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Project Report

On

“Business Research”

By

Aditya Purohit (BBA 2nd Year)

106/10 civil lines,

Ajmer 305001

Website: www.dezyneecole.com

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CONTENTS

Objective of the study

Product Category Hierarchy

Introduction to soft drink Industry

Introduction to the Coca Cola Company

Introduction to the PepsiCo Company

Comparison Chart on the basis of Ingredients

Comparison Chart on the basis of Economy

Marketing / Advertisement Strategies adopted by

the Coca-Cola Company and Pepsico Company

Celebrities in India Promoting the brands of the

companies

Conclusion

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Objective of the Study

Comparative Analysis between Pepsi and

Coca-Cola on the basis of different

aspects.

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PRODUCT CATEGORY

HIERARCHY

Beverages

Water Flavored

Non-Alcoholic

MilkHot

Beverages

Juices Soft Drinks

Pepsi Cola Coca Cola

Alcoholic

Wine Beer

Distilled Spirits

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INTRODUCTION TO SOFT DRINK

INDUSTRY:

In the modern urban culture, consumption of soft drinks

particularly among younger generation has become very

popular. Soft drinks in various flavors and tastes are

widely consumed by urban population at various

occasions like dinner parties, marriages, social get-

togethers, birthday celebrations etc. Children of all

ages and groups are especially attracted by the mere

mention of the word soft drinks. With the growing

popularity of soft drinks, the technology of its

production, p r e s e r v a t i o n , t r a n s p o r t a t i o n a n d

m a r k e t i n g i n t h e r e c e n t y e a r s h a s witnessed

phenomenal changes.

The so-called competition for this product in the

market is from different other brands. Mass media,

part icularly the emergence of television, has

contributed to a large extent of the ever growing

demand for soft drinks. The attractive jingles and sport

make the large audience remember this product at all times.

I t is expected that with the sort of mass

advertis ing, reaching almost the entire country and

offering various varieties, annual demand for the product is

expected to rise sharply in the times to come.

In any marketing situation, the behavioral / environmental

variables relating to consumers, competi t ion and

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Environment is constantly inf lux. The

competitors in a given industry may be making many

tactical maneuvers in market all the time. They may

introduce or initiate an aggressive promotion

campaign or announce a price reduction. The marketing

man of the firm has to meet this entire maneuver and take

care of competitive position of his firm and his brand in

the market. The only route open to him for achieving this

is the manipulation of his marketing tactics. In today’s

highly competitive market place, two players have

dominated the industry; The New York based Pepsi

Company Inc. and the Atlanta based Coca- Cola

Company. Through the globe, these major players have

been battling it out for a bigger chunk of the ever –

growing soft drink market. Now this battle has

been evolved up to India too with the arrival of these two

giants. Soft drink industry is on amazing

growth; ultimately these are only one person who

will determine their fortunes; The Indian consumer. The

real War to quench his thirst has just begun.

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The Coca-Cola Company is an American multinational

beverage corporation and manufacturer, retailer and marketer of

nonalcoholic beverage concentrates and syrups, which is

headquartered in Atlanta, Georgia. The company is best known

for its flagship product Coca-Cola, invented in 1886 by

pharmacist John Stith Pemberton in Columbus, Georgia. The

Coca-Cola formula and brand was bought in 1889 by Asa

Griggs Candler, who incorporated The Coca-Cola Company in

1892. Besides its namesake Coca-Cola beverage, Coca-Cola

currently offers more than 500 brands in over 200 countries or

territories and serves over 1.7 billion servings each day. The

company operates a franchised distribution system dating from

1889 where The Coca-Cola Company only produces syrup

concentrate which is then sold to various bottlers throughout the

world who hold an exclusive territory. The Coca-Cola Company

owns its anchor bottler in North America, Coca-Cola

Refreshments.

Its stock is listed on the NYSE and is part of DJIA, S&P

500 index, the Russell 1000 Index and the Russell 1000 Growth

Stock Index. Its current chairman and chief executive is Muhtar

Kent.

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PepsiCo Inc. is an American multinational food and beverage

corporation headquartered in Purchase, New York, United

States, with interests in the manufacturing, marketing and

distribution of grain-based snack foods, beverages, and other

products. PepsiCo was formed in 1965 with the merger of

the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo has since

expanded from its namesake product Pepsi to a broader range of

food and beverage brands, the largest of which include an

acquisition of Tropicana in 1998 and a merger with Quaker

Oats in 2001—which added the Gatorade brand to its portfolio.

As of January 2012, 22 of PepsiCo's product lines generated

retail sales of more than $1 billion each, and the company's

products were distributed across more than 200 countries,

resulting in annual net revenues of $43.3 billion. Based on net

revenue, PepsiCo is the second largest food & beverage business

in the world. Within North America, PepsiCo is ranked (by net

revenue) as the largest food and beverage business.

Indra Krishnamurthy Nooyi has been the chief executive of

PepsiCo since 2006, and the company employed approximately

297,000 people worldwide as of 2011. The company's beverage

distribution and bottling is conducted by PepsiCo as well as by

licensed bottlers in certain regions. PepsiCo is a SIC

2080 (beverage) company.

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Comparison Chart between

Coca-Cola and Pepsi

Ingredients Coca-Cola Pepsi

Sodium 50mg 15mg

Founded 1886 1898

Originally Brewed From Coca leaves and Kola Nuts Pepsin

Syrup Coloring E-150D E-150D

Caffeine 34 mg/serving 37.5 mg/serving

Taste Sweet Sweet

Sugar Content 39mg 41mg

Carbonation content 80.9% Less

Calories 160 150

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PEPSI VS. COKE

PEPSI Coca-Cola

$28 BILLION TURNOVER $16 BILLION

32% INT. SALES AS % 70%` OF TOTAL SALES

RS. 5OO Cr. TOTAL INVESTMENT RS. 250 Cr.

IN INDIA

RS. 300 CRORES PROPOSED RS. 2,400C

INVESTMENTS

2400 NO. OF EMPLOYEES (in ths.) 140

13 NO. OF OWNED NIL

BOTTLING PLANTS

18 NO. OF FRANCHISES 53

4000 NO. OF FOUNTAIN 1500

N.A. TOTAL INVESTMENT Rs 125 CR

BY BOTTLERS

6 NEW PLANTS PLANNED N.A.

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Marketing/Advertisement

Strategies

Brand Identity

The first step in understanding Image Advertising is to understand the image being created, i.e. Brand Image. Brand Image is consumers’ perception of the brand in question. This perception might actually be different from what the brand actually embodies – the Brand Identity. Advertising bridges the gap between Brand Image and Brand Image.

Kapferer's Prism There are a number of tools available to explore the identity of a brand. One such tool is Kapferer’s Prism. As shown in the diagram above, there are many facets to a brand. Kapferer identifies six key characteristics that together define the brand:

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Physique – the physical attributes of the brand

Personality – the personification of the brand

Relationship – the relationship between the consumer and the brand

Culture – the core values of the brand

Reflection – the way consumers want to be perceived when using the brand

Self-Image – the image that consumers have of themselves when associated with the brand.

A combination of these characteristics can be used to identify what the brand ultimately stands for. These exercises were performed on a few brands each from the stables of both PepsiCo and Coca Cola; diagram 2 depicts the results of these exercises.

Brand Proposition

Identity to Image – Evolution of Strategies

A closer look at the brand identities of each of the brands helps assess how successful their advertising campaigns have been in creating a brand image in tune with it, while being sensitive to the value system of the target audience.

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PepsiCo’s Campaign The analysis of Pepsi, 7 UP and Mountain Dew from the portfolio of PepsiCo puts forth some interesting aspects about the evolution of these brands. Pepsi was one of the first products to Indian markets after the economic reforms of 1991.

Pepsi

Pepsi began with the Yehi hai Right Choice Baby campaign, which has been one of the most memorable campaigns of the brand, featuring celebrity endorsers such as Shah Rukh Khan among others. The focus, as is clearly

evident, is on the product with the youth as its target segment. Yeh Dil

Mange More and Yeh Pyaas Hai Badi were some of the later campaigns.

Yeh Dil Mange More campaign was again a great success, having balanced the emotional as well as the functional appeal of the product. Featuring Sachin Tendulkar and many other leading stars at that point of time, this was also one of the longest campaigns carried out by Pepsi. The company however failed to maintain the trend and leverage it. Instead of moving on to a complete emotional appeal platform, the company decided on a product based promotion campaign. Though there is still some amount of emotional appeal to its campaigns, the principal focus is on the product - it being a preferred thirst quencher.

7 UP

In its early days, 7 UP inherited the global Fido-Dido campaign for promotion in India as well. However, with changing times and a contextual difference in India, a much more focused campaign was required. This led to

the Keep It Coolcampaign, which was targeted primarily at the youth and the teenager segment. Hence the appeal was at a more subtle, emotional level, which was meant to convey a potential lifestyle statement. The recent

campaign of Bheja Fryessentially leverages on the same emotional appeal

where the Keep It Cool campaign has been somewhat tweaked to have a local appeal.

Mountain Dew

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Mountain Dew is the latest entrant in the product portfolio. This product too has the appeal of being the drink of a daredevil or the No Fear personality.

The campaigns launched include Do the Dew and Dar Ke Aagey Jeet Hai. The initial campaign was unclear in terms of its appeal and the target segment, as a result of which the brand suffered some jolts in the beginning. However, the latest campaign captures the No Fear or the Macho Man image. In this sense, the brand directly competes with Thums Up from the Coca Cola Stable

Coca Cola’s Campaign The Coca Cola campaign in India, however, has been different from that of Pepsi, even though they both share similar product traits. Coca Cola had a presence in India before 1977, but was subsequently forced to exit the Indian market. When the company returned to India post liberalization, it came up with an innovative communication and advertising strategy. Coca Cola has essentially been following the principle of differentiation.

Coca Cola

Jo Chaaho Ho Jaaye, Coca Cola Enjoy was one of the company’s first campaigns in India. It was remarkably well executed, and appealed both at a product level as well as at an emotional level. These ads featured celebrities such as Hrithik Roshan and Aishwarya Rai. The target segment for Coca Cola in its initial days was the youth segment and this campaign clearly connected

well with the segment. However, the next advertising campaign of Thanda

Matlab Coca Cola was launched with an objective to have a mass appeal. The campaign leveraged the product platform rather than the emotional platform that it had established earlier.

It is however, important to note here that Coca Cola made some exceptions for India. The company has similar marketing strategies across geographies and usually doesn’t depend on celebrity endorsements. But given the great fan-following, and in adapting to the Indian context, the company had to initially deviate from its set charter. However with the current campaign

of Open Happiness, Coca Cola seems to have achieved both an emotional as well as a mass appeal. There is a very natural connect with the target segment, that of celebrating every day, and sharing small moments of joy with our loved ones, irrespective of any barriers.

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Sprite

Sprite - the other brand from the Coca Cola stable – began its journey with

the campaign titled All Taste No Gyaan. This appealed greatly to the youth who don’t like to be preached and relish their sense of ownership and decision making. Sprite has never depended on celebrity endorsements as a way to gain brand recognition or consumer recall. The ads are designed to be very witty, and generally connect very well with the target audience by

capturing every day moments. Seedhi Baat No Bakwaas - its next campaign – instantly connected with the target audience by coming across as a brand that was different from the other, one that focused on the individuality of the consumer. The emotional appeal is much stronger and shows a clear sign of maturity of the campaign.

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REASONS TO REMEMBER THE

ADVERTISEMENTS

24% people remember the advertisement because of CREATIVITY.

25% people remember the advertisement because of BRAND AMBASSADOR

11% people remember the advertisement because of THEIR IDEA OF

DELIVERING THE MESSAGE.

25%people remember the advertisement because of FREQUENCY OF ADD.15%

people remember the advertisement because of LOGICAL REASON.

According to the University of Rennes, DANONE R&D Institute.

24%

25%

11%

25%

15%

CREATIVITY

BRAND

AMBASSADOR

IDEA OF

DELIVERING THE

MESSAGE

FREQUENCY OF

ADD

LOGICAL

REASON

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CELEBRITIES PLAYING PART IN TO THE

SALES PROMOTION OF THE PRODUCT IN

INDIA:

CELEBRITIES OF PEPSI:

AMITABH BACHHAN

SHAHRUKH KHAN

PREETY ZINTA

SACHIN TENDULKAR

SAIF ALI KHAN

SAURAV GANGULY

RAHUL DRAVID

MOHD. KAIF

ZAHEER KHAN

HARBHAJAN SINGH

YUVRAJ SINGH

CELEBRITIES OF COKE:

SALMAN KHAN

AISHWARYA RAI

AMIR KHAN

AKSHAY KUMAR

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CONCLUSION

Pepsi is the market leader in terms of soft drinks in India,

but comes second to Coca-Cola which consists of Coca-

Cola and park brands.

H o w e v e r i n G o r a k h p u r i t i s t h e m a r k e t

l e a d e r . P e p s i ’ s m a i n t a r g e t i s obviously to be

the market leader and leave its nearest competitor,

Coca-C o l a , f a r b e h i n d . T o a c h i e v e

t h i s P e p s i s e e m s t o b e r e l y i n g o n ma s s

advertising. They spend about 50-60 crore rupees

annually on marketing

activit ies. The consumer is bombarded with

Pepsi advertisements, s ign, logo’s etc., everywhere.

Pepsi’s core market is the young –adult and Pepsi is

taking great measures to

c h a n g e t h e p e r c e p t i o n o f t h e s e y o u n g

a d u l t s . P e p s i w a n t s t h a t t h e s e consumers

should associate al l colas as Pepsi, the brand

Pepsi and cola should be synonymous with each other.

This they are trying to do by getting the heroes of these

consumers to endorse their product e.g. Sachin

Tendulkar and also by advertising for and by youngsters.

Pepsi dr inks are available in almost the whole

of India, this shows the importance paid to

distribution. Brand loyalists are very few in the market.

Thus the drink should be easily available, so that

consumers cannot shift their preferences.