You are on page 1of 40

Comparative study of marketing strategies between soft drink companies (coke Vs pepsi)

Coke V/s Pepsi Market Share CONTENTS Abstract Introduction Soft drinks industry-An overview History Products of Coke & Pepsi Problem Statement Research Methodology Research design Sources of collection of data Sampling methods Data collection Objectives of study Analysis & interpretation of data Findings Conclusion Recommendations Bibliography Questionnaire

Analysis of questionnaire

ABSTRACT This project is an extensive research on the marketing strategies of the two Cola giants Pepsi and Coca Cola. It covers an extensive survey and depicts all graphs, fact and figures of two companies. It begins with the introduction of soft drink industry and introduction of these two companies of soft drink industry. It covers some of the major strategies adopted by Pepsi and Coca-Cola. The project has been made interesting with the inclusion of the topics, which covers the 4Ps of marketing. The major players in the soft drink industry are Coke and Pepsi. They have a cut throat competition between themselves. One company follows whatever strategy the other copies it. Sample of both brands were selected on the basis of their uses and notice ability. Total sample of size of 200 respondents selected on the basic of convenience was surveyed which include consumers. Detailed description along with analysis of surveyed data is also being presented in this report. Data was collected from secondary as well as primary sources. Structure questionnaire was use to collect primary data Introduction In the modern urban culture consumption of soft drinks particularly among younger generation has become very popular. Soft drinks in various flavours and tastes are widely patronized by urbane population at various occasions like dinner parties, marriages, social get together; birthday calibration etc. children of all ages and groups are especially attracted by the mere mention of the word soft drinks. With the growing popularity of soft

drinks, the technology of its production, preservation, transportation and or marketing in the recent years has witnessed phenomenal changes. The so -called competition for this product in the market is from different other brands. Mass media, particularly the emergence of television, has contribute to a large extent of the e ver growing demand for soft drinks the attractive jingles and sport make the large audience remember this product at all times. It is expected that with the sort of mass advertising, reaching almost the entire country and offering various varieties annual demand for the product is expected to rise sharply in the times to come. In any marketing situation, the behavioural / environmental variables relating to consumers, competition and environment are constantly influx. The competitors in a given industry may be making many tactical manoeuvres in market all the time. The may introduce or initiate an aggressive promotion campaign or announce a price reduction. The marketing man of the firm has to meet all these manoeuvres and care of competitive position of his firm and his brand in the market. The only route open to him for achieving this is the manipulation of his marketing tactics. In todays highly competitive market place, three players have dominated the industry; The New York based Pepsi Company Inc. The Atlanta based coca- cola and U.K. based Cadbury Schweppes. Through the globe, these major players have been battling it out for a bigger chunk of the ever growing soft drink market. Soft drink industry is on amazing growth; ultimately these are only one p erson who will determine their fortunes. The real War to quench his thirst has just begun. SOFT DRINK INDUSTRY: AN OVERVIEW The success of soft drink industry depends upon 4 major factors viz. Availability

Visibility Cooling Range


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


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


As the soft drinks are consumed chilled so cooling them plays a vital role in boosting up the sales. The brand, which is available chilled, gets more sales then the one which is not, even if it is more preferred one.


This is the last but not the least factor, which affects the sale of the products of a particular company. Range availability means the availability of all flavors in all sizes.


PEPSI, company founded by CALEB D BRADHAM in 1890 at North Carolina in USA. Its CEO is ROGER ENRICO and in Pakistan Pepsi Cola. The head Office of Pepsi Cola is in Lahore. Presently it is operated in 196 countries. Pharmacist CALEB invented it to cure the disease DISPARSIA. It is from this word that was related to Pepsi. Soon it entered market American market as soft drink which at that time was mostly dominated by Coca-Cola, but soon Pepsi was able to dominate the cola market and there after it has been no looking back. Pepsi and Coca-Cola are engaged in ferocious cold war that has taken the whole world by storm.

EMPLOYMENT OPPORTUNITIES: Pepsi provides direct and indirect employment to person in supplying its raw materials, packing materials, distribution vehicles, glass bottles, plastic crates, display racks etc and to small artisans, painting and small traders in market places activities.

All the Pepsi business in Pakistan is either in Industries with backward linkages with farmers or in service industries, being highly distribution oriented.

Pepsi system operates over 100 trucks (direct operation) 8000 three-wheeler (distributors) and at least 1000 push carts, serving over half a million outlets in Pakistan. By the year 2012 the number of outlets to be served is expected to be double.


Pepsi is today one of the main sponsors of sports activities in India. It has continued to promote upcoming new player of Cricket, Hockey and Football.

Pepsi has developed a Pepsi cricket academy, which would develop over 500 young cricket enthusiasts in next five years. Similarly Pepsi cricket coaching camp and clinic are held to coach young boys in north and south.


Most of the bottling plants of Pepsi are located in major cities in India, thereby giving huge employment opportunities in these cities.


It estimated that Pepsi Cola and its franchises generates over Rs.5 Million (in 2012) by collection of excise duty and sales tax.


The Coca-Cola Company is the world's largest beverage company, largest manufacturer, distributor and marketer of non-alcoholic beverage concentrates and syrups in the world, and one of the largest corporations in the United States. The company is best known for its flagship product Coca-Cola, invented by pharmacist John Smith Pemberton in 1886. The Coca-Cola formula and brand was bought in 1889 by As a Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers nearly 400 brands in over 200 countries or territories and serves 1.5 billion servings each day.

The company operates a franchised distribution system dating back to 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory.

The Coca-Cola Company is headquartered in Atlanta, Georgia. The Coca-Cola Company was originally established as the J. S. Pemberton Medicine Company, a co-partnership between Dr. John Smith Pemberton and Ed Holland. The company was formed to sell three main products: Pemberton's French Wine of Cola (later known as Coca-Cola), Pemberton's Indian Queen Hair Dye, and Pemberton's Globe Flower Cough Syrup.

In 1884, 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. Companys 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. Blood worth, and J. C. Mayfield.


The bottling factory is having a manufacturing process comprising of water treatment, plant producing 100% bacterial free soft water as for specification prescribed by COKE & PEPSI. The soda sugar making unit is there to prepare sugar syrup, standard mixed percentage. There is a intermixing unit where through a semi automatic process sugar syrup. The both flavor water and CO2 is punched together resulting into the soft drinks of a particular flavor.

There is a huge bottle washing machine where the market returned bottles are washed continuously in the super heated water, chlorine and then soft chilled water.

Through the exhausted washing system the bottles are carried out of the washer with the help conveyer and automatically hundreds of bottles washed and cleaned. Conveyer leads bottles to the filling machine unit, where the ready soft drink mixture is put in 800 bottled per minute.

Simultaneously through an automatic system all the bottle is crowned with the help of crowning machine. The ready to go the market bottles are then passed through aggressive inspection and collected into carats (1 carats contains 24 bottles) with the help of automatic case packer machine.

After that pet containing soft drinks are sent to the warehouses and immediately the payment of the excise duty to the Govt. For packed bottle kept in the warehouses are insured and, ultimate stage of the production line is to dispatch it. The product reaches into the market through a network of distribution system.

Raw Material Inputs:

A coke & Pepsi bottling plant requires the following raw materials:

Sugar Flavor Water CO2 Crown Core Glass Bottles

Products of Pepsi& Coke The main product of Pepsi Cola Company is Pepsi and its sub brands are

Dew, Mist Mirinda, 7up, Aquafina, Pepsi Max. Pepsi light

It also diversified into Lays. Providing their consumers with easy-to-use, convenient and innovative containers are one of their top priorities. Package introductions they've made over the years include the industry's first 1 liter bottle; Regular, Disposable; Can. Pepsi Co. was the first company to respond to consumer preference with lightweight, recyclable, plastic bottles. These bottles are made of polyethylene terephthalate or "PET plastic," which is a form of polyester used to make strong, lightweight, shatterresistant bottles.

The main product of Coca Cola Company is Coke and its sub brands are Sprite 3g Sprite zero Sprite Fanta Diet Coke

Minute Maid-Pulpy orange Coca cola


Regular bottle = Rs. 15/Non returnable or disposable bottle = Rs. 35 1.5 liter bottle =Rs. 70 2.25 liter bottle = Rs.90 Pepsi can = Rs.40/25 Coke can= Rs.40/25





As there is neck to neck position between PepsiCo and Coca Cola brands the situation demands the market analysis through retailer & consumer which gives an overview of the market in quantitative terms. Statement of the problem is to know the competitive position. The company has to know the

demands of customer & their preferred flavoured brand, it is done through by frequent visiting of retailers & then come to know the needs of customer.

The survey covers all the dimensions that dealers consider while carrying out their business. The aim of survey was to visit the outlets in a particular sub route & get as much information as much possible.


I have done Descriptive research to find out our objectives. In descriptive research we use the primary and secondary data. Research methodology is the way to systematically solve the research problem. The method used for the research is Descriptive Research to find out our objectives. In descriptive research we use the primary and secondary both data, Sample Design for primary data have been collected through probability sampling. In which I have used convenient sampling. Data is collected through Market survey in university retail stores, consumers and other users of both the products in Lahore. Data Collection Instrument: - Well prepared structured questionnaires were used in this study, which includes both closed-ended and few open-ended questions to get information based on the objective of the research process.

The project is a study where focus is on the following points:

RESEARCH DESIGN A research design is defined, as the specification of methods and procedures for acquiring the Information needed. It is a plant or organizing framework for doing the study and collecting the data. Designing a research plan requires decisions all the data sources, research approaches, Research instruments, sampling plan and contact methods. Research design is mainly of following types: 1. Exploratory research. 2. Descriptive studies 3. Casual studies

EXPLORATORY RESEARCH The major purposes of exploratory studies are the identification of problems, the more precise Formulation of problems and the formulations of new alternative courses of action. The design of exploratory studies is characterized by a great amount of flexibility and ad-hoc veracity. DESCRIPTIVE STUDIES

Descriptive research in contrast to exploratory research is marked by the prior formulation of specific research Questions. The investigator already knows a substantial amount about the research problem. Perhaps as a Result of an exploratory study, before the project is initiated. Descriptive research is also characterized by a Pre-planned and structured design. CASUAL OR EXPERIMENTAL DESIGN A casual design investigates the cause and effect relationships between two or more variables. The hypothesis is tested and the experiment is done. There are following types of casual designs: After only design Before after design Before after with control group design Four groups, six studies design After only with control group design. Consumer panel design

PRIMARY DATA These data are collected first time as original data. The data is recorded as observed or encountered. Essentially they are raw materials. They may be combined, total but they have not extensively been statistically processed. For example, data obtained by the peoples.

SECONDARY DATA Sources of Secondary Data

Following are the main sources of secondary data: 1. Official Publications: Publications of the PEPSI & COKE and by the corporate office of PEPSI & COKE. 2. Publications Relating to Trade: Publications of the trade associations, stock exchange, trade union etc. 3. Journal/ Newspapers etc.: Some newspapers/ Journals collect and publish their own data, e.g. Indian Journal of economics, economist, Economic Times. 4. Data Collected by Industry Associations: For example, data available with PEPSI & COKE. 5. Unpublished Data: Data may be obtained from several companies, organizations, working in the same areas. For example, data on PEPSI & COKE magazines. Period of Study: This study has been carried out for a maximum period of 8 weeks. Area of study : The study is exclusively done in the area of marketing. It is a process requiring care, sophistication, experience, business judgment, and imagination for which there can be no mechanical substitutes. Sampling Design : The convenience sampling is done because any probability sampling procedure would require detailed information about the universe, which is not easily available further, it being an exploratory research.

Sample Procedure: In this study judgmental sampling procedure is used. Judgmental sampling is preferred because of some limitation and the complexity of the random sampling. Area sampling is used in combination with convenience sampling so as to collect the data from different regions of the city and to increase reliability. Sampling Size: The sampling size of the study is 100 users.

Methods of the Sampling: Probability Sampling It is also known as random sampling. Here, every item of the universe has an equal chance or probability of being chosen for sample. Probability sampling may be taken inform of: Simple Random Sampling A simple random sample gives each member of the population an equal chance of being chosen. It is not a haphazard sample as some people think! One way of achieving a simple random sample is to number each element in the sampling frame (e.g. give everyone on the Electoral register a number) and then use random numbers to select the required sample. Random numbers can be obtained using your calculator, a spreadsheet, printed tables of random numbers, or by the more traditional methods of drawing slips of paper from a hat, tossing coins or rolling dice.

Systematic Random Sampling This is random sampling with a system! From the sampling frame, a starting point is chosen at random, and thereafter at regular intervals. Stratified Random Sampling With stratified random sampling, the population is first divided into a number of parts or 'strata' according to some characteristic, chosen to be related to the major variables being studied. For this survey, the variable of interest is the citizen's attitude to the redevelopment scheme, and the stratification factor will be the values of the respondents' homes. This factor was chosen because it seems reasonable to suppose that it will be related to people's attitudes Cluster and area Sampling Cluster sampling is a sampling technique used when "natural" groupings are evident in a statistical population. It is often used in marketing research. In this technique, the total population is divided into these groups (or clusters) and a sample of the groups is selected. Then the required information is collected from the elements within each selected group. This may be done for every element in these groups or a subsample of elements may be selected within each of these groups. Non Probability Sampling It is also known as deliberate or purposive or judge mental sampling. In this type of sampling, every item in the universe does not have an equal, chance of being included in a sample

It is of following types: Convenience Sampling A convenience sample chooses the individuals that are easiest to reach or sampling that is done easy. Convenience sampling does not represent the entire population so it is considered bias. Quota Sampling In quota sampling the selection of the sample is made by the interviewer, who has been given quotas to fill from specified sub-groups of the population. Judgment Sampling The sampling technique used here in probability > Random Sampling. The total sample size is 100 profiles.

Data Collection Data is collected from various customers through personal interaction. Specific questionnaire is prepared for collecting data. Data is collected with mere interaction and formal discussion with different respondents and we collect data in PEPSI & COKE and face to face contact with the persons from whom the information is to be obtained (known as informants). The interviewer asks them questions pertaining to the survey and collects the desired information. Thus, we collect data about the working conditions of the workers of COKE; I worked at COKE contact the workers and obtain the information. The information obtained is first hand or original in character.


To find out the market plan of the company over the competitors. To analyze the market share of COKE v/s PEPSI

Analysis & Results For the purpose of the study, questionnaires were prepared for the Consumers. Care was taken to interview all types of consumers, i.e. A) Different Age Groups B) Males and Females C) People from different Localities etc. In all about 60 consumers were interviewed. The conclusions that one can draw from these answers provided by the consumers showed that marketing activities do form major part of the decision. One thing that was common amongst all the consumers who were once a day or once a week. The number one factors the influences a customer while buying a soft-drink wastage. This was true for all the consumers who were interviewed. The rest of the conclusions as deducted from the questionnaires are as follows: PREFERENCE OF SOFT DRINKS IN A DAY Question: How many times do you use your Preference of soft drinks in a day? once a day Twice a day once a week 25% 20% 5%



60% 50% 50% 40% 30% 20% 10% 0% once a day once a day wice a day wice a day once a week once a week other other 5% 25% 20%

Interpretation: The purpose of asking this question was to check the usage of soft drinks used by the people. The survey showed that 25% of the people used soft drinks once a day, 20% people used the soft drinks twice a day while 5% people used the soft drinks once a week. PREFERENCE TO THE BRAND Question: Which brand are you Preference to the brand?

pepsi coke

40% 60%

70% 60% 50% 40% 30% 20% 10% 0% pepsi coke pepsi coke

Interpretation: The purpose of asking this question was to check overall brand preference of the people. About 60% people preferred coke over Pepsi in the soft drinks while 40 % people preferred Pepsi over Coke. TO GIVE THE PREFERENCES Question: Which particular rate to give the preference? Most Popular Packaging Taste Price 10% 10% 70% 10%

80% 70% 60% 50% 40% 30% 20% 10% 0% Most Popular Packaging Packaging 10% 10%



Taste Taste Price


Most Popular

Interpretation: This purpose of this question was to check the field of preference for the people in the soft drinks. Almost 70% people said they preferred taste while 10% said they preferred packaging, price and most popular each. MARKETING STRUGGLES OF COMPANY EFFECTS THE SALES Question: Are the marketing strategies of a company affect its sales?

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

55% 45%

yes yes No


Interpretation: This question is to make an estimate of consumer thinking about the understanding and importance of marketing. 55% consumers are of the opinion that marketing strategies affect the sales.

Form of marketing Strategies Question: Which form of marketing strategies is most effective in the market? television Advertising Newspaper Advertising Outdoor Advertising Sales Promotion 5% 20% 30% 45%

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%


30% 20%


television Advertising

Newspaper Advertising

Outdoor Advertising

Sales Promotion

television Advertising Outdoor Advertising

Newspaper Advertising Sales Promotion

Interpretation: The purpose of this question is to analyse the consumer responsiveness to the form of marketing strategies. 45% consumers think that television advertising is the most efficient strategy while 30 %, 20% and 5% think that sales promotion, outdoor advertising and newspaper advertising are most efficient respectively. Change Brand on the basis of price Reduction Question: Will you change the brand on the basis of Price reduction?

yes no

51% 49%

52% 51% 51% 50% 50% 49% 49% 48%



yes yes no


Interpretation: This question is to test the percentage of brand loyalwho will not be affected by the price variations. 51 % of consumer say that they will respond to the price changes and ma change the brand. More Effective Advertising Question: Which Brand has more effective advertising? Pepsi Co Coke 50% 50%

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



Pepsi Co Pepsi Co Coke


Interpretation: This question is to analyse the consumer thinking about the advertising of coke and Pepsi. Almost 50% consumers regard Coke as the more efficient advertiser while 50% regard Pepsi as more efficient advertiser. Creative and Appealing Advertising of the soft drink company Question: Which Brand has creative and appealing advertising of the soft drink company?

Pepsi Co Coke

50% 50%

60% 50% 40% 30% 20% 10% 0% Pepsi Co Coke Pepsi Co Coke

Interpretation: This question is to analyse the consumer attraction to the advertising of particular brand. Half of the people regard Pepsi as more creative and appealing in advertising while other half regard coke as more creative and appealing. Innovating And Exciting Offers Which Brand is having the innovative ad exciting offers? Pepsi Co Coke 55% 45%

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

55% 45%

Pepsi Co Pepsi Co Coke


Interpretation: This question is to analyse the consumer awareness of exciting and innovative offers of the particular brands. Half of the people regard Pepsi as more innovative and exciting in advertising while other half regard coke as more innovative and exciting. Market Share Percentage Question: Do you think that coca-cola and Pepsi both are lavishly spending on their add campaigns to attract customers? Coke Pepsi Pure Drinks 56% 35% 9%

Chart Title
9% 35% 56% coke pepsi Pure Drinks

Sales Volume

Market Percentage Share Pepsi Coke Others 44% 51% 5%

Chart Title
5% 51%

44% pepsi Coke Others

Assumptions It is assumed that the chosen sample is the representation of whole population. It is assumed that information provided by the samples is accurate and best of their knowledge

Conclusions & Recommendations

Though the coke is enjoying about 63% of the total market share according to our research. While with the 37 % market share Pepsi is on the second step. If we are analysing properly then we find Pepsi is small product portfolio than coke, which is responsible for its second position. 1. Pepsi should focus on the taste of the product because 67% population is influenced by taste only.

2. Young generation is the potential consumer so companies should more focus on them. 3. Marketing team should try to increase the availability of Coke in rural areas. 4. 5. 6. 7. 8. Like Pepsi, Coke should offer more schemes and sponsorships. Coca cola should provide 1liter in plastic bottle. Like Pepsi, Coca Cola should diversify in potato chips. Both brands should prohibit their black marketing. Both brands should compromise to decrease the price so that the people belonging to lower class may also purchase it.


Research methods for business students (Mark Saunders, Thorn hill, Philip Lewis)


Personal Information: Name: Occupation:


Once a day Twice a day Once a week Other


Pepsi Coke



Yes No


Television Advertising Newspaper Advertising Outdoor Advertising Sales Promotion


Yes No


Pepsi Co. Coke Co.


Pepsi Co. Coke Co.


Pepsi Co. Coke Co.



Coke Local Brand

Analysis of the Questionnaire

Total respondent 100 Company Pepsi Coke No of respondent 37 63

a) Children up to 15 years of age liked to have soft drinks up to 2-3 times a day. b) Young adults liked to have soft drinks up to 1-2 times a day. c) Adults liked to have soft drinks about once or twice a week.

Children preferred Coca-Cola Fanta, Mirinda orange. Young adults liked Pepsi. The older generation preferred Coca-Cola, Limca&Mirinda Lemon. The reason given for choice of favorites soft drink was taste and easy availability. Only if the consumer liked the taste of drink, he would have it again.95% of the consumers felt that marketing strategies of the company did affect the sales of their soft-drink.

Marketing strategies made the consumer try a drink for the first time. The second time round it was the consumers choice himself and not strategy cou ld affect that. Youngsters were more acceptable to change. They tried different drinks, Cola and non-Cola. Adults stick to one and they prefer drinks that do not affect their health, like Limca. Major number of people found television advertising to be the most effective. Young and the old liked to watch the advertisements on television. Sponsoring events, outdoor advertising and sales promotion schemes were second choice of the consumers. Under television advertising, Pepsi came in as the number 1 favourite of the people the advertisement of Shah-Rukh Khan and the dog was the favourite of the consumers. Their new advertisement of Mirinda Lemon is also lifted by the people. The advertisement that came in second was the Coca-Cola advertisement of the people Cricket and the song Must-Kalander going on at the back. These, advertisement remained most in the minds of the people. Most of the consumers felt that Pepsi was the market leader in the soft-drink industry, in Delhi well as in India. 99% of the consumers interviewed felt that the marketing strategies of the Coca-Cola and Pepsi have helped them in attaining the huge market share that they possess. Women and

children prefer cans as compared to men. These are the major conclusion that can be drawn about a consumers behavior. Companies must take the initiative of finding out the habits of the consumers and then changing them, in their favour.


1- YOUNGSETRS prefer PEPSI COLA over COKE. 2- Older age group prefer Mirinda lemon and Limca over coke and Pepsi cola 3- ADS play a major role in choosing of brand. 4- Celebrities have a great effect on people consuming cold drinks. 5- People prefer Nimbooz (Pepsi co)over Pepsi cola and coke. 6- In terms of innovative and exciting offers Pepsi co leads coca-cola. 7- When the question of more effective advertisements was asked mixed reactions came with 50-50 response for both Coke and Pepsi. 8- Price plays an effective role for choosing of product among INDIANCONSUMERS. 9- TASTE came out to be most important for the consumers in preferring for a particular brand.1 10- TELEVISION came out to be most effective for ad campaigns as respondents of all age groups watch TV.