Coca-Cola Company overview and business operations

Coca-Cola Company in India

The Coca-Cola Company began its expansion into India during 1993. While this market has displayed great potential for growth and profit, the Company has struggled to gain a foothold in India. The reasons for this are mostly strategic and cultural. However, a number of market-driven and customer-focused changes have turned the tide in favor of the Coca-Cola Company, and it is currently a top competitor in the Indian soft drinks market. The global marketing issues covered below include the company's reasons for expansion, its entry modes into the country and the characteristics and importance of the Indian market.

Reasons for Expansion

The Coca-Cola Company has conducted business on an international scale for decades. The expansion into India is then part of its growth and globalization process. This growth also entails competition with other soft drink manufacturers such as Pepsi-Cola, which has accumulated a large customer base in India. Hence the Coca-Cola Company's to further its competition with this rival.

The success of Pepsi-Cola and other soft drink companies in India, as well as focused market research, has shown that India has huge growth potential in the soft drink market. A company such as Coca-Cola would then potentially benefit from Indian consumers, reportedly greater in number than the average in other Eastern countries.

Before the benefits of this market can however be reaped, it is vitally important to gain an understanding of the culture and concerns of this market. Entry modes should therefore be tailored according to consumer requirements.

It should also be recognized that the culture in the country is substantially different from that in the United States, and that sensitivity should be displayed with regard to management and hiring practices. If these are not taken into consideration, the market benefits cannot be utilized to their full potential.

Entry Modes

After several failures, the Coca-Cola Company has changed some of its entry mode practices in order to gain favor with the Indian market. One of these is selling a substantial amount of its shares through private placement with institutional investors and employees. In this way the company imparts some of its shares to the Indian market itself, thus giving India greater involvement in the company.

Another technique is the promotion of local brands of the soft drink that has shown potential in the Indian market. An example is Thums Up, which proved to be a favorite in the Indian market. Local brands and products proving useful specifically to the Indian market requirements are beneficial for entry and growth within the country. Kinley bottled water is an example of this, especially through the company's distribution network to villages.

Pricing is also an important part of entry and marketing in India. New, cheaper 200 ml bottles for example are aimed at rural and low-income urban markets. In a country where poverty is the plight of the majority of the citizens, such a strategy shows particular awareness of the specific culture and market. Market and cultural awareness is therefore of utmost importance when entering a foreign market such as India.

Characteristics and Importance of the Indian Market

It has been mentioned above that the Indian market, in terms of consumption per capita, has proved to be the soft drink market with the greatest growth potential in the East. It is therefore a very important location for the globalization and expansion practices of soft drink companies. Coupled with expansion plans however should be sensitivity to the market's needs, requirements and characteristics, some of which have been mentioned above.

In addition to the reality of in some cases extreme poverty, the culture of India frequently entails village life and military families. Cultural sensitivity is then be displayed in a number of ways, including showing examples of rural and military life in advertisements. Such techniques connect with the culture of India on an emotional level, thus encouraging a positive view of the advertised product.

Another very important part of India is its government and its requirements for doing business in the country. The government for example requires that India takes substantial part in any globalized business entering the country. The Coca-Cola company has begun practices to show this awareness, including its sale of shares.

Another way in which the company is showing this awareness is its hiring of Indian employees who are then allowed to make progress towards the position of manager. These managers serve to connect the branch of the company in India with the Coca-Cola basis in the United States, thus improving management practices and cultural understanding. An example of this is operations chief Sanjeev Gupta.