I

Cola Wars in China

Case Study
Analysis

Group Members
Tushar

Jalan (1282118)
Pranay Mukherjee (1282065)
Vishwarup Acharyya (1282120)
Vivek Chattopadhyay (1282121)
Purnendu Chatterjee (1282071)

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Soft Drinks - Introduction

Any

kind of beverage that doesnt contain

alcohol can be considered as a soft drink.
Some Examples
Fruit Juice
Energy Drinks
Carbonated Drinks
Packaged Water

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Players in China
Chinas soft drink market has some major players :-

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Company
Introductions
Coca Cola
The Worlds largest soft-drink
company
And fifth largest food and
beverage co.

Nestle
The worlds largest food and
beverage co.

PepsiCo
The fourth largest food and
beverage company in the world

Danone
Ranked sixth in the global food
and beverage industry

Chinas soft-drink industry

1980s multinational enter into the Chinese market

Annual growth 21% for last 20 years
Annual output increased from 0.288 million tons (261 million
liters) in 1980 to 16.69 million tons(15.141 billion liters) in 2001
Per capital consumption increased from 0.3 liter per annum in
1982 to 8 liters per annum in 2001
Total revenues exceeded RMB 40 billion in 2000
Soft drink become a regularly consumed product
Soft drink industry developed from carbonated drinks in 1980s to
packaged water in 1990s to tea in 2000s

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Wahaha
Wahaha - History

Founded in 1987 by Zong Qinghou, selling bottled soda water,

Ice cream and stationery in Hangzhou, Zhejiang Province.

Focused primarily on children with the marketing of its products

(Wahaha means to make children happy).

It eventually launched other children-oriented products too, like

fruit- flavoured milk and fruit juices.

In 1996, the company launched its own range of purified bottled

water and became the market leader.

In the same year, it entered into a joint venture with French

company Danone.

In 1998 it launched Future Cola, competing directly with the

multinational giants.

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Future Cola

A Preservative free carbonated drink similar to Coke.

First started in 1998

Promoted as a national brand to compete against the leaders,

Coca-cola and
Pepsi

The flavor is modified according to the Chinese taste

Types of Future Cola:

1. Regular Future Cola
2. Kids Cola (caffeine free)
3. Future Coffee Cola

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SWOT

Matrix
Weakness
( )

Strength
( )
S.W.O.T
Opportunity
( )

Threat
( )

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Strength Analysis

Excellent Reputation

Relationship with rural distributors

Joint venture with

Research and development team

Diversity in products

Weakness
Analysis

Well known competitors.

Strategy of distribution in products.

Concentrates it sales in rural areas.

Profit margin too low.

Sales force isnt as strong as competitors.

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Opportunities

Increase in sales

Urban markets in China (large cities)

Markets in nearby countries with similar culture and

tastes

Rapid growth in the soft-drink industry

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Threat Analysis

Presence of multinational corporations in the market

(PepsiCo. and Coca-Cola).

Risk of turning into another cheap Chinese company

(reputation)

Other local competitors like Fenhuang Cola, Alishan

Zhonghua Cola, Yanjing Cola and Jianlibaos Huating
Cola

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V

Marketing Mix (4Ps)

Product

Place

Target
Market
Promotio
n

Price

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PRODUCT

Coca-Cola

Classic
Diet
Sprite
Fanta

PRICE

PLACE

PROMOTION

Same basic price

as Pepsi

Maximum
presence in large
cities, very weak
in rural areas.

Heavy use of TV
advertising
Changed pack
design to
celebrate Beijing
hosting the 2008
Olympics

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PRODUCT

Pepsi Cola

Classic
Diet
Dew
7Up
Mirinda

PRICE
Same price as
Coca-Cola

PLACE

PROMOTION

Maximum focus
on the major
cities.
Not even
present
in the rural areas.

Done in a lesser
amount
compared to
Coca-Cola.
Use of TV
advertisements
and print media

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PRODUCT

Future
Cola
Regular
Kids
Coffee

PRICE
Low price
compared to
competitors

PLACE
High presence in
the smaller, rural,
areas
Strong
relationship with
local distributors

PROMOTION
Marketed as
Chinas Own
Cola.
National
celebrities are
used in TV and
print
advertisements

Future Action Plan

Wahaha should try its best in maintaining its current market

position and look for any kind of growth opportunities available

More emphasis should be given to the brand value. The

Chinas Own Cola concept should be marketed heavily to
create an emotional impact with the consumers

More variations of Future Cola can be introduced in order to put

more pressure on the multinationals

The youth segment should be targeted more through

advertisements and stylish packaging.

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Conclusion

Wahaha has progressed incredibly well in the soft drink sector.

All it needs to do is to maintain its current form and at the
same time, try for growth.

If it continues with its success, it might end up being on the

same level as Coca-Cola or PepsiCo, which would really make the
Cola Wars even more interesting.

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Thank you!
Have a good
day!