September 8, 2010

Pepsi to 'Max'?

 The Pepsi-Coke battle has seen a ‘strong’ new member being introduced in the former’s team. Pepsi recently launched the Pepsi Max cola in the Indian market, after its success in the western markets. India is primarily a market where both cola companies have increased the sweetness in their flavor Remember Coke’s early trial to change the drink’s taste in India and make it as strong as it was in the west and what it resulted into? Surprisingly, however the market leader of the soft drink market argues against this ‘sweet’ statement. 

Thums-up stands tall with a whooping seventeen percent market share (till 2003, it had twenty-four percent market share!) The strong taste of Thums-up has also being positioned strongly into the minds of the Indian consumer with the tagline ‘Taste the Thunder’. Pepsi rings in a close second with thirteen percent, followed by Coke with eight percent, if you observe only the cola market. As such, to battle the might of the thunderous Indian brand, Pepsi decide to introduce ‘Pepsi Max’ in the Indian market. What most people are dismissing as an illogical extension is actually a strategy in disguise to veer consumers away from Thums-up and towards the new brand. Indian consumers are however skeptical about such brands which try to take on the might of an already established brand. I see some innovators and early adopters trying the brand but if the product does not live upto the expectations then surely that will be it. Before growth, Pepsi Max would have to be minimized. Because most consumers, identify with Thums-up as it stands for the vintage Indian cola brand. It balanced its equity in a manner better than Campa Cola (by Pure Drinks Ltd. had a 30% market share then) did against Double Cola (US based) in the 70’s and that is why it is surviving today with a high percentage of loyal followers, of which some don’t even know that it’s a Coke brand. Coke brought the brand from Ramesh Chauhan of Parle--who declined Pepsi’s offer citing that Coke would be able to do better justice to their brand and don’t forget the allegations that Coke tried to kill the Thums up brand later to strengthen their hold on the market--as the latter wanted to concentrate on the yet to burgeon packaged water market and what was a three way battle between Pepsi (which reentered India in 1988), Coke (reentered in 1993 after being drive away due to FERA) and Thums-up, suddenly became a one on one war. Coke continued with the macho adventurous, carefree positioning of the brand that connected with the inner rebel in the Indian male (the main reason why Campa Cola failed with its happy and good image). Coke’s long term investment of $60 million in 1993 has surely rung in their present cash registers in the Indian market.
Even if you speak of campaigns, Thums-up has remained the same throughout with its strong positioning as an adventurous brand. Only three campaigns come to mind, ‘Toofani Thanda’, ‘Taste the Thunder’ and ‘Grow up to Thums up’. The latter more to appeal to a set of the audience whose earlier generation had witnessed the Thums up tale and not to forget, the positioning was so strong that Coke had to rub it off on Coca Cola with the campaign ‘Thanda matlab Coca Cola’. How many statements Coca Cola has changed after that? How many has Pepsi changed in answer? How many different celebrities, ranging from Tendulkar to SRK and from Aishwariya Rai to Amitabh Bachchan have been roped in between the two brands? Whereas, if you check Thums up it has only used three prominent celebs, Sunil Gavaskar (in 1977) Salman Khan (from 1996-2003) and Akshay Kumar (2003 onwards), who have a distinct carefree and rough image attached to them. This is truly iconic!
So coming back to the recent onslaught, what would be Coke’s reaction to Pepsi’s strategy? Don’t they know? Of course, they do if they are Coca Cola and especially, when the battle is with Pepsi for a market like India. Then what are they going to do about it? I doubt they will take any new product development decisions because the Thums-up brand is still the market leader. Coke can think of launching Coke zero in the Indian market which has traditionally being positioned similarly as Pepsi Max but I doubt they will do it as Thums-up has attained the status of a cult brand primarily because it did not give into the demands of seasonal temptations and maintained its positioning relevant with times. As long as Pepsi Max doesn’t challenge its hold too much, till then I see no reaction from Coke. But yes, Pepsi is not advertising the new brand too much currently except for outdoors and online. Pepsi has intelligently positioned it as a strong drink, free from sugar and for the health conscious consumer (targeting the 25-35 age group people who actually consume more Thums up. Good research by Pepsi, eh?).  Using  simplicity and creativity, Pepsi has put up a large OOH advert which shows a Pepsi Max bottle spilling the drink into an overflowing glass and the punch line says it all ‘Maximum kick, No sugar’. Are they trying to achieve converts from the liquor religion? Lol! Maybe you will see Coke retaliate to reinforce Thums up in our minds, by launching another of those high flying Akshay Kumar campaigns which always gets on my nerves. But one thing is for sure, Coke is not going to remain silent. In reality, you never know, especially when the battle is between these two giants. We’ll wait and watch how much Pepsi Max can actually ‘Max’ Pepsi’s share.

With hugs and kisses to the Consumer, 
The Young Marketer.


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