The document discusses the rise of new cola brands that are challenging Coca-Cola's dominance. It describes several brands that have emerged, including Qibla Cola and Mecca Cola which target the Muslim market, Zam Zam Cola which originated in Iran and Saudi Arabia, and Kola Real from Ajegroup in Peru. Kola Real has been the most successful, gaining over 10% market share in several Latin American countries through very low prices. While Coca-Cola has tried to counter its competitors through deals with distributors and retailers, the document suggests Ajegroup may pose the biggest threat given its success in Latin America so far.

1. The New Cola Wars
Presented by:
 Atiqah Nadwa Binti Mat Shohor (2011105771)
 Azlinda Binti Harun (2011149521)
 Jimmy Shanley Bin Norjahan Saleh (2011155953)
 Muhamad Shafiq Bin Muhamad Arif (2011972977)
 Syazwani Arbaiyah Binti Mohd Shahir (2011738041)

2. Introduction Background of
Started in 1886 by John Pemberton
(creator), Asa Griggs Candler (business
founder).
Background : Pharmaceutical and sales.
Initially the drink was known as
Pemberton’s French Wine of Cola.
The first drink sold was priced at 5 cents
per glass and only 9 glasses were sold per
day.

3. The drinks contained alcohol and later replaced
with sugar to make the taste more appealing
to drink.
The drink was renamed to Coca-Cola by
Pemberton’s bookkeeper.
Pemberton died in 1888 and never saw his
drink taken to the masses.
Asa Griggs Candler bought over the rights of
the drinks.
In 1892, the Coca-Cola company was officially
born.

4. SYNOPSIS OF THE CASE
• For many years, the world has seen the intense battle
between two powerful global brand, Coke and Pepsi.
• Recently, many private labels newcomers with unique
histories and international ambitions have emerged to
challenge the status quo.

5. Background
Launched in France in 2002 by a Tunisian-
born businessman.
Goal: To make Mecca Cola the cola of
choice for Muslims worldwide and to
combat America’s imperialism by
providing a substitute for American
products.
Mecca Cola’s packaging was similar to
Coke’s.

6. Background
Founders of the company were cousins,
Zahida Parveen and Zafer Iqbal and launched
in late 2002.
Slogan : “Qibla Cola, liberate your taste”
(Qibla means “direction” in Arabic)
The company announced that 10% of profits
from every two-liter bottle sold would go to
the Muslim charity Islamic Aid, which
specializes in establishing humanitarian
projects in some of the world's most deprived
communities.

7. SITUATION IN EUROPE
Mecca Cola entered the UK market with the goal of capturing
5% of the world’s 10th largest cola market.
Distribution of Mecca Cola was through small shops in
communities where 1.5 mil Muslim Britains were
concentrated.
Qibla Cola was launched in Britain in late 2002 and has plans
to enter the U.S market.
The Qibla Cola Company called for a boycott of all American
brands to protest the US-led war in Iraq.

8. They target students and young people and proclaimed
that people should switch to brands that were
independent of governments and their unjust policies.
Coca-Cola invested in smoothie maker, Innocent.
Innocent became Britain’s top brands due to its social
commitment and ethical marketing.
Innocent dedicated 10% of its profit to charity and use
recycled bottles.

9. Background
Founded in 1954 as the Iranian partner of
Pepsi until their contract was terminated
after the 1979 Islamic Revolution.
Muslim consumers boycotted American
products to protest support of Israel in the
ongoing Middle East conflict.
As a result, Zam Zam Cola was bombarded
with orders from neighbouring Arab
countries.

10. SITUATION IN THE MIDDLE EAST
Coca-Cola had already encountered a competitor that
positioned itself as an alternative to Coke: Zam Zam
Cola in Iran and Saudi Arabia.
Coca-Cola signed a franchised with the National
Beverage Company to bottle and distribute Coke
throughout the West Bank and Gaza Strip.

11. COMPANY BACKGROUND
Founded in 1988 by the Ananos-Jeri Family in
Ayacucho, Peru.
Rebels from the Shining Path terrorist group destroyed
farms and routinely hijacked Coca-Cola’s trucks.
The family decided to produce their own cola and sell
it locally.
Their cola was sold at an extremely low price
compared to Coke and Pepsi because they cut costs on
advertising.

12. Products: Real Kola & Big Cola
Operates in 22 countries; Brazil, Costa Rica,
Ecuador, India, Indonesia, Thailand, Venezuela and
Vietnam.

13. SITUATION IN LATIN AMERICA
Ajegroup’s Kola Real captured 22% of the Peruvian market, 16%
of the Ecuador market and 17% of the Venezuelan market due to
its extremely low price.
This forced Coca-Cola to cut their prices as well.
11% of Coca-Cola’s global profits came from Mexico and their
position was threatened when Ajegroup entered the Mexican
market.
Ajegroup set it prices at 20-50% below its competitors’ prices
resulting a rapid drop in sales for Coca-Cola and Pepsi.

14. SITUATION IN LATIN AMERICA contd
Ajegroup introduced big bottles at very low price (Big Cola).
Relied on salespeople to reach the smaller stores in Mexico that
accounted 75% of its sales.
Some distributors declined the new cola due to Coke threatening
to pull their products from the shelves.
Ruling by Mexico’s antitrust board had ordered Coke to stop
abusing its market power over distributors.
As a result, many distributors became aware that they had a
choice about what they are selling.

15. However, Coke could buy loyalty by offering free refrigerators
and buying life-insurance policies for its small retailers.
Coke also sends employees to visit stores to help with stocking
and display.
In the contrary, Ajegroup focused on cutting costs. Their
distribution was outsourced to third parties who delivered in
rundown trucks.
3 years after entering the Mexican market, Big Cola had grabbed
7% market share and represented 45% of the Ajegroup’s
consolidated sales.

16. Discussion Question
Which is you think the bigger threat to Coca Cola brands like
Qibla Cola and Mecca Cola or the Ajegroup? Why?

17. Bigger threat to
Is the

18. Produced in Hispanic countries (Peru). Their headquarter
located in Spain.
Estimated 500 mil population of the world are from
Hispanic countries. Around 360 mil Hispanics live in
Hispanic America and 40 mil live in Spain. Around 34
mill live in United States and the rest in Canada,
Morocco, Philippines and Brazil.
Sponsored 3 Barcelona football players. Indirectly the
teams performed and made Real Kola much more popular
in the Hispanic countries.
Attractive product

19. Discussion Question
What are the strengths and weaknesses of Qibla and Mecca Cola
compared to Coca Cola?

20. Strengths and Weaknesses
STRENGTHS WEAKNESSES
Strong financial backup of the UAE
based organization.
Brand name representing the Islamic
values only which could not be effective
in attracting non-Muslims.
Inspiring Brand name in the Pakistani
environment.
Fewer plants than competitors in the
start.
Product quality is competitive much
better than the past.
As a new comer Mecca Cola is yet to
develop mutually beneficial
relationships with suppliers and
distributors.
Low price as compared to competitors.
Heavy promotional budgets on teasers,
awareness and persuasion.
Highly available in rural areas and
urban areas.
Number of variants.

21. Strengths And Weaknesses
Strengths Weaknesses
Their bottle (shown in the image on the
left) markets their aim for social
responsibility by displaying a parody of
nutritional information.
They’re not very transparent as to which
charities they donate to. One has to go to
their website to find information about
the charities and projects they’ve worked
with but no where does it list the criteria
used to choose such initiatives.
The appeal for Qibla cola is gaining
global momentum. Consumers
appreciate the way Qibla cola tastes and
looks whilst knowing that their money
will contribute to worthy causes.
Collapse because of bottling and
distribution problem
Concentrates on Muslim market (non
muslim refuse to buy)
This February, Qibla announced it was
expanding into Libya. But then the
company's public communications
department suddenly lost its confidence.

22. Strengths and Weaknesses
STRENGTHS WEAKNESSES
The best global brand in the world in
terms of value ($77,839 billion).
Significant focus on carbonated
drinks.
World’s largest market share in
beverage.
Undiversified product portfolio.
Most extensive beverage distribution
Channel.
High debt level due to acquisitions.
Customer loyalty. Negative publicity.
Bargaining power over suppliers. Brand failures or many brands with
insignificant amount of revenues.
Corporate social responsibility.

23. Discussion Question
Why has the new cola launched by the Ajegroup been so
successful? Do you think this cola cloud successfully expand
outside Latin America? Why or why not?

24. The first bottle of Kola Real was produce in a family
residence in a city of Ayacucho, Peru during the 1980s.
The area was so ravaged by terrorist conflict that coca cola
and Pepsi had pulled out of doing business there.
This withdrawal created a gap in the local market just
begging to be filled by a home grown operation.
Due to the absence of coca cola products in the market,
Ajegroup was successfully tapping the gap in the market.

25. They can tap the market outside the Latin America especially in
Muslim countries by having the Halal certificate. Because beside
Coca Cola, their rivals are from Muslim-owned cola brand
(Mecca Cola and ZamZam Cola)

26. Discussion Question
Evaluate Coca Cola’s response to Ajegroup. What suggestions
would you give Coca Cola?

27. Coke abuse the market power over distributors at
Mexico
Coke offers free refrigerators to chill cokes
Buying its small retailers life-insurance policies.
Coke employees were constantly visiting stores to
help with stocking and display

28. Evaluation
Coke doing the right thing in order to sustain themselves
as a global brand and a major player in the soft drink
industry.

29. Suggestion
Aggressive promotion
Assign local celebrities as ambassadors (eg.
Footballers)
New slim bottle design similar to a canned Milo
Concentrates on concept store such as being done
by apple (sells home appliances, clothing lines)