Coca Cola in India

Coca Cola in India

• STUST• Intrernational Marketing

FOCUS NANTAI

Anissa Emil Jessie

1. Introduction• Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in every country except Cuba and North Korea

•Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton

•Based on Interbrand's best global brand 2011, Coca-Cola was the world's most valuable brand

1. Introduction• •The Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer and marketer of nonalcoholic beverage concentrates and syrups, which is headquartered in Atlanta, Georgia The company is best known for its flagship product Coca-Cola

•Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves over 1.7 billion servings each day.

2. Case Description•

•Despite of being one of the most known brands in the world Coca Cola had and still has problems in India

•Coca Cola entered in Indian market in 1972 but shortly after in 1974 left the market.

•To take advantage of that huge market Coca Cola reentered in Indian market in 1994 and acquiired local soft drink brands

•.Coca Cola’s new plant started to drying up water wells and polluting the water of locals

•In 2002 India had Anti Coca Cola movement and the company had to close their new plant in which they invested 12 million US$

3. Questions and Answers

• Q1: What should Coca Cola do to appease Indian government and ensure it’s survival in the market?

• Coca-Cola had a controversial relationship with Germany before and during World War II In 1936, Coca-Cola was deemed unsuitable for children due to its sugar content and additives.

•A division of the company continued to operate in Germany during the war, but were unable to import the syrup needed for production of Coca-Cola from the United States

•Fanta, a product developed in Germany due to shortages of supplies to make Coca-Cola, was merged into the Coca-Cola brand line following the end of the war


• Q1: What should Coca Cola do to appease Indian government and ensure it’s survival in the market

•Since studies indicate "soda and sweetened drinks are the main source of calories in American diet,most nutritionists advise that Coca-Cola and other soft drinks can be harmful if consumed excessively, particularly to young children

•The drink has also aroused criticism for its use of caffeine, which can cause physical dependence

•llegations against the company are varied and criticism has been based around; possible health effects of Coca-Cola products, the company's poor environmental record, perception of the companies' engagement in monopolistic business practices, questionable marketing strategies and violations of intellectual property rights


• Q1: What should Coca Cola do to appease Indian government and ensure it’s survival in the market•Since The company know their weakness they should adopt strategy with different approach and try first to “give” then “take”

•They should invest in Indian enviroment, quality of life and local comunity

•If it’s know that Indian have a water probles and that Coca Cola have problem because of the same reason they should invest alone or with a government in improoving of water supply system

•Besides there are a lot of other examples of supporting local comunity ( building schools, supporting culture, improving infrastructure)

•They should help and support the people because now they are considered as the enemy of the country


• Q2: What effect will this case have on Coca Cola’s operations in India

•Unfortunately Coca Cola don’t have a bright status in India because of their mistakes in India

•That means that their each step would be under special attention of the people, watchdog, international organizations and Indian government

•They don’t have right to do mistake again


• Q2: What effect will this case have on Coca Cola’s operations in India

•The Coca-Cola Company has invested nearly USD 2 billion in its operations in India since its re-entry back into India in 1992. The Coca-Cola system in India directly employs over 25,000 people including those on contract. The system has created indirect employment for more than 1,50,000 people

•The beverage industry is a major driver of economic growth. A National Council of Applied Economic Research (NCAER) study on the carbonated soft-drink industry indicates that this industry has an output multiplier effect of 2.1

•Coca-Cola in India is amongst the largest domestic buyers of certain agricultural products.


• Q3: What lesson do this case have for other multinationals that want to enter to Indian market

•Coca Cola is certainly good example what to DO and what NOT to do.

•India is indeed sensitive market and many MNC’s had and still have problems in Indian market

•India still doesn’t have good and powerful infrastructure and the people are sensitive and suspicious to the MNC’s

•Therefore, strategy should be: FIRST GIVE –

THEN TAKE


• Q3: What lesson do this case have for other multinationals that want to enter to Indian market

•For multinationals, the key to reaching the next level will be learning to do business the Indian way, rather than simply imposing global business models and practices on the local market. It’s a lesson many companies have already learned in China, which more multinationals are treating as a second home market

•A leading beverage company entered India with a typical global business model—sole ownership of distribution, an approach that raised costs and dampened market penetration. The company’s managers quickly identified two other big challenges: India’s fragmented market demanded multiple-channel handoffs, and labor laws made organized distribution operations very expensive. In response, the company contracted out distribution to entrepreneurs, cutting costs and raising market penetration.


• Q3: What lesson do this case have for other multinationals that want to enter to Indian market•A big global automobile company has become the one of the largest manufacturers in India, growing at a rate of more than 40 percent a year over the last decade, by building a local plant, setting up an R&D facility to help itself better understand what appeals to Indian customers, and hiring a well-known Indian figure as its brand ambassador.

•To realize India’s potential, multinationals must show a strong and visible commitment to the country, empower their local operations, and invest in local talent. They must pay closer attention to the needs of Indian consumers by offering the customization the local market requires.

•And multinational executives must think hard about the best way to enter the market. More and more, that will mean moving beyond the joint-venture approach that so many have adopted and learning to go it alone.

4. Current Situation•The Coca-Cola Company (TCCC) is a leading manufacturer, distributor and marketer of non-alcoholic beverage concentrates and syrups, in the World. •Business-Week and Interbrand, a branding consultancy, recognized Coca Cola as the number one brand in their top 100 global brands•Joint venture with Nestle resulted in the formation of Beverage Partners Worldwide

•More then 70% of revenue comes from outside the UnitedStates

•Enormous number of loyal customers and brand equity all over the world

4. Current Situation• New coke formula leading toa backclash which resulted inbad image of coke

•The company is fcing highburden of external debts for the last few years.

•In 2009 because of the dispute over wholesale proces of COca COla goods, COSTCO blocked the replenishment of their shelves with Diet coke and coke

4. Current Situation• •Coca Cola and its bottling partners will invest $5 billion in India by 2020 as it looks to raise its presence in one of its fastest-growing emerging markets

•India, a country of 1.2 billion people, remains one of the last big frontiers for the Atlanta-based beverage giant, Indians on average consume only 12 eight-ounce bottles of Coke a year compared with 230 in Brazil and 92 bottles globally.

•The company plans to spend the money increasing capacity at its Indian bottling unit and at its 13 bottling franchisees, expanding distribution and brand building

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FOCUS NANTAI

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Coca Cola in India