Volume 2, Issue 2 (February 2012)
“COCA COLA IN INDIA: A STUDY ON PRODUCT PORTFOLIO AND DISTRIBUTION ADAPTATION” Prof. Ray Titus* Nagabhushana**
The research study was conducted to learn the localization strategy of global beverage company Coca Cola in terms of two of its marketing mix variables, namely, the product portfolio on offer and the distribution process. In the process detailed information was collected on products launched, sales and distribution practices followed by the company, the working style of the retail outlets that stocked and retailed Coca Cola products, and to a limited extent the psyche of the consumers. In addition the study also uncovered initiatives taken up by the top level management and the strategies they laid out to enhance the company’s market share and sales turnover. This research was conducted with the help of questionnaires that tried to find the satisfaction levels of the retailers regarding the support they enjoyed in terms of the products and services offered by Hindustan Coca Cola company. In addition retailers were also queried on what more they expected from the company, and the response of consumers towards Coca Cola’s products.
*Professor & Area Chairperson – Marketing, Alliance University, School of Business, Bangalore, India **Research Associate – Marketing, Alliance University, School of Business, Bangalore, India International Journal of Research in Finance & Marketing http://www.mairec.org 360
Volume 2, Issue 2 (February 2012)
There are research studies that document the transition of multinational companies into transnational companies that are highly responsive to stake holders concerns. In the past most of the multinational companies were focussed on trying to penetrate global markets with standardized products by calling it a ‘global offer’. In addition they also tried to reap the benefits of economies of scale and experience curve effects. Theodore Levitt (1984) proposed to multinational companies that they continue offering standardized products with the help of marketing strategies and not to design and sell customized or localised products. C.K Prahalad and Kenneth Lieberthal (2003) in their article “The end of corporate imperialism” have felt that western multinational companies could have done better by understanding the distinctive environment of emerging countries like India and China. They argued that these firms have been imposing concepts, products, ideas developed for their home country in foreign markets. They charged that these multinational firms could have targeted a smaller segment of relatively affluent customers who are at par with western consumers in terms of purchasing power and lifestyle. Researchers have also explored the various benefits of localization that accrue to a localized brand such as larger brand equity, customer satisfaction, and customer and employee commitment to the product or brand, or to the company. It’s been opined that localization strategies are very much required for value creation/addition, and hence it is termed as “value-based localization” instead of “cost-based localization” (Lalit M. Johri and Phallapa Petison, 2007). One of best theories on such localisation lines has been the integrationresponsiveness framework proposed by C.K Prahalad & Doz (1987) which has given great insight & recommendations for the MNC’s in managing integration pressure from home country & local responsiveness pressure from host country. Research conducted by Dr. Ming-Chu Yu (2005) has concluded that MNC’s can be classified based on the extent to which they are integrated with their head quarters and the degree of local responsiveness. The extremely integrated and highly local responsive MNC’s come under ‘Active subsidiaries’ category, subsidiaries with extreme local responsiveness and very less integration are named as Autonomous subsidiaries’...
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