Professional Documents
Culture Documents
INTRODUCTION
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overview of the market, which will be evaluated to provide a conclusion of the
two different brands of cola in terms of their marketing strategies.
COCA-COLA VS PEPSI
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In 1985, The Coca-Cola Company, amid much publicity, changed its formula.
Some authorities believe that New Coke, as the reformulated drink came to be
known, was invented specifically in response to the Pepsi Challenge. However,
a consumer backlash led to Coca-Cola quickly introducing a modified version
of the original formula (removing the expensive Haitian lime oil and changing
the sweetener to corn syrup) as Coke "Classic".
Overall, Coca-Cola continues to outsell Pepsi in almost all areas of the world.
Saudi Arabia, Pakistan (Pepsi has been a dominant sponsor of the Pakistan
cricket team since the 1990s), the Canadian provinces of Quebec and Prince
Edward Island and the U.S. states of Michigan and South Carolina are the
exceptions.
By most accounts, Coca-Cola was India's leading soft drink until 1977 when it
left India after a new government ordered The Coca-Cola Company to turn over
its secret formula for Coke and dilute its stake in its Indian unit as required by
the Foreign Exchange Regulation Act (FERA). In 1988, PepsiCo gained entry to
India 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. In
1993, The Coca-Cola Company returned in pursuance of India's Liberalization
policy. In 2005, The Coca-Cola Company and PepsiCo together held 95%
market share of soft-drink sales in India. Coca-Cola India's market share was
60.8%.
Pepsi had long been the drink of Canadian Francophones and it continues to
hold its dominance by relying on local Québécois celebrities (especially Claude
Meunier, of La Petite Vie fame) to sell its product. "Pepsi" eventually became
an offensive nickname for Francophones viewed as a lower class by
Anglophones in the middle of the 20th century. The term is now used as an
historical reference to French-English linguistic animosity (During the
partitionist debate surrounding the 1995 referendum, a pundit wrote, "And a
wall will be erected along St-Laurent street [the traditional divide between
French and English in Montréal] because some people were throwing Coke
bottles one way and Pepsi bottles the other way").
Comedian Dave Chappelle starred in ads for both Coca-Cola and Pepsi, an act
which drew controversy. When referring to it in his show, Chappelle said, "I
can't even taste the difference: all I know is Pepsi's paying more right now, so it
tastes better."
Coca Cola has become a cultural icon and its global spread has spawned words
like "coca colonization", Pepsi Cola and its relation to Russia has also turned it
into an icon. In the early 1990s, the term, "Pepsi-stroika", began appearing as a
pun on "perestroika", the reform policy of the Soviet Union under Mikhail
Gorbachev. Critics viewed the policy as a lot of fizz without substance and as
an attempt to usher in Western products in deals there with the old elites. Pepsi,
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as one of the first American products in the Soviet Union, became a symbol of
the relationship.
REVIEW OF LITERATURE
The Indian market for soft drinks is increasing. “India is becoming a warmer
and drier country. “Chilled drinks are becoming increasingly important.”
(Britvic Soft-Drinks Category Report 2006) However “Carbonated soft
drinks…have felt the negative impact of heightened consumer interest in
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healthy eating.” “Consumer demand for healthier drinks led to a decline in
sales of carbonated drinks” (GMID)
The carbonates market peaked at 2003 with a rise of 10.5% from 2002 but has
been in decline since then. This market contains both the brands of Cola
analysed within this report.
Others 89.8
0 20 40 60 80 100
Coca Cola Pepsi Virgin Cola Others
Series1 7.2 2.7 0.3 89.8
Percent 5
Coca-cola is leading in terms of market share over both Pepsi-cola and Virgin-
cola. Virgin-cola has failed to gain a substantial share of the market at only
0.3% which is extremely low in comparison to Coca-cola at 7.2%.
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suggested by the slogan “The-coke-side-of-life” at the end.
To analyse the advert primary research was undertaken in the form of a small
focus-group consisting of ten people.
All focus-group members believed; the television advert featuring the journey
of a coca-cola in a vending machine was advert was exceptionally or very
creative. 80 % also believed that the advert was exceptionally or very
entertaining with a 17 year old male commenting;
100% of people questioned within this focus-group believed that the advert
lacked information about the product. 40% said that the advertisement was not
very persuasive. A male aged 32 commented;
This view was shared by people aged 25+ whereas the age group 16-24
suggested that it was fresh and incorporated what they saw as Coca-cola. An 18
year old female said;
“Its all the same, they use an attractive woman to tempt males,
there is nothing unique about it.”
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This view was generally shared by the women in the group. Asked how
persuasive the advert was a range of responses were received. One response
from a 30 year old female;
“As modern-consumers we are more aware of products and advertising does not
affect us as much when it comes to Cola drinks. We choose the drink we like
the taste of.”
The “Coke show” sales-promotion is currently running and part of the “Coke-
side-of-life” website has been created for this promotion. This promotion
encourages consumers to send in videos of what they see as the essence of
Coca-cola to be judged by professional movie producers. Coca-cola has made
use of the internet for short promotions such as the World Cup in 2006 and this
new campaign the “Coca-cola Show.”
Pepsi-cola have also made use of the internet to aid in sales promotion. The
“Max your life” interactive website targets consumers to increase sales by
providing incentives to buy a Pepsi. Pepsi-cola in addition teamed up with
Microsoft in creating a competition to win a new generation games console.
The use of opinion-leaders by Pepsi-cola has also been used as sales-promotion,
using model Deepika Padukone as a current figure-head for the Indian market
Pepsi-cola has been able to attract a male customer base. Pepsi-cola have long
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been affiliated with the use of opinion-leaders such as David Beckham.
Both the brands of Cola have used packaging to increase short term sales; one
example of this was the use of packaging during the recent 2006 world cup.
Both Coca-cola and Pepsi-cola focused on football however both used different
methods, Coca-cola using innovative bottle design techniques and the Pepsi-
cola using an opinion-leader in footballer David Beckham.
The use of packaging has been a long running theme in the marketing-
communications-mix of each brand. Through packaging each brand has been
able to communicate with the consumer directly and allow them to send a
message to the consumer which may lead to direct feedback from the consumer.
Coca-cola takes public relations very seriously in that the public relations
impact is considered in every aspect of business decision. Although Coca-Cola
utilises many methods of PR, one of the dominant methods Coca-Cola has used
is to use sponsorship in order to:
In order for Coca-cola to portray a responsible yet innovative brand image it has
been necessary to connect with the target-market. Through sponsoring events
which the target-market attends and adores Coca-cola has created an association
with the target-markets.
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made use of. The ever-expanding communications tool; the Internet. Both the
brands have specifically designed websites in order to provide the consumer
with information and entice them to the brand.
Apart from sponsorship , the brands use the media to keep in touch with their
stakeholders. Through a mixture of press conferences, releases and other media
articles each brand attempts to befriend their stakeholders. Evidence suggests
that the brands within this report saturates the market with their brand image
and message, it remains the consumer’s prerogative however to which they
interpret as the brand for them.
Through research completed for this report it is clear that not all parts of the
marketing-communications are utilised by the brands in this report. Both the
brands have analysed the most effective way of communicating with their
target-market and shareholders and because of this their marketing campaigns
have been streamlined. Therefore what is clear from the research is that direct-
marketing and personal-selling are two methods not utilised within this industry.
However it is very important to consider that the brands may use the methods of
personal-selling and direct-marketing when it comes to b2b (business to
business) transactions. Predictably marketing techniques used to promote a
brand to consumers differ vastly from b2b promotion.
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