You are on page 1of 95

Marketing Strategy of Coca- Cola and Its Comparison with Pepsi

A Term Paper (MBM 204)


Submitted To:
Dr. V.S. Caprihan Faculty of Mgmt

Submitted By:
Ankita Gupta 107653 MBA Integrated

TABLE OF CONTENTS

S. No. 1. 2. 3. 4. 5. 6. 7. 8. 9.

CONTENTS

Introduction The Coca-Cola Company- An Overview Coca-Cola Entry In India Brands of Coca-Cola in India The Pepsico Company- An Overview Pepsico Entry in India Brands of Pepsico in India

PAGE No. 1.

INTRODUCTION
Soft drinks have become part and parcel of the Indian lifestyle. Be it children, the college kid or the middle aged Indian soft drinks are enjoyed by one and all in the country. Especially after the influx of a number of fast food joints in India soft drinks have gained more popularity. Food like pizzas, burgers and French fries go hand in hand with soft drinks. Soft drinks are enormously popular beverages consisting primarily of carbonated water, sugar, and flavouring. A nonalcoholic, flavored, carbonated beverage usually commercially prepared and sold in bottles or cans. Gone are the days when a soft drink was enjoyed to the combat a sunny day. Today soft drinks are enjoyed with almost every meal that one has outside his/her home. Despite several issues that crept up regarding the ingredients used behind the manufacturing of soft drinks the market remained stable. The soft drink industry in India is categorized on the basis of carbonated and non carbonated drinks. The carbonated drinks include flavors like cola, lemon and orange and the non carbonated drinks segment includes mostly mango flavors. The non carbonated segment includes fruit juices and squashes. The Top Soft Drink Brands in India are CocaCola, Pepsi and Thumps Up. The other popular soft drink brands in India include Fanta, Mirinda7Up, Sprite Limca etc. In order to cater to all the segments of the society these top soft drink brands are available in numerous sizes. Starting from the age old 300 ml glass bottles to the 200 ml ones to the recently launched 500 ml and 1litre plastic bottles soft drinks are available in almost every size desired by the consumer. The carbonated drinks account for almost 80% of the total sales of the soft drinks market in India. Soft drinks do not only rule the urban markets they have successfully managed to penetrate the rural areas as well. Rural areas account for almost 75% sales of Pet bottles whereas the sales of 300 ml and 200ml bottles are higher in the rural areas. Based on consumption patterns the soft drink market in India is classified into two segments. The first is on premise which means the place where the soft drink was bought and consumed. This includes places like railway stations, stand alone shops, restaurants and cinemas. The other one being In-House consumption which means soft drinks purchased and consumed at home. However in India the former beats the latter hollow. Outdoor consumption accounts for almost 80% of the total sales of soft drinks and indoor consumption accounts for the remaining 20% of the sales of the soft drinks market. However the soft drinks market in India is still in its nascent stage as compared to countries like the USA. According to a report published in 2000 the per capita consumption of soft drinks in India was 5 bottles annually as compared to USA whose per capita consumption per annum stood at 800 bottles. Delhi happens to be the highest soft drink consuming region in India. Capturing the market is the main issue facing any company and when it comes to Beverage market, it becomes more intense because there are just two players and they are fighting strongly to capture each others market and don't have any other option.

Both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how this is done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share. Pepsi has always taken the lead in developing new products, but Coke soon learned their lesson and started to do the same. Coke hired marketing executives with good track records (98). Coke also implemented cross training of managers so it would be more difficult for cliques to form within the company The creativity and effectiveness of each company's marketing strategy will ultimately determine the winner with respect to sales, profits, and customer loyalty. These two companies are constructing new ways to sell Coke and Pepsi, but they are also thinking of ways in which to increase market share in other beverage categories. Although the goals of both companies are exactly the same, the two companies rely on somewhat different marketing strategies. Pepsi has always taken more risks, acted rapidly, and was always developing new advertising ideas. Both companies have also relied on finding new markets, especially in foreign countries. In the foreign markets, Coke has been more successful than Pepsi. For example, in Eastern Europe, Pepsi has relied on a barter system that proved to fail. However, in certain countries that allow direct comparison, Pepsi has beat Coke. In foreign markets, both companies have followed the marketing concept by offering products that meet consumer needs in order to gain market share. For instance, in certain countries, consumers wanted a soft drink that was low in sugar, yet did not have a diet taste or image. Pepsi responded by developing Pepsi Max. The next step is to take fast action to develop a product that meets the requirements for that particular region. Both companies cannot just sell one product; if they do they will not succeed. They have to always be creating and updating their marketing plans and products. The companies must be willing to accommodate their target markets. Gaining market share occurs when a company stays one-step ahead of the competition by knowing what the consumer wants. Applying Porters Five Forces to the soft drink industry:

1. A fierce competition exists among very few players: - Duopoly industry - Intense rivalry between Coke and Pepsi.

2. The threat of substitutes is reduced by the expansion of products portfolio : - Many alternative beverages e.g. juice, tea.

3. Suppliers have less bargaining power: - Many substitutes for sugar and packaging e.g. sugar - corn syrup, sweeteners packaging - glass, plastic, metal cans.

4. Di l l i i i : - Vending M ine no buyer bargaining power - Fast Food chain more bargaining power

i : - Amount of capital investment require - Exclusive 5. territories in distribution channel - The access to retail channel stores.

Diagram of Porter's 5 Forces


SUPPLIER POWER Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry BARRIERS TO ENTRY Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products BUYER POWER Bargaining leverage Buyer volume Buyer information Brand identity Price sensitivity Threat of backward integration Product differentiation Buyer concentration vs. industry Substitutes available Buyers' incentives

THREAT OF SUBSTITUTES -Switching costs -Buyer inclination to substitute -Relative price performance of substitutes

DEGREE OF RIVALRY -Exit barriers -Industry concentration ratio -Fixed costs/Value added -Industry growth -Intermittent overcapacity -Product differences -Switching costs -Brand identity -Diversity of rivals -Corporate stakes

THE COCA-COLA COMPANY- AN OVERVIEW

The Coca-Cola Company is a beverage retailer, manufacturer and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product CocaCola, invented by pharmacist John Stith Pemberton in 1886. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves 1.6 billion servings each day. The company operates a franchised distribution system dating from 1889 where The CocaCola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its anchor bottler in North America, Coca-Cola Refreshments. The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the NYSE and is part of DJIA, S&P 500 Index, the Russell 1000 Index and the Russell 1000 Growth Stock Index. Its current chairman and CEO is Muhtar Kent.

One of the Coca-Cola Company's headquarters buildings in Atlanta

HISTORY The Coca-Cola Company was originally established in 1892 as the J. S. Pemberton Medicine Company, a co-partnership between Dr. John Stith Pemberton and Ed Holland. The company was formed to sell three main products: Pemberton's French Wine Cola (later known as Coca-Cola), Pemberton's Indian Queen Hair Dye, and Pemberton's Globe Flower Cough Syrup. In 1894, the company became a stock company and the name was changed to Pemberton Chemical Company. The new president was D. D. Doe while Ed Holland became the new Vice-President. Pemberton stayed on as the superintendent. The company's factory was located at No. 107, Marietta St. Three years later, the company was again changed to Pemberton Medicine Company, another co-partnership, this time between Pemberton, A. O. Murphy, E. H. Bloodworth, and J. C. Mayfield. Finally in October 1898, the company received a charter with an authorized capital of $50,000.The charter became official on January 15, 1899. By this time, the company had expanded its offerings to include Pemberton's Orange and Lemon Elixir. During World War II, the company let Coca Cola GmbH run its business in Nazi Germany where it is said to have employed forced labour. MISSION, VISION & VALUES The world is changing all around us. To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business in the future and move swiftly to prepare for what's to come. We must get ready for tomorrow today. That's what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our bottling partners.

 Our Mission

At the Coca-Cola company we strive to refresh the world, inspire moments of optimism and happiness, create value and make a difference.
Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions.
y y y

To refresh the world... To inspire moments of optimism and happiness... To create value and make a difference.

 Our Vision Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth.
y y y y y y

People Be a great place to work where people are inspired to be the best they can be. Portfolio Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. Partners Nurture a winning network of customers and suppliers, together we create mutual, enduring value. Planet Be a responsible citizen that makes a difference by helping build and support sustainable communities. Profit Maximize long-term return to shareowners while being mindful of our overall responsibilities. Productivity Be a highly effective, lean and fast-moving organization.

 Our Winning Culture Our Winning Culture defines the attitudes and behaviors that will be required of us to make our 2020 Vision a reality.  Live Our Values Our values serve as a compass for our actions and describe how we behave in the world.
y y y y y y y

Leadership The courage to shape a better future Collaboration Leverage collective genius Integrity Be real Accountability If it is to be, it's up to me Passion Committed in heart and mind Diversity As inclusive as our brands Quality What we do, we do well

 Focus on the Market


y y

Focus on needs of our consumers, customers and franchise partners Get out into the market and listen, observe and learn

y y y

Possess a world view Focus on execution in the marketplace every day Be insatiably curious

 Work Smart
y y y y y

Act with urgency Remain responsive to change Have the courage to change course when needed Remain constructively discontent Work efficiently

 Act Like Owners


y y y y

Be accountable for our actions and inactions Steward system assets and focus on building value Reward our people for taking risks and finding better ways to solve problems Learn from our outcomes -- what worked and what didnt

 Be the Brand
y

Inspire creativity, passion, optimism and fun

ACQUISITIONS The company's recent attempt to buy a Chinese juice maker was foiled when China rejected its $4.2 billion bid for the Huiyuan Juice Group on the grounds that it would be a virtual monopoly. Nationalism was also thought to be a reason for aborting the deal. Rumours speculated that an American rejection of a bid for UNOCAL by a partly state-owned oil company played a part in the rejection. However, the company has a long history of acquisitions. Coca-Cola acquired Minute Maid in 1960. Coca-Cola acquired the Indian cola brand Thums Up in 1993. It acquired Barq's in 1995. In 2001, it acquired the Odwalla brand of fruit juices, smoothies and bars for $181 million. In 2007, it acquired Fuze Beverage from founder Lance Collins and Castanea Partners for an estimated $250 million. REVENUE

The Coca-Cola Company's Minute Maid group North America offices in Sugar Land Town Square, Sugar Land, Texas, United States

According to the 2005 Annual Report, the company sells beverage products in more than 200 countries. The report further states that of the more than 50 billion beverage servings of all types consumed worldwide every day, beverages bearing the trademarks owned by or licensed to Coca-Cola account for approximately 1.5 billion (the latest figure in 2010 shows that now they serve 1.6 billion drinks everyday). Of these, beverages bearing the trademark "Coca-Cola" or "Coke" accounted for approximately 78% of the Company's total gallon sales. Also according to the 2007 Annual Report, Coca-Cola had gallon sales distributed as follows:
y y y

43% in the United States 37% in Mexico, India, Brazil, Japan and the People's Republic of China 20% spread throughout the rest of the world

In 2010 it was announced that Coca-Cola had become the first brand to top 1 billion in annual UK grocery sales. LOBBYING In the U.S., Coca-Cola is a major lobbying force working to gain favorable legislation for the beverage industry. In both 2005 and 2006, it spent $1 million each year on lobbying. In 2007 that increased to $1.7 million, and by 2008, to $2.5 million. In 2009, total lobbying expenses jumped to $4.5 million, or nearly double the previous year. Much of the increased lobbying expenses are due to the industrys fight against increased taxes on soft drinks and other sweetened beverages. For 2009, Coca-Cola has 38 lobbyists at 7 different firms lobbying on its behalf. BOTTLERS In general, The Coca-Cola Company (TCCC) and/or subsidiaries only produces (or produce) syrup concentrate which is then sold to various bottlers throughout the world who hold a Coca-Cola franchise. Coca-Cola bottlers, who hold territorially exclusive contracts with the company, produce the finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise the resulting Coca-Cola product to retail stores, vending machines, restaurants and food service distributors. One notable exception to this general relationship between TCCC and bottlers is fountain syrups in the United States, where TCCC bypasses bottlers and is responsible for the manufacture and sale of fountain syrups directly to authorized fountain wholesalers and some fountain retailers.

1996-2002 Chevrolet Express wagon from The Coca-Cola Company.

Houston Coca-Cola Bottling Company CRITICISM The Coca-Cola Company has been involved in a number of crime controversies and lawsuits related to its relationship with human rights violations and other alleged unethical practices. A number of lawsuits have been issued in relation to its allegedly monopolistic and discriminatory practices, some of which have been dismissed, some of which have caused The Coca-Cola Company to change its business practices, and some of which have been settled out of court. It has also been involved in a discrimination case. Th have been ere continuing criticisms regarding the Coca-Cola Company's relation to the Middle East and U.S. foreign policy. An issue with pesticides in groundwater in 2003 led to problems for the company when an Indian NGO, Centre for Science and Environment, announced that it had found cancer causing chemicals in Coca-Cola as well as other soft drinks produced by the company, at levels 30 times that considered safe by the European Economic Commission. This caused an 11 percent drop in Indian Coca-Cola sales. The Indian Health Minister said the CSE tests were inaccurate, and said that the government's tests found pesticide levels within India's standards but above EU standards. The UK-based Central Science Laboratory, commissioned by Coke, found its products met EU standards in 2006. Coke and the University of Michigan commissioned an independent study of its bottling plants by The Energy and Resources Institute (TERI), which reported in 2008 no unsafe chemicals in the water supply, though it criticized Coke for the impact of its water usage on local supply. The company has been criticised on a number of environmental issues. Critics claim that the company's overuse of local water supplies in some locations has led to severe shortages for regional farmers and the forced closure of some plants. Packaging used in Coca-Cola's products have a significant environmental impact. However, the company strongly opposes attempts to introduce mechanisms such as container deposit legislation. There are charges that the Coca-Cola Company was involved in the violent repression of a union at several of its bottling plants in Colombia, South America. As of August 2005, when PBS's Frontline ran a story on the controversy, Coca-Cola strenuously denied all allegations of union-busting and murder of union leaders. Shareholders and U.S. college have boycotted Coca-Cola to try to put pressure on the company to approve a full-scale, independent investigation of the charges. On 10 December 2008, the US Food and Drug Administration (FDA) wrote to Mr. Muhtar Kent, President and Chief Executive Officer, to warn him that the FDA had concluded that Coca-Cola's product Diet Coke Plus 20 FL OZ was is in violation of the Federal Food, Drug, and Cosmetic Act. During an interview with Reuters, the Coca Cola company's spokesman,

Scot Williams, stated, "This does not involve any health or safety issues, and we believe the label on Diet Coke Plus complies with FDA's policies and regulations." In January 2009, the US consumer group the Center for Science in the Public Interest filed a class-action lawsuit against Coca-Cola. The lawsuit was in regards to claims made, along with the company's flavors, of Vitamin Water. Claims say that the 33 grams of sugar are more harmful than the vitamins and other additives are helpful. Coca-Cola insists the suit is "ridiculous." PRODUCTS AND BRANDS The Coca-Cola Company offers more than 500 brands in over 200 countries, besides its namesake Coca-Cola beverage. Tab was Coca-Cola's first attempt to develop a diet soft drink, using saccharin as a sugar substitute. Introduced in 1963, the product is still sold today, however its sales have dwindled since the introduction of Diet Coke. The Coca-Cola Company also produces a number of other soft drinks including Fanta (introduced circa 1941) and Sprite. Fanta's origins date back to World War II when Max Keith, who managed Coca-Cola's operations in Germany during the war, wanted to make money from Nazi Germany but did not want the negative publicity. Keith resorted to producing a different soft drink, Fanta, which proved to be a hit, and when Coke took over again after the war, it adopted the Fanta brand as well. The German Fanta Klare Zitrone ("Clear Lemon Fanta") variety became Sprite, another of the company's bestsellers and its response to 7 Up. Coca-Cola South Africa also released Valpre Bottled "still" and "sparkling" water. During the 1990s, the company responded to the growing consumer interest in healthy beverages by introducing several new non-carbonated beverage brands. These included Minute Maid Juices to Go, Powerade sports beverage, flavored tea Nestea (in a joint venture with Nestle), Fruitopia fruit drink and Dasani water, among others. In 2001, Minute Maid division launched the Simply Orange brand of juices including orange juice. In 2004, perhaps in response to the burgeoning popularity of low-carbohydrate diets such as the Atkins Diet, Coca-Cola announced its intention to develop and sell a low-carbohydrate alternative to Coke Classic, dubbed C2 Cola. C2 contains a mix of high fructose corn syrup, aspartame, sucralose, and Acesulfame potassium. C2 is designed to more closely emulate the taste of Coca-Cola Classic. Even with less than half of the food energy and carbohydrates of standard soft drinks, C2 is not a replacement for zero-calorie soft drinks such as Diet Coke. C2 went on sale in the U.S. on June 11, 2004, and in Canada in August 2004. C2's future is uncertain due to disappointing sales. Coca-Cola is the best-selling soft drink in most countries. While the Middle East is one of the only regions in the world where Coca-Cola is not the number one soda drink, Coca-Cola nonetheless holds almost 25% marketshare (to Pepsi's 75%) and had double-digit growth in 2003. Similarly, in Scotland, where the locally produced Irn-Bru was once more popular, 2005 figures show that both Coca-Cola and Diet Coke now outsell Irn-Bru. In Peru, the native Inca Kola has been more popular than Coca-Cola, which prompted Coca-Cola to enter in

negotiations with the soft drink's company and buy 50% of its stakes. In Japan, the best selling soft drink is not cola, as (canned) tea and coffee are more popular. As such, the CocaCola Company's best selling brand there is not Coca-Cola, but Georgia. Some claim Coke is less popular in India due to suspicions regarding the health standards of the drink. On July 6, 2006, a Coca-Cola employee and two other people were arrested and charged with trying to sell trade secrets information to the soft drink maker's competitor, PepsiCo for $1.5 million. The recipe for Coca-Cola, perhaps the company's most closely guarded secret, was never in jeopardy. Instead, the information was related to a new beverage in development. Coca-Cola executives verified that the documents were valid and proprietary. At least one glass vial containing a sample of a new drink was offered for sale, court documents said. The conspiracy was revealed by PepsiCo, which notified the authorities when they were approached by the conspirators. The company announced a new "negative calorie" green tea drink, Enviga, in 2006, along with trying coffee retail concepts Far Coast and Chaqwa. On May 25, 2007, Coca-Cola announced it would purchase Glaceau, a maker of flavored vitamin-enhanced drinks (vitamin water), flavored waters, and energy drinks, for $4.1 billion in cash. On September 3, 2008, Coca-Cola announced its intention to make cash offers to purchase China Huiyuan Juice Group Limited (which has a 42% share of the Chinese pure fruit juice market) for US$2.4bn (HK$12.20 per share). China's ministry of commerce blocked the deal on March 18, 2009, arguing that the deal would hurt small local juice companies, could have pushed up juice market prices and limited consumers choices. In October 2009, Coca-Cola revealed its new 90-calorie mini can that holds 7.5 fluid ounces. The first shipments are expected to reach the New York City and Washington D.C. markets in December 2009 and nationwide by March 2010. Cola-Cola operates a soft drink themed tourist attraction in downtown Atlanta, Ga; the "World of Coca-Cola" is a multi-storied exhibition of the many flavors sold by the company as well as a museum to the history of the company.

COCA-COLA ENTRY IN INDIA Coca- Cola was the 1st international soft drinks brand to enter India in early 1970s. Beginning in 1886, when a tumultuous, inventive, clamorous and neurotic new America got a taste of a nerve tonic invented by an obsessive chemist in the pursuit of the perfect medicine, to late 1890s when a worthy adversary was born, and to the present; change, aggression and controversy have been the order of the day. That nerve tonic was CocaCola, the obsessive chemist John Pemberton and the worthy adversary Pepsi and the adversity has not decreased an iota even after 100 years. Indian Soft Drinks Market 1970s and early 80sthe entry and exit of Coke India has proved to be perhaps the toughest battle ground for the Cola giants. Coca-Cola was the 1st international soft drinks brand to enter India in early 1970s. Indian market was dominated by domestic brands, with Limca being the largest selling brand. Cola was the largest selling flavor with market share of 40%, Lemon drinks 31% and orange drinks only 19%. Up till 1977, Coca-cola was the leading soft drink brand in India. But due to norms set by the Foreign Exchange Regulation Act (FERA), Coca-Cola left India and did not return till 1993 after a 16 year absence from the Indian beverage market. FERA needed Coca-Cola to reveal its secret concentrate formula as well as reduce its equity stake which was not acceptable. Pure drinks, Delhi launched Campa-Cola, to take advantage of Cokes exit and by the end of 70s, was the only Cola drink in the Indian market. In 1980, Parle, another major Indian player launched ThumsUp, the drink which till date is most popular soft-drink in India. Pure Drinks strongly objected to ThumsUp being called a soft drink as it felt its taste is too strong. For over a decade, Parle led the Indian soft-drinks market, with its market share reaching a peak of 70% in1990. Re-entry of Coca-Cola in 1993- On the 26th of October 1993, Coca-Cola re-entered the Indian market having acquired some of the leading Indian soft drink brands from Parle, namely Thums-Up, Maaza, Limca, Goldspot & Citra. These brands joined Cokes portfolio of international brands i.e. Coca-Cola, Sprite, Fanta, Schweppes as Coca-Cola India took control of the top soft drink brands in India from the very beginning. From 1993 to 2003, company invested US $ 1 billion in India.

BRANDS OF COCA-COLA IN INDIA There are both carbonated and non- carbonated brands launched in India by Coca-Cola.

In this term paper, we will talk with reference with the Coca- Cola, also known as Coke.

COCA-COLA

It is the worlds favourite drink. The worlds most valuable brand. The most recogni able word across the world across the world after OK. Coca- Cola has a truly remarkable heritage. From a humble beginning in 1886, it is now the flagship brand of the largest manufacturer, marketer and distributor of non alcoholic beverages in the world. In India, Coca- Cola was the leading soft- drink till 1977 when govt. policies necessitated its departure. Coca Cola made its return to the country in 1993 and made significant investments to ensure that the beverage is available to more and more people, even in the remote and inaccessible parts of the nation. Coca-Cola is a carbonated soft drink sold in the stores, restaurants, and vending machines of more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the United tates since March 27, 1944). Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century. The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise Coca Cola to retail stores and vending machines. uch bottlers include Coca-Cola Enterprises, which is the largest single Coca-Cola bottler in North America and western Europe. The Coca-Cola Company also sells concentrate for soda fountains to major restaurants and food service distributors. The Coca-Cola Company has, on occasion, introduced other cola drinks under the Coke brand name. The most common of these is Diet Coke, with others including Caffeine-Free Coca-Cola, Diet Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero, Coca-Cola Vanilla, and special editions with lemon, lime or coffee.

In response to consumer insistence on a more natural product, the company is in the process of phasing out E211, or sodium benzoate, the controversial additive used in Diet Coke and linked to DNA damage in yeast cells and hyperactivity in children. The company has stated that it plans to remove E211 from its other products, including Sprite and Oasis, as soon as a satisfactory alternative is found.

THE PEPSICO COMPANY- AN OVERVIEW PepsiCo, Incorporated is a Fortune 500, American global corporation headquartered in Purchase, Harrison, New York, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo has since expanded from its namesake product Pepsi to a broader range of food and beverage brands, the largest of which include an acquisition of Tropicana in 1998 and a merger with Quaker Oats in 2001 - which added the Gatorade brand to its portfolio as well. As of 2009, 19 of PepsiCo's product lines generated retail sales of more than $1 billion each, and the companys products were distributed across more than 200 countries, resulting in annual net revenues of $43.3 billion. Based on net revenue, PepsiCo is the second largest food & beverage business in the world. Within North America, PepsiCo is ranked (by net revenue) as the largest food and beverage business. Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006, and the company employed approximately 285,000 people worldwide as of 2010. The companys beverage distribution and bottling is conducted by PepsiCo as well as by licensed bottlers in certain regions. PepsiCo is a SIC 2080 (beverage) company. HISTORY Origin The recipe for Pepsi, the soft drink, was first developed in the 1890s by a New Bern, North Carolina pharmacist and industrialist, Caleb Bradham, who named it "Pepsi-Cola" in 1898. As the cola developed in popularity, he created the Pepsi-Cola Company in 1902 and registered a patent for his recipe in 1903. The Pepsi-Cola Company was first incorporated in the state of Delaware in 1919. Ownership of this company traded hands several times throughout the 1920s and 1930s, and in the early 1960s its product line expanded with the creation of Diet Pepsi and Mountain Dew. Separately, the Frito Company and H.W. Lay & Company - two American potato and corn chip snack manufacturers - began working together in 1945 with a licensing agreement allowing H.W. Lay to distribute Fritos in the Southeastern United States. The companies merged to become Frito-Lay, Inc. in 1961. In 1965, the Pepsi-Cola Company merged with Frito-Lay, Inc. to become PepsiCo, Inc., the company it is known as at present. At the time of its foundation, PepsiCo was incorporated in the state of Delaware and headquartered in Manhattan, New York. The company's headquarters were relocated to its still-current location of Purchase, New York in 1970, and in 1986 PepsiCo was reincorporated in the state of North Carolina. ACQUISITIONS AND DIVESTMENTS Between the late-1970s and the mid-1990s, PepsiCo expanded via acquisition of businesses outside of its core focus of packaged food and beverage brands; however it exited these noncore business lines largely in 1997, selling some, and spinning off others into a new company named Tricon Global Restaurants, which later became known as Yum! Brands, Inc.. PepsiCo

also previously owned several other brands that it later sold, in order to allow it to return focus to its primary snack food and beverage lines, according to investment analysts reporting on the divestments in 1997. Brands formerly (no longer) owned by PepsiCo include: Pizza Hut, Taco Bell, KFC, Hot 'n Now, East Side Mario's, D'Angelo Sandwich Shops, Chevys Fresh Mex, California Pizza Kitchen, Stolichnaya (via licensed agreement), Wilson Sporting Goods and North American Van Lines. The divestments concluding in 2007 were followed by multiple large-scale acquisitions, as PepsiCo began to extend its operations beyond soft drinks and snack foods into other lines of foods and beverages. PepsiCo purchased the orange juice company Tropicana Products in 1998, and merged with Quaker Oats Company in 2001, adding with it the Gatorade sports drink line and other Quaker Oats brands such as Chewy Granola Bars and Aunt Jemima, among others. In August 2009, PepsiCo made a $7 billion offer to acquire the two largest bottlers of its products in North America: Pepsi Bottling Group and PepsiAmericas. In 2010 this acquisition was completed, resulting in the formation of a new wholly owned subsidiary of PepsiCo, Pepsi Beverages Company. Also in late 2010, the company made its largest international acquisition when it purchased a majority stake in Wimm-Bill-Dann Foods - a Russian food company which produces milk, yogurt, fruit juices and dairy products. PRODUCTS AND BRANDS PepsiCos product mix as of 2009 (based on worldwide net revenue) consists of 63 percent foods, and 37 percent beverages. On a worldwide basis, the companys current products lines include several hundred brands that in 2009 were estimated to have generated approximately $108 billion in cumulative annual retail sales. The primary identifier of companies' main brands within the food and beverage industry are those which generate annual sales exceeding $1 billion, and 19 of PepsiCo's brands met this description as of 2009: Pepsi-Cola, Mountain Dew, Lay's, Gatorade, Tropicana, 7Up, Doritos, Lipton Teas, Quaker Foods, Cheetos, Mirinda, Ruffles, Aquafina, Pepsi Max, Tostitos, Sierra Mist, Fritos, and Walker's. AREAS OF BUSINESS The structure of PepsiCo's global operations has shifted multiple times in its history as a result of international expansion, and as of 2010 it is separated into four main divisions: PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCo Europe, and PepsiCo Asia, Middle East and Africa. As of 2009, 71 percent of the companys net revenues came from North and South America, 16 percent from Europe and 13 percent from Asia, the Middle East and Africa. CORPORATE GOVERNANCE Headquartered in Purchase, New York, with research and development headquarters in Valhalla, New York, PepsiCos Chairman and CEO is Indra Nooyi. The board of directors is composed of eleven outside directors as of 2010, including Ray Lee Hunt, Shona L. Brown, Victor Dzau, Arthur C. Martinez, Sharon Percy Rockefeller, Daniel Vasella, Dina Dublon, Ian M. Cook, Alberto Ibargen, James J. Schiro and Lloyd G. Trotter. Former top executives

at PepsiCo include Steven Reinemund, Roger Enrico, D. Wayne Calloway, John Sculley, Michael H. Jordan, Donald M. Kendall, Christopher A. Sinclair and Alfred Steele. On October 1, 2006, former Chief Financial Officer and President Indra Nooyi replaced Steve Reinemund as Chief Executive Officer. Nooyi remained as the corporation's president, and became Chairman of the Board in May 2007, later (in 2010) being named #1 on Fortune's list of the "50 Most Powerful Women"and #6 on Forbes' list of the "World's 100 Most Powerful Women".PepsiCo received a 100 percent rating on the Corporate Equality Indexreleased by the LGBT-advocate group Human Rights Campaign starting in 2004, the third year of the report. HEADQUARTERS

PepsiCo headquarters

The PepsiCo headquarters are located in Purchase, Harrison, New York. It was one of the last architectural works by Edward Durell Stone. It consists of seven three story buildings. Each building is connected to its neighbor through a corner. The property includes a sculpture garden with 45 sculptures. Works include those of Alexander Calder, Henry Moore, and Auguste Rodin. Westchester Magazine stated "The buildings square blocks rise from the ground into low, inverted ziggurats, with each of the three floors having strips of dark windows; patterned pre-cast concrete panels add texture to the exterior surfaces." In 2010 the magazine ranked the building as one of the ten most beautiful buildings in Westchester County. At one time PepsiCo had its headquarters in 500 Park Avenue in Midtown Manhattan, New York City. In 1956 Pepsico paid $2 million for the original building. PepsiCo built the new 500 Park Avenue in 1960. In 1966 Mayor of New York City John Lindsay started a private campaign to convince PepsiCo to remain in New York City. In 1967 PepsiCo announced that it was moving to 112 acres (45 ha) of the Blind Brook Polo Club in Westchester County. After PepsiCo left the Manhattan building, it became known as the Olivetti Building.

PEPSICO ENTRY IN INDIA PepsiCo entered India in 1989 and has grown to become the countrys largest selling food and beverage companies. PepsiCo India and its partners have invested more than U.S.$700 million since the company was established in the country in 1989. Some of the facts about Pespsico are: Revenues in 2007 is more than $39 billion. There are 37 bottling plants in India, of which 16 are company owned and 21 are franchisee owned. PepsiCos Frito Lay snack division has 3 state of the art plants. It has more than 185,000 employees across the world. In India, PepsiCo provides direct employment to 4,000 people and indirect employment to 60,000 people including suppliers and distributors. CEO : Mr.Sanjeev Chadha. India Headquarters : Gurgaon.

PepsiCo entered India in 1989 and has grown to become the countrys largest selling food and Beverage Company. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India. PepsiCo nourishes consumers with a range of products from treats to healthy eats that deliver joy as well as nutrition and always, good taste. PepsiCo Indias expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade, Tropicana 100% fruit juices, and juice based drinks Tropicana Nectars, Tropicana Twister and Slice, non-carbonated beverage and a new innovation Nimbooz by 7Up. Local brands Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands. PepsiCos foods company, Frito-Lay, is the leader in the branded salty snack market and all Frito Lay products are free of trans-fat and MSG. It manufactures Lays Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands and the recently launched Aliva savoury crackers. The companys high fibre breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lays core products, Lays, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated fats and all of its products contain voluntary nutritional labeling on their packets. The group has built an expansive beverage and foods business. To support its operations, PepsiCo has 36 bottling plants in India, of which 13 are company owned and 23 are franchisee owned. In addition to this, PepsiCos Frito Lay foods division has 3 state-of-the-

art plants. PepsiCos business is based on its sustainability vision of making tomorrow better than today. PepsiCos commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers.

ESTABLISHMENT PepsiCo established its business operations in India in 1989 and has grown to become one of the countrys leading food and beverage companies. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India. INVESTMENT PepsiCo India and its partners have invested more than USD1 billion since the company was established in the country. EMPLOYMENT PepsiCo India provides direct and indirect employment to 150,000 people including suppliers and distributors. PEPSICO BOILERPLATE PepsiCo is one of the worlds largest food and beverage companies, with revenues of nearly $60 billion. PepsiCo offers the worlds largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that each generates more than $1 billion in annual retail sales. Our main business - Frito-Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade also make hundreds of other nourishing, tasty foods and drinks that bring joy to our consumers in more than 200 countries. PepsiCos people are united by our unique commitment to sustainable growth, called Performance with Purpose. By dedicating ourselves to offering a broad array of choices for healthy, convenient and fun nourishment, reducing our environmental impact, and fostering a diverse and inclusive workplace culture, PepsiCo balances strong financial returns with giving back to our communities worldwide. 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. BEVERAGES

PepsiCo Indias expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Nimbooz, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks Gatorade, Tropicana100% fruit juices, and juice based drinks Tropicana Nectars, Tropicana Twister and Slice. Local brands Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands. FOODS PepsiCos food division, Frito-Lay, is the leader in the branded salty snack market and all Frito Lay products are free of trans-fat and MSG. It manufactures Lays Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands. The companys high fibre breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lays core products, Lays, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated fats and all of its products contain voluntary nutritional labeling on their packets. QUICK FACTS PepsiCo established its business operations in India in 1989
y y

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

y y y

It provides direct and indirect employment to 150,000 people in India It has more than 36 bottling plants including 13 Company & 23 Franchise owned ones 3 State-of-the-art food plants in Punjab, Maharashtra and West Bengal

MISSION "To be the world's premier consumer products company focussed on convenience food and beverages. We seek to produce healthy financial rewards to investors as we provide

opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity." VISION "To build Indias leading total beverage company, delighting consumers by best meeting their everyday beverage needs, and stakeholders, by delivering performance with purpose, through our talented people."

BRANDS OF PEPSICO IN INDIA

PEPSI

Pepsi is a carbonated soft drink that is produced and manufactured by PepsiCo. Invented in 1898 and introduced as "Brad's Drink", it was later renamed as Pepsi-Cola on June 16, 1903. Pepsi was first introduced as "Brad's Drink" in New Bern, North Carolina in 1898 by Caleb Bradham, who made it at his home where the drink was sold. It was later named Pepsi Cola, possibly due to the digestive enzyme pepsin and kola nuts used in the recipe. Bradham sought to create a fountain drink that was delicious and would aid in digestion and boost energy. In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore to a rented warehouse. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce bottles, and sales increased to 19,848 gallons. In 1909, automobile race pioneer Barney Oldfield was the first celebrity to endorse Pepsi-Cola, describing it as "A bully drink...refreshing, invigorating, a fine bracer before a race." The advertising theme "Delicious and Healthful" was then used over the next two decades. In 1926, Pepsi received its first logo redesign since the original design of 1905. In 1929, the logo was changed again. In 1931, at the depth of the Great Depression, the Pepsi-Cola Company entered bankruptcy in large part due to financial losses incurred by speculating on wildly fluctuating sugar prices as a result of World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Eight years later, the company went bankrupt again. Pepsi's assets were then purchased by Charles Guth, the President of Loft Inc. Loft was a candy manufacturer with retail stores that contained soda fountains. He sought to replace Coca-Cola at his stores' fountains after Coke refused to give him a discount on syrup. Guth then had Loft's chemists reformulate the Pepsi-Cola syrup formula. On three separate occasions between 1922 and 1933, the Coca-Cola Company was offered the opportunity to purchase the Pepsi-Cola company and it declined on each occasion PEPSI- PORTERS 5 FORCES MODEL Traditional competition  Prices of Coca-Cola, local brands  Market share  Promotional actions of competition. New entrants

New look-alike manufacturers

Substitute products


Fashionable new drinks, milk drinks, coffee, beer, water, smoothies.

Suppliers Price and availability of ingredients on world market.  Quality, speed, safety, traceability, flexibility of supply chain.


Buyers/ consumers


High as a result of intense competition both among branded and unbranded products.  Combined purchase poer of shops, bars and supermarkets.

MARKETING STRATEGIES ADOPTED BY PEPSI

& COKE IN AME ENVIRONMENT

LATE 70s AND EARL 80s


The history, the romance, the struggle, the courage, the endurance, the confidence and the competition characterizes the presence of an industry which no one in their wildest imagination had dreamt would last so long. Beginning in 1886, when a tumultuous, inventive, clamorous and neurotic new America got a taste of a nerve tonic invented by an obsessive chemist in the pursuit of the perfect medicine, to late 1890s when a worthy adversary was born, and to the present; change, aggression and controversy have been the order of the day. That nerve tonic was Coca -Cola, the obsessive chemist John Pemberton and the worthy adversary Pepsi and the adversity has not decreased an iota even after 100 years.

Indian Soft Drinks Market 1970s and early 80sthe entry and exit of Coke India has proved to be perhaps the toughest battle ground for the Cola giants Coca-Cola was the 1st international soft drinks brand to enter India in early 1970s Indian market was dominated by domestic brands with Limca being the largest selling brand. Cola was the largest selling flavor with market share of 40% Lemon drinks 31% and orange drinks only 19%. Up till 1977 Coca-cola was the leading soft drink brand in India. But due to norms set by the Foreign Exchange Regulation Act (FERA), Coca-Cola left India and did not return till 1993 after a 16 year absence from the Indian beverage market. FERA needed Coca -Cola to reveal its secret concentrate formula as well as reduce its equity stake which was not acceptable. Pure drinks, Delhi launched Campa -Cola, to take advantage of Cokes exit and by the end of 70s, was the only Cola drink in the Indian market. In 1980, Parle, another major Indian player launched ThumsUp, the drink which till date is most popular soft-drink in India. Pure Drinks strongly objected to ThumsUp being called a soft drink as it felt its taste is too strong. For over a decade, Parle led the Indian soft -drinks market, with its market share reaching a peak of 70% in1990. Late 80s and early 90s Pepsis struggle to enter India Pepsi saw the exit of Coke as a God send opportunity to capture then estimated 900 crore market of India. India was then a highly regulated market with International trade constituting only 6% of GDP in 1985. Foreign trade was subject to import tariffs, export tariffs and quantitative restrictions. Foreign direct investment (FDI) was restricted by barriers like upper limit equity participation, restrictions on technology transfer, export obligations and government approvals. Any foreign investment had a lot of political sensitivity to it. By the time PepsiCo began its negotiations, the upper cap for equity holding in Indian companies was 40%. PepsiCo realized itll have to be creative to enter the Indian markets. Attempt 1: In May 1985, PepsiCo joined hands with the RPG group to form Agro Product Export Limited. It planned to import Cola concentrate and sell soft-drinks under the Pepsi label and in return offered to export Juice Concentrate from Punjab. The government rejected the proposal due to its using a foreign name and importing the concentra te.

Attempt 2: Pepsi decided to play the Punjab Card by promising to invest $15 million in Punjab, establish an Agro Research centre (costing Rs 1.55 crores), a potato and grain based processing unit (costing Rs 8 crores) and a fruit and vegetable processing unit (costing Rs 5 crores). Benefits and proposal included better market for rice, wheat and fruits in Punjab, creation of 25000 jobs in Punjab and 25000 more in other areas. In 1988, government agreed. PepsiCo entered as Lehar Pepsi and by 1991, it was clear that most of its promises were just on paper. The company did improved the productivity in India, introduced farmers to new technology, established agriculture research centers in Jallowal and Channo (in Punjab) and Nelamangla in Karnataka and invested more capital than promised (by the year 2000, total investment was Rs 18 billion), but the picture on many other aspects was gloomy. The planned operations in Punjab were delayed and as a result, local farmers had to bear a combined loss of Rs. 2.5 Million. Pepsi paid only 0.75 Rs/Kg of Tomato compared to open market price of Rs 2/Kg. Employment was provided to only 783 people as compared to 50,000 promised (although company claimed it to be 26,000 due to direct and indirect operations). It began exporting tea, rice, shrimps, glass bottles, leather products as against fruits and vegetable products. There was an even a show-cause notice to Pepsi by the ministry of commerce. Luckily for PepsiCo, in 1991, the government of India liberated the economy on grounds of severe foreign exchange crisis and Pepsi was freed from all the commitments it had made during entry.
"Convincing India that it needs Western junk has not been easy." 1 - A New Internationalist Magazine Article, commenting on Pepsi's struggle to enter India, in August 1988.

A etter to Pepsi

Coca-Cola was forced to leave India in 1977, and Fernandes had personally cited this to Pepsi in his letter when Pepsi was toying around the idea to enter India. It was upto Pepsi to offer a very good package to the Indian government. In 1988, the New York office of the
President of the multi-billion cola company PepsiCo received a letter from India. The company had been trying for some time to enter the Indian market - without much success. The letter was written by George Fernandes (Fernandes), the General Secretary of one of the country's leading political parties, Janata Dal. He wrote, "I learned that you are coming here. I am the one that threw Coca-Cola out, and we are soon going to come back into the government. If you come into the country, you have to remember that the same fate awaits you as Coca-Cola." This development did not seem to be a matter that could be ignored. PepsiCo's arch-rival and the world's

number one cola company, Coca-Cola, had indeed been forced to close operations and leave India in 1977 after the Janata Dal came to power.3 Even in the late 1980s, India had a closed economy and government intervention in the corporate sector was quite high.

PEPSI- PULL TOWARDS LUCRATIVE INDIAN MARKET


However, multinational companies such as PepsiCo had been eyeing the Indian market for a long time for a host of reasons. As the major market for PepsiCo, the US, seemed to be reaching saturation levels, the option to expand on a global scale seemed to have become inevitable for the company. India was a lucrative destination since its vast population offered a huge, untapped customer base. During the late 1980s, the per capita consumption of soft drinks in India was only three bottles per annum as against 63 and 38 for Egypt and Thailand respectively. Even its neighbor Pakistan boasted of a per capita soft drink consumption of 13 bottles. PepsiCo was also encouraged by the fact that increasing urbanization had already familiarized Indians with leading global brands. Given these circumstances, PepsiCo officials had been involved in hectic lobbying with the Indian government to obtain permission to begin operations in the country. However, t company could not deny that he many political parties and factions were opposed to its entry into the country. It had therefore become imperative for PepsiCo to come up with a package attractive enough for the Indian government. The thirst for global presence made Pepsi to venture in India with already inroads in 150 countries before India. The huge consumer base of 850 million in India can never be ignored, in spite of all the odds Due to the fate of Coke in India the market entry had to be prepared carefully.

ISSUES TO CONSIDER: Political environment Intent of development of local players only Opposition to promotion of carbonated drinks Fear of invasion of foreign brand Legal environment Severe restrictions in equity through FERA Dispute in relation to ownership of Pepsi brand name( foreign name not allowed) Economic environment Closed and Forex starved economy Cold drink industry in nascent stage

Socio cultural environment Fear of invasion of MNC culture Fear of impact on Health/diet

WHY PUNJAB?

Punjab boasted a healthy agricultural sector with good crop record in past. Punjab being progressive state with larger landside with farmers Easy water availability High unemployment rate

THE PROMISE THAT HELPED PEPSI ENTER - THE STRATEGIES ADOPTED In May 1985, PepsiCo had joined hands with one of India's leading business houses, the R P Goenka (RPG) group, to begin operations in the country. The company, along with the RPG group company Agro Product Export Ltd., planned to import the cola concentrate and sell soft drinks under the Pepsi label.

To make its proposal attractive to the Indian government, PepsiCo stated the following:  It said that the import of cola concentrate would essentially be in return for exporting juice concentrate from operations to be established in the north Indian state of Punjab.  In its proposal submitted to the Ministry of Industrial Development, company sources said that the objectives of PepsiCo's entry into India revolved around 'promoting and developing the export of Indian agro-based products and introducing and developing PepsiCo's products in the country.' However, the government rejected this proposal primarily on two grounds: one, the government did not accept the clause regarding the import of the cola concentrate and, two, the use of a foreign brand name (Pepsi) was not allowed as per the regulatory framework.

The association with the RPG group too ended at this juncture. Not willing to sit quietly on the issue, PepsiCo put forward another proposal to the government a few months later (May, 1986):  The company knew that the political and social problems that plagued Punjab were an extremely sensitive issue for India in the 1980s. PepsiCo's decision to link its entry with the development and welfare of the state was thus a conscious one, aimed at winning the government over.  The fact that Punjab boasted a healthy agricultural sector (with good crop yields in the past) also played a role in PepsiCo's decision. Reportedly, the new proposal gave a lot of emphasis to the effects of PepsiCo's entry on agriculture and employment in Punjab (This was a wonderful offer, given the political/social unrest in Punjab in the

1980s). It committed to create 50000 jobs, 25000 will be in Punjab alone.  The company claimed that it would play a central role in bringing about an agricultural revolution in the state and would create many employment opportunities.  To make its proposal even more lucrative, PepsiCo claimed that these new employment opportunities would tempt many of the terrorists to return to society  It will develop the area it have planned to operate in.  Directing major (75%) investment towards agricultural sector.  74 percent of the total investment will be in food and agro- processing. Manufacturing of soft drinks will be limited to only 25 percent.  PepsiCo will bring advanced technology in food processing and provide thrust by marketing Indian products abroad.  State of the art technology would be provided in the fields of food processing and soft drink manufacturing at no foreign exchange outflow  50 percent of the total value of production will be exported  An agro-research centre will be established by PepsiCo in consultation with ICAR and PAU;  No foreign brand name will be used for domestic sales;  The export-import ratio will be 5:1 over 10 years, which means that for every dollar spends in foreign exchange on this project, the company will ensure an export earning of 5 dollars for 10 years;  25 percent of the total fruits and vegetable crops in Punjab will be processed in the project;  A substantial increase in government revenue due to consumer market expansion and tax collection.  It will boost the image of Indian products in foreign market.  More focus will be on exports than imports to improvise the balance of payments. FINALLY PEPSI ENTERED INDIAN MARKET Finally, in 1988, it entered India, as a 'Lehar Pepsi' brand (remember that funny sketch, who comes for 7-up these day?) Pepsi's entry into India was even noted by marketing gurus like Philip Kotler, who said, that Pepsi, apart from using the 4Ps, also used Politics and Public Opinion in the process. But, did Pepsi keep all of its promise? It didn't, and thankfully, India liberalized, and Pepsi was partly saved.

But, Pepsi had done many things good for this country. It brought about an amazing increase in tomato production, through contract farming. It also offered its contract farmers with advanced equipments free of cost. It also setup an agro-based research center in Punjab and Karnataka. Pepsi's Promises - Keep Some, Break Some! Pepsi began by setting up a fruit and vegetable processing plant at Zahura village in Punjab's Hoshiarpur district. The plant would focus on processing tomatoes to make tomato paste. Since the local varieties of tomatoes were found to be of inferior quality, Pepsi imported the required material for tomato cultivation. The company entered into agreements with a few big farmers (well-off farmers with large land holdings) and began growing tomatoes through the contract farming route (though the agro-climatic profile of Punjab was not exactly suitable for a crop like tomato, Pepsi had chosen the state because its farmers were progressive, their landholdings were on the larger side, and water availability was sufficient). Initially, Pepsi had a tough time convincing farmers to work for the company. Its experts from the US had to interact extensively with the farmers to explain how they could benefit from working with the company. Another problem, although a minor one, was regarding financial transactions with the farmers. When the company insisted on payments by cheque, it found out that as many as 80% of the farmers did not even have a bank account..! India Liberalizes - A Boon For Pepsi In the early 1990s, the Government of India was facing a foreign exchange crisis. The country was finding it extremely difficult to borrow funds from the international markets due to a host of problems on the political, economic and social fronts. Organizations like the International Monetary Fund agreed to help the Indian government deal with the financial crisis, on condition that it liberalized the Indian economy. As a result, the government decided to liberalize the economy. The removal of the numerous restrictions on foreign trade and the increased role of private equity in Indian markets were the two most prominent features of the government's new economic policy. Pepsi benefited from the economic changes in many ways. The removal of various restrictions meant that it no longer had to fulfill many of the commitments it had made at the time of its entry. The government removed the restrictions that bound Pepsi's investments in the soft drinks business to 25% of the overall investments and required it to export 50% of its production... After liberalisation it did the following        In 1994, it bought off its partner in venture i.e., Voltas and PAIC. Established wholly owned subsidiary PepsiCo Holding India Pvt Ltd. Changed name from Lehar Pepsi to Pepsi. Sold off its Tomato Paste Plant in 1995. Gradually reduces the contract farming. Plastic exports were 67%. Till 1997, the agro research was no where.

Pepsi Goes Farming - Finally Though Pepsi attracted a lot of criticism, many people felt there was a positive side to the company's entry into India. According to a www.agroindia.org article, Pepsi's tomato farming project was primarily responsible for increasing India's tomato production. Production increased from 4.24 million tonnes in 1991-92 to 5.44 million tones in 1995-96. The company's use of high yielding seeds was regarded as one of the reasons for the increase in productivity in tomato cultivation during the same period. Commenting on the above issue, Abhiram Seth, [Seth, the company's Executive Director (Exports and External Affairs)] said, "When we set up our tomato paste plant in 1989, Punjab's tomato crop was just 28,000 tonnes, whereas our own requirement alone was 40,000 tonnes. Today, the state produces 250,000 tonnes. Per hectare yields, which used to be 16 tonnes, have crossed 50 tonnes." Pepsi was, however, not as successful in the chili contract farming venture that was started soon after the tomato venture stabilized... Doing Business on its Own Terms The company's contract farming initiatives and its focus on improving Punjab's agricultural sector seemed to indicate that Pepsi had been working towards fulfilling its pre-entry commitments. However, the reality was quite different. In 2000, the company's exports added up to Rs 3 billion. The items export ed included not only processed foods, basmati rice and guar gum , but also soft drink concentrate. Though the company did not make the figures public, in all probability, the portion of soft drink concentrate in its exports was much higher than that of any other product. In fact, the company met the soft drink concentrate requirements of many of its plants worldwide through its Indian operations. Even by 2000, of its annual requirement of 25,000 tonnes of potatoes per annum, Pepsi got only 3,000 tonnes from its contract farmers. Given these figures, it would be interesting to see how it planned to achieve its objectives of meeting its complete requirement of potatoes through the contract farming route by 2004. In-short Post- Establishment Pepsi Commitments: Nothing official about it Evidence showed that right from the beginning, Pepsi had no intention of diversification in Punjab but the real motive was to sell soft drinks. It was a tactics played by PepsiCo to get entry in the domestic market of India Thus, Pepsi with its strong market instinct and research become the powerful player of Indian beverages and soft drink industry with implying their funda of GLOCALISATION.

GLOBAL + LOCALISATION

= GLOCALISATION

THUS PEPSI ADOPTD THE 6 Ps A WONDER MARKETING STRATEGY


Product Price Place Promotion Politics Public Image

POST- LIBERALISATION ERA Pepsi entered into the Indian beverage market in July 1986 as a joint venture with 2 local partners- Voltas and Punjab Agro, forming Pepsi Foods Ltd. Coca-Cola followed suit in 1990 with a joint venture with Britannia Industries India before creating a 100% owned company in 1993 and then ultimately aligning with Parle, the leader in the industy. As both companies would soon discover, competing in India requires special knowledge, skills and local expertise....what works here does not always work there. The primary barrier to Pepsi and Coca-Cola entry into the Indian market was its political/ legal environment as a result of its history. First, despite the liberalisation of the Indian economy in 1991 and introduction o New Industrial Policy to eliminate barriers, such as bureaucracy and regulation to FDI, India still had a strong history of protectionism, dating back most recently to its economic policies following the Gulf War. Indias past promotion of indigenous availability. 1. Depicts its affinity towards local products. In fact, the idea of protectionism in industries where India had a comparative advantage can be seen as early as the 1920s. Britain and India used discriminating protection to ward off German and Belgian competitors in the steel industry. Due to Indias suspicion on foreign business stemming from past history, both Pepsi and Coke received alien status upon entry to the Indian market. 2. The 2 corporations were required to follow many laws, designed as obstacles to impede foreign business. For example, sales of soft drink concentrate by Pepsi to local bottlers could not exceed 25% of total sales. Also, foreign businesses were no allowed to market their products under the same name if selling within the Indian market (e.g. Lehar Pepsi). Most controversial was the agreement Coca-Cola was forced to sign to sell 49% of its equity to buy out Indian bottlers. this response might have been acceptable if investment rules in India were clear and unchanging, but this as not the case during the 90s. As St. Augustine said, an unjust law is no law at all. Because of the lack of consistency in the legal environment, there was a greater importance placed on lobbying the politicians. As Coca-Cola soon discovered though,

when there was a change in the oversight of the Foreign Investment Protections Board, all previous lobbying become useless. Lack of solid institutions gives way to corruption. Coke and Pepsis Controls Due to the external nature o the political and legal environment of operating in India, much of the problems were out of Coca-Cola and Pepsis control. Even if the two were to have performed a more extensive environmental analysis, many of the problems would not have been forecasted. Government situations are dynamic and inconsistent where there is not a strong foundation of law. Thus, Pepsi and Coke focussed on the following controllable aspects: 1. Price Coca-Cola reduces prices nationwide by 15-25% to make thm affordable and easy to get access to. Pepsi introduced returnable glass bottles for consumers to recoup costs. 2. Product Coca-Cola and Pepsi launched different product lines to appeal to the Indian consumer tastes. They started with product lines that were already available, such as Cola, fuit drinks and carbonated water. Then, when the market was ready, they launched other lines, such as bottled water (Coke- Kinley and Pepsi- Aquafina) and clear lime sodas (Coke- Sprite, Pepsi- 7 Up). 3. Promotion Both Coca-Cola and Pepsi adapted to the local market with promotions. They promoted heavily during the Navratri festival. Pepsi gave away a kilo of Basmati rice with every refill of a case of Pepsi. This is an effective strategy to blend the old (rice) with the new (Pepsi). Coke gave away vacations to Goa, a famous resort in India. Further, they teamed up with influential figures in Indian pop- culture to promote their products. Pepsi launched an ambitious marketing campaign sponsoring cricket celebrities and athletes from the World Cup. Coke launched its Lifestyle Ad Campaign as a method of building brand loyalty among its target markets. India A (18-24 year old urban youth) and India B (rural youth). They used a music director and an actor to promote the project. Most importantly, they tried to create a connection between local idioms and their products so that they would stick. The use of celebrities is powerful marketing tool across cultures to promote products. 4. Channels of Distribution production plants and bottling centers were strategically placed in large cities all around India. More were added as demand grew, along with new product lines. In Cokes case, the JV with Parle provided access to its bottling plants and its products. By forming partnerships, both Coca-Cola and Pepsi were able to get initial access into the market.

The political environment in India proved to be very problematic for both PepsiCo and CocaCola when they entered the market. The government has long enforced a protectionist stance on its economy in order to safeguard the interests of its people. Even with the New Industrial Policy in 1991 (Pathak 2007), that loosened the grip on foreign businesses entering the country, PepsiCo and Coca-Cola still had to jump through many hurdles before they could operate. For example, PepsiCo was limited to selling at most 25% of total sales of their soft drink concentrate to local bottlers (Cateora 2007). They were also not allowed to use foreign brand names on their products, which meant that PepsiCo had to rename their products Lehar Pepsi and Lehar 7UP. These limitations served to dampen PepsiCos advance into the market, as well as tamper with the product element of their marketing mix by getting rid of the brands established name. Coca-cola on the other hand, was forced by the governmentto relinquish 49% of the companys shares in order to purchase the local bottling plants (Cateora 2007). What made it worst was that at the time the company was pleading with the government to waive the ruling; there was a change in the bureaucratic in the government that left all past lobbying efforts in vein. This lack of solid institutions not only makes it hard for companies to manage the enviroment, but also gives way to corruption. Unfortunately, even if the two companies had extensively researched the situation and performed comprehensive environment analysis, they would have not foreseen many of the problems. This is due to the unstable and unpredictable nature of the political and legal environment resulting from a lack of a solid foundation of law. While PepsiCo entered India in 1988, Coca-Cola only managed to properly re-enter the Indian market in 1993, a whole 5 years after its rival. Both companies ventures faced some strict conditions from the government.

The Coca-Cola Company Releases Test Results Confirming the Safety of Soft Drinks in India.
Article from: PR Newswire | August 11, 2006 | Company States Support for Establishment of Clear Criteria for Pesticide Residues in Soft Drinks in India ATLANTA, Aug. 11 /PRNewswire/ -- The Coca-Cola Company today announced results of independent laboratory tests confirming that the Company's soft drinks in India meet the stringent purity criteria set by the European Union for pesticides in bottled water. "There is no issue with the quality and purity of our products," said Rick Frazier, vice president of Technical Stewardship, The Coca-Cola Company.

Samples of Coca-Cola, Thums Up, Sprite, Fanta and Limca have been tested by the highly respected independent laboratory, Central Science Laboratories (CSL), in the United Kingdom. Re-entry of Coca-Cola in 1993 On the 26th of October 1993, Coca-Cola re-entered the Indian market having acquired some of the leading Indian soft drink brands from Parle, namely Thums-Up, Maaza, Limca, Goldspot & Citra. These brands joined Cokes portfolio of international brands i.e. CocaCola, Sprite, Fanta, Schweppes as Coca-Cola India took control of the top soft drink brands in India from the very beginning. From 1993 to 2003, company invested US $ 1 billion in India.

The beginning of Cola War For the Cricket World Cup 1996, Pepsi was not the official sponsor of the tournament, Coke was. But Pepsi had a whole pool of best players roped in as brand ambassadors from the sub continent and abroad. The ad campaign of Nothing Official About it rocked the country and despite Coke being the official sponsor, it was Pepsi which hogged the publicity.

In 1998, with the release of blockbuster movie Kuch Kuch Hota Hai, Pepsi took out another ace from its sleeve, featuring Shahrukh, Rani and Kajol in its ad. The punch line was Yeh Dil Maange More which was an iconic line and struck a chord amongst the people.

Coca-Cola countered by spoofing the ad, using Sprite, to hilarious effect. Pepsi responded with a spoof of its own, starring Azhar and Jadeja hitting on the Coke line of Eat Cricket, Sleep Cricket, Drink Only Coca Cola with the punch line of More More Cricket, More More Pepsi. Coke again hit back, this time with Thumbs Up ad. They portrayed the cricketers as monkeys and ended the ad with Dont be a bunder (monkey) Taste the Thunder! Situation turned ugly with Pepsi going to court and finally ended with Coke withdrawing the ad.

The Cola wars went on full-fledged till 2003, when a pesticide controversy forced Coke and Pepsi to fight on the same side in so called India's New Cola Wars.

The Controversies Presence of Pesticides: In 2003, the Centre for Science and Environment (CSE) findings stirred the beverage industry in India. CSE claimed to find dangerous levels of pesticides in all the 57 samples of 11 soft drinks brands collected by the organization from 25 different manufacturing units of Coca-Cola and PepsiCo spread over 12 states. The study found a cocktail of three-five different pesticides in all the samples - on an average 24 times higher

than norms laid down by government-run Bureau of Indian Standard (BIS). Rajasthan, Madhya Pradesh, Chhattisgarh, Gujarat and Kerala banned the sale of Colas in schools, colleges and government departments, and other states also took adversarial measures.

The day after the CSEs announcement, Coke and Pepsi came together in a rare show of solidarity at a joint press conference. The companies attacked the credibility of the CSE and their lab results, citing regular testing at independent laboratories proving the safety of their products. They promised to provide this data to the public, threatened legal action against the CSE while seeking a gag order, and contacted the United States Embassy in India for assistance. They roped in major film stars to explain their purity to public. Despite all these measures, sales dipped by as much as 80% in some regions. The soft drinks industry took over a year to get back on the growth track. Ground Water Crisis Coca-Cola was recently accused of ground water depletion in many areas of the country. Coca-Colas bottling operations which extract hundreds of millions of liters of water from the groundwater resource have significantly worsened the water crisis as groundwater levels have dropped sharply since Coca-Cola started its operations. The company was also accused of indiscriminately dumping its toxic waste into the surrounding areas polluting the water as well as the land. The Coke reiterated its commitment to trim down water usage and take steps towards environment sustainability and farmers welfare. However, activists retort that Coca Cola is in the business of water usage and wasting, creating a luxury product largely for the middle class. They are unlikely to put water concerns over profits, until they are forced to. The road ahead Amidst various allegations and controversies, the soft drinks industry in India, supported by its booming economy, strengthening middle class and low per capita consumption, is growing at a cruising pace. The focus has shifted from carbonated drinks to Fruit drinks, with both the companies launching Lemon drinks in 2009-10. In the next few years, the fruit juice category is likely to carry the growth flag forward as consumers become more health conscious. The companies are likely to take more steps to deal with environment sustainability. But the Cola wars are here to stay. We as customers can be assured of superior products and hilarious ads in the process. COLA WAR

When the cola giants, Pepsi and Coke, entered the Indian market, they brought with them the cola wars that had become part of global folklore. This case study details the various battles fought in India by the two rivals with its focus on the publicity campaigns where the two sought to steal each other's fizz.

"Our real competition is water, tea, nimbupani and Pepsi... in that order."

- Coke sources in 1996. "When you're No 2 and you're struggling, you have to be more innovative, work better, and be more resilient. If we became No 1, we would redefine the market so we became No 2! The fact is that our competition with the Coca-Cola company is the single most important reason we've accomplished what we have. And if they were honest, they would say the same thing." - Pepsi sources in 1998. "Both companies did not really concentrate on the fundamentals of marketing like building strong brand equity in the market, and thus had to resort to such tactics to garner market shares." - Business India in 1998.

Pepsi vs. Coke


The cola wars had become a part of global folklore - something all of us took for granted. However, for the companies involved, it was a matter of 'fight or succumb.'Both print and electronic media served as battlefields, with the most bitter of the cola wars often seen in form of the comparative advertisements. In the early 1970s, the US soft-drinks market was on the verge of maturity, and as the major players, Coke and Pepsi offered products that 'looked the same and tasted the same,'substantial market share growth seemed unlikely. However, Coke and Pepsi kept rejuvenating the market through product modifications and pricing/promotion/distribution tactics.

As the competition was intense, the companies had to frequently implement strategic changes in order to gain competitive advantage. The only way to do this, apart from introducing cosmetic product innovations, was to fight it out in the marketplace.

This modus operandi was followed in the Indian markets as well with Coke and Pepsi resorting to more innovative tactics to generate consumer interest. In essence, the companies were trying to increase the whole market pie, as the market-shares war seemed to get nowhere. This was because both the companies came out with contradictory market share figures as per surveys conducted by their respective agencies - ORG (Coke) and IMRB (Pepsi). For instance, in August 2000, Pepsi claimed to have increased its market share for the first five months of calendar year 2000 to 49% from 47.3%, while Coke claimed to have increased its share in the market to 57%, in the same period, from 55%
Media reports claimed that the rivalry between Coke and Pepsi had ceased to generate sustained public interest, as it used to in the initial years of the cola brawls worldwide. They added that it was all just a lot of noise to hardsell a product that had no inherent merit.

The Players

Coke had entered the Indian soft drinks market way back in the 1970s. The company was the market leader till 1977, when it had to exit the country following policy changes regarding MNCs operating in India. Over the next few years, a host of local brands emerged such as Campa Cola, Thumps Up, Gold Spot and Limca etc. However, with the entry of Pepsi and Coke in the 1990s, almost the entire market went under their control. Making billions from selling carbonated/colored/sweetened water for over 100 years, Coke and Pepsi had emerged

as truly global brands.


Coke was born 11 years before Pepsi in 1887 and, a century later it still maintained its lead in the global cola market. Pepsi, having always been number two, kept trying harder and harder to beat Coke at its own game.

In this never-ending duel, there was always a new battlefront opening up somewhere. In India the battle was more intense, as India was one of the very few areas where Pepsi was the leader in the cola segment. Coke re-entered India in 1993 and soon entered into a deal with Parle, which had a 60% market share in the soft drinks segment with its brands Limca, Thums Up and Gold Spot. Following this, Coke turned into the absolute market leader overnight. The company also acquired Cadbury Schweppes'soft drink brands Crush, Canada Dry and Sport Cola in early 1999.
Coke was mainly a franchisee-driven operation with the company supplying its soft drink concentrate to its bottlers around the world. Pepsi took the more capital-intensive route of owning and running its own bottling factories alongside those of its franchisees.

The ivalry on Various ronts I -Bottling


Bottling was the biggest area of conflict between Pepsi and Coke. This was because, bottling operations held the key to distribution, an extremely important feature for soft-drink marketing. As the wars intensified, both companies took pains to maintain good relationships with bottlers, in order to avoid defections to the other camp.

II -Advertising

When Coke re-entered India, it found Pepsi had already established itself in the soft drinks market. The global advertisement wars between the cola giants quickly spread to India as well. Internationally, Pepsi had always been seen as the more aggressive and offensive of the two, and its advertisements the world over were believed to be more popular than Coke's. It was rumored that at any given point of time, both the companies had their spies in the other camp. The advertising agencies of both the companies (Chaitra Leo Burnett for Coke and HTA for Pepsi) were also reported to have insiders in each other's offices who reported to their respective heads on a daily basis...
III -Product aunches
Pepsi beat Coke in the Diet-Cola segment, as it managed to launch Diet Pepsi much before Coke could launch Diet Coke. After the Government gave clearance to the use of Aspertame and Acesulfame-K (potassium) in combination (ASK), for use in low-calorie soft drinks, Pepsi officials lost no time in rolling out Diet Pepsi at its Roha plant and sending it to retail outlets in Mumbai.

IV -Poaching

Pepsi and Coke fought the war on a new turf in the late 1990s. In May 1998, Pepsi filed a

petition against Coke alleging that Coke had 'entered into a conspiracy'to disrupt its business operations. Coke was accused of luring away three of Pepsi's key sales personnel from Kanpur, going as far as to offer Rs 10 lakh a year in pay and perks to one of them, almost five times what Pepsi was paying him. Sales personnel who were earning Rs 48,000 per annum were offered Rs 1.86 lakh a year. Many truck drivers in the Goa bottling plant who were getting Rs 2,500 a month moved to Coke who gave them Rs 10,000 a month.
While new recruits in the soft drinks industry averaged a pay hike of between 40-60% Coke had offered 300400%. Coke, in its reply filed with the Delhi High Court, strongly denied the allegations and also asked for the charges to be dropped since Pepsi had not quantified any damages.

V - ther ronts
Till the late 1980s, the standard SKU for a soft drink was 200 ml. Around 1989, Pepsi launched 250 ml bottles and the market also moved on to the new standard size. When Coke re-entered India in 1993, it introduced 300 ml as the smallest bottle size. Soon, Pepsi followed and 300 ml became the standard.

But around 1996, the excise component led to an increase in prices and a single 300 ml purchase became expensive. Both the companies thus decided to bring back the 200 ml bottle, In early 1996, Coke launched its 200 ml bottles in Meerut and gradually extended to Kanpur, Varanasi, Punjab and Gujarat, and later to the south... In May 1996, Coke launched Thums Up in blue cans, with four different pictures depicting 'macho sports'such as sky diving, surfing, wind-surfing and snow-boarding. Much to Pepsi's chagrin, the cans were colored blue - the color Pepsi had chosen for its identity a month earlier, in response to Coke's 'red'identity.
There were frequent complaints from both the players about their bottlers and retailers being hijacked. Pepsi's blue painted retail outlets being painted in Coke's red color overnight and vice-versa was a common phenomena in the 1990s.

Coke also turned its attention to Pepsi's stronghold - the retail outlets. Between 1996-98, Coke doubled its reach to a reported 5 lakh outlets, when Pepsi was present at only 3.5 lakh outlets. To reach out to smaller markets, interceptor units in the form of mobile vans were also launched by Coke in 1998 in Andhra Pradesh, Tamil Nadu and West Bengal. However, in its rush to beat Pepsi at the retail game, Coke seemed to have faltered on the service front. For instance, many shops in Uttar Pradesh frequently ran out of stock and there was no servicing for Coke's coolers...

Is The

ivalry ealthy?

In a market where the product and tastes remained virtually indistinguishable and fairly constant, brand recognition was a crucial factor for the cola companies. The quest for better brand r ecognition was the guiding force for Coke and Pepsi to a large extent.

A relentless frontal attack strategy is what Coca-Cola in India continually launches against its customary rival Pepsi. Of course, Coke in India attacks Pepsi because not only can it match up with Pepsi, which still is the market leader in India, but also gives it a severe psychological trouble with its dominant flanking brand, Thums Up. According to statistics, Thums Up is the number 2 brand in the Indian soft drink industry, third being Coke itself. Cokes inexorable attack on Pepsi on the too sweet taste of the latter (Offensive Principle 2: Find a weakness in the leaders strength and attack at that point), also creates a huge psychosomatic incongruity. Coke being world wide superio to r Pepsi is trying to create a battlefield positioning where the ultimate supremacy of the cola war in India goes to Coca-Cola. Coke has realised that this battle for consumer positioning is extremely important in the emotionally charged Indian market and thats what supremacy is all about. The attack is also strategic on the cola front, with stronger taste appeal in both the brands being made the premeditated focus. Only time can tell whether or not Coca-Cola Indias ruthless attack on Pepsi will pay dividends or Pepsi would continue to find favour in the consumers mind.

Cola war gets personal for Pepsi chief

Penny Macrae, New Delhi September 11, 2006

US COLA giant PepsiCo has put the head of its India operations in front of TV cameras in a new bid to counter charges of high pesticide levels in its colas. A just-released ad shows PepsiCo India chairman Rajeev Bakshi walking a young man through a plant purification process and saying the colas carry his "personal guarantee" they are safe "for you, fo r me and for my children". "Our consumer research and feedback indicated consumers wanted the company to directly reassure them our products are completely safe," Mr Bakshi said. The ad is the latest tactic in Pepsi's fight -back since a New Delhi environme ntal group last month released a report claiming high levels of toxic chemicals in 57 drink products from 25 Indian Pepsi and Coca -Cola plants. The allegations were splashed on newspaper front pages and prompted southern Kerala state to ban Coke and Pepsi while five other states banned them from sale in schools and government offices. The Federal Opposition demanded a national ban while protesters went on cola -bottle smashing sprees. The cola rivals, which account for 99 per cent of India's huge soft drinks market, have insisted through newspaper ads and public statements that their locally bottled drinks meet international safety standards. The Indian Government has since said the report by the Centre for Science and Environment was "inconclusive" but the state-level bans on their products remain in place amid continued consumer wariness. "Basic consumer confidence has been shaken and it (the ad campaign) is one step in rebuilding the connect and rebuilding consumer confidence," Abhiram Seth, PepsiCo India's external affairs executive director, said late last week. The ad was initially being shown in Hindi, with plans for it to be broadcast in other Indian languages later, Mr Seth said. Pepsi launched the ad as a result of consumer group feedback that "a mess age from the owner of the company" could help improve Pepsi's Indian image "and the closest to that for Pepsi is the chairman", he said. Coca-Cola would not say if it planned to follow Pepsi's lead in putting its executives in front of TV cameras, citing commercial confidentiality.

Pepsi Sets Off a Cola War in India


March 21, 1988 More than a decade after Coca-Cola was kicked out of India in a burst of economic nationalism, a new cola war has erupted here over a proposal to let Pepsi-Cola compete with local soft-drink producers. The fight makes the fierce competition between Coke and Pepsi in the United States look polite by comparison. In recent weeks, the Parliamentary debate has echoed with fears that the Pepsi proposal could undermine India's booming domestic soft-drink industry. Going further, an associate of Prime Minister Rajiv Gandhi charged that Pepsi might be part of a Western plot to subvert India. ''Do we need Pepsi at the cost of the country's security?'' asked K.N. Singh, an official of the ruling Congress Party. Pepsi Support in the North On the other side, Pepsi has enlisted broad support among politicians, including many Sikh leaders and others in the troubled northern state of Punjab, where it wants to build its food and beverage processing plants. These leaders argue that the Pepsi proposal could actually help subdue Sikh terrorism by providing jobs to disaffected young people. ''This project will help the Punjabi farmers increase their incomes, generate employment and help our economy,'' said Amarinder Singh, a prominent Sikh leader.
The fight over Pepsi's proposed entry is widely seen as a test of the professed commitment of India to liberalizing its industrial policies, particularly the maze of regulations, licenses, permits and quotas that have long stifled competition and kept prices high. Political Connections The $17 million deal with Pepisco Inc. would be one of the smaller links with foreign companies established since Prime Minister Gandhi moved in 1985 to open up Indian industry to more competition from overseas. But no such proposal has generated more controversy, perhaps because all the participants are so politically well connected. ''If this deal does not go through, it will show that India is the only really socialist country left on earth,'' said a former finance ministry official, with evident sarcasm. ''Even China and the Soviet Union have allowed more foreigners in. We're the only ones left in the world clinging to this outmoded system of state control.'' Behind the battle, the Indian soft- drink market has grown to 2.5 billion bottles a year, nearly five times the level in 1978 after Coca-Cola was forced to leave. Even so, per-capita consumption of

soft drinks in India is low compared with that in other developing countries. Thums Up Leads the Fight

Today, 70 percent of the cola market is controlled by Parle Exports Private Ltd., a Bombay-based company with $150 million in sales that is leading the battle against Pepsi. The cola drink marketed by Parle is called Thums Up. Indeed, many politicians say Ramesh Chauhan, chairman of Parle, was instrumental in getting the Indian Government to oust Coca -Cola in 1977, which it did by demanding that it reduce its equity and disclose its secret cola formula to the Government. At the time, Mr. Chauhan was considered close to Prime Minister Morarji Desai, while the businessmen who operated the Coca-Cola franchise were allied with Indira Gandhi who later became Prime Minister. In any case, Mr. Chauhan's company did so well since then that it now exports its own fruit juice drinks to the United States and other countries. Parle's biggest seller in the United States is Maaza Mango, which, as its name indicates, is a mango pulp drink. Blunt Business Leader Mr. Chauhan, a blunt and highly res pected figure in the Bombay business community, denies that he is trying to protect his company from competition. Instead, he says foreign capital and imports should be restricted to high-technology areas in which India lacks the expertise to make the products itself. Pepsi has been trying to break into the Indian market for years, even agreeing not to market its drink under the name Pepsi-Cola. Under the current proposal, Pepsi would have less than a 40 percent share of a collaboration with Voltas International Ltd., a division of Tata Industries, and Punjab Agro-Industries, a Government unit. The deal would involve producing not only a cola drink but also potato chips, corn chips, fruit drinks and sauces - ''things that mom can make,'' according to Mr. Cha uhan, who asserts that Pepsi has come up with the idea of making these food products simply as an excuse to get in on the soft-drink business. Substantial Imports The Pepsi proposal does indeed call for substantial imports of equipment and ingredients, which has set off alarms among those worried about India's balance of payments. But advocates for Pepsi argue that the company would be introducing sophisticated technologies. ''Right now, 30 percent of all fruits grown in Punjab are wasted,'' said M. Z .A. B aig, chief executive of Tata Services, a participant in the project. ''Our project would end this

waste. What the industry needs right now is new technology and know -how. We'll bring in research centers to advise farmers and help them diversify.'' More important, Pepsi has pledged that it will export $150 million worth of food products in the next 10 years, five times the amount that it says it will have imported. In addition, it has promised to limit its sale of soft drinks domestically to 25 percent of it s total sales. Many Millions of Dollars ''If we are to be allowed into this country, it will be not for a few dollars more, but for many, many million dollars more,'' Ramesh Vangel, Pepsi's director for the project, told an Indian magazine this month. But to many analysts the central issue goes beyond the Pepsi proposal. The question, they say, is whether India is willing to open its markets to competition in a visible way.
'Pepsi has persevered for years, to its credit,'' Mr. Baig said. ''In the end, this is a test case of the Government's liberalization policy. Businessmen abroad are going to be looking at it that way.''
Marketplace Briefing -- Coca-Cola's war with Pepsi takes a new spin

December 10, 1997


With arch rival Coca-Cola sealing an endorsement deal with current batting sensation, Saurav Ganguly, to ride the cricketing season, Pepsi too is sharpening its claws with a little help from Ajay Jadeja and Sanath Jayasuriya. The new print and electronic-media campaign will be released on December 21 to coincide with the three-nation one-day tournament sponsored by Pepsi. The Jadeja ad will soon be followed by Jayasuriya's endorsement. Pepsi is also shooting a fresh ad with Rahul Dravid. All the new ads are being shot by Pepsi's steady, Prahalad Kakar. However, the company has no plans to put all its three men in a common ad. Guess, Pepsi has learned a lesson from its famous Tendulkar -Azhar-Kambli ad. With Kambli going totally out of form and Azhar belting a very indifferent performance, the ad could have very few runs. According to the marketing pundits, the new campaigns from Pepsi should help the beverage major combat Coke's strategy of getting associated with cricket as far as the consumer franchise is concerned. In fact, it is for the first time worldwide that Coke has signed a celebrity to endorse its brands. Clearly, for Pepsi three is not a crowd. Cheers for Ogilvy & Mather It's celebration time at Ogilvy & Mather advertising agency. After gaining a clutch of high -profile accounts like Lakme and Annapurna, ringing in the happy notes once again for the agency are Mumbai's office's new head Piyush Pandey and his ace creative director, Sonal Dabral. For Pandey, the accolades are for his print campaign for Pepsi which has fetched him the prestigious Grand Prix award at the London International Awards. With the

tongue firmly in cheek, the campaign reads like this: " No to Dope, No to Heroin, Say No to Coke! A public service message from Pepsi-Cola". Unfortunately, this ad would not be used in the country as it is for Pepsi's Phillipines operations. Accolades for Dabral Dabral, on the other hand, will be the recipient of the Living Legends award instituted by the Indo -American Society to commemorate 50 years of India's independence. The award is being give n to people who "will help usher India in to the 21st century". Dabral gets to share the stage with other advertising luminaries like Alyque Padamsee and Sylvester D'Cunha and industrialists like Kumarmangalam Birla, Rajiv Bajaj and Keshub Mahindra Intranet for Daily Thanthi Planetasia.com, the country's largest Internet business solutions company, is in the process of developing a comprehensive Intranet for handling business operations for the Chennai -based vernacular paper Daily Thanthi. The new package seeks to handle four key functions: booking space for advertisements, digitising ads, handle archival material and support management processes. The newspaper hopes to increase its speed of service to advertisers to enhance competitiveness. The new system will also save time in scanning advertisement copy and proofs, while also helping the paper in planning its layouts better. Bridgestone tyres to hit market by mid -1998 The steel-belted radial tyres, manufactured using the latest Bridgestone technology, wi ll be available in the domestic market by the middle of next year. The joint venture company set up by the world's largest tyre and rubber goods producer, Bridgestone Corporation, Japan and the Associated Cement Cos Ltd (ACC), had commenced trial production last November at its plant at Kheda, near Indore. Bridgestone ACC India Ltd is confident that there is immense opportunity for radialising the automobile -tyre sector, specially the passenger-car segment. The company is banking on its strategy of wooing international automobile majors which are setting up base in the country. The company has already been in talks with most of the leading car manufacturers with the pitch that it is an internationally known vendor for supplying quality products. Bridgestone ACC's managing director K. Sasamoto claims to have received a positive response from most of the leading car manufacturers. Bridgestone Corporation has developed these tyres after comprehensive studies of domestic roads and climatic conditions and extensiv e research at its Tokyo technical centre. Supercars unveils tyre sealant Supercars, a division of AKVA Investments Pvt Ltd, has launched Superseal 2000, a tyre sealant in India. Supercars vice president (marketing) M Shivakumar said the new product will b e available through its three franchisees in South India. The Bangalore-based company has entered into a strategic alliance with Hercules Sealants Corporation of the United States, the manufacturers of Superseal 2000 for Supercars. The new product remains homogeneous and stable under varying environmental conditions inside as well as

outside tyres and tubes. Superseal contains polymers, adhesive agents, natural and synthetic fibres and other kinds of micro -solids. The company claims that the ecofriendly product increases tyre tread life by 20 per cent by maintaining constant air pressure and reduces vehicle down time and operational costs due to punctures.

April 29, 2006

For t ri t Worl 1996, P i ot t offi i l onsor of t tournament, oke as ut Pepsi ad a ole kitt of est players from t e sub ontinent and abroad. e ad ampai n of Not ing Offi ial About it rocked t e country and knocked t e ind from okes Lungs. Possibly from t is time onwards oke also realized t e alue of celebrities in India and encefort went ahead with that strategy. Another consequence of this campaign was that from the next ricket World up, advertisers began signing exclusive contracts which stipulated that competitors cant have players who are in the tournament acting in their ads. And sadly for oke, it was Pepsi which was official this time. In 1998, the movie Kuch Kuch Hota Hai took the country by storm. Pepsi then took out another ace from its sleeve. his time S K, ani and Kajol starred in the ad. Also starring was the future star Shahid Kapoor who was noticed by the industry. he punchline this time was Yeh il Maange More which was an iconic line and struck a chord amongst the people. he oke people responded to this ad in a different and unique way. hey actually spoofed the ad, the product used being Sprite, again to hilarious effect. Pepsi responded with a spoof on its on its own, starring Azhar and Jadeja hitting on the oke line of Eat ricket, Sleep ricket, rink Only oca ola with the punch line of More More ricket, More More Pepsi. oke again hit back, this time with humbs Up ad. hey portrayed the cricketers as monkeys and ended the ad with ont be a bunder (monkey!!) aste he hunder!! hings turned ugly with Pepsi going to court and finally ended with oke withdrawing the ad. he year 2000 heralded the rise of a new superstar, Hrithik oshan. Both oke and Pepsi rushed to sign him, but oke won (possibly due to the fact that they promised that all the ads starring the superstar would be directed by his father). he first ads starring Hrithik oshan were launched in iwali Season. Pepsi hit back this time with a S K ad which also had a Hrithik look alike. his ad was directed by Prahlaad Kakkar and was in a bad taste. umors ran about S Ks insecurity and rest but the episode really was a footnote in the epic battle. Around this time okes market share surpassed Pepsi for the first time since okes launch in 1994 ( rivia: oke was first re-launched in India in Agra) and suddenly oke was defending and Pepsi attacking the market share. Now the wars shifted from cola to clear lime segment. oke realizing that in India humbs Up was a valuable brand and it could not use it for opponent bashing. his time it was between Sprite and Pepsis Mountain ew. Pepsi had launched ew with o the ew tagline emphasizing on Adventure sports. Sprite killed the ad with o he o ad which was funny and memorable. he ola Wars are here to stay. Its been just 10 odd years in India for them to start. In the USA they are on since a 100 years. he battle actually throws up some amazing ads and lets hope they continue. Yeh il Maange More!!!
 % $   $  (   $   $   $ '   ' $ $  $ $   $ '   '   $ $ '   $ &  (  (  ' ( ( ' $ " (   (  ( $   $ (     ( $  $ $ $

"







Cola Wars In India


  !  #           

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 Nayar 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 employe es while the suit was pending in court. On behalf of Pepsi, Ashok Desai and Arun Jaitley contended that Coca -Cola had been "rattled by the huge success of Pepsi in India entered into a conspiracy during the last six months to cause loss and damage to Pepsi's business interests by adopting unfair and illegal means." It added that Coca-Cola had approached many key managers and had successfully lured a commercial manager of its bottling business Gaurav Duggal, and a manager in Surat Sailesh Joshi, besides others. Pepsi charged that while initially these approaches were sporadic, over the last six months it is clear that Coca-Cola has changed its strategy and has decided to consciously target and approach key employees of Pepsi at various locations in India. The company has alleged that in most cases, the employees have not been given time to adhere to the 90-day notice period and the one -year confidentiality agreement. The latter deal bars employees joining its rivals for at least a year.

Desai claimed Coke's actions would directly harm the business interests of Pepsi, which had invested over $300 million in the country in establishing business infrastructure. In its defence, Coke is expected to seek relief in the Indian Constitution which states that there can be no restriction on the movement of labour. Besides, any effort by a company to restrict its employees from joining other companies might fall foul of the Monopolies and Restrictvie 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 organised the Yanni show, to snap its ties with Pepsi and join Coke. Incidentally, in results announced for the fir st three months of the year, Pepsi has swept Coca-Cola aside. Pepsi has reported a growth of 27 per cent compared to Coke's 21 per cent during the same period. In the first three months of last year, Pepsi grew by 18 per cent only. Coca-Cola India chief executive Donald Short had announced that Coke would grow by at least 20 per cent for the whole of 1998. Coca -Cola, along with the Parle brands it acquired when it came into India -- Thums Up, Limca, and Gold Spot -continue to dominate India with a 55 per cent market share to Pepsi's 43 per cent. But in the cola segment, Coke comes a poor third after Thums Up and Pepsi. The current summer season is the most important for the cola giants, with consumption at its peak.

A mischievous Pepsi ad annoys Coke and signals a new turn in India's long -running soft-drink slugfest By MASEEH AHMAN New elhi , June 12, 2000 Hrithik oshan is the real thing. After appearing in just one film, the young Bollywood actor with the rippling muscles and the vulnerable look, a cross between Sylvester Stallone and Leonardo i aprio, has become India's No. 1 heartthrob. So it was only fitting that the world's biggest soft-drink company, oca-Cola, should grab him as a local pitchman. But when Coke released its Hrithik commercial at the end of April, it soon found itself rudely upstaged by arch-rival Pepsi, which aired its own V spot last month poking fun at Hrithik oshan. In the Pepsi ad, a Hrithik look-alike wearing braces on his teeth is spurned by a pretty girl, who instead kisses Shah ukh Khan, a Bollywood star who has appeared in Pepsi's cola ads for the past few years. India's Cola War is getting punchier. Hrithik, clearly hurt, shot off a letter to Pepsi claiming, with unconvincing modesty, that he was a newcomer who needed encouragement, not a put-down. His fans, meanwhile, wrote angry letters to local newspapers and even organized a street demo in Calcutta. His father akesh oshan, a prominent Bollywood filmmaker who produced and directed Hrithik's smash-hit debut Kaho Naa ... Pyaar Hai, complained publicly that Pepsi was ridiculing his son because it had lost the bidding battle for Hrithik. he sizzle over Pepsi's mischievous 60-second spot underscores the fierce battle raging between the two multinationals for dominance of India's $1 billion soft-drink business. Pepsi has been selling in India since New elhi opened the market to foreign companies in 1991. Coca-Cola, which was forced to leave the country in 1977, returned with a bang in 1993, buying out the leading local cola, hums Up, and grabbing a big slice of the action. But the worldwide leader's cola drink still ranks No. 3 in India, behind Pepsi and hums Up. Expect more fireworks:the American giants are pouring in millions more in marketing dollars, signing up as pitchmen some of India's top actors, cricketers and pop singers at fabulous fees. he more the competition, the more the noise, the better, says Ireena Vittal of consulting firm McKinsey & Company. It'll help the soft-drink market to take off. Pepsi is obviously enjoying the latest fracas. Its spokesmen cheekily deny that the model with the ugly smile in its new ad is meant to be a Hrithik look-alike ( here's only a passing resemblance, a spokesman says rather disingenuously). It's the most entertaining marketing clash since the two tangled in 1996 over the cricket World Cup, which was played on the subcontinent. Coca-Cola spent more than $4 million for the rights to be the Cup's official sponsor. But Pepsi responded with an irreverent V spot poking fun at Coke and appealing to the disdain many young people have for all things official. As a result, Coca-Cola got some mileage from being the official drink while Pepsi boosted its image as a cola for fun-loving, free-thinking people.It was barrels of fun, says Vibha ishi, Pepsi's marketing director for India. Indeed, Pepsi's ads in India consistently focus on youth, who constitute more than half of the nation's estimated 1 0 million soft-drink consumers. Coke, meanwhile, has run a more broad-based campaign appealing to the entire family. With the Hrithik song-and-dance ad, Coke seems to be acknowledging that, in India at least, the youth market is where it's at. More than a third of India's 1 billion people are under 18. As the country develops economically, the young, especially in urban India, will be eating and drinking very differently, says Vittal. McKinsey, which completed a study of India's food and beverage business in 1997, predicts that by 200 , the soft-drink market will grow to around $2.4 billion. hat said, India's per-capita consumption of soft drinks is still a paltry six bottles a year, compared with 1 in Pakistan, 22 in China and more than 600 in Mexico. In India, drinking a cola is not an everyday habit, says Vikram Sakhuja, Coca-Cola's marketing manager for India. It is reserved for special occasions-5 4 5 1 4 5 4 4 4 4 2 4 1 1 3 2 4 1 1 3 0 ) 1

religious festivals, family outings, sports events. Coke and Pepsi hope to change this by getting the young hooked on cola. here are other obstacles, though. With Indian per-capita incomes still relatively low, price matters. A small increase last year, for instance, stagnated soft-drink sales. And Indian taste buds represent a stumbling block: Coke and Pepsi are simply too bland to go with some highly spiced provincial cuisines. We need more flavor, something distinctive and strong, says amesh Chauhan, a former soft-drink magnate who created the somewhat spicy humsUp brand. Since neither Pepsi nor Coke would ever countenance changing their sacred formulas, they'll continue to rely on stars like Hrithik to help win over young Indians. But it's a nasty battle out there.
6

Cola Quarrels
The latest round has Pepsi dragging Coke to court, alleging a conspiracy and saying that its arch-rival has gone beyond limits to grab lost. advantage.

When Coca-Cola India CEO and President Donald W. Short headed for India in March last year after heading Coke Japan, he got a terse sayonara from his bosses at the megacorp's headquarters in Atlanta, Georgia: "Do the right thing." Maybe he did too much of it. Just over a year later, it's going to land his company in court. On May 6, in the middle of the parched summer during which the Rs 3,000 crore soft-drink business scores its biggest hit -- almost 50 per cent of all soft -drink sales takes place between April and June -- the focus will shift from how many cases Coke sells to how it defends a case slapped on it by arch -rival Pepsi a couple of weeks ago. So far, the two companies had restricted themselves to pitched battles in the marketplace -- which was beginning to peak with the over -the-top advertising battle. "The reason I went to court," Pepsico India Holdings Chairman P.M. Sinha says, "is because I would like the fight in the marketplace".

Pepsi's Gripe

Among other things, Pepsi's petition alleges that Coke had "entered into a conspiracy" to disrupt its business operations. "Rattled by the huge success of Pepsi in India," goes the petition, "it has become clear from the sequence of events in the past six months that the defendants want to cause loss and damage to Pepsi's business by adopting unfair and illegal means."

Pepsi allegations run a range from forcing its employers and customers to leave. A sample: Coke offered key Pepsi sales people salary hikes of 300-400 per cent when the industry norm is 40 per cent -60 per cent for new hirings. Ace endorsers like paceman Javagal Srinath

were lured into breaking their contracts with A sampler of the salvo reads like an all -out, take-noPepsi. prisoners shooting match. And a lot of the firing is Coke tried to pressure the Board of Control about hiring. Coke has been accused of luring away for Cricket in India to break a sponsorship three of Pepsi's key sales personnel from Kanpur, deal it had signed for the recent Pepsi Triangular Series. going as far as to offer Rs 10 lakh a year in pay and perks to one of them, almost five times what Pepsi pays him. Sales rookies who were earning Rs 48,000 per annum were offered Rs 1.86 lakh a year. Many truck drivers in the Goa bottling plant who were trundlin g along on Rs 2,500 a month shifted up with Coke's bait of Rs 10,000 a month. In an industry where new hirings average a pay hike of between 40 per cent and 60 per cent, Coke, alleges Pepsi, was offering between 300 per cent and 400 per cent.

Other moves hurt too. Pepsi alleges that Coke's Marketing Director Sanjiv Gupta -the whizkid behind the marketing of superstar Amitabh Bachhan's ABCL -- was to join Pepsi in '97. But within days of his getting the appointment letter, Coke made a counter offer. Said Gupta in his note to Pepsi: "Since our discussion, I have now received an alternative offer more in tune with my career and financial aspirations and I am inclined to accept the alternative offer." Coke is playing cool and quiet even as Pepsi, drawing on an impressive battery of legal eagles -- so far, eight top lawyers, among them former finance minister P. Chidambaram, advocate K.K. Venugopal, former attorney -general Ashok Desai and Arun Jaitley -- is spitting ire. Coke executives are keeping mum, saying t hat the matter is sub-judice and insisting that the reply will be made in the courts. Short will only say this: "Coca-Cola failed to connect with consumers in India initially. But now we are delivering what is right for our customers and consumers." Delivering value for money, delivering advertising round -houses and conducting market coups have been standard operating procedure in the Coke vs Pepsi saga for decades. Those who switched loyalties from one company to another have been branded as traitors. Market gossip has it that one company has planted moles in the other. One routinely launches attacks on the other's bottling and distribution network. It's just hotted up in India, say market analysts, since Short's arrival. Short does have a business mission, and he has no problems admitting to that. Coke's short-sightedness was acute. In 1993, it began with a mammoth 69 per cent share of the market, according to data from the Indian Market Research Bureau, after buying out Parle's popular brands, Thums Up, Li mca and Gold Spot. But then choosing to ignore these, says J.D. Singh, professor of marketing at the International Management Institute, Delhi, it frittered away enviable collective strength. It did not realise that Parle's brands had enormous staying powe r, shown by their fightback with Pepsi. Market share had dropped by more than 10 per cent by the end of last

year, while Pepsi's market share went up from 23 per cent to 43 per cent in the same period. Top brass anger with the results was evident: Short is the third Coke CEO in four years. For its part, Pepsi didn't really push hard till Coke was about to re -enter the Indian market, thereby frittering away its own lead -time advantage of close to four years. "Both companies didn't really concentrate on the f undamentals of marketing like building strong brand equity in the market, and are now resorting to short -term strategies to garner a share of the market," says Singh. "The strategies reflect a poverty of imagination." Singh points to the sometimes clever, mostly callow ad wars that favour puns to scoring real points -- spending as much as Rs 70 crore a year to do so. But there's a story away from the glare of advertising and marketing, the truth that hurt Coke as much as it does Pepsi. When Coke bought Parle it also inherited 56 bottlers. But many of them needed huge investments in capital. Around the same time, Pepsi began what it calls COBO isation, or Company Owned Bottling Operations, because bottling infrastructure was one of its weakest points. It had 18 plants of which almost half weren't up to the mark. By the time Coke began to contemplate investing in its inherited bottling units, in 1995, it ran into differences of opinion. For instance, its Ahmedabad bottler, where former Thums Up don Ramesh Chauhan was a partner, had such differences that he switched to Pepsi. Last year, Coke's successful Goa bottler too switched to the Pepsi camp. Net effect: scrabble to maintain the advantage -- and regain it, depending on which company one looks to -- in the perennial battle between the two soft -drink giants which sizzle as often as their products claim to soothe. That, whatever the outcome in court, is the real thing.

Innovation, and why Pepsi lost the cola war


PepsiCos flagship soft drink ceded the No. 2 spot to rivalCoca-Cola Co.s Diet Coke.

It was a spot that the company had held for more than two decades. So what happened? In a wonderful essay in AdAge , Natalie Zmuda digs in to understand why PepsiCo a successful American company and brand, no matter how you cut it blinked, losing its footing against its rival. Its a tale of management woes, shortsighted strategy and confused marketing. In a way, its a story about lost corporate creativity. She writes: As war stories go, this one is epic. Its a tale of two companies, both in the same category, both facing the same market dynamics, said one executive close to Pepsi, referring to that brands rivalry with Coke. One of them stayed the course and recognized that brand building is a long -

term proposition. It built on its heritage, protected its brand and invested in its brand and its people. The other went into a tailspin, trying to reverse its fortunes overnight at any cost. It lost its best people, lost its continuity and, ultimately, lost its direction. One potential bright spot for the company: its Pepsi Refresh project, a social responsibility campaign intended to foster good relationships between bottlers and their local communities. But the big takeaway from this report is a dearth of creative ideas surrounding Pepsi, and too much emphasis on flavor-of-the-day marketing that comes with high turnover in its marketing department. Simply, no employees are able to stick around long enough to guide the brand through a long-term strategy.

April 27, 2010

Pepsi plans handsets in its cola war armoury


By John Sarkar & Manisha Yadava Apr 27 2010 Tags: Companies

PepsiCo Inc may be taking the cola war in India to an altogether new level. The company plans to roll out a licensing programme to launch Pepsi-branded merchandise that may include, hold your breath, mobile handsets. Also on the planned portfolio are apparel, sportswear and accessories. On a visit here last week, Michelle Minieri, president of Bradford Licensing, a company that works with PepsiCo Inc globally, told Financial Chronicle that after China, India was in the companys crosshairs. She said these products worked well in Asia because many young people aspired for a western lifestyle. We are in talks with Pepsi officials in New York for the launch, she said. In parallel, her company is in talks with sourcing partners in India also. The idea is that the products can be launched within 10 to 12 months. She did not name the partners. Exclusive stores and other innovative retail formats hawking anything from shoes to cell phones are on the cards, according to Minieri. Financial Chronicle had reported in September that Pepsi would enter a completely new line of business -exclusive fashion and apparel stores in India to sell its own brand of merchandise. aurav Marya, president of License India, Bradfords local partner, said the mid-level pricing of these products

would hold the key and Tier II and Tier III cities would be the core markets. In the handset category, Pepsi may be seen competing with lesser known brands seen in IPL such as Micromax and Zen, he added. A PepsiCo India spokesman did not rule out the possibility of branded merchandise. He said, though, that no agreement yet exists under which a third party may sell garments in India carrying PepsiCo beverage trademarks in existing or new retail outlets.

He added that though PepsiCo India retained the option of licensing its trademarks for such purposes in the future, no such plans are imminent. The domestic organised merchandising industry is still in an embryonic stage and industry estimates peg it at a modest s 200 crore to s 230 crore, behind countries such as China. But there is an immense potential for growth, say industry experts. Sajid Shamim, executive director of marketing and products of eebok India, the company which markets isney and IPL teams-branded apparel, said, We need to wait for another two years to see a boom in merchandise sales. ight now, the total market is very small but growing v ery fast. Sportswear companies like eebok and Puma are optimistic about growth, given the early ecnouraging response they received, according to company officials. On Bradfords plans to bring PepsiCo merchandising into India, Harish Bijoor, chief exec utive officer of Bijoor Consultants, said, PepsiCo is taking the right steps by entering Tier II and III cities. Tier 1 cities are saturated. People in the other cities are in the nascent stage of consumption and easily accept new and affordable options. Pepsi could cash in on the opportunity by tapping these cities in the right way, he said, adding, Pepsi is not an upmarket brand, neither its down market. Its a mid-market brand.
9 9 @ 9 9 9

Sachin against honi in Cola war?

Sachin Tendulkar could be pitted against PepsiCos endorser honi as Coca-Cola is in talks with the star batsman for an ad deal
BY: N.Namazi | Wed Dec 15, 2010

Beverage giant Coca-Cola is currently discussing an endorsement deal with Sachin Tendulkar ahead of the upcoming ICC Cricket World Cup. If Sachin

comes on board for Coke, a possibility of a high -profile off-field battle between the master blaster and his captain MS honi is highly probable. A celebrity management official familiar with the event said: Coke is very keen to have Tendulkar on board. Even though no contract has been signed yet between Coca-Cola and the cricketer, industry executives have confirmed that a short-term deal could take place soon. But, sports management firm, World Sports roup (WS ), (that represents Tendulkar) and Coca-Cola have declined to comment on this issue. We are always in discussions with any number of leading celebrities with regard to their support of our brands and initiatives, but we only announce formal agreements after they are signed a Coca-Cola India spokesman said. Harish Krishnamachar, senior VP of WS added: We are not in a position to discuss commercial terms for Sachin. Once a sponsor is signed, we will let our client announce it Not easy to get the ittle Master The ICC World kicks off in February next year and Tendulkar could be playing his last world cup. Plus, he is still immensely popular among fans. Coca -Cola wants to bet on the star player to make sure that PepsiCos huge ad campaign with honi does not steal all th e gains at the big event perhaps the largest for all marketers. honi has already signed a high -profile endorsement deal with United Breweries for 3 years for s. 26 crore & also renewed his existing deal with Maxx Mobile for 7 years valued at s. 29 cr ore!
Coca-Cola cuts down prices in elhi and Uttar Pradesh
F E E B D B C C C B

Coca-Cola trims prices of the 600 ml bottles of all its carbonated drinks in elhi and Uttar Pradesh.
BY: Nargis Namazi | Fri Jan 21, 2011

Coca-Cola cuts down prices in Delhi and ttar Pradesh

At a time when sales growth of carbonated drinks has slowed, Coca -Cola has decided to cut down the prices of all its carbonated beverages. Hindustan Coca Cola Beverages, the bottling arm of Coca -Cola India, has also slightly increased the beverage quantity of its 2-litre PET bottles, while retaining the price point of Rs. 55. "We cannot comment on specific pricing instances, but generally speaking, pricing and promotional initiatives in our business is very local and is governed by the OBPPC (occasion, brand, price, pack, channel) architecture in a given local geography," a Coca-Colaspokesman said. However, sources close to the move have informed that the dip in prices is impermanent original prices will be revised later on. Beverage companies have been badly hit mainly due to extreme cold conditions in the North which resulted in two back -to-back quarters of single -digit growth. Plus, the July-September quarter witnessed single -digit growth on account of record rainfall followed by very cold winters. The new pricing will be implemented from this month onwards. Both Coca-Cola and opponent PepsiCo offer similar discounts to augment sales in select markets as special promotional offers. But, so far, PepsiCo has maintained its prices. "Depending on the local factors in play, our bottlers introduce various promotional initiatives in their markets and which are consistent with the long -term growth strategy of the Coca-Cola system in India," the Coke spokesman said.
Sachin on board for Coke at s. 20 cr

Indias star batsman Sachin Tendulkar signs a 3-year endorsement deal with Coke

BY: Nargis Namazi | Thu Jan 6, 2011 TAGS: coca-cola, Coke, McCann-Erickson Worldgroup India, PepsiCo, Prasoon Joshi, Sachin Tendulkar, star batsman Sachin Tendulkar

Sachin Tendulkar
Share

Sachin Tendulkar is finally on board for Coca-Cola. But he will not appear in Coca -Cola brand campaigns, as per company executives. The ace batsman will be used in corporate campaigns mostly. "This is because Sachin symbolises trust, reliability and responsibility. We can leverage these qualities in our corporate campaigns and CSR initiatives," a Coke executive said . Two years agao, Cokes rival PepsiCo had dropped Tendulkar as they wanted younger brand ambassadors representing them. Coca-Cola, like PepsiCo, has also been focusing on the youth -based advertisements to push up sales. PepsiCo brought in younger celebrities such as Bollywood actors Ranbir Kapoor and Deepika Padukone as part of its Youngistaan campaign. On the other hand, Coca-Cola has actor Imran Khan in its recent ad -campaigns.

According to reliable sources, Coke will shoot a new TV commercial next month with Tendulkar the same will be scripted by Prasoon Joshi, executive chairman & chief executive officer, McCann-Erickson Worldgroup India. A Coca-Cola spokesperson informed that th ey had not entered into a contractual agreement with Tendulkar yet. "We are always in discussions with any number of leading celebrities with regard to their support of our brands and initiatives, but we only announce formal agreements after they are signe d," he said.
Dip in demand for Coke and Pepsi

Extended rains have shrunk sales for beverage giants CocaCola and Pepsi Co.
BY: N.Namazi | Tue Sep 21, 2010

TAGS: coca-cola, Coke, Pepsi, PepsiCo

Dip in demand for Coke and Pepsi


Share

Sales of both firms (rising at a healthy 20 -25% in the past eight to ten quarters) are currently down to single digits. Though neither Coca -Cola nor PepsiCo revealed numbers, beverage industry officials said unit case volume growth is down to about 8-9%. PepsiCo India (beverages) CEO Praveen Someshwar said, The unusual rains have impacted growth. Company and franchisee -owned plants of both beverage companies in the region of North India, especially UP, Delhi and Rajasthan, are running below capacit y now. Moreover, since the past two -three weeks, several production lines in these plants have been stopped. CK Jaipuria, a leading PepsiCo bottler with franchisee plants in Delhi and Andhra Pradesh, said: Production is not running to full capacity now. L ast year, during this season, there was shortage of supply because demand was exceptionally high. Since the April-June quarter witnessed temperatures at a 52 -year-high, the companies had considerably raised their manufacturing capacities anticipating a strong double-digit growth in the September quarter too. Coca-Cola posted unit case volume growth of 37% in the July -September fiscal year 2009 quarter, PepsiCo had reported an all -time high 50% volume growth in the same quarter last year. In the April -June quarter this year, Coca-Cola Indias unit case volume had expanded by 22% while PepsiCos development in the quarter was about 19%.

This is possibly the first time that production lines have been halted in a season for a prolonged period because of lack of demand and over supply, said a beverage industry official. Coca-Cola has 23 company-owned plants, 22 are operated by franchisees. Additionally, it has 11 contract packing units too. On the other hand, PepsiCo has 36 beverage bottling plants - 23 of these are owned by franchisees. Due to lack of demand, huge amounts of unsold stocks are getting collected. This has led to the companies pushing these products in modern trade (at least in metros). Since the rains have compelled people to stay indoors, impulse purchase of soft drinks through kirana stores have also been hit. Both companies are now hoping to increase sales via modern trade channels - where consumers purchase grocery in bulk and less as impulse purchases.
PepsiCo: To launch Pepsi Max!

PepsiCo is all set to challenge Coca-Cola (its direct competitor) well within a month by launching Pepsi Max, the companys second cola drink which will be pitted openly against the existing market leader Thumbs Up, deemed as a macho drink.
BY: N.Namazi | Wed Jun 23, 2010

Pepsi

A no-sugar, low-calorie drink, Pepsi Max will be marketed as a macho adult brand. Sources familiar with the development of the brand in the company reveal that Pepsi Max is likely to hit the market shelves in the next four or five weeks. Even though Max is a low-calorie drink, the company has avoided in labeling the brand as a diet cola. Instead PepsiCo is planning to promote it as a macho drink targeted mainly to male consumers and competing directly with Coca Colas Thums Up. Currently in this segment, Thums Up is the undisputed leader as it has been able to successfully lead the Rs, 8, 000 crore fizzy drink market. However, a PepsiCo India spokesman said that the company would not comment on market speculation. But he neither confirmed nor denied the development. Sources close to the companys progress, however, said PepsiCo wants to pit Pepsi Max solidly against its opponent, Thums Up. Thums Up was originally created by Ramesh Chauhan over three decades ago and was later acquired by Coca-Cola India. Besides attacking Thums Up, Pepsi Max could also crack open the low -calorie colas market till now a small category, and more associated with women, a business associate of PepsiCo said. The demand for diet colas in the Indian ma rket remains trivial and occupies less than 5% of the total aerated drinks market share despite the fact that various diet versions have existed here for more than a decade. The diet cola category is yet

to be cracked open in India, mainly because diets c ome with a taste challenge they taste different so are not very well received by Indian consumers, a source said. Max could fill that gap since it does not contain ingredients of a diet cola and yet is a low-calorie drink, he added. Currently sold in more than 40 countries, Pepsi Max will be available in bottles and PET cans here and will be competitively priced. In response to this, Coca Cola may introduce Pepsi Maxs global rival Coke Zero (a sugar -free cola as well) to upset its competitors plan. Co ca-Cola is yet to test out the potential of Coke Zero in the domestic market. But, indirect imports of Coke Zero are already available in some stores here. PepsiCo had added more fizz to its cola brand in Andhra Pradesh (AP) last year with the intension of disrupting the stranglehold of Thums Up. India is a key market for cola companies and has been observing quarterly growth rates in excess of 20%. Thus, the market for a new arrival like Max looks promising.

Coke and Pepsi ready for cola war in South Ind ia


Tuesday - Mar 03, 2009
Televisionpoint.com Correspondent |

Summer has arrived in South India and the Cola majors - Coca Cola India and PepsiCo India - are ready for an massive marketing war in the four southern states. The South Indian cine stars are considered larger -than-life and the cola rivalry over branding is expected to assume mega proportions. Coca Cola India has roped in Tamil actor Vijay as the company's face for Tamil Nadu. The flavoured water giant has signed a one -year contract with Vijay, wherein the actor will endorse the cola drink of the company. "Vijay has endorsed Coca Cola between 2000 and 2003. But the brand was growing at a rapid rate in Tamil Nadu at that point of time and the company decided to move ahead without any celebrity." an Coca Cola official said. "When we decided to have a face in Tamil Nadu this time round, Vijay was the first choice because of the good rapport the company had shared with the actor in the previous contract," the Coke official added. The company will be releasing TV commercials featuring Vijay from the second week of March across all the leading Tamil channels. Coca Cola already has signed up with actors Mahesh Babu and anesh for Andhra Pradesh and Karnataka. "Apart from this south Ind ian actresses Trisha and enelia have also been signed contracts with us to endorse our Fanta and Fanta Apple brands respectively," the Coke official added.
P P

yderabad

On the other hand, PepsiCo India, in an attempt to take on the iconic rival Thums Up in its stronghold Andhra Pradesh has signed on Telugu movie actor am Charan Teja to endorse Pepsi in Andhra Pradesh as part of the company's ongoing 'youngistaan' campaign. Charan is the son of noted Telugu cine star and now Praja ajyam president, Chiranjeevi, who was the brand ambassador of Thums Up in the state for a long time. Thums Up is a beverage which commands a strong following in AP, West Bengal, parts of UP and West Moving ahead, the success of hajini in Bollywood has pitch forked actress Asin onto a different platform. Contracted by PepsiCo for the last three years to appear in commercials mainly down south, Asin will now be featured more prominently in all Mirinda orange advertisements throughout the country. "The reach of Asin has improved following hajini's success in Bollywood and she would feature in all our advertisements in north India too," said PepsiCo International executive vice-president (flavours) Alpana Titus. eleasing the latest commercials featuring Asin at Coimbatore, Alpana said that Tamil Nadu was the biggest market for the Mirinda orange drink in India. With TN being the priority market for the orange drink, the company had planned special marketing strategies for the state. "The state constitutes 2 % of our all India sales. Norma lly 80% of advertisements for the south are made in Delhi. This time, we have adequately researched the expectations of the local audience and devised ads accordingly in the local environment," she added. The two new commercials with the theme 'Mirinda Ka nnu, Konjam alatta Pannu' were shot with the local audience in mind, said JWT vice -president Hari Krishnan. "The Chennai team of JWT devised the concept for the two ads and brought out the local flavour." The ad agency has been associated with PepsiCo fo r 20 years now. They have been shot by ajesh Krishnan, a Tamilian based out of Mumbai, he added. While the new advertisements hit the screen at prime time on Monday across the south, the all-India version would be released on February 2 . "Despite the ge neral recession, the orange drink has seen a healthy double -digit growth in the last six months of 2008 and in the early weeks of 2009. We expect it to grow further with the summer season setting in," Alpana said. According to her, the company had already kick-started its aggressive campaigning for 2009 summer across all media starting with Pongal season in south. In the north, ad campaigns will be launched around Holi. Its combo offers with snacks from the Pepsico stable too had helped increase sales. To attract customers, the company has also gone in for a change in packaging. "The 600 ml
S Q R S R Q R Q Q

plastic bottle has been designed with new curve for easy handling and the bottle now comes in an orange colour from the earlier transparent one," Alpana said.

Coke, Pepsi gear up for World Cup war


LALITHA S INIVASAN
T

Posted: Tuesday, Feb 22, 2011 at 0344 hrs IST

Tags: World Cup War | PepsiCo India | Coca-Cola India

Mumbai: Theres a new fizz in the ongoing cola war between Coca -Cola India and PepsiCo India, as both companies gear up for the onset of summer. In a bid to take on its arch rival, Coca-Cola India is fine-tuning communication strategy which includes, consumer engagement programmes and mass media advertising plans to promote its flagship brands Coke, Fanta, Limca and Thums -up in the next few months. To start with, Coca- Cola India is planning to launch an aggressive ad campaign featuring its new brand ambassador Sachin Tendulkar to build its corporate image. On the other hand, PepsiCo India is in the process of rolling out a high -decibel television campaign which includes four television commercials featuring MS Dhoni, Harbajan Singh, Virender Sehwag and cine star anbir Kapoor during the ICC World Cup 2011. To usher in the summer, PepsiCo India is currently getting ready to launch a multi -media ad campaign to promote its brands during the peak season.
Cashing in on the popularity of the ICC World Cup 2011 and IPL-4, Coca-Cola and PepsiCo are unleashing ad campaigns and ground activations to woo consumers. In fact, cola wars may pitch Sachin Tendulkar against MS Dhoni in the next few months. While captain MS Dhoni is leading PepsiCos ad campaigns, star batsman Sachin Tendulkar will lead Cokes corporate and brand campaigns. Clearly, there will be a clash between brand Dhoni and brand Sachin in the next few months. On Cokes communication strategy, a company spokesperson said, Sachin Tendulkar is our Happiness Ambassador and we will leverage his association with the company to amplify our CSR, corporate and brand messages. According to a company spokesperson, the onset of summer season provides coke an opportunity to reinforce the companys core creative idea and messages to the consumers for each of the brands. We therefore will be launching our campaigns for different brands
U

shortly. We will be rolling out with the campaign for Sprite based on the core creative idea of University of Freshology. This will be followed by our campaigns f or Coca-Cola, Thums Up, Fanta, Limca and some of our still beverage brands, in course of time, he added.

Meanwhile , PepsiCo India has launched a brand new commercial featuring Virender Sehwag and cine star Ranbir Kapoor as an extension of its Change the Game campaign for the ICC Cricket World Cup. Sandeep Singh Arora, executive vice president -marketing, Cola, PepsiCo India said, Change the Game is a big idea in the context of the game of cricket. With this campaign, we want to inspire the youth to change the game, be innovative, take risks, and do things differently even if it has not been done before. After the World Cup 2011 PepsiCo India will be shifting its marketing
focus to launch fresh ad campaigns to promote its brands during the summer.

Posted: Tuesday , Feb 22, 2011 at 0344 hrs ISTMumbai: Theres a new fizz in the ongoing cola war between Coca -Cola India and PepsiCo India, as both companies gear up for the onset of summer. In a bid to take on its arch rival, Coca -Cola India is fine -tuning communication strategy which includes, consumer engagement programmes and mass media advertising plans to promote its flagship brands Coke, Fanta, Limca and Thums -up in the next few months. To start with, Coca - Cola India is planning to launch an aggress ive ad campaign featuring its new brand ambassador Sachin Tendulkar to build its corporate image. On the other hand, PepsiCo India is in the process of rolling out a high -decibel television campaign which includes four television commercials featuring MS D honi, Harbajan Singh, Virender Sehwag and cine star Ranbir Kapoor during the ICC World Cup 2011. To usher in the summer, PepsiCo India is currently getting ready to launch a multi -media ad campaign to promote its brands during the peak season. Cashing in on the popularity of the ICC World Cup 2011 and IPL -4, Coca-Cola and PepsiCo are unleashing ad campaigns and ground activations to woo consumers. In fact, cola wars may pitch Sachin Tendulkar against MS Dhoni in the next few months. While captain MS Dhoni is leading PepsiCos ad campaigns, star batsman Sachin Tendulkar will lead Cokes corporate and brand campaigns. Clearly, there will be a clash between brand Dhoni and brand Sachin in the next few months. On Cokes communication strategy, a company spokespe rson said, Sachin Tendulkar is our Happiness Ambassador and we will leverage his association with the company to amplify our CSR, corporate and brand messages. According to a company spokesperson, the onset of summer season provides coke an opportunity to reinforce the companys core creative idea and messages to the consumers for each of the brands. We therefore will be launching our campaigns for different brands shortly. We will be rolling out with the campaign for Sprite based on the core creative idea of University of Freshology. This will be followed by our campaigns for Coca -Cola, Thums Up, Fanta, Limca and some of our still beverage brands, in course of time, he added.

Meanwhile , PepsiCo India has launched a brand new commercial featuring Vi render Sehwag and cine star Ranbir Kapoor as an extension of its Change the Game campaign for the ICC Cricket World Cup. Sandeep Singh Arora, executive vice president -marketing, Cola, PepsiCo India said, Change the Game is a big idea in the context of the game of cricket. With this campaign, we want to inspire the youth to change the game, be innovative, take risks, and do things differently even if it has not been done before. After the World Cup 2011, PepsiCo India will be shifting its marketing focus to launch fresh ad campaigns to promote its brands during the summer.

PRODUCT PRODUCT VARIETY QUALITY DESIGN FEATURES

SIZES GLASS 200 ml, 300 ml, 500 ml, 1000 ml PET 500 ml, 1.5 L, 2 L, 2.25 L, 500 ml + 100 ml CAN 330 ml FOUNTAIN Various Sizes

Brand Advantage
y Pepsi has become a friend to the youth and has led many youth cultures. Youngsters over the generations have grown up with Pepsi and share an emotional connect with it, unlike any other cola brand. Be it parties, hangouts, or just another day at home, a day is never complete without the fizz of Pepsi! Pepsi, Cricket and Bollywood have been joined at the hip since the beginning. Shah Rukh Khan, Sachin Tendulkar, Saif Ali Khan, Amitabh Bachchan, Kareena Kapoor, Priyanka Chopra, Virender Sehwag, M. S. Dhoni, John Abraham, Ranbir Kapoor and Deepika Padukone are a few celebrities who will go any length for a chilled Pepsi. The Pepsi My Can is undoubtedly the most popular cola pack of all times. It is not just a pack but a style statement for todays youth.

PRICE

Coca Cola marketing strategy Focus on availability of products in market. Focus on availability of products in outlets. Coke products visible for consumers. More focus in rural area Regular market vigilance by market developer Distribution of product according to locality Extra focus on monopoly outlets

Aggressive rural area advertisement Social festival in rural areas Target core brands Satisfy market priorities.  Focus on availability of products in market. Coca-Cola works on dikhega wo bikega philosophy. This is the main formula of the marketing strategy of each company. So availability of product in the market isclear. For this reason the market developer daily comes in market to check their product availability.  Focus on availability of products in outlets. There is big difference between the availability of products in markets and outlets. Coca-Cola want their products displayed in each outlet in market so it is important that the product first available in market after than it is put on outlets.  Focus on availability of products in outlets. The aim of Coca-Cola is that its products should be visible for the customers so company gives to retailers racks so many display items. Now days the company is giving visicoolers to retailers for visible their chilled product in market for more sales.  More focus in rural area The rural market is a significant part of our sales promotional discount schemes whixh is enabling us retailers link with our products. -Herminder Singh Chabada (STL) Coca-Cola In 2000, the Coca-Cola India spokes woman Nantoo Banerjee said that: The real market in India is the rural market. If you crack it there is tremendous potential. CCI begin focusing on rural areas after 2000 to increase volumes. This decision is giving a huge size and potential market to company. It have now sifted the focus to rural India. THANDA GOES RURAL In early 2002, CCI launched a new advertising campaign for attracting more rural consumers. The aids with India leading bollywood star Amir Khan, with movie of Lagan. The tagline says: Thanda Matlab Coca-Cola  Regular market vigilance by market developer

To know the position of Cokes products in the market Coca-Cola appoint some executive those go in market and checks availability, visibility of product, take care of companies assets, check visicoolers and talk to shopkeepers and take feedback about their product.  Distribution of product according to locality Coca Cola company distributes their schemes according to area. Area or place where soft drinks sold in a larger manner, on those place company gives good schemes to shopkeepers and retailers. Place like railway station, bus stand are consider in this category and place whih have low selling where company give small schemes to the shopkeepers.  Extra focus on monopoly outlets Outlets which only sales Coca-Cola product and gives good sale to company are considered in this category, company gives extra schemes, discounts and other gifts to these shops and tries to keep them happy and long relationship. Problem of these kind of outlets resolve as soon as possible.  Aggressive advertisement Coca-Cola uses the concept of aggressive advertising for sales promotion. Companies different schemes and advertises them with electronic and print media. These ads build bran image and establish awareness. Brand ambassador plays an important role. Brand ambassador encourage the today youth to trust their instincts, influence them. Successful ad campaigns like Jo chaho ho jaye & Life ho to aisi were very popular and had entered in youth vocabulary. In 2002, company launched the campaign Thanda matlab Coc-Cola which sky rocketed the brand to make. Coca-Cola launched Amir Khan in so many ads to capture rural market, one such ad says: Oye Soniyo Thanda Piyo.  Social festivals in rural areas Coca-Cola company time to time introduced rural social festival. In 2007, company launched Jalasa programmed in so many rural areas like Ringus, Renwal, Chomu, Phulera, for gaining the attention of the consumers. MARKET SEGMENTATION OF COCA-COLA Market can be segmented along 3 lines- outlet volume, Locality income and channel cluster: Segmentation

Channel Cluster

Locality Income

Outlet Volume

Grocery Gold Eating & drinking Convince

Low

Diamond Gold Silver Bronze

Medium High

Classification of outlets on the basis of volume Outlet classification Diamond Gold Silver Bronze Ko Vpo SLAB (phy C/s) >800 500-799 200-499 <200

TYPES OF OUTLETS Grocery Outlets which are primarily engaged in retailing of food and various household items. It include neighbourhood outlet stoking provisions, edible and general household items of daily usages E.g., commodities like flour, pulses, rice and branded household items like toothpaste, mosquito oil, soap, etc. E & D Outlets selling items to eat which are being cooked within outlet, made at the outlet and possibility consume in outlet. They may have place of sitting. It includes Bakery/ store/ restaurants/ bars/ juice/ soft drinks/ ice cream parlor/ tea, etc. Convenience Includes outlets which are small stores generally accessible locally. Thes are often located alongside busy roads. It includes chemist shops/ STD booth/ Pan bidi shops, etc. CHANNEL MANAGEMENT The partner type relationship with bottlers Franchise owned bottling operation (FOBO), as well as company owned bottling operation (COBO) network of the channel management mostly cover these type bottling. It is this way CCI strengthens in its marketing that give its and edge. Every number of its sales team is meticulously taught the merchandising and display skills that can leverage the reach of te companys bottling network to achieve high visibility of the product. FOBOs and COBOs: CCI work under 2 types of bottling operation:  FOBO (Franchise owned bottling operation)

 COBO (Company owned bottling operation) COBO company sells products by own self. Some of the COBOs of the company are at: Mumbai, Bangalore, Ahmadabad, Chennai, Kolkata, U.P. unit. FOBOs: The concrete is being on sell of products by franchise system the mfg. and the franchiser sell products in the market. Leaving COBOs, the FOBOs are in the rest of cities of India. Some of them are Delhi, Punjab, Bihar, Nagpur, Goa, Bhubaneswar, Hyderabad, etc. MARKET ALLOCATION Coca-Cola has concentrated in 4 types of markets: 1. Emerging Markets Like China and India, where there is low per capita income but good potential for investment because of their large size of population. 2. Leading Market Where it is leading the market in maintenance, consolidation and selling. 3. Critical Mass Market Where Coca-Cola has maintained and defend its position against competition. 4. Low Share Market Markets where Coca-Cola has low shares but where presence is required. TARGET CORE The Coca-Cola Company has tier- weekly targets for sales executives, marketing executive, market developer, sales persons and other get targets. After compleig their targets the company give them good intensive which attract them to wok with their full potential. FOCUS ON FRANCHISING WITH BUILDING A CORE OF COMPANY OWNERS Company is now planning a franchising with building a core for all routes so that the supply of products should be on time and the company demand Availability of product can be met.

SLOGANS PEPSI

1909-1939

Delicious and Healthful When they find the Pepsi-Cola bottles are empty, their morale will go down another 10 points Pepsi-Cola hits the spot, 12 full ounces, thats a lot, Twice as much for a nickel too, Pepsi-Cola is the Drink for you! Nickel, nickel, nickel, nickle, Trickle, trickle, trickle, trickle

1939-1950

Twice As Much For A Nickel Too

1950-1953

The Light Refreshment 1953-1961

Be Sociable

1961-1963

Now Its Pepsi For Those Who Think Young

1963-1967

Come Alive! Youre In The Pepsi Generation

1967-1969

Taste That Beats The Others Cold

1969-1973

Youve Got A Lot To Live, Pepsis Got A Lot To Give

1973-1975

Join The Pepsi People Feelin Free

1974

Lipsmackin thirst quenchin (ace tastin motivatin good buzzin cool talkin h igh walkin fast livin ever givin cool fizzin) Pepsi

1975-1978

Have A Pepsi Day

1978-1981

Catch That Pepsi Spirit

1981-1982

Pepsis Got Your Taste For Life!

1983

Pepsi Now!

1984

Pepsi, The Choice Of A New Generation Are you ready to take the challenge?

1985

Taste the difference Generation Next

1986

Join the Pepsi generation: feel the taste

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. Its the Cola

2000-2003

Aazadi dil ki (Hindi- meaning Freedom of the Heart)(India)

2003

Its 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. Its better than sex!

2006-2007

Why You Doggin Me/Taste the one thats forever young

2007-2008

More Happy/Taste the once thats forever young

2008

Yeh hai Youngistaan Meri Jaan! Hindi meaning This is the Young era my dear (India and Pakistan)

2008

Pepsi Stuff for Super Bowl Commercial

2008

epsi is #1

2008

Pepsify karo gai(Hindi meaning Wanna Pepsify!)

2008-2009

Something for Everyone

2009

Refresh everything and (during many commercials) Every Generation Refreshes The Wor ld

PROMOTION ADVERTISEMENT

Differences in strategies of both


Capturing the market is the main issue facing any company and when it comes to Beverage market, it becomes more intense because there are just two players and they are fighting strongly to capture each others market and don't have any other option.

Both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year. Just how is this done in such a competitive market is the underlying issue.

The facts are that each company is coming up with new products and ideas in order to increase their market share. Pepsi has always taken the lead in developing new products, but Coke soon learned their lesson and started to do the same. Coke hired marketing executives with good track records (98). Coke also implemented cross training of managers so it would be more difficult for cliques to form within the company

The creativity and effectiveness of each company's marketing strategy will ultimately determine the winner with respect to sales, profits, and customer loyalty.

These two companies are constructing new ways to sell Coke and Pepsi, but they are also thinking of ways in which to increase market share in other beverage categories. Although the goal of both companies are exactly the same, the two companies rely on somewhat different marketing strategies.

Pepsi has always taken more risks, acted rapidly, and was always developing new advertising ideas. Both companies have also relied on finding new markets, especially in foreign countries. In the foreign markets, Coke has been more successful than Pepsi. For example, in Eastern Europe, Pepsi has relied on a barter system that proved to fail. However, in certain countries that allow direct comparison, Pepsi has beat Coke. In foreign markets, both companies have followed the marketing concept by offering products that meet consumer needs in order to gain market share. For instance, in certain countries, consumers wanted a soft drink that was low in sugar, yet did not have a diet taste or image. Pepsi responded by developing Pepsi Max.

The next step is to take fast action to develop a product that meets the requirements for that particular region. Both companies cannot just sell one product; if they do they will not succeed. They have to always be creating and updating their marketing plans and products. The companies must be willing to accommodate their target markets .

Gaining market share occurs when a company stays one-step ahead of the competition by knowing what the consumer wants. My recommendation is to make sure the company is always doing market research. This way they are able to get as much feedback as possible from consumers. Next, analyze this data as fast as possible, and then develop the new product based upon this data. Once the product is developed, get it to the marketplace quickly. Time is a very critical factor. In my opinion, with all of these factors taken into consideration any company should give any company a good jump on market share.
IN B IE

Coca-Cola vs. Pepsi, Revised Edition

B Y AR M I N

In the last couple of weeks, a JPG has been making the internet rounds and, in the process, has gathered more than 6,500 Diggs (not that that is any measure of successful success, but still) and has been mentioned in dozens of design and culture blogs, including many which I frequent and respect. The problem is that the JPG is wrong and disingenuous. It comparatively illustrates the evolution of the Pepsi and Coca-Cola logos from their beginnings in the late nineteenth century to their current state at the end of the 2000s. The comparison chart mocks the ever-changing personality of the Pepsi logo in contrast to Coca-Colas stoic script logo, unaffected by the effects of time. The philosophical point it makes is indeed funny and, for the most part, accurate: Coca-Cola has long been the steady brand that triumphs over Pepsi as the latter attempts to gain ground with brand gimmicks and changes. And I will be the first to admit that the Coca-Cola logo and its consistency over the years is far more supreme than Pepsi, but every time I saw this JPG come up in more and more web sites and blogs I couldnt help but cringe at the inaccuracy and deception it engenders.

Pepsi vs. Coca-Cola ogo Evolution chart with a fat X from Brand New.

True, no one will die and the lasting effects of this JPG mean nothing, really. But I felt a burden of duty to correct a few things. The biggest problem is that the chart puts the same logo in 1885 as it does in 2008. This is not only wrong but idiotic. Technically, the Coca-Cola logo as it exists today can not be replicated with the tools of 1887 which, by the way, is the year the script logo was introduced. Not 1885. Coca-Cola was first served in 1886 and even then, the first official logo of Coca-Cola was not the script logo. It first appeared in the Atlanta Journal Constitution in 1886 as both a slab serif and chunky sans serif it wasnt until mid-1887 that Frank Robinson, Coca-Colas bookkeeper, drew the first traces of the Spencerian script logo that we all know.

First Coca-Cola logo appeared in the Atlanta Journal Constitution on Saturday May 23 1886.

The chart, for comic and poignant effect, then leaves a 120-year gap between the first and last logos. It makes for a great viral JPG, but not for telling the real story. For the first ten to twenty years you could probably find a dozen different executions of the Coca-Cola script as the logo was probably drawn over and over for different applications. It isnt until the 1930s and 1940s that a clear interpretation of the logo appears and is used consistently. During the late 1950s and early 1960s the script logo is placed within a shape, referred to as the fishtail logo, which is as off-brand as anything that Coca-Cola has ever done. The chart also fails to mention the introduction of the wave, a ubiquitous visual today, that was first implemented in the 1960s when Lippincott Mercer was in charge of making the Coca-Cola identity more consistent. More than any Pepsi blunder, the chart ignores the introduction of New Coke in 1985 with a new formula marketing and set of logos that completely ignored the script logo that left a bad taste in their consumers mouths. Around the same time, in 1986, Landor began rolling out an even more developed brand identity that modified the wave among other subtle changes. Missing from the chart in the Coca-Cola evolution is the penchant for Coca-Cola to use the shape of its bottle as an icon, acting on and off as the logo or complementary logo or subsidized logo of the main script logo, sometimes to a confusing fault. Todays Coca-Cola logo is, of course, amazingly similar to what it was 124 years ago but its not quite fair to idolize them for a flawless consistency that they havent actually earned. Once more, I will say that the Coca-Cola evolution is admirable and few companies probably just GE can claim to have extended their identity heritage across three centuries, but Coca-Cola isnt perfect and as much as I despise the new Pepsi identity which in no way am I trying to defend I believe a fair comparison is in order.

So, here is the new chart. Its not ideal, since I didnt have a document as clean and specific as this onefor Pepsi and I had to cobble the logos from different sources. The reds are all over the place and some are in black and white. What is the difference between Coca Cola and Pepsi? What are the differences: Taste-Price-marketing strategies of Coca Cola and Pepsi? "Thanks! Taste: In my opinion, Coca-Cola has a heavier taste of candy. Hope this helps. About price if not the same Market Strategies: Coca-Cola recently, ads memorable holiday. While Pepsi did with many celebrity endorsements. If you remember the Coca-Cola has always had Santa and polar bears, while Pepsi uses celebrities in their ads.

IMAGE ADVERTISING: THE ADVERTISING STRATEGIES OF PEPSI AND COCA COLA IN INDIA
Faculty Contributor: Seema Gupta, Professor Student Contributors: K Naganand and Avneesh Singh Narang
In a crowded product market, as companies are increasingly falling short of ways to differentiate their products from those of the competitors, Image Advertising seems to be a way out. This article highlights the major tenets of Image Advertising, by looking at the advertising strategies adopted by PepsiCo and Coca Cola in India. The model developed herein seeks to understand, among many other things, the evolution of a brand, and its role as an integral part of a companys brand portfolio.

Contrary to popular belief, advertising is as much a science as it is an art. As the primary mode of communication between a company and its prospective customer, an advertisement must connect to the consumer, and create in his mind an attractive image of the brand. The average consumer gets lost in the vast sea of information, and is unable to differentiate one product from another. Notwithstanding the scientific inputs that go into designing an advertising campaign, some campaigns make history while others fail miserably. Why? Ads are no longer informative tools, but, as Poisez aptly points out, there has been a shift in attention away from the physical aspects and functional benefits of products to their symbolic associations, expressiveness. Marketing has ventured into the emotional, the behavioural, and the cognitive. Today, the primary objective of the ad is to create an image. The fierce competition between cola giants PepsiCo and The Coca Cola Company (henceforth, Coca Cola) - and the advertisement strategies adopted by them in India to establish their respective brand images offers an interesting insight into Image Advertising.

Brand Identity
The first step in understanding Image Advertising is to understand the image being created, i.e. Brand Image. Brand Image is consumers perception of the brand in question. This perception might actually be different from what the brand actually embodies the Brand Identity. Advertising bridges the gap between Brand Image and Brand Image.

Exhibit 1: Kapferer's Prism1

There are a number of tools available to explore the identity of a brand. One such tool is Kapferers Prism (Exhibit 1). As shown in the exhibit above, there are many facets to a brand. Kapferer identifies six key characteristics that together define the brand:
y y y y y y

Physique the physical attributes of the brand Personality the personification of the brand Relationship the relationship between the consumer and the brand Culture the core values of the brand Reflection the way consumers want to be perceived when using the brand Self-Image the image that consumers have of themselves when associated with the brand

A combination of these characteristics can be used to identify what the brand ultimately stands for. These exercises were performed on a few brands each from the stables of both PepsiCo and Coca Cola; Exhibit 2 depicts the results of these exercises.

Exhibit 2: Brand Proposition

Identity to Image Evolution of Strategies


A closer look at the brand identities of each of the brands helps assess how successful their advertising campaigns have been in creating a brand image in tune with it, while being sensitive to the value system of the target audience.

PepsiCos Campaign
The analysis of Pepsi, 7 UP and Mountain Dew from the portfolio of PepsiCo puts forth some interesting aspects about the evolution of these brands. Pepsi was one of the first products to Indian markets after the economic reforms of 1991.
Pepsi

Pepsi began with the Yehi hai Right Choice Baby campaign, which has been one of the most memorable campaigns of the brand, featuring celebrity endorsers such as Shah Rukh Khan among others. The focus, as is clearly evident, is on the product with the youth as its target segment. Yeh Dil Mange More and Yeh
Pyaas Hai Badi were some of the later campaigns. Yeh Dil Mange More campaign was again a great success, having balanced the emotional as well as the functional appeal of the product. Featuring Sachin Tendulkar and many other leading stars at that point of time, this was also one of the longest campaigns carried out by Pepsi. The company however failed to maintain the trend and leverage it. Instead of moving on to a complete emotional appeal platform, the company decided on a product based promotion campaign. Though there is still some amount of emotional appeal to its campaigns, the principal focus is on the product - it being a preferred thirst quencher. 7 UP

In its early days, 7 UP inherited the global Fido-Dido campaign for promotion in India as well. However, with changing times and a contextual difference in India, a much more focused campaign was required. This led to the Keep It

Cool campaign, which was targeted primarily at the youth and the teenager segment. Hence the appeal was at a more subtle, emotional level, which was meant to convey a potential lifestyle statement. The recent campaign of Bheja Fry essentially leverages on the same emotional appeal where the Keep It Cool campaign has been somewhat tweaked to have a local appeal. Mountain Dew

Mountain Dew is the latest entrant in the product portfolio. This product too has the appeal of being the drink of a daredevil or the No Fear personality. The campaigns launched include Do the Dew and Dar Ke Aagey Jeet Hai . The initial campaign was unclear in terms of its appeal and the target segment, as a result of which the brand suffered some jolts in the beginning. However, the latest campaign captures the No Fear or the Macho Man image. In this sense, the brand directly competes with Thums Up from the Coca Cola Stable

Coca Colas Campaign


The Coca Cola campaign in India, however, has been different from that of Pepsi, even though they both share similar product traits. Coca Cola had a presence in India before 1977, but was subsequently forced to exit the Indian market. When the company returned to India post liberalization, it came up with an innovative communication and advertising strategy. Coca Cola has essentially been following the principle of differentiation.
Coca Cola Jo Chaaho Ho Jaaye , Coca Cola Enjoy was one of the companys first campaigns in India. It was remarkably well executed, and appealed both at a product level as well as at an emotional level. These ads featured celebrities such as Hrithik Roshan and Aishwarya Rai. The target segment for Coca Cola in its initial days was the youth segment and this campaign clearly connected well with the segment. However, the next advertising campaign of Thanda Matlab Coca Cola was launched with an objective to have a mass appeal. The campaign leveraged the product platform rather than the emotional platform that it had established earlier.

It is however, important to note here that Coca Cola made some exceptions for India. The company has similar marketing strategies across geographies and usually doesnt depend on celebrity endorsements. But given the great fan-following, and in adapting to the Indian context, the company had to initially deviate from its set charter. However with the current campaign of Open Happiness , Coca Cola seems to have achieved both an emotional as well as a mass appeal. There is a very natural connect with the target segment, that of celebrating every day, and sharing small moments of joy with our loved ones, irrespective of any barriers.
Sprite

Sprite - the other brand from the Coca Cola stable began its journey with the campaign titled All Taste No Gyaan . This appealed greatly to the youth who dont like to be preached and relish their sense of ownership and decision making. Sprite has never depended on celebrity endorsements as a way to gain brand recognition or consumer recall. The ads are designed to be very witty, and generally connect very well with the target audience by capturing every day moments. Seedhi Baat No Bakwaas - its next campaign instantly connected with the target audience by coming across as a brand that was different from the other, one that focused on the individuality of the consumer. The emotional appeal is much stronger and shows a clear sign of maturity of the campaign.

Proposed Framework
This analysis brought to light the roles played by each brand in the companys overall advertising strategy. Not every brand took the centre-stage: some were the core brands, while others were used as defensive shields and offensive attackers to fight off competition. The following framework helps classify different brands based on the roles each of them plays:
y y y

The Core Brand the flagship brand of the company The Cover Brand acts as a cushion to the core brand; soaks up competition The Stand-Alone Brand neither core nor cover; independent

Brand Portfolio Analysis


The brands in the portfolio of Pepsi and Coca Cola play an important role in terms of the overall impact they have on brand recall and consumer loyalty. The framework developed herein attempts to identify the importance of each brand in the portfolio and the role it plays. In the case of The Coca Cola Company, Coca Cola is the core brand or the flagship brand. The focus, therefore, is on capturing the maximum value that the brand can generate. In this case, Sprite plays the role of a cover brand (Exhibit 3). Any spoof or threat on Coca Cola is countered by Sprite. However, off late, Sprite is moving up the ladder to become a core brand in the portfolio. The importance of a cover brand is that it allows for maintaining a planned advertising strategy. This builds brand value and creates no confusion about brand proposition.

Exhibit 3: Brand Roles

In case of PepsiCo, Pepsi is the core brand or the flagship brand. However, Mountain Dew and 7 UP have played the role of standalone brands. Therefore, Pepsi has to constantly respond to spoofs and threats from other brands by tweaking or changing its planned advertising strategy. This strategy may lead to confusion in minds of the consumer about the brand proposition. Such a situation can be critical with regard to the connection a brand establishes with its target consumer segment. Recent trend suggests at Mountain Dew taking up the role of a cover brand in the PepsiCo brand portfolio.

Conclusion
This analysis led to some interesting insights. For a start, the image of the brand must be consistent not only with its identity, but with the value system of the target segment. It is, in fact, the complexity of the value system of the target segment of Pepsi and Coca Cola that allows for such a contrast in advertising styles. Furthermore, the race for prime position involves a well thought out strategy with clear cut roles for each of the brands in a portfolio. Advertising is indeed both an art and a science. The shift from information to image displays the rich potential of the advertising space. The exhilarating pace of evolution from the simple creative to the strategic takes your breath away. Definitely not for the faint hearted!

Difference between Coke and Pepsi


Amongst the leading rivals in the beverage industry, Coca-Cola and Pepsi struggle to remain on the top and prove to be the fiercest competition for each other. Keeping up their reputation and serving the masses since the past many decades, Coke and Pepsi both have similar problems, such as having inappropria te ingredients that are not suitable for different nations, like India, due to the cultural differences. For the sake of their future growth, these companies are seen to compromise in order to have their status and figures remaining on the top. Both the dr inks continue to confuse the consumers in the competition of wanting to be the best.
Basic Statistics

When it comes to the essential figures, we have seen that Pepsi has more advantages whereas coke is getting superior figures. Pepsi wins the game when it comes to making revenues and creating profit margins and it has been noted that since the past few months, Pepsi has updated itself more than Coke has. This is an indication that the investment banks are favoring Pepsi over coke. However, the companies aim to secure better measures in the future of promising markets which may bring them loss at one time but in the longer run, there is an increase in the economies of scale.
Success on Individual Basis

Pepsi has had constant growth during its occupancy in a s table pattern that shows promises of future expansion. Even though the customers do not like the speed of the pattern, long-term investors favor Pepsi exactly for this reason and therefore, the boost in price. The company is in their "maturity" state where the product is said to be enjoying the maximum economies of scale and can carry this success for quite a while, if the right tactics are used. If a company invests in Pepsi today, by 201 , Pepsi promises to rise almost 100 points more. You need to be pati ent when it comes to investing in such areas of business and to give you satisfaction, you get to see the capital increase over the years. However, Coca-Cola is not seen to be giving the same fluctuation to the investors as it changes in a $ range. This m ay attract those who believe in fixed income but since the past decade, no significant rise has been seen nor are there any signs of possible expansion. Coke has tried to add to its value to the maximum but it is feared to experience diseconomies of scales sometime in the near future.
Marketing Strategies
Y Y

Pepsi is expanding itself by focusing on CEO's that are of different cultures and this is the reason it is being a step ahead of Coca -Cola. Coke therefore needs to have different strategies to gain popular ity in different parts of the world and match the steps that Pepsi is taking.
Compare and Contrast:

While the market generally believes that Coke is on top of the industry, times are changing for the worse for this company as Pepsi has started becoming mor e favorable because:
y

The significant increase in the investing market and their different strategies of having the public on their side Pepsi updates itself after an interval of few months to show their stability when it comes to investors which shows that they are generally financially established.