Coke and Pepsi: from Global to Indian Advertising

Topics: Coca-Cola, Soft drink, Diet Coke Pages: 9 (3031 words) Published: June 1, 2013
Coca-Cola and Pepsi-Cola vied for a “throat share” of the soft drinks market for more than a century. Carbonated soft drinks (CSD) contributed to majority of the revenues in soft drinks. 丁he core market was Ihc United States which had high per capita consumption (see Exhibit 1 for per capita consumption of carbonates in select countries). The Americas accounted for 54% of the global CSD market. Europe for 34.5%, and Asia-Pacific for 1 \%.] The industry was characterized by the presence of strong brands - with three brands ㅡ Coca-Cola, Pepsi, and Sprite ranked 1, 23,and 61 globally and valued1 $70 billion. $14 billion, and S5.8 billion, respectively by Interbrand a leading brand valuation and consultancy firm.2 Advertising had played a major role in building the brands of the two majors which largely competed on parity pricing.

Until the mid-1990s,consumption of soft drinks in the United States steadily increased while that of milk and coffee declined. Thereafter, owing to shilling consumer prefcrcnccs towards healthier beverages, the US market began to plateau. This posed a challenge to the two majors. Was their era of susiained growth and profitability in CSD coming to an end or could they drive growth from emerging markets such as India? I low much should they invest in advertising? Should Indian advertising be shaped by global advertising? GLOBAL SOFT DRINK LUSTRY

[he term usofl drink” was coined to distinguish flavored drinks from hard liquor. The soft drink industry was horn when Coca-Cola syrup was formulated in 1886 by John Pemberton, a pharmacist in the United States who sold it at drugsiore fountains as a potion for *'menial and physical disorders/0 Tn 1894. Coca-Cola granted its first bottling franchise which led to the proliferation of Coca-Cola throughout the United States by 1895. An infrastructure of independent bottlers added sweeteners and carbonated waters to the syrups and bases received from Coca-Cola to produce the drink to exact specifications and distributed it within a specific region. This soon became the model distribution method for all the companies. The manufacturers provided a variety of services including quality control,marketing, advertising, research & development, and finance. In turn, the bottlers supplied the required capital investment for land,buildings, machinery,equipment, trucks, and bottles. The industry sold its product in two forms - packaged and fountain service. With fountain service,the product was dispensed in cups,typically in a restaurant or any location with a food service station and was consumed on the premises- Sales for consumption on the premises were termed “on-tradc” sales and those for consumption off the premises as “offtradc” sales. Worldwide off-trade sales dominated the sofl drink sales. Carbonated Soft Drink

During the 1980s,as consumers bccamc more interested in health and fitness, soft drink manufacturers developed low caloric beverages such as Diet Coke and Diet Pepsi, The 11 incss craze continued in 1990s leading to the emergence of “new age drinks” such as flavored sparkling waters, natural sodas, fruit juice drinks, flavored teas, and bottled coffec products. From the humble beginnings of one cola, the soft drink industry exploded into a kaleidoscope of beverages carbonates or non-carbonatcs. Carbonates were of two types ? cola and non-cola. Non-cola carbonates consisted of predominantly lime and orange flavors. In 2009,regular cola contributed to 42% of the global CSD market, whereas contribution of non-cola carbonates was 29% and diet cola 15%.2 4 Non-carbonates comprised fruit/vegetable juice, bottled water, functional drinks (such as energy drinks), and ready-to-drink tca/coffcc. Consumption of carbonated drinks varied widely by region and culture. While the developed markets of


Australia,Western Europe, and North America were strongly skewed towards low calorie colas,the developing markets...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about pepsi and coke
  • coke vs pepsi Essay
  • Coke vs. Pepsi Essay
  • Coke vs. Pepsi Essay
  • Coke vs Pepsi Essay
  • Pepsi Essay
  • Coke and Pepsi Essay
  • Financials on Coke vs Pepsi Essay

Become a StudyMode Member

Sign Up - It's Free