Coke & Pepsi learn to compete in India
Case Study: Coke & Pepsi learn to compete in India
Timing of entry into the Indian market brought different results for PepsiCo and Coca-Cola India. What benefits or disadvantages accrued as a result of earlier or later market entry?
Coca-Cola (1990)
Benefits:
advantages as „Early-Follower“, possibility to use reliable market information that´s already existing take-over of standards position as international market leader
Disadvantages:
expert knowledge of competitors has to be overtaken gain trust of new customers as „another“ foreign company
PepsiCo (1986)
Benefits:
early entry while the market is developing achievement of a good market position enforcement of product standards early impact on local producers (26% market share for Pepsi Food)
Disadvantages:
high costs for tapping a new market local demand for carbonated drinks very low at that time
The Indian market is enormous in terms of population and geography. How have the two companies responded to the sheer scale of operations in India in terms of product policies, promotional activities, pricing policies and distribution arrangements?
Coca-Cola
Product policies: focus on all beverages that are non-carbonated
Kinley Brand of bottled water introduction of new brands, introduction of new size „Mini“
Promotional activities: build a connection with the youth market
Business plan: “Think local - act local”:
Lucky draws where you can win a free trip to Goa, TV campaigns, employing local and regional festivals and sport events, building a connection with the youth: use of music and ballet, short films, work with actors and actresses
Campaign slogan: ”Cool means coca cola”
Retail outlet “Red Lounge” where the youth can spent time and consume Coke products.
Pricing policies:
Low prices and later on even reducing of prices (Skimming pricing)
Price bundles („Buy one – get one free“)
Distribution arrangements:
Red Lounge
Focus on Southern India
Pepsi
Timing of entry into the Indian market brought different results for PepsiCo and Coca-Cola India. What benefits or disadvantages accrued as a result of earlier or later market entry?
Coca-Cola (1990)
Benefits:
advantages as „Early-Follower“, possibility to use reliable market information that´s already existing take-over of standards position as international market leader
Disadvantages:
expert knowledge of competitors has to be overtaken gain trust of new customers as „another“ foreign company
PepsiCo (1986)
Benefits:
early entry while the market is developing achievement of a good market position enforcement of product standards early impact on local producers (26% market share for Pepsi Food)
Disadvantages:
high costs for tapping a new market local demand for carbonated drinks very low at that time
The Indian market is enormous in terms of population and geography. How have the two companies responded to the sheer scale of operations in India in terms of product policies, promotional activities, pricing policies and distribution arrangements?
Coca-Cola
Product policies: focus on all beverages that are non-carbonated
Kinley Brand of bottled water introduction of new brands, introduction of new size „Mini“
Promotional activities: build a connection with the youth market
Business plan: “Think local - act local”:
Lucky draws where you can win a free trip to Goa, TV campaigns, employing local and regional festivals and sport events, building a connection with the youth: use of music and ballet, short films, work with actors and actresses
Campaign slogan: ”Cool means coca cola”
Retail outlet “Red Lounge” where the youth can spent time and consume Coke products.
Pricing policies:
Low prices and later on even reducing of prices (Skimming pricing)
Price bundles („Buy one – get one free“)
Distribution arrangements:
Red Lounge
Focus on Southern India
Pepsi