Coke and Pepsi Learn to Compete in India

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COKE AND PEPSI LEARN TO COMPETE IN INDIA

Brief Overview:

* The case of Coke and Pepsi in India is a lesson that all marketers can observe, analyze and learn from, since it involves so many marketing aspects that are essential for all marketers to take into consideration

* Pepsi entered into the Indian beverage market in July 1986 as a joint venture with two local partners, Voltas and Punjab Agro, forming “Pepsi Foods Ltd.” While Coca-Cola followed suit in 1990 with a joint venture with Britannia Industries India before creating a 100% owned company in 1993 and then ultimately aligning with Parle, the leader in the beverage industry. As both companies would soon discover, “competing in India requires special knowledge, skills, and local expertise…what works here does not always work there.” (Cateora & Graham, 2008, p. 604). In this article, analyze the primary obstacle to Pepsi and Coca-Cola’s success, discuss their strategies to cope with the issue, and ultimately propose my own suggestions to improvement.

Question 1: The political environment in India has proven to be critical to company performance for both PepsiCo and Coca-Cola India. What specific aspects of the political environment have played key roles? Could these effects have been anticipated prior to market entry? If not, could developments in the political arena have been handle better by each company?

* Indian government viewed as unfriendly to foreign investors. Outside investment had been allowed only in high-tech sectors and was almost entirely prohibited in consumer goods sectors. The “Principle of indigenous available” If an item could be obtained anywhere else within the country, imports of similar items were forbidden. This made Indian consumers had a little choice of products or brands and no guarantees of quality or reliability.

* Indian Laws, the government mandated that Pepsi’s products be promoted under the “Lehar Pepsi” name. For Coca-Cola, they attempted...
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