A Case Study of PepsiCo & Coca-Cola Limited Researcher:- Dr. M. K. Gupta Shreelata Neelesh. BY- Rajani .Raising Reenu. Singh.
The Indian soft drinks industry haswitnessed a radical in the last few year. InIndia, after the exit of Coke in 1977, Parle and Puredrinks controlled the soft drinks market.Parle introduced Thumps Up in the beginning of 1980s. Until1991, the domestic market was
StrategyAccording to Thompson & Strickland ,” A company’s strategyconsists of the combination of competitive moves & businessapproaches that managers employ to pleaseCustomers, compete successfully, & achieve organizationalobjectives.”
The Level At Which Strategies Have ImplicationAre
1. To study of the major strategies implemented by the soft drink companies.2. To know about the effect of these strategies.
o PRIMARY DATA:- The primary data has beencollected through survey method. Data was collectedboth consumers and retailers. Questionnaires wereused to collect data.o SECONDARY DATA:- The secondary data was collected through Newspapers, Journals, Magazines, References Books and Internet.
Major Players in Soft drinks IndustriesThe major players in the soft drink market in India are Coca- Cola & PepsiCo.COCA-COLA LIMITEDCOCA-COLA INDIACoca- Cola was the leading soft drink s brand in India until1977. After that GovernmentReduce its equity stakes required under F.E.R.A. i.e. ForeignExchange regulation Act.After a gap of 16 years , Coca-cola returned India in 1993.Coke has portfolio of more than 3000 beverages which rangesfrom diet & regular sparkling beverages to still beverages suchas 100% fruit juices & fruit drinks , waters, sport drinks, teas &coffee, & milk & soy-based beverages.
YEAR MAJOR EVENT1886 Coca cola was created by John Pemberton, a pharmacist in Atlanta, Georgia, who sold a syrup mixed with fountain water as a potion for mental disorder.1887 Coca-Cola was registered as a trademark.1895 Cola-Cola was being sold in every state & territory in U.S.A.1899 Coca- Cola franchised its bottling operations in U.S.1906 Coke’s first bottling plant was opened in Canada, Cuba & Panama.1920’s Coke bottled in 27 countries , In spite of this reach volume was low quality & inconsistent & effective advertising was challenge with language, culture, & Government regulation all serving as barriers.1941 ll nd World war “ Every man in uniform gets coke for 5 cents”, even served world war troops.2003 Coke generated 70% of its income outside India.2008 Coke generated 85% of its income outside India.
In June 1990, Pepsi was launched in India under the brand nameof Lehar Pepsi.Pepsi was marketed as Lehar Pepsi till 1991 . Till this timeForeign brands was not allowed in India.According to a news report in ET dated on 9th of July 2009,PepsiCo recorded a 30% growth in 2009 against 12 % in thesame quarter in 2008.PepsiCo scaled up its investments in the beverages business toabout Rs. 1000 crore ( $220 million) in 2009.
YEAR MAJOR EVENTS1898 Pepsi was 1st introduced in Carolina by Caleb Bradham. Celeb used to make it at his pharmacy which sold the drink , It was known as “Brad’s drink” & later Pepsi Cola.1903 Bradham sold 7,968 gallons of syrup , Pepsi was officially registered at the US patent office.1904 Pepsi is sold in 6 ounce bottle & sales increased to 19,848 gallons.1905 Pepsi received its original logo design .1926 Pepsi received its 1st logo redesign since the original design of 1905.1929 Logo was changed again.1931 Pepsi – Cola company went bankrupt during the great depression. It was in large part due to financial losses incurred by speculating on wildly fluctuating sugar prices as a result of World War I . Magargel bought Pepsi trademark.1939 Again bankruptcy ,Pepsi assets purchased by Charles Guth , the President of
Coca- Cola India announced the launch of its innovative “Limca Laptop Ki Barish” consumer initiative nationally on 30th July 2009. As part of this unique initiative, a computer generated lucky draw would provide consumers a chance to win “HP Mini Laptop” every hour for next 45 days. This initiative was applicable to 200ml, 300ml, returnable glass bottles [RGB] and so on 500ml, 600ml, 1.25,1.5, & 2.25 litres PET bottles of Limca.
Response. No. of Respondents. Percentage. Sales Promotion 66 60 Schemes are Available Sales Promotion 44 40 Schemes are NOT Available Total 110 100 Source: Survey-The survey shows that 60% of the respondent take benefit of sales promotion schemes- 40% Of the respondents do not take any benefit of the sales promotion schemes offeredto them free coupons, etc.- Survey shows that many customers are still not being attracted towards the salespromotion schemes offered to them.- Hence the companies may seek to identify other innovative schemes for wooing suchcustomers.
Trade Promotion Strategies-These strategies are run for the retailers.-Retailers are offered trade- schemes like certain numberOf bottles free per case, display schemes, target schemes& other benefit like installation of refrigeration facilities,putting up of their walls, upgrading existing refrigerationfacilities, filling of their walls, giving them umbrellas &Sunshades.Softdrinks try to their products available wherever people tend to gather likerailways stations , bus stops, near large offices & movie halls.
Response No. of Respondents Percentage Total Promotion are 51 100 Available. Total Promotion are NOT 0 00 Available. Total 51 100 Source: Survey-The survey results show that all the 51 retailers were getting benefits in the form oftradePromotion schemes like sign boards, visi coolers, banners, chairs, & tables.-Companies are reaching out to the retailers to provide them with thesepromotionalTools.
In Rural areas, average daily wage is around Rs. 100 , whereasthe cost of a bottle of Coke was Rs. 10, affordability was a bigissue, it was perceived as a luxury that only a few customercould afford to purchase.Coca- Cola launched the Accessibility campaign. It introducednew 200ml bottle, smaller than traditional 300ml bottles.Coke also cut the price to half i.e. Rs. 5.This pricing strategy closed the gap between Coke & basicrefreshments like lemonade & tea. This made soft drinks trulyaccessible for the first time for rural consumers.
Options No. of Respondents Percentage 200 ml bottle 10 9.1 300 ml bottle 38 34.5 500 ml bottle 24 21.8 2 litre bottle 20 18.2 Tin cans 18 16.4 Total 110 100 Source: Survey•It is clear from the above survey that the most preferred size isthe300 ml bottle followed by the 500 ml bottle.• The companies should be careful that the supply of these twobottlesSizes should always be stringently monitered & it should not fallbelowThe actual demand.
•Developing world class •Good distributionadvertising campaigns. channel.•Introducing new can •Innovating healthyand bottle design. products.•Responsiveness •Providing the Coca-towards customer Cola experience.needs.
-Early Entry strategy Advantage reaped by Pepsi has beenserving it well till now.- Pepsi is the market leader & Coke occupies second spot.
Survey results analysis shows :- 70% Respondents feel the need of Home delivery facility, but only a little over 50% of Respondent are getting facility. The retailers are getting trade promotion schemes from companies. 60% of the respondents avail the sales promotion schemes offered to them. The survey results 96.4% watch Ad’s. It reveals 78.3 % respondents could correctly recall that “Aa Tu Jashn Mana Le” Ad was of Coke. This is a very high percentage of recall & it shows that Ad’s is effective. Hence the company may increase advertising expenditure. Coke’s Failure to sell the American way of life in its initial phase & the subsequent realization of its error was followed by the localization strategies which have been very successful for the Cola majors in India. Pepsi is the market leaders in softdrink industry in India
Supply chain management has gained importancein India in recent past. By fostering better & long term relations with suppliers & partnering with them, both companies would stand to gain. As far as the product line is concerned , the survey results clearly shows that the most preferred sizes should not fall below the actual demand.