
one side coke is trying to increase its popularity through.
Eat Food, enjoy Food. Drink only coca cola. Eat cricket, sleep cricket. Drink only coca
cola. Eat movies, sleep movies. Drink only coca cola.

On the other side of coin Pepsi has introduced AMITABH BACHHAN for capturing the
lemon market through MIRINDA – Lemon with “zor ka jhatka dhere se lage”.

But no doubt’ that UK based Cadbury is also recognizing its presence. So there is a real
crush in the soft drink market. with launch of the carbonated organize drink Crush, few
year ago in Banaras ., the first in a series of a launches , Cadbury Schweppes beverage
India (CSBI) HAS PLANNED:- The world third largest soft drink marketers all over the
country.CSBI o wholly owned subsidiary of the London based $ 6.52billion. Cadbury
Schweppes is hoping that crush is going well and well not suffer the same fate as the Rs.
175 crore Cadbury India’s apple drink Apella. CSBI is now with orange (crush), and
Schweppes soda in the market.

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As orange drinks are the smallest of non-cola categories that is Rs. 1100 crore markets
with 10% market share and cola heaving 50% is followed by Lemon segment with 25%.
The success of soft drink industry depends upon 4 major factors viz.
 Availability
 Visibility
 Cooling
 Range

AVAILABILITY
Availability means the presence of a particular brand at any outlet. If a product is now
available at any outlet and the competitor brand is available, the consumer will go for it
because generally the consumption of any soft drink is an impulse decision and not
predetermined one.

VISIBILITY
Visibility is the presence felt, if any outlet has a particular brand of soft drink say- Pepsi
cola and this brand is not displayed in the outlet, then its availability is of no use. The
soft drink must be shown off properly and attractively so as to catch the attention of the
consumer immediately Pepsi achieves visibility by providing glow signboards,
hoarding, calendars etc. to the outlets. It also includes various stands to display Pepsi
and other flavors of the company.

COOLING

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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.

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 HISTORY OF COCA-COLA
Jon Styth Pemberton first introduced the refreshing taste of Coca-Cola in Atlanta,
Georgia it was May 1861 when the pharmacist concocted caramel colored syrup in three–
legged brass kettle in his backyard. He first distributed the new product by carrying
Coca-Cola in a jug coin enjoys in a glass of Coca-Cola at the soda fountain. Whether by
design or accident, carbonated water was teamed with the new syrup, producing a drink
that was proclaimed “Delicious and Refreshing”.

Dr. Pemberton’s Partner and bookkeeper, Mr. Frank Robinson, suggested the
name and penned as “Coca-Cola” in the unique flowing script that is still famous
worldwide today.
Dr. Pemberton’s sold 25 gallons of syrup, shipped in bright Red wooden kegs.
Red has been a distinctive color associated with the No.1 soft drink brand ever since. For
his efforts, Dr. Pemberton grossed $ 50 and spent $ 73.96 on advertising, by 1891,
Atlanta chemist as a G.Canler had acquired complete ownership of the Coca-Cola
business.
He purchases it from the Dr.Pemberton family for $ 2300. With in 4 year his
merchandising flair helped to expand the consumption of Coca-Cola to over $25 million.
Robert W. woodruff become the president of the Coca-Cola company in 1923 and his
more than six decades of leadership took the business of commercial success making

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Coca-Cola an institution the world over. Coca-Cola begins as a never tonic, but candy
merchant Joseph A. Biedenharn of Mississippi was looking for awry to serve refreshing
beverages. He responded to this demand began offering bottle Coca-Cola using syrup
shipped from Atlanta, during a hot summer in 1894.

1894 … A modest start for a bold idea

In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage
called Coca-Cola impressed the store's owner, Joseph A. Biedenharn. He began bottling
Coca-Cola to sell, using a common glass bottle called a Hutchinson.

Biedenharn sent a case to Asa Griggs Candler, who owned the Company. Candler
thanked him but took no action. One of his nephews already had urged that Coca-Cola be
bottled, but Candler focused on fountain sales.

1899 … The first bottling agreement

Two young attorneys from Chattanooga, Tennessee believed they could build a business
around bottling Coca-Cola. In a meeting with Candler, Benjamin F. Thomas and Joseph
B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United
States (specifically excluding Vicksburg) -- for the sum of one dollar. A third
Chattanooga lawyer, John T. Lupton, soon joined their venture.

1900-1909 … Rapid growth

the three pioneer bottlers divided the country into territories and sold bottling rights to
local entrepreneurs. Their efforts were boosted by major progress in bottling technology,
which improved efficiency and product quality. By 1909, nearly 400 Coca-Cola bottling
plants were operating, most of them family-owned businesses. Some were open only
during hot-weather months when demand was high.

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1920s … Bottling overtakes fountain sales
as the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the U.S.
Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after their
1923 introduction. A few years later, open-top metal coolers became the forerunners of
automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola
exceeded fountain sales.

1920s and 30s … International expansion

Led by longtime Company leader Robert W. Woodruff, chief executive officer and
chairman of the Board, the Company began a major push to establish bottling operations
outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium,
Italy, Peru, Spain, Australia and South Africa. By the time World War II began, Coca-
Cola was being bottled in 44 countries.

1940s … Post-war growth

During the war, 64 bottling plants were set up around the world to supply the troops. This
followed an urgent request for bottling equipment and materials from General
Eisenhower's base in North Africa. Many of these war-time plants were later converted to
civilian use, permanently enlarging the bottling system and accelerating the growth of the
Company's worldwide business.

1960s … New brands introduced

Following Fanta® in the 1950s, Sprite®, Minute Maid®, Fresca® and TaB® joined
brand Coca-Cola in the 1960s. Mr. Pibb® and Mello Yello® was added in the 1970s. The
1980s brought diet Coke® and Cherry Coke®, followed by POWERADE® and
DASANI® in the 1990s. Today hundreds of other brands are offered to meet consumer
preferences in local markets around the world.

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1970s and 80s … Consolidation to serve customers
As technology led to a global economy, the retailers who sold Coca-Cola merged and
evolved into international mega-chains. Such customers required a new approach. In
response, many small and medium-size bottlers consolidated to better serve giant
international customers. The Company encouraged and invested in a number of bottler
consolidations to assure that its largest bottling partners would have capacity to lead the
system in working with global retailers.

1990s … New and growing markets

Political and economic changes opened vast markets that were closed or underdeveloped
for decades. After the fall of the Berlin Wall, the Company invested heavily to build
plants in Eastern Europe. And as the century closed, more than $1.5 billion was
committed to new bottling facilities in Africa.

21st Century …
The Coca-Cola bottling system grew up with roots deeply planted in local communities.
This heritage serves the Company well today as people seek brands that honor local
identity and the distinctiveness of local markets. As was true a century ago, strong locally
based relationships between Coca-Cola bottlers, customers and communities are the
foundation on which the entire business grows.

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COCA –COLA COMPANY PROFILE

Keeping in view of tapping the Indian soft drink market and also developing soft drinks
as a drinking product among Indians. The Coca-Cola in India has setup an independent
organizations which is H.C.C & B.C.C with a capital of 350 U.S.$ each by virtue of
sellout decision of the passed managing director Sh. S. C. Aggarwal.

Hindustan Coca-Cola bottling (N-W) Pvt. Ltd. Najibabad took the complete possession
of this plant, land, machinery, & intellectuals on February 14’ 1998 and since then
H.C.C, looking after all its affairs under company owned bottling plant to establish
integrated marketing system in the area.

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CORE BRANDS:

Coca-Cola: Developed in a brass pot in 1886, coca-cola is the most recognized and
admired trademark around the globe. Not to mention the
best selling soft drink in the world.

Sprite: In 1961, a citrus-flavored drink made its U.S debut, using “Sprite Boy
“as inspiration for its name. This elf with silver hair and a big smile was used in
1940s advertising for Coca-Cola. Sprite is now the fastest growing major soft drink
in U.S and the world’s most popular lemon-lime soft drink.

Fanta : The name “fanta “ was first registered as a trademark in Germany in 1941 ,when
it was used for a few year for a soft drink created from available materials and
flavors . The name was then revived in 1955 in Naples, Italy, when it was used for
the:” fanta “orange drink we know today. It is now the trademark name for a line of
flavored drinks around the world.

Diet coke: The extension of the coca-cola name began in 1982 with the introduction of
diet coke (also called coca-cola light in some countries). Diet coke quickly becomes the
number – one selling low –calorie soft drink in the world.

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 FABULOUS FACTS ABOUT COCA-COLA

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

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

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

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

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

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

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

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

8. The largest representation of the world’s best known package 100 foot tall glass
contour bottle is located at world of coca-cola, LAS VEGAS

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 HISTORY IN INDIA

Coca-cola in India

Coca-Cola, the corporation nourishing the global community with the world’s largest
selling soft drink concentrates since 1886, returned to India in 1993 after a 16 year hiatus,
giving new thumbs up to the Indian soft drink market. In the same year, the Company
took over ownership of the nation’s top soft-drink brand and bottling network. It’s no
wondering our brands assumed an iconic status in minds of world’s consumers.

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 A Healthy Growth to the Indian Economy

Ever since, Coca-Cola India has made significant investments to build and continually
consolidate its business in the country, including new production facilities, waste water
treatment plants, distribution systems, and marketing channels.

Coca-Cola India is among the country’s top international investors, having invested more
than US$ 1 billion in India in the first decade, and further pledged another US$100
million in 2003 for its operations.

A Pure Commitment to the Indian Economy

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

country’s job listings.

Creating Enormous Job Opportunities

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With virtually all the goods and services required to produce and market Coca-Cola being
made in India, the business system of the Company directly employs approximately
6,000 people, and indirectly creates employment for more than 125,000 people in related
industries through its vast procurement, supply, and distribution system.

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

with another 25 being owned by franchisees. That apart, a network of 21 contract packers
manufactures a range of products for the Company.

On the distribution front, 10-tonne trucks – open bay three-wheelers that can navigate the
narrow alleyways of Indian cities – constantly keep our brands available in every nook
and corner of the country’s remotest areas.

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

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 PROMISE BY COCA-COLA
The coca-cola company exists to benefits and refreshes every one it touches. The basic
proposition of our business is simple, solid and timeless. When we bring refreshment,
value, joy and fun to our stakeholders then we successfully nurture and protect our brand,
particularly coca-cola. That is the key to fulfilling our ultimate obligation to provide
consistently attractive to the owner so four business.

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

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BRANDS IN INDIA

28
 BRAND IN INDIAN ORIGIN

GOLD SPOT: this orange carbonate soft drink was introduced in the early 1950c, and
acquired by the Coca-Cola company in 1993, its tangy taste has been popular with
Indian teenagers

LIMCA: It is thirst-quenching beverage features a fresh and light lemon-lime taste and
lighthearted attitude. The limca brand was introduced in 1971 and acquired by the
coca-cola company in 1993.

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MAAZA: Maaza, launched in 1984 and acquired by the coca-cola company in 1993, is a
non carbonated mango soft drink with a rich, juice & natural mango taste.

THUMPS UP: in 1993, the Coca-Cola company acquired this brand, which was
originally introduced in 1977. Its strong and fizzy taste makes it unique carbonated
Indian cola.

PEPSICO

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PepsiCo is one the largest companies in the U.S. It figures amongst the largest 15
companies worldwide according to the number of employees hired. It has a U.S. Fortune
rank of 50.The company profits for 1997 were $2.14 billion on revenues of $20.92 billion
and Pepsi is bottled in nearly 190 countries. PepsiCo is a world leader in convenient
snacks, foods and beverages with revenues of more than $43 billion and over 198,000
employees. Take a journey through our past and see the key milestones that define
PepsiCo.

PepsiCo is a world leader in the food chain business. It consists of many companies
amongst which the prominent once are Pepsi-Cola, Frito-Lay and Pepsi Food
International. The group is presently into two of the most profitable and profitable and
growing industries namely, beverages and snack foods. It has scores of big brands
available in nearly 150 countries across the globe. The group has established for itself
once of the strongest brands in various segments of its operations.

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The beverages segment primarily markets its Pepsi, Diet Pepsi, Mountain Dew and other
brands worldwide and 7-UP outside the U.S. markets. These are positioned in close
competition with Coca-Cola Inc. of USA. A point which is worth a mention is that Coca-
Cola gets 80% of its profits for International operations while the same figure for
PepsiCo stands at 6%. The segment is also in the bottling plants and distribution facilities
and also distributes the ready to drink tea products of Lipton in North America. In a joint
venture with orient spray juice products PepsiCo also manufactures and distributes fruit
juices.

The snack food division manufactures and distributes and markets chips and other snacks
worldwide. The international operations of this segment extend to the markets of Mexico,
the UK and Canada. Frito-Lay represents this segment of PepsiCo.

The restaurant segment earlier primarily consists of the operations of the worldwide Pizza
Hut, Taco Bell and KFC chains. PFS. Pepsi company’s restaurant distribution operation,
supplies company owned and franchise restaurants in the U.S. The company ventured
into restaurant business with Taco Bell, KFC, Pizza Hut ended last year when they were
spanned off from the company. A packaged goods company comprised of Pepsi-Cola
Company and Frito-Lay will continue to bear the PepsiCo name. The move should
enhance both corporations ability to prosper with their own fully dedicated structure and
management team.

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 PEPSICO IN INDIA

PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab
government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited.
This joint venture marketed and sold Lehar Pepsi until 1991, when the use of foreign
brands was allowed; PepsiCo bought out its partners and ended the joint venture in 1994.
Others claim that firstly Pepsi was banned from import in India, in 1970, for having
refused to release the list of its ingredients and in 1993, the ban was lifted, with Pepsi
arriving on the market shortly afterwards. These controversies are a reminder of "India's
sometimes acrimonious relationship with huge multinational companies." Indeed, some
argue that PepsiCo and The Coca-Cola Company have "been major targets in part
because they are well-known foreign companies that draw plenty of attention."

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

organization in New Delhi, said aerated waters produced by soft drinks manufacturers in
India, including multinational giants PepsiCo and The Coca-Cola Company, contained

33
toxins, including lindane, DDT, malathion and chlorpyrifos — pesticides that can
contribute to cancer, a breakdown of the immune system and cause birth defects. Tested
products included Coke, Pepsi, 7 Up, Miranda, Fanta, Thumps Up, Limca, and Sprite.
CSE found that the Indian-produced Pepsi's soft drink products had 36 times the level of
pesticide residues permitted under European Union regulations; Coca Cola's 30 times.
CSE said it had tested the same products in the US and found no such residues. However,
this was the European standard for water, not for other drinks. No law bans the presence
of pesticides in drinks in India.

The Coca-Cola Company and PepsiCo angrily denied allegations that their products
manufactured in India contained toxin levels far above the norms permitted in the
developed world. But an Indian parliamentary committee, in 2004, backed up CSE's
findings and a government-appointed committee, is now trying to develop the world's
first pesticides standards for soft drinks. Coke and PepsiCo opposed the move, arguing
that lab tests aren't reliable enough to detect minute traces of pesticides in complex
drinks.

As of 2005, The Coca-Cola Company and PepsiCo together hold 95% market share of
soft-drink sales in India. PepsiCo has also been accused by the Puthussery panchayat in
the Palakkad district in Kerala, India, of practicing "water piracy" due to its role in
exploitation of ground water resources resulting in scarcity of drinking water for the
panchayat residents, who have been pressuring the government to close down the
PepsiCo unit in the village.

In 2006, the CSE again found that soda drinks, including both Pepsi and Coca-Cola, had
high levels of pesticides in their drinks. Both PepsiCo and The Coca-Cola Company
maintain that their drinks are safe for consumption and have published newspaper
advertisements that say pesticide levels in their products are less than those in other foods
such as tea, fruit and dairy products. In the Indian state of Kerala, sale and production of
Pepsi-Cola, along with other soft drinks, was banned by the state government in 2006,
but this was reversed by the Kerala High Court merely a month later. Five other Indian
states have announced partial bans on the drinks in schools, colleges and hospitals

34
 Brand Facts

PepsiCo nourishes consumers with a range of products from tasty treats to healthy eats
that deliver enjoyment, nutrition, convenience as well as affordability

The group has built an expansive beverage and foods business. To support its operations,
PepsiCo has 42 bottling plants in India, of which 13 are company owned and 29 are
franchisee owned. In addition to this, PepsiCo’s Frito Lay division has 3 state-of-the-art
plants. PepsiCo’s business is based on its sustainability vision of making tomorrow better
than today. PepsiCo’s commitment to living by this vision every day is visible in its
contribution to the country, consumers and farmers.

Beverages

PepsiCo India’s expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP,
Nimbooz, Miranda and Mountain Dew, in addition to low calorie options such as Diet

35
Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic
sports drinks - Gatorade, Tropicana100% fruit juices, and juice based

Drinks – Tropicana Nectars, Tropicana Twister and Slice. Local brands – Lehar Evervess
Soda, Dukes Lemonade and Mangola add to the diverse range of brands

Foods

PepsiCo’s food division, Frito-Lay, is the leader in the branded salty snack market and all
Frito Lay products are free of trans-fat and MSG. It manufactures Lay’s Potato Chips;
Cheetos extruded snacks, Uncle Chips and traditional snacks under the Kurkure and
Lehar brands. The company’s high fiber breakfast cereal, Quaker Oats, and low fat and
roasted snack options enhance the healthful choices available to consumers. Frito Lay’s
core products, Lay’s, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to

36
significantly reduce saturated fats and all of its products contain voluntary nutritional
labeling on their packets

QUICK FACTS

• PepsiCo established it's business operations in India in 1989

• Invested more than USD 1 Billion since inception
• Well known and loved global brands that delight and nourish consumers

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

• It has more than 42 bottling plants in India, of which 13 are company owned & 29
franchisee owned
• 3 State-of-the-art food plants in Punjab, Maharashtra and West Bengal

37
PEPSI CO INDIA: A FORTUNE 500 COMPANY IN INDIA

PepsiCo, which ranks among the world’s five largest food and beverage
companies with 16 brands, and its partners have invested more than
US$ 700 million in India - building businesses, which today provide
direct or indirect employment to more than 60,000 people. Since
Pepsi’s entry into the Indian market in 1989, several brands from its
portfolio have become established category leaders. Brand Pepsi is
now the 2nd biggest brand in the country. PepsiCo’s portfolio of
beverage brands in India includes the flagship cola brand Pepsi; Diet
Pepsi; two flavors of Mirinda – Orange and Lemon; 7UP; Mountain
Dew; packaged drinking water - Aquafina; variants of the fruit drink
brand Slice; the 100 per cent fruit juice brand Tropicana in several
variants and the world’s leading sports drink Gatorade.

38
.

Pepsi - Yeh Hai Youngistan Meri Jaan

BRAND HISTORY

Pepsi is a hundred year old brand loved by over 200 million people worldwide. The
largest single selling soft drink brand in India is the ubiquitous'socialiser'at every
occasion.

• Youngistan loves it. 200 million people worldwide love it. But what has made
Pepsi the single largest selling soft drink brand in India is actually a formula
concocted a century ago in a far away continent.
• 1886, United States of America. Caleb Brad man, the man with a plan, got on to
formulate a blockbuster digestive drink and decided to call it Brad’s drink. It was
this doctor’s potion that was to become Pepsi Cola in 1898, and eventually, Pepsi
in 1903.
• Pepsi has always played on the front foot and since its inception has come out
with revolutionary concepts like Diet, 2L bottles, recyclable plastic cola bottles
and the enviable My Can.

BRAND ADVANTAGE

• Pepsi has become a friend to the youth and has led many youth cultures.
Youngsters over the generations have grown up with Pepsi and share an
emotional connect with it, unlike any other cola brand. Be it parties, hangouts, or
just another day at home, a day is never complete without the fizz of Pepsi!
• Pepsi, Cricket and Bollywood have been joined at the hip since the beginning.
Shah Rukh Khan, Sachin Tendulkar, Saif Ali Khan, Amitabh Bachchan, Kareena

39
 Kapoor, Priyanka Chopra, Virender Sehwag, M. S. Dhoni, John Abraham, Ranbir
Kapoor and Deepika Padukone are a few celebrities who will go any length for a
chilled Pepsi.
• The Pepsi My Can is undoubtedly the most popular cola pack of all times. It is not
just a pack but a style statement for today’s youth.

40
41
 PEPSI PRODUCTS IN INDIA

SLOGANS USED BY PEPSI COMPANY

1898 Brad's Drink

1903 Exhilarating, Invigorating, Aids Digestion

1906 Original Pure Food Drink

1908 Delicious and Healthful

1915 For All Thirsts - Pepsi: Cola

1919 Pepsi: Cola - It makes you Scintillate

1920 Drink Pepsi: Cola - It Will Satisfy You

42
1928 Peps You Up!

1929 Here's Health!

1932 Sparkling, Delicious

1933 It's the Best Cola Drink

1934 Double Size

Refreshing and Healthful

1938 Join the Swing to Pepsi

1939 Twice as Much for a Nickel

1943 Bigger Drink, Better Taste

1947 It's a Great American Custom

1949 Why Take Less When Pepsi's Best?

1950 More Bounce to the Ounce

1954 The Light Refreshment

Refreshing Without Filling

1958 Be Sociable, Have a Pepsi

1961 Now It's Pepsi for Those Who Think Young

1963 Come Alive! You're in the Pepsi Generation

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

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

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1973 Join the Pepsi People Feeling' Free

1976 Have a Pepsi Day!

1979 Catch That Pepsi Spirit

Take the Pepsi Challenge

1981 Pepsi's Got Your Taste for Life

1983 Pepsi Now! 1984 The Choice of a New Generation

1987 America's Choice

1989 A Generation Ahead

1992 Gotta Have It

1993 Be Young, Have Fun, Drink Pepsi

1995 Nothing Else is a Pepsi

1997 Generation Next

1998 Same Great Taste 1999

The Joy of Cola

2000 The Joy of Pepsi

2003 Pepsi. It's the Cola

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

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

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

44
2005-2006: "An ice cold Pepsi. It's better than sex!"

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

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

2008: "Yeh Hai Youngistan Meri Jaan!" Hindi - meaning "This is the Young era my
dear" (India and Pakistan)

2008: "Pepsi Stuff" Super Bowl Commercial

2008: "Pepsi is #1" TV commercial

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

2008-2009: "Something for Everyone."

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

Refreshes the World"

THE RIVARLY BEGINS:

Coke Comes to India

Coca-Cola comes to India with fanfare in the fifties. For a number of days, The
Hindustan Times and other newspapers of New Banaras carried full page advertisement
showing a big boy in uniform with a soft-drink crown as the cap. There was no indication
of the product. After a few days, Coke was introduced. It was an entirely new drink
which fascinated people. It soon became the national drink. For the first time, a soft-drink
was available from one corner of the country to another. The person who brought Coca-
Cola to India was the father of late Sardar Charanjit Singh, Sardar Mohan Singh. A

45
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.

It poured in vast sums to whip up its visibility at the retail level, so that consumers were
greeted virtually at every street corner by Pepsi’s blue, red and white colors, because they
have perception “the thing on display Sells more.” Coca-Cola is, finally, redoing the real
thing to the replicate the success that it’s arch-rival, PepsiCo. Has achieved with its fast
and furious marketing. But to win them, Coke is copying Pepsi.

46
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.

47
 Coke already owns more brands than it will over need, since it has bought out
Ramesh Chauhan. Coke just needs to juggle these brands around dextrously to meet its
objectives, to ensure that Pepsi does not gain market share in t Today, Coke's product
line includes, Coca-Cola, Thumps Up, Fanta, Gold Spot, Maaza, Citra, Sprite, Bisleri
Club Soda and Diet Coke.

PACKAGING

Coca-Cola India Limited (CCIL) has bottled its Cola drink in different sizes and
different packaging i.e., 200 ml bottle, 300 ml. Bottle, 330 ml. Cans, 500 ml. Bottle
fountain Pepsi, and bottles of 1 and 2 litre.

PRODUCT POSITIONING

One important thing must be noticed that Thumps Up is a strong brand in western
and southern India, while Coca Cola is strong in Northern and Eastern India. With
volumes of Thumps Up being low in the capital, there are likely chances of Coca Cola
slashing the prices of Thumps Up to Rs. 5 and continue to sell Coca Cola at the same
rate. Analysts feel that this strategy may help Coke since it has 2 Cola brands in
comparison to Pepsi which has just one.

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.

48
b) PRICE

The price being fixed by industry, leaving very little role for the players to play in
the setting of the price, in turn making it difficult for competitors to compete on the basis
of price.

The fixed cost structure in Carbonated Soft Drinks Industry, and the intense
competition make it very difficult to change or alter the prices. The various costs
incurred by the individual company's are almost unavoidable. These being the costs of
concentrates, standard bottling operations, distributor and bottlers commissions,
distribution expenses and the promotional and advertising expenditure (As far as Coke is
concerned, it had to incur a little more than Pepsi as Pepsi paved its way to India in 1989
while Coke made a come back in 1993.)

Currently a 300 ml. Coke bottle is available for Rs. 6 to8 The 330 can was initially
available for Rs. 13 and now, since the price has gave up to Rs. 18 per can. The prices of
500 m, 1 litre. And 2ltr being Rs. 15 Rs. 23 and Rs. 40 respectively (according to the
current survey).

Dating back to ‘93', when Pepsi hiked the price of Pepsi - Cola from Rs. 5 to Rs. 6
per 250 ml. bottle in some parts of the country-including Agra. Coke penetrated the
market with price of Rs. 5 for a 300 ml. bottle, making it cheaper by Rs. 1 and 50 ml.
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.

49
 Price list

Name Bottle Size MRP (in Rs.)

Coke Per Bottle 200 ml 6

Coke 300 ml 10

Coke 500 ml (Plastic / Glass) 22

Coke 2 litre 60

Diet Coke (Can) 330 ml Can 35

Coke (Can) 330 ml Can 38

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

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.

50
Coke and its product were available in over 2, 50,000 outlets (in contrast with Pepsi's 2,
00,000). Coke has a greater advantage in terms of geographical coverage.

But Coke has had problems with its bottlers as the required profits for the bottlers
have not been forthcoming. This is more so because Coke has hiked the price of its
concentrate by Rs. 8 Further, Coke's operations in India are 100% Fobs. Now, it plans to
convert then into COBOs. This is straining the relationship between the Coke and its
bottlers.

The company had decided to create a fund to reimburse performing bottlers for the extra
costs incurred on account of the hike in prices of soft drink concentrates. Mr. Short also
realized that India is a price sensitive market and the company would have to absorb in
the increase in excise duty and said that in the long run Coke will have to slash prices for
the benefit of the consumers and said that they were considering a cut in the prices of
their fountain soft drinks.

Coke and Pepsi have devised strategies to get rid of middlemen in the
distribution network. However, 50% of the industry unfortunately depends on these
middlemen. As of now, around 100 agents are present in Bananas. Bottlers of the 2
multinationals have strongly felt the need to remove these middlemen from the
distribution system, but very little success has been achieved in doing so.

D) PROMOTION

It must be remembered that soft drinks purchases are an

"impulse buy low involvement products" which makes promotion and advertising an
important marketing tool. The 2 arch rivals have spent a lot on advertising and on
promotional activities.

51
 To promote a brand and even to spend a lot on advertising, the company must be
aware of the perceived quality of the brand, its brand power (if at all there is) since
consumers make purchase decision based on their perceptions of value i.e., of quality
relative to price.

According to Paul Stobart, Advertising encourages customers to recognize the

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

Coca Cola has entered new markets and also developing market economics (like India)
with much-needed jobs.

Coke attributes its success to bottlers, the Coca Cola system itself, i.e., its
executive committees, employees, BOD, company presidents but above all from the
consumer.

Coke's red color catches attention easily and also the Diet Coke which it
introduced was taking the Cake, as Pepsi has not come out with this in India.

Ever since Coke's entry in India in 1993, Coke made a come back (after quitting
in 1977), in October 24 in Agra, the city was flooded by trucks, there wheelers, tricycle
cards-all with huge red Coke-emblazoned umbrellas. Retailers were displaying their
Coke bottles in distinctive racks, also with specially-designed iceboxes to keep Coke
bottles cold. This was one big jolt to Pepsi.

STRATEGIES ADOPTED

BY COKE AND PEPSI

52
The Pepsi Process: Despite being a global brand, Pepsi has built its success on
meeting the Indian consumer’s needs, particularly in terms of making the brand
synchronize with localized events and traditions. Instead of harping on its global lineage,
ergo, it tries to plug into ethnic festivals, use the vernacular indifferent part of the
country, and blend into the local fabric. Pepsi is using both national campaigns-such as
the Drink Pepsi, Get Stuff scheme, which offers large discounts on other products to
Pepsi-buyers as well as local.

The Coke Copy: Instead of creating a bond with the customers through small but
high-impact events, Coca-Cola chose to associate itself with national and international
mega events like the World Cup Cricket, 1996, and world cup football 1998. But now
coke is also entering into local actions. Coke is also trying to make their brand
synchronize with localized events traditions and festivals. Coca-Cola new tag line in this
advertisement is “Real shopping, real refresher”. In this way Coke is copy Pepsi.

EMPOWERMENT
The Pepsi Process: Once of the strongest weapons in Pepsi’s armory is the flexibility
it has empowered its people with. Every manager and salesperson has the authority to
take whatever steps he, or she, feels will make consumers aware of the brand and
increase its consumption.

53
The Coke Copy: Flexibility is the weapon that Coca-Cola, fettered as it is by the need
for approvals from Atlanta for almost everything. In the past, this has shown up in its
stubborn insistence on junking the franchisee network it had acquired from Parle; in its
dependence on its own feedback mechanism over that of its bottlers;’ and on its
headquarters-led approach.

PRICE
The Pepsi process: Pepsi has consistently wielded its pricing strategy as in invitation
to sample, aiming to turn trial into addiction.

It launched the 500 ml bottle in 1994 at Rs. 8 versus Thumps Up’s Rs. 9, in April, 1996,
its 1.5 liters bottle followed Coke into the marketplace at Rs. 30 – Rs 5 less than
Coke’s .But it couldn’t continue the lower price positioning for long.

The Coke Copy: Initially, coke carbon-copied the strategy by introducing its 330ml
cans in January 1996, at an invitation price of Rs. 15 before raising it to Rs. 18. By this
time, it had realized that the Coca-Cola brand did not hold enough attraction for
customers to fork out a premium. The 200ml Coke, launched so far in parts of eastern,
western, and northernIndia, is priced at Rs. 5, lowering the entry-barriers. Too really
drive the market, as Coke wants to you must go down to Rs. 3’.

PEPSI VS. COKE

54
$28 BILLION TURNOVER $16 BILLION

32% INT. SALES AS % 70%

` OF TOTAL SALES

RS. 5OO CRORES TOTAL INVESTMENT RS. 250 C

IN INDIA

RS. 300 CRORES PROPOSED RS. 2,400C

INVESTMENTS

2400 NO. OF EMPLOYEES 140

13 NO. OF OWNED NIL

BOTTLING PLANTS

55
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

56
 Competitive Comparisons
• Advertising

57
• Coke: $34.4 million (1975) to $211.5 million
(1993)

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

Million (1993)

• Distribution

• Coke stronger in fountain. But Pepsi

IS growing in supermarkets?

• Pricing
• No differences

58
 COLA WARS
Coca-cola v/s Pepsi

OVER A CENTURY OF COLA SLOGANS,

COMMERCIALS, BLUNDERS, AND COUPS

There's little doubt that the most spirited and intense competition in the beverage world is
between Coca-Cola and Pepsi. These two American companies long ago took their battle
worldwide, and although there are other colas in the market, these giants occupy this
high-stakes arena by themselves. The impact of Coke and Pepsi on popular culture is
indisputable, and I have observed in my time managing this web site that America has not
become jaded about the cola wars. The memorabilia, the jingles, the trivia - all still
popular. So I am offering this page in an attempt to assuage a wee bit of the Coke and
Pepsi thirst that is thriving on our planet.

IT ALL STARTED . . . .

Coca-Cola was invented and first marketed in 1886, followed by Pepsi in 1898. Coca-
Cola was named after the coca leaves and kola nuts John Pemberton used to make it, and
Pepsi after the beneficial effects its creator, Caleb Brad ham, claimed it had on dyspepsia.
For many years, Coca-Cola had the cola market cornered. Pepsi was a distant, no
threatening contender. But as the market got more and more lucrative, professional
advertising became more and more important. These soda companies have been leading
the way in advertising ever since.

59
 ADVERTISING HISTORY & COMMERCIALS
Pepsi has definitely leaned towards the appeal of celebrities, popular music, and young
people in television commercials, while Coke relies more heavily on images of happiness
and togetherness, tradition, and nationalism, perpetually trying to cash in on its original
lead. In a simplified sense, you could sum up the strategies as Coke: Old, Pepsi: New. In
fact, as we will see, when Coca-Cola tried something new, it was disaster.

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

began to appear on billboards, newspapers, and streetcars. Soon there were serving trays
with images of people enjoying Coca-Cola, and glasses with the cola's name on them. At
this time, Coca-Cola and Pepsi were served in drugstore soda fountains.

In 1909, Pepsi used its first celebrity endorser, automobile race driver Barney Old-field,
in newspaper ads. In 1921, Pepsi went bankrupt, but continued to appear on the scene,
although not nearly so successfully as Coca-Cola. In 1931, Pepsi went bankrupt again,
but the new owner, Roy Megargel, would hit upon an idea that would finally give Coca-
Cola some competition. In 1934, he marketed Pepsi in a 12-ounce bottle for a nickel. At
the time, Coca-Cola was sold in a 6-ounce bottle for ten cents. Voila! Profits for Pepsi.

Pepsi racked up another first by airing the first radio jingle in 1939. It was so popular that
it was played in jukeboxes and became a hit record Coca-Cola hit the airwaves in 1941.

In 1946, inflation forced Pepsi to increase prices. And in 1950, Pepsi offered a larger 26-
ounce bottle to court the young American housewife.

In the 1960's, the cola ad wars moved to television. Coca-Cola employed a host of
celebrity singers to promote the product, including Connie Francis , Tom Jones, The New
Beats, Nancy Sinatra, and The Supremes. As we moved through the years, both colas

60
incorporated some of their best slogans ("Pepsi Generation" and "the Real Thing") into
subsequent commercials.

In the 1970s, market research showed that consumers preferred the taste of Pepsi over
Coke. The Pepsi Challenge is still being conducted today. But Coke came up with what is
arguably the best of all cola commercials, the 1971 I'd like to buy the World coke ad.

This landmark was recalled in Christmas versions in 1983 and 1984, and a 1990 Super
Bowl ad, which was enough to make some Baby Boomers weep with nostalgia.

In the 1980's, Pepsi lined up the celebrities, starting with late Michael Jackson, then
Madonna, Michael J. Fox, Billy Crystal, Lionel Ritchie, Gloria Stefan, Joe Montana, and
others. Coke signed on Michael Jordan, New Kids on the Block, Aretha Franklin, Elton
John, and Paula Abdul.

In 1985, responding to the pressure of the Pepsi Challenge taste tests, which Pepsi always
won, Coca-Cola decided to change its formula. Bill Cosby was the pitchman. This move
set off a shock wave across America. Consumers angrily demanded that the old formula
be returned, and Coca-Cola responded three months later with Classic Coke. Eventually,
New Coke quietly disappeared.

Pepsi, meanwhile, had its own flop, Crystal Pepsi, which was supposed to catch the
strange wave of the times when everything colorless was clean and desirable (Zima,
bottled water). And then there was Pepsi Lite with the lemony flavor and one calorie,
introduced in 1975. Remember that one? Apparently they didn't expect us to because later
they gave us Pepsi One, using the same concept, but a completely different taste. And,
extending the idea even further, we are now getting Pepsi Twist, a new product with a
twist of lemon flavor.

61
In 1991, Ray Charles sang, "You got the right one baby, uh-huh!" Also in the 1990s,
Cindy Crawford and the Spice Girls pitched Pepsi. And then Pepsi aired commercials
featuring the aggravating little girl (Halide Eisenberg) with her troubling male voice.

In the new century, both colas continue to battle it out on the television screen. And
celebrities continue to be important promoters. Recently, Pepsi has had commercials by
Bob Dole and Faith Hill, among others.

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 SLOGANS

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

COCA-COLA
1886 - Drink Coca-Cola
1904 - Coca-Cola Satisfies
1904 - Delicious and Refreshing
1905 - Coca-Cola Revives and Sustains
1905 - Good All the Way Down
1906 - The Drink of Quality
1906 - The Great National Temperance
1907 - Delicious Coca-Cola, Sustains, Refreshes, Invigorates
1907 - Cooling . . . Refreshing . . . Delicious
1908 - Sparkling - Harmless as Water, and Crisp as Frost
1909 - Delicious, Wholesome, Refreshing
1910 - It Satisfies
1910 - Quenches Thirst as Nothing Else Can
1911 - Its Time to Drink Coca-Cola
1911 - Real Satisfaction in Every Glass
1912 - Demand the Genuine - Refuse Substitutes

1913 - The Best Beverage under the Sun

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

63
1914 - Exhilarating, Refreshing
1914 - Demand the Genuine by Full Name
1914 - Pure and Wholesome
1916 - Just One Glass Will Tell You
1917 - Three Million A Day
1919 - Quality Tells the Difference
1920 - Drink Coca-Cola with Soda
1922 - Thirst Knows No Season
1922 - Thirst Can't Be Denied
1922 - Thirst Reminds You - Drink Coca-Cola
1923 - Refresh Yourself
1924 - Pause and Refresh Yourself
1925 - Six Million A Day
1925 - The Sociable Drink
1926 - Stop at the Red Sign
1927 - Around the Corner from Anywhere
1928 - A Pure Drink of Natural Flavors
1929 - The Pause that Refreshes
1930 - Meet Me at the Soda Fountain
1932 - Ice-Cold Sunshine
1933 - Don't Wear a Tired, Thirsty Face
1934 - Carry a Smile Back to Work
1935 - All Trails Lead to Ice-Cold Coca-Cola
1936 - What Refreshment Ought to Be
1936 - The Refreshing Thing to Do

1937 - America's Favorite Moment

1937 - So Easy to Serve and So Inexpensive
1938 - The Best Friend Thirst Ever Had
1938 - Pure Sunlight
1938 - Anytime is the Right Time to Pause and Refresh

64
1939 - Coca-Cola Goes Along
1939 - Make Lunch Time Refreshment Time
1939 - Makes Travel More Pleasant
1939 - The Drink Everybody Knows
1939 - Thirst Stops Here
1940 - Bring in Your Thirst and Go Away Without It
1941 - Completely Refreshing
1942 - Refreshment That Can't Be Duplicated
1942 - Whoever You Are, Whatever You Do, Wherever You May Be, When You Think
of Refreshment, Think of Ice-Cold Coca-Cola.
1943 - The Only Thing like Coca-Cola is Coca-Cola Itself. It's the Real Thing
1943 - A Taste All Its Own
1943 - That Extra Something
1944 - How About a Coke
1945 - Passport to Refreshment
1945 - Whenever You Hear "Have a Coke," You Hear the Voice of America
1947 - Coke Knows No Season
1947 - Serving Coca-Cola Serves Hospitality
1948 - Where There's Coke, There's Hospitality
1949 - Coca-Cola . . . Along the Highway to Anywhere
1950 - Help Yourself to Refreshment
1951 - Good Food and Coca-Cola Just Naturally Go Together
1952 - What You Want Is a Coke
1953 - Dependable as Sunrise
1954 - For People on the Go
1955 - America's Preferred Taste
1956 - Coca-Cola - Making Good Things Taste Better
1956 - Feel the Difference
1957 - Sign of a Good Taste
1958 - The Cold, Crisp Taste of Coke
1959 - Be Really Refreshed

65
1960 - Relax With Coke
1961 - Coke and Food - Refreshing New Feeling
1962 - Coca-Cola Refreshes You Best
1963 - Things Go Better With Coke
1965 - Something More Than a Soft Drink
1966 - Coke . . . After Coke . . . After Coke
1970 - Its the Real Thing
1971 - I'd like to buy the World a Coke 1974 - Look Up, America
1976 - Coke Adds Life
1979 - Have a Coke and a Smile
1982 - Coke Is It!
1984 - Just For the Taste of It (Diet Coke)
1985 - Just For the Free of It (Caffeine Free Coke)
1985 - We've Got a Taste For You (New Coke)
1985 - America's Real Choice (Coca-Cola Classic)
1986 - Catch the Wave (New Coke)
1986 - Red, White and You (Coca-Cola Classic)
1987 - You Can't Beat the Real Thing
1989 - Can't Beat the Feeling
1990 - Can't Beat the Real Thing
1993 - Always Coca-Cola
1993 - Taste it All

PEPSI-COLA

1903 - Exhilarating, Invigorating, Aids Digestion

1907 - Original Pure Food Drink
1909 - Delicious and Healthful
1915 - For All Thirsts - Pepsi-Cola
1919 - Pepsi-Cola - It Makes You Scintillate
1920 - Drink Pepsi Cola. It will satisfy you.

66
1928 - Peps You Up!
1932 - Sparkling, Delicious
1934 - Refreshing and Healthful
1939 - Twice As Much For A Nickel Too
1943 - Bigger Drink, Better Taste
1949 - Why take less when Pepsi's best?
1950 - More Bounce to the Ounce
1950 - The Light Refreshment
1954 - Refreshing Without Filling

1958 - Be sociable, have a Pepsi

1961 - Now It's Pepsi, For Those Who Think Young
1963 - Come Alive! You're In the Pepsi Generation
1967 - Taste That Beats the Others Cold
1967 - Pepsi Pours It On
1969 - You've Got a Lot to Live and Pepsi's Got a Lot to Give 1973 - Join the Pepsi
People Feelin' Free
1975 - Have a Pepsi Day
1978 - Catch That Pepsi Spirit
1981 - Pepsi's Got Your Taste For Life!
1983 - Pepsi Now!
1984 - Pepsi, the Choice of a New Generation
1992 - Gotta Have It
1993 - Be Young, Have Fun, Drink Pepsi1995 Nothing Else is a Pepsi

1997 Generation Next

1998 Same Great Taste 1999

The Joy of Cola

2000 The Joy of Pepsi

67
2003 Pepsi. It's the Cola

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

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

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

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

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

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

2008: "Yeh Hai Youngistan Meri Jaan!" Hindi - meaning "This is the Young era my
dear" (India and Pakistan)

2008: "Pepsi Stuff" Super Bowl Commercial

2008: "Pepsi is #1" TV commercial

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

2008-2009: "Something for Everyone."

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

Refreshes the World"

68
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

69
 Pepsi v Coca-Cola war turns hot

The ongoing cola war between global rivals Pepsi and Coca-Cola has taken a weird twist
in India with the former dragging the latter to court. The charge: Coca-Cola has snatched
employees, bottlers, and agents, all of whom are bound to Pepsi by a contract.

Pepsi has charged Coke with having entered into a conspiracy to disrupt its business
operations by inducing key employees and associates to break existing contracts illegally.

Pepsi has sought a permanent injunction and an ex parte order against coke, restraining it
from taking away Pepsi's employees and business associates. Pepsi has also reserved the
right to seek financial damages from Coke at a later date if necessary.

Pepsi has claimed that a dozen middle-level managers and three territory managers broke
their contracts with Pepsi to join Coke in recent months, while during the last year and
half, seven managers quit Pepsi to join Coca-Cola.

Justice C M Nair of the Delhi high court on April 17 issued notices and summons to
Coca-Cola and 15 others for May 6. However, Justice Nayar refused to grant the ex parte
injunction sought by Pepsi India to stop the alleged inducements by Coke in offering
employment to Pepsi's employees while the suit was pending in court.

On behalf of Pepsi, Ashok Desai and Arun Jaitley contended that Coca-Cola had been
"rattled by the huge success of Pepsi in India entered into a conspiracy during the last six
months to cause loss and damage to Pepsi's business interests by adopting unfair and
illegal means."

It added that Coca-Cola had approached many key managers and had successfully lured a
commercial manager of its bottling business Gaurav Duggal, and a manager in Surat
Sailesh Joshi, besides others.

70
Pepsi charged that while initially these approaches were sporadic, over the last six
months it is clear that Coca-Cola has changed its strategy and has decided to consciously
target and approach key employees of Pepsi at various locations in India.

The company has alleged that in most cases, the employees have not been given time to
adhere to the 90-day notice period and the one-year confidentiality agreement. The latter
deal bars employees joining its rivals for at least a year.

Desai claimed Coke's actions would directly harm the business interests of Pepsi, which
had invested over $300 million in the country in establishing business infrastructure.

In its defense, Coke is expected to seek relief in the Indian Constitution which states that
there can be no restriction on the movement of labor. Besides, any effort by a company to
restrict its employees from joining other companies might fall foul of the Monopolies and
Restrictive Trade Practices Act as an unfair trade practice.

Pepsi has cited the instance of Coke snapping up cricketer Javagal Srinath in spite of the
latter signing a contract with Pepsi's sports consultant, 21st Century Media. However,
media reports, quoting sources, said that Srinath's contract had been only in the verbal
stage.

Similarly, Pepsi has charged Coke with inducing the Board of Control for Cricket in
India to give the sponsorship of the recently concluded Pepsi Triangular Cricket Series to
Coke, as acknowledged in the BCCI submission before the Bombay high court, even
while a contract was signed with Pepsi.

Pepsi has listed the case of Coke trying to induce its music consultant DNA Networks
Private Ltd, which organized the Yanni show, to snap its ties with Pepsi and join Coke.

Incidentally, in results announced for the first three months of the year, Pepsi has swept
Coca-Cola aside. Pepsi has reported a growth of 27 per cent compared to Coke's 21 per
cent during the same period. In the first three months of last year, Pepsi grew by 18 per
cent only.

71
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.

72
BATTLE OF THE BEVERAGES:

73
 PEPSI IS NOT AS PRICEY

Regardless of which soda you like better though, Pepsi seems the better value than Coke
right now. Coke is trading at a nearly 20 percent premium to Pepsi based on 2002 P/Es
even though the two companies' earnings growth rates are nearly identical. (Pepsi's are
actually a shade higher.)

And when you look at revenues, the gap is even more dramatic. Coke is trading at 7
time’s estimated 2002 sales while Pepsi is trading at 3.5 times 2002 revenue estimates.
Both companies are expected to post slight declines in sales this year and an increase of
about 4 percent in 2003. Due to this disparity in valuation, Jeff Kanter, an analyst with
Prudential Securities, says he has a "buy' rating on Pepsi and "hold" on Coke. Prudential
does not do investment banking.

To be sure, Coke is still the market share leader in soft drinks. One of the main reasons
the stock has outperformed Pepsi this year was because it reported a better than expected
gain in unit volume in the first quarter. And the company has taken steps to cement its
carbonated beverage lead as well gain ground in the bottled water market. (Coke and
Pepsi both have their own brands of water, Dasani and Aquafina, respectively.)

On Tuesday, Coke announced that it was acquiring the Seagram's line of mixers, tonic,
ginger ale and seltzer from Diageo and per nod Richard. And last month, Coke entered
into an agreement with Group Danone to distribute Evian bottled water in North
America.

74
 Some pretzels with that soda?

But while Coke relies solely on beverages for growth, another factor in Pepsi's favor is its
diversity. "What attracts me to Pepsi is I have more faith in their ability to grow earnings.
Not only are they successful on the beverage side but they are successful with salty snack
foods," says Crit Thomas, director of growth equity for National City Investment
Management Co., the sub advisor for Armada Funds. As of March 31, Pepsi was the
seventh-largest holding in the Armada Tax Managed Equity Fund and the tenth-largest
holding in the Armada Equity Growth Fund.

In fact, Pepsi's carbonated beverages are not even the biggest generator of sales and
earnings for the company. Pepsi's Frito-Lay brand of snack foods, which include Fritos,
Doritos and Rold Gold, accounted for 61.2 percent of revenue and 65.3 percent of
operating profits in the first quarter.

Pepsi's soft drink business made up 19 percent of sales and 23.2 percent of operating
profit. Pepsi also owns Gatorade and Quaker Foods, having acquired Quaker Oats last
year.

One potential risk for both Pepsi and Coke is the economy. No, not if it goes back into a
recession. If the economy continues to improve, the stocks could fall victim to what is
known as sector rotation, the selling of defensive companies like food and beverages in
order to buy more economically sensitive companies in the financial services and
technology sectors. To that end, shares of Pepsi and Coke fell slightly on Wednesday
during the Cisco-induced market rally.

75
Still, Thomas says signs that the dollar is starting to weaken compared to other currencies
should prop up both stocks. That's because a weaker dollar helps boost the profits of
international subsidiaries, since profits made in a foreign currency are converted back to
dollars. The majority of Coke's sales are from its international operations, with just 38
percent of revenue coming from the U.S. last year. Pepsi is not as big globally but
currency fluctuations are still a factor, as international sales accounted for 29 percent of
revenue in 2001.

76
 Coke and Pepsi in India:
Coca-Cola controlled the Indian market until 1977, when the Janata Party beat the
Congress Party of then Prime Minister Indira Gandhi. To punish Coca-Cola's principal
bottler, a Congress Party stalwart and longtime Gandhi supporter, the Janata government
demanded that Coca-Cola transfer its syrup formula to an Indian subsidiary. Coca-Cola
balked and withdrew from the country. India, now left without both Coca-Cola and Pepsi,
became a protected market. In the meantime, India's two largest soft-drink producers
have gotten rich and lazy while controlling 80% of the Indian market. These domestic
producers have little incentive to expand their plants or develop the country's potentially
enormous market. Some analysts reason that the Indian market may be more lucrative
than the Chinese market. India has 850 million potential customers, 150 million of whom
comprise the middle class, with disposable income to spend on cars, VCRs, and
computers. The Indian middle class is growing at 10% per year. To obtain the license for
India, Pepsi had to export $5 of locally made products for every $1 of materials it
imported, and it had to agree to help the Indian government to initiate a second
agricultural revolution. Pepsi has also had to take on Indian partners. In the end, all
parties involved seem to come out ahead: Pepsi gains access to a potentially enormous
market; Indian bottlers will get to serve a market that is expanding rapidly because of
competition; and the Indian consumer benefits from the competition from abroad and will
pay lower prices. Even before the first bottle of Pepsi hit the shelves, local soft drink
manufacturers increased the size of their bottles by 25% without raising costs.

77
 PRICE

Maximum retail price of 300 ml bottles is controlled by the Central Government. The
other size and packs are priced keeping factors like competition, internal costs, external
costs, and the corporate objective of the company in the mind.
PRODUCT SELLING PRICE MAX.RETAIL PRICE
(Per crate) (Per crate)
300 ml bottles 240 264
500 ml bottles 364 388
1 Liter bottles 500 520
Soda 300 ml 164 188
Cans 332 352
1.5 Liter PET 50* 55*
bottles

• Price per bottles the empty bottles are priced at Rs 120 per crate and the shell at
Rs 100.

78
 PREFERENCE OF SOFT DRINKS IN A DAY

Once a day 25%

Twice a day 20%
Once a week 5%
Other 50%

60%
50% 50%
O nce a day
40% T w ic e a d a y
O nce a w eek
30%25%20% O th e r
20%
10% 5%
0%
O n c e Taw ic eO an c e Oa t h e r
day day w eek

Figure-1

79
 PREFERENCE TO THE BRAND

Pepsi 40%
Coke 60%

80%
40%
60%
60%
40%
20%
0%
Pepsi Coke

Pepsi Coke

Figure – 2

80
 TO GIVE THE PREFERENCES

More Popular 10%

Packaging 10%
Taste 70%
Price 10%

80% 70%
60%
40%
20% 10% 10% 10%
0%
M o re P a c k a g in Tg a s t e P r ic e
P o p u la r

M o r e P o p uPlaa rc k a g inT ga s t eP r ic e
Figure – 3

81
MARKETING STRAGGLES OF COMPANY EFFECTS THE
SALES

Yes 55%
No 45%

60% 55%
50% 45%
40%
30%
20%
10%
0%
Yes No

Yes No
Figure – 4

82
 FORM OF MARKETING STRATEGIES

Television Advertising 45%

Newspaper Advertising 5%
Outdoor Advertising 20%
Sales Promotion 30%

50% 45%

40%
30%
30%
20%
20%

10% 5%

0%
Television Adv. Newspaper Adv Outdoor Adv Sales Promotion
Television Adv. Newspaper Adv Outdoor Adv Sales Promotion

Figure – 5

83
CHANGE BRAND ON THE BASIS OF PRICE REDUCTION

Yes 51%
No 49%

Yes No

52%
51%
51%
50%
49%
49%
48%
Yes No

Figure – 6

84
 50
MORE EFFECTIVE ADVERTISING
%
%
Pepsi Co. 50%
Coke Co. 50% %
%
%%% %
%
%
%
%
%
%
%
%
%
80%
50 %
60% % %
%
40% %
20% %
%
0% %
Pepsi Co. Coke
% Co.
%
Pepsi Co. Coke Co. %
%
Figure – 7 %
%
%
%
%
%

85
CREATIVE AND APPEALING ADVERTISING OF THE
SOFT DRINK COMPANY

Pepsi Co. 45%

Coke Co. 45%

80%
45% 45%
60%
40%
20%
0%
Pepsi Co. Coke Co.

Pepsi Co. Coke Co.

Figure – 8

86
 INNOVATIVE AND EXCITING OFFERS

Pepsi Co. 55%

Coke Co. 45%

55%
50% 45%
40%
60%
30%
20%
10%
0%
Pepsi Co. Coke Co.

Pepsi Co. Coke Co.

Figure –9

87
 PUBLIC RELATIONS ANGLE
Innovative and exciting offers

The respondents were asked to compare between PepsiCo and Coca-Cola [I] Ltd. in
terms of who comes up with innovative and exciting offers, or rather things which are
lively and interesting to participate.

50% of the respondents replied in favor of PCI while 30% responded in favor of CCI.
17% of the respondents thought that both were equally good and it varied with time,
place and occasions. 3% of the respondents were not aware of all the activities and were
modest to admit it.

Quick and responsive to different occasions and events.

Comparing PepsiCo and Coca-Cola [I] Ltd, 55% of the respondents replied that it was
undoubtedly PepsiCo. They supported their statement with reasoning, saying so that
PepsiCo was first to associate with India’s 50 years of independence.

On the other hand 22% of the respondents felt that Coca-Cola [I] Ltd. is not trailing back.
It sponsors mega events like different Cricket tournaments, Olympic Games, World Cup
Football etc.19% of the respondents came up with a more balanced answer. They said if
one of the companies sponsors

One event it’s sure that the other will definitely go on for the next. It’s a tough tussle and
is really difficult to demarcate today

88
MARKET SHARE PERCENTAGE IN NEW DELHI

COKE 56%
PEPSI 35%
Pure Drinks 9%

9%

35% 56%

Pepsi Coke Pure Drinks

Figure - 10

89
MARKET PERCENTAGE SHARE IN ALL OVER INDIA
2008

Pepsi 44%
Coke 51%
Local Brand 5%

5% 44%

Pepsi
51% Coke
Local Brand

Figure - 11

BRAND PREFERENCES

90
In a survey done by A & M magazines on the best marketing companies in India. Pepsi
and Coca-Cola were also entered. The results were as follows:

Pepsi - 5h

Coca-Cola - 4h

The results of 95 were :

Pepsi - 7th

Coca-Cola - 9h

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

91
 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.

92
 Pepsi findings:
Pepsi is the 2ND largest selling soft drink in India today. In DELHI it has 35% of the
market share. In India it has 44% of the market share making it the largest selling soft
drink, but the second largest company in terms of sales.

The sales of Pepsi is approximately Rs. 1,000 crore annually in India of this only about
Rs. 30 crore annually is credited to the foods section of Pepsi. The rest is all earned by
the soft drinks.

The soft drinks in Pepsi Foods LTD include:

1. Pepsi Cola

2. Mirinda Orange

3. 7-Up

4. Mirinda Lemon

The main advantage the Pepsi has over its nearest competitor i.e., Coca-Cola is that of it’s
was the first multinational to enter India, in the soft drinks sector. Pepsi officials and
‘Dial-a-Pepsi’ scheme to grow the market, instead of giving discounts at the retail level.
Another point which attributed to Pepsi’s success is the bottling operations. Pepsi does
most of its bottling on its own. Another significant investment of Pepsi has been
fountains. Fountains have considerably increased sales of Pepsi, as they have offered
consumers a whole new way to experience soft drink. According to a study done, 80% of
all soft drinks are consumed on premise, at the point of purchase, rather than at home;
thus the fountain initiative has paid off.

93
Thus we see that Pepsi has followed aggressive marketing strategies making they get into
the minds of the consumer by being visible inside and outside the consumers home by
way of television, radio Newspapers, hoarding, sales-promotion schemes, etc. Pepsi has
been voted the number one customer service company across categories in terms of
regularity, availability responsiveness and initiative.

94
PRESENT COMPETITON BETWEEN COCA COLA AND
PEPSI

• If we see the present scenario its hard to tell which brand is winning the
cola wars as Pepsi had extended its cola wars to other sectors like FRITO-LAYS
and NIMBOOZ which is giving tough competition to coca –cola which doesn’t
target on these sectors.

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

companies are spending heavily on advertisement and more celebrities are roped in
by both the companies to fight the competition.

• Recently COLA-COLA beverages ACTORS IMRAN KHAN AND

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

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

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

95
• 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.

96
 FUTURE SCENERIO OF COCA COLA V/S PEPSI

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

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

• Pepsi have started advertisements with female actresses DEEPIKA PADUKONE

and COCA-COLA which had up till know only endorsed male actors for the 1st
time endorsed KALKI of DEVD fame with IMRAN KHAN in its new ad.

• With the coming up of COMMENWEALTH GAMES 2010 in NEW DELHI ,

both the brands would try to attract customers towards itself with heavy
promotion and ad campaigns to build new customers and increase there share in
market as well as strengthen their brand value and earn profits.

97
 QUESTIONNAIRE

Q.1. WHICH BRAND WILL YOU PREFERENCE OF SOFT DRINKS IN A DAY?

Once a day
Twice a day
Once a week
Other

Q.2. WHICH BRAND ARE YOU PREFERENCE TO THE BRAND?

Pepsi
Coke

Q.3. WHICH PARTICUALAR RATE TO GIVE THE PREFERENCES?

More Popular
Packaging
Taste
Price

Q.4. ARE THE MARKETING STRATEGIES OF A COMPANY AFFECT ITS

SALES?

Yes
No

Q.5. WHICH FORM OF MARKETING STRATEGIES IS MOST EFFECTIVE IN

THE MARKET?

Television Advertising
Newspaper Advertising
Outdoor Advertising

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Sales Promotion

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Q.6. WILL YOU CHANGE THE BRAND ON THE BASIS OF PRICE
REDUCTION?

Yes
No

Q.7. WHICH BRAND MORE EFFECTIVE IN ADVERTISING?

Pepsi Co.
Coke Co.

Q.8. WHICH BRAND HAS CREATIVE AND APPEALING ADVERTISING OF

THE SOFT DRINK COMPANY?

Pepsi Co.
Coke Co.

Q.9. WHICH BRAND HAVING THE INNOVATIVE AND EXCITING OFFERS?

Pepsi Co.
Coke Co.

Q.10 Do you think that coca-cola and Pepsi both are lavishly spending on their ad
campaigns to attract customers.

YES
NO

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 Consumers

For the purpose of the study, questionnaires were prepared for the Consumers. Care was
taken to interview all types of consumers, i.e., :

a. Different age groups

b. Males and females

c. People from different localities, etc.

In all about 60 consumers were interviewed. The conclusions that one can draw from
these answers provided by the consumers showed that marketing activities do form a
major part of the decision.

One thing that was common amongst all the consumers who were once a day or once a
week. The number one factors the influences a customer while buying a soft-drink was
taste. This was true for all the consumers who were interviewed. The rest of the
conclusions as deducted from the questionnaires are as follows:

The younger generation preferred soft drinks to the older generation.

a. Children up to 15 years of age liked to have soft drinks up to 2-3 times a day.

b. Young adults liked to have soft drinks up to 1-2 times a day.

c. Adults liked to have soft drinks about once or twice a week.

Children preferred Coca-Cola Fanta, Mirinda orange. Young adults liked Pepsi. The older
generation preferred Coca-Cola, Limca & Mirinda Lemon.

The reason given for choice of favorite’s soft drink was taste and easy availability. Only
if the consumer liked the taste of drink, he would have it again.95% of the consumers felt
that marketing strategies of the company did affect the sales of their soft-drink.

Marketing strategies made the consumer try a drink for the first time. The second time
round it was the consumers choice himself and not strategy could affect that. Youngsters
were more acceptable to change. They tried different drinks, Cola and non-Cola. Adults
stick to one and they prefer drinks that do not affect their health, like Limca.

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Major number of people found television advertising to be the most effective. Young and
the old liked to watch the advertisements on television.

Sponsoring events, outdoor advertising and sales promotion schemes were second choice
of the consumers. Under television advertising, Pepsi came in as the number 1 favorite of
the people the advertisement of Shah-Rukh Khan and the dog was the favorite of the
consumers. Their new advertisement of Mirinda Lemon is also lifted by the people. The
advertisement that came in second was the Coca-Cola advertisement of the people
Cricket and the song Must-Kalander going on at the back. These, advertisement remained
most in the minds of the people. Most of the consumers felt that Pepsi was the market
leader in the soft-drink industry, in Delhi well as in India.

99% of the consumers interviewed felt that the marketing strategies of the Coca-Cola and
Pepsi have helped them in attaining the huge market share that they possess. Women and
children prefer cans as compared to men. These are the major conclusion that can be
drawn about a consumers’ behavior. Companies must take the initiative of finding out the
habits of the consumers and then changing them, in their favor.

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 ANALYSIS OF QUESTANNAIRE

• 50 respondents were chosen among different age groups for conducting

the survey

• FINDINGS:

1. YOUNGSETRS prefer PEPSI COLA over COKE

2. Older age group prefer Mirinda lemon and limca over coke and Pepsi cola
3. ADS play a major role in choosing of brand
4. Celebrities have a great effect on people consuming cold drinks
5. People prefer Nimbooz (Pepsi co)over Pepsi cola and coke.
6. In terms of innovative and exciting offers Pepsi co leads coca-cola.
7. When the question of more effective advertisements was asked mixed
reactions came with 50-50 response for both Coke and Pepsi.
8. Price plays an effective role for choosing of product among INDIAN
CONSUMERS.
9. TASTE came out to be most important for the consumers in preferring for
a particular brand.
10. TELEVISION came out to be most effective for ad campaigns as
respondents of all age groups watch tv.

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 RECOMMENDATIONS
Soft drinks are an impulse product. When a person is thirsty, he would first think of water
or tea. Some even would prefer ‘Nimbooz “\

The Indian population is the largest in the world today, there can be no other country in
the world, which provides so much of an opportunity for the soft-drink manufacturers.
The Indian soft drink market is at 140 million cases per year, this is very low. Thus the
consumption of soft drink can go up.

Sinc118+e the entry of Coca-Cola into the country the industry is growing at a rate of
20% annually. If this rate is maintained, then by the year 2005 the market of soft drink
would be 1 billion cases annually.

However Coca-Cola wants to accomplish this feat by them. To do this the industry has to
take certain steps. All the companies are fighting to get a major share of this growing
market. They should all try to increase the total market along with their individual shares.

On the basis of all the field work and table work done, some suggestions can be made,
which may help the company in increasing the total market as well as the sale of the
companies. The various suggestions that can be made are as follows:-

Soft drinks retail at prices between Rs. 6 and Rs. 10. These are expensive when
measured against purchasing power.

According to one study, it takes Indian 50 minutes of work to be able to buy a bottle in
other countries, the norm is five minutes. Thus to increase the total market of soft drinks,
manufactures should try and decrease the prices, so as to increase sales.

Availability is a major factor, which makes the consumer buy a soft drink. Soft drinks
should be made available more readily than present. There are only 300, 000 retailers
stocking soft drinks in India. Thus retailing outlets should be increased. Also related to
this point, is vending machines. In developed machines, vending machines are kept in all
consumer areas, like super markets, schools, amusement parks, local markets, etc. These

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Tempt a person into buying the soft drink. So if vending machines are put in strategic
areas, it would definitely increase consumption of soft drinks.

Soft drink cans which are very convenient, as the consumer can take them anywhere,
unlike a bottle, are very expensive retailing from Rs. 15-Rs. 18. To increase sale of cans,
this price should be brought down.

Innovations increase sales of company. For e.g. fountain Pepsi increased sales of Pepsi
Cans increased sales of Coca-Cola. Thus the companies hav constantly come out with
innovative ideas.Example-300 ml plastic bottles, which the consumer can take with him,
unlike the glass bottles, which he has to return. Plastic bottles can even be used again by
households for various purposes.

The companies should conduct studies to get to know about consumer habits. For e.g.
Coke knows that Americans see 69 of its commercials every years , put 5.2 ice cubes in a
glass and prefer cans to pop out of vending machines at a temperature of 35 degrees.

If the companies know all this and more about Indian consumer behavior, it could tell
them how to sell their drinks, so as to increase sales.

It is seen In India, that people prefer having their drinks with or after food. Companies
could have commercials which show people enjoying their drink with a good meal, so
that consumers associate drinking soft drinks while having food.

Companies should try to educate the consumer about the health related subject. For e.g.:-

a) Limca is recommended to patients by doctors.

b) Cola drinks are known to be very fattening ,

But in fact cola drinks contain no calories from fat they contain calories from sugar
which can be easily burned off. The soft drink cans and plastic bottles should mention the
calories and other related information on the packing.

Companies should try to build high brand equity. This provides a number of advantages
to the company.
a) The company enjoys reduced marketing costs because of high level of consumer
brand awareness and loyalty.

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b) The company will have more trade leverage in bargaining with distributors and
retailers since the customer expects them to carry the brand.
c) The company can change a higher price than its competitors because the brand has
higher perceived quality.
d) The company can more easily launch brand extension.
e) Above all, the brand offers the company some defense against fierce price
competition.
The companies should go in for diversification

Once the brand is known, it is easier to sell more of its products. For e.g. Coca-Cola
clothes have sold about $100 million worth of clothes and accessories. This would
increase revenues of the company.

The companies should not have competitor myopia. It is more often the latent company
than the current competitor who busies the company. Pepsi and Coca-Cola are so busy
fighting with each other, that they have left the non-cola sector open for Cadbury-
Schweppes.

Advertising is a way building brand image. It does not promote quick selling. Thus
companies should used advertising only for long advertising can be used for:

a) Brand image building

b) Reminder advertising: reminding people to buy these drinks.
c) Reinforcement advertising-Telling people that they have made the right choice.

Television advertising seems to make a impact on the consumers (based on questionnaire

answers) so companies should concentrate more on television advertisements.

Sales promotion tools create a stronger and quicker response. Thus sales promotion tools
such as coupons, contests, premiums and the like should be used to dramatize product
offers and to boost sales. Sales-promotion effects are usually short run and induce the
people to purchase soft drinks, now.

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Coca-Cola and Pepsi have taken up sponsoring of events on a major scale.

All kinds or events, whether big (Wills Worked cup) or small (college contests) have
either Pepsi or Coke banners of sponsorship. The effectiveness of this can be questioned.
Whether these activities increase sales or not is a big huge question mark.

PepsiCo and Coca Cola (I) Ltd. should reduce their massive spending on sponsoring
events and try and channel this money into more productive activities, like innovative
packaging etc.

It is recommended that company should introduce more and more customer oriented
schemes and contexts. For e.g. Pepsi’s new campaign “Pepsi cool mal” in which they are
giving free gifts to their customers.
The company should maintain a small group of “missionary sales man” whose functions
should be to guide distributors and retailers, keep a constant watch over the prevailing
situation to provide the continuous feedback to the company.
It is also recommended that companies should launch soft drink in small pack 200 ml and
150 ml.
Thus we see that there various steps which can be taken by the companies to increase
their sales and to increase the total market share.

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 BIBLIOGRAPHY

 Marketing Management- By Philip Kotler

 WWW.PEPSICO.COM

 WWW.COCA-COLA.COM

 WWW.COLA-WARS.NET

 ADVERTISING MANAGEMENT BY JETHWANEY AND

JAIN

 COLA WARS BY J.C.LOUIS

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