Coke And Pepsi Learn To Compete In India

5720 words - 23 pages

CASE 13 Coke and Pepsi Learn to Compete in India
In 2007, the President and CEO of Coca-Cola asserted that Coke has had a rather rough run in India; but now it seems to be getting its positioning right. Similarly, PepsiCo’s Asia chief asserted that India is the beverage battlefield for this decade and beyond. Even though the government had opened its doors wide to foreign companies, the experience of the world’s two giant soft drinks companies in India during the 1990s and the beginning of the new millennium was not a happy one. Both companies experienced a range of unexpected problems and difficult situations that led them to recognize that competing in India ...view middle of the document...

A new government took office in June 1991 and introduced measures to stabilize the economy in the short term, then launched a fundamental restructuring program to ensure medium-term growth. Results were dramatic. By 1994, inflation was halved, exchange reserves were greatly increased, exports were growing, and foreign investors were looking at India, a leading Big Emerging Market, with new eyes. The turnaround could not be overstated; as one commentator said, “India has been in economic depression for so long that everything except the snake-charmers, 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 prohibited in consumer goods sectors. The “principle of indigenous availability” had specified that if an item could be obtained anywhere 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 liberalization of the Indian economy and the dismantling of complicated trade rules and regulations, foreign investment increased dramatically. Processed foods, software, engineering plastics, electronic equipment, power generation, and petroleum industries all benefited from the policy changes.

In India, over 45 percent of the soft drinks industry in 1993 consisted of small manufacturers. Their combined business was worth $3.2 million dollars. Leading producers included Parle Agro (hereafter “Parle”), Pure Drinks, Modern Foods, and McDowells. They offered carbonated orange and lemon-lime beverage drinks. Coca-Cola Corporation (hereafter “Coca-Cola”) was only a distant memory to most Indians at that time. The company had been present in the Indian market from 1958 until its withdrawal in 1977 following a dispute with the government over its trade secrets. After decades in the market, Coca-Cola chose to leave India rather than cut its equity stake to 40 percent and hand over its secret formula for the syrup. Following Coca-Cola’s departure, Parle became the market leader and established thriving 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 markets in Tanzania, Britain, the Netherlands, and the United States. Parle invested heavily in image advertising at home, establishing the dominance of its flagship brand, Thums Up. Thums Up is a brand associated with a “job well done” and personal success. These are persuasive messages for its target market of young people aged 15 to 24 years. Parle has been careful in the past not to call Thums Up a cola drink so it has avoided direct comparison with Coke and Pepsi, the world’s brand leaders. The soft drinks market in India is composed of six product segments: cola,...

Other Papers Like Coke and Pepsi Learn to Compete in India

Mercedes and Bmw (Bayerische Motoren Werke) Compete in the Luxury Car Segment

602 words - 3 pages was selected. It was decided to classify the scholastic achievement levels of the business administration grades into three groups: above average, average, and below average, represented by final grade point scores of 3.0-1.0, 2.5-2.9999, and 2.0-2.4999 respectively (2.0 is needed for graduation, and 4.0 indicates that a graduate had all A grades when in college). The incomes of the 751 respondents were classified into four levels: low, lower

Growth in China and India Essay

538 words - 3 pages Factors was published. The standard includes implementation procedures for both pure and denatured ethanol. For volume or density correction from observed temperature to 60 °F, the implementation procedure given in API MPMS Ch. 11.1-2004 shall be used. Pure and Denatured fuel grade ethanol’s are considered “special applications” (formerly known as Table 6C or Table 54C) with an alpha coefficient of 0.000599/°F or 0.001078/°C for Pure

Mulitculturalism In "A Passage To India"

587 words - 3 pages Multiculturalism in „A Passage to India” written by E. M. Forster in 1924 Author: - Born in London 1879 as member of the upper middle class - Education at private schools and later King’s college in Cambridge - Famous Edwardian Novelist, Essayist, Biographer, Story Writer, Travel Writer concerned with restrictions placed on personal freedoms - Agnostic, liberal humanist and social critic, with a strong belief in friendship - Themes

How to Become Rich in India ?

665 words - 3 pages The divine expenditure of money in India Money is the only source which creates action, motion and emotion in every aspect. As a common man I have basic needs from food to clothes to shelter to car. That’s what every body dreams about. Well most of the majority in India is of common men who are no body in the book of dictionary. There lives are simple and there needs are same. They all have same goals and aspirations. There money is

Socio Cultural Barriers Faced by Coca-Cola in India and Solutions to Overcome the Issues


Convenience Stores and Gas Stations in India

580 words - 3 pages 23rd September 2016 – Navi Mumbai, India: Market Report on India present the latest report on “Convenience Stores and Gas Stations in India”, The report acts as an essential tool for companies active across the India's retail industry and for new players considering entering the market. Summary "Retail Sales of Convenience Stores (Including Independents) and Gas Stations in India: Market Size, Growth and Forecast to 2020" provides

Cash & Carries and Warehouse Clubs in India

547 words - 3 pages 21th September 2016 – Navi Mumbai, India: Market Report on India present the latest report on “Cash & Carries and Warehouse Clubs in India”, The report acts as an essential tool for companies active across the India's retail industry and for new players considering entering the market. Summary "Retail Sales of Cash & Carries and Warehouse Clubs in India: Market Size, Growth and Forecast to 2020" provides detailed historic and forecast

Soft Power in China and India

605 words - 3 pages Soft power refers to the ability of a nation to obtain outcomes that it desires through persuasion and more notably, attraction. Conversely, hard power refers to power obtained through coercion. Through various methods, India and China are two nations that have experienced an extreme increase in their position as soft powers. China has provided an attractive model for many other nations by serving as proof that modernization and

E-Government in India: Opportunities and Challenges

4714 words - 19 pages Monga, A. (2008). E-government in India: Opportunities and challenges, JOAAG, Vol. 3. No. 2 E-government in India: Opportunities and challenges Anil Monga1 Abstract Public administration, governed by bureaucratic structures built on rationale principles, that dominated the twentieth century, has failed to respond to the changing requirements of the present times. E-governance, which is a paradigm shift over the traditional approaches in

Religious and Gender Roles in Ancient India

647 words - 3 pages RELIGIOUS AND GENDER ROLES IN ANCIENT INDIA Bureaucracy is the key to establishing a successful empire. In Ancient India, their bureaucratic system was the Caste System which was developed for social, economic, cultural and religious reasons. In this system, you were born into a particular caste and it would never change. The Law of Manu states that “the Exceedingly Resplendent One [the Creator of the Universe] assigned separate duties to the

1.1 Explain Theories and Philosophical Approaches to How Children Learn and Develop

934 words - 4 pages crucial to a child’s development and are a key part of the way in which we build relationships later on in our lives. Jean Piaget Piaget thought that children think differently to adults, he believed that the way children think and learn is led by their age and stage of cognitive development. This is because learning is based on experiences that they build on as they become older. As children’s experiences change for example, a child who only ever

Related Essays

Coke And Pepsi Essay

876 words - 4 pages These days Coke and Pepsi are using the 4Ps of marketing mix (Price, Product, Place and Promotion) in such a way so that a good quality can be provided to the consumers at a reasonable price to attract the consumers towards their brands. Both the companies know that there is so much potential in the Indian soft drink industry and the can increase their sales by making good marketing strategies. So, they are spending a huge amount of money on

Coke Vs. Pepsi In 2006 Essay

2051 words - 9 pages , resulting in positive economic profits. To be sure, there was tough competition between Coke and Pepsi for market share, and this occasionally hampered profitability. For example, price wars resulted in weak brand loyalty and eroded margins for both companies in the 1980s. The Pepsi Challenge, meanwhile, affected market share without hampering per case profitability, as Pepsi was able to compete on attributes other than price. 3. Compare the

To Compete In Mining Is Important

543 words - 3 pages shorter and shorter and the upgrading of new equipment is faster and faster. Especially the development of large sized mining machines has no mature experience to learn from and there is not any mistakes allowed in the designing process, for this reason, the mining equipment manufacturing companies will have to lean on the integration of many kinds of technologies, improve designing efficiency and designing quality and improve the independent

Can Coke And Pepsi Sustain Their Profits In The Wake Of Flattening Demand And The Growing Popularity Of Non Carbonated Drinks?

633 words - 3 pages Despite flattening demand for carbonated beverages such as Coke and Pepsi, the increased popularity of noncarbonated beverages, greater demand from emerging markets, and Coke and Pepsi's absolute and comparative advantages over competition, each continues to produce profits that meet and exceed industry expectations. In 2012, Coke and Pepsi posted profits margins of 18.78% and 9.42% (Cho, 2013), respectively, clearly utilizing their advantages