Coke N Pepsi

CASE 1? 3 coulomb and Pepsi Learn to deal in India THE BEVERAGE BATTLEFIELD In 2007, the President and CEO of coca plant-Cola asserted that carbon has had a kinda rough agitate in India just now now it seems to be hold fastting its positioning right. Similarly, PepsiCos Asia antique asserted that India is the drinkable battle? old age for this decade and beyond. Even though the regimen had opened its doors wide to international companies, the mint about of the worlds dickens teras piano drinks companies in India during the 1990s and the commence of the raw(a) millennium was non a happy genius.Both companies experient a vaga attachment of unexpected problems and dif? cult situations that take them to screw that competing in India requires special knowledge, skills, and topical anesthetic expertise. In m any ways, puff and Pepsi managers had to learn the aphonic way that what engages here does non always work there. The surroundings in India is chall(a) enging, but were learning how to picnic it, says an industry leader. THE INDIAN SOFT DRINKS manufacturing In India, oer 45 sh ar of the batty drinks industry in 1993 yard birdsisted of short manufacturers. Their combined pipeline was worth $3. trillion dollars. Leading producers included Parle Agro (here later Parle), subtle Drinks, advanced Foods, and McDowells. They offered carbonate orange and skunk-lime beverage drinks. Coca-Cola bay window (hereafter Coca-Cola) was well(p) now a contradictory fund to most Indians at that sentence. The follow had been array in the Indian grocery from 1958 until its back deal in 1977 sp be-time activity a animosity with the government over its trade secrets. afterward decades in the grocery, Coca-Cola chose to leave India rather than dupe sex its equity stake to 40 go away and hand over its secret grammatical construction for the syrup.Following Coca-Colas departure, Parle became the mart leader and realised thri ving export franchise businesses in Dubai, Kuwait, Saudi Arabia, and Oman in the Gulf, along with Sri Lanka. It set up production in Nepal and Bangladesh and served distant pabulumstuffs in Tanzania, Britain, the Netherlands, and the United States. Parle invested heavily in image advertising at home, establishing the mandate of its ? agship patsy, Thums Up. Thums Up is a tar rush associated with a job well d champion and personalised success.These are persuasive messages for its take aim foodstuff of unseas unityd conjure aged 15 to 24 years. Parle has been careful in the onetime(prenominal) not to recall Thums Up a cola drink so it has avoided unionize comparison with turn and Pepsi, the worlds scratch leaders. The kookie drinks foodstuff place in India is composed of six product make outs cola, sloughy lemon, orange, soda ( change peeing), mango, and light(a) lemon, in coiffe of importance. Cloudy lemon and clear lemon to have ones timeher make up the lem on-lime ingredient. prior(prenominal) to the arrival of conflicting producers in India, the ? ht for local domi queen mole rat was between Parles Thums Up and sensitive Drinks Campa Cola. In 1988, the industry had infrago a dramatic shakeout following a government warning that BVO, an essential segment in locally produced yielding drinks, was carcinogenic. Producers each cat2994X_ circumstance1_001-017. indd cat2994X_ matter1_001-017. indd 10 had to resort to using a costly imported relief pitcher, estergum, or they had to ? nance their own R&D in well-orderedise to ? nd a substitute ingredient. Many failed and quickly withdrew from the industry.Competing with the segment of carbonate soft drinks is an other beverage segment composed of noncarbonated crop drinks. These are a call for downth industry because Indian poprs perceive fruit drinks to be natural, healthy, and tasty. The take brand has traditionally been Parles Frooti, a mango-? avored drink, which was i n resembling manner exported to franchisees in the United States, Britain, Portugal, Spain, and Mauritius. open up INDIAN MARKET In 1991, India experienced an economic crisis of extractional severity, triggered by the educate in imported oil legal injurys following the ? rst Gulf War (after Iraqs impact of Kuwait).Foreign exchange reserves fell as nonresident Indians (NRIs) cut back on repatriation of their savings, imports were tightly cont turn over across all sectors, and industrial production fell while in? ation was rising. A impertinent government took of? ce in June 1991 and introduced measures to stabilize the economy in the short term, then launched a complete restructuring program to ensure medium-term growth. Results were dramatic. By 1994, in? ation was halved, exchange reserves were greatly change magnitude, exports were growing, and foreign investors were seeing at India, a lede Big Emerging commercialise, with current eyes.The reverse gear could not be over declared as one commentator utter, India has been in economic depression for so long that everything except the snake-ch strengtheners, cows and the Taj Mahal has faded from the memory of the world. The Indian government was viewed as unfriendly to foreign investors. Outside investment had been allowed only in high-tech sectors and was almost entirely prohibit in consumer goods sectors. The principle of indigenous handiness had speci? ed that if an item could be obtained anyplace else within the country, imports of similar items were forbidden.As a result, Indian consumers had little choice of products or brands and no guarantees of quality or reliability. Following relaxation of the Indian economy and the dismantling of conglome govern trade rules and regulations, foreign investment increased dramatically. Processed foods, software, engineering plastics, electronic equipment, mogul generation, and petroleum industries all bene? ted from the policy changes. PEPSICO AND COCA-COLA encipher THE INDIAN MARKET Despite its grand race, India had not been considered by foreign beverage producers to be an important market.In appendage to the deterrents obligate by the government with its spartan trade policies, rules, and regulations, local drive for carbonated drinks in India was very low compared with countries at a similar stage of economic schoolment. In 1989, the average Indian was purchasing only one-third feeding bottles a year, compared with per-capita 8/27/10 158 PM Cases 1 An Overview economic breathing in rate of 11 bottles a year in Bangladesh and 13 in Pakistan, Indias 2 neighbors. PepsiCo PepsiCo entered the Indian market in 1986 under the name Pepsi Foods Ltd. n a enounce venture with two local partners, Voltas and Punjab Agro. As expected, very stringent conditions were imposed on the venture. gross revenue of soft drink slim to local bottlers could not exceed 25 percentage of lend gross revenue for the sunrise(prenomi nal)(a) venture, and Pepsi Foods Ltd. was required to process and distribute local fruits and vegetables. The government also mandated that Pepsi Foods products be promoted under the name Lehar Pepsi (lehar meaning wave). Foreign collaboration rules in force at the time command the use of foreign brand names on products mean for sales event wrong India.Although the requirements for Pepsis founding were considered stringent, the CEO of Pepsi-Cola worldwide said at that time, Were voluntary to go so far with India because we pauperism to make sure we get an earlyish entry while the market is developing. In retention with local tastes, Pepsi Foods launched Lehar 7UP in the clear lemon family unit, along with Lehar Pepsi. selling and dissemination were center in the north and atomic fig 74 around the study cities of Delhi and Mumbai (formally Bombay). An aggressive charge policy on the one-liter bottles had a knockout impact on the local producer, Pure Drinks.The m arket leader, Parle, preempted any barely set melts by Pepsi Foods by introducing a impertinent(a) 250-ml bottle that exchange for the same price as its 200-ml bottle. Pepsi Foods struggled to ? ght off local rival from Pure Drinks Campa Cola, Dukes lemonade, and various brands of Parle. The ? ght for say-so intensi? ed in 1993 with Pepsi Foods launch of two raw brands, practice of medicineal composition and Teem, along with the introduction of fountain sales. At this time, market shares in the cola segment were 60 percent for Parle (down from 70 percent), 26 percent for Pepsi Foods, and 10 percent for Pure Drinks. Coca-ColaIn May 1990, Coca-Cola attempted to reenter India by direction of a proposed joint venture with a local bottling bon ton owned by the giant Indian conglomerate, Godrej. The government moody down this application just as PepsiCos application was being approved. Undeterred, Coca-Cola make its return to India by joining forces with Britannia Industries India Ltd. , a local producer of snack foods. The new venture was called Britco Foods. Among local producers, it was believed at that time that CocaCola would not take market share away from local companies because the beverage market was itself growing consistently from year to year.Yet this whimsy did not stop individual local producers from trying to align themselves with the market leader. olibanum in July 1993, Parle offered to sell Coca-Cola its bottling vegetations in the quartet severalize cities of Delhi, Mumbai, Ahmedabad, and Surat. In addition, Parle offered to sell its tether brands Thums Up, Limca, Citra, Gold Spot, and Mazaa. It chose to retain ownership only of Frooti and a soda (carbonated irrigate) called Bisleri. FAST breastward TO THE NEW MILLENNIUM Seasonal Sales Promotions2006 Navratri urge In India the summer gentle for soft drink inspiration lasts 70 to 75 solar days, from mid-April to June.During this time, over 50 percent of the years carbona ted beverages are consumed across the country. The second-highest season for cat2994X_ side1_001-017. indd cat2994X_case1_001-017. indd 11 consumption lasts only 20 to 25 days during the cultural festival of Navratri (Nav pith nightclub and ratri means night). This traditional Gujarati festival goes on for nine nights in the state of Gujarat, in the Hesperian part of India. Mumbai also has a signi? tip Gujarati population that is considered part of the patsy market for this contend. As the Regional marketing Manager for Coca-Cola India tated, As part of the call up localact local business plan, we have tried to involve the batch in Gujarat with Thums Up Toofani Ramjhat, with 20,000 free passes subjectd, one per Thums Up bottle. Toofan means a thunderstorm and ramjhat means lets dance, so together these words convey the psyche of a fast dance. There are a number of retail on-site activities too, such(prenominal)(prenominal) as the buy oneget one free scheme and well-dis posed blows where one can win a free trip to Goa. (Goa is an independent Portuguesespeaking state on the west coast of India, famed for its beaches and tourist resorts. For its part, PepsiCo also participates in yearbook Navratri celebrations through and through grassive sponsorships of garba competitions in selected venues in Gujarat. (Garba is the name of a dance, done by women during the Navratri festival. ) The Executive Vice President for PepsiCo India commented For the ? rst time, Pepsi has trussed up with the Gujarati TV express, Zee Alpha, to beam Navratri Utsav on all nine nights. Utsav means festival. Then there is the mega offer for the pack of Ahmedabad, Baroda, Surat, and Rajkot where every re? ll of a case of Pepsi 300-ml. ottles impart fetch one kg of Basmati rice free. These four cities are turn up in the state of Gujarat. Basmati rice is considered a premium quality rice. later the initial purchase of a 300-ml bottle, consumers can get re? lls at redu ced rank at select stores. The TV Campaign Both Pepsi-Cola and Coca-Cola engage in TV drivings employing local and regional festivals and sports events. A summer travail featuring 7UP was launched by Pepsi with the objectives of growing the family and inninging brand awareness. The date was chosen to coincide with the India Zimbabwe unmatched-Day play serial creationation.The new campaign slogan was Keep It Cool to accent the product attribute of refreshment. The national campaign was to be reinforced with regionally adapted TV campaigns, outdoor activities, and retail promotions. A 200-ml bottle was introduced during this campaign in order to increase frequency of purchase and masses of consumption. Prior to the introduction of the 200-ml bottle, most soft drinks were interchange in 250-ml, 300-ml, and euchre-ml bottles. In addition to 7UP, Pepsi Foods also introduced Mirinda Lemon, Apple, and Orange in 200-ml bottles.In the past, glory actors Amitabh Bachchan and G ovinda, who are celebrated male spark advances of the Indian movie industry, had endorsed Mirinda Lemon. This world-famous industry is referred to as Bollywood (the Hollywood of India based in Bombay). Pepsis Sponsorship of play and Football (Soccer) After India won an gravid victory in the IndiaEngland NatWest One-Day cricket series ? nals, PepsiCo launched a new ad campaign featuring the batting sensation, Mohammad Kaif. PepsiCos line-up of other cricket celebrities includes Saurav Ganguly, Rahul Dravid, Harbhajan Singh, Zaheer Khan, V .S. Laxman, and Ajit Agarkar. All of these players were . V part of the Indian team for the World loving cup Cricket Series. During the two months of the Series, a new product, Pepsi Blue, was 8/27/10 158 PM take up 6 Supplementary Material marketed comprehensive. It was positioned as a limited edition, icy-blue cola sold in 300-ml, returnable glass bottles and 500-ml plastic bottles, priced at 8 rupees (Rs) and Rs 15, respectively. In additio n, commemorative, nonreturnable 250-ml Pepsi bottles priced at Rs 12 were introduced. One rupee was tinge to US 2. 54 cents in 2008. ) In addition to the sponsorship of cricket events, PepsiCo has also taken advantage of World Cup soccer fever in India by featuring football game heroes such as Baichung Bhutia in Pepsis celebrity and music-related advertising communications. These ads have football players pitted against sumo wrestlers. To consolidate its investment in its promotional campaigns, PepsiCo sponsored a music picture with celebrity endorsers including the Bollywood stars, as well as several nationally known cricketers.The new music tv aired on SET Max, a satellite channel broadcast mainly in the northerly and western parts of India and popular among the 1525 year age gathering. Coca-Colas Lifestyle Advertising While Pepsis promotional efforts focuse on cricket, soccer, and other athletic events, Coca-Colas India strategy focuse on relevant local idioms in an effor t to make wet a affiliation with the juvenility market. The urban youth buns market, known as India A, includes 1824 year olds in study metropolitan areas. Several ad campaigns were used to collection to this market segment.One campaign was based on use of gaana music and ballet. (Gaana means to sing. ) The ? rst ad execution, called Bombay Dreams, featured A. R. Rahman, a famous music coach. This approach was very lucky among the lead audience of young people, increasing sales by about 50 percent. It also won an Ef? Award from the Mumbai Advertising Club. A second execution of blows southern strategy was Chennai Dreams (Chennai was formerly called Madras), a 60-second feature ? lm targeting consumers in Tamil Nadu, a region of southern India. The ? m featured Vijay, a youth scene who is famous as an actor in that region of south India. another(prenominal) of the 60-second ? lms featured actor Vivek Oberoi with Aishwarya Rai. Both are famous as Bollywood movie stars. Ais hwarya won the deteriorate World crown in 1994 and became an heartbeat hit in Indian movies after deciding on an acting career. This ad showed Oberoi trying to hook up with Rai by deliberately leaving his mobile resound in the taxi that she hails, and then life history her. The ad message aimed to emphasize con? dence and optimism, as well as a theme of seize the day. This campaign used print, outdoor, point-of-sale, restaurant and grocery chains, and local promotional events to tie into the 60-second ? lm. While awareness of soft drinks is high, there is a need to build a deeper brand connect in urban centers, according to the Director of trade for CocaCola India. Vivek Oberoiwhos an up and coming star today, and has a wholesome, energetic imagewill help build a stronger bond with the youth, and make them feel that it is a brand that plays a role in their life, just as much as Levis or Ray-Ban. In addition to promotions focused on urban youth, Coca-Cola India worked hard to bu ild a brand preference among young people in country-style target markets. The campaign slogan aimed at this market was thanda matlab Coca-Cola (or cool means Coca-Cola in Hindu). Coca-Cola India calls its rural youth target market India B. The choice objective in this market is to grow the generic soft drinks category and to develop brand preference for cytosine. The thanda (cold) campaign successfully propelled vitamin C into the number troika position in rural markets. cat2994X_case1_001-017. ndd cat2994X_case1_001-017. indd 12 Continuing to judicial system the youth market, coulomb has opened its ? rst retail outlet, blushful Lounge. The Red Lounge is touted as a one-stopdestination where the youth can spend time and consume Coke products. The ? rst Red Lounge pilot outlet is in Pune, and based on the feedback, more outlets will be rolled out in other cities. The sofa sports red color, keeping with the theme of the Coke logo. It has a giant LCD television, video game s, and Internet sur? ng facilities. The bushwhack offers the entire range of Coke products.The bon ton is also using Internet to append its reach into the everyday domain through the Web site www. myenjoyzone. com. The company has created a special online Sprite-itude zone that provides consumers opportunities for online gaming and expressing their creativity, keeping with the no-nonsense attitude of the drink. Coca-Colas speci? c marketing objectives are to grow the percapita consumption of soft drinks in the rural markets, confiscate a larger share in the urban market from competition, and increase the frequency of consumption.An affordability plank, along with introduction of a new 5-rupee bottle, was designed to help achieve all of these endings. The Affordability Plank The purpose of the affordability plank was to get up affordability of Coca-Colas products, bringing them within arms reach of consumers, and thereby promoting regular consumption. eliminaten the very low percapita consumption of soft drinks in India, it was expected that price reductions would expand both the consumer base and the market for soft drinks. Coca-Cola India dramatically reduced prices of its soft drinks by 15 percent to 25 percent nationwide to encourage consumption.This move followed an earlier regional action in North India that reduced prices by 1015 percent for its carbonated brands Coke, Thums Up, Limca, Sprite, and Fanta. In other regions such as Rajasthan, western and eastern Uttar Pradesh, and Tamil Nadu, prices were slashed to Rs 5 for 200-ml glass bottles and Rs 8 for 300-ml bottles, down from the subsisting Rs 7 and Rs 10 price points, respectively. Another initiative by Coca-Cola was the introduction of a new size, the mini, expected to increase total volume of sales and account for the major chunk of Coca-Colas carbonated soft drink sales.The price reduction and new production launch were announced together in a new television ad campaign for Fanta and Co ke in Tamil. A 30-second Fanta spot featured the brand ambassador, actress Simran, well-known for her dance sequences in Hindi movies. The ad showed Simran stuck in a traf? c jam. Thirsty, she tosses a 5-rupee coin to a wayside stall and signals to the vendor that she wants a Fanta Mini by pointing to her orange dress. (Fanta is an orangeade drink. ) She gets her Fanta and sets off a chain reaction on the move street, with everyone from school children to a traditional nani mimicking her action. Nani is the Hindi word for grandmother. ) The director of marketing commented that the company wanted to make consumers sit up and take notice. A NEW return CATEGORY Although carbonated drinks are the spine of both Cokes and Pepsis product line, the Indian market for carbonated drinks is now not growing. It grew at a compounded annual growth rate of only 1 percent between 1999 and 2006, from $1. 31 one million million to $1. 32 billion. However, the overall market for beverages, whic h includes soft drinks, juices, and other drinks, grew 6 percent from $3. 15 billion to $3. 4 billion. To encourage growth in demand for bottled beverages in the Indian market, several producers, including Coke and Pepsi, have 8/27/10 158 PM Cases 1 An Overview launched their own brands in a new category, bottled pissing system. This market was valued at 1,000 Crores. 1 Pepsi and Coke are responding to the declining popularity of soft drinks or carbonated drinks and the increased focus on all beverages that are non-carbonated. The ultimate goal is leadership in the packaged weewee supply market, which is growing more rapidly than any other category of bottled beverages.Pepsi is a signi? angle player in the packaged water market with its Aqua? na brand, which has a signi? cant share of the bottled water market and is among the top three retail water brands in the country. PepsiCo consistently has been working toward reducing its dependence on Pepsi Cola by bolstering its non-co la portfolio and other categories. This effort is aimed at fashion the company more broad-based in category growth so that no wiz product or category becomes the key determinant of the companys market growth.The non-cola segment is said to have freehand(p) to contribute one-fourth of PepsiCos overall business in India during the past three to four years. Previously, the multinational derived a major chunk of its growth from Pepsi-Cola. Among other categories on which the company is focusing are fruit juices, juice-based drinks, and water. The estimated fruit juice market in India is approximately 350 Crores and growing month to month. One of the key factors that has triggered this trend is the emergence of the mass luxury segment and increasing consumer spirit about health and wellness. Our hugely successful international brand Gatorade has gained momentum in the country with consumers embracing a modus vivendi that includes sports and exercise. The emergence of high-quality g ymnasiums, ? tness and aerobic centres mirror the ? tness trend, said a spokesperson. Coca-Cola introduced its Kinley brand of bottled water and in two years achieved a 28 percent market share. It initially produced bottled water in 15 places and later grow to another 15 plants. The Kinley brand of bottled water sells in various pack sizes 500 ml, 1 liter, 1. 5 liter, 2 liter, 5 liter, 20 liter, and 25 liter.The smallest pack was priced at Rs 6 for 500 ml, while the 2-liter bottle was Rs 17. The current market leader, with 40 percent market share, is the Bisleri brand by Parle. former(a) competing brands in this segment include Bailley by Parle, Hello by Hello mineral Waters Pvt. Ltd. , Pure Life by Nestle, and a new brand launched by Indian Railways, called Rail Neer. CONTAMINATION ALLEGATIONS AND water supply USAGE Just as things began to look up for the American companies, an environmental shaping claimed that soft drinks produced in India by Coca-Cola and Pepsi contained sig ni? cant levels of pesticide residue.Coke and Pepsi denied the charges and argued that extensive use of pesticides in tillage had resulted in a minute detail of pesticide in sugar used in their drinks. The result of tests conducted by the Ministry of Health and Family well-being showed that soft drinks produced by the two companies were risk-free to drink under local health standards. Protesters in India reacted to reports that Coca-Cola and Pepsi contained pesticide residues. Some states announced fond(p) bans on Coke and Pepsi products. When those reports appeared on the front pages of newspapers in India, Coke and Pepsi executives were con? ent that they could overcompensate the situation. But they stumbled. 1 One Crore cat2994X_case1_001-017. indd cat2994X_case1_001-017. indd 13 10,000,000 Rupees, and US$1 Rs48, so 1,000 Crore US$208,300. They underestimated how quickly events would spiral into a nationwide scandal, misjudged the speed with which local politicians would se ize on an Indian environmental conventions report to attack their global brands, and did not respond swiftly to quell the anxieties of their customers. The companies organise committees in India and the United States, working in tandem on legal and public dealings issues.They worked around the clock fashioning rebuttals. They commissioned their own laboratories to conduct tests and waited until the results came through before commenting in detail. Their approaches back? red. Their hesitancy to give details fanned consumer suspicion. They became bogged down in the technicalities of the charges sooner of focusing on winning back the support of their customers. At the start, both companies were un hustling when one state after another announced partial derivative bans on Coke and Pepsi products the drinks were prevented from being sold in government of? es, hospitals, and schools. Politicians exploited the populist potential. In hindsight, the Coke communications director said sh e could see how the environmental separate had picked Coca-Cola as a way of attracting prudence to the broader problem of pesticide contamination in Indian food products. Fringe politicians will cover up to be publicly hostile to big Western companies, regardless of how eager they are for their investment, she said. Failing to anticipate the political potential difference of the incident, Coke and Pepsi initially hoped that the crisis would blow over and they adopted a policy of silence. here(predicate) people interpret silence as guilt, said an Indian public relations expert. You have to roll up your sleeves and get into a street ? ght. Coke and Pepsi didnt understand that. Coca-Cola eventually decided to go on the attack, though indirectly, giving slender brie? ngs by executives, who questioned the scienti? c credentials of their products accusers. They tell reporters to Internet blogs full of entries that were uniformly proCoke, and they transfer out the cell phone numbe r for the director of an organization called the Center for saneness and Balance in Public Life.Emphasizing that he was not being paid by the industry, Kishore Asthana, from that center, said, One can drink a can of Coke every day for two years before taking in as much pesticide as you get from two cups of tea. The situation act to spin out of control. Newspapers printed images of cans of the drinks with headlines like noxious cocktail. News channels broadcast images of protesters burbling Coke down the throats of donkeys. A fault president for CocaCola India said his heart sank when he ? rst heard the accusations because he knew that consumers would be tardily confused. But even terminology like P. P. B. parts per billionis dif? cult to comprehend, he said. This makes our job very challenging. PepsiCo began a public relations offensive, placing large advertisements in day-to-day newspapers saying, Pepsi is one of the safest beverages you can drink today. The company ackn owledged that pesticides were submit in the groundwater in India and found their way into food products in general. But, it said, compared with the permitted levels in tea and other food products, pesticide levels in soft drinks are negligible. After all the bad press Coke got in India over the pesticide content in its soft drinks, an active group in California launched a campaign say at U. S. college campuses, accusing CocaCola of India of using singular groundwater, lacing its drinks with pesticides, and supplying farmers with toxic waste used for fertilizing their crops. According to one report, a plant that 8/27/10 158 PM Part 6 Supplementary Material produces 300,000 liters of soda drink a day uses 1. 5 million liters of water, enough to meet the requirements of 20,000 people.The issue revolved around a bottling plant in Plachimada, India. Although the state government tending(p) Coke permission to build its plant in 1998, the company was obliged to get the locally elected small town councils go-ahead to exploit groundwater and other resources. The village council did not renew permission in 2002, claiming the bottling operation had depleted the farmers drinking water and irrigation supplies. Cokes plant was unkindly until the corporation won a court ruling allowing them to reopen.The reopening of the plant in 2006 led students of a major midwestern university to call for a ban on the sale of all Coca-Cola products on campus. According to one source, more than 20 campuses banned Coca-Cola products, and hundreds of people in the United States called on Coca-Cola to confining its bottling plants because the plants drain water from communities throughout India. They contended that such irresponsible practices rob the poor of their inherent right to drinking water, are a source of toxic waste, cause dangerous harm to the environment, and threaten peoples health.In an attempt to stem the controversy, Coca-Cola entered talks with the Midwestern univer sity and agreed to cooperate with an independent enquiry assessment of its work in India the university selected the launch to conduct the research, and Coke ? nanced the study. As a result of the proposed research program, the university agreed to go on to allow Coke products to be sold on campus. In 2008 the study inform that none of the pesticides were found to be present in processed water used for beverage production and that the plants met governmental restrictive standards.However, the report voiced concerns about the companys use of sparse water supplies. Coca-Cola was asked by the Delhi-based environmental research group to consider concludeting down one of its bottling plants in India. Cokes reception was that the easiest thing would be to shut down, but the solution is not to run away. If we shut down, the area is still going to have a water problem. We want to work with farming communities and industries to reduce the amount of water used. The controversies highli ght the challenges that multinational companies can pillow slip in their overseas operations.Despite the huge popularity of the drinks, the two companies are often held up as symbols of Western cultural imperialism. QUESTIONS 1. The political environment in India has proven to be tiny to company performance for both PepsiCo and Coca-Cola India. What speci? c aspects of the political environment have play key roles? Could these effects have been judge prior to market entry? If not, could developments in the political arena have been handled break-dance by each company? 2. clock of entry into the Indian market brought unalike esults for PepsiCo and Coca-Cola India. What bene? ts or disadvantages accrued as a result of earlier or later market entry? 3. The Indian market is enormous in terms of population and geography. How have the two companies responded to the cat2994X_case1_001-017. indd cat2994X_case1_001-017. indd 14 untainted scale of operations in India in terms of product policies, promotional activities, set policies, and dispersal arrangements? 4. Global localization (glocalization) is a policy that both companies have mplemented successfully. Give examples for each company from the case. 5. How can Pepsi and Coke confront the issues of water use in the manufacture of their products? How can they defuse further boycotts or demonstrations against their products? How effective are activist groups like the one that launched the campaign in California? Should Coke address the group directly or just let the furor subside? 6. Which of the two companies do you think has better longterm prospects for success in India? 7.What lessons can each company draw from its Indian experience as it contemplates entry into other Big Emerging Markets? 8. chin wag on the decision of both Pepsi and Coke to enter the bottled water market instead of continuing to focus on their sum of money productscarbonated beverages and cola-based drinks in particular. 9. Most of l ate Coca-Cola has decided to enter the growing Indian market for energy drinks, forecasted to grow to $370 billion in 2013 from less than half that in 2003. The competition in this market is ? erce with completed ? rms including Red Bull and Sobe.With its new brand Burn, Coke initially targeted alternative distribution channels such as pubs, bars, and gyms rather than large retail outlets such as supermarkets. Comment on this strategy. This case was prepared by Lyn S. Amine, Ph. D. , Professor of market and foreign telephone line, Distinguished Fellow of the academy of Marketing Science, President, Women of the Academy of global transmission line, Saint Louis University, and Vikas Kumar, friend Professor, Strategic Management Institute, Bocconi University, Milan, Italy. Dr. Lyn S.Amine and Vikas Kumar prepared this case from public sources as a creation for classroom discussion only. It is not intended to illustrate either effective or ineffective handling of administrative problems. The case was revised in 2005 and 2008 with the authors permission. Sources Lyn S. Amine and Deepa Raizada, Market Entry into the Newly Opened Indian Market Recent Experiences of US Companies in the Soft Drinks Industry, in Developments in Marketing Science, XVIII, proceedings of the annual conference of the Academy of Marketing Science, Roger Gomes (ed. ) (Coral Gables, FL AMS, 1995), pp. 8792 Jeff Cioletti, Indian Government Says Coke and Pepsi Safe, Beverage World, kinfolk 15, 2003 Indian Group Plans Coke, Pepsi Protests After Pesticide Claims, AFP, celestial latitude 15, 2004 Fortune Sellers, Foreign Policy, May/ June 2004 International Pressure Grows to Permanently Close Coke Bottling adjust in Plachimada, PR Newswire, June 15, 2005 Indian Village Refuses Coca-Cola License to Exploit cornerstone Water, AFP, June 14, 2005 Why Everyone Loves to Hate Coke, Economist generation, June 16, 2005 PepsiCo India To emphasis on Non-Cola Segment, Knight Ridder Tribune Busines s News, family 22, 2006 For 2 Giants of Soft Drinks, A Crisis in a Crucial Market, The New York times, heroic 23, 2006 Coke and Pepsi Try to Reassure India That Drinks be Safe, The New York Times, August 2006 Catalyst The coruscate in Water Financial Times Limited, October 11, 2007 Marketing Coca-Cola Foraying Into Retail Lounge Format, Business Line, April 7, 2007 India Ops Now in Control, Says Coke Boss, The Times of India, October 3, 2007 Pepsi Repairing a Poisoned Reputation in India How the soda ash Giant Fought Charges of Tainted Products in a Country Fixated on its Polluted Water, Business Week, June 11, 2007, p. 48 Coca-Cola Asked to Shut Indian Plant to Save Water, International Herald Tribune, January 15, 2008 Coca Cola A Second pecker at Energy Drinks, DataMonitor, January 2010. 8/27/10 158 PM