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PROJECT REPORT ON “ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO”

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					                ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO



                         PROJECT REPORT
                                         ON
                              “ANALYSIS OF
              MARKETING STRATEGY OF
              COCA COLA AND PEPSICO”



                              UNDER GUIDANCE OF:
                              MR. ASHISH SAIHJPAL
                          (FACULTY, MARKETING)


                                               SUBMITTED BY:
                                               AKHILESH MITTAL
                                               ARVIND JAIN
                                               BIPIN SINGH
                                               KARAMJEET SINGH
                                               PAWAN KUMAR
                                       (MBA II SEMESTER, 2008-2010)




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      CHAPTER 1

                   INTRODUCTION TO BEVERAGE INDUSTRY


      1.1 BEVERAGE

      Any type of liquid specifically prepared for human consumption. Beverages in addition to
      basic need form part of the culture of human society. Different types of beverages are as
      follow

      1.1.1 WATER

      Despite the fact that most beverages, including juice, soft drinks, and carbonated drinks,
      have some form of water in them; water itself is often not classified as a beverage, and the
      word beverage has been recurrently defined as not referring to water but the bottled water
      that is processed through proper filtration and purification comes under the beverage
      category.

      1.1.2 ALCOHOLIC BEVERAGES

      An alcoholic beverage is a drink containing ethanol, commonly known as alcohol,
      although in chemistry the definition of an alcohol includes many other compounds. Ethanol
      (alcohol) is a psychoactive drug that has a depressant effect.

      Alcoholic beverages are divided into three general classes:

      Beers: The two main types of beer are ale and lager; each type has a distinct production
      processes. Mass-produced beer is typically aged for only a week or two after its
      fermentation and has an alcohol content of 4%–6% ABV. Other kinds of beer may be
      fermented and aged for several months.

      Wines: Wine involves a longer (complete) fermentation process and a long aging process
      (months or years) that results in an alcohol content of 9%–16% ABV. Sparkling wine can
      be made by adding a small amount of sugar before bottling, which causes a secondary
      fermentation to occur in the bottle.



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      Spirits: Unsweetened, distilled, alcoholic beverages that have an alcohol content of at least
      20% ABV are called spirits. Spirits are produced by distillation of a fermented product;
      this process concentrates the alcohol and eliminates some of the congeners.

      1.1.2 NON-ALCOHOL BEVERAGES

      A non-alcoholic beverage is a beverage that contains no alcohol. Non-alcoholic mixed
      drinks (including punches, "virgin cocktails", or "mock tails") are often consumed by
      children; people whom wishing to enjoy flavorful drinks without alcohol. Non-alcoholic
      beverages contain no more than .5 percent alcohol by volume. It also includes drinksthat
      have undergone an alcohol removal process such as non-alcoholic beers and de-alcoholized
      wines.

      Non-alcoholic variants:

      Low Alcohol Beer

      Non-Alcoholic Wines

      Sparkling Ciders

      1.1.3 SOFT DRINKS

      A soft drink is a beverage that does not contain alcohol. The name "soft drink" specifies a
      lack of alcohol by way of contrast to the term "hard drink". The term "drink", while
      nominally neutral, sometimes carries connotations of alcoholic content.Beverages like
      colas, flavored water, sparkling water, iced tea, lemonade, squash, and fruit punch are
      among the most common types of soft drinks. Many carbonated soft drinks are optionally
      available in versions sweetened with sugars or with non-caloric sweeteners.

      1.1.4 HOT BEVERAGES

      Coffee-based beverages: Cappuccino, Coffee Espresso, Café au lait, Frappe, Flavored
      coffees (mocha etc)

      Hot chocolate: It is a heated beverage that typically consists of shaved chocolate or cocoa
      powder, heated milk or water, and sugar.




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      Hot cider: It is an alcoholic beverage usually made from the fermented juice of apples,
      although pears are also used. In the United Kingdom, pear cider, which has no apple
      content, is known as Perry.

      Tea-based beverages: Tea, Green Tea, Flavored Tea, Pearl Milk Tea

      Herbal teas: An herbal tea, tisane, or ptisan is an herbal infusion made from anything other
      than the leaves of the tea bush (Camellia sinensis). Originated from both China and Middle
      East

      1.1.5 OTHERS

      Some substances may either be called food or drink, and accordingly be eaten with a spoon
      or drunk, depending on solid ingredients in it and on how thick it is, and on preference:

      Soups: Soup is a food that is made by combining ingredients such as meat and vegetables
      in stock or hot/boiling water, until the flavor is extracted, forming a broth.

      Yogurt: yoghurt is a dairy product produced by bacterial fermentation of milk.
      Fermentation of the milk sugar produces lactic acid, which acts on milk protein to give
      yoghurt its texture and its characteristic tang. Soy yoghurt, a dairy yoghurt alternative, is
      made from soymilk.

      Buttermilk: It is a fermented dairy product produced from cows' milk with a
      characteristically sour taste. The product is made in one of two ways. Originally,
      buttermilk was the liquid left over from churning butter from cream. In India, buttermilk,
      widely known as "chaas" is known to be the liquid leftover after extracting butter from
      churned curd.




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                                      CHAPTER 2

            INDUSTRIAL LEADERS (COCA COLA & PEPSI)


      At the core of the beverage industry is the carbonated soft-drink category. Soft drink holds
      51% (majority of market share) of the total beverage market. Soft drink can be further
      divided into carbonated drinks (Coca-cola, Pepsi, Thumbs up, Diet coke, Diet Pepsi etc.)
      and non-carbonated drinks (Orange, Cloudy lime, Clear lime and Mango). The dominant
      players in soft drink market are Coca Cola and Pepsi, which own virtually all of the North
      American market’s most widely distributed and best-known brands. They are dominant
      in world markets as well. These companies’ products occupy large portions of any
      supermarket’s shelf space, often covering more territory than real food categories like dairy
      products, meat etc.



      2.1 HISTORY OF COCA COLA



      Coca-Cola, started out as an insignificant one-man business and over the last one hundred
      and ten years has grown into one of the largest companies in the world. Dr. John
      Pemberton, an Atlanta pharmacist, invented Coca-Cola. He concocted the formula in a
      three-legged brass kettle in his backyard on May 8, 1886. He mixed a combination of lime,
      cinnamon, coca leaves, and the seeds of a Brazilian shrub to make the fabulous beverage.
      Coca-Cola debuted in Atlanta's largest pharmacy, Jacob's Pharmacy, as a five-cent non-
      carbonated beverage. Later on, the carbonated water was added to the syrup to make the
      beverage that we know today as Coca-Cola.In the mid-1970, more than half Coca-Cola
      sold was outside of the U.S. Coca-Cola products outsell closest competitor by more than
      two to one. One in every two cola and one in every three soft drinks is a Coca-Cola
      product. The best-known trademark in the world is sold in about one hundred and forty
      countries to 5.8 billion people in eighty different languages. This is why Coca-Cola is the
      largest soft drink company in the world. For more than 65 years, Coca-Cola has been a


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      sponsor of the Olympics.Advertisements for Coca Cola started on the radio in the 1930s
      and on the television in 1950. Currently Coca-Cola is advertised on over five hundred TV
      channels around the world.




      2.1.1 COKE’S CORPORATE VISION



      For more than a century, Coke has consistently delivered the simple promise of “Coca-
      Cola”. This has enabled Coke to sustain a long track record of growth. Amidst all the years
      of success, the most pivotal moments in Coke’s history came when they had to change
      their business dramatically. They had to do this to meet new challenges of the evolving
      world. But each time, Coke’s predecessors sustained growth momentum because of three
      consistent factors:

      The Company remained focus on the basic promise of Coca-Cola, which has not only
      endured, but also indeed carried Coke. Coca-Cola has been Coke’s consistent theme
      throughout the 115-year history.

      Working with strong ideals, always striving to behave in ways consistent with the brand
      itself.

      Coke’s leaders had the vision, foresight and the courage to innovate and adapt the
      mechanics of business to be enabled to thrive within the business conditions of each
      particular day.



      2.1.2 COKE’S OUSTER FROM INDIA

      The company left India in 1977 after the newly elected Janaty Party Government came to
      power at the Centre for the first time. They asked the company to divest 60 % of its
      business and divulge its secret Coca-Cola formula. Coke preferred to quit rather than dilute
      its equity to 40 per cent in compliance with the provisions of FERA.


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      2.1.3 THE RE-LAUNCH OF COCA COLA IN INDIA

      Coca Cola came back to India after 16 years when it was launched on October 24, 1993, at
      Agra. The Godrej group, Great Eastern Shipping and the Britannia Industries Ltd, led by
      RajanPillai, initially wooed Coca-Cola. In March 1991, it signed an MOU with BIL and
      the Chandrasekhar government accepted this proposal. But relationship between the two
      companies turned sour over the export- oriented clause and finally on June 23, 1993, Coca-
      Cola got the permission to enter the country with a 100 per cent unit in India. On
      September 22, 1993, the company bought out the Parle brands.



      2.2 HISTORY OF PEPSICO
      Born in the Carolinas in 1898, Pepsi-Cola has a long and rich history. The drink is the
      invention of Caleb Bradham (left), a pharmacist and drugstore owner in New Bern, North
      Carolina.

      The summer of 1898, as usual, was hot and humid in New Bern, North Carolina. So a
      young pharmacist named Caleb Bradham began experimenting with combinations of
      spices, juices, and syrups trying to create a refreshing new drink to serve his customers. He
      succeeded beyond all expectations because he invented the beverage known around the
      world as Pepsi-Cola.

      Caleb Bradham knew that to keep people returning to his pharmacy, he would have to turn
      it into a gathering place. He did so by concocting his own special beverage, a soft drink.
      His creation, a unique mixture of kola nut extract, vanilla and rareoils, became so popular
      his customers named it "Brad's Drink." Caleb decided to rename it "Pepsi-Cola," and
      advertised his new soft drink. People responded, and sales of Pepsi-Cola started to grow,
      convincing him that he should form a company to market the new beverage.

      In 1902, he launched the Pepsi-Cola Company in the back room of his pharmacy, and
      applied to the U.S. Patent Office for a trademark. At first, he mixed the syrup himself and
      sold it exclusively through soda fountains. But soon Caleb recognized that a greater


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      opportunity existed to bottle Pepsi so that people could drink it anywhere.

      The business began to grow, and on June 16, 1903, "Pepsi-Cola" was officially registered
      with the U.S. Patent Office. That year, Caleb sold 7,968 gallons of syrup, using the theme
      line "Exhilarating, Invigorating, Aids Digestion." He also began awarding franchises to
      bottle Pepsi to independent investors, whose number grew from just two in 1905, in the
      cities of Charlotte and Durham, North Carolina, to 15 the following year, and 40 by 1907.
      By the end of 1910, there were Pepsi-Cola franchises in 24 states.

      Pepsi-Cola's first bottling line resulted from some less-than-sophisticated engineering in
      the back room of Caleb's pharmacy. Building a strong franchise system was one of Caleb's
      greatest achievements. Local Pepsi-Cola bottlers, entrepreneurial in spirit and dedicated to
      the product's success, provided a sturdy foundation. They were the cornerstones of the
      Pepsi-Cola enterprise. By 1907, the new company was selling more than 100,000 gallons
      of syrup per year.

      Growth was phenomenal, and in 1909 Caleb erected a headquarters so spectacular that the
      town of New Bern pictured it on a postcard. Famous racing car driver Barney Oldfield
      endorsed Pepsi in newspaper ads as "A bully drink...refreshing, invigorating, a fine bracer
      before a race."

      The previous year, Pepsi had been one of the first companies in the United States to switch
      from horse-drawn transport to motor vehicles, and Caleb's business expertise captured
      widespread attention. He was even mentioned as a possible candidate for Governor. A
      1913 editorial in the Greensboro Patriot praised him for his "keen and energetic business
      sense."

      Pepsi-Cola enjoyed 17 unbroken years of success. Caleb now promoted Pepsi sales with
      the slogan, "Drink Pepsi-Cola. It will satisfy you." Then came World War I, and the cost of
      doing business increased drastically. Sugar prices see sawed between record highs and
      disastrous lows, and so did the price of producing Pepsi-Cola.

      After seventeen years of success, Caleb Bradham lost Pepsi Cola. He had gambled on the
      fluctuations of sugar prices during WORLD WAR I, believing that sugar prices would
      continue to rise but they fell instead leaving Caleb Bradham with an overpriced sugar


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      inventory. Pepsi Cola went bankrupt in 1923.In 1931, the Loft Candy Company Loft
      president, Charles G. Guth who reformulated the popular soft drink, bought Pepsi Cola.

      In 1940, history was made when the first advertising jingle was broadcast nationally. The
      jingle was "Nickel Nickel" an advertisement for Pepsi Cola that referred to the price of
      Pepsi and the quantity for that price. "Nickel Nickel" became a hit record and was recorded
      into fifty-five languages.

      In 1965 Pepsi-cola company and Frito-Lay, Inc. merged which result in the formation of
      today know PepsiCo, Inc.



      2.3 MARKET SHARE IN INDIA
      These two soft drink companies (Coca cola & Pepsi) acquire the major share of the soft
      drink Industry and always remain in the war to get the majority of market share with each
      other. These companies always be pioneer in using various innovative technology and
      method to become the market leader. These companies present the world new innovative
      ways of doing the marketing and how take advantage of various opportunities and how to
      use your strength in a better way.

      In India currently colas (carbonated soft drinks) products comprises 61% and non-cola
      segment constitutes 36% of the total soft drink market whereas 2% is covered under other
      various drinks like apple juice, cold coffee, cold tea etc.



      2.4 OPPORTUNITY IN INDIAN MARKET

      As in India, around 120 billion litres of beverage is consumed every year, of which only 5
      percent are in packaged segment and also if we compare per head consumption of soft
      drink in India to America it is 6 is to 700. So looking at these aspects we can say that there
      is lot of scope for these two soft drink giant in India to expand their market as the stakes
      are huge in Indian market.




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                      MARKETING STRATEGY


                                            OF


                    COCA COLA AND PEPSICO




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                                      CHAPTER 3

                       SEGMENTATION OF MARKET


      A market segment consists of a group of customers who share a similar set of needs and
      wants. Rather than creating the segment the marketer’s task is to identify them and decide
      which one to target. Leading soft drink companies Coca-Cola and Pepsi follow the similar
      segmentation strategy for target marketing.

      3.1 MASS MARKETING

      However in some of its popular product both the companies follow the mass marketing
      strategy. In this type of segmentation, companies target the whole market and not any
      particular segment of the population.

      3.2 TARGETED MARKETING

      Although the targeted group of the company is the whole population, they want to earn
      more revenue from a segment than their other revenue generator sources. For this, they
      recognize following bases for segmentation



      3.2.1 GEOGRAPHICAL

      3.2.1.1 REGION

      Both companies treat hot countries such as Asia, Middle East and African differently in
      comparison to cold countries. As in tropical countries, consumption of soft drinks is 70%
      in summer and 30% in winter season while in EUROPEAN countries its consumption is
      almost uniform. So soft drink companies prefer different marketing strategies in Asian and
      European countries. In countries like India and Pakistan, these companies invest huge
      resources in the season of summers, and their target area is domestic users, restaurants,
      school and college canteens and even rural chaupals. While in winter season their target is
      mainly party users and high-income group consumers.



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      3.2.1.2 RURAL VS. URBAN MARKET

      Coca-Cola Company is one of the first global majors to have spotted the potential spin offs
      from the country’s rural market. Population of Rural sector is more conscious more about
      the price whereas Population of Urban sector is more conscious about the quality and
      brand name of the product. so Coca cola and PepsiCo in Year 2002 bring the 200 ml bottle
      at Rs.5 specifically targeted at the rural sector so that soft drink can take place of the local
      drink like lemon, sugarcane juice and Tea etc.

      Both the companies Coca-Cola and PepsiCo have adopted different marketing strategy for
      rural and urban areas



      3.2.2 DEMOGRAPHIC SEGMENTATION

      3.2.2.1 AGE

      India is considered to be a young country i.e. average age of Indian population is less 38
      years. Thus targeting young generation can be a beneficial marketing strategy for soft drink
      companies. In fact this is the case, all the major brands like Pepsi, coca cola, and thumps
      up, mainly target younger generation in India. In Europe, as average population is older
      than Asian countries, Coca cola targeted the older generation of the population. Similarly
      in USA, Pepsi targeted the generation X (younger generation) as they comprises majority
      of the population and they positioned Pepsi in the mind of youth that Pepsi is for the youth

      3.2.2.2 GENDER

      Gender based segmentation is very important. As taste of male and female is different.
      Let’s take the example of coca cola, thumps up is promoted as masculine soft drinks while
      coca cola and Fanta are having light taste and mainly targeted for loving birds, ladies, and
      children. Same example is available in Pepsi, mirinda’ orange flavor is popular among
      ladies, girls, and children.




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                                        CHAPTER 4

                                     PRODUCT MIX
      A product is anything that can be offered to a market to satisfy a want or need, including
      physical goods, services, experiences, events, persons, places, properties, organizations,
      information, and ideas.

      If we take the example of soft drink industry, then these companies not only sell soft drinks
      in physical forms, but brands. A brand comprises of everythingfrom beverages to
      experiences. However in this chapter we shall try to understand and analyze the product
      line and product classification of Pepsi and coca cola.



      4.1 PRODUCT PORTFOLIO


      Both the cola majors have a variety of products available in their kitty. They have a wide
      range of product line. They keep coming on with new products to attract the customers and
      to have a major share of the market. So the product portfolio of these companies is as
      follows:



      4.1.1 COCA COLA




      The Coca-Cola Company has more than 2800 products in over 200 countries. From Inca
      Kola, a sparkling beverage found in North and South America, and Samurai, energy drink
      available in Asia; to Vita, an African juice drink, and BonAqua, water found on four
      continents, their product variety spans the globe…




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      The various products of Coca-Cola available in India are:

      Coca-Cola: Coca-Cola is the most popular and biggest-selling soft drink in history, as well
      as the best-known product in the world.

      Available in the following flavors: Cola, Cola Green Tea, Cola Lemon, Cola Lemon Lime,
      Cola Lime, Cola Orange and Cola Raspberry.



      Diet Coke: Diet Coke was born in 1982. Diet Coke is the drink for people who want no
      calories, but plenty of taste. Known as Coca-Cola light in some countries, it's now the No.
      3 soft drink in the world.

      Available in the following flavors: Black Cherry Cola Vanilla, Cola, Cola Green Tea, Cola
      Lemon,    Cola Lemon         Lime, Cola Lime,        Cola Orange and           Cola Raspberry


      Fanta:Fanta was introduced in the United States in 1960. Consumers around the world,
      particularly teens, fondly associate Fanta with happiness and special times with friends and
      family. This positive imagery is driven by the brand's fun, playful personality, which goes
      hand in hand with its bright color, bold fruit taste and tingly carbonation.



      Kinley: Kinley is a carbonated water that comes in wide array of variants such as tonic,
      bitter lemon, club soda and a myriad of fruit flavors.

      Available in the following flavors: Apple Peach, Bitter Grapefruit, Bitter Herbal, Bitter
      Lemon, Bitter Water, Blueberry Pomegranate, Club Soda, Ginger Ale, Lemon and
      Raspberry



      Limca: This thirst-quenching beverage features a fresh, light lemon-lime taste and fun-
      loving attitude. It's a homegrown, national treasure in India, that is acquired by the Coca-
      Cola Company in 1993. Limca continues to build a loyal following among young adults


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      who love the lighthearted way it complements the best moments of their lives. This drink is
      available in lemon flavor.




      Sprite: Introduced in 1961, Sprite is the world's leading lemon-lime flavored soft drink.
      Sprite is sold in more than 190 countries and ranks as the No. 4 soft drink worldwide, with
      a strong appeal to young people. Millions of people enjoy Sprite because of its crisp, clean
      taste that really quenches your thirst. But Sprite also has an honest, straightforward attitude
      that sets it apart from other soft drinks. Sprite encourages you to be true to who you are and
      to obey your thirst.



      Available in the following flavors: Bitter Lemon Citrus Grapefruit, Citrus, Lemon and
      Lemon Lime



      4.1.2 PEPSICO




      Pepsi has been bringing fun and refreshment to consumers for over 100 years. From its
      humble beginnings over a century ago, Pepsi-Cola has grown to become one of the best-
      known, most-loved products throughout the world. Today, the company continues to
      innovate, creating new products, new flavors and new packages in varying shapes and sizes
      to meet the growing demand for convenience and healthier choices.

      The various product of Pepsi available in India are:

      Pepsi: Pepsi is the most saleable product of PepsiCo. It is popular in the younger
      generation all around the world.



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      Diet Pepsi:With its light, crisp taste, Diet Pepsi gives you all the refreshment you need -
      with zero sugar, zero calories and zero carbs, Light, Crisp, refreshing.



      Mirinda: Mirinda was originally produced in Spain. Mirinda is a brand of soft drink
      available in fruit varieties including orange, grapefruit, and apple, strawberry, pineapple,
      banana, and passionfruit and grape flavors. The orange flavor of Mirinda represents the
      majority of Mirinda sales worldwide.


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



      Mountain Dew: Mountain Dew (also known as Mtn Dew as of late 2008) is a soft drink
      distributed and manufactured by PepsiCo. Mountain Dew (and its energy drink counterpart
      known as AMP) often incurs the disapproval of health experts due to its relatively high
      caffeine content for a soft drink or energy drink.


      Pepsi Blue: Pepsi Blue is a berry-flavored soft drink produced by PepsiCo. It was launched
      in India near the cricket world cup to associated the Pepsi with the Indian people as Blue is
      official colour of Indian cricket team. The flavor of Pepsi Blue was thought by drinkers to
      be similar to cotton candy with a berry-like aftertaste (it resembled that of blueberries or
      raspberries).


      Slice: Slice is a line of fruit-flavored soft drinks manufactured by PepsiCo and introduced
      in 1984. Varieties of Slice have included Apple, Fruit Punch, Grape, Passion fruit, Peach,
      Mandarin Orange, Pineapple, Strawberry, Cherry Cola, "Red", Cherry-Lime, and Dr Slice.




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      4.3 PRODUCT FILLINGSTRATEGY


      A firm can lengthen its product line by adding more items within the present range. There
      are several motives behind line filling:

  -   Reaching for incremental profits
  -   Trying to satisfy dealers who complain about lost sales because of missing items in the line
  -   Trying to utilize excess capacity
  -   Trying to be the leading full-time company
  -   Trying to plug holes to keep out competitors.

      Pepsi and coca-cola, both the company uses this type of line filling strategy.Time to time in
      different seasons Pepsiand Coca cola launches different type of products. Zerocoke
      (launched on the occasion of release of James bond movie QUANTUM OF SOLACE) by
      Coca Cola comes under this type of product filling marketing. However in absolute terms
      there is no any difference in the product ingredients, but their presentation is different and
      both the companies present their product as if this is a new product.



      4.4 PRODUCT LIFE CYCLE


      To be able to market its product properly, a business must be aware of the product life
      cycle of its product. The standard product life cycle tends to have five phases

      - DEVELOPMENT

      - INTRODUCTION

      - GROWTH

      - MATURITY

      - DECLINE

      In America carbonated soft drink market is currently in the maturity stage, which is
      evidenced primarily by the fact that they have a large loyal group of stable customers but

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      in the developing countries like carbonated soft drinks are in growth stage, which is
      evidenced by looking at the per head consumption of 6 bottles in India is lagging behind
      the us astounding 700 bottles per head consumption.




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                                     CHAPTER 5

                                     BRANDING
      Brand is defined as a name, term, symbol, or design, or a combination of them, intended to
      identify the goods or services of one seller or group of sellers and to differentiate them
      from those of competitors. A brand is thus a product or service that adds dimension that
      differentiate it in some way, from other products or services designed to satisfy the same
      need. These differences may be functional, rational, or tangible, related to product
      performance of the brand. They may also be more symbolic, emotional or intangible
      related to what brands represent.



      5.1 BRAND NAME
      Through various researches it is been found that a symbolically significant name helps to
      sell a product. One of interesting illustration how name affects marketing is the case study
      of coca cola. When it was introduced in china in the 1920, coca cola sounded like “kou-ke-
      kou-la” which means “a thirsty mouth and a mouth of candle wax”. The company changed
      the phonetic translation to “ke-kou-ke-le” which means “a joyful taste & happiness” thirsty
      Chinese consumers responded in drove to the more felicitous “meaning”.



      5.2 PACKAGING

      Coca cola and Pepsi are very innovated in the packing of their product. These companies
      introduced different concept of packing. The Airtight bottle concept is given by the Coca
      cola, which has revolutionized the bottling and packaging industry. These Cola giant also
      introduced the different size of returnable glass bottle like 200ml, 300ml and non-
      returnable plastic bottle like 600 ml, 1.5 litre, 2 litre according to the need of the targeted
      customer. They also pioneer in bring Cans and Frosted bottles in the market. Packing helps
      the brand to capture the desire target like 600ml packing is launched, as “express pack” so
      this is targeted to touring population and this segment need non-returnable bottles. The



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      Coca cola is innovative in design of bottle like Fanta, Aquafin (500ml & 1 litre) having
      curve shaped bottle that are easy to hold.



      5.3 LABELING

      Pepsico has associated it self to rich deep blue colour as blue colour represents eternal
      youthness and openness that is appropriately consistence with the youth segment they are
      targeting. Pepsico under the name of Project Globe Campaign spent 637 million dollars
      over 5 years, to introduce the new rich deep blue colouring. So labeling helps the brand to
      get attach with the targeted segment.



      5.4 ATTRIBUTES FOR STRONGEST BRAND SHARE


      According to a study done by scholars of HARVARD BUSINESS REVIEW the world’s
      strongest brands share following 10 ATTRIBUTES:

  1. The brand excels at delivering the benefits consumers truly desire.
  2. The brand stays relevant
  3. The pricing strategy is based on consumer perceptions of value.
  4. The brand is properly positioned.
  5. The brand is consistent.
  6. The brand portfolio and hierarchy make sense.
  7. The brand makes use of and coordinates a full repertoire of marketing activities to build
      equity.
  8. The brand’s managers understand what the brand means to consumers.
  9. The brand is given proper sustained support.
  10. The company monitors sources of brand equity.




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                                              STRONG BRAND




                                                    BONDING(NOTHING ELSE
                                                          BEAT IT)


                                                   ADVANTAGE(DOES IT OFFER
                                                   SOMETHING BETTER THAN
                                                          OTHERS)


                                                     PERFORMANCE(CAN IT
                                                          DELIVER)


                                                    RELEVANCE(DOES IT OFFER
                                                        ME SOMETHING)


                                                      PRESENCE(DO I KNOW
                                                           ABOUT IT)




                                                 WEAK BRAND

                                        (BRAND DYNAMICS PYRAMID)



      In the above explained brand dynamics pyramid, If any brand involves all the characteristic
      then it is a strong brand whereas if it does not having any of the characteristic then it is a
      weak brand. If we take Coca cola and Pepsi, they both maintain high level of strong
      relationship. It means there is an image in the mind of consumers that both the companies
                                                  nothing else can beat it.
      offer something better than others and that no




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      5.5 UNDERSTANDING OWN BRAND IMAGE

      Battered by competition from the sweeter Pepsi cola, Coca-cola decided in 1985 to replace
      it’s old formula with a sweeter variation NEW COKE.Cocacola spent $4 million on market
      research. Blind taste tests showed that coke drinkers preferred the new sweetener formula,
      but the launch of new coke provoked a national uproar, market researcher had measured
      the taste but had failed to measure the emotional attachment consumer had to coca-cola.
      There were angry letters, formal protests and even law suits threats to force the retention of
      “the real thing”. Ten weeks later, the company withdrew NEW COKE and reintroduced its
      century old formula as “classic coke” giving the old formula even stronger status in the
      market place.

      5.6 BRANDING IN RURAL MARKET BY COCA COLA

      In India (2002), Coca cola launched a new advertisement campaign featuring leading
      Hollywood star Amir khan.

      The advertisement with tagline-“Thana mat lab COCA COLA” was targeted at rural semi
      urban    consumers.

      The idea was to position Coca cola as a generic brand for cold drinks. The campaign was
      launched to supports Coca cola rural initiative. 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 coca-cola

      5.6.1 BRAND LOCALISATION STRATEGY: THE TWO INDIAS

      5.6.1.1 INDIA A: “LIFE HO TO AISI”

      This designation Coca-Cola gave to the market segment including metropolitan areas and
      large towns represented 4% of the country’s population. This segment sought social
      bonding as a need and responded to aspirational messages, celebrating the benefits of their
      increasing social and economic freedom.

      “Life ho to aisi” was the successful and relevant tagline found in Coca-Cola’s advertising
      to this audience.



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      5.6.1.2 INDIA B: “THANDA MATLAB COCA COLA”

      INDIA B included small towns and rural areas, comprising the other 96% of the nation’s
      populations. This segment’s primary need was out-of-home thirst quenching and the soft
      drink category was undifferentiated in the minds of rural consumers. With an average Coke
      costing Rs.10 and an average day’s wage around Rs.100, Coke was perceived as a luxury
      that few could afford. So when coca cola launched chota coke at Rs.5, it bought out a
      commercial featuring Bollywood actor Aamir khan to communicate the message of price
      cut and represents the Coke as a generic name “Thanda”

      “Thanda matlab Coca cola” was also the successful and relevant tagline found in coca cola
      advertisement to this audience



      5.7 BRAND REVITALIZATION

      To recover and reposition brand in mind of consumer when it is not working successfully
      is know as Brand Revitalization. So there is an interesting example how brand
      repositioning helps in recovering and growth of the product.

      Pepsi initially introduced Mountain Dew in 1969 and marketed it with the countrified
      tagline “Yahoo Mountain Dew”! It’ll tickle your inwards.” By the 1990s, the brand was
      languishing on store shelves despite an attempt to evolve the image with outdoor action
      scenes. To turn the brand around, Mountain Dew updated the packaging and launched ads
      featuring a group of anonymous young males-the “Dew Dudes” –participating in extreme
      sports such as bungee jumping, skydiving, and snowboarding while consuming
      mountaindew.the brand slogan became “do the DEW”. The brand’s successful pursuit of
      young soda drinkers led to mountain dew challenging diet coke to become the number
      three selling soft drink in terms of market share by 2000.




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                                      CHAPTER 6

                       POSITIONING AND PROMOTION
      Positioning is the act of designing the company offering and image to occupy a distinctive
      place in the mind of the target market.

      6.1 COKE AND PEPSI POSITIONING

      Coke had introduced in the market before the Pepsi. So taking the first move advantage
      Coke is able to place itself as the all American choice.Firstly the Pepsi in America try to
      position its product for the society as whole and for the purpose of refreshment, which can
      be clearly visible from their advertisement slogans like

  -   “ any whether is Pepsi whether”
  -   “ the light refreshment “
  -   “ be sociable, have a Pepsi “


      This positioning strategy they followed up to 1960 and after analyzing that it is very
      difficult to capture whole population as whole. So Pepsi after 1960 started targeted
      marketing. Pepsi targeted the youth section and position there product as a necessity for
      youth and Pepsi advertisement slogan after 1960 try to position Pepsi as the brand for
      youth which are clearly visible from there advertisement as follow




           (ADVERTISEMENT IN INDIA REPRESENTING YOUTH)



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  -   “ now its Pepsi for those who thing young”
  -   “ come alive, you’re in Pepsi generation “
  -   “ you,re got a lot to live and Pepsi’
  -   “ yehhaiyoungistaanmerijaan” (in india)
  -   “ taste the once that’s forever young”


      In the 1960s and early 1970s, PepsiCo was a much more aggressive and innovate company
      than coke. In this period Pepsi outflank coke to survive.

      In early 1975s Pepsi introduced the Pepsi challenge marketing campaign where PepsiCo
      set up a blind tasting between Pepsi-cola and Coca-cola. In this Pepsi started direct road
      show taste competition in which two glass of soft drink one is Pepsi and another is Coke is
      given to person not known by him which glass contain which soft drink and after tasting
      both the glasses they ask which soft drink is having better taste. In this competition Pepsi
      said 80% of people like Pepsi taste over Coke. PepsiCo took this a great advantage of the
      campaign with television commercial reporting the test results to the public. So through
      this competition Pepsi is able to position itself in the mind of customer that Pepsi have
      better the taste than coke.

      Coca cola follows Push Strategy to advertise and sell their product in the market. Coca cola
      usually giving higher discount to the retailer fills their selves space with their product and
      when the consumer see only coca cola in the market they are forced to buy there product
      only.

      In India both Coca-cola and PepsiCo have shown the door to older celebrity endorsers and
      are betting big on emerging stars.

      PepsiCo was parted ways with Shah rukh khan, Sachintendulkar, Rahuldravid,
      Souravganguly, Mahender singh dhoni, Ranbirkapoor, Deepikapadukone, Ishantsharma,
      Rohitsharma, Shreeshant and Virendersehwag to strengthen its ”youngistaan” brigade.
      PepsiCo signed Asin (of Ghajini fame) to take war to orange flavor category. PepsiCo had


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      tied up with Chennai super kings for its 7up brand, which is the most preferred drink there.
      PepsiCo has also signed on Telegu movie actor Ram charanteja as part of its youngistaan
      campaign to endorse Pepsi in Andhra Pradesh.




      Coca cola try to positions themselves as the happiness bringing drink and drink for every
      community as visible from above advertisement. As this is well judged by their
      advertisement and their slogans. Their are different advertisement, which depicts that’s
      coca cola, is the need for party or coca cola brings more joy and taste to the party. Coca
      cola has roped in GautamGambir as brand ambassador for the company new “coca cola
      open happiness” campaign ahead of IPL seasons. While the single ad campaign works

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      wonders, giving the difference in consumption patterns in the south, the coca cola majors
      had customized their advertisement for the four southern states. Coca cola, on the other
      hand identified the southern market as a great testing ground for its new brands, so much
      so that both its pulpy orange drink, minute maid and Fanta apple were first launched,
      marketed and advertised them before a pan India roll-out and a national campaign.



      6.2 COMMUNICATION STRATEGY
      Looking the changing environment the coca cola and PepsiCo calibrated their
      communication strategy in a very innovative way. “Imagery” works for carbonated soft
      drinks, while “functionality” works for other category. For instance, to entrench the
      “imagery” that Pepsi is the brand for youthfulness and irreverence; the company
      introduced the youngistaan commercial with the attitude, self-belief and can-do spirit. In
      contrast, Tropicana commercial needs to tell consumers “it’s 100 percent juice”.

      6.3 POSITIONING OF PRODUCT LINE EXTENSION

      (COKE AND PEPSI)

      Pepsi and coke have range of product in their basket, which are targeted to different market
      segment and their positioning are done in that way.

      6.3.1 THUMS UP (COCA COLA) & MOUNTAIN DEW (PEPSICO)

      Thums up of coca cola and mountain dew of Pepsi are targeted to the adventurous and
      energetic people that are interested in adventure and love taking risk to succeed. The
      advertisement of both the soft drink positions them in mind of consumer as the strong soft
      drink. Thums up campaign, however, has been led by Akshaykumar with his gravity
      defying stunts in the forefront. Similarly mountain dew giving advertisement like “darr ka
      agajeethai” position it as strong soft drink in mind of consumer.




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      6.3.2 GATORADE (PEPSICO)

      Gatorade of PepsiCo has mainly targeted sport-loving persons. So it is launched as the
      sports drink and it is also very much successful. Its promotion is largely restricted to the
      sporting arena as to position it as sports drink.

      6.3.3 TROPICANA & MINUTE MAID

      Tropicana of PepsiCo and Minute Maid of Coca cola are specially targeted to health
      conscious customers and want health drink having natural energy in it. These drinks come
      under the category of juices so these drink basically launched to transfer the consumer,
      which drink juices to Tropicana and Minute maid.



      6.3.4 MIRINDA (PEPSICO) & FANTA (COCA COLA)

      These drinks are specially launched for the lady sector of the population and these drinks
      are positioned in that way only. In the advertisement also they take lady personality for the
      promotion of these product so that the product make a space in lady sector.

      6.3.5 TAB (COCA COLA)

      Tab of coca cola initially flopped as diet cola because consumer could not tell the
      difference between tab with one calorie and diet Pepsi, which then had 100, as coke was
      not able to position it correctly in mind of the customer. Then coke figured out that it could
      position the tab or dramatized the difference by surrounding the bathing beauty with 100
      empty tab bottles. Armed with that insight, coke flooded the try screen with ads and backed
      them up in stores with display, signs and samples and after that it was a tremendous
      success.

      So until you are not able to correctly position your product in consumer mind it is
      impossible to get the success.




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      6.4 RELIGION BASED POSITIONING

      Positioning helps in creating a space in the mind of the consumer. If you are able to
      position your product in the right space you will get the rocking results. There is the
      interesting case regarding positioning that how a local soft drink company through
      appropriate positioning able to beat the international soft drink companies (Coke and
      Pepsi).

      Mecca cola is local soft drink company of Saudi Arabia. When coke and Pepsi enter in the
      market of Saudi Arabia they starts gaining the major share of the market and the share of
      Mecca cola starts declinig. so it is becoming very difficult for the Mecca cola to survive
      against the international brand. So to maintain its market Mecca cola starts positioning
      itself as the Muslim soft drink and coke, Pepsi as the American soft drink. After that putted
      emphasis that America is enemy of Muslim so coca and Pepsi are their enemy too. Mecca
      cola also starts giving some percentage of profit to organization which are fighting for the
      rights of Muslim. So in this way Mecca cola is been able to position itself as the soft drink
      of Muslim and after that the market share of Mecca cola increased in dramatic way and
      Pepsi and coke are out of the Saudi Arabia market.

      This practical example shows that if you are able to position yourself in the important
      space of consumer mind you will dominate the market.



      6.5 INNOVATION IN ADVERTISEMENT METHODS

      Industry observers say dependence on try is down to 75 percent from 95 percent till few
      years ago. Investment is going into out of home advertising, point-of-sale promotion and
      emerging media like radio and Internet.

      6.5.1 SUB-MINIMAL EFFECT ADVERTISEMENT

      Understanding the concept that increase in sale of complementary good helps in increasing
      the sale of the product. Coca cola starts advertising in movie- theaters and giving
      advertisement “drink coke and eat popcorn”. This resulted in 2% sales increase of coca



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      cola and 10% sales increase of popcorn. The choice of movie theater is because in movie
      theaters there are very less thing to distract mind of the person.

      Pepsi is also now advertise their product with snacks like sandwich, south Indian food etc
      so that when the consumer ask or eat that snack the picture of Pepsi come to their mind and
      they will ask for the Pepsi. This is know as Sub-minimal effect in which consumer did not
      get the idea how advertisement is influencing them.

      6.5.2 PERSONAL PROMOTION

      According to a survey people in Asia are more inclined to them and feel happy when some
      gives them personal recognition. So in china coca cola starts advertising through mobile
      phone. This advertisement strategy gives the touch of personal feeling. The sales of coca
      cola increased through this advertisement strategy.

      6.5.3 AMBUSH MARKETING

      New advertisement method is going in today scenario in which company does not take the
      direct sponsorship but do advertisement outside the main sponsorship area like in 1996
      cricket world cup Coke takes the main sponsorship but Pepsi instead of taking the main
      sponsorship utilize advertisement budget doing advertisement outside the stadium. As
      Coke after becoming the main sponsor of the world cup does not left with much
      advertisement budget so it is not able to do advertisement outside the stadium at large
      scale. But Pepsi takes this as opportunity and utilizes their fund doing advertisement
      outside the stadium. As cost of doing advertisement is cheap so they have done their
      promotion at large scale and they supported their this advertisement by giving slogans like
      “Nothing official about it”. So Pepsi expending less money than Coke had done a large
      advertisement campaign than Coke.



   6.6 COKE AND PEPSICO AD WAR

      A battle is hotting up in India between the two international Cola giants, Coke and Pepsi,
      to corner a bigger share of the nearly Rs.6500 crore market. “Share my dream,” said Coca-
      Cola to the Indian consumer in 1993. Older Coke lovers welcomed the world's best-known


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      brand back with misty eyes. The younger lot just shrugged. Among soft drinks, Coke was
      stronger than Pepsi among the older people (evidently nostalgia was at work) while Pepsi
      obviously scored above Coke with'Generation next'.        Coke was the official drink for the
      Wills World Cup but Pepsi blew officialdom to bits with its cheeky 'Nothing official about
      it'. After losing the world cup rights to Coke, Pepsi launched an aggressive campaign
      signing up leading Indian cricketers.      In 1998, Coke's teen strategy finally moved into
      place. It signed on SauravGanguly and Srinath and came up with the peppy 'Eat crickets,
      sleep cricket, drink only Coca-Cola'. A near winner was 'Peetikya Coca-Cola?' The aim
      was to fix the brand's message in consumer mind space. Just as Coke ads were finally
      telling stories the way Indian consumers like it, aided by Aamir-appeal, Hrithik-mania and
      Aditi-gaze, comes a damp squib about four friends growing up with Coke, too desperate
      and too dull.   The stakes are high and the two Cola giants are slugging it out for every bit
      of this market share, even if it means bitter tactics at times. Between Coke and Pepsi they
      have signed on nine players of the Indian cricket team and Bollywood seems to be the next
      hot spot they want to cool. For now, it's Shah Rukh, ManishaKoirala, RaniMukherjee,
      Kajol, PreityZinta and Superstar AmitabhBachchan in the blue (Pepsi) corner and
      KarismaKapoor, Rambha and Amir, Hrithik, AditiGowatrikar and Aishwarya, in the red
      (Coke). The battle continues with Aamir Khan and AishwariyaRai both wooed away from
      Pepsi by tempting offers from Coke. However this is just the beginning and things are
      likely to get even hotter.

   6.6.1 THUMPS UP VERSUS PEPSI

      The latest row in the ongoing battle. The latest Coke’s strategy is to engage Pepsi in war
      with Thumps up and playing safe with Coca-Cola. The latest ads of thumps up which
      features Salman Khan tries to make fun of Pepsi and it’s sweeter taste. Pepsi also has
      retaliated by its latest ad of Lehar Soda, which features a look alike of Salman Khan.




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                                       CHAPTER 7

                              PRICING STRATEGY


      Price is not just a number tag. Price comes in many forms and performs many functions. It
      is one of the factors that affect the sales in a drastic ways.



      7.1 PEPSI PRICING STRATEGY IN 1936



      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 cent, sales
      increased substantially. Pepsi encouraged price-watching consumers to switch referring 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. In 1936 alone 500 million bottles of Pepsi were
      consumed. For 1936 to 1939, Pepsi profit doubled and there is also a dramatic increase in
      sales of Pepsi.

      This case of Pepsi presents the live example how the pricing makes difference in marketing
      process of a firm.



      7.2 PRICING MIX (COCA COLA AND PEPSI)


      There is the time (2002-2003) when Coca cola and Pepsi tried to appeal to the masses
      through a 200ml bottle priced at Rs.5. It brought down the average price of its product to
      Rs.5 thereby bridging the gap between soft drink and other local option like tea, milk, and
      sugarcane juice or lemon water and it also make the price point of the soft drink within the
      reach of high potential rural market.




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      Coca cola and Pepsi in the market place now start with the basic introductory pack, which
      is a 200 ml returnable glass bottle priced at Rs.8 and is available across low income and
      rural areas. The next pack size is 300 ml at Rs.10 and is focused on those willing to pay
      more within the immediate consumption arena. Coca cola and Pepsi recently introduced an
      on-the-go pack as research showed it that the next pack of 600ml (mobile) was too much to
      consume on the go. The new on-the-go consumption pack is called the “express pack” and
      doing well in channels such as travel, malls, so on, where people want a single serve and it
      is priced at Rs.20. Can packing (250 ml) of Coca cola and Pepsi is priced at Rs.15. The
      company also introduced the party pack of 2 liter of the consumption in the party and is
      priced at Rs.55. The average price of this packing is cheap than other packing as to
      increase the consumption of soft drink in the market.

      PepsiCo India priced SoBe Adrenaline Rush (premium product) at Rs.75 for the can of
      245ml. SoBe Adrenaline Rush is a maximum energy supplement aimed at helping
      consumers perform at their peak by energizing their body and mind and charging up
      energy an alertness levels. As this is a premium and launched drink with energy booster so
      it is priced at higher price as compare to other drink. PepsiCo also introduced their sport
      drink in 500 ml packing for Rs.35. As this drink is specially introduced for the specifically
      sports segment so it is costlier as compare to other drinks. It also introduced its Nimbooz in
      packing of 200ml at Rs.10. Tropicana of PepsiCo comes in packing 200ml at Rs.15 and in
      packing 1liter at Rs.65.

      Coca cola also introduced its pulpy orange drink (Juice), Minute Maid, in India at Rs20 in
      the 500ml.




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                                     CHAPTER 8

                         DISTRIBUTION CHANNEL


      Distribution (or place) is one of the four elements of marketing mix. Frequently there may
      be a chain of intermediaries, each passing the product down the chain to the next
      organization, before it finally reaches the consumer or end-user. This process is known as
      the 'distribution chain' or the 'channel’. So we say that a set of interdependent organizations
      involved in the process of making a product available for the use or consumption is know
      as Distribution channel. Each of the elements in these chains will have their own specific
      needs, which the producer must take into account, along with those of the all-important
      end-user.

      8.1 DISTRIBUTION STRATEGY

      Coca cola and PepsiCo are world wide famous for their Distribution channel.In India the
      distribution network of Coca cola had 6.5lakh outlets across the country in 2000 and on the
      other hand Pepsi Co's distribution network had 6 lakh outlets across the country in the
      same year. Coca cola and PepsiCo had formulated different distribution strategy for urban
      sector and rural sector. For the urban distribution channel these companies adopted the
      model like direct store distribution, broker warehouse distribution and Vending & Food
      Service (V&FS) systemswhere as these companies are following the Hub and Spoke model
      for rural distribution channel, in which they divided the different categories of distributors
      according to the area they are covering.

      8.1.1 RURAL DISTRIBUTION CHANNEL (HUB AND SPOKE MODEL)

      Since last five years soft drink companies had started penetrating rural marketing also. For
      the rural sector these companies are working on Hub and Spoke model. To reach out to
      rural India, Coke started out by drawing up a hit list of high potential villages from various
      districts. So to ensure full loads, large distributors (Hubs) were appointed, and they were
      supplied from the company's depot in large towns and cities. Full load supplies were

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      offered twice weekly against payment by demand draft. On their part, the hubs appointed
                                  )
      smaller distributors (Spokes) in adjoining areas. The smaller distributors undertook fixed
      journey plans on a weekly basis and supplied against cash. The smaller distributors also
      hired rickshaws (cycle operated vans) that travelled to villages daily.




                                                BOTTLING
                                                 PLANT



                                                  HUB



                                                 SPOKES



                            RETAILERS           RETAILERS        RETAILERS


                        DISTRIBUTION CHANNEL IN RURAL AREAS




      BENEFITS

      This model has been utilized by soft drink companies like Pepsi and coca cola to reach
      rural market. This system allows for larger loads to travel long distances and smaller loads
                                                 mechanism
      to travel short distances. Thus making the mechanism cost effective coca cola supplies to
      large distributors from the company depots twice a week and the distributors in turn supply
      to the smaller distributor once a week.



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      8.1.2 DISTRIBUTION CHANNEL IN URBAN AREAS

      Both the soft drink company’s coke and Pepsi adopted a model DSD that is Direct Store
      Distribution. In this company directly supplies its product to the retailers which helps them
      to save the margin, which they give to the wholesalers and it also ensures quick availability
      of the product to the retailer. Based on its experience, PepsiCo and Coca cola had
      developed various distribution models to offer its products and services to customers in the
      US. Besides Direct Store Delivery (DSD they adopted other system like Broker Warehouse
      Distribution (BWD) and Vending & Food service (V&FS) systems.




           BOTTLING                         RETAIL
                                                                      CONSUMERS
            PLANT                           STORES




                       (DIRECT STORE DISTRIBUTION)

                DISTRIBUTION CHANNELIN URBAN AREAS




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      8.2 INNOVATION IN DISTRIBUTION SYSTEM

      Through their use of the most modern technology in recent years, PepsiCo and its bottlers
      were able to improve their distribution and logistics management operations significantly.
      To further improve the market penetration of its products globally, PepsiCo launched two
      new distribution methods in the initial years of the new millennium. These were the chilled
      DSD system and the hybrid system.

      8.2.1 CHILLED DSD SYSTEM

      The chilled DSD system was a relatively small distribution method, created for items,
      which required continuous refrigeration. This was primarily created for the fruit juices
      product line as they can spoil quickly if not given the required condition and care so chilled
      DSD system ensures that continuous refrigeration helps in preventing the products from
      spoiling.

      8.2.2 THE HYBRID SYSTEM

      In this system the company makes the collaboration with other company of complementary
      good so that their distribution channel is also used for the sales of its product. As taking the
      practical example of the collaboration of Coca cola and McDonald. Through this
      collaboration the distribution channel of the Coca cola increases, as at ever McDonald the
      Coca cola will be there. So increase the distribution channel through collaboration with
      other company is know as hybrid system. This system is actually benefited by the synergy
      created by collaboration of two companies.

      8.3 INTERNATIONAL DISTRIBUTION SYSTEM MANAGEMENT

      In order to manage its distribution systems effectively, PepsiCo and Coca cola had put in
      place-advanced logistics systems. They sold beverage concentrate to bottlers, who added
      carbon dioxide, sweetener and water to make beverages and beverage syrup. Syrup was
      either sold directly to the fountain accounts or was combined with carbonated water for
      bottling. Bottling companies were (with a few exceptions) owned and operated by local
      companies in the countries where PepsiCo and Coca cola operated.

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                                      CHAPTER 9

                     SOCIAL RESPONSIBILITY MARKETING
      The effects of marketing clearly extend beyond the company and the customer to a society
      as a whole. The societal marketing concept holds that the organization’s task is to
      determine the needs, wants and interests of the target markets and to deliver the desired
      satisfactions more effectively and efficiently than competitors in a way that preserves or
      enhances the consumer’s and society’s long term well being. The societal marketing
      concept calls upon marketers to build social and ethical consideration into their marketing
      practices.

      9.1 CORPORATE COMMUNITY INVOLVEMENT MARKETING
      This is a type of marketing in which company provide In-kind or Volunteer services in the
      community. This marketing with social work strategy helps to position the brand in the
      mind of the customer for the lifetime as social and ethical brand, which provides the
      opportunity for the long-term growth of the company. There is a interesting case of
      TAIWAN local soft drink company, which with the help social responsibility marketing
      able to compete with the international soft drink giant Coca cola and PepsiCo.

      In the year 1990 there came a devastating flood in eastern China. After careful survey the
      local soft drink company, King Car found that there is a blood relationship between the
      people of eastern China and Taiwan as Taiwan is an island near to eastern Chinese coast.
      The company constituted an organization for humanitarian work on its own cost and this
      organization starts helping the people affected by the devastating flood. It resulted in a
      sympathetic wave in the middle class of china, that organization was flooded with fund
      within few weeks of the formation of organization. Later on some international
      organization got involved in this work and King Car became a renounced and respectable
      name not only in Asia but in Europe and Africa too and in Taiwan its soft drink sales shoot
      up like anything.




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      Sociality responsible work doesn’t help companies for creating a brand image of socially
      responsible person only but it helps in other manner also. Socially responsible work creates
      a good image in the mind of consumers that is communicated to other generations without
      any serious effort by the company. Thus social corporate responsibility is also a type of
      investment, which helps the company in their positioning.

      9.2 COCA COLA SOCIAL WORK IN INDIA

      In a recent example of social corporate responsibility coca-cola been awarded golden
      peacock award for social corporate responsibility .As a responsible corporate and a user of
      water, Coca-Cola India believes that it can be a part of the solution on water issues. It
      focuses on Water Conservation, Access to clean drinking water and awareness of water
      conservation and related issues as its strategy on water stewardship. Coca-Cola India in
      partnership with several NGOs, central and state government agencies, schools and
      colleges and the local community have already installed 400 rainwater-harvesting projects
      across the country. It has also undertaken the construction of several check dams,
      rejuvenation of ponds and other traditional water bodies like step wells.

      Coca-Cola is in partnership with Rotary International has launched “Elixir of Life”- a
      project to provide potable water to more than 30,000 underprivileged children in and
      around Chennai. In addition to this, Coca-Cola India and UN-Habitat have signed an
      agreement, which includes the provision of providing clean drinking water to 100 schools
      in West Bengal.

      The Company also regularly supports education and health initiatives in addition to
      Disaster Relief and Rehabilitation programs as and when required.




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                                     CHAPTER 10

             POLITICAL ENVIRONMENT AND ITS EFFECT


      Political and legal environment are some important factors that influences the marketing
      strategy of soft drink companies. Take the example of India, inIndia coca-cola came in
      early 1970 after the janaty party came into 1977 they oppose the strategy adopted by coca
      cola. The janaty party banned the coca cola operation in India because of the not entering
      100% stake of the foreign company in India of the not essential product based company.
      This hurtled the company operation in India.

      Soft Drink CompanyPepsi co began its operation with LEHAR and opted the market
      strategy according to political and legal scenario of the country.

      The case of Coke and Pepsi in India is a lesson that all marketers can observe, analyze and
      learn from, since it involves so many marketing aspects that are essential for all marketers
      to take into consideration.

      Both companies had many difficulties, especially Coca-Cola, and it's useful to observe how
      it dealt with the different aspects, stating from the political environment of the Indian
      market and the trade barriers it faced, going through the market entry and penetration
      strategies considered and the flexible marketing mix used and how it was placed to
      increase consumption and market share, ending with the change in the environment and
      market due to boycott campaigns for different reasons.



      Until the early 1990s, India was considered unfriendly to foreign investors, especially in
      consumer goods sector. If an item could be obtained within the country, imports of similar
      items were forbidden.

      Due to this environment, Coca-Cola had withdrawn from the Indian market in 1977.

      Coke's refusal to give the formula and withdraw from the market wasn't a clever decision,
      because as a big company, coke must expect to face many challenges. It should have
      believed in it marketing capabilities and its ability to position its brand as a unique one,
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      different from others even if they claim they are the same. And using the huge resources it
      has worldwide, it could have planned a strategy to overcome this problem and stay in the
      market and even gain market share as a unique multinational brand.

      .




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                                     CHAPTER 11

           COCA COLA CORPORATE STRATEGY IN CHINA
      Multinationals often point to coca cola‘s achievements in CHINA as strong proof that
      endurance will eventually lead to success. But to understand coca cola as a passive player
      that “waited is out” is a seriously misunderstand the company strategy and management
      capability in CHINA. Coca cola planned rigorously for success. Its position as market
      leader is founded on an extraordinary ability to react in a timely and accurate way to
      changing market dynamics. As a result, coke led Pepsi right from the start and coca cola
      has been profitable for more than ten years in CHINA. PEPSI cola, which entered with its
      SHEUZEN plant in 1982. Just one year after coca cola is still trying to break even. Today’s
      sales of coca cola are almost three times of Pepsi. Coca cola has 23 bottling plant in
      CHINA nearly double the no. Pepsi-cola has. And three of Pepsi colas plant produces only
      local cola brands because the volume of Pepsi did not grow quickly enough to utilize the
      capacity

      What gave coca cola its advantage? A closer looks shows that company dominated the soft
      drink industry not by being an early mover but rather by making a series of brilliant short
      term moves when coke was first introduced in CHINA, it was not well accepted by
      Chinese consumers. For one thing coke looked and tested a bit like a Chinese herbal
      medicine. In addition most of the soft drink in CHINA at the time mere orange flavored
      and light color. So from the beginning coca cola invested in sprite and fanta as well as in
      coke, in early 1980s in fact more sprite than coke was sold.

      There were many reasons for sprite popularity, most Chinese women prefer sprite to coke
      and many consumers take sprite with beer or red wine. As coca cola continued to invest in
      the coke brand and as consumer accepted improved in the 1990. Sales of coke eventually
      exceeded sprite. Today the coke to Pepsi ratio is four to three. In contrast Pepsi-cola has
      been less successful with 7up; the Pepsi to 7up ratio is four to one.

      Coca cola long tern success has also involved taking as much control as possible of its joint
      venture. In the early 1980s foreign investment in the Chinese beverages industry was
      highly restricted; coca cola was forced to form partnership with government bodies. It

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      choose COFCO (Chinese national cereals, oil, food import export corporation) which
      monopolized the food import export business .and the ministry of light industry, which
      oversaw the development of the domestic food and beverages industry. Coca cola did not
      have equity majority, so it had limited management control of the bottling joint ventures.
      1988 when the regulation of bottling joint ventures was followed the company moved. The
      company moved quickly to acquire stakes from its partners to establish majority equity
      position and to gain management control.

      Coca cola did not stop here its shifted entire partner strategy at the same time by three
      partners CITIC (china international trust and investment cooperation), Swire pacific and
      Kerry group into its bottling ventures. Those strategic partnership coca cola was actively
      positioning for the future. Coca cola partner serve the no. of company critical objective.
      They share its investment risk in the bottling plant and at the same time it is able to
      leverage the political influence its partners to get government approval for new bottling
      plants. But most important these new partners give coca cola management control through
      equity majority ownership of the joint ventures.

      Pepsi cola in contrast did not seek equity majority and management control until 1993 so
      when it comes to Chinese market Pepsi cola lake lustier performance shows how even
      experienced marketer miscalculate the critical factor of success. Pepsi cola had not even
      begun to wrestle with the question of partnership in the early 1990. When coca cola
      already taking importance strides towards investment in a direct distribution system.
      Though this company was a able to provide better service to retailers, perform
      merchandising and point sale activities, motivate retailers, mange inventory level and
      increase profitability by capture wholesaler margin. These strategies gave an age to coca
      cola and the result are/ with direct distribution in place today 65% to 70% to coke sale are
      managed through its own sales force compared with only 20% of Pepsi . Coca cola is able
      to cover then 90% of the urban area compared with Pepsi cola 60%. Problems will emerge
      however as soon as the two competitors try to expand in to smaller cities when the volume
      potential justify only one plant with sufficient scale to break even. The government has
      already announced that it will grant just one license in these cities. As a result huge entry
      barriers established. Once a plant is built in small cities. Although coca cola was invested
      $500 million in china it recently announced that it wills double its investment in 1 billion
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      over the 5 years. So if its announced plans are realized coca cola will continue to lead
      Pepsi cola in market share by a margin of three to one.




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                                   CHAPTER 12

              SWOT ANALYSIS OF PEPSI AND COKE


      12.1 STRENGTHS

      Pepsi and Coke has been a complex part of world culture for a very long time. The
      products image is loaded with over-romanticizing and fun, this is an image many people
      have taken deeply to heart. Pepsi and Coke are the extremely recognizable brand, which is
      the greatest strength of them. Additionally there Bottling system is one of their greatest
      strengths. This allows them to the conduct business on a global scale while at the same
      time maintain a local approach. The bottling companies are locally owned and operated by
      independent business people who are authorized to sell product of these cola giant.
      PepsiCo and Coca cola are having the largest distribution network in the world, which is
      also there one of the greatest strength.

      12.2 WEAKNESSES
      Weaknesses for any business need to be both minimized and monitored in order to
      effectively achieve productivity and efficiency in their business activities. Although the
      international sales are increases but there is getting a saturation evident through the
      stability in cola drink in USA market and moreover all over the world the customer
      preference for cola drink is shifting towards the healthy drink is taking place. Being
      addictive of cola drink is also a health problem, because drinking of carbonated soft drink
      daily has an effect on your body also.

      12.3 OPPORTUNITIES

      Brand recognition is the significant factor affecting Pepsi and Coke competitive position.
      Pepsi and Coke brand is known well throughout 94% of world today. As in developing
      countries the per head consumption of cola drink is very less which evident from taking
      example of India. In India per head consumption is only 6 bottles as compare to 700 bottles
      in USA and in Indian market only 5% of the beverage come under packaging. So looking


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      at these data we can that for these two giant a lot of potential is there in developing market
      which is now also untapped.

      12.4 THREATS

      Currently, the threat of new viable competitors in the carbonated soft drink industry is not
      very substantial. The threat of Substitute, however, is a very real threat. The soft drink
      industry is very strong, but consumers are not necessarily married to it. Possible substitutes
      that continuously put pressure on both Pepsi and Coke include tea, coffee, juice, milk and
      hot chocolate. Eventhrough the Coca cola and Pepsi control nearly 40% of the entire
      beverage market, the changing health consciousness of the market could have a serious
      affect. Of course, both have already diversified into these markets, but still theseSubstitute
      will remain threat to them. Consumer buying power is also represents a key threat to the
      Pepsi and Coke.




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                                 CHAPTER 13

                                 REFERENCES


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