Pepsi vs coca cola case study pdf

IMB 387

Seema Gupta, Professor of Marketing prepared this case for class discussion. This case is not intended to serve as an endorsement, source of primary data, or to show effective or inefficient handling of decision or business processes. Copyright © 2012 by the Indian Institute of Management Bangalore. No part of the publication may be reproduced or transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise (including internet) – without the permission of Indian Institute of Management Bangalore.

SEEMA GUPTA

COKE AND PEPSI: FROM GLOBAL TO INDIAN ADVERTISING Coca-Cola and Pepsi-Cola vied for a “throat share” of the soft drinks market for more than a century. Carbonated soft drinks (CSD) contributed to majority of the revenues in soft drinks. The core market was the United States which had high per capita consumption (see Exhibit 1 for per capita consumption of carbonates in select countries). The Americas accounted for 54% of the global CSD market, Europe for 34.5%, and Asia-Pacific for 11%.1 The industry was characterized by the presence of strong brands – with three brands – Coca-Cola, Pepsi, and Sprite ranked 1, 23, and 61 globally and valued1 $70 billion, $14 billion, and $5.8 billion, respectively by Interbrand, a leading brand valuation and consultancy firm.2 Advertising had played a major role in building the brands of the two majors which largely competed on parity pricing. Until the mid-1990s, consumption of soft drinks in the United States steadily increased while that of milk and coffee declined. Thereafter, owing to shifting consumer preferences towards healthier beverages, the US market began to plateau. This posed a challenge to the two majors. Was their era of sustained growth and profitability in CSD coming to an end or could they drive growth from emerging markets such as India? How much should they invest in advertising? Should Indian advertising be shaped by global advertising? GLOBAL SOFT DRINK INDUSTRY The term “soft drink” was coined to distinguish flavored drinks from hard liquor. The soft drink industry was born when Coca-Cola syrup was formulated in 1886 by John Pemberton, a pharmacist in the United States who sold it at drugstore fountains as a potion for “mental and physical disorders.”3 In 1894, Coca-Cola granted its first bottling franchise which led to the proliferation of Coca-Cola throughout the United States by 1895. An infrastructure of independent bottlers added sweeteners and carbonated waters to the syrups and bases received from Coca-Cola to produce the drink to exact specifications and distributed it within a specific region. This soon became the model distribution method for all the companies. The manufacturers provided a variety of services including quality control, marketing, advertising, research & development, and finance. In turn, the bottlers supplied the required capital investment for land, buildings, machinery, equipment, trucks, and bottles. The industry sold its product in two forms – packaged and fountain service. With fountain service, the product was dispensed in cups, typically in a restaurant or any location with a food service station and was consumed on the premises. Sales for consumption on the premises were termed “on-trade” sales and those for consumption off the premises as “off-trade” sales. Worldwide off-trade sales dominated the soft drink sales. Carbonated Soft Drink During the 1980s, as consumers became more interested in health and fitness, soft drink manufacturers developed low calorie beverages such as Diet Coke and Diet Pepsi. The fitness craze continued in 1990s leading to the emergence of ‘‘new age drinks’’ such as flavored sparkling waters, natural sodas, fruit juice drinks, flavored teas, and bottled coffee products. From the humble beginnings of one cola, the soft drink industry exploded into a kaleidoscope of beverages – carbonates or non-carbonates. Carbonates were of two types – cola and non-cola. Non- cola carbonates consisted of predominantly lime and orange flavors. In 2009, regular cola contributed to 42% of the global CSD market, whereas contribution of non-cola carbonates was 29% and diet cola 15%.2,4 Non-carbonates comprised fruit/vegetable juice, bottled water, functional drinks (such as energy drinks), and ready-to-drink tea/coffee. Consumption of carbonated drinks varied widely by region and culture. While the developed markets of 1 Interbrand arrives at brand value based on financial performance, role of brand in purchase decision process, and the ability of the brand to secure expected future earnings. 2 By value

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Australia, Western Europe, and North America were strongly skewed towards low calorie colas, the developing markets of Eastern Europe and Latin America were skewed towards regular colas and the untapped markets of Asia Pacific, Middle East, and Africa were skewed towards lime flavor. Similar to the rest of the world, in India also, carbonated drinks contributed the maximum to the sales of soft drinks (Exhibit 2). Non-carbonates however grew faster than carbonates. During 2004–2009, while total CSD market had a compounded annual growth rate of 4.5%, cola carbonates grew by 2% and non-cola by 6.5%.5 Sales of cola carbonates was Rs. 18 billion in 2009 (1$ = Rs. 48.50, in December 2009), while that of non-cola carbonates was Rs. 26 million. Within non-cola segment, sales of lemon flavor was Rs. 12.8 million, whereas that of orange was Rs. 8.4 million (Exhibit 3). THE COCA-COLA COMPANY Coca-Cola was created in Atlanta in 1886 by pharmacist John Pemberton. His partner Frank Robinson named the drink as Coca-Cola and designed the now famous trademark.6 During World War II, at the request of General Eisenhower, Coca-Cola promised to deliver a bottle of Coke for five cents to every soldier wherever he was and whatever it cost the company.7 Coca-Cola bottling plants followed the US military world over which contributed to Coke’s dominant post-war presence in many European and Asian countries. In the 1960s, Coke launched Fanta (1960), Sprite (1961), and the low calorie cola Tab (1963). It diversified into non-carbonates by purchasing “Minute Maid” (fruit juice), “Duncan Foods” (coffee, tea, and hot chocolate), and “Belmont Springs Water.” In 1982, the company launched Diet Coke, the first ever extension of the Coca-Cola trademark which quickly became its most successful new brand launch in the twentieth century.8 Coca-Cola believed that beverage choices were shaped by ‘‘need’’ and ‘‘occasion.’’ It identified three overarching need states that motivated different consumption occasions – “routine refreshment need,” “active replenishment need”, and “sensory pleasure need.”3 Coke aimed to provide a portfolio of beverages that satisfied all the need and occasion states.9 In 2009, it had a portfolio of 3,300 non-alcoholic beverages sold across 200 countries. In 2009, Coca-Cola held 42% market share of the global CSD market.10 Its four brands – Coca-Cola, Diet Coke, Fanta, and Sprite ranked among the top five global CSD brands by sales volume (Exhibit 4). In 2010, Coca-Cola had revenues of $31 billion and net income of $6.8 billion (see Exhibit 5 for financial performance of Coca-Cola and PepsiCo). Coca-Cola in India Coca-Cola had entered the Indian market in 1970 and was the market leader until 1977 when it exited the country following changes in the government policies. Over the next few years, Parle emerged as a strong local player with a host of popular brands – Thums Up, Gold Spot, and Limca. Coca-Cola reentered India in 1993 and bought Parle that gave it ownership of Parle’s top brands, bottling network, and consumer franchise. International brands from its global portfolio – Coca-Cola, Diet Coke, Sprite, and Fanta were launched in India. On re-entering, Coca-Cola faced the challenge of managing the outdated bottling plants of Parle. Moreover, its single-minded focus on its flagship brand “Coke” resulted in the decline of the market share of Thums Up from 60% in 1993 to 15% in 1998. It then decided to beef up advertising and distribution of Thums Up to revive the brand.11 In the early 2000s, it streamlined its operations by closing down outdated plants, cut costs by using local raw materials, upgraded bottling technology and spread distribution network, eventually turning the corner in the mid-2000s. In 2009, Coca-Cola India was the market leader with 59% market share in CSD (see Exhibit 6 for company-wise market shares in India). ADVERTISING OF THE MAJOR CSD BRANDS OF COCA-COLA Coca-Cola – The Early Advertising Coca-Cola advertised for the first time in 1906 with the help of D’Arcy, a highly regarded print ad agency. The 1929 campaign “The pause that refreshes” met with huge success. During 1930 to mid-1950s, it used several campaigns

3 The routine refreshment need state was a habitual and low involvement condition motivating consumption at your desk, around the house or studying at night, and was dominated by water. Active replenishment reflected need for energy most commonly among sportspersons, people working out, and manual laborers. For decades, water served active replenishment needs until the emergence of sports drink. Sensory pleasure need states may include coffee, juice, and sparkling beverages, and are less predictable.

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with the theme of “refresh.” Early advertising used fine illustrations and portraits of Santa Claus by popular artists in leading magazines.12 During World War II, its ads celebrated the war effort of Coke in shipping to the troops. By 1950, Coca-Cola dominated the US market with 47% share.13 In the late 1950s, Coca-Cola ads implicitly recognized the existence of competitors: “America’s preferred taste” (1955) and “No wonder coke refreshes best” (1960).14 In the 1960s, it had well-known campaigns – “Things go better with a Coke” (1963) and “It’s the real thing” (1970). By the late 1960s, civil rights protests and a very unpopular war in Vietnam were all tearing the United States apart. In 1971, Coke launched the campaign “Hilltop.” The spot shot on a hillside began with two fresh-faced girls singing, “I’d like to buy the world a home, and furnish it with love…” They were joined by hundreds of others from different countries singing the next verse: “I’d like to teach the world to sing in perfect harmony. I’d like to buy the world a Coke, and keep it company.” The ad concluded with “What the world wants today is the real thing. Coca-Cola.”15 The ad became an international hit. During the mid-1970s when there was political uncertainty in the United States stemming from Watergate, Coke aired the campaign “Look up America.” By the late 1970s, racial strife in America had become huge with African Americans losing jobs. In 1979, the Coke campaign showed a young boy encountering “Mean Joe Green” as he leaves the football stadium after the game. Greene was one of the most feared and talented defenders who treated football similar to war and usually won crushing the opponents. In Coke’s ad, the kid stopped the ferocious player by simply asking, “Mr. Greene?” The massive Green turned to the small boy and answered, “Yeah?” “Do you need any help?” the kid asked. Greene shook him off and continued his retreat to the locker room. Unfazed by the star’s grave veneer, the kid asked, “Do you…want my Coke?” “No no” Green said. “Really, you can have it,” the boy responded. Greene finally relented, took the Coke, and, parched from the game, chugged the entire bottle. The earnest and intimidated boy expected nothing in return and walked away, but Joe shouted to him, “Hey kid!” When the boy turned, Green tossed his game jersey to the boy. “Wow, thanks, Mean Joe,” the kid said. Green’s face lit up with a big smile. The text, “Have a Coke and a smile,” concluded the ad which became a hit. 16 Always Coca-Cola In 1993, Coke launched “Always Coca-Cola” to challenge the youthful advertising of Pepsi and to regain the lost market share. Unlike its earlier campaigns, the “Always Coca-Cola” ads did not seek to appeal universally to a broad audience. Instead, the campaign encompassed multiple commercials targeted at different audiences. With the entertaining spots, Coke hoped to cater to the sensibilities of the youth (aged 18 to 29 years). At the same time, Coke was concerned that the new campaign must not alienate the core and aging longtime Coke drinkers. Individual commercials that highlighted traditional “family values” such as the ad on the reminiscing anniversary couple reached out to this group. Coke turned to Creative Artists Agency (CAA), a Hollywood agency (which had never before overseen an advertising campaign) in its quest for things that were cool in the film, music, and fashion industries. CAA used talented Hollywood directors to produce ads that were more similar to mini-movies than ads. One of the commercials “Northern lights” depicted a magical place where polar bears watched movies and drank Coca-Cola. It became one of the most popular symbols of Coke advertising. Coke broadcast the commercials in programs and channels that appealed to the desired target. An executive said:

A commercial that related the tale of a spaceship was aired during Star trek episodes and a music video-based ad ran on MTV.17

The commercials had an international structure with some centered around purely visual effects, allowing Coke to show the ads unchanged in several countries. Others were simply translated or modified into local languages. The campaign which continued through the year 2000 contributed to an increase in market share. Coca-Cola Advertising in the Twenty-first Century In the year 2000, “Always Coca-Cola” was replaced by “Coca-Cola Enjoy” which showed that Coke was one of life’s most common and affordable pleasures. The theme was global, but the campaign was adapted to local cultures. In 2003, Coke launched “Real” campaign which reminded consumers of its past, its authenticity, and its realness. In one commercial, Penelope Cruz walked into a restaurant, guzzled a Coke Classic, burped, and giggled. The commercials aimed at revealing celebrities during “real” moments in which they enjoyed a “real” soft drink.18

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By 2005, Coke wanted to refresh the brand. It launched a global campaign “Coke side of life” and the only rule laid down for local advertising was that the spots must show how the physical and emotional uplift a Coke provided, led to being positive. One commercial – “Happiness factory" received a Silver Lion at the 2007 Cannes awards. In 2009, Coke further built on the idea of life’s simple pleasures and positivity with its global campaign “Open happiness.” Coca-Cola Advertising in India Coke was launched in India in 1993 with the “Hilltop” commercial. During 1994–1998, Coke ran its global campaign “Always Coca-Cola” and during 2000–2001 “Coca-Cola enjoy.” In 2003, Coke launched a campaign “Thanda matlab Coca-Cola” positioning Coke as a generic cold beverage.19 It won the “Campaign of the year” award. During 2007–2008, Coke started a corporate campaign “Little drops of joy” targeted at all its stakeholders. The campaign reminded people that Coke does not just quench thirst; it recharges one’s soul, for a moment, one drop at a time.20 During 2009–2010, Coke started campaigns “Open happiness” and “Coke opens up possibilities.” Targeted at the youth as exemplified by the choice of the celebrity Imran Khan, the campaign showcased how Coke enabled building spontaneous connections even between strangers.21 Over the years, Coca-Cola used various celebrities in its ads including movie stars – Karishma Kapoor, Hrithik Roshan, and Aishwarya Rai; and cricketers – Srinath and Saurav Ganguly. In 2010, its brand ambassador was Aamir Khan. In 2009, Coke had 9.1% market share of CSD in India (see Exhibit 7 for brand-wise market shares in India). For global as well as Indian advertising, it had a long-standing partnership with McCann Erickson (see Exhibit 8 for advertising expenditure of brands in India). Diet Coke The Early Advertising In 1980, Diet Pepsi was the leader in the low calorie cola market which held 20% of the soft drinks market in the United States. In 1982, Coca-Cola launched Diet Coke. The campaign “Just for the taste of it” was targeted at yuppies (young urban professionals – both men and women) that cared deeply about personal appearance.22 The campaign was a success and continued for 10 years. Thereafter, the brand stagnated and was repositioned to speak directly to its core female audience. In 1993, Coca-Cola broadcast its “One awesome calorie” campaign.23 In 1997, Coca-Cola broadcast a new campaign “You are what you drink” based on the premise that the product helped people to look and feel their best. Coca-Cola identified three attitudinal segments as its target market. The “fit and confident” were the younger and hipper group, 20-something men and women who did not need to diet but feared gaining weight. The “reluctant dieters” were men and women in their 30s who wanted to look good without sacrificing taste. The “aggressive dieters” were women aged 35 years and above who worked hard to stay fit.24 To address diverse target audiences, Coca-Cola broadened the definition of Diet Coke as a stylish fashionable brand.25 Advertising in the Twenty-first Century In 2001, Coke launched a campaign "Live your life" which reached out to diet-weary consumers by focusing on happiness with oneself rather than with one's appearance. This campaign placed man at the center when Diet Coke campaigns had traditionally been woman-centric. Coca-Cola planned the repositioning of the brand as a “lifestyle” brand and moved it beyond the core female market. It launched a new campaign “For those who love life” and showed that the brand had great taste and was part of an active lifestyle. The campaign met with success.26 In 2010, Diet Coke launched a new campaign "Stay extraordinary", which celebrated the achievements of Diet Coke drinkers. Katie Bayne, Chief Marketing Officer, Coca-Cola North America said:

Diet Coke drinkers are multi-faceted, confident, and motivated people who embrace brands that inspire drive, passion, and courage. Diet Coke helps them to excel at both work and play and “Stay extraordinary.”27

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Diet Coke became the No. 1 low calorie drink in America. Known as Coca-Cola Lite in some countries, in 2010, it was the third largest CSD brand in the world by sales volume. In India, Diet Coke had a market share of 0.3% in 2009. It was advertised minimally and used the tagline “only one calorie.” Sprite The Early Advertising Introduced in the United States in 1961, Sprite was a tangy citrus drink whose sales consistently languished behind those of its rival 7 Up. In 1986, Coca-Cola launched a campaign “Great Lymon taste makes sense” stressing unique “lymon” (lime and lemon) flavor which contributed to Sprite surpassing 7 Up in market share.28 In 1987, it launched the “I like the Sprite in you” campaign which continued to drive its sales until 1994. The campaign targeted at 12– 29-year olds used a catchy musical theme that proclaimed, “I like the way you make me laugh/I like the funny things you do/I like the Sprite in you.” It was occasionally performed by famous pop musicians and had images of quirky characters.29 Obey Your Thirst In 1994, the company launched a campaign “Image is nothing. Thirst is everything. Obey your thirst.” The irreverent spots spoofed other commercials that used glamour and star appeal.30 Humor was essential to the campaign as were striking visuals. The brand’s market share increased during the life of the campaign. Sprite Advertising in the Twenty-first Century By 2001, however sales had begun to wane and new versions of the “Image is nothing” campaign failed to halt the decline. In the mid-2000s, Sprite launched a campaign "SubLYMONal" which acknowledged up-front that the commercials contained hidden subliminal content and encouraged people to interact with the advertisement. However, the campaign failed as the target audience found it difficult to decode the subliminal messages.31 In 2010, Bartle Bogle Hegarty launched a new global campaign "Sprite, the spark", which showed how Sprite gave the sudden burst of fresh thinking to an artist who was struggling to perform. The campaign emphasized individuality and creativity.32 In 2010, Sprite was the world's leading lemon–lime flavored soft drink and the fourth largest CSD brand in sales volume. Sprite Advertising in India Sprite was launched in India in 1999 with the “Image is nothing” campaign.4 One of the advertisements which spoofed the “Lux” soap commercial showed Lisa Ray (the model in Lux ad) bathing in Sprite so that her skin could keep glowing. “If you pay money people are willing to say anything” voiced the commercial. Through the 2000s, Sprite launched various versions of the “Image is nothing” campaign.5 Some of the advertisements showed spoofs of Pepsi and Mountain Dew ads. In 2009, Sprite was the No. 3 brand in India with a market share of 13%. Ogilvy & Mather (O&M) was its creative agency in India. Fanta Fanta, a fruit-flavored soft drink was purchased by Coca-Cola in 1960. The trademark was derived from the word “fantasy.” Fanta was more popular in Europe and South America. Brazil and India were its largest markets.33 The brand with its bright color, bold fruit taste, and tingly carbonation was targeted at teens. Throughout the 2000s, it broadcast a campaign “Grab a taste of Friday” which celebrated the fact that Friday was the most enjoyable part of the week.

4 The tagline in Hindi was “Only pyaas, baki sab bakwas”. 5 The various versions (in Hindi) were “Dikhawa hai waste, trust only taste” (2001); “All tast,e no gyaan” (2002); “Sprite bujhaye pyaas, baki sab bakwas” (2007); and “Seedhi baat, no bakwaas, clear hai” (2008).

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The brand was launched in India in 1993. Its advertising throughout conveyed that Fanta not just uplifted feelings, but also freed spirits encouraging one to indulge in the moment.6 The brand endorsed by Rani Mukherjee stood for playfulness.34 ADVERTISING OF THE INDIAN CSD BRANDS OF COCA-COLA Thums Up Thums Up was originally introduced in 1977 in India by Parle and thereafter acquired by Coca-Cola in 1993. With a strong taste and greater carbonation, it was targeted at young adult males. In 1987, the iconic slogans “Toofani thanda” and “Taste the thunder” were created which featured Salman Khan and Akshay Kumar.35 Vikas Gupta, VP Marketing, Coca-Cola India said:

The Thums Up “Taste the thunder” series portrays every person’s hidden yearning to dare and win over the impossible.36

Until 2009, Coca-Cola continued with the tagline ‘‘Taste the thunder” and “I want my thunder”. Kashmira Chadha, Director Marketing, Coca-Cola India said:

For a brand as iconic as Thums Up, one does not need to innovate. It is consistency that won the consumers over and it is therefore consistency that we offer them.37

In between, it ran a campaign “Grow up Thums Up” wherein it challenged Pepsi for a blind taste test. The campaign was based on the insight that portraying the brand as an adult drink would appeal to young consumers.38 In 2010, “Taste the thunder” campaign was revised to “I will do anything for my thunder.” In 2010, Thums Up was the top- selling brand with market share of 15.3%. Thums Up commanded a strong following in certain parts of the country such as Andhra Pradesh, West Bengal, and Uttar Pradesh. Its extra fizz had strong affinity with the local populace that had penchant for spicy food. Coke on the other hand was strong in Delhi and Punjab. In the east and west where Thums Up had a dominant market share, Coca-Cola advertised Thums Up aggressively and slashed the price of Coke. A reverse strategy was followed in the north and south, where Coke sold more than Thums Up. Limca The Early Advertising Limca was created in 1971 in India by Parle and thereafter acquired by Coca-Cola in 1993. It operated in the cloudy lemon segment which did not exist in most developed markets. In India, the brand had a strong equity particularly in the regional markets of Punjab and Andhra Pradesh. Over the years, it had Sonali Bendre, Saif Ali Khan, and Riya Sen as the celebrity endorsers. It had sharp fizz and was positioned as thirst-quenching refreshment with popular tagline “Lime ‘n’ Lemoni, Limca.” Advertising in the Twenty-first Century In 2001, it launched a campaign “Har pyas bujhaye” (quench every type of thirst) which aimed to position the brand as a quencher of not only physical thirst, but also emotional thirst. Virat Mehta, Vice-President, Client Services, O&M said:

Every soft drink is about quenching thirst, but Limca is the only one most clearly positioned as a thirst quencher. 39

After being a plain-vanilla thirst quencher for more than two decades, Limca intended to occupy a more powerful platform. A senior executive said:

6 Its campaigns were “Electric fun taste” (1995); “Anything is possible” (global campaign in 1998); “Bajao masti ki ghanti” (2001); “Dil khol ke” (2003); “Ghoonth bhar shararat kar ley” (2007); “Fanta ka signal loud, bunking is allowed” (2009); “Dikhao apne asli rang” (2010).

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There was an aura around the brand that was old, passive, and not in tune with the times. It was not a cool or a trendsetter brand for the young in the age group of 20–29 years. There was a need to portray the brand as fresh, active, and trendy.40

Market research showed that the young were buoyant about their lives. They wanted a drink that could refresh them. With its cloudy look and distinct Lime ‘n’ Lemoni taste, Limca invoked coolness and rejuvenation. This led to the proposition of freshness. The brand needed a dimension of freshness that consumers could relate to and the insight was “water” as water was widely considered as an elixir of life in India. The creative leap was that after drinking Limca, consumers see and experience water-like freshness where there is none. Not only were they submerged in the feeling of freshness, but people around them were caught unawares and they too experienced water-like freshness. The result was a campaign “Fresh ho jao” (be fresh) broadcast from 2005 until 2008.41 In 2009, a new campaign “Doobo taajgi mein, fresh ho jao” (get immersed in freshness, be fresh) was launched. It took the earlier idea of “water-like freshness” further based on the insight that consumers desire to rejuvenate emotions which are constantly being dulled in the routine pursuit of success.42 In 2010, the new “Splash of freshness” campaign used “romance” as a key to emotional rejuvenation. The communication was based on how Limca with its water-like freshness can spark a playful romantic interaction between two strangers.43 PEPSICO Pepsi-Cola was created in 1898 in North Carolina by druggist Caleb D Bradham who claimed that it cured dyspepsia (indigestion). Pepsi-Cola grew throughout the twentieth century and in 1963 acquired Frito-Lay, the largest US snack foods company. The company changed its name to PepsiCo Inc. and later acquired restaurant chains – Pizza Hut (1977), Taco Bell (1978), and Kentucky Fried Chicken (1986). In 1998, PepsiCo acquired Tropicana and in the early 2000s, Quaker Oats Co. which added Gatorade, the popular isotonic sports drink to its beverage lineup. In 2010, PepsiCo earned revenues of nearly $43 billion and net income of $5.9 billion. Pepsi-Cola was the beverage division of PepsiCo which had brands such as Pepsi, Diet Pepsi, Mountain Dew, and 7 Up. PepsiCo in India PepsiCo entered the Indian market in 1988 as a joint venture between PepsiCo, Punjab Agro Industrial Corporation, and Voltas India and sold Pepsi under the brand name Lehar Pepsi. In 1994, after liberalization of Indian economy, PepsiCo India bought out its partners and became a fully-owned subsidiary of PepsiCo. Pepsi had been associated with cricket and Bollywood and over the years had Shah Rukh Khan, Sachin Tendulkar, Saif Ali Khan, Amitabh Bachchan, Kareena Kapoor, Priyanka Chopra, Virendra Sehwag, M S Dhoni, John Abraham, Ranbir Kapoor, and Deepika Padukone as its celebrity endorsers. ADVERTISING OF THE MAJOR CSD BRANDS OF PEPSICO Pepsi The Early Advertising Pepsi was the flagship brand of Pepsi-Cola. In the early days, it used the tagline “Exhilarating, invigorating, aids digestion.” Other early campaigns had slogans such as “Twice as much” and “Why take less when Pepsi’s best?” In 1953, the calorie content in the product formulation was reduced which Pepsi highlighted with its “The light refreshment” campaign. The late-1950s campaign “Be sociable, have a Pepsi” and the early-1960s campaign “Now it’s Pepsi for those who think young” marked its first emphasis on youth.44 Pepsi Generation However the first major campaign targeting youth “Come Alive: You are in the Pepsi generation” (targeted at the then teenaged baby boomers) was launched in 1963.7 The commercials showed youthful faces engaged in energetic

7 Baby boomers were persons born during the post-World War II baby boom. They were considered to be privileged and more affluent and often against traditional values.

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http://en.wikipedia.org/wiki/Post-World_War_II_baby_boom
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activities such as surfing or riding motorcycles.45 By 1967, Pepsi had attained about 14% market share compared to Coke's 30%, whereas 20 years earlier Pepsi trailed Coke by a 1:5 ratio.46 Pepsi Challenge In 1977, Pepsi launched the “Pepsi challenge” campaign in which taste-testing booths were set up in parking lots and malls across America to test the brand consumers preferred. The ads resonated with the viewers and for some years, Pepsi eroded Coke’s market share bit by bit. The campaign was discontinued in 1983 after research indicated that Pepsi was being perceived as brash and pushy. Despite its best efforts, however, Pepsi could not overtake Coke. In 1983, Pepsi returned to the “Pepsi generation” campaign to continue to cultivate the youthful image and attract a new demographic group. The key target was consumers aged 12 to 24 years. BBDO Worldwide – the long-standing agency of Pepsi launched “Choice of a new generation” campaign starring Michael Jackson. Pepsi hired the producer of Jackson’s music videos to film the ads such that they looked similar to music videos on MTV. By 1987, the campaign had won more than 50 awards.47 While Pepsi targeted youth, it was conscious that its original “Pepsi generation” (those baby boomers who were teenagers in the 1960s) was aging. The “One look campaign” in 1991 negotiated this divide. The campaign played a hit song of the 1960s while simultaneously idealizing youth. While the children featured in the campaign were blissfully innocent and not loud and rebellious, the campaign employed a tongue-in-cheek humor and had scantily clothed models (such as Cindy Crawford) – elements that spoke to a younger audience.48 By the early 1990s, Coke had regained its supremacy. To reverse this trend, Pepsi launched the “Gotta have it” campaign which was targeted at aging baby boomers and featured older spokespersons. This strategy proved unsuccessful and Pepsi quickly returned to its younger audience with 1993’s “Be young, have fun, drink Pepsi” campaign. The campaign though well-received did not enable Pepsi to gain market share from Coca-Cola.49 In 1995, Pepsi revived the “Pepsi challenge campaign.” For many consumers, Coke was an automatic selection grounded in the belief that Coke tasted better than Pepsi. If enough people could be encouraged to participate, this could substantially increase Pepsi’s market share. The new campaign was subtle and avoided overt declarations of “Pepsi being the winning Cola.” Early in the creative process, the company toyed with end-lines such as “People prefer Pepsi”, but eventually settled for “its make your mind up time.50” The campaign met with success. In 1997, Pepsi revised its “Pepsi generation” campaign to “Generation next.” The campaign positioned Pepsi and its drinkers as looking in anticipation to the future and relied heavily on celebrity endorsers. The commercials elicited criticism that the edgier, more youth-oriented ads were alienating important audience segments.51 In early 2000, it launched the campaign “Ask for more” and in 2001 “The joy of Pepsi” that enlisted megastars Britney Spears and Beyonce Knowles to acknowledge its return to the focus on youth lifestyle. In 2003, “Pepsi, it’s the Cola” campaign took a more direct approach to selling and highlighted the various foods that tasted good with Pepsi.52 Pepsi Advertising in India The early advertising of Pepsi in India from 1990–1994 centered on the twin taglines “This is the right choice baby ah-ha” and “The choice of a new generation.” In 1996 when Coca-Cola was the sponsor of the Cricket World Cup, Pepsi ran a campaign “Nothing official about it.” In between, Pepsi broadcast spoofs of Thums Up and Coke ads. Hari Krishnan, Vice-President, JWT Delhi (the agency for Pepsi) said:

India is a country with two big obsessions – cricket and Bollywood. These two platforms have given India their youth icons. Pepsi has associated with these two platforms to connect with youth. The youth have an irreverent side to them and Pepsi stands for it.53

In 2001, Pepsi launched an Indian version of the global “Ask for more” campaign (Yeh dil mange more), which was replaced by another global campaign “Dare for more” (Yeh pyaas hai bari) in 2004. Shashi Kalathil, Executive Director (Marketing), Pepsi Foods Ltd. said:

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Today’s youth dream and yearn to get more out of life. The campaign is about the assertive spirit and confidence to make things happen.54