FMS MBA (MS)

Advertising Campaigns

Analysis Aerated Soft Drinks

By Abhishek Deheriya

MS-68

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Contents Executive Summary ........................................................................................................................... 2

Introduction ...................................................................................................................................... 3

The Indian Beverage Market .......................................................................................................... 3

How Much Ads are Visible in Your TV ................................................................................................ 4

Key Findings: ................................................................................................................................. 4

Volume growth of beverages sector on TV..................................................................................... 4

Share of categories of beverages sector on TV ............................................................................... 5

Volume growth of beverages categories on TV .............................................................................. 6

Top advertisers of beverages sector on TV ..................................................................................... 7

A Brief History ................................................................................................................................... 8

Coca-Cola Exit and Return.............................................................................................................. 9

War Begins .................................................................................................................................. 10

Research Design .............................................................................................................................. 12

Objectives: .................................................................................................................................. 12

Research Design: ......................................................................................................................... 12

Perceptual Map ............................................................................................................................... 14

Perceptual Map of Soft Drinks ..................................................................................................... 15

Perceptual Map based on Taste ................................................................................................... 16

Analysis of Perceptual Map and finding the Positioning ................................................................... 17

Coke ............................................................................................................................................ 17

Pepsi ........................................................................................................................................... 17

Thums Up .................................................................................................................................... 17

Limca ........................................................................................................................................... 18

Mountain Dew............................................................................................................................. 18

Mirinda ....................................................................................................................................... 18

Pepsi Max .................................................................................................................................... 18

Sprite........................................................................................................................................... 18

7Up ............................................................................................................................................. 19

Sample Questionnaire ..................................................................................................................... 20

Bibliography .................................................................................................................................... 22

Books and Journals ...................................................................................................................... 22

Websites ..................................................................................................................................... 22

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Executive Summary The whole world market aerated soft drink is dominated by two companies, Coca-Cola and

PepsiCo. In major markets, like USA, Europe etc, Coca-Cola is well ahead of PepsiCo in

terms of market share, but India is a different story. The market share is somewhat remains

50:50 for both, and there is always a tug of war between the two. This war can be seen on

your local grocer or pan shop where there is a competition amongst the Coca-Coal and

PepsiCo brands to have a better visibility.

This war can be seen on TV as well, where the two can be seen fighting for the space,

visibility, with their own league of stars or half of a team endorsing a one brand or the other.

But the bigger war that is being fought is inside the mind of the consumer. Every brand is

competing with the rival trying to become the first word to be uttered when someone wants a

cold drink. This mind game is everywhere, in TV ads, in print ads, outdoor, packaging and

pricing and everything one could think of.

Advertising is one of the media where the two mammoths are competing. This makes the

competition healthier as ads are all about ideas, and one can find best of the cold drinks

creative running in the screen with best of the tags, say ‗Thanda matlab….‘, or ‗Jashn mana

le‘, or ‗Yeh hai youngistan ka Wow‘.

This opens up a very interesting area of analyzing these ads, finding out individual

positionings, and creating a perceptual map of the consumers.

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Introduction India is a subtropical country. The climate is such that most of the regions, including the

Himalayas have to bear the raging sun. Also this is a country of traditions, where every

visitor is asked ―chai lengey ya thanda‖.

This is the country where youth population is around forty percent of the total. A population

with their own dreams and desires, their own attitudes, whether positive or negative,

aspirations, and the youth is thirsty for them.

Also India has one of the largest numbers of TV sets, one of the biggest newspaper‘s

circulation. The list is endless and the thirst as well.

The Indian Beverage Market India‘s one billion people, growing middle class, and low per capita consumption of soft

drinks made it a highly contested prize in the global Carbonated Soft Drink (CSD) market in

the early twenty-first century. Thirty percent of the country‘s population lives in urban areas

or large cities and drinks ten bottles of soda per year while the vast remainder lives in rural

areas, villages, and small towns where annual per capita consumption is less than four bottles.

Coke and Pepsi dominate the market and together have a consolidated market share above

95%. While soft drinks were once considered products only for the affluent, by 2003 91% of

sales were made to the lower, middle and upper middle classes. Soft drink sales in India grew

76% between 1998 and 2009, from 5,670 million bottles to over 10,000 million and were

expected to grow at least 10% per year through 2012. In spite of this growth, annual per

capita consumption was only 6 bottles versus 17 in Pakistan, 73 in Thailand, 173 in the

Philippines and 800 in the United States.

India is a major market for both the companies. As there is always a threat of losing the

market share to the another. Also this market has become interesting with the launch of many

Indian flavors close to Indian customers‘ heart. This makes this market a competitive one as

every brand is going for a kill, making full use of the resources. This makes the Indian TV

channels full of such ads.

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How Much Ads are Visible in Your TV

Key Findings: TV advertising of 'beverages' sector increased by 15 per cent during Jan-May '10

compared to Jan-May '09.

Aerated soft drink category led 'beverages' sector advertising on TV during

Jan-May '10.

Coca Cola India Ltd was the top advertiser of 'beverages' sector on TV during

Jan-May '10.

High advertising share of 'Minute Maid Nimbu Fresh' among the new brands of

'beverages' sector on TV during Jan-May '10.

Volume growth of beverages sector on TV

Growth in TV volumes of Beverages sector

Source: AdEx India - A Division of TAM Media Research

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Share of categories of beverages sector on TV

Source: AdEx India - A Division of TAM Media Research

'Aerated soft drink' had the maximum share i.e. 52 per cent of overall advertising share of

'beverages' sector on TV followed by 'milk beverages' and 'non aerated soft drink' with 29 per

cent and 16 per cent share respectively during Jan-May '10.

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Volume growth of beverages categories on TV

Source: AdEx India - A Division of TAM Media Research

Among the categories of 'beverages' sector, 'mineral water' was the top category to record

maximum growth in its TV ad volumes followed by 'milk beverages' and 'non aerated soft

drink' categories during Jan-May '10 compared to Jan-May '09.

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Top advertisers of beverages sector on TV

Source: AdEx India - A Division of TAM Media Research

'Coca Cola India Ltd' had the highest share i.e. 43 per cent of Beverages sector TV ad pie

followed by 'Pepsi Co' and 'Smithkline Beecham' at second and third position with 22 per

cent and 15 per cent share respectively during Jan-May '10.

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A Brief History Coca-Cola was formulated in 1886 by John Pemberton, a pharmacist in Atlanta, Georgia,

who sold it at drug store soda fountains as a ―potion for mental and physical disorders.‖ In

1891, Asa Candler acquired the formula, established a sales force, and began brand

advertising of Coca-Cola. The formula for Coca-Cola syrup, known as ―Merchandise 7X,‖

remained a well-protected secret that the company kept under guard in an Atlanta bank vault.

Candler granted Coca-Cola‘s first bottling franchise in 1899 for a nominal one dollar,

believing that the future of the drink rested with soda fountains. The company‘s bottling

network grew quickly, however, reaching 370 franchisees by 1910. In its early years,

imitations and counterfeit versions of Coke plagued the company, which aggressively fought

trademark infringements in court. In 1916 alone, courts barred 153 imitations of Coca-Cola,

including the brands Coca-Kola, Koca-Nola, and Cold-Cola. Coke introduced and patented a

6.5-oz bottle whose unique ―skirt‖ design subsequently became an American icon.

Candler sold the company to a group of investors in 1919, and it went public that year. Four

years later, Robert Woodruff began his long tenure as leader of the company. Woodruff

pushed franchise bottlers to place the beverage ―in arm‘s reach of desire,‖ by any and all

means. During the 1920s and 1930s, Coke pioneered open-top coolers for use in grocery

stores and other channels, developed automatic fountain dispensers, and introduced vending

machines. Woodruff also initiated ―lifestyle‖ advertising for Coca-Cola, emphasizing the role

that Coke played in a consumer‘s life. Woodruff developed Coke‘s international business as

well. During World War II, at the request of General Eisenhower, Woodruff promised that

―every man in uniform gets a bottle of Coca-Cola for five cents wherever he is and whatever

it costs the company.‖ Beginning in 1942, Coke won exemptions from wartime sugar

rationing for production of beverages that it sold to the military or to retailers that served

soldiers. Coca-Cola bottling plants followed the movement of American troops, and during

the war the U.S. government set up 64 such plants overseas—a development that contributed

to Coke‘s dominant postwar market shares in most European and Asian countries.

Pepsi-Cola was invented in 1893 in New Bern, North Carolina, by pharmacist Caleb

Bradham. Like Coke, Pepsi adopted a franchise bottling system, and by 1910 it had built a

network of 270 bottlers. Pepsi struggled, however; it declared bankruptcy in 1923 and again

in 1932. But business began to pick up when, during the Great Depression, Pepsi lowered the

price of its 12-oz bottle to a nickel—the same price that Coke charged for a 6.5-oz bottle. In

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the years that followed, Pepsi built a marketing strategy around the theme of its famous radio

jingle: ―Twice as much for a nickel, too.‖

In 1938, Coke filed suit against Pepsi, claiming that the Pepsi-Cola brand was an

infringement on the Coca-Cola trademark. A 1941 court ruling in Pepsi‘s favor ended a series

of suits and countersuits between the two companies. During this period, as Pepsi sought to

expand its bottling network, it had to rely on small local bottlers that competed with wealthy,

established Coke franchisees.31 Still, the company began to gain market share, surpassing

Royal Crown and Dr Pepper in the 1940s to become the second-largest-selling CSD brand. In

1950, Coke‘s share of the U.S. market was 47% and Pepsi‘s was 10%; hundreds of regional

CSD companies, which offered a wide assortment of flavors, made up the rest of the market.

Coca-Cola Exit and Return Coca-Cola left India in 1977, rather than reveal its formula to the government and reduce its

equity stake as required under the Foreign Exchange Regulation Act (FERA) which governed

the operations of foreign companies in India. After a 16-year absence, Coca-Cola returned to

India in 1993, cementing its presence with a deal that gave Coca-Cola ownership of the

nation's top soft-drink brands and bottling network. Coke‘s acquisition of local popular

Indian brands including Thums Up (the most trusted brand in India21), Limca, Maaza, Citra

and Gold Spot provided not only physical manufacturing, bottling, and distribution assets but

also strong consumer preference. This combination of local and global brands enabled Coca-

Cola to exploit the benefits of global branding and global trends in tastes while also tapping

into traditional domestic markets. Leading Indian brands joined the Company's international

family of brands, including Coca-Cola, diet Coke, Sprite and Fanta, plus the Schweppes

product range.

In 2000, the company launched the Kinley water brand and in 2001, Shock energy drink and

the powdered concentrate Sunfill hit the market. From 1993 to 2003, Coca-Cola invested

more than US$1 billion in India, making it one of the country‘s top international investors.22

By 2003, Coca-Cola India had won the prestigious Woodruf Cup from among 22 divisions of

the Company based on three broad parameters of volume, profitability, and quality. Coca-

Cola India achieved 39% volume growth in 2002 while the industry grew 23% nationally and

the Company reached breakeven profitability in the region for the first time.23 Encouraged

by its 2002 performance, Coca-Cola India announced plans to double its capacity at an

investment of $125 million (Rs. 750 crore) between September 2002 and March 2003.

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Coca-Cola India produced its beverages with 7,000 local employees at its twenty-seven

wholly-owned bottling operations supplemented by seventeen franchisee-owned bottling

operations and a network of twenty-nine contract-packers to manufacture a range of products

for the company. The complete manufacturing process had a documented quality control and

assurance program including over 400 tests performed throughout the process.

The complexity of the consumer soft drink market demanded a distribution process to support

700,000 retail outlets serviced by a fleet that includes 10-ton trucks, open-bay three wheelers,

and trademarked tricycles and pushcarts that were used to navigate the narrow alleyways of

the cities.25 In addition to its own employees, Coke indirectly created employment for

another 125,000 Indians through its procurement, supply, and distribution networks.

Sanjiv Gupta, President and CEO of Coca-Cola India, joined Coke in 1997 as Vice President,

Marketing and was instrumental to the company‘s success in developing a brand relevant to

the Indian consumer and in tapping India‘s vast rural market potential. Following his

marketing responsibilities, Gupta served as Head of Operations for Company-owned bottling

operations and then as Deputy President. Seen as the driving force behind recent successful

forays into packaged drinking water, powdered drinks, and ready-to-serve tea and coffee,

Gupta and his marketing prowess were critical to the continued growth of the Company.

War Begins When Coca-Cola reentered India, Pepsi was already there. Since then both of them embroiled

in an advertising war with each other. The real brand wars between the two giants began in

1996 during the much-hyped Reliance World Cup. The Coke campaign was topical and said

that it was the ‗official drink‘, to which Pepsi retorted with ‗nothing official about it‘. The

global players have made strategic use of stars from films and cricket in view of their

popularity. If Coke has Amir Khan and Aishwarya Rai (both featured in a Pepsi

advertisement a decade ago, but after their contract ended, Coke signed them on), Pepsi has

Shahrukh Khan, Saif Ali Khan, Preity Zinta and now Amitabh Bachachan. Coke, while

retaining the international baseline, has indianized its campaigns to suit the cultural milieu

and match its archival Pepsi‘s strategy. If the international tagline was ‗life tastes good‘, it

was ‗life ho to aisi‘ in India. However, the brand achieved a sort of benchmark when it added,

‗thand matlab cocacola‘ thanda is a generic term used by an average indian when he asks his

guests, ‗kya lenge – thand ya garam‘(what will you have – hot or cold).

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It is interesting to find that celebrity endorsement began almost a century ago in the Coke

advertising campaigns. ‗You must feel a smile to act one‘, said Joan Crawford in a Coke ad

before she became the chairperson of Pepsi.

Coca-Cola and Pepsi have been part of many controversies including painting their slogan on

ancient rocks in Rohtang Pass and later for pesticides in their products. Also there have been

many issues relating to consumption of ground water.

The Coke and Pepsi campaigns, according to analysts, may contribute nothing about brand

knowledge, but are definitely entertaining. The campaigns have come a long way—from

selling Coke as a carbonated drink, to a lifestyle brand.

A few of the Coca-Cola slogans that were part of the international campaigns:

1886 - Drink Coca-Cola.

1923 - Enjoy life.

1924 - Refresh yourself.

1941 - Coca-Cola is Coke!

1993 - Always Coca-Cola.

2000 - Enjoy.

2001 - Life tastes good. (also used in the UK)

2003 - Real.

2005 - Make It Real.

2006 - The Coke Side of Life (used also in the UK)

2007 - Live on the Coke Side of Life (also used in the UK)

2009 - Open Happiness

2010 - Twist The Cap To Refreshness

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Research Design

Objectives: The aim is to analyze various ads of aerated soft drinks brands and to find out their

positioning.

To prepare a perceptual map, mapping how various aerated soft drink brands are placed.

Research Design: A research design is simply and purely the framework or plan for a study that guides the

collection and analysis of data. Consumer‘s feedback is the most important aspect when one

tries to find out what a particular brand is speaking to a consumer, and how they are taking

them.

Data Source:

Primary data collected via a questionnaire. A total of 65 consumers were interviewed. As the

questionnaire was divided into various parts it was required to have more respondents for two

of its parts, so 10 more interviews were taken for those two parts of the questionnaire.

Secondary data was collected from journals, magazines, newspapers, books, and the Internet

websites.

The questionnaire was mainly open-ended, but some closed ended questions were also there.

And the questionnaire was an administered one.

Place of survey:

New Delhi

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Respondent Profile:

The total number of respondents was 75.

Out of total 75 respondents, 52 were male and 23 were female.

The age bracket was:

From 13 to 17, 30 respondents

From 18 to 21, 25 respondents

From 21 to 25, 11 respondents

From 26 to 30, 9 respondents

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Perceptual Map I have tried to develop a perceptual map taking the soft drink brands as its components. The

map depicts the how people perceive a particular soft drink. How a drink is able to create a

specific place in the mind of a consumer.

Also a perceptual map of the taste, as the taste of all the drinks is relative and a consumer has

their own concept of taste which puts them in various quadrants.

Perceptual mapping has been used as a strategic management tool for about thirty years. It

offers a unique ability to communicate the complex relationships between marketplace

competitors and the criteria used by buyers in making purchase decisions and

recommendations. Its powerful graphic simplicity appeals to senior management and can

stimulate discussion and strategic thinking at all levels of all types of organizations.

Perceptual mapping can be used to plot the interrelationships of consumer products, industrial

goods, institutions, as well as populations.

Perceptual Map: Components

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Perceptual Map of Soft Drinks

Perceptual Map: Brands

When asked to define a particular brand, the respondents had a very clear and distinct picture

in mind.

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Perceptual Map based on Taste

Perceptual Map: Taste

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Analysis of Perceptual Map and finding the

Positioning

Coke They found Coke to be a mature drink and thus has been placed in a group with attributes

such as real, rational, practical, confident. These are the characteristics what consumers found

to be contained in Coke. Also as per the positioning goes, Coke utilizes the brand color, i.e.

red as everyone calls it. And this has become the identity and Coke and Coca-Cola has been

used as substitutes.

A lot of people respondents gave the tag as ‗Thanda Matlab Coca-Cola‘, though they knew

the Open Happiness and Jashn campaigns. According to them it just suits Coke.

This also breaks the myth that the campaign was designed for rural India, and tier 2 and 3

cities and towns. The ad campaign was for everyone as it suited all. It doesn‘t really matter

what style one is using. The bottom line is it should connect. And thus the ad campaign. It is

off air and the positioning has been changed to make it for celebration, the slogan remained.

And so is the legend of ‗Thanda Matlab….‘ you got it right.

Pepsi Pepsi is placed in young and vibrant brands‘ quadrant. It is youthful, lively, flamboyant free

spirited.

Everyone calls Pepsi—a sweet drink. This is the reason many like it, and many do not. It is

all about the preference, as one of the respondent said. I like the combination of butter-

chicken and Pepsi, he said.

But is it all about the youth or sweetness or as a combo. Not quite. It‘s about Blue as well.

People recognized Pepsi as blue, which has been the color for the corporate brand as well.

Recently Pepsi changed its positioning to become a part of youth, as its rival, as they call it

was so rigid—it became fuddy-duddy. This positioning is followed by a new strategy of

targeting the consumer. Also this has brought Pepsi as a lively drink.

Thums Up According to some, this Toofani Thanda (a few gave the tag as this only) drink has now

become a cult brand. It is in the league of Bullet or Jeep, and this is our very own Indian

brand, took over by Coca-Cola.

The positioning has been more or less similar as it was twenty years ago. Toofani Thanda is

now Taste the Thunder.

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And to live up to the expectations, the ads are designed. A loop hole was also found in the

campaigns which its rival targeted, i.e. distribution. The ad suggests that Thums Up is not

readily found.

This is now a challenge for the creative to come up with a solution for this loop hole.

In line with its cult status, the brand is self-oriented, freedom seeker, ready to take risk, bold

and courageous.

Limca One of the female responded compared limca with liril. And rightly so. Both talk about

freshness. Limca‘s positioning is ‗water like freshness‘.

It is in the quadrant of sober and self-oriented. The brand, as it is depicted is relaxed, playful,

self-indulging.

According to many respondents, who have also tried other lemon drinks, Limca is the best.

Also used by a few when their tummy is not right.

Mountain Dew Dar ke agey jeet hai and Daba-do dar ki awaj…Solid lines, but so true. This is what this

adventure drink, which used to say ‗do the Dew‘, now stands for. And so is the image in the

minds of the consumers.

It is placed in the same quadrant as that of Thums Up. But for the taste people have kept is

along with 7Up and Sprite.

Also this is the fastest growing drink in the category according to the website.

Mirinda One person called it the next best thing after Gold Spot. He still remembers the taste of that

legendary drink. According to him mirinda does not go well with the food, but it is the

complete wholesome drink.

Utilizing the attributes Asin brings in, also to take on to its competitor, Fanta, which is more

or less taking the similar route of being naughty, crazy and alive.

Pepsi Max People have tried it. And those who have tried it said it is very, very sweet. One said that the

ad says ‗No sugar‘, but the drink is terribly sweet.

Sprite People had only one thing to say about sprite, i.e. Clear hai. It is one drink which is trying to

take the competition head on. And thus says no bakwas.

A typical route of ads, which makes the person having sprite look calm and cool.

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7Up Again the similar monosyllable, Fido dido. Also people now relate the drink with a pinch of

lemon to it. The brand is all about being relaxed and enjoying what comes your way.

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Sample Questionnaire Beverages: Aerated Cold Drinks Target Audience: 13 to 30 years, Male and Female Name: Age: Sex: Occupation: Student

Professional Business House-maker Others (Please specify)

Monthly Household Income: Contact details: Email id: Mobile No.: 1. Which cold drink do you prefer

2. Why

3. Why don’t you try the similar drink of another brand (if coke then why not pepsi)

4. Do you try other cold drinks as well

5. Why

6. If your cold drink was a person what attributes it had

7. Do you follow ads of various cold drinks

8. Can you recall their tag lines

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9. Have you ever changed your preference for the cold drink

10. Why

11. Do you like the ad of your current favorite drink

12. If yes, why

13. If no, why

14. Which ad do you like most 15. Does the presence of bollywood or sports stars influence your preference

16. What effect do these stars create? MEDIAGRAPHICS Newspaper TV

News channel

Entertainment

Sports

Infotainment

Others (Please specify) Internet (specify sites) Magazine (Ask for supplements for example India Today Travel etc

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Bibliography

Books and Journals Batra, Rajeev, Myers, John G. and Aaker, David A., Advertising Management

Kazmi, S.H.M, Batra and Satish K., Advertising and Sales Promotion

Jethwaney, Jaishri and Jain, Shruti, Advertising Management

Yoffie, David B., Cola Wars Continue: Coke and Pepsi in 2006, Harvard Business

Review

Coca Cola India: A Report, Tuck School of Business, Dartmouth

Websites

http://www.afaqs.com/perl/news/story.html?sid=27312_PepsiCo+experiments+with+aug

mented+reality+advertising

AdEx India - A Division of TAM Media Research

http://www.indiantelevision.com/tamadex/y2k10/june/tam25.php

http://www.mydigitalfc.com/companies/coca-cola-launches-limca-3-d-ad-586

http://www.pepsiindia.co.in

http://www.afaqs.com/news/case_studies/index.html

www.coca-colaindia.com/

http://www.afaqs.com/perl/news/case_studies/download.html?x=lr&cid=MzE=

&uid=ODQxMjM=