Coke and Pepsi Learn to Compete in India
CASE STUDY 2
International Marketing
1. The political environment in India has proven to be critical to company performance for both PepsiCo and Coca- Cola India. What specific aspects of the political environment have played key roles? Could these effects have been anticipated prior to market entry? If not, could developments in the political arena have been handled better by each company?
There are several specific aspects of the political environment, such as the principle of “indigenous availability”. Which was very difficult to trade and also establish the rules and the regulation. Secondly, it was forbidden the use of foreign brands in India.
But, since 1991, the liberalization of India’s
…show more content…
Should Coke address the group directly or just led the furor subside?
The most harmed enterprise was Coke Company, but why?
Because it enter in the market at the wrong time, obliging it to a hard competition with Pepsi. Another reason is that it has to sell almost the 50% of their equity to expand itself and other bureaucratically aspects like deny of the upcoming Indian shareholders voting rights.
6. Which of the two companies do you think has better long- terms prospects for success in India?
In the long term prospects, Pepsi will fare better because of its better marketing and advertising strategies, more widely accepted and more market share.
7. What lessons can each company draw from its India experience as it contemplates entry into other big emerging markets?
PEPSI
Beneficial of pay attention to market trends and to keep with local tastes. Celebrities appeal makes for exceptional advertising. And finally it pays to keep up with merging trends in the market.
COCA- COLA COMPANY
It pay specific attention to deals made with the government, establishing a good relation. And also he investment in quality products.
8. Comments on the decisions of both Pepsi & Coke to enter the bottle water market instead of continuing to focus on the core products- carbonated beverages and cola- based drink in particular.
They decided because it was a rising market and also the high demand it was. So that market was
1. What is their business strategy to grow profitably and compete over the long term?
PepsiCo is the 3rd largest manufacturer of food and beverage products with a total just shy of 30 billion dollars in sales, while Coca Cola is the 5th largest manufacturer of food and beverage products with a total of 21.5 billion in sales. The products that both PepsiCo and Coke Cola concentrate their manufacturing efforts on are products that are easily consumed and/or prepared. Therefore, PepsiCo leads the sales in convenient food and beverage category, sustaining 22% of sales. Coca Cola also has a large percent of total sales in this category coming in under PepsiCo with 12%. One important thing to remember when evaluating PepsiCo and Coca Cola is that although PepsiCo may outperform Coca Cola in a number of key statistics, this is not the case when
In an industry dominated by two heavyweight contenders, Coke and Pepsi, in fact, between 1996 and 2004 per capita consumption of carbonated soft drinks (CSD) remained between 52 to 54 gallons per year. Consumption grew by an average of 3% per year over the next three decades. Fueling this growth were the increasing availability of CSD, the introduction of diet and flavored varieties, and brand extensions. There is couple of reasons why the industry is so profitable such as market share, availability and diversity and brand name and world class marketing.
As we all go about our day, we rush to place to place. Around us there are things for sale, people everywhere trying to make money. As we are rushing around, we all tend to get thirsty as we have a thousand things going on. In America we have dozens of choices when it comes to soft drinks, although the two most widely known are Coca-Cola and Pepsi. Many are often stuck between choosing Coke or Pepsi; even though they are slightly different in appearance, taste, and price it makes a world of difference to the customer.
The key problems that Gupta should focus on in the short term are the allegations from Center for Science and Environment (CSE) that threatens to tarnish the image of the company’s brand, and the survey result of the its consumers. In a fallen world, crisis is inevitable. When it does occur, for the most part, ones’ wish is for it to go away as fast as possible. While it is an uncomfortable predicament; nevertheless one ought to have a plan in place to reconcile the issue. In this case study Gupta, president and CEO of Coca Cola India found himself in the middle of a crisis that could either annihilate his company’s existence or regain its success as the lead in India. While all crises are unique, the crisis characteristic that Gupta faces
1. What aspects of U.S. culture and of Indian culture may have been causes of Coke’s difficulties in India?
1.) Why do companies like Pepsi need to globalize? What are the various ways in which foreign companies can enter a foreign market? What hurdles and problems did Pepsi Face when it tried to enter India during the 1980s?
The crisis that happened at Coca Cola was a very crucial incident. It affected issues such as brand and reputation, and the company has to take action so as not to ruin its image. Coca Cola is a company with a very strong brand name all over the world. An attack like this of the NGO can lead any company to problems. Although the Center for Science and Environment attacked the safety of Coca Cola India 's products, Coke was well within the Indian government 's legal limits for pesticide residue in beverages. The fact is that the country 's standards are weak, so the problem of Sanjiv Gupta and his team is how to rebuild trust. Furtherore, Gupta tries to find ways on how he could contribute on the creation of higher standards for food and
A company like Pepsi usually operates on the principle of Economies of Scale. In order to achieve a larger market canvas and operate on this minimum efficient scale of operation, it is very essential that the company covers more market and potential customers by moving from a saturated market to an unsaturated one. (E.g. Pepsi shifted its focus from
Coca-Cola has been around for generations with the same iconic taste, logo and symbolism. Its brand has represented family and the memories of good times, celebrations and comfort of being with those we love. Unfortunately, the company has not made good marketing decisions in the recent past and has lost relevancy. The purpose of this essay is to assess the conditions that created Coca-Colas marketing problems, evaluate the future of healthy beverages and non-carb drink brand extensions, and provide recommendations to the management.
THE POLITICAL ENVIRONMENT: The critical concern Political environment has a very important impact on every business operation no matter what its size, its area of operation. Whether the company is domestic, national, international, large or small political factors of the country it is located in will have an impact on it. And the most crucial & unavoidable realities of international business are that both host and home governments are integral partners. Reflected in its policies and attitudes toward business are a governments idea of how best to promote the national interest, considering its own resources and political philosophy. A government control's and restricts a company's
This is a detailed and comprehensive case describing the market entry of two global consumer product companies, PepsiCo and Coca-Cola Corporation into a Big Emerging Market (BEM), India. It traces the history of the challenges encountered by these two companies in the developing country environment of India from the late 1980s to the present time. Emphasis is placed on lessons learned by the two companies as they adjust to competing in an unfamiliar and rapidly-changing environment.
3.How did the company react to the changes in the business environment after the liberalization of the Indian economy in the early 1990s? Critically comment on the allegations that Pepsi deliberately did not adhere to most of
1. “India is not an easy market to understand and operate in.” Why is the Indian market untenable for Multinational Companies, yet at the same time attractive to global businesses? Discuss.
Coca Cola and Pepsi are the brands with the highest brand equities. Both, Coca Cola and Pepsi have gone through the highs and lows of their business to reach that position. Coca Cola’s marketing has been changing over time with more and more products being added every day, while Pepsi has implemented several smart marketing strategies to improve its turnover and profits. So, let’s see what were the marketing strategies implemented by Coca Cola and Pepsi.