In an aggressive bid to pump up volumes and gain marketshare, both Pepsi and Coca-Cola India have dropped the price of their 300-ml returnable glass bottles (RGB) across all brands by 20 per cent, from Rs 10 to Rs 8.
The drop in price of 300-ml bottles, to start with, has been initiated in the east region. But according to industry sources, the price drop is likely to be extended to other crucial markets as well.
According to sources in Pepsi, the price drop on 300-ml packs is part of its summer pricing strategy for the east, which has of late emerged as the fastest growing area for the company. For Pepsi it’s a strategic move in a region, which is dominated by Coke’s Thums Up brand. While Thums Up leads at 55 per cent, Pepsi follows at 43 per cent.
And tactically, Pepsi’s price cut on its 300-ml bottles was announced on the eve of the roll-out of Thums Up’s 200-ml bottles in Calcutta. Pepsi has a marginal presence in the 200 ml segment in the region while Coke is going aggressive on the 200-ml packs to push sales in football-crazy West Bengal.
Currently, Calcutta accounts for 80 per cent of all soft drinks sales, while the rest of the state has very low per capital consumption.
The 300-ml RGB segment accounts for the major chunk of the total soft drinks market in the country. Both the companies follow region-specific pricing strategies for their brands.
Pepsi has also slashed prices of its 200-ml packs in Rajasthan and ‘smaller cities’ to Rs 5 while Coke is following the same pricing strategy in some parts of Uttar Pradesh for its 200-ml bottles segment.
Source: Financial Express