coca cola.ptx

8/14/2019 coca cola.ptx

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Prepared By-

Dhwani Shah Megha Jagtap Parth Purohit

Rohan Mehta Paras Charan Mochan Bhola


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Coca-Colas past in India

Present from 1958 until 1977

Industry Shakeup in 1988

State of the Industry in 1993

45% of market consisted of small manufacturers

$3.2 million market share

Low Demand for Carbonated Drinks

Average of 3 servings a year/person in 1989

Average of 1404 servings a year/person in U.S. in 2003


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Pepsi entered into the Indian beverage market in July

1986 as a joint venture with two local partners, Voltas

and Punjab Agro, forming PepsiFoods Ltd.

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 industry.

As both companies would soon discover, competing in

India requires special knowledge, skills, and local

expertisewhat works here does not always work there.

(Cateora & Graham, 2008, p. 604).


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Seasonal Sales Promotionsthe 2000 Navratri

Campaign-

Thums Up Toofani Ramjhat, with 20000 free passes

issued, one per Thumps up bottle.

On-site activities, buyone-get one freeand lucky draw

scheme like win the trip to Goa.

PepsiCo telecast Navratri utsav 2000 at Mumbai.

People enjoyed a mega offer of getting one kilo of basmati

rice free with 300 ml bottle.


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The 2002 Summer TV Campaign-

keep it cool the new slogan came up for the newcategory of 7UP.

Focused on objective on growing the category and

building brand salience.


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Coca-colas lifestyle advertising-

Used a strategy building a connect using the relevant local

idioms.

The campaign slogan was Thanda Matlab Coca-cola, which

focused on the youth.

Coca colas specific marketing objectives for 2003 were to

grow the per capita consumption of soft drinks in rural

markets, and to capture a larger share in the urban market

from competition and increase the freq of consumption.


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Several producers have launched their own brands in a

new category.

Coke brand Kinley was introduced in 2000.

Captured 28% market in 2002

Currently, 40% share is with Bisleri of parle, 11% of

Aquafina of Pepsi and other brands too.


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By 2002, hold 56% market in national soft drink market.

It recovered the losses upto 400 Cr. which was incurred

in 1993 (total Accumulated loss over 2000 Cr.)

49% of Holdings were ordered to sell to Indian Investors.

More over FIPB was changed and again Co. begin to

build new relations with bureaucrats.


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During 2003, due to iraq war, an All-India Anti-

Imperialist Forum to boycott purchase of American and

British goods for unjust war .

Led to decrease 50% in southern States through shop-to-

shop campaign


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3 Years cost cutting programs bought dramatic results.

Local purchasing policies bought 57% savings in Import

duties.

By reinvigorated with an infusion of 3.5 Million spent on

A&D held Thumbs Up ranked 2ndNation wide.


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In a production of 3 Lac ltr of Soda drink a day uses 1.5

million ltr of water, enough to meet the requirement of

20,000 people

Content of Pesticides residue was found in 2003, leading

to close of plant, until corporation won a court ruling

allowing them to reopen.


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India forced Coke to sell 49% of its equity to Indian investorsin 2002.

Coke asked for a second extension that would delay it until2007 which was denied.

Pepsi was held to this since they entered India in a different

year.

Coke asked the Foreign Investment Promotion Board to blockthe votes of the Indian shareholders who would control 49% ofCoke.

Change in oversight of the FIPB:

o Past lobbying efforts made useless.

Contd


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Could these problems have been forecasted prior to

market entry?

Probably not

Inconsistent, and changing government.

How could these developments in the political arena have

been handled differently?

Coke could of agreed to start new bottling plants

instead of buying out Parle, and thus wouldntof had

to agree to sell 49% of their equity.


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Benefits

Parle offered its bottling plants in 4 major cities.

Made its return to India with Britannia Industries

India Ltd.

Disadvantages

Rigid Rules and Regulations.

Buying of bottling plants leads to 49% disinvestment. Local demand of carbonated drinks is as very low.

Harder to establish themselves.


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Benefits

Own set up green filled bottling plants.

Advantage of coming before Coca Cola.

Government policies favored the company.

Joint venture with Volta's and Punjab Agro.

Gained 26% share by 1993.

Disadvantages

Pepsi approached Parle but it was rejected. Launched 7up and there is stiff competition in the

market for lemon drinks.


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Pepsi and coca-cola responded in many ways to the enormity of

India in terms of it population and geography.

Conti ..


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Product Policies:

Catering to Indian tastes

Entering with products close to those

already available in India such as

colas, fruit drinks, carbonated waters

Waiting to introduce American

type drinks

Coca-Cola introducing Sprite recently

Introducing new products

Bottled water

Conti ..


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Promotional Activities:

Both advertise and use

promotional material at Navratri.

Pepsi gives away premium rice

and candy with Pepsi

Coca-Cola offers free passes,

Coke giveaways as well as

vacations

Use of different campaigns for

different areas of India

India A campaigns try to

appeal to young urbanites

India B campaigns try to

appeal to rural areas


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Cont

Pricing Policies:

Pepsi started out with an aggressive pricing policy to

try to get immediate market share from Indian

competitors

Coca-Cola cut its prices by 15-25% in 2003

Attempt to encourage consumption to try to compete

with Pepsi and gain market share


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Contd ..

DistributionArrangements:

Production plants and bottling

centers placed in large cities all

around India

More added as demand grew and as

new products were added


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What is Glocalization?

Global + Localization = Glocalization

By taking a product global, a firm will

have more success if they adapt it

specifically to the location and culture

that they are trying to market it in.

Both companies have successfully

implemented glocalization


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Pepsi forms joint venture when first

entering India with two local partners,

Voltas and Punjab Agro, forming Pepsi

Foods Ltd.

In 1990, Pepsi Foods Ltd. changed the

name of their product to Lehar Pepsi to

conform with foreign collaboration rules.

In keeping with local tastes, Pepsi

launched its Lehar 7UP in the clear lemon

category.


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Advertising is doneduring the cultural

festival of Navrtri , a

traditional festival held in

the town of Gujarat

which lasts for nine days.

Pepsis most effective

glocalization strategy has

been sponsoring world

famous Indian athletes,

such as cricket and soccer

players.


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First joined forces with the local snack food

producer Britannia Industries India Ltd. in

the early 90s.

Formed a joint venture with the market

leader Parle in 1993.

For the festival of Navratri, Coca-Cola

issued free passes to the celebration in eachof its Thumps Up bottles.

Also ran special promotions where people

could win free vacations to Goa, a resort

state in western India.


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Coca-Cola also hired several famous Bollywood

actors to endorse their products.

Who could forget


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Yes, we agree that Coca-Cola India made mistakes inplanning and managing its return to India.

They wrongly forecasted Indian political environmentdue to which they had to dilute their stakes later (49%disinvestment).

They rejected the plan to put up green fields bottlingplants as they took over Parles existing bottling plants.

Coca cola tried to get extensions twice.


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Pepsi and Coke can confront the issue of water use in

the manufacturing of their products by the use of

canal irrigation & rainwater harvesting.

Then they can also put water recycling plant to treat

the discharged water from their factories and then

they can provide that water to farmers for theiragricultural use. This way the ground water problem

can also be solved and managed.


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Coke can further defuse boycotts or demonstrations

against their products in California by doing Ad-

campaigns in which they can ask the experts from the

ministry of health to convey the message to the public

that their products are safe and healthy.

They can also hire celebrities to do the Ads for their

products because the public follows them.

Coke should address the group directly because their

company was not wrong and they should justify

themselves.


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Beneficial to keep with local tastes

Beneficial to pay attention to market trends

Celebrity appeal makes for exceptional advertising

It pays to keep up with emerging trends in the market


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Pay specific attention to deals made with the

government

Establish a good business relationship with thegovernment

Investment in quality products

Advertising is crucial


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