The Political Environment for Coca-Cola and Pepsi in India Essay

The Political Environment for Coca-Cola and Pepsi in India - Essay Example 3. 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? India is the second most populated country in the world. The country has a population of 1.19 billion people (CultureGrams). Both Pepsi and Coca Cola have done a poor job of expanding the size of the market. One of the reasons that the companies have been ineffective in this foreign market is because the firms failed to realize that the marketing strategy that worked in Western nations will not be effective in an Asian marketplace. An inherent problem of the Indian marketplace is that income per capita of the consumers is very low. The yearly gross domestic product per capita of India is $3,500 (CultureGrams). The firms have not taken advantage of the fact that their products are food items that have the attribute of being a physiologi cal necessity for customers. 4. â€Å"Global localization† (glocalization) is a policy that both companies have implemented successfully. Give examples for each company from the case. The use of globalization was utilized in the marketing strategies of the companies. For instance Pepsi realized that the Indian people have the same passion for sports that many Americans have even though the sports each market likes is different. The Pepsi ad campaigns focused on sports that Indians like such as soccer. Globalization implies that companies can implement certain business strategies in different markets with similar results. The use of acquisition was a strategy that helped Pepsi increased its overall market share. Coca Cola utilized globalization in its... This essay describes and analyzes the political environment in India, that has been very challenging to both Coca-Cola and Pepsi due to the fact that the government is very protective of the local industries. It is stated that Coca Cola entered the Indian market first in 1958, but it withdrew India in 1977 due to a controversy over the copyrights of its formula. Intellectual property is often not protected in foreign marketplaces. In order for Coca-Cola and Pepsi to penetrate the marketplace in the late 1980’s and early 1990’s these firms had to negotiate joint ventures with local firms. The researcher mentiones that political environment of India could have been studied more closely prior to these two companies entering the India marketplace. One of the reasons that the companies have been ineffective in this foreign market is because the firms failed to realize that the marketing strategy that worked in Western nations will not be effective in an Asian marketplace. Th e researcher also describes an inherent problem of the Indian marketplace, that is that income per capita of the consumers is very low. The researcher also discusses what lessons can each company draw from its Indian experience as it contemplates entry into other Big Emerging Markets and comments on the decision of both Pepsi and Coke to enter the bottled water market instead of continuing to focus on their core products — carbonated beverages and cola based drinks in particular, because a lot of consumers prefer to drink a bottle of water over a soda.