Coke and Pepsi

Coke & Pepsi: From Global to Indian Advertising Case Analysis

Situation Analysis

The Coca-Cola company with a global portfolio—Coca-Cola and Diet Coke for cola carbonates, Sprite and Fanta for non-cola carbonates, and Thums Up and Limca in India has maintained its leadership in the carbonated soft drinks (CSD) industry since 1886. The acquisition of Parle enabled Coca-Cola to take over the Indian CSD market, since Thums Up had already become the cola product leader in India. In order to compete with the Coca-Cola Company, PepsiCo launched different brands in each category—Pepsi and Diet Pepsi for cola carbonates, 7 Up, Mountain Dew, and Mirinda for non-cola carbonates. Because Indian customers prefer non-cola carbonates for lemonade/lime and orange flavor, all the non-cola brands from both companies contributed to 41.8% of market share for Indian CSD market in 2009, of which Sprite took the leading position.

Due to low product differentiation in the CSD industry and the impulse buying behavior for this kind of product, the consumers’ perception of the brands plays an essential role in the purchasing decision. Therefore, applying effective advertising to implant a particular brand image to consumers is important for the CSD companies (Kumaratdbg, 2010). As for the US market, Coke delivers the messages that refreshment, uplifting feeling, pleasure, happiness, and even family-value come from drinking a bottle of Coke. Coke came up with these messages based on the needs, “routine refreshment need,” “active replenishment need,” and “sensory pleasure need,” that “trigger problem recognition” of desiring a beverage (Belch & Belch, 2012). For the India market, Coke conveys a consistent message globally. However, Pepsi emphasizes that Pepsi is for people who live young. Compared to Coke, Pepsi uses celebrity endorsement heavily due to the fact that its target audience is from ages 12-24 and are easily influenced by reference groups, like a popular star or a...