CHAPTER - 1

Introduction

1
1.1 INTRODUCTION

This project is focused on studying the various marketing strategies of Coca-Cola and the

scenario of Indian soft drink industry in the 1990’s.

Coca-Cola Co., the global soft drink industry leader controlled Indian soft drink industry

till 1977. Then Janta Party beats the Congress Party and the Central Government was

changed. This change brought problems for Coca-Cola principle bottler, who was a big

supporter of Gandhi Family. Now Janta Party government demanded that Coca-Cola

should transfer its syrup formula to an India subsidiary (Chakravarty, 43). Because of this

Coca-Cola backed and withdrew from the country. In the mean time, India’s two target

soft drink producers have gotten rich. Who were controlling 80% of the Indian soft drink

industry.

In 1993, the coco-Cola company came back to India. But the scenario of Indian soft drink

industry had been changed from 1977 to 1993. The competition in the soft drink industry

had become very tough. The major competitors at that time were Pepsi and Parle. Parle’s

best known brand includes ThumsUp, Limca, Citra and others were Gold Spot and

Maaza. At that time Parle had a market share of 53% and Pepsi had a market share of

20%.

Now Coca-Cola had to make some strategies to survive in this tough competition. For

this Coca-Cola decided to take over Parle, so that the company can take the advantage of

Parle’s network. This decision was proved very beneficial for Coke as it had ready access

to over 2,00,000 retailer outlets and 60 bottlers of Parle’s network.The marketing

strategies which were made by Coca-Cola company to win the Cola war in 1990s had

been very successful as Coca-Cola company had a total market share of 48.3% in

1998.So, the Indian soft drink industry saw a dramatic change in the decade of 1990s. All

the companies were trying to win the battle by making good marketing strategies.

2
These days Coke and Pepsi are using the 4Ps of marketing mix (Price, Product, Place and

Promotion) in such a way so that a good quality can be provided to the consumers at a

reasonable price to attract the consumers towards their brands.Both the companies know

that there is so much potential in the Indian soft drink industry and the can increase their

sales by making good marketing strategies. So, they are spending a huge amount of

money on advertising and other sales promotional activities of their brands

3
1.2 INDUSTRY PROFILE

 Beverage Industry Overview

The food processing industry in India has a total turn over of around USD 65 billion

which includes value added products of around USD 20.6 billion. Coca cola, Pepsi, and

Nestle are the leading beverage brands that have been ruling the Indian beverage market

since past few decades. Among all the beverages, tea and coffee are manufactured as well

as exported heavily in the international markets succumbing to the individual demands

around the world. The beverage industry in India constitutes of around USD 230 million

among the USD 65 billion food processing industry. The major sectors in beverage

industry in India are tea and coffee which are not only sold heavily in the domestic

market but are also exported to a range of leading overseas markets. Half of the tea and

coffee products are available in unpacked or loose form. Among the hot beverages

manufactured in India, tea is the most dominant beverage that is ruling both the domestic

and international market even today.

The taste factor in tea varies according to the taste of individuals in different countries

and the beverage companies in India manufacture the products in accordance with the

taste of the individuals. For example, the inhabitants in the southern parts of India prefer

dust tea whereas the inhabitants in the western part of India prefer loose tea. The

Southern India also prefers coffee a lot. The production capacity of the total packaged

coffee market is 19,600 tonnes which is approximately a USD 87 million market. The

soft drink market such as carbonated beverages and juices constitutes around USD 1

billion producing 284 million crates per year. In the peak season, the consumption

capacity reaches 25 million creates per month and during off season the same goes down

to 15 million crates in a month. Pepsi and Coca cola are the two leading brands in the

Indian market. The mineral water market in India is a USD 50 million industry and

produces 65 million crates. Around 4.9 million crates is usually consumed each month

but it rises to 5.2 million crates in the peak season.

4
1.3 COMPANY PROFILE

Coca-Cola Enterprises, established in 1886, is a young company by the standards of the

Coca-Cola system. Yet each of its franchises has a strong heritage in the traditions of

Coca-Cola that is the foundation for this Company. The Coca-Cola Company traces it’s

beginning to 1886, when an Atlanta pharmacist, Dr. John Pemberton, began to produce

Coca-Cola syrup for sale in fountain drinks. However the bottling business began in 1899

when two Chattanooga businessmen, Benjamin F. Thomas and Joseph B. Whitehead,

secured the exclusive rights to bottle and sell Coca-Cola for most of the United States

from The Coca-Cola Company.

The Coca-Cola bottling system continued to operate as independent, local businesses

until the early 1980s when bottling franchises began to consolidate. In 1986, The Coca-

Cola Company merged some of its company-owned operations with two large ownership

groups that were for sale, the John T. Lupton franchises and BCI Holding Corporation's

bottling holdings, to form Coca-Cola Enterprises Inc. The Company offered its stock to

the public on November 21, 1986, at a split-adjusted price of $5.50 a share. On an annual

basis, total unit case sales were 880,000 in 1986.

In December 1991, a merger between Coca-Cola Enterprises and the Johnston Coca-Cola

Bottling Group, Inc. (Johnston) created a larger, stronger Company, again helping

accelerate bottler consolidation. Unit case sales had climbed to 1.4 billion, and total

revenues were $5 billion. The Coca-Cola Company is the world’s largest beverage

company. They operate in more than 200 countries & markets more than 2800 beverage

products. The Coca-Cola Company is the global Soft drink industry leader, with world

5
headquarters in Atlanta, Georgia. The company and its subsidiaries employ nearly 30,000

people around the world Syrups, concentrates and beverages bases for Coca-Cola, the

company’s flagship brand, & over 160 other Company Soft Drink brands are

manufactured and Sold by the Coca Cold Company and its Subsidiaries in nearly 200

countries around the world. In fact approximately 70% of company volume and 80% of

company profit come from outside the United States.

By contract with the Coca-Cola Company on its local subsidiaries, local businesses are

authorized to bottle and sell company soft drinks within certain territorial boundaries and

under conditions that ensure the highest standards of quality and uniformity.The Coca-

Cola takes pride in being a worldwide business that is always local. Bottling and

distribution operations are, with some exception, locally owned and operated by

independent business people who are native to the nations in which they are located.

Headquartered at Atlanta, Georgia, they employ approximately 90500.employees all

over the world. It is often referred to simply as Coke or (in European and American

countries) as Cola or Pop.

6
1.4 Product Description

 COCA-COLA

Coca-Cola is the most popular and biggest-selling soft drink in history, as well as

one of the most recognizable brands in the world.

Created in 1886 in Atlanta, Georgia, by Dr. John S. Pemberton, Coca-Cola was

first offered as a fountain beverage at Jacob's Pharmacy by mixing Coca-

Colasyrup with carbonated water.

Coca-Cola was patented in 1887, registered as a trademark in 1893 and by 1895 it

was being sold in every state and territory in the United States.

In 1899, The Coca-Cola Company began franchised bottling operations in the

United States and in 1906 bottling operations for Coca-Cola began to expand

internationally.

7
 SPRITE

Introduced in 1961, Sprite is the world's leading lemon-lime flavored soft drink. Sprite is

sold in more than 190 countries and ranks as the No. 3 soft drink worldwide.

 FANTA

Introduced in 1940, Fanta is the second oldest brand of The Coca-Cola Company and our

second largest brand outside the US. Fanta Orange is the leading flavor but almost every

fruit grown is available as a Fanta flavor somewhere. Consumed more than 130 million

times every day around the world, consumers love Fanta for its great, fruity taste.

8
 DIET COKE

Diet Coke, also known as Coca-Cola light in some markets, is a sugar- and calori

e-free

soft drink. It was first introduced in the United States on August 9, 1982, as the first new

brand since 1886 to use the Coca-ColaTrademark. Today, Diet Coke/Coca-Cola light is

one of the largest and most successful brands of The Coca-ColaCompany, available in

more than 150 markets around the world.

 FRESCA

With a unique citrus taste, Fresca is a caffeine-free soft drink for discriminating adults.

Fresca was introduced in the United States in 1966 as a calorie-free grapefruit-flavored

drink. Its bubbly, crisp, light taste provides a flavorful beverage to consumers who want

great citrus taste in a calorie-free soft drink. Fresca is sweetened with sugar in some parts

of the world.
9
 MINUTE MAID

Minute Maid has been making juice for more than 60 years and has a heritage of

nutrition, innovation, and quality. In 1945, the U.S. Army ordered 500,000 pounds of

powdered orange juice from the Florida Foods Corporation, which later renames itself to

Vacuum Foods and then finally the Minute Maid Corporation. The Minute Maid

Corporation was acquired by The Coca-ColaCompany in 1960, marking its first venture

outside of soft drinks.

10
CHAPTER 2
RESEARCH
METHODOLOGY

11
OBJECTIVES OF THE STUDY

1. To study the marketing strategies adopted by Coca-Cola

2. To study the advertising effectiveness Coca-Cola on customer

3. To analyze the awareness of consumer regarding Coca Cola.

4. To help the company for further changes in the quality, pricing, and policies.

5. This study was aimed at Market analysis of Coca Cola and find out different

factor effects the growth of Coca Cola

6. To understand the reason behind the purchase of Coca Cola product

7. Another objectives of study was to perform Competitive analysis between Coca

Coal and its competitors

12
2.2 SCOPE OF STUDY
 To conduct this research the target population was the break down service users,
who are using break down service.

 Targeted geographic area of Delhi/NCR. Sample size of 50 persons was taken.

 To these 50 people a questionnaire was given, the questionnaire was a

combination of both open ended and closed ended questions.

 The date during which questionnaires were filled.

 Some dealers were also interviewed to know their prospective. Interviews with
the managers of break down service providers were also conducted.

 Finally the collected data and information was analysed and compiled to arrive at
the conclusion and recommendations given.

13
2.3 MISSION, VISION AND VALUES

The world is changing all around us. To continue to thrive as a business over the next ten

years and beyond, we must look ahead, understand the trends and forces that will shape

our business in the future and move swiftly to prepare for what's to come.

Our Mission

Our Road map starts with our mission, which is enduring. It declares our purpose as a

Company and serves as the standard against which we weigh our actions and decisions.

 To refresh the world...

 To inspire moments of optimism and happiness...

 To create value and make a difference

Our Vision

Our vision serves as the framework for our Road map and guides every aspect of our

business by describing what we need to accomplish in order to continue achieving

sustainable, quality growth.

 People: Be a great place to work where people are inspired to be the best they can

be

 Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate

and satisfy people’s desires and needs

14
 Partners: Nurture a winning network of customers and suppliers, together we

create mutual, enduring value

 Planet: Be a responsible citizen that makes a difference by helping build and

support sustainable communities

 Profit: Maximize long-term return to share owners while being mindful of our

overall responsibilities

 Productivity: Be a highly effective, lean and fast-moving organization

15
2.4 LIMITATION OF STUDY

 The main purpose of the study is get idea about the preference of the customer

toward various coca cola product. But there are certain :-

 Factors which affect this study they are as follow:-

 Since the sample procedure is judgmental, the sample selected may not be true

representation of the population

 Economic and market condition are very unpredicted (present and future)

 The study was confined to New Delhi only due to which the result cannot be

applied universally

 It is only for short period of time.

 Lack of professional approach since researcher is a student

 The sample size is only 50 so the sample may not be true

16
2.5 RESEARCH METHODOLOGY
Primary Source:-

The primary data has been collected simultaneously along with the secondary data for

meeting the established objectives to provide in solution for problem identified in the

study. It is the source which collects the primary data through Questionnaire and record

the raw data for further analysis, Primary source is used by the face-to-face survey with

the customers of the company .

Secondary Source:-

Secondary data is data collected by someone other than the user. Secondary data analysis

saves time that would otherwise be spent collecting data and, particularly in the case

of quantitative data, provides larger and higher-quality databases that would be

unfeasible for any individual researcher to collect on their own. In addition, analysts of

social and economic change consider secondary data essential, since it is impossible to

conduct a new survey that can adequately capture past change and/or developments.

As a researcher I have scanned a lot of sources to get an access to secondary data.

Secondary data study has provided a insight and forms an outline for the core objectives

established

The various source of secondary data used are :-

1. Internet

2. Magazines

3. Old data files of the research

17
 CHAPTER 3
CONCEPTUAL
DISCUSSION

18
3.1 MARKETING MIX

WHAT IS A MARKETING MIX?

It is a set of controllable tactical marketing tools - product, price, place & promotion -

that the firm blends to produce the response it wants in the target market.

THE FOUR PS OF THE MKT’S MIX

PRODUCT PRICE
Product Variety List Price
Quality MRP
Designs Discounts
TARGET
Features Allowances
CUSTOMERS
Brand name Pay Period
INTENDED
Packaging CR Terms
POSITIONING
Sizes

Services
PLACE
PROMOTION
Warranties
Channels
Advertising
Returns
Coverage
Personal Selling
Assortments
Sales Promotion
Locations
Public Relation
Transportation
Fig. 2
Logistics
Effective marketing would be blending the marketing mix elements into a coordinated

programme designed to achieve the company’s marketing objective by delivering value

to consumers.

Cola - Cola has always worked upon their marketing mix tools since its entry into India

and Coke’s objective has been to strengthen their brand in important segments of the

market and to gain a competitive edge over Pepsi brands.

19
3.2 MARKETING MIX OF COKE

PRODUCT

Coke was launched in India in Agra, October 24, in '93', soon after its traditional all

Indian launch of its Cola. at the sparking new bottling plants at Hathra, near Agra. Coke

was back with a bang after its exit in 1977.

Coke was planning to launch in next summer the orange drink, Fanta-with the clear

lemon drink, sprite, following later in the year.

Coke already owns more brands than it will over need, since it has bought out Ramesh

Chauhan. Coke just needs to juggle these brands around dextrously to meet its

objectives, to ensure that Pepsi does not gain market share in the process.

For if a vacuum develops, it is Pepsi which has the brand muscle and the distribution

network to grab customers today-not Coke. But Coke could not reduce its marketing

support for Thums Up until its own Cola would hit the four major metros (Delhi.

Bombay, Calcutta and Madras) Therefore, Coke had to give its existing levels of support

for Parle's brands and would push Thums Up and Limca. Coke has plans to' use quality

and hygiene as USPs. Their aim seems to be to expand market by market, Learning from

their mistakes.

In, 1998 Coke's product line includes, Coca-Cola, Thums Up, Fanta, Gold Spot, Maaza,

Citra, Sprite, Bisleri Club Soda and Diet Coke.

PACKAGING

Coca-Cola India Limited (CCIL) has bottled its Cola drink in different sizes and different

packaging i.e., 200 ml bottle, 300 ml. Bottle, 330 ml. Cans, 500 ml. Bottle fountain

Pepsi, and bottles of 1 and 1.5 ltr

20
PRODUCT POSITIONING

One important thing must be noticed that Thums Up is a strong brand in western and

southern India, while Coca Cola is strong in Northern and Eastern India. With volumes of

Thums Up being low in the capital, there are likely chances of Coca Cola slashing the

prices of Thums Up to Rs. 5 and continue to sell Coca Cola at the same rate. Analysts

feel that this strategy may help Coke since it has 2 Cola brands in comparison to Pepsi

which has just one.

Thums Up accounts for 40% of Coca Cola company's turn over, followed by Coca Cola

which has a 23% share and Limca which accounts for 17% of the turn over of the

company. (Thums up being the local drink, its share in the market is intact, forcing the

company to service the brand, as it did last year Mr. Donald short CEO, Coca Cola India,

said that, " we will be absolutely comfortable if Thums Up is No. 1 brand for us in India

in the year 2005. We will sell whatever consumers wants us to". Coca Cola India has

positioned Thums up as a beverage associated with adventure because of its strong taste

and also making it compete with Pepsi as even Pepsi is associated with adventure, youth.

21
3.3 COKE IN INDIA

Coke gained an early advantage over Pepsi since it took over Parle in 1994. Thus it had

ready access to over 2,00,000 retailer outlets and 60 bottlers.

Thus Coke had greater than Pepsi because it had ready access to the Parle network. For

example in 1994 Pepsi had 20 bottlers to serve the entire country while Coke had Parle’s

60 bottlers. In an important market like Delhi Pepsi had just one bottler while Coke had

four. On the other hand Pepsi had taken over the Dukes Mangola of Mumbai.

In 1993, Pepsi Foods Ltd. had control over the Rs. 1,100 - Crore Indian Soft Drinks

market. At that time, the soft drinks trycoon Ramesh Chauhan, was heading the Parle

group and at that time was deciding to explore the possibility of selling his best rolling

brands to Coke, rather than to Pepsi. Pepsi had entered the market 3 years before Coke

did. Before the Coke-Parle tie-up in '93- Ramesh Chauhan had 2 options before him- (1)

to stick around, fight it out again and hopefully, continue with his number one position.

(2) to sell out to Coca-Cola for a good return. This risk of losing out to one of the

multinationals, eventually, seemed to be throwing up the second alternative. Ramesh

Chauhan told business world (India's most popular business magazine) that "it is better to

seek a compromise than to fight a lone battle". But he was wisely simultaneously taking

steps to safeguard his market share. In a few months, Parle's products will be launched in

250 ml instead the current 200 ml. The indications are that the company will hold the

price line. Incidentally, both Pepsi and Coke (if it finally gets in) will cost more than

local brands because of the 300% duly on the imported ingredients. However, this

scenario was taking place pre-liberalization period and hence implied a very high duty on

imported items.

22
Entry of Pepsi and Coke in India or their proposals were at that time being opposed

because of the impact of first - strike on the minds of consumers. If Coca-Cola is

allowed an easy and quick entry through a window established by the government, there

can be no justification for denying similar access to Pepsi Co.

Basically what was wrong at that time with the Coke proposal was that while the Pepsi

deal could go through under the camouflage of horticultures and agriculture development

as their proposal stated, a pure soft drinks project was not so politically palatable (as it

would greatly hamper the indigenous industry).

Coke had plans, to invest $ 20 million in India and Pepsi was going to pump in Rs. 300

crore more. Ramesh Chauhan greatest compulsion, to 90 in for the 2nd option was that

many of his biggest bottlers were preparing to desert him for Coke, .since the bottlers

accounted for nearly one-third of Parle's sales. Parle's biggest bottles in the Easter

region,. Goenka, accounted for 80% market share in Calcutta, felt that the future lay with

Coca-Cola, no Indian company had the financial muscle to take on Coke.

Also, there was the most convincing factor for the tie-up, that Parle's Position in the

Indian soft drinks market and Coca-Cola's marketing strengths and experience would

make an unbeatable combination. At that time according to the world’s most popular and

well known magazine, Fortune, had rated Coke as the world's best brand. Even Coke

would greatly benefit from the tie-up, as Coke with Parle’s wide spread bottling and

distribution network, which was spread over more than a thousand towns and cities and

the gradual withdraw of Parle brand would ensure Coke would be the king. Parle's best

known brands include Thums Up, Limca, Citra and others were GOLD SPOT and

Maaza.
23
The biggest advantage to Parle from the tie-up would be an instant gain of $ 40 million,

which could be used profitably in other ventures.

According to a report the deal was that, Parle Exports had transferred the rights of all its

reputed soft drinks brands to Coca-Cola company, USA. In short, Coca-Cola Company

became the exclusive owner of Thums Up, Limca, Gold Spot, Citra and Maaza and could

therefore, withdraw them from the market whenever it would want to.

Under the agreement, the existing bottlers of Parle Exports would continue to produce

Parle brands under the licence from the Coca-Cola company.

The U.S. Multinational proposed to introduce its international brands -Coke, Fanta and

Sprite at an appropriate time. The Parle bottlers will be bottling these Coco - Cola brands

also. The exact nature of Parle, Coca-Cola tie-up is given below :

So, Ramesh Chauhan, sold his soft drink brands of the U.S. Multinatinal for ($ 40

million) and is presently a major Coke bottler. Delhi - based Parle Chairman gave up his

ownership of his soft drinks brand (Thums Up, Limca, Citra and Gold Spot) and was

awarded the bottling franchisee for Delhi, Bombay, Surat and Ahmedabad. Coke depends

on the 54 bottling plants which it was inherited from the Parle by out.

So, logically all brands of Parle as well as Coca-Cola will be marketed together. The only

problem being that Parle bottlers would not be able to meet the peculiar quality

requirements of Coke.

Model of Brand Selection

 Customer buys on value

 Value equals quality relative to price

 Quality includes all non-price attributes that count in the purchase decision

24
  Product

 Customer service

 Quality, price and value, are not absolute, but relative to competitors.

Quality Product

Value Customer Service

Price

Fig. 1

Key Channel Listing

 Supermarkets

 Convenience Stores

 Fast Food

 Petroleum Retailers

 Hotels/Motels/Resorts

25
 CHAPTER 4
DATA ANALYSIS
&
INTERPRETATION
26
4.1 ANALYSIS OF COCA COLA COMPANY

As the leading beverages company in the world, Coca Cola almost monopolizes the

entire carbonated beverages segment. Beside it, Coca Cola also maintain their reputation

as the leading company in the world using PEST Analysis so that Coca Cola can examine

the macro-environment of Coca Cola’s operations.

Political

When Coca Cola had decided to enter a country to distribute the products, Coca Cola was

monitoring the policies and regulations of each country. For the example, when entering

Moslems country such as Indonesia or Malaysia, Coca Cola followed the regulation by

adding “Halal” stamp in each Coca Cola’s products. In this case, Coca Cola has no

political issues in this matter.

Economic

Coca Cola also has low growth in the market for carbonated beverages (North America).

The market growth was 1% in 2004. For stimulating the growth, Coca Cola had spent

high budget of advertisement to endorse the customers.

Social

Nowadays, customers tend to change their lifestyle. Customers more aware about health

consciousness by reducing in drinking carbonated beverages to prevent diabetes or other

diseases. As a result, Coca Cola’s demand for carbonated beverages has decreased and

the revenues also decreased. Thus, Coca Cola diversify the products by adding

production lines in tea (Nestea), juices (Minute Maid), mineral water (Dasani and Ades),

and sport drinks (Powerade), and others.

27
Technological

Because of the developing technology, Coca Cola has advanced technology in producing

the products. Then, Coca Cola made innovations by giving flavors to the Coke, such as

Cherry Coke, Diet Coke, Coca Cola Zero, Coke with Lime, and others. But, the

customers still prefer the original taste of traditional Coke; it can be seen by the high

demands in traditional Coke.

28
4.2 PROMOTION STRATEGIES
GETTING SHELVES

They get or purchase shelves in big departmental stores and display their products in that

shelves in that style which show their product more clear and more attractive for the

consumers.

EYE CATCHING POSITION

Salesman of the Coca Cola company positions their freezers and their products in eye-

catching positions. Normally they keep their freezers near the entrance of the stores.

SALE PROMOTION

Company also do sponsorships with different college and school’s cafes and sponsors

their sports events and other extra curriculum activities for getting market share.

UTC SCHEME

UTC mean under the crown scheme, Coca Cola often do this type of scheme and they

offer very handy prizes in it. Like once they offer bicycles, caps, tv sets, cash prizes etc.

This scheme is very much popular among children.

DISTRIBUTION CHANNELS

Coca Cola Company makes two types of selling

1. Direct selling

2. Indirect selling

29
Direct Selling

In direct selling they supply their products in shops by using their own transports. They

have almost 450 vehicles to supply their bottles. In this type of selling company have

more profit margin.

Indirect Selling

They have their whole sellers and agencies to cover all area. Because it is very difficult

for them to cover all area of Pakistan by their own so they have so many whole sellers

and agencies to assure their customers for availability of Coca Cola products.

FACILITATING THE PRODUCT BY INFRASTRUCTURE

For providing their product in good manner company has provided infrastructure these

includes:

 Vizi cooler

 Freezers

 Display racks

 Free empty bottles and shells for bottles

ADVERTISEMENT

Coca Cola Company use different mediums

 Print media

 Pos material

 Tv commercial

30
PRINT MEDIA

They often use print media for advertisement. They have a separate department for print

media.

POS Material

Pos material mean point of sale material this includes: posters and stickers display in the

stores and in different areas.

TV COMMERCIALS

As everybody know that TV is a most common entertaining medium so TV commercials

is one of the most attractive way of doing advertisement. So Coca Cola Company does

regular TV commercials on different channels.

BILLBOARDS AND HOLDINGS

Coca Cola is very much conscious about their billboards and holdings. They have so

many sites in different locations for their billboards.

31
4.3 COMPETITORS OF COCA COLA
COMPARING THE MARKETING STRATEGIES OF COKE WITH
PEPSI
Coca-Cola India and Pepsi India are locked in a bitter battle for market share. So far

Pepsi has won, outselling Coke 27.1% to 10.8% (All India Market Share) But Coke's new

strategy adopted in India which gives Thums Up the local brand it acquired in 1993-94

from Parle exports - top marketing priority which would hurt Pepsi in the long run.

COKE'S STRATEGIC MOVE SINCE 1993

Four years after it entered the Rs. 1,800 crore Indian soft drinks market, Coca-Cola is

finally waking up to reality and duplicating the strategy of arch rival Pepsi. In these four

years the company has successfully managed to fritter away the 69 per cent market share

of -the five Parle brands -- Thums Up, Limca, Citra, Gold Spot and Maaza -- which it

bought from the Chauhan brothers. Wrong strategy : trying to push only its US brand,

ignoring the Indian-acquired brands and failing to strike a chord with Indian consumers

by not using localised advertising campaigns.

Donald Short, CEO of Coca Cola India. Mr. Short is trying to achieve what his

predecessors, Jaydev Raja and Richard P. Nicholas Ill, could not. His new mantra: do in

India as Pepsi does( as the famous saying at Coke Atlanta, do as the Atlantans do). Like

Pepsi, Coke has started sponsoring local events and staging frequent consumer promotion

campaigns. It has started picking up equity stakes in its bottlers to guarantee them

financial support though its bullying tactics on paying compensation have drawn sharp

criticism. It has finally started releasing locally-created ads, using Indian idiom to strike
32
a chord with consumers. And finally it has started pushing its strike a chord with

consumers. And finally it has started pushing its Indian brands -- led by Thums Up -

instead of focusing on only its flagship. After years of eating, sleeping and drinking

movies, cricket and Coke, Coca-Cola is finally waking up to the strength of the local

brands that it took over from Ramesh Chauhan in 1994. When Coca-Cola came to, India

it had hoped to continue its legendary rivalry with Pepsi world-wide and it was expected

that the India would fade out. So Coca-Cola pushed its own brand. But somebody forgot

to narrate the same script to Indian consumers who insisted that they wanted their thunder

back. Coca-Cola has now reconciled to the fact that Thums Up and Limca are the two

most popular soft drink brands in India, especially in the western and southern regions.

Keeping this in mind the company has lined up an aggressive marketing campaign to

push the two brands in the domestic market.

Mr. Short's new strategy, Thums Up contributes 40 per cent of Coca-Cola India’s

turnover while Limca accounts for another 17 per cent. Coke itself accounts for 23 per

cent. The balance comes from Coke's other brands, including Fanta. Citra and Maaza.

In terms of all-India market share. Thums Up has 16 per cent whereas Coke has 10.8 per

cent. As much as 30 per cent to 35 per cent of Coca-Cola India’s expenditure in 1998 will

be devoted to promoting Thums Up. Limca will command 15 per cent to 18 per cent,

marginally lower than the 20 per cent to 25 per cent which will be spent on promoting

Coke.

Despite being a global brand, Pepsi has built its success on meeting the Indian

consumer's needs, particularly in terms of making the brand synchronize with localized

events and traditions. By offering free Pepsi with idli it tried to beat Thums Up and Coke

in the south. In Calcutta, where Coke always has a large hold, Pepsi linked itself with

neighborhood cricket tournaments. In Delhi it associated itself with Holi and offered free

33
colour sachets with Pepsi bottles. Says Mr. Sinha, CEO of Pepsi : “We recruited local

salesmen to sell our products since to sell consumer products you need local experience.”

That is why Pepsi's events such as the Spot the Mirinda Man contest was such a huge

success. By contrast, Coke deliberately chose to bring in expatriates. Instead of trying to

create a bond with customers with low impact activities it resorted to high impact

activities like sponsoring the World Cup and the Olympics 'in 1996. But unfortunately

none of these helped it to raise its customer base despite the high advertising spend. In

fact Pepsi benefited more by releasing the “Nothing Official About It” campaign during

the same period.

34
Coke's lack of freedom to take any decision independently of its Atlanta headquarters

was also one of the major reasons why it has not been as nimble-footed as Pepsi in

evolving marketing strategy in a rapidly changing industry. Flexibility is the weapon

which Coca-Cola has lacked since all controls are vested with Atlanta. Coke's trade

promotions have followed a predictable pattern, offering fat margins to retailers for a

limited period of time -- without exploring alternatives that raise the level of involvement

for the seller as well as the consumer.

In sharp contrast, flexibility has always been one of the most important weapons in the

hands of Pepsi Company India. Every manager and salesperson has the authority to take

whatever steps he or she feels will make consumers aware of the brand and increase its

consumption.

Says Mr. Sinha : “AII we do is give people a budget in which they have to work. How

they go about is completely up to them. We are performance oriented and look at only

results, not at the methods adopted to get those results.”

The biggest thorn in Coke's strategy has been its long and bitter battle with its bottlers.

The conflicts have finally settled down to a pattern that reflect its global experience.

Coca-Cota India is floating two subsidiaries, Bharat Coca-Cola and Hindustan Coca-Cola

which will act as holding companies for most of its bottling operations. Thus giving the

transnational ownership and control over this crucial part of its operations. Earlier the

company had made the mistake of demanding huge investments from its bottlers without

worrying about the returns, assuming that they would be willing to sustain losses as long

as Coca-Cola did. In the process, it alienated the former Parle franchisees, the Chauhans.

According to Mr. Chauhan there is a big difference between the kind of investments

Coke has in mind and the kind of investments made by him.

35
Coca-Cola is now in the process of buying out bottling plants located in Patna and

Kanpur, to of its important northern markets. Mr. Sinha reveals his relations with the

bottlers by saying that they are his partners and the management listens to them, which

Coke last year failed to do. Every member of Pepsi's sales team is meticulously taught

the merchandising and display skills that can leverage the reach of the company's bottling

network to achieve high visibility for the product. Thus Pepsi Company India has used

its eight years in India to develop a relationship with its bottlers that enables it to work in

tandem with them. If Mr. Short can now adopt Pepsi's method of transferring the

transnational's expertise to its bottlers, his brands will benefit.

Pricing is another factor in which Pepsi has always had the edge. Pepsi has consistently

used its pricing strategy as an invitation to sample, aiming to turn trial into addiction. It

launched the 1996, its 1.5 liter bottle followed Coke into the market share at Rs. 30 -- Rs.

5 less than Coke's. In both cases, Pepsi raised the price once consumption stabilized,

counting on habit to compensate for the price hike. Coke initially carbon-copied the

strategy by introducing its 330ml. cans in January 1996 at an invitation price of Rs. 15

before raising it to Rs. 18. Mr. Short is now using a lower-priced smaller-sized version

the gain consumers. The 200 ml. Coke launched (so far) in parts of eastern, western and

northern India is priced at Rs. 6, lowering entry-barriers.

According to officials, by launching Thums Up and Limca in a big way, Coke will gain

lost ground. The twin-brand strategy, will help Coke play the pricing game against its

competitors. In the west and east, where Thums Up has a dominant market share, the

multinational will slash the price of Coke which constitutes only a minor share in the

overall volume. A reverse strategy will be followed in the north and south where Coke

sells more then Thums Up.

36
COCA-COLA VS PEPSI IN INDIA

Coca-Cola controlled the Indian market until 1977, when the Janta Party beat the

Congress party of then Prime Minister Indira Gandhi. To punish Coca-Cola's Principal

bottler, a Congress party stalwart and long live Gandhi supporter, the Janata government

demanded that Coca-Cola transfer in syrup formuale to an Indian subsidiary

(Chakravarty, 43). Coca-Cola backed and withdrew from the country. India, now left

without both Coca-Cola and Pepsi, became a protected market. In the meantime, India's

two target soft drink producers have gotten rich and lazy while controlling 80% of the

Indian market. These domestic producers have little incentive to expand their plants or

develop the country's potentially enormous market. Some analyst reason that the Indian

market may be more lucrative that the Chinese market, India has 850 million potential

customers, 150 millions of whom comprise the middle class, with disposable income to

spend on Cars, VCRs and Computers. The Indian middle class is growing at 10% per

year, to obtain the license for India, Pepsi had to export $5 of locally made products for

every $1 of materials it imported, and it had to agree to help the Indian government to

initiate a second agricultural revolution. Pepsi has also had to take an Indian partners. In

the end, all Parties involved seem to come out ahead. Pepsi gain access to potentially

enormous market, Indian bottlers will get to serve a market that is expanding rapidly

because of competition from abroad and will pay lower prices. Even before the first

bottle of Pepsi hit the shelves, local soft drink manufacturer increased the size of their

bottles by 25% without raising costs.

37
4.4 BRAND LOYALTY

From a marketing strategy viewpoint, brand loyalty is a very important concept.

Particularly in today's low-growth and highly competitive market-place, retaining brand-

loyal customers is critical for survival; and it is often a more efficient strategy than

attracting new customers. Indeed, it is estimated that it costs the average company six

times more to attract a new customer than to hold a current one. Brand loyalty is often

thought of as an internal commitment to purchase and repurchase a particular brand. As

a behavior phenomenon brand loyalty is simply repeat purchase behavior.

Both cognitive and behavior approaches to studying brand loyalty have value. We define

brand loyalty as repeat purchase intentions and behaviors. While the major focus of our

discussion is on brand loyalty as a behavior, we want to emphasize that cognitive

processes strongly influence the development and maintenance of this behavior.

Brand loyalty may be the result of extensive cognitive activity and decision marking.

Brand-loyal behavior may occur without the consumer ever comparing alternative

brands. Decisions have to be made about where and when to purchase the product; some

knowledge of the product and its availability must be activated from memory; intentions

to purchase ft and satisfaction influence the purchase behaviors.

The market for a particular brand could be analyzed in terms of the number of consumers

in each category, and strategies could be developed to enhance ibe brand loyalty of

particular groups.

i) Undivided brand loyalty is, of course, an ideal. In some cases, consumers may

purchase only a single brand and forego purchase if it is not available.

38
ii) Brand loyalty with an occasional Swatch is likely to be more common, though.

Consumers may switch occasionally for a variety of reasons:

iii) their usual brand may be out of stock, a new brand may come on the market and

tried once, a competitive brand is offered at a special low price, or a different

brand is purchased for a special occasion.

iv) Brand-loyalty switches are a competitive goal in low-growth or declining

markets. However, switching loyalty from one to another of the brands of the

same firm can be advantageous.

v) Divided brand loyalty refers to consistent purchase of two or more brands.

vi) Brand indifference refers to purchases with no apparent repurchase pattern. This

is the opposite extreme from undivided brand loyalty. While we suspect total

brand indifference is not common, some consumers of some products may exhibit

this pattern. Developing a high degree of brand loyalty among consumers is an

important goal of marketing strategy. Yet the rate of usage by various consumers

cannot be ignored. For simplicity, we have divided the dimensions into four

categories of consumers rather than consider each dimension as a continuum.

39
Brand Loyalty and Usage Rate

Brand Loyalty

Brand-Loyal, Brand - loyal,

Light Users Heavy users

Light Usage Heavy Usage

Brand-Indifferent, Brand-Indifferent,

light users heavy-users

Brand Indifference

Fig.2

The above figure shows that achieving brand-loyal consumers is most valuable when the

consumers arelso heavy users. This figure could also be used as a strategic toot by

plotting consumers of both the firm's brands and competitive brands on the basis of brand

loyalty and usage rates. Depending on the location of consumers and whether they are

loyal to the firm's brand or a competitive one, several strategies might be useful;

1. If the only profitable segment is the brand-loyal heavy user, focus on switching

consumer loyalty to the firm's brands.

2. If there is a sufficient number of brand-loyal light users, focus on increasing their

usage of the firm's brand.

3. If there is a sufficient number of brand-indifferent heavy users, attempt to make the

firm's brand name a salient attribute and/or develop a new relative advantage.

40
4. If there is a sufficient number of brand-indifferent light users, attempt to make the

firm's brand name a salient attribute and increase usage of the firm's brand among

consumers, perhaps by finding a sustainable relative advantage.

5. It is also important to plot consumers of competitive brands to develop

appropriate strategies. If a single competitor dominates the brand-loyal heavy-

user market and has too much market power to be overcome, then strategies may

have to be focused on other markets.

41
 4.5 SWOT ANALYSIS

SWOT Analysis of Soft Drink Industry in relation to Coke

Strengths Weaknesses

 Carbonated soft drink growth 10-15%  Weak infrastructure (esp. Cooling)

 Estimated PCC to increase to 6-8 bottles  Small retailers, less shelf space

 Heavy excise duty (40%), recently have

come down a little

 Cans have to be imported at high duty

rates.

 Problems of empty bottles

Opportunities Threats

 Low PCC as compared to neighboring  Political risks

countries
 Coke and Pepsi indulging in

 Growing rural market internecine

competition

 Rising disposable income

 Changing consumer trends due to

satellite TV.

42
ANALYSIS
1. Have you ever tried the product (Coca-Cola)?

Sno Option Out of Response Percentage (%)

1 Yes 50 33 66

2 No 50 17 34

Table 1

Chart Title
Yes No

34%

66%

Fig 3

Out of the 50 people we surveyed, 33 of them said they had tried Coca-Cola at least

once and 17 have not tried

43
 2. How do you like the product?

Sno Option Out of Response Percentage (%)

1 Very much 50 30 60

2 It’s not bad 50 15 30

3 Bad 50 5 10

Table 2

Chart Title
Very much It's not bad Bad

10%

30%
60%

Fig 4

From the analysis, it was found that majority of 60% (30 people) respondents said

they enjoyed drinking Coca-Cola and 30%(15 people) said it’s not bad and rest 10%

(5 people) who said they preferred other drinks

44
3. What brand would you say is more popular among the public?

Sno Option Out of Response Percentage (%)

1 Coca Cola 50 19 38

2 Limca 50 8 16

3 Pepsi 50 18 36

4 Sprite 50 5 10

Table 3

Chart Title
Coca Cola limca Pepsi Sprite

10%

38%

36%

16%

Fig 5

As seen in the chart, out of 50 people, 19 respondents said, in their opinion, Coca-Cola

was more ,8 respondents said they preferred limca as a popular brand, 18 preferred Pepsi

as most popular, and rest 5 preffered Sprite as most popular

45
4. Do you remember Coca Colas advertisements on TV?

Sno Option Out of Response Percentage (%)

1 Yes 50 32 64

2 No 50 18 36

Table 4

Chart Title
Yes No

36%

64%

Fig 6

The chart represents that a majority of 32people thought the Advertisements were good

enough & they like what they see, and rest 18 did not remember

46
5. Would you join Coca Cola in near future ?

Sno Option Out of Response Percentage (%)

1 Yes 50 14 28

2 No 50 36 72

Table 5

Chart Title
Yes No

28%

72%

Fig 7

The chart represents that a majority of 36 people will not work in Coca Cola company

and rest 14 would like to work in Coca Cola company in future

47
6. Do you think the price of Coca Cola is reasonable?

Sno Option Out of Response Percentage (%)

1 Yes 50 30 60

2 No 50 20 40

Table 6

Chart Title
Yes No

40%

60%

Fig 8

As seen in the above figure, a majority of 30 people out of the 50 respondents

thought that the Coca-Cola price are slightly overpriced and rest 20 people find it

as a perfect price

48
7. If you were to see the Coca Cola logo somewhere would you recognize it?

Sno Option Out of Response Percentage (%)

1 Yes 50 50 100

2 No 50 0 0

Table 7

Chart Title
Yes No

0%

100%

Fig 9

It is understood from the fact that the Logo of the Company still has its image in the

minds of the people with all the respondents saying they would recognize the “Coca-

Cola” Logo.

49
8.What influences your choice of soda?
Sno Option Out of Response Percentage (%)

1 Taste 50 8 16

2 Brand 50 8 16

3 Availability 50 6 12

4 Price 50 11 22

5 Quality 50 7 14

6 Popularity 50 10 20

Table 8

Chart Title
Taste Brand Availability Price Quality Popularity

20% 16%

16%
14%

12%
22%

Fig 10

From the above fig price place an important role in choice of soda, then popularity with 10

people out of 50 , taste and brand at equal level with 8 peple

50
9. How often do you buy the product?

Sno Option Out of Response Percentage (%)

1 Never 50 10 20

2 Few times a 50 16 32
week

3 Once/few time of 50 14 28
year

4 Everyday 50 10 20

Table 9

Chart Title
Never Few times a week Once/few times a year Everyday

20% 20%

28% 32%

Fig 11

As it can be seen in the figure, it was concluded that majority of the respondents bought

the product few times a week . This shows the brand loyalty of the customers towards

Coca-Cola.

51
10. Where do you buy Coca-Cola products the most?

Sno Option Out of Response Percentage (%)

1 Super market 50 15 30

2 Restaurants 50 17 34

3 General stores 50 18 36

Table 10

Chart Title
Super Market Restaurants General stores

30%
36%

34%

Fig 12

As seen in the above chart, customers usually preferred to buy Coca-Cola in general

stores , The second largest option was restaurants and third was Super market

52
 CHAPTER 5
SUGGESTIONS

53
 SUGGESTIONS

The suggestion made in this section are based on the market study conducted as part of

“Coca Cola”

1. Perform a detail demand survey at regular interval to know about the unique needs and

requirement of the customer

2. The company should focus to bring some more flavors like health drinks and other low

calories offerings. Coca cola can also introduce some fruit based drinks , as t has enter

the energy drink arena with Burn

3. The company must keep a watch on it primary competitors in market in order to be

able to compete with them

4. The company should use a new attractive system of word of mouth advertisement to

keep alive the general awareness in the whole market

5.the company should always be in a position to received a continuous feedback and

suggestion from its customers as well as from the market and try to solve it without any

delay to established its own good credibility

6.A strong watch should be kept on its distributer so that the goodwill of the brand

doesn’t get affected

54
 CHAPTER 6
RECOMMENDATIONS

&

CONCLUSION

55
6.1 RECOMMENDATIONS OF STUDY

After completing our project I have concluded some recommendation for the Coca Cola

company, which are following.

 Coca Cola Company should try to emphasis more on providing their

infrastructure in the market to facilitate their customers.

 According to the survey, conducted by the international firm Pakistani people like

little bit sweeter Cola drink. So for this Coca Cola company should produce their

product according to the local demand.

 Marketing team should try to increase the availability of Coke in rural areas.

 They should also focus the old people.

 As Coca Cola is most purchased in general store so they should focus on small

retailer

56
6.2 CONCLUSION

It was observed that Coca-Cola has been perceived quite positively as it has been

projected. People are aware of the Brand & Awareness of Coca-Cola is quite high in the

market. When a product is launched, avid Coke drinkers choose this soda over any other

competitor simply because it's a Coca-Cola product and they trust it.Although Coke has

been into controversies, people still prefer to stay loyal to the Brand with Coca-Cola

being termed as a more popular brand than Pepsi.Coca-Cola products would appear, on

the shelf, to have the most expensive range of soft drinks common to supermarkets, at

almost double the cost of no name brands. This can be for several reasons apart from just

to cover the extra costs of promotions, for which no name brands do without. When

people buy Coca-Cola they are not just buying the beverage but also the image that goes

with it, therefore to have the price higher reiterates the fact that the product is of a better

quality than the rest and that the consumer is not cheap. In supermarkets and convenience

stores Coca-Cola has their own fridge which contains only their products. There is little

personal selling, but that is made up for in public relations and corporate image. Coca-

Cola sponsors a lot of events including sports and recreational activities.

57
 CHAPTER 7
BIBLOGRAPHY&
QUESTIONNAIRE

58
BIBLIOGRAPHY

Books & Magazines:

 Philip Kotler “Marketing Management” 11th edition

 Kothari “Research Methodology” 3rd edition

 T.N Chhabra “Principle of Marketing” edition

 Annual Report of coca-Cola company.

Websites:

 www.coca-Colaindia.com

 www.altavista.com

 www.thecoca-colacompany.com

 www.india-server.com/

 www.news.bbc.co.uk/

 www.magindia.com/

 www.wikiinvest.com

 www.open2.net/

59
QUESTIONNAIRE

Hi this is Himza Kaul, I am pursing BBA form IP University, I am working on a project

“MARKETING STRATEGIES OF COCA COLA” for grant of degree. I assure that I
will not revealed out your identity

Name:-
Age:-15-20 30-35

20-25 35-above
25-30

Gender: -Male Female

1. Have you ever tried the product (Coca-Cola)?

a) Yes
b) No

2. How do you like the product?

a) Yes c) No
b) It’s not bad

3. What brand would you say is more popular among the public?
a) Coca-Cola c) Pepsi
b) Limca d) Sprite

4. Do you remember Coca Colas advertisements on TV?

a) Yes
b) No

60
5.Have you taken part in any marketing campaign of Coca Cola?
a) Yes
b) No

6. Do you think the price of Coca Cola is reasonable?

a)Yes
b) No

7. If you were to see the Coca Cola logo somewhere would you recognize it?
a)Yes
b) No

8.What influences your choice of soda?

a) Taste d)Price
b) Brand image e) Quality
c)Availability f)Popularity

9. How often do you buy the product?

a)Never b) Once/few times a year
c) Few times a week d) Everyday

10. Where do you buy Coca-Cola products the most?

a) Super Markets b) General stores
c) Restaurants

11. Any Suggestions

61
62