STRATEGIC MARKETING Group Presentation

Overview of Indian Market- Past

• In the year 1991, the Indian Government adopted Economic Liberalization Policy

• “Cold Drinks” as popularly known in India were an Urban phenomenon and the favorites (soda based) were Campa Cola, Gold Spot, Limca and Thums Up

• Pepsi entered in the Indian Market as Pepsi Foods Ltd. and was known as Lehar Pepsi

• Coke tried to reenter* in 1990 by merging with Godrej but was denied; merged with Britannia Industries India Ltd.

• July 1993 Parle sold its brands and plants to Coke

*Coke was present in India from 1970’s, but was banned in 1977 under FERA

Overview of Indian Market- Present

• Today the Indian Market for Carbonated Drinks is worth more than Rs.17000 crore

• The present scenario of the carbonated drinks market is duopoly* situation.

• Although in every place there are local competitors and there is a huge unorganized flavored water market.

• As far as the carbonated drinks are concerned there are only two brands (as per the Market Share).

– Coke (57.8%)

– Pepsi (35.6%)

*A duopoly is a competitive situation where there are two competitors, normally of roughly equal size.

Coca-Cola

BACKGROUND

Coca- Cola Milestones

• 1886: Founded by John Pemberton

• 1887: Registered as trademark.

• 1895: Sold in every state & territory in US.

• 2003: Headquartered in Atlanta with divisions & local operations in over 200 countries worldwide. 70% income outside US.

• 1970s: Entered Indian Market for the 1st time

• 1977: Exited the Indian Market

• 1993: Re-entry in India

• 1993-2003 : Invested more than US $1b in India- top international investor.

• 2003-2008: No. 1 soft drink company in India.

Coca- Cola Products in India

• Coke

• Diet Coke

• Thums Up

• Sprite

• Limca

• Maaza

• Fanta

• Georgia (Coffee)

• Kinley (Drinking Water)

PepsiCo.

BACKGROUND

Pepsi Co. Milestones

• 1899: Founded by Caleb Bradham

• 1902: Applied for trademark in US

• 1923: Declared bankrupt & assets sold

• 1985: Gained entry in India

• 1988* - Succeeded with Pepsi Food India Limited Project as a joint venture of Punjab Agro Industrial corporation & Voltas India Limited.

• 1991: Marketed & sold as Lehar Pepsi.

• 1994: Bought out its partner and become a fully owned subsidiary.

• Today it is the No. 2 soft drink company in India.

• *In 1988, forced to withdraw from market due to carcinogenic ingredient (BVO)

Coca- Cola Products in India

• Pepsi

• Diet Pepsi

• 7 Up

• Miranda

• Mountain Dew

• Tropicana Juices

• Lays, Cheetos & Ruffles (Snacks)

• Quaker Oats

• Aquafina (Drinking Water)

Battle between two giants

RIVALRY

FEATURES: COKE PEPSI

Bar weight 10 FL OZ ( 200ml) 10 FL OZ ( 200ml)

Calories 121.25 150

Carbohydrates (gm) 33.75 34.5

Flavors (numbers) 2 2

Price/bottle Rs 10 Rs 10

PRODUCT CLAIMS All foods and beverage can fit into healthy

balanced diet when consumed in appropriate

proportion.

Offers beverages that resorts to the

customer’s expectations and make it more

enjoyable for them to lead healthier lives.

TARGET CONSUMER Children, adults, younger generation and

sports personality and celebrities

People from younger generation, sports

personalities and celebrities

DISTRIBUTION Grocery stores, retail stores, shops, malls, etc. Grocery stores, retail malls, shops etc.

BRAND POSITIONING Sweetened carbonated drink Sweetened carbonated drink.

Competitor Capabilities Matrix

Differential Competitor Analysis

COKE PEPSI

PARENT COMPANY Coca Cola Company Pepsi Co

TOTAL SALES 450 million ( globally) 324.58 million (globally)

PRODUCTS Coca Cola , Diet Coke Pepsi, Diet Pepsi

MANAGEMENT Atul Singh (CEO) Indra K Nooyi (CEO)

LATEST PRODUCT None None

DISTRIBUTION Through retail malls, grocery shops , organized

and unorganized retails

Through retail malls, grocery shops, organized and unor

SPONSORSHIP Various events such as cricket matches, movies,

trade faires, college fests etc.

Sports events, trade faires,college fests etc.

PRODUCTION Company produces syrup concentrate which it

sells to bottlers through out the world

Contains carbonated water,high fructose corn

syrup,sugar, colorings, phosphoric acid, caffeine, citric

acid and natural flavours

FOUNDER Originated in 1886 in US by Dr.John S Pemberton Originated in North Carolilna by a young pharmacist

New Bern

MARKET SHARE 57.8% 35.6%

BRAND AMBASSADOR Imran Khan, Sachin Tendulakar Mahendra Singh Dhoni, Ranbeer Kapoor

NUMBER OF BOTTLING PLANTS 26( company owned), 14 (franchise owned) 15( company owned), 28( franchise owned)

Product

Product Type Coca-Cola Pepsi Co.

Carbonated Drinks (Black) Coke, Thums Up Pepsi

Carbonated Drink (Black) Diet Diet Coke Diet Pepsi

Carbonated Drinks (Orange) Fanta Miranda

Carbonated Drinks (Clear/ Lemon) Sprite, Limca 7 Up, Mountain Dew

Flavored Juice Maaza Tropicana

Coffee Georgia ***

Drinking Water Kinley Aquafina

Snacks *** Lays, Cheetos & Ruffles

Breakfast *** Quaker Oats

Place

Place

• Both Pepsi and Coke follow the Hub and Spoke model of distribution in rural India.

HUB Spoke

Village

Village

Village

Spoke

Village

Village

Village

Rural

Place

Coke

• Sales & Distribution is handled by a large number of bottlers.

• 26 bottling plants

• 60 distribution centres

• 20 contract packers

• Over 70000 retail outlets serviced via trucks, converted three wheelers, tricycles & push carts.

• 300 million soft drink consumers

Pepsi Co. • Pioneer in use of Vending

Machines and Restaurant, Departmental Stores

• Built up distribution network & bought out a lot of Bottlers

• Production plants and bottling centers were strategically placed in large cities all around India

• Focusing on the rural

• PepsiCo has 37 bottling plants in India, including 17 company-owned plants and 20 owned by franchisee partners

Price

Coke • Earlier COST BASED Pricing.

• The Rs. 5 (200 ml) and Rs. 8 (300 ml) marketing revolution

• Coke spends more on advertising than manufacturing

Pepsi Co.

• Competition based

• Very flexible to come down with the price very quickly

Promotion

Coke

• Brand Localization Strategy: The Two India’s

• India A: “Life ho to aisi”

• India B: “Thanda Matlab Coca-Cola”

• Small bottle scheme

Pepsi Co. • Pepsi balance 2 influences in the

minds of the customers:

• ‘You’re cool the way you are’

• ‘Don’t try to be any different’

• It was positioned as the new cool youth icon

• ‘Nothing Official About It’

• ‘Yeh Dil Maange More’

• ‘Mera Number Kab Ayega?’

• ‘Yeh Pyaas Hai Badi’

• ‘Youngistan’

• ‘Change the game’

Promotion

Coke Pepsi Co.

SWOT Analysis: Coke STRENGTHS • Well established Global Brand • Prior knowledge of Indian market

(1958-1977) • Tie up with local players (Britannia

Ltd) • Strong Fiscals to acquire local business

(bottling plants/local brands)

WEAKNESS

• Improper appreciation of existing Indian Laws at entry time (in case of acquisition, 49% sale of equity to local partners mandatory)

OPPORTUNITIES • Many successful brands to pursue • Advertise its less popular products • Buy out competition.

• More Brand recognition

THREATS • Strong Competition from Pepsi and

other local brands due to late entry • Stricter legal framework (49% equity

to Indian Investors) • Decreasing popularity of carbonated

drinks in India

SWOT Analysis: Pepsi Co.

STRENGTHS • International Brand and Global

Experience • Benefitted by learning from Coca

Cola mistakes in India pre 1977 • Willingness to comply with

stringent Indian Laws

WEAKNESS • Lack of Experience in Indian market

OPPURTUNITIES • Food division should expand • Noncarbonated drinks are the

fastest-growing part of the industry • There are increasing trend toward

healthy foods • Focus on most important customer

trend - "Convenience".

THREATS • Unfriendly political environment

and Indian legal framework • Competition from local

manufacturers • Low demand in Indian market for

carbonated drinks • Poor infrastructure especially in

rural India

Consumer Segmentation

Behavioral

Benefits sought: Thirst quencher; status symbol

Purchase Occasion: Parties and other get-togethers

Purchase Behavior: Instinctive/ Planned

Usage: Light, occasional

Perceptions and beliefs: Safe and stylish; preferred cola drink

Psychographics

Lifestyle: Trendy; Sophisticates

Personality: Cool; Youthful

Profile

Demographic: Urban, Rural

Socio Economic: Young affluent Indians

Geographic: Urban & Rural India

Segmenting Consumer Markets for Pepsi & Coke

Model for Brand Equity for Pepsi & Coke

Advertising: • TV: Yougistan with MTV • TV: MTV Coke Studio • Billboards • Posters • Radio

Sales Promotion: • Scratch cards • Lucky Draws • Buy1, get 1 free • Change to smaller

packaging

Event Experience: • Musical Concert Shows • Sponsorship Sports events • Tying up with TV Soaps

Word of Mouth Marketing: • No Systematic effort to

generate word of mouth marketing

Digital Marketing: • High Impact through digital

and social Media marketing

PR & Publicity: • Bollywood, cricket brand

ambassador • Sponsorship of Indian

cricket team and world cup

Marketing Communication

Programs

Brand Equity

Brand Image: • Youthful • Cool • Rebellious • Refreshing

Brand Awareness: • Exists across market • High awareness in urban

areas in comparison to rural areas

Brand Relationship: • Very low Brand Loyalty • Subject to availability and

price

Brand Equity for coke!

The most recognized word on the planet after “OK”!

Advertising Campaign

Coke was the official partner for 1996 world cup!

Coke used to advertise its brand as an official partner

and then….

More Youth Centric

More Emotional

Product Mix- BCG Matrix – Pepsi Co.

Stars: • Pepsi • Mountain Dew • Tropicana Juices

Question Mark: • Diet Pepsi • Miranda • 7 Up • Nimbooz

Cash Cow: • Aquafina

Dogs: • Pepsi Max

Relative Market Share

Ma

rket

Gro

wth

ra

te

H

L

H L

Product Mix- BCG Matrix - Coke

Stars: • Coke • Sprite

• Diet Coke

Question Mark: • Fanta • Georgia • Minute Maid

Cash Cow: • Thumps up • Limca • Maaza • Kinley

Dogs:

Relative Market Share

Ma

rket

Gro

wth

ra

te

H

L

H L

Ansoff model for Coke

Product Development: • “Cold Drinks” as popularly known in

India were an Urban phenomenon and the favorites (soda based) were Campa Cola, Gold Spot, Limca and Thums Up

• July 1993 Parle sold its brands and plants to Coke

Market penetration/ Expansion: • Family sized bottle • Pet Bottles • Small Quantity at low price for rural

market

Market Development: • Diet Coke - result of a growing trend

towards dieting and healthier living • Vanilla Coke - an alternative to Coke • Fanta Icy Lemon

Diversification: • Coca Cola developed the energy drink

‘Powerade’ in response to growth in the sports drink market.

• Georgia (Coffee)

Products

Ma

rket

E

N

E N

Ansoff model for Pepsi

Product Development: • Pepsi – Entered into an existing cola

market competing with local brands and coke – Existent Cash cow

Market penetration/ Expansion: • Diet Pepsi – Entered into an existing

market created by Diet coke – Existent Dog

Market Development: • Pepsi blue – Seasonal product that

took advantage of cricket world cup fever – not produced anymore

• Follower

Diversification: • Pepsi Max – Advertised through digital

media • Pepsi Caffechino – Pepsi’s attempt to

create a niche market for cola + Coffee Taste - Unsuccessful

Products

Ma

rket

E

N

E N

Pepsi & Coke: Three Levels of a Product

Freezers to ensure cold products, Free Branding for small outlets, Water bottles, Indian cricket

team, Celebrities, Merchandise

Non Alcoholic Cold Drinks, Thirst Quencher, Modern & Inspirational

Sweet Carbonated cola Size: 200ml, 300ml, 500ml, 1.5 ltr, 2ltr.

Glass bottles, Cans, Pet bottles Blue, Red, White

Low

High

Ability to standardized

Product element

Support Service

Product Attributes

Core Product Benefits

Current and Future Strategies

COKE PEPSI

OBJECTIVES To refresh the world.

To inspire moments of optimism and

happiness.

To create value and make a

difference.

To be the world’s premier consumer

products company focused on

convenient foods and beverages.

CURRENT

STRATEGIES

Product innovation and huge

spending on advertisement, cross

training of mangers.

More risk taking ability, rapid action

with respect to changing market

condition, finding new opportunities

for new market.

FUTURE STRATEGIES Extensive spending on market

research in order to determine the

tastes and preferences of the

customers, CSR, product innovation,

adoption of green revolution,

product line extensions.

Product line extensions, CSR, Brand

extensions, product innovations, sound

R&D department to develop products

as per the tastes and preferences of

the customers.

Giants Fight to get maximum share

Conclusion

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