OK, ladies and gentlemen, here we go again. As the earth's northern hemisphere begins tilting towards the sun, whose rays start striking the Tropic of Cancer at 23.5 degrees north vertically, the cola wars begin again. And of course, this year they are bigger, noisier and more violent, with both sides packing more firepower and spending more money than ever before. Please settle down in your ringside seats and let the good times roll. Incidentally, Coke's theme for the season is 'Red Hot Summer' and Pepsi's 'Cool Cool Summer'.
The strategies being used by the two sides start right from the...
Pack Sizes: Coke is ahead here. It launched several pack sizes and dispensers during the Wills World Cup. First came the 330 ml Coke and Fanta cans, then 1.5 litre PET bottles, can vending machines and backpack mobile dispensers. The last two were used in the World Cup stadia and will, for some time at least, be restricted to such large gatherings of thirsty people. The PET bottles come with special plastic caps, which, says Coke, preserve the fizz longer.
Post-World Cup has come the returnable one-litre glass bottle. This summer, 200 ml glass bottles are being test marketed in one city. Priced at Rs 5—instead of the Rs 7 for the standard 300 ml bottle— this pack size aims to penetrate the smaller towns and lower-income brackets. Coke hopes this will help raise the per capita consumption of soft drinks, still languishing at around 3.5 bottles a year, nearly one-fourth that of neighbouring Pakistan. And just as the cans, when they were launched, carried the Wills World Cup logo, the ones that will be on shelves during the upcoming Atlanta Olympics, will carry the Olympics logo. Last fortnight, Thums Up was launched in cans. Ramesh Chauhan's creation is already available in 500 ml glass bottles. Coke too will appear in this pack size before summer wanes this year.
Bottles will be Coke's mainstay in the Indian market for a long time to come, though the company claims that cans have performed well. "We expected non-returnables—cans and PET bottles—to account for 5-8 per cent of volumes, but initially they accounted for about 30 per cent," says Jimmy Mogal, senior manager, external affairs and corporate communications, Coca-Cola India. "Now they have settled to between 8 and 15 per cent of volumes."
Pepsi, which had won the first round of the pack size battle through its Fountain Pepsi dispensers, has retaliated to Coke's 1996 flurry with its own 330 ml cans. And if the history of the cola wars is anything to go by, expect several experiments in this area from Pepsi this summer. The 1.5 litre Pepsi PET bottles are already in the market. And so many different pack sizes obviously imply so many different...
Prices: "Coke doesn't believe in price wars," says Mogal. While Pepsi has just run a 50 per cent price-off on its brand in Bombay, Coke claims it will never offer such price-offs. Well, that's not fully true. After all, didn't Coke launch in India at a price lower than that of the other brands and force them to come down to Coke's level? Besides, the company has launched its one-litre glass bottles in Delhi this month at an introductory price lower than that of the equivalent Pepsi pack. The same strategy as Pepsi, which launched its 1.5 litre bottle at Rs 30 against Coke's Rs 35 as an introductory offer, and has since raised the price to the Coke level. Anyway, across the world, Coke and Pepsi have always used special price-off offers which last for a fixed period and then it's back to a standard price tag that both brands obey faithfully. For, in a rather unique product category like soft drinks, which exhibits strangely contradictory characteristics of being both an impulse-purchase item and a high-brandloyalty product, price is hardly a good bat-tlefield to dig your trenches in and hunker down. It's far better to do that with...
Sales Promotions: This is the war whoop aimed at bringing in new customers into the fold, get those who are already in to glug down more cola than they are wont to, or at least, generate enough brand noise and excitement to keep your brand top-of-the-mind. And Pepsi has already reached deafening decibel levels here.
One only has to look at Delhi, the country's largest soft drink market which accounts for about 20 per cent of India's total soft drink consumption. The Cool Cool Summer campaign, launched on May 10, is a blitzkrieg of games, contests, film festivals, rock shows, trekking and sports events. "We are targeting bored vacationing youngsters who have plenty of time on their hands, and don't know what to do. We are promising them a summer of non-stop fun and frolic for the coming two months," says Harit Nagpal, vice-president, operations, Pepsi. Through the campaign, Pepsi aims to go out to consumers—"literally within a two-km radius of their residence, through neighbourhood clubs, marketplaces, cinema halls, restaurants and parks," says Nagpal.
Graffiti contests are on at the capital's major shopping centres at Vasant Vihar, Khan Market, Greater Kailash, Rajouri Garden, Punjabi Bagh, Model Town and so on. A theme is scribbled on a board and enthusiastic members of the new generation nearly cover the full board in 15 min -utes. The author of what is judged the best graffiti wins a Pepsi T-shirt or a keychain or a cap. At 6:30 in the evening, the Pepsi tempo drives into the marketplaces, complete with stage, lights, and bands like The Gravy Train and Schizophrenia belt out cool numbers to regale the audience. There are no on-the-spot sales but enthusiasts can win Pepsi cans in the impromptu games that are organised by the company's people. Besides giant balloons, banners and extensive shop displays, a Pepsi Can Hunt contest is also on. Spots on FM radio and print ads urge teenagers to go to Pepsi vans parked at 12 locations and claim early bird prizes. At the end of the contest, motorbikes and cellular phones are on offer. At traffic intersections, school and college students are offering chilled cans to motorists. "We want to generate more and more trials for the product and hence instead of the consumer coming to the retail outlet, we are reaching out to him at a time and place where he can't resist it," says Nagpal.
Pepsi has also tied up with two leading personality schools in the capital and a tennis academy. Students enrolling for these courses, which are being publicised by Pepsi, get free Pepsi accessories. The company is also fixing treks and organising trekking paraphernalia like rucksacks. "The idea," explains Nagpal, "is to get people together and provide the initiative to youngsters to meet and make friends. Of course we get mileage for the brand, but we are not looking at direct translations of these spends into sales. The idea is much more long-term."
Pepsi is organising festivals of films popular with teenagers. In the offing is the Cool Cool currency contest where consumers have to collect bottle crowns and maybe add a little money to get gifts. "Once the umbrella concept of Cool Cool Summer has been identified," says Nagpal, "we are finding more activities to fit into it that convey the 'cool' attitude that the brand stands for. The campaign has given a focus to our promotions that were earlier being done in isolation."
Coke has its own share of promotional schemes, including the weekly Beat The Heat contests which have Walkmans and air conditioners as prizes. It has just launched its Red Hot Summer contest which offers prizes that, the company has reason to believe, will get teenagers burning with desire: six Mahindra jeeps. Also, as the Olympics near, to be held in Coke's home town Atlanta, the company will stoke excitement. For instance, huge Coke bottles displaying folk art from countries across the world are being sent to Atlanta. India too has dispatched one. And the company is pumping up the volume in...
Advertising: Coke has been running several of its international ads since the beginning of the year. Consumer focus group studies indicate that the commercial with the sweating sun quenching its thirst with Coke has gone down the best with audiences. This will be the lead ad this summer.
But the real advertising action is on the Thums Up front. The company is trying two distinct shifts in brand image. One is by ernationalising the image through commercials like the bungee-jumping ad: thirsty teenager bungee-jumps from cliff to pick up Thums Up bottle from truck hundreds of feet below—and introducing cans with images of four international adventure sports—sky diving, surfing, wind surfing and snow boarding, which, the company hopes, will surround the brand with an aura of thrill and excitement. The other is by personalising the brand by changing the ad line from "Taste the Thunder" to "I Want my Thunder."
The launch of the blue Thums Up cans with its bright red logo has invited sharp comment from Pepsi, which has just changed the colour of its logo in the US from red-and-blue to blue, and feels that the colour of the Thums Up can is a ploy to confuse the consumer. Coke retorts that one of the can graphics was first tested a year ago, so the question of copying months-old Pepsi cans doesn't arise. "Again, the association is with outdoor sports, so we had to show the sky or water," says Mogal. Hence, blue.
And so they go on, and on, the white-hot cola wars for the right to cool. You might as well sit back and enjoy the show.
