chapter 15 (soft drinks)
TRANSCRIPT
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Soft Drinks
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The Segment
Milk-Based Drinks
Fruit Juices and Nectars
Carbonated Soft Drinks
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Dominant Players
Carbonated Soft Drinks
• Coca Cola and PepsiCo• Almost equal market share
Milk Based Drinks
• Amul the clear market leader• More than 80% share
• Mother Diary, Gagan, Nandini also present
Fruit Juices and Nectars
• Dabur (Flagship brand Real)• Pepsico (Tropicana)
• Smaller players include Parle Agro (Frooti, Appy Fizz), Catch, Leh Berry
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Market Characteristics
Extremely competitive, market dominated by Pepsico and Coke
The total value of sales in this segment in the year 2006 were Rs 7000 crore
The growth rate of the consumption 22% p.a.
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Critical Success Factors
Brand strength
Distribution network
Bottling plants owned/efficient bottling
Advertising expenditure
Positioning, perceived value of product
Visibility at retail locations
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Pepsi’s Marketing Mix
Target segment – population in the age group 15–35 years
Positioned as a ‘cool’ drink for the youth and the ‘Gen Next’
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4Ps
Place• Introduction in A+ cities such as Chennai, Mumbai, Delhi and
move to the rest
• Pepsi started in Chennai and Coke in Mumbai
Price• Initial penetration strategy
• Prices move in tandem with oligopolistic nature of business
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Product• Product differentiation in terms of shape, bottles and cans,
colours and logos.
• Ultimately, difference in perception created
Promotions• Film stars and cricketers
• Sponsoring cricket tournaments
• Lifestyle products
4Ps
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Market Scenario
Market Size:
Rs.100 billion
CSDs make up 70% of it
MBDs 5% of the
market (Rs.5
billion)
Non-Carbonated Drinks
growth rate 30-35% per
annum
Of this, MBDs growth
more than 40% every
year
Sources:Infoquest, Fruit Juices in India, 2005
Datamonitor SoftDrinks in India to 2010, 2006
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Amul
Flavoured milk (Kesar, Elaichi, Rose), Cool Café, Cool Coco, Lassi, Buttermilk
80% market share
35% growth expected
85% of sales in small outlets
Shelf life 6 months
No refrigeration required
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Real Fruit Juices
Dabur Foods Division Pack sizes: 1ltr and 200 ml 6 months expiry, Tetrapak 40% market share 25% yearly growth Different distribution networks for
200 ml and 1 ltr variants Distributor promotions: 12+1 and
15+1 packs
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Comparison
BrandMajor selling
SKUsPack size Pack type Retail price
Distributor margin
Retailer margin
Amul
Flavoured milk (Kesar, Elaichi,
Rose)200 ml Glass bottle Rs 10 4.25% 10%
Buttermilk, Lassi 200 ml Tetrapak Rs 7/Rs 12 4.25% 10%
Cool Café, Cool Koko
200 ml Tetrapak Rs 12 4.25% 9%
Real
Orange, Mixed Fruit Juices
200 ml Tetrapak Rs 10 6.5% 15%
Orange, Mango Juice
1 ltr Tetrapak Rs 70 6.5% 15%
Activ: Orange-Carrot
1 ltr Tetrapak Rs 75 6.5% 12%
Tropicana
Juice: Orange 200 ml Tetrapak Rs 12 5% 12%
Nectar: Mango, Orange
200 ml Tetrapak Rs 10 6% 15%
Nectar: Orange 1 ltr Tetrapak Rs 60 6% 15%
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Market Characteristics - General
Consumption of RTDs on the rise
Have such drinks while on outings, hanging out, or as thirst quenchers
Consumption highly seasonal
Shift from CSDs to Juices and MBDs• Health concerns
• Pesticide controversy
Preference for Tetrapacks
Word of mouth plays a major role
Cost not a major factor
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Market Characteristics - MBDs
Has not made significant inroads in the market
Replacement for coffee or tea during summer months
More filling than fruit juices Preference for coffee and
chocolate flavours Do not stock MBDs at home Perception that they get spoiled
easily
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Market Characteristics - Juices
Fast growing segment Seen as a replacement for CSDs Orange and Mango flavours
liked the most Health consciousness
increasing, prefer no preservatives, sugar free versions
Prefer to store them at home, over CSDs and MBDs
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Conclusions
Carbonated drinks dominate the market
Increased health consciousness making Fruit juices, MBDs on a growth path
Pesticide controversies affected CSDs significantly
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Inferences
Fruit juice market witnessing high competition• Major players Dabur, PepsiCo hold almost 80%• Numerous smaller players trying to enter• The previous year saw a launch of more than 10 new brands
MBD market dominated by Amul• Large distribution network• Numerous variants• Established credence in milk-based segment• But still has tapped only a small segment of market
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Inferences
Scope for entry in the MBD segment
• Availability in the market not in tune with possible demand
• Amul lagging in brand promotions and creation of hype
Gradual change in consumer mindset
Ready to accept non-carbonated drinks
Distribution costs kept down by using packaging which negated the need for refrigeration
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Thank You!