Shikhar Goyal Section A PGP28001

Case - 1 COLA WARS CONTINUE: COKE AND PEPSI IN 2006

BACKGROUND The Cola Wars case analyzes the CSD (Carbonated Soft drinks) industry and the stakeholders i.e. the Concentrate Producers (CPs), Suppliers, Retail Channels& Bottlers. OBJECTIVE To ensure profitability and sustainable growth in response to the changing times, determining the steps to be done in the early years of the 21st century. CASE ANALYSIS Coke was the winner throughout the early 1960s due to its extensive bottling franchise and its brand name.But with the passage of time, Pepsi created strong hold on the market. From 1950 to 1960, Coke was the leader but after 1970 to 1990 Pepsi captured the market. Subsequently, Pepsi gained significant share owing to selective discounts in distribution outlets, targeted growing take-home market and targeted younger consumers like PEPSI GENERATION. Coke focused on overseas markets, while Pepsi focused on the US grocery channel. Coke and Pepsi are attacking the non CSD beverages category, each trying to become a total beverage company. Pepsi has had more success and has been more aggressive with non-CSDs so far. From pages 11-14 we know that the business model for CSDs is somewhat different from the classic CSD model.The supply chain and bottling requirements add complexity to the value chain, compared with therelatively simple CSD model. Nonetheless, the basic principles of the business remain the same.Coke and Pepsi own the brand and control product development and their dedicated bottlers leverageeconomies of scope in distribution. RECOMMENDATIONS Product and Packaging Innovations - The biggest problem facing Coke and Pepsi is the flattening demand for CSD and the growing popularity of non-carb beverages, bottled water etc. They can fight against the flagging demand through product and packaging innovations (logos, can and bottle designs), diverse product variants i.e. differently flavored CSDs.

* Due to saturation & market shrinkage of CSD, health hazardousness, they can think of shifting to non carbonated product line. Whatever decision they take, that should be taken considering the local culture. Aggressive Marketing and Promotion - The new popular beverage segment has huge scope for growth as the health-consciousness among the public increases and cannot be ignored. The margin for health and energy drinks is actually higher as compared to CSDs and the companies can cater to this demand through aggressive marketing and promotion. The existing production and distribution system for non-carbonates and alternate beverages needs a lot of improvement. They can also gain high profit margins on bottled water (around 20%) through Aquafina and Dasani with regard to increasing consumer concern over drinking water & main focus should be on maintaining best quality. Both Coke and Pepsi had realized that they had exerted too much control over the bottlers in the nineties. The bottlers profits had dropped substantially in the 1990s leading to buyouts, poor performance and discontentment. Both companies, especially Coke need to re-inject some margin in the bottler business and show greater flexibility in concentrate pricing. There has been a lot of negative publicity such as concern over obesity, the contamination scare in Coke and Pepsi as well as legal problems. This needs to be countered with better packaging standards, positive sports as well as celebrity endorsements etc. Huge Retailers such as Wal-Mart exerted pricing pressure and wanted to deal directly with CPs, eliminating the bottlers from the process. The companies tried to counter these pressures by focusing on innovative advertising, new products and packages.

Case - 2
Population Services International: The Social Marketing Project in Bangladesh Background and Problem The discussion in the case is about 2 products: Raja Condoms & Maya contraceptives marketed by PSI. The case highlights various initiatives taken by the firm in association with the Bangladesh government. But contraceptive Maya is not able to pick up in the sales as compared to the sales of Raja condoms, which is a hit product in the market despite higher price than its competitors. To reach maximum number of people possible, entire program was built around two basic principles: Motivate the consumer and motivate the trade. As PSI is facing the problem of low sales in Maya (Contraceptive pill), we need to find out basic reasons and measures to be taken: Recommendations Recommendations for Bangladesh Family Planning Program based on Case Analysis 1) Female population needs counseling & feel satisfied if some expert advice & recommend. Here RMPs (rural medical practitioners) are key to reach to the final consumer. So main target should be to promote through RMPs. 2) They should also check once the MAYA drug whether any further improvement can be done & make necessary improvement if so required. 3) To change Perception through channel push - In addition to motivating customers and making them knowledgeable, it needs to be understood that in cases of women contraceptive pill, the perception and association of pill is of birth control. Hence, promotion also needs to address to motivate the trade channel to increase the usage. As from the case, it is clear that there are some side effects in first turn, so hence increased importance to pass positive message through doctors and RMPs (Rural medical practitioners) to gain new customers. 4) Family Planning - We can also make a family planning workers group especially women to promote the usage of contraceptives in general, in addition to organizing social health care camps. 5) TV Advertisement - As we can easily see that TV impact on imparting information is quite high (>80%), so, we can start an ad campaign to reach villages containing benefits of small families. Similarly, it should push for taking precaution as prevention, rather than go for other hard measures such as abortion and other social problems etc. 6) Increasing margins for channel Partner - It is given in the case that though Raja, condom brand was the costliest, still people preferred to buy it as it was easily available with the retailers. This explains the power of retailers & distribution center. So company should increase prices so that retailers get more commission & they act as your stakeholders to market the product. Overall, Price points need to be checked again for improving trade margins

Mathematical calculation 100 condoms= 1 CYP 100 Condoms cost = 100*Tk 0.133 = 13.3Tk

(Tk 0.40 for 3 condoms)

For same Costs 13.3, 13.3/.7 pills = 19 pills CYP = 19/13=1.46 CYP (46% more effective for same cost)

We can make a tradeoff in between all channels' margins because there is scope to increase prices further to reach same benefits as of condoms. 7) Alternative Strategy - We can do to continue with Maya with more focus on trade channels and launch one premium products to cater to the segments buying higher rates items. 8) Effective Media use - It is given in the case that communication for Maya was poor. So company should use proper media to reach its target segment. Hence it can target rural women through radio & family planning worker. While urban females can be targeted through TV, Radio & Family planning worker. 9) Long term Measures (Empowering women) - Other long term measures that will go long way are Improve position of women (controlling Dowry+ providing higher education etc) to gain long term impact and higher participation in decision making.