COCA-COLA STILL IT IN INDIA DESPITE FIGHT FROM PEPSI

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BOMBAY-Pepsi-Cola's no-holds-barred ambush tactic against Coca-Cola's reentry into India has fizzled. Instead of tripping up Coca-Cola India, Pepsi's sly 21-month campaign of counter-promotions and backbiting ads appears instead appear to have won Coke the sympathies of the Indian public.

It also has apparently failed to shift the share pendulum substantially toward Pepsi, itself in India since 1990.

"Pepsi's attack is very harsh and negative," said Sohel Nalwala, a 24-year-old executive with an in-flight catering company. "Rather than damaging Coke, it does more harm to itself ... It's like a loser crying foul."

"I don't think we are taking a strident stance," said Neel Chatterjee, general manager-marketing of Pepsi Foods, New Delhi. "In our surveys with consumers and retailers there has been a great amount of dissatisfaction with Coke. Pepsi drives a very competitive wedge."

The drive began right after Coke announced last October its return to India after a 16-year absence. Coke left the country in 1977 after passage of a law requiring multinationals to dilute their ownership stakes to a level Coke deemed unacceptable.

The law has since been changed and last year Coke spent $70 million to acquire the country's largest soft drink company, Parle Group, and has been rolling slowly into India's major cities ever since. The company began with Agra, Calcutta, Chandigarh and Simla, and just last month hit Delhi and Bombay, with a goal of achieving national distribution by 1995.

Thanks to its purchase of Parle, the marketer of Thums Up, India's most popular cola brand, Coca-Cola Co. swiftly went from a 0% share to 60% of India's $380 million soft drink market. Pepsi, meanwhile, in the country for four years, held 32% of the market at the time of the purchase, according to estimates.

Pepsi almost immediately undertook a series of efforts designed to blunt Coke, and many of its moves backfired.

In Agra, the Taj Mahal's home city, Pepsi plastered the city with signs, free fountain equipment for retailers and offers to consumers of free ice cream with every Pepsi purchase. At Coca-Cola's press conference at a local hotel, Pepsi booked a neighboring hall and collared journalists on their way to the Coke bash.

The next day, Pepsi introduced a Michael Jackson concert promotional offer for November 1993, giving away a free ticket in exchange for 100 bottlecaps. The result: A crowd of bedraggled men with cap-stuffed plastic bags, allegedly fronting for ticket scalpers, claimed the tickets and Pepsi didn't attract as many of the intended teens and young adults crowd it had sought. Furthermore, unruly behavior led to a stone-throwing incident and Pepsi had to shut down its booth. In Bombay, Pepsi reportedly tried to interfere with a Coke-sponsored rock concert by setting up a Pepsi fountain next to Coke's stall at the concert. When it began giving Pepsi away for free, a riot ensued.

To top it off, local police shut down the Pepsi operation for lack of a license.

Pepsi's attacks haven't been limited to promotion, however. Through its local agency Hindustan Thompson Associates, Pepsi ran a full-age newspaper ad in Bombay that said: "Pepsi presents the reactions of people who tried a Coke." The rest of the page is blank except for the message "No words can describe the disappointment that you experienced. But there's a cola that can help you forget it. Yehi hai [This is the] right choice, baby, a-ha."

Another newspaper ad read: "In Bombay, people describe the taste of Coke in two words: `Pepsi, please.'*"

The measured response from Abraham Ninan, consumer marketing manager of Coca-Cola India, Bombay, was: "We will maintain the right to attack when we feel it is timely but it will also be on our own turf."

Coke's print, TV and outdoor ads are warm and fuzzy, mingling patriotism and warmth. One nostalgic 90-second spot shows 1,200 exuberant Indians on a rolling hillside singing together with the voice-over "Coca-Cola is happy to be back in India."

"It is what we are saying," snipes Pepsi's Mr. Chatterjee of the ads. "Coke is meant for bygone days and bygone years."

After all Pepsi's efforts, however, it's still uncertain whether Pepsi has managed to alter the balance with Coke. "In every market that Coke has been launched in, we've seen our total volumes for bottlers going up 30 to 40%," said Mr. Ninan, who declined to offer figures.

A recent poll from Indian magazine Business Today, however, indicates Coke and Pepsi are nearly neck-and-neck in the four cities in which Coke started. In the 16-to-24-year-old category, 35% drank Thums Up, 27% preferred Pepsi and 26% quaffed Coke. The remaining 3% drank Campa Cola, a local brand from Pure Drinks, Delhi.

But it's not a clear victory for Coke either, since many Indians simply don't like the taste of a cola that's less carbonated than their beloved Thums Up. "I don't think it is as good as Thums Up," said veteran cola drinker Khaleel Sulawiman, 56. "Something is missing ... this is not the same."

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