Previously, we had seen how Pepsi managed to enter India after 5 years of struggle:
During the debates over Pepsi’s proposals in Parliament, Ramesh Chauhan used his influence to lobby against Pepsi’s entry in India by pointing out that India already had a thriving softdrink industry and it was not necessary to invite a global cola brand. By the late 1980s, as Pepsi’s entry was imminent, he geared up his company (Parle) to counter Pepsi by increasing its softdrink advertising budget and providing incentives to retailers like extended credit and better profit margins.
Throughout the year 1990, Pepsi penetrated across the length & breadth of India and by September 1990, the time was right to open up its coffers. For the first few months, Pepsi spent significantly on huge billboards and free samples of Pepsi to millions of Indians. Coupons were provided in newspapers which could be exchanged for a bottle of Pepsi from any retail outlet.
Pepsi was confident of winning the tastebuds of Indians, but surprisingly, the resutls of the surveys proved otherwise. Although Indians “liked” the taste of Pepsi, they still preferred Thums Up. For example, 91 per cent of the consumers in Bangalore tried Pepsi once but only 10 per cent tried it for a second time.
This came as a shocker for Pepsi since it had always relied on the taste to promote its softdrink through promotions like the Pepsi Challenge in other parts of the world.
By the end of 1990, Pepsi realized that India was a tough market to crack and instead of promoting the taste, it had to promote its brand. The challenge for Pepsi was to portray itself as the right choice for consumers (especially youngsters) and hence the result was the “Yeh hi hai right choice baby, aha!!” campaign where the emphasis was on connecting consumers emotionally to the brand.
Pepsi produced a series of TV commercials (each ad being almost a minute long) to portray Pepsi as the right choice with the “aha” punch. It was one of the few FMCG companies which tried to capture the cultural diversity of India and hence was quickly able to connect to the masses.
Here is one such ad depicting the cultural diversity of India:
Also, the company roped in celebrities for promoting the brand through such “aha” ads.
Much before Aishwarya Rai became the heartthrob of the nation, she had acted in Pepsi ads with Aamir Khan & Mahima.
The ad was shot in just 1 night during the 1992 Mumbai riots:
Such branding efforts helped Pepsi gain marketshare. Due to lack of interest and marketing efforts, Campa Cola started losing marketshare and scaled down operations. Unable to face such intense competition, several local cola companies “died” a natural death. Some of them were acquired by Pepsi and some of the franchises of Parle switched their allegiance to Pepsi.
Although Parle was the main rival in the early 90s, Pepsi’s plan was to establish itself before any other MNC (like Coca Cola) could enter India. Hence, Pepsi left no stone unturned in its effort to reach out to the masses and one such medium in India was Cricket. Pepsi realized this pretty quickly and jumped into the bandwagon by sponsoring tournaments and identifying promising young players like Sachin Tendulkar & Vinod Kambli to advertise its brand.
Apart from the aggressive marketing, Pepsi strengthened its distribution network across India and the company did not mind rewarding its retailers generously for their loyalty. For example, Pepsi would send their officials disguised as customers to random stores and ask for a cola drink. If the store owner recommended him Pepsi, then the store would be rewarded with several crates of free Pepsi. i.e Pepsi not only managed to get celebrities to endorse its brand, but even lakhs of stores across India to recommend its brands to customers.
By 1992-93, Pepsi had established firmly in India as an aspirational brand for the youth, and in some ways, it had become the face of liberal India, which had just opened up the economy to accommodate a slew of global companies among which Pepsi, despite being a foreign brand, had become “Indian” due to its marketing efforts.
Could Coca Cola afford to miss the bus? We shall find out in the next part tomorrow.
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