Pepsi and Coca-Cola have faced challenges competing in India's political environment. Strong nationalism led to trade rules restricting foreign brands and limiting soft drinks sales. Pepsi entered earlier than Coca-Cola, gaining initial advantage through 26% market share, though it was forced to rename its brand. Coca-Cola's later entry made gaining market share harder as Pepsi was already established, but Coca-Cola benefited from purchasing established local brands. Both companies have adapted to India's large scale through policies like customizing products while maintaining core brands, using local celebrities, and establishing extensive distribution networks.

1. Coke and Pepsi Learn to Compete in

2. MAHMUD ZAMAN (Mhz)
S E N I O R L E C T U R E R
D E P A R T M E N T O F M A R K E T I N G A N D
I N T E R N AT I O N A L B U S I N E S S
N O RT H S O U T H U N I V E R S I T Y
PREPARED FOR PREPARED BY
Team: 3 from 7 2
Sayantan Banerjee 1812814630
Arnab Chakraborty 1812536630
Nahian Tasfee Akhkhar 1813052630

3. The political environment in India has proven to be critical to company
performance for both PepsiCo and Coca-Cola India. What specific
aspects of the political environment have played key roles?
• Strong Sense of Nationalism in India: Swadeshi Andolon (1948-1991)
 Trade Rules And Regulation
 Principle of Indigenous Availability
 Prohibited usage of foreign brand name in the local market
 Sales of soft drinks can not increase more than 25% of total
sales

4. Could these effects have been anticipated prior to market
entry? If not, could developments in the political arena
have been handled better by each company?
• No. Because the Indian Government was inconsistent
• Coca-Cola could start new bottling plants instead of buying Parle’s

5. Advantages :
• 26% of market share in 1993 in cola segment
• Early entry before Coca-Cola and First Mover advantage
Disadvantages :
• Forced to change name to “Lehar Pepsi”
• 25% limitation of soft drinks sale compared to total sales
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?

6. 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? (Cont’d.)
Advantages :
• Bought Parle’s leading brands : Thums Up, Limca, Citra, Gold Spot and Maza
• Bought Parle’s 4 bottling plants
Disadvantages :
• Later entry after Pepsi
• Harder to create market share because of Pepsi

7. 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?
Product Policy
• Coca-Cola does Standardization
Promotional Activities
• Coca-Cola does Customer Relation
Pricing Policy
Distribution Arrangement
• Both of them use Loss Leadership Policy
• Coca-Cola : India A and India B regions
• Pepsi does Customization
• Pepsi use Local Icons/Celebrity. • Pepsi : Around Mumbai and Delhi
• Affordability Plank(15%-25% price cut off)

8. “Global localization” (glocalization) is a policy that both companies
have implemented successfully. Give examples for each company from
the case.
• Pepsi Foods Ltd. formed a joint venture with two local partners, Voltas and Punjab Agro which
came up with the brand “Lehar Pepsi”
• Coca-Cola made its return to India by joining forces with Britannia Industries India Ltd. And created a
joint venture “Britco Foods”
• Coca-Cola brought Parle’s 4 bottling plants and so the leading brands : Thumps up, Limca, Citra, Gold
Spot, and Mazaa.
• Pepsi launched “Lehar 7UP” in the clear lemon category

9. How can Pepsi and Coke confront the issues of water use in the
manufacture of their products? How can they defuse further boycotts or
demonstrations against their products? How effective are activist groups
like the one that launched the campaign in California? Should Coke
address the group directly or just let the furor subside?

10. Which of the two companies do you think has better long term prospects
for success in India?
Pepsi Coca-Cola
• More commonly acknowledged
• More Market Stake
• Better marketing Strategy
• Behind Pepsi in Market Share
• Government Restriction

11. What lessons can each company draw from its Indian experience as it
contemplates entry into other Big Emerging Markets?
• Cross Culture Literacy
o Keep up with the local taste
• Advertisement
o Pay attention to market trend
o Good business relationship with government
o Investment in quality raw material like water.
o Utilize Celebrities and Sportsmen
o Festive and Seasonal offers

12. Comment on the decision of both Pepsi and Coke to enter the bottled
water market instead of continuing to focus on their core products
carbonated beverages and cola-based drinks in particular.
• Scarcity of pure water
• Carbonate beverage did not grow in the last decade
• Bottle water was the fastest growing market
• More opportunity and huge potential for growth

13. Most recently Coca-Cola has decided to enter the growing Indian market for
energy drinks, forecasted to grow to $370 billion in 2013 from less than half
that in 2003. The competition in this market is fierce with established firms
including Red Bull and Sobe. With its new brand Burn, Coke initially
targeted alternative distribution channels such as pubs, bars, and gyms rather
than large retail outlets such as supermarkets. Comment on this strategy.
• Energy Drinks should be more public as Coca-Cola has more exposure
• Price should be affordable by all walks of people

14. Conclusion
Taste The Feeling : Coca-Cola
Embrace your past, but live for now: Pepsi

15. ANY QUESTION?