IMPACT OF CELEBRITY ENDORSEMENT ON SOFT DRINKS WITH SPECIFIC REFERENCE TO BRAND COCA-COLA

IMPACT OF CELEBRITY ENDORSEMENT ON SOFT DRINKS WITH
SPECIFIC REFERENCE TO BRAND COCA-COLA
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1. Introduction
Soft drinks are gradually overtaking hot drinks as the biggest beverage sector in the
world, with consumption rising by around 5 percent a year according to a recent
report from Zenith International. But while the US remains the biggest market for
now, Asia is likely to be the main driver of sales growth in the future. This paper
provides insights on the market trends facing the soft drink industry. It outlines the
specific challenges confronting the companies operating in this arena, such as ever-
changing consumer tastes, a growing emphasis on product safety, and the
increasing power of global retailers. This paper explores opportunities for process
improvement and cites specific solutions that can empower soft drink companies to
meet industry challenges, both today and tomorrow, and drive profitability and
growth.
2. Industry background and overview
The business environment for the soft drink industry
To understand the soft drink industry, one must first look at the beverage industry
as a whole. In recent years, the beverage industry has been faced with new
opportunities and challenges. Changing consumer demands and preferences require
new ways of maintaining current customers and attracting new ones. Amid ever-
increasing competition, beverage companies must intensely court customers, offer
high-quality products, efficiently distribute them, ensure safety, and keep prices
low – all while staying nimble enough to exploit new markets by launching new
products. In this environment, success depends on a company’s ability to quickly
capitalize on emerging opportunities.
The beverage industry is extremely competitive, with private labels greatly
influencing the environment. A few global “beverage giants” produce many

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brands, but those brands fall into self-contained categories as well. Thus, the
“beverage” market is not really one market; it is a collection of markets with many
different types of products, processes and requirements. The beverage market
includes several different products that can be grouped into two main categories:
alcoholic (beer, wine, spirits) and non-alcoholic (carbonated soft drinks, juice,
water, sports drinks, etc.). Each category, and often each type, of beverage has its
unique issues and needs.
Within the beverage industry, the soft drink market has been showing signiﬁcant
growth in most countries in the recent years, particularly in the emerging markets.
While the U.S. represents the largest overall soft drink market and has the highest
per capita consumption level, most markets are showing double-digit growth both
in terms of volume and value. For instance, Mexico and Poland are two markets in
particular that stand out.
Within the soft drink sector, carbonated soft drinks (CSD) continue to dominate the
market, encompassing traditional favoured beverages as well as sugar- and
caffeine-free drinks, which have soared in popularity. Simultaneously,
manufacturers are focusing on innovation in order to maintain growth. New
product categories are emerging swiftly and many are already consolidating, as
consumer demand continues to shift toward healthier products, such as bottled
water, juices and juice drinks, sport drinks, ready-to-drink teas, and functional
beverages.
Recent trends in the food and beverage market centre on product safety, quality,
consumer demand, and channel complexity (including the growing inﬂuenceof
retailers on the supply chain). These trends have impacted the beverage industry in
general and the soft- drink sector in particular.

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In this paper, we will focus on the issues relevant for middle-market soft drink
companies, deﬁned as soft drink producers or bottlers with an annual turnover of
$500 million to $2 billion USD. Nonetheless, the majority of the points raised in
the paper will be applicable to all soft drink companies, regardless of size.
Business performance improvement priorities
– The path to value
Against the backdrop of these market challenges, how can soft drink companies
drive proitable growth and create value for their owners or shareholders?
In practical terms, there are four areas on which companies in the soft drink
business need to focus:
•Revenue protection and enhancement – for example, as driven by product and
packaging innovation, differentiated quality, improved product availability, and
better management of customer relationships
•Cost reduction/margin improvement – for example, through improved operational
efficiency, lower labour costs, reduced waste and the capture of operational
synergies from acquisitions
•Improved asset utilization – for example, through reduced inventory levels of soft
drinks held in cold storage and faster turnaround of re-usable transit packaging in
the supply chain
•Regulatory/assurance – for example, through demonstrating quality by
participating in retailer assurance schemes and assisting trade customers in
achieving full compliance with new traceability legislation.

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3. Market trends and industry challenges
In order to survive in this environment, companies must consider the market trends
that will likely shape the industry over the next few years. This will help soft drink
companies to understand the challenges they will encounter and to turn them into
opportunities for process improvement, enhanced flexibility and, ultimately,
greater profitability.
Market trends for the soft drink industry can be summarized by six fundamental
themes:
1. Changing consumer beverage preferences, featuring a shift toward health-
oriented wellness drinks
2. Growing friction between bottlers and manufacturers in the distribution system
3. Continually increasing retailer strength
4. Fierce competition
5. Complex distribution system composed of multiple sales channels
6. Beverage safety concerns and more-stringent regulations
Consumers turn to wellness and healthy drinks
In much of the developed world, a significant portion of the population is
overweight or obese. This includes two-thirds of Americans and an increasing
number of Europeans. Consequently, many people have started to actively manage

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their weight and change their lifestyles, a shift that is reflected in their choices in
the beverage aisles:
•Demand has increased for beverages that are perceived to be healthy
•Energy drink consumption has also climbed, due to the increasingly active
lifestyles of teenagers
This trend towards healthier drinks has created a number of new categories, and
changed the consumption trends of the beverage industry as a whole. While
previously dominated by carbonated soft drinks, the industry is now more evenly
balanced between carbonates, and product categories with a healthier image, such
as bottled water, energy drinks and juice.
While carbonates are still the largest soft drink segment, bottled water is catching
up fast, with an average of 58 litres consumed annually per capita. Among
individual countries, Italy ranks number one in bottled water consumption, with the
average Italian drinking 177 litres per year. Overall, bottled water represents the
fastest growing soft drink segment, expanding at 9 percent annually. This growth is
being partially driven by increasing awareness of the health benefits of proper
hydration.
The industry has responded to consumers’ desire for healthier beverages by
creating new categories, such as energy drinks, and by diversifying within existing
ones. For example, the leading carbonated soft drink companies have recently
introduced products with 50% less sugar that fall mid-way between regular and
diet classifications. Similarly, a South African juice company has recently released
a fruit-based drink that contains a full complement of vitamins and nutrients.

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Retailers’ power continuously increases
With Wal-Mart leading the charge, the world’s dominant retailers are demanding
better service and shorter order-to-delivery cycles from soft drink companies. This
is dramatically reshaping the industry, forcing soft drink companies to become
more efficient, while taking pricing power out of their hands. The dual need for
improved supply chain agility and cost- efficiency is challenging suppliers to
revaluate the ways in which they plan and manage their supply chains, as they
constantly search for approaches that will help them achieve the rock-bottom
prices and operational excellence now expected in the industry.
Furthermore, the growth of private-label products is encouraging manufacturers
to take a number of steps to compete more effectively. Increasingly, they are
turning to innovation and new product introduction as a means to achieve real
differentiation as well as growth. Branded manufacturers are also looking to get
closer to the consumer, with many of the larger ones piloting direct-to-consumer
marketing approaches. They are also trying to better understand the in-store
consumer experience by monitoring the execution of in-store activities.
Nevertheless, many suppliers are losing brand equity. In recent years, a couple of
factors have been fuelling the growing competition between manufacturers and
retailers:
•Retailers are using their power to set higher standards for marketing and
operational excellence, including escalating demands for improved service quality
and shorter order-to-delivery cycles from manufacturers and distributors. Many of
these demands, not only squeeze margins but also require significant capital
investments.
• Because of their direct relationships with consumers, retailers have a deeper
knowledge of consumer behaviour.

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Competition is becoming more and more difficult
In the beverage manufacturing industry, competition is growing due to the
following factors:
•Constant demand for new niche products related to consumer preferences for
healthier and more- diversified offerings
•Industry consolidation, which has significantly raised the bar for the “scale needed
to compete”
•The growth of private-label products.
These competitive pressures have led to:
•SKU (Stock keeping units) proliferation - number of SKUs in a typical beverage
company has doubled from 1991 to 200
• A plethora of new product failures:
• Only 20% are effective
• Only 10% generate significant revenue
• Most fail within the first two years
• Further consolidation and rationalization to capture cost savings by improving
operations and eliminating redundancy
• Industry leaders are acquiring small, high- growth companies
• Mid-market players are vertically integrating
• Declining soft drink prices:

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• Profitability can only be improved through greater efficiency in the supply chain
or through more-effective trade promotions, which usually require considerable
expenditures.
Statutory regulation is increasing
Governments around the world are concerned about food safety and quality.
Periodically, safety failures make big news in the global press. Amid this growing
concern, regulators are cracking down on sanitation and a variety of other food-
safety requirements.
While food safety is the major focus in Europe, the emphasis in the US is more on
bio-terrorism and food security. However, the provisions in the 2005 traceability
legislation in the US, which stemmed from the Bioterrorism Act of 2002, and those
in the EU Directive 178, Articles 18 and 19, are very similar. The U.S. Food and
Drug Administration (FDA) is proposing the registration and tracking of almost all
domestic and imported food articles, but some are concerned that the complexity of
the rules will overwhelm both the food industry and the FDA.
Each soft drink company must take these industry challenges into consideration, as
well as its own strengths and market position, when looking for ways to drive
innovation, accelerate growth and increase margins. The next section outlines
where some of the most promising opportunities for accomplishing these
objectives can be found.
The global beverage market has been forecast to increase at a compound annual
growth rate (CAGR) of 4.6% over the next five years, to reach a market value of
$1,347 billion by 2017. The global beverage industry's rising product demand, not

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much affected by the currents of global recession, bears testimony to its unyielding
growth throughout.
Until recently, the beverages market was divided simply between alcoholic and
non-alcoholic beverages. As consumers' tastes grew more sophisticated and
demand surged for a variety of beverage options catering to lifestyle changes and
health concerns, the beverages industry has responded with a dizzying array of
options to choose from.
The industry consists of the total revenues generated through the sale of soft
drinks, beers, ciders, flavoured alcoholic beverages (FABs), spirits, and wines.
Products manufactured by the beverage industry include: bottled water, juice,
sparkling and still drinks, syrups, nectars, ready-to-drink and regular teas and
coffees, dairy drinks, energy drinks, sports drinks, fruit powders, and alcoholic
drinks such as beer, wine, cider and spirits.
The industry experienced a CAGR of 2.3% for the period spanning 2007-2016.
Industry consumption volumes increased with a CAGR of 2.4% between 2006 and
2010, to reach a total of 717,040.5 million litres in 2011.
The market is flooded with innovative products which lead to the global beverage
industry's highly competitive nature. Customer loyalty is vital to the industry's
growth and to achieve and retain it; companies constantly strive towards
manufacturing high-quality products.
Some of the expected industry growth propellers are urbanisation, expansion in
middle class population, and increase in double income family. All companies are
keen on getting a share of market profit which has driven them to develop new
strategies such as aggressive advertisement and maintaining efficient distribution
channel maintenance to earn more profits.
The soft drinks industry will continue to straddle two different worlds: the mature
developed markets where growth has stagnated and developing markets where
previously high growth rates have slowed, but still offer the greatest upside.
Bottled water will continue to lead the soft drinks sector in volume terms, with a
projected growth rate of 5.4% over the coming year. Ready-to-drink tea and Asian
specialty drinks will be the fastest-growing soft drink segments with projected
growth rates in 2013 of 9% and 14%, respectively.

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Global energy drinks consumption surged by 14% in 2011 to 4.8 billion litres,
adding over 1.5 billion litres since 2007. Average growth over the past five years
has been 10% a year. Value has risen even more sharply, by an average 13% a
year, to €26,500 million or $37,000 million in 2011. Leading brands include Red
Bull, Monster and Burn.
The world beer market, which includes flavoured alcoholic drinks and cider,
generated sales worth more than $585 billion in 2010. Market growth is expected
to remain steady at a yearly rate of around 1.5% through 2015, bringing market
value close to $630 billion by 2015.
The global market for spirits expanded more than 3% in 2010 to reach almost $263
billion. It is predicted the market will exceed $306 billion in 2015, a near 17%
increase over five years. In 2010, the spirits market expanded 2% to exceed 19
billion litres. It is expected to reach over 21 billion litres in 2015, an 11% increase
in the five-year period. Whiskey leads the spirits market, representing almost 27%
of the overall market.
It's been the best of times and the worst of times for the beverage market. It has
weathered many headwinds, including volatility in the supply chain with higher
input costs for key commodities, with sugar prices rising 150% since 2008, corn
prices climbing 85%, and coffee prices increasing 42% since June 2010.
Packaging and distribution costs have also skyrocketed, with oil prices up 150%
since January 2009 and aluminium costs up 25% since January 2010. Juice pricing
has also sent shockwaves through the beverage industry over the past year, and we
will continue to see volatility in input costs for the near term.
One of the biggest overarching trends in the global beverage market is that
consumers are trading traditional carbonated soft drinks for "better for you"
alternatives amid rising concerns over obesity. The wellness movement is fuelling
growth in ready-to-drink teas and waters, and as consumers seek more enhanced
products with functional benefits, beverage companies are responding by
increasing their use of fortifications such as vitamins, minerals, caffeine and
antioxidants. Global beverage players also are meeting new consumer demands by
introducing a tier of low- and mid-calorie beverages.

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Current economic environment remains gloomy in western markets and Euro zone
countries are having a particularly turbulent ride. The signs so far indicate more
difficult times ahead for the global economy and on-going challenges for the
beverages industry.
Key industry players:
The Coca-Cola Company:
Coca-Cola is a leading manufacturer, distributor, and marketer of soft drink
concentrates and syrups. It owns or licenses more than 500 brands
across all categories of soft drinks, and the company is headquartered in Atlanta,
Georgia.
Until 2010, Coca-Cola sold its syrups and concentrates to a number of contracted
independent bottlers that would produce, bottle, and distribute the final product. In
February 2010, Coca-Cola bought out the remaining interests in Coca-Cola
enterprises, the main contracted bottler, giving the Coca-Cola Company control
over 90% of the North American volume.
PepsiCo, Inc:
PepsiCo is one of the largest food and beverage companies in the world. Its
products include a variety of salty, sweet, and grain-based snacks as well as Csds
and non-Csds. the company is responsible for the manufacturing, marketing, and
sales of these goods. It has 18 brands in its portfolio and is headquartered in New
York.
PepsiCo is divided into three business units: PepsiCo Americas foods (PAf),
PepsiCo Americas Beverages (PAB), and PepsiCo international (Pi). These three
business units are further divided into six reportable segments: frito-Lay North
America (fLnA); Quaker foods north America (QfnA); the Latin American food
and snack businesses (LAf); PAB; europe; and Asia, Middle east, and Africa
(AMeA).

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Groupe Danone
The Groupe Danone is a French food-products multinational corporation based in
the 9th arrondissement of Paris. It produces fresh dairy products, bottled water,
cereals and baby foods, and yogurts. In the United States it is marketed as the
Dannon Company. The company owns several internationally known brands of
bottled water: Aqua, Volvic, Evian, and Badoit; in Asia, it owns Yili, Aqua
(Indonesia), Sehat (Malaysia, Brunei, Singapore) and Robust, and has a 51%
holding in China's Wahaha Joint Venture Company. About 56% of its 2006 net
sales derived from dairy, 28% from beverages, and 16% from biscuits and cereals.
Dr Pepper Snapple Group:
The Dr Pepper snapple Group is a leading integrated brand owner, bottler, and
distributor of soft drinks in the United States, Canada, and Mexico. The company
has 15 brands and is headquartered in Plano, Texas.
Nearly half of the company's annual US volume is distributed by its company-
owned bottling and distribution network. The remainder is driven through third-
party/licensed bottlers and distributors, including those in both the Coca-Cola and
PepsiCo bottling systems, as well as independent bottlers, brokers, and
distributors.27 in 2009, 72% of dr Pepper snapple total volumes were distributed
through the former Coca- Cola and PepsiCo bottling partners (these bottling
partners were recently acquired by the Coca-Cola Company and PepsiCo inc.,
respectively). Pepsi Bottling Group, inc. (PBG) and Coca-Cola enterprises, inc.
(CCe) were the two largest customers of dr Pepper snapple's Beverage Concentrate
segment, and constituted 25% and 23%, respectively, of net sales during 2009.

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SOFT DRINK INDUSTRY IN INDIA
The 50-billion-rupee soft drink industry is growing now at 6 to 7% annually. In
India, Coke and Pepsi have a combined market share of around 95% directly or
through franchisees. Campa Cola has a 1% share, and the rest is divided among
local players. Industry watchers say, fake products also account for a good share of
the balance. There are about 110 soft drink producing units (60% being owned by
Indian bottlers) in the country, employing about 125,000 people. There are two
distinct segments of the market, cola and non-cola drinks. The cola segment claims
a share of 62%, while the non-cola segment includes soda, clear lime, cloudy lime
and drinks with orange and mango flavours.
The per capita consumption of soft drinks in India is around 5 to 6 bottles (same as
Nepal's) compared to Pakistan's 17 bottles, Sri Lanka's 21, Thailand's 73, the
Philippines 173 and Mexico 605. The industry contributes over Rs 12 billion to the
exchequer and exports goods worth Rs 2 bn. It also supports growth of industries
like glass, refrigeration, transportation, paper and sugar. The Department of Food
Processing Industries had stipulated that 'contains-no-fruit-juice' labels be pasted
on returnable glass bottles. About 85% of the soft drinks are currently sold in
returnable bottles. There was a floating stock of about 1000 million bottles valued
at Rs 6 bn. If the industry were to abide by the new guidelines, it would have to
invest in new bottles, resulting in a cost outgo of Rs 5 bn. Neither Coke nor Pepsi
is in a position to invest such a large amount.
Around 400,000 tonnes of raw material would be required to replace the existing
stock of bottles. Instead, the soft drink industry suggested that a seven-year
moratorium be extended to the industry so that it can incorporate the change in a
phased manner. There is no such mandatory requirement anywhere in the world to
specifically label the glass surface of returnable bottles. The government has
decided to extend the date for replacing the bottles to end-march 2006. In the
meantime, the producers have shifted substantially to the use of PET bottles.
Soft and aerated drinks were considered products for the middle class and the
affluent. That segregation is no more valid. Soft and aerated drinks are consumed
by all except those who cannot afford to buy any drink. An NCAER study says that
91% soft drink sales are made to the lower, middle and upper middle classes. The
soft drink industry has been urging the government to categorise aerated waters

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(soft drinks) equitably with other consumer products of mass consumption and
remove special excise duty.
The industry estimates that the beverage market should grow at twice the rate of
GDP growth. The Indian market should have, therefore, grown by at least 12%.
However, it has been growing at a rate of about 6%. In contrast, the Chinese
market grew by 16% a year, while the Russian market expanded at almost four
times the rate of growth of the Indian market.
It may be recalled that Coca-Cola, the world's number one player, was present in
India for a long time in collaboration with an Indian producer but was thrown out
in the late 1970s. It reappeared in India following the economic liberalization era -
but after its rival, world's number two, had already entered in a big way following a
long and tough fight against the opposition from the domestic producers. When
Coca-Cola re-entered, it installed a new milestone. It acquired the well flourishing
India's top player, Parle. Since then it is basically a fight between the two
American giants. Others are playing a peripheral role, as adjuncts to the two
MNCs. World's third biggest player, Cadbury Schweppes, had also made an entry
but was gobbled up by Coca-Cola. When Coca-Cola acquired Parle brands, it was,
in fact, buying the bottling facilities, the marketing network, and the established
consumer preference during the market build-up. The brands were a drag on the
global brand. Since Coca-Cola was not interested in brands (like Thumps Up), it
did not promote them. The result, at least, in the short run was a loss of the market
to the competitor. Coca-Cola decided to market more effectively the Parle brands.
It had in its armoury Coke, Thumps Up, Limca and Fanta. The latest to enter
market was Parle’s erstwhile Rimzim, alongside Portello, a black currant flavoured
drink, very popular in Srilanka.
Coca-Cola operates through 35 plants and 16 franchisees throughout the country,
while PepsiCo has 20 plants, but it has 7 more franchisees at 23 to 16 of its rival.
Coca-Cola claims a market share of 51%, while Pepsi has a share of 46%. The
claims, however, remain disputed. The other smaller players like Pure Drinks Ltd
claim the rest of the market. The shares of the two lead players are consolidated
figures, which include the respective bottlers. Coca-Cola had approached the
government for a five year extension for divesting 49% equity in its bottling

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subsidiary, Hindustan Coca-Cola Holdings. It had set up the marketing subsidiary
as part of its strategy to integrate all its bottling operations, both company-owned
and franchisee bottlers, apparently keeping in line with its global policy. All
together, it had bought initially over 38 franchisee bottlers.
Kandhari Beverages, coke bottlers for north have been eyeing to lift a stake in
Coca-Cola India. Coca-Cola had filed an application to offload 49% stake of its
bottling operations in favour of their Indian operators. Besides Kandhari, three
other bottlers, one each from Uttar Pradesh, Gujarat and Jammu, were lined up to
invest in Hindustan Coca-Cola Holding. Kandhari has already invested Rs 300
millionn in 1999 and 2000 to upgrade its capacity. The total investment by all the
four was expected to be Rs 1000 millionn. Both Coca-Cola and PepsiCo planned
for the launch of lemon-flavoured versions of their products. Both have been
expanding their non-carbonated drink line-ups, as consumers seem to be shifting
away from carbonated soft drinks. PepsiCo is deliberating whether to come out
with Pepsi Twist, a cola mixed with lemon. But while both companies have juice
does not sport drinks, bottled water and other such drinks in their line-ups, coke
nor Pepsi has launched a new national variety of a cola-flavoured carbonated soft
drink in years.
PepsiCo had achieved Rs 3 bn worth of exports, which include processed foods,
basmati rice, guar gum and soft drinks concentrate. PepsiCo completed the second
phase of its expansion and with this expansion, PepsiCo was to explore the
possibility of expanding the export of concentrates to more countries in addition to
the exports to Russia and other South Asian countries.
Pepsi India has entered into a marketing tie up with Hindustan Lever to promote
sales of soft drinks through Pepsi-HLL network of vending machines and
fountains. The major soft drink brands in the Pepsi stable are Pepsi, 7UP, Mirinda,
Tropicana and Acquafina.
As a major strategic departure, both MNCs were expanding their brand range.
Consequent to some diversifying moves, at present, the sales ratio of Coca-Cola
between soft drinks and other beverages is 95.5. The company intended to change
this to 80:20 in the next three years. Its juice brand, Maaza - acquired from Parle a
few years ago - is being given a major thrust. It has plans to go in for canned
coffee, iced tea and purified categories under expansion schemes. It has already

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launched its bottled water brand, Kinley, in the Indian market. Besides, it is
intending to acquire domestic brands in the non-carbonated beverages segment.
The global deal between Coca-Cola and P&G to form a snacks and beverages
joint venture company was reported to have slipped into rough weather. The P&G
brand of potato wafer, Pringles, seemed to be faced with distribution problems in
India. P&G had globally tied up with Coca-Cola to form a stand-alone juice and
snacks company. The new firm is focused on developing and marketing new
juices, juice based beverages and snacks on a global basis. The Sharjah-based
Allied Beverages was pushing its Ahlan brand in India, having entered the market
in mid-2000. Its target was carbonated drinks market in PET bottles. Its plans
were to launch a PET bottle in the popular 300 ml category. Ahlan expected to
gain a 12% share of the total PET bottle market in northern India. Of the total
market, PET bottle segment is approximately 12%. Presently, Allied Beverages
has a manufacturing unit at Dharuhera in Haryana. The product range includes
carbonated drinks - cola, orange, lemon and soda in three pack sizes - 500 ml, 1500
ml and 2000 ml. Allied Beverages sells non-carbonated drinks in 200 ml food
grade cups priced at Rs 7 in its portfolio, available in four different flavours. The
company's future plans include pulp-based fruit drinks in flavours, which will be
available in 200 ml non-returnable glass bottles.
IFB Agro Industries has handed over the distribution rights of Cadbury
Schweppes in favour of Coco-Cola India, following the global takeover of
Schweppes beverages by Coke. The company still retains the bottling rights for the
beverages.

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 Soft drinks shows strong double-digit growth
In 2014, soft drinks registered a stronger double digit off-trade value growth rate
than the CAGR for the review period. This growth was attributable to strong
double-digit performances in categories, such as bottled water and fruit/vegetable
juice, which had a good year due to rising mercury levels. Long summers and
higher disposable incomes continue to be the main growth drivers of soft drinks.
 2014 is a year of brand revival
In carbonates, 2014 proved to be a year of brand revival, especially among the
leading players, such as Coca-Cola and PepsiCo. A revamp of old brands started
with Coca-Cola when it revived its Citra brand in lime carbonates. In August 2012
the company also revived its RimZim brand. Similarly PepsiCo revived its Duke
brand in India.
 Intense competition between Coca-Cola and Pepsi continues
Tough competition between Coca-Cola and PepsiCo continued not just in
carbonates but in other categories, such as bottled water as well as fruit/vegetable
juice. Both companies are strengthening their non-carbonated drinks portfolio as
carbonates are slowly losing their sheen to fruit/vegetable juice in urban India
 Independent small grocers remain the strongest retail channel
Independent small grocers continued to lead the distribution of soft drinks. Modern
retail outlets are increasing their footprints in urban India but independent small
grocers continue to account for the largest share of sales. This is because of the
strong reach of independent small grocers in rural India which is a potential growth
avenue for soft drinks.

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 Soft drinks will continue to experience steady sales
Bottled water and fruit/vegetable juice will drive strong volume and value
growth within soft drinks during the forecast period. Soft drinks giants PepsiCo
and Coca-Cola will target rural areas in order to enhance their presence. The
outlook for soft drinks looks positive in the forecast period due to strong marketing
activities and product innovations by manufacturers.
Demand: Past & Future
YEAR CASES IN MILLION
2000-01 243
2001-02 262
2002-03 279
2003-04 291
2004-05 310
2005-06 330
2006-07 359
2007-08 373
2008-09 388
2009-10 403
2013-14 479
0
100
200
300
400
500
600
CASES IN MILLION
CASES IN MILLION

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CHAPTER 2
RESEARCH DESIGN

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Title of the study
“Impact of celebrity endorsement on soft drinks with specific reference to brand
Coca-cola”
Objectives of study:
 To study the impact of the Advertisements on the brand preference of
consumers.
 To study the consumer perception regarding the most effective media for
Advertisements.
 To identify the influence of celebrity endorsement on consumer buying
behavior.
 To study celebrity endorsement as a source of brand-building.
 To find which type of celebrity persona is more effective.

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Need and scope of the study:
As we know these days soft drink companies are advertising their product so much
on televisions and are spending so much money on the Advertisements of their
products. In soft drink industry the cost of advertising is nearly 35 % of the total
cost. For increasing the sale of their product they are taking film stars, cricket stars
in their advertisements of their products which are again very costly. The soft drink
companies are spending so much on the sponsorship of events like cricket match
etc. so this study deals with these aspects that whether Advertising is having any
effect on consumers or not.
This study will help
 To know that people are influenced by Brand Ambassadors or not.
 Analyze different media options available for Advertisements and which are
most influential ones.
 Influence of Advertisements on their brands and brand loyalty.
RESEARCH DESIGN
A research design is a framework or blueprint for conducting the marketing
research project. It specifies the details of the procedures necessary for obtaining
the information needed to structure and/or solve marketing research problem. The
research design used in this project is Descriptive research design.

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Sample Design
SAMPLING TECHNIQUE USED:
In this research we have used Convenience Sampling.
SAMPLE SIZE
For this study, a sample of 100 has been taken.
Data Collection Instrument:
Questionnaire
SOURCES OF DATA COLLECTION:
Primary data: It is the first hand information collected through questionnaire
Secondary data: Secondary data was collected from the following sources:
Books, Newspapers, Journals, Magazine, and Research Papers.
Tools of Investigation
The study was conducted with the help of questionnaire which was administered
personally to all the respondents. The questionnaire is aimed at fulfilling out the
impact of Advertisements of Coke and Pepsi in terms of Consumer preferences
recall and purchase behaviour.

Page 23
The questionnaire dealt with aspects like
 Impact of Advertisement of the purchase behavior of soft drinks
 Factors influencing choice of a brand
 Influence of advertisements on the preference and purchase of a soft drink
brand
 Reasons for brand preference.
Aided Recall test will be used to study the Recall ability of respondents for the
Advertisements of Coke and Pepsi. For Aided Recall various clues will be given
e.g. Slogans and name of the model and Respondents will be asked to identify the
soft drink brand ambassador associated with them. In some questions ranking
method is used.
After going through various sources like magazines, newspapers, websites I found
that lot of research work has been undertaken by researchers regarding impact
of celebrity endorsement, but there was a gap in the research regarding whether
celebrity endorsement act as a source of brand-building. There is a need to
discover this fact. Hence I decided to work on this particular aspect.
Hypothesis Testing
 The tool used for testing of hypothesis is a well structured questionnaire
which consists of close ended and multi choice questions.
 Close ended questions are structured ones with two or more alternative
responses from which the respondents can choose the right option. They
contain standardized answers and they are simple to administer and easy to
compile and analyze.
 Multiple choice questions contain more than two alternatives, that is, there
are a number of alternatives from which respondents can choose or else
specify their own choice.

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LIMITATIONS OF THE STUDY
 The study was done for a limited period and purely was done for academic
purpose
 The study covers only a part of population
 Analysis was made on the limited available data which need not be a true
representative of the population or a whole.
Scope of study:
 Study on celebrity endorsement effect on brand equity of Coca-Cola and its
impact on Coca-Cola which can useful for future strategies.
 This study leaves an immense scope for carrying out further research in the
following areas.
 To carry out similar study from the advertiser’ perspective and comparing
that with the customers’ perspective
 To establish a more definite correlation between celebrity impact on brand
and relation with customer's psychology.
 To carry out study on other possible aspect of endorsements.
 To carry out studies in other geographic areas i.e., in other nations and
include all possible industries to find out whether there is any significant
difference in the impact on the customers who are geographically separated.

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CHAPTER 3
COMPANY PROFILE

Page 26
The Coca-Cola Company is an American multinational beverage corporation and
manufacturer, retailer and marketer of non-alcoholic beverage concentrates
and syrups, which is headquartered in Atlanta, Georgia. The company is best
known for its flagship product Coca-Cola, invented in 1886 by pharmacist John
Stith Pemberton in Columbus, Georgia. The Coca-Cola formula and brand was
bought in 1889 by Asa Griggs Candler (December 30, 1851 - March 12, 1929),
who incorporated The Coca-Cola Company in 1892. The company operates
a franchised distribution system dating from 1889 where The Coca-Cola Company
only produces syrup concentrate which is then sold to various bottlers throughout
the world who hold an exclusive territory. The Coca-Cola Company owns
its anchor bottler in North America, Coca-Cola Refreshments.
Coca-Cola (also known as Coke) is a popular carbonated soft drink sold in stores,
restaurants and vending machines in over two hundred countries. It is produced by
The Coca-Cola Company, which is also occasionally referred to as Coca-Cola or
Coke. It is one of the world’s most recognizable and widely sold commercial
brands. Coke's major rival is Pepsi. Although Coke has been the target of urban
legends decrying the drink for its supposedly copious amounts of “acid”, or the
"life-threatening" effects of its carbonated water but still it is the most in-style soft
drink. About its safety and the ethics of the company that produces it, it is widely
accepted as the most dominant soft drink in the world today.

Page 27
Originally intended as a patent medicine when it was invented in the late 19th
century, Coca-Cola was bought out by shrewd businessman Asa Griggs Candler,
whose aggressive marketing tactics led Coke to its dominance of the world soft
drink market throughout the 20th century. Although faced with accusations of
perverse side-effects on the health of consumers and monopolistic practices by its
producing company, Coca-Cola has remained a popular soft drink well into the
first decade of the 21st century.
The last decade marked an increase in Coca-Cola's efforts to create a sustainable
framework for the future. In 2009, the company launched Live Positively - a public
commitment to making a positive difference in the worldby redesigning the way
we work and live so that sustainability is part of everything we do. Live Positively
includes goals for providing and tailoring beverages for every lifestyle, supporting
active, healthy living programmes, building sustainable communities, reducing and
recycling our packaging, cutting our carbon emissions, establishing a sustainable
water operation and creating a safe, inclusive work environment for all.
The company has continued to build on existing relationships with global sports
events such as the 2010 FIFA World Cup™ and prepare for the London, and
the company continued to nurture our affiliation with the Special Olympics, which
began in 1968.
Coca-Cola has remained dedicated to offering quality drinks for every lifestyle and
occasion, marketing those beverages responsibly and providing information that
consumers can trust. As of 2008, Coca-Cola can count more than 160 low and no
calorie drinks in the company's range, such as Coke Zero and Powerade Zero. The
company now also lists the nutritional information on the front of all drinks
in Great Britain with plans to roll out worldwide.
From the early beginnings when just nine drinks a day were served, Coca-Cola has
grown to be the world's most ubiquitous brand, with more than 1.6 billion beverage
servings sold each day. Now well into its second century, the company's goal is
still to provide magic every time someone drinks one of its more than 400 brands
and to do so in a sustainable way that benefits consumers and the communities we
operate in.

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BRANDS
Globally, the Coca-Cola Company owns or licenses nearly 400 brands in the non-
alcoholic beverage business. Many of those brands are considered among the
worlds most valuable. Some of these include:
- Carbonated soft drinks
Such as Coca-Cola, Diet Coke, Fanta, Sprite and Fresca
- Juices and juice drinks
Such as Minute Maid, Qoo, Fruitopia, Maaza and Bibo
- Sports drinks
Such as PowerAde and Aquarius
- Water products
Such as Ciel, Dasani and Bonaqua
- Teas
Such as Sokenbicha and Marocha
- Coffee
Such as Georgia coffee, the best-selling noncarbonated beverage in
Japan.

Page 29

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THE COCA-COLA STORY
Coca-Cola was invented by John S. Pemberton in 1886 in Columbus, Georgia,
originally as a coca-wine called Pemberton's French Wine Coca. It was initially
sold as a patent medicine for five cents a glass at soda fountains, which were
popular in America at the time thanks to a belief that carbonated water was good
for the health. It was re-launched as a soft drink to counter Prohibition.
The first sales were made at Jacob's Pharmacy in Atlanta, Georgia on May 8, 1886,
and for the first eight months only thirteen drinks were sold each day. Pemberton
then ran the first advertisement for the beverage on May 29 of the same year in the
Atlanta Journal. Asa Griggs Candler bought out Pemberton and his partners in
1887 and began aggressively marketing the product — the efficacy of this
concerted advertising campaign would not be realized until much later. By the time
of its 50th anniversary, the drink had reached the status of a national symbol.
Coca-Cola was sold in bottles for the first time on March 12, 1894 and cans of
Coke first appeared in 1955.
The first bottling of Coca-Cola occurred in Vicksburg, Mississippi at the
Biedenharn Candy Company in 1891. Its proprietor was Joseph A. Biedenharn.
The original bottles were Biedenharn bottles, very different from the much later
hobble-skirt design that is now so familiar. Asa Candler was tentative about
bottling the drink, but the two entrepreneurs who proposed the idea were so
persuasive that Candler signed a contract giving them control of the procedure.
However, the loosely-termed contract proved to be problematic for the company
for decades to come. Legal matters were not helped by the decision of the bottlers
to subcontract to other companies in effect, becoming parent bottlers. When the
United States entered World War II, Coke was provided free to American soldiers,
as a patriotic drink. The popularity of the drink exploded in the wake of World
War II as American soldiers returned home, more grateful than ever to partake of a
beverage that had become synonymous with the American way of life.

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GLOBAL MARKET SHARE: COKE VS PEPSI

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THEATRICAL ASPECT OF THE STUDY
The use of celebrities in order to increase the sales and/ or the recall value of a
brand is called celebrity endorsement the late '80s saw the beginning of celebrity
endorsements in advertising in India. Hindi film and TV stars as well as
sportspersons began encroaching on a territory that was, until then, the exclusive
domain of models. There was a spurt of advertising, featuring stars like Tabassum
(Prestige pressure cookers), Jalal Agha (Pan Parag), Kapil Dev (Palmolive Shaving
Cream) and Sunil Gavaskar (Dinesh Suitings). Of course, probably the first ad to
cash in on star power in a strategic, long-term, mission statement kind of way was
for Lux soap, a brand which has, perhaps as a result of this, been among the top
three in the country for much of its lifetime.
Endorsements by celebrities have started since a long time. The very fact that their
use has continued for so long is proof enough of its immense advantages, but they
have several disadvantages too. When it comes to celebrity endorsement, the first
brand that comes to the Indian mind is that of Lux, the Beauty Bar of the Stars.
Since its inception, Lux the brand has grown positioning itself thus. However,
recently Lux has tried to change its positioning from being a woman’s soap to
being soap for men as well. Sticking to its strategy of using celebrities to appeal to
its target audience, this time around it has used Shah Rukh Khan to endorse Lux.
But this time the response has been confusing.
One of the first sports endorsements in India was when Farokh Engineer became
the first Indian Crickets to model for Brylcream The Indian cricket teams now
earns roughly Rs. 100 crore through endorsements. There was a spurt of
advertising, featuring stars like tabassum (Prestige Pressure cookers). Jalal Agha
(Pan Parag).Kapil Dev (Palmolive Shaving cream) and Sunil Gavaskar (Dinesh
Sutings)

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RISE OF CELEBRITY CULTURE
The modern mass media has increased the exposure and power of celebrity. Often,
celebrity carries with it immense social capitals that is highly sought after by some
individuals. High paying jobs and other social perks unavailable to most people are
readily available to celebrities, even for wok not connected to the talents or
accomplishment that made them famous. For example A retired athletes might
receive high “speaking fees ‘or compensation for public appearances, despite his
talent having been sports. Often, celebrities cannot escape the public eye & risk
being followed by fans. As well, child celebrities are notorious for having poor
emotional health in adulthood, and often turn to drug and alcohols abuse when
their fame fades.
In India today, the use of celebrity advertising for companies has become a trend
and a perceive winning formula of corporate image building and product
marketing. Associating a brand with a top-notch celebrity can do more than perk
up brand recall. It can create linkages with the stars appeal, thereby adding
refreshing and new dimensions to the brand image. In a world filled with faces,
how many do you remember? Admittedly the ones that evoke some kind of feel in
you, whether it’s humours, acceptance, appreciation or recognition. These are the
faces you’d turn to look at, the ones that would stop you in your tracks. And that’s
when you have more than just a face. You have personality. “Personality that’s
reflective of your brand and promises to take it that extra mile”.
As existing media get increasingly cluttered, the need to stand out has become
paramount- and celebrities have proved to be the ideal way to ensure brand
prominence. Synergizing personality with product and message can create an
instant breakthrough. Result? Brand buzz. People begin to notice, opportunities
come about. People want to be part of the brand.
“Touch it. Feel it. Experience it.”

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Stars, who are known to shape destinies, cast an enormous influence. No, we’re not
talking about astrology here. We’re referring to the powerful effect of celebrities
on destinies of brands. One approving nod from a famous face can translate into
millions in brand sales. Perhaps that’s why the world over, companies have been
using stars to endorse everything, from food to food chains, from soft and hard
drinks to health drinks, from clothes and accessories to cars (and the tyres on
which they run).
Even political parties are awestruck by the charisma of stars. Such is the
magnetism of celebrities in this country that in the recent general elections, major
political parties fielded a record number of film stars and cricketers to contest from
important constituencies around the country.
CELEBRITY ENDORSEMENTS AS STRATEGY
Signing up stars for endorsements is a time-tested strategy and has been effectively
used by some of the top brands in the world including Nike and Pepsi. In India too,
HLL has used Hindi film stars to endorse their beauty soap Lux since the fifties.
Vimal, Thums Up, Gwalior and Dinesh are some of the other brands that used star-
appeal in the early days of mass advertising. And who can forget Kapil ‘Palmolive’
Dev?
Marketers believe that star endorsements have several benefits, key among them
being building credibility, fostering trust and drawing attention or any or all of
which can translate into higher brand sales.

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So how does one decide whether to put a celebrity in an ad? Ideally, this should be
dictated by the communication idea. MG Parmeswaran, Executive Director of FCB
Ulka says, “As advertising professionals, we recommend celebrity endorsements
when the case is justified.
Coke (Open Happiness)
Open Happiness is a global marketing campaign for The Coca-Cola Company that
was rolled out worldwide in the first half of 2009, following the company's "Coke
Side of Life" advertising campaign. It was developed by the Wieden +
Kennedy creative agency.
The campaign was launched on the reality television series American Idol on
January 21, 2009, and rolled out to other national markets over the following
weeks. In the United States, commercials following the Open Happiness theme
appeared during NBC's broadcast of Super Bowl XLIII on February 1, 2009, and
during ABC's broadcast of the 81st Academy Awards on February 22, 2009.
Marketing for The Coca-Cola Company based on the Open Happiness theme also
appeared in the United States as print ads in newspapers, in television
commercials, in outdoor advertising, and in in-store advertising.
Coca-Cola has launched a new TVC extending its ‘Crazy for happiness’ campaign.
The soft drink major has roped in Alia Bhatt, Varun Dhawan and Siddharth
Malhotra for the new commercial. The TVC created by McCann WorldGroup
India revolves around the tagline 'Bewajah khushiyan lutao, Coca-Cola pilao'
(Spread happiness without reason, share a Coca-Cola).

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The TVC opens in an Irani cafe where a hassled waiter is shown working
frantically. He is clearing dishes, taking orders from patrons and receiving
instructions from the owner of the café. Seated at a table are Bollywood actors Alia
Bhatt, Varun Dhawan and Siddharth Malhotra. Dhawan asks for three bottles of
Coke. Bhatt changes the order to four bottles. She gives a casual shrug when asked
why by Dhawan and Malhotra. When the waiter sets the bottles on the table, Bhatt
picks up the extra bottle and offers it back to the waiter. Surprised at her
unprecedented gesture, he looks at his boss for approval. The boss nods in the
affirmative and the waiter along with the three youngsters enjoy their drink. A
voice over signs off saying, 'Bewajah khushiyan lutao, Coca-Cola pilao'.
On the new TVC, Anupama Ahluwalia, vice-president, marketing, Coca-Cola
India and South West Asia, said, “Brand Coca-Cola has been at the forefront in
making a cultural point of view that encourages optimism and positivity in our
everyday lives. This summer, the ‘Bewajah khushiyan lutao, Coca-Cola pilao’
campaign inspires everyone to spread and share happiness without any reason,
through little gestures like sharing an ice cold bottle of Coca-Cola. We hope that
the new Coca-Cola campaign serves as the thought starter, the trigger which
encourages people to undertake simple acts of kindness towards others.”
Prasoon Joshi, CEO and chief creative officer, McCann World Group India, said,
“Take one of the world’s most loved brands and team it with the young and vibrant
stars of Bollywood, along with some peppy, foot tapping music. That’s how we
made the latest Coca-Cola campaign. The whole idea of the campaign was to take
the 'Crazy for happiness' theme to an individual level, with a call to action. The
emotions of togetherness and celebration, energised by a bottle of Coca-Cola, are
very real and identifiable, and we are sure that everyone will connect to this.”
The company has planned an integrated communication plan including OOH,
digital, point of sale merchandise and other on-ground initiatives across key
markets.

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CHAPTER 4
DATA ANALYSIS & INTERPRETATION

Page 38
SHOWING THE GENDER DISTRIBUTION PATTERN OF THE
RESPONDENTS
Gender:
Interpretation:
From the above Table, it can be seen that the number of male and female respondents
are almost equal. This equal distribution of gender is used to determine the preference
and behavior towards consumption of carbonates and also to compare between the
gender
56%
44%
MALE FEMALE

Page 39
AGE GROUP OF RESPONDENTS
Age group No of respondents Percentage (%)
15 02 02%
15 to 30 65 65%
30 to 45 22 22%
45 to 55 11 11%
55 above 00 00%
INTERPRETATION:
India now has major number of its population as youngster and the fact that brand Coca
cola should cater to the needs of the younger generation and also people who fall under
the age group of 15-30 years as they formulate the majority of the population and also
represent the customers to the beverage industry.
2%
65%
22%
11%
0%
15
15 to 30
30 to 45
45 to 55
55 above

Page 40
1) What is your occupation? (Occupation distribution pattern of the
respondents)
OCCUPATION No of respondents Percentage (%)
STUDENTS 25 25%
PROF/TECH 45 45%
SERVICE 01 01%
TEACHER 03 03%
BUSINESS 17 17%
HOMEMAKER 09 09%
OTHERS 00 00%
Interpretation:
From this pie-chart it is clear that majority of the respondents are prof /tech and rest of
share is occupied by students and business class.
25%
45%
1%
3%
17%
9%
0%
STUDENTS
PROF/TECH
SERVICE
TEACHER
BUSINESS
HOMEMAKER
OTHERS

Page 41
2) Which category of products you like most? (Different kinds of drinks
customers considers buying)
SOURCES Respondents Percentage
Carbonates 76 76%
Nectars 17 16%
Sports drinks 07 10%
Interpretation:
This pie-chart depicts that 76% of the people prefer carbonates and 17% nectars and
the rest prefer sports drinks.
76%
17%
7%
Carbonates
Nectars
Sports drinks

Page 42
3) If soft drinks then which brand of soft drinks do you prefer mostly?
Brands Respondents Percentage
Coca-cola 42 42%
Thumps -Up 16 16%
Sprite 16 16%
Red bull 05 05%
Miranda 05 05%
Fanta 10 10%
Pepsi 02 02%
7 Up 03 03%
Gatrode 01 01%
Interpretation:
This pie-chart depicts that 42% of the people like coca cola and 16% people prefer the
likes of thumps up and the rest have a varied interest on the remaining brands of
carbonates.
42%
16%
16%
5%
5%
10%
2% 3%
1%
Coca-cola
Thumps -Up
Sprite
Red bull
Miranda
Fanta
Pepsi
7 Up
Gatrode

Page 43
4) Are you influenced by other opinions and suggestions before making your
purchase decision?
SOURCES RESPONDENTS Percentage
Respondents saying YES 82 82%
Respondents saying NO 18 18%
Interpretation:
This pie-chart depicts that 82% of the people collect information or take any advice
before making purchase decision and rest 18% will just go-ahead with their purchase
process.
82%
18%
Respondents saying YES
Respondents saying NO

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5) If yes then which factor affects you most?
Sources Respondents Percentage
Friends 27 27%
Advertisement 57 57%
Opinion leader 13 13%
Others 03 03%
Interpretation:
The chart depicts that 57% of the people consider advertisement while going for
the purchase, followed by advice from friends 27%, opinion leader contribute 13%.
27%
57%
13%
3%
Friends
Advertisement
Opinion leader
Others

Page 45
6) Which factor related to product affects you most? (Reason behind the
purchase of a product)
SOURCES RESPONDENTS PERCENTAGE%
PRICE 27 27%
QUALITY 59 59%
CELEBRITY
ENDORSEMENT
13 13%
OTHERS 01 01%
Interpretation:
This pie-chart depicts that 59% of the people consider quality has the major factor that
affects the purchase decision followed by price 27% and celebrity endorsement 13%,
the above chart reveals that consumers often look for a good quality product backed by
reasonable price.
27%
59%
13%
1%
PRICE
QUALITY
CELEBRITY
ENDORSEMENT
OTHERS

Page 46
7) What attributes about Coco cola attracts you the most?
SOURCES RESPONDENTS PERCENTAGE
BRAND 55 55%
QUALITY 21 21%
TASTE 13 13%
CELEBRITY
ENDORSEMENT
11 11%
Interpretation:
The pie chart depicts that about 55% of the respondents believe in Coca-Cola has a
brand and has enjoyed a long and illustrious reign as #1 Best Global Brand for good
reason. An enduring classic that has evolved over its 127 years, Coca-Cola remains the
most recognizable and one of the most valuable brands in the world followed by taste
13% plays a major part with quality 21% and the remaining being celebrity
endorsement.
55%
21%
13%
11%
BRAND
QUALITY
TASTE
CELEBRITY
ENDORSEMENT

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8) Do you think celebrity endorsement work as an effective tool of persuasion
for soft drinks industries?
SOURCES RESPONDANTS PERCENTAGE
STRONGLY AGREE 10 10%
AGREE 70 70%
DISAGREE 20 20%
Interpretation:
This pie chart depicts that 70% of people agree that celebrity endorsement is an
effective tool of persuasion and 10% people strongly agree that it work as tool of
persuasion and 20% of people disagree that it is one of the tool.
10%
70%
20%
STRONGLY AGREE
AGREE
DISAGREE

Page 48
9) In case of Coca cola, which celebrity endorsement do you prefer?
SOURCES RESPONDANTS PERCENTAGE
BOLLYWOOD STARS 43 43%
SPORTS STARS 49 49%
OTHERS 08 08%
Interpretation:
This pie-chart depicts that majority of people around 49% like to see sports stars to
endorse their Brands followed by 43%of them want Bollywood Stars. While remaining
08 % don’t want to any celebrity endorsing the brand.
43%
49%
8%
BOLLYWOOD STARS
SPORTS STARS
OTHERS

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10) Is celebrity endorsement making you loyal towards brand Coca cola?
Interpretation:
This pie chart depicts that there is a greater difference between celebrity endorsement
and the quality of the product, people believe quality and price has an effective tool on
loyalty towards a brand, about 79% of the people disagree that Celebrity endorsement
is an effective tool of persuasion which in turn makes them loyal towards a product and
the remaining 21% of people strongly agree that celebrity endorsement is an effective
tool of persuasion which makes them loyal towards a product.
21%
79%
Respondents saying YES
Respondents saying NO

Page 50
11) What makes you choose a brand?
SOURCES RESPONDENTS PERCENTAGE
QUALITY 30 30%
ADVERTISEMENT 27 27%
CELEBRITY
ENDORSEMENT
09 09%
PRICE 30 30%
WORD OF MOUTH 04 04%
Interpretation:
The chart depicts that 30% of the people consider Quality while going for
the purchase, followed by advertisement with 27%,price with 30% and 04% people
Consider word of mouth. As people usually are more interested towards well known
brands and if these brands are often of good quality and are advertised by famous
celebrity it creates a huge impact.
30%
27%
9%
30%
4% QUALITY
ADVERTISEMENT
CELEBRITY
ENDORSEMENT
PRICE
WORD OF MOUTH

Page 51
12) Do you believe products specifically advertised by the celebrities are of
good quality?
SOURCE RESPONDENTS PERCENTAGE
YES 23 23%
NO 35 35%
SOME KIND OF
ASSURANCE
42 42%
Interpretation:
This pie chart depicts that 35% of the people disagree that Celebrity endorsement is an
effective tool of persuasion and the product is of a good quality followed by 42% of the
respondents think it is some kind of assurance and the remaining 23% people strongly
agree that celebrity endorsement is an effective tool of persuasion and the product will
be of a good quality.
23%
35%
42%
QUALITY
ADVERTISEMENT
CELEBRITY
ENDORSEMENT

Page 52
13) Would you buy Coca cola if your favorite celebrity is endorsing it?
Interpretation:
This pie-chart depicts that 60% of the people consider celebrity endorsement has not
influenced them while going for the purchase of Coca-Cola, followed by 40% of the
respondents who believe that they are influenced by celebrities while making a
purchase decision.
Agree
40%
Disagree
60%

Page 53
14) Do you believe the celebrities also use those products which they
themselves endorse?
Interpretation:
This pie-chart depicts that 60% of the people consider celebrities don’t use the product
which they endorse and the remaining 40% believe celebrities use this products and it
gives some kind of assurance about quality of the product.
Agree
40%
Disagree
60%

Page 54
15) What means of advertisements persuades you the most to purchase a
product?
SOURCE RESPONDENTS PERCENTAGE
Television 57 57%
Radio 02 02%
Internet 25 25%
Magazine 05 05%
Newspaper 11 11%
Interpretation:
From the above table it is clear that television and internet plays a major role in creating
awareness about product on the minds of consumers. This is followed by Magazines
and then news paper and the remaining played a least role in creating awareness on
the respondents.
30
27
9
30
4
QUALITY
ADVERTISEMENT
CELEBRITY
ENDORSEMENT
PRICE
WORD OF MOUTH

Page 55
CHAPTER 5
FINDINGS, CONCLUSION AND SUGGESTIONS

Page 56
FINDINGS FROM THE ANALYSIS
The following are summary of findings from the analysis made on the response
given by the respondents.
1)Also, nearly 72% of the respondents say that there it is clear that television and
internet plays a major role in creating awareness about product on the minds of
consumers. This is followed by Magazines and then news paper and the remaining
played a least role in creating awareness on the respondents.
2)Nearly 74% of the people consider celebrities don’t use the product which they
endorse and the remaining 26% believe celebrities use this products and it gives
some kind of assurance about quality of the product. It is clear that consumers
believe celebrities have no relationship associated with the product or the brand
3) The image given by a celebrity to a brand should be sustained with appropriate
appeals over a period of time. When there are already a number of celebrities in the
category, a new brand attempting the celebrity route may not be the best
alternative.
4) On an average about 48% of the respondents believe quality has the major factor
in choosing. As people usually are more loyal towards well known brands and if
these brands are often of good quality and are advertised by famous celebrity it
creates a huge impact. This shows that there has been a very good reach of the
advertisements featuring with celebrities.
5) More than half of the respondents (60%) said that there are fewer chances that
they would buy a particular soft drink brand because it is endorsed by their
favourite icon. They also look into other attributes like quality, price and value for
money.

Page 57
6) Reference group appeals could provide a creative dimension to brands if
marketers are drawn by the rationale of using celebrities rather than by the emotion
and excitement of celebrity usage.
7) Many respondents, nearly 70% of people believe quality and price has an
effective tool on loyalty towards a brand, celebrity endorsement may not push
them to buying a product quality and price is equally important.
8) Nearly 48% of the respondents believe Sports stars having a larger impact on
the endorsing of the product than any other form of celebrity.
9)Most no. of people nearly 56% believe that celebrity endorsement is an effective
mean of persuasion i.e. it convey the message clearly to the target audience
regarding product offerings and persuade them to go for the purchase.
10) According to the survey about 42% of the respondents agree on the fact that
brand name influence the buying decisions. Brands, which have positive image like
Coca-cola, definitely influence the buying behaviour of the customer.
11)Nearly 68% of the people consider quality has a major factor of which
influences them in making a purchase decision, celebrity endorsement has no
major factor people believe price and quality are the two important factors which
help them identifying a brand or a product .
12) Brand awareness and brand recall can be effectively established by
advertisements only. And if brand ambassadors can help to do those, then it can be
inferred that brand ambassadors indirectly help in creating good brand awareness
and brand recall.

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Conclusion
Understanding buying behaviour of customer is the toughest task for a marker, we
can identify the factors, which influence purchase decisions, but it is next to
impossible to know which factor influence when. We have countless permutation
and combination for it, each individual has different behaviour and different
influencing factors.
Marketers spend millions of dollars on advertising and especially on celebrities.
Hoping that the stars will bring their magic to the products and services they
endorse and make them more appealing and successful. But, all that celebrity
glitter is not gold, but it can be. If appropriately used, celebrity advertising has paid
off and definitely influenced the purchase decision. Celebrity endorsement does a
premium in term of impact and memorability. There is also a position influence on
persuasion, though less strong.
It is not enough that the celebrity is the advertising is remembered, more important,
the brand must be. In using celebrities as endorsed, advertisers need to understand
not only how to choose celebrities but also how to use them in advertising. The
strategy and creative execution should reinforce strongly and consistently the
celebrity brand association. And the celebrity should not only evoke positive
retains, but helps focus attention on the brand in the advertising. Thus the product
will be made more desirable because of its association with the star.

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SUGGESTIONS
1) Instead of hiring any celebrity companies should try to create nice innovative
idea and then match the suitability of celebrity with the idea. This is also supported
by the fact that Today’s era is of Gen X their taste changes very fast and wants
fresh material.
2) This study reveals that celebrity endorsement act as a source of brand-building
but it isn’t the complete solution. Companies should ensure a match between the
brand being endorsed and the celebrity so that the endorsements are able to
strongly influence the thought processes of consumers and create a positive
perception of the brand.
3) Companies can’t rely only on celebrity endorsement to sell their products but
they should follow an integrative approach so as to generate good sales volumes.
They should provide more schemes to their customers in order to sell their
products. Companies must realize that having a celebrity endorsing a brand is not a
goal in itself; rather it is one part of the communication mix that falls under the
broader category of sponsorship marketing.
4) The most preferred medium for celebrity endorsement strategy was television
although using several media was seen as an effective way to get good return on
investment since celebrity fees are usually high. Using multiple celebrities or a
single celebrity depends on the time period over which a campaign is planned to
have impact, campaign budget, and variance in target audience characteristics.
Other medium like radio, hoarding, poster, news paper etc can also be used to
promote the advertisement.

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5) Companies should also be vary of “vampire effect”, which is the effect of a
celebrity overshadowing the brand .This can cause a breakdown in the effective
communication of a product being advertised towards the consumer simply
because consumers are more attracted with celebrities, in order to come out of this
companies should ensure a match between the brand being endorsed and the
endorser so that the endorsements are able to strongly influence the thought
processes of consumers and create a positive perception of the brand.
6) Judging by the size of the contracts, endorsements must have proved very
effective, but experience has shown that it is not always a risk free policy for
drinks players. One's choice of celebrity is critical and even the most squeaky clean
personalities may have something they did not mention on their CV. Tiger Woods
is the obvious example; his Gatorade drink did not last long after it emerged that he
was more active off the golf course than he was on it.
7) One of the important recommendations that I want to give is that during this
slowdown period companies are cutting their advertisement expenditure but they
shouldn’t do this. This is because this slowdown provides them an opportunity to
differentiate themselves from their competitors. This is also supported by the
researches. One of the research explained that during 1960’s recessions 290 global
companies increased their advertisement expenditure and their sales increased by
whopping 300%. Some of the companies are well established brand name today’s
like IBM, Microsoft, 3M etc.
8) There are many other pitfalls that marketers must be conscious of, firstly, the
celebrity must actually drink the product they are endorsing. To be photographed
with a rival brand provides a ‘head in hands’ moment for marketers and leaves the
brand open to ridicule. The celebrity may have a shorter shelf life than expected as
people who come into fashion often go out of fashion just as rapidly. The chosen
one may be so much in vogue that they sign up to too many products, thereby
diluting their impact.

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9) Marketers should now seek to adopt 360 degree brand stewardship in which the
brand sees no limits on the number of contact points possible with a target
consumer. Advertising ideas, thus, revolve around this approach, and the celebrity
endorsement decisions are made through these strategic motives.

IMPACT OF CELEBRITY ENDORSEMENT ON SOFT DRINKS WITH SPECIFIC REFERENCE TO BRAND COCA-COLA

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