Coke and Pepsi Learn to Compete in India

1. The political milieu in India has proven to be critical to bon ton performance for two PepsiCo and Coca-Cola India. What specific aspects of the political surround tolerate played key role? Could these make hurt been expect prior to commercialize entry? If not, could developments in the political bena have been handled pause by each company? Answer The political environment have played key role as follow Indian government viewed as unfriendly to foreign investors.Outside enthronement had been allowed only in high-tech sectors and was almost entirely prohibited in consumer goods sectors. The Principle of native available If an item could be obtained anywhere else within the country, imports of similar items were forbidden. This make Indian consumers had a little choice of products or brands and no guarantees of woodland or reliability. Indian Laws, the government mandated that Pepsis products be promoted under the Lehar Pepsi distinguish. For Coca-Cola, they seek to enter into Indian merchandise by joining with Parle and became Coca-Cola IndiaSome of these effects may have been anticipated, especially foreseeing the corruption within Indian government. take inning that into account more proactively might have helped Coca-Cola avoid hardships in the past. As far as the contamination issues goes, that might not have been so easy to anticipate. Both companies held their own when trying to prove their products were within full limits compared to other food products. They could developments in political arena Coke could add up to start new-fangled bottling plants instead of buying out Parle, and thus wouldnt agreed to rat 49% of their equity.2. Timing of entry into the Indian securities industry brought different results for PepsiCo and Coca-Cola India. What benefits or disadvantages accrued as a result of previous or later market entry? AnswerPepsi early entry than Coca-Cola so it essential be different in benefits and disadvantages betw een them in quantify of entry into the Indian market Pepsi Advantage It could enter into market to begin with Coca-Cola so it could gain a foothold in the market tour it was still developing. Disadvantages It was forced to change its name to Lahar Pepsi.And government limited its salving drink sales to less than 25% of total sales. Coca-ColaAdvantages It could buy 4 bottling plants from industry leader (Parle). It withal bought Parles leading brands such as Thums Up, Limca, Citra, Gold Spot and Mazaa. And it could set up 2 new ventures with Parle to store and market product. Disadvantages It denied to entry in Indian market until 1993 because Pepsi was already there, so it was not easy to institute the market character with Pepsi.3. The India market is rattling(a) in terms of population and geography.How have the two companies responded to the sheer collection plate of operations in India in terms of product policies, promotional activities, set policies, and distribu tion arrangements? Answer Product Policies Coca-Cola and Pepsi launched different product lines for attractive to the Indian consumer tastes. They started with product lines that were already available, such as cola, fruit drinks, and carbonated water. And they introduced new products such as Sprite and bottled water. Promotion Activities Pepsi and Coca-Cola adapted themselves to the topical anesthetic market with promotions.Pepsi They promoted heavily during the cultural festival of Navrarti by offering people baffle one kilo of Basmati rice with every refill of a cutting of Pepsi. This is an effective strategy to exchange between the old (rice) and the new (Pepsi). On the other side, Coca-Cola offers free passes, and giveaway as well as vacations to Goa, a famous resort in India for promoting its product. Pricing Policies Pepsi launched with an aggressive pricing constitution to attempt to baffle immediate market share from Indian rivals. For, Coca-Cola cut back prices nat ionwide by 15-25% to make them affordable and to access the market share easily.Distribution Arrangements Production plants and bottling centers were strategically placed in large cities all most India. They were more added as demand grew, along with new product lines. In Coca-Colas case, the JV with Parle provided access to its bottling plants and its products. By forming partnerships, both Coca-Cola and Pepsi were able to get initial access into the market.4. Global localization (glocalization) is a policy that both companies have implemented successfully. Give example for each company from the case.Answer Pepsi Pepsi forms occasion venture when first entering India with two local partners, Voltas and Punjab Agro, forming Pepsi Foods Ltd. In 1990, Pepsi Foods Ltd. changed the name of their product to Lehar Pepsi to conform to foreign collaboration rules. In go alonging with local tastes, Pepsi launched its Lehar 7UP in the clear lemon category. Moreover, Pepsi is most effecti ve glocalization strategy has been sponsoring reality famous Indian athletes. Coca-Cola Firstly, joined forces with the local snack food getr Britannia Industry Indai Ltd. in the early 90s.Then, Coca-Cola formed a join venture with the market leader Parle in 1993. For the festival of Navrartri, Coca-Cola issued free passes to the exultation in each of its Thums Up bottles. It in like manner ran special promotions where people could win free vacations to Goa, a resort state in western India. Furthermore, Coca-Cola also hired many famous Bollywood actors to guarantee its products.5. How can Pepsi and Coke front the issues of water use in the manufacture of their products? How can they defuse just boycotts or demonstrations against their products?How effective are activist groups like the once that dejeuner the campaign in California? Should Coke Address the group without delay or just let the furor subside? AnswerMany failures of both Pepsi and Coca-Cola experience due to t he unforeseen external environment, including the boycott placed on American and British Goods following the Second Gulf War in 2003. Firstly, Pepsi and Coca-Cola should have more sharpened on its products. The market still hasnt interpreted off so they need to penetrate harder. In 2003, Indias annual consumption rate was still a poor seven per person.Specifically, Pepsi exhausted very small amounts on its 7UP marketing campaigns in India due to its relatively low market size (4. 5%). Advertising dollars should be handle more freely and strategically if they want to see a make on investment. Next, they should be defined more specifically in their come in markets. Coca-Cola separates its markets as India A and India B. This is too broad and lacks focus. We can enjoin demographics by gender, race, age, interests, job, and location. Then, Coca-Cola entered the market at a wrong time because they had to agree to abide by all of the Foreign Investment Laws of that year.To avoid h aving to sell its 49% stake though, Coca-Cola should have agreed to set up Greenfield bottling units instead, as Pepsi did. Further, Coca-Cola lost valuable market share by entering the deglutition market after Pepsi. By the time Coca-Cola was fully owned in 1993, Pepsi had already amassed a 26% market share. By continuing to hand for extensions and attempting to deny voting rights for the Indian stake, Coca-Cola was only tarnishing its public image and destroying its human relationship with the government. When entering into a foreign market, maintaining a good relationship with the drove countrys government is crucial.6. Which of the two companies do you think has better long-term prospects for success in India? AnswerIn my opinion, Pepsi will fare better than Coca-Cola in the long run because Pepsi has better in marketing and advertising. Its also more widely accepted from consumers because it came in this market early so this could make Pepsi got more market share than Coca- Cola.7. What lessons can each company draw from its India experience as it contemplates into other Big Emerging Markets? AnswerFor Coca-Cola, firstly, it mustiness consider more in dealing with government and also establish a good relationship with government. And it must pay attention for investment in quality products. For Pepsi, it must keep their products with local taste, and it should be focus on market trends in that area, celebrity appeal makes for exceptional advertising, and it must keep up with emerging trends in the market as well.8. newsmonger on the decision of both Pepsi and Coke to enter the bottled water market instead of continuing to focus on their core products carbonated beverages and cola-based drinks in particular. AnswerPepsi and Coca-Cola did successful in continuing to research emerging trends and implementing them. Pepsi created smaller bottles to keep up with the trend of high frequency/ high volume consumption. Coca-Cola launched the minis in an effort for higher volume. So, they should keep a close watch on the advertising campaign effectiveness, and research on pleasant of the advertising for object to buy.This measure ensured that advertising dollars were being strategically allocated and not wasted. Moreover, they must to dwell of establishments primarily engaged in manufacturing non-alcoholic, carbonated beverages, mineral waters and concentrates and syrups for the manufacture of carbonated beverages. Establishments primarily engaged in manufacturing fruit juices and non-carbonated fruit drinks are classified in canned and Preserved Fruit and Vegetable Industry.