Chapter: 01

Introduction
to study

Comparative Analysis
And Research
Pepsi cola Vs. Coca cola

COMPARATIVE RATIO ANALYSIS OF PEPSI & COCA COLA COMP

1.0

INTRODUCTION

Today many new companies are coming in to existence and because of this the
competition is also growing rapidly. Because of this reason they have to compete
with their competitors constantly. In some industries the new companies may not
come in to existence but the competition between the existing companies is
growing more and more. The soft drink industry is mainly suffering with this
particular problem. The Companies have to continuously compete with their
competitors to get good market share and good profits. To face their competitors
they have to know their position and the competitors position in the market. For
this, the Companys will compare itself with their competitor that means they will do
the comparative analysis in all aspects. Item by Item comparison of two or more
comparable alternatives ,processes, products, qualifications, set of data and
systems etc. in accounting for, for example changes in a financial statements items
over several accounting period maybe presented together to detect the emerging
trends in the firms operations and results.----From this we can understand that Comparative analysis means the comparison
between the similar things (products, place, technologies, living being sand etc.)
regarding the features, nature, functions, behavior, SWOT, and many other
characters is called Comparative analysis. In this comparative analysis the
researcher will take any two or more similar products (that means the functioning of
the products are almost same) and compare the common and the similar features of
the products to find out that which product is the best one. In comparative analysis
the Company will compare itself with the company which is in the top position in
that industry or which is top in the position in that particular area or region; from
this they can understand their position in that industry. It will be very useful know
what is the strength and weakness of the Company and the company will try rectify
the problems in order to increase their performance to reach and to beat out that
other Company with whom they are comparing their Company. In the present
scenario in the soft drink industry, the two gain companies are fighting with each
other. They are adopting and changing the strategies frequently. They are changing
their schemes and offers according to their competitors. They have to analyses their
competitors strategies and techniques comparing with their companys strategies
and techniques. The study on comparative Analysis of Pepsi and Coke is very useful

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COMPARATIVE RATIO ANALYSIS OF PEPSI & COCA COLA COMP

to Pepsi Company. The comparison is done on all aspects of the Company. From this
analysis the company can know their position in the soft drinks market. Through this
Analysis Pepsi Company can know the merits and demerits of the Company
comparing with Coke Company. There are two famous beverage companies, Coke
and Pepsi, have been competing dramatically and distributed the beverage market
profit for several decades. In the free market, it is hard to exactly tell which one is
the winner within the perfect competition, because both companies using the
different styles of commercials and products to expand their markets.

1.1 BACKGROUND OS STUDY

HISTORY OF COCA-COLA
The world has changed in many ways since pharmacist; John Stith Pemberton first
introduced the refreshing taste of Coca-Cola in Atlanta, Georgia. The name and the
product mean so many things to hundreds of Millions of consumers around the
globe. Coca-Cola products are served more than 705 million times every day,
quenching the thirsts of consumers in more than 195 countries in every climate.
That's a long way to come after such a modest beginning.
May1886 - Pemberton concocted caramel-colored syrup in a three-legged brass
kettle in his backyard. He first "distributed" the new product by carrying Coca-Cola
in a jug down the street to Jacobs Pharmacy. For five cents, consumers could enjoy a
glass of Coca-Cola at the soda fountain. Whether by design or accident,
Carbonated water was teamed with the new syrup, producing a drink that was
Proclaimed "Delicious and Refreshing." Dr. Pemberton's partner and bookkeeper,
Frank M. Robinson, suggested the name and penned, in the unique flowing script
that is famous worldwide today.
1886 - Sales of Coca-Cola averaged nine drinks per day. That first year, Dr.
Pemberton sold 25 gallons of syrup, shipped in bright red wooden kegs. Red has
been a distinctive color associated with the No. 1 soft drink brand ever since.
1891 - Atlanta entrepreneur Mr. Candler had acquired complete ownership of the
Coca-Cola business for $2,300. Pemberton was forced to sell because he was in a
state of poor health and was in debt. Within four years, Candler's merchandising
flair helped expand consumption of Coca-Cola to every state and territory.

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1917 - 3 Million Coke's sold per day. "COCA-COLA" is the worlds most
recognized trademark.
1919 - The Coca-Cola Company was sold a group of investors for $25 million.
1923 - The Coca-Cola Company was sold after the Prohibition Era to Ernest
Woodruff for 25 million dollars. He gave Coca-Cola to his son, Robert Woodruff, who
would be president for six decades. Woodruff's leadership took the business to
unrivaled heights of commercial success, making Coca-Cola an institution the world
over.
During the Woodruff era, Mr. Woodruff made a promise to the armed forces of
the United States to supply Coca-Cola to every serviceperson. He said that costs
and location did not matter; he supplied 5 billion bottles to the service.
1925 - 6 Million Coke's sold per day.
1927 - The first Coca-Cola radio advertisement.
1928 - Sales of bottled Coca-Cola surpassed fountain sales for the first time.
1943 On June 29, an urgent cablegram arrived from General Dwight
Eisenhower's Allied Headquarters in North Africa, requesting 10 Coca-Cola bottling
plants to serve American servicemen overseas. Eventually, 64 plants were set up
during WWII.
1950 - Advertising on the television began. Currently Coca-Cola is advertised
on over five hundred TV channels around the world.
1961 - Sprite was introduced.
1971 - The song "I'd like to Buy the World a Coke" was released.
1978 - The two liter bottle was introduced, and during that same year the
company also introduced plastic bottles
1982 - Diet Coke was introduced in July.
1985 - The Coca-Cola Company made what has been known as one of the biggest
marketing blunder. They stumbled into a new formula in efforts to produce diet
Coke. They put forth 4 million dollars of research to come up with the new formula.
The new formula was a sweeter variation with less tang, it was also slightly
smoother. The factor that influenced the change was that Coke's market share fell
2.5 percent in four years. Each percentage point lost or gain meant 200 million
dollars. This was the first flavor change since the existence of the Coca-Cola

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COMPARATIVE RATIO ANALYSIS OF PEPSI & COCA COLA COMP

Company. The change was announced April 23, 1985 at the Vivian Beaumont
Theater at the Lincoln Center.
COCA COLA IN INDIA
Coca-Cola was the leading soft drink brand in India until 1977 when it left rather than reveals its formula
to the government and reduces its equity stake as required under the Foreign Exchange Regulation Act
(FERA) which governed the operations of foreign companies in India. After a 16-year absence, CocaCola returned to India in 1993, cementing its presence with a deal that gave Coca-Cola ownership of the
nation's top soft-drink brands and bottling network. Cokes acquisition of local popular Indian brands
including Thumps Up (the most trusted brand in India), Limca, Mazaa, Citra and Gold Spot provided not
only physical manufacturing, bottling, and distribution assets but also strong consumer preference. This
combination of local and Global brands enabled Coca-Cola to exploit the benefits of global branding and
global trends in tastes while also tapping into traditional domestic markets.
Leading Indian brands joined the Company's international family of brands, including Coca- Cola, diet
Coke, Sprite and Fanta, plus the Schweppes product range. In 2000, the company launched the Kinley
water brand and in 2001, Shock energy drink and the powdered concentrate Sun fill hit the market.
From 1993 to 2003, Coca-Cola invested more than US$1 billion in India, making it one of the countrys
top international investors. Coca-Cola India achieved 39% volume growth in 2002 while the industry
grew 23% nationally and the Company reached breakeven profitability in the region for the first time.
Encouraged by its 2002performance, Coca-Cola India announced plans to double its capacity at an
investment of $125 million (Rs. 750 crore) between September 2002 and March 2003. Coca-Cola India
produced its beverages with 7,000 local employees at its twenty-seven wholly-owned bottling operations
supplemented by seventeen franchisee-owned bottling operations and a network of twenty-nine contractpackers to manufacture a range of products for the company. The complete manufacturing process had a
documented quality control and assurance program including over 400 tests performed throughout the
process.
The complexity of the consumer soft drink market demanded a distribution process to support 700,000
retail outlets serviced by a fleet that includes 10-ton trucks, pen-bay three wheelers, and trademarked
tricycles and pushcarts that were used to navigate the narrow alleyways of the cities.25 In addition to its
own employees, Coke indirectly created employment for another 125,000 Indians through its
procurement, supply, and distribution networks.
HISTORY OF PEPSI

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Pepsi was founded in New York in 1965. It is Producing Non-alcoholic beverage and
Food processing items. Pepsi carbonated beverage that is produced and manufactured by PepsiCo. It is
sold in retail stores, restaurants cinemas and fromvending machines. The drink was first made in the
1890s by pharmacist Caleb Bradham in New Bern, North Carolina. The brand was trademarked on June
16, 1903.Pepsi arrived on the market in India in 1988.PepsiCo gained entry to India in 1988 by creating a
joint venture with the Punjab government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas
India Limited. This joint venture marketed and sold Lehar Pepsi until 1991, when the use of foreign
brands was allowed; PepsiCo bought out its partners and ended the joint venture in 1994. Others claim
that firstly Pepsi was banned from import in India, in 1970, for having refused to release the list of its
ingredients and in 1993, the ban was lifted, with Pepsi arriving on the market shortly afterwards. These
controversies are a reminder of "Indias sometimes acrimonious relationship with huge multinational
companies." Indeed, some argue that PepsiCo and The Coca-Cola Company have "been major targets in
part because they are well-known foreign companies that draw plenty of attention.

PepsiCo In India
PepsiCo entered India in 1989 and has grown to become one of the countrys
leading food and beverage companies. One of the largest multinational investors in
the country, PepsiCo has established a business which aims to serve the long term
dynamic needs of consumers in India. PepsiCo India and its partners have invested
more than U.S.$1 billion since the company was established in the country. PepsiCo
provides direct and indirect employment to 150,000 people including suppliers and
distributors. PepsiCo nourishes consumers with a range of products from treats to
healthy eats, that deliver joy as well as nutrition and always, good taste. PepsiCo
Indias expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP,
Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi,
hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports
drinks - Gatorade, Tropicana100% fruit juices, and juice based drinks Tropicana
Nectars, Tropicana Twister and Slice.

PepsiCos foods company, Frito-Lay, is the

leader in the branded salty snack market and all Frito Lay products are free of trans-

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COMPARATIVE RATIO ANALYSIS OF PEPSI & COCA COLA COMP

fat and MSG. It manufactures Lays Potato Chips, Cheetos extruded snacks, Uncle
Chipps and traditional snacks under the Kurkure and Lehar brands. The companys
high fibre breakfast cereal, Quaker Oats, and low fat and roasted snack options
enhance the healthful choices available to consumers. Frito Lays core products,
Lays, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly
reduce saturated fats and all of its products contain voluntary nutritional labeling on
their packets. The group has built an expansive beverage and foods business. To
support its operations, PepsiCo has 43 bottling plants in India, of which 15 are
company owned and 28 are franchisee owned. In addition to this, PepsiCos Frito
Lay foods division has 3 state-of-the-art plants. PepsiCos business is based on its
sustainability vision of making tomorrow better than today. PepsiCos commitment
to living by this vision every day is visible in its contribution to the country,
consumers and farmers.

PRODUCTS AND SREVICE PROVIDE BY BOTH COMPANIES

PRODUCT OF PEPSCO
1.
2.
3.
4.
5.
6.
7.
8.

PRODUCT OF COCA-COLA

PEPSI
MIRINDA
MIRINDA LEMON
MOUNTAIN DEW
NIMBOOZ
SLICE
7 UP
AQUAFINA

1.
2.
3.
4.
5.
6.
7.

COKE
THUMS-UP
SPRITE
LIMCA
FENTA
MAZZA
KINLEY

1.2 PURPOSE OF STUDY

To analyze how coke and Pepsi learn to compete in India, with reference to
Hyderabad.
SECONDARY OBJECTIVE:

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1.
2.
3.
4.
5.

To analyze the distribution channel system.

To check the brand availability.
To analyze the effectiveness of the schemes launched by the company.
To find the retailers satisfaction.
To ensure the visibility of the product.

1.3 SCOPE OF STUDY

To study the overview of Pepsi Company (Pearl Bottling Pvt. Ltd.)
To know and compare the merchandising of Pepsi and Coke in retail outlets.
To identify the retailers opinion towards Pepsi products when compared to coke products.4.To offer some
finding and suggestions to the company for the improvement of its performance.
1. And to analysis the ratio of both companies
a. Financial ratios
i. liquidity ratio , the assets ability to cover current obligations
ii. leverage ratio , asset ability to cover long term debt obligations
b. operational ratios
i. activity ratio , asset amount of activity relative to amount of resource used
ii. profitability ratio , assess profits to amount of resources used
c. Valuation ratios, asset market price relative to assets or earnings.

1.4 LIMITATION OF THE STUDY

Though this is a very broad topic and to cover this topic in short span of
few months is not possible, so I preferred to select the comparative ratio
analysis of Pepsi and Coca-Cola in India the first limitation is the time
constraint. The second limitation is of the availability of the data I have
collected the data from various sources.

1.5 METHODOLOGY OF STUDY

My research report is based on a critical review of both primary and secondary data.
Primary data are used in very limited cases .Research methodology is a way to
systematically solve the research problems. It may be understood as a science of
studying how research is done scientifically. We study the various steps that are
generally adopted by a researcher in studying his research problem along with the
logic behind them. It is necessary for the researcher to know not only need to know
how to develop certain indices or tests, how to calculate the mean, the mode, the
median, standard deviation and chi square, how to apply the particular research

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techniques, are relevant and which are not and what would they mean and indicate
and why? Researchers also need to understand the assumptions underlying various
techniques and they need to know the criteria by which they can decide that certain
techniques and procedures will be applicable to certain problems and others will
not.
What Data Collection Devices were used?
In Secondary Data:
Search Engines
Wikipedia & Encyclopedia
www.slideshare.com , www.scribed.com www.google.com
www.pepsiindia.com www.cokeindia.com and so on
I am using some statistical tool and techniques for data processing and
analyzing like mean, correlation, regression, time series, index number, sampling
and sampling distribution, estimation, hypothesis testing and other testing etc, on
collected primary data and market share of PepsiCo and Coca-Cola.

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