Analysis of Marketing Strategy of Coca Cola and Pepsico

7/31/2019 Analysis of Marketing Strategy of Coca Cola and Pepsico

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ACKNOWLEDGEMENT

We think if any of us honestly reflects on who we are, how we got here, what we think we mightdo well, and so forth, we discover a debt to others that spans written history. The work of someunknown person makes our lives easier every day. We believe it's appropriate to acknowledge allof these unknown persons; but it is also necessary to acknowledge those people we know havedirectly shaped our lives and our work.

First of all we would like to thank our teacher Mr. Amit Lal for their guidance throughout thesemester.

Then we would like to thank Mr. B.P Chauhan, Mr. Pawan Gaur, Mr Vishal khosla and AbishekDutta for providing us the information that was required for completion of this project.

I express my thanks to Varun Beverages Ltd for granting me the permission to work with theesteem organization. I am also thankful to Mr. Pawan Gaur (C.E.), Varun Beverage Ltd. whoguided and helped me in all possible ways they could, at every stage of the project.

I would also like to thank all the SAN BEVERAGES Executives, distributors & staff ofdehradun area who provided me all the relevant information and their kind support, on the basisof which this report has been prepared.

Shaeeb mohd khanday


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EXECUTIVE SUMMARY

Analyzing the marketing Strategy of PEPSI and COCA COLA in DEHRADUN

Channels of distribution are an important aspect of marketing strategy. Channels chosen for thecompanys products effect every other marketing decision.

On 14th of June I start my project under the guidance of Mr. BP Chauhan(TDM) /Mr.PawanGaur (M.E.)Dehradun. I have been allocated the area for survey in Dehradun.Market Area of Dehradun :-

1: Sahastradhara Road

2: Patel Nagar

3: Upper Rajpur

4: Lower Rajpur

5: Chakrata road

6: GMS road

7: Haridwar road

8: Gandhi road

9: ISBT road

10: Kola garh

11: Hathi Barkala

12: Kavli road

13: EC road

14: Main Sahastradhara

15: Nehru colony

16: Niranjan pur

17: Nobawala


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PREFACE

Marketing plays pivotal role in todays business scenario in consumer product Company, when

there is such a high competition in the market.

The emphasis in the project is providing the study and an insight into Indian FMCG Business

Scenario. The Summer Project is designed to provide participation of MBA program as on the

job experience. This has given a chance to try and apply the academic knowledge and gain

insight into corporate culture. This helps in developing decision-making abilities and emphasizes

on active participation by the student.

I undertook my Project in Varun Beverages, a leading Bottler and Marketing partner of the Pepsi

Foods. During the training, I had worked on the project analysis of marketing strategy of PEPSI

and COCA COLA in Dehradun.

I gained valuable experience & knowledge during the survey. The Project consists of my

findings after data analysis & conclusions were drawn and finally recommendations were put

forward.


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Table of Contents

Chapter 1: Introduction to beverage industry

Chapter 2: Industrial leaders (coca cola & Pepsi)

Chapter 3: Segmentation of market

Chapter 4: Product mix

Chapter 5: Branding

Chapter 6: Positioning and Promotion

Chapter 7: Pricing strategy

Chapter 8: Distribution channel

Chapter 9: Social responsibility marketing

Chapter 10: SWOT analysis of Pepsi and coke

Chapter 11: Research methodology


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Chapter 1: Introduction to beverage industry

1.1 BEVERAGE

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.


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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 drinks that have undergone an alcohol

removal process such as non-alcoholic beers and de-alcohol zed 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, Caf au lait, Frappe, Flavored coffees

(mocha etc) Hot chocolate: It is a heated beverage that typically consists of shaved chocolate orcocoa powder, heated milk or water, and sugar.

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.


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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.


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CHAPTER 2

INDUSTRIAL LEADERS (PEPSI & COCA COLA)

At the core of the beverage industry is the carbonated soft-drink category. Soft drink holds 51%

(majority of market share) of the total beverage market. Soft drink can be further divided into

carbonated drinks (Coca-cola, Pepsi, Thumbs up, Diet coke, Diet Pepsi etc.) and non-carbonated

drinks (Orange, Cloudy lime, Clear lime and Mango). The dominant players in soft drink market

are Coca Cola and Pepsi, which own virtually all of the North American markets most widely

distributed and best-known brands. They are dominant in world markets as well. These

companies products occupy large portions of any supermarkets shelf space, often covering

more territory than real food categories like dairy products, meat etc.

2.1 HISTORY OF PEPSICO

Born in the Carolinas in 1898, Pepsi-Cola has a long and rich history. The drink is the inventionof 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

pharmacist 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.


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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." 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.


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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 result in the

formation of today knows PepsiCo Inc.


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2.1.1 ORGANIZATION STRUCTURE

VARUN BEVERAGES LTD.

CHAIRMAN

MARKET UNIT MANAGER

UNIT MANAGER

GENERAL MGR. TERRITORY DEV. MANAGER

PRODUCTION MGR. AREA DEV. Co-ORDINATOR

MANAGER

SHIPPING MGR. MARKETING EXE CUSTOMER EXE

TRANSPORT MGR. SALESMAN


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2.2 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-Cola sold 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. For more than 65 years, Coca-Cola has been a sponsor

of the Olympics. Advertisements for Coca Cola started on the radio in the 1930s and on the

television in 1950. Currently Coca-Cola is advertised on over five hundred TV channels around

the world.

2.2.1 COKES CORPORATE VISION

For more than a century, Coke has consistently delivered the simple promise of Coca- Cola.

This has enabled Coke to sustain a long track record of growth. Amidst all the years of success,

the most pivotal moments in Cokes history came when they had to change their business

dramatically. They had to do this to meet new challenges of the evolving world. But each time,

Cokes predecessors sustained growth momentum because of three consistent factors:

The Company remained focus on the basic promise of Coca-Cola, which has not only endured,

but also indeed carried Coke. Coca-Cola has been Cokes consistent theme throughout the 115-

year history. Working with strong ideals, always striving to behave in way consistent with the

brand itself. Cokes leaders had the vision, 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.


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2.2.2 COKES OUSTER FROM INDIA

The company left India in 1977 after the newly elected Government party came to power at the

Centre for the first time. They asked the company to divest 60 % of its business and divulge its

secret Coca-Cola formula. Coke preferred to quit rather than dilute its equity to 40 per cent in

compliance with the provisions of FERA.

2.2.3 THE RE-LAUNCH OF COCA COLA IN INDIA

Coca Cola came back to India after 16 years when it was launched on October 24, 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. 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.

2.3 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. 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.


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2.4 OPPORTUNITY IN INDIAN MARKET

As in India, around 120 billion litres of beverage is consumed every year, 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. 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.


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MARKETING STRATEGY OF PEPSICO AND COCA COLA

CHAPTER 3

SEGMENTATION OF MARKETA market segment consists of a group of customers who share a similar set of needs and wants.

Rather than creating the segment the marketers 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.

3.1 MASS MARKETINGHowever 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 segmentof the population.

3.2 TARGETED MARKETINGAlthough 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

3.2.1 GEOGRAPHICAL

3.2.1.1 REGIONBoth 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.


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3.2.1.2 RURAL VS. URBAN MARKET

Coca-Cola Company is one of the first global majors to have spotted the potential spin offs from

the countrys rural market. 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. So Coca cola and PepsiCo in Year 2002 bring the 200 ml bottle at Rs.5 specifically

targeted at the rural sector so that soft drink can take place of the local drink like lemon,

sugarcane juice and Tea etc. Both the companies Coca-Cola and PepsiCo have adopted different

marketing strategy for rural and urban areas

3.2.2 DEMOGRAPHIC SEGMENTATION

3.2.2.1 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 thums 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 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

3.2.2.2 GENDER

Gender based segmentation is very important. As the taste of male and female is different. Lets

take the example of coca cola, thums 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.


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CHAPTER 4

PRODUCT MIXA 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 notonly sell soft drinks in physical forms, but brands. A brand comprises of everything from

beverages to experiences. However in this chapter we shall try to understand and analyze the

product line and product classification of Pepsi and coca cola.

4.1 PRODUCT PORTFOLIOBoth 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:

4.1.1 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 Bon Aqua, water found on four continents, their

product variety spans the globe

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, as

well as the best-known product in the world.

Available in the following flavors: Cola, Cola Green Tea, Cola Lemon, Cola Lemon

Lime, Cola Lime, Cola Orange and Cola Raspberry.


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Diet Coke: Diet Coke was born in 1982. Diet Coke is the drink for people who want no

calories, but plenty of taste. Known as Coca-Cola light in some countries, it's now the

No.3 soft drink in the world.

Available in the following flavors: Black Cherry Cola Vanilla, Cola, Cola Green Tea,

Cola Lemon, Cola Lemon Lime, Cola Lime, Cola Orange and Cola Raspberry

Fanta:Fanta was introduced in the United States in 1960. Consumers around the world,

particularly teens, fondly associate Fanta with happiness and special times with friends

and family. This positive imagery is driven by the brand's fun, playful personality, which

goes hand in hand with its bright color, bold fruit taste and tingly carbonation.

Kinley: Kinley is a carbonated water that comes in wide array of variants such as tonic,

bitter lemon, club soda and a myriad of fruit flavors.

Available in the following flavors: Apple Peach, Bitter Grapefruit, Bitter Herbal, Bitter

Lemon, Bitter Water, Blueberry Pomegranate, Club Soda, Ginger Ale, Lemon andRaspberry

Limca: This thirst-quenching beverage features a fresh, light lemon-lime taste and fun

loving attitude. It's a homegrown, national treasure in India that is acquired by the Coca-

Cola Company in 1993. Limca continues to build a loyal following among young adults

who love the lighthearted way it complements the best moments of their lives. This drink

is available in lemon flavor.

Sprite: Introduced in 1961, Sprite is the world's leading lemon-lime flavored soft drink.

Sprite is sold in more than 190 countries and ranks as the No. 4 soft drink worldwide,with a strong appeal to young people. Millions of people enjoy Sprite because of its crisp,

clean taste that really quenches your thirst. But Sprite also has an honest, straightforward

attitude that sets it apart from other soft drinks. Sprite encourages you to be true to who

you are and to obey your thirst.

Available in the following flavors: Bitter Lemon Citrus Grapefruit, Citrus, Lemon and

Lemon Lime.


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4.1.2 PEPSICO

Pepsi has been bringing fun and refreshment to consumers for over 100 years. From its humble

beginnings over a century ago, Pepsi-Cola has grown to become one of the best known, most-

loved products throughout the world. Today, the company continues to innovate, creating new

products, new flavors and new packages in varying shapes and sizes to meet the growing demand

for convenience and healthier choices.

The various product of Pepsi available in India are:

Pepsi: Pepsi is the most saleable product of PepsiCo. It is popular in the younger generation allaround the world.

Diet Pepsi: With its light, crisp taste, Diet Pepsi gives you all the refreshment you need -

with zero sugar, zero calories and zero carbs, Light, Crisp, refreshing.

Mirinda: Mirinda was originally produced in Spain. Mirinda is a brand of soft drink

available in fruit varieties including orange, grapefruit, and apple, strawberry, pineapple,

banana, and passion fruit and grape flavors. The orange flavor of Mirinda represents the

majority of Mirinda sales worldwide.

7up: 7 Up is a brand of a lemon-lime flavored non-caffeinated soft drink. The rights to

the brand are held by Dr Pepper Snapple Group in the United States, and PepsiCo (or itslicensees) in the rest of the world.

Mountain Dew: Mountain Dew (also known as Mtn Dew as of late 2008) is a soft drink

distributed and manufactured by PepsiCo. 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.


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Pepsi Blue: Pepsi Blue is a berry-flavored soft drink produced by PepsiCo. It was

launched in India near the cricket world cup to associated the Pepsi with the Indian

people as Blue is official color of Indian cricket team. 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. Varieties of Slice have included Apple, Fruit Punch, Grape, Passion fruit, Peach,

Mandarin Orange, Pineapple, Strawberry, Cherry Cola, "Red", Cherry-Lime, and Dr

Slice.

4.3 PRODUCT FILLINGSTRATEGYA firm can lengthen its product line by adding more items within the present range. 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.

Pepsi and coca-cola, both the company uses this type of line filling strategy Time to time in

different seasons Pepsi and Coca cola launches different type of products. Zero coke (launched

on the occasion of release of James bond movie QUANTUM OF SOLACE) by Coca Cola comes

under this type of product filling marketing. However in absolute terms there is no any differencein the product ingredients, but their presentation is different and both the companies present their

product as if this is a new product.

4.4 PRODUCT LIFE CYCLETo be able to market its product properly, a business must be aware of the product life cycle of

its product. The standard product life cycle tends to have five phases

DEVELOPMENT

INTRODUCTION

GROWTH

MATURITY DECLINE

In America carbonated soft drink market is currently in the maturity stage, which is evidenced

primarily by the fact that they have a large loyal group of stable customers but in the developing

countries like carbonated soft drinks are in growth stage, 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.


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CHAPTER 5:

BRANDINGBrand is defined as a name, term, symbol, or design, or a combination of them, intended toidentify the goods or services of one seller or group of sellers and to differentiate them from

those of competitors. A brand is thus a product or service that adds dimension that differentiate it

in some way, from other products or services designed to satisfy the same need. These

differences may be functional, rational, or tangible, related to product performance of the brand.

They may also be more symbolic, emotional or intangible related to what brands represent.

5.1 BRAND NAME

Through various researches it has been found that a symbolically significant name helps to sell aproduct. One of interesting illustration how name affects marketing is the case study of coca

cola. When it was introduced in china in the 1920, coca cola sounded like kou-kekou- la which

means a thirsty mouth and a mouth of candle wax. 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.

5.2 PACKAGINGCoca cola and Pepsi are much innovated in the packing of their product. These companies

introduced different concept of packing. The Airtight bottle concept is given by the Coca cola,

which has revolutionized the bottling and packaging industry. These Cola giant also introduced

the different size of returnable glass bottle like 200ml, 300ml and nonreturnable plastic bottle

like 600 ml, 1.5 litre, 2 litre according to the need of the targeted customer. They also pioneer in

bring Cans and Frosted bottles in the market. Packing helps the brand to capture the desire target

like 600ml packing is launched, as express pack so this is targeted to touring population and

this segment need non-returnable bottles. The Coca cola is innovative in design of bottle like

Fanta, kinley (500ml & 1 litre) having curve shaped bottle that are easy to hold.


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5.3 LABELINGPepsiCo has associated itself to rich deep blue color as blue color represents eternal youthness

and openness that is appropriately consistence with the youth segment they are targeting.

PepsiCo under the name of Project Globe Campaign spent 637 million dollars over 5 years, to

introduce the new rich deep blue coloring. So labeling helps the brand to get attach with the

targeted segment.

5.4 ATTRIBUTES FOR STRONGEST BRAND SHAREAccording to a study done by scholars of HARVARD BUSINESS REVIEW the worlds

strongest brands share following 10 ATTRIBUTES:

1. The brand excels at delivering the benefits consumers truly desire.

2. The brand stays relevant

3. The pricing strategy is based on consumer perceptions of value.

4. The brand is properly positioned.

5. The brand is consistent.

6. The brand portfolio and hierarchy make sense.

7. The brand makes use of and coordinates a full repertoire of marketing activities to build

equity.

8. The brands managers understand what the brand means to consumers.

9. The brand is given proper sustained support.

10. The company monitors sources of brand equity.


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Strong brand

WEAK BRAND

(BRAND DYNAMICS PYRAMID)

In the above explained brand dynamics pyramid, If any brand involves all the characteristic then

it is a strong brand whereas if it does not having any weak brand. If we take Coca cola and Pepsi,

they both maintain high level of strong relationship. It means there is an image in the mind of

consumers that both the companies offer something better than others and nothing else can beat

it.


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5.5 UNDERSTANDING OWN BRAND IMAGEBattered by competition from the sweeter Pepsi cola, Coca-cola decided in 1985 to replace its

old formula with a sweeter variation NEW COKE. Coca cola spent $4 million on market

research. Blind taste tests showed that coke drinkers preferred the new sweetener formula, but

the launch of new coke provoked a national uproar, market researcher had measured the taste but

had failed to measure the emotional attachment consumer had to coca-cola. There were angry

letters, formal protests and even law suits threats to force the retention of the real thing. Ten

weeks later, 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.

5.6 BRANDING IN RURAL MARKET BY COCA COLAIn India (2002), Coca cola launched a new advertisement campaign featuring leading Bollywood

star Amir khan. The advertisement with tagline-Thana mat lab COCA COLA was targeted at

rural semi urban consumers.The idea was to position Coca cola as a generic brand for cold drinks. The campaign was

launched to supports Coca cola rural initiative. However, 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

5.6.1 BRAND LOCALISATION STRATEGY: THE TWO INDIAS

5.6.1.1 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 countrys population. This segment sought social bonding as a needand responded to aspirational messages, celebrating the benefits of their increasing social and

economic freedom.

Life ho to aisi was the successful and relevant tagline found in Coca-Colas advertising to thisaudience.

5.6.1.2 INDIA B: THANDA MATLAB COCA COLA

INDIA B included small towns and rural areas, comprising the other 96% of the nations

populations. This segments primary need was out-of-home thirst quenching and the soft drink

category was undifferentiated in the minds of rural consumers. With an average Coke costing

Rs.10 and an average days wage around Rs.100, Coke was perceived as a luxury that few couldafford. So when coca cola launched chota coke at Rs.5, 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.


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5.6.1.3 Brands Philosophy

While developing brand strategy, PepsiCo needs to determine its branding philosophy. This

philosophy outlines the use of manufacturer, dealer and in generic brands as well as the use of

family or individual branding.

Manufacturer brands (national brands)

Manufacturer brands contain the names of manufacturers and generate the vast majority of sales

revenues for most product categories. Pepsi Cola appeal to a wide range of the consumers, who

desire the low risk of the poor product performance, good quality, routinized purchase behavior,

status and convenience shopping. According to Pepsi Cola, manufacturer brands are well known

and trusted because quality control is strictly maintained. Their brand names are identifiable and

present distinctive images to shoppers.

Manufacturers normally produce a number of product alternatives under their brands. Throughthe manufactures brand the major marketing focus of Pepsi Cola is to attract and retain

consumers who are loyal to the firms offerings and to control the marketing effort for the

brands.

Private Brands

It contains the names designated by wholesalers or retailers and account for the significant levels

of sales revenues in many product categories. Dealers secure relatively exclusive rights for their

brands and are usually more responsible for their distribution. Private brands typically require

large total investment.

Wholesalers and retailers are able to sell their items at lower prices and still obtain higher per-

unit profits. The marketing focus of private brands is to attract and retain the customer who are

loyal to the dealer and for the distributor / retailers to exert control over marketing plan for these

brands large wholesalers and retailers now advertise their brands extensively.

Generic Brands

Generic brand emphasize the names of the products themselves and not manufacturer and dealers

names. Generics appeal to price conscious, careful shoppers, who perceive them as representing

a very good value, are sometimes willing to accept lower quality, and often purchase for large

families generic brands are sold one advertised and receive secondary shelf space consumers

must search out these brands. The major marketing goal is to offer low priced, lower quality

items to consumers interested in price savings.

So Pepsi Cola obtain the manufacturer brand instead of the generic and private brands.


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5.7 BRAND REVITALIZATIONTo recover and reposition brand in mind of consumer when it is not working successfully is

known as Brand Revitalization. So there is an interesting example how brand repositioning helps

in recovering and growth of the product. Pepsi initially introduced Mountain Dew in 1969 and

marketed it with the countrified tagline Yahoo Mountain Dew! Itll tickle your inwards. By

the 1990s, the brand was languishing on store shelves despite an attempt to evolve the image

with outdoor action scenes. To turn the brand around, 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, skydiving, and snowboarding while consuming

mountain dew. The brand slogan became Do the DEW. The brands successful pursuit ofyoung soda drinkers led to mountain dew challenging diet coke to become the number three

selling soft drink in terms of market share by 2000.


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CHAPTER 6:

POSITIONING AND PROMOTION

Positioning is the act of designing the company offering and image to occupy a distinctive placein the mind of the target market.

6.1 COKE AND PEPSI POSITIONINGCoke 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

o any whether is Pepsi whether

o the light refreshment

o be sociable, have a Pepsi

o now itsPepsi for those who thing young

o come alive, youre in Pepsi generation

o youve got a lot to live and Pepsi

o yeh hai youngistaan meri jaan (in India)

o - taste the once thats forever young

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 clearlyvisible from there advertisement as follow

(ADVERTISEMENT IN INDIA REPRESENTING YOUTH)


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In the 1960s and early 1970s, PepsiCo was a much more aggressive and innovative 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 endorsers and are betting big

on emerging stars.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.


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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 thats 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. Coca cola, on the other hand identified the southern market as a great testing

ground for its new brands, so much so that 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.

6.2 COMMUNICATION STRATEGY

Looking the changing environment the coca cola and PepsiCo calibrated their communicationstrategy in a very innovative way. Imagery works for carbonated soft drinks, while

functionality works for other category. For instance, to entrench theimagery 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 its 100 percent juice.

6.3 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 is done in that way.

6.3.1 THUMSUP (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 likedarr kagae jeet hai position it as strong soft

drink in the mind of consumer.

6.3.2 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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6.5 INNOVATION IN ADVERTISEMENT METHODSIndustry observers say dependence on try is down to 75 percent from 95 percent till few yearsago. Investment is going into out of home advertising, point-of-sale promotion and emergingmedia like radio and Internet.

6.5.1 SUB-MINIMAL EFFECT ADVERTISEMENTUnderstanding the concept that increase in sale of complementary good helps in increasing the

sale of the product. Coca cola starts advertising in movie- theaters and giving advertisement

drink coke and eat popcorn. This resulted in 2% sales increase of coca cola and 10% sales

increase of popcorn. The choice of Movie Theater is because in movie theaters there are very

less thing to distract mind of the person. Pepsi is also now advertise their product with snacks

like sandwich, 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. This is known as Sub-minimal effect

in which consumer did not get the idea how advertisement is influencing them.

6.5.2 PERSONAL PROMOTIONAccording to a survey people in Asia are more inclined to them and feel happy when some givesthem personal recognition. So in china coca cola starts advertising through mobile phone. Thisadvertisement strategy gives the touch of personal feeling. The sales of coca cola increasedthrough this advertisement strategy.

6.5.3 AMBUSH MARKETINGNew 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 worldcup Coke takes the main sponsorship but Pepsi instead of taking the main sponsorship utilizeadvertisement budget doing advertisement outside the stadium. As Coke after becoming the mainsponsor of the world cup does not left with much advertisement budget so it is not able to doadvertisement outside the stadium at large scale. But Pepsi takes this as opportunity and utilizestheir fund doing advertisement outside the stadium. As cost of doing advertisement is cheap sothey have done their promotion at large scale and they supported this advertisement by givingslogans like Nothingofficial about it. So Pepsi expending less money than Coke had done alarge advertisement campaign than Coke.

6.6 COKE AND PEPSICO AD WARA 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


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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. 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.

6.6.1 THUMS UP VERSUS PEPSIThe latest row in the ongoing battle, the latest Cokes strategy is to engage Pepsi in war withThums up and playing safe with Coca-Cola. The latest ads of thums up which features SalmanKhan tries to make fun of Pepsi and its sweeter taste. Pepsi also has retaliated by its latest ad ofLehar Soda, which features a look alike of Salman Khan.


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CHAPTER 7:

PRICING STRATEGYPrice 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.

7.1 PEPSI PRICING STRATEGY IN 1936Pepsi 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.

7.2 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.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 lemon water and it also makes 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 maximum energy supplements aimed at helping consumers

perform at their peak by energizing their body and mind and charging up energy an alertnesslevels. 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.


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CHAPTER 8:

DISTRIBUTION CHANNELDistribution (or place) is one of the four elements of marketing mix. Frequently there may be a

chain of intermediaries; each passing the product down the chain to the next organization, beforeit finally reaches the consumer or end-user. This process is known as the 'distribution chain' or

the 'channel. So we say that a set of interdependent organizations involved in the process of

making a product available for the use or consumption is known as Distribution channel. Each of

the elements in these chains will have their own specific needs, which the producer must take

into account, along with those of the all-important end-user.

8.1 DISTRIBUTION STRATEGYCoca cola and PepsiCo are worldwide famous for their Distribution channel. In India the

distribution network of Coca cola had 6.5lakh outlets across the country in 2000 and on the other

hand Pepsi Co's distribution network had 6 lakh outlets across the country in the same year. Cocacola and PepsiCo had formulated different distribution strategy for urban sector and rural sector.

For the urban distribution channel these companies adopted the model like direct store

distribution, broker warehouse distribution and Vending & Food Service (V&FS) systems where

as these companies are following the Hub and Spoke model for rural distribution channel, in

which they divided the different categories of distributors according to the area they are

covering.

8.1.1 RURAL DISTRIBUTION CHANNEL (HUB AND SPOKE MODEL)Since last five years soft drink companies had started penetrating rural marketing also. For the

rural sector these companies are working on Hub and Spoke model. To reach out to rural India,

Coke started out by drawing up a hit list of high potential villages from various districts. So to

ensure full loads, large distributors (Hubs) were appointed, and they were supplied from the

company's depot in large towns and cities. Full load supplies were offered twice weekly against

payment by demand draft. On their smaller distributors (Spokes) in adjoining areas. Journeyplans on a weekly basis and supplied against cash. The hired rickshaws (cycle operated vans)

that travelled to villages daily.


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DISTRIBUTION CHANNEL IN RURAL AREA

BENEFITSThis model has been utilized by soft drink companies like Pepsi and coca cola to reach rural

market. This system allows for larger loads to travel long distances and smaller loads to travel

short distances. Thus making the merchant large distributors from the company depots twice a

week and the distributors in turn supply to the smaller distributor once a week.

8.1.2 DISTRIBUTION CHANNEL IN URBAN AREASBoth the soft drink companys coke and Pepsi adopted a model DSD that is Direct Store

Distribution. In this company directly supplies its product to the retailers which helps them to

save the margin, which they give to the wholesalers and it also ensures quick availability of theproduct to the retailer. Based on its experience, PepsiCo and Coca cola had developed various

distribution models to offer its products and services to customers in the US. Besides Direct

Store Delivery (DSD they adopted other system like Broker Warehouse Distribution (BWD) and

Vending & Food service (V&FS) systems.


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(DIRECT STORE DISTRIBUTION)DISTRIBUTION CHANNELIN URBAN AREAS

8.2 INNOVATION IN DISTRIBUTION SYSTEMThrough their use of the most modern technology in recent years, PepsiCo and its bottlers were

able to improve their distribution and logistics management operations significantly. To furtherimprove the market penetration of its products globally, PepsiCo launched two new distribution

methods in the initial years of the new millennium. These were the chilled DSD system and the

hybrid system.

8.2.1 CHILLED DSD SYSTEM

The chilled DSD system was a relatively small distribution method, created for items, whichrequired continuous refrigeration. This was primarily created for the fruit juices product line as

they can spoil quickly if not given the required condition and care so chilled DSD system ensures

that continuous refrigeration helps in preventing the products from spoiling.


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8.2.2 THE HYBRID SYSTEMIn this system the company makes the collaboration with other company of complementary good

so that their distribution channel is also used for the sales of its product. As taking the practical

example of the collaboration of Coca cola and McDonald. Through this collaboration the

distribution channel of the Coca cola increases, as at ever McDonald the Coca cola will be there.

So increase the distribution channel through collaboration with other company is known as

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

companies.

8.3 INTERNATIONAL DISTRIBUTION SYSTEM MANAGEMENTIn order to manage its distribution systems effectively, PepsiCo and Coca cola had put in place-

advanced logistics systems. They sold beverage concentrate to bottlers, who added carbon

dioxide, sweetener and water to make beverages and beverage syrup. Syrup was either sold

directly to the fountain accounts or was combined with carbonated water for bottling. Bottlingcompanies were (with a few exceptions) owned and operated by local companies in the countries

where PepsiCo and Coca cola operated.


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CHAPTER 9:

SOCIAL RESPONSIBILITY MARKETINGThe effects of marketing clearly extend beyond the company and the customer to a society as a

whole. The societal marketing concept holds that the organizations task is to determine the

needs, wants and interests of the target markets and to deliver the desired satisfactions moreeffectively and efficiently than competitors in a way that preserves or enhances the consumers

and societys long term well being. The societal marketing concept calls upon marketers to build

social and ethical consideration into their marketing practices.

9.1 CORPORATE COMMUNITY INVOLVEMENT MARKETINGThis is a type of marketing in which company provide In-kind or Volunteer services in the

community. 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, which provides the opportunity for the

long-term growth of the company. There is a interesting case of TAIWAN local soft drinkcompany, which with the help social responsibility marketing able to compete with the

international soft drink giant Coca cola and PepsiCo. In the year 1990 there came a devastating

flood in eastern China. After careful survey the local soft drink company, 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. The company constituted an organization for humanitarian

work on its own cost and this organization starts helping the people affected by the devastating

flood. It resulted in a sympathetic wave in the middle class of china, that organization was

flooded with fund within few weeks of the formation of organization. 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. Sociality responsible work doesnt help companies for creating a brand

image of socially responsible person only but it helps in other manner also. 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. Thus social corporate responsibility is also a type of

investment, which helps the company in their positioning.


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CHAPTER 10:

SWOT ANALYSIS OF PEPSI AND COKE

12.1 STRENGTHSPepsi 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.

12.2 WEAKNESSESWeaknesses 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.

12.3 OPPORTUNITIESBrand 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 beverage comes 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.

12.4 THREATSCurrently, 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 verystrong, 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 this Substitute will remain threat to them. Consumer buying power is

also represents a key threat to the Pepsi and Coke.


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LOGO OF THE PEPSI BRAND


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Logo of Coca Cola


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Chapter 11: Research methodology.

11.1Objective:To:

analyze thedifferent strategies of PepsiCo and Coca Cola find out the effect of their respective strategies on the sale of their products

find out, Whether these strategies help in creating brand loyalty

find out, How effective are these strategies in creating awareness about the products

find out demand of different products under the respective brand name

Research in common refers to a search of knowledge. One can also define research as a scientific

& systematic search for pertinent information of a specific topic. It is the pursuit of truth with the

help of study observation, comparison & experiment.

11.2 DEVELOPING RESARCH PLAN:

After deciding the objective of marketing research the next step is deciding Research plan for

gathering effective information related to this research project. The research consists of

following steps, which are discussed subsequently.

11.2.1 Research Design:

Descriptive Research: In my market survey descriptive research process was carried out to

describe the market characteristics, consumer profiles, distribution strategies, and market

potential.

Data Source:

During project study I use both primary as well as secondary data source. For primary datacollection I visited various retailers in Dehradun & for secondary data I went through Books,

Journals & Internet. The information collected is relevant, correct & unbiased.


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I followed survey technique for collecting the data. In market survey research approach the

carried out information from retailers by using instrument & methods of surveying like, I have

chosen personal contact methods because of higher response rate & meaningful responses. This

helped me to get the general feedback that helped me in completion of the research part of

project.

Reach Instrument:

The research instrument used was EDS and DSR form. In which market information detail of

each outlet should be filled in EDS form. For this I have visited each & every outlet & check all

the brands & packs of Pepsi available or which one is available and demand in comparison with

Coke & filled it in EDS forms. In my research process I have used generally closed ended

questionnaire where respondents could answer in their own manner. Through this I was able to

extract information from the respondents about Pepsis products & the competitors.

Sampling Plan:

In designing the sampling plan following points were considered:

Sampling Unit: It includes who is to be a surveyed. Major retailers of Dehradun constitute my

sampling unit.

Sampling Size: I have surveyed about each & every outlet of the area specified to me so size

would reach up to 350 retailers i.e. the geographical limit is the area of Dehradun.


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Contact Method:

In my research process, I have collected information through personal interview process with the

help of EDS. Form given by the company because it is the most reliable & accurate method for

collecting primary data. Through this, the analysis of body language & facial expressions can betraced.

Methods of data interpretation:

In this market study I have used pie chart for data analysis & interpretation because pie chart is

the easiest & comprehensive medium for presentation of data.

Samplingunit isa single retailer outlet which may be:-provision store, stationery shop, eatery &

kiosk.

The universe studied is the sum of the retailers in the Dehradun area.

11.3 DATA ANALYSIS

MARKET FINDINGS: ROUTWISE

The routine wise marketing findings in the survey are extracted from the questionnaire and DSR attached.

Below are analyzed data and its interpretation in the form of pie charts.


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Beverage products whether of Pepsi or Coca Cola or others is liked by almost every age group. So far as

Dehradun, the capital of Uttrakhand youth of age between 20-25 are major buyers of Pepsi.

Demographic Profile

5%

20%

40%

20%

15%

Year 10-15 15-20 20-25 25-30 above 30

No. 1


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Findings show that beverage products whether of Pepsi or Coca Cola is mostly consumed at anytime. This any time seem to lie between 11am to 4pm or we can say that major consumptionoccurs near about at afternoon.

Time Preference

30%

10%60%

Evening Morning Any time

No. 2


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We all know that Coca Cola and Pepsi are Major market leaders so far as beverage industry is

concern. Their market penetration varies from state to state and from city to city. As the research

was conducted in Dehradun city the findings show that Pepsi is more prevalent than Coca Cola.

Market Share of Main Leaders

52%46%

2%

Pepsi Coke Other

No. 3


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Market is flooded with different flavors under different brands and their demand also differs so

far as age group, climate, situation is concern. If we talk of Pepsi and Coca Cola in Dehradun,

dew and slice flavor of Pepsi is demanded enormously and these flavors contribute more in

market share of respected brand.

Market Share of Best Flavor Providers

60%

38%

2%

Pepsi Coke Others

s

No. 4


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As the findings show that youth are major buyers of Pepsi products, they are fully aware about

which products is under which brand. But there are people who do not buy using brand name.

Flavor Awareness of Pepsi

2% 8%

90%

One Two More than two

No. 5


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Both the Pepsi and Coca Cola has maintain the trend of introducing various products under their

brand name and these products has been well accepted by people. Similar sort of product named

as Diet Pepsi was launched by PepsiCo and the findings show that in Dehradun majority of

people were aware about Diet Pepsi.

Awareness about Diet Pepsi

89%

11%

Yes No

z

No. 6


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So far as plane flavor of both Pepsi and Coca Cola is concern, there is not so much difference in

their market capturing power. But still Sprite of Coca Cola has a little more demand than 7 up.

Market Share in Plane Flavor

51%

49%

Sprite 7 Up

No. 7


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In case of lemon flavor limca has captured major market in Dehradun area than its complementary flavor

Mirinda lemon.

Market Share in Lemon Flavor

70%

30%

Limca Mirinda Lemon

No. 8


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11.4 FINDINGS & EXPLANATIONS:

So far as demographic profile is concern, the result was that the major buyers of Pepsi

and Coca Cola were youth between the ages of 20-25 and 25-30. The most interesting

point to analyze was that the consumption of beverage products by the age group 10-15 is

increasing and mostly in among the childrens of upper family classes.

After interpreting the findings regarding the time preference, the result came out that the

customer prefer to buy the beverage products in late afternoon. These finding may vary

from other findings carried out in other cities depending upon geography of that place. So

far my area of survey was the capital of uttrakhand and here the weather conditions

during early morning and evening remains cool, so people does not prefer to buy the chillproducts in morning and evening.

One of the main interesting finding was that the market share of Pepsi in dehradun is

more than that of Coca Cola. The reason for that may be the better distribution channels

of Pepsi and its penetration in the market. Another reason for that may be that in Coca

Cola we have ordered system and supply of products is met when order is placed by

retailer. Where as in Pepsi we dont have ordered system and the distribution channels

and vehicles are available throughout the day.

Now so far as different flavors under the brand name of Pepsi and Coca Cola are concernand their part in respective market share, the Pepsi seems to be the best flavor provider.

But the demand of some flavors is negligible as compared to others. If we talk of Pepsi

the more demanded flavors are dew and slice. Similarly in Coca Cola thums up and coca

cola are more demanded. And its these flavors that matters so far as the market share of

respective brands is concern.

Another important fact was to find out whether people know which flavor belongs to

which brand. The result was similar as I have expected i.e. majority of people were aware

about which flavor is of Pepsi and which one is of Coca Cola. 90% of people know the

product under particular brand name, they are consuming or buying.


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Companies are coming with different products and important to create awareness about

these products. Diet Pepsi was similar kind of product launched under brand name

PepsiCo. Finding show that Pepsi was successful in creating awareness about this product

as 89% of customers know about it.

If we talk of market share of plane flavors, there is not so much difference. Both 7up of

Pepsi and sprite of Coca Cola have equally captured the market. But the results show that

sprite is more preferred than 7up.

Similarly the findings show that in case of lemon flavor, limca has greater market share

than mirinda lemon. The reason for that is, lemon is in the market from very beginning

when Coca Cola enter India.


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11.5 CONCLUSION

1. After visiting nearly 350 outlets I found that Pepsi & the products under its brand name isdoing a good job in Dehradun. It is clear that Pepsi is leading Coca Cola in the soft drinkmarket in Dehradun region. If we compare Pepsi and Coca Cola in terms of Signage ordisplay material then Pepsi has an edge over coke.

2. At this time it is solely depends on the retailer which brand he offers to the consumer?Although the company has been unable to satisfy the retailers. The company must takeimmediate steps in order to resolve its disputes with these retailers.

3. It was also found that the schemes that are brought up in the market by Pepsi & Coke afterevery couple of day is making huge effect on the sale of Pepsi and Coca Cola than theirbrand name. Whereas one is cannibalizing others market only.

4. It was also seen that Pepsi brand is better sold than coke. But it is Thums up, which ismaking the major difference in the market.

5. The sale in age wise section, it was found that 200ml is sold in all the age groups with samefrequency but 300ml is sold mostly in 16 to 45yr. of age group where as CAN is sold toyounger generation only. Finally 2litre are used only for family or party purpose.

6. It was also seen that Pepsi brand is lagging the Coke especially in Muslim dominated area,

which makes a major difference in the market.


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11.6 RECOMMENDATIONS

1. PEPSI, the choice of Generation next is not providing the first choice of young generation. A

young generation wants something strong in cold drinks & thus prefers Thums up. Pepsi should

come out with some extra strong taste to catch up maximum young generation & to become

exactly Generation Next drink.

2. Company should appoint competent & honest salesman so that they could provide schemes to

the entire retailers & cover their full route.

3. It is often seen that some salesman do not intimate schemes to the retailer & few of the

retailers complained about it. So there should be frequent visits of Customer Executives to their

respective areas to keep the shopkeepers benefited with various schemes.

4. Delay in starting of supply vans from respective depot should be checked & a proper time

register should be maintained.

5. Most of the retailers are complaining about non-fulfillment of commitments regarding their

sampling. Company should make sure that the retailers get the sampling on time so that they are

satisfied.

6. Most of the retailers are complaining about delay & no replacement of burst bottles.

Marketing Management should sort some solutions to this major problem of replacing burst

bottles.

7. Half filled bottles should also be checked at the time of issue of goods from the distributors

godown to the respective routes.

8. Company should try to give some credit facility to the distributors so that they get motivated.

9. Credit facility for retailers should be provided.

10. Proper feedback system should be developed by ensuring regular visits & check randomly at

the various outlets.


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11.7

Questionnaire

On

Customer preference towards Pepsi & Coca Cola

Dear Retailer/Customer, being a marketing researcher for PepsiCo, we appreciate your cooperation andthank you for providing your valuable time. We would like to know your preference towards Pepsi andCoca cola. Please fill up the questions below, so that we have an opportunity to serve you better.

1) Name:2) Address:3) Outlet name:4) Contact no:

Q.no1: What is the present share of your outlet?

Pepsi Coca Cola

Q.no2: Which Brand according to you is most preferred by people?

Pepsi Coca Cola

Q.no3: Do you think Brand Name affects the sale?

Yes No

Q.no4: What is the demand of different customer group?Group Pepsi Coca Cola

Male _____ _____

Female _____ _____

Children _____ _____

Q.no5: Which company more actively responds to your complaints?

Pepsi Coca Cola Other

Q.no6: Which of the company you feel have better distribution network?


Q.no7: Which of the company you feel provide better Schemes?


Q.no8: Are you satisfied with the Brand Pepsi?

Yes No


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Q.no9: Which flavor of PepsiCo is more demanded?

Pepsi Mirinda-Orange

Mirinda-Orange Mirinda-Lime

Mountain Dew Slice

Q.no10: Does Coca Cola offer better service than PepsiCo?

Yes No

Q.no11: Which age group you feel is major buyer of PepsiCo products?

10-15 15-20 20-25 25-30 Above 30

Q.no12: Are you aware about Diet Pepsi product of PepsiCo is?

Yes No

Q.no13: Are you satisfied with pricing of Pepsi?

Yes No

Q.no14: What according to you is positive point of PepsiCo over Coca Cola?

Better quality

Better service

Better schemes

Better Strategies

Q.no15: Do you agree that Pepsi has better advertisement and sales promotion strategies?

Strongly Agree Agree Disagree Strongly Disagree

Q.no16: Please rank the products of Pepsi according to their demand?

Pepsi

Dew

Mirinda

Slice

7up


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Q.no17: According to you at what time people prefer to buy Pepsi or Coke products?

Morning Evening other time

Q.no18: Which according to you has best flavor product mix?

PepsiCo Coca Cola other

Q.no18: Would you like to recommend any suggestion?

Thank you


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BIBLIOGRAPHY & REFERENCES

1. Rick Yan, THE LITMUS TEST FOR SUCCESS IN CHINA, HARVARD BUSINESS

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Web site links:

18. http://www.slideshare.net/rajsinghprofessional/cocacola-in-rural-india

19. http://www.sirpepsi.com/pepsi11.htm

20. http://www.agriculture-industry-india.com/agricultural-commodities/soft-drinks.html

21. http://www.indiabschools.com/marketing_018.htm

22. http://inventors.about.com/library/inventors/blpepsi.htm

Analysis of Marketing Strategy of Coca Cola and Pepsico

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