What is a brand ?

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
aspirational lifestyles based on these consumer relationships. Associating oneself
with a brand transfers these lifestyles onto consumers.

The branded lifestyles extol values over and above the brands’ product or service
category that allow the brands to be extended into other product and service
categories. Thus saving companies the trouble and costs of developing new
brands, while entering new lucrative markets.The combination of emotions,
relationships, lifestyles and values allows brand owners to charge a price premium
for their products and services, which otherwise are barely distinguishable from
generics.

The Key To Branding

• For branding strategies to be successful, consumers must be convinced that

there are meaningful differences among brands in the product or service category.

• Consumer must not think that all brands in the category are the same.
• PERCEPTION = VALUE

Brand Wars

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What’s brand wars? Why are companies fighting each other? The main reason for
it 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. Let’s talk about prices.
The brand wars often take the form of price wars. It’s when 2competing
companies are lowering prices more and more until they reach the level of their
costs and they just get no profit. 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.

For example, advertising. It is quite noticeable for customers, and it helps to

increase sales. But that’s it for theory, and let’s get down to some practical
examples.

When we hear about the brand wars the first example that comes into our minds is
that of the Pepsico and the Coca-Cola companies. It all started in the 1980s. PEPSI
entered the market

12 years after the Coca-cola company, so it had to launch different campaigns in

order to increase sales. The beginning of the brand war was the campaign called
Pepsi challenge. It was designed after some people said that coca-cola and Pepsi
were identical drinks with no taste difference. At malls, shopping centers and
other public places, a Pepsi representative set up a table with two blank cups, one

2
with Pepsi and one with Coke. Shoppers were encouraged to taste both colas, and
then select which drink they preferred. Then the representative revealed the two
bottles so the taster could see whether they preferred Coke or Pepsi. If Pepsi was
revealed, the shopper was given a small prize. But some participants recall that the
two beverages were served to them at different temperatures. The Pepsi sample
was served chilled but the Coca-Cola was at room temperature, thus making it less
appealing than the Pepsi.

Pepsi Stuff is a marketing strategy and global campaign launched by PepsiCo

during which people were to collect Pepsi points and then purchase stuff with
them. Celebrities like CindyCrawford, Britney Spears, Shaquille O'Neal, Shakira,
David Beckham, and the Spice Girls appeared in TV, print, outdoor, in-store,
Internet, and catalog advertising promoting Pepsi Stuff. In 2005, nine years after
Pepsi Stuff was first launched, The Coca-Cola Company launched iCoke, a very
similar program in which consumers collect points printed on packages. Then let’s
talk about the fast food chains: McDonalds, Starbucks and Wendy’s.
Recentlymany people in the US has started to prefer more upscale food with less
calories and fat, and thus the fast food chains like Mc Donald’s, Burger King and
Wendy’s are losing clients, and as a result, profit. And the only time when they
still get many clients is during breakfast. So, the fast food chains got into a battle
for the breakfast market which makes now the major part of their profit. And they
all started this year with new offerings. Let’s draw our attention to the
McDonald’s and Starbucks companies. The brand war between McDonald’s and
Starbucks is called the cola war of the new century. Starbucks used to be the
coffee-bar king. It was the first American fast food chain that offered a wide
variety of coffee tastes: vanilla latte, caramel cappuccino and others. And now
McDonalds is installing coffeemaking machines in all of its restaurants so that its
clients can taste the same kinds of coffee. And the survey conducted by some
American association found out that many people like McDonald’s espresso

3
coffee more. Besides, coffee at McDonalds is a whole dollar cheaper than one in
the Starbucks company. And at the meantime Starbucks has started to sell
sandwiches just like at McDonald’s. And the reason they do it is that they just try
to get each other’s clients. Another interesting example is the battle between
Budweiser and Miller Lite – two large companies producing beer. It all began
when Miller decided to make fun of Bud, the ‘King of Beers,’ by appointing itself
the ‘President Of Beers.’ Most people took it as an election season joke, but not
the Budweiser company, the market leader. In response Budweiser started telling
that Miller was owned by a South African brewery, so the queen of state can’t be a
foreigner, can he? Then, the number of insults which the Budweiser was pouring
on Miller Lite only increased. And it all resulted in a lawsuit.

The court ordered Budweiser stop insulting miller Lite, but even after the court
decision there were chattering about the foreign brewery on TV and in
newspapers. So, what is the moral of these stories? There’s no point in copying
someone else’s product. The money which will be spent on lawsuits

Afterwards could be spent on developing some new product or some other

competitive advantage. There’s no point in damaging brand wars. Competition is
good – it increases the quality of products and makes companies be more
customerdriven. But companies should know when they must stop, otherwise they
can lose.

Taste

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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

Pepsico 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 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

The History of Coca-cola

5
The first Coca-Cola recipe was invented in a drugstore in Columbus, Georgia by
John Pemberton, originally as a cocawine called Pemberton's French Wine Coca
in 1885. He may have been inspired by the formidable success of Vin Mariani, a
European cocawine.[citation needed]

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,[citation needed]
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. After both
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.

6
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
outdoor wall advertisement was painted in the same year as well in Cartersville,
Georgia. 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.

Coke concentrate, or Coke syrup, was and is sold separately at pharmacies in

small quantities, as an over-the-counter remedy for nausea or mildly upset
stomach.

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

7
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.

21st 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. 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.

8
 1.3 The History of Coca-cola

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

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

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

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.

21st 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

9
artificial sweetener sucralose ("Splenda"), the same sweetener currently used in
Pepsi One. 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.

10
INTRODUCTION OF COCA COLA

11
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

The world's favorite drink. The world's most valuable brand. 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. 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

12
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.

13
 Products Of Coca Cola

COCA-COLA MANGOLA
SPRITE
THUMS-UP
FANTA

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 The History Of Pepsi

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 Pepsico 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 Pepsico
in newspaper ads as "A bully drink...refreshing, invigorating, a fine bracer before a
race".

In 1931, the Pepsico 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 Pepsico syrup formula.

15
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 / Pepsico 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, Pepsico's profits doubled.

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 Pepsico 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.

1.6 The History Of Pepsi

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

16
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 Pepsico 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 Pepsico
in newspaper ads as "A bully drink...refreshing, invigorating, a fine bracer before a
race".

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 / Pepsico 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, Pepsico's profits doubled.

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 Pepsico 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.

17
 INTRODUCTION OF PEPSI

Pepsi is one of the most well known brands in the world today available in over 160
countries. The company 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.

18
 PRODUCTS OF PEPSI

PEPSI Miranda Mountain 7 UP

DEW

19
 Cola Wars

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".

According to Beverage Digest's 2008 report on Carbonated Soft Drinks (CSD),

PepsiCo's U.S. market share is 30.8 percent, while The Coca-Cola Company's is 42.7
percent. Coca-Cola outsells Pepsi in most parts of the U.S., notable exceptions being
central Appalachia, North Dakota, and Utah. In the city of Buffalo, New York, Pepsi
outsells Coca-Cola by a two-to-one margin.

Overall, Coca-Cola continues to outsell Pepsi in almost all areas of the world.
However, exceptions include India; Saudi Arabia; Pakistan (Pepsi has been a
dominant sponsor of the Pakistan cricket team since the 1990s); the Dominican
Republic; Guatemala the Canadian provinces of Quebec, Newfoundland and
Labrador, Nova Scotia, and Prince Edward Island; and Northern Ontario.

20
Pepsi had long been the drink of Canadian Francophones and it continues to hold its
dominance by relying on local Québécois celebrities (especially Claude Meunier, of
La Petite Vie fame) to sell its product. PepsiCo use the slogan "here, it's Pepsi" (Ici,
c'est Pepsi) to answer to Coca-cola publicity "Everywhere in the world, it's Coke"
(Partout dans le monde, c'est Coke).

By most accounts, Coca-Cola was India's leading soft drink until 1977 when it left
India after a new government ordered The Coca-Cola Company to turn over its secret
formula for Coke and dilute its stake in its Indian unit as required by the Foreign
Exchange Regulation Act (FERA). In 1988, PepsiCo gained entry to India 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. In 1993, The Coca-Cola Company
returned in pursuance of India's Liberalization policy. In 2005, The Coca-Cola
Company and PepsiCo together held 95% market share of soft-drink sales in India.
Coca-Cola India's market share was 52.5%.

In 1989, Billy Joel mentions the rivalry between the two companies in the song "We
Didn't Start The Fire". The line "Rock & Roll and Cola Wars" refers to Pepsi and
Coke's usage of various musicians in their advertising campaigns. Coke used Paula
Abdul, while Pepsi used Michael Jackson. They then continued to try to get other
musicians to advertise their beverages.

In 1992, following the Soviet collapse, Coca-Cola was introduced to the Russian
market. As it came to be associated with the new system, and Pepsi to the old, Coca-
Cola rapidly captured a significant market share that might otherwise have required
years to achieve. By July 2005, Coca-Cola enjoyed a market share of 19.4 percent,
followed by Pepsi with 13 percent.

21
 The beginning of the Cola war:

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
Pepsico introduced an exciting new flavor, Wild Cherry Pepsi. 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.'

22
 After the war benefit to coke

Introduced the Pepsi Challenge marketing campaign where PepsiCo set up a blind tasting
between Pepsico and rival Coca-Cola. During these blind taste tests the majority of
participants picked Pepsi as the better tasting of the two soft drinks. PepsiCo took great
advantage of the campaign with television commercials reporting the test results to the
public

In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. In 2002,
the strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that "helped
redefine promotion marketing."Source: Promo Magazine, 2002.

As with most popular soft drinks, Pepsi and its associated beverages have had various
celebrity endorsers like Jeff Gordon, David Beckam and Christina Aguilera

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. In 2002, Coca-Cola launched the
campaign "Thanda Matlab Coca-Cola

to encourage the target audience to switch brands, make the purchase, and create a
preference in the market for the product as opposed to its competition youth.

The Coca Cola Company is part of the fabric of life in each

of the communities they serve throughout the world. It operates as a
local business partner, providing quality in the marketplace,

23
enhancing the workplace, preserving the environment and strengthening
the community.

Coke in India

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 a 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

A Healthy Growth to The Indian Economy

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.

A Pure Commitment to The Indian Economy

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.

24
 Creating Enormous Job Opportunities

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. That apart, a network of 21
contract packers manufacture 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.

These are only some of the facts that speak about our commitment to the growth of
the Indian Economy

TARGETING OF COKE

COCA-COLA. How about that? Though targeted at the youth, its appeal is nearly
universal and it is believed that at least half the world's population has drunk a bottle
of this dark, sweetened and flavored water.

25
It is true Coca-Cola is drunk by young and old, male or female, in home and, in large
quantities, out of home. It is consumed by itself or as a mixture for almost any strong
spirit be it rum or whisky; vodka or cheap brandy.

However, if you ask the brand manager for Coca-Cola, he would have a definition for
his target market. Target market is defined as people whom the brand wants to
actively target. This is different from the brand's consumers, which may be a much
wider group or, in some cases, a smaller group. However, the brand does have a target
group, which should be ideally defined as people who do (or don't do) certain things.
To define the brand franchise there are three easy steps that we should take. First, we
should define the target market (people who the brand wants to actively target).

Next, we should identify the target segments (segments of the target market that the
business expects 80 per cent of its revenues from). Note that both the target market
and the target segment should be measurable; something that many brand managers
forget

Third and most importantly, in my view, we must describe the target consumer. This
description should not be as it is conventionally done. This is because we need a vivid
and inspirational description that cuts across the target segments.

The target consumer should be the reason to come to work everyday as it is this
person whose needs and wants we want to satisfy in a manner and with a product or
service offering, which is better than our competitor.

Now, young Bhanuteja, I hope you are beginning to see some of the reasons as to why
we need to define the brand franc This definition could be to narrow or widen the
target market. Indeed, it is by understanding different segments in the market which
are different from each other (which is why they are segments); yet, very much a part

26
 of our target market. Finally, after having measured the size of the target markets and
segments so as to

establish our brand offering we then define the target consumer; not by dry statistics
but by developing a vivid and inspirational description of the target consumer that cuts
across all target segments. This will enable you to have a clear picture in your mind so
that you can focus your brand marketing’s

Targets differ, appeal may not COKE

There are brands which have universal appeal but having target groups brings focus to
marketers. I usually read about brands targeted at a young audience or a mature
audience and so on. Is there any brand, which has everyone as its target audience,
irrespective of sex, age, income, and so on? Is it vital for a brand to narrow its target
audience down to a set of qualities? Is it that they will cease to be different otherwise?
Can you think of any brands, which succeeded by appealing to everybody?

Though targeted at the youth, its appeal is nearly universal and it is believed that at
least half the world's population has drunk a bottle of this dark, sweetened and
flavoured water.

It is true Coca-Cola is drunk by young and old, male or female, in home and, in large
quantities, out of home. It is consumed by itself or as a mixture for almost any strong
spirit be it rum or whisky; vodka or cheap brandy.

27
However, if you ask the brand manager for Coca-Cola, he would have a definition for
his target market. Target market is defined as people whom the brand wants to
actively target. This is different from the brand's consumers, which may be a much
wider group or, in some cases, a smaller group. However, the brand does have a target
group, which should be ideally defined as people who do (or don't do) certain things.

To define the brand franchise there are three easy steps that we should take. First, we
should define the target market (people who the brand wants to actively target).

Next, we should identify the target segments (segments of the target market that the
business expects 80 per cent of its revenues from). Note that both the target market
and the target segment should be measurable; something that many brand managers
forget.

28
Coke Strategy

(Plans to reach more villages)

AS part of its business strategy, Coca-Cola has decided to expand rural penetration in
West Bengal by targeting more than 5,000 villages and increasing the number of
distributors to more than 700 during the current summer.

In rural Bengal, now about 85,000 outlets sell Coca-Cola products.

Similarly, the company has also finalised its nationwide rural marketing policy aiming
at hiking its market share of carbonated soft drinks (CSDs). It plans to reach out to
40,000 more villages across the country with products affordable at price in PET
bottles and also in cheaper cartons. The company expects the per capita consumption
of colas in the country to go up to 15 "standard" bottles by the end of the current year
compared to the current average consumption of 10 bottles.

Mr Sunil Gupta, Vice-President (Public Affairs & Communications) of Coca-Cola

India, told newspersons here on Wednesday that the company has appointed about
400 distributors through out the country to market its sugar-free soft drink concentrate
in small sachets.

29
It expected to maintain 22 per cent growth rate in its CSD business as against the
national average of about 16 per cent. The company plans to generate greater market
share by increasing the

affordability, availability and acceptability of its products targeting the urban, and
specifically, the rural segment.

The retail network will be expanded by 24 per cent during the current fiscal. The
company plans to push its popular Thums Up brand in West Bengal offering a Chhota
Thums Up - 200 ml bottle - at Rs 5. Bottles with the number `5' under the crown will
entitle consumers to prizes such as Mahindra Scorpios, Yamaha Enticers, Bangla
music cassettes, Hero cycles and sunglasses.

The company is setting up redemption centres all over the State to allow consumers to
bring their prize-winning crowns and exchanges the same for prizes.

The Paanch Mila Kya campaign features the leading actress Bipasha Basu leveraging
her popularity in West Bengal. This ad will be featured on all Bengali TV channels.
The promotion is being heavily supported with extensive hoardings, in-shop
merchandising, print advertising and a special rock road show

MARKETING THROUGH

30
ADDS

The world's favourite drink. The world's most valuable brand. 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.
In 2002, Coca-Cola launched the campaign "Thanda Matlab Coca-Cola" which sky-
rocketed the brand to make it India's favourite soft-drink brand. In 2003, Coke was
available for just Rs. 5 across the country and this pricing initiative togetherwith
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.

31
Marketing Strategy

Coke

When it comes to marketing strategy blunders, pretty much everybody remembers the
nosedive failure of New Coke, right? But what most people don’t know is the
fascinating story behind the story, & the valuable lesson it reveals. In the early
eighties, Coke was about to lose a marketing trump card to Pepsi. Coke’s market share
had been in free fall since the end of the war, declining from 60% at that time, to just
24% in 1983. Pepsi was about to be able to claim that not only did it taste better than
Coke (as proven in blind taste tests), but also that it was actually more popular. This

32
would have added even more fuel to Pepsi’s already significant marketing
momentum.

While Coke was also losing market share to other new market entries, and increasing
consumer preference for diet, citrus, & caffeine-free beverages etc., Pepsi’s marketing
strategy was continuing to win new customers. Obviously, people preferred the taste
of Pepsi! Better taste was the main thrust of their advertising. Why else would
anybody drink such an otherwise worthless mixture of ingredients?
This fact was further born out with the runaway success of Diet Coke. Coke actually
developed it from the ground up to taste more like Pepsi, rather than simply replacing
the sugar content of the original recipe with artificial sweeteners All of the facts &
evidence pointed to Coke having a taste problem with the original recipe.

Coke had in fact been working in secret for years on a new one. Drawing on the
success of Diet Coke, Coke’s marketing strategy

called for the modification of that recipe to a sugar based drink. They felt they could
finally turn the tide by introducing “NEW Coke”, based on that formula. In pre launch
blind taste tests, people thought the new Coke tasted sweeter & smoother than the
original. Extensive research revealed that people preferred the New Coke to both the
original Coca Cola recipe & Pepsi. Statistically speaking, the taste of New Coke was
significantly preferable. New Coke was the solution, but what to do with the original?
If they kept both on the market, it was a surebet that Pepsi would be able to claim that
it was more popular than both, at least for a time! And a marketing strategy that called
for the promotion of a new & an old Coke would only confuse the public & dilute the
brand.

The original recipe was dropped. So what happened when new Coke was introduced?
It bombed completely, & utterly! Here’s the brilliant tagline that

33
they used to introduce it. “The Best Just Got Better, Coke Is It!” Gee, that looks like a
winner. People hated the new Coke, many without even having to taste it. And they
were incensed that the original had been “stolen” from them. One hundred years, &
countless millions of dollars in advertising had made Coke Cola a part of people’s

very identity. Drinking Coca Cola wasn’t about taste at all. It was about mental
association.

Emotional Opium!

The act of raising that funny looking spiral bottle to your lips. The cane sugary
fragrance that followed. The sharp carbonated bite that set your throat a blaze with
each vigorous swig. For many people, it was anchored deeply to fond, albeit
sometimes even imaginary memories. Coke had no choice but to bring back the
original recipe, amid a huge fanfare of publicity, as though it were the second coming.
What a hullabaloo about nothing. Sugar water. For god’s sake! If nothing else, this
story should prove to you once & for all that it’s not what you do that counts, it’s what
you say & how powerfully you say it. And, that your customer’s buy, or don’t buy, for
all kinds of seemingly irrational reasons. What’s critically important is not your
product, but how your marketing strategy relates ownership of that product to your
buyer’s beliefs, feelings, & desires! It also demonstrates that “me to” can be a very
dangerous marketing strategy. While huge companies like Coke can afford to blow
through billion dollar advertising budgets like there’s no tomorrow, as a Guerrilla
marketer, I urge you to avoid expensive frontal assaults & one-upmanship like the
plague. Be creative instead, & seek to outflank the enemy!

34
PepsiCo In India

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

35
Oats, and low fat and roasted snack options enhance the healthful choices available to
consumers. 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.

PEPSI MAX REPOSITIONS TO

TARGET HEALTHY MEN

PEPSI Max has unveiled a new TVC and brand sampling campaign-targeting men
following research into the minds of cola drinkers. Pepsi marketing director Tony
Thomas said research showed the split of the cola market into two key segments —

36
 full sugar and diet—did not reflect consumer needs. “Diet is an out-dated concept,”
Thomas said “There are many consumers out there who embrace life and get the most
they can out of it and, while they are into staying in shape, do not buy into the diet
concept on the grounds of it being a taste and image compromise.” Pepsi Max targets
the 20–30 age group and is consumed by more men than women, unlike its competitor
Diet Coke. The campaign is spearheaded by a 30-second TVC showing a group of
friends who bring to life a mental fantasy. Emerging from a kombi van decked out in
white water rating life vests, helmets and armed with paddles, the six 20-something
guys and girls remove the rubbish from a large wheelie bin, get inside and then ‘raft’
it down the street and into the harbour, paddling away.

Marketing Strategies of Pepsi

In 1975, PepsiCo introduced the Pepsi Challenge marketing campaign where PepsiCo
set up a blind tasting between Pepsico and rival Coca-Cola. During these blind taste
tests the majority of participants picked Pepsi as the better tasting of the two soft
drinks. PepsiCo took great advantage of the campaign with television commercials
reporting the test results to the public

In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. In
2002, the strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that
"helped redefine promotion marketing."Source: Promo Magazine, 2002.

37
Celebrity endorsers

As with most popular soft drinks, Pepsi and its associated beverages have had various
celebrity endorsers like Jeff Gordon,David Beckam and Christina Aguilera

Marketing

Pepsi logo (1973-87). In 1987, the font was modified slightly to a more rounded
version which was used until 1991.

Pepsi logo (2003-09). Pepsi Wild Cherry and Pepsi ONE used this design through
October 2009.

38
Pepsi bottle in Mexico. As of November 2009, this logo is still in use in Mexico and
most countries.

In 1975, Pepsi introduced the Pepsi Challenge marketing campaign where PepsiCo set
up a blind tasting between Pepsico and rival Coca-Cola. During these blind taste tests
the majority of participants picked Pepsi as the better tasting of the two soft drinks.
PepsiCo took great advantage of the campaign with television commercials reporting
the results to the public.

In 1976 Pepsi, RKO Bottlers in Toledo, Ohio hired the first female Pepsi salesperson,
Denise Muck, to coincide with the United States bicentennial celebration.

In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. By
2002, the strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that
"helped redefine promotion marketing."

In 2007, PepsiCo redesigned their cans for the fourteenth time, and for the first time,
included more than thirty different backgrounds on each can, introducing a new
background every three weeks. One of their background designs includes a string of
repetitive numbers 73774. This is a numerical expression from a telephone keypad of
the word "Pepsi."

In late 2008, Pepsi overhauled their entire brand, simultaneously introducing a new
logo and a minimalist label design. The redesign was comparable to Coca-Cola's
earlier simplification of their can and bottle designs. Also in 4th quarter of 2008 Pepsi
teamed up with Google/Youtube to produce the first daily entertainment show on
Youtube, Poptub. This daily show deals with pop culture, internet viral videos, and
celebrity gossip. Poptub is updated daily from Pepsi.

39
Since 2007, Pepsi, Lay's, and Gatorade have had a "Bring Home the Cup," contest for
Canada's biggest hockey fans. Hockey fans were asked to submit content (videos,
pictures or essays) for a chance at

winning a party in their hometown with the Stanley Cup and Mark Messier.

In 2009, "Bring Home the Cup," changed to "Team Up and Bring Home the Cup."
The new installment of the campaign asks for team involvement and an advocate to
submit content on behalf of their team for the chance to have the Stanley Cup
delivered to the team's hometown by Mark Messier.

Pepsi has official sponsorship deals with three of the four major North American
professional sports leagues: the National Football League, National Hockey League
and Major League Baseball. Pepsi also sponsors Major League Soccer.

Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket
team are just one of the teams that the brand sponsors. The team wears the Pepsi logo
on the front of their test and ODI test match clothing.

On July 6, 2009, Pepsi announced it would make a $1 billion investment in Russia

over three years, bringing the total Pepsi investment in the country to $4 billion.

In July 2009, Pepsi started marketing itself as Pecsi in Argentina in response to its
name being mispronounced by 25% of the population and as a way to connect more
with all of the population.

In October 2008, Pepsi announced that it would be redesigning its logo and re-
branding many of its products by early 2009. In 2009, Pepsi, Diet Pepsi and Pepsi
Max began using all lower-case fonts for

40
name brands, and Diet Pepsi Max was re-branded as Pepsi Max. The brand's blue and
red globe trademark became a series of "smiles," with the central white band arcing at
different angles depending on the product. Pepsi in countries such as the U.S.,
Canada, Brazil, Bolivia, Guatemala, Nicaragua, Honduras, El Salvador, Colombia,
Argentina, Puerto Rico, Costa Rica, Panama and Australia is carrying the "smile"
logo, while the rest of the countries continue to use the old design on all packaging.

Pepsi and Pepsi Max cans and bottles in Australia now carry the localised version of
the new Pepsi Logo. The word Pepsi and the logo are in the new style, while the word
"Max" is still in the previous style. Pepsi Wild Cherry continues to carry the 2003
Pepsi design on bottles and cans as of November 2009.

41
MARKETING OF THE PRODUCT

THORUGH ADDS & LAUNCHES

For over 100 years, Pepsico 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. Check out highlights of our favorite ads here.

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, Pepsico.
• 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. 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 — who
will stop at nothing to get their Dew.

42
2003: Pepsico 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 flavor.
Available summer 2003.
• 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.

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.

• Pepsico teams up with the National Football League, becoming its Official Soft
Drink Sponsor.

43
• 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.

• 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-flavored 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.

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 are two of baseball's top sluggers – Sammy Sosa and Ken Griffey Jr.

44
• 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
its first-ever television advertising campaign

45
Wrong side of Pepsi Ads

Creavitivity : Creativity according to me is putting something new before the world.

This ad-maker has really done a fantastic job and gone miles ahead of the other Soft-
drinks’ ad-campaigns.

My Dope on marketing fundas : My marketing professor always taught me of market

segmentation. Segmenting the customers as per their individual characteristics. This
helps in catering to the individual tastes of the consumers and keep him loyal to the
product. But then this is the fiercely fought market place by the cola makers and each
one is expanding their market reach as well as customer base. Everytime I meet a Cola
salesman he tries to convince me about the obvious reasons for cola consumption
poised to rise in India. The obvious reasons are how low is the per capita consumption
of cola in India vis-a-vis that in Pakistan and other nations.

So it means, if the existing population of consumers are not adding to the bottomline,
target new customers. To position the product before the new envisaged customers,
take out a new campaign to woo new customers like exposed bellies of bikini clad
babes, a guitar, a burger, light-poles at cricket stadium, a cricketer inside ur pocket
and yes, the great SRK !

This advertisement will go down in History of advertising world as the new chapter
written for wooing the non-alive and imaginery objects to buy the products.

Objective of the advertisement was:

The objective of the bare bellies of bikini clad babes was to show that summer is
approaching and dont forget to carry ur Pepsi to quench thirst.The guitar signified
time to roam free since this is a vacation time and people develope and / or nurture
new hobbies ! Playing guitar is one of them !

46
 The stadium flashlight wanting Pepsi reminded people of the ongoing cricket season
and reminded them of having Pepsi while watching the cricket. The singing burger
signified that eating out is a fashion now a days and since this is a holiday season,
people would eat more outside. While doing that don’t forget to have a Pepsi.

The hidden cricketer from the pocket was shut up to create one more shot at the model
of the rival cola company.

What it turned out in reality : Shahrukh Khan sporting his all time ’’I’m the Best’’
attitude on his face walking by few rich babes asking a Rs. 6 Pepsi because it is so
bubbly ! Come on babes, u can earn lifetime money for drinking your Pepsi by
working in the outfit in any remixes or any Vikram Bhat movie !

Forming of lips out of anything went so outrageous afterwards that and finally the
golden moment came....

The golden moment that made me stood up and salute the outrageous creativity of
the ad-maker and not to forget the foresight ness.

Pepsi is not as pricey

Regardless of which soda you like better though, Pepsi seems the better value than
Coke right now. Coke is trading at a nearly 20 percent premium to Pepsi based on
2002 P/Es even though the two companies' earnings growth rates are nearly identical.
(Pepsi's are actually a shade higher.)

47
 And when you look at revenues, the gap is
even more dramatic. Coke is trading at 7
times estimated 2002 sales while Pepsi is
trading at 3.5 times 2002 revenue estimates.
Both companies are expected to post slight
declines in sales this year and an increase of
about 4 percent in 2003. Due to this
disparity in valuation, Jeff Kanter, an analyst
with Prudential Securities, says he has a
"buy' rating on Pepsi and "hold" on Coke.
Prudential does not do investment banking.

To be sure, Coke is still the market share leader in soft drinks. One of the main reasons
the stock has outperformed Pepsi this year was because it reported a better than expected
gain in unit volume in the first quarter. And the company has taken steps to cement its
carbonated beverage lead as well gain ground in the bottled water market.

48
Marketing Approach

Both Coca-Cola and Pepsi try to market as part of a life-style. Coca-Cola uses phrases
such as "Coke side of life" in their website, www.coca-cola.com, while Pepsi uses
phrases such as "Hot stuff" in their website, www.pepsi.com, to promote the idea that
Pepsi is "in sync" with the cool side of life.

Pepsi tries to reach out to the younger generation by appealing to pop culture. If you
visit their website you will be greeted with flashy pages containing pop music, cars,
and fashion.

Coca-Cola's website also has links for music and sports, two arenas in which soda-pop
is often consumed; however, Coca-Cola's is less flashy and uses a classical appeal,
most likely because of Coca-Cola's long history as the standard for cola beverages.

After both beverage giants announced to remove HFCs from their vending machines
and launched pilot projects testing R744 this spring, Coca-Cola now attempts to best
Pepsi in overall sustainability with its “Commitment 2020”, a set of goals regarding
the company’s five strategic CRS focus areas.

49
On 22 July 2009, the Coca-Cola Enterprises announced that it had set goals for its five
strategic Corporate Responsibility and Sustainability (CRS) focus areas and has
committed to achieving these goals by the year 2020 - what the company is calling
"Commitment 2020". With regards to the focus area “Energy Conservation/Climate
Change” the company has committed to

reduce the overall carbon footprint of its business operations by 15 percent by 2020,
as compared to a 2007 baseline.

Further to setting sustainability goals, the document “OUR CRS JOURNEY ...
DELIVERING ON OUR COMMITMENTS” reiterates the company’s efforts with
regards to HFC-free refrigeration. “We have already eliminated HFCs from the
insulation in our equipment, and we are working to eliminate them from our
equipment completely. We are piloting alternative refrigerant gases, such as CO2,

50
which has less of an environmental impact than HFCs. In Europe, we are also testing
hydrocarbon-based refrigeration.Our goal is to have 1,400 CO2 coolers in place in
time for the Vancouver 2010 Olympic Winter Games”.

Pepsi “aggressively” working to find HFC-free alternatives

Already in September 2008 on the other hand, Pepsico North America Beverages
announced that it has launched an interactive website that emphasises its efforts in
environmental sustainability. Pepsi shares its environmental sustainability
commitments at www.PepsiEcoChallenge.com, which include reducing water
consumption by 20%, electricity usage by 20% and fuels consumption by 25%, all by
2015 – as well as its progress toward these and other environmental goals.

With regards to refrigerants and the insulation of refrigeration equipment “Pepsi has
worked aggressively with its equipment suppliers to find alternatives to
hydrofluorocarbons (HFCs) and chlorofluorocarbons (CFCs) that were once widely
used in insulating and refrigerating equipment but have been shown to have a
detrimental impact on the environment. Since the end of 2007 all refrigerated POS
equipment purchased by Pepsi worldwide is insulated with HFC-free foaming agents
(PepsiCo led the industry in mandating this change). We are working with our
equipment suppliers to explore and test coolers that use hydrocarbon (HC) or carbon-
dioxide (CO2) refrigerants as an alternative to hydrofluorocarbons, where permitted
by government regulations. We are currently conducting field tests of both types of
refrigerants in Europe and Asia. Our goal is to fully eliminate use of HFCs in
refrigerated equipment”.

51
Pepsi launches R744 pilot project…

At the end of March 2009, PepsiCo announced it was launching a pilot programme in
the US capital Washington DC to test the most climate-friendly vending machines
ever in the US. Featuring its new logo and an environmental sticker on each bottle, the
30 new R744 dispensers will be placed in high consumer traffic places and tested over
a period of 18 months in the capital with the aim of rolling them out globally over the
next few years. According to the company the new machines will generate 12% less
Green House Gas (GHG) emissions than current ones, will use 5.08 kilowatt-hours of
energy per day, and will be the first of their type to be introduced in the US.

… and Coke announces more CO2 coolers

Soon after PepsiCo announced its pilot program in Washington DC, Coca-Cola
announced in April 2009 plans to install 4 CO2 beverage coolers at the House of
Representatives in spring 2009 as well as up to 1,800 CO2 coolers and vending
machines throughout the U.S. and Canada later this year. Most of these coolers are
destined for Vancouver, where 1,400 climate-friendly coolers and vending machines
will be installed at the venues for the 2010 Olympic Winter Games. According to the
company, the CO2 coolers eliminate 99 percent of the direct green house gas (GHG)
emissions by means of using natural refrigerant R744, include an intelligent energy
management system (EMS-55) that cuts energy use by an average of 26 percent and
reduce indirect green house gas

emissions by more than three tons over the lifetime of the machine.

More recently, ice-cold merchandisers manufacturer Frigoglass announced the launch

of its Ecocool range that depending on the application use natural refrigerants R744,
R290, or R600a, as well as the use of natural substances in the insulation process.

52
Frigoglass’ global customer base spans across 15 countries in four continents
including Coca-Cola bottlers, while its market share in 2008 reached 20%.

Coke Vs. Pepsi

(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 (98). Just how is this done in such a competitive market is the
underlying issue. The facts are that each company is coming up with new products
and ideas in order to increase their market share. The creativity and effectiveness of

53
each company's marketing strategy will ultimately determine the winner with respect
to sales, profits, and customer loyalty (98). 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 are exactly the same, the two companies rely on somewhat different
marketing strategies (98). Pepsi has always taken the lead in developing new products,
but Coke soon learned their lesson and started to do the same. Coke hired marketing
executives with good track records (98). Coke also implemented cross training of
managers so it would be more difficult for cliques to form within the company (98).

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 (99) 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 (99). 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

54
they do they will not succeed. They have to always be creating and updating their
marketing plans and products. The companies must be willing to accommodate their
“target markets”. Gaining market share occurs when a company stays one-step ahead
of the competition by knowing what the consumer wants. My recommendation is to
make sure the company is always doing market research. This way they are able to
get as much feedback as possible from consumers.

Next, analyze this data as fast as possible, and then develop the new product based
upon this data. Once the product is developed, get it to the marketplace quickly. Time
is a very critical factor. In my opinion, with all of these factors taken into
consideration any company should give any company a good jump on market share

55
Pricing and Marketing Strategies

(Pepsi\coca cola)

APART from the high-decibel price wars and the usual battle over market shares, cola
brands Coca-Cola and Pepsi have been in a quiet behind-the-scenes skirmish - to
reach the rural masses. After an almost stagnant growth in this segment for the last
two years, both Coke and Pepsi have made efforts this year to penetrate deep into the
rural markets by substantially increasing their retailer and distribution network and
with innovative pricing and marketing strategies.

While the per-capita consumption of carbonated soft drinks in rural areas is just 2.8
litres compared to the 7.4-litre consumption nationally, the cola majors say this
renewed effort has helped step up sales in the rural markets considerably. While Pepsi
says that the contribution of the rural sales to the overall sales of the company has
been in the range of 10 to15 per cent this year, Coke spokesperson's, in a recent
interview to Catalyst, has been quoted as saying that the company has increased its
rural share from nine per cent two years ago to 25 per cent this year, by penetrating as
many as 40,000 villages.

56
However, both the companies feel that the rural markets are still largely untapped and
a lot needs to be done. Both of them feel that there is substantial scope to further
increase the contribution of the rural markets to the overall sales.

Speaking to Catalyst, on the sidelines of a seminar on rural marketing, organised by

Direcway, the global education wing of Hughes, George Kovoor, Executive Vice-
President, Traditional Trade, Pepsi Foods Ltd, says: "The major challenge which we
face in the rural markets is availability. Since soft drinks are sold in returnable glass
bottles, one cannot sell through the conventional FMCG wholesale channel to drive
availability in rural markets."

Therefore, the company, says Kovoor, has chosen a `hub and spoke' format of
distribution. "The spoke is typically closest to the

57
retail outlets and is serviced by a hub distributor who is supplied directly from the
plant or the company's warehouse. This format allows for large loads travelling longer
distances and short loads doing short distances which is cost-effective."

Similarly, Coca-Cola also has a hub and spoke distribution format. "We use all
possible means of transport that range from trucks, auto rickshaws, cycle rickshaws
and hand carts to even camel carts in Rajasthan and mules in the hilly areas, to cart
our products from the nearest hub," says a Coke spokesperson.

Once available, the focus is then on getting the consumer to try the product by giving
him a reason to buy. This also means making the product available in a chilled form at
the neighbourhood store, getting the pricing and packaging right.

According to the Coke spokesperson, due to the poor and erratic power supply in
villages, the company has invested in non-electric chilling equipment to ensure the
availability of chilled products to

the consumers. Also he says, "We have doubled the number of refrigerators in the
market to five lakh in the last one year."

With the rural market being extremely price sensitive, the soft drink companies have
to make sure that they strike the right balance as far as pricing is concerned. "We try

58
and make our products affordable in terms of unit price point. We also take into
consideration the price of the `alternate beverage' options that the consumer has in
these areas," says Kovoor.

However, considering the price-sensitive nature of the consumers in these areas, it is

only the glass bottles that allow the price to be as low as Rs 5, says Kovoor.

"If the same bottle was non-returnable, the end price would have been more than
double because of the cost of the package and that is not a great price offering for the
rural consumer," he says. "However glass bottles are tougher to distribute and sell
since they

have to be brought back and the outlets have to deposit glass and crates to sell our
products," he adds.

Apart from pricing, reworking the pack size was also necessary. "The introduction of
200 ml packs at highly affordable prices provided us with a strong product offering, as
our international quality products are made available at affordable prices. This has

59
helped us compete and increase our share and presence in this market," points out the
Coke spokesperson.

In fact, a powerful driver for both the companies in the rural markets has been the 200
ml packs.

But attractive pricing and convenient packaging is not enough to sell the brand in
these markets. The greatest challenge is to convince the consumer the need to buy this
product. Says Kovoor, "The issue in the rural markets is not spending power. In fact,
most rural consumers have the spending power, but they have to be given a tangible
reason to buy a soft drink when they have other options to quench their thirst, such as
water or a homemade sherbet."

Therefore, while marketing the product, it is also important for these companies to do
something, which is of relevance to the consumers. In fact, Kovoor feels that
operating rural vans with Pepsi campaigns painted on them is not a very effective idea
to connect with the consumers. "We instead try to participate in various rural activities
such as melas, undertake display drives

in mandi stalls, run on-pack promos and focus a lot on price communication."

Apart from associating in the various mela and haat activities Kovoor points out that
the rural consumers relate a lot to celebrities. "Celebrities have worked out like a
dream for us," he says. A poster of Bollywood star such as Amitabh Bachchan or
cricketer Sachin Tendulkar in a mandi or a mela for instance, says Kovoor, heightens
the aspirational association of their products.

"In fact the Amitabh and Sachin campaign of Pepsi in which the two stars are engaged
in a kite fight or the Sachin campaign in which he is in the midst of a group of
children is focused on our rural audience and have done wonders for us," he says.

60
Simiarly, Coke's Thanda Matlab campaign as well as the Chota Coke campaign,
points out the Coke spokesperson, also targets the rural masses. "Apart from this, all
our outdoor and indoor communications are also integrated to capture the `consumer
connect' that is established through our TV ads," he says.

Therefore it's not just right pricing and packaging, but it is the ability to establish the
right connect with the consumers which helps a brand to make it big in rural India.

Pepsi keeps price advantage through 60s and 70s, when Pepsi charged its bottlers 20%
less for its concentrate

With rising ingredient costs, Pepsi could no longer offer twice as much for the same
price. So it raised price to Coke’s level giving it a war chest to fuel an aggressive ad
campaign

Battle shifted from Price to Quality, with Pepsi targeting the youth

What followed was the Pepsi Challenge & “Real Thing” Coke ads

61
Perceived quality caught up. Deeper pocketed and lower cost Coke initiated a price
war in selective markets where Pepsi was weak in the 70s. Pepsi responded with its
discounts and by the end of the 80s, 50% of food store sales were on discount

Other companies moved into the lower left quadrant of the market. But the two major
players forced price down to “ultimate value.”

To break price spiral, Coke launched New Coke to keep Coke loyals and induce
switching among Pepsi buyers. Rejected by market.

Attempts to move to next arena via niches in caffeine and sugar substitutes

SOURCES SAYS:

Pepsi sources in 1998.

"Both companies did not really concentrate on the fundamentals of marketing like
building strong brand equity in the market, and thus had to resort to such tactics to
garner market shares."

Abstract

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

62
 to steal the rival's employees and other mini wars.

On the whole, the case attempts to provide a comprehensive perspective regarding the
dimensions of the cola wars and the direction in which they are heading.

PEPSI VS. COKE

Making billions from selling carbonated/colored/sweetened water for over 100 years,
Coke and Pepsi had emerged as truly global brands. Coke was born 11 years before
Pepsi in 1887 and, a century later it still maintained its lead in the global cola market.
Pepsi, having always been number two, kept trying harder and harder to beat Coke at
its own game. In this never-ending duel, there was always a new battlefront opening
up somewhere. In India the battle was more intense, as India was one of the very few
areas where Pepsi was the leader in the cola segment. Coke re-entered India in 1993
and soon entered into a deal with Parle, which had a 60% market share in the soft
drinks segment with its brands Limca, Thums Up and Gold Spot. Following this,
Coke turned into the absolute market leader overnight. The company also acquired
Cadbury Schweppes’ soft drink brands Crush, Canada Dry and Sport Cola in early
1999

Coke was mainly a franchisee-driven operation with the company supplying its soft
drink concentrate to its bottlers around the world. Pepsi took the more capital-
intensive route of owning and running its own bottling factories alongside those of its
franchisees. Over half of Pepsi’s sales were made by its own bottling units

Though Pepsi had a lead over Coke, having come in before the era of economic
liberalization in India, it had to spend the early years fighting the bureaucracy and
Parle’s Ramesh Chuahan every step of the way. Pepsi targeted the youth and seemed
to have struck a right chord with the market. Its performance was praiseworthy, while
Coke had to struggle to a certain extent to get its act right. In

63
a span of 7 years of its operations in the county, Coke changed its CEO four times.
Media reports about the troubles faced by Coke and the corrective measures it adopted
were aplenty

64
Case Study

Coca Cola India's Thirst for the Rural Market: 'Thanda' Goes Rural

In early 2002, Coca-Cola India (CCI) (Refer Exhibit I for information about CCI)
launched a new advertisement campaign featuring leading bollywood actor - Aamir
Khan. The advertisement with the tag line - 'Thanda Matlab Coca-Cola4' was targeted
at rural and semi-urban consumers. According to company sources, the idea was to
position Coca-Cola as a generic brand for cold drinks. The campaign was launched to
support CCI's rural marketing initiatives.

CCI began focusing on the rural market in the early 2000s in order to increase
volumes. This decision was not surprising, given the huge size of the untapped rural
market in India (Refer Exhibit II to learn about the rural market in India).

With flat sales in the urban areas, it was clear that CCI would have to shift its focus to
the rural market. Nantoo Banerjee, spokeswoman - CCI, said, "The real market in
India is in the rural areas. If you can crack it, there is tremendous potential."5

However, the poor rural infrastructure and consumption habits that are very different
from those of urban people were two major obstacles to cracking the rural market for
CCI. Because of the erratic power supply most grocers in rural areas did not stock
cold drinks. Also, people in rural areas had a preference for traditional cold beverages
such as 'lassi'6 and lemon juice. Further, the price of the beverage was also a major
factor for the rural consumer.

CCI's Rural Marketing Strategy

CCI's rural marketing strategy was based on three A's - Availability, Affordability
and Acceptability. The first 'A' - Availability emphasized on the availability of the
product to the customer; the second 'A' - Affordability focused on product pricing, and
the third 'A'- Acceptability focused on convincing the customer to buy the product.

65
CCI's Rural Marketing Strategy Contd...

Availability

Once CCI entered the rural market, it focused on strengthening its distribution
network there. It realized that the centralized distribution system used by the company
in the urban areas would not be suitable for rural areas. In the centralized distribution
system, the product was transported directly from the bottling plants

However, CCI realized that this distribution system would not work in rural markets,
as taking stock directly from bottling plants to retail stores would be very costly due to
the long distances to be covered. The company instead opted for a hub and spoke
distribution system (Refer Figure II).

Under the hub and spoke distribution system, stock was

transported from the bottling plants to hubs and then from hubs, the stock was
transported to spokes which were situated in small towns. These spokes fed the
retailers catering to the demand in rural areas.

CCI not only changed its distribution model, it also changed the type of vehicles used
for transportation. The company used large trucks for transporting stock from bottling
plants to hubs and medium commercial vehicles transported the stock from the hubs to
spokes.

For transporting stock from spokes to village retailers the company utilized auto
rickshaws and cyclesCommenting on the transportation of stock in rural markets, a
company spokesperson said, "We use all possible means of transport that range from

66
trucks, auto rickshaws, cycle rickshaws and hand carts to even camel carts in
Rajasthan and mules in the hilly areas, to cart our products from the nearest hub."7 In
late 2002, CCI made an additional investment of Rs 7 million (Rs 5 million from the
company and Rs 2 million from the company's bottlers) to meet rural demand.

By March 2003, the company had added 25 production lines and doubled its glass and
PET bottle capacity8. Further it also distributed around 2,00,000 refrigerators to its
rural retailers. It also purchased 5,000 new trucks and auto rickshaws for boosting its
rural distribution. Through its rural distribution initiatives, CCI was able to increase
its presence in rural areas from a coverage of 81,383 villages in 2001 to 1,58,342
villages in August 2003. Apart

from strengthening its distribution network, CCI also focused on pricing in rural
market.

Affordability

A survey conducted by CCI in 2001 revealed that 300 ml bottles were not popular
with rural and semi-urban residents where two persons often shared a 300 ml bottle. It
was also found that the price of Rs10/- per bottle was considered too high by rural
consumers. For these reasons, CCI decided to make some changes in the size of its
bottles and pricing to win over consumers in the rural market.

In 2002, CCI launched 200 ml bottles (Chota Coke)9 priced at Rs 5. CCI announced
that it would push the 200 ml bottles more in rural areas, as the rural market was very
price-sensitive. It was widely felt that the 200 ml bottles priced at Rs. 5 would
increase the rate of consumption in rural India. Reports put the annual per capita
consumption of bottled beverages in rural areas at one bottle as compared to 6 bottles
in urban areas.

Affordability Contd...

67
The 200 ml bottles priced at Rs. 5 would also make CCI competitive against local
brands in the unorganized sector. It was reported that in the states of Rajasthan and
Gujarat the local cola brands such as Choice and Tikli cost only half the price offered
by CCI, which gave them the advantage in garnering the major market share before
CCI came out with Chota Coke. CCI also targeted the rural

consumer aggressively in its marketing campaigns, which were aimed at increasing

awareness of its brands in rural areas.

Acceptability

The initiatives of CCI in distribution and pricing were supported by extensive

marketing in the mass media as well as through outdoor advertising. The company put
up hoardings in villages and painted the name Coca Cola on the compounds of the
residences in the villages. Further, CCI also participated in the weekly mandies 10 by
setting up temporary retail outlets, and also took part in the annual haats11 and fairs -
major sources of business activity and entertainment in rural India.

CCI also launched television commercials (TVCs) targeted at rural consumers. In

order to reach more rural consumers, CCI increased its ad-spend on Doordarshan.12
The company ensured that all its rural marketing initiatives were well-supported by
TVCs. When CCI launched Chota Coke in 2002 priced at Rs. 5, it bought out a
commercial featuring Bollywood actor Aamir Khan to communicate the message of
the price cut and the launch of 200 ml bottles to the rural consumers. The commercial
was shot in a rural setting.

In the summer of 2003, CCI came up with a new commercial featuring Aamir Khan,
to further strengthen the Coca-Cola brand image among rural consumers. The
commercial aimed at making coke a generic name for 'Thanda.' Of the reason for
picking up the word 'Thanda', Prasoon Joshi, national creative director - McCann
Erickson, the creator of the commercial, said, "Thanda is a very

68
North India-centric phenomenon.

Go to any restaurant in the north, and attendants would promptly ask, 'thanda ya
garam?' 'Thanda' usually means lassi or nimbu pani, 'garam' is essentially tea. Because
the character, in itself, represented a culture, we wanted to equate Coke with 'Thanda',
since 'Thanda' too is part of the popular dialect of the north. Thus making 'Thanda'
generic for Coca-Cola. With the long-playing possibilities of the 'Thanda' idea
becoming evident, 'Thanda' became the central idea.

69
The Rivalry on Various Fronts

BOTTLING:

Biggest area of conflict.

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

A major stumbling block for Coke was the conflict with its strategic bottling partner,
Ramesh Chauhan of the Parle group of companies. Coke alleged that Chauhan had
secretly manufactured Coke’s concentrate. Chauhan, in turn, accused coke of
backtracking on commitments to grant him bottling rights in Pune and Bangalore and
threatened legal action. The matter almost reached the courts and the strategic alliance
showed signs of coming apart. Industry observers commented that for a company like
Coke that was so heavily franchisee driven, antagonizing its chief bottler was suicidal.

Advertising

When Coke re-entered India, it found Pepsi had already established itself in the soft
drinks market. The global advertisement wars between the cola giants quickly spread

70
to India as well. Internationally, Pepsi had always been seen as the more aggressive
and offensive of the two, and its advertisements the world over were believed to be
more popular than Coke's.

It was rumored that at any given point of time, both the companies had their spies in
the other camp. The advertising agencies of both the companies (Chaitra Leo Burnett
for Coke and HTA for Pepsi) were also reported to have insiders in each other's
offices who reported to their respective heads on a daily basis...

Product Launches

Pepsi beat Coke in the Diet-Cola segment, as it managed to launch Diet Pepsi much
before Coke could launch Diet Coke. After the Government gave clearance to the use
of Aspertame and Acesulfame-K (potassium) in combination (ASK), for use in low-
calorie soft drinks, Pepsi officials lost no time in rolling out Diet Pepsi at its Roha
plant and sending it to retail outlets in Mumbai...

Poaching

Pepsi and Coke fought the war on a new turf in the late 1990s. In May 1998, Pepsi
filed a petition against Coke alleging that Coke had ‘entered into a conspiracy'to
disrupt its business operations. Coke was accused of luring away three of Pepsi's key
sales

71
personnel from Kanpur, going as far as to offer Rs 10 lakh a year in pay and perks to
one of them, almost five times what Pepsi was paying him. Sales personnel who were
earning Rs 48,000 per annum were offered Rs 1.86 lakh a year. Many truck drivers in
the Goa bottling plant who were getting Rs 2,500 a month moved to Coke who gave
them Rs 10,000 a month.

While new recruits in the soft drinks industry averaged a pay hike of between 40-60%
Coke had offered 300-400%. Coke, in its reply filed with the Delhi High Court,
strongly denied the allegations and also asked for the charges to be dropped since
Pepsi had not quantified any damages...

Other Fronts

• Till the late 1980s, the standard SKU for a soft drink was 200 ml. Around 1989,
Pepsi launched 250 ml bottles and the market also moved on to the new standard size.
When Coke re-entered India in

1993, it introduced 300 ml as the smallest bottle size. Soon, Pepsi followed and 300
ml became the standard.

But around 1996, the excise component led to an increase in prices and a single 300
ml purchase became expensive. Both the companies thus decided to bring back the
200 ml bottle, In early 1996, Coke launched its 200 ml bottles in Meerut and gradually
extended to Kanpur, Varanasi, Punjab and Gujarat, and later to the south...

72
• In May 1996, Coke launched Thums Up in blue cans, with four different pictures
depicting ‘macho sports'such as sky diving, surfing, wind-surfing and snow-boarding.
Much to Pepsi's chagrin, the cans were colored blue - the color Pepsi had chosen for
its identity a month earlier, in response to Coke's ‘red'identity...

• There were frequent complaints from both the players about their bottlers and
retailers being hijacked. Pepsi's blue painted retail outlets being painted in Coke's red
color overnight and vice-versa was a common phenomena in the 1990s...

• Coke also turned its attention to Pepsi's stronghold - the retail outlets. Between
1996-98, Coke doubled its reach to a reported 5 lakh outlets, when Pepsi was present
at only 3.5 lakh outlets.

To reach out to smaller markets, interceptor units in the form of mobile vans were
also launched by Coke in 1998 in Andhra Pradesh, Tamil Nadu and West Bengal.

However, in its rush to beat Pepsi at the retail game, Coke seemed

to have faltered on the service front. For instance, many shops in Uttar Pradesh
frequently ran out of stock and there was no servicing for Coke's coolers...

Objectives

The purpose of this research is expose the facts of the appearance of both Pepsi and
Coke in India in terms of marketing communication. This research is mainly based on

73
the marketing communication in which the purpose is to expose the either company’s
marketing communication on the media and contribute the matter to the fact of Pepsi
cola’s strong position.

Conclusions

Pepsi seems stronger in all of the contributed parts than Coke. Pepsi has more brands
than Coke and cover higher media than Coke. Pepsi advertise with almost all of the
brands while Coke mainly advertise only one brand i.e. Coca-Cola. Both used
Emotional and rational appeals in their messages. Pepsi’s marketing share is
evidenced 70

74
Quality and Food Safety Programs
PepsiCo is dedicated to producing the safest, highest quality and best tasting beverages and
foods in every part of the world. Developing and maintaining robust Food Safety programs is
how we assure safety for every package, every day in every market. PepsiCo has detailed
internal programs and procedures for Food Safety. Below is a summary of our policies,
programs and actions designed to keep our products safe and meeting high quality
standards. PepsiCo Food Safety

PepsiCo has an excellent track record in delivering safe products through our PepsiCo Food Safety Policy.
Our efforts are focused on building a sustainable food safety program and providing the framework to
develop and sustain food safety of existing brands and new innovation. The scope covers the design,
manufacture and distribution of beverage and food products. Our programs and procedures apply to all
current and future divisions in PepsiCo.

PepsiCo's programs and procedures for Food Safety and Quality address the following key areas:

Organizational Responsibility: The food safety responsibilities of all individuals at all levels of the
organization are outlined and documented in order to ensure that the authority and accountability of all
quality and food safety decisions are well understood
.
Critical Food Safety Elements: Our comprehensive food safety program ensures compliance with the
following critical food safety elements: HACCP, low acid manufacturing, allergen management, crisis
management, foreign object control, good manufacturing practices (GMP's) and pest management.

Regulatory: PepsiCo ensures that all products and processes are in compliance with applicable
regulatory requirements. These include areas such as ingredients, GMOs, labeling, net weight, pesticide
and chemical residues, juice HACCP, flavor regulations and any local or country-specific requirements.

Food Security: It is the responsibility of each PepsiCo operation to plan, design, implement and
maintain a comprehensive facility security plan in order to ensure our products are safe for human
consumption. A facility security plan is implemented by each plant, facility and distribution center, in
accordance with the baseline standards and framework established by the PepsiCo Security
Organization. It includes an annual review of effectiveness and is updated as necessary
.
Product Design: All PepsiCo products, processing equipment and facilities are designed, developed
and commercialized in a manner that enables manufacturing sites to produce product that is safe, legal
and fit for human consumption. The Research and Development and commercialization teams are
responsible for ensuring processes and products meet all regulatory requirements and are designed to
be safe for human consumption. Equipment design and procurement must meet all standards for GMP
compliance and sanitary design
.
Manufacturing: PepsiCo is committed to the manufacture of products that are safe and fit for human
consumption. We achieve this by ensuring the process is controlled, raw materials are managed
appropriately and the finished product is handled correctly. Manufacturing includes the following
equipment process controls: Conformance to specification, equipment preventative maintenance,
calibration, equipment verification, start-up and change-over operation. The following programs manage
ingredients, in-process materials and finished goods: Product traceability, inspection and testing
procedures, incoming raw material and packaging controls, water quality, packaging quality, control of
non-conforming product, product rework and review and approval of variances. Our warehouses are
routinely assessed, approved and monitored
.
Documentation and Records: PepsiCo ensures that all documentation and records are compliant to
government regulations and the Food Safety Policy. This includes a defined master list of documents
and assigned responsibility for managing documents. Records are maintained to demonstrate
compliance with manufacturing specifications and policies.

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 Supply Quality: All purchased ingredients are procured against an approved specification from an
approved vendor facility. Suppliers must pass a rigorous approval process. Manufacturing facilities only
receive raw ingredients from approved suppliers. Supplier performance is routinely monitored, recorded
and reassessed.

Auditing and Self Assessments: PepsiCo has an established framework in which it executes yearly
food safety audits of manufacturing and suppliers. These audits provide assessments of manufacturing
facilities for compliance, effectiveness and improvement in accordance with PepsiCo food safety policies
and procedures.

Corrective and Preventative Action: Corrective and preventive action is initiated in response to non-
conformances that may occur relative to process, product or package specifications. Effectiveness is
verified by the prevention of reoccurrences. The corrective action program includes effective and timely
handling of consumer / customer complaints, root cause analysis, audits for program effectiveness and
follow-up investigations.

Training: Each functional department identifies training needs and provides training for all employees
including full-time, part-time, temporary and contractors. This ensures that they have the appropriate
level of education, experience and training necessary to effectively perform the required activities
specified in the PepsiCo Food Safety Policy. A training business plan must be established to address
food safety training for HACCP, allergen management, low acid manufacturing, GMP's, control of
nonconforming product, employee safety, food security and specific job applications.

Consumer and Customer Satisfaction: PepsiCo ensures that procedures are in place to monitor
consumer and customer satisfaction. The procedures must provide timely and accurate responses to
customer complaints and strive for continuous improvement.

Quality Organization

PepsiCo Quality professionals assess product compliance to the Quality Policy. This program is focused on
processes and procedures supporting quality policies and prioritization of critical risk areas. PepsiCo Quality
professionals assess product compliance to the Quality Policy. This program is focused on processes and
procedures supporting quality policies and prioritization of critical risk areas. Our Quality agenda is lead by
quality professionals in various regions who oversee the following areas:

• Food Safety
• Innovation (R&D)
• Manufacturing Quality
• Co-manufacturing Quality
• Supplier Quality
• Plant Quality

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PepsiCo's Political Contributions Policy

PepsiCo's Board of Directors has approved the following policy. Together with other
policies and procedures, including our Code of Conduct, it guides our approach to
political contributions. By following the policy and the accompanying procedures, by
adhering to the letter and the spirit of all applicable laws and regulations, and by
exercising sound judgment regarding our involvement in the political process, we affirm
and strengthen our commitment to PepsiCo's values.

Policy

It is essential in a democratic society that citizens participate in their government. The

health of our society depends on all of us being well informed and responsibly engaged in
the political process.

The PepsiCo Concerned Citizens Fund (CCF) receives voluntary employee contributions
to make political campaign contributions to U.S. federal and state political parties,
committees and candidates. The CCF and the company's corporate contributions provide
an important opportunity for PepsiCo, and its employees, to participate in the democratic
process.

We believe that providing financial support to responsible pro-business candidates is an

important means by which we help improve the business climate, our quality of life and
the society in which we live, enabling us to succeed as a company committed to integrity,
innovation and value.

The following criteria will be used in connection with all contributions:

The candidate's or entity's commitment to improving the business climate;

The candidate's or entity's position or voting record on issues of direct concern to

PepsiCo;

The location of PepsiCo facilities or employees within the candidate's district or state;

The candidate's position on key committees where legislation of importance to PepsiCo

is considered or the candidate's demonstrated leadership - or potential for leadership -
within the U.S. Congress or a State Legislature;

The candidate's need for campaign financial assistance.

The public policy issues we face as a company and our engagement in the public policy
process, including contributions as part of the political process, are discussed with and
reviewed by the Nominating and Corporate Governance Committee of the company's
Board of Directors.

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Details on PepsiCo's political contributions will be posted on its website on an annual
basis. This will occur in conjunction with the release of PepsiCo's Corporate Citizenship
Report each year.

All contributions and support of U.S. or state political parties, committees or candidates
from the CCF or corporate funds must be made in accordance with applicable campaign
finance and disclosure laws.

Coercion of any employee to contribute to the CCF or to make any political contribution
of any kind is unacceptable.

Our employees have the right to be engaged in the political process in their individual
capacity as they see fit, and make political contributions of their own time and money to
the candidates or parties of their choice. Of course, those efforts must not in any way
suggest PepsiCo's support.

Management and supervisory employees who are citizens of the United States may
voluntarily contribute to the CCF.

PepsiCo employees must obtain approval of the Corporate Vice President Public Policy &
Government Affairs before making political contributions of corporate funds.

All contributions must be reviewed by the corporate law department to ensure legal
compliance.

All payments from the CCF to support U.S. or state political parties, committees or
candidates must be approved by the CCF Executive Committee.

Feb. 3, 2006

Less Packaging

Pepsi has led the way in reducing packaging materials through cost-effective changes in
design and production. Known in the industry as “light-weighting, these efforts explain
why our bottles and cans look and feel different than the ones you might remember from
years ago.

Lightweighting is good for the business and good for the environment – it reduces the
amount of raw materials and energy used to make our packages and means that less waste
is generated after our beverages are enjoyed. However, our lightweighting goals must

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always be balanced against the need to protect the flavors and ingredients in our products,
to allow for stacking during transportation and in stores, and to ensure the safety of our
consumers.

If you’re wondering why some bottles, particularly water bottles like the ones we use for
Aquafina, are lighter than other beverage bottles, here’s why:

• Bottles used for non-carbonated beverages like our Tropicana juice drinks, Aquafina
flavored waters, and Lipton Iced Teas, need a thicker sidewall to protect their flavors and
ingredients from exposure to oxygen. Without this protection, some flavors and
ingredients can lose their taste and other features over prolonged periods of time.

• Bottles used for carbonated beverages like Pepsi, Mountain Dew and Sierra Mist need
an even thicker side wall to hold in the carbonation.

We are continually working to innovate new ways to lightweight all of our packaging.
Here are some examples of work that’s already been done.

• The amount of aluminum used to make our soft drink cans has been reduced 10% since
1993, which saves about 75 million pounds of aluminum a year.

• The amount of plastic used to make our 2-liter soft drink bottles has been reduced by
39% since 1980.

• We’ve trimmed the amount of plastic used in our most popular Aquafina bottle - the
half-liter (16.9 oz) bottle - by 35% since 2002. This saves more than 50 million pounds of
plastic and reduces greenhouse emissions by 118 million pounds annually.

• In 2008, we introduced a new, half-liter bottle for our Aquafina flavored waters, Lipton
Iced Teas, and Tropicana juice drinks. The new bottle contains 20% less plastic than the
previous bottle (18.6 grams versus 23.5 grams) and its label is 10% smaller than before.
These innovations are taking twenty million pounds of packaging out of the system each
year.

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• By using a thinner gauge material, we’ve reduced the amount of plastic in our multi-
pack wraps (i.e. 6-pack, 8-pack, 12-pack, etc), by 18%.

Sustainable Packaging & Recycling

We produce our beverages in a variety of packages, each carefully designed to deliver

convenience and appeal to our consumers while protecting the integrity of our beverages
and minimizing environmental impact throughout the package’s life-cycle. Balancing all
those needs is a tall order for a bottle or a can but given the number of packages we
produce each year, it is an absolute imperative.

To minimize the impact of our packaging on the environment, we follow the recognized
principles of sustainable packaging design:

Reduce: using less material in our packaging

Reuse: reusing packaging where feasible

Recycle: designing packaging that is 100% recyclable and that contains as much recycled
material as possible

We employ these principles not only for our bottles and cans, but also for the “secondary”
packaging (i.e. pallets, boxes, shrinkwrap and trays) that we use to protect, transport and
display our beverages.

In addition, we are working to help ensure consumers properly dispose of packaging after
they enjoy our beverages. This includes labeling our packages to help educate consumers
about their proper disposal and promoting recycling among our consumers and in our
communities.

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Product Safety & Quality
The global nature of our business requires that the Coca-Cola system has the highest
standards and processes for ensuring consistent product safety and quality -- from our
concentrate production to our bottling and product delivery. We measure key product and
package quality attributes to ensure our beverage products in the marketplace meet
Company requirements and consumer expectations. Consistency and reliability are critical
to our product quality and to meeting global regulatory requirements and Company
standards.

quality

Our system, everywhere in the world, has the highest standards and processes for ensuring
product safety and quality. Consistency and reliability are critical to meeting global
regulations and Company standards—from concentrate production to product delivery
We measure key product and package quality attributes to ensure our beverage products
in the marketplace meet Company requirements and consumer expectations. Consistency
and reliability are critical to our product quality and to meeting global regulatory
requirements and Company standards. The global nature of our business requires that the
Coca-Cola system has the highest standards and processes for ensuring consistent product
safety and quality -- from our concentrate production to our bottling and product delivery.
To ensure such consistency and reliability, the Coca-Cola system is governed by The
Coca-Cola Management System (TCCMS). TCCMS is our integrated quality
management program, which holds all of our operations systemwide to the same
standards for production and distribution of our beverages. It guarantees the highest
standards in the management of product quality, the environment, and health and safety
throughout the Coca-Cola system.
Each business within the Coca-Cola system must establish, implement, document and
maintain a safety and quality system in accordance with TCCMS requirements.

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In 2007, we increased our Company’s Global Product Quality Index rating to 94.5 from
94.2 in 2006, reaching our highest-ever value. Our 2007 Company Global Package
Quality Index rating increased to 90.4 from 89.2 in 2006, also reaching our highest-ever
value.

ingredients
To sensibly enjoy our products, it helps to understand more about the ingredients we use
and the benefits they provide. While there are many different ingredients in the more than
3000 beverages we make, one focus here on three that people ask about frequently:
sparkling water, sweeteners and caffeine. Variety is the foundation of our commitments to
our consumers. With our range of beverage products, package sizes and nutrition
information provided on our packages, we strive to inform, motivate and empower
consumers to make sensible beverage choices. Our goal is to help people around the
world lead healthier lives by providing beverages for every lifestyle, life stage and life
occasion. Read our "Advertising and Marketing to Children Policy."
We have nearly 500 beverage brands inclusive of more than 3,000 beverages. They range
from regular and low- and no-calorie sparkling beverages to still beverages such as 100
percent fruit juices and fruit drinks, waters, sports and energy drinks, teas and coffees, and
milk- and soy-based beverages. All of these beverages are made of high-quality
ingredients and can be part of a healthy, balanced diet.
In 2007, the Company launched 450 new beverage products, including 150 low- and no-
calorie options for consumers. The launch of these low- and no-calorie options expanded
our portfolio of that category by approximately 17 percent from 2006 to 2007. To date,
we have more than 700 low- and no-calorie beverage products, accounting for
approximately 23 percent of our 2007 unit case volume. Coca-Cola Zero, now available in
more than 90 countries, has been an important addition to these no-calorie beverage
alternatives.
As an additional way to help consumers manage calories, we continue to introduce
smaller packaging sizes in markets throughout the world. In the United States, we
introduced the 8-ounce, 100-calorie aluminum cans of Coca-Cola, Cherry Coke and
Sprite.
Understanding the growing consumer need for products that deliver enhanced beverage
benefits, we offer functional beverages that can help consumers address nutrition gaps and
performance needs. For example, NutriJuice, a vitamin- and mineral-fortified orange juice
drink specifically developed to help address the problem of iron-deficiency anemia and
malnutrition in children, was launched in the Philippines in 2007.
portfolio
Our commitment to consumers is to provide a variety of products for every lifestyle, life
stage and occasion. All our products can be part of an active, healthy lifestyle, which
consists of combining a moderate, balanced and varied diet with regular physical activity.
Our Company continues to expand our beverage portfolio in order to meet consumers'
evolving needs and preferences. We currently offer more than 2,600 Coca-Cola beverages

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around the world. Visit our Products section to learn about beverage variety, product
safety and quality, nutrition, hydration, sweetners and how our beverages can fit into your
healthy, active lifestyle.

Packaging

Our goal is to advance a packaging framework in which our packaging is no longer seen
as waste, but as a valuable resource for future use.

Completing the cycle

Packaging adds value to our products by increasing shelf life, minimizing breakage,
reducing transportation and handling costs, safeguarding public health, providing product
information and creating consumer convenience. But in an era of rising energy costs and
scarce resources, we must work toward packaging that adds value not only to our
products, but also to our environment and society.

reduce

We're continually exploring new ways to optimize the amount of material and energy we
use in our packaging. Since the introduction of all our major packages, we've significantly
reduced the materials used to make them, without sacrificing quality.

Reduce
We have a long history of designing packages with the environment in mind. In 1969, our
Company commissioned the first study to examine the whole environmental impact of a
package, laying the framework for the life cycle assessment methodology used today.
Our focus on life-cycle management has helped us sustain the use of high value
recyclable materials and reusable packages. About 85 percent of our global beverage
volume is delivered in primary packaging made from polyethylene terephthalate (PET)
plastic, aluminum, glass and steel. The materials are 100 percent recyclable. The
remaining 15 percent of beverage volume is largely delivered through highly efficient
bulk package systems such as refillable steel tanks or concentrated bag-in-box containers
for fountain syrup.
We are advancing sustainable design efforts through an initiative known as e3, which
focuses on improving efficiency, life-cycle effectiveness and eco-innovation. For
example, using state-of-the-art computer design software, we have effectively reduced

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and improved the impact resistance of our most recognizable package – the glass contour
bottle.
Introduced in 2000, the Ultra Glass contour bottle is designed to improve impact
resistance, and reduce weight and cost. The innovative Ultra Glass bottles are 40 percent
stronger, 20 percent lighter and 10 percent less expensive than traditional contour bottles.
Use of the Ultra Glass design has eliminated 52,000 metric tons of glass -- resulting in a
CO2 reduction of 26,000 tons or the equivalent of planting 8,000 acres of trees.
Throughout our system, we tailor our packaging to meet local economic, social and
environmental needs. In least developed markets, we rely more heavily on refillable
bottles in order to offer greater affordability to consumers and prevent waste. In other
instances, we adjust the amount of material used in PET bottles based on local
temperatures to reduce packaging while maintaining product quality.

recover

Approximately 85% of our unit case volume today is delivered in recyclable bottles and
cans. The recovery of these containers and their materials for reuse is critical to our
sustainability aspirations. Our target is to recover directly 50% of the equivalent bottles
and cans sold worldwide. In india most of the packaging we use is refillable packaging
once the use these packaging collected washed and refilled system directly managed by
coca cola.

reuse
We're helping to foster demand for recovered materials because of our increased use of
recycled content in our packages. We also are purchasing products that are made from
recycled beverage packaging and enhancing the efficiency of our refillable bottles
We are working to advance technologies that allow us to use greater amounts of recycled
materials in our packaging.
More than half of the metal in our aluminum cans is recycled. Since introducing the first-
ever beverage container with recycled PET in 1991, we have continued to invest
significant dollars in development of environmentally and economically viable recycling
technologies. Today, we lead the industry in the innovative use of recycled plastic. Learn
how we create value through sustainable fashion.
The Coca-Cola Company is using recycled content PET in more than 17 markets around
the world. Recycling plastic for reuse yields financial benefits, requires less energy than
producing bottles with virgin materials, and reduces waste and greenhouse gases. Read
about our community recycling programs.
We also invested in building PET recycling plants that produce bottles from recycled
content in Australia, Austria, Mexico, the Phillippines, Switzerland and the United States.

84
Our plant in the United States will be the world's largest plastic bottle to bottle recycling
plant with capacity to produce approximately 100 million pounds of food grade recycled
PET plastic for reuse each year -- the equivalent of producing nearly 2 billion 20 ounce
Coca-Cola bottles.

Policy of The Coca-Cola Company

Corporate Political Contributions
The Coca-Cola Company is the world’s largest beverage company, refreshing consumers
with more than 450 sparkling and still brands. Along with Coca-Cola, recognized as the
world’s most valuable brand, the Company’s portfolio includes 12 other billion dollar
brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade,
Minute Maid and Georgia Coffee. Globally, we are the No. 1 provider of sparkling
beverages, juices and juice drinks, and ready-to-drink teas and coffees. Through the
world’s largest beverage distribution system, consumers in more than 200 countries enjoy
the Company’s beverages at a rate of 1.5 billion servings a day. With an enduring
commitment to building sustainable communities, our Company is focused on initiatives
that protect the environment, conserve resources and enhance the economic development
of the communities where we operate.
Because public policy issues have the potential to impact our business, people and
communities, our Company, like other commercial enterprises, uses its resources on
occasion to advance matters of public policy that are consistent with the sustainability of
our business and our Company’s values.
To that end, our Company recognizes the importance of meaningful corporate governance
practices as it relates to corporate political contributions in the United States.
Accordingly, corporate political contributions are based upon the following criteria:
1 Legal Compliance: Our Company’s political contributions are made in
compliance with all applicable laws and corresponding legal reporting requirements. To
ensure compliance, all corporate political contributions are reviewed and approved by our
Company’s Vice President, Government Relations and appropriate legal counsel.

1 Board and Management Oversight: Corporate political contributions are

reviewed retroactively by the Public Issues and Diversity Review Committee to ensure
alignment with Company policy and our overall values. In addition, the Public Issues and
Diversity Review Committee, along with the Company’s Public Policy and Corporate
Responsibility Council, periodically review Company policy regarding political
contributions and also corresponding Company practices.

1 Public Policy Support: Consistent with applicable laws, corporate political

contributions may be given to political candidates and organizations whose views and
work are consistent with the interests and values of our Company, our bottling and overall
business system, the non-alcoholic beverage industry and the communities in which we
operate. Because our Company’s vision and values are an outgrowth of our unique brands
and people, we recognize that political candidates and organizations may support
positions that align with some, but not all, aspects of our contribution policy. In these

85
instances, we base our involvement on those areas of mutual agreement that we believe
will have the greatest benefit to our shareowners and key stakeholders.

1 Public Transparency: Our Company supports public transparency relating to

corporate political contributions and our Company complies with all applicable laws and
legal reporting requirements relating to corporate political contributions. In addition, and
to further the goal of transparency in this area, we will post this policy and an annual
report of our contributions to political candidates and any political entities organized
under 26 USC Sec. 527 of the Internal Revenue Code on our Company website:
www.thecoca-colacompany.com.

If you have any questions or require further information regarding this Company policy,
please contact the office of the Vice President, Government Relations.

Conclusion:
Advertising professionals realize that the heart of any campaign is not just the product but also the position it
holds in people's minds. Thus the New Coke fiasco couldn’t have been predicted nor could the overwhelming
response to Classic Coke.
In the interest of aligning their marketing campaigns with various sets of social values, companies like the
cola giants, may try to emphasize their reputation for ethical conduct or the social value of their products.
They might enter under-served markets, with the dual aim of distributing goods and services to those who
might not otherwise have access to them, and at the same time finding profitable new business niches and
creating good will toward the company. Coke and Pepsi are practicing social marketing in rural India and
interior China.
International marketing can be very complex. Many issues have to be resolved before a company can even
consider entering uncharted foreign waters. This becomes very evident as one begins to study the
international cola wars. Often, the company that gets into a foreign market first usually dominates that
country's market.
The concepts, which are becoming more important in every market, include color, product attractiveness
visibility, and display quality. In addition, availability (meeting local demand by increasing production locally),
acceptability (building brand equity), and affordability (pricing higher than local brands, but adapting to local
conditions) are the key factors. Keeping these factors in mind the two companies have hired local
professionals to better un

Packaging Of The Pepsi & Coca cola

Coca cola company goal is to advance a packaging framework in which our packaging is
no longer seen as waste, but as a valuable resource for future use.Pepsi produce our
beverages in a variety of packages, each carefully designed to deliver convenience and
appeal to our consumers while protecting the integrity of our beverages and minimizing
environmental impact throughout the package’s life-cycle. Coke Packaging adds value to
our products by increasing shelf life, minimizing breakage, reducing transportation and

86
handling costs, safeguarding public health, providing product information and creating
consumer convenience. To minimize the impact of our packaging on the environment, we
follow the recognized principles of sustainable packaging design:

Reduce: In Pepsi company using less material in our packaging. In Coke We're
continually exploring new ways to optimize the amount of material and energy we use in
our packaging. Since the introduction of all our major packages, we've significantly
reduced the materials used to make them, without sacrificing quality.

Reuse: Pepsi reusing packaging where feasible. Our target is to recover directly 50% of
the equivalent bottles and cans sold worldwide. In india most of the packaging we use is
refillable packaging once the use these packaging collected washed and refilled system
directly managed by coca cola.

Recycle :Pepsi designing packaging that is 100% recyclable and that contains as much
recycled material as possible. Coke helping to foster demand for recovered materials
because of our increased use of recycled content in our packages. We also are purchasing
products that are made from recycled beverage packaging and enhancing the efficiency of
our refillable bottles

Coke company working to advance technologies that allow us to use greater amounts of
recycled materials in our packaging. In addition, Pepsi working to help ensure consumers
properly dispose of packaging after they enjoy our beverages. This includes labeling our
packages to help educate consumers about their proper disposal and promoting recycling
among our consumers and in our communities.

Sales and income data, in

millions
Net sales $21,742 $23,104 $24,088 $28,857 $31,944
Net income (profits) $4,847 $4,872 $5,080 $5,981 $5,807
Units sold, in billions 19.8 20.6 21.4 22.7 23.7
Sales and income data, in
millions

87
Net sales $21,742 $23,104 $24,088 $28,857 $31,944
Net income (profits) $4,847 $4,872 $5,080 $5,981 $5,807
Units sold, in billions 19.8 20.6 21.4 22.7 23.7

88