“Coke and Pepsi learn to compete in India” case 1. 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? 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?
A/ The Indian government was unfriendly to foreign investors, because outside investment was only allowed in high-tech sector and the remaining industries were discriminated. In addition, the “Principle of indigenous available” played a major role in the political environment by forbidding imports of items that could be produced
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A/ Product policies | Promotional activities | Pricing policies | Distribution arrangements | Entering with products close to those already available in India such as colas, fruit drinks, carbonated waters, Coca-Cola introducing Sprite recently, and Introducing new products like bottled water. | Both advertise and use promotional material at Navrartri. Pepsi makes presence in sportive activities and Coca-cola offers giveaways and vacations. They both also use famous people in India to promote their products and their target market was young people. | 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. They both implemented bottles with less ml to increase the frequency of purchase. | At the beginning they focused on major cities but then wanted to explore rural areas of the country. Coca-cola products also were distributed in the “Red Lounge” -> a “cool” place to have fun with friends. Moreover, production plants and bottling centers placed in large cities all around India. |
4. "Global localization" (glocalization) is a policy that both companies have implemented successfully. Give examples for each company from the case.
-Pepsi kept with local tastes and launched its Lehar 7UP in the clear lemon category. In 1990, Pepsi Foods Ltd. changed the name