5th Case(Sales and promotion): The Coke-Pepsi Rivalry!!

It is very hard to tell about this famous topic within a post....In fact, the coke-pepsi rivalry is so old and so diversified that one can write a book on it!!...Anyway, I am trying to make it short.

Making billions from selling carbonated/colored/sweetened water for over 100 years, Coke and Pepsi had emerged as truly global brands. Coke was born 11 years before Pepsi in 1887 and, a century later it still maintained its lead in the global cola market. Pepsi, having always been number two, kept trying harder and harder to beat Coke at its own game. In this never-ending duel, there was always a new battlefront opening up somewhere. In India the battle was more intense, as India was one of the very few areas where Pepsi was the leader in the cola segment. Coke re-entered India in 1993 and soon entered into a deal with Parle, which had a 60% market share in the soft drinks segment with its brands Limca, Thums Up and Gold Spot.

Coke was mainly a franchisee-driven operation with the company supplying its soft drink concentrate to its bottlers around the world. Pepsi took the more capital-intensive route of owning and running its own bottling factories alongside those of its franchisees. Over half of Pepsi's sales were made by its own bottling units.

Though Pepsi had a lead over Coke, having come in before the era of economic liberalization in India, it had to spend the early years fighting the bureaucracy and Parle's Ramesh Chuahan every step of the way. Pepsi targeted the youth and seemed to have struck a right chord with the market. Its performance was praiseworthy, while Coke had to struggle to a certain extent to get its act right. In a span of 7 years of its operations in the county, Coke changed its CEO four times. Media reports about the troubles faced by Coke and the corrective measures it adopted were aplenty.

When Coke re-entered India, it found Pepsi had already established itself in the soft drinks market. The global advertisement wars between the cola giants quickly spread to India as well. Internationally, Pepsi had always been seen as the more aggressive and offensive of the two, and its advertisements the world over were believed to be more popular than Coke's. It was rumored that at any given point of time, both the companies had their spies in the other camp. The advertising agencies of both the companies (Chaitra Leo Burnett for Coke and HTA for Pepsi) were also reported to have insiders in each other's offices who reported to their respective heads on a daily basis. Based on these inputs, the rival agency formulated its own plans. These hostilities kept the rivalry alive and healthy. However, the tussle took a serious turn at times with complaints to Advertising Standards Council of India, and threats of lawsuits.

While Pepsi always relied on advertisements featuring films stars, pop stars and cricket players, Coke had initially decided to focus on Indian culture and jingles based on Indian classical music. These were also supported by coke advertisements that were popular in the West.

Somehow, Coke's advertisements missed the Indian pulse by a wide margin. Pepsi soon came to be seen as a 'defender' who had humiliated the 'invader' with its superior creative strengths. When Coke bagged the official sponsorship rights to the 1997 Cricket World Cup, Pepsi created media history by unleashing one of the country's most successful advertisement campaigns - the 'Nothing Official About It' campaign . Pepsi took on Coke, even when the latter sponsored the replays of the matches, through the campaign, 'Uncork a Cola.' Media coverage of the war even hinted that the exclusion of Rahul Dravid (Pepsi's model) from the Indian team had something to do with the war. However, Coke had its revenge when it bagged the television sponsorship rights for the 1997 Pepsi Asia Cup. Consequently, Pepsi, in spite of having branded the event was not able to sponsor it.

The severe damage caused by the 'Nothing Official About It' campaign prompted Coke to shift its advertising account from McCann Erickson to Chaitra Leo Burnett in 1997. The 'Eat-Sleep-Drink' series of ads was born soon after. Pepsi responded with ads where cricket stars 'ate a bat' and 'slept on a batting pad' and 'drank only Pepsi.' To counter this, Coke released a print advertisement in March 1998, in which cricketers declared, 'Chalo Kha Liya!' Another Thums Up ad showed two apes copying Pepsi's Azhar and Ajay Jadeja, with the line, 'Don't be a bunder (monkey), Taste the thunder.' For once, it was Pepsi's turn to be at receiving end. A Pepsi official commented, "We're used to competitive advertising, but we don't make fun of the cricketers, just the ad." Though Pepsi decided against suing Coke, the ad vanished soon after the dissent was made public. Commenting on this, a Pepsi official said, "Pepsi is basically fun. It is irreverent and whacky. Our rival is serious and has a 'don't mess with me' attitude. We tend to get away with fun but they have not taken it nicely. They don't find it funny."

Coke then launched one of its first offensive ads, ridiculing Pepsi's ads featuring a monkey. 'Oye! Don't be a bunder! Taste the Thunder', the ad for Thums Up, went with the line, 'issued in the interest of the present generation by Thums Up.'

The 1998 Football World Cup was another event the cola majors fought over. Pepsi organized local or 'para' football matches in Calcutta and roped in Indian football celebrity Bhaichung Bhutia to endorse Pepsi. Pepsi claimed it was the first to start and popularize 'para' football at the local level. However, Coke claimed that it was the first and not Pepsi, to arrange such local games, which Coke referred to as 'pada.' 

While Pepsi advertisements claimed, 'More football, More Pepsi,' Coke utilized the line, 'Eat football, Sleep football, Drink only Coca-Cola,' later replaced by 'Live football, dream football and drink only Coca-Cola.' Media reports termed Pepsi's promos as a 'me-too' effort to cash in on the World Cup craze, while Coke's activities were deemed to be in line with its commitment and long-term association with the game.

Coke's first offering in the lemon segment (not counting the acquired market leader brand Limca) came in the form of Sprite launched in early 1999. From the very beginning, Sprite went on the offensive with its tongue-in-cheek advertisements. The line 'Baki Sab Bakwas' (All the rest is nonsense) was clearly targeted at Pepsi's claims in its ads. The advertisement made fun of almost all the Pepsi and Mirinda advertisements launched during 1998. Pepsi termed this as Coke's folly, claiming it was giving Sprite a 'wrong positioning,' and that it was a case of an ant trying to fight a tiger.  

Sprite received an encouraging response in the market, aided by the high-decibel promotions and pop music concerts held across the country. But Pepsi was confident that 7 Up would hold its own and its ads featuring film stars would work wonders for Mirinda Lemon in the lemon segment.

When Pepsi launched an advertisement featuring Sachin Tendulkar with a modified Hindi movie song, 'Sachin Ala Re,' Coke responded with an advertisement with the song, 'Coke Ala Re.' Following this, Pepsi moved the Advertising Standards Council of India and the Advertising Agencies Association of India, alleging plagarisation of its 'Sachin Ala Re' creation by Coke's advertising agency, Chaitra Leo Burnett, in its 'Coke Ala Re' commercial. The rivals were always engaged in the race to sign the most popular Bollywood and cricket celebrities for their advertisements. More often than not, the companies pitched arch-rivals in their respective fields against each other in the cola wars as well. (Refer Table I)

Celebrity Endorsers *

	Indian film industry	Cricket players
Coke	Karisma Kapoor, Hrithik Roshan, Twinkle Khanna, Rambha, Daler Mehndi, Aamir Khan, Aishwarya Rai. **	Robin Singh, Anil Kumble, Javgal Srinath.
Pepsi	Aamir Khan, Aishwarya Rai**, Akshay Kumar, Shahrukh Khan, Rani Mukherjee, Manisha Koirala, Kajol, Mahima Chaudhary, Madhavan, Amrish Puri, Govinda, Amitabh Bachchan.	Azharuddin, Sachin Tendulkar, Rahul Dravid, Sourav Ganguly.

* The list is not exhaustive.
**Aamir and Aishwarya had switched from Pepsi to Coke.

In October 2000, following Coke's 'Jo Chaaho Ho Jaaye' campaign, the brand's 'branded cut-through mark, ' reached an all-time high of 69.5% as against Pepsi's 26.2%. In terms of stochastic share, Coke had a 3% lead over Pepsi with a 25.5% share. Pepsi retaliated with a campaign making fun of Coke's advertisements. The advertisement had a mixed response amongst the masses with fans of both the celebrities defending their idols. In May 2000, Coke threatened to sue Pepsi over the advertisements that ridiculed its own commercials. Amidst wide media coverage, Pepsi eventually stopped airing the controversial advertisement. In February 2001, Coke went on the offensive with the 'Grow up to the Thums Up Challenge' campaign. Pepsi immediately issued a legal notice on Coke for using the 'Yeh Dil Maange More' phrase used in the commercial. Coke officials, however, declined to comment on the issue and the advertisement continued to be aired. 

Pepsi and Coke fought the war on a new turf in the late 1990s. In May 1998, Pepsi filed a petition against Coke alleging that Coke had 'entered into a conspiracy' to disrupt its business operations. Coke was accused of luring away three of Pepsi's key sales personnel from Kanpur, going as far as to offer Rs 10 lakh a year in pay and perks to one of them, almost five times what Pepsi was paying him. Sales personnel who were earning Rs 48,000 per annum were offered Rs 1.86 lakh a year. Many truck drivers in the Goa bottling plant who were getting Rs 2,500 a month moved to Coke who gave them Rs 10,000 a month. While new recruits in the soft drinks industry averaged a pay hike of between 40-60% Coke had offered 300-400%. Coke, in its reply filed with the Delhi High Court, strongly denied the allegations and also asked for the charges to be dropped since Pepsi had not quantified any damages. Pepsi claimed that this was causing immense damage as those employees who had switched over were carrying with them sensitive trade-related information. After some intense bickering, the issue died a natural death with Coke emerging the winner in another round of the battle.