Cultural, environmental, social, technological, political and legal forces were the main drivers of the changing marketing environment of Coca Cola. Before Neville Isdell was brought out of retirement in 2004, Coca Cola’s main product focus was single mindedly devoted to the traditional cola, producing ‘syrupy concentrate for bottlers, under license, to transform into the world’s favourite drink.’(Jobber, 2010) But in the face of changing consumer’s attitudes towards soft drinks and the pushing of healthier choices by the state governments, (Fresh! Healthy Vending, 2010) Coca Cola was slowly losing out to PepsiCo, which diversified their product line to include diet and non sugar options (NSW Government, 6 May 2010). PepsiCo also initiated the acquisition of Tropicana for $3.3Billion in 1998 (CNN Money, 1998), setting itself up as the largest producer of branded juices for the health conscious in the USA. Subsequent acquisitions of Quaker Oats, Gatorade, Lay’s and Aquafina positioned itself as the world’s 4th largest Food & Beverage (F&B) company with sales of US$22000Million; as compared to Coca Cola, which was ranked 13th, with sales of US$8191Million, solely from sales of Beverages.( Top 100 Food & Beverage Company 2010, 2010) PepsiCo advanced with technology, with investments in upgrading its internal structure with Enterprise Resource Planning (ERP) systems from SAP (Cnet News, 2004), to cut cost and streamline operations. Coca Cola, on the other hand, continued licensing bottlers to bottle the drinks, each with their own system of ERP (Computer World.com, 2004) (ERP-BI, 2010). This not only causes the synchronization and delivery of information to be slow, it also shows the lack of investment Coca Cola has on technological advancements and marketing solutions. Coca Cola has been generally apathetic to the environment with a lack of social conscience towards the people of India. Coca Cola’s bottling plant has been accused of irresponsible chemical waste dumping from their bottling plants in India and distributing toxic waste to uneducated farmers as fertilizers with Heavy Metal Contaminants of Lead and Cadmium (India Resource.Org, 2004). Not only did it affect the soil which the farmers depended on for their livelihood, the contaminants were adsorbed into the vegetables planted on the soil and fertilizers, contaminating and rendering their produce unsafe for consumption. Toxic waste dumping was only stopped when the state government ordered Coca Cola to do so (India Resource Centre, 2004). PepsiCo & Coca Cola’s need for large amount of water for the production of their soft drinks has also caused water shortages in India (About.com, 2010). To address this problem, PepsiCo in 2003 launched a country-wide program to achieve a “positive water balance” in India by 2009(Wikipedia, 2010). Coca Cola’s bottling company was ordered to cease operations and is still fighting to regain their plant license. Indiscriminate drawing of water underground with no proper filtration system has also caused high levels of contaminants leaked into the in the bottled Coke. Tests done by the Government of India found presence of Pesticide and other poisonous contaminants, 36 times over the legal permissible limits. Coca-Cola had registered 11 percent drop in sales after the pesticide allegations were made in 2003. Again, the case was brought to court, with no corrective action on Coca Cola’s part. The permissible limits were re-established and cleared only after Pesticide limits in soft drinks were done on samples from India. (Wikipedia, 2010) (About.com, 2010) In conclusion, before Mr Isdell came on board, Coca Cola’s response to the evolving marketing environment was slow and short sighted, with a backward looking mentality; while PepsiCo was more far sighted with diversification plans and investments in technological advances.
PepsiCo has a higher level of market orientation as compared to Coca Cola. PepsiCo is a customer and...
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