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1、had to resort to using a costly imported substitute estergum or they had to fi nance their own R as one commentator said India has been in economic depression for so long that ev erything except the snake charmers cows and the Taj Mahal has faded from the memory of the world The Indian government wa
2、s viewed as unfriendly to foreign investors Outside invest ment had been allowed only in high tech sectors and was almost entirely prohibited in consumer goods sectors The principle of indigenous availability had specifi ed that if an item could be obtained anywhere else within the country imports o
3、f similar items were forbidden As a result Indian consumers had little choice of products or brands and no guarantees of quality or reliability Following liberalization of the Indian economy and the dis mantling of complicated trade rules and regulations foreign investment increased dramatically Pro
4、cessed foods software engineering plastics electronic equipment power generation and petroleum industries all benefi ted from the policy changes PEPSICO AND COCA COLA ENTER THE INDIAN MARKET Despite its huge population India had not been considered by for eign beverage producers to be an important m
5、arket In addition to the deterrents imposed by the government through its austere trade policies rules and regulations local demand for carbonated drinks in India was very low compared with countries at a simi lar stage of economic development In 1989 the average Indian was buying only three bottles
6、 a year compared with per capita THE BEVERAGE BATTLEFIELD In 2007 the President and CEO of Coca Cola asserted that Coke has had a rather rough run in India but now it seems to be getting its positioning right Similarly PepsiCo s Asia chief asserted that India is the beverage battlefi eld for this de
7、cade and beyond Even though the government had opened its doors wide to for eign companies the experience of the world s two giant soft drinks companies in India during the 1990s and the beginning of the new millennium was not a happy one Both companies experienced a range of unexpected problems and
8、 diffi cult situations that led them to recognize that competing in India requires special knowledge skills and local expertise In many ways Coke and Pepsi manag ers had to learn the hard way that what works here does not always work there The environment in India is challenging but we re learning h
9、ow to crack it says an industry leader THE INDIAN SOFT DRINKS INDUSTRY In India over 45 percent of the soft drinks industry in 1993 con sisted of small manufacturers Their combined business was worth 3 2 million dollars Leading producers included Parle Agro hereafter Parle Pure Drinks Modern Foods a
10、nd McDowells They offered carbonated orange and lemon lime beverage drinks Coca Cola Corporation hereafter Coca Cola was only a distant memory to most Indians at that time The company had been pres ent in the Indian market from 1958 until its withdrawal in 1977 fol lowing a dispute with the governme
11、nt over its trade secrets After decades in the market Coca Cola chose to leave India rather than cut its equity stake to 40 percent and hand over its secret formula for the syrup Following Coca Cola s departure Parle became the market leader and established thriving export franchise businesses in Du
12、bai Kuwait Saudi Arabia and Oman in the Gulf along with Sri Lanka It set up production in Nepal and Bangladesh and served distant markets in Tanzania Britain the Netherlands and the United States Parle invested heavily in image advertis ing at home establishing the dominance of its fl agship brand T
13、hums Up Thums Up is a brand associated with a job well done and personal success These are persuasive messages for its target mar ket of young people aged 15 to 24 years Parle has been careful in the past not to call Thums Up a cola drink so it has avoided direct comparison with Coke and Pepsi the w
14、orld s brand leaders The soft drinks market in India is composed of six product seg ments cola cloudy lemon orange soda carbonated water mango and clear lemon in order of importance Cloudy lemon and clear lemon together make up the lemon lime segment Prior to the arrival of foreign producers in Indi
15、a the fi ght for local dominance was between Parle s Thums Up and Pure Drinks Campa Cola In 1988 the industry had experienced a dramatic shakeout fol lowing a government warning that BVO an essential ingredient in locally produced soft drinks was carcinogenic Producers either CASE 1 3Coke and Pepsi
16、Learn to Compete in India cat2994X case1 001 017 indd 10cat2994X case1 001 017 indd 108 27 10 1 58 PM8 27 10 1 58 PM Cases 1 An Overview consumption lasts only 20 to 25 days during the cultural festival of Navratri Nav means nine and ratri means night This tra ditional Gujarati festival goes on for nine nights in the state of Gujarat in the western part of India Mumbai also has a signifi cant Gujarati population that is considered part of the target market for this campaign As the Regional Marke
