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Coca-Cola & Pepsi in India
Transcript of Coca-Cola & Pepsi in India
Exchange Reserves New Industry Policy
-Trade rules and regulation Timing of Entry Advantages
-no imagination of the products in the market
-bad economic environment Early Entry Late Entry Advantages
-more stable economic environment (parle)
-tight policies at the time Coca-Cola & Pepsi Strategies Product policies Promotional activities Pricing policies Distribution polices Glocalisation ‘Global localisation’ (glocalisation) is a policy that both companies have implemented successfully.
Used localized company names– Coca Cola India & Lehar Pepsi
Promotions were tailored to local preference – Bollywood& local sporting celebrities, The Navaratri festival
Tailored products to local preference – 7UP & Sprite
Products were priced according to locals’ affordability
Joint ventures with local companies – Parle, Voltas, Punjab Agro Introduced new products and new sizes (mini, 200ml, 300ml)
New product packaging
Pepsi introduced 7UP, followed by Coca-Cola introducing Sprite
Coca-Cola and Pepsi launched their own brand of bottled. The rural youths & metropolitan youths
Advertising campaigns take place on a nationwide-scale or on smaller scale when targeting people from certain age groups in certain parts of India
Advertising campaigns are held during special events, E.g. Navrarti Campaign in 2002
Events are broadcasted through a variety of media channels
Used Bollywood celebrities and sports stars to appeal to the locals Greatly affected by population trends
Pricing: Controllable factor
Coca-Cola introduced “affordability plank” in 2003, where prices were reduced by 15% to 25%
Pepsi later matched this to stay competitive Depends on market, industry and population trend Boycotts and Protest Environmental issues
Union issues Attitude towards Protest
Wait until the furor subside
Ask for a governmental investigations for solving the problems. Solutions
Project Anandana of the Coca Cola Company
Constant investment in further development of biodegradable bottles
Better communications channels with the consumer Coca-Cola’s Mistakes in Indian Market Timing of entry
- In the first entry (1957)
Coca-Cola did not seize the good opportunity (to be the market leader)
- In the second entry(1993)
Coca-Cola lost valuable market share (lost to Pepsi)
Coca-Cola encounter unpleasant entry condition (Indian disinvestment rule ) Broken its promise
It kept applying for the extension
It deny the voting rights of its upcoming stakeholders from India
The response to the government was focus on maintaining control over the operation and holding a strong financial position.( rather than comply the local clause) Comparison of Coca-cola and Pepsi So, in the long run, the winner is …….. Lessons and Recommendations Modes of Entry
Timing of Entry
Openness of Government Thank You! Any Questions? Time Line 1988 BVO Issue 1986
3 Bottles average 1990
First Gulf War Coke
Coke (100%) Reference Anderson, E & Gatignon, H 1986, ‘Modes of foreign entry: a transaction cost analysis and propositions’, Journal of International Business Studies, 17, (Fall), 1-25.
Joseph, J & Gerard, JT 2005, Drivers of success for market entry into China and India, University of Southern California, Los Angels.
Nagaraj, R 2000, ‘Indian economy since 1980: virtuous growth or polarization?’, Economic and Political Weekly, 35, (32), 2831-2839.
Pan, Y & Chi, PSK 1999, ‘Financial performance and survival of multinational corporations in China’, Strategic Management Journal, 20, 359-374 Jimmy