CHAPTER 1 : INTRODUCTION1.1 BACKGROUND OF STUDYIn the first place, advertising is still the number one communication tool for businesses, immense changes within, for instance, technology has required companies to implement other promotional strategies other than traditional marketing communication tools. However, as a consequence of long-term changes, such as the increase of a larger and more diverse range of media, as well as the arrival of new technologies, particularly the Internet, consumers have become better informed than ever, and as a result, some of the traditional advertising methods are no longer as effective as they used to be (www.economist.com). The overall objective of this paper is to gain a deeper understanding of different international and local factors affecting consumer preferences on a local market. Specifically, we want to explore the effect international well-recognized advertising campaigns have on consumers buying process. We also want to study whether or not there is a relationship between the above mentioned factors influence on the choice of homogenous products. We have limited our research to the cola drink industry, rather than the entire soft-drink industry. Although we examine consumer perceptions on international brands marketing strategies, the focus of the investigation will be on Coca-Colas and Pepsis advertisement and sponsorship as well as their brands.Instead, firms have increasingly employed other marketing tools, such as corporate sponsorship of sports, arts and cultural events to name a few(Ruth, 2003). Sponsorship is claimed to be the worlds fastest growing form of marketing, and in 2001, worldwide spending was estimated to be as much as $24.6 billion. Moreover, sponsorship activities are applied with the belief that companies can enter international markets and appeal to local consumer preferences(Dolphin, 2003). This promotional tool has proved to be successful in reaching a large global audience, and seeing as consumer behaviours differ greatly in preferences and product choices, it is apparent why sponsorship has outperformed other marketing methods .As a result of globalization, the use of advertisement across cultural borders has grown immensely, and while one expert claims that the average person is daily exposed to 1,600 advertisements, another expert estimates the total number to be as much as 5,000 a day(Armstrong, 2005) , from billboards to bumper stickers to logos on caps and T-shirts. Seeing as advertising clutter has increased tremendously and is more intense than ever, it is vital that companies differentiate themselves from competitors by creating even more powerful, entertaining, and innovative advertisement messages. However, this has proven to be very costly, especially within highly competitive product markets, such as the soft-drink industry, which requires higher advertising budgets just to stay even with competitors. Examples of such companies that spend billions of dollars on advertising in order to stay key players in their industry are The Coca-Cola Company and PepsiCo. Not only are Coca-Cola and Pepsi dominant market leaders on the worldwide beverage market, but they are also two of the most notable and widely sold commercial brands in the world and annually spend billions of dollars on advertising campaigns. In 2004, Coca-Colas worldwide advertising budget exceeded $1.5 billion, while Pepsis advertising expenditure totalled $1.3 billion. Coca- Colas advertising has always been celebrated globally, and introduced its first advertising theme in the early 1900's and has since seen plenty of popular themes that have become recognised worldwide . Today, Coca-Cola depends heavily on images of happiness and togetherness, tradition and nationalism, whereas Pepsi relies more on the appeal of celebrities, popular music, and young people in their television commercials.

PEPSI V/S COCO-COLAPepsi and Coca-Cola have been battling each other for over a century through the use of aggressive advertising and marketing campaigns. These ongoing battles, referred to as the "Cola-Wars", began in the 1980s and have proven to continue throughout this year's Super Bowl advertisements and promotions.While Pepsi and Coca-Cola are relatively homogeneous products, both companies are continuously trying to develop a perceived product differentiation with their consumers. This differentiation has been instilled by the companies through the use of celebrity endorsements, an appealing brand image or icon, unique target audience, as well as direct comparison advertisements.For years, Coca-Cola has created a "family-friendly" image by utilizing the polar bear and Santa as its identifier in their advertising campaigns. Pepsi, on the other hand, positioned itself as the "the choice of a new generation" by showing people doing different things such as dirt biking and snowboarding, as well as through the use of celebrity icons. Due to these differences in advertising, Coca-Cola and Pepsi have developed very different brand images for products that are essentially homogeneous. Coca-Cola has portrays itself as the classic, traditional cola, while Pepsi has portrayed itself as the more modern, hip version of cola in order to appeal to the younger generation.

While their promotional strategies are very different, both techniques have proven to be rather successful, as Coke and Pepsi currently make up most of the market share within the cola industry. With a low concentrated market, or few competitors/firms in the industry, Coca-Cola and Pepsi ultimately went head-to-head in order to compete for a each others proportion of the market share. In order to do this, they not only needed to develop an effective brand image for itself and increase awareness, but also develop a perceived product differentiation and superiority that separated the two leading brands. As a result, the "Cola Wars" began with the use of mutually-targeted advertisements and marketing campaigns.This war can still be seen today, as Pepsi took its latest slash at Coca-Cola in this weekends Super Bowl campaign. As seen in the video above, Pepsi posted a video/ advertisement to show what was going on behind-the-scenes during Cokes Super Bowl ad filming set. The Coke actors were shown relentlessly trying to get a Pepsi out of the broken vending machine, even though there was a perfectly good working Coca-Cola machine right next to it. Pepsi made this dig in order to portray their brand as superior to Coke by implying People will do anything to have Pepsi before settling for a Coke and Look... even Cokes staff prefers to drink Pepsi. If Pepsi effectively differentiated its product through consumer perception with this advertisement, they will be able to acquire a portion of Coca-Colas market share.

1.2 OBJECTIVE OF STUDYThe objective of the study are: To study in detail the operational advertising strategies of pepsico and coco-cola company. The study also focuses on the profile of the pepsico company and also that of the coco-cola company and it also differentiate their prospective advertising strategies

1.3 SCOPE

CHAPTER 2: PROFILE OF PEPSICO AND COCO-COLA COMPANIESINTRODUCTION ABOUT PEPSICO COMPANYAbout PepsiCoPepsiCo is a global food and beverage leader with net revenues of more than $65 billion and a product portfolio that includes 22 brands that generate more than $1 billion each in annual retail sales. Our main businesses Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola make hundreds of enjoyable foods and beverages that are loved throughout the world. PepsiCos people are united by our unique commitment to sustainable growth by investing in a healthier future for people and our planet, which we believe also means a more successful future for PepsiCo. We call this commitment Performance with Purpose: PepsiCos promise to provide a wide range of foods and beverages from treats to healthy eats; to find innovative ways to minimize our impact on the environment by conserving energy and water and reducing packaging volume; to provide a great workplace for our associates; and to respect, support and invest in the local communities where we operate. PepsiCo India Region: Leadership through Performance with Purpose PepsiCo entered India in 1989 and in a short period, has grown into one of the largest food and beverage businesses in the country. PepsiCo growth in India has been guided by its global vision of Performance with Purpose. This means that while businesses maximize shareholder value, they have a responsibility to all the stakeholders, including the communities in which they operate, the consumers they serve and the environment whose resources they use.Large investor and one of the largest food & beverage businesses in IndiaOne of the largest US multinational investors in the country, PepsiCo has been consistently investing in India and has built an expansive beverage and snack food business supported by 38 beverage plants and 3 food plants. PepsiCo and its partners recently announced an additional targeted investment of Rs. 33,000 Crore in India by 2020 in the areas of product innovation, increasing manufacturing capacity, ramping up market infrastructure, strengthening supply chain and expanding companys agriculture programme. PepsiCo Indias diverse portfolio includes iconic brands like Pepsi, Lays, Kurkure, Tropicana, Gatorade and Quaker. In two decades, the company has been able to organically grow eight brands that generate Rs. 1000 crores or more in estimated annual retails sales and are household names, trusted across the country.A growing portfolio of enjoyable and wholesome snacks and beveragesPepsiCo Indias portfolio reflects its commitment to nourish consumers with a diverse range of fun and healthier products. The portfolio includes several healthier treats like Quaker Oats, Tropicana juices, Tropicana fruit powders, rehydrator Gatorade, Tata Water plus, Lays baked range, Quaker flavoured oats and Quaker Nutri Upma & Nutri Poha breakfast range with the power of wholegrain.

Model partnership with over 24,000 farmersPepsiCo India has pioneered and established a model of partnership with farmers and now works with over 24,000 happy farmers across nine states. More than 45 percent of these are small and marginal farmers with a land holding of one acre or less. PepsiCo provides 360-degree support to the farmer through assured buy back of their produce at pre-agreed prices, quality seeds, extension services, disease control packages, bank loans, weather insurance, and the latest technological practices. The association with PepsiCo India has not only raised the incomes of small and marginal farmers, but also their social standing.Global leader in water conservationIn 2009, PepsiCo India achieved a significant milestone, by becoming the first business to achieve Positive Water Balance in the beverage world, and has been Water Positive since then. This fact has been independently assured by Deloitte Touch Tohmatsu India Pvt. Ltd. In 2012, PepsiCo India saved 8.2 billion litres more that it consumed in its manufacturing operations. The company made this possible through innovative irrigation practices like direct seeding, community water recharging initiatives, and by reducing the consumption of water in its manufacturing facilities. PepsiCo is lauded for its efforts for water conservation and has received numerous awards such as CII National award for water management, Water Digest award for water practices and Golden Peacock award for water conservation amongst others.

Care for the environmentPepsiCo India is now focused on reducing its carbon footprint. More than 40 per cent of its energy is today generated from renewable sources such as bio mass & rice husk boilers and wind turbines. Initiatives such as reduction in use of chemicals, eco-friendly packaging initiatives and efficient waste management help reduce load on the environment. PepsiCo in partnership with the NGO Exnora and local municipalities has also been working on a unique waste collection and treatment program called Waste-to-Wealth. The award winning programme has positively impacted more than 5,00,000 people.Exemplary employment practicesPepsiCo India provides direct and indirect employment to almost 2,00,000 people. The company believes in providing employment and growth opportunities to local talent. Its College of Leadership, ensures early identification of talent, and employees focused development through critical experiences. PepsiCo firmly believes that encouraging diversity means encouraging policies and systems that respect peoples special needs. Not only does PepsiCo have a vibrant and diverse workforce, it takes the utmost care to make dynamic business leaders of its employees and foster their career and personal growth through differentiated experiences and a robust leadership development model.

External Awards received by PepsiCo India in 2013 Doc T.S.R. Murali, Head R&D, was awarded a Gold Medal by Secretary, Ministry of Food Processing, Government of India for his outstanding contribution in supporting R&D, Innovation and growth of Food Processing Sector in India. Satharia plant was awarded LEED (Leadership in Energy and Environmental Design) Gold Green Certification by Indian Green Building Council. India Region Finance and BIS team won UKs Adam Smith award in collaboration with Citibank for Best practices and innovation under the section Asia Pacific Regional Award for Best Practices in the Highly Commended category. PepsiCo India won the award for Excellence in Developing the Leaders of Tomorrow at the second edition of the SHRM (Society for Human Resource Management) India HR Awards. PepsiCo Indias Sangareddy Plant was recognized by CII with Commendation Certificate for Strong Commitment to Excel in Food Safety in the category of Large Manufacturing Food Businesses Beverages. PepsiCo Indias Sathariya, plant won the CII Award for Outstanding Performance in Food Safety Excellence in the Category of Rising Star; Large Manufacturing Food Businesses Beverages.

INTRODUCTION ABOUT COCO-COLA COMPANYAbout Coco-colaThe Coca-Cola Company re-entered India through its wholly owned subsidiary, Coca-Cola India Private Limited and re-launched Coca-Cola in 1993 after the opening up of the Indian economy to foreign investments in 1991. Since then its operations have grown rapidly through a model that supports bottling operations, both company owned as well as locally owned and includes over 7,000 Indian distributors and more than 2.2 million retailers. Today, our brands are the leading brands in most beverage segments. The Coca-Cola Company's brands in India include Coca-Cola, Fanta Orange, Limca, Sprite, Thums Up, Burn, Kinley, Maaza, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh and the Georgia Gold range of teas and coffees and Vitingo..

In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-Cola Company namely Coca-Cola India Pvt Ltd which manufactures and sells concentrate and beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely, Hindustan Coca-Cola Beverages Pvt Ltd; thirteen licensed bottling partners of The Coca-Cola Company, who are authorized to prepare, package, sell and distribute beverages under certain specified trademarks of The Coca-Cola Company; and an extensive distribution system comprising of our customers, distributors and retailers. Coca-Cola India Private Limited sells concentrate and beverage bases to authorized bottlers who are authorized to use these to produce our portfolio of beverages. These authorized bottlers independently develop local markets and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other businesses. In turn, these customers make our beverages available to consumers across India.

The Coca-Cola system in India has already invested USD 2 Billion till 2011, since its re-entry into India. The company will be investing another USD 5 Billion till the year 2020. The Coca-Cola system in India directly employs over 25,000 people including those on contract. The system has created indirect employment for more than 1,50,000 people in related industries through its vast procurement, supply and distribution system. We strive to ensure that our work environment is safe and inclusive and that there are plentiful opportunities for our people in India and across the world.The beverage industry is a major driver of economic growth. A National Council of Applied Economic Research (NCAER) study on the carbonated soft-drink industry indicates that this industry has an output multiplier effect of 2.1. This means that if one unit of output of beverage is increased, the direct and indirect effect on the economy will be twice of that. In terms of employment, the NCAER study notes that "an extra production of 1000 cases generates an extra employment of 410 man days."

As a Company, our products are an integral part of the micro economy particularly in small towns and villages, contributing to creation of jobs and growth in GDP. Coca-Cola in India is amongst the largest domestic buyers of certain agricultural products.

As an industry which has strong backward and forward linkages, our operations catalysis growth in demand for products like glass, plastic, refrigeration, transportation, and Industrial and agricultural products. Our operations also lead to incremental growth for enterprises engaged in post-production activities like merchandising, marketing and sales. In addition, we share best practices and technological advancements with our suppliers, vendors and allied industries which often lead to improvement in the overall standards of quality across industries.

The Coca-Cola Company has always placed high value on good citizenship. Our basic proposition entails that our Company's business should refresh the market; enrich the workplace; protect and preserve the environment; and strengthen the community. We leverage our unique strengths to actively support and respond to local needs -- be it the need for education, health, water or nutrition. We have used our distribution network for disaster relief, our marketing prowess to raise awareness on issues such as PET recycling, and our presence in communities to improve access to education and potable water. The Coca-Cola India Foundation is now taking forward in the community at large, projects and programs of social relevance to carry forward the message of inclusive growth and development.

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