Coca-Cola has readied an extensive game plan to counter rival PepsiCo’s Rs150-crore marketing extravagance around the Indian Premier League this summer, which includes an entry-level price war, market expansion and heavy advertising. The top beverages maker will take its Rs8 price point for Coke national, introduce 400-ml PET bottles, increase distribution with a focus on small towns and launch a new campaign with hit film ‘Student of the Year’ actors Alia Bhatt, Varun Dhawan and Siddharth Malhotra during the IPL season, company officials said. The campaign will be themed around ‘Refreshment at Rs 8’ to drive the low price point. The company believes these plans will help it effectively counter rival PepsiCo’s big-ticket plan to paint IPL with its colour. PepsiCo will be spending almost Rs150 crore, or Rs3 crore per day, on the 50-day tournament having bagged almost all possible onair and on-ground sponsorship deals.
PepsiCo has picked title sponsorship of IPL for five years for Rs400 crore, or Rs80 crore per year, starting this season. It also spent more than Rs60 crore to become one of the two presenting sponsors of the IPL on broadcasting channel SET Max, which gives it the maximum airtime during matches, besides coughing up more than Rs10 crore to become drinking partners of eight out of nine IPL teams. Branding experts, however, say that high-decibel advertising alone cannot woo consumers to brands. “A wiser strategy is to invest on distribution and pampering consumers with attractive prices through out the year,” Harish Bijoor, veteran brand strategy consultant, said. A Coca-Cola official said that unlike PepsiCo, which is investing heavily in peak summer months through IPL, Coca-Cola’s strategy hinges on year-round activation. “Over the years, we have observed that the seasonality curve for beverages is tapering off. Our communication strategy will be aligned to this business reality,” Anupama Ahluwalia, VP marketing at Coca-Cola India, said.
Richa Arora, founder and chief strategy officer of consultancy firm Five by Six Consulting, said, “Seasonality is flattening out marginally, but summer remains the big season for beverages.” She added that the beverages firms need to look beyond the two months of IPL. Coca-Cola, which selectively dropped prices of 200-ml glass bottles of Coke to Rs8 last year, is now taking this price point national although its profit margin is negligible. “This price point hurts profitability, but the firm is hoping volumes would make up for it,” an official involved with the developments said. “It’s also necessary to spur consumption of brand Coke – in line with the global mandate to push the brand’s market share,” the person added. The company will continue selling brands such as Thums Up and Sprite at Rs11 and Rs12. Coca-Cola moves to counter Pepsi’s IPL bonanza through entry-level price war, and market expansion
Ahluwalia said the Rs8 entry point for Coca-Cola will bring new consumers into the cola segment. “We are leveraging our distribution and route to market capabilities to build on this,” she said. The firm is also introducing 400-ml PET packs, priced at Rs18- 20, to fill the gap between 300-ml glass bottles and 500-ml PET bottles. A first for the industry, the firm is hopeful this pack will help step up consumption of its beverage brands Coke and Thums Up colas, lemon drinks Sprite and Limca, and orange beverage Fanta. Coca-Cola will also be airing its campaign on SET Max during IPL. It has already bought advertising spots up to 50% of what PepsiCo has, and is expected to scale it up to 70% as the tournament progresses. Declining to comment on specific deals, Rohit Gupta, president of Multi Screen Media (MSM), which owns SET Max channel, said: “Depending on the category, firms competing with sponsors can buy anywhere between 70% and 80% of air-time.” On the distribution front, Coca-Cola is stepping up its presence in untapped smaller towns. From the existing 2.2 million outlets in the country that Coke reaches, it is targeting 2.4 million outlets. Coca-Cola, across its brands, has close to 54% share in the Rs14,000-crore Indian soft drink market, while PepsiCo holds 36%. The rest is accounted for by smaller, local brands including RC Cola and Campa Cola.