India could be the future battleground for Pepsi MAX and Coke Zero
It has been positioned across the globe as a product to take on Coca-Cola’s popular Coke Zero, a sugar- free carbonated drink. But the story is different in India where Coke Zero has not even been launched.
So what prompted Pepsi to launch Pepsi MAX, a zero-calorie carbonated drink, in India on Monday? The question is all the more pertinent as the beverages giant already has Diet Pepsi, a zero-calorie diet beverage in India – a market where diet colas account for just one per cent of the total sparkling beverages sales of 650 million cases a year. That certainly isn’t big enough for two power-packed brands.
To the uninitiated, MAX uses a different kind of sweetener called sucralose which comes closest to the taste of a regular cola. That is what differentiates it from a Diet Pepsi.
Competitors and experts say that MAX has been launched for three reasons. One, Pepsi wants to be prepared for a possible launch of Coke Zero sometime this year. Globally, Coke Zero is five time sthe size of Pepsi MAX. While Coca-Cola has been wildly successful in the US with the five-year-old brand, which taps into the healthy shopper mindset, Pepsi MAX has long been a top-seller in Europe.
Two, the company hopes it will expand the overall volumes of brand Pepsi which is lagging the sales of Thums Up and Sprite, which are both part of the Coca Cola stable. And three, some marketers say MAX has been positioned at the same target group which drinks Thums Up, the positioning being young adults looking for a “macho” product.
Punita Lal, executive director – marketing, Pepsi India, however, has other reasons for launching a second diet product in the country. She says that the product is targeted at the age group of 25-35 years, the slightly older consumers who have graduated from drinking Pepsi cola, but are avoiding colas as they are more health conscious.
Lal is also addressing another niche market. “Globally, diet beverages are associated with health-conscious women only. We have positioned MAX as a drink with attitude and intensity to make it more appealing to men. It’s for the urban lifestyle-oriented youth who is fitness conscious and looking for a strong attitude quotient in their beverage options but is not willing to compromise on taste” adds Lal.
She points out that while Diet Pepsi appeals more to the calories-conscious women, MAX will rope in the men.
Pepsico is aware that a big-bang launch won’t make much sense for a niche product like MAX. So it is launching it in phases – first from Delhi and the National Capital Region this Friday. The product will be marketed in other metros over the next three months and then go to the smaller cities and towns.
To ensure that consumers get to sample the product, Pepsi has gone in for aggressive pricing – a 250 ml slim can pack for MAX will be priced at Rs 15 compared to Rs 18 for a Diet Pepsi. “The pricing points are to make the product more accessible to consumers. A multi-pack of four cans will also be made available,” says Sandeep Arora, vice president – marketing of Pepsi India.
But will MAX really expand the diet market, or will it cannibalise Diet Pepsi? .Most competitors say that the Indian market is not developed enough for a company to justify two diet cola brands. Besides, consumers may get confused. Even Lal concedes that the company might eventually phase out Diet Pepsi if MAX is successful. “We will wait and watch and see later whether we should continue to sell Diet Pepsi” says Lal.
Pepsi has not been able to dislodge Thums Up, which remains the number one brand and MAX has been positioned to woo Thums Up drinkers.
| INDIA SALES SNAPSHOT (in million cases) | |
| Branded packaged beverage industry | 1,700 |
| Of which | |
| Sparkling beverages | 650 |
| Others* | 1,050 |
| * Juices, water, ready-to-drink coffee, tea etc Figures for 2009 | |
That will be reflected in its promotion campaign, which Arora says, will be supported by a 360-degree plan with ‘disruption’ at its core. Consumers will be greeted by a larger than life outdoor campaign comprising building wraps as well as huge Pepsi Max bottles and other ‘spectaculars’ visible at high traffic zones and youth hang-outs. In addition to in-store activation, experiential sampling will be given a whole new meaning with exclusive mobile bars in high visibility areas like multiplexes and malls. This approach will also extend to the social media domain to engage the core target group online.
So will MAX make a dent in the Indian beverage market? Competitors, predictably, see no impact on brands like Thums Up, which is in a different price bracket as well. But Lal says it is a long-term investment which will only expand the category of colas. Her bosses would be watching that closely.
