Tuesday, November 12, 2019
Coke & Pepsi learn to compete in India Essay
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? Coca-Cola (1990) Benefits: advantages as Ã¢â¬Å¾Early-FollowerÃ¢â¬Å", possibility to use reliable market information thatÃ ´s already existing take-over of standards position as international market leader Disadvantages: expert knowledge of competitors has to be overtaken gain trust of new customers as Ã¢â¬Å¾anotherÃ¢â¬Å" foreign company PepsiCo (1986) Benefits: early entry while the market is developing achievement of a good market position enforcement of product standards early impact on local producers (26% market share for Pepsi Food) Disadvantages: high costs for tapping a new market local demand for carbonated drinks very low at that time 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? Coca-Cola Product policies: focus on all beverages that are non-carbonated Kinley Brand of bottled water introduction of new brands, introduction of new size Ã¢â¬Å¾MiniÃ¢â¬Å" Promotional activities: build a connection with the youth market Business plan: Ã¢â¬Å"Think local Ã¢â¬â act localÃ¢â¬ : Lucky draws where you can win a free trip to Goa, TV campaigns, employing local and regional festivals and sport events, building a connection with the youth: use of music and ballet, short films, work with actors and actresses Campaign slogan: Ã¢â¬ Cool means coca colaÃ¢â¬ Retail outlet Ã¢â¬Å"Red LoungeÃ¢â¬ where the youth can spent time and consume Coke products. Pricing policies: Low prices and later on even reducing of prices (Skimming pricing) Price bundles (Ã¢â¬Å¾Buy one Ã¢â¬â get one freeÃ¢â¬Å") Distribution arrangements: Red Lounge Focus on Southern India Pepsi Product policies: bolstering non-cola portfolio and other categories: fruit juices juice-based drinks and water, introduction of new products Promotional activities: Sponsorship of garba, TV campaigns, employing local and regional Ã festivals and sport events, sponsorship of Cricket and Football as well as a music video with Bollywood stars. Pricing policies: aggressive pricing policy (impact on local producer Parle) Distribution arrangements: focus on northern and western parts of India Which of the two companies has better long-term prospects for success in India? Why? PepsiCo has better long-term prospects for success in IndiaÃ earlier market entry than Coca ColaÃ non-cola portfolio makes one-fourth of the overall business in India (e.g. significant player in the packaged water market) Ã following the consumers lifestyle of sports and exercise through fitting advertisement not as bad as Coca-Cola involved in the pesticide accusation What lessons can each company draw from its Indian experience as itÃ contemplates entry into other big emerging markets? ItÃ¢â¬â¢s not possible to transfer the complete marketing strategy from Europe or US to the Asian market. You have to know about the cultural and governmental Ã specifics of the market where you want to be successful. Communication policy: In India people interpret a policy of silence as guilt so the company has to get into a street fight if something wrong is published.Ã ItÃ¢â¬â¢s important to know much about the local market: Which products are sold to which price? Who are theÃ market leaders? How aggressive is the competition?