Coca-Cola and Pepsi cut prices in India

27 May 2009

NEW DELHI: Coca-Cola and PepsiCo, the soft drinks manufacturers, have both recently implemented price reduction schemes in India as they seek to gain an advantage in the increasingly competitive cola market in the country.

Pepsi has previously announced than it is to greatly increase its investment in developing markets like India and China over the next few years, while Coca-Cola similarly plans to heighten its activities in these countries, as part of its efforts to appeal to "global tribes" of consumers.

The cost of the 330ml variants of Coke, Sprite and Fanta in India – as well as that for the company's Limca and Thums Up brands – has now fallen by 5 rupees ($0.11; €0.08; £0.07) to 20 rupees overall.

Coca-Cola has also reduced the price of some larger goods, meaning that a 400ml bottle of Minute Maid is now available for 20 rupees, with more sizeable packs of the juice brand on sale at varied discount rates across different regions in the country.

According to the company, this strategy was motivated by a desire to keep up with "evolving market conditions," which demand that "the right brand is available in the right pack and right prices."

PepsiCo has also introduced a 250ml can of Diet Pepsi to the market which costs just 15 rupees, while its 600ml products are available for 20 rupees, although a 300ml Diet Pepsi still costs 25 rupees.

This approach is said to be "consumer-driven," and the soft drinks giant argues that in "recessionary conditions, it is even more important for us to offer great value."

By contrast, recent research from the newspaper Livemint found that Procter & Gamble has actually increased the price of a number of its shampoo brands over the last year-and-a-half.

For example, the price of Pantene is up 21%, while Sunsilk has seen a similar uplift of 10.2% over the last six months, and the cost of Head & Shoulders has also risen by 11% in the last 18 months.

Unilever, by contrast, has looked to drive volume sales by selling larger sizes of its Lux soap bar at the same price as the typical 90 gram product.

Data sourced from Economic Times/Livemint; additional content by WARC staff