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Introduction Of Pepsi
 

Introduction Of Pepsi

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    Introduction Of Pepsi Introduction Of Pepsi Document Transcript

    • What is a brand ? A brand is a name, term, sign, symbol, or design which is intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. Products and services have become so alike that they fail to distinguish themselves by their quality, efficacy, reliability, assurance and care. Brands add emotion and trust to these products and services, thus providing clues that simplify consumers’ choice. These added emotions and trust help create a relationship between brands and consumers, which ensures consumers’ loyalty to the brands. Brands create aspirational lifestyles based on these consumer relationships. Associating oneself with a brand transfers these lifestyles onto consumers. The branded lifestyles extol values over and above the brands’ product or service category that allow the brands to be extended into other product and service categories. Thus saving companies the trouble and costs of developing new brands, while entering new lucrative markets.The combination of emotions, relationships, lifestyles and values allows brand owners to charge a price premium for their products and services, which otherwise are barely distinguishable from generics. The Key To Branding • For branding strategies to be successful, consumers must be convinced that there are meaningful differences among brands in the product or service category. • Consumer must not think that all brands in the category are the same. • PERCEPTION = VALUE 1
    • Brand Wars What’s brand wars? Why are companies fighting each other? The main reason for it is that the companies are trying to get more customers and to increase their market. The aim of the battle is to get the customer to buy your product and not the product of the competitor. There are two types of customers: Active and Passive. Active customers know what they want. And passive ones, on the contrary, have no idea of what they want and think for a long time about what product to buy. So, the second group – passive customers – is the bone of contention, the object of fighting in brand wars. Thus, companies are trying to get their customers by many methods. These methods are: improving the quality of goods, then lowering prices and offering discounts, and using advertising, of course. Let’s talk about prices. The brand wars often take the form of price wars. It’s when 2competing companies are lowering prices more and more until they reach the level of their costs and they just get no profit. Price wars are good for customers but bad for companies as they decrease their profits. So, it’s better to use other methods when fighting in a brand war. For example, advertising. It is quite noticeable for customers, and it helps to increase sales. But that’s it for theory, and let’s get down to some practical examples. When we hear about the brand wars the first example that comes into our minds is that of the Pepsi-Cola and the Coca-Cola companies. It all started in the 1980s. PEPSI entered the market 12 years after the Coca-cola company, so it had to launch different campaigns in order to increase sales. The beginning of the brand war was the campaign called Pepsi challenge. It was designed after some people said that coca-cola and Pepsi 2
    • were identical drinks with no taste difference. At malls, shopping centers and other public places, a Pepsi representative set up a table with two blank cups, one with Pepsi and one with Coke. Shoppers were encouraged to taste both colas, and then select which drink they preferred. Then the representative revealed the two bottles so the taster could see whether they preferred Coke or Pepsi. If Pepsi was revealed, the shopper was given a small prize. But some participants recall that the two beverages were served to them at different temperatures. The Pepsi sample was served chilled but the Coca-Cola was at room temperature, thus making it less appealing than the Pepsi. Pepsi Stuff is a marketing strategy and global campaign launched by PepsiCo during which people were to collect Pepsi points and then purchase stuff with them. Celebrities like CindyCrawford, Britney Spears, Shaquille O'Neal, Shakira, David Beckham, and the Spice Girls appeared in TV, print, outdoor, in-store, Internet, and catalog advertising promoting Pepsi Stuff. In 2005, nine years after Pepsi Stuff was first launched, The Coca-Cola Company launched iCoke, a very similar program in which consumers collect points printed on packages. Then let’s talk about the fast food chains: McDonalds, Starbucks and Wendy’s. Recentlymany people in the US has started to prefer more upscale food with less calories and fat, and thus the fast food chains like Mc Donald’s, Burger King and Wendy’s are losing clients, and as a result, profit. And the only time when they still get many clients is during breakfast. So, the fast food chains got into a battle for the breakfast market which makes now the major part of their profit. And they all started this year with new offerings. Let’s draw our attention to the McDonald’s and Starbucks companies. The brand war between McDonald’s and Starbucks is called the cola war of the new century. Starbucks used to be the coffee-bar king. It was the first American fast food chain that offered a wide variety of coffee tastes: vanilla latte, caramel cappuccino and others. And now McDonalds is installing coffeemaking machines in all of its restaurants so that its clients can taste the same kinds of coffee. And the survey conducted by some American association found out that many people like McDonald’s espresso 3
    • coffee more. Besides, coffee at McDonalds is a whole dollar cheaper than one in the Starbucks company. And at the meantime Starbucks has started to sell sandwiches just like at McDonald’s. And the reason they do it is that they just try to get each other’s clients. Another interesting example is the battle between Budweiser and Miller Lite – two large companies producing beer. It all began when Miller decided to make fun of Bud, the ‘King of Beers,’ by appointing itself the ‘President Of Beers.’ Most people took it as an election season joke, but not the Budweiser company, the market leader. In response Budweiser started telling that Miller was owned by a South African brewery, so the queen of state can’t be a foreigner, can he? Then, the number of insults which the Budweiser was pouring on Miller Lite only increased. And it all resulted in a lawsuit. The court ordered Budweiser stop insulting miller Lite, but even after the court decision there were chattering about the foreign brewery on TV and in newspapers. So, what is the moral of these stories? There’s no point in copying someone else’s product. The money which will be spent on lawsuits Afterwards could be spent on developing some new product or some other competitive advantage. There’s no point in damaging brand wars. Competition is good – it increases the quality of products and makes companies be more customerdriven. But companies should know when they must stop, otherwise they can lose. 4
    • Taste Coca-Cola is the original cola, while there isn't a huge difference in taste, Pepsi mirrored their cola after Coke's, being just different enough in taste to not actually be the same drink. Similarities Pepsi-Cola and Coca Cola Classic are both carbonated cola beverages. Sweetness Pepsi tastes sweeter than Coca-Cola, This is the reason why many prefer Pepsi over Coca-Cola in a blind test but prefer Coke when drinking an entire can. Carbonation Coca-Cola has more carbonation than Pepsi depending on what region you are in. It was said that depending on where each one was made the amount of carbonation in them will be different therefore proving that neither Coca-Cola nor Pepsi have more carbonation 5
    • The History of Coca-cola The first Coca-Cola recipe was invented in a drugstore in Columbus, Georgia by John Pemberton, originally as a cocawine called Pemberton's French Wine Coca in 1885. He may have been inspired by the formidable success of Vin Mariani, a European cocawine.[citation needed] In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton responded by developing Coca-Cola, essentially a non-alcoholic version of French Wine Cola. The first sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8, 1886. It was initially sold as a patent medicine for five cents a glass at soda fountains, which were popular in the United States at the time due to the belief that carbonated water was good for the health. Pemberton claimed Coca- Cola cured many diseases, including morphine addiction, dyspepsia, neurasthenia, headache, and impotence. Pemberton ran the first advertisement for the beverage on May 29 of the same year in the Atlanta Journal. By 1888, three versions of Coca-Cola—sold by three separate businesses—were on the market. Asa Griggs Candler acquired a stake in Pemberton's company in 1887 and incorporated it as the Coca Cola Company in 1888. The same year, while suffering from an ongoing addiction to morphine,[citation needed] Pemberton sold the rights a second time to four more businessmen: J.C. Mayfield, A.O. Murphey, C.O. Mullahy and E.H. Bloodworth. Meanwhile, Pemberton's alcoholic son Charley Pemberton began selling his own version of the product. John Pemberton declared that the name "Coca-Cola" belonged to Charley, but the other two manufacturers could continue to use the formula. So, in the summer of 1888, Candler sold his beverage under the names Yum Yum and Koke. After both failed to catch on, Candler set out to establish a legal claim to Coca-Cola in late 1888, in order to force his two competitors out of the business. Candler purchased exclusive rights to the formula from John Pemberton, Margaret Dozier and Woolfolk Walker. However, in 1914, Dozier came forward to claim her signature 6
    • on the bill of sale had been forged, and subsequent analysis has indicated John Pemberton's signature was most likely a forgery as well. In 1892 Candler incorporated a second company, The Coca-Cola Company (the current corporation), and in 1910 Candler had the earliest records of the company burned, further obscuring its legal origins. By the time of its 50th anniversary, the drink had reached the status of a national icon in the USA. In 1935, it was certified kosher by Rabbi Tobias Geffen, after the company made minor changes in the sourcing of some ingredients. Coca-Cola was sold in bottles for the first time on March 12, 1894. The first outdoor wall advertisement was painted in the same year as well in Cartersville, Georgia. Cans of Coke first appeared in 1955. The first bottling of Coca-Cola occurred in Vicksburg, Mississippi, at the Biedenharn Candy Company in 1891. Its proprietor was Joseph A. Biedenharn. The original bottles were Biedenharn bottles, very different from the much later hobble-skirt design that is now so familiar. Asa Candler was tentative about bottling the drink, but two entrepreneurs from Chattanooga, Tennessee, Benjamin F. Thomas and Joseph B. Whitehead, proposed the idea and were so persuasive that Candler signed a contract giving them control of the procedure for only one dollar. Candler never collected his dollar, but in 1899 Chattanooga became the site of the first Coca-Cola bottling company. The loosely termed contract proved to be problematic for the company for decades to come. Legal matters were not helped by the decision of the bottlers to subcontract to other companies, effectively becoming parent bottlers. Coke concentrate, or Coke syrup, was and is sold separately at pharmacies in small quantities, as an over-the-counter remedy for nausea or mildly upset stomach. New Coke 7
    • On April 23, 1985, Coca-Cola, amid much publicity, attempted to change the formula of the drink with "New Coke". Follow-up taste tests revealed that most consumers preferred the taste of New Coke to both Coke and Pepsi, but Coca-Cola management was unprepared for the public's nostalgia for the old drink, leading to a backlash. The company gave in to protests and returned to a variation of the old formula, with high-fructose replacing cane sugar, under the name Coca-Cola Classic on July 10, 1985. 21st Century On February 7, 2005, the Coca-Cola Company announced that in the second quarter of 2005 they planned to launch a Diet Coke product sweetened with the artificial sweetener sucralose ("Splenda"), the same sweetener currently used in Pepsi One. On March 21, 2005, it announced another diet product, Coca-Cola Zero, sweetened partly with a blend of aspartame and acesulfame potassium. In 2007, Coca-Cola began to sell a new "healthy soda": Diet Coke with vitamins B6, B12, magnesium, niacin, and zinc, marketed as "Diet Coke Plus." On July 5, 2005, it was revealed that Coca-Cola would resume operations in Iraq for the first time since the Arab League boycotted the company in 1968. In April 2007, in Canada, the name "Coca-Cola Classic" was changed back to "Coca-Cola." The word "Classic" was truncated because "New Coke" was no longer in production, eliminating the need to differentiate between the two. The formula remained unchanged. In January 2009, Coca-Cola stopped printing the word "Classic" on the labels of 16-ounce bottles sold in parts of the southeastern United States. The change is part of a larger strategy to rejuvenate the product's image. 8
    • In November 2009, due to a dispute over wholesale prices of Coca-Cola products, Costco stopped restocking its shelves with Coke and Diet Coke. 1.3 The History of Coca-cola The first Coca-Cola recipe was invented in a drugstore in Columbus, Georgia by John Pemberton, originally as a cocawine called Pemberton's French Wine Coca in 1885. He may have been inspired by the formidable success of Vin Mariani, a European cocawine.[citation needed] In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton responded by developing Coca-Cola, essentially a non-alcoholic version of French Wine Cola. The first sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8, 1886 New Coke On April 23, 1985, Coca-Cola, amid much publicity, attempted to change the formula of the drink with "New Coke". Follow-up taste tests revealed that most consumers preferred the taste of New Coke to both Coke and Pepsi, but Coca-Cola management was unprepared for the public's nostalgia for the old drink, leading to a backlash. The company gave in to protests and returned to a variation of the old formula, with high-fructose replacing cane sugar, under the name Coca-Cola Classic on July 10, 1985. 21st Century 9
    • On February 7, 2005, the Coca-Cola Company announced that in the second quarter of 2005 they planned to launch a Diet Coke product sweetened with the artificial sweetener sucralose ("Splenda"), the same sweetener currently used in Pepsi One. On March 21, 2005, it announced another diet product, Coca-Cola Zero, sweetened partly with a blend of aspartame and acesulfame potassium. In 2007, Coca-Cola began to sell a new "healthy soda": Diet Coke with vitamins B6, B12, magnesium, niacin, and zinc, marketed as "Diet Coke Plus." On July 5, 2005, it was revealed that Coca-Cola would resume operations in Iraq for the first time since the Arab League boycotted the company in 1968. In April 2007, in Canada, the name "Coca-Cola Classic" was changed back to "Coca-Cola." The word "Classic" was truncated because "New Coke" was no longer in production, eliminating the need to differentiate between the two. The formula remained unchanged. In January 2009, Coca-Cola stopped printing the word "Classic" on the labels of 16-ounce bottles sold in parts of the southeastern United States. The change is part of a larger strategy to rejuvenate the product's image. In November 2009, due to a dispute over wholesale prices of Coca-Cola products, Costco stopped restocking its shelves with Coke and Diet Coke. 10
    • INTRODUCTION OF COCA COLA 11
    • The Coca-Cola Company believes our business has always been based on the trust consumers everywhere place in us—trust that is earned by what we do as a corporate citizen and by our ability to live our values as a commercial enterprise There is much in our world to celebrate, refresh, strengthen and protect. Through our actions as local citizens, we strive every day to refresh the marketplace, enrich the workplace, preserve the environment and strengthen our communities At the heart of our business is the trust consumers place in us. They rightly expect that we are managing our business according to sound ethical principles, that we are enhancing the health of our communities, and that we are using natural resource responsible. The Coca Cola company started operations in India in 1993 after an absence of 16 years. To reach India's 300 million soft-drink consumers, the company distributes its products through over 700,000 retail outlets Coca Cola India directly employs over 7000 workers. Over the past nine years, the company has invested over US$ 827 million in India with over US$ 800 million in its bottling subsidiary. Significant growth has come from Kinley, its packaged water brand, which claims to have around 35 per cent share of the packaged drinking water market The world's favorite drink. The world's most valuable brand. The most recognizable word across the world after ‘OK’.Coca-Cola has a truly remarkable heritage. From a humble beginning in 1886, it is now the flagship brand of the largest manufacturer, marketer and distributor of non-alcoholic beverages in the world. In India, Coca-Cola was the leading soft-drink till 1977 when govt. policies necessitated its departure. Coca-Cola made its return to the country in 1993 and made significant investments to ensure that the beverage is available to more and more people, even in the remote and inaccessible parts of the nation. Coke had entered the Indian soft drinks market way back in the 1970s. The 12
    • company was the market leader till 1977, when it had to exit the country following policy changes regarding MNCs operating in India. Over the next few years, a host of local brands emerged such as Campa Cola, Thumps Up, Gold Spot and Limca etc. However, with the entry of Pepsi and Coke in the 1990s, almost the entire market went under their control. 13
    • Products Of Coca Cola COCA-COLA MANGOLA SPRITE THUMS-UP FANTA 14
    • The History Of Pepsi Pepsi was originally named "Brad's Drink", after its creator, Caleb Bradham, a pharmacist in New Bern, North Carolina. It was created in the summer of 1893 and was later renamed Pepsi Cola in 1898, possibly due the digestive enzyme pepsin and kola nuts used in the recipe. Bradham sought to create a fountain drink that was delicious and would aid in digestion and boost energy In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore into a rented warehouse. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce bottles, and sales increased to 19,848 gallons. In 1926, Pepsi received its first logo redesign since the original design of 1905. In 1929, the logo was changed again. In 1929, automobile race pioneer Barney Oldfield endorsed Pepsi- Cola in newspaper ads as "A bully drink...refreshing, invigorating, a fine bracer before a race". In 1931, the Pepsi-Cola Company went bankrupt during the Great Depression- in large part due to financial losses incurred by speculating on wildly fluctuating sugar prices as a result of World War I. Assets were sold and Roy C. Megargel bought the Pepsi trademark. Eight years later, the company went bankrupt again. Pepsi's assets were then purchased by Charles Guth, the President of Loft Inc. Loft was a candy manufacturer with retail stores that contained soda fountains. He sought to replace Coca-Cola at his stores' fountains after Coke refused to give him a discount on syrup. Guth then had Loft's chemists reformulate the Pepsi-Cola syrup formula. 15
    • Rise During the Great Depression, Pepsi gained popularity following the introduction in 1936 of a 12-ounce bottle. Initially priced at 10 cents, sales were slow, but when the price was slashed to five cents, sales increased substantially. With a radio advertising campaign featuring the jingle "Pepsi cola hits the spot / Twelve full ounces, that's a lot / Twice as much for a nickel, too / Pepsi-Cola is the drink for you," Pepsi encouraged price-watching consumers to switch, obliquely referring to 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. Coming at a time of economic crisis, the campaign succeeded in boosting Pepsi's status. In 1936 alone 500,000,000 bottles of Pepsi were consumed. From 1936 to 1938, Pepsi-Cola's profits doubled. Pepsi's success under Guth came while the Loft Candy business was faltering. Since he had initially used Loft's finances and facilities to establish the new Pepsi success, the near-bankrupt Loft Company sued Guth for possession of the Pepsi-Cola company. A long legal battle, Guth v. Loft, then ensued, with the case reaching the Delaware Supreme Court and ultimately ending in a loss for Guth. 1.6 The History Of Pepsi Pepsi was originally named "Brad's Drink", after its creator, Caleb Bradham, a pharmacist in New Bern, North Carolina. It was created in the summer of 1893 and 16
    • was later renamed Pepsi Cola in 1898, possibly due the digestive enzyme pepsin and kola nuts used in the recipe. Bradham sought to create a fountain drink that was delicious and would aid in digestion and boost energy In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore into a rented warehouse. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce bottles, and sales increased to 19,848 gallons. In 1926, Pepsi received its first logo redesign since the original design of 1905. In 1929, the logo was changed again. In 1929, automobile race pioneer Barney Oldfield endorsed Pepsi- Cola in newspaper ads as "A bully drink...refreshing, invigorating, a fine bracer before a race". During the Great Depression, Pepsi gained popularity following the introduction in 1936 of a 12-ounce bottle. Initially priced at 10 cents, sales were slow, but when the price was slashed to five cents, sales increased substantially. With a radio advertising campaign featuring the jingle "Pepsi cola hits the spot / Pepsi-Cola is the drink for you," Pepsi encouraged price-watching consumers to switch, obliquely referring to 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. Coming at a time of economic crisis, the campaign succeeded in boosting Pepsi's status. In 1936 alone 500,000,000 bottles of Pepsi were consumed. From 1936 to 1938, Pepsi-Cola's profits doubled. Pepsi's success under Guth came while the Loft Candy business was faltering. Since he had initially used Loft's finances and facilities to establish the new Pepsi success, the near-bankrupt Loft Company sued Guth for possession of the Pepsi-Cola company. A long legal battle, Guth v. Loft, then ensued, with the case reaching the Delaware Supreme Court and ultimately ending in a loss for Guth. 17
    • INTRODUCTION OF PEPSI Pepsi is one of the most well known brands in the world today available in over 160 countries. The company has an extremely positive outlook for India. This reflects that India holds a central position in Pepsi's corporate strategy. India is a key market for Pepsi co, and at the same time the company has added value to Indian agriculture and industry. PepsiCo entered India in 1989 and is concentrating in three focus areas - Soft drink concentrate, snack foods and vegetable and food processing. Faced with the existing policy framework at the time, the company entered the Indian market through a joint venture with Volta’s and Punjab Agro Industries. With the introduction of the liberalization policies since 1991, Pepsi took complete control of its operations. The government has approved more than US$ 400 million worth of investments of which over US$ 330 million have already flown in. One of PepsiCo's key strategies was to develop a completely local management team. Pepsi has 19 company owned factories while their Indian bottling partners own 21. The company has set up 8 Greenfield sites in backward regions of different states. PepsiCo intends to expand its operations and is planning an investment of approximately US$ 150 million in the next two-three years. 18
    • PRODUCTS OF PEPSI PEPSI Miranda Mountain 7 UP DEW 19
    • Cola Wars According to Consumer Reports, in the 1970s, the rivalry continued to heat up the market. Pepsi conducted blind taste tests in stores, in what was called the "Pepsi Challenge". These tests suggested that more consumers preferred the taste of Pepsi (which is believed to have more lemon oil, less orange oil, and uses vanillin rather than vanilla) to Coke. The sales of Pepsi started to climb, and Pepsi kicked off the "Challenge" across the nation. This became known as the "Cola Wars." In 1985, The Coca-Cola Company, amid much publicity, changed its formula. The theory has been advanced that New Coke, as the reformulated drink came to be known, was invented specifically in response to the Pepsi Challenge. However, a consumer backlash led to Coca-Cola quickly introducing a modified version of the original formula (removing the expensive Haitian lime oil and changing the sweetener to corn syrup) as Coke "Classic". According to Beverage Digest's 2008 report on Carbonated Soft Drinks (CSD), PepsiCo's U.S. market share is 30.8 percent, while The Coca-Cola Company's is 42.7 percent. Coca-Cola outsells Pepsi in most parts of the U.S., notable exceptions being central Appalachia, North Dakota, and Utah. In the city of Buffalo, New York, Pepsi outsells Coca-Cola by a two-to-one margin. Overall, Coca-Cola continues to outsell Pepsi in almost all areas of the world. However, exceptions include India; Saudi Arabia; Pakistan (Pepsi has been a dominant sponsor of the Pakistan cricket team since the 1990s); the Dominican Republic; Guatemala the Canadian provinces of Quebec, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island; and Northern Ontario. 20
    • Pepsi had long been the drink of Canadian Francophones and it continues to hold its dominance by relying on local Québécois celebrities (especially Claude Meunier, of La Petite Vie fame) to sell its product. PepsiCo use the slogan "here, it's Pepsi" (Ici, c'est Pepsi) to answer to Coca-cola publicity "Everywhere in the world, it's Coke" (Partout dans le monde, c'est Coke). By most accounts, Coca-Cola was India's leading soft drink until 1977 when it left India after a new government ordered The Coca-Cola Company to turn over its secret formula for Coke and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act (FERA). In 1988, PepsiCo gained entry to India by creating a joint venture with the Punjab government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited. This joint venture marketed and sold Lehar Pepsi until 1991 when the use of foreign brands was allowed; PepsiCo bought out its partners and ended the joint venture in 1994. In 1993, The Coca-Cola Company returned in pursuance of India's Liberalization policy. In 2005, The Coca-Cola Company and PepsiCo together held 95% market share of soft-drink sales in India. Coca-Cola India's market share was 52.5%. In 1989, Billy Joel mentions the rivalry between the two companies in the song "We Didn't Start The Fire". The line "Rock & Roll and Cola Wars" refers to Pepsi and Coke's usage of various musicians in their advertising campaigns. Coke used Paula Abdul, while Pepsi used Michael Jackson. They then continued to try to get other musicians to advertise their beverages. In 1992, following the Soviet collapse, Coca-Cola was introduced to the Russian market. As it came to be associated with the new system, and Pepsi to the old, Coca- Cola rapidly captured a significant market share that might otherwise have required years to achieve. By July 2005, Coca-Cola enjoyed a market share of 19.4 percent, followed by Pepsi with 13 percent. 21
    • The beginning of the Cola war: 1975 heralded the ‘Pepsi Challenge’, a landmark marketing strategy, which convinced millions of consumers that the taste of Pepsi was superior to Coke. Simultaneously, Pepsi Light, with a distinctive lemon taste, was introduced as an alternative to traditional diet colas. In 1983 Coke launched aspartame/saccharin blend Diet Coke. In response in 1989 Pepsi-Cola introduced an exciting new flavor, Wild Cherry Pepsi. Thus Diet Pepsi's 'The Other Challenge' campaign was based around a 54-46% lead over Diet Coke in independently researched taste tests in Australia. It was only in 1996 that Pepsi unveiled a revolutionary 'blue' look worldwide 'to transform the image and attitude' of one of the world's best-known brands. 'Pepsi Blue represents a quantum leap into the future and redefines how the Cola Wars will be fought and won in the 21st Century.' 22
    • After the war benefit to coke Introduced the Pepsi Challenge marketing campaign where PepsiCo set up a blind tasting between Pepsi-Cola and rival Coca-Cola. During these blind taste tests the majority of participants picked Pepsi as the better tasting of the two soft drinks. PepsiCo took great advantage of the campaign with television commercials reporting the test results to the public In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. In 2002, the strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that "helped redefine promotion marketing."Source: Promo Magazine, 2002. As with most popular soft drinks, Pepsi and its associated beverages have had various celebrity endorsers like Jeff Gordon, David Beckam and Christina Aguilera Coca-Cola has been very strongly associated with cricket, sponsoring the World Cup in 1996 and various other tournaments, including the Coca-Cola Cup in Sharjah in the late nineties. Coca-Cola's advertising campaigns Jo Chaho Ho Jaye and Life ho to Aisi were very popular and had entered the youth's vocabulary. In 2002, Coca-Cola launched the campaign "Thanda Matlab Coca-Cola to encourage the target audience to switch brands, make the purchase, and create a preference in the market for the product as opposed to its competition youth. The Coca Cola Company is part of the fabric of life in each of the communities they serve throughout the world. It operates as a local business partner, providing quality in the marketplace, 23
    • enhancing the workplace, preserving the environment and strengthening the community. Coke in India Coca-Cola, the corporation nourishing the global community with the world’s largest selling soft drink concentrates since 1886, returned to India in 1993 after a 16 year hiatus, giving a new thumbs up to the Indian soft drink market. In the same year, the Company took over ownership of the nation’s top soft-drink brand and bottling network. It’s no wonder our brands have assumed an iconic status in the minds of the world’s consumers A Healthy Growth to The Indian Economy Ever since, Coca-Cola India has made significant investments to build and continually consolidate its business in the country, including new production facilities, waste water treatment plants, distribution systems, and marketing channels. Coca-Cola India is among the country’s top international investors, having invested more than US$ 1 billion in India in the first decade, and further pledged another US$100 million in 2003 for its operations. A Pure Commitment to The Indian Economy The Company has shaken up the Indian carbonated drinks market greatly, giving consumers the pleasure of world-class drinks to fill up their hydration, refreshment, and nutrition needs. It has also been instrumental in giving an exponential growth to the country’s job listings. 24
    • Creating Enormous Job Opportunities With virtually all the goods and services required to produce and market Coca-Cola being made in India, the business system of the Company directly employs approximately 6,000 people, and indirectly creates employment for more than 125,000 people in related industries through its vast procurement, supply, and distribution system. The Indian operations comprises of 50 bottling operations, 25 owned by the Company, with another 25 being owned by franchisees. That apart, a network of 21 contract packers manufacture a range of products for the Company. On the distribution front, 10-tonne trucks – open bay three-wheelers that can navigate the narrow alleyways of Indian cities – constantly keep our brands available in every nook and corner of the country’s remotest areas. These are only some of the facts that speak about our commitment to the growth of the Indian Economy TARGETING OF COKE COCA-COLA. How about that? Though targeted at the youth, its appeal is nearly universal and it is believed that at least half the world's population has drunk a bottle of this dark, sweetened and flavored water. 25
    • It is true Coca-Cola is drunk by young and old, male or female, in home and, in large quantities, out of home. It is consumed by itself or as a mixture for almost any strong spirit be it rum or whisky; vodka or cheap brandy. However, if you ask the brand manager for Coca-Cola, he would have a definition for his target market. Target market is defined as people whom the brand wants to actively target. This is different from the brand's consumers, which may be a much wider group or, in some cases, a smaller group. However, the brand does have a target group, which should be ideally defined as people who do (or don't do) certain things. To define the brand franchise there are three easy steps that we should take. First, we should define the target market (people who the brand wants to actively target). Next, we should identify the target segments (segments of the target market that the business expects 80 per cent of its revenues from). Note that both the target market and the target segment should be measurable; something that many brand managers forget Third and most importantly, in my view, we must describe the target consumer. This description should not be as it is conventionally done. This is because we need a vivid and inspirational description that cuts across the target segments. The target consumer should be the reason to come to work everyday as it is this person whose needs and wants we want to satisfy in a manner and with a product or service offering, which is better than our competitor. Now, young Bhanuteja, I hope you are beginning to see some of the reasons as to why we need to define the brand franc This definition could be to narrow or widen the target market. Indeed, it is by understanding different segments in the market which are different from each other (which is why they are segments); yet, very much a part 26
    • of our target market. Finally, after having measured the size of the target markets and segments so as to establish our brand offering we then define the target consumer; not by dry statistics but by developing a vivid and inspirational description of the target consumer that cuts across all target segments. This will enable you to have a clear picture in your mind so that you can focus your brand marketing’s Targets differ, appeal may not COKE There are brands which have universal appeal but having target groups brings focus to marketers. I usually read about brands targeted at a young audience or a mature audience and so on. Is there any brand, which has everyone as its target audience, irrespective of sex, age, income, and so on? Is it vital for a brand to narrow its target audience down to a set of qualities? Is it that they will cease to be different otherwise? Can you think of any brands, which succeeded by appealing to everybody? Though targeted at the youth, its appeal is nearly universal and it is believed that at least half the world's population has drunk a bottle of this dark, sweetened and flavoured water. It is true Coca-Cola is drunk by young and old, male or female, in home and, in large quantities, out of home. It is consumed by itself or as a mixture for almost any strong spirit be it rum or whisky; vodka or cheap brandy. 27
    • However, if you ask the brand manager for Coca-Cola, he would have a definition for his target market. Target market is defined as people whom the brand wants to actively target. This is different from the brand's consumers, which may be a much wider group or, in some cases, a smaller group. However, the brand does have a target group, which should be ideally defined as people who do (or don't do) certain things. To define the brand franchise there are three easy steps that we should take. First, we should define the target market (people who the brand wants to actively target). Next, we should identify the target segments (segments of the target market that the business expects 80 per cent of its revenues from). Note that both the target market and the target segment should be measurable; something that many brand managers forget. 28
    • Coke Strategy (Plans to reach more villages) AS part of its business strategy, Coca-Cola has decided to expand rural penetration in West Bengal by targeting more than 5,000 villages and increasing the number of distributors to more than 700 during the current summer. In rural Bengal, now about 85,000 outlets sell Coca-Cola products. Similarly, the company has also finalised its nationwide rural marketing policy aiming at hiking its market share of carbonated soft drinks (CSDs). It plans to reach out to 40,000 more villages across the country with products affordable at price in PET bottles and also in cheaper cartons. The company expects the per capita consumption of colas in the country to go up to 15 "standard" bottles by the end of the current year compared to the current average consumption of 10 bottles. Mr Sunil Gupta, Vice-President (Public Affairs & Communications) of Coca-Cola India, told newspersons here on Wednesday that the company has appointed about 400 distributors through out the country to market its sugar-free soft drink concentrate in small sachets. 29
    • It expected to maintain 22 per cent growth rate in its CSD business as against the national average of about 16 per cent. The company plans to generate greater market share by increasing the affordability, availability and acceptability of its products targeting the urban, and specifically, the rural segment. The retail network will be expanded by 24 per cent during the current fiscal. The company plans to push its popular Thums Up brand in West Bengal offering a Chhota Thums Up - 200 ml bottle - at Rs 5. Bottles with the number `5' under the crown will entitle consumers to prizes such as Mahindra Scorpios, Yamaha Enticers, Bangla music cassettes, Hero cycles and sunglasses. The company is setting up redemption centres all over the State to allow consumers to bring their prize-winning crowns and exchanges the same for prizes. The Paanch Mila Kya campaign features the leading actress Bipasha Basu leveraging her popularity in West Bengal. This ad will be featured on all Bengali TV channels. The promotion is being heavily supported with extensive hoardings, in-shop merchandising, print advertising and a special rock road show MARKETING THROUGH 30
    • ADDS The world's favourite drink. The world's most valuable brand. The most recognizable word across the world after OK. Coca-Cola has a truly remarkable heritage. From a humble beginning in 1886, it is now the flagship brand of the largest manufacturer, marketer and distributor of non-alcoholic beverages in the world. Coca-Cola returned to India in 1993 and over the past ten years has captured the imagination of the nation, building strong associations with cricket, the thriving cinema industry, music etc. Coca-Cola has been very strongly associated with cricket, sponsoring the World Cup in 1996 and various other tournaments, including the Coca- Cola Cup in Sharjah in the late nineties. Coca-Cola's advertising campaigns Jo Chaho Ho Jaye and Life ho to Aisi were very popular and had entered the youth's vocabulary. In 2002, Coca-Cola launched the campaign "Thanda Matlab Coca-Cola" which sky- rocketed the brand to make it India's favourite soft-drink brand. In 2003, Coke was available for just Rs. 5 across the country and this pricing initiative togetherwith improved distribution ensured that all brands in the portfolio grew leaps and bounds. Coca-Cola had signed on various celebrities including movie stars such as Karishma Kapoor, cricketers such as Srinath, Sourav Ganguly, southern celebrities like Vijay in the past and today, its brand ambassadors are Aamir Khan, Aishwarya Rai, Vivek Oberoi and cricketer Virendra Sehwag. 31
    • Marketing Strategy Coke When it comes to marketing strategy blunders, pretty much everybody remembers the nosedive failure of New Coke, right? But what most people don’t know is the fascinating story behind the story, & the valuable lesson it reveals. In the early eighties, Coke was about to lose a marketing trump card to Pepsi. Coke’s market share had been in free fall since the end of the war, declining from 60% at that time, to just 24% in 1983. Pepsi was about to be able to claim that not only did it taste better than Coke (as proven in blind taste tests), but also that it was actually more popular. This 32
    • would have added even more fuel to Pepsi’s already significant marketing momentum. While Coke was also losing market share to other new market entries, and increasing consumer preference for diet, citrus, & caffeine-free beverages etc., Pepsi’s marketing strategy was continuing to win new customers. Obviously, people preferred the taste of Pepsi! Better taste was the main thrust of their advertising. Why else would anybody drink such an otherwise worthless mixture of ingredients? This fact was further born out with the runaway success of Diet Coke. Coke actually developed it from the ground up to taste more like Pepsi, rather than simply replacing the sugar content of the original recipe with artificial sweeteners All of the facts & evidence pointed to Coke having a taste problem with the original recipe. Coke had in fact been working in secret for years on a new one. Drawing on the success of Diet Coke, Coke’s marketing strategy called for the modification of that recipe to a sugar based drink. They felt they could finally turn the tide by introducing “NEW Coke”, based on that formula. In pre launch blind taste tests, people thought the new Coke tasted sweeter & smoother than the original. Extensive research revealed that people preferred the New Coke to both the original Coca Cola recipe & Pepsi. Statistically speaking, the taste of New Coke was significantly preferable. New Coke was the solution, but what to do with the original? If they kept both on the market, it was a surebet that Pepsi would be able to claim that it was more popular than both, at least for a time! And a marketing strategy that called for the promotion of a new & an old Coke would only confuse the public & dilute the brand. The original recipe was dropped. So what happened when new Coke was introduced? It bombed completely, & utterly! Here’s the brilliant tagline that 33
    • they used to introduce it. “The Best Just Got Better, Coke Is It!” Gee, that looks like a winner. People hated the new Coke, many without even having to taste it. And they were incensed that the original had been “stolen” from them. One hundred years, & countless millions of dollars in advertising had made Coke Cola a part of people’s very identity. Drinking Coca Cola wasn’t about taste at all. It was about mental association. Emotional Opium! The act of raising that funny looking spiral bottle to your lips. The cane sugary fragrance that followed. The sharp carbonated bite that set your throat a blaze with each vigorous swig. For many people, it was anchored deeply to fond, albeit sometimes even imaginary memories. Coke had no choice but to bring back the original recipe, amid a huge fanfare of publicity, as though it were the second coming. What a hullabaloo about nothing. Sugar water. For god’s sake! If nothing else, this story should prove to you once & for all that it’s not what you do that counts, it’s what you say & how powerfully you say it. And, that your customer’s buy, or don’t buy, for all kinds of seemingly irrational reasons. What’s critically important is not your product, but how your marketing strategy relates ownership of that product to your buyer’s beliefs, feelings, & desires! It also demonstrates that “me to” can be a very dangerous marketing strategy. While huge companies like Coke can afford to blow through billion dollar advertising budgets like there’s no tomorrow, as a Guerrilla marketer, I urge you to avoid expensive frontal assaults & one-upmanship like the plague. Be creative instead, & seek to outflank the enemy! 34
    • PepsiCo In India PepsiCo entered India in 1989 and has grown to become one of the country’s leading food and beverage companies. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India. PepsiCo India and its partners have invested more than U.S.$1 billion since the company was established in the country. PepsiCo provides direct and indirect employment to 150,000 people including suppliers and distributors. PepsiCo nourishes consumers with a range of products from treats to healthy eats, that deliver joy as well as nutrition and always, good taste. PepsiCo India’s expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade, Tropicana100% fruit juices, and juice based drinks – Tropicana Nectars, Tropicana Twister and Slice. Local brands – Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands. PepsiCo’s foods company, Frito-Lay, is the leader in the branded salty snack market and all Frito Lay products are free of trans-fat and MSG. It manufactures Lay’s Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands. The company’s high fibre breakfast cereal, Quaker 35
    • Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lay’s core products, Lay’s, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated fats and all of its products contain voluntary nutritional labeling on their packets. The group has built an expansive beverage and foods business. To support its operations, PepsiCo has 43 bottling plants in India, of which 15 are company owned and 28 are franchisee owned. In addition to this, PepsiCo’s Frito Lay foods division has 3 state-of-the-art plants. PepsiCo’s business is based on its sustainability vision of making tomorrow better than today. PepsiCo’s commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers. PEPSI MAX REPOSITIONS TO TARGET HEALTHY MEN PEPSI Max has unveiled a new TVC and brand sampling campaign-targeting men following research into the minds of cola drinkers. Pepsi marketing director Tony Thomas said research showed the split of the cola market into two key segments — 36
    • full sugar and diet—did not reflect consumer needs. “Diet is an out-dated concept,” Thomas said “There are many consumers out there who embrace life and get the most they can out of it and, while they are into staying in shape, do not buy into the diet concept on the grounds of it being a taste and image compromise.” Pepsi Max targets the 20–30 age group and is consumed by more men than women, unlike its competitor Diet Coke. The campaign is spearheaded by a 30-second TVC showing a group of friends who bring to life a mental fantasy. Emerging from a kombi van decked out in white water rating life vests, helmets and armed with paddles, the six 20-something guys and girls remove the rubbish from a large wheelie bin, get inside and then ‘raft’ it down the street and into the harbour, paddling away. Marketing Strategies of Pepsi In 1975, PepsiCo introduced the Pepsi Challenge marketing campaign where PepsiCo set up a blind tasting between Pepsi-Cola and rival Coca-Cola. During these blind taste tests the majority of participants picked Pepsi as the better tasting of the two soft drinks. PepsiCo took great advantage of the campaign with television commercials reporting the test results to the public In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. In 2002, the strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that "helped redefine promotion marketing."Source: Promo Magazine, 2002. 37
    • Celebrity endorsers As with most popular soft drinks, Pepsi and its associated beverages have had various celebrity endorsers like Jeff Gordon,David Beckam and Christina Aguilera Marketing Pepsi logo (1973-87). In 1987, the font was modified slightly to a more rounded version which was used until 1991. Pepsi logo (2003-09). Pepsi Wild Cherry and Pepsi ONE used this design through October 2009. 38
    • Pepsi bottle in Mexico. As of November 2009, this logo is still in use in Mexico and most countries. In 1975, Pepsi introduced the Pepsi Challenge marketing campaign where PepsiCo set up a blind tasting between Pepsi-Cola and rival Coca-Cola. During these blind taste tests the majority of participants picked Pepsi as the better tasting of the two soft drinks. PepsiCo took great advantage of the campaign with television commercials reporting the results to the public. In 1976 Pepsi, RKO Bottlers in Toledo, Ohio hired the first female Pepsi salesperson, Denise Muck, to coincide with the United States bicentennial celebration. In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. By 2002, the strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that "helped redefine promotion marketing." In 2007, PepsiCo redesigned their cans for the fourteenth time, and for the first time, included more than thirty different backgrounds on each can, introducing a new background every three weeks. One of their background designs includes a string of repetitive numbers 73774. This is a numerical expression from a telephone keypad of the word "Pepsi." In late 2008, Pepsi overhauled their entire brand, simultaneously introducing a new logo and a minimalist label design. The redesign was comparable to Coca-Cola's earlier simplification of their can and bottle designs. Also in 4th quarter of 2008 Pepsi teamed up with Google/Youtube to produce the first daily entertainment show on Youtube, Poptub. This daily show deals with pop culture, internet viral videos, and celebrity gossip. Poptub is updated daily from Pepsi. 39
    • Since 2007, Pepsi, Lay's, and Gatorade have had a "Bring Home the Cup," contest for Canada's biggest hockey fans. Hockey fans were asked to submit content (videos, pictures or essays) for a chance at winning a party in their hometown with the Stanley Cup and Mark Messier. In 2009, "Bring Home the Cup," changed to "Team Up and Bring Home the Cup." The new installment of the campaign asks for team involvement and an advocate to submit content on behalf of their team for the chance to have the Stanley Cup delivered to the team's hometown by Mark Messier. Pepsi has official sponsorship deals with three of the four major North American professional sports leagues: the National Football League, National Hockey League and Major League Baseball. Pepsi also sponsors Major League Soccer. Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket team are just one of the teams that the brand sponsors. The team wears the Pepsi logo on the front of their test and ODI test match clothing. On July 6, 2009, Pepsi announced it would make a $1 billion investment in Russia over three years, bringing the total Pepsi investment in the country to $4 billion. In July 2009, Pepsi started marketing itself as Pecsi in Argentina in response to its name being mispronounced by 25% of the population and as a way to connect more with all of the population. In October 2008, Pepsi announced that it would be redesigning its logo and re- branding many of its products by early 2009. In 2009, Pepsi, Diet Pepsi and Pepsi Max began using all lower-case fonts for 40
    • name brands, and Diet Pepsi Max was re-branded as Pepsi Max. The brand's blue and red globe trademark became a series of "smiles," with the central white band arcing at different angles depending on the product. Pepsi in countries such as the U.S., Canada, Brazil, Bolivia, Guatemala, Nicaragua, Honduras, El Salvador, Colombia, Argentina, Puerto Rico, Costa Rica, Panama and Australia is carrying the "smile" logo, while the rest of the countries continue to use the old design on all packaging. Pepsi and Pepsi Max cans and bottles in Australia now carry the localised version of the new Pepsi Logo. The word Pepsi and the logo are in the new style, while the word "Max" is still in the previous style. Pepsi Wild Cherry continues to carry the 2003 Pepsi design on bottles and cans as of November 2009. 41
    • MARKETING OF THE PRODUCT THORUGH ADDS & LAUNCHES For over 100 years, Pepsi-Cola has produced some of the finest soft drink ads available anywhere in the world. From today's "Joy of Pepsi," as sung by Britney Spears, to yesterday's "Nickel, Nickel" (1939), our ads are as memorable as the products we produce. Check out highlights of our favorite ads here. 2004: Pepsi unveils five new TV commercials for Pepsi and Sierra Mist on Super Bowl XXXVIII, making this the 19th straight year that Pepsi has advertised in the big game. • On Super Bowl Sunday, Apple and Pepsi officially launch a historic promotion to legally give away millions of free songs to Mac and Windows PC users from Apple's iTunes Music Store. • On the Academy Awards telecast, Diet Pepsi stole the spotlight as the country’s fastest-growing major soft drink bowed a new advertising campaign with the tagline, “Diet Pepsi. It’s the Diet Cola. The zero-calorie cola brand illustrates how it is the best option to go with food and social occasions, much like its sister brand, Pepsi-Cola. • Two popular sportscasters help turn life’s everyday moments into a cause for celebration in a new advertising campaign for Pepsi EDGE, the new cola with full- flavored taste but half the sugar, carbs & calories of regular colas. The campaign tagline, "This moment deserves a Pepsi EDGE," reminds consumers that they can reward themselves with a Pepsi EDGE for completing even the simplest of tasks. • Mountain Dew brings nostalgia back into pop culture as it introduces new commercials featuring the classic Mad Magazine "Spy vs. Spy" characters — who will stop at nothing to get their Dew. 42
    • 2003: Pepsi-Cola unveils a new advertising campaign, "Pepsi. It's the Cola," which is the brand's first major campaign shift since 1999. The new campaign highlights the popular soft drink that goes with everything from food to fun. • Pepsi's last major campaign change was in 1999, when it debuted "The Joy of Cola," which became "The Joy of Pepsi" in 2000. • Pepsi updates its look with a bolder, more contemporary image that better captures the brand's youthful attitude. • Mountain Dew offers its third line extension with Mountain Dew LiveWire, combining the unique citrus taste of Mountain Dew with a bold orange flavor. Available summer 2003. • Pepsi's blockbuster summer promotion "Pepsi Play for a Billion" gives 1,000 consumers the chance to play for $1 billion on a live television show on The WB. A guaranteed $1 million prizewinner will be chosen and will then have a chance to win $1 billion without forfeiting the $1 million prize. • In September, Richard Bay, a 42-year-old high school teacher from Princeton, West Virginia, became a millionaire on "Pepsi Play for a Billion" on The WB. Bay and the television audience then held their collective breath to see if he would also win the billion dollars. Instead, his number was two digits off the billion-dollar number, but Bay was still pleased with his cool million. 2002: In March, supermodel Cindy Crawford helps introduce a new look for Diet Pepsi. The updated graphics better represent the brand's light, crisp, refreshing qualities. • Pepsi-Cola teams up with the National Football League, becoming its Official Soft Drink Sponsor. 43
    • • Pepsi declares, "It's a blue thing," and unveils Pepsi Blue in July. A fusion of berries with a splash of cola, the blue-hued soft drink is created by and for teens. Through nine months of research and development, Pepsi asks young consumers what they want most in a new cola. Their response: "Make it berry and make it blue." • In December, American music and film sensation Beyoncé Knowles is welcomed as the newest member of the Pepsi family. • 2001: The popular "Joy of Cola" tagline gets an update, becoming the "Joy of Pepsi." Three months later, Britney Spears stars in a blockbuster Pepsi commercial that breaks during the Academy Awards. An hour before the telecast, the high- energy spot debuts online, where more than 2 million fans click their way to Britney's own version of the "Joy of Pepsi." • Thirsty consumers are invited to "discover a sensation as real as the streets," when cherry-flavored Mountain Dew Code Red is introduced. • Pepsi puts a little twist on a great thing, unveiling the first national TV commercial for new lemon-flavored Pepsi Twist. 2000: The popular Pepsi Challenge makes its return, and consumers across the country let their taste decide the best cola and one-calorie cola. Helping launch the Challenge are two of baseball's top sluggers – Sammy Sosa and Ken Griffey Jr. 44
    • • On the airwaves, the "Joy of Cola" campaign is a hit as "Pepsi Girl" Hallie Eisenberg rocks with pop star Faith Hill and perennial rockers KISS. • Among those doing the Dew is hip-hop artist Busta Rhymes, and Aquafina launches its first-ever television advertising campaign 45
    • Wrong side of Pepsi Ads Creavitivity : Creativity according to me is putting something new before the world. This ad-maker has really done a fantastic job and gone miles ahead of the other Soft- drinks’ ad-campaigns. My Dope on marketing fundas : My marketing professor always taught me of market segmentation. Segmenting the customers as per their individual characteristics. This helps in catering to the individual tastes of the consumers and keep him loyal to the product. But then this is the fiercely fought market place by the cola makers and each one is expanding their market reach as well as customer base. Everytime I meet a Cola salesman he tries to convince me about the obvious reasons for cola consumption poised to rise in India. The obvious reasons are how low is the per capita consumption of cola in India vis-a-vis that in Pakistan and other nations. So it means, if the existing population of consumers are not adding to the bottomline, target new customers. To position the product before the new envisaged customers, take out a new campaign to woo new customers like exposed bellies of bikini clad babes, a guitar, a burger, light-poles at cricket stadium, a cricketer inside ur pocket and yes, the great SRK ! This advertisement will go down in History of advertising world as the new chapter written for wooing the non-alive and imaginery objects to buy the products. Objective of the advertisement was: The objective of the bare bellies of bikini clad babes was to show that summer is approaching and dont forget to carry ur Pepsi to quench thirst.The guitar signified time to roam free since this is a vacation time and people develope and / or nurture new hobbies ! Playing guitar is one of them ! 46
    • The stadium flashlight wanting Pepsi reminded people of the ongoing cricket season and reminded them of having Pepsi while watching the cricket. The singing burger signified that eating out is a fashion now a days and since this is a holiday season, people would eat more outside. While doing that don’t forget to have a Pepsi. The hidden cricketer from the pocket was shut up to create one more shot at the model of the rival cola company. What it turned out in reality : Shahrukh Khan sporting his all time ’’I’m the Best’’ attitude on his face walking by few rich babes asking a Rs. 6 Pepsi because it is so bubbly ! Come on babes, u can earn lifetime money for drinking your Pepsi by working in the outfit in any remixes or any Vikram Bhat movie ! Forming of lips out of anything went so outrageous afterwards that and finally the golden moment came.... The golden moment that made me stood up and salute the outrageous creativity of the ad-maker and not to forget the foresight ness. Pepsi is not as pricey Regardless of which soda you like better though, Pepsi seems the better value than Coke right now. Coke is trading at a nearly 20 percent premium to Pepsi based on 2002 P/Es even though the two companies' earnings growth rates are nearly identical. (Pepsi's are actually a shade higher.) 47
    • And when you look at revenues, the gap is even more dramatic. Coke is trading at 7 times estimated 2002 sales while Pepsi is trading at 3.5 times 2002 revenue estimates. Both companies are expected to post slight declines in sales this year and an increase of about 4 percent in 2003. Due to this disparity in valuation, Jeff Kanter, an analyst with Prudential Securities, says he has a "buy' rating on Pepsi and "hold" on Coke. Prudential does not do investment banking. To be sure, Coke is still the market share leader in soft drinks. One of the main reasons the stock has outperformed Pepsi this year was because it reported a better than expected gain in unit volume in the first quarter. And the company has taken steps to cement its carbonated beverage lead as well gain ground in the bottled water market. 48
    • Marketing Approach Both Coca-Cola and Pepsi try to market as part of a life-style. Coca-Cola uses phrases such as "Coke side of life" in their website, www.coca-cola.com, while Pepsi uses phrases such as "Hot stuff" in their website, www.pepsi.com, to promote the idea that Pepsi is "in sync" with the cool side of life. Pepsi tries to reach out to the younger generation by appealing to pop culture. If you visit their website you will be greeted with flashy pages containing pop music, cars, and fashion. Coca-Cola's website also has links for music and sports, two arenas in which soda-pop is often consumed; however, Coca-Cola's is less flashy and uses a classical appeal, most likely because of Coca-Cola's long history as the standard for cola beverages. After both beverage giants announced to remove HFCs from their vending machines and launched pilot projects testing R744 this spring, Coca-Cola now attempts to best Pepsi in overall sustainability with its “Commitment 2020”, a set of goals regarding the company’s five strategic CRS focus areas. 49
    • On 22 July 2009, the Coca-Cola Enterprises announced that it had set goals for its five strategic Corporate Responsibility and Sustainability (CRS) focus areas and has committed to achieving these goals by the year 2020 - what the company is calling "Commitment 2020". With regards to the focus area “Energy Conservation/Climate Change” the company has committed to reduce the overall carbon footprint of its business operations by 15 percent by 2020, as compared to a 2007 baseline. Further to setting sustainability goals, the document “OUR CRS JOURNEY ... DELIVERING ON OUR COMMITMENTS” reiterates the company’s efforts with regards to HFC-free refrigeration. “We have already eliminated HFCs from the insulation in our equipment, and we are working to eliminate them from our equipment completely. We are piloting alternative refrigerant gases, such as CO2, 50
    • which has less of an environmental impact than HFCs. In Europe, we are also testing hydrocarbon-based refrigeration.Our goal is to have 1,400 CO2 coolers in place in time for the Vancouver 2010 Olympic Winter Games”. Pepsi “aggressively” working to find HFC-free alternatives Already in September 2008 on the other hand, Pepsi-Cola North America Beverages announced that it has launched an interactive website that emphasises its efforts in environmental sustainability. Pepsi shares its environmental sustainability commitments at www.PepsiEcoChallenge.com, which include reducing water consumption by 20%, electricity usage by 20% and fuels consumption by 25%, all by 2015 – as well as its progress toward these and other environmental goals. With regards to refrigerants and the insulation of refrigeration equipment “Pepsi has worked aggressively with its equipment suppliers to find alternatives to hydrofluorocarbons (HFCs) and chlorofluorocarbons (CFCs) that were once widely used in insulating and refrigerating equipment but have been shown to have a detrimental impact on the environment. Since the end of 2007 all refrigerated POS equipment purchased by Pepsi worldwide is insulated with HFC-free foaming agents (PepsiCo led the industry in mandating this change). We are working with our equipment suppliers to explore and test coolers that use hydrocarbon (HC) or carbon- dioxide (CO2) refrigerants as an alternative to hydrofluorocarbons, where permitted by government regulations. We are currently conducting field tests of both types of refrigerants in Europe and Asia. Our goal is to fully eliminate use of HFCs in refrigerated equipment”. 51
    • Pepsi launches R744 pilot project… At the end of March 2009, PepsiCo announced it was launching a pilot programme in the US capital Washington DC to test the most climate-friendly vending machines ever in the US. Featuring its new logo and an environmental sticker on each bottle, the 30 new R744 dispensers will be placed in high consumer traffic places and tested over a period of 18 months in the capital with the aim of rolling them out globally over the next few years. According to the company the new machines will generate 12% less Green House Gas (GHG) emissions than current ones, will use 5.08 kilowatt-hours of energy per day, and will be the first of their type to be introduced in the US. … and Coke announces more CO2 coolers Soon after PepsiCo announced its pilot program in Washington DC, Coca-Cola announced in April 2009 plans to install 4 CO2 beverage coolers at the House of Representatives in spring 2009 as well as up to 1,800 CO2 coolers and vending machines throughout the U.S. and Canada later this year. Most of these coolers are destined for Vancouver, where 1,400 climate-friendly coolers and vending machines will be installed at the venues for the 2010 Olympic Winter Games. According to the company, the CO2 coolers eliminate 99 percent of the direct green house gas (GHG) emissions by means of using natural refrigerant R744, include an intelligent energy management system (EMS-55) that cuts energy use by an average of 26 percent and reduce indirect green house gas emissions by more than three tons over the lifetime of the machine. More recently, ice-cold merchandisers manufacturer Frigoglass announced the launch of its Ecocool range that depending on the application use natural refrigerants R744, R290, or R600a, as well as the use of natural substances in the insulation process. 52
    • Frigoglass’ global customer base spans across 15 countries in four continents including Coca-Cola bottlers, while its market share in 2008 reached 20%. Coke Vs. Pepsi (MARKETING) Control of market share is the key issue in this case study. The situation is both Coke and Pepsi are trying to gain market share in this beverage market, which is valued at over $30 billion a year (98). Just how is this done in such a competitive market is the underlying issue. The facts are that each company is coming up with new products and ideas in order to increase their market share. The creativity and effectiveness of 53
    • each company's marketing strategy will ultimately determine the winner with respect to sales, profits, and customer loyalty (98). Not only are these two companies constructing new ways to sell Coke and Pepsi, but they are also thinking of ways in which to increase market share in other beverage categories. Although the goal of both companies are exactly the same, the two companies rely on somewhat different marketing strategies (98). Pepsi has always taken the lead in developing new products, but Coke soon learned their lesson and started to do the same. Coke hired marketing executives with good track records (98). Coke also implemented cross training of managers so it would be more difficult for cliques to form within the company (98). On the other hand, Pepsi has always taken more risks, acted rapidly, and was always developing new advertising ideas. Both companies have also relied on finding new markets, especially in foreign countries. In the foreign markets, Coke has been more successful than Pepsi. For example, in Eastern Europe, Pepsi has relied on a barter system that proved to fail. However, in certain countries that allow direct comparison, Pepsi has beat Coke. In foreign markets, both companies have followed the marketing concept by offering products that meet consumer needs (99) in order to gain market share. For instance, in certain countries, consumers wanted a soft drink that was low in sugar, yet did not have a diet taste or image (99). Pepsi responded by developing Pepsi Max. These companies in trying to capture market share have relied on the development of new products. In some cases the products have been successful. However, at other times the new products have failed. For Coke, changing their original formula and introducing it as “New Coke” was a major failure. The new formula hurt Coke as consumers requested Classic Cokes’ return. Pepsi has also had its share of failures. Some of their failures included: Pepsi Light, Pepsi Free, Pepsi AM, and Crystal Pepsi. One solution to increasing market share is to carefully follow consumer wants in each country.The next step is to take fast action to develop a product that meets the requirements for that particular region. Both companies cannot just sell one product; if 54
    • they do they will not succeed. They have to always be creating and updating their marketing plans and products. The companies must be willing to accommodate their “target markets”. Gaining market share occurs when a company stays one-step ahead of the competition by knowing what the consumer wants. My recommendation is to make sure the company is always doing market research. This way they are able to get as much feedback as possible from consumers. Next, analyze this data as fast as possible, and then develop the new product based upon this data. Once the product is developed, get it to the marketplace quickly. Time is a very critical factor. In my opinion, with all of these factors taken into consideration any company should give any company a good jump on market share 55
    • Pricing and Marketing Strategies (Pepsicoca cola) APART from the high-decibel price wars and the usual battle over market shares, cola brands Coca-Cola and Pepsi have been in a quiet behind-the-scenes skirmish - to reach the rural masses. After an almost stagnant growth in this segment for the last two years, both Coke and Pepsi have made efforts this year to penetrate deep into the rural markets by substantially increasing their retailer and distribution network and with innovative pricing and marketing strategies. While the per-capita consumption of carbonated soft drinks in rural areas is just 2.8 litres compared to the 7.4-litre consumption nationally, the cola majors say this renewed effort has helped step up sales in the rural markets considerably. While Pepsi says that the contribution of the rural sales to the overall sales of the company has been in the range of 10 to15 per cent this year, Coke spokesperson's, in a recent interview to Catalyst, has been quoted as saying that the company has increased its rural share from nine per cent two years ago to 25 per cent this year, by penetrating as many as 40,000 villages. 56
    • However, both the companies feel that the rural markets are still largely untapped and a lot needs to be done. Both of them feel that there is substantial scope to further increase the contribution of the rural markets to the overall sales. Speaking to Catalyst, on the sidelines of a seminar on rural marketing, organised by Direcway, the global education wing of Hughes, George Kovoor, Executive Vice- President, Traditional Trade, Pepsi Foods Ltd, says: "The major challenge which we face in the rural markets is availability. Since soft drinks are sold in returnable glass bottles, one cannot sell through the conventional FMCG wholesale channel to drive availability in rural markets." Therefore, the company, says Kovoor, has chosen a `hub and spoke' format of distribution. "The spoke is typically closest to the 57
    • retail outlets and is serviced by a hub distributor who is supplied directly from the plant or the company's warehouse. This format allows for large loads travelling longer distances and short loads doing short distances which is cost-effective." Similarly, Coca-Cola also has a hub and spoke distribution format. "We use all possible means of transport that range from trucks, auto rickshaws, cycle rickshaws and hand carts to even camel carts in Rajasthan and mules in the hilly areas, to cart our products from the nearest hub," says a Coke spokesperson. Once available, the focus is then on getting the consumer to try the product by giving him a reason to buy. This also means making the product available in a chilled form at the neighbourhood store, getting the pricing and packaging right. According to the Coke spokesperson, due to the poor and erratic power supply in villages, the company has invested in non-electric chilling equipment to ensure the availability of chilled products to the consumers. Also he says, "We have doubled the number of refrigerators in the market to five lakh in the last one year." With the rural market being extremely price sensitive, the soft drink companies have to make sure that they strike the right balance as far as pricing is concerned. "We try 58
    • and make our products affordable in terms of unit price point. We also take into consideration the price of the `alternate beverage' options that the consumer has in these areas," says Kovoor. However, considering the price-sensitive nature of the consumers in these areas, it is only the glass bottles that allow the price to be as low as Rs 5, says Kovoor. "If the same bottle was non-returnable, the end price would have been more than double because of the cost of the package and that is not a great price offering for the rural consumer," he says. "However glass bottles are tougher to distribute and sell since they have to be brought back and the outlets have to deposit glass and crates to sell our products," he adds. Apart from pricing, reworking the pack size was also necessary. "The introduction of 200 ml packs at highly affordable prices provided us with a strong product offering, as our international quality products are made available at affordable prices. This has 59
    • helped us compete and increase our share and presence in this market," points out the Coke spokesperson. In fact, a powerful driver for both the companies in the rural markets has been the 200 ml packs. But attractive pricing and convenient packaging is not enough to sell the brand in these markets. The greatest challenge is to convince the consumer the need to buy this product. Says Kovoor, "The issue in the rural markets is not spending power. In fact, most rural consumers have the spending power, but they have to be given a tangible reason to buy a soft drink when they have other options to quench their thirst, such as water or a homemade sherbet." Therefore, while marketing the product, it is also important for these companies to do something, which is of relevance to the consumers. In fact, Kovoor feels that operating rural vans with Pepsi campaigns painted on them is not a very effective idea to connect with the consumers. "We instead try to participate in various rural activities such as melas, undertake display drives in mandi stalls, run on-pack promos and focus a lot on price communication." Apart from associating in the various mela and haat activities Kovoor points out that the rural consumers relate a lot to celebrities. "Celebrities have worked out like a dream for us," he says. A poster of Bollywood star such as Amitabh Bachchan or cricketer Sachin Tendulkar in a mandi or a mela for instance, says Kovoor, heightens the aspirational association of their products. "In fact the Amitabh and Sachin campaign of Pepsi in which the two stars are engaged in a kite fight or the Sachin campaign in which he is in the midst of a group of children is focused on our rural audience and have done wonders for us," he says. 60
    • Simiarly, Coke's Thanda Matlab campaign as well as the Chota Coke campaign, points out the Coke spokesperson, also targets the rural masses. "Apart from this, all our outdoor and indoor communications are also integrated to capture the `consumer connect' that is established through our TV ads," he says. Therefore it's not just right pricing and packaging, but it is the ability to establish the right connect with the consumers which helps a brand to make it big in rural India. Pepsi keeps price advantage through 60s and 70s, when Pepsi charged its bottlers 20% less for its concentrate With rising ingredient costs, Pepsi could no longer offer twice as much for the same price. So it raised price to Coke’s level giving it a war chest to fuel an aggressive ad campaign Battle shifted from Price to Quality, with Pepsi targeting the youth What followed was the Pepsi Challenge & “Real Thing” Coke ads 61
    • Perceived quality caught up. Deeper pocketed and lower cost Coke initiated a price war in selective markets where Pepsi was weak in the 70s. Pepsi responded with its discounts and by the end of the 80s, 50% of food store sales were on discount Other companies moved into the lower left quadrant of the market. But the two major players forced price down to “ultimate value.” To break price spiral, Coke launched New Coke to keep Coke loyals and induce switching among Pepsi buyers. Rejected by market. Attempts to move to next arena via niches in caffeine and sugar substitutes SOURCES SAYS: Pepsi sources in 1998. "Both companies did not really concentrate on the fundamentals of marketing like building strong brand equity in the market, and thus had to resort to such tactics to garner market shares." Abstract When the cola giants, Pepsi and Coke, entered the Indian market, they brought with them the cola wars that had become part of global folklore. This case study details the various battles fought in India by the two rivals with its focus on the publicity campaigns where the two sought to steal each other's fizz. The case also outlines battles fought on other fronts - conflicts with bottles, product modifications, attempts 62
    • to steal the rival's employees and other mini wars. On the whole, the case attempts to provide a comprehensive perspective regarding the dimensions of the cola wars and the direction in which they are heading. PEPSI VS. COKE Making billions from selling carbonated/colored/sweetened water for over 100 years, Coke and Pepsi had emerged as truly global brands. Coke was born 11 years before Pepsi in 1887 and, a century later it still maintained its lead in the global cola market. Pepsi, having always been number two, kept trying harder and harder to beat Coke at its own game. In this never-ending duel, there was always a new battlefront opening up somewhere. In India the battle was more intense, as India was one of the very few areas where Pepsi was the leader in the cola segment. Coke re-entered India in 1993 and soon entered into a deal with Parle, which had a 60% market share in the soft drinks segment with its brands Limca, Thums Up and Gold Spot. Following this, Coke turned into the absolute market leader overnight. The company also acquired Cadbury Schweppes’ soft drink brands Crush, Canada Dry and Sport Cola in early 1999 Coke was mainly a franchisee-driven operation with the company supplying its soft drink concentrate to its bottlers around the world. Pepsi took the more capital- intensive route of owning and running its own bottling factories alongside those of its franchisees. Over half of Pepsi’s sales were made by its own bottling units Though Pepsi had a lead over Coke, having come in before the era of economic liberalization in India, it had to spend the early years fighting the bureaucracy and Parle’s Ramesh Chuahan every step of the way. Pepsi targeted the youth and seemed to have struck a right chord with the market. Its performance was praiseworthy, while Coke had to struggle to a certain extent to get its act right. In 63
    • a span of 7 years of its operations in the county, Coke changed its CEO four times. Media reports about the troubles faced by Coke and the corrective measures it adopted were aplenty 64
    • Case Study Coca Cola India's Thirst for the Rural Market: 'Thanda' Goes Rural In early 2002, Coca-Cola India (CCI) (Refer Exhibit I for information about CCI) launched a new advertisement campaign featuring leading bollywood actor - Aamir Khan. The advertisement with the tag line - 'Thanda Matlab Coca-Cola4' was targeted at rural and semi-urban consumers. According to company sources, the idea was to position Coca-Cola as a generic brand for cold drinks. The campaign was launched to support CCI's rural marketing initiatives. CCI began focusing on the rural market in the early 2000s in order to increase volumes. This decision was not surprising, given the huge size of the untapped rural market in India (Refer Exhibit II to learn about the rural market in India). With flat sales in the urban areas, it was clear that CCI would have to shift its focus to the rural market. Nantoo Banerjee, spokeswoman - CCI, said, "The real market in India is in the rural areas. If you can crack it, there is tremendous potential."5 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 CCI. Because of the erratic power supply most grocers in rural areas did not stock cold drinks. Also, people in rural areas had a preference for traditional cold beverages such as 'lassi'6 and lemon juice. Further, the price of the beverage was also a major factor for the rural consumer. CCI's Rural Marketing Strategy CCI's rural marketing strategy was based on three A's - Availability, Affordability and Acceptability. The first 'A' - Availability emphasized on the availability of the product to the customer; the second 'A' - Affordability focused on product pricing, and the third 'A'- Acceptability focused on convincing the customer to buy the product. 65
    • CCI's Rural Marketing Strategy Contd... Availability Once CCI entered the rural market, it focused on strengthening its distribution network there. It realized that the centralized distribution system used by the company in the urban areas would not be suitable for rural areas. In the centralized distribution system, the product was transported directly from the bottling plants However, CCI realized that this distribution system would not work in rural markets, as taking stock directly from bottling plants to retail stores would be very costly due to the long distances to be covered. The company instead opted for a hub and spoke distribution system (Refer Figure II). Under the hub and spoke distribution system, stock was transported from the bottling plants to hubs and then from hubs, the stock was transported to spokes which were situated in small towns. These spokes fed the retailers catering to the demand in rural areas. CCI not only changed its distribution model, it also changed the type of vehicles used for transportation. The company used large trucks for transporting stock from bottling plants to hubs and medium commercial vehicles transported the stock from the hubs to spokes. For transporting stock from spokes to village retailers the company utilized auto rickshaws and cyclesCommenting on the transportation of stock in rural markets, a company spokesperson said, "We use all possible means of transport that range from 66
    • trucks, auto rickshaws, cycle rickshaws and hand carts to even camel carts in Rajasthan and mules in the hilly areas, to cart our products from the nearest hub."7 In late 2002, CCI made an additional investment of Rs 7 million (Rs 5 million from the company and Rs 2 million from the company's bottlers) to meet rural demand. By March 2003, the company had added 25 production lines and doubled its glass and PET bottle capacity8. Further it also distributed around 2,00,000 refrigerators to its rural retailers. It also purchased 5,000 new trucks and auto rickshaws for boosting its rural distribution. Through its rural distribution initiatives, CCI was able to increase its presence in rural areas from a coverage of 81,383 villages in 2001 to 1,58,342 villages in August 2003. Apart from strengthening its distribution network, CCI also focused on pricing in rural market. Affordability A survey conducted by CCI in 2001 revealed that 300 ml bottles were not popular with rural and semi-urban residents where two persons often shared a 300 ml bottle. It was also found that the price of Rs10/- per bottle was considered too high by rural consumers. For these reasons, CCI decided to make some changes in the size of its bottles and pricing to win over consumers in the rural market. In 2002, CCI launched 200 ml bottles (Chota Coke)9 priced at Rs 5. CCI announced that it would push the 200 ml bottles more in rural areas, as the rural market was very price-sensitive. It was widely felt that the 200 ml bottles priced at Rs. 5 would increase the rate of consumption in rural India. Reports put the annual per capita consumption of bottled beverages in rural areas at one bottle as compared to 6 bottles in urban areas. Affordability Contd... 67
    • The 200 ml bottles priced at Rs. 5 would also make CCI competitive against local brands in the unorganized sector. It was reported that in the states of Rajasthan and Gujarat the local cola brands such as Choice and Tikli cost only half the price offered by CCI, which gave them the advantage in garnering the major market share before CCI came out with Chota Coke. CCI also targeted the rural consumer aggressively in its marketing campaigns, which were aimed at increasing awareness of its brands in rural areas. Acceptability The initiatives of CCI in distribution and pricing were supported by extensive marketing in the mass media as well as through outdoor advertising. The company put up hoardings in villages and painted the name Coca Cola on the compounds of the residences in the villages. Further, CCI also participated in the weekly mandies 10 by setting up temporary retail outlets, and also took part in the annual haats11 and fairs - major sources of business activity and entertainment in rural India. CCI also launched television commercials (TVCs) targeted at rural consumers. In order to reach more rural consumers, CCI increased its ad-spend on Doordarshan.12 The company ensured that all its rural marketing initiatives were well-supported by TVCs. When CCI launched Chota Coke in 2002 priced at Rs. 5, it bought out a commercial featuring Bollywood actor Aamir Khan to communicate the message of the price cut and the launch of 200 ml bottles to the rural consumers. The commercial was shot in a rural setting. In the summer of 2003, CCI came up with a new commercial featuring Aamir Khan, to further strengthen the Coca-Cola brand image among rural consumers. The commercial aimed at making coke a generic name for 'Thanda.' Of the reason for picking up the word 'Thanda', Prasoon Joshi, national creative director - McCann Erickson, the creator of the commercial, said, "Thanda is a very 68
    • North India-centric phenomenon. Go to any restaurant in the north, and attendants would promptly ask, 'thanda ya garam?' 'Thanda' usually means lassi or nimbu pani, 'garam' is essentially tea. Because the character, in itself, represented a culture, we wanted to equate Coke with 'Thanda', since 'Thanda' too is part of the popular dialect of the north. Thus making 'Thanda' generic for Coca-Cola. With the long-playing possibilities of the 'Thanda' idea becoming evident, 'Thanda' became the central idea. 69
    • The Rivalry on Various Fronts BOTTLING: Biggest area of conflict. Bottling was the biggest area of conflict between Pepsi and Coke. This was because, bottling operations held the key to distribution, an extremely important feature for soft-drink marketing. As the wars intensified, both companies took pains to maintain good relationships with bottlers, in order to avoid defections to the other camp. A major stumbling block for Coke was the conflict with its strategic bottling partner, Ramesh Chauhan of the Parle group of companies. Coke alleged that Chauhan had secretly manufactured Coke’s concentrate. Chauhan, in turn, accused coke of backtracking on commitments to grant him bottling rights in Pune and Bangalore and threatened legal action. The matter almost reached the courts and the strategic alliance showed signs of coming apart. Industry observers commented that for a company like Coke that was so heavily franchisee driven, antagonizing its chief bottler was suicidal. Advertising When Coke re-entered India, it found Pepsi had already established itself in the soft drinks market. The global advertisement wars between the cola giants quickly spread 70
    • to India as well. Internationally, Pepsi had always been seen as the more aggressive and offensive of the two, and its advertisements the world over were believed to be more popular than Coke's. It was rumored that at any given point of time, both the companies had their spies in the other camp. The advertising agencies of both the companies (Chaitra Leo Burnett for Coke and HTA for Pepsi) were also reported to have insiders in each other's offices who reported to their respective heads on a daily basis... Product Launches Pepsi beat Coke in the Diet-Cola segment, as it managed to launch Diet Pepsi much before Coke could launch Diet Coke. After the Government gave clearance to the use of Aspertame and Acesulfame-K (potassium) in combination (ASK), for use in low- calorie soft drinks, Pepsi officials lost no time in rolling out Diet Pepsi at its Roha plant and sending it to retail outlets in Mumbai... Poaching Pepsi and Coke fought the war on a new turf in the late 1990s. In May 1998, Pepsi filed a petition against Coke alleging that Coke had ‘entered into a conspiracy'to disrupt its business operations. Coke was accused of luring away three of Pepsi's key sales 71
    • personnel from Kanpur, going as far as to offer Rs 10 lakh a year in pay and perks to one of them, almost five times what Pepsi was paying him. Sales personnel who were earning Rs 48,000 per annum were offered Rs 1.86 lakh a year. Many truck drivers in the Goa bottling plant who were getting Rs 2,500 a month moved to Coke who gave them Rs 10,000 a month. While new recruits in the soft drinks industry averaged a pay hike of between 40-60% Coke had offered 300-400%. Coke, in its reply filed with the Delhi High Court, strongly denied the allegations and also asked for the charges to be dropped since Pepsi had not quantified any damages... Other Fronts • Till the late 1980s, the standard SKU for a soft drink was 200 ml. Around 1989, Pepsi launched 250 ml bottles and the market also moved on to the new standard size. When Coke re-entered India in 1993, it introduced 300 ml as the smallest bottle size. Soon, Pepsi followed and 300 ml became the standard. But around 1996, the excise component led to an increase in prices and a single 300 ml purchase became expensive. Both the companies thus decided to bring back the 200 ml bottle, In early 1996, Coke launched its 200 ml bottles in Meerut and gradually extended to Kanpur, Varanasi, Punjab and Gujarat, and later to the south... 72
    • • In May 1996, Coke launched Thums Up in blue cans, with four different pictures depicting ‘macho sports'such as sky diving, surfing, wind-surfing and snow-boarding. Much to Pepsi's chagrin, the cans were colored blue - the color Pepsi had chosen for its identity a month earlier, in response to Coke's ‘red'identity... • There were frequent complaints from both the players about their bottlers and retailers being hijacked. Pepsi's blue painted retail outlets being painted in Coke's red color overnight and vice-versa was a common phenomena in the 1990s... • Coke also turned its attention to Pepsi's stronghold - the retail outlets. Between 1996-98, Coke doubled its reach to a reported 5 lakh outlets, when Pepsi was present at only 3.5 lakh outlets. To reach out to smaller markets, interceptor units in the form of mobile vans were also launched by Coke in 1998 in Andhra Pradesh, Tamil Nadu and West Bengal. However, in its rush to beat Pepsi at the retail game, Coke seemed to have faltered on the service front. For instance, many shops in Uttar Pradesh frequently ran out of stock and there was no servicing for Coke's coolers... Objectives The purpose of this research is expose the facts of the appearance of both Pepsi and Coke in India in terms of marketing communication. This research is mainly based on 73
    • the marketing communication in which the purpose is to expose the either company’s marketing communication on the media and contribute the matter to the fact of Pepsi cola’s strong position. Conclusions Pepsi seems stronger in all of the contributed parts than Coke. Pepsi has more brands than Coke and cover higher media than Coke. Pepsi advertise with almost all of the brands while Coke mainly advertise only one brand i.e. Coca-Cola. Both used Emotional and rational appeals in their messages. Pepsi’s marketing share is evidenced 70 74
    • Quality and Food Safety Programs PepsiCo is dedicated to producing the safest, highest quality and best tasting beverages and foods in every part of the world. Developing and maintaining robust Food Safety programs is how we assure safety for every package, every day in every market. PepsiCo has detailed internal programs and procedures for Food Safety. Below is a summary of our policies, programs and actions designed to keep our products safe and meeting high quality standards. PepsiCo Food Safety PepsiCo has an excellent track record in delivering safe products through our PepsiCo Food Safety Policy. Our efforts are focused on building a sustainable food safety program and providing the framework to develop and sustain food safety of existing brands and new innovation. The scope covers the design, manufacture and distribution of beverage and food products. Our programs and procedures apply to all current and future divisions in PepsiCo. PepsiCo's programs and procedures for Food Safety and Quality address the following key areas: Organizational Responsibility: The food safety responsibilities of all individuals at all levels of the organization are outlined and documented in order to ensure that the authority and accountability of all quality and food safety decisions are well understood . Critical Food Safety Elements: Our comprehensive food safety program ensures compliance with the following critical food safety elements: HACCP, low acid manufacturing, allergen management, crisis management, foreign object control, good manufacturing practices (GMP's) and pest management. Regulatory: PepsiCo ensures that all products and processes are in compliance with applicable regulatory requirements. These include areas such as ingredients, GMOs, labeling, net weight, pesticide and chemical residues, juice HACCP, flavor regulations and any local or country-specific requirements. Food Security: It is the responsibility of each PepsiCo operation to plan, design, implement and maintain a comprehensive facility security plan in order to ensure our products are safe for human consumption. A facility security plan is implemented by each plant, facility and distribution center, in accordance with the baseline standards and framework established by the PepsiCo Security Organization. It includes an annual review of effectiveness and is updated as necessary . Product Design: All PepsiCo products, processing equipment and facilities are designed, developed and commercialized in a manner that enables manufacturing sites to produce product that is safe, legal and fit for human consumption. The Research and Development and commercialization teams are responsible for ensuring processes and products meet all regulatory requirements and are designed to be safe for human consumption. Equipment design and procurement must meet all standards for GMP compliance and sanitary design . Manufacturing: PepsiCo is committed to the manufacture of products that are safe and fit for human consumption. We achieve this by ensuring the process is controlled, raw materials are managed appropriately and the finished product is handled correctly. Manufacturing includes the following equipment process controls: Conformance to specification, equipment preventative maintenance, calibration, equipment verification, start-up and change-over operation. The following programs manage ingredients, in-process materials and finished goods: Product traceability, inspection and testing procedures, incoming raw material and packaging controls, water quality, packaging quality, control of non-conforming product, product rework and review and approval of variances. Our warehouses are routinely assessed, approved and monitored . Documentation and Records: PepsiCo ensures that all documentation and records are compliant to government regulations and the Food Safety Policy. This includes a defined master list of documents and assigned responsibility for managing documents. Records are maintained to demonstrate compliance with manufacturing specifications and policies. 75
    • Supply Quality: All purchased ingredients are procured against an approved specification from an approved vendor facility. Suppliers must pass a rigorous approval process. Manufacturing facilities only receive raw ingredients from approved suppliers. Supplier performance is routinely monitored, recorded and reassessed. Auditing and Self Assessments: PepsiCo has an established framework in which it executes yearly food safety audits of manufacturing and suppliers. These audits provide assessments of manufacturing facilities for compliance, effectiveness and improvement in accordance with PepsiCo food safety policies and procedures. Corrective and Preventative Action: Corrective and preventive action is initiated in response to non- conformances that may occur relative to process, product or package specifications. Effectiveness is verified by the prevention of reoccurrences. The corrective action program includes effective and timely handling of consumer / customer complaints, root cause analysis, audits for program effectiveness and follow-up investigations. Training: Each functional department identifies training needs and provides training for all employees including full-time, part-time, temporary and contractors. This ensures that they have the appropriate level of education, experience and training necessary to effectively perform the required activities specified in the PepsiCo Food Safety Policy. A training business plan must be established to address food safety training for HACCP, allergen management, low acid manufacturing, GMP's, control of nonconforming product, employee safety, food security and specific job applications. Consumer and Customer Satisfaction: PepsiCo ensures that procedures are in place to monitor consumer and customer satisfaction. The procedures must provide timely and accurate responses to customer complaints and strive for continuous improvement. Quality Organization PepsiCo Quality professionals assess product compliance to the Quality Policy. This program is focused on processes and procedures supporting quality policies and prioritization of critical risk areas. PepsiCo Quality professionals assess product compliance to the Quality Policy. This program is focused on processes and procedures supporting quality policies and prioritization of critical risk areas. Our Quality agenda is lead by quality professionals in various regions who oversee the following areas: • Food Safety • Innovation (R&D) • Manufacturing Quality • Co-manufacturing Quality • Supplier Quality • Plant Quality 76
    • PepsiCo's Political Contributions Policy PepsiCo's Board of Directors has approved the following policy. Together with other policies and procedures, including our Code of Conduct, it guides our approach to political contributions. By following the policy and the accompanying procedures, by adhering to the letter and the spirit of all applicable laws and regulations, and by exercising sound judgment regarding our involvement in the political process, we affirm and strengthen our commitment to PepsiCo's values. Policy It is essential in a democratic society that citizens participate in their government. The health of our society depends on all of us being well informed and responsibly engaged in the political process. The PepsiCo Concerned Citizens Fund (CCF) receives voluntary employee contributions to make political campaign contributions to U.S. federal and state political parties, committees and candidates. The CCF and the company's corporate contributions provide an important opportunity for PepsiCo, and its employees, to participate in the democratic process. We believe that providing financial support to responsible pro-business candidates is an important means by which we help improve the business climate, our quality of life and the society in which we live, enabling us to succeed as a company committed to integrity, innovation and value. The following criteria will be used in connection with all contributions: The candidate's or entity's commitment to improving the business climate; The candidate's or entity's position or voting record on issues of direct concern to PepsiCo; The location of PepsiCo facilities or employees within the candidate's district or state; The candidate's position on key committees where legislation of importance to PepsiCo is considered or the candidate's demonstrated leadership - or potential for leadership - within the U.S. Congress or a State Legislature; The candidate's need for campaign financial assistance. The public policy issues we face as a company and our engagement in the public policy process, including contributions as part of the political process, are discussed with and reviewed by the Nominating and Corporate Governance Committee of the company's Board of Directors. 77
    • Details on PepsiCo's political contributions will be posted on its website on an annual basis. This will occur in conjunction with the release of PepsiCo's Corporate Citizenship Report each year. All contributions and support of U.S. or state political parties, committees or candidates from the CCF or corporate funds must be made in accordance with applicable campaign finance and disclosure laws. Coercion of any employee to contribute to the CCF or to make any political contribution of any kind is unacceptable. Our employees have the right to be engaged in the political process in their individual capacity as they see fit, and make political contributions of their own time and money to the candidates or parties of their choice. Of course, those efforts must not in any way suggest PepsiCo's support. Management and supervisory employees who are citizens of the United States may voluntarily contribute to the CCF. PepsiCo employees must obtain approval of the Corporate Vice President Public Policy & Government Affairs before making political contributions of corporate funds. All contributions must be reviewed by the corporate law department to ensure legal compliance. All payments from the CCF to support U.S. or state political parties, committees or candidates must be approved by the CCF Executive Committee. Feb. 3, 2006 Less Packaging Pepsi has led the way in reducing packaging materials through cost-effective changes in design and production. Known in the industry as “light-weighting, these efforts explain why our bottles and cans look and feel different than the ones you might remember from years ago. Lightweighting is good for the business and good for the environment – it reduces the amount of raw materials and energy used to make our packages and means that less waste is generated after our beverages are enjoyed. However, our lightweighting goals must 78
    • always be balanced against the need to protect the flavors and ingredients in our products, to allow for stacking during transportation and in stores, and to ensure the safety of our consumers. If you’re wondering why some bottles, particularly water bottles like the ones we use for Aquafina, are lighter than other beverage bottles, here’s why: • Bottles used for non-carbonated beverages like our Tropicana juice drinks, Aquafina flavored waters, and Lipton Iced Teas, need a thicker sidewall to protect their flavors and ingredients from exposure to oxygen. Without this protection, some flavors and ingredients can lose their taste and other features over prolonged periods of time. • Bottles used for carbonated beverages like Pepsi, Mountain Dew and Sierra Mist need an even thicker side wall to hold in the carbonation. We are continually working to innovate new ways to lightweight all of our packaging. Here are some examples of work that’s already been done. • The amount of aluminum used to make our soft drink cans has been reduced 10% since 1993, which saves about 75 million pounds of aluminum a year. • The amount of plastic used to make our 2-liter soft drink bottles has been reduced by 39% since 1980. • We’ve trimmed the amount of plastic used in our most popular Aquafina bottle - the half-liter (16.9 oz) bottle - by 35% since 2002. This saves more than 50 million pounds of plastic and reduces greenhouse emissions by 118 million pounds annually. • In 2008, we introduced a new, half-liter bottle for our Aquafina flavored waters, Lipton Iced Teas, and Tropicana juice drinks. The new bottle contains 20% less plastic than the previous bottle (18.6 grams versus 23.5 grams) and its label is 10% smaller than before. These innovations are taking twenty million pounds of packaging out of the system each year. 79
    • • By using a thinner gauge material, we’ve reduced the amount of plastic in our multi- pack wraps (i.e. 6-pack, 8-pack, 12-pack, etc), by 18%. Sustainable Packaging & Recycling We produce our beverages in a variety of packages, each carefully designed to deliver convenience and appeal to our consumers while protecting the integrity of our beverages and minimizing environmental impact throughout the package’s life-cycle. Balancing all those needs is a tall order for a bottle or a can but given the number of packages we produce each year, it is an absolute imperative. To minimize the impact of our packaging on the environment, we follow the recognized principles of sustainable packaging design: Reduce: using less material in our packaging Reuse: reusing packaging where feasible Recycle: designing packaging that is 100% recyclable and that contains as much recycled material as possible We employ these principles not only for our bottles and cans, but also for the “secondary” packaging (i.e. pallets, boxes, shrinkwrap and trays) that we use to protect, transport and display our beverages. In addition, we are working to help ensure consumers properly dispose of packaging after they enjoy our beverages. This includes labeling our packages to help educate consumers about their proper disposal and promoting recycling among our consumers and in our communities. 80
    • Product Safety & Quality The global nature of our business requires that the Coca-Cola system has the highest standards and processes for ensuring consistent product safety and quality -- from our concentrate production to our bottling and product delivery. We measure key product and package quality attributes to ensure our beverage products in the marketplace meet Company requirements and consumer expectations. Consistency and reliability are critical to our product quality and to meeting global regulatory requirements and Company standards. quality Our system, everywhere in the world, has the highest standards and processes for ensuring product safety and quality. Consistency and reliability are critical to meeting global regulations and Company standards—from concentrate production to product delivery We measure key product and package quality attributes to ensure our beverage products in the marketplace meet Company requirements and consumer expectations. Consistency and reliability are critical to our product quality and to meeting global regulatory requirements and Company standards. The global nature of our business requires that the Coca-Cola system has the highest standards and processes for ensuring consistent product safety and quality -- from our concentrate production to our bottling and product delivery. To ensure such consistency and reliability, the Coca-Cola system is governed by The Coca-Cola Management System (TCCMS). TCCMS is our integrated quality management program, which holds all of our operations systemwide to the same standards for production and distribution of our beverages. It guarantees the highest standards in the management of product quality, the environment, and health and safety throughout the Coca-Cola system. Each business within the Coca-Cola system must establish, implement, document and maintain a safety and quality system in accordance with TCCMS requirements. 81
    • In 2007, we increased our Company’s Global Product Quality Index rating to 94.5 from 94.2 in 2006, reaching our highest-ever value. Our 2007 Company Global Package Quality Index rating increased to 90.4 from 89.2 in 2006, also reaching our highest-ever value. ingredients To sensibly enjoy our products, it helps to understand more about the ingredients we use and the benefits they provide. While there are many different ingredients in the more than 3000 beverages we make, one focus here on three that people ask about frequently: sparkling water, sweeteners and caffeine. Variety is the foundation of our commitments to our consumers. With our range of beverage products, package sizes and nutrition information provided on our packages, we strive to inform, motivate and empower consumers to make sensible beverage choices. Our goal is to help people around the world lead healthier lives by providing beverages for every lifestyle, life stage and life occasion. Read our "Advertising and Marketing to Children Policy." We have nearly 500 beverage brands inclusive of more than 3,000 beverages. They range from regular and low- and no-calorie sparkling beverages to still beverages such as 100 percent fruit juices and fruit drinks, waters, sports and energy drinks, teas and coffees, and milk- and soy-based beverages. All of these beverages are made of high-quality ingredients and can be part of a healthy, balanced diet. In 2007, the Company launched 450 new beverage products, including 150 low- and no- calorie options for consumers. The launch of these low- and no-calorie options expanded our portfolio of that category by approximately 17 percent from 2006 to 2007. To date, we have more than 700 low- and no-calorie beverage products, accounting for approximately 23 percent of our 2007 unit case volume. Coca-Cola Zero, now available in more than 90 countries, has been an important addition to these no-calorie beverage alternatives. As an additional way to help consumers manage calories, we continue to introduce smaller packaging sizes in markets throughout the world. In the United States, we introduced the 8-ounce, 100-calorie aluminum cans of Coca-Cola, Cherry Coke and Sprite. Understanding the growing consumer need for products that deliver enhanced beverage benefits, we offer functional beverages that can help consumers address nutrition gaps and performance needs. For example, NutriJuice, a vitamin- and mineral-fortified orange juice drink specifically developed to help address the problem of iron-deficiency anemia and malnutrition in children, was launched in the Philippines in 2007. portfolio Our commitment to consumers is to provide a variety of products for every lifestyle, life stage and occasion. All our products can be part of an active, healthy lifestyle, which consists of combining a moderate, balanced and varied diet with regular physical activity. Our Company continues to expand our beverage portfolio in order to meet consumers' evolving needs and preferences. We currently offer more than 2,600 Coca-Cola beverages 82
    • around the world. Visit our Products section to learn about beverage variety, product safety and quality, nutrition, hydration, sweetners and how our beverages can fit into your healthy, active lifestyle. Packaging Our goal is to advance a packaging framework in which our packaging is no longer seen as waste, but as a valuable resource for future use. Completing the cycle Packaging adds value to our products by increasing shelf life, minimizing breakage, reducing transportation and handling costs, safeguarding public health, providing product information and creating consumer convenience. But in an era of rising energy costs and scarce resources, we must work toward packaging that adds value not only to our products, but also to our environment and society. reduce We're continually exploring new ways to optimize the amount of material and energy we use in our packaging. Since the introduction of all our major packages, we've significantly reduced the materials used to make them, without sacrificing quality. Reduce We have a long history of designing packages with the environment in mind. In 1969, our Company commissioned the first study to examine the whole environmental impact of a package, laying the framework for the life cycle assessment methodology used today. Our focus on life-cycle management has helped us sustain the use of high value recyclable materials and reusable packages. About 85 percent of our global beverage volume is delivered in primary packaging made from polyethylene terephthalate (PET) plastic, aluminum, glass and steel. The materials are 100 percent recyclable. The remaining 15 percent of beverage volume is largely delivered through highly efficient bulk package systems such as refillable steel tanks or concentrated bag-in-box containers for fountain syrup. We are advancing sustainable design efforts through an initiative known as e3, which focuses on improving efficiency, life-cycle effectiveness and eco-innovation. For example, using state-of-the-art computer design software, we have effectively reduced 83
    • and improved the impact resistance of our most recognizable package – the glass contour bottle. Introduced in 2000, the Ultra Glass contour bottle is designed to improve impact resistance, and reduce weight and cost. The innovative Ultra Glass bottles are 40 percent stronger, 20 percent lighter and 10 percent less expensive than traditional contour bottles. Use of the Ultra Glass design has eliminated 52,000 metric tons of glass -- resulting in a CO2 reduction of 26,000 tons or the equivalent of planting 8,000 acres of trees. Throughout our system, we tailor our packaging to meet local economic, social and environmental needs. In least developed markets, we rely more heavily on refillable bottles in order to offer greater affordability to consumers and prevent waste. In other instances, we adjust the amount of material used in PET bottles based on local temperatures to reduce packaging while maintaining product quality. recover Approximately 85% of our unit case volume today is delivered in recyclable bottles and cans. The recovery of these containers and their materials for reuse is critical to our sustainability aspirations. Our target is to recover directly 50% of the equivalent bottles and cans sold worldwide. In india most of the packaging we use is refillable packaging once the use these packaging collected washed and refilled system directly managed by coca cola. reuse We're helping to foster demand for recovered materials because of our increased use of recycled content in our packages. We also are purchasing products that are made from recycled beverage packaging and enhancing the efficiency of our refillable bottles We are working to advance technologies that allow us to use greater amounts of recycled materials in our packaging. More than half of the metal in our aluminum cans is recycled. Since introducing the first- ever beverage container with recycled PET in 1991, we have continued to invest significant dollars in development of environmentally and economically viable recycling technologies. Today, we lead the industry in the innovative use of recycled plastic. Learn how we create value through sustainable fashion. The Coca-Cola Company is using recycled content PET in more than 17 markets around the world. Recycling plastic for reuse yields financial benefits, requires less energy than producing bottles with virgin materials, and reduces waste and greenhouse gases. Read about our community recycling programs. We also invested in building PET recycling plants that produce bottles from recycled content in Australia, Austria, Mexico, the Phillippines, Switzerland and the United States. 84
    • Our plant in the United States will be the world's largest plastic bottle to bottle recycling plant with capacity to produce approximately 100 million pounds of food grade recycled PET plastic for reuse each year -- the equivalent of producing nearly 2 billion 20 ounce Coca-Cola bottles. Policy of The Coca-Cola Company Corporate Political Contributions The Coca-Cola Company is the world’s largest beverage company, refreshing consumers with more than 450 sparkling and still brands. Along with Coca-Cola, recognized as the world’s most valuable brand, the Company’s portfolio includes 12 other billion dollar brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid and Georgia Coffee. Globally, we are the No. 1 provider of sparkling beverages, juices and juice drinks, and ready-to-drink teas and coffees. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy the Company’s beverages at a rate of 1.5 billion servings a day. With an enduring commitment to building sustainable communities, our Company is focused on initiatives that protect the environment, conserve resources and enhance the economic development of the communities where we operate. Because public policy issues have the potential to impact our business, people and communities, our Company, like other commercial enterprises, uses its resources on occasion to advance matters of public policy that are consistent with the sustainability of our business and our Company’s values. To that end, our Company recognizes the importance of meaningful corporate governance practices as it relates to corporate political contributions in the United States. Accordingly, corporate political contributions are based upon the following criteria: 1Legal Compliance: Our Company’s political contributions are made in compliance with all applicable laws and corresponding legal reporting requirements. To ensure compliance, all corporate political contributions are reviewed and approved by our Company’s Vice President, Government Relations and appropriate legal counsel. 1Board and Management Oversight: Corporate political contributions are reviewed retroactively by the Public Issues and Diversity Review Committee to ensure alignment with Company policy and our overall values. In addition, the Public Issues and Diversity Review Committee, along with the Company’s Public Policy and Corporate Responsibility Council, periodically review Company policy regarding political contributions and also corresponding Company practices. 1Public Policy Support: Consistent with applicable laws, corporate political contributions may be given to political candidates and organizations whose views and work are consistent with the interests and values of our Company, our bottling and overall business system, the non-alcoholic beverage industry and the communities in which we operate. Because our Company’s vision and values are an outgrowth of our unique brands and people, we recognize that political candidates and organizations may support positions that align with some, but not all, aspects of our contribution policy. In these 85
    • instances, we base our involvement on those areas of mutual agreement that we believe will have the greatest benefit to our shareowners and key stakeholders. 1Public Transparency: Our Company supports public transparency relating to corporate political contributions and our Company complies with all applicable laws and legal reporting requirements relating to corporate political contributions. In addition, and to further the goal of transparency in this area, we will post this policy and an annual report of our contributions to political candidates and any political entities organized under 26 USC Sec. 527 of the Internal Revenue Code on our Company website: www.thecoca- colacompany.com. If you have any questions or require further information regarding this Company policy, please contact the office of the Vice President, Government Relations. Conclusion: Advertising professionals realize that the heart of any campaign is not just the product but also the position it holds in people's minds. Thus the New Coke fiasco couldn’t have been predicted nor could the overwhelming response to Classic Coke. In the interest of aligning their marketing campaigns with various sets of social values, companies like the cola giants, may try to emphasize their reputation for ethical conduct or the social value of their products. They might enter under-served markets, with the dual aim of distributing goods and services to those who might not otherwise have access to them, and at the same time finding profitable new business niches and creating good will toward the company. Coke and Pepsi are practicing social marketing in rural India and interior China. International marketing can be very complex. Many issues have to be resolved before a company can even consider entering uncharted foreign waters. This becomes very evident as one begins to study the international cola wars. Often, the company that gets into a foreign market first usually dominates that country's market. The concepts, which are becoming more important in every market, include color, product attractiveness visibility, and display quality. In addition, availability (meeting local demand by increasing production locally), acceptability (building brand equity), and affordability (pricing higher than local brands, but adapting to local conditions) are the key factors. Keeping these factors in mind the two companies have hired local professionals to better un Packaging Of The Pepsi & Coca cola Coca cola company goal is to advance a packaging framework in which our packaging is no longer seen as waste, but as a valuable resource for future use.Pepsi produce our beverages in a variety of packages, each carefully designed to deliver convenience and appeal to our consumers while protecting the integrity of our beverages and minimizing environmental impact throughout the package’s life-cycle. Coke Packaging adds value to our products by increasing shelf life, minimizing breakage, reducing transportation and 86
    • handling costs, safeguarding public health, providing product information and creating consumer convenience. To minimize the impact of our packaging on the environment, we follow the recognized principles of sustainable packaging design: Reduce: In Pepsi company using less material in our packaging. In Coke We're continually exploring new ways to optimize the amount of material and energy we use in our packaging. Since the introduction of all our major packages, we've significantly reduced the materials used to make them, without sacrificing quality. Reuse: Pepsi reusing packaging where feasible. Our target is to recover directly 50% of the equivalent bottles and cans sold worldwide. In india most of the packaging we use is refillable packaging once the use these packaging collected washed and refilled system directly managed by coca cola. Recycle :Pepsi designing packaging that is 100% recyclable and that contains as much recycled material as possible. Coke helping to foster demand for recovered materials because of our increased use of recycled content in our packages. We also are purchasing products that are made from recycled beverage packaging and enhancing the efficiency of our refillable bottles Coke company working to advance technologies that allow us to use greater amounts of recycled materials in our packaging. In addition, Pepsi working to help ensure consumers properly dispose of packaging after they enjoy our beverages. This includes labeling our packages to help educate consumers about their proper disposal and promoting recycling among our consumers and in our communities. Sales and income data, in millions Net sales $21,742 $23,104 $24,088 $28,857 $31,944 Net income (profits) $4,847 $4,872 $5,080 $5,981 $5,807 Units sold, in billions 19.8 20.6 21.4 22.7 23.7 Sales and income data, in millions 87
    • Net sales $21,742 $23,104 $24,088 $28,857 $31,944 Net income (profits) $4,847 $4,872 $5,080 $5,981 $5,807 Units sold, in billions 19.8 20.6 21.4 22.7 23.7 88