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Page 1: Marketing Management (Coca Cola)

MARKETING MANAGEMENTMARKETING MANAGEMENT

TERM PROJECT ONTERM PROJECT ON

Page 2: Marketing Management (Coca Cola)

TABLE OF CONTENTS

Executive Summary

Objective of the Study

Methodology

Industrial Profile

Coca-Cola Profile

Coca-Cola Strategies

How did Coke Get into Mess

Consumer Behavior

The 4P’s and 3A’s

SWOT Analysis

Analysis of the Study

Sales Promotion of Coca Cola

Conclusion

Questionnaire

Page 3: Marketing Management (Coca Cola)

EXECUTIVE SUMMARY

The consumers buying behavior is dynamic and unique in nature and

each company through its sales promotional efforts tries to have a

positive impact on them. Being the worlds most ambitious brand Coca-

Cola wants to increase its market share in India and to achieve this it

has undertaken aggressive sales promotional strategies in the past few

years. Through our project we have made an attempt to understand

how successful Coca-Cola is in influencing the mind set of the

consumer through various promotional activities it has undertaken and

their short comings.

Our endeavor in this project was to understand the soft drink industry

and the functioning of Coca-Cola. The effect of Sales Promotional

strategy on buying behavior was understood through the questionnaire

method of survey and informal interview with retailers and consumers.

The questionnaires were analyzed and the results showed that these

strategies had a direct and positive correlation with the consumption

pattern. The communication channels at all levels are another key

factor that has played a critical role in bringing about these changes.

Page 4: Marketing Management (Coca Cola)

Even with a number of constraints, we have been able to get a fair

picture as to how Sales Promotion schemes work on the mind of the

consumer and help the company in achieving its goals.

Recent Sales Promotional activities undertaken by Coca-Cola :

In order to come close to the typical Indian consumer who are inclined

towards movies, sports and other entertainment activities, Coke has

initiated aggressive campaigns in this regard. This was largely to cater

to a larger population as well as getting an edge over its rival brand.

The following are some of the recent activities sponsored by coke.

To cash in on the latest Aamir, Sonali megahit “Sarfarosh”, a

promotion ‘Sar-fresh ho jaao’, was organised in Aurangabad. This

was well published in the leading newspapers and as many as 65

banners were placed at strategic points.

Coca-Cola sponsored ‘Johnny Lever Nite’ and ‘Phalguni Pathak

Nite’ were held at Nasik. Both the events were well publicised

through banners, posters, hand bills and ads in local dailies.

Thums Up sponsored ‘Gurdaas Maan Nite’ at Aurangabad. To

publicise truck backs were painted with event detail. A trade

Page 5: Marketing Management (Coca Cola)

redemption scheme of 100 tickets ran wherein consumers got a

ticket for a PET bottle.

Urs known as ‘Jarjari Baba Baksh Dulhemiurs’ is a popular festival

held at Kultabad in Aurangabad district. This gave Coke an

excellent opportunity to connect with the rural consumer. They put

up special banners welcoming pilgrims at key intersections, outlets

were elaborately merchandised and several discount schemes were

made. Around two lakhs people are estimated to visit every year.

The up country town Hassan in Karnataka now boasts of the

countrys first ‘Coke pub’. This outlet solely stocks and sells

only coke products and offers discounts and other scheme.

Coke Channel [V] Live Show was held at Pune with an audience of

20,000 plus. A trade redemption scheme ran wherein consumers

could exchange 3 Coke crowns with a ticket of the show. People

wearing Red or having Coke at particular outlets were given free

passes. The show featured Parikrama, Aryans, Jassi, Pentagram and

Channel [V] V.J’s.

Coca-Cola organised a series of musical shows featuring the latest

sensation in Punjabi music, Hans Raj Hans. The shows were held in

Page 6: Marketing Management (Coca Cola)

Hoshiyarpur, Phagwara, Mohali, Patiala, Bhatinda and Amritsar.

Each show was attended by about 30,000 people.

As schools and colleges opened up for the new academic session at

Hydreabad and Secundrabad, the students were given a refreshing

welcome by Coca-Cola. On the opening day the products were

made available to students at a special price of Rs.4/-. The ‘Back to

School’ activity was conducted in 63 schools and college across the

twin cities.

Malahar a restaurant at Taj Residency, Indore, had a specially

designed cricket bat shaped Coca-Cola menu card.

A basic computer awareness program was organised at Ahmedabad

for children in order to teach them fundamental of computers and

various games. Students were also awarded with certificate and

momento.

Coca-Cola has always associated itself with cricket by hosting

various tournaments both at national and international levels.

Coke came up with certain promotional schemes at Diwali like ‘Do-

Wali Dhamaka’ in association with bowling alleys like Magic

Planet, Little paradise etc. in Delhi. It also hosted the Diwali

Page 7: Marketing Management (Coca Cola)

Carnival at the Bristol Hotel with the main attraction being the pop

singer Jassi.

The most successful campaign for Coke in recent times has been its

association with movies, particularly the latest blockbuster ‘Hum

Saath Saath Hain’. The unique feature of this campaign was that all

the banners of the movie featured the name Coca-Cola.

The above mentioned campaigns are just a indicator of the vast and

aggressive promotions planned on part of Coke. Their campaigns are

aimed at publicizing Coke throughout India both rural and urban and

focusing on their slogan ‘Always getting closer to within arms reach’.

Page 8: Marketing Management (Coca Cola)

OBJECTIVE OF THE STUDY

The present soft drink industry in India has two major giants in Coca-

Cola and Pepsi Co. Coke has a market share of 53% and Pepsi lags

behind marginally. Thus both these companies adopt aggressive

strategies to gain an edge over the other. Our objective has been to

study the effect of sales promotion strategies adopted by Coca-Cola

and the effect these have on the consumer buying behavior.

The aim of this project is to understand how successful Coca-Cola has

been in creating an impact on the minds of the consumer through its

campaigns and thereby increasing its brand loyalty and market share.

Page 9: Marketing Management (Coca Cola)

METHODOLOGY

The study was conducted through a questionnaire survey of consumers.

The sample size was 50 which was randomly chosen and importance

was given to the heterogeneity in the sample. The questionnaire

stressed on the role that sales promotion strategies play on the mind of

the consumer and whether they induce a customer to change

preferences. It measures the effect of these schemes on the purchase

decision and the brand image. The consumers were also interviewed to

get an in-depth knowledge of their preferences and how a company

works on their psyche through Sales Promotion strategies.

The knowledge of the retailers was gauged by the interview method.

The interview helped us to know what strategies he adopts on behalf of

the company to push the product to the end consumer.

Page 10: Marketing Management (Coca Cola)

SALES PROMOTION

CONSUMERS RETAILERS

QUESTIONAIRREINTERVIEWS INTERVIEWS

Page 11: Marketing Management (Coca Cola)

INDUSTRY PROFILE

Since the entry of PepsiCo to India in 1987, the soft drink industry has

undergone a radical change. When Pepsi entered, Parle was the leader

with Thums Up being its flagship brand. Other product offerings by

Parle were Limca and Gold Spot. Another upcoming player in the

market was the erstwhile bottler of Coca-Cola, Pure Drinks. Its

offering included Campa Cola, Campa Lemon and Campa Orange.

With the re entry of Coca-Cola in the Indian market, Pepsi had to go in

for more aggressive marketing to sustain its market share.

The chronology of the initial phase of the ‘Cola Wars’ started in 1977

when refusing to dilute its equity stake Coca-Cola wound up its

operations in the country. Parle launched Thums Up and Pure drinks

launched Campa Cola. In 1990 Pepsi Cola and Seven Up were

launched in limited markets in north India. At the same time the Pepsi

project was cleared by the government and there was a change in the

brand name to Lehar Pepsi. Simultaneously the Coca-Cola application

was rejected. Citra from Parle hit the market in May 1990. In 1991

Pepsi extended its reach on a national scale with products being

launched in Delhi and Bombay. By 1993 Pepsi launched Teem and

Page 12: Marketing Management (Coca Cola)

Slice and captured about 25-30% of the soft drinks market in about 2

years. The fact that the fight for market share in Cola segment is

referred to as Cola wars signifies the intense competition prevailing in

the industry. Although Parle had complete dominance in the drinks

market it opted out of the competition. Both Coke and Pepsi have

reowned brands, and financial and marketing power to support them.

Page 13: Marketing Management (Coca Cola)

THE COCA-COLA PROFILE

The product that has given the world its best known taste was born in

Atlanta, Georgia on May 8, 1886. "Delicious and Refreshing" a theme

that continues to echo today wherever Coca-Cola is enjoyed. Dr. John

Styth Pemberton, a local pharmacist, produced the syrup for Coca-

Cola.

The trademark Coca-Cola, used in the marketplace since 1886, was

registered in USA patent office on January 31, 1893. The now familiar

shape was granted registration as a trademark by the US patent office

in 1977. The bottle joined the trademarks "Coca Cola" registered in

1893 and Coke registered in 1945.

Ernest Woodruff was the person who gave Coke to the entire world.

The company pioneered the innovative six-bottle carton in the early

1920's for e.g. making it easier for the consumer to take Coca-Cola

home. The Coca-Cola Company were also the pioneers of fountain

dispensers and the metal can. During the World War 2. Coke

distributed 5 billion for the military service personnel during the war.

As the world emerged from a time of conflict, Coca-Cola emerged as a

worldwide symbol of friendship and refreshment. In 1955, the Coca-

Cola company marketed its first soft drink other than Coke :- an

Page 14: Marketing Management (Coca Cola)

orange flavored soft drink introduced in Naples, Italy. Fanta is now

the number 5 soft drink worldwide. Also in the late 1950's company

developed a citrus flavored drink. The short, sharp and memorable

sound of Sprite made it an ideal name for the new product. Minute

Maid is another of the company's popular trademarks. In 1982, Coke

created history by introducing Diet Coke - a top low calorie soft drink.

In 1988, Coca-Cola was confirmed as the most admired and best

known trademark in the world.

THE BRAND - COKE

The product Coke falls in the low involvement product category. A

high involvement product category includes products like washing

machine which one buys after lot of exploring and research. On the

other hand a low involvement product involves more of instant buying

e.g. centerfresh, coke, Pepsi, etc. For such a product the advertisements

are a must as it is through ads the brand can be made a "top of the

mind" brand. The advertisement of Coke are as a matter of fact large in

number, since it is these ads which actually leave an impact on the

audiences mind.

Worldwide, Coke as such has had a very serious image. It has been the

older generation that has been its target audience, as it has maintained

Page 15: Marketing Management (Coca Cola)

a very official image. But, in India, Coke was not being successful

with its image since the concepts of consuming aerated drinks is

common among the youngsters. The older generation prefers tea or

coffee to soft drinks. Therefore, Coke has now shifted its target to the

young generation. Now the ads include young stars like Karisma

Kapoor, Twinkle Khanna, Aamir Khan etc.

Even when we see the Coca-Cola ads we can see that it maintains its

serious/official image. It never comes up with counter ads like Pepsi

does. For instance, when Coke became the official sponsor of the

World Cup, Pepsi came up with its adline- "Nothing official about it".

The main competitor of Coke is Pepsi and there are very few others.

Looking at the competition one can say that the market structure that

the company is operating in is Oligopolistic. The competitiveness

between Coke and Pepsi is evident through the advertisements and the

price changes from time to time. The price of the two products remain

always the same as one can be bought easily in place of the other. So to

say, when the price of one falls, the other immediately follows.

Globally Coke is more in demand, but in India it is marginally ahead

of Pepsi with 53% share falling from initially 67% share.

Page 16: Marketing Management (Coca Cola)

HOW DID COKE GET INTO A MESS IN INDIA ?

The answer to that question is the story of how Coca-Cola -- which ran

up nearly $2.5 billion in net earnings in 1999 -- has made a mess of its

first nine years of its second coming in India. The country is one of the

largest of the nearly 200 markets it operates in. By the end of this year,

Coke would have pumped in $800 million in India, $700 million of it

in the last three years alone. That is more than the investment it has

made in any other emerging market ever, and more than twice the

investment that Pepsi has made in India. By internal assessments, Coke

can't even begin to make profits on that investment within the next 18

years. But the most embarrassing part is this: after all these years, India

is the only market in which Coke trails as the third cola brand -- after

Thums Up and Pepsi.

Alex von Behr, the new Coke India chief is now here to control the

operations. Coke is hoping that von Behr's past will help him in the

current job. "His must be the second-most Herculean job in the Coke

world to that of Douglas Daft (Coca-Cola Inc.'s just-appointed new

CEO)," says a Coke insider. To understand why, visit Coke's

headquarters at Gurgaon, outside Delhi. Since September -- when a

team from Atlanta arrived to comb through Coca-Cola India's

Page 17: Marketing Management (Coca Cola)

operations to find out where the excesses have piled up -- executives

have dreaded walking down the corridors for one reason. The office

has too many dark rooms, too many empty chairs, and squeaky clean

desks. Of the group of 300-odd who would keep the office buzzing at

all hours last summer, no more than 198 are left at the Coca-Cola India

headquarters. Among those who have left are top-notchers like

Damindra Dias, vice-president (finance), Cynthia D'Souza, vice-

president (human resources), and George Samuel, chief of franchisee-

owned bottling operations. They didn't leave as others do -- others are

routinely transferred overseas. They simply left the company. The

period will go down in the company's history as payback time, for the

mess that it got into in the 1990s. As Coke prepares for a fightback,

within the company there is a bold and open admission of the things

that went wrong. Three major strands have emerged in its mistakes. It

never managed its infrastructure, it never managed its crate of 10

brands, and it never managed its people. Today, Coke is working at full

speed to rectify precisely those three mistakes. Coke has a huge

distance to cover before it can put the mistakes of its past behind. As it

wound its way through the decade, every one of its chief executive

officers faltered on each of these counts. The story begins from 1993,

Page 18: Marketing Management (Coca Cola)

the year Coke returned to India after 16 years, riding on a big bang

deal.

Wrong cue?

Remember the basic facts of the time? Jaydev Raja, young, spunky

CEO, moves in on the country's largest soft drink operation, owned by

the tough-talking Ramesh Chauhan. Raja proceeds to buy out the

brands (which enjoyed an aggregate market share of 60%) -- the

market leader Thums Up, Gold Spot, Limca (and later, Maaza). More

vital to him is the network of 56 bottlers that comes with the deal.

From day one, Coke the company begins with a bang. Pepsi is running

scared.Raja, in asking Chauhan for his network, had butted into a

similar conversation between him and Pepsi. Industry sources say that

Pepsi had got KPMG to value the operations, and that the total

valuation of the brands and the distribution agreements that would

have to be inked with the bottlers came to around $73 million. Coke, it

is believed, paid out  no less than $100 million in pipping Pepsi to the

post (of which a straight payment of $40 million was made to Chauhan

for the brands). Did Coke overpay? It is difficult to answer that

question, but a comparison should help -- after losing out to Coke,

Pepsi invested over $400 million in its own bottling operations. That

Page 19: Marketing Management (Coca Cola)

slowed it down somewhat but also ensured that it did not have to

grapple with a culture problem that became Coke's worst nightmare a

few years later. The Chauhan deal also included a couple of little

clauses that would return to haunt Coke. Chauhan tried to ensure three

future roles. He was to be consultant to Coke, he would have first right

of refusal for a mega bottling plant for the Pune-Bangalore corridor,

and as bottlers in the two biggest markets Delhi and Mumbai, he and

his brother would have a powerful say in Coke's future.

Getting the marketing and distribution act together had proven beyond

him. To be fair to Raja, the weaknesses in the bottling system were

almost insurmountable. Territories were like fiefdoms. The plants were

low-tech affairs with an average capacity of 200 bottles per minute

(Coke's global standards are between 1,200 and 1,600 bpm). Bottlers

had to deal with a corporate system that kept them at arm's length.

They were invited to 5-star hotels for half-day workshops on Coke's

market plans. But the flow of ideas was one way -- no inputs were

taken from bottlers. Coke on its part had to struggle to convince

bottlers that they needed trucks which would have back doors that

could be locked. Investment of every extra cent had to be forced down

the bottlers' throat. Chauhan's bungalow at Santiniketan, New Delhi,

Page 20: Marketing Management (Coca Cola)

was becoming the centre of growing discontent. Bottlers dropped in,

told Chauhan of their problems with Raja's set-up. Chauhan himself

started telling people that Coke was not doing enough to promote

Thums Up. Coke was not consulting him on any move, making a

mockery of his "consultant" status. Finally, the action shifted to

Chauhan's lawyer's home at Vasant Vihar, where Chauhan spelt out

why he felt cheated. He brought up the clause on his consultant status,

on fees that he thought should still be paid to him, and on the fact that

Coke did not want to give him the right to set up the bottling plant for

the Pune-Bangalore corridor. On condition of anonymity, those within

Coke who weathered that storm will tell you another story. Coke found

that more Thums Up was being sold in northern Indian markets than it

had supplied concentrate for. Where did the extra concentrate come

from? Coke suspected the man who had till recently owned the Thums

Up formula. Whatever be the truth, what came into the open was the

fact that Coke India and its biggest bottler were fighting a bitter battle.

Baring its teeth

The headquarters felt that the man to replace Raja should be one who

could strike bulk deals with hotel chains and big restaurant chains such

as McDonald's. They picked Richard Nicholas, skilled at selling Coke

Page 21: Marketing Management (Coca Cola)

to big institutional buyers.  Coke, through its massive initial purchase,

had actually bought into a bit of a mess. It needed someone who could

manage the excesses: both of bottlers and of brands.Nicholas was

hardly the man for the job. Old timers among bottlers still remember

the tone with which Coke spoke to them. Without prior consultations,

Coca-Cola sent across formats for joint venture agreements to the

bottlers -- they were being asked to give up ownership, part or whole,

so that Coke could grow. The impression quickly gained ground that

Coke wanted to grow at the expense of the bottlers. The gist of Coke's

offer was: expand from 250 bpm to no less than 1,200 or 1,600 bpm, or

simply sell out. There were those who never thought of selling out of

their businesses, some who set great store by being Coke bottlers, and

others who felt that with the kind of money needed for the expansion,

they would much rather set up four or five plants in new areas rather

than expand so dramatically at their existing plant. Coke did not

provide soft loans (such as those offered by Pepsi to its few franchisee

bottlers) -- although it made huge capacity demands. New Delhi-based

Mansarovar Bottling had to go public in the mid-nineties to finance

growth. Several bottlers spent upto Rs 16 crore each in upgrading

capacity from 200 to 400 bpm, when the margin on a bottle of Coke,

for the bottler, was no more than a puny 5%. They mostly refused

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Coke's ultimatum. Some bottlers started walking across to Pepsi (a

migration by Pinakin Shah, Coke's Ahmedabad-based bottler, led to a

court case). Once again, Ramesh Chauhan took up cudgels for his

erstwhile bottlers, and it all hit the headlines.

Brand stranded

Even as Nicholas put the big deals in place, Coke volumes were still

not moving off the shelves into consumer homes.Coke ran its global

ads to show off its worldwide leader status. One, called "Orchestra",

showed people in a beach setting, playing the coke jingle on tin drums,

bottles, and other make-shift musical instruments -- communication

which worked elsewhere, but sank like a stone in India. In its three

years in India, Coke went through three marketing heads -- Abraham

Ninan, Nitin Dalvi, Ninan again. The ad-spend on Thums Up was

negligible, but Coke was still failing to replace it, as planned. Thums

Up's market share was being taken by Pepsi -- Pepsi Cola's  share was

around 30%, almost thrice  Coke's. The dream of Coke-red India was

fast turning to dust.

You just had to take a look at Coke's 10-brand portfolio to see that.

You call that a portfolio. There are three orange (Gold Spot, Crush and

Page 23: Marketing Management (Coca Cola)

Fanta) and two clear lemon drinks (Sprite, Limca) in there.

But the central issue was bigger. Could Coke ever kill an asset like the

Thums Up brand, when it could risk losing a substantial percentage of

its market share lead to Pepsi? Nicholas, his predecessor and his

successors have not been able to make up their mind until recently.

Now, the Thums Up ad budget has been stepped up, clearly to help it

develop an identity. Nobody got it as wrong as Nicholas. Critics still

underline the fact that when Coke's World Cup of Cricket campaign in

1996 got thrashed by Pepsi's spunky "Nothing official about it" splash,

the sporty Thums Up was missing completely. Coke finally unleashed

a big bungee jumping campaign for Thums Up in 1996, but withdrew

it quickly after some children started trying to emulate the trained

young man who tries out the dangerous sport in the ad. 

Mr Nice Guy

Nicholas' successor Donald Short came to India with one brief: to get

the infrastructure issue resolved. And he came with a blank cheque. He

realised early that the face Coke presented to India was too threatening,

too rough, and too foreign. He changed things within the office, and

concentrated on winning back the bottlers. Gradually, rather than

through dramatic confrontation, he got them around to talking about

Page 24: Marketing Management (Coca Cola)

selling out. One by one, 38 bottlers agreed to sell, and the deals were

settled amicably. The total bill, as mentioned before, came to $700

million. But some in the industry say that the price of cold beverages

capacity should not go beyond Rs 3 per case, whereas Coke ended up

paying between Rs 5 and Rs 7 per case. They say that made a huge

difference. 

Short did manage to present a better face of Coke to the bottlers and

employees. The prices paid for the plants included goodwill for market

development for the last four years, and also compensated sellers for

loss of earnings for a few years. Children of former owners were given

jobs (their understanding of the business would land some of them

general managers' slots). He hiked salaries, a major factor in snaring

more than 20 Pepsi employees, which prompted Pepsi to drag Coke to

court. But again, overspending was an issue. When Short arrived in

1997, Coke had 60 employees in India. By the last quarter of 1999, that

number had risen to well over 300 at the Gurgaon headquarters alone,

even if you don't take into account the massive bottling workforce.

Coke's big problem has recently been to rationalise its workforce at

headquarters.

 

Page 25: Marketing Management (Coca Cola)

Coketales

Coke's bottling fiascos are legend. Here is one. One fine morning, the

Timblose family that owned Coke's Goa bottling plant in India decided

to defect (some say it was due to a marriage into the family of the

Pepsi bottler). What did the soft drinks company do? Coca-Cola

bought out Timblose truckers -- at four times what they were getting

paid. Since it did not have a local bottling plant, these truckers had to

then bring in supplies from neighbouring Karnataka at much greater

cost. The company tried setting up a plant, but ran into environmental

hassles. Chief minister after chief minister stalled the plan, while

Pepsi, which by then had funded Timblose's new trucking line, made

merry. The Coca-Cola plant has finally only just gone on stream.

Pepsi has often aimed jibes at Coke in its Indian ads, most memorably

through the "Nothing Official About It" campaign during the 1996

Cricket World Cup. Coke is retaliating through Sprite, its clear lemon

brand. The ads poke fun at Pepsi's millennium commercials and other

celebrity-oriented campaigns. Some in the ad industry think this isn't

too clever -- taking on a drink that owns 60% of the most popular cola

market with a minor label in the clear lemon segment, which itself

accounts for about 2% of the total cold beverages market. Coke doesn't

Page 26: Marketing Management (Coca Cola)

think so: it has traditionally royally ignored Pepsi, and is happy using

extras to fight its battles. The hero it will save to fight another day.

From a disaster case to a model which could earn more revenues for

coke could be quite a transition. Watch out for that. 

Page 27: Marketing Management (Coca Cola)

COCA-COLA’S STRATEGY

Coca-Cola has adopted aggregation segmentation. This means that

Coca-Cola is in effect not segmenting the market because its drinks are

targeted at all people of all ages.

Since the days it was launched in the country, Coke has not been able

to take a distinct position in the market. It came in with the ‘We’re glad

to be back’ nostalgia position for those Indians who had been

consumers of Coke before it had left the country – primarily an elderly

age group by now. Thereafter, it tried to position itself as the drink for

all ethnic races (through advertisements showing people of different

races and color dancing together), as the drink for young Indians (with

the animated cricket advertisements during the World Cup) and as the

drink for the Urban as well as the Semi-Urban Indians (with the

‘Zindagi ek josh hai’ advertisements showing semi-urban background).

Thus, it tried to be too many things to too many people and never

occupied a distinct position in the mind of the Indian consumer (It’s

current USP-Always Coca Cola almost gets lost in the entire ad

sequence). With its nostalgia and the Zindagi ek josh ads, it also

missed the big market comprising young city Indians who could not

Page 28: Marketing Management (Coca Cola)

identify with its nostalgia position and found the semi-urban unifying

message rather unappealing compared to Pepsi’s ‘exciting, on the

move, young’ image. Its international position of ‘The Real Thing’

also never came out really well. The said rendering of advertisements

by McCann Erickson paled in comparison to the high voltage Pepsi

advertisements.

Coke limited its promotional campaigns to mass media campaigns,

largely TV ads, during the initial years. This limited the brand salience

that it was able to create with the Indian consumer and affected its

performance in a product category that banks on a high degree of brand

recall.

However, Coke did differentiate itself as the ‘Red’ drink through its

ads (the significance and meaning of Red for an average Indian is

disputable). It also maintained its personality of a mature and confident

person who is unfazed by the strong direct attacks of a brat like Pepsi

and who does not resort to hitting back. The only thing lacking was the

ability to attract the attention of the consumers and to deliver these

positioning and image variables decisively.

Page 29: Marketing Management (Coca Cola)

The ‘Hollywood to Bollywood Hangama’ and the ‘Meri Jaan

Hindustan’ sponsored cassette on the occasion of India’s independence

are two such instances of local promotions by Coke. The ‘spirit’ of

coke and the various advertising slogans that it adopted over the years

has not undergone a radical change. Still it is interesting to know that

the Coke line has changed 33 times in the past 101 years.

1886

1904

1905

1906

1917

1922

1925

1927

1929

1932

1938

1939

1942

1942

1948

1949

1952

1956

1957

Drink Coca Cola

Delicious and Refreshing

Coca Cola refreshes and sustains

The great national temperance

Three million a day

Thirst knows no reason

Six million a day

Around the corner from everywhere

The pause that refreshes

Ice cold sunshine

The best friend thirst ever had

Coca Cola goes along

Wherever you are, whatever you do, wherever you maybe, when

you think of refreshment, think of ice-cold Coca Cola

The only thing like Coca-Cola is Coca-Cola itself. It’s the real thing

Where there's Coke there is hospitality

Coca Cola…along the high way to anywhere

What you want is a Coke

Coca Cola…making good things taste better

Sign of good taste

Page 30: Marketing Management (Coca Cola)

1958

1959

1963

1970

1971

1975

1976

1979

1982

1985

1986

1989

1990

1992

1993…

1999

2000

The cold, crisp taste of Coke

Be really refreshed

Things go better with Coke

It's the real thing

I'd like to buy the world a Coke

Look up America

Coke adds life

Have a Coke and smile

Coke is it!

We've got a taste for you (Coca-Cola and Coca-Cola Classic)

America's real choice

Catch the wave ( Coca Cola) Red white & you (Coca Cola Classic)

Can't beat the feeling

Can't beat the real thing

Always Coca-Cola

Eat Cricket, Sleep Cricket, Drink only Coca-Cola

Hum saath saath hai

Jo chaho ho jaye coca cola enjoy

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HOW SALES PROMOTION WORKS

Sales promotion is an activity or material that offers consumers,

salespersons, or resellers a direct involvement for purchasing a

product. It's one aspect of the large area of promotion, which also

includes advertising, personal selling and publicity. Organizations

often make use of sales promotion to reinforce the effectiveness of

other ingredients of the promotion mix, especially advertising and

personal selling.

Sales promotion includes all short term offers directed at buyers,

retailers or wholesalers and designed to achieve a specific, immediate

response. The incentives directed at consumers include coupons,

premiums, free samples and free exhibits. Trade promotion, which are

directed towards retailers and wholesalers, include cash and

merchandise allowances, equipment's and awards to such firms or to

their personnel.

Sales promotion, especially those that are directed towards consumers,

are often communicated through or coordinated through an

advertisement. Consequently, these programs may contribute to the

building of brand awareness, to the development of more favorable

attitudes or to some other advertising objective.

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The different types of Sales Promotion include Discounts Freebies Contests Exhibition Event Marketing Point of Purchase Material

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PRODUCT RELATED STRATEGY

To establish and reinforce Coca-Cola as the standard for product

integrity amongst all beverages, Coca-Cola has adopted. The following

measures

Consistent delivery, wholesome product quality in line with

established brand standards.

In immediate consumption segments, always ensure ice-cold

availability.

Communication product integrity through a single brand name

Coca-Cola unique product formulation and paralleled product

integrity make Coca-Cola the beverage that delivers real Coca taste

and refreshes the body mind and spirit.

Key Components of Strategy

Product Formulation

Consistent delivery on key attributes of Cola taste, flavour, sweeteners,

carbonation, body and colour.

No chargers to current formulation

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No consumer taste test

Full compliance’s with product policy

Product Delivery

Ice-cold availability in “immediate-consumption” segments

Communication of ice- cold consumption in “future consumption”

segments through packaging graphics.

Branding

Single brand name-Coca-Cola

Brand used in conjunction with English

Logo in spencerian script as per ensuing

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PRICE

Initially, coke carbon – copies the strategy by introducing its 330 ml

cans in January 1996, at an invitation price of Rs. 15 before raising it

to Rs. 18. By this time, it had realised that the Coca-Cola brand did not

hold enough attraction for customers to fork out a premium. In twist to

entry pricing, therefore, short is tweaking the Sinha template, hs’s

using lowers prices smaller – sized version to gain consumers. The

200ml Coke, launched so far in parts of eastern, western, and northern

India, is prices at Rs. 5 lowering the entry barriers. Not in used long

enough for its efficacy to be tested, the strategy, nevertheless, draws

contempt from Ramesh Chauhan, 57. CEO Parle Exports, Coke “bottle

in Delhi, who scoffs: “You can’t achieve anything by bringing down

the pricing from Rs. 7 to Rs. 5.5 to really drive the market, coke must

go down to Rs. 3” So it will be Sinha’s to catch up with smallet,

cheaper bottles.

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CHANNEL MANAGEMENT

Coca-Cola conflicts with its bottlers have finally settled down to a

pattern that it’s global experience understand. Coca-Cola India is

floating two subsidiaries, Bharat Coca-Cola and Hindustan Coca-Cola,

which will act as holding companies for most of its bottling operations,

thus giving the transactional ownership and control over this company

had made the mistake of demanding huge investments from its bottlers

without worrying about the will to sustain losses as long as Coca-Cola

did. In the process, it had alienated the former Parle franchises so much

that they refused to give off their best. If Short can now adopt Pepsi

method of transferring the translation’s expertise to the bottlers, his

brands will benefit.

Distribution and Bottling System

Virtually all the goods and services required to produce and market

Coca-Cola locally are made in India. Wherever needed, assistance is

provided to local suppliers, enabling them to meet the Company’s

regorous quality standards. In this way, CCI contributes not only to the

development of the soft drink industry, but also to the development of

related industries and to the whole economy.

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At present they have 3,50,000 outlets supplying Coca-Cola products

and the company has now introduced the following innovations for

distribution.

Full depth stackable plastic cates, in bright rend with Coca-Cola

trademark.

Newsix and 10 ton closed by route tricks, loaded by forklift with

standardised pallets of multiple crates, permitting more efficient

distribution.

New Three wheeled vehicles open bay, for citylalley distribution.

CCI has adopted an Intensive Distribution strategy. It is imperative to

have a wide spread distribution or in other words, the desired ‘width’

and ‘depth’ of distribution. Therefore, within an area products

available at maximum possible locations. Here they focus on the

‘Availability’ which is a very important factor which constantly needs

to be reviewed.

Company Bottlers Distributors Customers

Coca-Cola System

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The company has now a 53 strong bottling plant network, (the Gujarat

Bottling Company ceasedio be a Coca-Cola franchising mid – 1995),

and has been granted approval by the Government of India to invest a

total of US$ 840 million into the country. Out of the 53 bottling plant

networks, 32 are bottling Coca-Cola and the rest are bottling the other

brands of the Coca-Cola company. One bottling plant network has

been setup by Coca-Cola for Cans and another one for Pet Bottles.

Distribution-Coke

As has already been demonstrated, this is the key to the soft drinks

business, Coca-Cola has devised a new strategy for retail marketing. It

has identified five segments bound by a similar need or desire to

purchase viz. Transportation, education and entertainment, eating and

drinking, work and grocery store. It will be the concerted effort on the

part of Coca-Cola to reach as many of these channels as possible.

Coca-Cola India has added a brand new proprietary link to the cold

chain, this summer- the pouring junction. Coca-Cola has patented a

new technology for vending soft drinks which promises to reduce

bottlenecks in distribution and bring the fizz back to Coca-Cola India

the technology for the cold- plate pre-mix pouring junction has been

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developed indigenously by Coca-Cola India. The company was

awarded the patent for the technology from the government of India, in

January, 1998.

The pouring junction is seeking worldwide registration through its

Atlanta – based parent, the Coca-Cola Company.

The pouring junction’s distinctions are as follows:

It’s low –cost technology which offers mobility in vending

Doesn’t need electricity to operate

Offers flexibility in dispensing amounts

Ensure that the soft drink comes out chilled at the correct

temperature and carbonation without any direct contact with

contaminated ice for water.

The Pouring junction also promises to shake up soft-drink pricing. A

chilled 200 ml will cost just Rs. 5 when dispensed from a pouring

junction, compared to Rs. 8 for 300ml dispensed from a fountain. The

cooling system is deceptively simple, relying on a base loaded with

crushed ice.

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The company plans to distribute 1,000 pouring junction for starters,

and eventually hopes to expand at the rate of 1,000 pouring junctions a

month, because the pouring junction is expected to score over other

high-cost cooling equipment like the Visicooler or the fountain.

Coca-Cola India has lined up a number of exclusive tie-ups in the

travel sector to tap potential consumers on board airlines and trains.

The soft drink major’s contracts include those with Sahara Airlines

and the Konkan Railway Corporation. Both these companies will serve

only Coke to their passengers. Besides, it is close to signing an

exclusive agreement with railways to serve Coke-on board the

prestigious Rajdhani Express Express, which connects various state

capitals to Delhi. In return, Coke will extend value-added benefits such

as Kiosks, on board dispensers and Use me bins to the railways.

Amongst airlines, Coke claims to have captured an 80% on Indian

Airlines (IA) flights. On-board Jet Airways, Coke has a 50% market

share, Coke has also signed an agreement with the Oberoi Flight

Kitchen, which supplies food to a number of airlines.

However despite the above mentioned initiatives, distribution is the

key area where Pepsi scores over Coke. Coke does not have a

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streamlined distribution system, it on one hand suffers because of the

turbulent relations that is has with its bottlers. Secondly, Pepsi has

exclusive tie-ups with most of the restaurants, hotels, clubs, movie

halls etc. thus raising the entry barriers for Coke in these captive

markets. Coke is following suit but at the moment lags far behind

Pepsi in this respect.

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PACKAGE SIZES

In 1993 the standard industry package was the 250ml returnable glass

bottle. This was being retailed at Rs. 5 CCI introduced 300 ml

Returnable Glass Bottles, (RGB), while maintaining the price at Rs.

5.00. The rest of the industry was forced to follow CCI’s example and

upgrade to 300 ml from 250 ml. The focus of CCI was to offer

consumers better value for price, and this has remained the cornerstone

of CCI’s strategy in India.

At present, CCI’s brands are available in a host of package sizes.

These includes 200 ml RGB, 300 ml RGB, 500 ml RGB, 1 Litre RGB,

1.5 Litre PET and 330 ml Cans. The 200-ml package was introduced

in March 1996, and was positioned to capitalise the potential of the

rural and semi-urban markets of India.

Coca-Cola India was the first soft drink company in the country to

launch cans. Coca-Cola and Fanta marked the beginning of the can

revolution in India. These brands were launched in cans just before the

World Cup Cricket in January 1996. Thum Up and Limca cans were

introduced in May 1996. These launches brought India on par with

international packaging standards in the soft drink industry. For the

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first time Indian consumers had a convenient, mobile, single serve

consumption package.

Consumers benefited from 11 more brand package combinations, led

by the successful, first ever launch of 1.5 litres PET bottles and the

subsequent introductions of 500 ml and 1Litre RGBs. This came with

the superior tamper-evident, leakage-proof Plastic Closures. This was a

technological leap over the metal closures then used by the rest of the

soft drink industry. All the four national brands, i.e. Coca-Cola, Fanta,

ThumsUp and Limca are available in all of the above package sizes.

Latest Development

Mobile Coke-easier to carry, more than can- around 500 ml

Mini Coke-Those who cannot consume 300 ml and for those who find

300ml-a bit expensive.

Packaging

Objective

To motivate brand purchase and maximize enjoyment of the

consumption experience

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To create a distinct identity for Coca-Cola in the mind of the

consumer.

Overall

Differentiate brand Coca-Cola by the use of the contour package,

icons and unique graphics.

Leverage packaging- as a communication vehicle of core Coca-

Cola values.

Gain availability of consumer relevant package types and sizes for

usage occasions and channels.

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As per our study on Coca-Cola, a SWOT analysis has been done

Strengths

1. Portfolio of 7 brands-Coke,

Fanta, Thumps-up, Limca,

Citra, Gold Sport and Maaza.

2. Established value for all of

their brands

3. Built immense consumer

awareness

4. One of the world’s most

pervasive consumer products

to refresh and to enjoy

5. Brand image

Threats

The 2 MNC Pepsi and Coca-Cola

keep indulging in pricing

gimmicks and smart-alike

advertising to the entire Indian

consumers. Both the companies

are a threat to one-another as both

of them are spending huge

amounts on campaigns in press

and electronic media.

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Opportunity

1. Marketing programmes

2. Product sampling

3. Indian - rural market has a

great potential -this sector is

basically “Real Market” for its

products-intense Research

should be done and a no. of

strategies should be evolved.

Weakness

1. Distribution system needs to be

upgraded as main goal is to

make it always available –

within an arm’s reach of

desire.

2. Per capita consumption is very

low

3. Market regulation

Brand Positioning

Positioning of the different brands in the Indian soft - drink market can

be analysed by the way the various brands have been advertised by

their companies and the manner in which they are perceived by the

consumers. Some of the key positioning based used by some of the

leading brands are indicated bellow.

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Youthfulness

Pepsi : "Generation Next", "Right Choice" Youthfulness fun with a

distinctly American connotation.

Coke : "Eat Cricket" Sleep Cricket, Drink only Coca - Cola"

Suggesting youthful drink.

ThumsUp : "Taste the Thunder", indicates adventure with all its

related connotations.

Health

Limca : "With Isotonic Sales" - positioned as a balanced health

drink

Slice : Aims at freshness of fruits and health

Fashionable

Fanta : Anything is possible

Campa-Cola : "The taste of the times"

Gold spot : "The Zin Thing" Placed as the “in drink” of the day

Mirinda : Miranda - a-a-a suggests light humour.

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Thirst - Quencher

Citra : 'Citra super Cooler'

Teem : Appealing to thirst

Limca : Thirsty - time Limca times

Sprint : "Standard out from the crowd" "out of the ordinary

7Up : Thirst and youthfulness.

Market Segmentation

Demographic: Soft drinks are mostly consumed in the urban market.

However, the market can be segment on the basis of several

demographic variables like the age of the consumer, geographic

location of the market and place of consumption (indoor or outdoor)

Climate : Places with high humidity and temperatures induce loss of

body fluid under these climate conditions consumers use cost drinks to

replenish the lost body fluid. Hence there is a potential soft drink

market is such places.

Medicinal : Certain flavours like plain sodas are perceived to aid in

digestion

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User Status : Most consumers perceive soft drinks as a Thirst -

Quencher. A few segments can be defined based on the purpose behind

the consumption.

Normal : The group of consumers who consume soft drinks as a thirst

quenching medium

Select : The group of consumers who consume soft drinks as a diluting

medium for alcoholic beverages.

Elite : The group of consumers who prefer soft drinks to water. They

also offer soft drinks to guests

Social : This group comprises of individual and institution who serve

soft drinks during social functions. This segment has emerged as the

most rapidly growing market.

The market strategy of Coca-Cola Revolves around

Acceptability

Availability

Affordability

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The emphasis is on these three fronts. Firstly they focus on

distribution, their objective is to be within arm’s reach of desire of

every consumer, meaning than they should continue to implement

aggressive distribution strategies so as to former increase their reach to

the millions in India.

Secondly, building on acceptability and affordability, they aggressively

continue to add value to the entire experience of drinking their

products, enabling them to draw ever so closer to their consumer.

Their focus is not on more market numbers but on the fluid intake.

Internationally they consider their growth potential infinite, and India

is the epitome of their growth potential infinite, Currently in India, the

primary emphasis is to enhance their production and distribution

systems to bring them to international levels. This will enable them to

provide a choice from their brands to every potential consumer in any

part of India.

They are highly consumer driven company, and their objective is to

drive volumes through advertisements. For e.g., their volumes

increased by 64% in the 1st quarter of 196 as a result of their World cup

Cricket initiatives. For the 1999 Cricketing season they launched an

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innovative series of advertisements named “Experts”. Their strategy

was to further enhance their emotive association with the game of

cricket in general and Cricket fans in particular. This reinforces that

whenever and wherever there is Cricket there is Always Coca-Cola.

In 1993 Coca-Cola bought out Parle Exports: This was a sound

strategic decision on their part since it enabled them to obtain both,

very strong brands and an excellent distribution network.

However, at this point in time, Coca-Cola committed a strategic

mistake. It overestimated the brand equity of Coca-Cola. However, in

the 16 years that Coke was away. India saw a whole new generation

growing up on other Colas. Millions of teenagers (probably a sizeable

if not the biggest chunk of the Cola consumers) did not identify with

Coca-Cola nor were they enamoured by Coke simply because of it

being a global brand. The biggest mistake Coke did was to take the

Indian consumer for granted. The company believed that it name alone

coupled with global ad campaigns would be sufficient to tempt the

Indian consumer to guzzle coke by the gallon. Coca-Cola, in love with

the mother brand, neglected the star Indian brand Thums Up.

Moreover, Coke employed its global positioning strategy of targeting

at consumers from 8 to 80.

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Coke was positioned as a thirst-quenching refreshing ice cold drink for

all occasions. It also stuck on to its global strategy of high value

advertising. It also used the same international advertising used

globally instead of coming out with an Indianized version of the same.

The culture of Coca-Cola keeps a straight face, the jacket and necktie

types, remains tight – lipped is more American than Indian.

Coca-Cola was restricted by its Atlanta-centric attitude. Previously all

policy decisions had to be approved by Atlanta. The organizational

culture was so restrictive that even an advertisement copy had to be

sent to Atlanta for their approval. However, post 1997, when Donald

Short replaced Richard P. Nicholas III, Coca-Cola India has seen a

revolution of sorts. The new CEO of Coca-Cola International, Douglas

Ivester has given Short a free hand with his mandate being to do

whatever was right to drive up market share in India. This is

responsible for Coca-Cola’s recent change of image and its more

aggressive marketing policies which are also being referred to as

“Pepsization of Coke”.

“Do the Right Thing” Today it’s a mission statement for Coca-Cola

India.

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Ironically Pepsi has had a lot to do with the enunciation of the

statement, Ever since the battle for the soft drink market broke in India,

Coke’s Rival form New York has been gaining the upper hand here.

But now, the aggressive initiative that Coke is embarking upon

promise to even things out a little. Coca-Cola is finally and redoing

the real thing to replicate the success that its arch-rival Pepsi has

achieved with its fast and furious marketing, coke is copying Pepsi in

the following ways.

Push Vs Pull Strategy

The firm follows ‘Push’ strategy focussing on the promotional efforts

of manufactures on the member of the distribution channel itself.

Allowance, trade promotions and personal selling one designed to

influence middlemen to stock the manufacturers products and promote

them to final consumer.

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TOP OF THE MIND (in percent)

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CONSUMER BEHAVIOR

It is defined as the study of the buying units and the exchange

processes involved in acquiring, consuming and disposing of goods,

services, experiences and ideas. The study of consumer behavior is the

study of how individuals make decisions to spend their available

resources on consumption related items. It includes the study of what

they buy, why they buy it, when, where and how often they buy it and

use it.

It is very important to understand the psychology of the consumer as

for a marketer the consumer is the be all and end all. All his activities

are directed towards making the product available to the consumer and

keeping him happy. The consumers buying habits are not stable and

promotions offer one way to persuade people to switch to a competing

brand or try a new product. For e.g. it is estimated that more than 2/3 rd

of purchase decisions for regularly purchased super market items are

unplanned purchases.

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Why study Consumer Behavior ?

Understanding consumers and the consumption process brings a no of

benefits, among them the ability to assist managers in their decision

making, provide marketing researchers with a knowledge base from

which to analyze consumers, help legislators and regulators create laws

and regulations concerning the purchase and sale of goods and

services, and assist the average consumer in making better purchase

decisions. Moreover, studying consumer behavior will enhance your

understanding of the psychological, sociological and economic factors

that influence all human behaviors.

1. Consumer analysis should be the foundation of marketing

management. It assists managers to :-

Design the marketing mix.

Segment the market place.

Position and differentiate products.

Perform an environmental analysis.

Develop market research studies.

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2. Consumer behavior should play an important role in the

development of public policy.

3. The study of consumer behavior will enable one to be a more

effective consumer.

4. Consumer analysis provide 3 types of information :-

Consumer orientation.

Facts about human behavior.

Theories to guide the thinking process.

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ANALYSIS OF THE STUDY

PREFRENCE OF DRINKS

Since the Cola market in India is divided into 2 segments Coke and

Pepsi, this question was targeted to find out which drink out of the two

is more popular with the consumers. According to our study the

preference was more towards Coke with 62% favoring it, Pepsi having

32% and others with 6%.

PARAMETERS OF CHOICE OF SOFT DRINK

There are many parameters that are considered by a consumer before

buying a soft drink such as Price, Brand, Taste and Impulse. Incase of

a soft drink the taste is of utmost importance. Whereas for some people

It can be an act of impulse. Through our study we concluded that for

most people ( 62%) Taste played the major factor in the decision to

buy a drink. The next factor was Brand, this was most felt because

Pepsi and Coke have positioned themselves very strongly in the minds

of the consumers. For some it did not matter which brand he

consumed, it was more on decision made on impulse as they felt that

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there was not much of taste difference between the two brands, for

them a Cola remained a Cola.

CONSUMERS REACTION

To know the consumers reaction towards the sales promotional

activities undertaken by a company and whether it induces the

consumer to switch brands, our survey indicated that 50% of the

people are brand loyal, for them the taste of the drink was most

important and they were not ready to change to another drink because

of Sales promotional activities. Whereas 48% can change preferences

if given attractive offers. They perceived these offers to be attractive

enough for them to change brand. The rest 2% were undecided as it

depended a lot to them as to what the offer was. An attractive offer

could make them switch.

MOST ATTRACTIVE SALES PROMOTIONAL ACTIVITIES

Amongst the different sales promotional activities undertaken, most

people found Great Savers, Movie campaigns and Event Marketing

as most attractive and widely accepted. Great Savers were perceived as

convenient, because they are available to the consumer at their

doorstep.

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Movie campaign and Event marketing were equally preferred as

Indians associate themselves most with movies and other forms of

entertainment.

The Point of Purchase material displayed by the retailers influenced the

consumer to alter his last minute decisions in favor of Coke.

MAJOR RECENT CAMPAIGNS BY COKE

The Sales Promotion campaigns by Coke were divided into two main

segments -- Movie campaigns

Event campaigns.

It was found that in the past 6 months among the Movie campaigns

Hum Saath Saath Hai has been Coke's most successful strategy of

promoting Coke. This was mainly due to the fact that the timing of the

campaign was appropriate, with people associating Coke with the

festive season Diwali and family togetherness which was the highlight

of the movie Hum Saath Saath Hai. Next Movie campaign which was

most remembered and liked was Taal, as Coke was very prominently

displayed during the movie.

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Among the events, Coke was most associated with the Coca-Cola

Trophy, as cricket is part of an average Indian household. There was a

wide coverage of the event and Coke advertised at strategic points on

the field.

One must also not forget the huge success of the coke gift packs during

the festive season of Diwali which were available in attractive

packaging targetting the kids.

EFFECTS OF THE RECENT CAMPAIGNS

Based on our survey of Sales Promotion effectiveness of Coke we

found that 69% of the respondents did not switch over to Coke or those

who were already consuming did not consume more of it although they

were quite popular and attractive.

PERSONALITY MOST ASSOCIATED WITH COKE

The respondents were given six choices to choose from which were as

follows :- Karisma Kapoor, Aamir Khan, Twinkle Khanna, Daler

Mehndi, Saurav Ganguly and Javagal Srinath. This was to know

whether the celebrity endorsements are successful and people identify

with them and to see its effect on consumption patterns. Karisma

Kapoor being one of the leading actress was the most associated with

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Coke by the 52% of the respondents. 22% of the respondents

associated Coke with Aamir Khan despite the fact that Aamir endorsed

Pepsi before.

Daler Mehndi, the pop icon received 12% of the respondents

association.

The sports personalities did not receive much popularity as the

filmstars, this may have been because Saurav Ganguly and Javagal

Srinath are not among the most popular cricketers today.

On the level of consumption 38% feel that celebrity endorsements had

a positive effect in increasing their consumption level. 62% feel that

their consumption level has not increased.

IMPACT OF SALES PROMOTION SCHEMES

This was measured on three major parameters to know whether these

strategies have had a positive effect, negative effect or whether they

were not effective at all.

74% of the respondents feel that these have had a positive impact in

improving their brand image. They felt that the association of Coke

with the major stars of Bollywood and the entertainment industry kept

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Coke afresh in the minds of the consumers. While 6% feel that there

has been a negative impact. This was mainly felt by the hardcore Pepsi

drinkers who thought that Coke was trying to imitate the style of Pepsi

by associating itself with the celebrities, and the rest 20% feel that

there has been no major effect.

According to 65% of the respondents promotions by Coke have

increased their consumption levels. This was because of the lucrative

schemes offered. 29% feel that there has been no change while 4% feel

that it has had a negative effect on their consumption as they were not

satisfied with the Sales promotional activities and they felt that Pepsi

had better offers.

The effect which the Sales Promotion had to score over its rival brand

was that 52% of the people felt that there was a positive impact and

such strategies if effective could induce a consumer to change. 40% of

the respondents felt that their strategies were not good enough to score

over the rival brand.

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RECOMMENDED SALES PROMOTION STRATEGIES

The respondents gave certain recommendations, which they felt would

help Coke gain brand image. Out of 150 respondents most

recommended was the celebrity endorsements. 2'nd in line was Event

Marketing followed by Social awareness events and association with

Movie halls and restaurants.

The respondents felt that the aspirations of the customers would rise if

they felt celebrities consumed the same brand. They also felt that if

Coke advertised on special events and promoted social awareness

schemes, these promotions would in turn lead to an improved brand

image of Coke.

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RECOMMENDATIONS TO THE

COMPANY

1. Coke should carry on their celebrity endorsements with Karisma

Kapoor and Aamir Khan as they have been highly successful, as

they add aspirational value for the respondents. Coke should try and

rope in popular teenage idols such as Aishwaria Rai and Salman

Khan to cash in on their popularity.

2. Coke should increase their event marketing. Sponsoring college

rock shows, road shows, international events and holidays will have

positive effect on consumers as judged by the responses of the

respondents through our questionnaire.

3. Viewing the increasing public awareness on social issues such as

blood donation camps, aids awareness, environmental issues, Coke

should try and start social awareness campaigns, which will be

targeted both at youth and middle aged people.

4. More popular sports personalities should be targeted as has been

the strategy of Pepsi.

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LIMITATIONS OF THE STUDY

No study is an ultimate effort. It always leaves room for improvement.

And it is the limitation of one study which serves as the bases for

further research ventures.

1. The limited information regarding the parameters on which the

company differentiates its target audience from its competitors.

2. Certain questionnaires were rendered useless due to inadequate

information provided.

3. Size of the study was too small, keeping in mind the magnitude of

Coca-Cola consumers.

4. Time frame was not sufficient as studying the entire Sales

Promotion strategy of a company like Coca-Cola with millions of

consumers would require a detailed study of a larger sample.

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CONCLUSION

This study has given a brief overview of the importance of Sales

Promotion of Coca-Cola on Consumer Behavior. The responses

received has shown clearly that the Sales Promotional strategies of the

company seem to have clicked and have had a positive effect on its

consumers.

The major success in the recent time has been the personality

endorsement specifically by Hritik Roshan,Aishwarya Rai,Aamir Khan

Karisma Kapoor, its tie up with restaurant and movies like Hum Saath

Saath Hai, the discount it gives in the form of Great Savers and the

Coca-Cola trophy (Cricket). The reason behind all these successes

could be attributed to the fact that Coke targets the typical Indian

family, the Cricket freaks and the effect of Bollywood charisma on the

typical Indian consumer.

We have also tried to come up with certain recommendations through

our analysis of the questionnaire which we feel will help the company

in the long run.

Page 68: Marketing Management (Coca Cola)

To sum up we can say that Coke continues its successful endeavor in

the area of Sales Promotion. Seeing the growth potential of the soft

drink market in India, Coca-Cola can certainly increase its market

share through innovative and unique Sales Promotional strategies. We

wish the company all the best.

Page 69: Marketing Management (Coca Cola)

FEEDBACK FROM THE RETAILERS

When it comes to Sales Promotion the retailers have an important role

to play. They are one of the channels through which the feedback

regarding the performance of the Sales Promotional scheme reaches

the company.

The Coca-Cola company undertakes certain Sales promotional

activities which are beneficial to the dealers and on the other hand

attract a lot of customers to the product.

How Coke helps its Retailers :

A company can make upteem number of sales promotion schemes, try

and attract the consumers towards their product but it is ultimately the

retailer who is the final among the sales line of the manufacturer and

the last person in touch with the consumer before he makes his

purchase . They ultimately have the power to influence the customers

to make last minute changes. If the retailers are kept satisfied and

motivated the company would benefit in turn. In order to keep the

motivation of the retailers high, Coca-Cola indulges in certain

promotional schemes which are directed towards them.

Page 70: Marketing Management (Coca Cola)

Coca-Cola provides retailers specific contests which allow them to be

eligible to win prizes. Such schemes motivate the retailers to sell more

of Coke products. According to the capabilities of the retailers, Coke

managers set targets for them and if those are met the retailers are

given gift upto the extent of free refrigerators etc. These schemes keep

the retailers happy and in turn keep the sales high. The retailers are

given billboards for their shops to be displayed which have the shops

name and Coca-Cola endorses on it.

How Retailers help Coke :

Every company wants that shopkeepers stock their and only their

products. All manufacturers want this but the retailers are unable to do

so because of space constraints. Coke loyal retailers, mostly motivated,

display more of Coke than any other soft drink. They keep more of

Coke glow signs and posters and even try to influence consumers of

other soft drinks to consume Coke. This is solely due to the fact that

Coke takes utmost care of it's retailers by giving them incentives, gifts

and special offers. The relationship between them is such that both the

parties mutually benefit.

Page 71: Marketing Management (Coca Cola)

Effect of sales promotion on consumers:

Through an interview with a number of dealers, it was known that the

point of purchase material utilised by the company was one of the most

effective ways of attracting consumers. It actually helped a lot in

influencing the last minute decesions of the consumer. It was learnt

that as and when additional POP material was put up in the stores there

was a positive effect on the sales of Coca-Cola. Secondly it was also

found that generally after the launch of a new advertisement campaign,

if it was attractive and captivating enough the sales would increase by

about 10-15%. This showed that the sales promotional schemes and the

aggressive campaigns have a positive baring on the buying behavior of

the consumer. It was noted that during festivals like Rakhi and Diwali

the campaigns become more aggressive and are more noticed by the

consumers. Consumers generally are looking for more schemes and

discounts during this season and thus if the company wants to increase

sales it should take advantage of these festivals.

Page 72: Marketing Management (Coca Cola)

ASSUMPTIONS

1. Although Coca-Cola India has a large number of brands under its

umbrella, like Fanta, Sprite, Thums-Up, Limca, Diet coke and

Maaza but I have stressed only on their flagship brand “COKE” in

order to avoid complications in the study. Most of the sales

promotional strategies undertaken by the company have been

endorsed through the brand COKE.

2. Coca-Cola has always given due importance to promotional

activities so as to position itself as the top brand. Among all the

strategies, we have taken only the last six months into consideration

as these would be the freshest in the minds of the consumers.

Page 73: Marketing Management (Coca Cola)

Balance Sheet

(Rs. in

Million)

Year ended 31st March 2001 31st March 2000 31st March 1999

SOURCES OF FUNDS

Shareholders' Funds

Capital * 9094.40 80.00 80.00

Reserves and Surplus ** 595.05 594.72 605.11

Debit balance of Profit & Loss A/c (8,562.36) (8,739.96) (8,258.61)

Net worth (I) 1,127.09 (8,065.24) (7,573.50)

Loan Funds

Secured Loans 0 0 0

Unsecured Loans 1,259.68 10,274.08 9,628.99

Loan funds (II) 1,259.68 10,274.08 9,628.99

TOTAL LIABILITIES (I+II) 2,386.77 2,208.84 2,055.49

APPLICATION OF FUNDS

Fixed Assets

Gross Block 161.78 167.23 214.07

Less: Depreciation 98.25 104.07 152.89

Net block (III) 63.53 63.16 61.18

Page 74: Marketing Management (Coca Cola)

Investments (IV) 1,259.71 1,259.71 1,259.71

Current Assets, Loans and Advances

Inventories 3.44 13.27 44.01

Sundry Debtors 486.87 538.68 538.80

Cash & Bank Balances 467.78 404.25 394.26

Loans and Advances 827.35 627.29 921.87

Other Current Assets 125.19 216.74 205.29

Work in Progress 3,521.58 2,879.24 3,346.45

Current assets, loans & advances (V) 5,432.21 4679.47 5,450.68

Current liabilities & provisions

Less : Current Liabilities & Provisions

(VI)

4,368.69 3793.50 4,716.08

Net Current Assets (V-VI) (VII) 1,063.52 885.97 734.60

TOTAL ASSETS (III+IV+VII) 2,386.76 2,208.84 2,055.49

* Includes Rs. 9014.40 million Share Application Money – Pending Allotment.

** This represent exchange variation reserve. As per EPI’s accounting policy, the final adjustment

on account of exchange various is done on final settlement of all claims and liabilities of the

overseas projects

Page 75: Marketing Management (Coca Cola)

Profit and Loss Account

(Rs. in Million)

Year ended 2000-01 1999-00 1998-99

INCOME

Work done for the year 2,119.07 1,385.53 1,442.91

Other Income 285.25 129.92 70.40

Interest 205.33 191.12 186.71

Exchange Variation 0 0.10 0.86

Total Income 2,609.65 1,706.67 1,700.88

EXPENDITURE

Direct Expenditure 2,125.77 1,275.35 1,250.66

Administrative Expenditure 254.35 230.02 216.97

Depriciation 5.65 4.89 5.89

Contract Contingencies 17.07 33.93 31.00

Profit/(Loss before interest 206.81 162.48 196.36

Interest 12.13 647.70 646.59

Profit/(Loss) for the year 194.68 (485.22) (450.23)

Prior Period Adjustments (Net) (17.08) 3.87 108.38

Profit /(Loss) carried to Balance Sheet 177.60 (481.35) (341.86)

Page 76: Marketing Management (Coca Cola)

QUESTIONNAIRE

NAME___________________

AGE ___

OCCUPATION ____________

1. Do you drink soft drinks? Yes____ No____

2 How often do you drink? Daily___ Twice in 3 days_____ 4Times in a week _____ Can’t say_____

3 Which brand do you prefer ? Pepsi _______ Sprite ______ Mirinda _____ Seven up ______ Fanta_______ Limca ______ Coke______ Any other______

4 Which of the following reasons make you prefer the above chosen brand of soft drink?Price ______ Brand image_______Taste _______Impulse _______Can’t say/other reason (please specify)_________

5 Do you recall any of the coke ads? Yes(please specify which one)___________ No______

6. Do you think that the new coke ad campaigns have encouraged you to prefer coke over any other rival brand?

Page 77: Marketing Management (Coca Cola)

Yes______ No_______

7 If Yes (to the above) ,please give the influencing factors ?