In India, over 45% of the soft drinks industry consisted of small manufacturers in 1993.

It had players like Parle Agro, Pure Drinks, Modern foods & McDowells 1958-1977: Coca cola left India and Parle became the Leader with its brand Thums Up. 1988: BVO an essential ingredient in locally produced soft drinks. 1986: Pepsico entered Indian market with name Pepsi Foods Ltd in a joint venture with 2 local partners Voltas and Punjab Agro. 1989: Average consumption was 3 bottles a year in India.

1990: Coke re-entered Indian market with Godrej but was disapproved by the Government. New venture with Britannia named Britco Foods. Parle sold its bottling plants and sold few of its brands to Coca cola. To encourage growth in demand for bottled beverages in the Indian market, several producers, including Coke and Pepsi, have launched their own brands in a new category, bottled water. This market was valued at 1,000 Crores.

An environmental organization claimed that soft drinks produced in India by Coca-Cola and Pepsi contained significant levels of pesticide residue. The issue revolved around a bottling plant in Plachimada, India. Coke want to work with farming communities and industries to reduce the amount of water used. The controversies highlight the challenges that multinational companies can face in their overseas operations. Despite the huge popularity of the drinks, the two companies are often held up as symbols of Western cultural imperialism.

India was seen as unfriendly to foreign investors In 1988, the industry had experienced a dramatic shakeout following a government warning that BVO, an essential ingredient in locally produced soft drinks, was carcinogenic LPG in 1991- New Industrial Policy, Trade rules & regulations simplified and foreign investment increased. Pepsi was sold under the name Lehar Coca Cola had to sell 40% of its stake and handover its secret formula for the syrup.

When one state after another announced partial bans on Coke and Pepsi products; the drinks were prevented from being sold in government offices,hospitals, and schools. Politicians exploited the populist potential. Fringe politicians will continue to be publicly hostile to big Western companies, regardless of how eager they are for their investment, she said.

Could these problems have been forecasted prior to market entry? Probably not, it is due to changing government and simultaneous change in the policies. How could these developments in the political arena have been handled differently? They could have agreed to the government norms and conditions and acted immediately when there was a an issue raised with water contamination allegations.

Pepsi Advantages Entered the market before coca cola and was able to gain foothold in the market while it was still developing. Disadvantages Were forced to change their name to Lehar Pepsi Government limited their soft drinks sales to less than 25% of total sales and was asked to concentrate on Fruits and vegetables. Struggled to fight off local competition

Coca- Cola - Advantages Emerging market Manufacturing facilities 4 bottling plants from Industry leader Parle. Parle sold its leading brands like Thums Up, Limca, Citra, Gold spot and Mazaa Disadvantages Local dominance Difficult to establish and increase market share

Catering to Indian Tastes carbonated and noncarbonated. It had concentrated on 6 soft drinks product segments which include Cola, Cloudy Lemon, Orange, Soda, Mango and clear lemon Introducing bottled water . Introducing 200 ml bottles.

During festive seasons Navaratri Sponsorship in various events and issuing free passes by Coca Cola as well as vacation offers. Both Pepsi-Cola and Coca-Cola engage in TV campaigns employing local and regional festivals and sports events. A summer campaign featuring 7UP was launched by Pepsi with the objectives of growing the category and building brand awareness. Pepsis Sponsorship of Cricket and Football (Soccer).

Pricing Policies Coca- cola cut its prices by 15-25% in 2003 to encourage consumption and gain market share. Pepsi adopted an aggressive pricing policy on 1ltr bottle which had a severe impact on the local producer like Pure Drinks. Distribution arrangements Production plants and bottling centers placed in large cities all around India Coca-Cola Marketing and distribution were focused in north and west around Delhi and Bombay Pepsi

Pepsi forms joint 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 with foreign collaboration rules.
In keeping with local tastes, Pepsi launched its Lehar 7UP in the clear lemon category.

Advertising is done during the cultural festival of Navrtri , a traditional festival held in the town of Gujarat which lasts for nine days. Pepsis most effective global localization strategy has been sponsoring world famous Indian athletes, such as cricket and soccer players.

First joined forces with the local snack food producer Britannia Industries India Ltd. in the early 90s. Formed a joint venture with the market leader Parle in 1993.

For the festival of Navratri, Coca-Cola issued free passes to the celebration in each of its Thumps Up bottles.
Also ran special promotions where people could win free vacations to Goa, a resort state in western India. Coca-Cola also hired several famous Bollywood actors to endorse their products, vivek oberoi and Aishwarya Rai

Pepsi and Coke can confront the issue of water use in the manufacturing of their products by the use of canal irrigation & rainwater harvesting. Then they can also put water recycling plant to treat the discharged water from their factories and then they can provide that water to farmers for their agricultural use. This way the ground water problem can also be solved and managed.

Coke can further defuse boycotts or demonstrations against their products in California by doing Adcampaigns in which they can ask the experts from the ministry of health to convey the message to the public that their products are safe and healthy.
They can also hire celebrities to do the Ads for their products because the public follows them. Coke should address the group directly because their company was not wrong and they should justify themselves.

Pepsi They have better marketing and advertising strategies. They are widely accepted and have more market share. They involve less in political conflicts. Coke had conflicts and also their market share is less than Pepsi.

Lessons learned by Pepsi

Celebrity appeal makes for exceptional Ads. They have to keep a watch on changing market trends. Pepsi realized how important it is to understand and keep with local tastes thus focusing on the clear lemon category which was a great hit in India.

Lessons learned by Coca-Cola They have to stay focused on the deals made with government and maintain healthy relationship with each other.

Invest in local products and improve advertising. It is extremely important for MNCs to follow the laws of the land, and not look for short-cuts establish special promotions where people could win free vacations

The Indian market for carbonated drinks was now not growing. It grew at a compounded annual growth rate of only 1 percent between 1999 and 2006, from $1.31 billion to $1.32 billion. To encourage growth in demand for bottled beverages in the Indian market, several producers, including Coke and Pepsi, launched their own brands in a new category, bottled water. This market was valued at 1,000 Crores. To respond to 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 water market, which is growing more rapidly than any other category of bottled beverages.

About 71% of urban youth intake Energy Drinks The target buyers for energy drinks continue to be the young and working Indian population. Energy drinks urban phenomena and supermarkets can be the primary channels of their sales. Apart from the retail stores, the alternative distribution channel of Pubs, bars and gyms may be effective as its target buyers are youth.