ASIA PACIFIC INSTITUTE OF MANAGEMENT STUDIES

NEW DELHI

Advertising strategy between Coca-Cola and

Pepsi

Submitted to Submit by

jayant sanyal Amrita

kumari

Kmaran Siddqui

Subhamay
Biswas
 Priyasha Sarker

Definition:

Advertising is a powerful communication force, highly visible, and one of the

most important tools of marketing communications that helps to sell products,
services, ideas, and images, etc. Advertising is controlled, identifiable,
information and persuasion by means of mass communication media.

Most commonly, the desired result is to drive consumer behavior with respect
to a commercial offering, although political and ideological advertising is also
common. Advertising messages are usually paid for by sponsors and viewed
via various media; including traditional media such as newspapers,
magazines, television, radio, outdoor or direct mail; or new media such as
websites and text messages.

Advertising, in its non-commercial guise, is a powerful educational tool

capable of reaching and motivating large audiences. "Advertising justifies its
existence when used in the public interest—it is much too powerful a tool to
use solely for commercial purposes." The definition have used certain words
that need some elaboration-

I. Non-personal presentation and promotion: Advertising is totally non-

personal, offering no personal, offering no personal interaction,
delivered through media, and often viewed as intrusion.

II. Any paid form: Publicity refers to stories and brand mentions in mass
media without any payment. Favorable publicity projects products,
services or idea in any media because it is considered informative and
useful for the audience. Here the paid aspect of the definition reflects
the fact that the space or time for an advertising message generally
must be bought.

III. Ideas, goods & services: Advertising, being a powerful mass

communication tool, is used not only to present and promote goods and
services with the intent of selling them; it is also increasingly used to
further the goals of public interest and social causes.

IV. An identified sponsor: An identified sponsor clarifies the difference

between advertising and propaganda. Here propaganda attempts to
 present certain opinion and ideas, which may influence public attitude
and action.

V. Controlled: The advertiser controls the content of the advertising

message, its time and direction. Advertiser says only what they want to
say and by selecting the appropriate medium, direct the message to
audience whom they want to target.

VI. Mass communication media: The board group of audience can best be
reached by mass media such as newspaper, magazines, television,
radio, and outdoor displays.

VII. Persuasion: The major objectives of advertising inherent in the

presentations and promotion in ideas, goods, or services are to achieve
predetermined objectives through persuasive communication,
precipitating the change or reinforcement of desired attitude or
behavior.

Objective:

Advertising objectives are the communication tasks to be accomplished with

specific customers that a company is trying to reach during a particular time
frame. A company that advertises usually strives to achieve one of four
advertising objectives: trial, continuity, brand switching, and switchback.
Which of the four advertising objectives is selected usually depends on where
the product is in its life cycle.

Trial: The purpose of the trial objective is to encourage customers to make an

initial purchase of a new product. Companies will typically employ creative
advertising strategies in order to cut through other competing advertisements.
The reason is simple: Without that first trial of a product by customers, there
will not be any re peat purchases.

Continuity: Continuity advertising is a strategy to keep current customers

using a particular product. Existing customers are targeted and are usually
provided new and different information about a product that is designed to
build consumer loyalty.

Brand Switching: Companies adopt brand switching as an objective when they

want customers to switch from competitors' brands to their brands. A common
strategy is for a company to compare product price or quality in order to
convince customers to switch to its product brand.

Switchback: Companies subscribe to this advertising objective when they want

to get back former users of their product brand. A company might highlight
new product features, price reductions, or other important product information
in order to get former customers of its product to switchback.

Media Mix and Integrated marketing communications:

Media Mix the combination of media types used to carry the advertiser's
message. Media Plan a blueprint for a firm's advertising, giving details of
the media mix, the specific media vehicles and the media schedule.

Integrated Marketing Communications (IMC) is the coordination and

integration of all marketing communication tools, avenues, functions and
sources within a company into a seamless program that maximizes the impact
on consumers and other end users at a minimal cost. It is a process for
managing customer relationships that drive brand value primarily through
communication efforts. Such efforts often include cross-functional processes
that create and nourish profitable relationships with customers and other
stakeholders by strategically controlling or influencing all messages sent to
these groups and encouraging data-driven, purposeful dialog with them. IMC
includes the coordination and integration of all marketing communication
tools, avenues, and sources within a company into a seamless program in
order to maximize the impact on end users at a minimal cost. This integration
affects all firms’ business-to-business, marketing channel, customer-focused,
and internally directed communications.
 P epsiCo entered India in 1989 and has grown to
become the country's largest selling food and Beverage Company. 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 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, Tropicana 1oo%
fruit juices, and juice based drinks - Tropicana Nectars, Tropicana Twister
and Slice, non- carbonated beverage and a new innovation Nimbooz by
7Up. Local brands - L e h a r 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 and the
recently launched 'Aliva' savoury crackers. The company's high fibre
breakfast cereal, Quaker 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 36 bottling plants in India, of which 13 are
company owned and 23 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.

Youngistaan Campaign:

This campaign has two new celebrities Ranbir Kapoor and Deepika
Padukone - who acted in the two most-talked about Hindi films in 2007,
to accompany brand ambassador Shah Rukh Khan.
Ranbir confronts SRK while making a futile attempt at entering Deepika's
room to grab a Pepsi, Ranbir spots a poorly lit neon sign that reads
'Young Hindustan Supermarket'. Due to the broken neon light, Ranbir
spots just a few letters. When asked, where he has come from, Ranbir,
based on this observation, replies, "Youngistaan". "This time we wanted
an all-encompassing theme. ‘Youngistan' reflects the mood of India's
youth, which is today keen to take the ropes and drive India," says
Punita Lal, executive director, marketing, PepsiCo.

"Youngistan", hopes to cash in on the buzz surrounding today's

youngsters. Youngistan is not so much a place and it is a state of mind of
today's youth. "While the term is new, what it stands for - the GenNext
attitude - is not new".

STP - Segmenting, Targeting and Positionin g of Youngistaan

Campaign:
 A. Segmenting Pattern
Demographic:
The campaign targets teens and young adults of metros and phase II
cities.
Psychographics:
The campaign attempts to capture the youth of today by focusing on
their personality, lifestyle and attitude of youth through the
advertisement.
B. Targeting Strategy
The Youngistaan Campaign uses undifferentiated targeting strategy to
reach out to its target audience. That is it launched youngistaan campaign
for all the target audience in the same way.
C. Positioning
The campaign positioning is done on the basis of user approach i.e. a
personality based approach where a user's image or association rubs off
on the brand image.
For this campaign Pepsi used the three most popular celebrities of the
last year i.e. Shah Rukh Khan, Ranbir Kapoor and Deepika Padukone.

Placement of "Youngistaan Campaign"

The campaign was first launched on T.V during the tri -series matches in
February. The campaign is launched with 36o-degree activation across
radio, outdoor, modern trade, and Web and wireless platforms.

Pepsi has launched a website for Youngistan inside the Pepsi Cool Zone
and is planning to make it a responsive peer group site where
youngsters can visit and make comments on any topic.

Pepsi Youngistan is also sponsoring ''Wassup Youngistan" on MTV, a show

where youth can voice their thoughts.

Advertising Agency of "Youngistaa n Campaign"

JWT (J. Walter Thompson) is the advertising agency of Pepsi Youngistaan
Campaign. The idea is fast climbing the popularity charts. The seed of
'Youngistaan' germinated through a recent TV campaign featuring the
'Saawariya' kid, Ranbir Kapoor, the present heart-throb of millions, Deepika
Padukone, and the ever -so-smart and smashing SRK.

PepsiCo India Executive Vice-President, Marketing (Cola), Sandeep Singh

Arora, while commenting on the new campaign said, "The new campaign
targets the youth of the nation, not only youngsters but also people young
at heart.'Youngis taan' represents a never failing attitude, desire to take on
challenges and the power to turn things around."
Expressing his opinion regarding the 'Youngistaan' concept, Hari
Krishnan, Vice- President at JWT, said, "Youngistaan is a feeling that is
racing through every youthful nerve in the country today. Brand Pepsi
will simply tap this energy and help the youth express this emotion."

Advertising Strategy of Pepsi:

• Pepsi's target audiences are mostly teens and young adults and
their advertising reflects this in every possible way.
• The company changes its advertising strategy and image to
reflect the target's interests.
• Pepsi makes sure that the advertisements reflect to the target
audience's interests and nostalgia.
• The advertising strategy includes cool, hip promos to
attract more of the target audience.
• The advertising is mostly creative and has different elements
like music and sports other than Bollywood.
• Pepsi.com also plays an important role in advertising and
attracts target audience by giving access to options like
downloads, gaming, music mixing applications etc.

Commu nica tion Obj ectives PEPSI

• To separate brand identity for each products.
 • Extensive reminder advertising for repeat purchase.
• Use of Teaser Adv. (Shah Rukh Khan, Ranbir Kapoor and Deepika
Padukone.) to supress 'NOISE'.
• Mention the Nutritional Value of product to increase consumer
awareness and build responsible brand image.
• 'SIS' to assist /boost im puls e b u y i n g : Tropicana f o l l o w e d t his
s t r a t e g y q u i t e succesfully.
• Consumer Schemes to entice swift purchase action and also
generate more impulse buying as consumer have become more
knowledgeable and understand value for money hence prefer to
products giving a better deal with good quality products.

Media selection

Television
PepsiCo India, one of the country's biggest advertisers, is diversifying its ad
spends away from television which once accounted for 90 percent of the
budget, to focus on other media, especially online, as it aims to
connect with its core youth audience. The company has recently
launched a television campaign, which aims at connecting with consumers
through gaming. "The concept called ‘The Game’ will bring together
gaming and TV advertising. The idea is to involve consumers in our
advertising and not just doing one-way communication.

Outdoor Media
PepsiCo has increased the share of non-TV advertising spend to 3o per cent
of its advertising budget. This includes print, outdoor media, mall
advertising, mobile related applications and the Internet.

Internet
This year pepsico had decreased its superbowl expenditure budget to
increase its presence on online media to focus on youth. It has nearly
invested more than 2o million on online media with its refresh project and
create an impact on social networking s ite s like facebook twitter etc.

Sponsorships
Pepsi has sponsored various sports events like icc world cricket league,
many india Pakistan matches, IPL and also many other regional events.
Pepsi Youngistan is also sponsoring ''Wassup Youngistan" on MTV, a show
where youth can voice their thoughts.

Coca-Cola Enterprises, established in

1986, is a young company by the standards of the Coca-Cola system.
Yet each of its franchises has a strong heritage in the traditions of
Coca-Cola that is the foundation for this Company.
The Coca-Cola Company traces it’s beginning to 1886, when an
Atlanta pharmacist, Dr. John Pemberton, began to produce Coca-Cola
syrup for sale in fountain drinks. However the bottling business began
in 1899 when two Chattanooga businessmen, Benjamin F. Thomas and
Joseph B. Whitehead, secured the exclusive rights to bottle and sell
Coca-Cola for most of the United States from The Coca-Cola Company.
The Coca-Cola bottling system continued to operate as independent,
local businesses until the early 1980s when bottling franchises began
to consolidate. In 1986, The Coca-Cola Company merged some of its
company-owned operations with two large ownership groups that
were for sale, the John T. Lupton franchises and BCI Holding
Corporation's bottling holdings, to form Coca-Cola Enterprises Inc. The
Company offered its stock to the public on November 21, 1986, at a
split-adjusted price of $5.50 a share. On an annual basis, total unit
case sales were 880,000 in 1986.
In December 1991, a merger between Coca-Cola Enterprises and the
Johnston Coca-Cola Bottling Group, Inc. (Johnston) created a larger,
stronger Company, again helping accelerate bottler consolidation. As
part of the merger, the senior management team of Johnston assumed
responsibility for managing the Company, and began a dramatic,
successful restructuring in 1992.Unit case sales had climbed to 1.4
billion, and total revenues were $5 billion.

Strategic planning

In the year 2002, the company had a great success, as the strategy worked
which resulted in making Coca Cola Company the world’s leading company. In
2001, company accomplished the crust of its strategy as

• Worldwide volume increased by 4 percent with strong international

growth of 5 percent and clear signs that our North American business is
growing solidly and predictable.
• Earnings per share grew by 82 percent, as we delivered on our
commitment to create volume growth while aggressively
• Return on common equity grew from 23 percent in 2000 to 38 percent
this year.
• Return on capital increased from 16 percent in 2000 to 27 percent in
2001.
• The company has generated free cash flow of $3.1 billion, up from $2.8
billion in 2000, a clear indication of its underlying financial strength.
The strategy for the future of the company is very straightforward. The
marketing strategy for the year 2002 is as follows

• Accelerate carbonated soft-drink growth, led by Coca-Cola.

 • Selectively broaden the family of beverage brands to drive profitable
growth.
• Grow system profitability and capability together with our bottling
partners.
• Serve customers with creativity and consistency to generate growth
across all channels.
• Direct investments to highest potential areas across markets.
• Drive efficiency and cost-effectiveness everywhere.
• PROMISE OF COKE

The basic proposition of our business is simple, solid and timeless. When
we bring refreshment, value, joy and fun to our stakeholders, then we
successfully nurture and protect our brands, particularly Coca-Cola. That is
the key to fulfilling our ultimate obligation to provide consistently attractive
returns to the owners of our business.

• TARGET MARKET

Coke’s commercials basically based on young generations, So, the young

generation is the target market of Coke because they want to represent
Coke with the youth and energy but they also consider about the old
people they take then as a co-target market.

• MAJOR SEGMENTS

Major segments are basically those people who take this drink daily and
those areas where the demands are higher than the other areas. There are
so many people who take this drink daily and those people who take
weekly and those who take less often are always there as well. So, their
basic segments are those people who take this drink regularly.

MARKETING STRATEGY

Our local marketing strategy enables Coke to listen to all the voices around
the world asking for beverages that span the entire spectrum of tastes and
occasions. What people want in a beverage is a reflection of which they are,
where they live, how they work and play, and how they relax and recharge.
Whether you're a student in the United States enjoying a refreshing Coca-Cola,
a woman in Italy taking a tea break, a child in Peru asking for a juice drink, or
a couple in Korea buying bottled water after a run together, we're there for
you. We are determined not only to make great drinks, but also to contribute
to communities around the world through our commitments to education,
health, wellness, and diversity. Coke strives to be a good neighbor,
consistently shaping our business decisions to improve the quality of life in the
communities in which we do business. It's a special thing to have billions of
friends around the world, and we never forget it.
Coca Cola Company gives incentives to middle men or retailers in way a they
offer them free samples and free empty bottles, by this these retailers and
middle man push their product in the market. And that’s why coca cola seen
more in the market. And they have a good sale in the market because
according to the expert which product seen more in the market that sells
more.
“Seen as sold”

They do agreements with a shop keepers and stores to exclusive sale in those
stores. These stores are called as KEY accounts in their local language.
And coke also invest heavy budget on these stores and offers them free
samples and free bottles and sometime cash incentives.

Thanda Matlab Coca-Cola Campaign:

STP - Segmenting, Targeting and Positionin g of Thanda Matlab

Coca-Cola Campaign:

A. Segmenting Pattern
Demographic:

The campaign targets teens and young adults of Towns and rural part of
India.
Psychographics:
The campaign attempts to capture the youth of today by focusing on their
personality, lifestyle and attitude of youth through the advertisement.
B. Targeting Strategy
The Thanda Matlab Coca-Cola Campaign uses undifferentiated targeting
strategy to reach out to its target audience. This ad launched for targeting
the pub culture and this ad making the anyway.
C. Positioning
The campaign positioning is done on the basis of user approach i.e. a
personality based approach where a user's image or association rubs off on
the brand image.

Placement of "Thanda Matlab Coca-Cola Campaign"

The campaign was launched with 360 degree activation across radio,
television and outdoor media platforms.
Coca-Cola was launched this ad with superstar Amir Khan from Bollywood
across whole across India. This ad was friendly with the culture at that time.
Try to impress upon consumer mind by targeting ego. The Coca-Cola only
targeted the youth and young generation.

Commu nica tion Obj ectives Coca-Cola

• To create product differentiation.
• Use the brand ambassador Amir Khan.
• Provide fresh and value for money drink
• To generate more impulse buying

Media selection

Television

Coca-Cola India, one of the country's biggest advertisers, is diversifying its

ad spends away from television, to focus on other media, especially
online, as it aims to connect with its core youth audience. Aamir
khan endorsed the brand to increase its popularity and enhance more sales.

Outdoor Media

Coca-Cola India spend adequate amount on outdoor media. This includes

print, outdoor media, mall advertising, mobile related applications and the
Internet.
Marketing Expenditure:

The graph shows marketing expenditure done on different brands by Coca-

Cola India and PepsiCo India.
Conclusion:

By closely analyzing the advertisement strategies

of the two brands, i.e., Coca-Cola and Pepsi, we conclude that both the
organizations are competent enough and have really worked hard to position
their brands. Both the companies are crystal clear about their advertising
objectives and creative strategy.
Pepsi has tried to concentrate more on youth through their
“youngistan campaign” whereas Coca-Cola has tried to position its brand as
the only alternative for thirst. They have created a brand image such that
whenever customer thinks about “thanda” or a “chilled thirst quenching
drink”, only Coca-Cola should resonate in his mind. Coke has also achieved
this alternative through its “thanda matlab coka-cola” brand.
Both the companies have well differentiated in their IMC
approach, to attain their respective objective and this has provided them
maximum clarity, consistency and impact. As a result of this they were able
to position their image as they wanted.
Concludingly, I would say that both the brands will give
tough competition to each other as long as they exist.