Television

QUESTION AND ANSWER SESSION WITH RON COUGHLIN

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Mr. SHIVJIT KHULLAR

What apart from the marketing efforts etc. what was so different in India that gives you such a big lead i.e. India is one of the rare cases in the world where you have managed to open such a huge gap so what do you think, what do you think is it the environment, the conditions? 



Mr. RON COUGHLIN 

I am not going to sit here and claim to be an expert to lure the people in India but it started with the people, we understood right away we needed the right people, and we need local management of operation and that is in contrast to the strategy that out competitors took that is no.1. 



No. 2 we understood and continue to understand today that we need separate communication obviously leveraging of a global stately but you that you need to have a direct communication that really addressed this balance a long history of local traditions with you know some what with western outlook that can only be balanced by a team that understands that locally not out of Europe by any means.



RAVI FROM BAJAJ

I want to ask one question to Ron. Youth also says in many research that they want keep experimenting changes very often they do not like to see, to wear, to drink, to listen to the same thing. Change is part of their life. So I was asking Ron about Pepsi as a drink how long will it remain the same taste? Should it be the same taste in a new package? Or will we continuously give them the same taste with new message. Is there any thinking on that? 



Mr. RON COUGHLIN 

No problem. I think you have to look at it in two pieces. One is what do you want to do with Pepsi and second one is what do you want do with the portfolio PepsiCo. The first thing with Pepsi I think highlighted by Michael Jackson. If you constantly refresh your brand then the brand doesn't get old. It is a matter of when the brands get old is when the consumer looks for other offerings. But the fact of the matter is that today the people drink more and more drinks retailers carry more and more drinks so you know you can have the right line up of products and Pepsi cola that meet those needs but we think we can continue to grow Pepsi cola just fine, I mean per caps in India are one tenth / one twentieth of what they are in Mexico so there is plenty of Pepsi cola that can be sold.



SHIVJEET KULLAR 

O.K. they will use their range to provide different tastes for different people.



ASHWIN CHOPRA FROM IMG 

Roger Enrico has his written in his book 'The Other Guy Blinked' that you signed up Michael Jackson was the best thing you guys had ever done. Now what was the idea behind getting celebrities to indorse your brand? Why wasn't this idea there before Michael Jackson? What is the theory behind it?



MR. RON COUGHLIN 

Two things had happened. The first I highlighted earlier which is that life style advertising did not have the same impact. The Pepsi advertising is known for having major impact - major breakthrough.



No.2. Though this is a little complex, in the United States we had run something called the Pepsi challenge for years and years which was a competitive challenge with Coca Cola and the time between the life style advertising getting old and the challenge seeming a little too aggressive we wanted to break out and create new mould of marketing and Michael Jackson came along but these things did not come planned basically there is funny story a big white limousine pulled up in front of Pepsi and out comes this guy with big black and white hair and it was Don King and for those who know Don King and Don King was managing Michael Jackson at that time surprise surprise and the chairman of Pepsi Roger Enrico is pretty conservative guy I have never seen him not in a suit. 



And to have Don King walking into Pepsi was a pretty amazing sight. And he said I have got the performer for you - This guy is going to be biggest thing. Roger believed and at that time everybody thought he was foolish. But Roger believed him. Roger took a huge bet. That is probably why he is Chairman today because he had some foresight. But we knew we needed something fresh but Michael was not this big strategic decision that it's probably been made out to be. 



MR. SHIVJEET KULLAR 

Also I would like you to comment that actually today we live in age of falling heroes. We are going through some of the biggest scandals in our cricketing things. So, there is a danger too, right? 



MR. RON COUGHLIN 

I mean I would say at this time our reliance on celebrities is much much lower. If you looked at the mid 80's probably three quarters of commercials that Pepsi produced were celebrity based, now it's 1/8th of what we produce. So what you try to do is have the brand transcend the celebrity. And more like what you saw in the early life style advertising where the brand stands for the teen and is the proponent of the teen rather than seeing it through celebrity's eyes especially today because you have had so many issues with celebrities.



MARTIE 

I have seen the days when Pepsi and Coke were freely available in India for 25 paise a bottle and then George Fernandes came and through them out. At that time there were only two companies that were making these drinks. It was duopoly. And today the soft drink market is again duopoly. Marketing is just a matter of being either one and a half up or one and a half down. So, in such a market situation like perhaps in the U.S. I think marketing probably plays a very very small role in consumption of the soft drinks and my comment is that this kind of hype about Coke / Pepsi gives a lot of jobs, lot of employment - but it is lot of hype.



MR. RON COUGHLIN 

The hype that you reference, the infamous cola wars have been amazing for Pepsi and Coke. They create attention on the category and have been a vehicle for growth. So they have been amazing for the category in terms of driving growth.



That is no.1 but no.2 in terms of price if we did not have brand equity we could not sell our products for any price. If people did not think that they said the right thing about them we could not sell them for any price. So price is 100 percent contingent upon equity. 



It is a relationship there and without marketing continuing the build the equity you would never have the price could not drive the brand within a year the business would be gone. So, there is direct correlation - pricing gets more heated some times depending on economic conditions but you try to minimize the price impact. 



AMRIT SINGH DEO - CRICKET NEXT.COM 

Ron the Internet is the next big thing for the youth, what is Pepsi's take on that? 



Mr. RON COUGHLIN 

Right now our strategy is admittedly a little diverse. We have probably 15-16 web sites for each country zone activity. I think it is clearly not the way to go - The internet is undoubtedly a major power in teen life and a youth branch like Pepsi, needs to have a focused strategy. I cannot share our's now. But you will be seeing more from it but that said, there are some exciting things they are doing locally - its Rediff right that you are partnered with?



There is a program called Pepsi-chart that we do web-site stuff with in the U.K. but in terms of a global look that is soon to come. 

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