Pepsi vs. Coke_ an Analysis

Hi,

The use of soft drinks has risen manifoldin the recent years, from your favoriteactor to your beloved cricketer, you cansee them all sporting and endorsing asoft-drink. Though we know thatsoft-drinks are not that good for health,still most of us take soft-drinks withoutany fuss.

When we are talking of soft-drinks, howcan not Pepsi and Coke be reminded of;Pepsi and Coca Cola are twointernational soft-drink giants whichcontrol most of the soft-drinks beveragebusiness in the world. Pepsi has thefollowing brands under its umbrella:Pepsi, Diet - Pepsi, Pepsi Max, Kurkure,Tropicana, Gatorade, Mountain Dew,Slice, Quaker, Aliva, Aquafina, Nimbooz,7Up, Lays, Uncle Chips etc.

Coke on the other hand has the followingbrands:Coca Cola, Coke light, Diet - coke, Kinleywater, Kinley Soda, Scheweppes, MinuteMaid, Maaza, Limca, Fanta, Sprite,Thums Up, Mountain Dew etc.

Pepsi and Coke command over 95% ofthe soft-drink market in India.However Coke continues to outsell Pepsimost areas of the world but in India andPakistan and some other other countries,PepsiCo fares far better than coke. Still,both the companies are highly profitablein their Indian business.

Pepsi Vs. Coke: Ananalysis

Pepsi Vs. Coke: An analysis http://ankitmarketing.blogspot.com.au/2011/11/pepsi-vs-coke-analysis...

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PepsiCo is the second-largestbeverage business in the world afterCoca Cola Ltd. More than 45 percent ofthe revenue of PepsiCo comes fromoutside the United States,with approximately 30 percentcoming from emerging and developingmarkets.Coke has around 43% US beveragemarket share, PepsiCo has the figure ataround 31%, Cadbury Scheweppes hasa share of around 18%.

The article lays stress on the Marketingideology of Pepsi and Coke specially inIndian markets.

Lets first have a brief look at the historyof introduction of Coke and Pepsi inIndia:

Coke was the leading Indian soft-drinkbrand in 1977 when a governmentregulation to share the Coke's secretformula forced Coca Cola to exit India.Coke re-entered India in 1993 after thepolicies were relaxed a bit. Cokeacquired local Indian brands like ThumsUp, Limca, Maaza, Citra and Gold Spotand made a strong come back into theIndian Markets.

PepsiCo entered India in 1989 with ajoint venture with Parle Agro and VoltasIndia Ltd.In 1995, Coke had 52 % of the Indian


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India, the Pepsi brand has becomesynonymous with cold beverages. Cokeuses a portfolio of drinks to counter thatadvantage.

Pepsi has had a strong Marketingcampaign targeting mainly Youngsterswhich has worked wonders for Pepsi.Pepsi has had alliances with most of thepopular actors, it has been the OfficialSponsor of Indian cricket team for a longtime now. Pepsi's 'Change The Game' adcampaign in the 2011 Cricket World Cupwas a mega success and boosted theSales a lot.

Coke also had some successful adcampaigns in the likes of 'Thanda matlabCoca Cola' and Coke - 'OpenHappiness', the latest Coke ad is 'BurrBurr' ad series.A number of Pepsi and Coke challengeswherein participants with a blindfold areasked to taste Coke and Pepsi in plaincups and rate the better of the two, havebeen organized by these companies timeand again. Coke had also introduced aLoyalty Points Awards program.

Coke Marketing usually focuses on:


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Slandering Coke, Youth, Market Segment

Pepsi's Distribution:1) Exclusive contracts with franchisebottlers and independent distributors andretailers like Walmart.2) Agreements with its competitors likeUnilever with Lipton, Starbucks forFrappuccino.

Coke's distribution:1) Independent bottlers with exclusivecontracts.2) Coca- cola enterprises.

Moreover, PepsiCo has a number ofproducts in the Food segment like potatochips, Quaker oatmeal etc. as opposedto Coke which deals mainly inthe Beverages, this provides PepsiComore range and thus a deeperpenetration into the Markets.

A SWOT analysis of Coke and Pepsihelps in determining the strategies bestsuited for enhanced future growth forPepsi and Coke respectively.

SWOT Analysis

StrengthsCoke: High profile Global BrandPresence, Four of the top five leadingbrands, Broad-based bottling strategy,47% of total volume Sales in carbonates

Pepsi: high profile global brandpresence, world's 2nd best-sellingsoft-drink brand, constant productinnovation, aggressive marketingstrategies using famous celebs, a broadportfolio of products

WeaknessesCoke: Carbonates market is in decline,over-complexity of relationship with


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Pepsi is strongest in North-America, theyonly target young people

OpportunitiesCoke:

Soft drinks volumes in the AsiaPacificregion forecast to increase by over45, Brands like Minute Maid Lightand Minute Maid Premium Heart Wiseare positioned well with the “Health-concerned” market, Use distributionstrengths in Eastern Europe andLatin America

Pepsi:Increased consumer concerns withregards to drinking water, growth inhealthier beverages, growth in RTD teaand Asian beverages, growth in thefunctional drinks industry

ThreatsCoke:Growing health-conscious society,PepsiCo's Gatorade, Aquafina andTropicana are stronger brands, boycott inthe middle-east, earlier protest againstCoke in India, negative publicity inwestern-Europe

Pepsi:Obesity and health concerns, Cokeincreases Marketing and Innovationspending to $400M globally, relying onNorth-America only is bad


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In my conclusion, i would like to point outthat Pepsi and Coke have managedsome extremely successful brands; withtime focus will be more and more onEmerging markets plus there will be a lotof emphasis on healthier beverages andmore innovative products. Stress will alsobe laid on cleaner and more environmentfriendly practices employed by thesecompanies.

Kudos to these exemplary role models!Pepsi & Coke :-)

Cheers,Ankit

Posted 23rd November 2011 by ankit

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Pepsi vs. Coke_ an Analysis

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