1) What aspects of US and Indian culture may have been a cause of Coke’s difficulties in India?
No two cultures are the same in the world. American culture is quite different from Indian culture. America has a mixture of different cultures while Indian culture is unique and has its own values.
Enormity of India
American is a fully developed country with primarily western culture. The country is also considered as a melting pot due to large-scale immigration from many different countries throughout its history. The cultural diversity is not so great as in India.
India is a big and poor developing country with different varieties in geographical features, resources, climate conditions and ancient civilizations including four major religions: Hinduism, Buddhism, Jainism and Sikhism. There is great cultural diversity throughout the country. The South, North, and Northeast each has own distinct cultures and almost every state has its own cultural niche.
In Indian rural areas, there is a high scarcity of drinking water. If those poor Indians can’t drink enough water, drinking Coke has no meaning to them. Rural consumption habit and buying capacity are also different from urban people. To most poor rural Indians, Coke is a luxury and may only afford to buy one bottle once a year.
Indians concern great values to trust and quality. For urban population, price sensitive consumers want the quality thing at cheap price and does not accept any price quality trade-offs.
There are different ways and styles of communication in each country. A message could be translated completely opposite to what was meant. US style communication may be completely not accepted in India. US has a low low-context culture in which communication is more direct and explicit without any implied or common rules. Yet India is a high-context culture in which communications has implied messages to be explained only by the context of the culture.
Around 26 different languages were spoken across India. Only 30% of the population knew English, and more than 40% were illiterate. As language is the key to express motions and ideas to let others understand clearly, linguistic differences also play a role for Coco-Cola difficulties in India whereas there is only one de facto national language English in US.
The flavor that Indians prefer will differ vastly from Americans. The Indians already has traditional drinks like Lassi, Lemon juice, Jeerawater etc and consumers were already got used to and satisfied. This explains why Coke in India is not as popular as in US.
Shared Values against Foreign Companies
Due to Indian’s colonial legacy, Indians distrust the big and foreign investors and object to the evils of capitalism and globalism. The foreign companies are believed to be greedy, devoted solely to profit, and uncaring about the health of the consumers.
There is a risk that business will be banned in India due to strong hold of regional activists and anti-globalization NGOs.
Geert Hofsted’s Cultural Dimensions
The following diagram is extracted from http://geert-hofstede.com/india.html which compares the five indexes between India and US in Hofsted Cultural Dimension Model.
There is a large difference between India and USA. India has a culture of hierarchy originated from caste system. The juniors will only follow the orders from the seniors. For low PD index in US, the power is distributed more equally and empowerment of employees is common.
US is strongly individualistic and India has a collectivist culture. Family is more important than work in India. The value of work was undervalued in India. Americans are more self-reliant and purse their own personal decisions without much regard to other family groups. Sometimes, Americans need to strike a balance between career and family. .
India has a...
References: 1. http://www.thecoca-colacompany.com/citizenship/index.html
2. Coca-Cola India, Tuck School of Business at Dartmouth, 2004-1-0085, Jennifer Kaye, T’05, under the direction of Professor Paul A. Argenti
3. Coca-Cola India Corporate Social Responsibility Strategy, Hadiya Faheem, 2009
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