Case analysis - Coke and Pepsi learn to Compete in India - Term Paper Example

Case Analysis: Coke and Pepsi learn to compete in India al affiliation) The latter thesis mentioned in this particular paper would potentially highlight core concepts and fundamentals of as to when and how the Coca Cola Company and Pepsi Co essentially learned to compete in the beverage industry concerning the emerging world economic giant known as India. The following literature would shed particular light on introducing the two company campaigns used to penetrate the Indian market and the problems faced in doing this.

This paper would also give appropriate suggestions to those highlighted difficulties and hence come up with possible and alternated solutions while simultaneously providing other recommendations as well. Conclusively the paper would also answer the case study’s three most appropriate questions and therefore would see through it all till the end. Case Analysis: Coke and Pepsi learn to compete in India Coca Cola and Pepsi have been one of the major key players in the beverage industry of India for a long time now and with the economic revolution in this emerging giant since 1994 India has surely but steadily been growing making it a potential gold mine for foreign investors and companies alike Coca cola and Pepsi (Lyn S.

Amine and Deepa Raizada). When the gulf war started back in 1992 there was a lot of NRI coming back to India due to the fact that international oil prices were rising and inflation and unemployment were at it’s peak in the history of India, as such India concluded all it’s foreign investments on consumer goods and up till 1994 only used products manufactured and deployed by local industries. With the downsizing economy effectively over it was time to exploit this emerging market and hence Pepsi and Coca cola started their custom made TV campaigns using potential Bollywood starts and national cricketing players form the Indian team.

While the Pepsi Company used attractive taglines to implement their marketing schemes associating their brand with one of the most famous entities in India the Coca Cola Company used their famous jingle marketing keywords and attractive thirty-second promos to promote their specific drinks in the Indian Beverage market (AFP, December 15, 2004). These key competitors started their marketing campaigns in 1977 and 1986 respectively with Coca Cola Company being first of the latter and accordingly Pepsi was to follow it’s all time adversaries.

Initially The Coca Cola Company started its beverage campaign in 1958 but with some tussle with the government in around the late 60s on not giving out it’s carbonated formula to the local beverage industry was and hence Coca Cola had no choice but to eventually pull our of this hostile situation. In 1977 the Coca Cola industry returned to the Indian markets to potentially compete with local beverage giants such as thumbs up and Parle while with the coming of Pepsi Co in 1986 the beverage market become more saturated than ever and with that came all the anticipated problems faced by these two foreign companies.

The major problem concerning the Indian beverage market is that due to the increasing population living standard have been very low in recent times and hence there are environmental concerns regarding the safety of the water used i.e. how clean and healthy is it to use the local supplies of water regarding the manufacture of foreign industrial beverage while another aspect distorted with an ever increasing population is the fact that there may in the very near future run out of potential water supply to provide these foreign companies with enough fresh and clean water that may compensate for the whole demand situated in the country itself (Jeff Cioletti September 15, 2003).

Another anticipated issue is that as these are carbonated drinks and as such target a limited amount of beverage drinkers, the problem lies that with such a vast population growth people the consumer might amount to the legal drinking age and hence companies like Coca Cola and Pepsi would lose market sales while urbanization in such countries also lead to a rising per capita income which again manages to sneak it’s jaws into those consumers as well who due to financial circumspect cannot significantly afford branded alcohol beverages.

One other issue regarding the problems faced by Coca Cola and Pepsi is the environmental restrictions placed by the Indian government on both the water that is used must be to a certain percentage pesticide free even though the actual water supply provided may be polluted or not and the issue regarding the use of plastic bottles comprising of non biodegradable containers and hence use up to a lot of revenue in dealing with such situations. For instance the Pepsi company had to on it’s own budget contact NGO water supplying companies to provide fresh and less polluted water for beverage manufacturing.

The best solutions that have been initiated with is reliance on factors like aggressive TV advertisement and R&D research to conclude on water that is appropriate and fit for drinking. The water shortage issue is also been seen to account for as a major concern and hence multinational corporations such as these fundamentally arrange for more drinking water from neighboring borders or locate for the nearest sea and set up distillation processes. Regarding the non-biodegradable bottles even though there has been exponential awareness recently plastics used here are totally recycled using refilling techniques and hence make up for that particular problem as well.