CASE 1- 3 Coke and Pepsi Learn to Compete in India

         The political environment of India was very tough for both Pepsi and Coke, as this system had very strong Indian government, which promoted nationalism. That’s why there were strict trade rules and regulation in India for the foreign companies. There were many policies in India, which did not allow certain aspects of business. Moreover, the government also promoted local products over international products, which made life difficult for Pepsi and Coke, when they entered in Indian market.

        The results for Pepsi and Coke were different and these results of market entry were mixed in nature. For instance, Pepsi entered the market before Coke, so their application was approved, but Coke’s application was denied that time. So, Pepsi did have the advantage of entering first in the market to get attraction and attention of consumers. But it was difficult too for Pepsi, as carbonated beverages products were not being consumed in the market. On the other hand, when Coke entered the market, a competitor has already developed a carbonated drinks market, which was beneficial for Coke.

         The policies for doing business in India were diversified by both companies. For instance, they grabbed the attention of customers by participating in local social, cultural and sports events. One example was the Navratri Campaign in 2006, as this Navratri event continued for more than 20 days in India. Other than that, the companies also participated in sporting events through sponsorships. They sponsored Football as well as Cricket events across India. Coke changed its pricing policy to be more affordable, where Pepsi used to come up with new size products to attract consumers.

        The term “glocalization” means that a global brand accommodating the local market needs and demands. The specific example for Pepsi in the case is that they came up with a joint venture with the Indian local partners like a joint venture with Voltas and Punjab Agro, and they also came up with new name called “Lehar Pepsi”. Similarly, Coke also partnered with a local Indian company Godrej. Moreover, Coke used Bollywood stars in their ads to attract local customers.

        The first important thing for both companies was to engage with groups, who were active in boycotts, and ask them to see their prevention strategies so that they can know more about the company, and negative image spreading can be stopped. On the other hand, they should have looked at the fact that if their consumers looking for any change in the policy, and then they should have done that for satisfaction of customers. These strategies could help both companies to rescue the level of boycotts against them.

        Looking at the case, it can be said that long term prospects and opportunities for success looked more obvious for Pepsi as compared to Coke. Their entry in the Indian market was earlier than Coke so they were more renowned and having more market share. The Coca Cola Company had rifts with Indian government and chances of their long term growth were in danger due to this. However, by following the footprints of Pepsi, they can also catch up in the future.

        The entry in India came with so many lessons for both companies. Now, next time before moving into a foreign market, they must analyze and research the local government system, their rules and regulations to see if environment is suitable for them or not. They must analyze the legal and environmental aspects of their business in the targeted country so that they know what to expect in this regard. Moreover, they should assess the market in detail and know all relevant aspects of the business to be sure that if going into certain market is viable or not.

        The decision of going with the bottled market was a good one for both companies. It was a good decision because growth rate of the carbonated drinks market was lot lower than the bottled water market. Moreover, the Indian consumers were becoming more health conscious and use of bottled water was increasing with the passage of time. So, covering this market was logical and strategically beneficial for Pepsi and Coke, as it has more growth opportunities.

            This strategy of targeting alternative distribution channels was a good one from Coke because when market has a fierce competition for any product, then it is never easy to compete with such products on mass level. So, their strategy to go with distribution channels like bars, pubs etc was great rather than directly selling the product in mass retail market, where great competition was there for them in shape of companies like Sobe and Red Bull. This start by Coca Cola had more chances of success rather getting failed.