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1.

Indias political environment


India was seen as unfriendly to foreign investors for decades.
The Principle of "indigenous availability was the policy which banned the imports
being sold in India.
With the liberalization of Indian Government in 1991, new industrial policy was
launched and trade rules and regulations were simplified. This increased the
foreign investments including Coke and Pepsi.
Pepsi entered in 1986 while Coke attempted to re-enter in 1990 by means of joint
venture with giant Indian conglomerate- Godrej. Pepsi became Lehar Pepsi and
Coca- Cola merged with Parle and became Coca-Cola India.
i.
ii.
iii.
iv.
v.

Difficult exchange arrangements, tenets and directions


Prohibited use of outside brand name in India
Sales of soda pops focus to neighborhood bottlers couldn't surpass
25% offers of the wander
Required to prepare and convey nearby foods grown from the ground
Market was little in size

Could these impacts have been foreseen preceding business sector passage?
These impacts were most likely not be foreseen on account of speculation standards
in India which were vague and modifying amid the 1990s and execution of
government principles was conflicting
Could improvements in the political field have been taken care of better by every
organization?
With a specific end goal to stay away from a few confinements of Indian
government Coca-Cola could run new packaging plants as opposed to purchasing
out Parle, and along these lines wouldn't need to offer 49% of its value.
2.

Early and late entry


Pepsi (1986 early entry)
Advantages
i.
Pepsi had the first movers advantage and entered before Coca-Cola,
got 26% share of the overall industry by 2003
ii.
It had great product differentiation as they were easier to separate
from nearby items
Disadvantages
i.
Stricter directions were imposed by political factors Hence it changed
their name to Lehar Pepsi
ii.

Limitation of soda pop deals to 25% of aggregate deals by Government

iii.

There was tough rivalry with neighborhood brands

iv.
No encounters or no past cases of failure as compared to Coca Cola in
India
Early and late entry
Coca-Cola (1993 late entry)

Advantages
i.

Coca Cola bought 4 bottling plants from industry pioneer Parle

ii.
It acquired Parle's driving brands: Thumbs Up, Limca, Citra, and
so forth
iii.
There were 2 new pursuits with Parle to bottle and market
production

3.

Disadvantages
i.

Harder to establish market share with Pepsi because of intense


competition, hostile environment and because Pepsi had the first
movers advantage.

ii.

No allowance for equity buy back

Promotional activities
Pepsi
Price Pepsi had aggressive marketing strategy
Place It initially targeted around Delhi and Mumbai
Promotion Sponsorship at Navratri, TV campaign using sports and
celebrities, sales promotion
Product Different bottle size (200ml), fountain sales, 3 tastes of Mirinda,
Pepsi Blue, and sparkling water
Promotional activities
Coca-Cola

Price Coca Cola had affordable pricing strategy in India, It made huge
reductions up to 15-25%
in 2003
Place different target regions in India. In 1993 it was Delhi, Mumbai,
Ahmedabad and Surat.
Promotion Events, lifestyle focus, sales promotion, connection with youth
market, build brand preference, campaign slogans like Thanda matlab Coca
Cola. Opened retail outlet Red Lounge.
Product Acquired 5 brands from Parle, water, mini-sized bottles
4.

Globalization of Pepsi

Pepsi Foods Ltd. became Lehar Pepsi

Pepsi forms joint venture with two local partners

Pepsi held its advertising during the cultural festival of Navratri

It launched Lehar 7UP in order to correspond to local tastes

It sponsored world famous Indian athletes, such as various cricket and soccer
players
Glocalisation of Coca-Cola

Formed a joint venture with the giant indian conglomerate- Godrej.

Coca-Cola issued free passes to the celebration in each of its Thums Up


bottles for the cultural festival of Navratri

It held on-site activities where people could win a free trip to Goa

Strategy of building a connect using the relevant local idioms

Coca Cola hired several famous Bollywood actors to endorse their products

5. PepsiCo's utilization of water was the subject of contention in India in the early
and mid-2000s to some degree in light of the organization's claimed affect on water
use in a nation where water deficiencies are a perpetual issue. In this setting,
PepsiCo was seen by India-based ecological associations as an organization that
occupied water to make an optional item, making it an objective for pundits at the
time.
The Coca Cola Company used 290 billion liters of water in 2006, adequately alone to
meet the entire world's drinking water prerequisites for 10 days. This fresh water
was generally used to clean their apparatus in the era system, changing 66% of this
water into waste water. One must note this is done in a country where water
inadequacy is a little issue. Along these lines, both multi-national must 'take the bull
by the horn' and change the way they do certain frameworks without stowing
ceaselessly however being veritable. More powerful strategies for cleaning must be
found to waste less water and be more tried and true towards the Indian nation.
Coca-Cola has as of late reported an association of US $20 billion over three years
among them and the world untamed life sponsor on water conservation. This will
help in patching up the trust with the Indian masses keeping in mind the end goal to
win in the Indian market. A segment of corporate social obligation is basic for
associations to work better inside outside market.

Appalling consideration can hurt an association's reputation surely. This was


doubtlessly experienced by both PepsiCo and Coca Cola India. Though admonitory

sheets were made and uprightness tests were driven with a particular true objective
to evade support boycotts or shows against their things, this was deficient. Better
usage of Public Relations would have been an underlying stride. Having driven
perfection tests, the accompanying step would be that of passing on the results
capably. Denying the charges and after that demonstrating these tests could have
been felt as an incite. The use of authority proclamations and open days at the
generation lines showing the technique for example would have made both the
organization and the general populace more part. Additionally, endeavoring to deal
with the lawmaking body by underlining on corporate social obligation could have
grabbed government's trust and along these lines acquire a more secure position
consequently. Offering a rate of their advantages to help in building schools or
specialist's offices in India could have been an idea.

Fanatic social events, like the one in California, are able. They can be magnificent
accomplices moreover most exceedingly terrible foes for an association. Their effect
on the general Coke client is phenomenal as they accomplish the buyer particularly
through various activities; and subsequently these customers compel
creators/suppliers et cetera to make a move. Honestly, the campaigns in California
incited a couple bundling plants closing down and what's more the halting of
concurrences with Coca Cola.

Coke should address the social occasion particularly keeping up a vital separation
from charges of endeavoring to cover its activities and exercises. Thusly it would
shield itself and would in like manner have the ability to recoup its credibility and
continue gathering its photo by being proactive. Another inspiration driving why it
should do all things considered is to get trust of customers since it claims it has
nothing to conceal by being straightforward and giving an answer instead of sitting
tight for the gossipy goodies, charges and shame to fade away.
6. Long-term prospects
Pepsi
i.

More market share because of first movers advantage (23.5% vs. 16.5%)

ii.

It has wider and better market penetration

iii.

Its advertisement campaigns have been more successful


Coca-Cola

i.

It lags behind Pepsi with smaller market share

ii.

It has difficulties in relationships with government

Pepsi will be better in the long term prospects for success because of aforesaid
statements.

7.

Lessons from Indian experience

i.
Better assessment of political dangers and associations with government are
required
ii.
Better timing of nailing the target. Organizations require more precise
forecasting of consumption rates
iii.
Beneficial to stay aware of emerging patterns of consumer behavior and
market trends
iv.

Key variables of progress:

a.

Availability (taking care of nearby demand by expanding generation locally);

b.

Acceptability (building brand value);

c.
Affordability (valuing higher than nearby brands, however adjusting to
neighborhood conditions).

8. Since there was a growing trend of a transition from sedentary lifestyle to a


healthy lifestyle in India, adding new products to the product line was a wise move
by both the companies- Coca Cola and Pepsi. Hence both Coca Cola and Pepsi
entered the bottled water market instead of continuing to focus on their core
products- Carbonated beverages and cola based drinks in particular. Pepsi and Coke
responded to the declining popularity of soft drinks. The other categories they
focused were fruit juices, juice based drinks and water. Coca Cola introduced Kinley
brand of bottled water and achieved 28% market share in just 2 years.

9. Since the market is already flooded with energy drinks with Red Bull and Sobe in
India, and there is intense competition at the retail stores, targeting new distribution
channels initially like pubs, bars and gyms seems like a great idea and strategy for
brand awareness. Once the efficacy of the brand is tested at these alternative
distribution centers, Coca- Cola can gradually transcend into the retail stores since
the Coke Burn would already have its presence in the market and most of the
people who go to gyms will be aware of the product. Coca Cola can then adjust their
pricing strategy to cater to the demand created in the market for Coke Burn. Since
the energy drinks was estimated to grow to $370 billion in 2013 and it continues to
grow, adding newer products to the product line like Coke Burn would be really
beneficial for the company.