MAJOR PROJECT REPORT

ON

COMPARATIVE STUDY OF COCA-COLA AND PEPSI

Submitted to: Submitted by:

Dr. Suhasini Parashar Anagha Tanwar

09514901713

BBA (GEN.) 6th Semester

MAHARAJA SURAJMAL INSTITUTE

(Affiliated to Guru Gobind Singh Inderprastha University)

NAAC Accredited Recognized by U.G.C

C-4, Janakpuri, New Delhi-110058

 CERTIFICATE

This is to certify that ANAGHA TANWAR student of BBA (GEN) Programme Roll
Number 09514901713 from MAHARAJA SURAJMAL INSTITUTE, affiliated to GURU
GOBIND SINGH UNIVERSITY has completed her project COMPARATIVE STUDY
OF COCA-COLA AND PEPSI under my supervision. She has taken key interest and
shown almost sincerity in completion of this project. And completed this project under my
guidance and this is her original work and has also submitted the project report of same on
time.

DR. SUHASINI PARASHAR

READER

(DEPARTMENT OF BUSINESS ADMINISTRATION)

 TABLE OF CONTENTS

S.No. CHAPTERS PAGE

NO.
1. CHAPTER 1:
 INTRODUCTION 1

 OBJECTIVES 2
3
 RESEARCH METHODOLOGY
4
 LIMITATIONS

2. CHAPTER 2:
 LITERATURE REVIEW 6

 PROFILE OF PEPSI AND COCA-COLA 9

3. CHAPTER 3:
ANALYSIS AND INTERPRETATION OF DATA
29
 COMPARATIVE STATEMENT
54
 DATA ANALYSIS

CHAPTER 4: CONCLUSION AND RECOMMENDATION

4.  BIBLIOGRAPHY 70

 APPENDIX 71

ACKNOWLEDGEMENT
I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals and organizations. I would like to extend my sincere
thanks to all of them.

I am highly indebted to the Teacher in Charge DR. SUHASINI PARASHAR for her
guidance and constant supervision as well as for providing necessary information regarding
the project & also for her support in completing the project.

I would like to express my special gratitude and thanks to industry persons for giving me
such attention and time.

ANAGHA TANWAR

09514901713

BBA (GEN) 6th Semester

CHAPTER 1
INTRODUCTION
In this research we have surveyed the product performance and the buying
behaviour of two famous brands of soft drinks- Pepsi and Coca-Cola, which are
consumed b y people of all ages.

During this research, I have found out the meanings of Brand Rivalry, Brand
Loyalty, the marketing techniques that both the companies follow, to find out
the extent to which the customers are satisfied by both the brands, which brand
is a better investment and which brand has a bigger market share.

OBJECTIVES
This project is based upon the comparative study consumer behaviour towards Pepsi and
Coca-Cola soft drinks.

Objectives of the study are:

 To study the factors affecting the consumption pattern.

 To identify which brand is more consumed by the consumer.
 To find the extent of brand loyalty.
 To find out the costumer satisfaction level associated with the product and the
customer preference level.
 To find out which brand has a greater market share.

RESEARCH METHODOLOGY
Research in common parlance refers to a search for knowledge. One can also define research
as a systematic and scientific search for pertinent information on a specified topic. In fact,
research is an art of scientific investigation.

PRIMARY DATA:

It is a first hand data collected from original sources.

SECONDARY DATA:

Data is collected from secondary sources.

Project is based on secondary data that includes books, Internet, newspaper and magazine.

LIMITATIONS
 Difficulties in collection of first hand data.

 It was not possible to access the supervisory data.

 The subject of study was vast and there were constraints of time.

 As study is not based on primary data, it may be inaccurate.

CHAPTER 2
 5

BRAND RIVALRY
A brand is a name, term, sign, symbol, or design which is intended to identify
the goods or services of one seller or group of sellers and to differentiate
them from those of competitors.

Products and services have become so alike that they fail to distinguish
themselves by their quality, efficacy, reliability, assurance and care. Brands
add emotion and trust to these products and services, thus providing clues
that simplify consumers’ choice.

These added emotions and trust help create a relationship between brands and
consumers, which ensures consumers’ loyalty to the brands. Brands create
inspirational lifestyles based on these consumer relationships. Associating
oneself with a brand transfers these lifestyles onto consumers

Branding is more than just a business buzzword. It has become the crux of
selling in the new economy. If the old marketing mantra was, “Nothing
happens until somebody sells something”, the new philosophy could be
“Nothing happens until somebody brands something."

In its simplest form, a brand is a noun. It is the name attached to a product or

service. However, upon close inspection, a brand represents many more
intangible aspects of a product or service: a collection of feelings and
perceptions about quality, image, lifestyle and status. It creates in the mind
of customers and  prospects the perception that there is no product or  service
on the market that is quite like  yours. In short, a brand offers the customer
a guarantee and then delivers on  it.
Creating a strong brand identity will build mind share one of the strongest
competitive advantages imaginable.

6
As a result, customers will think of your business first when they think of
your product category.
 For example, when you think of tissues, more likely than not, you think of
the Kleenex brand. And when you're looking for tape to wrap a present,
Scotch is the brand that springs to mind. Likewise, when your child wants a
hamburger, he will often say he wants to go to McDonald’s. The reason
behind these strong brand-product associations is that these companies have
built rock solid brand identities.

And since ‘brand’ being such a powerful tool in the success of a business, it
is not strange that we see though competition between brands offering similar
kind of goods or services. This is known Brand Rivalry .

Brand rivalry is an extra aggressive in competition between two different

brands to reach at number one or to capture more market share.
In the most aggressive variants, ethics, moral values and even the law can be
neglected and it is only a race to reach the number one position which drives
the brand.

The main reason for b rand rivalry is that the companies are trying to get more
customers and to increase their market. The aim of the battle is to get the
customer to buy your product and not the product of the competitor.

There are two types of customers: Active and Passive. Active customers know
what they want. And passive ones, on the contrary, have no idea of what they
want and think for a long time about what product to buy. So, the second
group – passive customers – is the bone of contention, the object of fighting
in brand wars. Thus, companies are trying to get their customers by many
methods. These methods are: improving the quality of goods, then lowering
prices and offering discounts, and using advertising, of course. The brand
wars often take the form of price wars. It’s when to competing companies are
lowering prices more and more until they reach the level of their costs and
they just get no profit.
7
Price wars are good for customers but bad for companies as they decrease
their profits.
So, it’s better to use other methods when fighting in a brand war.

In today’s global scenario brand rivalry is not only about competitive

advantage, but also being closer to customer, i.e. to have superior customised
customer connectivity and it is used for fighting between brands for the best
position. It specifically implies inter-brand completion by rival firms
producing close substitutes (brands). This target at reducing the market share
of the competitor firm while advancing its own.

The aim of this project is to bring out two rival brands, go deep into its
formation, history and growth; then to analyse the rivalry that exists
between them and to understand the difference between the strategies and
tactics adopted by each of them

In this project we will be comparing the rival brands PEPSI & COCA-COLA .

8
PROFILE OF PEPSI AND COCA-COLA

9
10
 PEPSI

AN INTRODUCTION

Pepsi is a carbonated  soft drink that is produced and manufactured

by PepsiCo. Created and developed in 1898 and introduced as "Brad's Drink",
it was later renamed as Pepsi-Cola on June  16, 1903, then to Pepsi in 1961.

It is one of the most well known brands in the world today available in over
160 countries. It has an extremely positive outlook for India. This reflects
that India holds a central position in Pepsi's corporate strategy.

India is a key market for Pepsi co, and at the same time the company has
added value to Indian agriculture and industry. PepsiCo entered India in 1989
and is concentrating in three focus areas- Soft drink concentrate, snack foods
and vegetable and food processing.

Faced with the existing policy framework at the time, the company entered
the Indian market through a joint venture with Volta’s and Punjab Agro
Industries. With the introduction of the liberalization policies since 1991,
Pepsi took complete control of its operations.

The government has approved more than US$ 400 million worth of
investments of which over US$ 330 million have already flown in. One of
PepsiCo's key strategies was to develop a completely local management team.

Pepsi has 19 company owned factories while their Indian bottling partners
own 21. The company has set up 8 Greenfield sites in backward regions of
different states. PepsiCo intends to expand its operations and is planning an
investment of approximately US$ 150 million in the next two-three years.

11
 PEPSI
LITERATURE REVIEW

Pepsi was originally named "Brad's Drink", after its creator, Caleb Bradham,
a pharmacist in New Bern, North Carolina. It was created in the summer of
1893 and was later renamed Pepsi Cola in 1898, possibly due the digestive
enzyme pepsin and kola nuts used in the recipe. Bradham sought to create a
fountain drink that was delicious and would aid in digestion and boost energy

In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore into a
rented warehouse. That year, Bradham sold 7,968 gallons of syrup. The next
year, Pepsi was sold in six-ounce bottles, and sales increased to 19,848
gallons. In 1926, Pepsi received its first logo redesign since the original
design of 1905. In 1929, the logo was changed again. In 1929, automobile
race pioneer Barney Oldfield endorsed Pepsi-Cola in newspaper ads as "A
bully drink...refreshing, invigorating, a fine bracer before a race".

Bankruptcy

In 1931, the Pepsi-Cola Company went bankrupt during the Great Depression-
in large part due to financial losses incurred by speculating on wildly
fluctuating sugar prices as a result of World War I. Assets were sold and Roy
C. Megargel bought the Pepsi trademark. Eight years later, the company went
bankrupt again. Pepsi's assets were then purchased by Charles Guth , the
President of Loft Inc. Loft was a candy manufacturer with retail stores that
contained soda fountains. He sought to replace Coca-Cola at his stores'
fountains after Coke refused to give him a discount on syrup. Guth then had
Loft's chemists reformulate the Pepsi-Cola syrup formula.

Pepsi Cola Trademark

The original trademark application for Pepsi-Cola was filed on

September  23, 1902 with registration approved on June 16, 1903.

12
In the application's statement, Caleb Bradham describes the trademark as an
"arbitrary hyphenated word "PEPSI-COLA", and indicated that the mark was
in continuous use for his business since August 1, 1901. The Pepsi-Cola's
description is a flavoring-syrup for soda water. The trademark expired on
April 15, 1994.A second Pepsi-Cola trademark is on record with the  USPTO.
The application date submitted by Caleb Bradham for the second trademark is
Saturday, April 15, 1905 with the successful registration date of
April 15, 1906, over three years after the original date.

Curiously, in this application, Caleb Bradham states that the trademark had
been continuously used in his business "and those from whom title is derived
since in the 1905 application the description submitted to the USPTO was for
a tonic beverage. The federal status for the 1905 trademark is registered and
renewed and is owned by  PepsiCo, Inc. of Purchase.

Rise

During the Great Depression, Pepsi gained popularity following the

introduction in 1936 of a 12- ounce bottle. Initially priced at 10 cents, sales
were slow, but when the price was slashed to five cents, sales increased
substantially. With a radio advertising campaign featuring the jingle "Pepsi
cola hits the spot / Twelve full ounces, that's a lot / Twice as much for a
nickel, too / Pepsi-Cola is the drink for you," Pepsi encouraged price-
watching consumers to switch, obliquely referring to the Coca-Cola standard
of six ounces a bottle for the price of five cents (a nickel), instead of the 12
ounces Pepsi sold at the same price. Coming at a time of economic crisis, the
campaign succeeded in boosting Pepsi's status. In 1936 alone 500,000,000
bottles of Pepsi were consumed. From 1936 to 1938, Pepsi-Cola's profits
doubled.

13
Pepsi's success under Guth came while the Loft Candy business was faltering.
Since he had initially used Loft's finances and facilities to establish the new
Pepsi success, the near-bankrupt Loft Company sued Guth for possession of
the Pepsi-Cola Company.

A long legal battle, Guth v. Loft, then ensued, with the case reaching the
Delaware Supreme Court and ultimately ending in a loss for Guth.

Niche Marketing

Walter Mack was named the new President of Pepsi-Cola and guided the
company through the 1940s. Mack, who supported progressive  causes, noticed
that the company's strategy of using advertising for a general audience either
ignored Americans or used ethnic stereotypes in portraying blacks. He
realized African Americans were an untapped  niche market  and that Pepsi
stood to gain market share  by targeting its advertising directly towards
them. To this end, he hired  Hennan Smith, advertising executive "from the
Negro newspaper field"  to lead an all-black sales team, which had to be cut
due to the onset of  World War II. In 1947, Mack resumed his efforts,
hiring Edward F. Boyd to lead a twelve-man team. They came up with
advertising portraying black Americans in a positive light, such as one with a
smiling mother holding a  six pack of Pepsi while her son (a young  Ron
Brown, who grew up to be  Secretary of Commerce ) reaches up for one.
Another ad campaign , titled "Leaders in Their Fields", profiled twenty
prominent African Americans such as  Nobel Peace Prize  winner Ralph  and
photographer  Gordon Parks.

Boyd also led a sales team composed entirely of blacks around the country to
promote Pepsi.  Racial segregation  and laws were still in place throughout
much of the U.S.; Boyd's team faced a great deal of discrimination as a
result, from insults by Pepsi co-workers to threats by the  Ku Klux Klan. On
the other hand, it was able to use  racism as a selling point, attacking Coke's
reluctance to hire blacks and support by the chairman of Coke for
segregationist Governor  Herman Talmadge . 

14
As a result, Pepsi's market share as compared to Coke's shot up dramatically.
After the sales team visited Chicago, Pepsi's share in the city overtook that of
Coke for the first time.

This focus on the market for black people caused some consternation within
the company and among its affiliates. It did not want to seem focused on
black customers for fear  white customers would be pushed away.  In a meeting
at the Waldorf-Astoria Hotel , Mack tried to assuage the 500  bottlers  in
attendance by pandering to them, saying: "We don't want it to become known
as a nigger drink." After Mack left the company in 1950, support for the
black sales team faded and it was cut.

 Current Situation

PepsiCo, Inc. is one of the most successful consumer products companies in

the world, with 2000 revenues of over $20 billion and 125,000 employees.
The company consists of: Frito-Lay Company, the largest manufacturer and
distributor of snack chips; Pepsi-Cola Company, the second largest soft drink
business and Tropicana Products, the largest marketer and producer of
branded juice. PepsiCo brands are among the best known and most respected
in the world and are available in about 190 countries and territories.

15
 16

PRODUCTS OF PEPSI
Pepsi

Pepsi is a carbonated  soft drink that is produced and manufactured

by PepsiCo. Created and developed in 1898 and introduced as "Brad's Drink",
it was later renamed as Pepsi-Cola on June  16, 1903, then to Pepsi in 1961. It
is one of the most well known brands in the world today available in over 160
countries.

Mirinda

Mirinda is a brand of soft drink originally created in  Spain, but with global

distribution. The word Mirinda means "admirable, wonderful" in  Esperanto . It
is available in fruit varieties including orange grapefruit, apple, strawberry,
raspberry, pineapple, pomegranate, banana, lemon, hibiscus, guarana,
tangerine, and grape flavours as well as tamarind. A "citrus" flavour is also
available in certain areas of the Middle East.

Mountain Dew

Mountain Dew is a carbonated  soft drink  brand produced and owned

by PepsiCo. The original formula was invented in the 1940s by Tennessee
beverage bottlers Barney and Ally Hartman and was first marketed in  Marion,
Virginia, Knoxville  and Tennessee. The Mountain Dew brand and production
rights were acquired by the Pepsi-Cola company in 1964, at which point its
distribution expanded more widely across the  United States .

17

7UP
7UP is a brand of a lemon-lime  flavoured non-caffeinated  soft drink . The
rights to the brand are held by  Dr Pepper Snapple Group  in the United States,
and Pepsi Co (or its licensees) in the rest of the world.

18
 19

COCA-COLA
 AN INTRODUCTION

Coca-Cola is a carbonated  soft drink  sold in stores, restaurants, and  vending

machines  in more than 200 countries.  It is produced by The Coca-Cola
Company of Atlanta, Georgia, and is often referred to simply as  Coke.
Originally intended as a  patent medicine  when it was invented in the late 19th
century by John Pemberton , Coca-Cola was bought out by businessman  Asa
Griggs Candler , whose marketing tactics led Coke to its dominance of the
world soft-drink market throughout the 20th century.

The company produces  concentrate , which is then sold to licensed Coca-Cola

bottlers throughout the world. The bottlers, who hold territorially exclusive
contracts with the company, produce finished product in cans and bottles
from the concentrate in combination with filtered water and sweeteners. The
bottlers then sell, distribute and merchandise Coca-Cola to retail stores and
vending machines. Such bottlers include  Coca-Cola Enterprises , which is the
largest single Coca-Cola bottler in North America and Western Europe. The
Coca-Cola Company also sells concentrate for  soda fountains  to major
restaurants and food service  distributors.

The Coca-Cola Company has, on occasion, introduced other cola drinks under
the Coke brand name. The most common of these is  Diet Coke, with others
including  Caffeine-Free Coca-Cola , Diet Coke Caffeine-Free,  Coca-Cola
Cherry, Zero, Coca, and special versions with lemon, lime or coffee.

Based on Interbrand's best global brand 2011, Coca-Cola was the world's
most valuable brand.

20
The Coca-Cola Company believes our business has always been based on the
trust consumers everywhere place in us—trust that is earned by what we do as
a corporate citizen and by our ability to live our values as a commercial
enterprise, there is much in our world to celebrate, refresh, strengthen and
protect.

Through our actions as local citizens, we strive every day to refresh the
marketplace, enrich the workplace, preserve the environment and strengthen
our communities. At the heart of our business is the trust consumers place in
us. They rightly expect that we are managing our business according to sound
ethical principles, that we are enhancing the health of our communities, and
that we are using natural resource responsible.

The Coca Cola Company started operations in India in 1993 after an absence
of 16 years.

To reach India's 300 million soft-drink consumers, the company distributes

its products through over 700,000 retail outlets Coca Cola India directly
employs over 7000 workers. Over the past nine years, the company has
invested over US$ 827 million in India with over US$ 800 million in its
bottling subsidiary. Significant growth has come from Kinley, its packaged
water brand, which claims to have around 35 per cent share of the packaged
drinking water market

It is the world's favourite drink. It is the world's most valuable brand and the
most recognizable word across the world after ‘OK’. Coca-Cola has a truly
remarkable heritage.

From a humble beginning in 1886, it is now the flagship brand of the largest
manufacturer, marketer and distributor of non-alcoholic beverages in the
world.

In India, Coca-Cola was the leading soft drink till 1977 when govt. policies
necessitated its departure.

21
Coca-Cola made its return to the country in 1993 and made significant
investments to ensure that the beverage is available to more and more people,
even in the remote and inaccessible parts of the nation. Coke had entered the
Indian soft drinks market way back in the 1970s.

The company was the market leader till 1977, when it had to exit the country
following policy changes regarding MNCs operating in India. Over the next
few years, a host of local brands emerged such as Campa Cola, Thumps Up,
Gold Spot and Limca etc. However, with the entry of Pepsi and Coke in the
1990s, almost the entire market went under their control.

22
 COCA-COLA

LITERATURE REVIEW

The first Coca-Cola recipe was invented in a drugstore in Columbus, Georgia

by John Pemberton , originally as a coca wine called Pemberton's French Wine
Coca in 1885. He may have been inspired by the formidable success of Vin
Mariani, a European coca wine.

In 1886, when Atlanta and Fulton County passed prohibition legislation,

Pemberton responded by developing Coca-Cola, essentially a non-alcoholic
version of French Wine Cola. The first sales were at Jacob's Pharmacy in
Atlanta, Georgia, on May 8, 1886. It was initially sold as a patent medicine
for five cents a glass at soda fountains , which were popular in the United
States at the time due to the belief that carbonated water was good for the
health. Pemberton claimed Coca-Cola cured many diseases, including
morphine addiction, dyspepsia, neurasthenia , headache, and impotence .
Pemberton ran the first advertisement for the beverage on May 29 of the same
year in the Atlanta Journal.

By 1888, three versions of Coca-Cola—sold by three separate businesses—

were on the market. Asa Griggs Candler acquired a stake in Pemberton's
company in 1887 and incorporated it as the Coca Cola Company in 1888. The
same year, while suffering from an ongoing addiction to morphine, Pemberton
sold the rights a second time to four more businessmen: J.C. Mayfield , A.O.
Murphey, C.O. Mullahy and E.H. Bloodworth. Meanwhile, Pemberton's
alcoholic son Charley Pemberton began selling his own version of the
product.

John Pemberton declared that the name "Coca-Cola" belonged to Charley, but
the other two manufacturers could continue to use the formula. So, in the
summer of 1888, Candler sold his beverage under the names Yum Yum and
Koke.

23
After both of them failed to catch on, Candler set out to establish a legal
claim to Coca-Cola in late 1888, in order to force his two competitors out of
the business. Candler purchased exclusive rights to the formula from John
Pemberton, Margaret Dozier and Woolfolk Walker . However, in 1914, Dozier
came forward to claim her signature on the bill of sale had been forged, and
subsequent analysis has indicated John Pemberton's signature was most likely
a forgery as well.

In 1892 Candler incorporated a second company, The Coca-Cola Company

(the current corporation), and in 1910 Candler had the earliest records of the
company burned, further obscuring its legal origins. By the time of its 50th
anniversary, the drink had reached the status of a national icon in the USA. In
1935, it was certified kosher by Rabbi Tobias Geffen , after the company
made minor changes in the sourcing of some ingredients.

Coca-Cola was sold in bottles for the first time on March 12, 1894. The first
outdoors wall advertisement was painted in the same year as well in Georgia.
The Cans of Coke first appeared in 1955. The first bottling of Coca-Cola
occurred in Vicksburg, Mississippi, at the Biedenharn Candy Company in
1891.

Its proprietor was Joseph A. Biedenharn. The original bottles were

Biedenharn bottles, very different from the much later hobble-skirt design
that is now so familiar. Asa Candler was tentative about bottling the drink,
but two entrepreneurs from Chattanooga, Tennessee, Benjamin F. Thomas and
Joseph B. Whitehead, proposed the idea and were so persuasive that Candler
signed a contract giving them control of the procedure for only one dollar.

Candler never collected his dollar, but in 1899 Chattanooga became the site
of the first Coca-Cola bottling company. The loosely termed contract proved
to be problematic for the company for decades to come. Legal matters were
not helped by the decision of the bottlers to subcontract to other companies,
effectively becoming parent bottlers.

24
Twentieth Century Landmarks

By the time of its 50th anniversary, the soft drink had reached the status of a
national icon in the USA. In 1935, it was certified  kosher by Atlanta
Rabbi Tobias Geffen , after the company made minor changes in the sourcing
of some ingredients.

The longest running commercial Coca-Cola soda fountain anywhere was

Atlanta's Fleeman's Pharmacy, which first opened its doors in 1914.  Jack
Fleeman took over the pharmacy from his father and ran it till 1995; closing
it after 81 years.

On July 12, 1944, the one-billionth gallon of Coca-Cola syrup was

manufactured by The Coca-Cola Company. The Cans of Coke first appeared
in 1955.

New Coke

On April 23, 1985, Coca-Cola, amid much publicity, attempted to change the
formula of the drink with "New Coke". Follow-up taste tests revealed that
most consumers preferred the taste of New Coke to both Coke and Pepsi, but
Coca-Cola management was unprepared for the public's nostalgia for the old
drink, leading to a backlash. The company gave in to protests and returned to
a variation of the old formula , with high-fructose replacing cane sugar, under
the name Coca-Cola Classic on July 10, 1985.

Twenty-first Century

On February 7, 2005, the Coca-Cola Company announced that in the second

quarter of 2005 they planned to launch a Diet Coke product sweetened with
the artificial sweetener sucralose ("Splenda"), the same sweetener currently
used in Pepsi One.

25
On March 21, 2005, it announced another diet product, Coca-Cola Zero,
sweetened partly with a blend of Aspartame and Acesulfame potassium . In
2007, Coca-Cola began to sell a new "healthy soda": Diet Coke with vitamins
B6, B12, Magnesium, Niacin, and zinc, marketed as "Diet Coke Plus."

On July 5, 2005, it was revealed that Coca-Cola would resume operations in

Iraq for the first time since the Arab League boycotted the company in 1968.

In April 2007, in Canada, the name "Coca-Cola Classic" was changed back to
"Coca-Cola." The word "Classic" was truncated because "New Coke" was no
longer in production, eliminating the need to differentiate between the two.
The formula remained unchanged.

In January 2009, Coca-Cola stopped printing the word "Classic" on the labels
of 16-ounce bottles sold in parts of the southeastern United States . The
change is part of a larger strategy to rejuvenate the product's image.

In November 2009, due to a dispute over wholesale prices of Coca-Cola

products, Costco stopped restocking its shelves with Coke and Diet Coke.

26
 27

PRODUCTS OF COCA-COLA

Coca-Cola
Coca-Cola is a carbonated  soft drink  sold in stores, restaurants, and  vending
machines  in more than 200 countries.  It is produced by The Coca-Cola
Company of Atlanta, Georgia, and is often referred to simply as  Coke.

Thumps-up

Thumps Up is a brand of cola in India.  It was introduced in 1977 to offset
the expulsion of  The Coca-Cola Company  from India. The brand was bought
out by Coca-Cola who re-launched it in order to compete against  Pepsi.

Sprite

Sprite is a transparent,  lemon-lime  flavoured , caffeine-free  soft drink,

produced by the Coca-Cola Company . It was introduced in the  United
States in 1961. This was Coke's response to the popularity of 7 UP . It comes
in a primarily silver, green, and blue can or a green transparent bottle with a
primarily green and blue label.

Fanta

Fanta is a global  brand of fruit-flavoured carbonated  drinks from the Coca-

Cola Company . There are over  100 flavours worldwide . The drink debuted
in Nazi Germany  in 1941 and originally sold only in Europe.

Maaza

Maaza is a Coca-Cola fruit drink brand marketed in India and Bangladesh, the

most popular drink being the  mango variety so much that over the years, the
Maaza brand has become synonymous with Mango.Coca-Cola has also
launched Maaza in orange and pineapple variants.

28

CHAPTER 3

ANALYSIS AND INTERPRETATION OF DATA

 29

PEPSI VS COCA-COLA

A Comparison
Taste

Coca-Cola is the original cola, while there isn't a huge difference in taste;
Pepsi mirrored their cola after Coke's, being just different enough in taste
to not actually be the same drink.

Similarities

Pepsi-Cola and Coca Cola Classic are both carbonated cola beverages.

Sweetness

Pepsi tastes sweeter than Coca-Cola, This is the reason why many prefer
Pepsi over Coca-Cola in a blind test but may prefer Coke when drinking
an entire can.

Carbonation

Coca-Cola has more carbonation than Pepsi depending on what region you
are in. It was said that depending on where each one was made the amount
of carbonation in them will be different therefore proving that neither
Coca-Cola nor Pepsi have more carbonation.

30
 31

PEPSI VS COCA-COLA

THE COLA WAR

The Cola Wars  are a campaign  of mutually targeted television advertisements
and marketing campaigns since the 1980s to present between soft drink
manufacturers  Coca-Cola Company  and PepsiCo Incorporated . According to
Consumer Reports, in the 1970s, the rivalry continued to heat up the market.
Pepsi conducted blind taste tests in stores, in what was called the " Pepsi
Challenge ".

These tests suggested that more consumers preferred the taste of Pepsi (which
is believed to have more lemon oil, less orange oil, and uses vanillin rather
than vanilla) to Coke. The sales of Pepsi started to climb, and Pepsi kicked
off the "Challenge" across the nation. This became known as the " Cola
Wars."

In 1985, The Coca-Cola Company , amid much publicity, changed its formula.
The theory has been advanced that New Coke, as the reformulated drink came
to be known, was invented specifically in response to the Pepsi Challenge.
However, a consumer backlash led to Coca-Cola quickly introducing a
modified version of the original formula (removing the expensive Haitian
lime oil and changing the sweetener to corn syrup) as Coke "Classic".

The Beginning

1975 heralded the ‘Pepsi Challenge’, a landmark marketing strategy, which

convinced millions of consumers that the taste of Pepsi was superior to Coke.
Simultaneously, Pepsi Light, with a distinctive lemon taste, was introduced as
an alternative to traditional diet colas.

In 1983 Coke launched aspartame/saccharin blend Diet Coke. In response in

1989 Pepsi-Cola introduced an exciting new flavour, Wild Cherry Pepsi.

32

Thus Diet Pepsi's 'The Other Challenge' campaign was based around a 54-
46% lead over Diet Coke in independently researched taste tests in Australia.
It was only in 1996 that Pepsi unveiled a revolutionary 'blue' look worldwide
'to transform the image and attitude' of one of the world's best-known brands.
'Pepsi Blue represents a quantum leap into the future and redefines how the
Cola Wars will be fought and won in the 21st Century.'

Competition

Many of the brands available from the three largest soda producers, The
Coca-Cola Company and PepsiCo are intended as direct, equivalent
competitors. The following chart lists these competitors by type or flavour of
drink.

Flavour/Type PepsiCo The Coca-Cola Company

Cola Pepsi Coca-Cola

Diet Cola Diet Pepsi / Pepsi Light, Diet Coke / Coca-Cola

Pepsi ONE, Light,
Pepsi Max Tab,
Coca-Cola Zero

Cherry-flavoured cola Pepsi Wild Cherry Coca-Cola Cherry

"Pepper"-style Dr Slice Mr. Pibb / Pibb Xtra

Orange Mirinda, Fanta,

Tropicana Twister, Minute Maid
Tango,
Slice

33

Lemon-lime Teem, Sprite,

Sierra Mist, Lemon & Paeroa
 7 Up (in countries other than
US)

Flavour/Type PepsiCo The Coca-Cola

company
Root beer Mug Root Beer Barq's
Ramblin' Root Beer
Cream soda Mug Cream Soda Barq's Red Creme
Soda
Juices Tropicana, Minute-maid
Dole Simply Orange

Iced tea Lipton, Nestea,

Brisk Gold Peak Tea

Sports drinks Gatorade, PowerAde,

Propel Aquarius,
Vitamin Water
Energy drinks AMP Full-Throttle,
NOS,
Relentless,
Monster
Mineral Waters Aquafina Kinley,
Dasani
34

Marketing Campaigns

Coca-Cola and Pepsi-Cola focused particularly on pop stars; notable  soft

drink promoters included  Mariah Carey , KISS, Tina Turner, Britney
Spears, David Bowie, Rod Stewart, Jim Varney, Elvis Presley , Michael
Jackson, Madonna, and Ray Charles (for Pepsi) and  Whitney Houston , Paula
Abdul, Weird Al Yankovic , George Michael , Christina Aguilera , Max
Headroom, and Elton John (for Coca-Cola).

Coca-Cola

One example of a heated exchange that occurred during the Cola Wars was Coca-Cola
making a strategic retreat on July 11, 1985, by announcing its plans to bring back the original
'Classic' Coke after recently introducing New Coke.

Pepsi

Pepsi ads often focused on celebrities choosing Pepsi over Coke, supporting
Pepsi's positioning  as "The Choice of a New Generation." Pepsi generation
was created focusing on the user of the drink, never the drink. Coke always
focused on the drink. Pepsi focused on the person using it. They showed
people riding dirt bikes, waterskiing, or kite flying, hang gliding — doing
different things. And at the end of it there would always be a Pepsi as a
reward.

This all happened when color television was first coming in. They were the
first company to do lifestyle marketing. The first and the longest-running
lifestyle campaign were and still is Pepsi. In 1975, Pepsi began showing
people doing blind taste tests  called  Pepsi Challenge  in which they preferred
one product to the other, and then they began hiring more and more popular
spokespersons to promote their products. In their hope to win the Cola Wars a
Concorde was painted blue with PEPSI written across it in white lettering. In
the late 1990s, Pepsi launched its most successful long-term strategy of the
Cola Wars, Pepsi Stuff. Consumers were invited to "Drink Pepsi, Get Stuff"
and collect Pepsi Points on billions of packages and cups.

35

They could redeem the points for free Pepsi lifestyle merchandise. After
researching and testing the program for over two years to ensure that it
resonated with consumers, Pepsi launched Pepsi Stuff, which was an instant
success. Tens of millions of consumers participated. Pepsi outperformed Coke
during the summer of the  Atlanta Olympics  - held in Coke's hometown -
where Coke was a lead sponsor of the Games.

Due to its success, the program was expanded to include  Mountain Dew, and
into Pepsi's international markets worldwide. The company continued to run
the program for many years, continually innovating with new features each
year.

The Pepsi Stuff promotion became the subject of a  lawsuit. In one of the
many commercials, Pepsi showed a young man in the cockpit of a  Harrier
Jump Jet. Below ran the caption "Harrier Jet: 7 million Pepsi Points." There
was a mechanism for buying additional Pepsi Points to complete a Pepsi Stuff
order. John Leonard, of Seattle, Washington, sent in a Pepsi Stuff request
with the maximum amount of points and a check for over $700,000US to
make up for the extra points he needed. Pepsi did not accept the request and
Leonard filed suit. The judgment was that a reasonable person viewing the
commercial would realize that Pepsi was not, in fact, offering a Harrier Jet.
In response to the suit, Pepsi added the words "Just Kidding" under the
portion of the commercial featuring the jet as well as changing the "price" to
700 million Pepsi points

Coca-Cola and Pepsi engaged in a " cyber-war" with the re-introduction of

Pepsi Stuff in 2005 & Coca-Cola retaliated with Coke Rewards. This cola war
has now concluded, with Pepsi Stuff ending its services and Coke Rewards
still offering prizes on their website. Both were loyalty programs that give
away prizes and product to consumers after collecting bottle caps and 12 or
24 pack box tops, then submitting codes online for a certain number of
points. However, Pepsi's online partnership with Amazon allowed consumers
to buy various products with their "Pepsi Points", such as mp3 downloads.
Both Coca-Cola and Pepsi previously had a partnership with the iTunes Store.

36

In Space

In 1985, Coca-Cola and Pepsi were launched into  space aboard the  Space
Shuttle Challenger  onSTS-51-F.
The companies had designed special cans (officially the Carbonated Beverage
Dispenser Evaluation payload or CBDE) to test packaging and dispensing
techniques for use in  zero G conditions. The experiment was classified
a failure by the shuttle crew, primarily due to the lack of
both refrigeration  and gravity.

The "Coca-Cola Space Dispenser" (Fluids Generic Bio-processing Apparatus-

1, or FGBA-1) was designed to provide astronauts the opportunity to enjoy
Coca-Cola and Diet Coke in the weightless environment of space, and to
"provide baseline data on changes in astronauts' taste perception of beverages
consumed in microgravity."  It held 1.65 liters each of Coca-Cola and Diet
Coke. An astronaut would dispense the carbonated drink of choice into a
"Fluids Transfer Unit" or sealed drinking cup through a quick connect on the
dispenser. To save power, the dispenser would chill the liquid on demand via
cooling coils between the storage container and the quick connect fitting. The
FGBA-1 and 18 of the "Fluid Transfer Units" flew aboard the  Space Shuttle
Discovery in 1995. (STS-63)

Further development led to a Coca-Cola fountain dispenser (Fluids Generic

Bio-processing Apparatus-2 or FGBA-2) intended as "a test bed to determine
if carbonated beverages can be produced from separately stored carbon
dioxide, water and flavored syrups and determine if the resulting fluids can
be made available for consumption without bubble nucleation and resulting
foam formation".  This unit dispensed  PowerAde sports drink in addition to
Coca-Cola and Diet Coke. This unit flew on  STS-77 aboard Space Shuttle
Endeavour  in 1996. Unfortunately, the FGBA-2 did not work as expected.

Second Cola War

During the 1990s, a "second cola war" was reported in the  United Kingdom.

37

This time it was due to the launch of Virgin Cola , as well as  Sainsbury's store
brand Classic Cola , which, unlike most store brand colas, was designed to
look like a top product worthy of competition. For a few years both colas
were competitive with Coca-Cola and Pepsi; at one point Coca-Cola even
sued Sainsbury's claiming the design of the Classic Cola can was too similar
to Coke's. However, today, both Virgin and Classic Cola are far behind the
two major brands.

The high-publicity marketing also continued into the 1990s. In 1997,

the Spice Girls (then at their peak) signed a multi-million pound sponsorship
deal with Pepsi. They starred in three  Pepsi commercials; released two
limited edition singles with Pepsi, " Move Over " and "Step to me"; featured
on Pepsi packaging; and performed two live concerts in Istanbul organized
and sponsored by the company.

Cola Wars today

In 2007, Indra Nooyi became the fifth CEO in PepsiCo's 44-year history, and
the game completely changed. A former management consultant, she decided
not to duke it out directly with Coke. Instead, she’s trying to redefine the
playing field.

U.S. Consumption of carbonated soft drinks has steadily declined in the past
decade.
Part of that comes down to the array of alternative beverages the market now
offers. Part of it comes down to health concerns in a nation with an obesity
problem.
But rather than buck the trend, Ms. Nooyi seeks to refocus Pepsi. “Lifestyles
have changed,” she notes, “And we have to modify our products.”

In that spirit, she’s focusing the company more on water, juices, teas and
sports drinks.
Pepsi’s top brands in those areas include Aquafina and Gatorade. And while
it trails in soft drink sales, it leads the world in ready-to-drink teas through
Lipton, while its Tropicana wins out in juices/nectars.
38
The company is betting big on creating healthy foods through its Quaker
Oats, Gatorade and Tropicana divisions. And it just began the Global
Nutrition Group to deliver breakthrough products.
Nooyi says the new Group “is part of our long-term strategy to grow our
nutrition business from about $10 billion in revenues today to $30 billion by
2020.

To further that goal, Pepsi hired several well-known nutritionists to direct its
efforts at reducing fat, sodium and sugar in its products. Already, Lay’s
potato chips have 25% less sodium… and by 2011, they’ll be made from
100% natural ingredients.
As Caroline Levy, a CLSA analyst, noted, “PepsiCo is currently focused on
better-for-you” products.

Coke’s Consistent Strategy Wins the Cola War

Meanwhile, Coca-Cola doesn’t seem to care about what Pepsi has accepted.
CEO Muhtar Kent not only continues to focus on selling soft drinks globally,
but even vows to rebuild Coke sales in the U.S. market.
 And admittedly, Coke’s beverage volume in North America dropped
only 2% last year. 2009 was extremely difficult economically on top
of a relatively cool summer.

 In comparison, Pepsi’s beverage volume in the same region plunged

8%.

According to Beverage Digest, this makes Coca-Cola brand the uncontested

U.S. heavyweight.
Indeed, looking at all carbonated soft drinks, Coke brands commanded 41.9%
of the total market last year compared to PepsiCo’s 29.9%.
The same goes for the companies’ flagship brands. Through 2009, Coca-Cola
commanded 17% of the U.S. soft drink market; Pepsi held only 9.9%. And
while both brands have been declining, Pepsi is doing so at a slightly faster
rate.

39
Pepsi Admits Defeat… Goes On New Health Kick
As far as Pepsi is concerned, the cola wars are over. It now needs to focus on
convincing investors that it has the right focus in this new health kick.
Currently, the Global Nutrition Group is little but a nice marketing tool. Will
Pepsi really develop healthier foods and drinks while still coming up with
new types of chips and soda flavours is a question.
It recently reduced the top end of its guidance for earnings growth this year
from 13% to 11%. This may be due to increased investment in nutrition… or
because of a difficult, competitive global environment.
Coke, among others, continues to steal market share away from Pepsi.
Carbonated beverages still produce much of the company’s sales and for now,
they’re still key to Pepsi’s future health.

40
 PEPSI VS COCA-COLA

Which cola brand is the better Investment?

A study found that 80 percent of people could differentiate a sample of  Coca-

Cola from a sample of  Pepsi . The same study found that if you give people three
samples they can only accurately guess which samples are which 33 percent of the
time. That’s the same odds as randomly guessing.

Malcolm Gladwell called this the Triangle Problem in his book  Blink: the
Power of Thinking without Thinking . The idea is that the two products are
much more similar than they are different. Some people even theorize that
the preferences than the actual soda.
This same concept can be extrapolated to each company’s respective stock.

Coke vs. Pepsi –Dividends

Both Pepsi and Coke are favorites of super investor Warren Buffett. That’s
because both stocks have had strong growth and both are cash cows when it
comes to dividends.

One interesting note not apparent in the above table above is that Coca-Cola
has raised its dividend in a slower, more consistent manner. Pepsi, on the
other hand, has significantly upped their dividend distribution over the last
few years.
 In 2004, Pepsi offered a quarterly dividend of 16 cents when Coke
was offering a quarter.

 Coke has increased annual dividends for 49 years running. Pepsi

also has a streak of increasing their annual dividend for 39 straight
years.
 41

 Coke’s stock price has grown in value by over 50 percent since the
beginning of 2009. Pepsi’s stock has grown by about 40 percent in
the same time.

In terms of market share, Coke owns the top two spots in  the cola industry  –
Coke and Diet Coke- with Pepsi’s flagship cola coming in at third.
Pepsi does have a slight advantage over Coke in diversification.
 Pepsi has snack food brands such as Frito-Lay and Quaker under its
umbrella. They also own the brands that make beverages such as
Gatorade, Tropicana and Naked Juices.

 While Coke hasn’t tapped the snack food market, they do have some
beverage diversification. Dasani bottled water, PowerAde and Minute
Maid juices are all under Coca-Cola’s umbrella.
 42

PEPSI VS COCA-COLA

PRESENCE IN INDIA

PEPSI

PepsiCo entered India in 1989 and has grown to become one of the country’s
leading food and beverage companies. One of the largest multinational
investors in the country, PepsiCo has established a business which aims to
serve the long term dynamic needs of consumers in India.

PepsiCo India and its partners have invested more than U.S.$1 billion since
the company was established in the country. PepsiCo provides direct and
indirect employment to 150,000 people including suppliers and distributors.

PepsiCo nourishes consumers with a range of products from treats to healthy

eats that deliver joy as well as nutrition and always, good taste. PepsiCo
India’s expansive portfolio includes iconic refreshment beverages Pepsi, 7
UP, Mirinda and Mountain Dew, in addition to low calorie options such as
Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking
water, isotonic sports drinks - Gatorade, Tropicana100% fruit juices, and
juice based drinks – Tropicana Nectars, Tropicana Twister and Slice. Local
brands – Lehar Evervess Soda, Dukes Lemonade and Mangola add to the
diverse range of brands.

PepsiCo’s foods company, Frito-Lay, is the leader in the branded salty snack
market and all Frito Lay products are free of trans-fat and MSG. It
manufactures Lay’s Potato Chips; Cheetos extruded snacks, Uncle Chipps and
traditional snacks under the Kurkure and Lehar brands.

The company’s high fibre breakfast cereal, Quaker Oats, and low fat and
roasted snack options enhance the healthful choices available to consumers.
 43

Frito Lay’s core products, Lay’s, Kurkure, Uncle Chipps and Cheetos are
cooked in Rice Bran Oil to significantly reduce saturated fats and all of its
products contain voluntary nutritional labeling on their packets.

The group has built an expansive beverage and foods business. To support its
operations, PepsiCo has 43 bottling plants in India, of which 15 are company
owned and 28 are franchisee owned. In addition to this, PepsiCo’s Frito Lay
foods division has 3 state-of-the-art plants. PepsiCo’s business is based on its
sustainability vision of making tomorrow better than today.

PepsiCo’s commitment to living by this vision every day is visible in its

contribution to the country, consumers and farmers.

COCA-COLA

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

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

Coca-Cola India is among the country’s top international investors, having

invested more than US$ 1 billion in India in the first decade, and further
pledged another US$100 million in 2003 for its operations.

The Company has shaken up the Indian carbonated drinks market greatly,
giving consumers the pleasure of world-class drinks to fill up their hydration,
refreshment, and nutrition needs. It has also been instrumental in giving an
exponential growth to the country’s job listings.
 44

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

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

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

On the distribution front, 10-tonne trucks – open bay three-wheelers that can
navigate the narrow alleyways of Indian cities – constantly keep our brands
available in every nook and corner of the country’s remotest areas.
 45

PEPSI VS COCA-COLA

Marketing

Control of market share is the key issue in this case study. The situation is
both Coke and Pepsi are trying to gain market share in this beverage market,
which is valued at over $30 billion a year. Just how this is done in such a
competitive market is the underlying issue.

The facts are that each company is coming up with new products and ideas in
order to increase their market share. The creativity and effectiveness of each
company's marketing strategy will ultimately determine the winner with
respect to sales, profits, and customer loyalty. Not only are these two
companies constructing new ways to sell Coke and Pepsi, but they are also
thinking of ways in which to increase market share in other beverage
categories. Although the goal of both companies is exactly the same, the two
companies rely on somewhat different marketing strategies.

Pepsi has always taken the lead in developing new products, but Coke soon
learned their lesson and started to do the same. Coke hired marketing
executives with good track records. Coke also implemented cross training of
managers so it would be more difficult for cliques to form within the
company.

On the other hand, Pepsi has always taken more risks, acted rapidly, and was
always developing new advertising ideas . Both companies have also relied on
finding new markets, especially in foreign countries.

In the foreign markets, Coke has been more successful than Pepsi. For
example, in Eastern Europe, Pepsi has relied on a barter system that proved to
fail. However, in certain countries that allow direct comparison, Pepsi has
beat Coke. In foreign markets, both companies have followed the marketing
concept by offering products that meet consumer needs in order to gain
market share. For instance, in certain countries, consumers wanted a soft
drink that was low in sugar, yet did not have a diet taste or image.
 46

Pepsi responded by developing Pepsi Max.

These companies in trying to capture market share have relied on the

development of new products. In some cases the products have been
successful. However, at other times the new products have failed. For Coke,
changing their original formula and introducing it as “New Coke” was a
major failure . The new formula hurt Coke as consumers requested Classic
Cokes’ return.

Pepsi has also had its share of failures. Some of their failures included: Pepsi
Light, Pepsi Free, Pepsi AM, and Crystal Pepsi. One solution to increasing
market share is to carefully follow consumer wants in each country.

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

Gaining market share occurs when a company stays one-step ahead of the
competition by knowing what the consumer wants. My recommendation is to
make sure the company is always doing market research. This way they are
able to get as much feedback as possible from consumers.

Next, analyze this data as fast as possible, and then develop the new product
based upon this data. Once the product is developed, get it to the marketplace
quickly where time is a very critical factor.
 47

PEPSI VS COCA-COLA

Advertising Strategies

PEPSI

For over 100 years, Pepsi-Cola has produced some of the finest soft drink ads
available anywhere in the world. From today's "Joy of Pepsi," as sung by
Britney Spears, to yesterday's "Nickel, Nickel" (1939), our ads are as
memorable as the products we produce.

Some highlights of the Ads are given below.

1999: The new campaign highlights the popular soft drink that goes with
everything from food to fun.

• Pepsi's last major campaign change was in 1999, when it debuted "The Joy
of Cola," which became "The Joy of Pepsi" in 2000.

• Pepsi updates its look with a bolder, more contemporary image that better
captures the brand's youthful attitude.

• Mountain Dew offers its third line extension with Mountain Dew LiveWire,
combining the unique citrus taste of Mountain Dew with a bold orange
flavour.

• Pepsi's blockbuster summer promotion "Pepsi Play for a Billion" gives

1,000 consumers the chance to play for $1 billion on a live television show
on The WB. A guaranteed $1 million prize winner will be chosen and will
then have a chance to win $1 billion without forfeiting the $1 million prize.
 48

• In September, Richard Bay, a 42-year-old high school teacher from

Princeton, West Virginia, became a millionaire on "Pepsi Play for a Billion"
on The WB. Bay and the television audience then held their collective breath
to see if he would also win the billion dollars. Instead, his number was two
digits off the billion-dollar number, but Bay was still pleased with his cool
million.

2000: The popular Pepsi Challenge makes its return , and consumers across
the country let their taste decide the best cola and one-calorie cola. Helping
launch the Challenge is two of baseball's top sluggers – Sammy Sosa and Ken
Griffey Jr.

• On the airwaves, the "Joy of Cola" campaign is a hit as "Pepsi Girl" Hallie
Eisenberg rocks with pop star Faith Hill and perennial rockers KISS.

• Among those doing the Dew is hip-hop artist Busta Rhymes, and Aquafina
launches it’s first-ever television advertising campaign.

2001: The popular "Joy of Cola" tagline gets an update, becoming the "Joy
of Pepsi." Three months later, Britney Spears stars in a blockbuster Pepsi
commercial that breaks during the Academy Awards. An hour before the
telecast, the high-energy spot debuts online, where more than 2 million fans
click their way to Britney's own version of the "Joy of Pepsi."

Thirsty consumers are invited to "discover a sensation as real as the streets,"

when cherry-flavoured Mountain Dew Code Red is introduced.

Pepsi puts a little twist on a great thing, unveiling the first national TV
commercial for new lemon-flavored Pepsi Twist.
2002: In March, supermodel Cindy Crawford helps introduce a new look for
Diet Pepsi. The updated graphics better represent the brand's light, crisp,
refreshing qualities.

49

• Pepsi-Cola teams up with the National Football League, becoming its

Official Soft Drink Sponsor.

• Pepsi declares, "It's a blue thing," and unveils Pepsi Blue in July. A fusion
of berries with a splash of cola, the blue-hued soft drink is created by and for
teens. Through nine months of research and development, Pepsi asks young
consumers what they want most in a new cola. Their response: "Make it berry
and make it blue."

• In December, American music and film sensation Beyoncé Knowles is

welcomed as the newest member of the Pepsi family.

2003: Pepsi-Cola unveils a new advertising campaign, "Pepsi. It's the Cola,"
which is the brand's first major campaign shift since 1999. The new campaign
highlights the popular soft drink that goes with everything from food to fun.

• Pepsi's last major campaign change was in 1999, when it debuted "The Joy
of Cola," which became "The Joy of Pepsi" in 2000.

• Pepsi updates its look with a bolder, more contemporary image that better
captures the brand's youthful attitude.

• Mountain Dew offers its third line extension with Mountain Dew LiveWire,
combining the unique citrus taste of Mountain Dew with a bold orange
flavour.

50

• Pepsi's blockbuster summer promotion "Pepsi Play for a Billion" gives

1,000 consumers the chance to play for $1 billion on a live television show
on The WB. A guaranteed $1 million prizewinner will be chosen and will then
have a chance to win $1 billion without forfeiting the $1 million prize.

• In September, Richard Bay, a 42-year-old high school teacher from

Princeton, West Virginia, became a millionaire on "Pepsi Play for a Billion"
on The WB. Bay and the television audience then held their collective breath
to see if he would also win the billion dollars. Instead, his number was two
digits off the billion-dollar number, but Bay was still pleased with his cool
million.

2004: Pepsi unveils five new TV commercials for Pepsi and Sierra Mist on
Super Bowl XXXVIII, making this the 19th straight year that Pepsi has
advertised in the big game.

• On Super Bowl Sunday, Apple and Pepsi officially launch a historic

promotion to legally give away millions of free songs to Mac and Windows
PC users from Apple's iTunes Music Store.

• On the Academy Awards telecast, Diet Pepsi stole the spotlight as the
country’s fastest-growing major soft drink bowed a new advertising campaign
with the tagline, “Diet Pepsi. It’s the Diet Cola. The zero-calorie cola brand
illustrates how it is the best option to go with food and social occasions,
much like its sister brand, Pepsi-Cola.
• Two popular sportscasters help turn life’s everyday moments into a cause
for celebration in a new advertising campaign for Pepsi EDGE, the new cola
with full-flavored taste but half the sugar, carbs & calories of regular colas.

51

The campaign tagline, "This moment deserves a Pepsi EDGE," reminds

consumers that they can reward themselves with a Pepsi EDGE for
completing even the simplest of tasks.

• Mountain Dew brings nostalgia back into pop culture as it introduces new
commercials featuring the classic Mad Magazine "Spy vs. Spy" characters —
that will stop at nothing to get their Dew.
 52

COCA-COLA

As the world's favourite drink, the world's most valuable brand and the most
recognizable word across the world after ‘OK’; Coca-Cola has a truly
remarkable heritage. From a humble beginning in 1886, it is now the flagship
brand of the largest manufacturer, marketer and distributor of non-alcoholic
beverages in the world.

Coca-Cola returned to India in 1993 and over the past ten years has captured
the imagination of the nation, building strong associations with cricket, the
thriving cinema industry, music etc.

Coca-Cola has been very strongly associated with cricket, sponsoring the
World Cup in 1996 and various other tournaments, including the Coca-Cola
Cup in Sharjah in the late nineties.

Coca-Cola's advertising campaigns “ Jo Chaho Ho Jaye and Life ho to Aisi”

were very popular and had entered the youth's vocabulary.

2002:Coca-Cola launched the campaign " Thanda Matlab Coca-Cola " which
skyrocketed the brand to make it India's favourite soft-drink brand.

2003: Coke was available for just Rs. 5 across the country and this pricing
initiative together with improved distribution ensured that all brands in the
portfolio grew leaps and bounds.

Coca-Cola had signed on various celebrities including movie stars such as

Karishma Kapoor , cricketers such as Srinath, Sourav Ganguly, southern
celebrities like Vijay in the past and today, its brand ambassadors are Aamir
Khan, Aishwarya Rai , Vivek Oberoi and cricketer Virendra Sehwag .
 53

Q.1) Do you consume soft drinks, if yes, which one?

Status No. of Respondents Percentage

Pepsi 29 58%

Coca Cola 21 42%

Total 50 100%

Table no.1: Responses of the preferences of respondents

42%
Pepsi
Coca Cola
58%

Figure no. 1: Show the preferences of respondents

 Analysis: 29 respondents consume Pepsi which are 58% & 21 respondents consumes Coca
Cola which are 42%.

Conclusion: Most of the respondents prefer to consume Pepsi over Coca Cola because of the
taste & popularity.

54
Q.2) How often do you consume soft drinks?

Status No. of Respondents Percentage

More than once a day 7 14%

Few times a week 19 38%

Only on special occasions 24 48%

Never 0 0%

Total 50 100%

Table no. 2: Response showing how often respondent consume soft drink.

30%

25% 24%

20% 19%

15%

10% 7%
5%

0%
More than Few times a Only on Never
once a day week special
occasions

Figure no. 2: Show the nature of employees towards the consumption of soft drink
Analysis: 7 respondents consume soft drink more than once a day, 19 respondents consume
soft drink few times a week & 24 respondents consume soft drink only on special occasions.

Conclusion: Most of the respondents consume soft drink on special occasions like in a party
& some respondent prefer it few times a week mainly in summer season.

55

Q.3) Since how much time you are using your brand?

Status No. of Respondents Percentage

1-6 months 9 18%

6-12 months 11 22%

1-2 years 8 16%

More than 2 years 22 44%

Total 50 100%

Table no. 3: Responses showing the consumption period of the brand.

25%
22%
20%

15%
11%
10% 9%
8%

5%

0%
1-6 months 6-12 months 1-2 years More than 2
years

Figure no. 3: Shows that from how much time the respondents are using their brand.

Analysis: 9 respondents are consuming there brand from 1-6 months i.e., 18%, 11
respondents are consuming there brand from 6-12 months i.e., 22%, 8 respondents are
consuming there brand from 1-2 years i.e., 16% & 22 respondents are consuming there brand
from more than 2 years i.e., 44%.

Conclusion: Most of the respondents are consuming there brand from more than 2 years
because of the taste & preference.
56

Q.4) What is the reason behind choosing your brand?

Status No. of Respondents Percentage

Taste 16 32%

Advertisement 9 18%

Easily available 11 22%

Popularity 14 28%

Total 50 100%
Table no. 4: Response showing the reasons behind choosing the brand.

18%
16%
16%
14%
14%
12% 11%
10% 9%
8%
6%
4%
2%
0%
Taste Advertisement Easily Popularity
available

Figure no. 4: Show the reason behind choice of brand

Analysis: 16 respondents choose their brand on the basis of taste i.e., 32%, 9 respondent
choose their brand on the basis of advertisement i.e., 18%, 11 respondent choose their brand
on the basis of their easy availability i.e., 22% & 14 respondent choose their brand on the
basis of their popularity i.e., 28%.

Conclusion: There are several factors which affects the decisions of the respondents in
choosing their favorite brand of soft drink. Taste & popularity are the main factors for
influencing the choice of brand.
57
Q.5) Will you change the brand on the basis of price reduction?

Status No. of Respondents Percentage

Yes 28 56%

No 22 44%

Total 50 100%

Table no. 5: Response about the price reduction

22
Yes
No
28

Figure no. 5: Show the response about price reduction

Analysis: 28 respondents responses that they will change the brand on the basis of their price
reduction i.e., 56% & 22 respondents responses that they will not change the brand on the
basis of their price reduction i.e., 44%.
Conclusion: Most of the respondents are agreed to change the brand on the basis of price
reduction because of the taste of other brand but some respondents are not willing to change
their brand on the basis of price reduction because they are satisfied with their brand.

58
Q.6) Which brand has creative & appealing advertising of the soft drink company?

Status No. of Respondents Percentage

Pepsi 30 60%

Coca Cola 20 40%

Total 50 100%

Table no. 6: Response about the advertisement of the soft drink company

40%
Pepsi
Coca Cola
60%

Figure no. 6: Show the creative & appealing advertisement of the soft drink brand

Analysis: 30 respondent responses that Pepsi has most creative & appealing advertisement of
the soft drink company i.e., 60% & 20 respondent responses towards in the favor of Coca
Cola i.e., 40%.
Conclusion: 60% of the respondents are satisfied with the creative & appealing
advertisement of Pepsi due to the Cricketer involved in the advertisement & 40% the
respondents are satisfied with the creative & appealing advertisement of Coca Cola because
of the Actors doing the advertisement.
59

Q.7) Which brand will you prefer in case of Diet cold drink?

Status No. of Respondents Percentage

Pepsi 29 58%

Coca Cola 21 42%

Total 50 100%

Table no. 7: Response about the preference in case of Diet cold drink

42%
Pepsi
Coca Cola
58%

Figure no. 7: Show the result the preference in case of Diet cold drink

Analysis: 58% respondents replied that they would prefer Pepsi in case of Diet cold drink &
42% respondents replied that they would prefer Coca Cola in case of Diet cold drink.
Conclusion: 29 of the respondents are satisfied with the Diet cold drink of Pepsi because of
the taste & color of the soft drink & 21 of the respondents are satisfied with the Diet cold
drink of Coca Cola because of its taste.

60

Q.8) According to you, which brand of soft drink, is most preferred by the youngsters?

Status No. of Respondents Percentage

Pepsi 36 72%

Coca Cola 14 28%

Total 50 100%

Table no. 8: Response about the preferences of the youngsters

28%

Pepsi
Coca Cola

72%

Figure no. 8: Show the result about the preference by the youngsters
Analysis: 36 respondent responses that youngsters prefer Pepsi i.e., 72% & 14 respondent
responses that youngsters prefer Coca Cola i.e., 28%.

Conclusion: Most of the respondents think that youngsters prefer Pepsi because of its taste &
very few responded that Coca Cola is preferred by the youngsters because of its
advertisement.
61

Q.9) What is the reason behind choosing the particular soft drink brand by the youth?

Status No. of Respondents Percentage

Status symbol 6 12%

Style factor 15 30%

Advertisement by their idols 14 28%

Other factor 15 30%

Total 50 100%

Table no. 9: Response about the reason behind choosing the particular soft drink

16% 15% 15%

14%
14%
12%
10%
8%
6%
6%
4%
2%
0%
Status symbol Style factor Advertisement by Other factor
their idols

Figure no. 9: Show the reason behind choosing the particular soft drink brand
Analysis: 12% respondents replied that status symbol affects the preferences of the soft drink
by the youth, 30% respondents replied that style factor determines the preferences of the soft
drink by the youth, 28% respondent replied that the advertisement of the soft drink by their
idols affects the preferences by the youth & 30% respondent replied that other factor affects
the preferences of the youth.

Conclusion: Most of the respondents find that style factor & other factors plays an important
role in choosing the soft drink brand by the youth.

62

Q.10) Please indicate your satisfaction level with your Cola brand?

Status No. of Respondents Percentage

Highly satisfied 17 34%

Satisfied 29 58%

Not satisfied 4 8%

Total 50 100%

Table no. 10: Response about the satisfaction level

35%

30% 29%

25%

20% 17%
15%

10%

5% 4%

0%
Highly satisfied Satisfied Not satisfied

Figure no. 10: Show the satisfaction level of the respondent

Analysis: 17 respondents are highly satisfied with their soft drink brand which is 34%, 29
respondents are satisfied with their soft drink brand which is 58% & only 4 respondents are
not satisfied with their soft drink brand which is 8%.

Conclusion: Most of the respondents are satisfied with the of products of their soft drink
brand because of the taste and very few are not satisfied with their soft drink brand because
of the taste.

63

CHAPTER 4

CONCLUSION AND RECOMMENDATION

64
 65

CONCLUSION

This project has been helpful in understanding the meaning of Brand Rivalry.
It was noted that Brand Rivalry is an extra aggressive in competition between
two different brands to reach at number one or to capture more market share.
In the most aggressive variants, ethics, moral values and even the law can be
neglected and it is only a race to reach the number one position that drives
the brand.

Through this project we were able to understand how Pepsi & Coca-Cola were
formed and the problem faced by them in the initial years of operation and
how did they overcome all those difficulties.

This project made known to us how Pepsi & Coca-Cola being the prominent
brand rivalries fought fiercely against each other through their production
tactics, marketing strategies and advertisements. All through this war which
continues even to this day, both the brands have done their level best to
convince the people that one is better than the other.

Through this project we also discussed various differences that exist between
the strategies and techniques adopted by both of them to sell out their
product.

Therefore, I hope that the project has met its aim.

In fact, all of the battles have seen a conclusion; a victor and a loser; but in
the case of Pepsi & Coca-Cola, while both sides still claim a victory, the jury
is still out the public is still undecided and the soda still stands in solitude.

As the bottom line conclusion, the battle of Coca-Cola versus Pepsi does not
seem to end. It is like they are arch enemies for each other. Nevertheless, it
is always interesting to see the market battle between these two soft drink
products.

66

Result of the Study

Pepsi is the market leader in terms of soft drinks industry in India. Pepsi’s main target is
obviously to be the market leader and leave its nearest competitor, Coca Cola, far behind. To
achieve this Pepsi seems to be relying on mass advertising. They spend about 50-60 crore
rupees annually on marketing activities. The consumer is bombarded with Pepsi
advertisements, sign, logo’s etc., everywhere. Pepsi’s core market is the youth & adult and
Pepsi is taking great measures to change the perception of these young-adults. Pepsi wants
that these consumers should associate all colas as Pepsi, the brand Pepsi and cola should be
synonymous with each other. This they are trying to do by getting the hero’s of these
consumers to endorse their product e.g. Sachin Tendulkar and also by advertising for and by
youngsters. Pepsi drinks are available in almost the whole of India, this shows the importance
paid to distribution. Brand loyalists are very few in the market. Thus the drink should be
easily available, so that consumers cannot shift

their preferences.

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

a. Different age groups

b. Males and females

c. People from different localities, etc.

In all about 50 consumers were interviewed. The conclusions that one can draw from these
answers provided by the consumers showed that marketing activities do form a major part of
the decision. One thing that was common amongst all the consumers who were once a day or
once a week. The number one factor the influences a customer while buying a soft-drink was
taste. This was true for all the consumers who were interviewed. The rest of the conclusions
as deducted from the questionnaires are as follows:-

The younger generation preferred soft drinks to the older generation.

67

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

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

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

Children preferred Coca-Cola Fanta, Mirinda orange. Young adults liked Pepsi. The older
generation preferred Coca-Cola, Limca & Mirinda Lemon. The reason given for choice of
favorite soft drink was taste and easy availability. Only if the consumer liked the taste of
drink, he would have it again. 95% of the consumers felt that marketing strategies of the
company did affect the sales of their soft-drink. Marketing strategies made the consumer try a
drink for the first time. The second time round it was the consumers choice himself and not
strategy could affect that. Youngsters were more acceptable to change. They tried different
drinks, Cola and non-Cola. Adults Stick to one and they prefer drinks that do not affect their
health, like Limca.

Major number of people found television advertising to be the most effective. Young and the
old, all liked to watch the advertisements on television. Sponsoring events, outdoor
advertising and sales promotion schemes were second choice of the consumers. Under
television advertising, Pepsi came in as the number 1 favorite of the people the advertisement
of Shah-Rukh Khan and the dog was the favorite of the consumers. Their new advertisement
of Mirinda Lemon is also lifted by the people. The advertisement that came in second was,
the Coca Cola advertisement of the people Cricket and the song Must-Kalander going on at
the back. These, advertisement remained most in the minds of the people. Most of the
consumers felt that Pepsi was the market
 leader in the soft-drink industry in India. 99% of the consumers interviewed felt that the
marketing strategies of the Coca-Cola and Pepsi have helped them in attaining the huge
market share that they possess. Women and children prefer cans as compared to men. These
are the major conclusion that can be drawn about a consumer’s behavior. Companies must
take the initiative of finding out the habits of the consumers and then changing them, in their
favors.

68

RECOMMENDATIONS

 Lead-time should be decreased.

 More attention should be paid to customer’s complaints.

 A company should regularly visit the industries and listen to their complaints.

 Some planning and meetings of company executives should be there so as to avoid

complications.

 Thorough inspection of stocks should be done to avoid mixing of inferior quality

stock with fresh stock.
 69

BIBLIOGRAPHY

 www.google.com

 www.wikipedia.org

 www.slideshare.net

 www.coca-cola.com

 www.pepsi.com

 www.scribd.com

 www.realversus.com

 www.investmentu.com
 70

APPENDIX

Name: __________________________

Age: ____________________________

Gender: _________________________

Profession: _______________________

Address: _________________________

Q.1) Do you consume soft drinks, if yes, which one?

a.) Pepsi ( ) b.) Coca- Cola ( )

Q.2) How often do you consume soft drinks?

a.) More than once a day ( ) b.) Few times a week ( )

 c.) Only on special occasions ( ) d.) Never ( )

Q.3) Since how much time you are using your brand?

a.) 1-6 months ( ) b.) 6-12 months ( )

c.) 1-2 years ( ) d.) More than 2 years ( )

71

Q.4) What is the reason behind choosing your brand?

a.) Taste ( ) b.) Advertisement ( )

c.) Easily available ( ) d.) Popularity ( )

Q.5) Will you change the brand on the basis of price reduction?

a.) Yes ( ) b.) No ( )

Q.6) Which brand has creative & appealing advertising of the soft drink company?

a.) Pepsi ( ) b.) Coca- Cola ( )

Q.7) Which brand will you prefer in case of Diet cold drink?

a.) Pepsi ( ) b.) Coca- Cola ( )

Q.8) According to you, which brand of soft drink, is most preferred by the youngsters?

a.) Pepsi ( ) b.) Coca- Cola ( )

Q.9) What is the reason behind choosing the particular soft drink brand by the youth?

a.) Status symbol ( ) b.) Style factor ( )

c.) Advertisement by their idols ( ) d.) Other factors ( )

72

Q.10) Please indicate your satisfaction level with your Cola brand?

a.) Highly satisfied ( ) b.) Satisfied ( )

c.) Not satisfied ( )

Q.11) Please indicate your suggestions & recommendations which you would like to
give?

_________________________________________________________________________

_________________________________________________________________________
73