The fizz has gone out of cola ads this summer. The combative advertising between arch rivals Coca-Cola India and PepsiCo India that marked the onset of summers in the country is conspicuous by its absence even as consumer demand for colas is growing at a scorching pace.
Cola advertising, till around four or five years ago, not only stood for marvelous creativity, it also provided the industry, consumers included, something to talk about, given their penchant for cheeky slogans and smart repartees. The two rivals would often take direct pot-shots at each other that sometimes landed them in trouble as well. Yet, the phenomenon continued unabated. Remember the Coke tagline a decade ago: ?Eat Cricket, Sleep Cricket, Drink only Coca-Cola?? And Pepsi?s response to it: ?Ever heard of a soft drink major called Cola-Cola India?? And who can forget Pepsi?s ?Nothing official about it? slogan during the 1996 Cricket World Cup in which Coca-Cola was the official sponsor.
The 90s and even the first half of the current decade was witness to a no-holds barred rivalry between the two companies on all fronts including pricing, distribution and advertising. The reason was simple: the cola market was small and growing at a slower pace. There were only a handful of consumers to win over and hence, the imperative to woo them first.
The scenario, however, has changed of late. The market is growing, so are the top and bottom lines and hence, an apparent bonhomie between the rivals.
What could have also helped douse the fire is that the category as a whole has been facing intense scrutiny in recent years. Whether it was the pesticides controversy or concerns over the effects on health, the two companies have been forced to bury the hatchet and defend their products.
?There are enough growth opportunities for both Coke and Pepsi in India,? says Punita Lal, executive director (marketing), PepsiCo India. ?We want to grow the category now. India is under indexed, so our objective is to increase consumption of colas and soft drinks in domestic markets.?
Like PepsiCo, Coca-Cola India is also looking at the growth potential of the Rs 7,200 crore branded soft drinks sector in India. ?Our intent is to focus on the consumers and leverage the opportunity that stands before the company,? explains Ricardo Fort, vice-president-marketing, Coca-Cola India. Coca-Cola India recorded one of its highest growth numbers in the October-December 2009 quarter even as it saw 14 consecutive quarters of growth, out of which 11 saw double-digit growth.
According to independent industry reports, Indian consumers drink 120 billion litres of beverages every year of which, only 4% are ready-to-drink packaged beverages. ?This shows that there is tremendous growth in India for the entire packaged ready to drink segment?this is true for both sparkling and still beverages. It is this opportunity which drives Coca-Cola India,? he adds.
It is this new-found confidence that has perhaps allowed the two to tone down the aggressive pitch in their ad campaigns. Rohit Ohri, partner, JWT India, the agency that handles Pepsi?s advertising in India, says ?What it (PepsiCo) has changed is its communication strategy. Increasingly, young consumers want brands to engage them in an interactive two-way communication.?
The new ads from the rivals clearly indicate the focus has shifted from competition to consumers and pushing consumption. Instead of taking potshots at each other, the two companies are trying to woo the consumers who seem to be in a mood to splurge.
Much of the marketing action is also shifting to the digital media, in tandem with changing media consumption. ?Earlier, we were allocating 80% of ad spend on television advertising and 20% for other media such as print, web, outdoor and mobile communications. But now the ratio stands at 70:30,? said Lal.
Carbonated soft drinks ads accounted for the top slot in the food and beverages television ads category in 2009, according to ad trends data analysed by AdEx India, a division of audience measurement agency TAM Media Research. Coca-Cola India and PepsiCo were among the top three advertisers on TV in the food and beverages category in 2009.
Prasoon Joshi, chairman of McCann Erickson India, the agency which handles the ad account of Coca-Cola in India, however, says that while the tenor of the ads may have changed, tough competition is there to stay. He says: ?I would not say that the cut-throat competition between the cola majors has taken a back seat. Instead, the scene has changed dramatically now.?Joshi says that while soft drinks majors dominated the advertising charts earlier, it?s now new sectors such as telecom that rule the small screen now. ?But, whenever we require combative advertising, we will do it for Coke.?
However, right now, the accent seems to be on connecting with consumers through various media?mobile, internet and digital platforms. To take on Coke, PepsiCo is drawing up a fresh growth strategy which includes digital campaigns and new consumer engagement modules, both online and on-ground. For starters, the company has just rolled out a new marketing initiative called ?The Game? to connect with consumers through the electronic media.With this initiative PepsiCo has brought gaming to TV advertising for the first time ever, according to Lal. ??The Game? will not only attract eyeballs but also drive participation amongst youngsters,? she explains.
?PepsiCo?s new initiative `The Game? attempts to combine the niche world of interactive gaming with the mass Bollywood world to create a first of its kind gaming commercial in India. This communication though primarily on TV, will straddle internet, outdoor, radio and mobile,? adds Ohri.
Coca-Cola, too, is currently exploring various media options to connect with consumers. ?Innovation has always been the fulcrum of our strategy. Coca-Cola India is always on the lookout for opportunities to engage and connect with its consumers,?says Coca-Cola?s Fort. ?For the summer season in 2010, we have already rolled out brand campaigns for our brands such as Thums Up, Coca-Cola, Fanta, etc. The above-the-line initiatives are further backed by a range of integrated communication initiatives leveraging both the digital media and also other platforms like radio, out-of-home, and on ground activations.?
For instance, Coca-Cola has recently rolled out a new initiative called ?Thums Up Thunder Wheels? to connect with the young consumers within the digital space. ?Consumers just need to buy a bottle of Thums Up and look under the crown for a 9-digit unique code,?explains the company spokesperson.
The opportunity in the non-carbonated soft drinks sector, especially the nimbu-paani category, too seems to have grabbed their attention, with both the companies launching new brands and attendant campaigns to promote them. The share of PepsiCo and Coca-Cola ads in the non-carbonated soft drinks category on TV went up from 25% and 16%, respectively, in 2006 to 35% and 45% in 2009, according to AdEx India data. In 2009, PepsiCo had taken the lead by entering the segment with Nimbooz under its 7 UP brand. Parle Agro had followed suit to bring out LMN in the market. The battle for the branded nimbu paani market has just got fiercer with Coca-Cola India launching a lemon drink Nimbu Fresh under its Minute Maid brand earlier this year.
Innovation seems to be the name of game in the branded soft drinks sector in India. To woo consumers, Coca-Cola India is planning to launch a slew of its global brands in the next two years. ?We have already launched a range of innovations for the Indian market- be it Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh and also Burn. As part of this commitment, we continue to explore a wide variety of beverage opportunities across all beverage segments,?said the coke spokesperson.
As for PepsiCo?s growth plans, Lal said the company is extending its distribution routes, agents and sales persons to reach out to a wider target audience. ?Also, we are investing in infrastructure, manufacturing facility, brands and `go-to-market? initiatives to pump up volumes,?she added.
For now, Coke and Pepsi seem to have brokered peace as they unnleash online and offline campaigns to woo consumers across the country. But the rivals are not calling it quits either. According to Ohri, the past one year has seen a revival of the carbonated soft drinks segment in India. ?This revival may bring back the cola wars,?he adds. And the battle lines will be drawn again.