EXECUTIVE SUMMARY

This project is an extensive research on the marketing strategies of the two Cola giants and Coca Cola. It covers an extensive survey and depicts all graphs, fact and figures of two companies. It begins with the introduction of industry and introduction of these two companies of soft drink industry. It covers some of the major strategies adopted by Pepsi and Coca-Cola like their pricing policy, sales promotion and advertising policy, distribution policy etc. The project has been made interesting with the inclusion of the topics, which covers the 4P‘s of marketing.

The major players in the soft drink industry in are Coke and Pepsi. Pepsi holds the major market share followed by Coke. They have a cut throat competition between themselves. Whatever strategy is followed by one company, it is copied by the other.

Sample of to brands were selected on the basis of there uses and noticeciability.

One of the selected brands is NO1 brand in their respective product categories the other one brand is close competitor of the No 1 brands. Total sample of size of 200 respondents selected on the basic of convenience was surveyed which include consumers.

Data was collected from secondary as well as primary sources. Structure questionnaire was use to collect primary data INTRODUCTION:

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 patronized by urbane population at various occasions like dinner parties, marriages, social get together, birthday calibration 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, preservation, transportation and or marketing in the recent years has witnessed phenomenal changes.

The so-called competition for this product in the market is from different other brands. Mass media, particularly the emergence of television, has contribute 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.

It is expected that with the sort of mass advertising, 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, competition and environment are constantly influx. The competitors in a given industry may be making many tactical maneuvers in market all the time. The may introduce or initiate an aggressive promotion campaign or announce a price reduction. The marketing man of the firm has to meet all these maneuver and 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, three players have dominated the industry; The New York based Pepsi Company Inc. The Atlanta based coca- cola and U.K. based Cadbury . 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 three 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. SOFT DRINK INDUSTRY: AN OVERVIEW

It all began in 1886, when a tree legged brass kettle in Hohn Styth pemberton‘s backyard in Atlanta was brewing the first P of marketing legeent Unaware the pharmacist has given birth to a caramel colored syrup, which is now the chief ingredient of the world‘s favorite drink. The syrup combined with carbonated the soft drink market. It is estimated that this drink is served more than one thousand million times in a day. Equally oblivious to the historic value of his actions was Frank Ix. Robinson, his partner and book keeper. Pemberton & Robinson laid the first foundation of this beverage when an average nine drinks per day to begin with, upping volumes as sales grew. In 1894, this beverage got into bottle, courtesy a candy merchant from Mississippi. By the 1950‘s Colas was a daily consumption item, stored in house hold fridges. Soon were born other non- cola variants of this product like & . Now, the soft drink industry has been dominated by three major player – – (1) The New York based Pepsi co. Inc.(2) The Atlanta based coca cola co. (3) The united Kingdom based Cadburyry Schweppes. Though out the glove these major players have been battling it. Out for a bigger chunk of the ever-growing cold drink market. Now this battle has begun in India too. India is now the part of cold drink war. Gone are days of Ramesh Chauhan, India‘s one time cola king and his bouts of pistol shooting. Expect now to hear the boon of cannons when the Coca Cola & Pepsi co. battles it out for, as the Jordon goes a bigger share of throat. By buying

Over local competition, the two American Cola giants have cleared up the arena and are packing all their power behind building the Indian franchisee of their globe girdling brands. The huge amount invested in fracture has never been seen before. Both players seen an enormous potential in his country where swigging a carbonated beverage is still considered a treat, virtually a luxury. Consequently, by world standards India‘s per capita consumption of cold drinks as going by survey results is rock bottom, less than over Neighbors Pakistan & Bangladesh, where it is four times as much. Behind the hype, in an effort invisible to consumer Pepsi pumps in Rs 3000 crores (1994) to add muscle to its infrastructur e in bottling and distribution. This is apart from money that company‘s franchised bottles spend in upgrading their plants all this has contributed to substantial gains in the market. In colas, Pepsi is already market leader and in certain cities like Banaras, Pepsi outlets are on one side & all the other colas put together on the other. While coke executive scruff at Pepsi‘s claims as well as targets, industry observers are of the view that Pepsi has definitely stolen a march over its competitor coke. Apart from numbers, Pepsi has made qualitative gains. The foremost is its image. This image turnaround is no small achievements, considering that since it was established in 1989, taking the hardship route prior to liberalization and weighed down by export commitments. Now, at present as there are three major players coke, Pepsi and Cadbury and there is stiff competition between first two, both Pepsi and coke have started, sponsoring local events and staging frequent consumer promotion campaigns. As the mega event of this century has started, and the marketers are using this event – world cup football, cricket events and many more other events. Like Pepsi, coke is picking up equity in its bottles to guarantee their financial support; one side coke is trying to increase its popularity through. Eat Food, enjoy Food. Drink only coca cola. Eat cricket, sleep cricket. Drink only coca cola. Eat movies, sleep movies. Drink only coca cola.

On the other side of coin Pepsi has introduced AMITABH BACHHAN for capturing the lemon market through MIRINDA – Lemon with ―zor ka jhatka dhere se lage‖.

But no doubt‘ that UK based Cadbury is also recognizing its presence. So there is a real in the soft drink market. with launch of the carbonated organize drink Crush, few year ago in Banaras ., the first in a series of a launches , Cadbury Schweppes beverage India (CSBI) HAS PLANNED:- The world third largest soft drink marketers all over the country.CSBI o wholly owned subsidiary of the London based $ 6.52billion. Cadbury Schweppes is hoping that crush is going well and well not suffer the same fate as the Rs. 175 crore Cadbury India‘s apple drink Apella. CSBI is now with orange (crush), and Schweppes soda in the market. As orange drinks are the smallest of non-cola categories that is Rs. 1100 crore markets with 10% market share and cola heaving 50% is followed by Lemon segment with 25%. The success of soft drink industry depends upon 4 major factors viz.  Availability  Visibility  Cooling  Range COCA – COLA COMPANY PROFILE

Keeping in view of tapping the Indian soft drink market and also developing soft drinks as a drinking product among Indians. The Coca-Cola in India has setup an independent organizations which is H.C.C & B.C.C with a capital of 350 U.S.$ each by virtue of sellout decision of the passed managing director Sh. S. C. Aggarwal.

Hindustan Coca-Cola bottling (N-W) Pvt. Ltd. Najibabad took the complete possession of this plant, land, machinery, & intellectuals on February 14‘ 1998 and since then H.C.C, looking after all its affairs under company owned bottling plant to establish integrated marketing system in the area. MARKETING STATEGIES OF COKE AND PEPSI

a) PRODUCT

Coke was launched in India in Agra, October 24, in '93', soon after its traditional all Indian launch of its Cola. At the sparking new bottling plants at Hathra, near Agra. Coke was back with a bang after its exit in 1977.

Coke was planning to launch in next summer the orange drink, -with the clear lemon drink, , following later in the year.

Coke already owns more brands than it will over need, since it has bought out Ramesh Chauhan. Coke just needs to juggle these brands around dextrously to meet its objectives, to ensure that Pepsi does not gain market share in t Today, Coke's product line includes, Coca- Cola, Thumps Up, Fanta, , Maaza, , Sprite, Bisleri Club Soda and Diet Coke.

PACKAGING

Coca-Cola India Limited (CCIL) has bottled its Cola drink in different sizes and different packaging i.e., 200 ml bottle, 300 ml. Bottle, 330 ml. Cans, 500 ml. Bottle fountain Pepsi, and bottles of 1 and 2 litre.

PRODUCT POSITIONING

One important thing must be noticed that Thumps Up is a strong brand in western and southern India, while Coca Cola is strong in Northern and Eastern India. With volumes of Thumps Up being low in the capital, there are likely chances of Coca Cola slashing the prices of Thumps Up to Rs. 5 and continue to sell Coca Cola at the same rate. Analysts feel that this strategy may help Coke since it has 2 Cola brands in comparison to Pepsi which has just one.

Thumps Up accounts for 40% of Coca Cola company's turn over, followed by Coca Cola which has a 23% share and which accounts for 17% of the turn over of the company. (Thumps up being the local drink, its share in the market is intact, forcing the company to service the brand, as it did last year Mr. Donald short CEO, Coca Cola India, said that, " we will be absolutely comfortable if Thumps Up is No. 1 brand for us in India in the year 2000. We will sell whatever consumers want us to". Coca Cola India has positioned Thumps up as a beverage associated with adventure because of its strong taste and also making it compete with Pepsi as even Pepsi is associated with adventure, youth.

b) PRICE

The price being fixed by industry, leaving very little role for the players to play in the setting of the price, in turn making it difficult for competitors to compete on the basis of price.

The fixed cost structure in Carbonated Soft Drinks Industry, and the intense competition make it very difficult to change or alter the prices. The various costs incurred by the individual company's are almost unavoidable. These being the costs of concentrates, standard bottling operations, distributor and bottlers commissions, distribution expenses and the promotional and advertising expenditure (As far as Coke is concerned, it had to incur a little more than Pepsi as Pepsi paved its way to India in 1989 while Coke made a come back in 1993.)

Currently a 300 ml. Coke bottle is available for Rs. 6 to8 The 330 can was initially available for Rs. 13 and now, since the price has gave up to Rs. 18 per can. The prices of 500 m, 1 litre. And 2ltr being Rs. 15 Rs. 23 and Rs. 40 respectively (according to the current survey).

Dating back to ‗93', when Pepsi hiked the price of Pepsi - Cola from Rs. 5 to Rs. 6 per 250 ml. bottle in some parts of the country-including Agra. Coke penetrated the market with price of Rs. 5 for a 300 ml. bottle, making it cheaper by Rs. 1 and 50 ml. than Pepsi. Coke's strategy at that time being able to expand the availability of soft drinks even in rural India. Coke's priority being to first increase the number of drinks per drinker, and then the number of drinkers itself. Pepsi also tried this but was trapped by a series of competitive price increase and changes in bottle sizes by Parle. But the prices of soft drinks have shot up since Pepsi's arrival and the current prices are being mentioned as under. Price list

Name Bottle Size MRP (in Rs.)

Coke Per Bottle 200 ml 6

Coke 300 ml 10

Coke 500 ml (Plastic / Glass) 22

Coke 2 litre 60

Diet Coke (Can) 330 ml Can 35

Coke (Can) 330 ml Can 38

However, the trends may have been in the early '90's, now the prices of Pepsi and Coke are the same making it difficult in future and present to compete on the basis of price.

c) PLACE

Coke may have gained an early advantage over Pepsi since it took over Parle in 1994. Hence, it had ready access to over 2, 00,000 retailer outlets and 60 bottlers. Coke was had a This landmark was recalled in Christmas versions in 1983 and 1984, and a 1990 Super Bowl ad, which was enough to make some Baby Boomers weep with nostalgia.

In the 1980's, Pepsi lined up the celebrities, starting with late Michael Jackson, then Madonna, Michael J. Fox, Billy Crystal, Lionel Ritchie, Gloria Stefan, Joe Montana, and others. Coke signed on Michael Jordan, New Kids on the Block, Aretha Franklin, Elton John, and Paula Abdul.

In 1985, responding to the pressure of the Pepsi Challenge taste tests, which Pepsi always won, Coca-Cola decided to change its formula. Bill Cosby was the pitchman. This move set off a shock wave across America. Consumers angrily demanded that the old formula be returned, and Coca-Cola responded three months later with Classic Coke. Eventually, New Coke quietly disappeared.

Pepsi, meanwhile, had its own flop, Crystal Pepsi, which was supposed to catch the strange wave of the times when everything colorless was clean and desirable (Zima, bottled water). And then there was Pepsi Lite with the lemony flavor and one calorie, introduced in 1975. Remember that one? Apparently they didn't expect us to because later they gave us Pepsi One, using the same concept, but a completely different taste. And, extending the idea even further, we are now getting Pepsi Twist, a new product with a twist of lemon flavor.

In 1991, Ray Charles sang, "You got the right one baby, uh-huh!" Also in the 1990s, Cindy Crawford and the Spice Girls pitched Pepsi. And then Pepsi aired commercials featuring the aggravating little girl (Halide Eisenberg) with her troubling male voice.

In the new century, both colas continue to battle it out on the television screen. And celebrities continue to be important promoters. Recently, Pepsi has had commercials by Bob Dole and Faith Hill, among others. CELIBRITIES PLAYING PART IN TO THE SALES PROMOTION OF THE PRODUCT:

CELIBRITIES OF PEPSI:

 AMITABH BACHHAN  SHAHRUKH KHAN  PRIETY ZINTA  SACHIN TENDULKAR  SAIF ALI KHAN  SOURAV GANGULY  RAHUL DRAVID  MOHD. KAIF  ZAHEER KHAN  HARBHAJAN SINGH  YUVRAJ SINGH  RANBIR KAPOOR  VINDHU DARA SUNGJ  DEEPIKA PADUKONE

CELIBRITIES OF COKE:

 SALMAN KHAN  AISHWARYA RAI  AAMIR KHAN  VIVEK OBEROI  BIPASHA BASU  AKSHAY KUMAR  IMRAN KHAN  KALKI Pepsi v Coca-Cola war turns hot

The ongoing cola war between global rivals Pepsi and Coca-Cola has taken a weird twist in India with the former dragging the latter to court. The charge: Coca-Cola has snatched employees, bottlers, and agents, all of whom are bound to Pepsi by a contract.

Pepsi has charged Coke with having entered into a conspiracy to disrupt its business operations by inducing key employees and associates to break existing contracts illegally.

Pepsi has sought a permanent injunction and an ex parte order against coke, restraining it from taking away Pepsi's employees and business associates. Pepsi has also reserved the right to seek financial damages from Coke at a later date if necessary.

Pepsi has claimed that a dozen middle-level managers and three territory managers broke their contracts with Pepsi to join Coke in recent months, while during the last year and half, seven managers quit Pepsi to join Coca-Cola.

Justice C M Nair of the Delhi high court on April 17 issued notices and summons to Coca-Cola and 15 others for May 6. However, Justice Nayar refused to grant the ex parte injunction sought by Pepsi India to stop the alleged inducements by Coke in offering employment to Pepsi's employees while the suit was pending in court.

On behalf of Pepsi, Ashok Desai and Arun Jaitley contended that Coca-Cola had been "rattled by the huge success of Pepsi in India entered into a conspiracy during the last six months to cause loss and damage to Pepsi's business interests by adopting unfair and illegal means."

It added that Coca-Cola had approached many key managers and had successfully lured a commercial manager of its bottling business Gaurav Duggal, and a manager in Surat Sailesh Joshi, besides others.  PEPSI is targeting young generation and their ad campaigns are a clear example of that, whereas coca-cola is targeting the family as a whole which has been its old formula from ages.

 Presently coca-cola may be leading in beverages like coke, but its facing severe competition from Mirinda, Nimbooz and snack industry where PEPSI is ruling thanks to its ad that has led to great sales for PEPSI CO.

 Though in packed drinking water KINLEY (COCA-COLA BRAND) and ACQAFINA (PEPSI CO BRAND) both are treated equally by customers. Moreover BISLERI still rules in this segment. FUTURE SCENERIO OF COCA COLA V/S PEPSI

 The between coca-cola and Pepsi would further grow and in my view its never ending

 Both the companies would try to become NO1 and there would AD WAR between the two which would prove to be beneficial for actors/actresses as they would earn more through advertisements.

 Pepsi have started advertisements with female actresses DEEPIKA PADUKONE and COCA-COLA which had up till know only endorsed male actors for the 1st time endorsed KALKI of DEVD fame with IMRAN KHAN in its new ad.

 With the coming up of COMMENWEALTH GAMES 2010 in NEW DELHI , both the brands would try to attract customers towards itself with heavy promotion and ad campaigns to build new customers and increase there share in market as well as strengthen their brand value and earn profits. RECOMMENDATIONS

Soft drinks are an impulse product. When a person is thirsty, he would first think of water or tea. Some even would prefer ‗Nimbooz ―\

The Indian population is the largest in the world today, there can be no other country in the world, which provides so much of an opportunity for the soft-drink manufacturers. The Indian soft drink market is at 140 million cases per year, this is very low. Thus the consumption of soft drink can go up.

Sinc118+e the entry of Coca-Cola into the country the industry is growing at a rate of 20% annually. If this rate is maintained, then by the year 2005 the market of soft drink would be 1 billion cases annually.

However Coca-Cola wants to accomplish this feat by them. To do this the industry has to take certain steps. All the companies are fighting to get a major share of this growing market. They should all try to increase the total market along with their individual shares.

On the basis of all the field work and table work done, some suggestions can be made, which may help the company in increasing the total market as well as the sale of the companies. The various suggestions that can be made are as follows:-

Soft drinks retail at prices between Rs. 6 and Rs. 10. These are expensive when measured against purchasing power.

According to one study, it takes Indian 50 minutes of work to be able to buy a bottle in other countries, the norm is five minutes. Thus to increase the total market of soft drinks, manufactures should try and decrease the prices, so as to increase sales.

Availability is a major factor, which makes the consumer buy a soft drink. Soft drinks should be made available more readily than present. There are only 300, 000 retailers stocking soft drinks in India. Thus retailing outlets should be increased. Also related to this point, is vending machines. In developed machines, vending machines are kept in all consumer areas, like super markets, schools, amusement parks, local markets, etc. These Tempt a person into buying the soft drink. So if vending machines are put in strategic areas, it would definitely increase consumption of soft drinks.

Soft drink cans which are very convenient, as the consumer can take them anywhere, unlike a bottle, are very expensive retailing from Rs. 15-Rs. 18. To increase sale of cans, this price should be brought down.

Innovations increase sales of company. For e.g. fountain Pepsi increased sales of Pepsi Cans increased sales of Coca-Cola. Thus the companies hav constantly come out with innovative ideas.Example-300 ml plastic bottles, which the consumer can take with him, unlike the glass bottles, which he has to return. Plastic bottles can even be used again by households for various purposes.

The companies should conduct studies to get to know about consumer habits. For e.g. Coke knows that Americans see 69 of its commercials every years , put 5.2 ice cubes in a glass and prefer cans to pop out of vending machines at a temperature of 35 degrees.

If the companies know all this and more about Indian consumer behavior, it could tell them how to sell their drinks, so as to increase sales.

It is seen In India, that people prefer having their drinks with or after food. Companies could have commercials which show people enjoying their drink with a good meal, so that consumers associate drinking soft drinks while having food.

Companies should try to educate the consumer about the health related subject. For e.g.:-

a) Limca is recommended to patients by doctors.

b) Cola drinks are known to be very fattening ,

But in fact cola drinks contain no calories from fat they contain calories from sugar which can be easily burned off. The soft drink cans and plastic bottles should mention the calories and other related information on the packing.

Companies should try to build high brand equity. This provides a number of advantages to the company.

a) The company enjoys reduced marketing costs because of high level of consumer brand awareness and loyalty. b) The company will have more trade leverage in bargaining with distributors and retailers since the customer expects them to carry the brand.

c) The company can change a higher price than its competitors because the brand has higher perceived quality.

d) The company can more easily launch brand extension.

e) Above all, the brand offers the company some defense against fierce price competition.

The companies should go in for diversification

Once the brand is known, it is easier to sell more of its products. For e.g. Coca-Cola clothes have sold about $100 million worth of clothes and accessories. This would increase revenues of the company.

The companies should not have competitor myopia. It is more often the latent company than the current competitor who busies the company. Pepsi and Coca-Cola are so busy fighting with each other, that they have left the non-cola sector open for Cadbury-Schweppes.

Advertising is a way building brand image. It does not promote quick selling. Thus companies should used advertising only for long advertising can be used for:

a) Brand image building

b) Reminder advertising: reminding people to buy these drinks.

c) Reinforcement advertising-Telling people that they have made the right choice.

Television advertising seems to make a impact on the consumers (based on questionnaire answers) so companies should concentrate more on television advertisements.

Sales promotion tools create a stronger and quicker response. Thus sales promotion tools such as coupons, contests, premiums and the like should be used to dramatize product offers and to boost sales. Sales-promotion effects are usually short run and induce the people to purchase soft drinks, now.

Coca-Cola and Pepsi have taken up sponsoring of events on a major scale. All kinds or events, whether big (Wills Worked cup) or small (college contests) have either Pepsi or Coke banners of sponsorship. The effectiveness of this can be questioned. Whether these activities increase sales or not is a big huge question mark.

PepsiCo and Coca Cola (I) Ltd. should reduce their massive spending on sponsoring events and try and channel this money into more productive activities, like innovative packaging etc.

It is recommended that company should introduce more and more customer oriented schemes and contexts. For e.g. Pepsi‘s new campaign ―Pepsi cool mal‖ in which they are giving free gifts to their customers.

The company should maintain a small group of ―missionary sales man‖ whose functions should be to guide distributors and retailers, keep a constant watch over the prevailing situation to provide the continuous feedback to the company.

It is also recommended that companies should launch soft drink in small pack 200 ml and 150 ml.

Thus we see that there various steps which can be taken by the companies to increase their sales and to increase the total market share. BIBLIOGRAPHY

 Marketing Management- By Philip Kotler

 WWW.PEPSICO.COM

 WWW.COCA-COLA.COM

 WWW.COLA-WARS.NET

 ADVERTISING MANAGEMENT BY JETHWANEY AND JAIN

 COLA WARS BY J.C.LOUIS