Project Newpd

Factors affecting purchase decision in soft drinks industry
Kristu Jayanti College Page 1

INTRODUCTION
Market provides a key to gain actual success only to those brands
which match best to the current environment i.e." imperative" which can be delivered
what are the people needs and they are ready to buy at the right time without any
delay. It is perfectly true but this also depends on availability of good quality
products and excellent taste and services which further attract and add a golden
opportunity for huge sales. This also depends on the good planning approach and
provide ample opportunity plus sufficient amount of products for sales in the coming
years.
Consumer or buyer is central figure of all marketing activities. It is the
consumer who determines the growth, prosperity and even existence of an industry.
Hence the market should always feel the pulses of customers. The mind decides and
the eyes acts. But what goes to the mind of buyers or consumers is difficult to
understand. The marketers need to understand fully the working of buyers mind and
devise suitable strategies to create a favourable orientation in the mind of consumers.
The aim of the marketing is to meet and satisfy consumer needs and
wants better than competitors. Consumer behaviour is the study of how individuals,
groups and organisations select, buy, use and dispose of goods, services, setting prices
devising channels, crafting messages and developing other marketing activities.
Marketers are always looking for emerging trends that suggest new marketing
opportunities. Successful marketing requires that companies fully connect with their
customers. Gaining a thorough in-depth consumer understands helps to ensure that the
right products are marketed to the right consumers in the right way.



The project has been titled Factors Affecting The purchase decision
in soft drinks industry. As the title indicates it is an attempt to study Consumer
buying behaviour and an analysis of market position of some of the leading brands
existing in the market. This study will help to find a solution for some of the
questions like who is the consumer, what induces him to buy? His/her perception
towards some of the leading brands of soft drinks in the industry
This project introduces study of consumers preferences for Soft
Drink Industry. After going through a detail analysis of market behaviour and future
prospect, it may also provide an opportunity to the players those are playing a vital
role in the industry to frame a good future plan to satisfy maximum needs of the
customers and established its guiding role in throughout the country as a whole.
This study report also provides the various factors affecting the services.
Marketing Division of a soft drink company has to keep in mind various factors
specially while preparing a plan for marketing its product or services. Detail
description along with analysis of surveyed data is being presented in this report



2.1 SATEMENT OF THE PROBLEM:
In todays market situation there is a very high growth completion
existing soft drink industries the two companies, which mainly competing each other
are coca cola and Pepsi, as these companies are known worldwide through various
Medias of advertisements.
FACTORS AFFECTING PURCHASE DESECIONS IN SOFT DRINKS
INDUTRY
The project has been titled the study attempts to analysis and determine the various
factors that influence the buying behaviour of consumer towards soft drinks and how
the customers react to various attributes like brand image, price, quality, taste,
availability, packaging advertisements, etc of their favourite soft drinks. That is how
the consumer perceives the various brands in the soft drinks industry.
2.2 OBJECTIVES OF THE STUDY
To find which brand of soft drink is widely using in Bangalore metro
To understand the brand preference of soft drink industry.
To understand the product preference among soft drinks.
To evaluate the impact of advertisement on consumer.
To evaluate the impact of sales promotion on customer purchase
To compare the traditional soft drinks with new soft drink products
To do critical comparison of the leading brands, namely coco cola,
and Pepsi with respect to the following attributes.
-price


-promotion
-quality
-taste
-packing
-advertisement
-availability

2.3 REVEIW OF THE LITERATURE
2.3.1 Consumer Behaviour:
The aim of the marketing is to meet and satisfy consumer needs and
wants better than competitors. Consumer behaviour is the study of how individuals,
groups and organisations select, buy, use and dispose of goods, services, setting prices
devising channels, crafting messages and developing other marketing activities.
Marketers are always looking for emerging trends that suggest new marketing
opportunities. Successful marketing requires that companies fully connect with their
customers. Gaining a thorough in-depth consumer understands helps to ensure that the
right products are marketed to the right consumers in the right way.
In the words of Walters and Paul Consumer behaviour is the process
whereby individuals decide , what, when, where, how and from whom to buy
purchase goods and services of all the different categories if human behaviour, eating,
sleeping, reading, working, playing and so on- buying is one of the most complex and
most important one. This is because involve parting with money, which May be a part


of hand earned wage.VB profit of a restful investment or even the entire savings of
lifetime.
2.3.2 Buying Behaviour:
According to Webster Buying behaviour is all psychological, social and
physic behaviour of potential customers as they become aware of evaluate, purchase,
consume and tell other people about products.
Marketer must understand every fact of consumer behaviour and some of
key consumer questions in term of Who, what, Where, How and why. Smart
companies try to understand the customers and their experiences in learning choosing,
using and even disposing of products. Buying behaviour involves a complicated series
of response reactions to many factors or motives may be expressed or unexpected and
are based up on deep seated needs or more openly felt wants when someone buys
something he/she psychologically satisfies both a need and a want. He/she buys a
specific product of a vast log, because it provides him/her with certain mental or
physical satisfaction.
2.3.3 Characteristics of customer or buyers behaviour:
1. Buyer behaviour comprises mental and physical activities if a buyer
when he wants to buy goods and services to satisfy his wants.
2. It includes both visible (Physical activities like going to market, buying
the product and using it) and invisible activities (mental activities like
thinking about product and deciding to buy or not to buy).
3. It is very complex and dynamic tax.


4. An individual buying behaviour is influenced by internal factors such
as needs, habits, attitudes, motives and also by external or environmental
factors like, social groups, culture status, economic and business conditions.
But human mind is block box. The mind of men is the most abstruse
thing in the world. It is very difficult to see the mind however thanks to the growth of
psychology and behavioural sciences; it has now possible to have some sort of an x-
ray of the human mind. One cannot observe the mind, but one can see and scrutinize
behaviour.
2.3.4 Background of marketing:
Marketing is a social process by which individuals and groups obtain what
they need and want through creating, offering, and freely exchanging product and
services of value with others. The ultimate purpose of production is the satisfaction of
human wants. Production of goods has no meaning unless they are distributed to
consumers. The goods produced should be transferred to consumers at a time when
they need it. Consumers can satisfy their wants only when the goods reach in their
hands. Marketing helps in doing.
Marketing consists of all the activities which create, distributed products,
services in accordance with present and potential customer demand and firms ability
to produce. It involves identifying, anticipating and satisfying customer needs and
desires. In short marketing is process of providing the right product at of the right
quality in the right quantity in the right place the right time.



Marketing Management:
Marketing is everywhere. Formally or informally, people and
organisations engage in vast number of activities that could be called marketing.
Good marketing has become an increasingly vital ingredient for business success. It is
embedded in everything we do from the cloths we and marketing profoundly as
affects our day-to-day lives. wear, to website we click on, to the ads we see:
What is marketing?
Marketing deals with identifying and meeting human and social needs.
One of the shortest definitions of marketing is meeting needs profitably. Good
marketing is not accident, but a result of careful planning and execution; marketing
practices being are continually being refined and reformed in virtually all industries to
increase the chances of success.
The American marketing association offers the following formal definition:
Marketing is an organizational function and a set of process for creating,
communicating and delivering value to customers and for managing customers
relationship in ways that benefit organization and its stake holders.
There will always, one can assume, be need of selling. But the aim of
marketing is to make selling superfluous. Than aim of the marketing is to know and
understand the customer so well that the products are service fits him and sells itself.
Ideally marketing should result in customers who are ready to buy. All that should be
needed than is to make the product or service available.



Market:
The word market is derived from the Latin word mareatus, which means
merchandise, trade or a place where business is conducted. In ordinary language the
term market is a place where goods are bought and sold.
The concept of exchange and relationship lead to the concept of market. A
market is the set of actual and potential buyers of products thus buyers share a
particular need or want that can be satisfied through exchanges and relationship. The
size of the market depends on the numbers of people who exhibit the need, have
resources to engage, to exchange, and willing to offer these resources in exchange of
what they want.
The product concept:
The product concept holds that consumers will favour products that
offer the most quality and innovative features. Thus an organization should devote
energy to making continuous product improvement.
The selling concept:
The ideas that consumers will not buy a product if there is large scale
selling and promotion efforts. the selling concept is optimized in the thinking of
Sergiou zyman, coco colas former vice president of marketing: the purpose of
marketing is to sell more stuff to more people more often for more money in order to
make more profit .



The societal marketing concept:
The societal marketing concept holds that organization should
determine the needs, wants, and interest of target markets. it should than maintains or
improve the consumers and society well being.
2.3.5 Factors affecting consumer behaviour
Cultural factors
Cultural factors exert the broadest and deepest influence on consumers
buying behaviour. The markets need to understand the role played by the culture,
subculture and social class.
Culture
The set of basic values, perceptions, wants and behaviour learned by a
number of societies from family and other important institution.
Subculture
A group of people with shared values system based on common life
experiences and situations.
Social class
A group of people with shared values system based in a society whose
members share similar values, interests and behaviour.
Social Factors
A consumers behaviour also influenced by social factors, such as the consumers
small group, family and social roles and status.


Family
The family is the most important consumer buying organisation in society and it
has been researched extensively where marketers are interested.
Group
Groups which have social, economic, professional or religious relationship.
A group consists of family members, friends, co- workers, classmate, teenagers, and
sports group etc. A consumer buys those goods, which his reference group buys.
Role and status
A role consists of the activities people are expected to perform according to the
persons around them. Each role carries on status reflecting the general esteem given to
it by society.
Personal Factors
Age and life cycle state
People change the goals and services they buy over their lifetimes. Taste in food,
clothes furniture and recreation are often age related.
Occupation
A persons occupation affects the goal and services bought. Blue- collar workers tend
to buy more rugged, white-collar workers buy more business suits.



Economic situation
A persons economic situation will affect product choice. Marketers of
income sensitive goods watch trends in personal income, savings and income rates.
Lifestyle
An individuals pattern of living as expressed in his or her activities, interests and
opinions.
Personality and self concept
A persons distinguishing psychological characteristics that led to relatively
consistent and lasting responses to his or her own environment.
Psychological factor
Motivation
A need that is sufficiently pressing to seek satisfaction or there need.
Perception
The processes, by which people select, organised on and interpret information to form
a meaningful picture of the world.
Learning
The buyer behaviour is strongly influenced by learning simply means
change in behaviour of person arising from experience.



2.3.6 Need and importance of the Study
Modern marketing is consumer oriented. Therefore, the study of consumer
buying behaviour is very important in forming the production policies, price policies
distribution policies and also in designing the sales promotion programme.
1. It is important to understand buyer behaviour due to the following reasons
2. It is helpful in understanding the purchase behaviour and performance of
different customers. This enables the marketer to design appropriate marketing
strategies.
3. It helps to plan and developed product according to taste and preference of
consumers.
4. It is also important in forming suitable pricing policies.
5. It helps to know the buying motives of the consumers.
6. It is useful in understanding marketing potentials are in accessing market
opportunities
7. It helps to understand the needs behaviour and expectation of the consumers.
8. It helps to make necessary changes in marketing mix policies to suit the needs
of the market.
9. It helps to access correctly the strength and weakness of various brands of soft
drinks.
This particular chapter two literature, one is regarding the influence of coke
and Pepsi among the tea drinkers in India and second article is about the price war
between Pepsi and coke.


The purpose of the first literature is it shows the influence of soft drinks on
tea consumptions are by the middle and lower income groups. The second articles
show the level of completion between Pepsi and coke.
The war between the worlds soft drinks leaders in India seems poised to
spill over quitting the sales tea, tea industry official said. Coke returned to India in
1993 under the four year old economic reform after being kicked out by a socialist
government in 1977.
Pepsi, which came in 1990, was waiting there is erosion. It happen
everywhere said said R.K. Krishna Kumara, managing director of the worlds
biggest tea company, Tata tea. He said students and youngsters increasingly favour
soft drinks. With the return of the soft drinks, consumptions of tea could be
affected. the whole soft drinks industry is growing at a rapid rate said Abraham
Nihan. He said the soft drinks industrys output grew from 120 million cases in 1993
to 128 million in1994 - growth of 6.6 % coke and thumps up the Indian brand it
bought out, together grew at a 40% pace during the period, Nina said. domestic
consumption or tea has grown steadily, but a slow rate Indias tea drinkers, despite a
burgeoning middle class, have raised their consumption by just 20 million kg (44
million IBs) a tear since 1991, when they bought 525 million kg (1.33 billion IBs) in
1995. up from 585 in 1994 a 3.4% increase that is just around half of the soft drinks
markets usual growth rate.
Exports have been hit by the financial crises in Iran and Russia, major
buyers. Exports slumped from 180 million kg (396 million IBs) in 1993 to 149
million kg (327 million IBs) in 1994. The industry has forecast stagnant exports in
1995 at 150 million kg (330 million Ibs), the governments ambitious target of 1


billion kg (2.2 billion Ibs) for the year 2000 would be different to achieve. official
say, the Indian tea association which groups tea producers and traders, said the overall
output, which was 744 million kg (1.64 billion Ibs) in 1994, was expected to rise by
just one million kg (2.2 million Ibs) in 1995, with the beverages market being period
open by an aggressive cola and soft drinks industry, much more attention will now
have to be paid to ensure that tea remains relevant and cotemporary visa versa the
needs and preferences of the Indian consumer TTA chairman S.K. Bhasin said at an
annual general meeting.
Tata Tea and other leading companies have recently spawned and promoted
a host of tea brands targeted at different preferences, focusing on packaging and
convenience concepts like tea bags. but the soft drinks which have cut prices and have
a younger image, Are formidable competition, especially helped by big spending on
advertisement. Pepsi has used shah Rukh khan, Ranbir Singh and Deepika Padukone
Bollyhood stars and miss universe Sushmitha Sen and coca cola has Hrithick
Roshan and Ameer Kahan as a brand ambassador.
2.4 SCOPE OF THE STUDY:
This study aims at having a closer look into the minds of the people to
understand their thoughts and feelings towards the various brands of soft drinks
available. Sample size is restricted to 100 respondents, its also provides consumers
perception towards soft drinks. The study conducted at Karnataka in selected areas of
the Bangalore covering colleges.



2.5 RESERACH METHODOLOGY
The study is about the customers buying behaviour towards soft drinks
and a comparison of leading brands, namely coco cola and Pepsi. the main purpose of
this study is to find, what are the factors that led the consumer to buy a particular
brand of soft drinks, and to analysis factors that lead the consumers to buy a
particular brand of soft drinks, and to analysis their reaction to various attributes like
brand image. Price, quality, taste, quantity, advertisement, availability, etc with
respect to their favourite brands. And also analyze consumers perceptions towards
the leading brands coca cola and Pepsi. Area of the study is limited to Bangalore only.
Survey method was adopted this study. Field work was used for the collection of data.
The information thus gathered constituted primary data and secondary data, which
was gathered form books journals, magazines, internet etc.
2.5.1 Sampling techniques:
Sample of 100 respondents were covered. While administering
the questionnaire it was ensured that the questions would meet the objectives and
requirements of the study. And also ensured the samples represent the population.
Multi stages area sampling techniques was adopted, where by the Bangalore city map
was divided into few blocks. Thus blocks were spread all over the city.
2.5.2 Types of research
The type of research adopted for the projects is descriptive
research and the type of sampling plan is that on non random method. The number
of respondents chosen was 100 and the survey was conducted among them with the
help of requirements. The survey was conducted within Bangalore city.


2.5.3 Sample size:
A sample of 100 respondents was divided on the basis of sex, age,
education, occupation and monthly income. So this 100 sample includes
representatives of different categories.
2.5.4 Instrumentation Technique:
The information required for projects was collected both the primary and
secondary sources.
2.5.6 Questionnaire Preparation:
A structure questionnaire was prepared to get primary data.
Questionnaire was designed to suit the objectives of the study. The questionnaire was
verified by project guide.
After preparation of the questionnaire, it was tested on five respondents of
different occupation and income, this facilitated to find out errors and minor mistakes
and find out any unrevealing statements etc.
The main tool that has been used in data collection is questionnaire that
has been constructed for this purpose. Using the above tools the primary data has been
obtained. Primary data was collected by means questionnaires, which was distributed
to respondents of different age, sex, occupations, income group. A respondent was
interviewed and data was collected for them



2.5.7 Tools for the data collection:
Primary data
The main tool that has been used in the data collection is questionnaire that
has been constructed for this purpose. a respondent was interviewed and data is
collected.
Secondary data:
Secondary data is collected from various books, journals, research papers, at
magazines and mainly from internet.
2.6 LIMITATION OF THE STUDY:
1. Time was the greatest constraints as the time allocated for field work was only
one month.
2. This in turn stopped the researcher form having deeper study.
3. Financial constraints also affected the quality of the work as thee expenses
were all borne by the researcher. Since the area is vast, the researcher could
contact only a limited number of respondents.
4. The researcher has collected data using the questionnaire and therefore the
study is limited to the data collected.



THE SOFT DRINKS INDUSTRY

Soft drinks industry have been described as making the most
extensive dietary impact of foreign corporation in the developed world They are
priced just within the reach of the poorest in these countries and may represent, via
glossily images, symbols of an enviable western life style.
Because of the relative poverty of many people in the third world,
staple food may be neglected in preference of soft drinks. In 1969 it was reported that
babies in Zambia had become malnourished because their mothers fed them coke and
Fanta, believing it was the best thing they could give their children. Around the time
54% of the seriously malnourished children admitted the childrens hospital at Ndola
had Fantababy written on their progress charts. The Zambian government
subsequently banned Fanta advertisements because of their influence on the poor



A study at the nutrition institute in Rio de Janeiro found high levels of
consumption of Coke, Fanta and Pepsi in its survey of schools children between 16-
14 year old. All the children showed signs of vitamin deficiency with the poorest of
them also showed protein/ calorie malnutrition.
A Mexican priest wrote, in 1974 that Mexican villagers believed soft drinks
should be consumed every day, leading to lower consumption of natural products
such as fruit . some families were even seen to be selling their natural in order to buy
soft drinks.
3.1.1 GLOBAL SOFT DRINKS INDUSTRY
Soft drinks consumption worldwide is growing by around 5% a year
total volume
North America is the largest soft drinks market with 27% share in
2006.
Carbonates are the biggest soft drinks sector with 45% of global
volume.
Bottled water is the highest growing sector, rising by 12% in 2006 and
accounting for 53% of total soft drinks growth from 2001-2005.
The five fastest growing countries between 2001 and 2005 were from
Asia, East Europe and the Middle East.
It is important to know the advance of Asia, East Europe and other
developing markets, commented Zenith Researcher directory Gary Roethenbaugh
Tanks to highly popular and rapidly emerging markets such as China and India,
Consumption in Asia is projected to overtake that of North America in 2008.


The Five fastest growing countries between 2002 and 2006 are all
expected to come from Asia
Pakistan is predicted to have the highest percentage growth rate of all.
India is expected to make sizeable volume gains, as affluence speaks to
more of its huge population.
Indonesia, China and Vietnam complete the top five future growths.
We can anticipate the overall market should hit 600,000 million litters in
the end of the year 2008. A continuing 5% growth rate compares favourably with at
best 1% for hot drinks, 2 % for milk and 3% for alcohol. Economic obstacles and
climate fluctuations will, of course, present numerous challenges. But the outlook for
global soft drinks is as strong today as it has ever been.
Table 1: Global Soft drinks market segmentation I: %share, by
value 2004
Category

%share

Carbonates 46.80
Bottled Water 18.40
Juices 14.90
Tea and coffee 8.50
Functional Brands 7.60
Concentrates 3.90
Total 100



Table 2: Global Soft drinks market segmentation II: %share, by value 2004

Geography %Share
Europe 37.10
US 30.90
Asia- Pacific 19.80
Rest of the world 12.30
Total 100

The history of America soft drinks go hand in hand
A uniquely American industry, the manufacturing of soft drinks began in
the 1830s however the evolution of soft drinks took place over a much longer time
period. The fore runners of soft drinks began one more than 2000 years ago when
Hippocrates, the father of medicine first suspect that mineral water could be
beneficial to our well being, but Hippocrates did not envision drink the effervescent
mineral water bubbling from the earths crust. Instead that Greek and romance used
them for bathing and relaxation. More than 1000 years passed before mineral water
made the transition from therapeutic bath to refreshing beverage.
In America, the transition result from the discovery of natural springs in New
York may legends and myths developed about the earths mysterious water, believed
to be cures for everything from the arthritis to indigestion the claims attracted
physicians and scientists how began studying the tiny bubbles fizzing from these
water.



Scientists eventually proclaimed the air begin realised has gas chromium
simple carbon dioxide. Soon after wards they perfect a way of producing artificially
carbonated water in the laboratory. With the development it was only a matter of time
before soft drinks made it in to the hands of the American public.
By the 1830s, both artificial and natural mineral water were considered
healthy and refreshing products in American but pharmacists believing they could
improve upon their curative properties, experimented with a multitude of ingredients
form birch bark to dandelions while no miracle cures developed. Some very
interesting flavorous and tastes were discovered. Ginger ale, root beer, sarsaparilla,
lemon and strawberry were among the most popular of the early flavours.
The soft drinks were a seasonal business in the early days operating
primarily during the summer months. Sales were limited by few outlets for the new
carbonated beverages and by the consumers restricted mobility.
For many years, Americas pharmacists were the driving force behind the
refinement of soft drinks and many of the flavours and combination. Their association
with chemistry and medicine made them ideally suited for the business, still part
pharmacology and part refreshment.
The local pharmacy was the centre attraction in many American towns in mid
1800s. It was customary to gather around the new soda foundations and enjoys
favourite refreshment mixed in the spot. However, has the corner drug store grew in
popularity, thus the soft drink bottling industry was taking shape.



Gradually, demand grew for soft drinks to be consumed in the home.
Bottling the product provide difficult at first since pressure from the carbon dioxide
forced corks right out the bottles. Clearly, if soft drinks were ever to be sold for
consumption beyond the corner pharmacy, there would have to be a way to keep them
coked. Inventors worked for years to develop the solutions. Patenting some 1,500
different corks, cap and lids for soft drinks bottles.
Then in 1982, the crown cap was invented. Tiny in design, the crown
completely revolutionised the soft drink industry by preventing the escape of the
carbon dioxide form bottle beverages. Infract it was the dominant soft drinks closers
for more than 70 years.
Soon the crown caps success was being felted the corner pharmacy. As
home consumption of soft drinks grew, demand at the corner drug store began to
winder. Many pharmacists, realising the promising feature of soft drinks, abandoned
their trade to become full- time bottlers.
Others began stocking soft drinks in their stores. Horse drawn wagons
travelled Americas streets. Loaded with brand-name soft drinks are headed for
growing retail outlets. While the crown caps helped lid the way to soft drinks in the
home it was not until the 1920s that the trend took hold. The invention of hom-
paks, the first six pack cartons, made more convenient to carry products back to the
house. Their use resulted in the increased availability the growing popularity of soft
drinks across the America.



The appearance of the automobile heralded a new era for drink industry .roads side
stands appeared across the country. Service stations became major out lets
for bottled refreshment and large motorised delivery trucks were better able to satisfy
the countries growing taste for the liquid refreshment.
Automatic vending machines began appear in 1920s once again changing
the business of the soft drinks. Vending machine and fountain dispenser lead the way
to the expansion of soft drinks to the industrial outlet. Americans could now consume
the popular beverage at home or at work.
New technology helped soft drink bottlers meet growing consumer
demand by significantly increasing the products availability. Traditional 6-ounce
split bottles grew to 8-ounce and then larger containers. Today, with more than two
million soft drinks vending machines in the U.S., refreshment is literally right around
the corner.
The mushrooming demand for product resulted in the growth of soft drink
industry, from the pharmacies into a national industry. Investors of soft drinks spread
their products across America by opening strategically placed bottling facilities.
America by opening strategically placed bottling facilities through franchise
agreements. Eventually it became clear that supplying a growing nations thirst for
soft drinks would require more than a few additional bottling plants. But until the
1980s, the industry was primarily one of the manual operations. Glass bottles were
blown individually, while filling and packaging were almost totally manual
operations. Expansion could not occur without a more mechanized process.


The changes between 1980-1910: new automated machinery was developed,
making the soft drink industry more efficient and productive. The number of plants
bottling soft drinks increased from 1377 4916 as sales soared.
The industrial age was in full swing, Americas population was exploding
and soft drink demand was booming. Together, the soft drink industry and the nation
entered the era of mass production and national marketing.
New modern machinery turned out uniform products and significantly
increased the production of soft drinks. By the time the great depression hit.
Carbonated beverages already were established as part of the American way of life.
Consumers were unwilling to give up soft drinks.
The depprellion lead the way to the creation of innovative new soft drink
brands and containers which continued during the 1940s and 50s. Responding to
consumer demand, the industry rolled out soft drinks in cans and introduced diet
beverages to the market. Careers were developed for convenience and case in taking
soft drinks from the store to the home.
Together, America and its soft drink industry suffered hardships caused by
world war 2
nd
. Shortage of cork, sugar and steel significantly impact the
manufacturing process, but soft drinks continued to be available to the public the soft
drink industry participated in scrap metal collection drives and made significant
efforts to converse natural resources in order to support the war efforts. Soft drinks
were classified as essential to solider morale by the U.S. war department and both
the soft drink industry and the federal government made every effort to provide troops
with products. When unable to ship soft drinks directly to the soldiers, the
government sent machinery and materials so they could be made on the spot.


Since that time, the country as experienced significant progress a man on the
moon, colour TV, computers and compact disk players. For the soft drinks industry, it
has meant the development of new flavours. The sake of canned products in vending
machines, and the invention of polyethylene terephthalate (PET) bottles.
Soft drinks companies have kept place with the nations endless thirst for
refreshment. While many things have changed throughout the years soft drinks
continue to be Americas beverage of choice. Soft drinks are good part of America.
IMPORTANT EVENTS IN THE DEVELOPMENT OF SOFT DRINKS:
1874 The first ice-cream soda sold.
1876 Root beer mass produced for public sale.
1881 The first cola-flavoured beverage introduced.
1892 William Painter invented the crown bottle cap.
1899 The first patent issued for a glass blowing machine, used to
produce glass bottles.
1913 Gas motored trucks replaced horse drawn carriages as delivery
vehicles.
1919 The American Bottlers of Carbonated Beverages formed.
1920 The U.S. Census reported that more than 5,000 bottlers now
exist.
Early 1920's the first automatic vending machines dispensed sodas into
cups.
1923 Six-pack soft drink cartons called "Hom-Paks" created.
1934 Applied colour labels first used on soft drink bottles, the
colouring was baked on the face of the bottle.


1952 The first diet soft drink sold called the "No-Cal Beverage" a
gingerly sold by Kirsch.
1959 The first diet cola sold.
1962 The pull-ring tab first marketed by the Pittsburgh Brewing
Company of Pittsburgh, PA. The pull-ring tab was invented by Alcoa.
1965 The resalable top invented.
1966 The American Bottlers of Carbonated Beverages renamed The
National Soft Drink Association.
1970 Plastic bottles are used for soft drinks.
1973 The PET (Polyethylene Terephthalate) bottle created.
1974 The stay-on tab invented. Introduced by the Falls City Brewing
Company of Louisville, KY.
1981 The "talking" vending machine invented.
Mid 80s- caffeine-free and low- sodium soft drinks fain popularity.
Early 1990s- clear colas manufactured.
1991 Soft drinks company begin using PET bottle.
1992 Number of soft drinks containers recycled since the first earth
day in
INDUSTRY ANALYSIS:
Dominant Economic Factors:

Market size, growth rate and overall profitability are three economic
indicators that can be used to evaluate the soft drink industry. The market size of this
industry has been changing. Soft drink consumption has a market share of 46.8%
within the non-alcoholic drink industry. Data monitor (2005) also found that the total


market value of soft drinks Reached $307.2 billion in 2004 with a market value
forecast of $367.1 billion in 2009. Further, the 2004 soft drink volume was 325,367.2
million litters (see Table 2). Clearly, the soft drink industry is lucrative with a
potential for high profits, but there are several obstacles to overcome in order to
capture the market share.

The growth rate has been recently criticized due to the U.S. market saturation
of soft Drinks. Data monitor (2005) stated, Looking ahead, despite solid growth in
consumption, the global soft drinks market is expected to slightly decelerate,
reflecting stagnation of market Prices. The change is attributed to the other growing
sectors of the non-alcoholic industry Including tea and coffee (11.8%) and bottled
water (9.3%). Sports drinks and energy drinks are also expected to increase in growth
as competitors start adopting new product lines.
Profitability in the soft drink industry will remain rather solid, but market
saturation especially in the U.S. has caused analysts to suspect a slight deceleration of
growth in the Industry (2005). Because of this, soft drink leaders are establishing
themselves in alternative.
Markets such as the snack, confections, bottled water, and sports drinks
industries (Barbara Murray, 2006c). In order for soft drink companies to continue to
grow and increase
profits they will need to diversify their product offerings.
The geographic scope of the competitive rivalry explains some of the
economic features Found in the soft drink industry. According to Barbara Murray
(2006c), The sector is Dominated by three major playersCoca-Cola is king of the
soft drink-empire and boasts a Global market share of around 50%, followed by


PepsiCo at about 21%, and Cadbury Schweppes at 7%. Aside from these major
players, smaller companies such as Cott Corporation and National Beverage
Company make up the remaining market share. All five of these companies make a
portion of their profits outside of the United States. The US does not hold the highest
percentage of the global market share; therefore companies need to be able to
compete globally in order to be successful. Coca-Cola has a similar distribution of
sales in Europe, North America, and Asia. On the other hand, the majority of
PepsiCos profits come from the United States. Compared to PepsiCo, Cadbury
Schweppes has a stronger global presence with their global mix. Smaller companies
are also trying to establish a global presence. The saturation of the US markets has
increased the global expansion by soft drink leaders to increase their profits.
The ease of entry and exit does not because competitive pressure on the
major soft drinks Companies. It would be very difficult for a new company to enter
this industry because they would not be able to compete with the established brand
names, distribution channels, and high capital investment. Likewise, leaving this
industry would be difficult with the significant loss of money from the fixed costs,
binding contracts with distribution channels, and advertisements used to create the
strong brand images. This industry is well established already, and it would be
difficult for any company to enter or exit successfully.

Three leading companies have prominent presence in the soft drink
industry. The leaders include the Coca-Cola Company, PepsiCo, and Cadbury
Schweppes. According to the Coca-Cola annual report (2004), it has the most soft
drink sales with $22 billion. The Coca-Cola Product line has several popular soft
drinks including Coca-Cola, Diet Coke, Fanta, Barqs, and Sprite, selling over 400


drink brands in about 200 nations (Murray 2006a). PepsiCo is the next top competitor
with soft drink sales grossing $18 billion for the two beverage subsidiaries, PepsiCo
Beverages North America and PepsiCo International (PepsiCo Inc., 2004). PepsiCos
soft drink product line includes Pepsi, Mountain Dew, and Slice which make up more
than one quarter of its sales. Cadbury Schweppes had soft drink sales of $6 billion
with a product line consisting of soft drinks such as A&W Root Beer, Canada Dry,
and Dr. Pepper (Cadbury Schweppes, 2004).
Financial Analysis:
The carbonated beverage industry is a highly competitive global industry
as illustrated in the financial statements. According to John Sicher of Beverage Digest
(2005), Coca-Cola was the number one brand with around 4.5 billion cases sold in
2004. Pepsi followed with 3.2 billion cases, and Cadbury had 1.5 billion cases sold.
However, the market share shows a different picture. Coca-Cola and PepsiCo control
the market share with Coca-Cola holding 43.1% and Pepsi with 31.7% however these
market shares for both Coca-Cola and PepsiCo have slightly decreased from 2003 to
2004. Coca-Colas volume has also decreased 1.0% since 2003, whereas PepsiCos
volume has increased 0.4% Diet Coke posted a 5% growth, but Coca-Colas other top
10 brands declined (Sicher, 2005). Overall, Coca-Colas market position has declined
in 2004. The strategic group map also shows the growth of Cott Corp. of 18% which
is significantly higher than that of Coca-Cola and PepsiCo.

The American Beverage Association (2006) states that in 2004, the retail
sales for the entire soft-drink industry were $65.9 billion. Barbara Murray (2006e)
analyzed the industry averages for 2004 and average net profit margin was 11.29%.


The current ratio average was 1.11 and the quick ratio average was 0.8. These figures
help analyze the financial statements of the major corporations in the industry.
Coca-Cola has seen their net profit margin increase from 20.7% to
22.1% from 2003 to 2004. According to Coca-Colas annual report (2004), 80% of
their sales are from soft drinks; therefore the total sales amount was used for their
financial analysis. These figures show that their profits are increasing, but at a slow
rate. This is in line with what is happening in the soft drink industry. The market
highly competitive and growth has remained at a stable level. The slight increase in
Coca-Colas profit margin is most likely from their new energy drink product line.
This industry is currently expanding rapidly, and is allowing the major
beverage companies to increase their profits. Coca-Colas working capital was around
$1.1 billion in 2004. This is a large increase from 2003 at only $500 million. This
shows that they have sufficient funds to pursue new opportunities. However, their
current ratio and quick ratio are a cause for concern.
A current ratio of 2 or better is considered good and Coca-Colas was 1.102.
This number shows that they may not have enough funds to cover short term claims.
The quick ratio for 2004 was at 0.906 and is considered good when it is greater than
1. This illustrates that Coca-Cola may not have the ability to pay short term debt
without selling inventory. These two numbers are a concern because they are not able
to satisfy their short term obligations. The current and quick ratios are in line with the
industry averages, however (Murray, 2006e), Coca-Cola needs to improve these ratios
in order focus on long-term plans (Coca-Cola Company, 2004).
PepsiCos financial statements cannot be analyzed for only the soft drinks
industry because they do not distinguish between businesses. Over half their profits
are from snacks or other beverage items; however there are sales and profit figures for


their two beverage subsidiaries. These sales figures grew from almost $16.5 billion in
2003 to $18 billion in 2004 (Pepsi Co. Inc., 2004). Their operating profit margin also
increased 1% from 2003 to 2004 as illustrated in Table 13. This shows that beverage
profits are increasing for them, but also at a slow rate. The increase could be due to
the increase in market share that the Pepsi products gained in 2004 (Sicher 2004). The
PepsiCo. Annual Report (2004) stated that beverage volume increased 3% in 2004,
but was driven by the high growth of the non-carbonated beverage industry.
Cadburys current and quick ratios are very similar to those of Coca-
Cola. The current Ratio and quick ratio for Cadbury Schweppes for 2004 were both
0.917 Again, The current ratio should be 2 or more, and the quick ratio should be over
1. This illustrates that Cadbury also has difficulty paying short term debt and claims.
Cadburys net profit margin has increased by 0.7% from 2003 to 2004. This can be
attributed to their market share growth in 2004 of 0.2% (Sicher, 2005). One ratio that
is concerning is their debt to equity ratio for 2004. They have almost two times as
much debt as they do to equity, which means that their funds are mainly provided by
creditors as opposed to owners. This is concerning because they owe a lot of money,
and must make a decent profit to be able to pay it off. The industry average for debt to
equity is 81%, and Cadbury is far from that number (2006e). Also, Cadbury has a
negative working capital for both 2003 and 2004, meaning they have more liabilities
than assets.

This shows that they do not have any funds to pursue new opportunities, as
their current assets are being used to pay off liabilities (Cadbury, 2004). Overall, the
financial statements of the three top competitors in the soft drink industry show that
the industry is highly competitive and has little growth.


Net profit margins increased for all three corporations, however only at a
small rate. It also seems that all three companies lack sufficient current and quick
ratios, but are all within a reasonable range of the industry average (2006e). This may
be due to expanding their product lines to include energy drinks and non-carbonated
beverages in order to increase profits and diversify their business. The soft drinks
market is now in the matured stage of the life cycle. Growth in the industry has
remained stagnant, and the financial statements of the major corporations in the
industry illustrate that their sales and income are following this trend.
The companies are in good financial positions; gross profits and net
profit margins are continuing to increase each year. The leverage and activity ratios
are all within reasonable Range. However, one area all three corporations need to
improve on is the liquidity ratios. Their quick and current ratios are low and need to
be increased so they are able to meet short-term Obligations.
Industry Changes:

The soft drink industry is affected by macro environmental factors of
the industry that will lead to change. First, the entry/exit of major firms is a trend in
the industry that will likely lead to change. More specifically, merger and
consolidation has been prevalent in the soft drinks market, causing some firms to exit
the industry and then re-enter themselves. Several leading companies have been
looking to drive revenue growth and improve market share through the increased
economies of scale found through mergers and acquisitions. One specific example is
how Pepsi Co acquired Quaker Oats, who bought Gatorade which will help expand
PepsiCos energy drink sector (Data monitor, 2005). This trend has increased
competition as firms Diversification of products is increasing.



A second trend in the macro environment is globalization. With the growing
use of the Internet and other electronic technologies, global communication is rapidly
increasing. This is allowing firms to collaborate within the country market and expand
into world markets. It has driven competition greatly as companies strive to be first-
movers.
Specifically, the global soft drink markets compound annual growth rate
(CAGR) is expected to expand to 3.6% from 2004 to 2009 (Data monitor, 2005).
Third, changing societal concerns, attitudes, and lifestyles are important trends. In the
United States and Europe, people are becoming more concerned with a healthy
lifestyle. Consumer awareness of health problems arising from obesity and inactive
lifestyles represent a serious risk to the carbonated drinks sector (Data monitor,
2005, p. 15). The trend is causing the industrys business environment to change, as
firms are differentiating their products in order to increase sales in a stagnant market.
Thus, the long-term industry growth rate, the fourth trend, shows low growth in recent
years. Since 2000, the CAGR is 1.5 per cent (Data monitor, 2005).
The low growth rates are of concern for soft drink companies, and several
are creating new Strategies to combat the low rates. This leads to the fifth trend of
growing buyer preferences for differentiated products. Because soft drinks have been
around since as early as 1798 (American Beverage Association, 2006), buyers want
innovation with the products they buy. In todays globalizing society, being plain is
not good enough. According to Barbara Murray (2006c), The key for all of these
beverage companies is differentiation. The giants have new formulations and
appearances.
Whatever the strategy, be it a new colour, flavour, or formula,
companies will strive to create the greatest brand awareness in the minds of the


consumer in the hopes of crowding out its competitors. Thus, the last trend, product
innovation, is necessary to combat buyers need for a variety of tastes. Firms are
already differentiating by taste, with the Coca-Cola Company as an example. The
firms product line includes regular Coca-Cola, Diet Coke, Diet cherry Coke, cherry
Coke, Vanilla Coke, Coca-Cola with Lime, and Coca-Cola with lemon and many
more (Murray, 2006a).
3.1.2 SOFT DRINK INDUSTRIES IN INDIA
A soft drink is a non-alcoholic beverage. It is artificially flavoured
and contains no fruit or pulp. India with population of more than 100 crores is
potentially one of the largest consumer markets in the world after China. The
consumer market can be defined as the market for products and services that are
purchased by individuals as households goods for their personal consumption. Soft
drink is a typical consumer product purchased by individuals to quench thirst and
secondly for refreshment. Searching for the point of Indian soft drinks we first
document on Gold Spot, this was the first brand soft drink in India. It was introduced
by PARLE during later part of 40s.
Cola giant, Coca-Cola was the first foreign soft drink to be introduced in
India in 1965, Coca-Cola make a very good beginning and dominated the whole
scheme right from the word go. It (Coca-Cola) faced no competition at that time.
COCA COLA entered India in the year 1993 in collaboration with PARLE INDIA
LTD.


The marketing people did not even receive to publicize Coca-Cola for
it sold first like probability not-cakes. This extraordinary success of soft drinks
can be attributed to the following factors:-
Absence of contemporary competitive brand.
Euphoric image built up in the Western countries proceeded the entry
into Indian Market; and
Indians are very found by nature of foreign goods, services etc. due to
prolonged foreign rules.
Parley Exports (P) Ltd, later in 1970 introduced Limca, Lemony Soft drinks.
Before Limca introduce, they had tentatively introduced Cola, Pepsi, which they had
to soon withdraw in the face of battering confrontation with Coca-Cola.
Three of four groups of Indians companies who had the required production
capacity started their own brands of Cola, Lemon, Orange, but failed to achieve their
goal on a national basis. India always has love and hate relationship with MNCs
which gave a significant opportunities to soft drink industries in India when Coca-
Cola decided to windup its operation in 1977 rather than bowing to the Indian
government insisting on:-
Dilution of equity, as the government felt that lots of foreign currency
was
being wasted.
Manufacturing of the top-secret concentration in India.
Disclose of the chemical composition of the essence.


This left a large vacuum in the popular soft drink market, and a vista
was opened to any company with the requisite, technical, marketing and
organizational skills.
The exit of Coca-Cola from India in 1977 accelerated the growth of
several Indian Soft Drink. New soft drink in the form of Tetra pack entered the
market among Frooti, Jump-In and Treetop were the prominent once. Till 1977
their equipped bottling plants and the distribution network a longing to be of no
use. It took them one year to develop new formula to survive and gradually came
up with Campa, Lemon, Orange and Cola that order.
However Parley, the pioneer in the soft drinks, blazed its way to national
prominence with their product Thumps Up bearing the slogan Happy Days Are
Here Again. This particular slogan helped to win over the loyalists or addicts to
Coca-Cola, who was in the state of Cola Shock or Cola Depression. Soon the Indian
Soft drink industry started at a phenomenal rate, and all Parley Products Gold Spot,
Limca and Thumps Up became the brand leader in their own segment. In spite of all
these, the drink market still has large gap, as claim by soft drink manufacturers. To fill
these gaps there are many soft drinks concentrate and squashes flooded the market.
The Indian soft markets basically offered three flavours i.e. Orange, Lemon and Cola.
Words of Ministry of Food Processing Industry for Soft Drink Industry
The 50-bn-rupee soft drink industry is growing now at 6 to
7% annually. In India, Coke and Pepsi have a combined market share of around 95%
directly or through franchisees. Campa Cola has a 1% share, and the rest is divided
among local players. Industry watchers say, fake products also account for a good
share of the balance. There are about 110 soft drink producing units (60% being


owned by Indian bottlers) in the country, employing about 125,000 people. There are
two distinct segments of the market, cola and non-cola drinks. The cola segment
claims a share of 62%, while the non-cola segment includes soda, clear lime, cloudy
lime and drinks with orange and mango flavours.
The per capita consumption of soft drinks in India is around 5 to 6 bottles
(same as Nepal's) compared to Pakistan's 17 bottles, Sri Lanka's 21, Thailand's 73, the
Philippines 173 and Mexico 605. The industry contributes over Rs 12 bn to the
exchequer and exports goods worth Rs 2 bn. It also supports growth of industries like
glass, refrigeration, transportation, paper and sugar. The Department of Food
Processing Industries had stipulated that 'contains-no-fruit-juice' labels be pasted on
returnable glass bottles. About 85% of the soft drinks are currently sold in returnable
bottles. There was a floating stock of about 1000 mn bottles valued at Rs 6 bn. If the
industry were to abide by the new guidelines, it would have to invest in new bottles,
resulting in a cost outgo of Rs 5 bn. Neither Coke nor Pepsi is in a position to invest
such a large amount.
Around 400,000 tonnes of raw material would be required to replace the
existing stock of bottles. Instead, the soft drink industry suggested that a seven-year
moratorium be extended to the industry so that it can incorporate the change in a
phased manner. There is no such mandatory requirement anywhere in the world to
specifically label the glass surface of returnable bottles. The government has decided
to extend the date for replacing the bottles to end-march 2006. In the meantime, the
producers have shifted substantially to the use of PET bottles.
Soft and aerated drinks were considered products for the middle class and the
affluent. That segregation is no more valid. Soft and aerated drinks are consumed by


all except those who cannot afford to buy any drink. An NCAER study says that 91%
soft drink sales are made to the lower, middle and upper middle classes. The soft
drink industry has been urging the government to categorize aerated waters (soft
drinks) equitably with other consumer products of mass consumption and remove
special excise duty.
The industry estimates that the beverage market should grow at twice
the rate of GDP growth. The Indian market should have, therefore, grown by at least
12%. However, it has been growing at a rate of about 6%. In contrast, the Chinese
market grew by 16% a year, while the Russian market expanded at almost four times
the rate of growth of the Indian market.
It may be recalled that Coca-Cola, the world's number one player,
was present in India for a long time in collaboration with an Indian producer but was
thrown out in the late 1970s. It reappeared in India following the economic
liberalization era - but after its rival, world's number two, had already entered in a big
way following a long and tough fight against the opposition from the domestic
producers. When Coca-Cola re-entered, it installed a new milestone. It acquired the
well flourishing India's top player, Parley. Since then it is basically a fight between
the two American giants. Others are playing a peripheral role, as adjuncts to the two
MNCs. World's third biggest player, Cadbury Schweppes, had also made an entry but
was gobbled up by Coca-Cola. When Coca-Cola acquired Parley brands, it was, in
fact, buying the bottling facilities, the marketing network, and the established
consumer preference during the market build-up.
The brands were a drag on the global brand. Since Coca-Cola was
not interested in brands (like Thumps Up), it did not promote them. The result, at


least, in the short run was a loss of the market to the competitor. Coca-Cola decided to
market more effectively the Parley brands. It had in its armoury Coke, Thumps Up,
Limca and Fanta. The latest to enter market was Parleys erstwhile Rimzim, alongside
Portello, a black currant flavoured drink, very popular in Sri Lanka.
Coca-Cola operates through 35 plants and 16 franchisees throughout the
country, while PepsiCo has 20 plants, but it has 7 more franchisees at 23 to 16 of its
rival. Coca-Cola claims a market share of 51%, while Pepsi has a share of 46%. The
claims, however, remain disputed. The other smaller players like Pure Drinks Ltd
claim the rest of the market. The shares of the two lead players are consolidated
figures, which include the respective bottlers. Coca-Cola had approached the
government for a five year extension for divesting 49% equity in its bottling
subsidiary, Hindustan Coca-Cola Holdings. It had set up the marketing subsidiary as
part of its strategy to integrate all its bottling operations, both company-owned and
franchisee bottlers, apparently keeping in line with its global policy. All together,
it had bought initially over 38 franchisee bottlers.
Kandhari Beverages, coke bottlers for north have been eyeing to lift a
stake in Coca-Cola India. Coca-Cola had filed an application to offload 49% stake of
its bottling operations in favour of their Indian operators. Besides Kandahar, three
other bottlers, one each from Uttar Pradesh, Gujarat and Jammu, were lined up to
invest in Hindustan Coca-Cola Holding. Kandahar has already invested Rs 300 mn in
1999 and 2000 to upgrade its capacity. The total investment by all
the four was expected to be Rs 1000 mn. Both Coca-Cola and PepsiCo planned for the
launch of lemon-flavoured versions of their products. Both have been expanding their
non-carbonated drink line-ups, as consumers seem to be shifting away from
carbonated soft drinks. PepsiCo is deliberating whether to come out with Pepsi Twist,


a cola mixed with lemon. But while both companies have juice does not sport drinks,
bottled water and other such drinks in their line-ups, coke nor Pepsi has launched a
new national variety of a cola-flavoured carbonated soft drink in years.
PepsiCo had achieved Rs 3 bn worth of exports, which include processed
foods, basmati rice, guar gum and soft drinks concentrate. PepsiCo completed the
second phase of its expansion and with this expansion; PepsiCo was to explore the
possibility of expanding the export of concentrates to more countries in addition to the
exports to Russia and other South Asian countries.
Pepsi India has entered into a marketing tie up with Hindustan Lever to
promote sales of soft drinks through Pepsi-HLL network of vending machines and
fountains. The major soft drink brands in the Pepsi stable are Pepsi, 7UP, Miranda,
Tropicana and Aquafina.
As a major strategic departure, both MNCs were expanding their brand
range. Consequent to some diversifying moves, at present, the sales ratio of Coca-
Cola between soft drinks and other beverages is 95.5. The company intended to
change this to 80:20 in the next three years. Its juice brand, Maaza - acquired from
Parley a few years ago - is being given a major thrust. It has plans to go in for canned
coffee, iced tea and purified categories under expansion schemes. It has already
launched its bottled water brand, Kinley, in the Indian market. Besides, it is intending
to acquire domestic brands in the non-carbonated beverages segment.
The global deal between Coca-Cola and P&G to form a snacks and
beverages joint venture company was reported to have slipped into rough weather.
The P&G brand of potato wafer, Pringles, seemed to be faced with distribution


problems in India. P&G had globally tied up with Coca-Cola to form a stand-alone
juice and snacks company.
The new firm is focused on developing and marketing new juices,
juice based beverages and snacks on a global basis. The Sharjah-based Allied
Beverages was pushing its Ahlan brand in India, having entered the market in mid-
2000. Its target was carbonated drinks market in PET bottles. Its plans were to
launch a PET bottle in the popular 300 ml category. Ahlan expected to gain a 12%
share of the total PET bottle market in northern India. Of the total market, PET bottle
segment is approximately 12%. Presently, Allied Beverages has a manufacturing unit
at Dharuhera in Haryana. The product range includes carbonated drinks - cola,
orange, lemon and soda in three pack sizes - 500 ml, 1500 ml and 2000 ml. Allied
Beverages sells non-carbonated drinks in 200 ml food grade cups priced at Rs 7 in its
portfolio, available in four different flavours. The company's future plans include
pulp-based fruit drinks in flavours, which will be available in 200 ml non-returnable
glass bottles.
IFB Agro Industries has handed over the distribution rights of Cadbury
Schweppes in favour of Coco-Cola India, following the global takeover of Schweppes
beverages by Coke. The company still retains the bottling rights for the beverages.
It was noticed for the first time during the summer of 2004 that soft drink
companies were registering a slower growth in the sale of bottled water at 20%
compared to 35% in case of drinks.



Leading Brands
Coca Cola, Thums Up, Limca, Fanta, Gold Spot, Rim Zim, Maaza, Pepsi,
Miranda, 7'UP, Mangola, Slice, Duke's, Lemonada, Crush, Canada Dry, Campa.
Table 3: Market Growth Rates
1990-91 - 1996-97 9.4%
1996-97 - 2001-02 7.8%
2001-02 - 2006-07 6.5%
2004-05 - 2009-10 5.4%
2009-10 - 2014-15 3.5%
Sensitivity Coefficient 5.2%

Table 4: Market Segmentation
Segment Share (%)
North 24
East 18
West 32
South 26
Rural 30
Urban 70



Market Structure

Table 5: Product Variation
Company Share (%)
Cola Drinks:
Thums Up 29
Coca Cola 25
Pepsi 18
Non Cola Drinks:
Gold Spot 2
Fanta 9
Mirinda 8
Limca 9
Overall Colas 62
Lemon:
Cloudy 7
Clear 3
Orange 17
Mango 3
Soda 8



Robust growth continues
The soft drinks industry continued on its path to recovery from the low
growth seen between 2005 and 2006, with higher volume growth in 2008 than that
seen in 2007. The mature sectors of bottled water, fruit/vegetable juice and carbonates
saw a dynamic year, with companies refreshing their products brand image and
packaging to attract new consumers. Emerging product categories, such as energy
drinks and reconstituted 100% juice, saw high double-digit growth rates, as
companies increased their products penetration in India. Off-trade volume growth
was slightly higher than on-trade volume growth, as convenient on-the-go packaging,
company sponsored chillers in kiranas and attractive supermarket displays fuelled off-
trade sales across the market.
Companies reposition their brands and update product portfolios
With the industry back on the upward growth curve, companies
refreshed their brands by introducing new and more premium packaging designs, pack
sizes and communication campaigns. In 2008, bottled water was especially dynamic,
with all the major national brands following the cue of Bisleris rebranding in late
2007. Carbonates and juice drinks were also reinvigorated with new pack sizes that
targeted on-the-go consumption by young adults. With naturally healthy becoming
a key focus for consumers and manufacturers, fruit/vegetable drinks companies
focused their efforts on highlighting their products fresh fruit content and health
attributes. Companies put in motion plans to extend their product portfolios to
emerging categories such as 100% juice, energy drinks and flavored water.



Table 6: Indian Product Range
Flavour Ingredients Pack Product Company
Cola Cola
Flavour
carbonated
water sugar
200Ml.
300Ml.
500Ml.
1 Litre
1.5
Litre
2 Litre
Coke,
Thums up
RC

Pepsi
Coca-
Coal

RC cola

Pepsi
Orange Orange
Flavour +
Carbonated
Water+
Sugar
200Ml.
300Ml.
500Ml.
1 Litre
1.5
Litre
2 Litre
Fanta

Mirinda
Coca-
Cola

Pepsi

Fruit
Juice
Mango
Pulp+
Treated
water+
sugar
250 ML Maaza
Minute
Maid

Pulpy
Orange
Slice
Tropicana
Appy Fizz
Real
Coca-
Cola

Pepsi

Appy
Fizz
Cloudy
Lemon
Lemon
Flavour +
Carbonated
Water+
Sugar
200Ml.
300Ml.
500Ml.
1 Litre
1.5
Litre
2 Litre
Limca
LMN

Mirinda
Lemon
Nimbooz
Coca-
Cola
Parley
agro

Pepsi
Clear
Lemon
Lemon
Flavour+
Carbonated
Water +
Sugar
200Ml.
300Ml.
500Ml.
1 Litre
1.5
Litre
2 Litre
Sprite

7Up
Dew

Coca-
Cola

Pepsi

Soft drinks are as strong today as it has ever been.



3.2 COMPANY PROFILES
3.2.1 Coco-Cola
The coco cola company is the global soft drinks industry leader with
world head quarters in Atlanta, Georgia. The company and its subsidiaries employee
nearly 30000 People around the world. Syrups, concentrates and beverages basis for
coco cola, the companys flagship brand, and over 160 other company soft drink are
manufactured and sold by the coca cola company and its subsidiaries in nearly 200
country around the world in fact, approximately 70000 of company volume and 80%
of company profit come from the outside the united states. The production of the coco
cola companys touch lives everywhere. There core brands have made an impact
around the world, brands such as Fanta, sprite, and of course coco cola are available
and recognised in many countries. Each of their brand is distributed in one more
countries and is tailored to the culture and taste of those consumers so where ever you
are, sure to find a coca cola product to enjoy.
The story begins in Atlanta, Georgia on May 8
th
1886, when a pharmacist
called doctor john smith pemberton 1
st
mixed coco cola in his back yard. the formula
which was made from carbonated water, cane sugar syrup, cafe, extracts of kola nuts
and kola leaves, was brought to the nearby Jacobs pharmacy where it made its debut
as a soft drink the same day, selling for only 5 sends. His book keeper named this
drink coco cola after the first two ingredients. And the same distinctive script he
wrote it in is the same logo they use to this day.
In January 1893 coco cola was registered with the U.S. patent office. Later
on in 1950 the route class company created the famous contoured glass for coco cola
in 1950.


In 1917 coco cola was found to be the worlds most recognised trade mark
with a record of 3 million cokes sold per day. Unfortunately john pemberton fell ill,
and didnt live to see his product success.
Early growth:
In 1893 calendar registered coco cola has a patented trade mark. He also
responded to growing concerns over the dangers of cocaine by reducing the amount of
coca in the drink to a trace.
However he kept some coca extract in coco cola so the name would
accurately describe the drink. Calendar only had a patent on the name and not the
drinks syrup that is drinks base, containing all the ingredients minus the carbonated
water. He figured that keeping the coca in his formula would legally allow the
company to distinguish his from imitation. Other companies also produced soda
drinks made with cola nut extracts. In particular, the Pepsi, Cola Company and its
cola of the same name would become coco colas major competitor over the next few
decades.
Calendar also spent more than 11000 $ on his first massive
advertising campaign in 1892. The coco cola appeared across the country painted has
a mural on walls, displayed on posters and soda fountains where the drink was
severed. And imprinted on widely marketed, common house hold items, such as
calendars and drinking glass. In addition, Candler was the first person ever to use
coupons to gain customers for products. He distributed flyers offering free soda from
plain glass of coco cola to people visiting his drug store. In 1894 coco cola opened its
first coke syrup production plant outside of Atlanta, in Dallas, Texas. That same year
candy store owner in Vicksburg, Mississippi, installed bottling machine and produced


the first bottled coke. It had previously been sold only at soda fountains. By 1895 the
drink was sold in U.S. states and territories.
In 1899 lawyer Benjamin Thomas and Joseph whitc head of Chattanooga,
openness, bought the exclusive right to distributed coke syrup to bottles throughout
most of the country for only one dollar. At the same time Candler saw little profit in
bottling and was more than willing to give up that part of the business. In 1915 the
route glass company created a counter glass bottle for coke and its design based on
the curvature of a coco cola bean. This bottle designs a coke trade mark world wide
the same year, Candler retired from the company. In 1919 Candler family sold coco
cola to business man earnest woodruff of Columbus, Georgia. For 25 million $.
War Time Developments:
During world war second (1939 - 1945) woodruff also boasted cokes
popular image in the United States by pledging that his company would provide coke
to every U.S. soldier. The company did not limit itself, to only doing business that
would increase his success in America. In the period leading up the war between 1930
and 1936, it had set up a division of the company in Germany and it continued during
the war. It recreated its image has a German company and allowed to produce all but
two, secrete, coco cola ingredients in their own factories.
In 1941 the German companies president, maqxkeith, developed Fanta
orange soda using orange flavour and all the German - made coke ingredients. The
coco cola companies war time efforts helped it expand its global markets, often with
the economic supports of the U.S. government. By the end of the war in 1945, it had
established 64 overseas bottling plants. That same year the company registered a
patent on coco cola popular nickname, coke.


Post war growth:
In 1935 Robert woodruff retried as the coco cola companies president.
Candler and woodruff are remembered has the two most important figured in the
companys early growth, both are their contribution to the company and their
considerable fortunes donated to the city of Atlanta. After woodruffs departure the
company began to diversify by producing new products, acquiring new business and
entering new international markets. In 1960 the coco cola company purchased the
minute maid corporation, producer of fruit juices. And began offering in canes.
Between 1960 63. It also launched for new soft drinks in the United
States. Fanta an orange soda, sprite, a lemon lime soda etc... In 1964 the company
acquired the Duncan Corporation. In1967 it created the coco cola foods by merging
its Duncan and minute made operations. And the late 1960s cicada faced difficulties
in some of its forge in markets when the company built a bottling plant in Israel at the
outset of the Arab - Israeli war, the government of ISS Arab Teague nation banned the
production and sale of coke. A year later withdrew form its market in India when
Indian government requested the coco cola reduced its equity in joint ventures to
40%. The company refused to relinquish so much control over that operation. In 1977
coca cola began packaging coke and other drinks in two litters plastic bottles. In
1982 the company introduced diet coke, which soon became the best selling diet soft
drinks in the world.
In 1982 coco cola purchased the motion picture company Columbia
picture industries, INC, also known as tri star pictures. For almost $700 million. two
years later, a company sold off its Columbia holdings and other media acquisition to
Sony corporation for over 1.5 billion dollar.


Recent developments:
In 1986 the cola company consolidated all of its non franchised U.S.
bottling operations has coco cola enterprises. In the new company began acquiring
independent bottling companies a venture that grew into the worlds largest bottler of
soft drinks by 1988. While coco cola enterprises distributed over half of all coco cola
products in the United States, small franchise business continued to bottle, can and
distributed the companys drinks worldwide. In 1987 the coco cola company was
listed in the prestigious Dow Johns industrial average index of stock market
performance its stock is trade on the New York stock exchange. Coco cola and Pepsi
company products occupied 9 of the top ten spots in U.S. at present coco cola ranked
first in soft drink sales and the company earned almost 80% of its profit from
international sales.
Five Competitive Forces for Coca-Cola Company:
The soft drink industry is very competitive for all corporations involved,
with the greatest competition being that from rival sellers within the industry. All soft
drink companies have to think about the pressures; that from rival sellers within the
industry, new entrants to the industry, Substitute products, suppliers, and buyers.
The competitive pressure from rival sellers is the greatest
competition that Coca-Cola faces in the soft drink industry. Coca-Cola, Pepsi Co., and
Cadbury Schweppes are the largest competitors in this industry, and they are all
globally established which creates a great amount of competition. Though Coca-Cola
owns four of the top five soft drink brands (Coca-Cola, Diet Coke, Fanta, and Sprite),
it had lower sales in 2005 than did PepsiCo (Murray, 2006c). However, Coca-Cola
has higher sales in the global market than PepsiCo. In 2004, PepsiCo dominated


North America with sales of $22 billion, whereas Coca-Cola only had about $6.6
billion, with more of their sales coming from overseas. PepsiCo is the main
competitor for Coca-Cola and these two brands have been in a power struggle for
years (Murray, 2006c).
Brand name loyalty is another competitive pressure. The Brand Keys
Customer Loyalty Leaders Survey (2004) shows the brands with the greatest customer
loyalty in all industries. Diet Pepsi ranked 17th and Diet Coke ranked 36th as having
the most loyal customers to their brands. The new competition between rival sellers is
to create new varieties of soft drinks, such as vanilla and cherry, in order to keep
increasing sales and enticing new customers (Murray, 2006c). New entrants are not a
strong competitive pressure for the soft drink industry. Coca-Cola and Pepsi Co
dominate the industry with their strong brand name and great distribution channels.
In addition, the soft-drink industry is fully saturated and growth is small.
This makes it very difficult for new, unknown entrants to start competing against the
existing firms. Another barrier to entry is the high fixed costs for warehouses, trucks,
and labour, and economies of scale. New entrants cannot compete in price without
economies of scale. These high capital requirements and market saturation make it
extremely difficult for companies to enter the soft drink industry; therefore new
entrants are not a strong competitive force (Murray, 2006c).
Substitute products are those competitors that are not in the soft drink
industry. Such substitutes for Coca-Cola products are bottled water, sports drinks,
coffee, and tea. Bottled water and sports drinks are increasingly popular with the trend
to be a more health conscious consumer. There are progressively more varieties in the
water and sports drinks that appeal to different consumers tastes, but also appear


healthier than soft drinks. In addition, coffee and tea are competitive substitutes
because they provide caffeine.
The consumers who purchase a lot of soft drinks may substitute coffee if
they want to keep the caffeine and lose the sugar and carbonation. Specialty blend
coffees are also becoming more popular with the increasing Number of Starbucks
stores that offer many different flavours to appeal to all consumer markets. It is also
very cheap for consumers to switch to these substitutes making the threat of substitute
products very strong (Data monitor, 2005). Suppliers for the soft drink industry do not
hold much competitive pressure. Suppliers to Coca-Cola are bottling equipment
manufacturers and secondary packaging suppliers. Although Coca-Cola does not do
any bottling, the company owns about 36% of Coca-Cola Enterprises which is the
largest Coke bottler in the world (Murray, 2006a). Since Coca-Cola owns the majority
of the bottler, that particular supplier does not hold much bargaining power. In terms
of Equipment manufacturers, the suppliers are generally providing the same products.
The number of equipment suppliers is not in short supply, so it is fairly easy for a
company to switch Suppliers. This takes away much of suppliers bargaining power.

The buyers of the Coca-Cola and other soft drinks are mainly large
grocers, discount Stores and restaurants. The soft drink companies distribute the
beverages to these stores, for Resale to the consumer. The bargaining power of the
buyers is very evident and strong. Large Grocers and discount stores buy large
volumes of the soft drinks, allowing them to buy at lower Prices. Restaurants have
less bargaining power because they do not order a large volume. However, with the
number of people are drinking less soft drinks, the bargaining power of buyers could


start increasing due to decreasing buyer demand (Murray, 2006a) Porters Five Forces
Model identifies the five forces of competition for any company.
The recognition of the strength of these forces helps to see where Coca-
Cola stands in the Industry. Of the five forces, rivalry within the soft drink industry,
especially from PepsiCo, is The greatest source of competition for Coca-Cola.
3.2.2Pepsi Cola Company:
Pepsi cola North America, head quartered in purchase. New York is the
refreshment beverage unit of Pepsi company beverages and foods North America also
comprises Pepsi companies Tropicana, Gatorade and Puaker foods business in the
United States and Canada. Pepsi cola North America carbonated soft drinks. including
Pepsi, diet Pepsi, Pepsi twist, mountain dew code red, sierra mist, and mug root bear
account for nearly 1/3 rd of total soft drink sales in the united states.
Pepsi cola north Americas non carbonated beverages port folio includes
aquafina, which is the number one brand of bottled water in the united states, dole
single serve juice and sobe, which offers a wide range of soft drinks with herbal
ingredients. The company also makes and markets North Americas bestselling, ready
to drink indeed teas and coffees via joint ventures with Lipton and star bucks
respectively.
Pepsi company, INC is one of the worlds largest food and beverages
companies. The companys principle businesses include:
- Frito lays snack
- Pepsi cola beverages
- Gatorade sports drinks
- Tropicana juices


- Quaker foods
Brief over view of the company:
Pepsi company, INC is a diversified consumer products company with
three major lines of business:
1. Beverages (Pepsi cola) It is people oldest and largest business. Includes
drinks like Pepsi, diet Pepsi, mountain dew, slice. Mug, 7up, etc available in
194 countries
2. Snack foods: it includes the famous Frito lay brand in the United States
and other international brands (example amith crips ltd. in the U.K) available
in 40 countries.
3. Restaurants: includes leading brands like pizza hut. Taco bell and KFC.
(Operating 94 countries) and some relatively lesser known ones.
4. California pizza kitchen, Chevys Mexican restaurants, hot n now mainly
in the U.S
Pepsi cola company was founded in 1903 when Caleb d Brahma a
pharmacist stated to market his beverages invention in North Carolina. Today, Pepsi
cola is second largest soft drink producer it the world. Also, it has been ranked 10
th

most recognised brand name in the world.
Pepsi co, Inc was founded in 1965 through the merger of Pepsi Cola
Company and fritillary. Tropicana was acquired in 1998 in 2001, Pepsi company
merged with the quake rotas company. creating the worlds tithe largest food and
beverages company, with brands each generating more than $1 billion in annual retail


sales, Pepsi companys success is the result of superior products, high standards of
performance distinctive competitive and the high levels of integrity of thri people.
Pepsi Company had been in the Indian market during the mid 1950s but
pulled out because of the lack of profitability. it re entered in 1990 by negotiating a
joint venture agreement with Tata industries, Indianan largest private company and
government owned Punjab agro industries. Realizing the rapidly growing incomes of
Indian consumers.
Pepsis decision to enter the Indian market was very wise indeed.
The company today enjoys a foot hold of the Indian market and its market share
surprised its interest rival coco cola. The Indian soft drinks market has been growing
rapidly- form a billion 1977 - to about 5 billion bottles in 2003. Another thing which
not to be forgotten is that Indias middle class is much larger than china. Furthermore,
many observers are predicted that India will eventually become an economic giant
thus growing income should support more sales. Initially, Pepsi Company had to
accept some limitation.
Limit owned to 39.9%: place the locals Lehar logo with its
logo to and to export 72% of its concentrated among others. But later, with
liberalization of FDI these very limitation became Pepsi companies strengths being
the very first to be in the Indian market, much to the dismay of coco cola.



The Real fresh juice Companies
3.2.3 Tropicana
History
Anthony T. Rossi (19001993) was born in Italy on the island of Sicily. He
had the equivalent of a high school education, and immigrated to the United States
when he was 21 years old. He drove a taxicab, was a grocer in New York, farmed in
Virginia and then moved to Florida in 1940 where he farmed and was a restaurateur.
His first involvement with the Florida citrus industry was fresh fruit gift boxes sold by
Macy's and Gimbel's department stores in New York City, New York.
In 1947, Rossi settled in Palmetto, Florida and began packing
fruit gift boxes and jars of sectioned fruit for salads under the name Manatee River
Packing Company. As the fruit segment business grew, the company moved to a
larger location in east Bradenton, Florida and changed its name to Fruit Industries.
The ingredients for the fresh fruit salads on the menu of New Yorks famed Waldorf-
Astoria Hotel were supplied by Fruit Industries. At the east Bradenton location, Rossi
began producing frozen concentrate orange juice as a natural extension of the fruit
section business.
Evolution of Tropicana Pure Premium
In 1952, with growth of the orange juice business in mind, Rossi
purchased the Grapefruit Canning Company in Bradenton. The fresh fruit segments
and orange juice business were so successful that he discontinued production of fruit
boxes. He developed flash pasteurization in 1954, a process that rapidly raised the
temperature of juice for a short time to preserve its fresh taste. For the first time,


consumers could have the fresh taste of pure not-from-concentrate juice in a ready to
serve chilled package. The juice, Tropicana Pure Premium, became the companys
flagship product. In 1957, the companys name was changed to Tropicana Products,
Inc. to reflect the growing appeal of the Tropicana brand.
Shipping innovation
Tropicana purchased one million dollars worth of refrigerated trucks to
deliver Pure Premium. Soon, 2,000 dairies delivered Pure Premium orange juice to
the doorsteps of consumers each morning. By 1958, a ship, S.S. Tropicana, was
taking 1.5 million gallons of juice to New York each week from new base at Cape
Canaveral, Florida. From 1960 to 1970, Tropicana utilized TOFC (trailers on flatbed
cars) to move the juice more efficiently.
In 1970, Tropicana orange juice was shipped as finished goods via refrigerated
boxcars in one weekly round-trip from Florida to Kearny, New Jersey. By the
following year, the company was operating two 65-car unit trains a week, each
carrying around 1 million gallons of juice. The "Great White Juice Train" (the first
unit train in the food industry, consisting of 150 100-ton insulated boxcars fabricated
in the Alexandria, Virginia shops of Fruit Growers Express) commenced service on
June 7, 1971 over the 1,250-mile (2,012-kilometer) route. An additional 100 cars were
soon incorporated into the fleet, and small mechanical refrigeration units were
installed to keep temperatures constant on hot days. In 2004, Tropicanas rail fleet of
514 cars traveled over 35 million miles a method that is three times more fuel
efficient than other shipping methods.


In the 21st century, the Tropicana-CSX Juice Trains have been the focus of efficiency
studies and have received awards. They are considered good examples
[who?]
of how
modern rail transportation can compete successfully with trucking and other modes to
carry perishable products.
Going public and expansion: 19691997
Tropicana Products, Inc. went public in 1969. The stock was first sold over the
counter, but gained a listing on the New York Stock Exchange under the symbol TOJ.
In the same year, it became the first company in the citrus industry to operate its own
plastic container manufacturing plant.
[1]

Rossi sold Tropicana to Beatrice Foods in 1978. He then retired, and was inducted
into the Florida Agricultural Hall of Fame in 1987. Under Beatrice, Tropicana had
the financial resources to develop more products. In 1985, Tropicana debuted
Tropicana Pure Premium HomeStyle orange juice, which featured added pulp.
[1]

In the 1960s, Tropicana made history by being the first company to sell
bottled Florida orange juice overseas. The company received its first order for 14,000
cases of orange juice at a European food industry trade fair in 1965, and France was
the first country outside of North America to enjoy Tropicana products.
Beatrice was acquired by investment company Kohlberg Kravis
Roberts in 1986, and Tropicana was sold to The Seagram Company, Ltd.. In the
decade that followed, they introduced new juice beverage creations, including the
Twister line of bottled and frozen juice blends.


In the early nineties under Seagram, Tropicana also began to expand
distribution to global markets. They formed a partnership with Kirin to process and
distribute Kirin-Tropicana juices in Japan. By that time, the company was also
distributing Tropicana Pure Premium in Canada, the United Kingdom, Ireland,
France, Germany, Argentina, Panama and Sweden. As the 1990s continued,
Tropicana further expanded internationally, entering several more Latin American
countries, Hong Kong and China.
Seagram Beverage Group acquired Dole Food Companys global
juice business in 1995, including the Dole brands in North America, and Dole,
Fruvita, Looza and Juice Bowl juices and nectars in Europe. Dole was operated under
Tropicana Dole Beverages North America and Tropicana Dole Beverages
International.

Tropicana Orange Juice.


Sold to PepsiCo and twenty-first century: 1998present
Tropicana was acquired by PepsiCo in 1998, which combined it with the
Dole brand for marketing purposes.
[1]
It has become the worlds leading producer of
branded fruit juices.
Citing the decreased productivity of Florida's orange crop after recent
hurricanes, Tropicana now uses Brazilian oranges in some of its juice.
2009 Redesign
In February 2009, Tropicana switched the design on all its cartons to
a new image created by the Arnell Group. The new image showed the actual orange
juice and redesigned the cap to look like the outside of an orange. After less than two
months and a 20% drop in sales, Tropicana switched back to its original design (the
orange skewered by the drinking straw).

Making the juice
Tropicana works with more than 400 established Florida groves, which
are selected for sandy soil conditions and advanced irrigation practices.
[9]
. The
company is the largest single buyer of Florida fruit and processes about 60 million
boxes of fruit. Once the fruit is picked, oranges are hand graded and any fruit that
doesnt meet quality inspections is removed.
The oranges are then washed and the orange oil is extracted from
the peel to capture the from-the-orange taste, which are later blended into the juice for
consistent quality and flavor. The oranges are squeezed and the fresh juice is flash


pasteurized. Tropicana developed flash pasteurization to minimize the time the orange
juice is exposed to heat while providing maximum nutrition and flavor.
Oranges have a limited growing season, and because there is demand
for juice year round, an unspecified quantity of juice (some or potentially all) is
deaerated and then stored for future packaging in chilled tanks to preserve quality.
The aseptic tanks protect the juice from oxygen and light and hold the liquid at
optimal temperatures just above freezing to maintain nutrition. It has been reported
that deaerated juice no longer tastes like oranges, and must be supplemented before
consumption with orange oils and Ethyl butyrate (ethanol and butyric acid)
[11]
.
Tropicana also uses small quantities of high-quality orange juice from Brazil to
supplement the Florida crop. Pulp may be blended in at this point, too, depending on
the product.
Tropicanas carton and plastic packaging are engineered to maintain
quality and freshness. The companys packaging materials ensure the juice stays fresh
inside the package by preventing outside moisture and light from affecting its quality.
Not-for-profit affiliations
In 2008 Tropicana joined forces with charity Cool Earth and started the
'Rescue Rainforest' campaign in the U.S. People could buy special promotional packs
of Tropicana and enter the pack's code online. For each code entered, 100 square feet
of rainforest could be saved. The project is based in the Ashaninka corridor in Peru,
which lies in an arc of deforestation. As of June 2009, over 47,000,000 square feet
(almost 2 square miles) had been saved.


Along with launching the Rescue Rainforest initiative, Tropicana has been trying to
reduce their carbon footprint by encouraging carton recycling and supporting the
Sustainable Forestry Initiative.
Headquarters
Tropicana Products has its headquarters in Chicago. PepsiCo, the parent
company of Tropicana, planned to begin moving Tropicana employees into its
existing Chicago facility in the first quarter of 2004. PepsiCo moved Tropicana into
Chicago so all of its juice brands would be consolidated into one Chicago-based unit.
Until 2004 Tropicana Products was headquartered in the four story Rossi Office
Building in Bradenton, Florida.
3.2.4 Dabur real fruit juice

Most Indians look forward to seeing the neighborhood "juice Walla," a
vendor perched on the road with his cart or selling his wares in a tiny shop, who
blends a combination of fruitswatermelon, papaya, pomegranate, orange, and
pineapple, plus sugarcane, a hint of lime, and (if you wish) exotic spicesto create a
medley of tastes.


Until a decade ago, fruit juice in India usually meant the freshly
squeezed beverage sold by this ubiquitous street vendor or (if the Wallas sanitary
conditions were questionable) juice instantly prepared within the confines of your
kitchen. Other fruit-based drinks were full of preservatives, and drinks popular in the
West, like Snapple, were imported but not available in most stores.
But when Dabur Foods launched its line of fruit juices in 1996, Indians had
a new choicea Real choice. "I chose the name Real because I wanted customers to
know that our juices were natural and healthy, contained no preservatives, and tasted
like eating actual fruit," says Amit Burman, CEO of Dabur Foods. "The one word
'Real'conveyed all of that."
The first hurdle Dabur faced was selling the concept of packaged juices to
a skeptical Indian public. "At the initial stage it was a challenge for us to break into
the market," says Burman. "The Indian consumer has always preferred fresh juice to
packaged juice. The consumer is wary of packaged food, as they feel it has
preservatives and is therefore not fresh."
Despite this mindset, the fruit juice segment has seen rapid growth
over the last few years. The fruit-juice market in India is pegged at 2.5 billion rupees
(US$ 56 million), a small amount compared with the larger, non-carbonated drinks
market (15 billion rupees, or $337 million), and is growing 30 percent per year.
Today, the flagship brand of Dabur Foods maintains leadership status (57 percent
market share) and shares shelf space with a number of competing offerings from
Tropicana, Safal, and Ladakh.


"The key driver for product acceptance has been taste," says Burman. "Indian
consumers like to add sugar when they squeeze their juice. We ensure that we cater to
our customers' taste and preferences, and have added sugar to our juices." The
assortment of Real fruit juice flavors includes orange, mango, pineapple, mixed fruit,
grape, guava, tomato, litchi, cranberry, and mausami (sweet lime).
The brand appeals to parents who want to give their school-bound
children a portable beverage that's a healthy alternative to nutritionally bankrupt
colas. The juices come in convenient Tetra Pak packaging (known colloquially as
"squeeze boxes") designed to fit into a tiffin box (lunch box).
Following the success of Real, Dabur launched Real Activ in 2002 and
Real Junior in 2004. These new products cater to niche audiences without diluting the
equity of the core brand. Real Activ, made with a combination of fruit and vegetable
juices and boosted with antioxidants like Vitamins A, C, and E, is an unsweetened
option marketed to health-conscious young adults. According to a spokesperson of a
popular retail chain in India, "the non-sugar variants are a big hit with fitness freaks."
Real Junior juices are intended for children under six. The juices come
in a smaller size (125 ml; the school packs are 200 ml), are enriched with calcium,
and promise low acidity.
Through advertising and promotionsparticularly the tagline "tastes
like eating a fruit"Real tries to address Indian consumers' concerns regarding
packaged food. One ad shows a child sipping a pack of Real juice while he stares at a
mirror; his double drinks from an actual orange. Below-the-line activities attracting a


young audience include in-school promotions and joint promotions with Disney
Channel.
In order to boost the Real brand at pubs and bars, Dabur has organized "mixology"
workshops across the country. These workshops use Real fruit juice as the essential
ingredient to make cocktails and nonalcoholic "mocktails."
Realizing that distribution plays a significant role in building awareness
for the brand, Dabur tries to ensure that the brand is widely available through retail
networks in India while expanding its reach in the food-service industry by securing
placement in hospitals, airlines, railways, hotels, and restaurants. According to
Beverages for Health and Wellness in the Indian Market, a report by Ivan Fernandez
of market consultants Frost and Sullivan, the growing trend of on-the-go consumption
presents beverage suppliers with new distribution opportunities like workplaces,
gyms, and colleges.
The increasing Indian beverage market includes other juice players like
Mohan Meakin's Gold Coin, Rital Impex's Coco Joos, and Ladakh's Leh Berry. But
by launching new flavors and focusing on the brand's core values, Dabur Foods hope
to ensure consumers continue to embrace the "Real" thing.



Table 7 : Gender of the respondent

Gender Of the
respondents
No of respondents Percentage
Male 60 60
Female 40 40
Total 100 100

Interpretation:
From table 1, it is inferred that 60% of the respondents are male and
40%of the respondents are female. This population consists of lecturers, students. It is
further inferred aprox half of the respondents is male.



Graph 1: Gender of the respondent
Inference:
The data is collected randomly from around 100 respondents where majority
of the respondents are male but female are also there.

0
10
20
30
40
50
60
70
80
90
100
No of respondents Percentage
Female
Male


Table 8: Occasion of More purchase

Occasions of purchase

Interpretation:

The above table shoes that the respondents used to purchase more for
celebrations , next comes kitty party and third sports events are comming. Out of
remaining 11 purchase while marriage occassions and remaining 5 constutes others.

Frequency Percent
Valid marriage 11 11.0
kitty party 21 21.0
celebration 47 47.0
sports events 16 16.0
others 5 5.0
Total 100 100.0


Graph 2 :Occasion of More purchase

Inference:
Most of the people go for Soft drinks more during celebration times
like birthday parties, Small meetings.

others sports events celebration kitty party marriage
Ocassion of purchase
50
40
30
20
10
0
F
r
e
q
u
e
n
c
y
Ocassion of purchase


Table 9: How they come to know about the Soft drinks

No of
Respondents
Percentage
Advertisements 66 66
Word of mouth 18 18
Friends &
peers
26 26
Others 9 9
Total 100 100

Interpretation:

Out of 100, 66% 0f consumers came to know about the soft drinks through
advertisements, 18% of them through word of mouth, 26% of them through friends
and peers, and few of them through others .



Graph 3 :How they come to know about the Soft drinks

Inference:
Most of the customers came to know about the soft drinks
through advertisements , word of mouth and friends and peers also play secondary but
vital role.

No of Respondents
0
10
20
30
40
50
60
70
No of Respondents
Percentage


Table 10 : Most preferred beverage you take

Frequency Percent
Valid cool drinks
44 44.0
fresh juice
24 24.0
tea or coffee
26 26.0
Alcohol
6 6.0
Total
100 100.0

Interpretation:
The above table shows that out of 100 respondents. Most of them used
to consume cool drinks. Out of 100, 44% of respondents used to consume cool drinks,
24% of respondents like to have fresh juice, 26% tea or coffee and 6% of them prefer
alcohol.



Graph 4 : Most preferred beverage you take

Inference:
Majority of the market share is acquired by cool drinks industry
then other beverage (Tea , Coffee, Alcohol)industry.

alcohol
tea or coffee
fresh juice
cool drinks
Preffered beverage of the respondent


Table11 : No of times they go for cool drinks in a week

Times No of
respondents
Percentage
Once 45 45
Twice 24 24
Thrice 11 11
Many Times 20 20
Total 100 100

Interpretation:
Most of the respondents consume cool drinks once in a week. Out of 100
respondents, 45% of respondents will have once in a week, 24% of respondents will
have twice a week, 11% of them will have thrice a week and 20 of them are having
many times a week.



Graph 5 : No of times the respondents go for cool drinks in a week

Inference:

Majority of the people consuming cool drinks once in a week hence
majority of the consumers are not loyal.

No of respondents
Percentage 0
5
10
15
20
25
30
35
40
45
Once
Twice
thrice
Many
times
No of respondents
Percentage


Table 12 : Purchase is Occasionally or routine Basis

No of
respondents
Percentage
Occasionally 69 69
Routine 31 31

Interpretation:

The above Table shows that, Out of 100 respondents 69% of the
respondents Purchase of soft drinks is Occasional and 31% of the respondents
purchase of soft drinks is routine.



Graph 6 : Purchase is Occasionally or routine Basis

Inference:
Occasional Buyers are over whelming the routine buyers.

0
10
20
30
40
50
60
70
Ocassion Routine
No of respondents
No of respondents


Table 13 : Most preferred brands of cool drinks

Drinks No of
respondents
Percentage
Coco-cola 31 31
Pepsi 19 19
Thums up 14 14
Sprite 9 9
Mirinda 6 6
Maaza 8 8
Slice 4 4
Dew 4 4
Fanta 5 5
Total 100 100

Interpretation:
Most of the respondents selected Coco-cola as their favourite brand. It
comes first with 31 respondents, next Pepsi comes with 19, Thums Up with 14, Sprite
with 9, Mirinda with 6, Maaza with 8,Slice & dew with 4 each Fanta with 3 and 7 UP
with 2.



Graph 7 : Most preferred brands of cool drinks

Inference:
Most of the customers prefer brands like coke and Pepsi where the other
brands like Thums up, Sprite and Slice also made a place in customers mind.

7UP Fanta Dew Slice Maaza Mirinda Sprite Thums
up
Pepsi Coco-
cola
Most Prefered Brands
30
20
10
0
P
e
r
c
e
n
t
Most Prefered Brands


Table 14 : The reasons for the consumption of Soft drinks

Attributes No of
Respondents
Percentage
Taste 26 26
Quality 11 11
Quantity 8 8
Price 6 6
Suits lifestyles
and Status
16 16
Influence of
celebrities
6 6
Promotional
offers
14 14
Advertisements 13 13
Total 100 100

Interpretation:
Out of 100 respondents, 26 Prefers soft drinks for Taste, 11
prefers for Quality, 08 prefers for Quantity, 6 prefer for price, 16 prefers due to life
style and Status 14 for promotional offers, 6 for influence of celebrities and 13 for
advertisements.



Graph 8 : The reasons for the consumption of Soft drinks

Inference:
For majority of the customers attribute like taste is the main reason for the
consumption of a particular brand of soft drinks with other attributes like quality and
price etc

Advertisements
promotional offers
Influance of celebrities
Suits lifestyle and status
Price
Quantity
Quality
Taste
Reasons for the consumption of soft drinks


Table 15 : Influences in an advertisement

No of
Respondents
Percentage
Model 35 35
Content like
punch line & logo
etc
15 15
Features of the
Product
23 23
Overall
presentation of
add
19 19
No influence 8 8
Total 100 100

Interpretation:
Majority of the respondents are influenced by the model in an advertisement.
Out of 100, 35 people are influenced by the Model, 15 respondents are influenced by
the Content like Punch line and logo etc in an advertisement, 22 of the respondents
are influenced by the product features, 18 respondents are influenced by the overall
presentation and 10 of them have no influence of any of these factors.



Graph 9 : Influences in an Advertisement

Interference:
Brand ambassadors plays an important role in purchase decision of soft drinks.

0
5
10
15
20
25
30
35
40
Frequency
Percentage


Table 16 : Recall any of the advertisement recently you have seen.

No of
respondents
Percentage
Pepsi 40 40
Coco-Cola 28 28
Mirinda 14 14
Maaza 13 13
Sprite 7 7
Total 100 100

Interpretation:

Out of 100 respondents, 40% of them recalled Pepsi advertisement,28% of
them recalled Coco-Cola advertisement, 14% of them recalled the Mirinda
advertisement, 13%of them recalled the Maaza advertisement and 7% of them
recalled the Sprite advertisements



Graph 10 : Recall any of the advertisement recently you have
seen.

Inference:
Most of the customers are influenced by the celebrities endorsements
which helps to achieve brand recognition.

No of respondents
Pepsi
Coco-cola
Mirinda
Maaza
Sprite


Table 17 : General packet size of buying cool drinks.

Packet Size No of
respondents
Percentage
200 ml 35 35
500 ml 45 45
1.5 litter 19 19
2 litter 11 11
Total 100 100

Interpretation:
Most of the respondents prefer Smaller packet size for
consumption, Out of 100 respondents,35% respondents prefer packet size of 200 ml,
45% of respondents prefer 500 ml packet size, 19% of the respondents buy packet
size of 1.5 litter cool drinks and 11% of the respondents would buy big packet size of
2 litter.



Graph 11: General packet size of buying cool drinks.

Inference:

Majority of the respondents prefer 500ml and 200 ml packet size for
consumption then the bigger one.

0
5
10
15
20
25
30
35
40
45
200 ml 500 ml 1.5 litter 2 litter
No of respondents
Percentage


Table 18 : Have you tried any new soft drinks

No of
respondents
Percentage
Yes 44 44
No 66 66
Total 100 100

Interpretation:
Among 100 respondents, 44% of the respondents tried new Soft drinks
whereas 66% of the respondents wont tried any new soft drinks.



Graph 12 : Have you tried any new soft drinks

Inference:
We can infer that most of the consumers hesitate to try new soft drink
brands for consumption.

0
10
20
30
40
50
60
70
No of respondents
Percentage
yes
no


FINDINGS:

1. The data is collected randomly from around 100 respondents where majority
of the respondents are male including female .
2. Most of the people go for Soft drinks, more during celebration times like
birthday parties, Small meetings, hang up with friends.
3. Most of the customers have come to know about the soft drinks through
advertisements . Word of mouth and friends and peers also plays secondary
but vital role.
4. Majority of the market share is acquired by soft drinks industry then other
beverage ( tea, coffee, alcohol) industry.
5. Majority of the people consume cold drinks once in a week hence majority of
the consumers are not loyal.
6. Occasional Buyers are over whelming the routine buyers.
7. Most of the customers prefer products like Coke and Pepsi where the other
products like Thums up, Sprite and Slice have also made a place in customers
mind.
8. For majority of the customers consumption, taste is the most important
attribute followed by attributes like Price, Quality etc.
9. Brand ambassadors plays an important role in buying decision of soft drinks.
10. Most of the customers are influenced by the celebrities endorsements which
helps to achieve brand recognition.
11. Majority of the respondents prefer 500ml and 200 ml bottle size for
consumption then the bigger one.



SUGGESTIONS:
1. People use to buy more quantity of soft drinks on some special occasions like
celebrations, So the companies should provide some price discounts, lucky
draw contexts, etc to attract more customers during the occasions of
celebrations.
2. Companies should give priority to taste ,quality and price of the product, the
primary consideration of the customers while purchasing soft drinks.
3. During market survey it has been found that Coco-Cola and Pepsi are the clear
market leaders, so the other companies can follow their foot prints.
4. Companies have to give more concentration to advertisements because its
found that consumer buying behaviour is more influenced by advertisements.
5. Brand ambassador also influence the customers buying behaviour towards soft
drinks. So the companies should try to introduce highly influential celebrities
in the advertisements.
6. Packaging is the another important factor that influence the success or failure
of a brand, So it should be available from mini pack to mega pack.



CONCLUSION:
It has been outlined in findings and suggestions, the coherent picture of
the outcome of the research done. Some of the main attributes that led the consumers
to buy a particular brand of soft drinks are its taste and whether the product suits their
lifestyle and status.
Most of the consumers go for consumption of soft drinks only during
special occasions like birthday parties, meetings etc. Consumers choose the brand for
consumption mainly on taste followed by price and quality. Advertisements, Word of
mouth Communication and Peers are important factors that influence purchase
decision of consumers. The consumer frequency of buying the soft drinks depends on
the individual perception about the product.
Coke and Pepsi are the most preferred brands by consumers which have
presence globally and as well as in India. The other brands preferred are Sprite, Slice,
Thums Up etc. Role played by Brand Ambassador is very important fact in creating
awareness of the brands. Celebrity Endorsements of the product creates the right
image for the brand and makes consumer remember the product for a longer time.
According to my study the factors like Taste, Quality, Quantity,
Advertisements, Celebrity Endorsements , Brand Image etc affects the purchase
decision of consumers . So, the companies should focus more on these factors to
target the market effectively.



BIBLIOGRAPHY

BOOKS REFFERED

Donald .R.Cooper.,Pamela .S.Schindler [Research Methodology].,
Tata McGraw-Hill,2006,page no 120- 136

WEBSITE VISITED
www.cocacola.com
www.mofpi.nic.in
www.foodindustryindia.com

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Factors affecting purchase decision in soft drinks industry

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