INTRODUCTION In the modern urban culture consumption of soft drinks particularly among

younger generation has become very popular. Soft drinks in various flavors and tastes are widely
patronized by urban population at various occasions like dinner parties, marriages, social get
together; birthday celebration etc. Children of all ages are especially attracted by the mere
mention of the word soft drinks. The so-called competition for this product in the market is
different from other products. Mass media, particularly television, has contributed to a large
extent to the ever growing demand for soft drinks. The attractive jingles and sports make the
large audience remember the brand at all times. In todays highly competitive market place, two
players have dominated the industry; The New York based Pepsi Company Inc. and the Atlanta
based Coca- Cola. Throughout the globe, these major players have been battling it out for a
bigger chunk of the ever growing soft drink market. This battle has been witnessed in India too,
between these two giants.
Coco cola
Think of a brand success story, and you may well think of Coca-Cola. Indeed, with nearly 1 billion
Coca-Cola drinks sold every single day, it is the worlds most recognized brand.
Yet in 1985 the Coca-Cola Company decided to terminate its most popular soft drink and replace it
with a formula it would market as New Coke. New coke was a Coca cola brand failure story. To
understand why this potentially disastrous decision was made, it is necessary to appreciate what was
happening in the soft drinks marketplace. In particular, we must take a closer look at the growing
competition between Coca-Cola and Pepsi-Cola in the years and even decades prior to the launch of
NewCoke. The relationship between the arch-rivals had not been a healthy one. Although marketing
experts have believed for a long time that the competition between the two companies had made
consumers more cola-conscious, the firms themselves rarely saw it like that. Indeed, the Coca-Cola
company had even fought Pepsi-Cola in a legal battle over the use of the word cola in its name, and
lost. Outside the courts though, Coca-Cola had always been ahead. Shortly after World War II, Time
magazine was already celebrating Cokes peaceful near-conquest of the world. In the late 1950s, Coke
outsold Pepsi by a ratio of more than five to one. However, during the next decade Pepsi repositioned
itself as a youth brand. This strategy was a risky one as it meant sacrificing its older customers to
Coca-Cola, but ultimately it proved successful. By narrowing its focus, Pepsi was able to position its
brand against the old and classic image of its competitor. As it became increasingly seen as the drink
of youth Pepsi managed to narrow the gap. In the 1970s, Cokes chief rival raised the stakes even
further by introducing the Pepsi Challenge testing consumers blind on the difference between its
own brand and the real thing. To the horror of Coca-Colas longstanding company president, Robert
Woodruff, most of those who participated preferred Pepsis sweeter formula.

In the 1980s Pepsi continued its offensive, taking the Pepsi Challenge around the globe and heralding
the arrival of the Pepsi Generation. It also signed up celebrities likely to appeal to its target market
such as Don Johnson and Michael Jackson (this tactic has survived into the new millennium, with
figures like Britney Spears and Robbie Williams providing more recent endorsements). By the time
Roberto Goizueta became chairman in 1981, Cokes number one status was starting to look vulnerable.
It was losing market share not only to Pepsi but also to some of the drinks produced by the Coca-Cola
company itself, such as Fanta and Sprite. In particular the runaway success of Diet Coke was a doubleedged sword, as it helped to shrink the sugar cola market. In 1983, the year Diet Coke moved into the
number three position behind standard Coke and Pepsi, Cokes market share had slipped to an alltime low of just under 24 per cent. Something clearly had to be done to secure Cokes supremacy.
Goizuetas first response to the Pepsi Challenge phenomenon was to launch an advertising campaign
in 1984, praising Coke for being less sweet than Pepsi. The television ads were fronted by Bill Cosby,
at that time one of the most familiar faces on the planet, and clearly someone who was too old to be
part of the Pepsi Generation. The impact of such efforts to set Coca-Cola apart from its rival was
limited. Cokes share of the market remained the same while Pepsi was catching up. Another worry
was that when shoppers had the choice, such as in their local supermarket, they tended to plump for
Pepsi. It was only Cokes more effective distribution which kept it ahead. For instance, there were still
considerably more vending machines selling Coke than Pepsi. Even so, there was no getting away from
the fact that despite the proliferation of soft drink brands, Pepsi was winning new customers. Having
already lost on taste, the last thing Coca-Cola could afford was to lose its number one status.
The problem, as Coca-Cola perceived it, came down to the product itself. As the Pepsi Challenge had
highlighted millions of times over, Coke could always be defeated when it came down to taste. This
seemed to be confirmed by the success of Diet Coke which was closer to Pepsi in terms of flavour.
So in what must have been seen as a logical step, Coca-Cola started working on a new formula. A year
later they had arrived at New Coke. Having produced its new formula, the Atlanta-based company
conducted 200,000 taste tests to see how it fared. The results were overwhelming. Not only did it
taste better than the original, but people preferred it to Pepsi-Cola as well.
However, if Coca-Cola was to stay ahead of Pepsi-Cola it couldnt have two directly competing
products on the shelves at the same time. It therefore decided to scrap the original Coca-Cola and
introduced New Coke in its place. The trouble was that the Coca-Cola company had severely
underestimated the power of its first brand. As soon as the decision was announced, a large
percentage of the US population immediately decided to boycott the new product. On 23 April 1985
New Coke was introduced and a few days later the production of original Coke was stopped. This joint

decision has since been referred to as the biggest marketing blunder of all time. Sales of New Coke
were low and public outrage was high at the fact that the original was no longer available.
It soon became clear that Coca-Cola had little choice but to bring back its original brand and formula.
We have heard you, said Goizueta at a press conference on 11 July 1985. He then left it to the
companys chief operating officer Donald Keough to announce the return of the product

thums up and campa cola comes in existence

Depending on the magnitude of the business (statewide or nationwide), there

can be one or more bottling plants, but there will always be only 1 concentrate
supplier for a soft drink brand. The names are self explanatory: Concentrate
supplier provides the concentrate which can be in the form of syrup or powder.
The bottling plant mixes this concentrate with water, adds carbon dioxide to
produce the carbonated (fizz) soft drink and distributes it to the retail outlets.
In the case of Coca Cola soft drink, the concentrate supplier was Coca Cola
company which used to supply the concentrate (which was prepared by the
company using its secret formula) to several bottling plants who would add it to
water, carbonate it and distribute it on behalf of Coca Cola. Most of these
bottling plants of Coca Cola in and around the NCR were actually owned by a
company called Pure Drinks. i.e Pure Drinks was a franchise of Coca Cola and
operated it independently. They depended on Coca Cola only for the concentrate
and the brand name, but other than these, they were self sustaining independent
companies.
When Coca Cola quit India in 1977, the operations of its bottling franchise Pure
Drinks came to a halt. The Govt of India approached Pure Drinks and offered to
supply the new Swadeshi Double Seven Cola so that it could resume
operations. i.e Instead of Coca Cola, the Govt would supply the concentrate and
Pure Drinks would continue bottling and the only change they had to do was put
a different sticker (Double Seven instead of Coca Cola).
Although it looked like a safe proposition (no risk and production would resume
as usual without affecting any process), the owner of Pure Drinks, Satwant Singh,
who had an entrepreneurial mind, had some other ambitious plans in mind. He
wanted to launch his own brand of cola to fill this gap left by Coca Cola and by
the end of the year, his team had developed the concentrate formula which
tasted similar to Coca Cola.

It was now time to brand this new cola drink by Pure Drinks. Since the company
was well aware of the fact that customers loved (and even obsessed with) the
Coca Cola brand, it chose a name which imitated it: Campa Cola. Such was the
extent of imitation that even the fonts (text style) and colors were a replica of
Coca Cola.
To counter the tag-line of Double Seven colas For the good times, the
company marketed its cola aggressively under the tag-line Life is full of Campa
Cola times
Although it was perceived as a disgusting local imitation of Coca Cola, the
general impression was that was anyday better than Double Seven. Riding on the
success of the Coke replica, which was targeted at the youth, the company
launched an orange flavor as well, targeted at kids.
Despite the criticism (for imitation), Campa Cola turned out to be a successful
brand within weeks. However, its supply was limited only around NCR region and
metros.
Among the remaining franchises of Coca Cola, some of them switched to Double
Seven and rest of them collaborated to create their own variants of Cola and
other flavor drinks. Torino & Dixi Cola were some of the brands which
became popular in South India. Dukes was another brand which became popular
in Mumbai in the absence of Coca Cola.
This way, the void left by Coca Cola was quickly filled by local brands, the major
ones being Campa Cola, Torino, Dixi Cola, Dukes and several more scattered
across India. Hence there was still no pan-India cola brand which could fulfill the
void left by Coca Cola

1.

2.
3. ENTRY OF PEPSI Pepsico saw the opportunity to enter the Indian market after CocaCola departed. In their first attempt in 1985, Pepsico tried to join hands with one of Indias
leading business house, the R P Goenka group, to begin operations in the country. They
put forward a deal to promote the development and export of Indian agro- based
products, and in turn get permission from central government to import cola concentrate
and to sell a Pepsico brand. This request was rejected on the grounds that the import of

concentrate could not be agreed to and the use of foreign names were not allowed. In
their second attempt in 1988, Pepsico put forward a very impressive offer. They promised
to create employment opportunities for about 50,000, make 75% of the total investments
in food and agro processing, bring advanced technology and 50% of total produce to be
exported. PepsiCo gained entry to India in 1988 by creating a joint venture with the
Punjab government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India
Limited. This joint venture marketed and sold Lehar Pepsi until 1991, when the use of
foreign brands was allowed; PepsiCo bought out its partners and ended the joint venture
in 1994.

4.
5. 8. RE ENRTY OF COCA COLA The Coca-Cola Company re-entered India through its
wholly owned subsidiary, Coca-Cola India Private Limited and re-launched Coca-Cola in
1993 after the opening up of the Indian economy to foreign investments in 1991.
However, Coke's reentry was based upon several commitments and stipulations which
the company agreed to implement in due course. One such major commitment was that
Hindustan Coca-Cola Holdings would divest 49 per cent of its shareholding in favor of
resident shareholders by June, 2002. As the company had returned to India after a gap of
16 years, many local brands had emerged till then. It acquired ownership in the Parle
Group which gave the company instant ownership to the popular brands likes Thumps
Up, Goldspot, Limca and Mazza. The deal not only gave manufacturing, bottling, and
distribution assets to Coke but also a strong consumer preference. Jayadev Raja was
made the first Chief Executing Officer of Coca Cola India. Access to 53 of Parles plants
and a well set bottling network, gave Coca Cola Company an excellent base for rapid
introduction of the companys international brands.
6.
7. 9. PEPSI AND COKE-PESTICIDE CONTROVERSY-2003 - 2006 The 2 international
brands Pepsi and Coca Cola faced a new challenge when the local governments placed
a ban on their products following a report by an environmental group claiming the sodas
contained high levels of pesticide. On August 5, 2003, The Centre for Science and the
Environment (CSE) issued a news release which stated that The soft drinks brands sold
contain a deadly cocktail of pesticides residue. The CSE, a New Delhi based research
and advocacy group that aims for sustainable growth, based its accusations on tests
conducted by the Pollution Monitoring Laboratory in April, 2003. During the tests,
pesticide residue was 24 times above limits set by the Bureau of Indian Standards in 57
samples tested. In one bottle of Coca-Cola bought in Calcutta, the level of the
carcinogenic pesticide Lindane exceeded the bureaus standards by 140 times. The
pesticides Lindane, DDT, Malathion and chlorpyrifos are responsible for cancer,
damage to the nervous system and reproductive system, birth defects, and severe
disruption of immune system. Coca Cola India president and CEO Sanjiv Gupta argued
against the allegations of CSE and questioned their testing method. This dispute had
stoked a fresh media maelstrom and had fanned protests across several regions
8. .
9. 10. The state of Gujarat and Madhya Pradesh, had banned the sale of the soft drinks in
schools and government offices. Similar bans were announced by state governments in
the northern states of Rajasthan and Punjab a week before Lawmakers from the
opposition Bharatiya Janata Party called for a nationwide ban. Protesters in Mumbai and

Kolkata defaced Pepsi and Coke ads and burned placards depicting soda bottles. Public
had gone furious and protest for Coke and Pepsi to leave India had begun. Soon, sales
dropped by 30 40%. Both Coke and Pepsi published newspaper advertisements to
spread message that pesticide levels in their products are below permissible levels and
less than those detected in other foods, such as tea, fruits and dairy products.

10.
11. 11. RESULT Repeated tests were conducted and on August 21, 2003, the then Minister
of Health and Family Welfare, Sushma Swaraj announced that the samples did not
contain unsafe levels of pesticides. The Joint Parliamentary Committee (JPC)
investigating pesticide contamination in soft drinks and beverages tabled its final report in
Parliament in 2004, corroborating the findings of the Centre for Science & Environment
(CSE) that leading Coca-Cola and Pepsi brands contained hazardous pesticides. The
efforts of the Government of India have led to the establishment of stricter norms that are
on par with the best in the world. 2 years later, Coca Cola hiked prices in India by 10-15
percent. The reason given was price increases to cover rising raw material and
distribution costs and the lingering effects of the pesticide allegations which drove decline
in sales.
12.
13. 12. LEADING BRAND IN INDIAN SOFT DRINKS MARKET GOLD SPOT: This orange
colored carbonated soft drink was introduced in the early 1950s, and acquired by the
Coca-Cola company in 1993. Its tangy taste has been popular with Indian teenagers.
LIMCA: This thirst-quenching beverage features a fresh and light lemon-lime taste. The
Limca brand was introduced in 1971 and acquired by the Coca-Cola company in 1993.
MAAZA: Maaza, launched in 1984 and acquired by the coca-cola company in 1993, is a
non carbonated mango soft drink with a rich, juice & natural mango taste. THUMPS UP:
In 1993, the Coca-Cola company acquired this brand, which was originally introduced in
1977. Its strong and fizzy taste makes it unique carbonated Indian cola. As of February
2012, Thums Up is the leader in the cola segment in India, commanding approximately
42% market share and an overall 15% market share in the Indian aerated waters market.
APPY FIZZ It is a product by Parle Agro, introduced in India in 2005. Appy Fizz
consists of carbonated apple juice, and is used as the basis for cocktails and is a popular
drink. After the success of Appy which was clean apple juice, Parle launched its sequel
product as Grappo Fizz, which is a carbonated grape juice. RASNA - Rasna is a soft
drink concentrate brand owned by Pioma Industries which is based in Ahmedabad, India.
It was launched in mid-seventies but started gaining popularity in the eighties when the
market was dominated by carbonated soft drinks like Thums up, Gold Spot and Limca. As
of 2009, Rasna had a 93% market share in the soft drink concentrate market in India.
14.
15. 13. According to 2012 reports, Sprite has a market share of 14 per cent while Thums Up
has a 15 per cent share. Following the two Coca Cola brands, Sprite and Thums Up, is
Pepsi, which has a 11.2 per cent market share. Sprite is also the largest selling sparkling
(carbonated) soft drink brand in China as well, according to news reports. Brand Coke
itself follows Pepsi with a 7.5 per cent share. Several other brands such as Fanta and
Mirinda with a similar share of the market as Coke jostle for the fourth place in terms of
share. Sprite, launched its new summer campaign with a tagline of chalo apni chaal in
summer 2012. It continued with its campaign which targets the Indian youth.

16.
17. 14. CONCLUSION There are still a lot of issues that Coke and Pepsi need to resolve
when it comes to their image abroad and in India. They both still represent the west, but
they need to become better adapted to the different environments they decide to become
part of. They need to not just be able to market their product efficiently; they need to show
some responsibility when things start to go sour for them. The Indian people continue to
steadily buy and consume soft drinks. However, Indians in general are consuming a wider
variety of beverages and Coke and Pepsi should be willing to expand the options. They
already have some fruit sodas, and some bottled water markets, but potential for
introducing fruit cocktails and other beverages do exist in the market. Coke and Pepsi still
continue to align themselves with brands, celebrities, sports, and lifestyles that the
Indians find appealing. Both the companies need to continuously check on their products
to make sure they are safe, and continue to be environmentally and morally sound with
their plants, operations, distribution, and products in general.
18.
19. 15. BIBLIOGRAPHY http://heritage.coca-cola.com/timeline.swf
http://www.slideshare.net/deadharshad/coke-1826796
http://www.slideshare.net/Lauraelizabethwilson/cocacola-india-crisis-case-study-analysis
http://www.campabeverages.com/ http://www.slideshare.net/daipayan_abhi/cocacolaindia http://www.indiaresource.org/campaigns/coke/2003/cocacolabends.html http://www.nytimes.com/2006/08/07/business/worldbusiness/07cnd-soda.html?_r=0
http://timesofindia.indiatimes.com/home/science/Pepsi-still-contains-worrying-levels-ofcarcinogen-Group/articleshow/20897196.cms
http://www.slideshare.net/ankurdineshsharma/pepsico-in-india-case-study-presentationiim- calcutta http://www.thehindubusinessline.com/marketing/sprite-set-to-overtakethums-up-as-largest-soft- drink-brand-in-india/article4361420.ece
20. 16. THE END

Rating...

Market research data by AC Nielsen, which now tracks both Coca-Cola and PepsiCo, shows that,
thanks to Thums Up, Sprite, Limca and Fanta, Coca-Cola India has a huge lead over rival PepsiCo
across all categories of drinks-colas, orange, clear lime and cloudy lemon. While Coca-Cola India's
consolidated share of carbonated soft drinks is 57.8%, PepsiCo follows at a distant second with
35.6% share. Though an apple-to-apple comparison between both rivals may not be fair in the cola
segment because Coca-Cola has two brands against PepsiCo's one, Coca-Cola overshadows its rival
across all other carbonated soft drink (CSD) segments.

Brand Pepsi with 13.1% market share is the only brand in the PepsiCo portfolio to cross the 10%
market mark. In contrast, four Coca-Cola brands have market shares of over 10%. After Thums Up,
Coca-Cola's second biggest brand is the clear lime Sprite with a 12.2% share, followed by cloudy
lemon drink Limca at 10.9% and orange-flavoured Fanta at 10%. Two of Coca-Cola's best-selling
brands-Thums Up and Limca-were acquired from Mr Chauhan. However, its own brand Coke ranks
third in the cola ranking-with an 8.2% share.

Understandably then, Thums Up enjoys one of the largest shares of Coca-Cola India's marketing and
ad budgets. This is a far cry from the strategy adopted by the company soon after it had acquired Mr
Chauhan's brands in 1993, when it was accused of neglecting Thums Up on both distribution and
marketing, promoting its own cola brand instead. However, that was then. Now, it is widely believed
that Akshay Kumar, who endorses Thums Up, is Coca-Cola India's most expensive celebrity
endorser-ahead of Aamir Khan and Hrithik Roshan, both of which endorse brand Coke. To leverage
its strong carbonation flavour, Thums Up's positioning as a macho drink with advertising almost
always hinging on dare devilry has worked well for the brand. Thums Up's key markets include Andhra
Pradesh, WB and Karnataka. Sprite's mainstay markets are Delhi, Mumbai and Bangalore while
Fanta is popular in the Southern states.
Officials of neither Coca-Cola nor PepsiCo commented on this story. Both Coca-Cola and PepsiCo
are big advertising and marketing spenders. PepsiCo's strongest brand after cola is Mirinda Orange at
8.9% against rival Fanta's 10% share. The gap between Coca-Cola's Sprite (12.2%) and PepsiCo's 7
Up (at 5.8% share)-both clear lime brands-is wider. In the cloudy lemon segment, Coca-Cola's Limca
at 10.9% overshadows PepsiCo's Mirinda cloudy lime, which barely manages a 0.4% share.