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PROJECT REPORT ON “ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO”
UNDER GUIDANCE OF: MR. ASHISH SAIHJPAL (FACULTY, MARKETING)
SUBMITTED BY: AKHILESH MITTAL ARVIND JAIN BIPIN SINGH KARAMJEET SINGH PAWAN KUMAR (MBA II SEMESTER, 2008-2010)
UNIVERSITY BUSINESS SCHOOL, LUDHIANA
ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO
CHAPTER 1 INTRODUCTION TO BEVERAGE INDUSTRY
Any type of liquid specifically prepared for human consumption. Beverages in addition to basic need form part of the culture of human society. Different types of beverages are as follow 1.1.1 WATER Despite the fact that most beverages, including juice, soft drinks, and carbonated drinks, have some form of water in them; water itself is often not classified as a beverage, and the word beverage has been recurrently defined as not referring to water but the bottled water that is processed through proper filtration and purification comes under the beverage category. 1.1.2 ALCOHOLIC BEVERAGES An alcoholic beverage is a drink containing ethanol, commonly known as alcohol, although in chemistry the definition of an alcohol includes many other compounds. Ethanol (alcohol) is a psychoactive drug that has a depressant effect. Alcoholic beverages are divided into three general classes: Beers: The two main types of beer are ale and lager; each type has a distinct production processes. Mass-produced beer is typically aged for only a week or two after its fermentation and has an alcohol content of 4%–6% ABV. Other kinds of beer may be fermented and aged for several months. Wines: Wine involves a longer (complete) fermentation process and a long aging process (months or years) that results in an alcohol content of 9%–16% ABV. Sparkling wine can be made by adding a small amount of sugar before bottling, which causes a secondary fermentation to occur in the bottle.
UNIVERSITY BUSINESS SCHOOL, LUDHIANA
ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO
Spirits: Unsweetened, distilled, alcoholic beverages that have an alcohol content of at least 20% ABV are called spirits. Spirits are produced by distillation of a fermented product; this process concentrates the alcohol and eliminates some of the congeners. 1.1.2 NON-ALCOHOL BEVERAGES A non-alcoholic beverage is a beverage that contains no alcohol. Non-alcoholic mixed drinks (including punches, "virgin cocktails", or "mock tails") are often consumed by children; people whom wishing to enjoy flavorful drinks without alcohol. Non-alcoholic beverages contain no more than .5 percent alcohol by volume. It also includes drinksthat have undergone an alcohol removal process such as non-alcoholic beers and de-alcoholized wines. Non-alcoholic variants: Low Alcohol Beer Non-Alcoholic Wines Sparkling Ciders 1.1.3 SOFT DRINKS A soft drink is a beverage that does not contain alcohol. The name "soft drink" specifies a lack of alcohol by way of contrast to the term "hard drink". The term "drink", while nominally neutral, sometimes carries connotations of alcoholic content.Beverages like colas, flavored water, sparkling water, iced tea, lemonade, squash, and fruit punch are among the most common types of soft drinks. Many carbonated soft drinks are optionally available in versions sweetened with sugars or with non-caloric sweeteners. 1.1.4 HOT BEVERAGES Coffee-based beverages: Cappuccino, Coffee Espresso, Café au lait, Frappe, Flavored coffees (mocha etc) Hot chocolate: It is a heated beverage that typically consists of shaved chocolate or cocoa powder, heated milk or water, and sugar.
UNIVERSITY BUSINESS SCHOOL, LUDHIANA
ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO
Hot cider: It is an alcoholic beverage usually made from the fermented juice of apples, although pears are also used. In the United Kingdom, pear cider, which has no apple content, is known as Perry. Tea-based beverages: Tea, Green Tea, Flavored Tea, Pearl Milk Tea Herbal teas: An herbal tea, tisane, or ptisan is an herbal infusion made from anything other than the leaves of the tea bush (Camellia sinensis). Originated from both China and Middle East 1.1.5 OTHERS Some substances may either be called food or drink, and accordingly be eaten with a spoon or drunk, depending on solid ingredients in it and on how thick it is, and on preference: Soups: Soup is a food that is made by combining ingredients such as meat and vegetables in stock or hot/boiling water, until the flavor is extracted, forming a broth. Yogurt: yoghurt is a dairy product produced by bacterial fermentation of milk. Fermentation of the milk sugar produces lactic acid, which acts on milk protein to give yoghurt its texture and its characteristic tang. Soy yoghurt, a dairy yoghurt alternative, is made from soymilk. Buttermilk: It is a fermented dairy product produced from cows' milk with a characteristically sour taste. The product is made in one of two ways. Originally, buttermilk was the liquid left over from churning butter from cream. In India, buttermilk, widely known as "chaas" is known to be the liquid leftover after extracting butter from churned curd.
UNIVERSITY BUSINESS SCHOOL, LUDHIANA
LUDHIANA 5 .S. an Atlanta pharmacist. John Pemberton. Diet Pepsi etc. Jacob's Pharmacy. The dominant players in soft drink market are Coca Cola and Pepsi. The best-known trademark in the world is sold in about one hundred and forty countries to 5. Coca-Cola products outsell closest competitor by more than two to one. Coca-Cola debuted in Atlanta's largest pharmacy.8 billion people in eighty different languages. These companies’ products occupy large portions of any supermarket’s shelf space. Thumbs up. 2. One in every two cola and one in every three soft drinks is a Coca-Cola product. which own virtually all of the North American market’s most widely distributed and best-known brands. and the seeds of a Brazilian shrub to make the fabulous beverage. Soft drink holds 51% (majority of market share) of the total beverage market. Cloudy lime. For more than 65 years. meat etc. He mixed a combination of lime. He concocted the formula in a three-legged brass kettle in his backyard on May 8. invented Coca-Cola. Coca-Cola has been a UNIVERSITY BUSINESS SCHOOL. often covering more territory than real food categories like dairy products. Clear lime and Mango). the carbonated water was added to the syrup to make the beverage that we know today as Coca-Cola. 1886. coca leaves. more than half Coca-Cola sold was outside of the U.) and non-carbonated drinks (Orange. started out as an insignificant one-man business and over the last one hundred and ten years has grown into one of the largest companies in the world. Later on. Pepsi. This is why Coca-Cola is the largest soft drink company in the world. Diet coke. They are dominant in world markets as well.In the mid-1970.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO CHAPTER 2 INDUSTRIAL LEADERS (COCA COLA & PEPSI) At the core of the beverage industry is the carbonated soft-drink category. Dr. cinnamon.1 HISTORY OF COCA COLA Coca-Cola. Soft drink can be further divided into carbonated drinks (Coca-cola. as a five-cent noncarbonated beverage.
They asked the company to divest 60 % of its business and divulge its secret Coca-Cola formula. Coca-Cola has been Coke’s consistent theme throughout the 115-year history. Coke has consistently delivered the simple promise of “CocaCola”. but also indeed carried Coke. 2. UNIVERSITY BUSINESS SCHOOL. Working with strong ideals. Coke’s predecessors sustained growth momentum because of three consistent factors: The Company remained focus on the basic promise of Coca-Cola. This has enabled Coke to sustain a long track record of growth. foresight and the courage to innovate and adapt the mechanics of business to be enabled to thrive within the business conditions of each particular day. 2. Currently Coca-Cola is advertised on over five hundred TV channels around the world.2 COKE’S OUSTER FROM INDIA The company left India in 1977 after the newly elected Janaty Party Government came to power at the Centre for the first time. which has not only endured. Coke preferred to quit rather than dilute its equity to 40 per cent in compliance with the provisions of FERA.1.1. always striving to behave in ways consistent with the brand itself.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO sponsor of the Olympics.1 COKE’S CORPORATE VISION For more than a century. LUDHIANA 6 .Advertisements for Coca Cola started on the radio in the 1930s and on the television in 1950. the most pivotal moments in Coke’s history came when they had to change their business dramatically. But each time. Amidst all the years of success. Coke’s leaders had the vision. They had to do this to meet new challenges of the evolving world.
People responded. 2. He succeeded beyond all expectations because he invented the beverage known around the world as Pepsi-Cola. and sales of Pepsi-Cola started to grow. His creation.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO 2. became so popular his customers named it "Brad's Drink. CocaCola got the permission to enter the country with a 100 per cent unit in India. vanilla and rareoils. The drink is the invention of Caleb Bradham (left). The summer of 1898. 1993." Caleb decided to rename it "Pepsi-Cola. He did so by concocting his own special beverage. led by RajanPillai. Caleb Bradham knew that to keep people returning to his pharmacy. So a young pharmacist named Caleb Bradham began experimenting with combinations of spices. Pepsi-Cola has a long and rich history. 1993. as usual. he mixed the syrup himself and sold it exclusively through soda fountains. a soft drink. a pharmacist and drugstore owner in New Bern. initially wooed Coca-Cola. In 1902.1. juices. convincing him that he should form a company to market the new beverage. Patent Office for a trademark.3 THE RE-LAUNCH OF COCA COLA IN INDIA Coca Cola came back to India after 16 years when it was launched on October 24. The Godrej group." and advertised his new soft drink. But relationship between the two companies turned sour over the export. In March 1991.S. a unique mixture of kola nut extract. North Carolina. North Carolina. 1993. he would have to turn it into a gathering place. the company bought out the Parle brands. LUDHIANA 7 . and syrups trying to create a refreshing new drink to serve his customers. it signed an MOU with BIL and the Chandrasekhar government accepted this proposal. and applied to the U. he launched the Pepsi-Cola Company in the back room of his pharmacy. On September 22.oriented clause and finally on June 23. at Agra. But soon Caleb recognized that a greater UNIVERSITY BUSINESS SCHOOL. Great Eastern Shipping and the Britannia Industries Ltd.2 HISTORY OF PEPSICO Born in the Carolinas in 1898. At first. was hot and humid in New Bern.
Pepsi-Cola's first bottling line resulted from some less-than-sophisticated engineering in the back room of Caleb's pharmacy. and in 1909 Caleb erected a headquarters so spectacular that the town of New Bern pictured it on a postcard. The business began to grow. Aids Digestion. Caleb sold 7. entrepreneurial in spirit and dedicated to the product's success.968 gallons of syrup. invigorating. By 1907. It will satisfy you. He had gambled on the fluctuations of sugar prices during WORLD WAR I. They were the cornerstones of the Pepsi-Cola enterprise. the new company was selling more than 100. By the end of 1910. Sugar prices see sawed between record highs and disastrous lows. and so did the price of producing Pepsi-Cola. Patent Office. 1903. and Caleb's business expertise captured widespread attention.000 gallons of syrup per year. in the cities of Charlotte and Durham. and the cost of doing business increased drastically. Building a strong franchise system was one of Caleb's greatest achievements. Growth was phenomenal. A 1913 editorial in the Greensboro Patriot praised him for his "keen and energetic business sense. provided a sturdy foundation. and 40 by 1907. "Pepsi-Cola" was officially registered with the U.. Pepsi had been one of the first companies in the United States to switch from horse-drawn transport to motor vehicles. whose number grew from just two in 1905. Famous racing car driver Barney Oldfield endorsed Pepsi in newspaper ads as "A bully drink. a fine bracer before a race." He also began awarding franchises to bottle Pepsi to independent investors. and on June 16. That year. to 15 the following year. Caleb Bradham lost Pepsi Cola.S. Caleb now promoted Pepsi sales with the slogan. Local Pepsi-Cola bottlers.." Pepsi-Cola enjoyed 17 unbroken years of success.refreshing. "Drink Pepsi-Cola. there were Pepsi-Cola franchises in 24 states." Then came World War I." The previous year.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO opportunity existed to bottle Pepsi so that people could drink it anywhere. LUDHIANA 8 . North Carolina. He was even mentioned as a possible candidate for Governor. believing that sugar prices would continue to rise but they fell instead leaving Caleb Bradham with an overpriced sugar UNIVERSITY BUSINESS SCHOOL. using the theme line "Exhilarating. Invigorating. After seventeen years of success.
In 1965 Pepsi-cola company and Frito-Lay. The jingle was "Nickel Nickel" an advertisement for Pepsi Cola that referred to the price of Pepsi and the quantity for that price. Pepsi Cola went bankrupt in 1923. around 120 billion litres of beverage is consumed every year. cold tea etc. "Nickel Nickel" became a hit record and was recorded into fifty-five languages. Charles G.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO inventory. cold coffee.In 1931. Guth who reformulated the popular soft drink. UNIVERSITY BUSINESS SCHOOL. In India currently colas (carbonated soft drinks) products comprises 61% and non-cola segment constitutes 36% of the total soft drink market whereas 2% is covered under other various drinks like apple juice. 2. 2. In 1940. the Loft Candy Company Loft president. These companies present the world new innovative ways of doing the marketing and how take advantage of various opportunities and how to use your strength in a better way. Inc. of which only 5 percent are in packaged segment and also if we compare per head consumption of soft drink in India to America it is 6 is to 700. bought Pepsi Cola.3 MARKET SHARE IN INDIA These two soft drink companies (Coca cola & Pepsi) acquire the major share of the soft drink Industry and always remain in the war to get the majority of market share with each other. So looking at these aspects we can say that there is lot of scope for these two soft drink giant in India to expand their market as the stakes are huge in Indian market.4 OPPORTUNITY IN INDIAN MARKET As in India. Inc. LUDHIANA 9 . These companies always be pioneer in using various innovative technology and method to become the market leader. history was made when the first advertising jingle was broadcast nationally. merged which result in the formation of today know PepsiCo.
ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO MARKETING STRATEGY OF COCA COLA AND PEPSICO UNIVERSITY BUSINESS SCHOOL. LUDHIANA 10 .
they want to earn more revenue from a segment than their other revenue generator sources. In this type of segmentation.2.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO CHAPTER 3 SEGMENTATION OF MARKET A market segment consists of a group of customers who share a similar set of needs and wants. these companies invest huge resources in the season of summers. In countries like India and Pakistan. consumption of soft drinks is 70% in summer and 30% in winter season while in EUROPEAN countries its consumption is almost uniform. As in tropical countries. school and college canteens and even rural chaupals.2 TARGETED MARKETING Although the targeted group of the company is the whole population. companies target the whole market and not any particular segment of the population.1 MASS MARKETING However in some of its popular product both the companies follow the mass marketing strategy. Leading soft drink companies Coca-Cola and Pepsi follow the similar segmentation strategy for target marketing. LUDHIANA 11 .1 GEOGRAPHICAL 3. and their target area is domestic users. they recognize following bases for segmentation 3. UNIVERSITY BUSINESS SCHOOL. While in winter season their target is mainly party users and high-income group consumers. 3.2.1. Middle East and African differently in comparison to cold countries. restaurants. So soft drink companies prefer different marketing strategies in Asian and European countries. Rather than creating the segment the marketer’s task is to identify them and decide which one to target.1 REGION Both companies treat hot countries such as Asia. 3. For this.
1.2. LUDHIANA 12 . UNIVERSITY BUSINESS SCHOOL. mirinda’ orange flavor is popular among ladies.2. Coca cola targeted the older generation of the population. Let’s take the example of coca cola. and children. URBAN MARKET Coca-Cola Company is one of the first global majors to have spotted the potential spin offs from the country’s rural market.2. Same example is available in Pepsi.e. so Coca cola and PepsiCo in Year 2002 bring the 200 ml bottle at Rs. Both the companies Coca-Cola and PepsiCo have adopted different marketing strategy for rural and urban areas 3. Population of Rural sector is more conscious more about the price whereas Population of Urban sector is more conscious about the quality and brand name of the product. In Europe. ladies. In fact this is the case.2.5 specifically targeted at the rural sector so that soft drink can take place of the local drink like lemon. coca cola.2 GENDER Gender based segmentation is very important.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO 3. As taste of male and female is different.2 DEMOGRAPHIC SEGMENTATION 3. sugarcane juice and Tea etc. as average population is older than Asian countries. thumps up is promoted as masculine soft drinks while coca cola and Fanta are having light taste and mainly targeted for loving birds. average age of Indian population is less 38 years.1 AGE India is considered to be a young country i.2.2 RURAL VS. Similarly in USA. mainly target younger generation in India. and children. all the major brands like Pepsi. girls. and thumps up.2. Thus targeting young generation can be a beneficial marketing strategy for soft drink companies. Pepsi targeted the generation X (younger generation) as they comprises majority of the population and they positioned Pepsi in the mind of youth that Pepsi is for the youth 3.
places. energy drink available in Asia. and ideas. to Vita. However in this chapter we shall try to understand and analyze the product line and product classification of Pepsi and coca cola. organizations. then these companies not only sell soft drinks in physical forms. If we take the example of soft drink industry.1. 4. So the product portfolio of these companies is as follows: 4. water found on four continents. services. properties. From Inca Kola. events. They have a wide range of product line.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO CHAPTER 4 PRODUCT MIX A product is anything that can be offered to a market to satisfy a want or need. LUDHIANA 13 . a sparkling beverage found in North and South America. information. and BonAqua. experiences. persons.1 COCA COLA The Coca-Cola Company has more than 2800 products in over 200 countries. but brands. an African juice drink. their product variety spans the globe… UNIVERSITY BUSINESS SCHOOL. and Samurai. including physical goods.1 PRODUCT PORTFOLIO Both the cola majors have a variety of products available in their kitty. They keep coming on with new products to attract the customers and to have a major share of the market. A brand comprises of everythingfrom beverages to experiences.
Diet Coke: Diet Coke was born in 1982. Ginger Ale. Cola Lemon Lime. as well as the best-known product in the world. Cola Lemon. Bitter Water. Limca continues to build a loyal following among young adults UNIVERSITY BUSINESS SCHOOL. 3 soft drink in the world. club soda and a myriad of fruit flavors. Lemon and Raspberry Limca: This thirst-quenching beverage features a fresh. Consumers around the world. Available in the following flavors: Cola. Cola Green Tea. Diet Coke is the drink for people who want no calories. fondly associate Fanta with happiness and special times with friends and family. Club Soda. light lemon-lime taste and funloving attitude. Cola Lime. it's now the No. Bitter Herbal. bitter lemon.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO The various products of Coca-Cola available in India are: Coca-Cola: Coca-Cola is the most popular and biggest-selling soft drink in history. national treasure in India. This positive imagery is driven by the brand's fun. bold fruit taste and tingly carbonation. playful personality. Cola Green Tea. Bitter Grapefruit. but plenty of taste. It's a homegrown. Blueberry Pomegranate. Cola Lemon. Cola Orange and Cola Raspberry. Bitter Lemon. Cola Orange and Cola Raspberry Fanta:Fanta was introduced in the United States in 1960. that is acquired by the CocaCola Company in 1993. Cola Lime. Cola. Cola Lemon Lime. Available in the following flavors: Black Cherry Cola Vanilla. which goes hand in hand with its bright color. Known as Coca-Cola light in some countries. Available in the following flavors: Apple Peach. particularly teens. Kinley: Kinley is a carbonated water that comes in wide array of variants such as tonic. LUDHIANA 14 .
Sprite: Introduced in 1961. From its humble beginnings over a century ago. most-loved products throughout the world. with a strong appeal to young people. It is popular in the younger generation all around the world. Sprite is the world's leading lemon-lime flavored soft drink.1. The various product of Pepsi available in India are: Pepsi: Pepsi is the most saleable product of PepsiCo. the company continues to innovate. UNIVERSITY BUSINESS SCHOOL. Pepsi-Cola has grown to become one of the bestknown. But Sprite also has an honest. new flavors and new packages in varying shapes and sizes to meet the growing demand for convenience and healthier choices. Lemon and Lemon Lime 4. Available in the following flavors: Bitter Lemon Citrus Grapefruit. 4 soft drink worldwide. creating new products. Millions of people enjoy Sprite because of its crisp.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO who love the lighthearted way it complements the best moments of their lives. Today. This drink is available in lemon flavor. Sprite encourages you to be true to who you are and to obey your thirst. LUDHIANA 15 . straightforward attitude that sets it apart from other soft drinks.2 PEPSICO Pepsi has been bringing fun and refreshment to consumers for over 100 years. clean taste that really quenches your thirst. Sprite is sold in more than 190 countries and ranks as the No. Citrus.
Mountain Dew: Mountain Dew (also known as Mtn Dew as of late 2008) is a soft drink distributed and manufactured by PepsiCo. pineapple. Mirinda: Mirinda was originally produced in Spain. Diet Pepsi gives you all the refreshment you need with zero sugar. and PepsiCo (or its licensees) in the rest of the world.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO Diet Pepsi:With its light. Cherry Cola. It was launched in India near the cricket world cup to associated the Pepsi with the Indian people as Blue is official colour of Indian cricket team. and Dr Slice. UNIVERSITY BUSINESS SCHOOL. Cherry-Lime. The flavor of Pepsi Blue was thought by drinkers to be similar to cotton candy with a berry-like aftertaste (it resembled that of blueberries or raspberries). Slice: Slice is a line of fruit-flavored soft drinks manufactured by PepsiCo and introduced in 1984. "Red". and passionfruit and grape flavors. Passion fruit. Crisp. Fruit Punch. banana. Varieties of Slice have included Apple. Grape. zero calories and zero carbs. LUDHIANA 16 . grapefruit. Pepsi Blue: Pepsi Blue is a berry-flavored soft drink produced by PepsiCo. and apple. Peach. 7up: 7 Up is a brand of a lemon-lime flavored non-caffeinated soft drink. The orange flavor of Mirinda represents the majority of Mirinda sales worldwide. Pineapple. Strawberry. refreshing. strawberry. Mountain Dew (and its energy drink counterpart known as AMP) often incurs the disapproval of health experts due to its relatively high caffeine content for a soft drink or energy drink. Light. Mandarin Orange. Mirinda is a brand of soft drink available in fruit varieties including orange. crisp taste. The rights to the brand are held by Dr Pepper Snapple Group in the United States.
MATURITY .DEVELOPMENT . LUDHIANA 17 . a business must be aware of the product life cycle of its product.4 PRODUCT LIFE CYCLE To be able to market its product properly. However in absolute terms there is no any difference in the product ingredients. There are several motives behind line filling: Reaching for incremental profits Trying to satisfy dealers who complain about lost sales because of missing items in the line Trying to utilize excess capacity Trying to be the leading full-time company Trying to plug holes to keep out competitors. 4.GROWTH . but their presentation is different and both the companies present their product as if this is a new product. both the company uses this type of line filling strategy.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO 4. Pepsi and coca-cola.Time to time in different seasons Pepsiand Coca cola launches different type of products. which is evidenced primarily by the fact that they have a large loyal group of stable customers but UNIVERSITY BUSINESS SCHOOL.DECLINE In America carbonated soft drink market is currently in the maturity stage. The standard product life cycle tends to have five phases .3 PRODUCT FILLINGSTRATEGY A firm can lengthen its product line by adding more items within the present range. Zerocoke (launched on the occasion of release of James bond movie QUANTUM OF SOLACE) by Coca Cola comes under this type of product filling marketing.INTRODUCTION .
which is evidenced by looking at the per head consumption of 6 bottles in India is lagging behind the us astounding 700 bottles per head consumption.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO in the developing countries like carbonated soft drinks are in growth stage. UNIVERSITY BUSINESS SCHOOL. LUDHIANA 18 .
These differences may be functional. term.5 litre.2 PACKAGING Coca cola and Pepsi are very innovated in the packing of their product. One of interesting illustration how name affects marketing is the case study of coca cola. or tangible. 2 litre according to the need of the targeted customer. 1.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO CHAPTER 5 BRANDING Brand is defined as a name. 300ml and nonreturnable plastic bottle like 600 ml. 5. When it was introduced in china in the 1920. The UNIVERSITY BUSINESS SCHOOL. The Airtight bottle concept is given by the Coca cola. emotional or intangible related to what brands represent. These companies introduced different concept of packing. or a combination of them. as “express pack” so this is targeted to touring population and this segment need non-returnable bottles. or design. related to product performance of the brand. Packing helps the brand to capture the desire target like 600ml packing is launched. They may also be more symbolic. rational. These Cola giant also introduced the different size of returnable glass bottle like 200ml. A brand is thus a product or service that adds dimension that differentiate it in some way. intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. coca cola sounded like “kou-kekou-la” which means “a thirsty mouth and a mouth of candle wax”. They also pioneer in bring Cans and Frosted bottles in the market. symbol. from other products or services designed to satisfy the same need. 5.1 BRAND NAME Through various researches it is been found that a symbolically significant name helps to sell a product. which has revolutionized the bottling and packaging industry. The company changed the phonetic translation to “ke-kou-ke-le” which means “a joyful taste & happiness” thirsty Chinese consumers responded in drove to the more felicitous “meaning”. LUDHIANA 19 .
The brand makes use of and coordinates a full repertoire of marketing activities to build equity. The brand portfolio and hierarchy make sense. 8. The company monitors sources of brand equity. 5. 5. 6.4 ATTRIBUTES FOR STRONGEST BRAND SHARE According to a study done by scholars of HARVARD BUSINESS REVIEW the world’s strongest brands share following 10 ATTRIBUTES: 1. The brand excels at delivering the benefits consumers truly desire. The pricing strategy is based on consumer perceptions of value. 4. 9. So labeling helps the brand to get attach with the targeted segment. The brand is properly positioned. The brand is given proper sustained support. 7. The brand is consistent. 5. Pepsico under the name of Project Globe Campaign spent 637 million dollars over 5 years. LUDHIANA 20 . The brand stays relevant 3. 10. The brand’s managers understand what the brand means to consumers. Aquafin (500ml & 1 litre) having curve shaped bottle that are easy to hold. 2.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO Coca cola is innovative in design of bottle like Fanta.3 LABELING Pepsico has associated it self to rich deep blue colour as blue colour represents eternal youthness and openness that is appropriately consistence with the youth segment they are targeting. UNIVERSITY BUSINESS SCHOOL. to introduce the new rich deep blue colouring.
If we take Coca cola and Pepsi. If any brand involves all the characteristic then it is a strong brand whereas if it does not having any of the characteristic then it is a weak brand. It means there is an image in the mind of consumers that both the companies offer something better than others and that no nothing else can beat it. they both maintain high level of strong relationship.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO STRONG BRAND BONDING(NOTHING ELSE BEAT IT) ADVANTAGE(DOES IT OFFER SOMETHING BETTER THAN OTHERS) PERFORMANCE(CAN IT DELIVER) RELEVANCE(DOES IT OFFER ME SOMETHING) PRESENCE(DO I KNOW ABOUT IT) WEAK BRAND (BRAND DYNAMICS PYRAMID) In the above explained brand dynamics pyramid. UNIVERSITY BUSINESS SCHOOL. LUDHIANA 21 .
1 BRAND LOCALISATION STRATEGY: THE TWO INDIAS 5.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO 5. Coca-cola decided in 1985 to replace it’s old formula with a sweeter variation NEW COKE. Blind taste tests showed that coke drinkers preferred the new sweetener formula. The idea was to position Coca cola as a generic brand for cold drinks. the company withdrew NEW COKE and reintroduced its century old formula as “classic coke” giving the old formula even stronger status in the market place.6. However.1 INDIA A: “LIFE HO TO AISI” This designation Coca-Cola gave to the market segment including metropolitan areas and large towns represented 4% of the country’s population. 5.6 BRANDING IN RURAL MARKET BY COCA COLA In India (2002).6. market researcher had measured the taste but had failed to measure the emotional attachment consumer had to coca-cola. “Life ho to aisi” was the successful and relevant tagline found in Coca-Cola’s advertising to this audience. LUDHIANA 22 . UNIVERSITY BUSINESS SCHOOL. formal protests and even law suits threats to force the retention of “the real thing”. the poor rural infrastructure and consumption habits that are very different from those of urban people were two major obstacles to cracking the rural market for coca-cola 5. The advertisement with tagline-“Thana mat lab COCA COLA” was targeted at rural semi urban consumers. This segment sought social bonding as a need and responded to aspirational messages. There were angry letters. celebrating the benefits of their increasing social and economic freedom. The campaign was launched to supports Coca cola rural initiative. but the launch of new coke provoked a national uproar.1. Ten weeks later. Coca cola launched a new advertisement campaign featuring leading Hollywood star Amir khan.Cocacola spent $4 million on market research.5 UNDERSTANDING OWN BRAND IMAGE Battered by competition from the sweeter Pepsi cola.
With an average Coke costing Rs. To turn the brand around. skydiving. LUDHIANA 23 .7 BRAND REVITALIZATION To recover and reposition brand in mind of consumer when it is not working successfully is know as Brand Revitalization. This segment’s primary need was out-of-home thirst quenching and the soft drink category was undifferentiated in the minds of rural consumers. So when coca cola launched chota coke at Rs. UNIVERSITY BUSINESS SCHOOL. Mountain Dew updated the packaging and launched ads featuring a group of anonymous young males-the “Dew Dudes” –participating in extreme sports such as bungee jumping.100.5.the brand slogan became “do the DEW”.2 INDIA B: “THANDA MATLAB COCA COLA” INDIA B included small towns and rural areas.10 and an average day’s wage around Rs. the brand was languishing on store shelves despite an attempt to evolve the image with outdoor action scenes. The brand’s successful pursuit of young soda drinkers led to mountain dew challenging diet coke to become the number three selling soft drink in terms of market share by 2000.” By the 1990s. comprising the other 96% of the nation’s populations. and snowboarding while consuming mountaindew. it bought out a commercial featuring Bollywood actor Aamir khan to communicate the message of price cut and represents the Coke as a generic name “Thanda” “Thanda matlab Coca cola” was also the successful and relevant tagline found in coca cola advertisement to this audience 5.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO 5.6. Coke was perceived as a luxury that few could afford. So there is an interesting example how brand repositioning helps in recovering and growth of the product.1. Pepsi initially introduced Mountain Dew in 1969 and marketed it with the countrified tagline “Yahoo Mountain Dew”! It’ll tickle your inwards.
1 COKE AND PEPSI POSITIONING Coke had introduced in the market before the Pepsi.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO CHAPTER 6 POSITIONING AND PROMOTION Positioning is the act of designing the company offering and image to occupy a distinctive place in the mind of the target market. 6. So taking the first move advantage Coke is able to place itself as the all American choice.Firstly the Pepsi in America try to position its product for the society as whole and for the purpose of refreshment. Pepsi targeted the youth section and position there product as a necessity for youth and Pepsi advertisement slogan after 1960 try to position Pepsi as the brand for youth which are clearly visible from there advertisement as follow (ADVERTISEMENT IN INDIA REPRESENTING YOUTH) UNIVERSITY BUSINESS SCHOOL. So Pepsi after 1960 started targeted marketing. have a Pepsi “ This positioning strategy they followed up to 1960 and after analyzing that it is very difficult to capture whole population as whole. which can be clearly visible from their advertisement slogans like “ any whether is Pepsi whether” “ the light refreshment “ “ be sociable. LUDHIANA 24 .
Coca cola follows Push Strategy to advertise and sell their product in the market.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO - “ now its Pepsi for those who thing young” “ come alive. So through this competition Pepsi is able to position itself in the mind of customer that Pepsi have better the taste than coke. In this period Pepsi outflank coke to survive. Ranbirkapoor. Souravganguly. Rohitsharma. Rahuldravid. PepsiCo was parted ways with Shah rukh khan. PepsiCo took this a great advantage of the campaign with television commercial reporting the test results to the public. Shreeshant and Virendersehwag to strengthen its ”youngistaan” brigade. PepsiCo signed Asin (of Ghajini fame) to take war to orange flavor category. In this competition Pepsi said 80% of people like Pepsi taste over Coke. Mahender singh dhoni. Coca cola usually giving higher discount to the retailer fills their selves space with their product and when the consumer see only coca cola in the market they are forced to buy there product only. Ishantsharma. In this Pepsi started direct road show taste competition in which two glass of soft drink one is Pepsi and another is Coke is given to person not known by him which glass contain which soft drink and after tasting both the glasses they ask which soft drink is having better taste. In early 1975s Pepsi introduced the Pepsi challenge marketing campaign where PepsiCo set up a blind tasting between Pepsi-cola and Coca-cola. Deepikapadukone. you’re in Pepsi generation “ “ you. PepsiCo was a much more aggressive and innovate company than coke. LUDHIANA 25 .re got a lot to live and Pepsi’ “ yehhaiyoungistaanmerijaan” (in india) “ taste the once that’s forever young” In the 1960s and early 1970s. In India both Coca-cola and PepsiCo have shown the door to older celebrity endorsers and are betting big on emerging stars. Sachintendulkar. PepsiCo had UNIVERSITY BUSINESS SCHOOL.
Coca cola try to positions themselves as the happiness bringing drink and drink for every community as visible from above advertisement. which is the most preferred drink there. Their are different advertisement. PepsiCo has also signed on Telegu movie actor Ram charanteja as part of its youngistaan campaign to endorse Pepsi in Andhra Pradesh. is the need for party or coca cola brings more joy and taste to the party. LUDHIANA 26 . As this is well judged by their advertisement and their slogans.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO tied up with Chennai super kings for its 7up brand. Coca cola has roped in GautamGambir as brand ambassador for the company new “coca cola open happiness” campaign ahead of IPL seasons. While the single ad campaign works UNIVERSITY BUSINESS SCHOOL. which depicts that’s coca cola.
3 POSITIONING OF PRODUCT LINE EXTENSION (COKE AND PEPSI) Pepsi and coke have range of product in their basket. on the other hand identified the southern market as a great testing ground for its new brands. which are targeted to different market segment and their positioning are done in that way. 6. has been led by Akshaykumar with his gravity defying stunts in the forefront. Tropicana commercial needs to tell consumers “it’s 100 percent juice”. while “functionality” works for other category.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO wonders. giving the difference in consumption patterns in the south.2 COMMUNICATION STRATEGY Looking the changing environment the coca cola and PepsiCo calibrated their communication strategy in a very innovative way.3. Thums up campaign. self-belief and can-do spirit. For instance. the coca cola majors had customized their advertisement for the four southern states. minute maid and Fanta apple were first launched. LUDHIANA 27 . Coca cola. 6. however. 6. so much so that both its pulpy orange drink.1 THUMS UP (COCA COLA) & MOUNTAIN DEW (PEPSICO) Thums up of coca cola and mountain dew of Pepsi are targeted to the adventurous and energetic people that are interested in adventure and love taking risk to succeed. The advertisement of both the soft drink positions them in mind of consumer as the strong soft drink. “Imagery” works for carbonated soft drinks. to entrench the “imagery” that Pepsi is the brand for youthfulness and irreverence. In contrast. marketed and advertised them before a pan India roll-out and a national campaign. the company introduced the youngistaan commercial with the attitude. Similarly mountain dew giving advertisement like “darr ka agajeethai” position it as strong soft drink in mind of consumer. UNIVERSITY BUSINESS SCHOOL.
3 TROPICANA & MINUTE MAID Tropicana of PepsiCo and Minute Maid of Coca cola are specially targeted to health conscious customers and want health drink having natural energy in it. 6. These drinks come under the category of juices so these drink basically launched to transfer the consumer. as coke was not able to position it correctly in mind of the customer.3.2 GATORADE (PEPSICO) Gatorade of PepsiCo has mainly targeted sport-loving persons. 6. Armed with that insight.3. Its promotion is largely restricted to the sporting arena as to position it as sports drink. coke flooded the try screen with ads and backed them up in stores with display.4 MIRINDA (PEPSICO) & FANTA (COCA COLA) These drinks are specially launched for the lady sector of the population and these drinks are positioned in that way only. which then had 100. Then coke figured out that it could position the tab or dramatized the difference by surrounding the bathing beauty with 100 empty tab bottles. which drink juices to Tropicana and Minute maid. UNIVERSITY BUSINESS SCHOOL. So until you are not able to correctly position your product in consumer mind it is impossible to get the success.3. 6.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO 6. LUDHIANA 28 . So it is launched as the sports drink and it is also very much successful.3.5 TAB (COCA COLA) Tab of coca cola initially flopped as diet cola because consumer could not tell the difference between tab with one calorie and diet Pepsi. In the advertisement also they take lady personality for the promotion of these product so that the product make a space in lady sector. signs and samples and after that it was a tremendous success.
Mecca cola is local soft drink company of Saudi Arabia. This practical example shows that if you are able to position yourself in the important space of consumer mind you will dominate the market. 6.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO 6. so it is becoming very difficult for the Mecca cola to survive against the international brand. If you are able to position your product in the right space you will get the rocking results.5 INNOVATION IN ADVERTISEMENT METHODS Industry observers say dependence on try is down to 75 percent from 95 percent till few years ago. After that putted emphasis that America is enemy of Muslim so coca and Pepsi are their enemy too. This resulted in 2% sales increase of coca UNIVERSITY BUSINESS SCHOOL.4 RELIGION BASED POSITIONING Positioning helps in creating a space in the mind of the consumer. Coca cola starts advertising in movie.5. point-of-sale promotion and emerging media like radio and Internet. Mecca cola also starts giving some percentage of profit to organization which are fighting for the rights of Muslim. Pepsi as the American soft drink. There is the interesting case regarding positioning that how a local soft drink company through appropriate positioning able to beat the international soft drink companies (Coke and Pepsi). So in this way Mecca cola is been able to position itself as the soft drink of Muslim and after that the market share of Mecca cola increased in dramatic way and Pepsi and coke are out of the Saudi Arabia market. So to maintain its market Mecca cola starts positioning itself as the Muslim soft drink and coke. LUDHIANA 29 .1 SUB-MINIMAL EFFECT ADVERTISEMENT Understanding the concept that increase in sale of complementary good helps in increasing the sale of the product. Investment is going into out of home advertising.theaters and giving advertisement “drink coke and eat popcorn”. When coke and Pepsi enter in the market of Saudi Arabia they starts gaining the major share of the market and the share of Mecca cola starts declinig. 6.
Pepsi is also now advertise their product with snacks like sandwich. The sales of coca cola increased through this advertisement strategy. to corner a bigger share of the nearly Rs.5.6500 crore market. Older Coke lovers welcomed the world's best-known UNIVERSITY BUSINESS SCHOOL.5. 6.” said CocaCola to the Indian consumer in 1993. So Pepsi expending less money than Coke had done a large advertisement campaign than Coke. “Share my dream. LUDHIANA 30 .2 PERSONAL PROMOTION According to a survey people in Asia are more inclined to them and feel happy when some gives them personal recognition. So in china coca cola starts advertising through mobile phone. 6. The choice of movie theater is because in movie theaters there are very less thing to distract mind of the person. But Pepsi takes this as opportunity and utilizes their fund doing advertisement outside the stadium. As Coke after becoming the main sponsor of the world cup does not left with much advertisement budget so it is not able to do advertisement outside the stadium at large scale.3 AMBUSH MARKETING New advertisement method is going in today scenario in which company does not take the direct sponsorship but do advertisement outside the main sponsorship area like in 1996 cricket world cup Coke takes the main sponsorship but Pepsi instead of taking the main sponsorship utilize advertisement budget doing advertisement outside the stadium. This advertisement strategy gives the touch of personal feeling.6 COKE AND PEPSICO AD WAR A battle is hotting up in India between the two international Cola giants. 6. This is know as Sub-minimal effect in which consumer did not get the idea how advertisement is influencing them. As cost of doing advertisement is cheap so they have done their promotion at large scale and they supported their this advertisement by giving slogans like “Nothing official about it”. Coke and Pepsi. south Indian food etc so that when the consumer ask or eat that snack the picture of Pepsi come to their mind and they will ask for the Pepsi.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO cola and 10% sales increase of popcorn.
Coke was stronger than Pepsi among the older people (evidently nostalgia was at work) while Pepsi obviously scored above Coke with'Generation next'. After losing the world cup rights to Coke. For now. In 1998. comes a damp squib about four friends growing up with Coke. aided by Aamir-appeal. Kajol.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO brand back with misty eyes. which features a look alike of Salman Khan. PreityZinta and Superstar AmitabhBachchan in the blue (Pepsi) corner and KarismaKapoor. It signed on SauravGanguly and Srinath and came up with the peppy 'Eat crickets. 6. ManishaKoirala. sleep cricket. too desperate and too dull. Among soft drinks. Hrithik. Pepsi also has retaliated by its latest ad of Lehar Soda. UNIVERSITY BUSINESS SCHOOL. The latest ads of thumps up which features Salman Khan tries to make fun of Pepsi and it’s sweeter taste. it's Shah Rukh. Coke's teen strategy finally moved into place. Hrithik-mania and Aditi-gaze. Rambha and Amir. The latest Coke’s strategy is to engage Pepsi in war with Thumps up and playing safe with Coca-Cola. Pepsi launched an aggressive campaign signing up leading Indian cricketers.6. The stakes are high and the two Cola giants are slugging it out for every bit of this market share. Coke was the official drink for the Wills World Cup but Pepsi blew officialdom to bits with its cheeky 'Nothing official about it'. even if it means bitter tactics at times. in the red (Coke). RaniMukherjee. A near winner was 'Peetikya Coca-Cola?' The aim was to fix the brand's message in consumer mind space. Just as Coke ads were finally telling stories the way Indian consumers like it. AditiGowatrikar and Aishwarya. drink only Coca-Cola'. LUDHIANA 31 . The younger lot just shrugged. Between Coke and Pepsi they have signed on nine players of the Indian cricket team and Bollywood seems to be the next hot spot they want to cool. The battle continues with Aamir Khan and AishwariyaRai both wooed away from Pepsi by tempting offers from Coke. However this is just the beginning and things are likely to get even hotter.1 THUMPS UP VERSUS PEPSI The latest row in the ongoing battle.
7. This case of Pepsi presents the live example how the pricing makes difference in marketing process of a firm.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO CHAPTER 7 PRICING STRATEGY Price is not just a number tag. Pepsi encouraged price-watching consumers to switch referring the coca cola standard of six ounces a bottle for the price of five cents (a nickel). For 1936 to 1939. Price comes in many forms and performs many functions. In 1936 alone 500 million bottles of Pepsi were consumed.2 PRICING MIX (COCA COLA AND PEPSI) There is the time (2002-2003) when Coca cola and Pepsi tried to appeal to the masses through a 200ml bottle priced at Rs. milk. Pepsi profit doubled and there is also a dramatic increase in sales of Pepsi. but when the price was slashed to five cent. 7. LUDHIANA 32 .1 PEPSI PRICING STRATEGY IN 1936 Pepsi gained popularity following the introduction in 1936 of a 12-ounce bottle. Initially priced at 10 cents. and sugarcane juice or lemon water and it also make the price point of the soft drink within the reach of high potential rural market.5 thereby bridging the gap between soft drink and other local option like tea. instead of the 12-ounces Pepsi sold at the same price. It brought down the average price of its product to Rs. sales increased substantially. It is one of the factors that affect the sales in a drastic ways. sales were slow.5. UNIVERSITY BUSINESS SCHOOL.
8 and is available across low income and rural areas. in India at Rs20 in the 500ml. The company also introduced the party pack of 2 liter of the consumption in the party and is priced at Rs. Can packing (250 ml) of Coca cola and Pepsi is priced at Rs. malls. Coca cola and Pepsi recently introduced an on-the-go pack as research showed it that the next pack of 600ml (mobile) was too much to consume on the go.55. As this drink is specially introduced for the specifically sports segment so it is costlier as compare to other drinks. The next pack size is 300 ml at Rs.15 and in packing 1liter at Rs.75 for the can of 245ml.20. PepsiCo India priced SoBe Adrenaline Rush (premium product) at Rs. which is a 200 ml returnable glass bottle priced at Rs. PepsiCo also introduced their sport drink in 500 ml packing for Rs. Coca cola also introduced its pulpy orange drink (Juice). LUDHIANA 33 . SoBe Adrenaline Rush is a maximum energy supplement aimed at helping consumers perform at their peak by energizing their body and mind and charging up energy an alertness levels. so on. The new on-the-go consumption pack is called the “express pack” and doing well in channels such as travel.15.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO Coca cola and Pepsi in the market place now start with the basic introductory pack.35.65. where people want a single serve and it is priced at Rs.10. Minute Maid. The average price of this packing is cheap than other packing as to increase the consumption of soft drink in the market.10 and is focused on those willing to pay more within the immediate consumption arena. Tropicana of PepsiCo comes in packing 200ml at Rs. As this is a premium and launched drink with energy booster so it is priced at higher price as compare to other drink. It also introduced its Nimbooz in packing of 200ml at Rs. UNIVERSITY BUSINESS SCHOOL.
and they were supplied from the company's depot in large towns and cities. which the producer must take into account. Coke started out by drawing up a hit list of high potential villages from various districts.1.1 RURAL DISTRIBUTION CHANNEL (HUB AND SPOKE MODEL) Since last five years soft drink companies had started penetrating rural marketing also.1 DISTRIBUTION STRATEGY Coca cola and PepsiCo are world wide famous for their Distribution channel. So we say that a set of interdependent organizations involved in the process of making a product available for the use or consumption is know as Distribution channel. So to ensure full loads.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. in which they divided the different categories of distributors according to the area they are covering. along with those of the all-important end-user. broker warehouse distribution and Vending & Food Service (V&FS) systemswhere as these companies are following the Hub and Spoke model for rural distribution channel. 8.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO CHAPTER 8 DISTRIBUTION CHANNEL Distribution (or place) is one of the four elements of marketing mix. Frequently there may be a chain of intermediaries. To reach out to rural India. LUDHIANA 34 . Each of the elements in these chains will have their own specific needs. 8. This process is known as the 'distribution chain' or the 'channel’.In India the distribution network of Coca cola had 6. each passing the product down the chain to the next organization. Coca cola and PepsiCo had formulated different distribution strategy for urban sector and rural sector. For the rural sector these companies are working on Hub and Spoke model. before it finally reaches the consumer or end-user. large distributors (Hubs) were appointed. For the urban distribution channel these companies adopted the model like direct store distribution. Full load supplies were UNIVERSITY BUSINESS SCHOOL.
Thus making the mechanism cost effective coca cola supplies to mechanism large distributors from the company depots twice a week and the distributors in turn supply to the smaller distributor once a week. The smaller distributors undertook fixed ) journey plans on a weekly basis and supplied against cash. This system allows for larger loads to travel long distances and smaller loads to travel short distances. LUDHIANA 35 . BOTTLING PLANT HUB SPOKES RETAILERS RETAILERS RETAILERS DISTRIBUTION CHANNEL IN RURAL AREAS BENEFITS This model has been utilized by soft drink companies like Pepsi and coca cola to reach rural market. UNIVERSITY BUSINESS SCHOOL. On their part.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO offered twice weekly against payment by demand draft. The smaller distributors also hired rickshaws (cycle operated vans) that travelled to villages daily. the hubs appointed smaller distributors (Spokes) in adjoining areas.
Besides Direct Store Delivery (DSD they adopted other system like Broker Warehouse Distribution (BWD) and Vending & Food service (V&FS) systems.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO 8. which they give to the wholesalers and it also ensures quick availability of the product to the retailer. LUDHIANA 36 .1. Based on its experience. In this company directly supplies its product to the retailers which helps them to save the margin. BOTTLING PLANT RETAIL STORES CONSUMERS (DIRECT STORE DISTRIBUTION) DISTRIBUTION CHANNELIN URBAN AREAS UNIVERSITY BUSINESS SCHOOL. PepsiCo and Coca cola had developed various distribution models to offer its products and services to customers in the US.2 DISTRIBUTION CHANNEL IN URBAN AREAS Both the soft drink company’s coke and Pepsi adopted a model DSD that is Direct Store Distribution.
3 INTERNATIONAL DISTRIBUTION SYSTEM MANAGEMENT In order to manage its distribution systems effectively.2. UNIVERSITY BUSINESS SCHOOL. who added carbon dioxide.1 CHILLED DSD SYSTEM The chilled DSD system was a relatively small distribution method. Bottling companies were (with a few exceptions) owned and operated by local companies in the countries where PepsiCo and Coca cola operated. PepsiCo and Coca cola had put in place-advanced logistics systems.2 INNOVATION IN DISTRIBUTION SYSTEM Through their use of the most modern technology in recent years. 8. 8. Syrup was either sold directly to the fountain accounts or was combined with carbonated water for bottling. So increase the distribution channel through collaboration with other company is know as hybrid system.2. which required continuous refrigeration. Through this collaboration the distribution channel of the Coca cola increases.2 THE HYBRID SYSTEM In this system the company makes the collaboration with other company of complementary good so that their distribution channel is also used for the sales of its product. 8.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO 8. This system is actually benefited by the synergy created by collaboration of two companies. sweetener and water to make beverages and beverage syrup. created for items. PepsiCo and its bottlers were able to improve their distribution and logistics management operations significantly. These were the chilled DSD system and the hybrid system. as at ever McDonald the Coca cola will be there. They sold beverage concentrate to bottlers. To further improve the market penetration of its products globally. PepsiCo launched two new distribution methods in the initial years of the new millennium. LUDHIANA 37 . 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. As taking the practical example of the collaboration of Coca cola and McDonald.
UNIVERSITY BUSINESS SCHOOL. which with the help social responsibility marketing able to compete with the international soft drink giant Coca cola and PepsiCo. King Car found that there is a blood relationship between the people of eastern China and Taiwan as Taiwan is an island near to eastern Chinese coast. In the year 1990 there came a devastating flood in eastern China. that organization was flooded with fund within few weeks of the formation of organization. The societal marketing concept calls upon marketers to build social and ethical consideration into their marketing practices. LUDHIANA 38 . The societal marketing concept holds that the organization’s task is to determine the needs. After careful survey the local soft drink company. wants and interests of the target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and society’s long term well being. It resulted in a sympathetic wave in the middle class of china. This marketing with social work strategy helps to position the brand in the mind of the customer for the lifetime as social and ethical brand. The company constituted an organization for humanitarian work on its own cost and this organization starts helping the people affected by the devastating flood. There is a interesting case of TAIWAN local soft drink company. Later on some international organization got involved in this work and King Car became a renounced and respectable name not only in Asia but in Europe and Africa too and in Taiwan its soft drink sales shoot up like anything. which provides the opportunity for the long-term growth of the company.1 CORPORATE COMMUNITY INVOLVEMENT MARKETING This is a type of marketing in which company provide In-kind or Volunteer services in the community. 9.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO CHAPTER 9 SOCIAL RESPONSIBILITY MARKETING The effects of marketing clearly extend beyond the company and the customer to a society as a whole.
ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO Sociality responsible work doesn’t help companies for creating a brand image of socially responsible person only but it helps in other manner also.a project to provide potable water to more than 30. In addition to this. It focuses on Water Conservation. rejuvenation of ponds and other traditional water bodies like step wells. 9. Thus social corporate responsibility is also a type of investment. Access to clean drinking water and awareness of water conservation and related issues as its strategy on water stewardship. LUDHIANA 39 . Coca-Cola India and UN-Habitat have signed an agreement. Coca-Cola India believes that it can be a part of the solution on water issues. Coca-Cola is in partnership with Rotary International has launched “Elixir of Life”. which includes the provision of providing clean drinking water to 100 schools in West Bengal. Socially responsible work creates a good image in the mind of consumers that is communicated to other generations without any serious effort by the company. Coca-Cola India in partnership with several NGOs.2 COCA COLA SOCIAL WORK IN INDIA In a recent example of social corporate responsibility coca-cola been awarded golden peacock award for social corporate responsibility . central and state government agencies. which helps the company in their positioning. schools and colleges and the local community have already installed 400 rainwater-harvesting projects across the country.As a responsible corporate and a user of water. It has also undertaken the construction of several check dams. The Company also regularly supports education and health initiatives in addition to Disaster Relief and Rehabilitation programs as and when required.000 underprivileged children in and around Chennai. UNIVERSITY BUSINESS SCHOOL.
imports of similar items were forbidden. Both companies had many difficulties. The janaty party banned the coca cola operation in India because of the not entering 100% stake of the foreign company in India of the not essential product based company. analyze and learn from. Coke's refusal to give the formula and withdraw from the market wasn't a clever decision. If an item could be obtained within the country. stating from the political environment of the Indian market and the trade barriers it faced. Until the early 1990s. ending with the change in the environment and market due to boycott campaigns for different reasons. Soft Drink CompanyPepsi co began its operation with LEHAR and opted the market strategy according to political and legal scenario of the country. inIndia coca-cola came in early 1970 after the janaty party came into 1977 they oppose the strategy adopted by coca cola. especially in consumer goods sector. going through the market entry and penetration strategies considered and the flexible marketing mix used and how it was placed to increase consumption and market share. especially Coca-Cola. It should have believed in it marketing capabilities and its ability to position its brand as a unique one. India was considered unfriendly to foreign investors. Due to this environment. LUDHIANA 40 . Coca-Cola had withdrawn from the Indian market in 1977. Take the example of India. and it's useful to observe how it dealt with the different aspects. because as a big company. since it involves so many marketing aspects that are essential for all marketers to take into consideration. This hurtled the company operation in India. UNIVERSITY BUSINESS SCHOOL. The case of Coke and Pepsi in India is a lesson that all marketers can observe. coke must expect to face many challenges.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO CHAPTER 10 POLITICAL ENVIRONMENT AND ITS EFFECT Political and legal environment are some important factors that influences the marketing strategy of soft drink companies.
LUDHIANA 41 . And using the huge resources it has worldwide.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO different from others even if they claim they are the same. . UNIVERSITY BUSINESS SCHOOL. it could have planned a strategy to overcome this problem and stay in the market and even gain market share as a unique multinational brand.
In contrast Pepsi-cola has been less successful with 7up. in early 1980s in fact more sprite than coke was sold. Coca cola planned rigorously for success. In addition most of the soft drink in CHINA at the time mere orange flavored and light color. Sales of coke eventually exceeded sprite. Pepsi-cola has. PEPSI cola. As a result. coca cola was forced to form partnership with government bodies. which entered with its SHEUZEN plant in 1982. LUDHIANA 42 . There were many reasons for sprite popularity. most Chinese women prefer sprite to coke and many consumers take sprite with beer or red wine. In the early 1980s foreign investment in the Chinese beverages industry was highly restricted. Just one year after coca cola is still trying to break even. As coca cola continued to invest in the coke brand and as consumer accepted improved in the 1990. Coca cola has 23 bottling plant in CHINA nearly double the no. So from the beginning coca cola invested in sprite and fanta as well as in coke.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO CHAPTER 11 COCA COLA CORPORATE STRATEGY IN CHINA Multinationals often point to coca cola‘s achievements in CHINA as strong proof that endurance will eventually lead to success. But to understand coca cola as a passive player that “waited is out” is a seriously misunderstand the company strategy and management capability in CHINA. the Pepsi to 7up ratio is four to one. coke led Pepsi right from the start and coca cola has been profitable for more than ten years in CHINA. Today the coke to Pepsi ratio is four to three. Its position as market leader is founded on an extraordinary ability to react in a timely and accurate way to changing market dynamics. It UNIVERSITY BUSINESS SCHOOL. And three of Pepsi colas plant produces only local cola brands because the volume of Pepsi did not grow quickly enough to utilize the capacity What gave coca cola its advantage? A closer looks shows that company dominated the soft drink industry not by being an early mover but rather by making a series of brilliant short term moves when coke was first introduced in CHINA. Coca cola long tern success has also involved taking as much control as possible of its joint venture. Today’s sales of coca cola are almost three times of Pepsi. For one thing coke looked and tested a bit like a Chinese herbal medicine. it was not well accepted by Chinese consumers.
Although coca cola was invested $500 million in china it recently announced that it wills double its investment in 1 billion UNIVERSITY BUSINESS SCHOOL. As a result huge entry barriers established. Coca cola did not stop here its shifted entire partner strategy at the same time by three partners CITIC (china international trust and investment cooperation). Coca cola is able to cover then 90% of the urban area compared with Pepsi cola 60%. But most important these new partners give coca cola management control through equity majority ownership of the joint ventures. mange inventory level and increase profitability by capture wholesaler margin. LUDHIANA 43 . perform merchandising and point sale activities.and the ministry of light industry. Though this company was a able to provide better service to retailers. Swire pacific and Kerry group into its bottling ventures. Coca cola partner serve the no. which oversaw the development of the domestic food and beverages industry. Pepsi cola in contrast did not seek equity majority and management control until 1993 so when it comes to Chinese market Pepsi cola lake lustier performance shows how even experienced marketer miscalculate the critical factor of success. These strategies gave an age to coca cola and the result are/ with direct distribution in place today 65% to 70% to coke sale are managed through its own sales force compared with only 20% of Pepsi . food import export corporation) which monopolized the food import export business . Coca cola did not have equity majority. Pepsi cola had not even begun to wrestle with the question of partnership in the early 1990.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO choose COFCO (Chinese national cereals. When coca cola already taking importance strides towards investment in a direct distribution system. The government has already announced that it will grant just one license in these cities. so it had limited management control of the bottling joint ventures. The company moved quickly to acquire stakes from its partners to establish majority equity position and to gain management control. of company critical objective. 1988 when the regulation of bottling joint ventures was followed the company moved. Those strategic partnership coca cola was actively positioning for the future. oil. They share its investment risk in the bottling plant and at the same time it is able to leverage the political influence its partners to get government approval for new bottling plants. motivate retailers. Once a plant is built in small cities. Problems will emerge however as soon as the two competitors try to expand in to smaller cities when the volume potential justify only one plant with sufficient scale to break even.
LUDHIANA 44 .ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO over the 5 years. UNIVERSITY BUSINESS SCHOOL. So if its announced plans are realized coca cola will continue to lead Pepsi cola in market share by a margin of three to one.
Additionally there Bottling system is one of their greatest strengths. PepsiCo and Coca cola are having the largest distribution network in the world. This allows them to the conduct business on a global scale while at the same time maintain a local approach. Being addictive of cola drink is also a health problem. which is also there one of the greatest strength. this is an image many people have taken deeply to heart.2 WEAKNESSES Weaknesses for any business need to be both minimized and monitored in order to effectively achieve productivity and efficiency in their business activities. 12. The products image is loaded with over-romanticizing and fun. As in developing countries the per head consumption of cola drink is very less which evident from taking example of India. 12. Although the international sales are increases but there is getting a saturation evident through the stability in cola drink in USA market and moreover all over the world the customer preference for cola drink is shifting towards the healthy drink is taking place. So looking UNIVERSITY BUSINESS SCHOOL. LUDHIANA 45 .ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO CHAPTER 12 SWOT ANALYSIS OF PEPSI AND COKE 12. Pepsi and Coke brand is known well throughout 94% of world today. In India per head consumption is only 6 bottles as compare to 700 bottles in USA and in Indian market only 5% of the beverage come under packaging.3 OPPORTUNITIES Brand recognition is the significant factor affecting Pepsi and Coke competitive position. which is the greatest strength of them.1 STRENGTHS Pepsi and Coke has been a complex part of world culture for a very long time. The bottling companies are locally owned and operated by independent business people who are authorized to sell product of these cola giant. because drinking of carbonated soft drink daily has an effect on your body also. Pepsi and Coke are the extremely recognizable brand.
is a very real threat. juice. but still theseSubstitute will remain threat to them. The soft drink industry is very strong. however. 12. the threat of new viable competitors in the carbonated soft drink industry is not very substantial.4 THREATS Currently. coffee. but consumers are not necessarily married to it. LUDHIANA 46 . The threat of Substitute. UNIVERSITY BUSINESS SCHOOL. the changing health consciousness of the market could have a serious affect. Of course. both have already diversified into these markets. milk and hot chocolate. Possible substitutes that continuously put pressure on both Pepsi and Coke include tea.ANALYSIS OF MARKETING STRATEGY OF COCA COLA AND PEPSICO at these data we can that for these two giant a lot of potential is there in developing market which is now also untapped. Consumer buying power is also represents a key threat to the Pepsi and Coke. Eventhrough the Coca cola and Pepsi control nearly 40% of the entire beverage market.
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