Minor Project Report

On
Marketing Strategies of Coca Cola

Project report Submitted in partial fulfilment of the requirement of degree of

BACHELOR OF BUSINESS ADMINISTRATION

Submitted By:
ARMAN ALAM
Enrollment Number: 01591101721

SHRI GURU TEGH BAHADUR INSTITUTE OF

This is to certify that the minor project titled “Marketing Strategies of Coca Cola” is an
academic work done by ARMAN ALAM submitted in the partial fulfillment of the
requirement for the award of the degree of BBA at SHRI GURU TEGH BAHADUR
INSTITUTE OF MANAGEMENT & TECHNOLOGY, under my guidance & direction.

To the best of my knowledge and belief the data & information presented by him in the
project has not been submitted earlier.

______________________
Signature

Dr. Supreet Kaur

I am sincerely thankful to Dr. Supreet Kaur, under whose guidance I have successfully
completed this project and time spent with her had been a great learning experience. I think her
constant encouragement, warm responses and for filling every gap with valuable ideas has
made this project successful. She made it possible for me to put all my theoretical knowledge
to work out on the topic: “MARKETING STRATEGIES OF COCA COLA.
A mammoth project of this nature calls for intellectual nourishment, professional help and
encouragement from many people. We are highly thankful to all of them for their help and
encouragement. We wish to acknowledge our great debt to all of them whose ideas and
contribution influenced me to complete the project work.

Arman Alam
01591101721
 INTRODUCTION

This project is focused on studying the various marketing strategies of Coca-Cola and the
scenario of Indian soft drink industry in the 1990’s.

Coca-Cola Co., the global soft drink industry leader controlled Indian soft drink industry till
1977. Then Janta Party beats the Congress Party and the Central Government was changed.
This change brought problems for Coca-Cola principle bottler, who was a big supporter of
Gandhi Family. Now Janta Party government demanded that Coca-Cola should transfer its
syrup formula to an India subsidiary (Chakravarty, 43). Because of this Coca-Cola backed and
withdrew from the country. In the mean time, India’s two target soft drink producers have
gotten rich. Who were controlling 80% of the Indian soft drink industry.

In 1993, the coco-Cola company came back to India. But the scenario of Indian soft drink
industry had been changed from 1977 to 1993. The competition in the soft drink industry had
become very tough. The major competitor at that time were Pepsi and Parle. Parle’s best known
brands includes ThumsUp, Limca, Citra and others were Gold Spot and Maaza. At that time
Parle had a market share of 53% and Pepsi had a market share of 20%.

Now Coca-Cola had to make some strategies to survive in this tough competition. For this
Coca-Cola decided to take over Parle, so that the company can take the advantage of Parle’s
network. This decision was proved very beneficial for Coke as it had ready access to over
2,00,000 retailer outlets and 60 bottlers of Parle’s network.

The marketing strategies which were made by Coca-Cola company to win the Cola war in
1990s had been very successful as Coca-Cola company had a total market share of 48.3% in
1998.

So, the Indian soft drink industry saw a dramatic change in the decade of 1990s. All the
companies were trying to win the battle by making good marketing strategies.
These days Coke and Pepsi are using the 4Ps of marketing mix (Price, Product, Place and
Promotion) in such a way so that a good quality can be provided to the consumers at a
reasonable price to attract the consumers towards their brands.
Both the companies know that there is so much potential in the Indian soft drink industry and
the can increase their sales by making good marketing strategies. So, they are spending a huge
amount of money on advertising and other sales promotional activities of their brands.
 SOFT DRINK INDUSTRY: AN OVERVIEW

It all began in 1886, when a tree legged brass kettle in Hohn Styth pemberton’s backyard in
Atlanta was brewing the first P of marketing leged. Unaware the pharmacist has given birth to
a caromel colored syrup, which is now the chief ingredient of the world’s favorite drink. The
syrup combined with carbonated the soft drink market. It is estimated that this drink is served
more than one thousand million times in a day.

Equally oblivious to the historic value of his actions was Frank Ix. Robinson, his partner and
book keeper. Pemberton & Robinson laid the first foundation of this beverage when an average
nine drinks per day to begin with, upping volumes as sales grew.

In 1894, this beverage got into bottle, courtesy a candy merchant from Mississippi. By the
1950’s Colas were a daily consumption item, stored in house hold fridges. Soon were born
other non- Cola variants of this product like orange & Lemon.

Now, the soft drink industry has been dominated by three major player – (1) The New York
based Pepsi co. Inc.(2) The Atlanta based Coca Cola co. (3) The United Kingdom based
Cadbury Schweppes.

Throughout the globe these major players have been battling it. Out for a bigger chunk of the
ever-growing cold drink market. Now this battle has begun in India too. Inida is now the part
of cold drink war. Gone are days of Ramesh Chauhan, India’s one time Cola king and his bouts
of pistol shooting. Expect now to hear the boon of cannons when the Coca Cola & Pepsi co.
battle it out for, as the Jordon goes a bigger share of throat. By buying over local competition,
the two American Cola giants have cleared up the arena and are packing all their power behind
building the Indian franchisee of their globe girdling brands. The huge amount invested in
fracture has never been seen before. Both players seen an enormous potential in his country
where swigging a carbonated beverage is still considered a treat, virtually a luxury.
Consequently, by world standards India’s per capita consumption of cold drinks as going by
survey results is rock bottom, less than over Neighbors Pakistan & Bangladesh, where it is four
times as much.
Behind the hype, in an effort invisible to consumer Pepsi pumps in Rs 3000 crores (1994) to
add muscle to its infrastructure in bottling and distribution. This is apart from money that
company’s franchised bottles spend in upgrading their plants all this has contributed to
substantial gains in the market. In Colas, Pepsi is already market leader and in certain cities
like Banaras , Pepsi outlets are on one side & all the other Colas put together on the other.
While Coke executive scruff at Pepsi’s claims as well as targets, industry observers are of the
view that Pepsi has definitely stolen a lot from its competitor Coke.

Apart from numbers, Pepsi has made qualitative gains. The foremost is its image. This image
turnaround is no small achievements, considering that since it was established in 1989, taking
the hardship route prior to liberalization and weighed down by export commitments.

Now, at present as there are three major players Coke, Pepsi and Cadbury and there is stiff
competition between first two, both Pepsi and Coke have started, sponsoring local events and
staging frequent consumer promotion campaigns. As the mega event of this century has started,
and the marketers are using this event – world cup football, cricket events and many more other
events.

Like Pepsi, Coke is picking up equity in its bottles to guarantee their financial support; one side
Coke is trying to increase its popularity through.
Eat Food, enjoy Food. Drink only Coca Cola. Eat cricket, sleep cricket. Drink only Coca Cola.
Eat movies, sleep movies. Drink only Coca Cola.

But no doubt’ that UK based Cadbury is also ecognising its presence. So there is a real crush
in the soft drink market.with launch of the carbonated organize drink Crush, few year ago in
Banaras ., the first in a series of a launches , Cadbury Schweppes beverage India (CSBI) HAS
PLANNED:- The world third largest soft drink marketers all over the country.CSBI o wholly
owned subsidiary of the London based $ 6.52billion. Cadbury Schweppes is hoping that
crush is going well and well not suffer the same fate as the Rs. 175 crore Cadbury india’s
apple drink Apella. CSBI is now with orange (crush), and Schweppes soda in the market.

As orange drinks are the smallest of non-Cola categories that is Rs. 1100 crore market with
10% market share and Cola heaving 50% is followed by Lemon segment with 25%.
The success of soft drink industry depends upon 4 major factors viz.
  Availability
 Visibility
 Cooling
 Range
AVAILABILITY

Availability means the presence of a particular brand at any outlet. If a product is now
available at any outlet and the competitor brand is available, the consumer will go for the
outlet because generally the consumption of any soft drink is an impulse decision and not
predetermined one.

VISIBILITY

Visibility is the presence felt, if any outlet has a particular brand of soft drink say- Pepsi Cola
and this brand is not displayed in the outlet, then its availability is of no use. The soft drink
must be shown off properly and attractively so as to catch the attention of the consumer
immediately Pepsi achieves visibility by providing glow signboards, hoarding, calendars etc.
to the outlets. It also includes various stands to display Pepsi and other flavours of the
company.

COOLING

As the soft drinks are consumed chilled so cooling them plays a vital role in boosting up the
sales. The brand, which is available chilled, gets more sale than the one which is not, even if
it is more preferred one.

RANGE

This is the last but not the least factor, which affects the sale of the products of a particular
company.
 COMPANY PROFILE

Coca-Cola Enterprises, established in 1886, is a young company by the standards of the Coca-
Cola system. Yet each of its franchises has a strong heritage in the traditions of Coca-Cola that
is the foundation for this Company.
The Coca-Cola Company traces it’s beginning to 1886, when an Atlanta pharmacist, Dr. John
Pemberton, began to produce Coca-Cola syrup for sale in fountain drinks. However the bottling
business began in 1899 when two Chattanooga businessmen, Benjamin F. Thomas and Josep h
B. Whitehead, secured the exclusive rights to bottle and sell Coca-Cola for most of the United
States from The Coca-Cola Company.
The Coca-Cola bottling system continued to operate as independent, local businesses until the
early 1980s when bottling franchises began to consolidate. In 1986, The Coca-Cola Company
merged some of its company-owned operations with two large ownership groups that were for
sale, the John T. Lupton franchises and BCI Holding Corporation's bottling holdings, to form
Coca-Cola Enterprises Inc. The Company offered its stock to the public on November 21, 1986,
at a split-adjusted price of $5.50 a share. On an annual basis, total unit case sales were 880,000
in 1986.
In December 1991, a merger between Coca-Cola Enterprises and the Johnston Coca-Cola
Bottling Group, Inc. (Johnston) created a larger, stronger Company, again helping accelerate
bottler consolidation. As part of the merger, the senior management team of Johnston assumed
responsibility for managing the Company, and began a dramatic, successful restructuring in
1992.Unit case sales had climbed to 1.4 billion, and total revenues were $5 billion
The Coca-Cola Company is the world’s largest beverage company. They operate in more than
200 countries & markets more than 2800 beverage products. Headquartered at Atlanta,
Georgia, they employ approximately 90500 employees all over the world. It is often referred
to simply as Coke or (in European and American countries) as Cola or Pop.

MISSION, VISION AND VALUES

The world is changing all around us. To continue to thrive as a business over the next ten years
and beyond, we must look ahead, understand the trends and forces that will shape our business
in the future and move swiftly to prepare for what's to come. We must get ready for tomorrow
today. That's what our 2020 Vision is all about. It creates a long-term destination for our
business and provides us with a "Road map" for winning together with our bottling partners.
Our Mission

Our Road map starts with our mission, which is enduring. It declares our purpose as a Company
and serves as the standard against which we weigh our actions and decisions.
 To refresh the world...

 To inspire moments of optimism and happiness...

 To create value and make a difference

Our Vision

Our vision serves as the framework for our Road map and guides every aspect of our business
by describing what we need to accomplish in order to continue achieving sustainable, quality
growth.

 People: Be a great place to work where people are inspired to be the best they can be

 Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and
satisfy people’s desires and needs

 Partners: Nurture a winning network of customers and suppliers, together we create

 Planet: Be a responsible citizen that makes a difference by helping build and support
sustainable communities

 Profit: Maximize long-term return to share owners while being mindful of our overall
responsibilities

 Productivity: Be a highly effective, lean and fast-moving organization

Our Winning Culture

Our Winning Culture defines the attitudes and behaviors that will be required of us to make
our 2020 Vision a reality.
Live Our Values

Our values serve as a compass for our actions and describe how we behave in the world.

 Leadership: The courage to shape a better future

 Collaboration: Leverage collective genius

 Integrity: Be real

 Accountability: If it is to be, it’s up to me

 Passion: Committed in heart and mind

 Diversity: As inclusive as our brands

 Quality: What we do, we do well

Focus on the Market

 Focus on needs of our consumers, customers and franchise partners

 Get out into the market and listen, observe and learn

 Possess a world view

 Focus on execution in the marketplace every day

 Be insatiably curious

Work Smart

 Act with urgency

 Remain responsive to change

 Have the courage to change course when needed

 Remain constructively discontent

 Work efficiently
Act Like Owners

 Be accountable for our actions and in actions

 Steward system assets and focus on building value

 Reward our people for taking risks and finding better ways to solve problems

 Learn from our outcomes -- what worked and what didn’t

Be the Brand

 Inspire creativity, passion, optimism and fun

The Profile

The Coca-Cola Company is the global Soft drink industry leader, with world
headquarters in Atlanta, Georgia. The company and its subsidiaries employ nearly 30,000
people around the world Syrups, concentrates and beverages bases for Coca -Cola, the
company’s flagship brand, & over 160 other Company Soft Drink brands are manufactured
and Sold by the Coca Cold Company and its Subsidiaries in nearly 200 countries around the
world. In fact approximately 70% of company volume and 80% of company profit come from
outside the United States.

By contract with the Coca-Cola Company on its local subsidiaries, local businesses are
authorized to bottle and sell company soft drinks within certain territorial boundaries and under
conditions that ensure the highest standards of quality and uniformity.

The Coca-Cola takes pride in being a worldwide business that is always local. Bottling
and distribution operations are, with some exception, locally owned and operated by
independent business people who are native to the nations in which they are located.

The Coca-Cola company stock, with ticker symbol KO 2 is listed and traded in the
United States on the New York stock exchange, common stock also is traded on the on the
Boston, Chicago, Pacific an Philadelphia Exchanges Outside the United States, Company
common stock is listed and traded on common and swiss exchanges.

The Company operating management structure consists of five geographic groups:

1. The North America Group Comprises the United States and Canada.

2. The Latin American group includes the Company’s operations across Central and South
American from Mexico to Argentina.

3. The Company’s most populated operating group, the Middle and far east group, ranges
from the Middle East to India, China, Japan and Australia.

4. The greater Europe group stretches from Greenland to Russia’s far last, including some of
the most established markets in Western Europe and the rapidly growing nations of Eastern
and Central Europe.

5. The Africa group includes the Company’s business in 50 countries in Sub Sahara Africa.
 The Coca-Cola Company continues to activate sponsorships throughout the world
including associations with World Cup Soccer. The National Football league. NASCAR, the
Tour de France, the Rugby World Cup, COPA America and numerous local sports teams. The
Coca-Cola Company has sponsored the Olympic games since 1928.

COKE IN INDIA

Coke gained an early advantage over Pepsi since it took over Parle in 1994. Thus it
had ready access to over 2,00,000 retailer outlets and 60 bottlers.

Thus Coke had greater than Pepsi because it had ready access to the Parle network. For
example in 1994 Pepsi had 20 bottlers to serve the entire country while Coke had Parle’s 60
bottlers. In an important market like Delhi Pepsi had just one bottler while Coke had four. On
the other hand Pepsi had taken over the Dukes Mangola of Mumbai.

In 1993, Pepsi Foods Ltd. had control over the Rs. 1,100 - Crore Indian Soft Drinks
market. At that time, the soft drinks trycoon Ramesh Chauhan, was heading the Parle group
and at that time was deciding to explore the possibility of selling his best rolling brands to
Coke, rather than to Pepsi. Pepsi had entered the market 3 years before Coke did. Before the
Coke-Parle tie-up in '93- Ramesh Chauhan had 2 options before him- (1) to stick around, fight
it out again and hopefully, continue with his number one position. (2) to sell out to Coca-Cola
for a good return. This risk of losing out to one of the multinationals, eventually, seemed to be
throwing up the second alternative. Ramesh Chauhan told business world (India's most popular
business magazine) that "it is better to seek a compromise than to fight a lone battle". But he
was wisely simultaneously taking steps to safeguard his market share. In a few months, Parle's
products will be launched in 250 ml instead the current 200 ml. The indications are that the
company will hold the price line. Incidentally, both Pepsi and Coke (if it finally gets in) will
cost more than local brands because of the 300% duly on the imported ingredients. However,
this scenario was taking place pre-liberalization period and hence implied a very high duty on
imported items.

Entry of Pepsi and Coke in India or their proposals were at that time being opposed
because of the impact of first - strike on the minds of consumers. If Coca-Cola is allowed an
easy and quick entry through a window established by the government, there can be no
justification for denying similar access to Pepsi Co.

Basically what was wrong at that time with the Coke proposal was that while the Pepsi
deal could go through under the camouflage of horticultures and agriculture development as
their proposal stated, a pure soft drinks project was not so politically palatable (as it would
greatly hamper the indigenous industry).

Coke had plans, to invest $ 20 million in India and Pepsi was going to pump in Rs. 300
crore more. Ramesh Chauhan greatest compulsion, to 90 in for the 2nd option was that many
of his biggest bottlers were preparing to desert him for Coke, .since the bottlers accounted for
nearly one-third of Parle's sales. Parle's biggest bottles in the Easter region,. Goenka,
accounted for 80% market share in Calcutta, felt that the future lay with Coca-Cola, no Indian
company had the financial muscle to take on Coke.

Also, there was the most convincing factor for the tie-up, that Parle's Position in the
Indian soft drinks market and Coca-Cola's marketing strengths and experience would make an
unbeatable combination. At that time according to the world’s most popular and well known
magazine, Fortune, had rated Coke as the world's best brand. Even Coke would greatly benefit
from the tie-up, as Coke with Parle’s wide spread bottling and distribution network, which was
spread over more than a thousand towns and cities and the gradual withdraw of Parle brand
would ensure Coke would be the king. Parle's best known brands include Thums Up, Limca,
Citra and others were GOLD SPOT and Maaza.

The biggest advantage to Parle from the tie-up would be an instant gain of $ 40 million,
which could be used profitably in other ventures.

According to a report the deal was that, Parle Exports had transferred the rights of all
its reputed soft drinks brands to Coca-Cola company, USA. In short, Coca-Cola Company
became the exclusive owner of Thums Up, Limca, Gold Spot, Citra and Maaza and could
therefore, withdraw them from the market whenever it would want to.

Under the agreement, the existing bottlers of Parle Exports would continue to produce
Parle brands under the licence from the Coca-Cola company. The U.S. Multinational proposed
to introduce its international brands -Coke, Fanta and Sprite at an appropriate time. The Parle
bottlers will be bottling these Coco - Cola brands also. The exact nature of Parle, Coca-Cola
tie-up is given below : So, Ramesh Chauhan, sold his soft drink brands of the U.S. Multinatinal
for ($ 40 million) and is presently a major Coke bottler. Delhi - based Parle Chairman gave up
his ownership of his soft drinks brand (Thums Up, Limca, Citra and Gold Spot) and was
awarded the bottling franchisee for Delhi, Bombay, Surat and Ahmedabad. Coke depends on
the 54 bottling plants which it was inherited from the Parle by out. So, logically all brands of
Parle as well as Coca-Cola will be marketed together. The only problem being that Parle
bottlers would not be able to meet the peculiar quality requirements of Coke.