A

PROJECT REPORT
ON
COMPARISON BETWEEN PEPSI & COKE.
Submitted for partial fulfilment of requirement for the award of degree
of BACHELOR OF MANAGEMENT STUDIES
Of
Mumbai University,(Mumbai)
Session (2013-2016)
PREPARED & SUBMITTED BY
MONISH P GORE
SEAT NO.1247090
UNDER THE GUDIANCE OF
Mrs. BOOMA HALPETH
THE SIA COLLEGE OF HIGHER EDUCATION
P-88, MIDC RESIDENTIAL ZONE, SAGARLI
DOMBIVILI (EAST)

ACADEMIC YEAR 2015-2016

DECLARATION
I MONISH P GORE declare that the report of the project work entitled
COMPARISON BETWEEN PEPSI & COKE is based on my own work
carried out during the course of my study under the supervision of Mrs.
BOOMA HALPETH. The information submitted in this project work is
true and original to the best of my knowledge and belief.

MONISH P GORE
( 1247090 )

CERTIFICATE
This is to certify that Mr. MONISH P GORE Student of BMS (Bachelor of
management studies) semester v (2014-2015) Seat no.1247090 Has
successfully completed his project work on COMPARISON BETWEEN
PEPSI & COKE Under the guidance of Prof. BOOMA HALPETH as
per Mumbai University syllabus.

COURSE CO. ORDINATOR

PROJECT GUIDE

EXTERNAL EXAMINAR

PRINCIPAL

Sr No.

Contents

Pg no.

Executive summary

Introduction

4-5

Overview(Soft drink in India)

6-9

Coke(Company Profile)

10-12

History (Coke in India)

13-16

Brand in Indian Origins

17

PepsiCo in India

18-23

Coke in India

24-31

Marketing Strategies (Coke & Pepsi)

32-37

10

Coke v/s Pepsi

38-58

11

Finding & Analysis

59-61

12

Present Competition

62-63

13

Questionnaire

64-65

14

Consumer Survey

66-67

15

Recommendations

68-71

16

Bibliography

72

EXECUTIVE SUMMARY

This project is an extensive research on the marketing strategies of the two

Cola giants Pepsi and Coca Cola. It covers an extensive survey
and depicts all graphs, fact and figures of two companies. It
begins with the introduction of soft drink industry and
introduction of these two companies of soft drink industry. It
covers some of the major strategies adopted by Pepsi and CocaCola like their pricing policy, sales promotion and advertising
policy, distribution policy etc. The project has been made
interesting with the inclusion of the topics, which covers the 4Ps
of marketing.
The major players in the soft drink industry in India are Coke and Pepsi.
Pepsi holds the major market share followed by Coke. They have
a cut throat competition between themselves. Whatever strategy is
followed by one company, it is copied by the other.
Sample of to brands were selected on the basis of there uses and
noticeciability.

i . exe

One of the selected brands is NO1 brand in their respective product

categories the other one brand is close competitor of the No 1
brands. Total sample of size of 200 respondents selected on the
basic of convenience was surveyed which include consumers.
Data was collected from secondary as well as primary sources. Structure
questionnaire was use to collect primary data

INTRODUCTION:
In the modern urban culture consumption of soft drinks particularly among
younger generation has become very popular. Soft drinks in various flavors
and tastes are widely patronized by urbane population at various occasions
like dinner parties, marriages, social get together, birthday calibration etc.
children of all ages and groups are especially attracted by the mere mention
of the word soft drinks.

With the growing popularity of soft drinks, the technology of its production,
preservation, transportation and or marketing in the recent years has
witnessed phenomenal changes.

The so-called competition for this product in the market is from different
other brands. Mass media, particularly the emergence of television, has
contribute to a large extent of the ever growing demand for soft drinks the
attractive jingles and sport make the large audience remember this product at
all times.

It is expected that with the sort of mass advertising, reaching almost the
entire country and offering various varieties annual demand for the product
is expected to rise sharply in the times to come.

In any marketing situation, the behavioral / environmental variables relating

to consumers, competition and environment are constantly influx. The
competitors in a given industry may be making many tactical maneuvers in
market all the time. The may introduce or initiate an aggressive promotion
campaign or announce a price reduction. The marketing man of the firm has
to meet all these maneuver and care of competitive position of his firm and
his brand in the market. The only route open to him for achieving this is the
manipulation of his marketing tactics.
In todays highly competitive market place, three players have dominated
the industry; The New York based Pepsi Company Inc. The Atlanta based
coca- cola and U.K. based Cadbury Schweppes.
Through the globe, these major players have been battling it out for a bigger
chunk of the ever growing soft drink market. Now this battle has been
evolved up to India too with the arrival of these three giants.
Soft drink industry is on amazing growth; ultimately these are only one
person who will determine their fortunes. The Indian consumer the real
War to quench his thirst has just begun.

SOFT DRINK INDUSTRY: AN OVERVIEW

It all began in 1886, when a tree legged brass kettle in Hohn Styth
pembertons backyard in Atlanta was brewing the first P of marketing
legeent Unaware the pharmacist has given birth to a caramel colored syrup,
which is now the chief ingredient of the worlds favorite drink. The syrup
combined with carbonated the soft drink market. It is estimated that this
drink is served more than one thousand million times in a day.
Equally oblivious to the historic value of his actions was Frank Ix.
Robinson, his partner and book keeper. Pemberton & Robinson laid the first
foundation of this beverage when an average nine drinks per day to begin
with, upping volumes as sales grew.
In 1894, this beverage got into bottle, courtesy a candy merchant from
Mississippi. By the 1950s Colas was a daily consumption item, stored in
house hold fridges. Soon were born other non- cola variants of this product
like orange & Lemon.
Now, the soft drink industry has been dominated by three major player (1)
The New York based Pepsi co. Inc.(2) The Atlanta based coca cola co. (3)
The united Kingdom based Cadbury Schweppes.
Though out the glove these major players have been battling it. Out for a
bigger chunk of the ever-growing cold drink market. Now this battle has
begun in India too. India is now the part of cold drink war. Gone are days of
Ramesh Chauhan, Indias one time cola king and his bouts of pistol
shooting. Expect now to hear the boon of cannons when the Coca Cola &
Pepsi co. battles it out for, as the Jordon goes a bigger share of throat. By
buying

Over local competition, the two American Cola giants have cleared up the
arena and are packing all their power behind building the Indian franchisee
of their globe girdling brands. The huge amount invested in fracture has
never been seen before. Both players seen an enormous potential in his
country where swigging a carbonated beverage is still considered a treat,
virtually a luxury. Consequently, by world standards Indias per capita
consumption of cold drinks as going by survey results is rock bottom, less
than over Neighbors Pakistan & Bangladesh, where it is four times as much.
Behind the hype, in an effort invisible to consumer Pepsi pumps in Rs 3000
crores (1994) to add muscle to its infrastructure in bottling and distribution.
This is apart from money that companys franchised bottles spend in
upgrading their plants all this has contributed to substantial gains in the
market. In colas, Pepsi is already market leader and in certain cities like
Banaras, Pepsi outlets are on one side & all the other colas put together on
the other. While coke executive scruff at Pepsis claims as well as targets,
industry observers are of the view that Pepsi has definitely stolen a march
over its competitor coke.
Apart from numbers, Pepsi has made qualitative gains. The foremost is its
image. This image turnaround is no small achievements, considering that
since it was established in 1989, taking the hardship route prior to
liberalization and weighed down by export commitments.
Now, at present as there are three major players coke, Pepsi and Cadbury
and there is stiff competition between first two, both Pepsi and coke have
started, sponsoring local events and staging frequent consumer promotion
campaigns. As the mega event of this century has started, and the marketers
are using this event world cup football, cricket events and many more
other events.
10

Like Pepsi, coke is picking up equity in its bottles to guarantee their

financial support; one side coke is trying to increase its popularity through.
Eat Food, enjoy Food. Drink only coca cola. Eat cricket, sleep cricket. Drink
only coca cola. Eat movies, sleep movies. Drink only coca cola.
On the other side of coin Pepsi has introduced AMITABH BACHHAN for
capturing the lemon market through MIRINDA Lemon with zor ka jhatka
dhere se lage.
AVAILABILITY
Availability means the presence of a particular brand at any outlet. If a
product is now available at any outlet and the competitor brand is
available, the consumer will go for it because generally the consumption of
any soft drink is an impulse decision and not predetermined one.
VISIBILITY
Visibility is the presence felt, if any outlet has a particular brand of soft
drink say- Pepsi cola and this brand is not displayed in the outlet, then its
availability is of no use. The soft drink must be shown off properly and
attractively so as to catch the attention of the consumer immediately Pepsi
achieves visibility by providing glow signboards, hoarding, calendars etc.
to the outlets. It also includes various stands to display Pepsi and other
flavors of the company.
COOLING

11

As the soft drinks are consumed chilled so cooling them plays a vital role
in boosting up the sales. The brand, which is available chilled, gets more
sales then the one which is not, even if it is more preferred one.
RANGE
This is the last but not the least factor, which affects the sale of the
products of a particular company.
Range availability means the availability of all flavors in all sizes.

12

COCA COLA COMPANY PROFILE

Keeping in view of tapping the Indian soft drink market and also developing
soft drinks as a drinking product among Indians. The Coca-Cola in India has
setup an independent organizations which is H.C.C & B.C.C with a capital
of 350 U.S.$ each by virtue of sellout decision of the passed managing
director Sh. S. C. Aggarwal.
Hindustan Coca-Cola bottling (N-W) Pvt. Ltd. Najibabad took the complete
possession of this plant, land, machinery, & intellectuals on February 14
1998 and since then H.C.C, looking after all its affairs under company
owned bottling plant to establish integrated marketing system in the area.

13

FABULOUS FACTS ABOUT COCA-COLA

1.

The worlds largest spherical coca-cola sign is in Nagoya, Japan a

top the dial Nagoya building in front of the Nagoya railway station.
The sing is a double sphere constructed from more then 46 tone of
steel, more 940meter of neon tubing, and more then, 879 light bulbs.
The outer shape features the coca-cola logo and contour bottle, while
the inner sphere portrays a comic scene with twinkling planets and
stars.

2.

One of the worlds largest signs for coca-cola is located on a hill

called ELHACHA in America, Chile. It is 400 feet wide and 131
feet high and is made from 70,000, 26 ounce bottles.

3.

The first out door paint sign advertising coca-cola still exists. It was
painted in 1894 in Cartersville, Georgia.

4.

Coca-cola is one of the worlds most recognizable trademarks

recognized in countries that account for 98 percent of the worlds
population.

14

5.

If all the coca-cola ever produced were in 8- ounce bottles. And these
bottles were distributed to each person in the world. There would be
678 bottles or over 42 gallons for each person.

6.

If all the coca-cola ever produced were in 8 ounce bottles, placed

side by side and end to end to from a lane highway, it would wrap
around the earth 82 times.

7.

If all the coca-cola ever produced were flowing over Niagara fall at
its normal rate of 105 million gallons per second instead of water,
the falls would flow for about a day and a half 38 hours and 46
minutes.

8.

The largest representation of the worlds best known package 100

foot tall glass contour bottle is located at world of coca-cola, LAS
VEGAS

15

HISTORY IN INDIA

Coca-cola in India

Coca-Cola, the corporation nourishing the global community with the

worlds largest selling soft drink concentrates since 1886, returned to India
in 1993 after a 16 year hiatus, giving new thumbs up to the Indian soft drink
market. In the same year, the Company took over ownership of the nations
top soft-drink brand and bottling network. Its no wondering our brands
assumed an iconic status in minds of worlds consumers.

16

A Healthy Growth to the Indian Economy

Ever since, Coca-Cola India has made significant investments to build and
continually consolidate its business in the country, including new production
facilities, waste water treatment plants, distribution systems, and marketing
channels.
Coca-Cola India is among the countrys top international investors, having
invested more than US$ 1 billion in India in the first decade, and further
pledged another US$100 million in 2003 for its operations.
A Pure Commitment to the Indian Economy
The Company has shaken up the Indian carbonated drinks market greatly,
giving consumers the pleasure of world-class drinks to fill up their
hydration, refreshment, and nutrition needs. It has also been instrumental in

17

giving an exponential growth to the countrys job listings.

Creating Enormous Job Opportunities

With virtually all the goods and services required to produce and market
Coca-Cola being made in India, the business system of the Company
directly employs approximately 6,000 people, and indirectly creates
employment for more than 125,000 people in related industries through its
vast procurement, supply, and distribution system.
The Indian operations comprises of 50 bottling operations, 25 owned by the
Company, with another 25 being owned by franchisees. That apart, a
network of 21 contract packers manufactures a range of products for the
Company.
On the distribution front, 10-tonne trucks open bay three-wheelers that can

18

navigate the narrow alleyways of Indian cities constantly keep our brands
available in every nook and corner of the countrys remotest areas.
These are only some of the facts that speak about our commitment to the
growth of the Indian Economy

BRANDS IN INDIA

19

BRAND IN INDIAN ORIGIN

20

GOLD SPOT: this orange carbonate soft drink was introduced in the early
1950c, and acquired by the Coca-Cola company in 1993, its tangy taste
has been popular with Indian teenagers
LIMCA: It is thirst-quenching beverage features a fresh and light lemonlime taste and lighthearted attitude. The limca brand was introduced in
1971 and acquired by the coca-cola company in 1993.
MAAZA: Maaza, launched in 1984 and acquired by the coca-cola company
in 1993, is a non carbonated mango soft drink with a rich, juice &
natural mango taste.
THUMPS UP: in 1993, the Coca-Cola company acquired this brand, which
was originally introduced in 1977. Its strong and fizzy taste makes it unique
carbonated Indian cola.

PEPSICO

21

PepsiCo is one the largest companies in the U.S. It figures amongst the
largest 15 companies worldwide according to the number of employees
hired. It has a U.S. Fortune rank of 50.The company profits for 1997 were
$2.14 billion on revenues of $20.92 billion and Pepsi is bottled in nearly 190
countries. PepsiCo is a world leader in convenient snacks, foods and
beverages with revenues of more than $43 billion and over 198,000
employees. Take a journey through our past and see the key milestones that
define PepsiCo.
PepsiCo is a world leader in the food chain business. It consists of many
companies amongst which the prominent once are Pepsi-Cola, Frito-Lay and
Pepsi Food International. The group is presently into two of the most
profitable and profitable and growing industries namely, beverages and
22

snack foods. It has scores of big brands available in nearly 150 countries
across the globe. The group has established for itself once of the strongest
brands in various segments of its operations.
The beverages segment primarily markets its Pepsi, Diet Pepsi, Mountain
Dew and other brands worldwide and 7-UP outside the U.S. markets. These
are positioned in close competition with Coca-Cola Inc. of USA. A point
which is worth a mention is that Coca-Cola gets 80% of its profits for
International operations while the same figure for PepsiCo stands at 6%. The
segment is also in the bottling plants and distribution facilities and also
distributes the ready to drink tea products of Lipton in North America. In a
joint venture with orient spray juice products PepsiCo also manufactures and
distributes fruit juices.
The snack food division manufactures and distributes and markets chips and
other snacks worldwide. The international operations of this segment extend
to the markets of Mexico, the UK and Canada. Frito-Lay represents this
segment of PepsiCo.
The restaurant segment earlier primarily consists of the operations of the
worldwide Pizza Hut, Taco Bell and KFC chains. PFS. Pepsi companys
restaurant distribution operation, supplies company owned and franchise
restaurants in the U.S. The company ventured into restaurant business with
Taco Bell, KFC, Pizza Hut ended last year when they were spanned off
from the company. A packaged goods company comprised of Pepsi-Cola
Company and Frito-Lay will continue to bear the PepsiCo name. The move

23

should enhance both corporations ability to prosper with their own fully
dedicated structure and management team.

PEPSICO IN INDIA

PepsiCo gained entry to India in 1988 by creating a joint venture with the
Punjab government-owned Punjab Agro Industrial Corporation (PAIC) and
Voltas India Limited. This joint venture marketed and sold Lehar Pepsi until
1991, when the use of foreign brands was allowed; PepsiCo bought out its
partners and ended the joint venture in 1994. Others claim that firstly Pepsi
was banned from import in India, in 1970, for having refused to release the
list of its ingredients and in 1993, the ban was lifted, with Pepsi arriving on
the market shortly afterwards. These controversies are a reminder of "India's
sometimes acrimonious relationship with huge multinational companies."
24

Indeed, some argue that PepsiCo and The Coca-Cola Company have "been
major targets in part because they are well-known foreign companies that
draw plenty of attention."
In 2003, the Centre for Science and Environment (CSE), a nongovernmental organization in New Delhi, said aerated waters produced by
soft drinks manufacturers in India, including multinational giants PepsiCo
and The Coca-Cola Company, contained toxins, including lindane, DDT,
malathion and chlorpyrifos pesticides that can contribute to cancer, a
breakdown of the immune system and cause birth defects. Tested products
included Coke, Pepsi, 7 Up, Miranda, Fanta, Thumps Up, Limca, and Sprite.
CSE found that the Indian-produced Pepsi's soft drink products had 36 times
the level of pesticide residues permitted under European Union regulations;
Coca Cola's 30 times. CSE said it had tested the same products in the US
and found no such residues. However, this was the European standard for
water, not for other drinks. No law bans the presence of pesticides in drinks
in India.
The Coca-Cola Company and PepsiCo angrily denied allegations that their
products manufactured in India contained toxin levels far above the norms
permitted in the developed world. But an Indian parliamentary committee, in
2004, backed up CSE's findings and a government-appointed committee, is
now trying to develop the world's first pesticides standards for soft drinks.
Coke and PepsiCo opposed the move, arguing that lab tests aren't reliable
enough to detect minute traces of pesticides in complex drinks.
As of 2005, The Coca-Cola Company and PepsiCo together hold 95%
market share of soft-drink sales in India. PepsiCo has also been accused by
25

the Puthussery panchayat in the Palakkad district in Kerala, India, of

practicing "water piracy" due to its role in exploitation of ground water
resources resulting in scarcity of drinking water for the panchayat residents,
who have been pressuring the government to close down the PepsiCo unit in
the village.
In 2006, the CSE again found that soda drinks, including both Pepsi and
Coca-Cola, had high levels of pesticides in their drinks. Both PepsiCo and
The Coca-Cola Company maintain that their drinks are safe for consumption
and have published newspaper advertisements that say pesticide levels in
their products are less than those in other foods such as tea, fruit and dairy
products. In the Indian state of Kerala, sale and production of Pepsi-Cola,
along with other soft drinks, was banned by the state government in 2006,
but this was reversed by the Kerala High Court merely a month later. Five
other Indian states have announced partial bans on the drinks in schools,
colleges and hospitals

26

Pepsi - Yeh Hai Youngistan Meri Jaan

BRAND HISTORY
Pepsi is a hundred year old brand loved by over 200 million people
worldwide. The largest single selling soft drink brand in India is the
ubiquitous'socialiser'at every occasion.

Youngistan loves it. 200 million people worldwide love it. But what
has made Pepsi the single largest selling soft drink brand in India is
actually a formula concocted a century ago in a far away continent.

1886, United States of America. Caleb Brad man, the man with a plan,
got on to formulate a blockbuster digestive drink and decided to call it
Brads drink. It was this doctors potion that was to become Pepsi
Cola in 1898, and eventually, Pepsi in 1903.

Pepsi has always played on the front foot and since its inception has
come out with revolutionary concepts like Diet, 2L bottles, recyclable
plastic cola bottles and the enviable My Can.
BRAND ADVANTAGE

Pepsi has become a friend to the youth and has led many youth
cultures. Youngsters over the generations have grown up with Pepsi
and share an emotional connect with it, unlike any other cola brand.
Be it parties, hangouts, or just another day at home, a day is never
complete without the fizz of Pepsi!

Pepsi, Cricket and Bollywood have been joined at the hip since the
beginning. Shah Rukh Khan, Sachin Tendulkar, Saif Ali Khan,
Amitabh Bachchan, Kareena Kapoor, Priyanka Chopra, Virender

27

Sehwag, M. S. Dhoni, John Abraham, Ranbir Kapoor and Deepika

Padukone are a few celebrities who will go any length for a chilled
Pepsi.

The Pepsi My Can is undoubtedly the most popular cola pack of all
times. It is not just a pack but a style statement for todays youth.

THE RIVARLY BEGINS:

Coke Comes to India
Coca-Cola comes to India with fanfare in the fifties. For a number of days,
The Hindustan Times and other newspapers of New Banaras carried full
page advertisement showing a big boy in uniform with a soft-drink crown as
the cap. There was no indication of the product. After a few days, Coke was
introduced. It was an entirely new drink which fascinated people. It soon
became the national drink. For the first time, a soft-drink was available from
one corner of the country to another. The person who brought Coca-Cola to
India was the father of late Sardar Charanjit Singh, Sardar Mohan Singh. A
practical man Mohan Singh realized that to popularize Coca-Cola, and make
it a best seller it was necessary to catch them young. So he focused on
youngsters in the society.
The company realized that to become a mass consumption product, one has
to go to the village. They gave much importance to the distributive network.
The company trucks supplied coke to even the remotest village.
Few products appears to be more similar than soft drinks, yet the Cola wars
that mark the competition between Coke and Pepsi show how even

28

organizations with highly similar product can be differentiated by their

business strategies. Then comes battles over the issue of bottle size
standardization. Coke the arch rival tried to offering more Cola at a lower
price. Pepsi which had some of its early investment tied up in 250ml bottles,
went the fountain way. The General bottle size freed has settled at 300 ml.
100 ml more than the pre MNC standard. Fountain mix dispensers, carry
home bottles, even 1.50 plastic bottle with caps good enough to keep them
lying down and still preserve the fizz.

It poured in vast sums to whip up its visibility at the retail level, so that
consumers were greeted virtually at every street corner by Pepsis blue, red
and white colors, because they have perception the thing on display Sells
more. Coca-Cola is, finally, redoing the real thing to the replicate the
success that its arch-rival, PepsiCo. Has achieved with its fast and furious
marketing. But to win them, Coke is copying Pepsi.

29

MARKETING STATEGIES OF COKE AND PEPSI

a)

PRODUCT
Coke was launched in India in Agra, October 24, in '93', soon after its

traditional all Indian launch of its Cola. At the sparking new bottling plants
at Hathra, near Agra. Coke was back with a bang after its exit in 1977.
Coke was planning to launch in next summer the orange drink, Fantawith the clear lemon drink, sprite, following later in the year.

Coke already owns more brands than it will over need, since it has
bought out Ramesh Chauhan. Coke just needs to juggle these brands around
dextrously to meet its objectives, to ensure that Pepsi does not gain market
share in t Today, Coke's product line includes, Coca-Cola, Thumps Up,
Fanta, Gold Spot, Maaza, Citra, Sprite, Bisleri Club Soda and Diet Coke.
PACKAGING
Coca-Cola India Limited (CCIL) has bottled its Cola drink in different
sizes and different packaging i.e., 200 ml bottle, 300 ml. Bottle, 330 ml.
Cans, 500 ml. Bottle fountain Pepsi, and bottles of 1 and 2 litre.
PRODUCT POSITIONING
One important thing must be noticed that Thumps Up is a strong
brand in western and southern India, while Coca Cola is strong in Northern
and Eastern India. With volumes of Thumps Up being low in the capital,
there are likely chances of Coca Cola slashing the prices of Thumps Up to
30

Rs. 5 and continue to sell Coca Cola at the same rate. Analysts feel that this
strategy may help Coke since it has 2 Cola brands in comparison to Pepsi
which has just one.
Thumps Up accounts for 40% of Coca Cola company's turn over,
followed by Coca Cola which has a 23% share and Limca which accounts
for 17% of the turn over of the company. (Thumps up being the local drink,
its share in the market is intact, forcing the company to service the brand, as
it did last year Mr. Donald short CEO, Coca Cola India, said that, " we will
be absolutely comfortable if Thumps Up is No. 1 brand for us in India in the
year 2000. We will sell whatever consumers want us to". Coca Cola India
has positioned Thumps up as a beverage associated with adventure because
of its strong taste and also making it compete with Pepsi as even Pepsi is
associated with adventure, youth.

b)

PRICE
The price being fixed by industry, leaving very little role for the

players to play in the setting of the price, in turn making it difficult for
competitors to compete on the basis of price.
The fixed cost structure in Carbonated Soft Drinks Industry, and the
intense competition make it very difficult to change or alter the prices. The
various costs incurred by the individual company's are almost unavoidable.
These being the costs of concentrates, standard bottling operations,
distributor and bottlers commissions, distribution expenses and the
promotional and advertising expenditure (As far as Coke is concerned, it had

31

to incur a little more than Pepsi as Pepsi paved its way to India in 1989
while Coke made a come back in 1993.)
Currently a 300 ml. Coke bottle is available for Rs. 6 to8 The 330 can was
initially available for Rs. 13 and now, since the price has gave up to Rs. 18
per can. The prices of 500 m, 1 litre. And 2ltr being Rs. 15 Rs. 23 and Rs.
40 respectively (according to the current survey).
Dating back to 93', when Pepsi hiked the price of Pepsi - Cola from
Rs. 5 to Rs. 6 per 250 ml. bottle in some parts of the country-including Agra.
Coke penetrated the market with price of Rs. 5 for a 300 ml. bottle, making
it cheaper by Rs. 1 and 50 ml. than Pepsi. Coke's strategy at that time being
able to expand the availability of soft drinks even in rural India. Coke's
priority being to first increase the number of drinks per drinker, and then the
number of drinkers itself. Pepsi also tried this but was trapped by a series of
competitive price increase and changes in bottle sizes by Parle. But the
prices of soft drinks have shot up since Pepsi's arrival and the current prices
are being mentioned as under.

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Price list
Name

Bottle Size

MRP (in Rs.)

Coke Per Bottle

200 ml

Coke

300 ml

10

Coke

500

ml

(Plastic

/ 22

Glass)
Coke

2 litre

60

Diet Coke (Can)

330 ml Can

35

Coke (Can)

330 ml Can

38

However, the trends may have been in the early '90's, now the
prices of Pepsi and Coke are the same making it difficult in future and
present to compete on the basis of price.

c)

PLACE
Coke may have gained an early advantage over Pepsi since it took

over Parle in 1994. Hence, it had ready access to over 2, 00,000 retailer
outlets and 60 bottlers. Coke was had a better distribution network, owing

33

to the wide network of Parle drinks all over India.

Coke has further

expanded its distribution network.

Coke and its product were available in over 2, 50,000 outlets (in contrast
with Pepsi's 2, 00,000).

Coke has a greater advantage in terms of

geographical coverage.
But Coke has had problems with its bottlers as the required profits for
the bottlers have not been forthcoming. This is more so because Coke has
hiked the price of its concentrate by Rs. 8 Further, Coke's operations in India
are 100% Fobs. Now, it plans to convert then into COBOs. This is straining
the relationship between the Coke and its bottlers.
The company had decided to create a fund to reimburse performing bottlers
for the extra costs incurred on account of the hike in prices of soft drink
concentrates. Mr. Short also realized that India is a price sensitive market
and the company would have to absorb in the increase in excise duty and
said that in the long run Coke will have to slash prices for the benefit of the
consumers and said that they were considering a cut in the prices of their
fountain soft drinks.
Coke and Pepsi have devised strategies to get rid of middlemen
in the distribution network. However, 50% of the industry unfortunately
depends on these middlemen. As of now, around 100 agents are present in
Bananas. Bottlers of the 2 multinationals have strongly felt the need to
remove these middlemen from the distribution system, but very little success
has been achieved in doing so.

34

D) PROMOTION
It must be remembered that soft drinks purchases
are an "impulse buy low involvement products" which makes promotion and
advertising an important marketing tool. The 2 arch rivals have spent a lot
on advertising and on promotional activities.
To promote a brand and even to spend a lot on advertising, the
company must be aware of the perceived quality of the brand, its brand
power (if at all there is) since consumers make purchase decision based on
their perceptions of value i.e., of quality relative to price.
According to Paul Stobart, Advertising encourages customers to
recognize the quality the company offers. Price promotions often produce
short-term sales increases.
Coca Cola has entered new markets and also developing market economics
(like India) with much-needed jobs.
Coke attributes its success to bottlers, the Coca Cola system itself, i.e.,
its executive committees, employees, BOD, company presidents but above
all from the consumer.
Coke's red color catches attention easily and also the Diet Coke which
it introduced was taking the Cake, as Pepsi has not come out with this in
India.
Ever since Coke's entry in India in 1993, Coke made a come back
(after quitting in 1977), in October 24 in Agra, the city was flooded by

35

trucks, there wheelers, tricycle cards-all with huge red Coke-emblazoned

umbrellas. Retailers were displaying their Coke bottles in distinctive racks,
also with specially-designed iceboxes to keep Coke bottles cold. This was
one big jolt to Pepsi.

STRATEGIES ADOPTED
BY COKE

AND PEPSI

The Pepsi Process: Despite being a global brand, Pepsi has built its success
on meeting the Indian consumers needs, particularly in terms of making the
brand synchronize with localized events and traditions. Instead of harping on
its global lineage, ergo, it tries to plug into ethnic festivals, use the
vernacular indifferent part of the country, and blend into the local fabric.
Pepsi is using both national campaigns-such as the Drink Pepsi, Get Stuff
scheme, which offers large discounts on other products to Pepsi-buyers as
well as local.

The Coke Copy: Instead of creating a bond with the customers through
small but high-impact events, Coca-Cola chose to associate itself with

36

national and international mega events like the World Cup Cricket, 1996,
and world cup football 1998. But now coke is also entering into local
actions. Coke is also trying to make their brand synchronize with localized
events traditions and festivals. Coca-Cola new tag line in this advertisement
is Real shopping, real refresher. In this way Coke is copy Pepsi.

EMPOWERMENT
The Pepsi Process: Once of the strongest weapons in Pepsis armory is the
flexibility it has empowered its people with. Every manager and salesperson
has the authority to take whatever steps he, or she, feels will make
consumers aware of the brand and increase its consumption.
The Coke Copy: Flexibility is the weapon that Coca-Cola, fettered as it is
by the need for approvals from Atlanta for almost everything. In the past,
this has shown up in its stubborn insistence on junking the franchisee
network it had acquired from Parle; in its dependence on its own feedback
mechanism over that of its bottlers; and on its headquarters-led approach.

PRICE
The Pepsi process: Pepsi has consistently wielded its pricing strategy as in
invitation to sample, aiming to turn trial into addiction.
It launched the 500 ml bottle in 1994 at Rs. 8 versus Thumps Ups Rs. 9, in
April, 1996, its 1.5 liters bottle followed Coke into the marketplace at Rs. 30

37

 Rs 5 less than Cokes .But it couldnt continue the lower price positioning
for long.

The Coke Copy: Initially, coke carbon-copied the strategy by introducing

its 330ml cans in January 1996, at an invitation price of Rs. 15 before raising
it to Rs. 18. By this time, it had realized that the Coca-Cola brand did not
hold enough attraction for customers to fork out a premium. The 200ml
Coke, launched so far in parts of eastern, western, and northernIndia, is
priced at Rs. 5, lowering the entry-barriers. Too really drive the market, as
Coke wants to you must go down to Rs. 3.

PEPSI VS. COKE

$28 BILLION

TURNOVER

$16

BILLION
32%

INT. SALES AS %
`

OF TOTAL SALES

38

70%

RS. 5OO CRORES

TOTAL INVESTMENT

RS.

250 C
IN INDIA
RS. 300 CRORES

PROPOSED

RS. 2,400C

INVESTMENTS
2400

NO. OF EMPLOYEES

13

NO. OF OWNED

140

NIL

BOTTLING PLANTS
18

NO. OF FRANCHISES

53

4000

NO. OF FOUNTAIN

1500

N.A.

TOTAL INVESTMENT

Rs 125 CR

BY BOTTLERS
6

NEW PLANTS PLANNED

39

N.A.

PEPSI AND COKE MARKET SHARE IN INDIA

40

Competitive Comparisons
Advertising

Coke: $34.4 million (1975) to $211.5 million

(1993)
Pepsi: $25.3 million (1975) to $147.3
Million (1993)
Distribution
Coke stronger in fountain. But Pepsi
IS growing in supermarkets?
Pricing
No differences

41

COLA WARS
Coca-cola v/s Pepsi

OVER A CENTURY OF COLA SLOGANS, COMMERCIALS,

BLUNDERS, AND COUPS
There's little doubt that the most spirited and intense competition in the
beverage world is between Coca-Cola and Pepsi. These two American
companies long ago took their battle worldwide, and although there are other
colas in the market, these giants occupy this high-stakes arena by
themselves. The impact of Coke and Pepsi on popular culture is
indisputable, and I have observed in my time managing this web site that
America has not become jaded about the cola wars. The memorabilia, the
jingles, the trivia - all still popular. So I am offering this page in an attempt
to assuage a wee bit of the Coke and Pepsi thirst that is thriving on our
planet.
IT ALL STARTED . . . .
Coca-Cola was invented and first marketed in 1886, followed by Pepsi in
1898. Coca-Cola was named after the coca leaves and kola nuts John
Pemberton used to make it, and Pepsi after the beneficial effects its creator,
Caleb Brad ham, claimed it had on dyspepsia. For many years, Coca-Cola
had the cola market cornered. Pepsi was a distant, no threatening contender.
But as the market got more and more lucrative, professional advertising

42

became more and more important. These soda companies have been leading
the way in advertising ever since.

ADVERTISING HISTORY & COMMERCIALS

Pepsi has definitely leaned towards the appeal of celebrities, popular music,
and young people in television commercials, while Coke relies more heavily
on images of happiness and togetherness, tradition, and nationalism,
perpetually trying to cash in on its original lead. In a simplified sense, you
could sum up the strategies as Coke: Old, Pepsi: New. In fact, as we will
see, when Coca-Cola tried something new, it was disaster.
The first magazine ad for Coca-Cola appeared in Munsey's in 1902.
Advertisements began to appear on billboards, newspapers, and streetcars.
Soon there were serving trays with images of people enjoying Coca-Cola,
and glasses with the cola's name on them. At this time, Coca-Cola and Pepsi
were served in drugstore soda fountains.
In 1909, Pepsi used its first celebrity endorser, automobile race driver
Barney Old-field, in newspaper ads. In 1921, Pepsi went bankrupt, but
continued to appear on the scene, although not nearly so successfully as
Coca-Cola. In 1931, Pepsi went bankrupt again, but the new owner, Roy
Megargel, would hit upon an idea that would finally give Coca-Cola some
competition. In 1934, he marketed Pepsi in a 12-ounce bottle for a nickel. At
the time, Coca-Cola was sold in a 6-ounce bottle for ten cents. Voila! Profits
for Pepsi.

43

Pepsi racked up another first by airing the first radio jingle in 1939. It was so
popular that it was played in jukeboxes and became a hit record Coca-Cola
hit the airwaves in 1941.
In 1946, inflation forced Pepsi to increase prices. And in 1950, Pepsi offered
a larger 26-ounce bottle to court the young American housewife.
In the 1960's, the cola ad wars moved to television. Coca-Cola employed a
host of celebrity singers to promote the product, including Connie Francis ,
Tom Jones, The New Beats, Nancy Sinatra, and The Supremes. As we
moved through the years, both colas incorporated some of their best slogans
("Pepsi Generation" and "the Real Thing") into subsequent commercials.
In the 1970s, market research showed that consumers preferred the taste of
Pepsi over Coke. The Pepsi Challenge is still being conducted today. But
Coke came up with what is arguably the best of all cola commercials, the
1971 I'd like to buy the World coke ad.

This landmark was recalled in Christmas versions in 1983 and 1984, and a
1990 Super Bowl ad, which was enough to make some Baby Boomers weep
with nostalgia.
In the 1980's, Pepsi lined up the celebrities, starting with late Michael
Jackson, then Madonna, Michael J. Fox, Billy Crystal, Lionel Ritchie, Gloria
Stefan, Joe Montana, and others. Coke signed on Michael Jordan, New Kids
on the Block, Aretha Franklin, Elton John, and Paula Abdul.

44

In 1985, responding to the pressure of the Pepsi Challenge taste tests, which
Pepsi always won, Coca-Cola decided to change its formula. Bill Cosby was
the pitchman. This move set off a shock wave across America. Consumers
angrily demanded that the old formula be returned, and Coca-Cola
responded three months later with Classic Coke. Eventually, New Coke
quietly disappeared.
Pepsi, meanwhile, had its own flop, Crystal Pepsi, which was supposed to
catch the strange wave of the times when everything colorless was clean and
desirable (Zima, bottled water). And then there was Pepsi Lite with the
lemony flavor and one calorie, introduced in 1975. Remember that one?
Apparently they didn't expect us to because later they gave us Pepsi One,
using the same concept, but a completely different taste. And, extending the
idea even further, we are now getting Pepsi Twist, a new product with a twist
of lemon flavor.
In 1991, Ray Charles sang, "You got the right one baby, uh-huh!" Also in the
1990s, Cindy Crawford and the Spice Girls pitched Pepsi. And then Pepsi
aired commercials featuring the aggravating little girl (Halide Eisenberg)
with her troubling male voice.
In the new century, both colas continue to battle it out on the television
screen. And celebrities continue to be important promoters. Recently, Pepsi
has had commercials by Bob Dole and Faith Hill, among others.

45

CELIBRITIES PLAYING PART IN TO THE SALES

PROMOTION OF THE PRODUCT:

CELIBRITIES OF PEPSI:

AMITABH BACHHAN
SHAHRUKH KHAN
PRIETY ZINTA
SACHIN TENDULKAR
SAIF ALI KHAN
SOURAV GANGULY
RAHUL DRAVID
MOHD. KAIF
ZAHEER KHAN
HARBHAJAN SINGH
YUVRAJ SINGH
RANBIR KAPOOR
VINDHU DARA SUNGJ
DEEPIKA PADUKONE

CELIBRITIES OF COKE:

SALMAN KHAN
AISHWARYA RAI
AAMIR KHAN
VIVEK OBEROI
BIPASHA BASU
AKSHAY KUMAR
IMRAN KHAN
KALKI

46

Pepsi v Coca-Cola war turns hot

The ongoing cola war between global rivals Pepsi and Coca-Cola has taken
a weird twist in India with the former dragging the latter to court. The
charge: Coca-Cola has snatched employees, bottlers, and agents, all of
whom are bound to Pepsi by a contract.
Pepsi has charged Coke with having entered into a conspiracy to disrupt its
business operations by inducing key employees and associates to break
existing contracts illegally.
Pepsi has sought a permanent injunction and an ex parte order against coke,
restraining it from taking away Pepsi's employees and business associates.
Pepsi has also reserved the right to seek financial damages from Coke at a
later date if necessary.
Pepsi has claimed that a dozen middle-level managers and three territory
managers broke their contracts with Pepsi to join Coke in recent months,
while during the last year and half, seven managers quit Pepsi to join CocaCola.
Justice C M Nair of the Delhi high court on April 17 issued notices and
summons to Coca-Cola and 15 others for May 6. However, Justice Nayar
refused to grant the ex parte injunction sought by Pepsi India to stop the
alleged inducements by Coke in offering employment to Pepsi's employees
while the suit was pending in court.

47

On behalf of Pepsi, Ashok Desai and Arun Jaitley contended that Coca-Cola
had been "rattled by the huge success of Pepsi in India entered into a
conspiracy during the last six months to cause loss and damage to Pepsi's
business interests by adopting unfair and illegal means."
It added that Coca-Cola had approached many key managers and had
successfully lured a commercial manager of its bottling business Gaurav
Duggal, and a manager in Surat Sailesh Joshi, besides others.
Pepsi charged that while initially these approaches were sporadic, over the
last six months it is clear that Coca-Cola has changed its strategy and has
decided to consciously target and approach key employees of Pepsi at
various locations in India.
The company has alleged that in most cases, the employees have not been
given time to adhere to the 90-day notice period and the one-year
confidentiality agreement. The latter deal bars employees joining its rivals
for at least a year.
Desai claimed Coke's actions would directly harm the business interests of
Pepsi, which had invested over $300 million in the country in establishing
business infrastructure.
In its defense, Coke is expected to seek relief in the Indian Constitution
which states that there can be no restriction on the movement of labor.
Besides, any effort by a company to restrict its employees from joining other
companies might fall foul of the Monopolies and Restrictive Trade Practices
Act as an unfair trade practice.

48

Pepsi has cited the instance of Coke snapping up cricketer Javagal Srinath in
spite of the latter signing a contract with Pepsi's sports consultant, 21st
Century Media. However, media reports, quoting sources, said that Srinath's
contract had been only in the verbal stage.
Similarly, Pepsi has charged Coke with inducing the Board of Control for
Cricket in India to give the sponsorship of the recently concluded Pepsi
Triangular Cricket Series to Coke, as acknowledged in the BCCI submission
before the Bombay high court, even while a contract was signed with Pepsi.
Pepsi has listed the case of Coke trying to induce its music consultant DNA
Networks Private Ltd, which organized the Yanni show, to snap its ties with
Pepsi and join Coke.
Incidentally, in results announced for the first three months of the year, Pepsi
has swept Coca-Cola aside. Pepsi has reported a growth of 27 per cent
compared to Coke's 21 per cent during the same period. In the first three
months of last year, Pepsi grew by 18 per cent only.
Coca-Cola India chief executive Donald Short had announced that Coke
would grow by at least 20 per cent for the whole of 1998. Coca-Cola, along
with the Parle brands it acquired when it came into India -- Thums Up,
Limca, and Gold Spot -- continue to dominate India with a 55 per cent
market share to Pepsi's 43 per cent. But in the cola segment, Coke comes a
poor third after Thumps Up and Pepsi.
The current summer season is the most important for the cola giants, with
consumption at its peak.

49

BATTLE OF THE BEVERAGES:

50

PEPSI IS NOT AS PRICEY

Regardless of which soda you like better though, Pepsi seems the better
value than Coke right now. Coke is trading at a nearly 20 percent premium
to Pepsi based on 2002 P/Es even though the two companies' earnings
growth rates are nearly identical. (Pepsi's are actually a shade higher.)
And when you look at revenues, the gap is even more dramatic. Coke is
trading at 7 times estimated 2002 sales while Pepsi is trading at 3.5 times
2002 revenue estimates. Both companies are expected to post slight declines
in sales this year and an increase of about 4 percent in 2003. Due to this
disparity in valuation, Jeff Kanter, an analyst with Prudential Securities, says
he has a "buy' rating on Pepsi and "hold" on Coke. Prudential does not do
investment banking.
To be sure, Coke is still the market share leader in soft drinks. One of the
main reasons the stock has outperformed Pepsi this year was because it
reported a better than expected gain in unit volume in the first quarter. And
the company has taken steps to cement its carbonated beverage lead as well
gain ground in the bottled water market. (Coke and Pepsi both have their
own brands of water, Dasani and Aquafina, respectively.)
On Tuesday, Coke announced that it was acquiring the Seagram's line of
mixers, tonic, ginger ale and seltzer from Diageo and per nod Richard. And
last month, Coke entered into an agreement with Group Danone to distribute
Evian bottled water in North America.

51

Coke and Pepsi in India:

Coca-Cola controlled the Indian market until 1977, when the Janata Party
beat the Congress Party of then Prime Minister Indira Gandhi. To punish
Coca-Cola's principal bottler, a Congress Party stalwart and longtime
Gandhi supporter, the Janata government demanded that Coca-Cola transfer
its syrup formula to an Indian subsidiary. Coca-Cola balked and withdrew
from the country. India, now left without both Coca-Cola and Pepsi, became
a protected market. In the meantime, India's two largest soft-drink producers
have gotten rich and lazy while controlling 80% of the Indian market. These
domestic producers have little incentive to expand their plants or develop the
country's potentially enormous market. Some analysts reason that the Indian
market may be more lucrative than the Chinese market. India has 850
million potential customers, 150 million of whom comprise the middle class,
with disposable income to spend on cars, VCRs, and computers. The Indian
middle class is growing at 10% per year. To obtain the license for India,
Pepsi had to export $5 of locally made products for every $1 of materials it
imported, and it had to agree to help the Indian government to initiate a
second agricultural revolution. Pepsi has also had to take on Indian partners.
In the end, all parties involved seem to come out ahead: Pepsi gains access
to a potentially enormous market; Indian bottlers will get to serve a market
that is expanding rapidly because of competition; and the Indian consumer
benefits from the competition from abroad and will pay lower prices. Even
before the first bottle of Pepsi hit the shelves, local soft drink manufacturers
increased the size of their bottles by 25% without raising costs.

52

PRICE

Maximum retail price of 300 ml bottles is controlled by the Central

Government. The other size and packs are priced keeping factors like
competition, internal costs, external costs, and the corporate objective of the
company in the mind.
PRODUCT
300 ml bottles
500 ml bottles
1 Liter bottles
Soda 300 ml
Cans
1.5 Liter PET
bottles

SELLING PRICE
(Per crate)
240
364
500
164
332
50*

MAX.RETAIL PRICE
(Per crate)
264
388
520
188
352
55*

Price per bottles the empty bottles are priced at Rs 120 per crate and
the shell at Rs 100.

53

PREFERENCE OF SOFT DRINKS IN A DAY

Once a day
Twice a day
Once a week
Other

Figure-1

54

25%
20%
5%
50%

PREFERENCE TO THE BRAND

Pepsi
Coke

80%
60%

40%
60%

40%
60%

40%
20%
0%
Pepsi

Coke
Pepsi
Figure 2

55

Coke

MARKETING STRAGGLES OF COMPANY EFFECTS THE SALES

Yes
No

60%
50%
40%
30%
20%
10%
0%

55%
45%

55%
45%

Yes

No
Yes
Figure 4

56

No

FORM OF MARKETING STRATEGIES

Television Advertising
Newspaper Advertising
Outdoor Advertising
Sales Promotion

50%

45%
5%
20%
30%

45%

40%

30%

30%

20%

20%
5%

10%
0%
Television Adv.
Television Adv.

Newspaper Adv
Newspaper Adv

Figure 5

57

Outdoor Adv
Outdoor Adv

Sales Promotion
Sales Promotion

MORE EFFECTIVE ADVERTISING

Pepsi Co.
Coke Co.

50%
50%

%%%

80%
60%
40%
20%
0%

50
%

50
%
%
%
%
%
Pepsi Co.
Coke
% Co.
%
%
Pepsi Co. Coke Co.
%
%
Figure 7
%
%
%
%
%
%
%
%
58
%
%

%
%
%
%
%
PUBLIC RELATIONS ANGLE%
%
Innovative and exciting offers
%
The respondents were asked to compare between PepsiCo
% and Coca-Cola [I]
% offers, or rather
Ltd. in terms of who comes up with innovative and exciting
things which are lively and interesting to participate.
50% of the respondents replied in favor of PCI while 30% responded in
favor of CCI. 17% of the respondents thought that both were equally good
and it varied with time, place and occasions. 3% of the respondents were not
aware of all the activities and were modest to admit it.
Quick and responsive to different occasions and events.
Comparing PepsiCo and Coca-Cola [I] Ltd, 55% of the respondents replied
that it was undoubtedly PepsiCo. They supported their statement with
reasoning, saying so that PepsiCo was first to associate with Indias 50 years
of independence.
On the other hand 22% of the respondents felt that Coca-Cola [I] Ltd. is not
trailing back. It sponsors mega events like different Cricket tournaments,
Olympic Games, World Cup Football etc.19% of the respondents came up
with a more balanced answer. They said if one of the companies sponsors

One event its sure that the other will definitely go on for the next. Its a
tough tussle and is really difficult to demarcate today

59

MARKET SHARE PERCENTAGE IN NEW DELHI

COKE
PEPSI
Pure Drinks

56%
35%
9%

9%

35%

56%
Pepsi

Coke

Figure - 10

60

Pure Drinks

MARKET PERCENTAGE SHARE IN ALL OVER INDIA 2008

Pepsi
Coke
Local Brand

44%
51%
5%

5%

44%

Pepsi
Coke
Local Brand

51%

Figure - 11

BRAND PREFERENCES

61

In a survey done by A & M magazines on the best marketing companies in

India. Pepsi and Coca-Cola were also entered. The results were as follows:
Pepsi

5h

Coca-Cola

4h

Pepsi

7th

Coca-Cola

9h

The results of 95 were :

This shows that both the companies are paying more attention to the
marketing of their products. Pepsi is higher up on the scale than Coca-Cola.
We can see that by the brilliant advertising done by Pepsi, which can be seen
on every hook and corner of metro cities consumers, so prefer Pepsi
advertisements and other activities of Pepsi, to that of Coca-Cola.

62

FINDINGS & ANALYSIS

The Indian soft drinks market is at 140 million cases per year. This is very
low, even as compared to Pakistan and Bangladesh. All these factors
together have contributed to a 20% growth in the soft drinks industry.. If this
demand continues to grow at 20% grow at 20% annually, within 10 years the
volumes could reach 1 billion cases. This kind of growth is the reason for the
entry of the two giants of the soft drink industry of the world.
Coca-Cola
Pepsi
Coca-Cola and Pepsi together control 97% of the 4 entire Indian markets.
The rest of the 3% is shared by companies like Cadbury-Schweppes and
Campa-Cola. The total no. of case sold is 140 million of these 77 million
cases of Cola drinks are sold and 63 million of non-cola drink. There is a
rapid increase in the sale of cola soft drinks. Whereas in 1990, they
accounted for a third of all soft drinks sold, now their share is well over half.
Also cola sales are growing at a faster rate than non-colas. One of the
reasons for this could be the aggressive marketing strategies for Cola drinks
by Pepsi and Coca-Cola.
The race to quench the great Indian thirst had deigned.

63

Pepsi findings:
Pepsi is the 2ND largest selling soft drink in India today. In DELHI it has
35% of the market share. In India it has 44% of the market share making it
the largest selling soft drink, but the second largest company in terms of
sales.
The sales of Pepsi is approximately Rs. 1,000 crore annually in India of this
only about Rs. 30 crore annually is credited to the foods section of Pepsi.
The rest is all earned by the soft drinks.
The soft drinks in Pepsi Foods LTD include:
1. Pepsi Cola
2. Mirinda Orange
3. 7-Up
4. Mirinda Lemon

The main advantage the Pepsi has over its nearest competitor i.e., Coca-Cola
is that of its was the first multinational to enter India, in the soft drinks
sector. Pepsi officials and Dial-a-Pepsi scheme to grow the market, instead
of giving discounts at the retail level. Another point which attributed to
Pepsis success is the bottling operations. Pepsi does most of its bottling on
its own. Another significant investment of Pepsi has been fountains.
Fountains have considerably increased sales of Pepsi, as they have offered
consumers a whole new way to experience soft drink. According to a study
done, 80% of all soft drinks are consumed on premise, at the point of
purchase, rather than at home; thus the fountain initiative has paid off.

64

Thus we see that Pepsi has followed aggressive marketing strategies making
they get into the minds of the consumer by being visible inside and outside
the consumers home by way of television, radio Newspapers, hoarding,
sales-promotion schemes, etc. Pepsi has been voted the number one
customer service company across categories in terms of regularity,
availability responsiveness and initiative.

65

PRESENT COMPETITON BETWEEN COCA COLA AND PEPSI

If we see the present scenario its hard to tell which brand is winning
the cola wars as Pepsi had extended its cola wars to other sectors like
FRITO-LAYS and NIMBOOZ which is giving tough competition to
coca cola which doesnt target on these sectors.

Second aspect which is to be given in consideration is that, both the

companies are spending heavily on advertisement and more celebrities
are roped in by both the companies to fight the competition.

Recently COLA-COLA beverages ACTORS IMRAN KHAN AND

KALKI for a new ad ;to reply back to this a new ad by PEPSI
beverages featuring ACTOR RANBIR KAPOOR and VINDHU
DARA SINGH came up which is making waves at present.

Coke is served in MC DONALDS and there we wont find Pepsi

products even the coffee served is of GEORGIA which is a coca-cola
brand, same is the case of PIZZA HUT and KFC which is owned by
PEPSI CO there only Pepsi products are served ,,,this had lead 2 clear
war in restaurant segment as well

66

 PEPSI is targeting young generation and their ad campaigns are a

clear example of that, whereas coca-cola is targeting the family as a
whole which has been its old formula from ages.

Presently coca-cola may be leading in beverages like coke, but its

facing severe competition from Mirinda, Nimbooz and snack industry
where PEPSI is ruling thanks to its KURKURE ad that has led to
great sales for PEPSI CO.

Though in packed drinking water KINLEY (COCA-COLA BRAND)

and ACQAFINA (PEPSI CO BRAND) both are treated equally by
customers. Moreover BISLERI still rules in this segment.

67

QUESTIONNAIRE
Q.1. WHICH BRAND ARE YOU PREFERENCE TO THE BRAND?
Pepsi
Coke
Q.2. WHICH PARTICUALAR RATE TO GIVE THE
PREFERENCES?
More Popular
Packaging
Taste
Price
Q.3. ARE THE MARKETING STRATEGIES OF A COMPANY
AFFECT ITS SALES?
Yes
No
Q.4. WHICH FORM OF MARKETING STRATEGIES IS MOST
EFFECTIVE IN THE MARKET?
Television Advertising
Newspaper Advertising
Outdoor Advertising
Sales Promotion

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Q.4. WILL YOU CHANGE THE BRAND ON THE BASIS OF PRICE

REDUCTION?
Yes
No
Q.6. WHICH BRAND MORE EFFECTIVE IN ADVERTISING?
Pepsi Co.
Coke Co.
Q.7. WHICH BRAND HAS CREATIVE AND APPEALING
ADVERTISING OF THE SOFT DRINK COMPANY?
Pepsi Co.
Coke Co.

Consumers
For the purpose of the study, questionnaires were prepared for the
Consumers. Care was taken to interview all types of consumers, i.e., :
a. Different age groups
b. Males and females
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c. People from different localities, etc.

In all about 60 consumers were interviewed. The conclusions that one can
draw from these answers provided by the consumers showed that marketing
activities do form a major part of the decision.
One thing that was common amongst all the consumers who were once a
day or once a week. The number one factors the influences a customer while
buying a soft-drink was taste. This was true for all the consumers who were
interviewed. The rest of the conclusions as deducted from the questionnaires
are as follows:
The younger generation preferred soft drinks to the older generation.
a. Children up to 15 years of age liked to have soft drinks up to 2-3 times a
day.
b. Young adults liked to have soft drinks up to 1-2 times a day.
c. Adults liked to have soft drinks about once or twice a week.
Children preferred Coca-Cola Fanta, Mirinda orange. Young adults liked
Pepsi. The older generation preferred Coca-Cola, Limca & Mirinda Lemon.
The reason given for choice of favorites soft drink was taste and easy
availability. Only if the consumer liked the taste of drink, he would have it
again.95% of the consumers felt that marketing strategies of the company
did affect the sales of their soft-drink.
Marketing strategies made the consumer try a drink for the first time. The
second time round it was the consumers choice himself and not strategy
could affect that. Youngsters were more acceptable to change. They tried

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different drinks, Cola and non-Cola. Adults stick to one and they prefer
drinks that do not affect their health, like Limca.
Major number of people found television advertising to be the most
effective. Young and the old liked to watch the advertisements on television.
Sponsoring events, outdoor advertising and sales promotion schemes were
second choice of the consumers. Under television advertising, Pepsi came in
as the number 1 favorite of the people the advertisement of Shah-Rukh Khan
and the dog was the favorite of the consumers. Their new advertisement of
Mirinda Lemon is also lifted by the people. The advertisement that came in
second was the Coca-Cola advertisement of the people Cricket and the song
Must-Kalander going on at the back. These, advertisement remained most in
the minds of the people. Most of the consumers felt that Pepsi was the
market leader in the soft-drink industry, in Delhi well as in India.

RECOMMENDATIONS
Soft drinks are an impulse product. When a person is thirsty, he would first
think of water or tea. Some even would prefer Nimbooz \
The Indian population is the largest in the world today, there can be no other
country in the world, which provides so much of an opportunity for the softdrink manufacturers. The Indian soft drink market is at 140 million cases per
year, this is very low. Thus the consumption of soft drink can go up.

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Sinc118+e the entry of Coca-Cola into the country the industry is growing at
a rate of 20% annually. If this rate is maintained, then by the year 2005 the
market of soft drink would be 1 billion cases annually.
However Coca-Cola wants to accomplish this feat by them. To do this the
industry has to take certain steps. All the companies are fighting to get a
major share of this growing market. They should all try to increase the total
market along with their individual shares.
On the basis of all the field work and table work done, some suggestions can
be made, which may help the company in increasing the total market as
well as the sale of the companies. The various suggestions that can be made
are as follows:Soft drinks retail at prices between Rs. 6 and Rs. 10. These are expensive
when measured against purchasing power.
According to one study, it takes Indian 50 minutes of work to be able to buy
a bottle in other countries, the norm is five minutes. Thus to increase the
total market of soft drinks, manufactures should try and decrease the prices,
so as to increase sales.
Availability is a major factor, which makes the consumer buy a soft drink.
Soft drinks should be made available more readily than present. There are
only 300, 000 retailers stocking soft drinks in India. Thus retailing outlets
should be increased. Also related to this point, is vending machines. In
developed machines, vending machines are kept in all consumer areas, like
super markets, schools, amusement parks, local markets, etc. These

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Tempt a person into buying the soft drink. So if vending machines are put in
strategic areas, it would definitely increase consumption of soft drinks.
Soft drink cans which are very convenient, as the consumer can take them
anywhere, unlike a bottle, are very expensive retailing from Rs. 15-Rs. 18.
To increase sale of cans, this price should be brought down.
Innovations increase sales of company. For e.g. fountain Pepsi increased
sales of Pepsi Cans increased sales of Coca-Cola. Thus the companies hav
constantly come out with innovative ideas.Example-300 ml plastic bottles,
which the consumer can take with him, unlike the glass bottles, which he has
to return. Plastic bottles can even be used again by households for various
purposes.
The companies should conduct studies to get to know about consumer
habits. For e.g. Coke knows that Americans see 69 of its commercials every
years , put 5.2 ice cubes in a glass and prefer cans to pop out of vending
machines at a temperature of 35 degrees.
If the companies know all this and more about Indian consumer behavior, it
could tell them how to sell their drinks, so as to increase sales.
It is seen In India, that people prefer having their drinks with or after food.
Companies could have commercials which show people enjoying their drink
with a good meal, so that consumers associate drinking soft drinks while
having food.
Companies should try to educate the consumer about the health related
subject. For e.g.:a) Limca is recommended to patients by doctors.
b) Cola drinks are known to be very fattening ,
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But in fact cola drinks contain no calories from fat they contain calories
from sugar which can be easily burned off. The soft drink cans and plastic
bottles should mention the calories and other related information on the
packing.
Companies should try to build high brand equity. This provides a number of
advantages to the company.
a) The company enjoys reduced marketing costs because of high level of
consumer brand awareness and loyalty.
b) The company will have more trade leverage in bargaining with
distributors and retailers since the customer expects them to carry the
brand.
c) The company can change a higher price than its competitors because the
brand has higher perceived quality.
d) The company can more easily launch brand extension.
e) Above all, the brand offers the company some defense against fierce
price competition.
The companies should go in for diversification
Once the brand is known, it is easier to sell more of its products. For e.g.
Coca-Cola clothes have sold about $100 million worth of clothes and
accessories. This would increase revenues of the company.
The companies should not have competitor myopia. It is more often the
latent company than the current competitor who busies the company. Pepsi
and Coca-Cola are so busy fighting with each other, that they have left the
non-cola sector open for Cadbury-Schweppes.

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BIBLIOGRAPHY

Marketing Management- By Philip Kotler

WWW.PEPSICO.COM

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 WWW.COCA-COLA.COM

WWW.COLA-WARS.NET

ADVERTISING MANAGEMENT BY JETHWANEY AND

JAIN

COLA WARS BY J.C.LOUIS

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