Seasoned flavours

Mumbai: The phenomenal sales growth of carbonated soft drinks Pepsi (about 30 to 35 per cent) and Coca-Cola (40 per cent and above) in the months of April and May 2003 has proved that there is a right price for everything — you just have to get to it.

In fact, since PepsiCo and Coca-Cola, the two US-based companies, set up operations in India, never have they achieved the kind of sales growth with their carbonated soft drink (CSD) brands as they have in the past two months.

The success is mostly due to a cutthroat price war initiated by Coca-Cola India when it launched Coke in 200-ml packs priced at Rs 5. Pepsi India was left with no choice but to follow suit. Not only this, Pepsi went one step further and slashed prices of its 300-ml packs to Rs 6 — all because it didn't have 200-ml bottles.

The price war was, of course, augmented by some slick advertising, with Coke bringing in film star Aamir Khan in various regional guises to reinforce its price-led strategy. Pepsi, not to be outdone, roped in reigning queen Aishwarya Rai and current heartthrob Vivek Oberoi to do the honours.

It has all paid off.

For two companies, which in the past two years were unable to hasten the sales of soft drinks and which repeatedly requested the government to reduce the excise duty on these to help increase sales, have achieved an unprecedented sales growth with the very same soft drinks.