LOVELY PROFESSIONAL UNIVERSITY

Strategy Management

Comparative Advertising as a Positioning

Strategy

Submitted to: Submitted by :Arun Kumar Saini

Jaspreet Kaur Roll no : RT1903 A25
Regd no : 10907007

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 ACKNOWLEDGEMENT
First of all we would like to thank the Lovely University and take the opportunity to do this
project as a part of the M.B.A.

Many people have influenced the shape and content of this project, and many supported me
through it. I express my sincere gratitude to Lect. Miss Jaspreet kaur

She has been an inspiration and role model for us. Her guidance and active support has made it
possible to complete the assignment.

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 INDEX
1. Advertising

2. History of Coca Cola & Pepsico

3. Market Share in India

4. Segmentation of Market

5. Product Mix

6. Positioning & Promotion

7. Ad War Between Coca Cola and Pepsico

8. Political Environment and its effects

9. SWOT Analysis of Pepsico and Coca Cola

ADVERTISMENT
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Advertising is the promotion of a company’s products and services carried out primarily to drive
sales of the products and services but also to build a brand identity and communicate changes or
new product /services to the customers. Advertising has become an essential element of the
corporate world and hence the companies allot a considerable amount of revenues as their
advertising budget. There are several reasons for advertising some of which are as follows:

• Increasing the sales of the product/service

• Creating and maintaining a brand identity or brand image.

• Communicating a change in the existing product line.

• Introduction of a new product or service.

• Increasing the buzz-value of the brand or the company.

Thus, several reasons for advertising and similarly there exist various media which can be
effectively used for advertising. Based on these criteria there can be several branches of
advertising. Mentioned below are the various categories or types of advertising:

Print Advertising – Newspaper, Magazines, Brochures, Fliers

The print media have always been a popular advertising medium. Advertising products via
newspapers or magazines is a common practice. In addition to this, the print media also offers
options like promotional brochures and fliers for advertising purposes. Often the newspapers and
the magazines sell the advertising space according to the area occupied by the advertisement, the
position of the advertisement (front page/middle page), as well as the readership of the
publications. For instance an advertisement in a relatively new and less popular newspaper would
cost far less than placing an advertisement in a popular newspaper with a high readership. The
price of print ads also depend on the supplement in which they appear, for example an
advertisement in the glossy supplement costs way higher than that in the newspaper supplement
which uses a mediocre quality paper.

Outdoor Advertising – Billboards, Kiosks, Tradeshows and Events:

Outdoor advertising is also a very popular form of advertising, which makes use of several tools
and techniques to attract the customers outdoors. The most common examples of outdoor
advertising are billboards, kiosks, and also several events and tradeshows organized by the
company. The billboard advertising is very popular however has to be really terse and catchy in
order to grab the attention of the passersby. The kiosks not only provide an easy outlet for the
company products but also make for an effective advertising tool to promote the company’s

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products. Organizing several events or sponsoring those makes for an excellent advertising
opportunity. The company can organize trade fairs, or even exhibitions for advertising their
products. If not this, the company can organize several events that are closely associated with
their field. For instance a company that manufactures sports utilities can sponsor a sports
tournament to advertise its products.

Broadcast advertising – Television, Radio and the Internet

Broadcast advertising is a very popular advertising medium that constitutes of several branches
like television, radio or the Internet. Television advertisements have been very popular ever since
they have been introduced. The cost of television advertising often depends on the duration of the
advertisement, the time of broadcast (prime time/peak time), and of course the popularity of the
television channel on which the advertisement is going to be broadcasted. The radio might have
lost its charm owing to the new age media however the radio remains to be the choice of small-
scale advertisers. The radio jingles have been very popular advertising media and have a large
impact on the audience, which is evident in the fact that many people still remember and enjoy
the popular radio jingles.

Covert Advertising – Advertising in Movies

Covert advertising is a unique kind of advertising in which a product or a particular brand is
incorporated in some entertainment and media channels like movies, television shows or even
sports. There is no commercial in the entertainment but the brand or the product is subtly (or
sometimes evidently) showcased in the entertainment show. Some of the famous examples for
this sort of advertising have to be the appearance of brand Nokia which is displayed on Tom
Cruise’s phone in the movie Minority Report, or the use of Cadillac cars in the movie Matrix
Reloaded.

Surrogate Advertising – Advertising Indirectly

Surrogate advertising is prominently seen in cases where advertising a particular product is
banned by law. Advertisement for products like cigarettes or alcohol which are injurious to heath
are prohibited by law in several countries and hence these companies have to come up with
several other products that might have the same brand name and indirectly remind people of the
cigarettes or beer bottles of the same brand. Common examples include Fosters and Kingfisher
beer brands, which are often seen to promote their brand with the help of surrogate advertising.

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Public Service Advertising – Advertising for Social Causes
Public service advertising is a technique that makes use of advertising as an effective
communication medium to convey socially relevant messaged about important matters and social
welfare causes like AIDS, energy conservation, political integrity, deforestation, illiteracy,
poverty and so on. David Oglivy who is considered to be one of the pioneers of advertising and
marketing concepts had reportedly encouraged the use of advertising field for a social cause.
Oglivy once said, "Advertising justifies its existence when used in the public interest - it is much
too powerful a tool to use solely for commercial purposes.”

Today public service advertising has been increasingly used in a non-commercial fashion in
several countries across the world in order to promote various social causes. In USA, the radio
and television stations are granted on the basis of a fixed amount of Public service
advertisements aired by the channel.

Celebrity Advertising
Although the audience is getting smarter and smarter and the modern day consumer getting
immune to the exaggerated claims made in a majority of advertisements, there exist a section of
advertisers that still bank upon celebrities and their popularity for advertising their products.
Using celebrities for advertising involves signing up celebrities for advertising campaigns, which
consist of all sorts of advertising including, television ads or even print advertisements.

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 HISTORY OF COCA COLA

Coca-Cola 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. Dr. John Pemberton, an Atlanta
pharmacist, invented Coca-Cola. He concocted the formula in a three-legged brass kettle in his
backyard on May 8, 1886. He mixed a combination of lime, cinnamon, coca leaves, and the
seeds of a Brazilian shrub to make the fabulous beverage.

Coca-Cola debuted in Atlanta's largest pharmacy, Jacob's Pharmacy, as a five-cent

noncarbonated beverage. Later on, the carbonated water was added to the syrup to make the
beverage that we know today as Coca-Cola. In the mid-1970, more than half Coca-Colas old was
outside of the U.S. Coca-Cola products outsell closest competitor by more than two to one. One
in every two cola and one in every three soft drinks is a Coca-Cola product. The best-known
trademark in the world is sold in about one hundred and forty countries to 5.8 billion people in
eighty different languages. This is why Coca-Cola is the largest soft drink company in the world.

THE RE-LAUNCH OF COCA COLA IN INDIA

Coca Cola came back to India after 16 years when it was launched on October 24, 1993, at Agra.
The Godrej group, Great Eastern Shipping and the Britannia Industries Ltd, led by Rajan Pillai,
initially wooed Coca-Cola. In March 1991, it signed an MOU with BIL and the Chandrasekhar
government accepted this proposal.

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But relationship between the two companies turned sour over the export- oriented clause and
finally on June 23, 1993, Coca- Cola got the permission to enter the country with a 100 per cent
unit in India. On September 22, 1993, the company bought out the Parle brands.

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 HISTORY OF PEPSICO

Born in the Carolinas in 1898, Pepsi-Cola has a long and rich history. The drink is the invention
of Caleb Bradham (left), a pharmacist and drugstore owner in New Bern, North Carolina.

The summer of 1898, as usual, was hot and humid in New Bern, North Carolina. So a young
armacist named Caleb Bradham began experimenting with combinations of spices, juices, and
syrups trying to create a refreshing new drink to serve his customers. He succeeded beyond all
expectations because he invented the beverage known around the world as Pepsi-Cola.

Caleb Bradham knew that to keep people returning to his pharmacy, he would have to turn it into
a gathering place. He did so by concocting his own special beverage, a soft drink. His creation, a
unique mixture of kola nut extract, vanilla and rare oils, became so popular his customers named
it "Brad's Drink." Caleb decided to rename it "Pepsi-Cola," and advertised his new soft drink.

People responded, and sales of Pepsi-Cola started to grow, convincing him that he should form a
company to market the new beverage. In 1902, he launched the Pepsi-Cola Company in the back
room of his pharmacy, and applied to the U.S. Patent Office for a trademark.

At first, he mixed the syrup himself and sold it exclusively through soda fountains. But soon
Caleb recognized that a greater opportunity existed to bottle Pepsi so that people could drink it
anywhere. The business began to grow, and on June 16, 1903, "Pepsi-Cola" was officially
registered with the U.S. Patent Office. That year, Caleb sold 7,968 gallons of syrup, using the
theme line "Exhilarating, Invigorating, Aids Digestion."

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He also began awarding franchises to bottle Pepsi to independent investors, whose number grew
from just two in 1905, in the cities of Charlotte and Durham, North Carolina, to 15 the following
year, and 40 by 1907. By the end of 1910, there were Pepsi-Cola franchises in 24 states. Pepsi-
Cola's first bottling line resulted from some less-than-sophisticated engineering in the back room
of Caleb's pharmacy.

Building a strong franchise system was one of Caleb's greatest achievements. Local Pepsi-Cola
bottlers, entrepreneurial in spirit and dedicated to the product's success, provided a sturdy
foundation. They were the cornerstones of the Pepsi-Cola enterprise. By 1907, the new company
was selling more than 100,000 gallons of syrup per year. Growth was phenomenal, and in 1909
Caleb erected a headquarters so spectacular that the town of New Bern pictured it on a postcard.
Famous racing car driver Barney Oldfield endorsed Pepsi in newspaper ads as "A bully
drink...refreshing, invigorating, a fine bracer before a race."

The previous year, Pepsi had been one of the first companies in the United States to switch from
horse-drawn transport to motor vehicles, and Caleb's business expertise captured widespread
attention. He was even mentioned as a possible candidate for Governor. A 1913 editorial in the
Greensboro Patriot praised him for his "keen and energetic business sense."

Pepsi-Cola enjoyed 17 unbroken years of success. Caleb now promoted Pepsi sales with the
slogan, "Drink Pepsi-Cola. It will satisfy you." Then came World War I, and the cost of doing
business increased drastically. Sugar prices see sawed between record highs and disastrous lows,
and so did the price of producing Pepsi-Cola.

After seventeen years of success, Caleb Bradham lost Pepsi Cola. He had gambled on the
fluctuations of sugar prices during WORLD WAR I, believing that sugar prices would continue
to rise but they fell instead leaving Caleb Bradham with an overpriced sugar inventory. Pepsi
Cola went bankrupt in 1923.In 1931, the Loft Candy Company Loft president, Charles G. Guth
who reformulated the popular soft drink, bought Pepsi Cola.

In 1940, history was made when the first advertising jingle was broadcast nationally. The jingle
was "Nickel Nickel" an advertisement for Pepsi Cola that referred to the price of Pepsi and the
quantity for that price. "Nickel Nickel" became a hit record and was recorded into fifty-five
languages. In 1965 Pepsi-cola Company and Frito-Lay, Inc. merged which results in the
formation of today know PepsiCo, Inc.

MARKET SHARE IN INDIA

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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. These
companies always be pioneer in using various innovative technology and method to become the
market leader.

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. 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, cold coffee, cold tea etc.

SEGMENTATION OF MARKET
A market segment consists of a group of customers who share a similar set of needs and wants.
Rather than creating the segment the marketer’s task is to identify them and decide which one to
target. Leading soft drink companies Coca-Cola and Pepsi follow the similar segmentation
strategy for target marketing.

MASS MARKETING
However in some of its popular product both the companies follow the mass marketing strategy.
In this type of segmentation, companies target the whole market and not any particular segment
of the population.

TARGETED MARKETING
Although the targeted group of the company is the whole population, they want to earn more
revenue from a segment than their other revenue generator sources. For this, they recognize
following bases for segmentation

GEOGRAPHICAL REGION

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Both companies treat hot countries such as Asia, Middle East and African differently in
comparison to cold countries. As in tropical countries, consumption of soft drinks is 70% in
summer and 30% in winter season while in EUROPEAN countries its consumption is almost
uniform.

So soft drink companies prefer different marketing strategies in Asian and European countries. In
countries like India and Pakistan, these companies invest huge resources in the season of
summers, and their target area is domestic users, restaurants, school and college canteens and
even rural chaupals. While in winter season their target is mainly party users and high-income
group consumers.

DEMOGRAPHIC SEGMENTATION
AGE
India is considered to be a young country i.e. average age of Indian population is less 38 years.
Thus targeting young generation can be a beneficial marketing strategy for soft drink companies.
In fact this is the case, all the major brands like Pepsi, coca cola, and thumps up, mainly target
younger generation in India.

In Europe, as average population is older than Asian countries, coca cola targeted the older
generation of the population. Similarly in USA, Pepsi targeted then ration 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.

GENDER
Gender based segmentation is very important. As taste of male and female is different. Let’s take
the example of coca cola, thumps up is promoted as masculine soft drinks while coca cola and
Fanta are having light taste and mainly targeted for loving birds, ladies, and children. Same
example is available in Pepsi, mirinda’ orange flavor is popular among ladies, girls, and children.

PRODUCT MIX

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A product is anything that can be offered to a market to satisfy a want or need, including physical
goods, services, experiences, events, persons, places, properties, organizations, information, and
ideas. If we take the example of soft drink industry, then these companies not only sell soft
drinks in physical forms, but brands. A brand comprises of everything from beverages to
experiences.

PRODUCT PORTFOLIO
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Both the cola majors have a variety of products available in their kitty. They have a wide range
of product line. They keep coming on with new products to attract the customers and to have a
major share of the market. So the product portfolio of these companies is as follows:

COCA COLA
The Coca-Cola Company has more than 2800 products in over 200 countries. From Inca Kola, a
sparkling beverage found in North and South America, and Samurai, energy drink available in
Asia; to Vita, an African juice drink, and BonAqua, water found on four continents, their product
variety spans the globe…

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.

COKE AND PEPSI POSITIONING

Coke had introduced in the market before the Pepsi. 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, which can be clearly visible
from their advertisement slogans like

“Any whether is Pepsi whether”

“The light refreshment “

“Be sociable, 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. So Pepsi after 1960 started targeted marketing. 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

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“Now it’s Pepsi for those who thing young”

“Come alive, you’re in Pepsi generation “

“You’re got a lot to live and Pepsi’

“Yeh hai youngistaan meri jaan” (in India)

“Taste the once that’s forever young”

In the 1960s and early 1970s, PepsiCo was a much more aggressive and innovate company than
coke. In this period Pepsi outflank coke to survive. In early 1975s Pepsi introduced the Pepsi
challenge marketing campaign where PepsiCo set up a blind tasting between Pepsi-cola and
Coca-cola.

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 this
competition Pepsi said 80% of people like Pepsi taste over Coke.

PepsiCo took this a great advantage of the campaign with television commercial reporting the
test results to the public. So through this competition Pepsi is able to position itself in the mind of
customer that Pepsi have better the taste than coke. Coca cola follows Push Strategy to advertise
and sell their product in the market.

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 their product
only. In India both Coca-cola and PepsiCo have shown the door to older celebrity endorser’s and
are betting big on emerging stars.

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PepsiCo was parted ways with Shah Rukh Khan, Sachin Tendulkar, Rahul Dravid, Sourav
Ganguly, Mahender Singh Dhoni, Ranbir Kapoor, Deepika Padukone, Ishant Sharma, Rohit
Sharma, Shreeshant and Virender Sehwag to strengthen its ”youngistaan” brigade.

PepsiCo signed Asin (of Ghajini fame) to take war to orange flavor category. PepsiCo had 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.

Coca cola try to positions themselves as the happiness bringing drink and drink for every
community as visible from above advertisement. As this is well judged by their advertisement
and their slogans. There are different advertisement, which depicts that’s coca cola, is the need
for party or coca cola brings more joy and taste to the party.

Coca cola has roped in Gautam Gambir as brand ambassador for the company new “coca cola
open happiness” campaign ahead of IPL seasons. While the single ad campaign works wonders,
giving the difference in consumption patterns in the south, the coca cola majors had customized
their advertisement for the four southern states.

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Coca cola, on the other hand identified the southern market as a great testing ground for its new
brands, so much so that both its pulpy orange drink, minute maid and Fanta apple were first
launched, marketed and advertised them before a pan India roll-out and a national campaign

COMMUNICATION STRATEGY
Looking the changing environment the coca cola and PepsiCo calibrated their communication
strategy in a very innovative way. “Imagery” works for carbonated soft drinks, while
“functionality” works for other category. For instance, to entrench the “imagery” that Pepsi is the
brand for youthfulness and irreverence; the company introduced the youngistaan commercial
with the attitude, self-belief and can-do spirit. In contrast, Tropicana commercial needs to tell
consumers “it’s 100 percent juice”.

POSITIONING OF PRODUCT LINE EXTENSION

(COKE AND PEPSI)

Pepsi and coke have range of product in their basket, which are targeted to different market

Segment and their positioning are done in that way.

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. Thums up campaign,
however, has been led by Akshay Kumar with his gravity defying stunts in the forefront.
Similarly mountain dew giving advertisement like “darr ke aga jeet hai” position it as strong soft
drink in mind of consumer.

GATORADE (PEPSICO)
Gatorade of PepsiCo has mainly targeted sport-loving persons. So it is launched as the sports
drink and it is also very much successful. Its promotion is largely restricted to the sporting\ arena
as to position it as sports drink.

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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. These drinks come under the
category of juices so these drink basically launched to transfer the consumer, which drink juices
to Tropicana and Minute maid.

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. In the advertisement also they take lady personality for the
promotion of this product so that the products make a space in lady sector.

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, which then had 100, as coke was not able to position
it correctly in mind of the customer. Then coke figured out that it could position the tab or
dramatized the difference by surrounding the bathing beauty with 100 empty tab bottles.

Armed with that insight, coke flooded the try screen with ads and backed them up in stores with
display, signs and samples and after that it was a tremendous success. So until you are not able to
correctly position your product in consumer mind it is impossible to get the success.

RELIGION BASED POSITIONING

Positioning helps in creating a space in the mind of the consumer. If you are able to position your
product in the right space you will get the rocking results. 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).

Mecca cola is local soft drink company of Saudi Arabia. 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 declining. So it is becoming very difficult for the Mecca cola to survive against the
international brand.

So to maintain its market Mecca cola starts positioning itself as the Muslim soft drink and coke,
Pepsi as the American soft drink. After that putted emphasis that America is enemy of Muslim so

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coca and Pepsi is their enemy too. Mecca cola also starts giving some percentage of profit to
organization which is fighting for the rights of Muslim.

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. This practical example shows that if you are able to position yourself in the
important space of consumer mind you will dominate the market.

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 COKE AND PEPSICO AD WAR

A battle is hotting up in India between the two international Cola giants, Coke and Pepsi, to
corner a bigger share of the nearly Rs.6500 crore market. “Share my dream,” said Coca-Cola to
the Indian consumer in 1993. Older Coke lovers welcomed the world's best-known brand back
with misty eyes.

The younger lot just shrugged. Among soft drinks, Coke was stronger than Pepsi among the
older people (evidently nostalgia was at work) while Pepsi obviously scored above Coke with
‘Generation next'. Coke was the official drink for the Wills World Cup but Pepsi blew
officialdom to bits with its cheeky 'Nothing official about it'.

After losing the world cup rights to Coke, Pepsi launched an aggressive campaign signing up
leading Indian cricketers. In 1998, Coke's teen strategy finally moved into place. It signed on
Saurav Ganguly and Srinath and came up with the peppy 'Eat crickets, sleep cricket, drink only
Coca-Cola'. 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, aided by Aamir-
appeal, Hrithik-mania and Aditi-gaze, comes a damp squib about four friends growing up with
Coke, too desperate and too dull. The stakes are high and the two Cola giants are slugging it out
for every bit of this market share, even if it means bitter tactics at times. 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.

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For now, it's Shah Rukh, Manisha Koirala, Rani Mukherjee, Kajol, Preity Zinta and Superstar
Amitabh Bachchan in the blue (Pepsi) corner and Karisma Kapoor, Rambha and Amir, Hrithik,
Aditi Gowatrikar and Aishwarya, in the red (Coke). The battle continues with Aamir Khan and
Aishwariya Rai both wooed away from Pepsi by tempting offers from Coke. However this is just
the beginning and things are likely to get even hotter.

THUMPS UP VERSUS PEPSI

The latest Coke’s strategy is to engage Pepsi in war with Thumps up and playing safe with Coca-
Cola. The latest ads of thumps up which features Salman Khan tries to make fun of Pepsi and it’s
sweeter taste. Pepsi also has retaliated by its latest ad of Lehar Soda, which features a look alike
of Salman Khan

PRICING STRATEGY
Price is not just a number tag. Price comes in many forms and performs many functions. It is one
of the factors that affect the sales in a drastic ways.

PEPSI PRICING STRATEGY IN 1936

Pepsi gained popularity following the introduction in 1936 of a 12-ounce bottle. Initially priced
at 10 cents, sales were slow, but when the price was slashed to five cent, sales increased
substantially. 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), instead of the 12-ounces
Pepsi sold at the same price.

In 1936 alone 500 million bottles of Pepsi were consumed. For 1936 to 1939, Pepsi profit
doubled and there is also a dramatic increase in sales of Pepsi. This case of Pepsi presents the
live example how the pricing makes difference in marketing process of a firm.

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.5. It brought down the average price of its product to Rs.5 thereby
bridging the gap between soft drink and other local option like tea, milk, and sugarcane juice or

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lemon water and it also make the price point of the soft drink within the reach of high potential
rural market.

Coca cola and Pepsi in the market place now start with the basic introductory pack, which is a
200 ml returnable glass bottle priced at Rs.8 and is available across low income and rural areas.
The next pack size is 300 ml at Rs.10 and is focused on those willing to pay more within the
immediate consumption arena.

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. The new on-the-go consumption
pack is called the “express pack” and doing well in channels such as travel, malls so on, where
people want a single serve and it is priced at Rs.20. Can packing (250 ml) of Coca cola and Pepsi
is priced at Rs.15. The company also introduced the party pack of 2 liter of the consumption in
the party and is priced at Rs.55.

The average price of this packing is cheap than other packing as to increase the consumption of
soft drink in the market. PepsiCo India priced So Be Adrenaline Rush (premium product) at
Rs.75 for the can of 245ml. So Be 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.

As this is a premium and launched drink with energy booster so it is priced at higher price as
compare to other drink. PepsiCo also introduced their sport drink in 500 ml packing for Rs.35.
As this drink is specially introduced for the specifically sports segment so it is costlier as
compare to other drinks.

It also introduced its Nimbooz in packing of 200ml at Rs.10. Tropicana of PepsiCo comes in
packing 200ml at Rs.15 and in packing 1liter at Rs.65. Coca cola also introduced its pulpy
orange drink (Juice), Minute Maid, in India at Rs20 in the 500ml.

POLITICAL ENVIRONMENT AND ITS EFFECT

Political and legal environment are some important factors that influences the marketing strategy
of soft drink companies. Take the example of India, in India coca-cola came in early 1970 after
the janta party came into 1977 they oppose the strategy adopted by coca cola.

The janta 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. This hurtled the
company operation in India. Soft Drink Company Pepsi co began its operation with LEHAR and
opted the market strategy according to political and legal scenario of the country.

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The case of Coke and Pepsi in India is a lesson that all marketers can observe, analyze and learn
from, since it involves so many marketing aspects that are essential for all marketers to take into
consideration. Both companies had many difficulties, especially Coca-Cola, and it's useful to
observe how it dealt with the different aspects, stating from the political environment of the
Indian market and the trade barriers it faced, 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, ending with the change in the environment and market due to
boycott campaigns for different reasons.

Until the early 1990s, India was considered unfriendly to foreign investors, especially in
consumer goods sector. If an item could be obtained within the country, imports of similar items
were forbidden. Due to this environment; Coca-Cola had withdrawn from the Indian market in
1977. Coke's refusal to give the formula and withdraw from the market wasn't a clever decision,
because as a big company, coke must expect to face many challenges. It should have believed in
it marketing capabilities and its ability to position its brand as a unique one,

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SWOT ANALYSIS OF PEPSI AND COKE

STRENGTHS
Pepsi 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.

WEAKNESSES
Weaknesses 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.

OPPORTUNITIES
Brand 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.

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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.

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 REFRENCES
http://www.pepsico.com/

http://www.coca-colaindia.com/

http://www.americanartarchives.com/pepsi.htm

http://www.megaessays.com/viewpaper/22088.html

http://www.nytimes.com/2010/07/19/business/media/19adco.html

http://www.socialmediatoday.com/SMC/174604

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