Competitor Analysis

Mezan Beverages Private Limited launched its beverages project in a record time of one year and
started its production in March 2016. Having a number of competitors gave Cola Next a tough
time. Challenged by direct and indirect competitors was a crucial time for Cola Next to sustain in
the market.
Direct Competitors:
Gourmet Cola:
In 1987, Gourmet Bakers and Sweets were founded by Mr. Nawaz Chatah as a single outlet of a
bakery unit, which is the largest food retail chain of Pakistan. It is located in Lahore, the second
biggest city in Pakistan known for its traditional food and passion for eating. The portfolio of
products that Gourmet has are Beverages, Milk, Ice cream, Water, Jam, Ketchup, Nimco, Juices,
Bread, Powder milk, Mithai and Bon Vivant. Gourmet has more or less 120 outlets in Lahore
and Faisalabad. It is the only local beverage company in Pakistan which provides soft drink with
price competiveness and standard quality over the year. Gourmet food is one of the fastest
growing bakers and confectioners store in Pakistan.
Shandy Cola:
Shandy Cola was established in 1995 to manufacture high quality carbonated drinks for the fast
growing Pakistani market. Today, despite the competition dominated by major international
brands, Shandy Cola is recognized as a leading Pakistani brand and credit goes to Shandy-Cola
to set places for locally produced soft drinks among eminent international brands. We have won
the trust of millions of Pakistani consumers by adopting the international quality standard. We
are thankful to the millions of consumers who have given us confidence by appreciating our
taste, quality and competitive pricing strategies. In order to facilitating the company’s growth in
the food and beverages manufacturing community, Shandy Cola Pakistan has become known for
its commitment to quality and working closely with segments. Specific tastes and trends are
identified and product expectations are to meet or exceed these expectations.

Presently the company is successfully marketing its seven well-known products:

 SHANDY COLA
 LIMONCA
 APPLE GOLD
 SHANDY ORANGE
 LYCHIA
 ICE CREAM SODA.
Years of manufacturing expertise, Latest process machinery and automatic packaging facility,
combined with tremendous efforts for quality assurance, enabled the company to virtually
guarantee the supply of high quality, competitively priced Beverages of International Standard
with the added convenience of P.E.T bottles.
Indirect Competitors:
Coca Cola:
In 1953, Coca-Cola started their operations in Pakistan. In the first stage, it was not the same as it
is now. In 1951, they just had franchise bottling and then afterwards in 1996, company took over
all the bottling system. The Coca-Cola Company has its own plants and operates supply chain
system. The Coca-Cola System in Pakistan serves over 200,000 customers/retail outlets, which
have 2500 employees that are working continuously for the company. Coca Cola has
successfully provided 54 years of dedicated service to its customers in Pakistan. Coca Cola
Beverages Pakistan has a very narrow product range in Pakistan. The brands that the company
has are Coca Cola, Fanta and Sprite. CCBPL has 6 plants and 13 warehouses throughout the
country and serves a population of more than 170 million with a production capacity of 111
million physical cases (CCBPL, 2014). CCBPL is a significant player in the growth of Pakistan’s
economy since it is one of the country’s top foreign direct investments in FMCG sector (Coca
Cola, 2014).
Coca-Cola. Coca Cola is the second largest beverage industry in Pakistan. It constitutes about
30-35% soft drinks sales. Coca cola also offers a variety of products:

 Sprite

 Sprite 3G

 Fanta

 Diet Coca Cola

Varieties of sizes are also offered by the company raging from 175ml mini bottle to 2.25 liters
jumbo-sized bottle. Pepsi does not have a specific outlet and can be bought from any shop or
store in the city.

Pepsi Co:
In 1979, the company introduced the franchise of Pepsi Cola International with the name of
Pepsi Beverage Company Limited of Pakistan. Within five years of getting a franchise, Pepsi
Beverages Pakistan Ltd. has managed to repeat the success of previous work in the beverage
market by becoming a market leader across the Sindh, most specifically in the region of Karachi
and later in Hyderabad. Dynamic partnership established in 1979 between Pakistan Beverage
Limited and Pepsi Cola International, in fact, is a force to be reckoned with in the market, and
that stands true to this day. 3 This great success flowed gradually to other cities of Pakistan in the
south and north region, over a period of time, which makes Pepsi and its brands the most popular
cola beverage across the country. Today, with about 60 acres of space under the accumulated
storage and processing, Pakistan Beverage Company Limited is one of the bottling plants of
Pepsi- Cola’s well-equipped and well managed among all franchises in Pakistan (PBL, 2014).
Pepsi-Cola. From around the 120 million soft drinks sales in Pakistan, Pepsi-Cola constitutes to
about 70 million sales annually. Pepsi offers a wide range of drinks. These include:

 7Up

 Mirinda

 Diet Pepsi

 Mountain Dew

These drinks are available in plastic bottles and tin cans. Varieties of sizes are also offered by the
company raging from 175ml mini bottle to 2.25 liters jumbo-sized bottle. Pepsi does not have a
specific outlet and can be bought from any shop or store in the city.

Analysis:

Other than these two main competitors and the local competitors, many other small ventures also
exist in the market but they constitute to only about 5% of the share in the beverages industry.
Despite this strong competition in the market, Cola Next can carve out its name in the industry.
The prices offered by Cola Next are sure to give us an edge in the market. Also the flavors
offered by Cola Next are different and will surely attract a variety of consumers.

The objective is to find out the dilemma that why local Cola Company like Cola Next in Pakistan
could not established or capture the market share since independence. There are two giant of cola
companies working in Pakistan i.e. Pepsi and Coca Cola, these two brand have great influence
over their consumer that’s why no other brand survived in the market over them in the past.
Many local cola brands were introduced to the market i.e. Makah cola, RC cola and many more,
but none of them survived and disappeared after a period of time. Those brands were failed to
achieve consumers’ preference and repeat purchase behavior. Mezan oil is Pakistan’s local brand
operating in Punjab side, after their success in food industry, they introduced a cola with the
name Cola Next airing Humayun Saeed, their cola got influence and capture the market with the
passage of time in Lahore and Faisalabad, they were targeting a variety of people in the market
and they constrained their company to country wide only. The main area where the company is
lacking is publicity and advertising their product they didn’t spend a sufficient amount on
marketing. On the other hand, Coca Cola and Pepsi spend huge amount on marketing and
promotion activities regularly to remain in consumers’ brain when they go to buy the soft drinks.
Cola Next has limited themselves only to Pakistan, they didn’t consider other areas of the
country as their target markets, they also have issues in finance as they are lacking in financial
resource and is unable to invest a huge amount as compared to their competitors, while Coca
Cola and Pepsi are investing 248 million and 1 billion in Pakistan. They are 14 generating the
annual sale of around million soft drinks. Pepsi is the market leader of carbonated water in
Pakistan having 65% of market shares and leading beverage company in Pakistan and Coca Cola
constitutes about (35) % market share. The other problem which was figured out is that Cola
Next does not have many potential outlets and they have weak distribution channel system
around Pakistan, they left open space for their competitors by not targeting hotel, colleges,
canteen and etc. Their placement is not good as they didn’t establish maximum number of outlet
they have no outlets in different cities in Pakistan. The company should plan to launch the Cola
Next to different cities in Pakistan to enhance or overcome their financial resources issue, they
must work on their target market and segmentation by not leaving open space for their
competitors and they should start spending budget on marketing, advertisement and promotion
activities to give awareness about their product like Pepsi and coke, in order to give tough
competition to their competitors.

Continuously advertising campaign by the Coca Cola with new ideas and innovations and
targeting all different income level of families i.e. upper, middle and lower will boost their profit
margin and credibility in the market. The advertising campaign should focus on particular ideas
that is happiness like Pepsi do in their promotional campaign. Why Pepsi is a strong brand in
Pakistan, not any other local or foreign brand?

Pepsi is maintaining good quality in Pakistan, through high tech machines, and through good and
dedicated employees. The availability of Pepsi is to be found in any location of Pakistan, their
supply chain of products is dramatically improving the demand of their consumer. Pepsi enjoy
the brand loyalty, that people are so much dedicated to their product. Another reason is due to
their high market share, that’s why public trust their product. On the other hand, Pepsi Co. has
related Pepsi with Pakistan Cricket Team. They spend a large sum of money on their advertising,
which create an image of loyalty. On the other hand, the Cola Next, which is although available
at very affordable prices, but not be able to capture the complete market of Pakistan and
restricted themselves because of their lack of advertising, as well as their lack of outlets. They
are not preparing proper marketing strategies to fight against big giants like Pepsi and Coca Cola
or even local brands like gourmet Cola. They should focus on their product design because
public are much more attractive to the product image as well as to the low price. In order to gain
their market share, they should also introduce their product across the Pakistan so that would
enhance the profitability and its awareness as well.

Extensive advertising strategy and more & more advertising campaigns by the Coca Cola
Company with innovations and new ideas help them to compete with the Pepsi Cola and they
should have target different classes of the society, which are upper, middle and lower class. This
strategy will surely help them to increase their product demand, increase the gross margin on
sales and increase the trustworthiness in the market. Coca Cola advertisements are not focus on
one subject and by doing this they were lost their way of success. They should focus on one 30
slogans, which is happiness for the advertisement like what the Pepsi did in their advertisement.
Pepsi Cola is the leading brand in the Pakistan cola beverages industry, why not the local cola
brand or any other foreign brand leads the market?

On the basis of researches done on the Pepsi by studying different research papers it has been
concluded that Pepsi provides great quality in their products and the taste of their product is
similar to that taste, which is commonly accepted by the consumers in the Pakistan. They have
healthy financial resources and they have no issue regarding finance. They have high tech
machines and equipment by which they manufacture great quality products. They also have well
trained and dedicated employee, which enhances the reputation of a company. Their placement
of a product is equally good because of the supply chain infrastructure and their product is easily
available all over the country. The consumer of the Pepsi cola shows so much dedication to
purchase the product of a Pepsi that is why Pepsi Cola enjoys the brand loyalty. One more reason
is market share, because the more market share means the more trust on the product. Moreover,
Pepsi itself associated with the Pakistan Cricket Team. They invest a large sum of money to
promote their product and to promote Pakistani cricketers as well. Their advertisements guide
consumers that cricketers are so much loyal to Pepsi cola and cricketers are considered as role
models in our country so that this concept eventually create an image of a brand loyalty in the
minds of consumers. On the other hand, the Cola Next is available in cheap prices and the
consumers of every social class easily purchased their product, hence they are not able to sell
their product in the whole country like Pepsi or Coca Cola does because they don’t have enough
financial resources and they are not advertising their products as much as Pepsi and Coca. 31
Cola does. They also have limited outlets only in Punjab. They have not made appropriate
marketing strategies for their products to face the challenge of big giants of Pakistan beverages
Industry, which are Pepsi Cola and Coca Cola. They should focus on the packaging of their
products, because the packaging creates a congruence, satisfaction and commitment with the
product, which leads to a brand personality that eventually achieve a brand loyalty. In order to
gain the market share to survive in the market, they should focus to make new strategies by
which they introduced their products all over the Pakistan and it enhance their profitability of the
product and awareness as well.

Pepsi, Coca Cola, Gourmet Cola, Shandy Cola and many other local companies are playing in
the Pakistan Beverages Industry. Pepsi and Coca Cola share most of the shares of the market i.e.
more than 90% of the entire local market of Pakistan. It can be said that both the companies are
enjoying very stiff competition between them. Now a day’s new brand comes in the market, but
most of the brands are facing difficulties to find a respectable place in the market, and they do
not consider as competitors for the Pepsi and Coca Cola. There are many factors on which we
repealed newly introduced companies from the competition to Pepsi and Coca Cola and those
factors are quality of the product, availability of the product, visibility of the product and
promotion of the product. Pepsi and Coca Cola are almost same in the positioning of the brands.
They both brands are considered as a substitute of each other. There are number of consumers,
who find difficulties to distinguish between those products. On the other hand, the newly
introduced brands fell in the category of inferior brands on the basis of the quality of the product.
Quality is one of the 32 reasons that is why the newly introduced brands are unable to create
their own market and most of the shares are captured by these two giants. The religious
campaigns that give boost to the newly introduced companies to capture the market by availing
this opportunity and make the best out of it, but still they are struggling in the market. Those
religious campaigns were carried out by the religious groups of a country in the past years. We
are not considered that those campaigns are fully failed and do not disturb their businesses, but
those campaigns imposed a negative image on Pepsi in the minds of consumers due to the
affiliation of company with Israel. In the end, it can be said that there are only two major
competitors in the Pakistan Beverages Industry similar to the other countries in the world. But
the situation of the Pakistani market is very much different from the other markets in the world.
In Pakistan, Pepsi is the market leader and Coca Cola is on the second position. But outside the
Pakistan, Coca Cola is considering as a top cola brand and Pepsi is nowhere near from it. Out of
the 100% market shares, 60% shares claimed by Pepsi. On the other hand, 30-35% shares
claimed by Coca Cola. The market shares of both the competitors are increasing day by day.

Marketing Mix (4P’s)

Product:

Cola Next has wide varieties of items, that offers high quality of products offered in the market.
Mezan worked on introducing its new products that has a wide range and amazing energy drinks.

Price:

Cola Next offers good quality products at low prices to make able to low income people for
enjoying a high quality taste and fruitful food and Products at the prices on which they can afford
them. It is also gaining high a good will and competitive advantage of low prices.

Place:

Mezan targeted entire Pakistan to sell Cola Next. It started in 2016, by commercializing their
product on the television, to the target the entire citizens countrywide.

Promotion:

Cola Next promoted its products in a very different way as compare to other companies. It has
spent low on publicity and more on commercials by airing Humayun Saeed and Mehwish Hayat,
few of the top and highly paid actors of Pakistan to be in their commercials. Moreover, using
local and motivating taglines like, “Level Barha. Next Pe Aa” to target local citizens of Pakistan.