PROJECTREPORT

ON
ASTUDYOF
FACTORINFLUENCINGCHOICEOFSOFTDRINKS

INUDAIPURCITY

SUMITTEDINPARTIALFULFILLMENTFORDEGREEOF
MASTEROFBUSINESSADMINISTRATION

Executivesummary

SoftDrinksBouncesBack
After a somewhatsubdued performancein 2006duetoarecurrence of
the pesticides controversy, soft drinks sales bounced back strongly to record
doubledigitvolume growth in2007.Withcarbonatesgrowthbackona positive
1

upward curve alongside burgeoning sales of fruit/vegetable juice and bottles

water, soft drinks showed impressive growth in 2007. Offtrade volumesgrew
slightly faster than ontrade volumes, driven by higher consumption of
packaged and branded soft drinks at homeand on the go.The emergence of
supermarkets/hypermarkets, heavy consumer promotions and various new
productlaunchesplayedakeyroleindrivingofftradevolumegrowth.

BottledWaterandFruit/vegetableJuiceContinuetobeStarPerformers
Soft drinks sales in 2007 were propelled by bottled water and
fruit/vegetable juice withtheir healthier positioninghelping todrivesalesofsoft
drinks. While carbonates posted singledigit growth in 2007, rebounding from
the pesticidescontroversyof2006,itwasbottledwaterandfruit/vegetablejuice
that stormed ahead with high doubledigit growth rates. Poor municipal
infrastructure for tap water has pushed sales of bulk packaged water to
households. Fruit/vegetable juice isgrowingas a resultofincreasedconsumer
expenditure on naturally healthy (NH) beverages. While functional drinks and
RTDtea also posted impressivegrowthin2007,theyweregrowingfromavery
small baseandareyettoachieveacriticalmassintermsofestablishingaloyal
consumerbase.

CocaColaIndiaandPepsiCoIndiaslipinshares
With consumers showing a growing preference for healthier soft drinks
such asbottledwaterandfruit/vegetable juice ratherthancarbonates in2007,
the two carbonates giants suffered amarginal declinein share.Althoughboth

players embarked on a change in strategy to focus more on noncarbonated

soft drinks in their portfolios, they were unable to maintain share andlostout
slightlytoo homegrown playersParle Bisleriand DaburIndia.CocaColaIndia
launched Minute Maid and pushed the sales of its juices while PepsiCoIndia
heavily promoted Tropicana, Aquafina and Gatorade during 2007. In addition,
CocaCola India and PepsiCo India embarked on rebranding themselves as
totalbeverageplayersandnotjustcarbonatesplayers.

Booming Modern Retail Brings Many Opportunities for Soft Drinks

Players
With the retailsceneinIndiaundergoingarapidmetamorphosiswiththe
establishment of supermarkets/ hypermarkets and convenience stores, soft
drinks sales have benefited positively. People in urban areas are increasingly
flocking tosupermarkets topick up specialty itemsthat are notavailableinthe
kirana stores that are found all over India. Modernretail outlets have provided
soft drinks players with many opportunities to push their brands. Consumer
promotions forfruit/vegetable juice and emergingsectorssuchasRTDteaand
functional drinks are driving product sampling. Attractive pointofsale (PoS)
displaysand giftpacksof concentratesarealso drawing consumerattentionin
supermarkets/hypermarkets.

HealthyDrinkstoDriveForecastGrowth

Soft drinks is expected to post a strong performance on the back of

increasing affluence amongst consumers and evolving lifestyles which lead to
consumers devoting less time to preparing fresh food and drink at home.
Competition from theunorganizedsector will diminish gradually as consumers
show greater aversion to buying unpackaged and unbranded soft drinksfrom
street vendors due to health and hygiene concerns. Rising health
consciousness is also expected to drive sales of naturally healthy (NH) soft
drinks such as 100% juice and mineral water. In addition, softdrinks such as
sports drinks and juicebased carbonates are also expected to fare well over
theforecastperiodasconsumersperceivethemtobehealthy.

BeverageIndustry
EMERGINGBEVERAGETRENDS

Thebeverageindustryisashiftinglandscapeasvolumeleadingcategories

such as soft drinks and beer continue to

experience share erosion while

functional and health& wellnessorientedcategories enjoydoubledigitvolume

growth:

SoftDrinks3.9%

DomesticBeer1.2%

EnergyDrinks+53%

BottledWater+25%

RTDTea+23%

SportsDrinks+19%

Industry

giants

Coca

Cola

(
http://www.coke.com/
)

and

Pepsi

(
http://www.pepsico.com/
) continue to diversify their portfolios, as evidenced
with

Cokes

recent

acquisitions

involving

Glaceaus

vitaminwater

(
http://www.glaceau.com/
) and Fuze (
http://www.drinkfuze.com/
), as well as
PepsispurchaseofIzzeNaturalSoda(
http://www.izze.com/
).
Functional beverages continue to be the hottest segment in beverage, driven
by energy drinks (+53% growth in 2006). Red Bull (
http://www.redbull.com/
)
continues

to

lead

the

category,

but

challengers

Monster

(
http://www.monsterenergy.com/
) and Rockstar (
http://www.rockstar69.com/
)
arerealizingshareleadershipinselectmarkets.
Bottled water is experiencing resurgence, +25% versus year ago, and is
second only to energy drinks in volume growth. Segment growth is driven
largely by the introduction of enhanced/fortified/flavored waters, led by
Glaceaus vitaminwater but featuring a slew of new entrants including:
Metromint (
http://www.metromint.com/
),Hint(
http://www.drinkhint.com/
),Propel
Fitness

Water

(
http://www.propelwater.com/
),

SoBe

Lifewater

(
http://www.sobelifewater.com/
), Aquafina Alive (www.aquafina.com), among
manyothers.
RTDtea isridingtheantioxidantwaveto23%volumegrowthversusprioryear,
drivenby consumersgrowingawareness of thehealthbenefitsassociatedwith
antioxidants. Arizona (
http://www.arizonabev.com/
) leads the category,
followed

by

Lipton

(
http://www.lipton.com/
)

and

Snapple

(
http://www.snapple.com/
) brands. Organic RTD tea brands are a growing
market niche led by Honest Tea (
http://www.honesttea.com/
) and Republic of
Tea(
http://www.republicoftea.com/
).

Thesuperfruitscontinuetocapturetheattentionofhealthandwellness
enthusiasts,offeringsignificantdosesofantioxidantsandotherelementsthat
addressmyriadhealthconcerns.PomWonderful
(
http://www.pomwonderful.com/
)ledthesuperfruitmovementwithits
pomegranateblendsanduniquepackagingandmerchandising.BossaNova
(
http://www.bossausa.com/
)andSambazon(
http://www.sambazon.com/
)
featurethepowerfulAcaiberryfromSouthAmericanrainforests.
Innovation continues to drive the beverage industry. Let Power Brands help
youbringyourbeveragebrandtolife!

CONTENTS

1) Preface..
2) Acknowledgement....
3) ExecutiveSummary..
4) Introduction..
5) CompanyProfile.
6) ResearchMethodology...
7) DataAnalysis&Interpretation..
8) Conclusion&Recommendations
9) Appendix.
10) Bibliography

TheIndianBeverageMarket

Indias one billion people, growing middle class, and low per capita
consumption of soft drinks made it a highly contestedprize inthe globalCSD
marketin theearly twentyfirstcentury.Ten percent ofthecountryspopulation
livedin urban areas orlarge citiesand drank tenbottlesofsodaperyearwhile
the vast remainder lived in rural an eras, villages, and small towns where
annual per capita consumption were less than four bottles. Coke and Pepsi
dominated the market and together had a consolidated market share above
95%. While soft drinks wereonce consideredproducts only for the affluent, by
2003 91% of sales were made to thelower, middle and upper middle classes.
Soft drink sales in Indiagrew 76% between1998 and 2002, from5,670million
bottles to over10,000millionandwere expected togrowatleast10%per year
through 2012.2 8 In spite of this growth, annual per capita consumption was
only 6 bottles versus 17 inPakistan,73 inThailand,173 inthePhilippinesand
800intheUnitedStates.


With its large population and low consumption, the rural market
represented a significant opportunityfor penetration and a critical battleground
for market dominance. In 2001, CocaCola recognized that to compete with
traditional refreshments including lemon water, green coconut water, fruit
juices, tea, and lassi, competitive pricing was essential. In response, Coke
launchedasmallerbottlepricedatalmost50%ofthetraditionalpackage.

INDIANHISTORY

India is home to one of the most ancient cultures in the world dating
back over 5000 years. At the beginning of the twentyfirst century, twentysix
different languages were spoken across India, 30% of the population knew
English,andgreaterthan40%wereilliterate. Atthistime,thenationwasinthe
midst ofgreat transition andthedichotomybetween theoldIndiaand thenew
was stark. Remnants of the caste system existed alongside the worlds top
engineering schools and growing metropolises as the historically agricultural
economyshifted intothe servicessector.In the process,Indiahadcreatedthe
worldslargestmiddleclass,secondonlytoChina.

ABritishcolonysince1769whentheEastIndiaCompanygainedcontrol
ofallEuropeantradeinthenation,Indiagaineditsindependencein1947under
Mahatma Ghandi and his principles of nonviolence and selfreliance. In the
10

decades that followed, selfreliancewas taken totheextremeasmanyIndians

believed that economic independence wasnecessaryto betruly independent.
As a result, the economy was increasingly regulated and many sectors were
restricted to the public sector. This movement reached its peakin 1977when
the Janta party government came to power and CocaColawas thrown out of
the country. In 1991,thefirstgeneration of economic reforms wasintroduced
andliberalizationbegan.

STORYOFSOFTDRINKS

Segmentationofsoftdrinks:

The Soft drinks can be segmented on the basisof pointof purchase or

onthebasisoftypeofproducts.Thestoryofsoft drinksisfascinating,sincethe
beginning of life the most pressing needs of all living beings is food & sweet
juice when cut open, ditto the watermelon & fresh coconuts. Man Learnt the
Secrets oftheseSources &usedthem as additionalpleasant aiddrinks beside
water. As year passed in thousands, man tried to imitate nature in preparing
these drinkssoasto usethemaswell.AsaresultoflaboriousSearchin1772,
Joseph priestly combined carbon dioxide with water & artificially produced
arched water bubbling with gas spread quickly & artificially produced arched
water bubbling with gas spread quickly & parched mouth begin to consume
this.

11

The Segmentation on the basisof pointof purchasedividesthe market

into two parts on premise 80% of the Consumption of Soft drinks is done
Premisei.e.restaurants,railwaystation,cinemahalletc.

AtHome:
Therestof20%ofthemarketcompromisesofthesoftdrinkspurchased
forconsumptionathome.
Themarketcanalsobesegmentedonthebasisofproducts.Thesegment
couldbeasfollows
This account for 62% ofthetotalsoftdrinksatallIndialevel.Thebrands
thatfall inthis categoryare Pepsi, Thums up,Coke.NonColasegment,which
can be further, divided as orange. This segment has 19%share of the total
market. Mirinda orange (of Pepsi) Fanta & and Gold Spot (Both of Coke) &
crushrepresenttheorangesegment.

Lime:

Thissegmentrepresents14%ofthetotalmarket.CokesLimca

&PepsisMirindafallinthiscategory.
The market leader is close to 70% market share of this segment but
sprite has considerably cut into this market. Mango, Slice Mangola& Maza is
the leadingMangodrink.MangoDrinks account forabout3%ofthesoftdrinks
market. There is very thin line of difference between the clear & cloudy lime.
Themost obvious feature isthatclearlimehastobebottledingreenbottlesas
sunlightharmsthedrinks&changethetaste.

12

THEINDIANSOFTDRINKINDUSTRYSCENARIO

Domestic firms in India, which once enjoyed the benefits of sheltered

markets, are increasingly facing competition from global giants in 1990s.
Sheltered market had once allowed Indian entrepreneurs to develop strong
brands that have held there own against the onslaught of the multinational

13

companies. Some domestic firms have chosen the strategy of tieups with
MNCs.Othershavetriedtomeetthecompetitionheadon.

Whatever route Indianfirms take todeal with competition from MNCs it

isimperativeforthemtokeeptrackofglobalstrategiesofthesefirms.Oftenthe
strategies undertaken at the local level are only part of the global strategies,
because it is difficultfor any firm to allowsignificantdifferences inapproach in
differentmarkets.

CocaColacontrolled the Indianmarketuntil1977,whentheJantaParty

beat the Congressparty ofthenPrimeMinisterIndiraGandhi.To punishCoca
Colas principal bottler, a Congress party stalwart and long time Gandhi
supporter, the Janta government demanded that Coca Cola transferred its
syrup formulatoanIndiansubsidiary.CocaColabackedandwithdrewfromthe
country.

India now left without both Coca Cola and Pepsi became a protected
market. After Coca Cola made its exit from Indianmarketin1977, therewas a
vacuum in the soft drink market, advantage was taken by Parle and Pure
drinks. Parley launched Thumps Up and gained a substantial and robust
marketshare.
In 1977 with a changein the government at thecentre led tothe exitof
coke, which preferred to quit rather than dilute its equity to 40% incompliance
with theprovisionsof FERA, the first national coladrinktoemergewasDouble
Seven. In the mean time, Pure Dinks, Delhi, on Cokes exitswitched over to
Campa Cola, and, by the end of 1970s, Campa Cola was practically alone in
theColamarket.

14


Parle introduced ThumpsUp inthe beginningof1980s,followed bythrill
by McDowells and Double Cola by Double Cola manufacturing Company
(DCMC)anNRIrunoutfit withitsplantatNasik.Anadditionaldimensiontothe
Indian soft drink industry was that of fruit drinks, which were valued at Rs. 40
Crores andamongthebrandsin the market,the leaderwasParlesFruitywith
about 40% of the market share. The other players in this segment who have
posed challenges to Parle are Godreg(with Jumpin) and Ahemdabad bases
PiomaIndustriesRasnaColaCola.

Setup in 1949, by 1978, Parle led the Indian soft drinks market with a
share of 33%.GoldSpotand Limcaweretheclearwinners,andlater,Thumps
Up alsostartedcontributing toitsgrowth. Thus,Parleytouchedamarketshare
of around 60% in 1990. However, with the arrival of Pepsi, Parles share
decreased to 53% and Pepsi quickly attained a market share of about 20
percent.

Till 1990, Parles chief rival was PureDrinks,which wassteadily losing

out toParley. After the arrival of Pepsi,the marketshareofPureDrinksfurther
deteriorated. This was mostly because Pure Drinks had smaller number of
bottlingplants and alimiteddistributionnetwork exactlythesamereason why
Pepsicouldnot domuchagainstParle.Parlehad60bottlersagainstPepsis20
and2.1lakhretailersagainstPepsis1.5Lakh.
Before 1992 , the Indian soft drink industry had not grown fast mostly
due to high excise duties and government encouragement of fruitdrinks over
carbonated drinks. TheLimca waslargestselling brand ofbottledsoftdrinksin
India, from consumers point of view Cola was the most popular flavor. It

15

accounted for about 40 percent of the market. Lime and Lemon drinks
followedwith about 30 percent,and Orange drinkshad onlyabout20percent
of themarket share. Carbonatedsoft drinks accountedfortherest 10 percent.
From 1984 to 1992, the Rs, 1,200 Crore Indian soft drinkindustrygrew atan
averageof2.5to3percent,thehighestbeing12.4percentduring19841985.

Pepsi hadbegun its effortsin mid1980s butonly in1990 it wasableto

make an entry in the Indian Cola market. In early 1985, the then government
rejected a proposal with RPG GROUP. This involved the export of fruit juice
concentrate fromPunjab inreturnfor theimport of Cola concentrate. Thedeal
offeredwasa3:1EXIMratio.

The revised proposal made by Pepsi also met lots of resistance. The
strongest opposition to the proposal came from the food and civil supplies
ministry, which argued that India should be promoting fruit juices, not
carbonated soft drinks. Opposition also came from CSIR, one of whose
laboratories developed its own soft drink flavors. After more than 5 years of
acrimonious battles Pepsi wasfinallylaunchedinIndiainJune1990.Toobtain
the license forIndia,Pepsihadtoexport $5 oflocally made productsforevery
$1 of materials imported,and it had to agree tohelp the Indiangovernment to
initiate a second agricultural revolution. Pepsi has also had to take on Indian
partners. Pepsi Co, Punjab Agro Industries CoOperation (PAIC) and Voltas
promotedtheproject.

16

PepsihadaverysignificantfirstmoveradvantageintheIndianmarket.It
did not have the condition of divestment of 49 per cent equity in downstream
ventures attachedto it whenitreceivedpermissiontoinvestinIndia.Pepsihad
obtained thegovernment approval foritsdownstreamventurespriortotheFD1
guidelines that made Indian equity holding mandatory. Thus, in its original
clearance,Pepsiwasnotonlyallowedtohold100percentequity .initsholding
companybutwasalsoallowedtocarryoutbottlingandmarketingoperations.

The government approval, moreover, had allowed Pepsi to earn* out

acquisition of assets to expand its business in the country. Pepsi used this
clause in its approval to buy out 100 per cent stake in some of the domestic
bottling companies including its high profile buyout of Gujarat Bottling
Company, the former Coke franchisee in Ahmedabad. (Industry ministry
sources have clarified that while Pepsi would be required to seek fresh
government approval if it picks up shares in domestic bottling companies as
partofitsportfolioinvestment,itdoes notneed such approvaliftheassetsare
acquiredforexpansion.)

Therewasnowa triangularbattlebetweenParle,PepsiandPureDrinks.
Pepsi launched250mlbottlesinJune1990tocapturethe250mlbottlemarket
of Thums Up(launched in November1989).Asaresponse,ThumsUpranads
downgrading Pepsi's taste and declared that it was a fast drink. Thums Up
enteredthebrandwartotallywithblindtastetestads.

17

ThumsUp launched Double Maha Cola, the500 ml bottle,toprovethat

bigger is better in colawarsand wasagainfirstto introduce'takeaway'250ml
bottles for the first time in the Indian colamarket. Pepsi got into moretrouble
when sixmonths after its launch it caught government's attention regarding its
commitments.Soon after, a showcause notice was issuedto thecompanyfor
prima facie violation of the conditions stipulated in the letter of intent with
regardtotheproductionofsoftdrinkconcentrate.

Coca Cola came back to India after 16 years when it waslaunchedon

October24, 1993, atAgra.CocaCola wasinitiallywooedbytheGodrejgroup,
Great Eastern Shipping and the Britannia IndustriesLtd,ledbyRajanPillai.In
March 1991, it signedan MOU(Memorandumof Understanding)with BIL and
thisproposalwasacceptedbytheChandrasekhargovernment.Butrelationship
between the two companies turned sour over the exportoriented clause and
finallyonJune23,1993,CocaColagotthepermissiontoenterthecountrywith
a100percent unitin India. OnSeptember 22. 1993, the company bought out
theParlebrands.
Afterthe secondcoming,oftheinternationalvarietiesofColadrinks,the
market has witnessed a highprofile tussle between the global giants
CocaColaand PepsiCo. This tussle andthe respective problemsfacedbythe
two firms in the Indian market are extremely instinctive. PepsiCo gained a
significant firstmover advantage through its ability to gain earlyaccessto the
market. Coke, after a couple of abortive attempts, seemed to have made an
entry under ideal conditions inthe market. However, it then faced dissensions
withinthe ranksofitsbottlers.Itsmannerofdealingwiththebottlersseemedto
lack Pepsi's finesse and India seemed to be one of the rare markets where
PepsiwasholdingitsownagainstCokeandconsolidatingitsposition.

18


ThecompanieshavecontinuedtowagetheirwarinIndia.Coke,withthe
strategic moveof buying out Parle, gained a hugemarketshareovernight.Hut
Pepsi issparing noefforts togainalargershareofthemarket.Thepotentialin
the Indian market is tremendous. The Indian market is roughly more thanRs
1,200 crore moreover, the per capita consumption of three bottles in Indiais
laggingwaybehindtheUS'sastounding700bottlespercapitaconsumption.

Both Coke and Pepsi haverightly realized that the immediate priority is
in expanding the market by increasing the growth rates. The Indian market
averagedagrowthrateof2.5percentbetweentheyears198492.From 1992,
when the Cola war took a seriousturn,the growth ratehasalmostdoubled. In
1995 the market grew by 20 per cent in volume term, with estimatedsales of
140 million cases (one case :

24 bottles of 300 ml each)up from 115 million

casesin1994.

The industry, prior to 1990, was witnessing sluggish growth rates

(CAGR: around 5 per cent) withtwodomesticplayers:Parle andPureDrinks.
The entry of the cola giants, Coke and Pepsi, led to a rapidexpansionin the
size of the market (CAGR for the first half of the1990s:around 20 per cent).
Coke's acquisition of Parlehas turnedthe market intoaduopoly. Alsonotonly
the market size is increasing, there is also a shift of consumer preference
between the different soft drink segments. Whereas in 1990, cola was
accounting for a third of all soft drinks sold, today it accounts for well over a
half.

19

20

COMPANYPROFILE

In 1902 the Pepsi Cola Company was launched in the back room of
pharmacy and was applied in patent office for a trademark. The business
begins to grow on June16,1903 PepsiCola wasofficiallyregisteredwiththe
US patent office. That year Cola sold 7,968 gallons of syrup using them in
exhilarating aids digestion. It also awarded for franchised to bottle Pepsi to
independent investors, where number grew from just two in 1905 in cities of
charlotteandDurham,to15thefollowingyear,and40by1907.

GoldSpotis consideredas thefirst branded soft drinkin India.Itwas

introducedbyParle in early forties. CocaColawasthefirstforeignsoftdrinkto

beintroduced in Indianmarkets.The CocaCola CompanyenteredIndia inthe
early fifties, when four bottling plants were setup at Bombay, Calcutta, Delhi
and Kanpur. CocaCola enjoyed a goodbeginning and dominatedthemarket.
Parle exports private Ltd. the major domestic player later in 1970 introduced
Limca, a lemon soft drink. Before Limca introduction, they had attentively
introducedColaPepinowhichwassoonwithfromthemarket.

21

In July 1977 Coca Cola left India following a public dispute over share
holding structure and import permits. As per FERA regulations the company
was required to indicateorclearoperation.CocaColaleftabiggap,whichwas
filled by several companies who came forward pushing different brands in
market.

Parle productsintroduced theircolaThums Up pure drinksintroduced

Campa Cola along with orange and lemon. Modern Bakeries introduced
Double Seven Thrill Rush and Aprint. At the same time various regional
softbrandsplayedanindependentroleintheirrespectiveterritorieslikeDuke
andMangolaetc.

After Coke was asked to leave India Pepsi began to layplans to enter
thishuge market.Pepsiworked withanIndian business groupinseekinggovt.
approval for its entryoverthe objections ofboth domesticsoftdrinkcompanies
and antimultinational legislators, Pepsi saw the solution to lie in making an
offer that Indian Govt. would find hard to refuse. Pepsi offered to help India
export someof its agricultural productsinavolumethatwouldcovermorethan
the cost of importing soft drink concentrate. Pepsi also promised to focus
considerableselling effortson rural areas tohelp their economicdevelopment.
Pepsi furtherofferedtotransferfoodprocessingpackagingandwatertreatment
to India in the way Pepsi started its operations in April 1989 for beverages,
snack food and export business. In 1990 first Pepsi, Cola was produced in
India.

PepsiCo entered India in 1989 and in the span of a little more than a
decade, hasgrowntobecomethecountry'slargestsellingsoft drinkscompany.

22

The Company has invested heavily in India making it one of the largest
multinationalinvestors. Thegrouphasbuiltanexpansivebeverage,snackfood
andexports business and to supportthe operationsarethe group's 39bottling
plantsinIndia,ofwhich17arecompanyownedand22arefranchiseeowned.

PepsiCo stays committed to providing its consumers with top quality

beverages. Its diverse portfolio of brands include the flagship cola brand
Pepsi Diet Pepsi 7Up Mirinda Mountain Dew Slice fruit drink Tropicana
brand 100% fruit juices in various flavors Aquafina packaged drinking water
Gatorade plus local brands Lehar Evervess Soda, Dukes Lemonade and
Mangola.

PepsiCo is also a dominant player in the snack food segmentin India.

PepsiCo's snack food company FritoLay is the leader in the branded potato
chip market. It manufactures Lay's Potato Chips Cheetos extruded snacks,
UncleChips traditionalnamkeen snacks under the Kurkure andLeharbrands
andQuakerOats.

PepsiCo is one of the largest MNC exporters in India and its export
business consist of three categories agri business, commodities and Pepsi
system sales. PepsiCo has made significant investments with the Punjab
Agriculture University to develop a comprehensive agrotechnology
Programmed that has helped thousands of farmers across India improve the
yield of their farms and the quality of their agricultural products. PepsiCohas
leveraged its knowledge in contract farming to developseaweed cultivation in

23

Tamil Nadu and haspartnered withthe Government of Punjab tohelpfarmers

ofthestatethroughtheutilizationofdevelopedtechnologyforcitrusfarming.

As part of its sustainable development initiatives, PepsiCo India has

been a committed leader in the promotion of rain water harvesting, water
conservation recycling and the reduction of effluent discharge. PepsiCo has
also established zero waste centers and PET recycling supply chains and
assistedvictimsofnaturaldisasters.PepsiCostaysdedicatedinitsendeavorto
develop community outreach programs by supporting rural water supply
schemes, administeringmedicalcampsinvillages,providingcomputerstorural
schools and creatingopportunities for womenin rural areas throughvocational
trainingasanalternatemeansoflivelihood.

PepsiCo India has worked closely with the Defense forces in

rehabilitationof DefensePersonnelthroughprojectslikeMissionVijay2.Under
thisprojectPepsi in association withCastrolhelpedsoldierssetboothsinrural
area to sellPepsiandCastrolproductsthereby helpingthemtonotonlyearna
decent living but to also add some color to their lives. Through this project
PepsiCo India also tries to give these soldiers distribution rights for its soft
drinks.
It gives PepsiCo India great pleasure in associating with Defense India and
Samvedna for an event to bring cheers and smiles for our Jawaans of BSF
(BorderSecurityForce)atWagah.

In the next year, 1991 production on Mirinda and 7 Up started. The

productionof Slice, Teem andFountain Pepsistartedin1993CocaColacame

24

back again in October 1993 and launched in Agra. It joined hands withParle
Export Pvt.Ltd. toenter India andgraduallytookoverthesamecompany.The
nineties also saw a new foreign entrant called Cadbury Schmeppes, which
rolledoutCanadaDryandCrushinMetropolitancities.

Pepsi enteredthecloudylemoncategorybylaunchingitsMirindaLemon
in 1998. In may 1999, a notification, presenting the presentation of food
Adulteration (Fourth Amendment) rules 1999, allowed the use of the blended
artificial sweeteners, as part time and a successful fame potassium in the
formulation of soft drinks, which inwhatmadetheentry ofdietPepsiand diet
coke. CocaCola also rolled out its popular clear lemon drink sprit in India at
sameyear,1999.

25

WhatsinPepsi?

Pepsicontains:

Carbonated water, High fructose Glucose syrup/or Sugar color,Phosphoricacid,

Caffeine,Citricacidandnaturalflavors.

Calories

100

TotalFat(gm)

Sodium(mg)

25

Potassium(mg)

10

TotalCarbohydrates(gm)

27

Sugars(gm)

27

Protein(gm)

Caffeine(mg)

25

26

27

COMPANYSTRUCTURE

PepsiCo India Holding Ltd. is created by Pepsi Company, to carry out

the sales and marketing operation in India. Mr. Rajiv Bakshi, (G.M. business
unit), heads the Indian Unit.Therearethree marketingunits inIndia East and
North, West and South. East & North units areheaded by Mr. PrakashAiyer.
Each marketing unit is subdivided into state units, and their state units are
divided into territories. Allahabad territory falls in U.P. unit of East and North
Marketingunit.

Company owned bottling operation (cobo) of U.P. unit comprises of

Share bottling plants at Sathariya (Jaunpur), Jainpur (Kanpur) and Bajpur
(Nainital) which supply to six territories at Allahabad, Gorakhpur, Kanpur,
Lucknow, Bareilly in U.P. and Uttranchal. This unit is headedbyMr.Saurabh
Gupta(UnitManager)heisassistedbyMr.HarshRai,MarketingManager.The
other staff in his office is finance controller, finance coordinator, MEM
Coordinator, Legal Advisor, Marketing Executive, Accounts Executive and
personalExecutives.

Each territoryisheadedbyterritoryDevelopmentManager(TDM) whois

assisted by one or two Accounts Development Coordinators (ADC) .The

territory developments Manager (TDM) have a team of executives. These
executives are Customer executives, Service executives, and Accounts
executives. Executive working on Projects Mr. Rohan Arora is Territory
Development Manager (TDM) and Mr. Ajay Nagar is Accounts Development
Coordinator (ADC) of Allahabad Territory. The Customer executive in this
28

territory is Mr. Subodh Kumar, Mr. Devendra Singh. The Customer Service
Executives of this territory is Mr. Raghvendra and Accounts executive is Mr.
Neelkamal.

Allahabad territory is a big territory coveringeastern districts ofU.P. as

Allahabad, Varanasi, Mirzapur, Ghazipur, Sonebhadra, Pratapgarh, Bhadoi,
Kausambi, Jaunpur etc. There are 72 distributors in this territory. The annual
turnoverof company in this territorywas3millioncrorein2004.Theturnoverof
thecompanyinIndiawas115millioncroreinthesameyear.

29

ORGANISATIONCHART
BusinessUnitManager(India)

MUM

MarketingUnitManager

MUM

(West)(East&North)

(South)

UnitManager

TDM

TDM TerritoryDevelopmentManagerTDMTDMTDM

(Kanpur)(Lucknow)
(Uttranchal)

(Allahabad)(Gorakhpur)(Barreilly)

TerritoryTraini
Coordinator

AccountDevelopment

CE

CECECECECECE

(Ghazipur)(Mirzapur)

(Jaunpur)

(Pratapgarh)(Bhadoi)(Kausambi)(Sonebhadra)

30


C E

CustomerExecutive

(Varanasi) (Allahaabd)

31

PEPSICOHEADQUARTERS

Pepsi co India world head Quarters is located in Purchase, N.Y.

approximately 45 minutes from New York City. Edward Darrel Stone, One of
Americas foremost architects, designed the sevenbuilding headquarters
complex that includes the Donald M.Kendall Sculpture collection in a garden
setting.

Thecollection ofworks isfocusedontwentiethcentury &featureswork

by masters such as Auguste Rodin, Henri Laurens, Henry Moore, Alexander
Calder,AlbertoGiacometti,ArnaldoPamodoro&ClaesOldenburg.

32

COMPANYSGLOBALSTRATEGY

Set awinner growth goals if you act like numbertwo,youwillalwaysbe

numbertwo.
Hiringpeoplewholovechangeandthriveonrisktaking.
Upsettherulesofthemarketplace..
Alwaysanticipatetheresponseyoumayprovoke.
Executionofaplanoftenderivesuccessmorethenmoremarketing
EncourageExecutivestothinklaterally.
ConjureUpthosecreativetacticstoknackfizzoutofitscompetition.

33

PEPSICOMISSION

Wededicateoureffortsto

In India, only 40% people drinks soft drinks. So the main mission of
PepsiistocapturetheRuralMarketstomakeitaonemanshow.
Hiring & training People who single handedly drive the business
forward.
Providingcourteous,prompt&efficientservicetoourcustomer.
Buildinglongtermprosperityofourbrandsinthemarketplace.
Exploring & developing opportunities that helps in building competitive
edges.

34

35

MARKETSIZEANDGROWTHRATE

The particular feature of market is that of positioning & targeting of

various brands while cola brand of Coke is targeted at teenagers & is
positioned asrefreshment formind& body. The Thumsupbrandistargetedat
peopleinagegroup&ispositionedasfundrink.

Soft Drink market size for Fy00 was around 270mm cases (6480ml
bottle). The market, which was witnessing 56% growth in the early 1905 &
evenslowergrowthataround23%inthelate80s.Presentlythemarketgrowth
has slowed down with growth rateof 78 per annum dawnwith growth rateof
78% per annum compared to 22% growth rate in the previous year. The
market size for Fy01 is expected to be 7000mmbottles. Themarketgrowthof
22% till last year target still due to high excise duty of 40% leading to higher
price of the end product. In terms of SKUS the market is Skewed towards
300mlwhich constitutes around8085% of themarket rest intheformofother
pack, Size, But with increasing occasion led & home refrigeration led
consumption the sales of bigger SKUs like more than 1 liter pack size has
increased this has led toincrease contributionfrompetbottlessalesupto75%
areinUrbanareas.

Another skew ness is in terms of the time of the year when the
consumption takes place. Sale of soft of Drinks takes place during summer
while just 56% of the total salestake place inthe winter. Insummer thehigh
season starts for 7075 days, which contributes more than 50% of the total
yearssales.
36

37

BRANDPROFILE

PepsiCo Company provides five brands of Soft drinks. In all brands of

Pepsi oneis Soda, Second Mineralwaterandotherarerunningsuccessfullyin
the market.Atpresent time Pepsi providestwonew softdrinks.DewMountain
and Blue Pepsi and above marketedwith reasonably good success. Theyare
completelydefinedbelow
1. Pepsi
2. BluePepsi
3. PepsiDiet
4. Miranda(Lemon+Mango)
5. Slice
6. 7up
7. Aquafina
8. DewMountain

Now here wewilldiscussaboutthemarketsharesofeachbrandsofsoft

drinks.Theremarketshareareasfollows

38

39

SoftDrinks

MarketShare

Pepsi

57%

Mirinda(Orange)

16%

Mirinda(Lemon)

2%

Slice

1.5%

TeemSoda

NotAvailable

7UP

1.5%

Aquafina

3%

BluePepsi

2%

DewMountain

8%

PepsiDiet

6%

40

QuantityDetailsofallbrandsofSoftdrinksaregivenasbelow

SOFTDRINKS

Quantity

Pepsi

200ml,300ml,600ml,1lt,2lt.

MirindaOrange

200ml,300ml,600ml,1lt,2lt

MirindaLemon

200ml,300ml,600ml,1lt,2lt

Slice

250ml,500ml

7up

200ml,300ml,2lt

TeemSoda

300ml,600ml

PepsiDiet

330ml,500ml

Aquafina

1lt

Dewmountain

200ml

BluePepsi

500ml

The PepsiCo company hadprovided its 300mlbottlesoftdrinks(B.S.D.)

in the month of June 95, 200ml launched in the year of 1999 and I lit, 1.5 lit
bottle launched intheyear1996 while500mland2itlaunchedin2000,Mineral
water,Aquafinahadbeenlaunchedintheyear2001.
Dew mountain, Blue Pepsi 200ml, 500, ml, has been launched in the year
2003.

41

42

PEPSIDISTRIBUTIONCHANNEL

Pepsi's main strategy is to operate franchisee (Franchisees owned

Bottling operation). Pepsi indulges mainly in direct contribution lo retailer and
resorts to indirect in certain areas. Pepsi distributes through three channels
whichisshownbelow:

Thereis no involvementofwholesalersinthedistributionofproducts.Itismore
like an agent network. The companies have divided the country into various
regionsandestablishedafranchiseeineachregion.Thefranchiseeshavetheir
ownbottlingplantsandmanageallthedaytodayoperations.
43


PACKAGING

Packaging plays a vital role inincreasing decreasingin the salesof the

products. Thus, packaging of the product should be attractive and product
shouldbeavailableindifferentsizes.
Tokeep inmind theimportanceof packaging PepsiCoandCocacolais
adopting new technology for looking theproducts attractive andproducing the
product indifferentsize.The differentpacksizes available are 200 ml,300ml,
330ml(Can), 600ml(promotionalpackwith100mlextra),Iliters.,1.5liters.,2
liters.,and200ml/250ml(slice).

RANGESOFDIFFERENTPACKAVAILABLE
1. GLASS200ml,300ml,1literand250ml.
2. PET500ml,600ml,1literand2liter.
3. TETRA200ml(SLICE)
4. CANS330ml
INGLASS
24Bottles*200ml=1Case
24Bottles*250ml=1Case
24Bottles*300ml=1Case
6Bottles*1000ml=1Case
INPET
24Bottles*500/600ml=1cartoons
12Bottles*1000ml=1cartoons
9Bottles*2000ml=1cartoons
12Bottles*1500ml=1cartoons
44

TETRA
24Bottles*200ml=1Case
CANS
24cans*330ml=1Case

ADVERTISING STRATEGIES ADOPTED BY AERATED SOFT DRINK

INDUSTRY

Soft drinksisperhaps themosthardfoughtproductcategoriesinIndiain

every respect media, events, distribution, pricing, communication,
endorsements and soon...Everyyearitconsistentlyemergesasoneofthetop
10 categories on television. We, at AdEx India, have looked at year 2003 to
understandtheyearthatwasforthisexceptionallycompetitivesegment!
One clearandpredictablepatternin 2003wasthetwoclearpeaksofad
spend one during the world cup and the other during the festive time.
Interestingly, while Pepsi dominated media budgets during World Cup,
CocaCola seems to have been the dominant spender in the month of
September.
However, this time we at AdEx thought of dwelling on aspects of
advertising intermsof strategy adoptedbythedifferentplayersinthiscategory
andthedurationofadvertisingacrossgenresonTVandpress.
Thispapertriestothrowsomelightonthefollowingaspects:

GenrewiseandchannelwisecompositionofadvertisingonTV

Advertising strategy adoptedbytheaeratedsoftdrinkplayersonTVand

press

Zonewiseandgenrewiseadvertisingonpress
45

Specificcase:zonewiseandgenrewiseadvertisingforPepsiandCoke

Genre wise analysis on aerated drinks establishes that this category is

heavilyadvertisedon feature films,music,cricket andsoaps.Majorpart ofthe
advertising on Cricket can be attributed to the fact that Pepsi was the official
sponsor of the Cricket World Cup 2003. However, apart from cricket Pepsiis
activelypresentonothertypesofsportssuchassoccer,wrestlingetc.

46

FIGHTFORTHEMARKETSHARES

Withthecolamajorsbusysharpeningtheirarsenal,it'sapitched

battleallthewaywhetherontelevisionorinthemarketplace. '
According to figures released by IMRB, in the month of
JanuaryFebruary, the combined market share of all carbonated soft drinks
(CSD) beverages under PepsiCo'sdomesticproduct portfolioincludingPepsi,
Mirinda Orange, MirindaLemonand 7 Up stands at48.3percent.TheIMRB
data adds that with the exception of Mirinda Lemon, all PepsiCo beverages
haveledoverCocaCola'sbrandsintermsofmarketshareinthisperiod.

However, when contacted by Business Line, CocaCola's official

spokesperson disagreed with these figures. According to ORGMARG, which
tracks market figures for CocaCola India, the combined market share of all
CocaColabrands puttogetherstandsat58percent.Whiledecliningtoprovide
individual market share of brands under the company's portfolio, Coca Cola
India's official spokesperson sa1d, "We do notagree with the figures given by
PepsiCo. If our turnover last year was almost double theirs, how can their
market shares be higher? The market shares they are stating are obviously
questionable."

Pepsi's official spokesperson reiteratedthat among colas, whichoccupy

close to70 percentof the approximately 270millioncases CSD market, Brand
Pepsi's market share stands at 51 per cent. The combined market shares of
CocaColaandThumsUpstandsat49percent,accordingtoIMRB.
47


In the carbonated orange segment, which accounts for roughly 15 per
cent oftheoverall CSDmarket, the market share forMirinda Orangehasbeen
estimated at 53' per cent by IMRB. The market share of CocaCola's Fanta
brandisestimatedat47percent.

In thecloudylemon segment, which accounts forroughly 10 percentof

the CSD market, CocaCola's LimcabrandleadsPepsiCo's MirindaLemonby
ahugemargin.Limcahasa75percentsizeofthissegment,whiletheshareof
Mirinda Lemon is 25percent.Accordingtoindustryestimatestheshareofthe
cloudy lemon segment has slipped below that of the orange segment.
Interestingly, the cloudy lemon segment does not exist in most developed
markets,andisprimarilyadevelopingcountryphenomenon.

48

PEPSICO:SOONTOHIT$1BILLIONMARKININDIA

PepsiCo willsoon join theelitebandofcompanieswith$lbillionsalesin

India. The company currently has sales of $700 million. Since 1989 the $27
billion food and beveragesgiant has invested$700 millionin Indiaandseena
steady doubledigitgrowthin its volumes.TheIndianoperationsaretheAtlanta
basedcompanys:fifthlargestoutsidetheUSnow.

"We are on track to make it the second or third largest," Steve

Reinemund, chairman & CEO PepsiCo told the media in New Delhi.
Reinemund's visit was preceded by that of E Neville Isdell, chairman of the
boardandCEO ofThe CocaCola Company, whochosetovisitIndiaontaking
chargeofCoke'sglobaloperationsafewmonthsago.

Reinemund said PepsiCo'sRs5perpackaffor_bilitystrategyinitiatedby

Coke and Pepsi hadworked wellin India andhelpedthe company increaseits
consumer base from 150 million to 250 million. He said with the strategy
PepsiCo had attained critical mass. "It is time now to increase the depth of
consumption,"hesays.

However, he admitted that the company was forced to hike its prices
recently as there was an affordability challenge all over the world. "We have
learnt this lesson and reverted to higher price points (in India) after having
achieved our objective of 150 million consumer footprints. We do not see any
depthinourfuturepricingandtherefore,wehavechangedourstrategy."

49

Pepsi Co is now making operating profits in India and its exports are
worth over $60 million, up from just $3 million in 1991. Reinemund was
especially upbeat about the company's snacks business Frito Lay, in India,
which he said was the fastest growing segment for five consecutive years.
"Indiaisclearlyoneofourprioritymarkets,"hesaid.

Extolling Indian corporate talent, Reinemund said PepsiCo India was

being run withoutanyexpatriatesand40officialsfromtheIndianoperationshad
so far been placed in the company's global businesses. We are planning a
significant increase in our manpower exports from India," he said. He said
PepsiCo employed more than 4,000 people in India directly and over 60,000
indirectly withitsconceptof contractfarmiJ1g inIndia.Ithas relationships with
over 2,000 farmers. The company introduced farmers inIndia tosix highyield
potato varieties and helped development of new seedswhichhelpedincrease
the total annual production of tomatoes from 28,000 tones to over 250,000
tonesinPunjab.

Thecompany had no plans tomakeany structuralchangesinIndiasaid

Reinemund, since of the 37 bottling plants in the country,17companyowned
bottling plants accounted for 55 per cent of total production. He dismissed
reports that arch rival Coke wasclosingin onthe sales ofPepsiproducts and

50

saidPepsi'sleadershippositionwasbecauseIndiansloveditsproducts.

Reinemund met finance minister P Chidambaram and planning

commissiondeputychairmanMontekSinghAhluwalialaterintheday.

Sources said Reinemund was likely to discuss issues of future

investments and the high taxation policy of the government towards the soft
drinksindustryand theoverallfiscal environment withChidambaram andother
senior government officials. CocaCola and PepsiCo have been urging the
government for lowering taxes, specially the special excise duty of eight per
centleviedoncarbonatedsoftdrinks.

This is Reinemund's first visit to India and signifies the increasing

importance of Indian operationsfor PepsiCo. India isnow amongthe top eight
businesses of PepsiCo worldwide in terms of beverage and snack sales and
secondonlytoChinawithinAsia.

51

ADVERTISINGANDPUBLICITY

PepsiCo is oneof the biggestendspendersinIndia.Itisalsoone ofthe

biggest global end spenders. It has a long list of endorsers from pop star
Ricky MartintofilmstarSharukhKhan,KarinaKapoor,PriteyJienta,SaifAli
Khan, Fardin Khan and Amitabh Bachchan. Hindustan Thompson
Associates, the big guest advertising agency of India has the account of
PepsiCo, is known for its broad cast advertising but it alsospends a lot in
non broad cast advertising i.e. hoarding, banners, poster, stickers,
specialties, hanger, dealer board, glow signboard,wall paintings and news
paper, theexpensesofthesetypeofadvertisingaremadeatterritoryorunit
level. Allahabadterritoryhasassignedtwo local advertisingagenciesR.D.
AssociatesandKrishnaforitsterritorialadvertising.

52

Pepsi'sProducts

53

54

COOLINGFACILITIESATOUTLET

The company has distributed 3,000 coolingapproachatthe outlet.The

company has purchased these coolers from six different companies out of
whichfewalsoprovidemaintainedservices.ThecompaniesareAlywn,Carrier,
Kelvinator,Konark&Helchama.
In India 80% soft drink is consumed at the outlets &the rest 20% is
consumed at homes, this requires the soft drink manufacturer to provide
adequatecooling facilities atthe outletstomakethesoftdrinks,readytoserve
to the consumer. Pepsi Company wants to serve its customers with finished
products.The company supplies final productto the retailers &itisretailoutlet
wheretheproductistransformedintofinishedproduct.Whileservingthechilled
softdrinks tocustomer, so the chilledPepsiavailableat theretailoutletsisthe
finishedproduct.

The company has also installed deep freezers models of 100lt, 250lt
&1000lt. This cooling equipment is the property of the company, which are
installed at outlets to serve the customer. Theyarein stalledatthose outlets,
whichhavea deposit of 12 cratesof empties uponeach10litercapacityofthe
order & a potential ofselling fourcarats annuallyoneach Liter capacity of the
cooler. The retailers are required to keep only PepsiCo product in these
coolers.

The capacity of coolers varies from 65 liters to 330 liters. Most of the
models have a transparent door, which makes the product visible. These
modelsarecalledVISIcoolers.

55

56

MARKETINGSCHEMES

For increasing the market share and beating the competitors company
providesdifferentschemesondifferenttime.Theschemesareoftwotypesone
for Consumers and other for retailers. During my training period two types of
consumerschemesandtwotypesofretailerschemesweregoingon.
1.FreeFlavors,ToRetailers
:

Company offers few bottle flavors free to retailers on purchase of one

caratofflavor onsome specific days.The freeflavorsschemevariesfromone

bottletomanybottles.

2.DisplayRackScheme:
This scheme is only for retailers. In this scheme company provides a
Pepsi rack to retailer. The rack is filled with different bottles of Pepsi. The
retailersareinstructedthatiftheywillmaintaintheirracksinthesamecondition
as it was when it was purchased. After completion of onemonth different gift
packsaredistributedtotheretailers.
3.HaiKoiJawab:
This scheme was launched on 300ml bottle of Pepsi. This is U.T.C.
scheme meaning Under the Crown. In this scheme some number are given
under the bottle of Pepsi and company announcessomelucky number.Ifthis
number ismatched withthenumberunderthecrownnumberthentheownerof
thatbottlewinsdifferentcashprizes.
4.MirandaU.T.C:
This scheme was launched on 300ml bottle of Miranda. This is U.T.C.
Schememeaning under the crown.Inthisschemesomedollaramountisgiven
under the bottle and the consumer may collect these dollars and add it.
Companyprovideddifferentgiftpacksondifferentcrownnumber.

57

Their schemes are offered by thecompany tomaintain thecompetition atitis

offeredonthosedayswhenCocaColaoffersanysimilarscheme.

4PS

4 Ps is the main features that directlyaffectthe organization without 4

Ps organization is not able to produce the product. 4 Ps represent themain
features of product. Many possibilities can be collected into four groups of
VariablesknowasFourPsi.e.product,price,place,promotion.

Product:
Product means the good and service combination of the company
offeredto the target market.Company changesthesizes,variety, flavor brand
nameoftheproductafteroneortwoyear.

Price:
Price is the amountof moneywhichcustomershavetopaytoobtainthe
product calculates suggested retails prices that its dealers might charge for
sources.Butdealersrarelychargethefullstickerprice.

Place:
They are mostly available in al place but easily available in the Urban
MarketbutnotfrequentlyfoundinRuralMarket.

Promotion:

58

Promotion means activities that communicate the merit of the product

and persuade target customers to buy it.The measurement factor to promote
the Pepsi productistoincreasegoodtransportationinruralmarket.IfthePepsi
is available to capture the ruralmarketthenitis certain that it will occupyfirst
positionofsoftdrinksindustry.

59

TheCocaColaCompany
OneCocaColaPlaza
Atlanta,GA30313
Phone:4046762121
Fax:4045155997
WebSite:
http://www.cocacola.com/

DETAILS

IndexMembership:

Sector:
Industry:
Employees(lastreportedcount):

DowJonesComposite
DowIndustrials
S&P100
S&P500
S&P1500SuperComp
ConsumerGoods
BeveragesSoftDrinks
92,400

OFFICERS

Pay

Exercised

60

Mr.MuhtarKent
,
58ChiefExec.Officer,Pres,DirectorandMemberof
Exec.Committee
Mr.GaryP.Fayard
,

$5.60M

$0

$1.83M

$0

52ChiefAdmin.Officer,Exec.VP,PresofAfrica
GroupandChiefOperatingOfficerofAfricaGroup
Mr.JosOctavioReyes
,

$1.59M

$0

56PresofLatinAmericaandChiefOperatingOfficer
ofLatinAmerica
Mr.IrialFinan
,

$1.86M

$0

56ChiefFinancialOfficersandExec.VP
Mr.AlexanderB.CummingsJr.
,

$2.13M
$0
51Exec.VPandPresofBottlingInvestments&
SupplyChain
Dollaramountsareasof31Dec08andcompensationvaluesareforthelastfiscal
yearendingonthatdate."Pay"issalary,bonuses,etc."Exercised"isthevalueof
optionsexercisedduringthefiscalyear.

REUTERSABRIDGEDBUSINESSSUMMARY

The CocaCola Company manufactures, distributes, and markets

nonalcoholic beverage concentrates and syrups worldwide.Itprincipallyoffers
sparkling and still beverages. The companys sparkling beverages include
nonalcoholic readytodrinkbeverageswithcarbonation,suchasenergy drinks,
and carbonated waters and flavored waters. Its still beverages consist of
nonalcoholic beverages without carbonation, includingnoncarbonatedwaters,
flavored waters and enhanced waters, juices and juice drinks, teas, coffees,
andsportsdrinks.TheCocaColaCompanyalsooffersfountainsyrups,syrups,
andconcentrates,suchas flavoringingredients andsweeteners.Thecompany
markets its nonalcoholic beverages under the CocaCola, Diet Coke, Fanta,
and Sprite brand names. The CocaCola Company also owns mineral water

61

brandsKildevaeldand Kurvand in Denmark andsoftdrinkbrandHyvaaPaivaa

in Finland. It sells its finished beverage products primarily to distributors, and
beverage concentrates and syrups to bottling and canning operators,
distributors, fountain wholesalers, and fountain retailers. The company was
foundedin1886andisheadquarteredinAtlanta,Georgia.

COKEININDIA

CocaCola was the leading soft drink brand in India until 1977 when it
left rather than reveals its formula to the government and reduces its equity
stake as required under the Foreign Exchange Regulation Act (FERA) which
governed the operations of foreign companies in India. After a 16year
absence, CocaCola returned to India in 1993, cementing its presence witha
deal that gave CocaCola ownership of the nation's top softdrink brands and
bottling network. Cokes acquisition of local popular Indian brands including
Thums Up (the mosttrusted brand inIndia2 1), Limca, Maaza,Citraand Gold

62

Spotprovided notonlyphysicalmanufacturing,bottling,and distributionassets

but also strong consumer preference. This combination of local and global
brandsenabledCocaCola toexploit the benefits ofglobalbrandingandglobal
trends in tastes while also tapping into traditional domestic markets. Leading
Indian brands joined the Company's international family of brands, including
CocaCola, dietCoke,Sprite and Fanta, plustheSchweppesproductrange.In
2000,thecompanylaunchedtheKinleywaterbrandandin2001,Shockenergy
drinkandthepowderedconcentrateSunfillhitthemarket.

From 1993to 2003, CocaColainvestedmorethanUS$1billioninIndia,

makingitoneofthecountrystopinternationalinvestors.22by2003, CocaCola
India had won the prestigious Woodruf Cup from among 22 divisions of the
Company based onthreebroadparametersofvolume,profitability,andquality.
CocaColaIndia achieved 39% volume growth in 2002 while theindustrygrew
23% nationallyand theCompany reachedbreakevenprofitability intheregion
for the first time.2 3 Encouraged by its 2002 performance, CocaCola India
announced plans to double its capacity at an investment of $125 million (Rs.
750crore)betweenSeptember2002andMarch2003.

CocaCola India produced its beverages with 7,000 local employees at

its twentyseven whollyowned bottlingoperations supplemented by seventeen
franchiseeowned bottling operations and a network of twentynine
contractpackers to manufacture a range of products for the company. The
complete manufacturing process had a documented quality control and
assuranceprogramincludingover400testsperformedthroughouttheprocess.

63

The complexity of the consumer soft drink market demanded a

distribution process to support 700,000 retail outlets serviced by a fleet that
includes10tontrucks,openbaythreewheelers,andtrademarkedtricyclesand
pushcarts that were used to navigate the narrow alleyways of the cities.25 In
addition to its ownemployees,Cokeindirectly created employmentforanother
125,000Indiansthroughitsprocurement,supply,anddistributionnetworks.

Sanjiv Gupta, President and CEO of CocaCola India, joined Coke in

1997 as Vice President, Marketing and was instrumental to the companys
success in developing abrand relevant tothe Indianconsumerand in tapping
Indias vast rural market potential. Following his marketing responsibilities,
Gupta served as Head of Operations for Companyowned bottling operations
and then as Deputy President. Seen as the driving force behind recent
successful forays into packaged drinking water, powdered drinks, and
readytoserve teaandcoffee,Guptaandhismarketingprowesswerecriticalto
thecontinuedgrowthoftheCompany.

HISTORYOFCOKE

TheEarlyDays

CocaCola was created in 1886 by John Pemberton, a pharmacist in

Atlanta, Georgia, who sold thesyrupmixed withfountainwaterasapotion for

64

mental and physical disorders. The formula changed hands three moretimes
before Asa D. Candler added carbonation and by 2003, CocaCola was the
worlds largest manufacturer, marketer, and distributor of nonalcoholic
beverage concentrates and syrups, with more than 400 widely recognized
beverage brands in its portfolio. With the bubbles making the difference,
CocaColawas registered as atrademarkin1887andby1895,wasbeingsold
in everystateandterritoryintheUnitedStates.In1899,itfranchiseditsbottling
operations in the U.S., growing quickly to reach 370 franchisees by 1910.10
Headquartered in Atlanta with divisions and local operations in over 200
countries worldwide, CocaCola generated more than 70% of its income
outsidetheUnitedStatesby
2003.

Internationalexpansion
Cokes first international bottling plants opened in 1906 in Canada,
Cuba, and Panama.11 By the end of the 1920s CocaCola was bottled in
twentyseven countries throughoutthe world andavailable in fiftyone more.In
spite of this reach, volume was low, quality inconsistent, and effective
advertising a challenge with language, culture, and government regulation all
serving as barriers. FormerCEO Robert Woodruffsinsistence thatCocaCola
wouldntbufferthestigma of being an intrusiveAmericanproduct,andinstead
would use local bottles, caps, machinery,trucks,and personnelcontributedto
Cokes challenges as well with a lack of standard processes and training
degradingquality.

CocaCola continued working for over 80 years on Woodruffs goal: to

make Coke available wherever and whenever consumers wanted it,anarms

65

reach of desire. The Second World War proved tobe thestimulus CocaCola
needed to build effective capabilities around the world and achieve dominant
globalmarketshare.Woodruffspatrioticcommitmentthatevery maninuniform
gets abottleofCocaColaforfivecents,whereverheisandatwhatevercostto
our company was more than just great public relations. Asaresultof Cokes
status as a military supplier, CocaCola was exempt from sugar rationingand
also receivedgovernment subsidies to build bottlingplants around theworldto
serve.

TurnoftheCenturyGrowthImperative

The1990sbrought aslowdown insales growth fortheCarbonated Soft

Drink (CSD)industryin the UnitedStates,achieving only 0.2%growthby2000
(just under 10 billioncases) in contrast tothe57%annualgrowthexperienced
during the 1980s. While per capita consumption throughout the world was a
fraction of the United States, major beverage companies clearly had to look
elsewhere for the growth their shareholders demanded. The looming
opportunity for twentyfirst century was in theworldsdeveloping marketswith
theirrapidlygrowingmiddleclasspopulations.

TheWorldsMostPowerfulBrand

Inter brands GlobalBrand Scorecard for 2003rankedCocaColathe#1

Brand in the World and estimated its brand value at $70.45 billion. The
rankings methodology determined a brands valuation on the basis of how

66

muchitwaslikelytoearn inthefuture,distillingthepercentageofrevenuesthat
could becreditedtothebrand,andassessingthebrandsstrengthtodetermine
the risk of future earnings forecasts. Considerations included market
leadership, stability, and global reach, incorporating its ability to cross both
geographicalandculturalborders.

From the beginning, Coke understood the importance of branding and

the creationof adistinctpersonality.18Itscatchy,welllikedslogans19(itsthe
real thing (1942, 1969), things go better with Coke (1963), coke is its (1982),
cantbeat the Feeling(1987),anda1992returntocantbeattherealthing) 20
linked that personality to the core values of each generation and established
Coke as the authentic, relevant, and trustedrefreshment ofchoiceacross the
decadesandaroundtheglobe.

67

MarketingColainIndia

The postliberalization period in India saw the comeback of cola but

Pepsi had already beaten CocaCola to the punch, creatively entering the
market in the1980sin advanceof liberalization byway ofajointventure.As
earlyas1985,PepsitriedtogainentryintoIndiaandfinallysucceededwiththe
Pepsi Foods Limited Project in 1988, as a JV of PepsiCo, Punjab
governmentowned PunjabAgroIndustrial Corporation(PAIC),andVoltasIndia
Limited. Pepsi was marketed andsoldasLeharPepsiuntil1991whentheuse
of foreign brands was allowed under the new economic policy and Pepsi
ultimately bought out its partners, becoming a fullyowned subsidiary and
endingtheJVrelationshipin1994.

While the jointventure was onlymarginallysuccessful initsownright,it

allowedPepsitogainpreciousearlyexperiencewiththeIndianmarketandalso
served asanintroductionofthePepsibrandtotheIndianconsumersuchthatit
was wellpoised to reap the benefits when liberalization came. Though Coke
benefited from Pepsi creating demand and developing the market, Pepsis
headstart gave Coke a disadvantage in the mind of the consumer. Pepsis
appeal focused on youth and when Coke entered India in 1993 and
approached themarketselling anAmerican wayof life, it failed toresonate as
expected.

68

2001MarketingStrategy

CocaColaCEO Douglas Daft setthedirectionforthenextgenerationof

successfor hisglobalbrandwith aThink local,actlocalmantra.Recognizing
that a single global strategy or single global campaign wouldnt work, locally
relevant executions became an increasingly important element of supporting
Cokesglobalbrandstrategy.

In 2001, after almosta decadeof laggingrival Pepsiintheregion,Coke

India reexamined its approach in an attempt to gain leadership in the Indian
market and capitalize on significant growth potential, particularly in rural
markets. The foundation of the new strategy grounded brand positioning and
marketing communications in consumer insights, acknowledging that urban
versus rural India were two distinct markets on a variety of important
dimensions. The soft drink categorys role in peoples lives, the degree of
differentiation between consumer segments and their reasonsforentering the
category, and the degree to which brands in the category projected different
perceptions to consumers were among the many important differences
between how urban and rural consumers approached the market for
refreshment.

69


In rural markets, where both the soft drink category and individual
brandswereundeveloped,the task wasto broadenthebrandpositioningwhile
in urban markets,with highercategoryandbranddevelopment,thetaskwasto
narrowthebrandpositioning,focusingondifferentiationthroughofferingunique
and compelling value. This lens, informed by consumer insights, gave Coke
direction on the tradeoffbetween focus and breadth abrandneededinagiven
market and made clear that to succeed in either segment, unique marketing
strategieswererequiredinurbanversusruralIndia.

RuralSuccess
Comprising74%ofthecountry'spopulation,41%ofitsmiddleclass,and
58% of its disposable income, the rural market was an attractive target andit
deliveredresults. Cokeexperienced37%growthin2003inthissegmentversus
the24%growthseeninurbanareas.
Driven by the launch of the new Rs. 5 product, per capita consumption
doubled between 20012003. This market accounted for 80% of Indias new
Coke drinkers, 30% of 2002volume,and wasexpectedto account for50%of
thecompanyssalesin2003.

BrandLocalizationStrategy:TheTwoIndies

IndiaA:Lifehotoaisi
India A, the designation CocaCola gave to the market segment
including metropolitan areas andlarge towns,represented 4% ofthecountrys
population.33Thissegmentsoughtsocialbondingasaneedandrespondedto
70

inspirational messages, celebrating the benefits of their increasing social and

economic freedoms. Life ho toaisi,(life as it should be)was the successful
andrelevanttaglinefoundinCocaColasadvertisingtothisaudience.

IndiaB:ThandaMatlabCocaCola
CocaCola India believed that the first brand to offer communication
targeted to the smaller towns would own the rural market and went after that
objective with a comprehensive strategy. India B included small towns and
rural areas, comprising the other 96% of the nations population. This
segments primary need was outofhome thirstquenching and the soft drink
category was undifferentiated in the minds of rural consumers. Additionally,
with an average Coke costing Rs. 10andan average dayswagesaroundRs.
100,Cokewasperceivedasaluxurythatfewcouldafford.

In an effort to make the price point of Coke within reach of this

highpotential market, CocaCola launched the Accessibility Campaign,
introducing a new 200ml bottle,smaller than thetraditional 300mlbottlefound
in urban markets, and concurrently cutting the price in half, to Rs. 5. This
pricing strategy closed the gap between Coke and basic refreshments like
lemonade and tea,making soft drinkstruly accessiblefor thefirst time. At the
same time, Coke invested in distribution infrastructure to effectively serve a
disbursed population and doubled the number of retail outlets in rural areas
from 80,000 in 2001 to 160,000 in2003,increasingmarketpenetrationfrom13
to25%.

71

Cokes advertising and promotion strategy pulled the marketing plan

together using local language and idiomatic expressions. Thanda, meaning
cool/cold is also generic for cold beverages and gave Thanda Matlab
CocaCola delicious multiple meanings. Literally translated to Coke means
refreshment, the phrase directly addressed both the primary need of this
segment for cold refreshment while at the same time positioning Coke as a
Thandaor genericcold beveragejustliketea, lassi,or lemonade.Asaresult
of theThandacampaign,CocaCola wonAdvertiseroftheYearandCampaign
oftheYearin2003.

CORPORATESOCIALRESPONSIBILITY

Asoneofthelargestandmostglobalcompaniesintheworld,
CocaColatookseriouslyitsabilityandresponsibilitytopositivelyaffectthe
communitiesinwhichitoperated.Thecompanysmissionstatement,calledthe
CocaColaPromise,stated:TheCocaColaCompanyexiststobenefitand
refresheveryonewhoistouchedbyourbusiness.TheCompanyhasmade
effortstowardsgoodcitizenshipintheareasofcommunity,byimprovingthe
qualityoflifeinthecommunitiesinwhichtheyoperate,andtheenvironment,by
addressingwater,climatechangeandwastemanagementinitiatives.Their
72

activitiesalsoincludedTheCocaColaAfricaFoundationcreatedtocombatthe
spreadofHIV/AIDSthroughpartnershipwithgovernments,UNAIDS,andother
NGOs,andTheCocaColaFoundation,focusedonhighereducationasa
vehicletobuildstrongcommunitiesandenhanceindividualopportunity.
CocaColasfootprintinIndiawassignificantaswell.TheCompanyemployed
7000citizensandbelievedthatforeverydirectjob,3040morewerecreated
inthesupplychain.

Likeitsparent,CokeIndiasCorporateSocialResponsibility(CSR)
initiativeswerebothcommunityandenvironmentfocused.Prioritiesincluded
education,whereprimaryeducationprojectshadbeensetuptobenefitchildren
inslumsandvillages,waterconservation,wheretheCompanysupported
communitybasedrainwaterharvestingprojectstorestorewaterlevelsand
promoteconservationeducation,andhealth,whereCokeIndiapartneredwith
NGOsandgovernmentstoprovidemedicalaccesstopoorpeoplethrough
regularhealthcamps.Inadditiontooutreachefforts,thecompanycommitted
itselftoenvironmentalresponsibilitythroughitsownbusinessoperationsin
Indiaincluding.

Environmentalduediligencebeforeacquiringlandorstartingprojects.
Environmentalimpactassessmentbeforecommencingoperations.
Groundwaterandenvironmentalsurveysbeforeselectingsites.
Compliancewithallregulatoryenvironmentalrequirements.
BanonpurchasingCFCcontainingrefrigerationequipment.
Waste water treatment facilities with trained personnel at all
companyownedbottlingoperations.
Energyconservationprograms.

73

 50%watersavingsinlastsevenyearsofoperations

74

RESEARCHMETHODOLOGY
75

Scopeofthestudy:
Theresearchpertainstothestudyofconsumerchoiceforsoftdrinksat
Udaipurmarket.Thisstudyisattempttoanalyzethepresenttopbrands
preferredbycustomerforsoftdrinkinudaipurmarket,examinetheproduct
factorsthatinfluencethepurchasingdecisionsofbuyersandtoknowthe
relationbetweengender&preferenceforsoftdrinks&flavors.

Objectivesofthestudy
Aseveryresearchhassomeobjective/stoachieveorproblem/stosolve.
Becauseeveryresearchisconductedinordertoachievesomeobjectives.
Objectivesofthisresearchstudyare
1. Tostudythebrandpreferencefordifferentkindofsoftdrinks.
2. Todeterminethefactorsthatinfluencestheconsumerchoiceofa
particularsoftdrink.
3. Tostudytheconsumptionpattern&behavioralaspectsofconsumes
suchasfrequencyofconsumption,quantityofconsumption,placeof
consumptionetc.
4. Tostudythesalespromotiontool/techniquessourcesofmediathat
attractsconsumersmost.

76

METHODOLOGY
Datacollection
Thetypeofdatacollectedfortheresearchwasprimaryaswellassecondary.

Primarydatawascollectedthrough:
Directcontactwiththecustomers.
Questionnairesfilledbythecustomers.

Secondarydatawascollectedthrough:
Variousjournals
Internetsurveyreports

77


FieldworkandSample
Whiledevelopingandutilizingasamplefortheresearchpurpose,thefollowing
stepswereused:
Definingtheuniverse
Developingthesampleframe
Selectingasamplingframe
Determiningthesamplesize
Selectingtheresearchinstrument

Universe
Theuniverseorpopulationisthespecificgroupofpeopleisthespecificgroup
ofpeoplefromconditions,activities,etc.whichformthepivotalpointofthe
project.
Fordevelopingandusingsample,itbecomestheprimarydutyofresearcherto
definethepopulationfromwhichshe\heintendstodrawthesample.
Theuniverseofmyprojectisabout130consumersofUdaipurcity,which
formedthepivotalpointofmyproject.

Samplingframe
Asamplingframemaybedefinedasthelistingofthegeneralcomponentsof
theindividualunitthatcomprisethedefinedpopulation.

78

Incaseofmyproject,samplingframeisvariousconsumersframeisvarious
consumersincludinglowermiddleclass,middleclassandrichclass.

Samplingprocedure
Afterdefiningthesamplingframe,otherimportantpointtobediscussedis
whichsamplingproceduretobeadopted.
Asimplerandomsamplingtechniquewillbeusedtounderstandcustomers
outlooktowardsthesoftdrinks.

Samplesize
130consumersofUdaipurcityanattemptwillbemadetomakethesample
representativeofthewholepopulationunderstudy.

Researchinstrument:
QuestionnaireswereusedtofindoutFactorsinfluencingconsumerchoiceof
softdrinksinUdaipurcitywiththehelpofthequestionnaire,filledby130
consumers,theresultwasanalyzed.
Theprocesswasfollowedtoprepareaquestionnaire:
1. Specifytheinformationneeded.
2. Determinedthetypesofquestionstobeasked.
3. Decidingthenumberandsequenceofquestionnaire.

79

4. Preparingpreliminarydraftofquestionnaire.
5. Revisedandprotestedthequestionnaire.

Limitations
Althoughtheresearchwasconductedinawaytoensureaccurateresultsbut
certainerrorsmighthaveoccurredduetosomeunavoidablereasons.Someof
thelimitationsoftheprojectare:

Datacollection
1. Nonresponsebysomeoftherespondents.
2. Sincethepopulationisnothomogeneous,somebiasnessmighthave
crepedin.
3. Thesampleofconvenience,thusitisnotthetruerepresentativeofthe
complete.

MEASUREMENTERROR
Therewascertaindegreeofmisinterpretationbytherespondentsaboutthe
pointsraisedintheinterview.

80

81

No.ofRespondents

In%

Males

70

54%

Females

60

46%

Total

130

100%

DataAnalysisandInterpretation

1. Genderwiseprofile:

Graph1.1

82

Interpretation:
Astheabovegraphshowsthattherewereequalmaleandfemalerespondents,
maleswerelittlehigherthanfemalesbyonly4%.

2.AgewiseProfile
:

1020
years

In%

2130
years

In%

3140
years

In%

More
than40
years

In%

Total

Male

12

17%

28

40%

21

30%

13%

70

14

23%

20

33%

16

27%

10

17%

60

26

20%

48

37%

37

28%

19

15%

130

Femal
e
Total

83

Graph2.1

Interpretation:
Astheabovegraphclearlydepictsthatmostofmalesrespondents
[40%]wereyouthasfallintothecategoryof2130years.

Graph2.2

84

Interpretation:
Astheabovegraphclearlydepictsthatmostoffemalesrespondents
[33%]werealsoyouthastheyfallintothecategoryof2130years.

3.OccupationwiseProfile:
85

Service

In%

Business

In%

Professionals

In%

Other[Students
housewives
etc.]

In%

Male

28

40%

14

20%

13.%

19

27%

Female

10

17%

0%

13.%

42

70%

Total

38

28.%

14

10%

17

13.%

61

47%

Graph3.1

Interpretation:
As the above graph clearly shows that there were most of males
respondents[40%]wereservicecategory

86

Graph3.2

Interpretation:
As the above graph clearly shows that there were most of females
respondents[43%]werehousewivescategory

87

4.Incomegroupwiseprofile:

Male
Femal
e
Total

Lessthan

In%

10,000

In%

15,000

In%

Morethan

Rs.10,000

15,000

20,000

20,000

37

53%

13%

13%

15

42

70%

7%

13%

79

61%

13

10%

17

13%

21

In
%

Total

21
%
10
%
16
%

70
60
130

Graph4.1

88

Interpretation:
As the above graph clearly shows that there were most of males
respondents[53%]wereincomegroupofRs.LessthanRs.10,000.

Graph4.2

89

Interpretation:
As the above graph clearly shows that there were most of females
respondents[70%]wereincomegroupofRs.LessthanRs.10,000.

5.Rankingofdifferentflavorsofsoftdrinksaccordingto
choice
90

ofconsumers:

Graph5.1

Interpretation:
TheabovegraphshowsthatMangoFlavor ispreferredmostbythemale
customersthannextisCola&Lemonisleastpreferredbythem.
The above graph shows that Orange Flavor is preferred most by the
femalecustomersthannextisMango&Colaisleastpreferredbythem.

6.Brandrecallofdifferentsoftdrinkbrands:

91

Brand

Col

Recall

Pepsi

Thumsup

Fanta Slice Mirinda Limca Fruity Maza

60%

60%

65%

60%

40%

45%

55%

60%

40%

40%

35%

40%

60%

55%

45%

40%

Topof
themind 70%
recall
Unaided
recall

30%

Graph6.1

Interpretation:

Astheabove graph showsthat comparatively coke isatthe top ofthe

mind recall by most of customers [70%] and next is Pepsi. In Unaided brand
recallMazaandFruity.

92


7.

Rankingoffactorsthatinfluencetheconsumerchoiceof
softdrink:
Factors

Male

Female

Taste

Price

Health

Weather

SocialGathering

Packaging

Ads&offers

Status

Graph7.1

93

Interpretation:
Tasterankedasfirstfactoraffectingconsumerchoicebybothmale&
femaleconsumers.Priceisrankedsecondbymaleconsumerswhereashealth
factorisrankedbyfemaleconsumerswhichaffecttheirchoiceofsoftdrinks.

8.Consumptionperweekbyconsumers:

Less
than5
times

Male

47

Femal
e
total

44
91

In%
67
%
74
%
70
%

610
times

In%

More
than10
times

In%

Undecided

In%

Total

12

17%

3%

13%

70

13%

0%

13%

60

20

15%

2%

17

13%

130

Graph8.1

94

Graph8.2

95

Interpretation:
From theabove graphwecansaythatmostoftheconsumers[70%]are
not having any regular schedule of consumingsoftdrinks.Bothmales[13%]&
females [13%] consumer said that it is undecided and only 1.54% consumer
saidthattheydrinkmorethan10timesinweeksoitisnotdefinite.

96

9.Quantityofconsumptionatonce:

200ml.

In%

300ml.

In%

500ml.

In%

Morethan
500ml.

In%

Total

Male

23

33%

28

40%

19

27%

0%

70

24

40%

24

40%

12

20%

0%

60

47

37%

52

40%

31

23%

0%

130

Femal
e
Total

Graph9.1

97

Graph9.2

Interpretation:
From thegraphs we cansaythat [Bothmales &females] majority ofthe
consumers [40%] prefer to drink these softdrinksin the quantity of300 ml.at
once & than nextis 200 ml. with[37%]but there is big differencein consumer
responsefortherestsoftheoptions.
98

10.DrinkingPattern:

Withgroup

In%

Alone

In%

Total

Male

58

82.86%

12

17.14%

70

Female

54

90%

10%

60

Total

112

87.69%

18

12.31%

130

Graph10.1

Graph10.2
99

Graph10.3

Interpretation:

100

From the above it is clearly visible that mostly customers [87.69%]

enjoydrinkingthesesoftdrinkswhentheyarewithgroup.

11.Areaofconsumption:
Outside

Social

In

B/C

Gathering

parties

17%

7%

13%

18

30%

7%

0%

30

23%

7%

7%

Home

In%

Male

14

20%

30

43%

12

Female

20

33%

18

30%

Total

34

26%

48

37%

location

In%

Cinema

Halls

In%

In%

Graph11.1

101

Graph11.1

Graph11.3

102

Interpretation:
Astheaboutgraphsshowthatmostly[37%]customerspreferdrinkingat
outsidelocation&athome/officeandcinemahalls.Thismeanscustomerdrink
thesedrinkwhenevertheygoforoutinglocations.

103

12.Consumerchoicewhenmultiplechoicesaregivenwithoutprice.

Male
Femal
e
Total

Soups

In%

Hot
drinks

In%

Soft
Drinks

In%

Fruit
juices

In%

Total

14

20%

13%

28

40%

19

27%

70

16

27%

10

17%

20

33%

14

23%

60

30

23%

19

15%

48

37%

33

25%

130

Graph12.1

Graph12.2

104

Graph12.3

Interpretation:
From theabovegraphitisseenthatwhenmultiplechoicearegiven
to customers withoutanychargeforthati.e.when pricefactorisexcluded,then

105

more than 37% customers prefer to drink soft drinks and next is Fruit juices,
soups,tea/coffeerespectively.

13.SourcesofInformation:

News
Paper

Male
Femal
e
Total

In%

T.V.
ads

12

17%

6
18

In%

By
retailer
s

In%

Total

12

17%

7%

70

70%

10

17%

3%

60

64%

22

17%

5%

130

In%

Hoardin
g

42

60%

10%

42

14%

84

Graph13.1

106

Graph13.2

Graph13.3

107

Interpretation:
From theabove graph it isclearlyvisiblethatmainsourceofinformation
tocustomersregardingsoftdrinksisT.V.adsaccordingto64%customers.

108

14.

InfluenceofBrandAmbassadorConsumerchoiceofSoftdrinks.

Male
Female
Total

Yes
49
24
73

In%
70%
40%

No
21
36
57

In%
30%
60%

Total
70
60
130

Graph14.1

Interpretation:
From theabovegraphclearlydepictsthathereisabigdifferenceamong
the response of male &femalecustomer, asin theopinionofmostofthemale
customers [70%] Brand ambassador influences their choice whereas in the
opinion of female majority [60%] said that there is no impact of any Brand
Ambassadorupontheirchoice.

109

15.PreferredCelebritiesasBrandAmbassadoraccordingto
Consumers:

Bollywood
Celebritie In%
s

Male

30

Femal
e

16

Total

46

43
%
27
%
35
%

Sports
Celebritie
s

12
28
40

In%

17
%
46
%
31
%

Bot
h

23
12
35

In%

33
%
20
%
27
%

Other
celebritie
s

5
4
9

In
%

7
%
7
%
7
%

Tota
l
70
60
130

Graph15.1

Graph15.2

110

Graph15.3

Interpretation:
As the graph depicts that highest 35% people said that bollywood
celebrities should be the brand ambassador ofsoft drinks andthan27%were
with both but here is big difference among the choice of male & female
customers.

111

16.Mostpreferredsalespromotiontools/techniques:

Male
Female
Total

Buy2get
1free
12
14
26

Scratch/
Magic
cards
7
8
15

Price
discounts
30
22
52

Extra
Quantity
offer
14
10
24

Somethin
gfree

Total

7
6
13

70
60
130

Graph16.1

112

Graph16.2

113

Graph16.3

Interpretation:
Aspertheanalysisofabovegraphsthatofthecustomers[40%]prefer
pricediscountsthenthereisbuy2get1freeoffer.

114

17.BrandLoyaltyamongConsumersofSoftdrinks:

Brandloyal

In%

Male
Female
Total

28
18
46

40%
30%
35%

NotBrand
loyal
42
42
84

In%

Total

60%
70%
65%

70
60
130

Graph17.1

Interpretation:
Astheabovegraphsshowthereare35%customerswhobrandloyalbut
malesarehavingmuchloyaltyincomparisontofemalescustomers.

115

FactFindings

1. No.ofRespondents:
There were total 130 respondents outof which 70were males &
60werefemales.

2. Agegroup:
20%respondentsfallintotheagegroupof1020years.
37%respondentsfallintotheagegroupof2130years.
28%respondentsfallintotheagegroupof3140years.
15%respondentsfallintotheagegroupofmorethan40years.

3. Occupationofrespondents:
28%oftherespondentswereService.
10%oftherespondentswereBusiness
13%oftherespondentswereProfessionals
47%oftherespondentswereStudents&housewivesetc.

4. Incomegroupofrespondents:
61% of the respondents fall into the income group of less than
Rs.10,000.
10% of the respondents fall into the income group of
10,00015,000.
116

 13% of the respondents fall into the income group of

15,00020,000.
16% of the respondents fall into the income group of more than
Rs.20,000.

5. Rankingoffactorsthatinfluencetheconsumerchoiceofsoftdrink:
Taste ranked as first factor affecting consumer choice by both
male&femaleconsumers.
Price is ranked secondby maleconsumerswhereashealthfactor
is ranked by female consumers which affect their choice of soft
drinks.

6. Ranking of different flavors of soft drinks according to choice of

consumers:
MangoFlavor is preferredmostby themale customers than next
isCola&Lemonisleastpreferredbythem.
Orange Flavor is preferred most by the female customers than
nextisMango&Colaisleastpreferredbythem.

7. Brandrecallofdifferentsoftdrinkbrands:
Comparatively coke is at the top of the mind recall by most of
customers [70%] and next is Pepsi. In Unaided brand recall
MaazaandFruity.

117

8. Consumptionperweekbyconsumers:
70% of the consumers said that their consumption per week of
softdrinkislessthan5times.
15% of the consumers said that their consumption per week of
softdrinkis610times.
2% of theconsumers saidthattheirconsumptionperweekofsoft
drinkismorethan10times.
13% of the consumers said that their consumption per week of
softdrinkisUndecided.

9. Quantityofconsumptionatonce:
37%oftheconsumersliketodrink200ml.ofsoftdrinksatonce.
40%oftheconsumersliketodrink300ml.ofsoftdrinksatonce.
23%oftheconsumersliketodrink500ml.ofsoftdrinksatonce.
Zero of the consumers like to drink more than 500 ml. of soft
drinksatonce.

10. DrinkingPattern:
87.69%oftheconsumersenjoydrinkingsoftdrinksingroup.
12.31%oftheconsumersenjoydrinkingsoftdrinksalone.

11. Areaofconsumption:
26%mostlyconsumethesedrinksathome/offices.
37%mostlyconsumethesedrinksatoutsidelocation.
23%mostlyconsumethesedrinksatcinemahalls.
7%mostlyconsumethesedrinksatsocialgatherings.
7%mostlyconsumethesedrinksatbusiness/corporateparties.

118

12. Consumerchoicewhenmultiplechoicesaregivenwithoutprice.
23% customers prefer to drink soups when price factor is
excluded.
15% customers prefer to drink hot drinks when price factor is
excluded.
37% customers prefer to drink soft drinks when price factor is
excluded.
25%customersprefertodrinkFruitjuiceswhenpricefactoris
excluded.

13. Sourceofinformation:
14% of the consumers said that they get information regarding
differentbrandsofsoftdrinksthroughNewspaperAds.
64% of the consumers said that they get information regarding
differentbrandsofsoftdrinksthroughT.V.Ads.
17% of the consumers said that they get information regarding
differentbrandsofsoftdrinksthroughhoardings.
5% of the consumers said that they get information regarding
differentbrandsofsoftdrinksthroughbyretailers.

14. InfluenceofBrandAmbassadorConsumerchoiceofSoftdrinks.
70% of males consumers said that there choice isinfluencedby
brandambassadors.

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 Whereas 60% of thefemalesconsumerssaidthat therechoiceis

notinfluencedbyanybrandambassadors.

15. Mostpreferredsalespromotiontools/techniques:
20%oftheconsumerslikeBuy2get1free.
12%oftheconsumerslikeScratch/Magiccards.
40%oftheconsumerlikePricediscounts.
18%oftheconsumerlikeExtraQuantityoffer.
10%oftheconsumerslikesomethingfree.

16. BrandLoyaltyamongConsumersofSoftdrinks:
40%maleconsumerswerebrandloyaland:
Only30%femaleconsumerswerebrandloyalforsoftdrink.

Conclusion

Throughthisresearchstudyweconcludethat
There many flavors but Mango flavor is liked most by the
consumer.Cola& mango are alsopopular among male&female
consumerrespectively.
Generallypeoplearenothavinganyregulartimingordrinkingsoft
drinkbutwecanassumethatonanaverageeverycustomerdrink
thesedrinkslessthan5timesinaweek.
Generally people prefer to drink 300 ml. quantity of soft drink at
once.

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 Mostofconsumersdrinkssuchsoftdrinksingroup.
Generally peopledrinkthesedrinksatoutsidelocationswhenever
theygoforouting&cinemahalls.
If price factor is not taken into consideration & multiple choices
aregiventoconsumerthentheyprefersoftdrinkmost.
The most popular source of information regarding soft drink
brandsisT.V.
Brand ambassador has the influence on choice of most of the
male consumer. But there is comparatively less influence on
femaleconsumer.
According to most of the male consumers bollywood celebrities
should be the brand ambassador whereasaccordingtothemost
of female consumers sports celebrities should be the brand
ambassadorforendorsingsoftdrinks.
The three most preferred sales promotion techniques are price
discount, but to get one free & something free with product
respectively.
Half of the male consumers are brand loyal whereas female
consumersarecomparativelylesswhothebrandloyalis.
The most influencing factor is price. According male consumers
price is also having more influence but according to females
healthfactoris much moreinfluencing than price as they maybe
veryhealthconscious.

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Suggestions

Promotionofmangoflavor:
Companies should focus moreonthepromotionofmangoflavorsofsoft
drinks because comparatively to cola drinks mango flavored drinksare
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verylessadvertised &promotedbysoftdrinkbrandswhereasaccording
toourresultcolaflavorismorepreferredbymostoftheconsumers.

Maintainingtaste&keeplaunchinginnovativeflavors:
Companies should maintainthetaste ofits flavored drinks should keep
improving thetaste&qualityofitsdrinks,companiesmayalsolaunched
some innovative mixed flavors of drinks where two flavors in onedrink
can be provide like orangepineapple etc. it willgive adifferenttaste of
customers.

Reductioninprice:
Price is also major factor of consumers choice of soft drinks. So
companies should try to decrease its price by decreasing its
extravagant expenditure in advertisement to trap the market of those
customers whose choice is very much affected with the price of soft
drinks.

Dietdrinks:
Health is also a major factor influencing consumer choices of many
consumers. So fruit juice are giving tough competition to soft drinks.
Companies should advertised its product in a manner in which its
reflects that consuming their drinks will not harm any body. As coke &
Pepsi have already lunched its drinks for the segment which is very
much health conscious i.e. Diet Coke & Diet Pepsi respectively which
are fat free. But companies should launch diet drinks in other flavors
also. Especially in mango flavor as it is preferred by most of the
consumers. Companies should try to win the trust of consumers that

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these drinks are not having pesticides contents more than limits by
sponsoringsomerationalappealbasedadvertisement.

Quantitydiscounts:
Companiesshouldtrytoincreasedthesalesof itsdrinksforthepurpose
of increasing its offering in parties. As in parties consumers mostly
prefer soft drinks even after having multiple choices, companies should
provide quantity discount as in parties more quantity is purchased at
once.

Humorous,creative&sensibleads:
As companies are already promoting their brands through T.V. ads but
companies should take very much care ofthetargetsegment &should
ensure that no ad should hurt the person directly or indirectly. Now a
days ad withhumorousappealsarelike byviewers very muchsothere
shouldbehumorouscreativeadsonT.V.

Selectionofbrandambassador:
Companies should get the endorsement from both Bollywood &Sports
celebrities as most as the people like those ads where both of these
celebritiesendorsetheproducttogether.

Salespromotion:
For sales promotion companies should give the price discount as it is
preferred by most of the customers. In of seasons companies already
provide butifinthesummercompaniesshouldpricediscountthenitcan
be boost up there sales both in Rupees & volume. Companies should

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bye to get one free schemes also some complementary product also
may be given with big bottle i.e. like two ltr. Bottle of soft drinks
companiesmaygivewafers&snakesetc.

Brandloyalty:
As there were not more customers whoarebrandloyal& easily switch
on to other brands. So companies should strengthen its distribution
network &ensuretheproper supply & arabilityof theredrinkstoprevent
people switching on to other brands, companies should alsoorganized
activities and shoulddoprograms,seminarsforsocial &moralcausesto
builditsbrandimage&brandloyaltyamongstthecustomers.

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SWOTANALYSISOFORGANISATION

Strengths:

ThosearelargeOrganization
CapturingaBroadMarket
ItisMultinationalCompany
ProperUtilizationofManPower
ProductarehighlydemandedinMarket

Weaknesses
:

Serviceisnotuptothemark
Unabletopenetratealargeno.Ofruralareas
Unabletobreakupthemonopolyofcompetition
Reducingthebrandloyaltyoftheconsumer

Opportunities
:

Largenumberofconsumer
LargeMarketsegment
Byremovingweaknessescompanycouldbeultimateleader

Threats:

ExistenceofLocalSoftDrink
BoycottofsoftdrinksduetoSwedishiMovement
DifferentoffersandSchemesprovidedbytheothersoftdrinkcompanies

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Annexure
Questionnaireforthestudyoffactorsaffectingconsumerchoiceofsoftdrinks

Name
Gender:
[]Male
[]Female
Agegroup: []1020years
[]2130years
[]3140years
[]Morethan40years
Occupation: []Service
[]Business
[]Professional
[]Student
[]Housewife
[]Others________
Incomegroup(p.m.)[]LessthanRs.10,000
[]10,00015,000
[]15,00020,000
[]MorethanRs.20,000

1. Pleaserankthefollowingflavorsofsoftdrinksthatyoulikemost.

Cola_______
Orange________

Mango_____
Lemon________

2. Pleasenamethebrandsofsoftdrinks,whichyouremember.

_________________________________________________

3. Pleasenamethebrand/sofsoftdrinksthatyoulikemostforfollowingflavors.

Cola_______
Orange________

Mango_____
Lemon________

4. Pleasenamethefollowingthatinfluenceyourdecisionwhenyoupurchasea
softdrink?(On18scale,where1ishighest&8islowestrank)
Taste________
Aftereffects/Health_________
Price________
Occasion/SocialGathering_______
Packaging______
Advertisement&offers_________
Weather/Heat_____
Status__________

5. Howmanytimesyoudrinkthesebeveragesinaweek?
[]Lessthan5times
[]610times
[]morethan10times
[]Undecided

6. Howmuchquantityofthesedobeveragesdoyouconsumeatonce?
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[]200ml.
[]500ml.

[]300ml
[]Morethan500ml..

7. Youenjoydrinkingthesedrinks?
[]Withgroup
[]Alone

8. Mostlywheredoyouconsumesuchdrinks?
[]Athome/office
[]Atoutsidelocations
[]Atcinemahalls
[]Atsocialgathering
[]Atcorporate/businessparties[]others_____

9. Inaparty,iffollowingdrinksareofferedtoyouthenwhomdrinkyouwould
liketotake?
[]Soups
[]Hotdrinks/coffee/Tea
[]Cold/Softdrinks
[]Fruitjuices

10. Howdoyougetinformationregardingthedifferentbrand&flavorsofthese
beveragesavailableinthemarket?
[]Newspapersads.
[]T.V.ads.
[]Hoardings&Banners []Byretailers
[]Other________

11. Doseanybrandambassadorofthesedrinksinfluenceyourchoice?
[]Yes
[]No

12. Pleasenameanybrand&itsbrandambassador.
Brandname_____________Brandambassador____________

13. Accordingtoyou,whoshouldbethebrandambassadorforsoftdrink?
[]Bollywoodcelebrities
[]Sportscelebrities
[]Both
[]Othercelebrities_______

14. Whichofthefollowingsalespromotiontools/techniquesdoyoulikemostfor
softdrink?
[]Buytwoget1free
[]Scratch/Magiccard
[]Pricediscount
[]Extraquantityoffer
[]Somethingfree
[]Others__________

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15. Doyoueasilyswitchontootherbrandwhenyoudonotgetyourfavorite&
desiredbrand/sforthesedrinks?
[]Yes
[]No

Thanksverymuchforyourkindsupport&cooperation.

WithBestRegards
DeepakChechani

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Bibliography

Websites:
I. www.google.co.in
II. www.pepsico.com
III. www.cocacola.com

Books:
I. C.R.Kothari

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