INTRODUCTION

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 meantime, 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 competitor at that time were Pepsi and
Parle. Parle’s best known brands includes Thump, 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.

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.

SOFT DRINK INDUSTRY: AN OVERVIEW

It all began in 1886, when a tree legged brass kettle in Hohn Styth pemberton’s backyard in
Atlanta was brewing the first P of marketing legend. Unaware the pharmacist has given birth
to a caramel-coloured syrup, which is now the chief ingredient of the world’s favourite drink.
The syrup combined with carbonated the soft drink market. It is estimated that this drink is
served more than one thousand million times in a day.

Equally oblivious to the historic value of his actions was Frank Ix. Robinson, his partner and
book keeper. Pemberton & Robinson laid the first foundation of this beverage when an
average nine drinks per day to begin with, upping volumes as sales grew.

In 1894, this beverage got into bottle, courtesy a candy merchant from Mississippi. By the
1950’s Colas were a daily consumption item, stored in house hold fridges. Soon were born
other non- Cola variants of this product like orange & Lemon.

Now, the soft drink industry has been dominated by three major player – (1) The New
York based Pepsi co. Inc. (2) The Atlanta based Coca Cola co. (3) The United Kingdom
based Cadbury Schweppes.

Throughout the globe these major players have been battling it. Out for a bigger chunk of the
ever-growing cold drink market. Now this battle has begun in India too.
India is now the part of cold drink war. Gone are days of Ramesh Chauhan, India’s one-time
Cola king and his bouts of pistol shooting. Expect now to hear the boon of cannons when the
Coca Cola & Pepsi co. battle it out for, as the Jordon goes a bigger share of throat. By buying
over local competition, the two American Cola giants have cleared up the arena and are
packing all their power behind building the Indian franchisee of their globe girdling brands.
The huge amount invested in fracture has never been seen before. Both players seen an
enormous potential in his country where swigging a carbonated beverage is still considered a
treat, virtually a luxury. Consequently, by world standards India’s per capita consumption of
cold drinks as going by survey results is rock bottom, less than over Neighbours Pakistan &
Bangladesh, where it is four times as much.

Behind the hype, in an effort invisible to consumer Pepsi pumps in Rs 3000 crores (1994) to
add muscle to its infrastructure in bottling and distribution. This is apart from money that
company’s franchised bottles spend in upgrading their plants all this has contributed to
substantial gains in the market. In Colas, Pepsi is already market leader and in certain cities
like Banaras, Pepsi outlets are on one side & all the other
Colas put together on the other. While Coke executive scruff at Pepsi’s claims as well as
targets, industry observers are of the view that Pepsi has definitely stolen a lot from its
competitor Coke.

Apart from numbers, Pepsi has made qualitative gains. The foremost is its image. This image
turnaround is no small achievements, considering that since it was established in 1989, taking
the hardship route prior to liberalization and weighed down by export commitments.

Now, at present as there are three major players Coke, Pepsi and Cadbury and there is stiff
competition between first two, both Pepsi and Coke have started, sponsoring local events and
staging frequent consumer promotion campaigns. As the mega event of this century has
started, and the marketers are using this event – world cup football, cricket events and many
more other events.

Like Pepsi, Coke is picking up equity in its bottles to guarantee their financial support; one
side Coke is trying to increase its popularity through.
Eat Food, enjoy Food. Drink only Coca Cola. Eat cricket, sleep cricket. Drink only Coca
Cola. Eat movies, sleep movies. Drink only Coca Cola.

But no doubt’ that UK based Cadbury is also recognising its presence. So, there is a real
crush in the soft drink market. With launch of the carbonated organize drink Crush, few year
ago in Banaras., the first in a series of a launches, Cadbury Schweppes beverage India
(CSBI) HAS PLANNED: - The world third largest soft drink marketers all over the
country’s o wholly owned subsidiary of the London based $ 6.52billion. Cadbury Schweppes
is hoping that crush is going well and well not suffer the same fate as the Rs. 175 crore
Cadbury India’s apple drink Paella. CSBI is now with orange (crush), and Schweppes soda in
the market.

As orange drinks are the smallest of non-Cola categories that is Rs. 1100 crore market with
10% market share and Cola heaving 50% is followed by Lemon segment with 25%.
The success of soft drink industry depends upon 4 major factors viz.

 Availability  Visibility  Cooling  Range AVAILABILITY

Availability means the presence of a particular brand at any outlet. If a product is now
available at any outlet and the competitor brand is available, the consumer will go for the
outlet because generally the consumption of any soft drink is an impulse decision and not
predetermined one.

VISIBILITY
Visibility is the presence felt, if any outlet has a particular brand of soft drink say- Pepsi
Cola and this brand is not displayed in the outlet, then its availability is of no use. The soft
drink must be shown off properly and attractively so as to catch the attention of the
consumer immediately Pepsi achieves visibility by providing glow signboards, hoarding,
calendars etc. to the outlets. It also includes various stands to display Pepsi and other
flavours of the company.

COOLING
As the soft drinks are consumed chilled so cooling them plays a vital role in boosting up the
sales. The brand, which is available chilled, gets more sale than the one which is not, even
if it is more preferred one.
RANGE
This is the last but not the least factor, which affects the sale of the products of a particular
company.
COMPANY PROFILE
 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. As part of the merger, the senior management team of Johnston
assumed responsibility for managing the Company, and began a dramatic, successful
restructuring in 1992.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. 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.
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. We must get ready for
tomorrow today. That's what our 2020 Vision is all about. It creates a long-term destination
for our business and provides us with a "Road map" for winning together with our bottling
partners.

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

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

Our Winning Culture

Our Winning Culture defines the attitudes and behaviours that will be required of us to make
our 2020 Vision a reality.

Live Our Values

Our values serve as a compass for our actions and describe how we behave in the world.

Leadership: The courage to shape a better future

Collaboration: Leverage collective genius

Integrity: Be real

Accountability: If it is to be, it’s up to me

Passion: Committed in heart and mind

Diversity: As inclusive as our brands

Quality: What we do, we do well

Focus on the Market

Focus on needs of our consumers, customers and franchise partners

Get out into the market and listen, observe and learn

Possess a world view

Focus on execution in the marketplace every day

Be insatiably curious

Work Smart

Act with urgency

Remain responsive to change

 Have the courage to change course when needed
Remain constructively discontent

Work efficiently

Act Like Owners

Be accountable for our actions and in actions

Steward system assets and focus on building value

Reward our people for taking risks and finding better ways to solve problems

Learn from our outcomes -- what worked and what didn’t

Be the Brand

Inspire creativity, passion, optimism and fun

COCA-COLA WORLDWIDE (BACKGROUND)

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

The Coca-Cola company stock, with ticker symbol KO 2 is listed and traded in the
United States on the New York stock exchange, common stock also is traded on the on the
Boston, Chicago, Pacific an Philadelphia Exchanges Outside the United States, Company
common stock is listed and traded on common and swiss exchanges.

The Company operating management structure consists of five geographic groups:

1. The North America Group Comprises the United States and Canada.

2. The Latin American group includes the Company’s operations across Central and South
American from Mexico to Argentina.

3. The Company’s most populated operating group, the Middle and far east group, ranges
from the Middle East to India, China, Japan and Australia.
4. The greater Europe group stretches from Greenland to Russia’s far east, including some
of the most established markets in Western Europe and the rapidly growing nations of
Eastern and Central Europe.

5. The Africa group includes the Company’s business in 50 countries in Sub Sahara Africa.

The Coca-Cola Company continues to activate sponsorships throughout the world

including associations with World Cup Soccer. The National Football leagues. NASCAR, the
Tour de France, the Rugby World Cup, COPA America and numerous local sports teams.
The Coca-Cola Company has sponsored the Olympic games since 1928.
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 Mangala 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 tycoon 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, Parley’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 permineralization period and
hence implied a very high duty on imported items.

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 crores 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,
Genkan, 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 Thumps Up, Lima, Citra and others were GOLD SPOT and Masa.

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 Thumps 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. Multinational for ($
40 million) and is presently a major Coke bottler. Delhi - based Parle Chairman gave up his
ownership of his soft drinks brand (Thumps 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.

MARKET SHARES IN % FIGURES (2012-13)

Pure Drinks
10%
Others
Pepsi 4%
26%

Coke + Parle
60%

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

 Product

 Customer service

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

Quality Product

Value Customer Service

Price

ASSUMPTIONS

Improvements in perceived quality in turn lead to high market share and market leaders
spend to build their franchise.
 Companies spend a larger share of their sales income on advertising and tend to be much
more profitable than companies that spend less.

Brands that spend a much larger than average share of their sales on advertising earn an
average return on investment of 32% while brands that advertise much less than their
competitors average only 17%.

Increases in advertising expenditure are closely correlated with gains in master share
(even after adjusting for the effects of other factors).

Sales promotions like price-off, etc. has no significant correlation with market share
changes (only its effect on consumer behaviour is observed).

To some extent companies with high, quality simply have more to say in their advertising,
so they are likely to spend more money saying it.

Market-perceived quality is a more important measure of competitiveness than market

share for 2 bey reasons:

1. Most market leaders had to develop quality leadership to achieve their large share
position superior quality is the base upon which market leadership is usually built.

2. Generally according to data, business that begin with a large share of the market tend
to lose share. By contrast, those that begin with superior quality tend to hold or gain
share.

Therefore, market share is often a lagging indicator of a company's performance; quality is

the clear key to success.

Pepsi is a perfect example, since it came to India in 1989 with a market share of 0% it
now in 1998 enjoys a share of 45.2% in the market.

But in case of soft drink, the 2 Cola giants Pepsi and Coke cannot to a great extent
differentiate on their brands (but of course in terms of taste and fizz), a lot has to be spent on’
ads, packaging and promotion, i.e., making it more easily available.

However, recently in the world's famous business magazine, fortune, Coca Cola was
rated as the world's number one brand.

It must be noted that the brand also has to work in different ways from market to
market. A constant check on, brand management techniques, on the promotion of the brand,
in a consistent and robust manner, is essential for the brands future. One point where Coke
scores over Pepsi has been in production and distribution system internationally and
nationally (because of access to Parle's distribution network) which ensures the product
reaches the consumers in perfect condition.

The advertising message that is conveyed to the people in the advertising slogan
"Always the real thing" (1993), is a credible statement about the brand's virtues. What
reinforces this conviction amongst, consumers, apart from the reassurance provided by the
consistent quality of the Coca Cola product, is that competitive brands all seek to emulate
Coca Cola. There is very little attempt on their part to create a distinctive positioning and
personality for their brands. A vast complex network of production, distribution and
marketing has kept the brand in front.

Coca Cola has entered new markets and also developing market economics (like
India) with much-needed jobs.

Coke attributes its success to bottlers, the Coca Cola system itself, i.e., its executive
committees, employees, BOD, company presidents but above all from the consumer.

Coke's red colour catches attention easily and also the Diet Coke which it introduced
was taking the Cake, as Pepsi has not come out with this in India.

Ever since Coke's entry in India in 1993, Coke made a comeback (after quitting in
1977), in October 24 in Agra, the city was flooded by trucks, there wheelers, tricycle cards-
all with huge red Coke-emblazoned umbrellas. Retailers were displaying their Coke bottles
in distinctive racks, also with specially-designed iceboxes to keep Coke bottles cold. This
was one big jolt to Pepsi.
About the topic
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
Product Variety PRICE
Quality List Price
Designs MRP
Features Discounts
Brand name TARGET Allowances
Packaging CUSTOMERS Pay Period
Sizes INTENDED CR Terms
Services POSITIONING
Warranties
Returns

PLACE
PROMOTION
Channels
Advertising
Coverage
Personal Selling
Assortments
Sales Promotion
Locations
Public Relation
Transportation
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.
MARKETING MIX OF COKE

a) 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 Thumps 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 Thumps 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, Thumps Up, Fanta, Gold Spot,
Maaza, Citra, Sprite, Bisleri Club Soda and Diet Coke.

All India Market Share ‘98

Overall 48.3%

Coca-Cola 10.8%
 Thumps up 16%

Fanta 5%

Limca 10%

Gold Spot 1.5%

Others 5%

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 litre

PRODUCT POSITIONING
One important thing must be noticed that Thumps Up is a strong brand in western and
southern India, while Coca Cola is strong in Northern and Eastern India. With volumes of
Thumps Up being low in the capital, there are likely chances of Coca Cola slashing the prices
of Thumps 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.

Thumps 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 turnover of the
company. (Thumps 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 Thumps 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
Thumps 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.
 PORTER'S FIVE FORCES MODEL OF COCA COLA
BARGAINING POWER OF SUPPLIERS

Most of the ingredients needed for beverages and snacks are basic commodities such as
potatoes, flavour, colour, caffeine sugar, packaging etc. So, the producers of these
commodities have no bargaining power over the pricing for this reason; the suppliers in this
industry are weak.

Bargaining Power of Buyers

Buyers in this industry have the bargaining power, because main source of the revenue and
market share in beverage and food industry are fast food fountain, convenience stores food
stores vending etc. The profit margins in each of these segments noticeably demonstrate the
buyer power and how special buyers pay diverse prices based on their power to bargain.

Threat of New Entrant

There are many factors that make it hard for new player to enter the beverage industry some
of important factors are brand image and loyalty, advertising expense, bottling network, retail
distribution fear of retaliation and global supply chain.

Brand Image / Loyalty

Pepsi and Coke continuously focusing on increasing their biggest beverage and food
products, they have built some of the globe’s strongest brands that are loved by consumers
throughout the world. Innovative Marketing has leveraged their worldwide brand-building
strength to attach with consumers in significant ways and impel the growth globally. These
all campaign results in higher number of loyal customers and strong brand equity throughout
the world. In 2011, Coca-Cola was declared the world’s most valuable brand according to
Interbrand’s best global brand. This makes it impossible for new entrance to enter the
beverage industry easily.

Advertising Spend

Cock and Pepsi has very effective advertising campaign, their advertising also represent the
cultures of different countries. They also sponsor different games and teams and also featured
in countless television programs and films. The marketing and advertising expense were
approximately $ 15 billion. This makes landscape very harder for new players to succeed.

Bottling Network

Pepsi and Coca Cola have lived and exclusive contracts with bottler’s that have privileges in
all over the world. These franchise agreements or contracts forbid bottler’s from keeping
competitor’s brands. Coke has the world's largest beverage distribution network; consuming
in more than 200 countries enjoys the Coke’s beverages at an average of nearly 1.6 billion
servings a day. Coca-Cola is sold in restaurants, vending machine and stores in more than
200 countries. PepsiCo has adopted the globe’s most powerful “go-to-market systems”,
serving more than 10 million outlets a week by operating greater than 100,000 different
routes, and producing more than $300 million in retail sales per day. They have also
purchased some of the bottlers, this makes difficult for new players to get bottler contracts or
to build their bottling plants.

Retail Distribution

Coke and Pepsi offers 16 to 21 percent margins to retailers for the space they present. These
margins are substantial for retailers and this makes it very hard for the new player to persuade
retailers to carry their products.
Fear of Retaliation

It is very difficult for new player to enter in this industry because; they will be highly
retaliating by local players in local markets and in global scenario they have to face the
duopoly of Coke and Pepsi. This ultimately could result in price war which affects the new
player.

Global Supply Chain

Cock Bill & Melinda Gates Foundation and non-profit Techno Serve initiated a partnership to
facilitate more than 50,000 small fruit farmers in Kenya Uganda to increase their productivity
and double their incomes by 2014. Coke has significant opportunities within global supply
chain to encourage and develop more sustainable practices to benefit consumers, customers
and suppliers. While; it is still in the premature stages of exploring these opportunities and
dedicated to the economic vitality and health of the farming communities our supply chain
engages. Pepsi promotes and support sustainable agriculture not only because it makes good
business sense, it purchases million tons of potatoes and fruits.

Threat of Substitute Products

Large numbers of substitutes are available in the market such as water, tea, juices coffee etc.
But firms counter them with innovative marketing and massive advertising which build
growth for their brands by highlighting their benefits. Players also differentiate themselves by
well-known global trade marks, brand equity and availability of the products which most of
the substitute products cannot contest. To protect themselves from competition players in
soft drink industry offer Diversify products such as such as Pepsi offers soft drinks (Pepsi,
Slice, Mountain Dew), beverages (Tropicana Juices, Dole Juices, Lipton tea, Aquafina
bottled water, Sport drinks, Tropicana Juices), Snacks (Roald Gold pretzels and Frito-Lay).
Coke also offers most diversified range of products such as Cola-Cola Cherry, Coca-Cola
Vanilla, Diet Coke, Diet Coke Caffeine-Free, Caffeine-Free Coca-Cola and range of lime or
coffee and lemon.
Competitive Rivalry within an Industry

Beverage industry competition can be classified as a Duopoly with Pepsi and Coca Cola. The
market share of other competitors is too low to encourage any price wars. Cola-Cola gets
competitive advantage through the well-known global trade marks by achieving the premium
prices. It means Cola-Cola have something that their competitors do not have. While Pepsi
has leveraged its worldwide brand-building strength to attach with consumers in significant
ways and impel the growth globally
PEST 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.

Technological
Because of the developing technology, Coca Cola has advanced technology in producing the
products. Then, Coca Cola made innovations by giving flavours 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.
Statement of problem
objectives
 OBJECTIVE 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 study the advertising effectiveness Coca-Cola on customer

4. To analyse the awareness of consumer regarding Coca Cola.

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

6. To study the comparison between coca cola and other beverage companies.

7. To study the market share of coca cola.

8. To study the marketing mix programme.

9. To study market status and goodwill of COCA COLA company.

PADAGOGY
Research methodology
RESEARCH & METHODOLOGY

Marketing research is the process of systematic design, collection of data, analysis and
reporting of data to specific marketing situation which an organization faces.

It is an activity which is done by organization for accomplishment of a particular

objective. Through this activity an organization find the specific reason of the problem
which organization face.

Marketing research got a vital role in decision making process by making available
right information, at the right time, and to the right person who involves in decision
making process. Thus it is the basic tool of marketing mix elements, like product, place,
price and promotion.

The research methodology is considered as a major part of the study that is being
conducted. It determines the strength, reliability and accuracy of the project.
Methodology will be considered as the methods used in research is selecting sample,
sample size, data collection and various tools for data analysis.

Research Design
The issue of research has been defined in very much clear term, the researcher will
require to prepare research design that will describe the conceptual structure of whole
research.

There are four steps in the research process-

 Identify the issues of the research.

 Develop the research plan.
 Implementation of research plan.
 Interpreting the research reporting the finding.

There are two basic type of research design-

 Exploratory Research (helps to determine the objective of retailers/clients).

 Conclusive Research (it includes experimental and descriptive method).
Sources of Data collection

To do a research always we use two sources of data collection. Primary and secondary

Secondary Source:

Secondary source is the internet, magazines, and old data files of the research.
Data analysis and interpretation