IBS-MUMBAI

IMC- Report
Section - B
By: MADHURA GUPTA (11BSP0503) AKANKSHA JODHANI(11BSP1924) DHAWAL WADERA(11BSP2099)

10th July, 2012

Coke and Pepsi- Pesticide Fiasco

The Problem
On August 5th, The Center for Science and Environment (CSE), an activist group in India growth issued a press release stating: "12 major cold drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues". According to tests conducted by the Pollution Monitoring Laboratory (PML) of the CSE from April to August, three samples of twelve PepsiCo and Coca-Cola brands from across the city were found to contain pesticide residues surpassing global standards by 30-36 times including lindane, DDT, malathion and chlorpyrifos. These four pesticides were known to cause cancer, damage to the nervous and reproductive systems, birth defects, and severe disruption of the immune system. In reaction to this report, the Indian government banned Coke and Pepsi products in the Parliament and state governments launched independent investigations.

The Reaction
Such huge accusations made above had a drastic effect on not only the sales of these two beverage giants but also on the brand image and reputation of the company. The sales of the companies plunged down to 30%-40% over the next two months. Such a downfall was witnessed at a time when under normal conditions both these companies were recording a 75%-80% sales growth rate. Such optimum sales conditions were completely reversed and the companies witnessed fall in sales for the first time in the Indian market, moreover, the effect of the catastrophe in India was also seen in the New York Stock Exchange, thus triggering global changes and effects. Under such a stressful situation, both Pepsi and Coke came together and took an immensely defensive position. They claimed that the reports by CSE were false, and that they would personally have their products checked, and the results would be published in their respective websites. They also threatened the Quasi-govt. body of legal actions and vowed to move court if the self-contested tests showed results contrary to those of the CSE.

The Remedy
It was of immense important for both these companies to regain their market position as far as their sales figures were concerned. Moreover, they had to check their tarnished image and recreate the image that they had enjoyed in the pre-fiasco period. The situation was worse for

Coke, because it had just recorded a lead in the field of Soft drinks beating Pepsi and gaining no. 1 position after three years of rigorous and extensive marketing. Hence reclaiming their positions was important for both the companies. In order to do so, both Pepsi and Coke subjected to extensive promotional strategies.

Both the companies, aimed at clearing their names from the pesticide fiasco by holding separate laboratpry tests and publishing the results oon their websites.

They sought the assistance of prominent Film and Soap celebrities to convince the consumers and draw them back, such as Aamir Khan and Smriti irani.

They aimed at reiniforcing the demand of their drinks with captions like 'Thanda matlab Coca-Cola' and 'It's the Cola, dare for more?' etc

Morover they sought the help og the US embassy in India for legal aid so as to be able to realize all their fundamental and constitutional rights

CADBURYS PACKAGING PROBLEM

I feel like having a Cadbury
This is what we say every time we crave for any chocolate or cocoa bar in general. Cadbury has become a generic or synonymic name for all chocolate lovers. This kind of brand persona has been built over years through excellent marketing strategies and branding campaigns. However, this seemingly foolproof marketing veil was pierced when Cadbury faced accusations on its quality standards on 7th October 2003.

The Problem
The Maharashtra Food and Drug Administration conducted laboratory tests on samples of Cadburys products and confirmed the presence of two dead and one live organism. The unspecified product was manufactured by Cadburys factory near Pune. This discovery was made just a week after the Pepsi and Coke Pesticide fiasco, thus fuelling the quality concern of consumers. This fiasco occurred just before Diwali, which is the peak festive season in India and Cadbury saw a sales drop of 30% in a season when it usually records a 15% rise (Data for 2000-2003). Hence it was obvious that the reputation and credibility of Cadbury was under intense scrutiny. It was important for Cadbury to get back the trust of not only its consumers but also its other key stakeholders.

Getting back the Customer Loyalty

Taking Responsibility

Even though Cadbury did not accept that it was their mistake, however they did not rebuff the accussation. They accepted that a mistake had been made at some level of the distribution channel. Cadbury identified that the aberration had been caused due to storage issues. They found the exact link in the distribution channel and shifted the focus from the rumor about manufacturing defects

Getting to the root of the cause

Taking apt measures

Cadbury came up with a double protective cover within a record time of 2 months and launched the new improved packaging in January, 2004

Regaining Brand Value

Once, Cadbury accepted the aberration and got to its cause, it was important for it to get back its consumers. Cadbury did this in two steps. First and foremost it made sure that the real story behind the fiasco reached the public in general, so that the doubt in the mind of the consumers was removed. Next it was important to reinforce the demand of Cadbury in the minds of the consumers. Cadbury widely spread the entire story on the Storage Aberration. It made available the details of the drawbacks in the storage facilities that lead to the presence of worms. It was important for the consumers to know that Cadbury was not directly involved with the fiasco and that its quality standards had not degraded. This information was broadcasted over the month of October and November.

To reinforce the image of Cadbury on the minds of the Indian consumer, Cadbury roped in Amitabh Bachchan, one of the most respected celebrities of the country and made him the voice and face of Cadbury. The audio-visual commercial created by Cadbury showed Mr. Amitabh Bachchan personally checking and approving the quality and packaging standards of Cadbury. In one go, Cadbury aimed at the emotional and the logical quotient of the Indian consumer. It hit the emotional front of consumers through Mr. Bachchan and managed the logical aspect by showing the excellent and improved standards of Cadbury. Cadbury established the fact that it not only had perfect standards, but it has also increased the packaging quality through Double Protection and Purity Seal. These were the two tools that Cadbury had applied in order to deal with the fiasco and re-establish its powerful Brand image.

After 8 weeks of campaigning and herculean efforts the sales of Cadbury rose back to their original level as before October, thus proving the mettle of its excellent branding and marketing strategies.

Incredible India-Communications Strategy

Incredible India has won many awards and accolades for its nation-wide campaigns and promotional strategies. Its excellent use of the various communication tools has been an inspiration for many and is an example of efficient and effective marketing. The various communication tools that have been used by Incredible India, over the past few years are listed below.

Print

Electronic

Internet

Direct

Print Media
Newspapers and magazines are one of the most widely accepted forms of information source, in addition to their deep penetration power withy respect to the masses. Incredible India has taken complete advantage of this mode of communication. Newspapers Print ads for Incredible India have appeared in most of the top grossing newspapers of India, including Times of India, Hindustan Times etc. These ads aimed at showing the various cultural aspects of the nation and apply huge emphasis on the importance and adventure of exploring it. Magazines Apart from print ads in national magazines like Stardust and Savvy, Incredible India came up with the innovative idea of providing DVDs with ads and digital brochures within the ZDNet Indias technology magazine. This unique marketing strategy had a complete different approach and hence resulted in attracting people from various spheres.

Electronic Media
Incredible India brought in one of the most celebrated personalities of India, Mr. Aamir khan for its commercials. It promoted views such as Atithi Devo Bhava which means Guests are treated equivalent to Gods in India. Another of its view that it promoted widely was Atulya Bharat, which literally means incomparable India. Thus the main aim of Incredible India was to reach out to tourists globally and promote the values and cultures of India. It took the cultural aspects of the nation and used it as a flag bearer of the entire promotional campaign. The point to be emphasized here is that, they took the usual boring Indian philosophies as already mentioned above and twisted it to present a modern version of the same, which reached out to the masses on a larger scale. In another of its a commercial, it shows a foreigner tour the length and breadth of India, and finally describing it as Incredible India in a post card he sends home towards the end of his trip. In this ad, the aim is to establish the fact that tourists globally accept the incredibility, beauty and attraction that this nation holds. Moreover, it especially emphasizes on each state, their unique cultures and tourism attractions in the most innovative ways, like shadow art, dancecapades, road blocks etc.

Internet
The major element of the online campaign of Incredible India was its robust Response Mechanism. This mechanism had been created in order to create a channel of communication between the visitors. All queries of the users or visitors on the website of Incredible India were answered at a lightning fast speed, thus building an excellent rapport with the same. This resulted in immediate increase of tourist traffic. This excellent strategy of customer service through response mechanism beat other tourism brands by a very huge margin thus clearing the path for Incredible India. After this, the website further developed its website to form as under, www.incredibleindia.org

Direct Communication
Incredible India also applied direct marketing techniques to reach out to its audience. It distributed post cards with its railway tickets issued by Indian Railways. It also distributed its brochures and leaflets at vantage points such as coffee shops, restaurants and other public places that are frequented by people.

A Comparison of the Brands

Crisis Management
Coke, Pepsi and Cadbury have been market leaders in their respective categories over decades. Incidentally, these brands faced serious allegations against their quality standards. Moreover, both the events namely the Coke-Pepsi Pesticide Fiasco and the Cadbury Packaging Problem occurred within a gap of a few weeks. In a situation like this, when big players from different products segments face similar crisis, management skills are tested at their best. The beverage giants and the cocoa king had applied their complete marketing and promotional prowess in managing the above mentioned adversities. However the approach and result were different for them.

Coke and Pepsi

Defensive Strategy

Cadbury
Acceptance

Remedy through Brand rebuilding

Brand rebuilding with a remedial stance

Coke and Pepsi applied a defensive strategy, as in they came together and decided to retest their products personally and even threatened for legal actions, whereas Cadbury got into acceptance mode. It did not take full responsibility but agreed that a mistake had been committed somewhere down their distribution channel.

The impact of these can be seen in the fact that even though all the three companies witnessed sales drops of almost 30% to 40%. Cadbury regained its formal sales figure within 8 weeks vis--vis Coke and Pepsi which took almost a year to get back on their feet in the Indian market. Kudos should also be given to the fact that Cadbury aimed at rebuilding or recreating its formal Brand value through showing remedial effects like introducing the double protection cover and purity seal in comparison the strategy applied by the Cola giants, where they though remedy would automatically followed if they pushed their Brand image. Results were seen for both the strategies, but the former was faster than the latter.

Communications Strategy
The communication strategy exploited by Cadbury, Coke and Pepsi, revolves around Print and Electronic media taking in the fact that they are relatively older brands in comparison to Incredible India which exploited Internet and Direct Medium as well. The task for Incredible India is comparatively more extensive, as the other brand have been around in their respective fields whereas incredible India has yet to reach out to the masses in large and effect them enough to change their behavioral aspects towards the brand. The aims of these brands are completely different. While three of them are FMCG products, one is into tourism, hence has completely different kind of market segmentation strategy and thus different communication strategies. Where Cadbury, Coke and Pepsi emphasize on witty tag lines and celebrity power, Incredible India emphasizes on bringing out the Magical aspect of India thus inviting tourists through promoting cultures and values of the nation with a modern twist so as to cater the technologically advanced masses of the present.