Project Report On---Comparison of marketing mix for

Coca Cola & Pepsi

CH INSTITUTE OF MANAGEMENT
AND COMMUNICATION

Post Graduate Diploma in Management

Batch II Term II
Subject: Marketing Management

Comparison of Marketing Mix for Coca Cola and PepsiCo

Guided By :
By :

Submitted

DECLARATION
I hereby declare that the work entitled Comparison of marketing mix for coca cola & Pepsi
co. in CHIMC submitted to-------- is a record of an original work done by us under the
guidance of ................. Prof of marketing management PGDM batch .... Term .... in
.......college and this project work is submitted in the partial fulfillment of the requirement for
award of post graduate diploma in management and communication. The results embodied in
this project have not been submitted to any other institute for the award of any diploma.
Date - 21/04/2011

...........................

Acknowledgement
I owe a great many thanks to a great many people who helped and supported me during the
writing of this book.
My deepest thanks to Lecturer .................... The Guide of the project, for guiding and correcting
various documents of us with attention and care. He has taken pain to go through the project and
make necessary correction as and when needed.
I would also thank my Institution and my faculty members without whom this project would
have been a distant reality.

Introduction
Introduction of Pepsi Co
Pepsi was founded in New York in 1965. It is Producing Non-alcoholic beverage and Food
processing items. Pepsi is a carbonated beverage that is produced and manufactured by PepsiCo.
It is sold in retail stores, restaurants cinemas and from vending machines. The drink was first
made in the 1890s by pharmacist Caleb Bradham in New Bern, North Carolina. The brand was
trademarked on June 16, 1903. Pepsi arrived on the market in India in 1988.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 "Indias sometimes acrimonious relationship with huge multinational companies."
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."

Introduction of coco-cola
Coca-Cola is a carbonated soft drink sold in stores, restaurants and vending machines
worldwide. The Coca-Cola Company in Atlanta, Georgia produces it. It was incorporated in
1886. The Coca-Cola Company claims that it is sold in over 200 countries.
The US soft-drink giant, Coca-Cola, reentered India in the 1990s after abandoning its businesses
in the late 1970s in the wake of Foreign Exchange Regulation Act of 1973. The Act, meant to
'Indianite' foreign companies, made it mandatory for foreign companies to dilute their
shareholdings to 40 per cent. Instead of diluting its shareholdings to the required limit prescribed
by the Act, Coca-Cola opted to discontinue its operations in India.
Coca-Cola is a leading player in the Indian beverage market with an approximate 60 per cent
share in the carbonated soft drinks segment.
The US soft-drink giant, Coca-Cola, reentered India in the 1990s after abandoning its businesses
in the late 1970s in the wake of Foreign Exchange Regulation Act of 1973. The Act, meant to
'Indianize' foreign companies, made it mandatory for foreign companies to dilute their
shareholdings to 40 per cent. Instead of diluting its shareholdings to the required limit prescribed
by the Act, Coca-Cola opted to discontinue its operations in India.

Mission & Vision

Mission of Coke

To refresh the world in mind, body & sprit.

To create a value in brands & difference everywhere we engage.
To do everything differs.
Our product in each hand.
Being a global leader in beverage.

Mission of Pepsi
PepsiCo mission is to be the world's premier consumer Products Company focused on
convenient foods and beverages. We seek to produce financial rewards to investors as we provide

opportunities for growth and enrichment to our employees, our business partners and the
communities in which we operate. And in everything we do, we strive for honesty, fairness and
integrity.

Vision of coke

Profit: Maximize the return of shareholder.

People: Establish a great place to work where people are inspired to the Best they can do.
Portfolio : Bringing to the world a portfolio of beverage brands that
Anticipate and safely peoples desire & need.
Partners: nurturing a winning network of partners & building a mutual Loyalty.

Vision of Pepsi co.

Pepsi co vision is put into action through programs and a focus on environmental
stewardship, activities to benefit society, and a commitment to build shareholder value by
making PepsiCo a truly sustainable company.

Marketing Mix

Marketing Mix
Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives.
Marketing mix has a classification for these marketing tools. these marketing are classified and
called as the four ps i.e. product, price, place and promotion.
The most basic marketing tool is product which includes product design, quality, features,
branding, and packaging. a critical marketing tool is price i.e. the amount of money that
customers pay for the product. it also includes discounts, allowances, credit terms and payment
period.
Place is another key marketing mix tool. and it includes various activities the company
undertakes to make the product accessible and available to the customer. Some factors that
decide the place are transport facilities, channels of distribution, coverage area, etc.
Promotion is the fourth marketing mix tool which includes all the activities that the company
undertakes to communicate and promote its product to target market. Promotion includes sales
promotion, advertising, sales force, public relations, direct marketing, etc.

Product

Product
In marketing, a product is anything that can be offered to a market that might satisfy a want or
need. It is of two types: Tangible (physical) and Intangible (non-physical). Since services have
been at the forefront of all modern marketing strategies, some intangibility has become essential
part of marketing offers. It is therefore the complete bundle of benefits or satisfactions that
buyers perceive they will obtain if they purchase the product. It is the sum of all physical,
psychological, symbolic, and service attributes, not just the physical merchandise. All products
offered in a market can be placed between Tangible (Pure Product) and Intangible (Pure Service)
spectrum.
A product is similar to goods. In accounting, goods are physical objects that are available in the
marketplace. This differentiates them from a service, which is a non-material product. The term
goods is used primarily by those that wish to abstract from the details of a given product. As such
it is useful in accounting and economic models. The term product is used primarily by those that
wish to examine the details and richness of a specific market offering. As such it is useful to
marketers, managers, and quality control specialists.
A service is a non-material or intangible product - such as professional consultancy, serving, or
an entertainment experience.

Coca-Cola Product
The Coca-Cola formula is The Coca-Cola Company's secret recipe for Coca-Cola. As a publicity
marketing strategy started by Robert W. Woodruff, the company presents the formula as one of
the most closely held trade secrets ever and only a few employees know or have access to. This

Coca-Cola formula appears to be the original formula to Coca-Cola. It is from the book For
God, Country and Coca-Cola.
The company Coca-cola is a multinational and it is not limited to one product. Through the years
they have invented and introduced many products than their main cola drinks. The list of Cocacola brands are as follows:
Appletiser
Lemon
Aquarius
&
BPM Energy
Paeroa
Barq's
Lift
Beat soda
Lift plus
Beverly
Lilt
Cannings
Manzan
Cheers
a Lift
Ciel
Mare
Coca-Cola Black
Rosso
Cherry Vanilla
Mello
Coca-Cola Blak
Yello
Coca-Cola C2
Mezzo
Coca-Cola Cherry
Mix
Coca-Cola Citra
Minute
Coca-Cola M5
Maid
Coca-Cola Zero
Nestea
Coca-Cola
New
Coca-Cola with
Coke
Lemon
Nordic
Coca-Cola with Lime
Mist
Dasani
OK
Delaware Punch
Soda
Diet Coke
Pibb
Fanta
Xtra
Fanta Citrus
Powerad
Fioravanti
e
Fresca
Qoo
Frisco
Raspber
Fruitopia
ry Coke
Frutonic
Relentle
Full Throttle
ss
Georgia
Sarsi
Hi-C
Senzao
Hit
Simply
Kia-Ora
Orange
Kinley
Smart
Sparkle
Sprite
Sprite

Ice
Sprite
Remix
Sprite
Zero
Surge
Swerve
Tab
Tab
Clear
Tab
Energy
Tab XTra
Tiky
Vault

Pepsi-Product
The Pepsi-Cola drink contains basic ingredients found in most other similar drinks
including carbonated water, high fructose corn syrup, sugar, colorings, phosphoric
acid, caffeine, citric acid and natural flavors. The caffeine free Pepsi-Cola contains
the same ingredients but no caffeine.
Some of the different and varied brands of Pepsi are as follows:

All Sport
Aquafina
Caffeine-Free Pepsi
Crystal Pepsi
Diet Pepsi

Pepsi
Pepsi Blue
Pepsi Cappuccino
Pepsi Max
Pepsi ONE

Gatorade
Izze
Jazz
Josta
Kas
Manzanita Sol
Mirinda
Mountain Dew
Mountain Dew AMP
Mountain Dew LiveWire
Mountain Dew MDX
Mug Root Beer

Pepsi Samba
Pepsi Tarik
Pepsi Twist
Propel Fitness Water
Sierra Mist
Slice
SoBe
Storm
Teem
Tropicana Products
Tropicana Twister

Comparison Coke and PepsiProduct

Coke & Pepsi-Product

As seen above both the companies Coke and Pepsi have a number of products. Many of these
products are innovations but there are also many products which are brought out just as a
competitive product for the other companies. Some of these products that are brought in the
market by both the companies to compete against each other are as follows:
Coke

Pepsi

The main dark cola drink of the company

which started the rivalry between these
companies.

Pepsi version of dark cola which is the

major primary competitor to Coke.

Full Throttle is an energy drink brand

produced by The Coca-Cola Company. It
debuted in late 2004 in North America.

AMP is an energy drink produced and

distributed by PepsiCo under the Mountain
Dew soft drink brand.

Vault is a carbonated beverage that was

released by The Coca-Cola Company in
June 2005.

Mountain Dew MDX is an energy drink

manufactured and distributed by PepsiCo
under the Mountain Dew brand. It was
introduced in 2005.
Gatorade is a non-carbonated

Powerade is a sports drink by The Coca-

sports drink marketed by Quaker Oats

Cola Company and currently number two

in the sports drink market worldwide.

Company, a division of PepsiCo. Originally

made for athletes, it is now
often consumed as a snack beverage.

Sprite is a clear, lemon-lime flavored, noncaffeinated soft drink, produced by the

Coca-Cola Company. It was introduced to
the United States in 1961.

7 Up is a brand of a lemon-lime flavored

soft drink.

Minute Maid is a product line of beverages,

usually associated with orange juice, but
now extends to soft drinks of many kinds.
The Minute Maid company is now owned
by Coca-Cola, and is the world's largest
marketer of fruit juices and drinks. It is
headquartered in Houston, Texas.

Tropicana Products is an American

company based in Bradenton, Florida,
USA, which is one of the world's largest
producers and marketers of orange juice. It
has been owned by PepsiCo, Inc. since
1998.

Nestea is a brand of iced tea manufactured

and distributed by the Nestle company's
beverage department in the United States,
and by Coca-Cola in several European
countries, Brazil and Venezuela.

Lipton Original Iced Tea is a ready-to-drink

iced tea brand sold by Lipton through a
worldwide partnership with Pepsi.

Barq's is a brand of root beer notable for

being the only major N o r t h
A m e r i c a n root beer to contain caffeine. It
has been bottled since the start of the 20th

Mug Root Beer is a brand name of root

beer made by the Pepsi company.

century and is currently sold by the CocaCola Company.

Diet Coke or Diet Coca-Cola is a sugarfree soft drink produced and distributed by
The Coca-Cola Company. It was
introduced in the United States in July
1982.

Diet Pepsi is a low-calorie carbonated cola.

It was introduced in 1964 as a variant of
Pepsi-Cola with no sugar.

Kinley is a brand of still or carbonated

water owned by The Coca-Cola Company.

Aquafina is a non-carbonated bottled water

produced by PepsiCo.

Aquarius is a mineral sports drink

manufactured by The Coca-Cola Company.
It was first introduced in 1983.

All Sport was a sports drink. It is produced

by PepsiCo.

Fanta is a soft drink brand owned by The

Coca-Cola Company. It is produced and
distributed by The Coca-Cola Company's
bottlers.

Mirinda is a brand of soft drink. Mirinda is

owned by PepsiCo.

Sprite Ice was the first flavor extension for

The Coca-Cola Company's Sprite brand
soft drink.

Pepsi Blue is a soft drink made by PepsiCo

and launched in mid-2002.

Coca-Cola Blak is a coffee-flavoured soft

drink introduced by Coca-Cola in 2006.

Pepsi Cappuccino is a cappuccino-flavored

carbonated soft drink produced by Pepsico.

Maaza is a Coca-Cola fruit drink brand

marketed in India and Bangladesh.

Slice is a line of fruit-flavored soft drinks

manufactured by PepsiCo and introduced
in 1984.

Limca is a lemon and lime flavoured

carbonated soft drink made in India by
Coca-cola.

Teem was a lemon-lime-flavored soft drink

produced by The Pepsi-Cola Company.

Price

Price
In economics and business, the price is the assigned numerical monetary value of a
good, service or asset.
Price is also central to marketing where it is one of the four variables in the
marketing mix that business people use to develop a marketing plan.
Pricing is a big part of the marketing mix. Choosing the right price and the right
pricing strategy is crucial to the marketing process.
The price of the product is not something that is fixed. On the other hand the price
of the product depends on many other factors. Some times the price of the product

has got nothing to do with the actual product itself. The price may act as a way to
attract target customers.
The price of the product is decided keeping many things in mind. These things
include factors like cost incurred on the product, target market, competitors,
consumer buying capacity etc.

Coke Price
Coke was a company ruling the markets before Pepsi entered. Earlier the price of coke was cost
based i.e. it was decided on the cost which was spent on making the product plus the profit and
other expenses.
But after the emergence of other companies especially the likes of Pepsi, Coca-cola started with
a pricing strategy based on the basis of competition. Nowadays more expenses are spent on
advertising my soft-drink companies rather than on manufacturing.
Coke has brought in a revolution especially in Indian markets with the Rs. 5 pricing strategy
which was very famous. It was the first company to introduce the small bottle of Coke for just
Re.5. This campaign was very successful especially with the price conscious Indian consumers.
Even today most prices of Coke are decided on the basis of the competition in the market.

Pepsi Price
Pepsi again decides it price on the basis of competition. The best think about the company Pepsi
is that it is very flexible and it can come down with the price very quickly. The company is
renowned to bring the price down even up to half if needed.
But this risk taking attitude has also earned Pepsi losses. Though lowering the price would attract
the customers but it would not help them cover up the cost incurred in production hence causing
them losses.
This was the situation earlier but now Pepsi is a full-fledged and growing company. It has
covered all its losses and is now growing at a rapid rate.

Place

Pepsi and coke place

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 known 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.
Place is refers to distribution which is given in after promotion.

Promotion

Promotion
Promotion is one of the four aspects of marketing. Promotion comprises four subcategories:
- Advertising,
-Personal selling,
-Sales promotion,
- Publicity and public relations
The specification of these four variables creates a promotional mix or promotional plan. A
promotional mix specifies how much attention to pay to each of the four subcategories, and how
much money to budget for each. A promotional plan can have a wide range of objectives,
including: sales increases, new product acceptance, creation of brand equity, positioning,
competitive retaliations, or creation of a corporate image.
Promotion is the fourth marketing mix tool which includes all the activities that the company
undertakes to communicate and promote its product to target market. Promotion includes sales
promotion, advertising, sales force, public relations, direct marketing, etc.

Promotion of Pepsi & Coke

Both the companies Pepsi and coke are famous for their promotions. The rivalry was first started
when Pepsi started with its blind taste tests known as the Pepsi Challenge. The challenge is
designed to be a direct response to critics who allege that Coca-Cola and Pepsi-Cola are identical
drinks, with no meaningful differences. The challenge takes the form of a taste test. At malls,
shopping centers and other public locations, a Pepsi representative sets up a table with two blank
cups, one containing Pepsi and one with Coke. Shoppers are encouraged to taste both colas, and
then select which drink they prefer. Then the representative reveals the two bottles so the taster
can see whether they preferred Coke or Pepsi. If Pepsi is revealed, the shopper is given a small
prize. The implication is that Pepsi tastes better than Coke, and thus consumers should
purchase Pepsi.
In blind taste tests, more consumers prefer the taste of Pepsi to that of Coca-Cola. Because Coke
was the historical leader, more people expected that they'd prefer and select Coke. Their surprise
at picking Pepsi in the blind taste test (products were served in unmarked cups) helped change
their minds about which product they prefer. Capturing this on film, Pepsi turned this into a
memorable TV campaign that lasted many years.

Also ad-campaigns are put up on the television by both the players. The following statistic just
tells of much of share of ads on TV are captured by these players.
In India both Coca-cola and PepsiCo have shown the door to older celebrity endorsers and are
betting big on emerging stars.
They both promote their products trough advertisement.

Pepsi-Advertisement
Firstly the Pepsi in America advertise 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
In India PepsiCo was Selecting to celebrity for advertisement these celebrity areShahrukh Khan,
Sachin Tendulkar,
Rahul Dravid,
Sourav Ganguly,
Mahender singh dhoni,
Ranbir kapoor,
Deepika padukone,
Ishant sharma,
Rohitsharma,
Shreeshant
Virender sehwag to strengthen its youngistaan brigade. PepsiCo signed Asin (of Ghajini
fame) to take war to orange flavor category.
PepsiCo had tried to 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
Coke Advertisement
There are different advertisement, which depicts thatscoca cola, is the need for party or coca
cola brings more joy and taste to the party. Cocacola has roped in GautamGambir as brand
ambassador for the company new coca cola open happiness campaign ahead of IPL seasons.
Coke also advertises in different electronic media and print media for advertisement they use
Internet, TV show Magazine, News paper and many more.
Cokes advertisement was very famous in which famous actor Amir khan Show that Thanda
matlab coco cola.

Distribution

Distribution Strategy
Coca cola and PepsiCo are worldwide 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) systems where
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.

Rural Distribution ChannelSince 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.

Distribution Channels in Urban Area

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

(DIRECT STORE DISTRIBUTION)

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.

Chilled DSD SystemThe 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.

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 known as
hybrid system. This system is actually benefited by the synergy created by collaboration of two
companies.

INTERNATIONAL DISTRIBUTION SYSTEM MANAGEMENT

In order to manage its distribution systems effectively, PepsiCo and Coca cola had put in placeadvanced 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.

SWOT ANALYSIS

SWOT ANALYSIS OF PEPSI AND COKE

StrengthPepsi 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.

WeaknessWeaknesses 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 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.

OpportunityBrand 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 beverages come under packaging. So looking at these data we can that for
these two giant a lot of potential is there in developing market which is now also untapped.

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. Even through
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 these Substitute will remain threat to them. Consumer buying power
is also represents a key threat to the Pepsi and Coke.

Conclusion

Conclusion
After the completion of project we have seen the different aspects of this Project. Also we have
gained some new knowledge about both of company.
The outcome that came out from the information work is that in Trinity coke is the market leader
with 54% market share. Pepsi is having only 46% market share. We come to know that Pepsi is
the leading brand of Pepsi co. with 29% market share of its total market share and Thumbs up is
the leading brand of coke with 28% market share of itself.
Through this project we also come to know that young generation is the potential market for
beverage industry, taste is the 1st preference to choosing the product and one more important
factor that below 12 years and above to 50years people like the soft drinks while people between
12- 30 year prefer cola drinks and rest people who comes in between 30 -50 year have common.