可口可乐与百事可乐在印度的商业竞争Cokeandes

CokeandPepsiLearntoCompeteinIndiaByDianaBerger,ArthurCatlin,IanCavanaugh,LarryCenotto,DaveChristiansen,andMattRossBackgroundofBeverageIndustryinIndiaCoca-Cola’spastinIndiaPresentfrom1958until1977IndustryShakeupin1988StateoftheIndustryin199345%ofmarketconsistedofsmallmanufacturers$3.2millionmarketshareLowDemandforCarbonatedDrinksAverageof3servingsayear/personin1989Averageof1404servingsayear/personinU.S.in2003PoliticalEnvironmentinIndiaPoliticalEnvironmentinIndiaKeyIssuesIndiaseenasunfriendlytoforeigninvestorsformanyyearsThe“PrincipleofIndigenousAvailability”PolicybanningimportsbeingsoldinIndiaTheLiberalizationofIndia’sGovernmentin1991“NewIndustrialPolicy”Traderules®ulationssimplifiedForeigninvestmentincreasedPepsientersin1986Coca-Colafollowsin1993PoliticalEnvironmentinIndiaIndianLawsUnlawfultomarketundertheirWesternnameinIndiaPepsibecame“LeharPepsi”Coca-ColamergedwithParleandbecame“Coca-ColaIndia”DifferentLawsforPepsiandCokeCoca-Colaagreedtoselloff49%ofitsstockasaconditionofenteringandbuyingoutanIndiancompanyPepsienteredearlier,andwasnotsubjecttothisPoliticalEnvironmentinIndiaProblemsIndiaforcedCoketosell49%ofitsequitytoIndianinvestorsin2002Cokeaskedforasecondextensionthatwoulddelayituntil2007IndiadeniedthisPepsiwasheldtothissincetheyenteredIndiainadifferentyear.CokeaskedtheForeignInvestmentPromotionBoardtoblockthevotesoftheIndianshareholderswhowouldcontrol49%ofCokeChangeinoversightoftheFIPBPastlobbyingeffortsmadeuselessPoliticalEnvironmentinIndiaCouldtheseproblemshavebeenforecastedpriortomarketentry?ProbablynotInconsistent,andchanginggovernmentHowcouldthesedevelopmentsinthepoliticalarenahavebeenhandleddifferently?CokecouldofagreedtostartnewbottlingplantsinsteadofbuyingoutParle,andthuswouldn’tofhadtoagreetosell49%oftheirequityTimingofMarketEntryTimingofMarketEntryPepsi(earlyentry-1986)Advantages

EnteredthemarketBeforeCoca-ColaandwasabletogainafootholdinthemarketwhileitwasstilldevelopingGained26%marketshareby1993DisadvantagesWereforcedtochangetheirnametoLeharPepsiGovt.limitedtheirsoftdrinksalestolessthan25%oftotalsalesStruggledtofightofflocalcompetitionTimingofMarketEntryCoca-Cola(lateentry-1993)AdvantagesWereabletobuy4bottlingplantsfromindustryleaderParleAlsoboughtParle’sleadingbrands:ThumsUp,Limca,Citra,GoldSpotandMazaaSetup2newventureswithParletobottleandmarketproductDisadvantagesDeniedentryuntil1993becausePepsiwasalreadythereHardertoestablishmarketsharewithPepsithereWerenotallowedtobuyback49%ofequityResponsestoIndia’sEnormityPepsiandCoca-ColarespondedinmanywaystotheenormityofIndiaintermsofitpopulationandgeographyResponsestoIndia’sEnormityProductPoliciesCateringtoIndiantastesEnteringwithproductsclosetothosealreadyavailableinIndiasuchascolas,fruitdrinks,carbonatedwatersWaitingtointroduceAmericantypedrinksCoca-ColaintroducingSpriterecentlyIntroducingnewproductsBottledwaterResponsestoIndia’sEnormityPromotionalActivitiesBothadvertiseandusepromotionalmaterialatNavrartriPepsigivesawaypremiumriceandcandywithPepsiCoca-Colaoffersfreepasses,CokegiveawaysaswellasvacationsUseofdifferentcampaignsfordifferentareasofIndia“IndiaA””campaignstrytoappealtoyoungurbanites“IndiaB””campaignstrytoappealtoruralareasResponsestoIndia’sEnormityPricingPoliciesPepsistartedoutwithanaggressivepricingpolicytotrytogetimmediatemarketsharefromIndiancompetitorsCoca-Colacutitspricesby15-25%in2003AttempttoencourageconsumptiontotrytocompetewithPepsiandgainmarketshareResponsestoIndia’sEnormityDistributionArrangementsProductionplantsandbottlingcentersplacedinlargecitiesallaroundIndiaMoreaddedasdemandgrewandasnewproductswereaddedCokeandPepsi’s““GlocalizationStrategies”Whatis““Glocalization”?Global+Localization=GlocalizationBytakingaproductglobal,afirmwillhavemoresuccessiftheyadaptitspecificallytothelocationandculturethattheyaretryingtomarketitin.BothcompanieshavesuccessfullyimplementedglocalizationPepsi’sGlocalizationPepsiformsjointventurewhenfirstenteringIndiawithtwolocalpartners,VoltasandPunjabAgro,forming““PepsiFoodsLtd”.In1990,PepsiFoodsLtd.changedthenameoftheirproductto“LeharPepsi”toconformwithforeigncollaborationrules.Inkeepingwithlocaltastes,PepsilauncheditsLehar7UPintheclearlemoncategory.Pepsi’sGlocalizationAdvertisingisdoneduringtheculturalfestivalofNavrartri,atraditionalfestivalheldinthetownofGujaratwhichlastsforninedays.Pepsi’’smosteffectiveglocalizationstrategyhasbeensponsoringworldfamousIndianathletes,suchascricketandsoccerplayers.Coca-Cola’’sGlocalizationFirstjoinedforceswiththelocalsnackfoodproducerBritanniaIndustriesIndiaLheearly90’’s.FormedajointventurewiththemarketleaderParlein1993ForthefestivalofNavrartri,Coca-Colaissuedfreepassestothecelebrationineachofits““ThumsUp””bottlesAlsoranspecialpromotionswherepeoplecouldwinfreevacationstoGoa,aresortstateinwesternIndiaCoca-Cola’’sGlocalizationCoca-Colaalsohiredseveralfamous““Bollywood””actorstoendorsetheirproducts.Whocouldforget……VivekOberoiAishwaryaRaiCoca-ColaIndia’’sMistakesEntersMarketattheWrongTimeByenteringatthistime,Coca-ColaIndiaagreedtoabidebyalltheForeignInvestmentLawsofthatyear.Coca-ColaIndiatriestoexpandinvestmentGovernmentallowedacquisitiononlyifCoca-Colaagreedtosell49%ofequitywithin2yearsCoca-Colatriedtogetextensions……twiceIndiagrantedthefirstextension,deniedthesecondCoca-ColaIndiatriedtodenytheupcomingIndianshareholdersvotingrightsForeignInvestmentPromotionBoard(FIPB)DeniesThisCoca-ColaIndia’’sMistakes1stMistakeCoca-Colashouldhavebeenmorecarefulofwhentheyenteredthemarketandwhattheywerepromisingwhentheyentered.2ndMistakeCoca-Colashouldnothavetriedtoweaseltheirwayoutofpromisesthattheymade.ThesemistakeshurtCoca-Cola’’sim