Challengess in international market

1. Group :2
Rahul Goswami
Anshun Gosalia
Chesta Badjatiya
Utkaarsh Yogesh Sharm
Vivek Churiwala

2. BEVERAGES MARKET
• Since the early 1900s beverage companies have evolved
from regional firms that mainly produced goods for local
markets, to today’s corporate giants that make products
for international markets.
• In 2014, US liquid refreshment beverage market volumes
rose 2.2% to 30.9 billion gallons.
• According to Beverage Marketing Corporation data, the
top four brands in the US liquid refreshment beverage
market in 2014 belonged to the carbonated soft drink
category.

3. BEVERAGE MARKET
• Cold drinks such as soft drinks and fruit drinks are
becoming more common in the country. Coca-cola and
PepsiCo dominate this category. Packaged water is
increasingly prevalent
• Corporate manufacturers of non-alcoholic beverages are
expected to grow at an annual rate of 16.5% and non-
corporate manufacturers at 19%, according to the report
titled Unleashing the Potential of the Non-alcoholic
Beverage Sector.

4. COCA-COLA COMPANY
• Headquartered in Atlanta, Georgia
• The Coca-Cola formula and brand were bought in 1889 by Asa Griggs
Candler
• The company has gone on to establish an unmatched portfolio of
beverages; refreshing consumers with its leading beverage brands like
Coca-Cola, Coca-Cola Zero, Diet Coke, Thums Up, Fanta, Fanta
Green Mango, Limca, Sprite, Sprite Zero, VIO Flavored Milk, Maaza,
Minute Maid range of juices, Georgia and Georgia Gold range of hot
and cold tea and coffee options, Kinley and Bonaqua packaged
drinking water, Kinley Club Soda and burn energy drink.

5. PEPSI CO.
• PepsiCo generated more than US $63 billion dollars in net revenue in
2015, driven by a complementary food and beverage portfolio that
includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana.
• PepsiCo's product portfolio includes a wide range of enjoyable foods and
beverages, including 22 brands that generate more than US $1 billion
dollars each in estimated annual retail sales.
• PepsiCo entered India in 1989 and in a short period, has grown into one
of the largest MNC food and beverage businesses in the country
• According to Consumer Reports, in the 1970s, the rivalry continued to
heat up the market. Pepsi conducted blind taste tests in stores, in what
was called the "Pepsi Challenge"

6. CHALLENGES FACED BY COCA COLA &
PEPSI
GOVT. REGULATIONS AS BARRIERS
• They received alien status upon entry in the Indian market.
• Coca Cola had to agree to sell 49% of its equity as a condition of entering.
• Sales of Pepsi's soft drink concentrate to local bottlers could not exceed
25% of total sales while fruits and vegetables by Pepsi Foods Ltd. had to
be processed.
• Inconsistency in legal environment – led to increased lobbying and to
corruption which was a great threat.
• According to Indian law it was forbidden to promote products under foreign
brand names if sold within India and thus Coca Cola became 'Coca Cola
India'& Pepsi became 'Lehar Pepsi'.

7. CHALLENGES FACED BY COCA COLA &
PEPSI
• Coca-Cola had to face many issues regarding its quality, resource
exploitation and market exploitation along with price-quality trade-offs.
• Coca-Cola was criticized for polluting the nearby fresh water and ground
water and soil; because of this issue, farmers are suffering from water
scarcity
• They entered the market with products close to those already available
in India such as lime beverages, fruit drinks as well as water.
• The segmentation of different areas of India allowed for the
differentiation and division of rural and urban Indian youth into
categories, 'India A' and 'India B' respectively. Doing so they were able to
advertise and promote their products differently so as to target and
appeal to these markets individually.

8. CHALLENGES FACED BY COCA COLA &
PEPSI
• Because of the attacks by the CSE and NGOs (Non-Governmental Organizations) on
Coca-Cola, the brand faced many challenges. First, being the world’s most valuable
brand whose value is greatly influenced by the image of the company and its products,
their primary problem was trying to rebuilding their image to the Indian public and
regaining Indian consumers’ trust.

9. CHALLENGES FACED BY COCA COLA &
PEPSI•PEPSI is getting beaten up in its flagship product category, drinks, in the world’s
largest market, North America and got displaced to no.2 position.
•Due to increasing concerns among American regarding use of excessive sugar
and increasing concern of obesity rises resulted in decreasing consumption of
carbonated drinks

10. FINDINGS
PEPSI
• It is beneficial to pay attention to market trends in order to
position your product accordingly.
• A very important point for Pepsi in India was the pricing
policy and bottle sizes.
• Adapting communication mix as well as distribution methods
to the market is also a key point.
• Local celebrity appeals made for exceptional advertising for
PepsiCo.

11. FINDINGS
COCA COLA
• The importance of timing of entry should not be overlooked.
• Coca Cola entered the market at a poor time because they
had to agree to abide by all of the Foreign Investment Laws
of that year.
• Defining your target audiences more specifically than what
Coca Cola did in India could have helped for better
targeting/positioning and thus advertising of products.

12. FINDINGS
• While realizing the importance of paying attention to market trends; Coca
Cola surely realizes the importance of investing in local products. While
not investing in Thumps Up brand for the first couple of years, decreasing
market share from 60% of total carbonated beverage sales to 15%, after a
substantial investment, Thumps Up ranked second nationwide within a
year.
• Establishing a good business relationship with the host country's
government and/or any other governmental or non-governmental groups
present in the country is also vital as these could act either as a source of
advantage or could impede your success.

13. RECOMMENDATIONS
• Concentrate on the brand’s perception - As there is a saying that
“marketing is a battle of perceptions, not products”.
• Don’t clone your rivals - In creating New Coke, Coca-Cola was
reversing its brand image to overlap with that of Pepsi.
• Don’t be scared to U-turn - By going back on decision to scrap
original product, the company ended up creating an even stronger
bond between the product and the consumer.
• Do the right market research - Despite the thousands of taste tests
carried out on new formula, company failed to conduct adequate
research into the public perception of the original brand.

14. THANK YOU