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Cultural Impact on Brand: A Case Study on Coca Cola’s Cultural Issues in India

Article · December 2013

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 Table of Contents
INTRODUCTION.............................................................................................................................................................. 3
BACKGROUND OF COCA COLA: ............................................................................................................................... 4
COCA COLA SYSTEM WORLDWIDE AND IN INDIA: ............................................................................................. 6
MISSION, VISION AND VALUES: ................................................................................................................................ 7
CULTURAL IMPACT ON BRAND: ................................................................................................................................ 9
ETHICAL ISSUES CONCERNING COCA-COLA IN INDIA.................................................................................... 12
COCA COLA POLITICAL ISSUES IN INDIA: ........................................................................................................... 14
COCA COLA ENVIRONMENTAL ISSUES IN INDIA:.............................................................................................. 16
COMPETITION: ............................................................................................................................................................. 19
CASE OBJECTIVES: .................................................................................................................................................... 20
GLOBAL POSITIONS: .................................................................................................................................................. 22
THE COCA-COLA COMPANY SECOND QUARTER AND YEAR-TO-DATE 2013 RESULTS........................ 23
INNOVATION: ................................................................................................................................................................ 35
SEO (Search Engine Optimization and PPC) (Pay-Per-Click) Objectives in India .............................................. 38
CURRENT SCENARIO:................................................................................................................................................ 41
PROBLEM DEFINITION: .............................................................................................................................................. 44
ANALYSIS OF THE SITUATION: ............................................................................................................................... 46
SOLUTIONS AND RECOMMENDATIONS: .............................................................................................................. 48
SUGGESTIONS: ............................................................................................................................................................ 48
FORECASTS AND PREDICTIONS: ........................................................................................................................... 49
CONCLUSION: .............................................................................................................................................................. 50
REFERENCES: .............................................................................................................................................................. 51

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 List of Table

Table 1 .............................................................................................................................................................................. 25
Table 2 .............................................................................................................................................................................. 25
Table 3 .............................................................................................................................................................................. 33
Table 4 .............................................................................................................................................................................. 33
Table 5 .............................................................................................................................................................................. 34
Table 6 .............................................................................................................................................................................. 34
Table 7 .............................................................................................................................................................................. 35
Table 8 .............................................................................................................................................................................. 38
Table 9 .............................................................................................................................................................................. 38
Table 10 ............................................................................................................................................................................ 39
Table 11 ............................................................................................................................................................................ 40

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INTRODUCTION

India’s more than one billion people, growing middle class, and low per capita consumption of soft
Drinks made it a highly contested prize in the global CSD (Central Securities Depository) market in
the early twenty-first century. Ten percent of the country’s population lived in urban areas or large
cities and drank ten bottles of soda per year while the vast remainder lived in rural areas, villages,
and small towns where annual per capita consumption was less than four bottles. Coke and Pepsi
dominated the market and together had a consolidated market share above 95%. While soft drinks
were once considered products only for the affluent, by 2003, 91% of sales were made to the
lower, middle and upper middle classes. Soft drink sales in India grew 76% between 1998 and
2002, from 5,670 million bottles to over 10,000 million (See Exhibit 6) and were expected to grow
at least 10% per year through 2012.28 In spite of this growth, annual per capita consumption was
only 6 bottles versus 17 in Pakistan, 73 in Thailand, 173 in the Philippines and 800 in the United
States.
With its large population and low consumption, the rural market represented a significant
opportunity for penetration and a critical battleground for market dominance. In 2001, Coca-Cola
recognized that to compete with traditional refreshments including lemon water, green coconut
water, fruit juices, tea, and lassie, competitive pricing was essential. In response, Coke launched a
smaller bottle priced at almost 50% of the traditional package.

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BACKGROUND OF COCA COLA:

The Coca-Cola Company re-entered India through its wholly owned subsidiary, Coca-Cola India
Private Limited and re-launched Coca-Cola in 1993 after the opening up of the Indian economy to
foreign investments in 1991. Since then its operations have grown rapidly through a model that
supports bottling operations, both company owned as well as locally owned and includes over
7,000 Indian distributors and more than 2.2 million retailers. Today, the brands are leading brands
in most beverage segments. The Coca-Cola Company's brands in India
include Coca-Cola, Fanta Orange, Limca, Sprite, Thumps Up, Burn, Kinley,
Maaza, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh and the
Georgia Gold range of teas and coffees and Vitingo (a beverage fortified
with micro-nutrients).

In India, the Coca-Cola system comprises of a wholly owned subsidiary of

The Coca-Cola Company namely Coca-Cola India Pvt.Ltd, (Private Limited)
which manufactures and sells concentrate and beverage bases and
powdered beverage mixes, a Company-owned bottling entity, namely,
Hindustan Coca-Cola Beverages Pvt Ltd; thirteen licensed bottling partners
of The Coca-Cola Company, who are authorized to prepare, package, sell
and distribute beverages under certain specified trademarks of The Coca-
Cola Company; and an extensive distribution system comprising of
customers, distributors and retailers. Coca-Cola India Private Limited sells
concentrate and beverage bases to authorized bottlers who are authorized to use these to produce
company portfolio of beverages. These authorized bottlers independently develop local markets
and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other
businesses. In turn, these customers make company beverages available to consumers across
India.

The Coca-Cola system in India has already invested USD 2 Billion till 2011, since its re-entry into
India. The company will be investing another USD 5 Billion till the year 2020. The Coca-Cola

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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 in related industries through its vast
procurement, supply and distribution system. They strive to ensure that work environment is safe
and inclusive and that there are plentiful opportunities for people in India and across the world.
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. This means that if one unit of output of beverage is
increased, the direct and indirect effect on the economy will be twice of that. In terms of
employment, the NCAER (National Council for Applied Economic Research) study notes that "an
extra production of 1000 cases generates an extra employment of 410 man days."

As a Company, the products are an integral part of the micro economy particularly in small towns
and villages, contributing to creation of jobs and growth in GDP. Coca-Cola in India is amongst the
largest domestic buyers of certain agricultural products.

As an industry which has strong backward and forward linkages, the operations catalysis growth in
demand for products like glass, plastic, refrigeration, transportation, and Industrial and agricultural
products. The operations also lead to incremental growth for enterprises engaged in post-
production activities like merchandising, marketing and sales. In addition, they share best practices
and technological advancements with company suppliers, vendors and allied industries which often
lead to improvement in the overall standards of quality across industries.

The Coca-Cola Company has always placed high value on good citizenship. Coca basic
proposition entails that Company’s business should refresh the market; enrich the workplace;
protect and preserve the environment; and strengthen the community. The company’s leverage
brand unique strengths to actively support and respond to local needs -- be it the need for
education, health, water or nutrition. They have used distribution network for disaster relief, India
marketing prowess to raise awareness on issues such as PET recycling, and brand presence in
communities to improve access to education and potable water. The Coca-Cola India Foundation
is now taking forward in the community at large, projects and programs of social relevance to carry

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forward the message of inclusive growth and development. For more details on activities of the
Coca-Cola India Foundation, please visit the website of the Coca-Cola India Foundation.1

COCA COLA SYSTEM WORLDWIDE AND IN INDIA:

At the core of business in India, as in the rest of the world is production and distribution network,
which they call the “Coca-Cola system”. Globally, the Coca-Cola system includes the Company
and more than 300 bottling partners. The Coca-Cola Company manufactures and sells concentrate
and beverage bases. the authorized bottlers combine concentrate or beverage bases as the case
may be with sweetener (depending on the product), water or carbonated water to produce finished
beverages. These finished beverages are packaged in authorized containers bearing trademarks --
such as cans, refillable glass bottles, non-refillable PET bottles and tetra packs -- and are then sold
to wholesalers or retailers. In India, additionally, the Company also sells certain powdered
beverage mixes such as Vitingo.
Brand beverages reach ultimate consumers through brand customers: the grocers, small retailers,
hypermarkets, restaurants, convenience stores and millions of other businesses that are the final
points of distribution in the Coca-Cola system. What truly defines the Coca-Cola system, and
indeed what makes it unique among businesses, is company ability to create value for customers
and consumers.
In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-Cola
Company namely Coca-Cola India Pvt Ltd which manufactures and sells concentrate and
beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely,
Hindustan Coca-Cola Beverages Pvt Ltd; thirteen licensed bottling partners of The Coca-Cola
Company, who are authorized to prepare, package, sell and distribute beverages under certain
specified trademarks of The Coca-Cola Company; and an extensive distribution system comprising
of brand customers, distributors and retailers. Coca-Cola India Private Limited sells concentrate
and beverage bases to authorized bottlers who use these to produce portfolio of beverages. These
authorized bottlers independently develop local markets and distribute beverages to grocers, small

1
http://www.coca-colaindia.com/ourcompany/company_history.html
6|Page
retailers, supermarkets, restaurants and numerous other businesses. In turn, these customers
make brand beverages available to consumers across India.2

MISSION, VISION AND VALUES:

The world is changing all around Coca cola. To continue to thrive as a business over the next ten
years and beyond, India company must look ahead, understand the trends and forces that will
shape business in the future and move swiftly to prepare for what's to come. Coca cola’s must get
ready for tomorrow today. That's what company 2020 Vision is all about. It creates a long-term
destination for business and provides us with a "Road map" for winning together with bottling
partners.
Coca Cola’s Mission:
The Coca Road map starts with Coca Cola’s mission, which is enduring. It declares the purpose
as a Company and serves as the standard against which weigh company actions and decisions.

 To refresh the world...

 To inspire moments of optimism and happiness...
 To create value and make a difference

Visions:
The vision serves as the framework for the Road map and guides every aspect of company
business by describing what they need to accomplish in order to continue achieving sustainable,
quality growth.

 People: Be a great place to work where people are inspired to be the best they can be.
 Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy
people’s desires and needs.
 Partners: Nurture a winning network of customers and suppliers, together to create mutual,
enduring value.
 Planet: Be a responsible citizen that makes a difference by helping build and support
sustainable communities.

2
http://www.coca-colaindia.com/ourcompany/coca_cola_system.html
7|Page
  Profit: Maximize long-term return to share owners while being mindful of company overall
responsibilities.
 Productivity: Be a highly effective, lean and fast-moving organization.

India Winning Culture

The winning culture defines the attitudes and behaviors that will be required of Coca Cola’s
managers to make company 2020 Vision a reality.
Live Brand Values
The values serve as a compass for actions and describe how behave in the world.

 Leadership: The courage to shape a better future

 Collaboration: Leverage collective genius
 Integrity: Be real
 Accountability: If it is to be, it’s up to me
 Passion: Committed in heart and mind
 Diversity: As inclusive as company brands
 Quality: What they do, they do well

Focus on the Market

 Focus on needs of consumers, customers and franchise partners

 Get out into the market and listen, observe and learn
 Possess a world view
 Focus on execution in the marketplace every day
 Be insatiably curious

Work Smart

 Act with urgency

 Remain responsive to change
 Have the courage to change course when needed
 Remain constructively discontent
 Work efficiently
8|Page
Act Like Owners

 Be accountable for the actions and in actions

 Steward system assets and focus on building value
 Reward the people for taking risks and finding better ways to solve problems
 Learn from outcomes -- what worked and what didn’t

Be the Brand

 Inspire creativity, passion, optimism and fun

CULTURAL IMPACT ON BRAND:

1. Cultural Effect

According to Pukthuanthog and Walker, 2007, everyone who does business in a foreign country
has to be aware of, and responsive to that nation’s culture.

Since satisfying the cultural learned needs of customers is a fundamental objective of marketing,
gaining an intimate knowledge of the social and cultural influences of customers and the
determinants of their purchase behaviour are vital to the success of marketing across cultures.

Having respect and understanding of another culture and as well as ability to set one’s own cultural
mores (values), generally distinguishes successful global marketers from their less successful
counterparts (Bowman and Okuda, 1985).

Perhaps the biggest problem faced by multinational organisations is learning how best to market
products and treat customers in emerging global markets (Miles, 1995). Global marketers will only
be successful if they rise to the challenge of understanding culture and how it impacts on strategic
global market planning and implementation.

Relating to the effect of culture on the people, a global marketer would be looking at addressing the
intricacies of cross cultural consumer behaviours through theories and models that explain cultural
influences, consumer needs and consumer behaviour and then develop methods to compare and
contrast consumers and buyers across cultures and their behaviours.

9|Page
Culture can be defined according to Hofstede (1996: 21) as a collective programming of the mind
that distinguishes members of one category of people from those of another. Culture is
multifaceted and is a learned response to recurring situations as members or cultural components
learn, relate or share values to one another.

Culture can also be viewed has having two other layers: Visible and Hidden. Visible, with
representing overt behaviour that can be easily seen like clothes worn and eaten habits and
Hidden, representing values and morals like family values that are not visible and basic cultural
assumptions such as ethnicity and national identity which are not always overt but subject of
sometimes wrong assumption (Hofstede, 1991).

Culture is therefore fundamental to global marketing strategy and marketers should learn how to
take an objective perspective on views; communication and negotiation; and social behaviour.

Culture can therefore also be defined as the patterned ways of thinking, feeling and reacting,
acquired and transmitted mainly by symbols, constituting the distinctive achievement of human
groups, including their embodiment in artefacts, the essential case of culture consists of traditional
ideas and especially their attached values.

Culture comes in different forms as

(a) Business specific, which is market planned, controlled and focused within specific rules.

(b) Organization/Employee specific, with varying individualistic cultures of values and beliefs
adopted as one.

(c) individualistic specific, where culture is individualistic imbibed based on interaction with others.

Yeo and Carter 2005, examined effect of culture strength, managerial competencies and their
effect on corporate performance as measured by return on investment and equity. This study
showed that there was a relationship between corporate culture and managerial competencies and
that both have strong influences on corporate effectiveness. This study in conclusion helped
managers identify cultural strengths which might be context and cultural specific.

In recent years, socio- cultural influences have been identified as critical determinants of marketing
behaviour. Cultural components such as language, religion, values and attitudes, education, social
organisation. Aesthetics, technology and political discourse have varying impact and
10 | P a g e
communication to consumers perception to a brand or its elements. As a whole, cultural
component are not believed to affect international operations, however the strength lies in the
ability of a global marketer to discover similarities and differences to aid selection and operations
into new market.3

2. Culture effect India:

Socio Cultural barriers faced by coca cola in India Coca – cola, the world’s largest selling soft drink
company had established its strong presence in the world since 1886. Coca-Cola is the first
international soft drink brand to enter the Indian market in the early 1970’s. Till 1977 Coca-Cola
was the leading brand in India; later, due to FERA (Foreign Exchange Regulation Act), they left
India and didn’t return till 1993. Coca-Cola had to face many issues regarding its quality, resource
exploitation and market exploitation along with price-quality trade-offs. People all over India are
challenging Coca-Cola for its abuse of water resource. Coca-Cola had affected both quality and
quantity of ground water. Due to its waste extracts, Coca-Cola was criticized for polluting the
nearby fresh water and ground water and soil; because of this issue, farmers are suffering from
water scarcity. Despite all these social and cultural issues, customers are using Coca-Cola due to
its strong brand reputation all over the world. This is because Indians are now using more soft
drinks and the youngsters are more in this category. However, with many studies and policy
changes, Coca-Cola will be able to establish its brand reputation and increase its market share in
the near future.
This report is prepared from an organizational point of view. The point here is to prepare a report
from a consultant point of view, as Coca-Cola has hired us to do a market study and analysis on
the cultural factors the company is envisaged to face in the Indian Market. Read further to gain
better understanding about the impact of culture on business processes and activities, and also on
the business performance.4

3
Brunel Business School.( 2012) Cultural Effect towards Brand Extension as a Global Marketing Strategy(1124460). Brunel University West London

4
PETER B. SMITH, MARK F. PETERSON AND SHALOM H. SCHWARTZ, 2002. CULTURAL VALUES, SOURCES OF GUIDANCE, AND THEIR RELEVANCE TO MANAGERIAL
BEHAVIOR – A 47-Nation Study. JOURNAL OF CROSS-CULTURAL PSYCHOLOGY, Vol. 33 No. 2, pp. 188-208.
11 | P a g e
ETHICAL ISSUES CONCERNING COCA-COLA IN INDIA
Situation Analysis:

In 2003, the community near the Coca-Cola bottling plant in Kerala, India protested against the
water scarcity and polluted water that resulted from its bottling operations. The allegations caused
the closure of the bottling plant. Coca-Cola was banned in the state for these unethical business
practices. Soon after the incident, the Center for Science and Environment (CSE), a Delhi-based
environmental NGO, released a report indicating the presence of pesticides, greatly exceeding
European standards, in a dozen popular beverages sold under the brand names of the Coca-Cola
Company and PepsiCo. This report raised serious protests all over India on the soft drink
industries, especially Coca-Cola and PepsiCo. Together, the companies have 90% of the India's
soft drink market.

In response to the allegations, Coca-Cola denies them by saying their products are safe and
questions the lab reports presented by CSE. The University of Michigan placed the Coca-Cola
Company on probation in 2006, and asked for an independent assessment of its operations in
India. The soft drinks were examined by an independent lab, The Energy and Resources Institute
(TERI). According to the reports the soft drinks were declared safe and pesticide free. However,
the CSE claimed that only the water was tested and not the other ingredients; ingredients such as
artificial flavors and sugar. After the reports from TERI were published the government declared
soft drinks as safe. However, the problems with some bottling plants still remain, due to the
depleting levels of ground water, day by day.

Critical Issues/Problems:

Solid waste and water issue: The communities near the bottling plant in India complained about the
passage of sludge as fertilizer, causing health and environmental damage. The most important
issue concerning these communities is the depletion of water levels caused by the Coca-Cola
bottling operations which have drastically reduced availability of water for irrigation purposes.

Pesticides in soft drinks: The other issue concerning human health caused by Coca-Cola is that
their bottled water and soft drinks contain pesticides which were tested by the reputed NGO, CSE.

Dual product standards: Coca-Cola is accused of having dual standards in terms of their products
and safety measures concerning human health with respect to USA, Europe and India.
12 | P a g e
Community issue: These allegations affected Coca-Cola largely with its sales and also caused the
closure of one of their bottling plants in Kerala, India. Additionally, Coca-Cola’s products are
banned in the state of Kerala, India.

Action Taken:

Coca-Cola Company, India thought seriously about its corporate responsibility and witnessing huge
sales losses. In order to gain trust among the local communities near the bottling plant, they
improved their business practices and reduced the water usage by 34%. Through the practice of
rainwater harvesting, Coca-Cola returned substantial water to the aquifers. They have stopped
distributing sludge as Biosolids(fertilizers) to farmers for agriculture use, and have taken initiatives
with the Indian government to encourage the development of additional solid waste disposal sites.
The water used for making soft drinks is treated with activated carbon filtration and run through a
purification process to ensure that the water is free of pesticide residue. The ingredients are also
closely monitored and undergo various quality checks. According to the company’s factsheet, they
strictly follow the product standards which are the same all over the world.

Coca-Cola has also partnered with the NGO’s and the government to provide medical access to
poor people through regular health camps. In addition to their outreach efforts, the company
committed itself to environment responsibility through its business operations. For example by
following the practices of conserving energy and by adhering to the ban on purchasing CFCs,
Coca-Cola exhibited greater corporate responsibility.

The allegations in other ways helped Coca-Cola Company, India to show their corporate social
responsibility and to maintain good product quality standards. The initiatives all over India helped
them reach villages for a good cause and also indirectly marketed their products with establishing a
trust among the public. After all these allegations, the CSE is still not convinced of the quality of the
product. Therefore, Coca-Cola must prove that they have upgraded their lab with sophisticated
instrument which is capable of measuring pesticide residue in soft drinks. As per the recent reports
by CSE, they claim that the pesticide residue has gone up 27 times higher than expected level by
the Bureau of Indian Standards (BIS) (in 2006).5

5
Amit Srivastava . July 10th, 2003.Communities Reject Coca-Cola in India , India Resource Center

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COCA COLA POLITICAL ISSUES IN INDIA:
US drink manufacturer Coca-Cola is facing renewed problems in India after Kerala's state
government recently imposed a temporary ban on water extraction at its Plachimada bottling plant.
The ban, which lasts until June 15, follows a recent parliamentary inquiry that found that soft drinks
manufactured by Coca-Cola and Pepsi contained pesticide residues. These are the latest in a
string of problems that Coca-Cola has faced and signals continued difficulties for the company,
despite its move last December to create an advisory board tasked with navigating its affairs
through the complex local political landscape.
Coca-Cola has chalked up a turbulent history in India, only choosing to return to the country in
1993 after a somewhat unceremonious exit in 1977. That said, 2003 was a particularly difficult year
for the Indian arm of Coca-Cola, with 2004 shaping up to be similarly onerous. Coca-Cola faced
negative press over issues as diverse as contamination; anti-Iraq-war protests; alleged
environmental degradation; and, as 2003 came to a close, an alleged sexual-harassment case
involving a senior company executive and a former Miss Universe with whom the company had
previously had a product-endorsement contract.
The Plachimada issue has now returned to haunt the company and follows a barrage of bad press
over the bottling plant. The ban has come in response to acute water shortages the district is
facing, but is part of a much wider debate over water exploitation. In December, a High Court ruling
saw the Indian arm of US drinks manufacturer Coca-Cola, Hindustan Coca-Cola Beverages Ltd,
ordered to stop extracting groundwater at its southern Indian production facility in Plachimada,
Kerala. Unsurprisingly, the company appealed the decision. The ruling also failed to satisfy local
groups who have been campaigning for years for the closure of the bottling plant, demanding
compensation for the environmental damage that they argue it has caused. The Plachimada
bottling factory opened in 1999, since when locals have complained that water resources have
fallen dramatically - impacting adversely on farming yields - and that the remaining supplies have
been contaminated, rendering them unfit for human usage.
Contamination issues of a similar kind also continue to dog the company. The recent parliamentary
inquiry came in response to findings that the Center for Science and Environment (CSE), a Delhi-
based non-governmental organization (NGO), released last July. In a report on 12 leading soft-
drink brands, the NGO argued that that all contained higher levels of toxins than would be
permitted under European Union regulations. In a move calculated to capture public attention, the
CSE argued that repeat exposure to the likes of pesticide residues could result in cancer and the
14 | P a g e
immune system's failure. Coke and Pepsi account for more than 80 percent of the market and own
all 12 drink brands. As such, the two companies were the focus of the resultant public protests. The
Indian government attempted to quash the issue in August, releasing a report suggesting that any
pesticide residues found in the drinks were within given guidelines. This failed to satisfy the
opposition, which called for a more thorough report, the findings of which were published in early
February and have subsequently renewed the debate.

Complex issues surround multinationals operating in a country such as India. In light of this, Coca-
Cola has evidently contemplated a phoenix-styled resurrection of its reputation and product sales
with the creation of an advisory board. The board, formed in December, comprises some of the
country's leading professionals in the fields of economics, law and industry, operating under the
chairmanship of former cabinet secretary Naresh Chandra. The group held its first meeting on
December 16 and is expected to convene three to four times a year, both to review the company's
performance in India and guide it on a range of issues, including policy formulation, operational and
environmental matters, corporate citizenship, social responsibility and corporate governance. The
first meeting arrived at the decision to form an Indian environmental council, which will be headed
by former chief justice B N Kirpal.
It is worth noting that some of the problems Coca-Cola has faced and continues to be troubled by
form part of a wider debate, for which the drink giant cannot alone be held accountable.
Environment and health issues feature highly in the Indian psyche, particularly with the continued
publicity regarding the Bhopal disaster in 1984, caused when 27 tons of poison gases escaped
from a Union Carbide pesticide factory, killing thousands within hours and injuring more than
500,000 other people. As such, a significant challenge that foreign companies face is the simple
fact that many of the groups who campaign over environmental issues and the like have powerful
political ties. Their opposition is based not just on environmental and health concerns, but often
also on nationalistic sentiment - targeting these huge multinationals for what is often regarded as
their adverse impact on the local culture. Furthermore, any health scare, particularly one related to
contamination, vividly captures the public imagination, often to the multinational's disadvantage.
A factor that has emerged from the toxin debate is the need for government to address lacking
standards governing the quality of water that is used for soft drinks. Coca-Cola and Pepsi claim
that they are operating to local standards, but - as CSE illustrated - these may not meet those set
by the EU. As such, it is not just large multinationals that need to pay more attention to issues such

15 | P a g e
as social responsibility, but also the government.
In light of these issues, Coca-Cola's decision to create an advisory board was an interesting move.
From a cynic's standpoint, it could be argued that the company's decision to create an advisory
council and then populate it with high-profile figures immediately affords it some protection from
criticism, and gives it easy access to the country's decision-makers - a useful asset in the face of
social or legal action. Furthermore, it provides Coca-Cola with the opportunity to create a more
easily identifiable Indian brand, not unlike Hindustan Lever, and as such reduce the propensity for
its market to regard it as "foreign". Less cynically, the creation of an advisory council is something
of a precedent. This is the first such move by a multinational operating in India, and may
demonstrate a realization that foreign multinationals need to be more attentive to local concerns
and show greater awareness of social responsibility if they are ultimately to succeed in the local
marketplace.6

COCA COLA ENVIRONMENTAL ISSUES IN INDIA:

Coca-Cola and Water Use in India: “Good Till the Last Drop”

The marketing executive who came up with Coca-Cola’s popular slogan

in 1908 most likely never expected it would be taken so literally.
However, a hundred years ago there probably weren’t many who
imagined a term like “water wars” could exist in a region that
experiences annual monsoons. On February 25 a complaint was filed in
the New York Supreme Court against the The Coca-Cola Company
alleging that they knew about and sought to cover up human rights
abuses in Guatemala. While that trial gets started, the company’s
controversial practices in India continue involving the over-exploitation
of limited water resources and the contamination of groundwater supplies. In response to public
outcry the soft drink company is now championing itself as a longtime environmental leader and
the business community is eager to advertise their claim. Yesterday CNN Money reported that:

Coke has been a leader when it comes to environmental issues: It is aiming to be water neutral
meaning every drop of water used by the company will be replenished — by 2020.

6
http://www.atimes.com/atimes/South_Asia/FB24Df04.html
16 | P a g e
This would come as a surprise to the Plachimada community in the State of Kerala. Ever since
Coca-Cola opened a bottling plant on their land in 2000 they have been faced with chronic drought
and polluted water. In 2006 these residents of a small impoverished community in southern India
began a pitched campaign to evict Coca-Cola from their land which led to fierce battles with local
authorities.In 2003 Indian journalist Arjun Sen wrote in The Statesman:

Three years ago, the little patch of land in the green, picturesque rolling hills of Palakkad yielded 50
sacks of rice and 1,500 coconuts a year. It provided work for dozens of labourers. Then Coke
arrived and built a 40-acre bottling plant nearby. In his last harvest, Shahul Hameed, owner of a
smallholding, could manage only five sacks of rice and just 200 coconuts. His irrigation wells have
run dry, thanks to Coke drawing up to 1.5 million litres of water daily through its deep wells to bottle
Coke, Fanta, Sprite, and the drink the locals call without irony, “Thumbs Up.”

To make matters worse, the bottling plant was producing thousands of gallons of toxic sludge and,
as the BBC reported, disposed of it by selling the carcinogenic material to local farmers as
“fertilizer.” High levels of pesticides were also reportedly found in the soft drink produced in the
region leading to bans across the country. According to The Guardian, some Indian farmers even
chose to spray their fields with Coca-Cola rather than use the more expensive pesticides from
Monsanto.

However, the most serious problem was water use. According to anthropologist Ananthakrishnan
Aiyer writing in the journal Cultural Anthropology the persistent water problems in the region soon
became a crisis after the company’s arrival:

A severe drought in 2004 in Kerala complicated matters as Plachimada was declared a “water
impoverished” zone in 2005. By 2005, the Plachimada situation was being replicated as the
struggle over water and irrigation rights spread to other rural communities across the country,
which led to several agitations and demonstrations against The Coca-Cola Company.

Despite attempts to revoke their license Coca-Cola remained. As Aiyer pointed out, it would have
been foolish not to. The company extracted groundwater nearly free of charge (except for a small
fee for discharging wastewater) and they were able to reap enormous profits as a result. In the late
1990s the average cost of industrial water in the U.S. was about five dollars per 10,000 litres,
whereas in India the price was a mere three cents.
17 | P a g e
Water in India is literally free and highly lucrative for private corporations. Thus, access to cheap
groundwater and the low cost of extracting it in combination with low labor costs and state and
local governments falling over each other to attract “foreign investment,” all play a role in facilitating
the entry of transnational corporations into the water industry.

However, this investment, from Coca-Cola and other multinationals, has come at a significant cost
to the local population:

The rural population has especially suffered the most. The clearest and most visible signs of this
distress, and there are many, are of course the steady numbers of farmer suicides across the
country. By several reliable estimates, there have been anywhere from 22,000 to 25,000 suicides
by farmers in the past decade and the majority of these have taken place in the western and
southern states. This amounts to about seven suicides a day–a situation that would have called for
a national emergency in most Western neoliberal states, but it is certainly not the case in India.

Clearly this trend is the result of larger forces and not just the actions of a single company. Aiyer
highlights the role of the World Bank in promoting the privatization of water throughout the country
that has resulted in multinational companies and wealthy landowners “sidestepping local
government bodies and taking direct control of canals
and irrigation schemes.” In the case of Plachimada, Coca-Cola has become a symbol for these
larger forces at work:

It is little wonder that the struggle by the residents of Plachimada against The Coca-Cola
Company, an eminently concentrated form of capital, galvanized so much support in India and
elsewhere, and that their struggle has been inspirational and played a significant role in generating
opposition to The Coca-Cola Company and PepsiCo in other rural communities in India facing
similar threats from transnational corporations. While the Kerala plant was temporarily closed due
to the popular protest, to this day the people of Plachimada continue their struggle to receive
compensation for contamination and over-exploitation of water resources on their land. Coca-Cola
has shifted their operations to other areas of southern India and continues to produce their fizzy

18 | P a g e
drink in a region that regularly faces chronic drought. More than one hundred years since the
slogan was first used, “Good Till the Last Drop” continues to have lasting relevance.7

COMPETITION:

Coca-Cola Classic is a well-recognized brand worldwide. Unfortunately, domestic sales do not

reflect Coca-Cola Classic’s true marketing potential. Due to newly introduced beverages and the
growing popularity of the competition, Coca-Cola Classic sales continue to decline.

Direct Competition:
Cola flavored sodas: Pepsi, RC Cola, store brand colas other brands of cola-flavored soda provide
the same experience as Coca- Cola Classic. Non-loyal cola drinkers cannot even taste the
difference between brands.

Indirect Competition:
Other carbonated drinks: Dr. Pepper, Mountain Dew, 7-Up, Diet Sodas Other flavors of carbonated
drinks can substitute Coca-Cola Classic. They have the same texture and are consumed with
similar foods: pizzas, burgers, snacks. All of these sodas provide the same benefit to the
consumer: an easily accessible drink that will complement any food.
Functional drinks: Energy Drinks, Enhanced Water/Sports Drinks, Teas Functional drinks are
rapidly growing in popularity among teenagers and young adults. They provide a more
concentrated dose of caffeine, vitamins or nutrients for the students and athletes who are in need

7
AIYER, A. (2007). THE ALLURE OF THE TRANSNATIONAL: Notes on Some Aspects of the Political Economy of Water in India Cultural
Anthropology, 22 (4), 640-658 DOI: 10.1525/can.2007.22.4.640
19 | P a g e
of energy. With an overlapping of target market and similar key benefits of providing energy,
functional drinks are taking market share from Coca-Cola Classic.

Non-Soda Competition:
Other beverages: Any brand of unfortified juice, water or milk there is a wide range of drinks
available to quench thirst or to complement a meal or snack. Water, milk and all other drinks
compete to satisfy the consumer’s next wave of thirst.

CASE OBJECTIVES:
What are psychographic and behavioral characteristics of the target market?
What is the target market’s perception of CSDs and Coca-Cola Classic?
What are the CSD purchase trends among the target market?
What are common lifestyle trends within the target market?
What is the media consumption of the target market?

What are the psychographic and behavioral characteristics of the target audience?
The target audience invests much of its time in social activities. They feel most comfortable when
around others, and they use multiple forms of communication to keep in touch with others. The
target audience values friends highly and prefers to do activities as a group rather than as
individuals.
What is the target market’s perception of Coca-Cola Classic?
Social, conservative and fun are a few words that the target uses to describe the Coca-Cola
Classic brand. They see Coca-Cola Classic as a solid brand that will always be around, though it
may not always adapt well to current trends. The target audience says that Coca-Cola Classic
does not put enough emphasis on what is interesting to them.
What are CSD purchase trends among the target market?
23% of the target market is generally loyal to brands but has not yet made a definite brand choice
for soft drink consumption. These customers are ready to make a brand choice but are waiting for
a brand that connects with them. The target market is health-conscious and thus has increased its
consumption of non-soda drinks; however, it has not given up soft drinks entirely.
What are common lifestyle trends within the target market?

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Health has become a major concern for the target market. It is, however, a matter of perception.
While 96% of respondents consider themselves healthy or somewhat healthy, only 26% watch their
calorie intake. Therefore, while being healthy is trendy, few follow a strict diet. Instead, they make
their consumption decisions based on perceptions of healthiness.
The target is generally receptive to advertising; it is less annoyed by advertising
than the older population. 13-18 year olds look to advertising for current trends. They consider both
advertising and their friends the strongest influences when purchasing the right products.
Dynamics primarily drink soda in social settings with friends and family.

What is the media consumption of the target market?

91% of the target audience considers itself to be at least somewhat connected to major news and
world events. The target audience spends much of their time on the computer, and sees it as a
valid source of information.

Segmenting through media purchases

Aware of the benefits of segmenting the market, they looked for a divide delineating the target into
two psychographic groups throughout the primary research process. Case found no such distinct
divide. In fact, they see the younger half of the target attempting to emulate the older half, aligning
with their world views and preferences. With no discernable difference in outlook within the target,
any division of the target into primary and secondary sub-groups would be completely arbitrary.
Yet, though their underlying preferences may be similar, a high school student lives in a very
different world from a college student or a young professional. In order to best connect with their
everyday experiences, they plan to segment through media channels, allowing us to tailor
executions to the specific life experiences most relevant to the audience while still maintaining the
underlining message among the target.

Coca Cola Target Market:

The target audience is the Dynamics,13-24 year old non-loyal beverage drinkers seeking
convenience in their active, busy and connected lives. Dynamics engage in several activities that
involve the use of multiple communication media at the same time.
How are they Dynamic:
Non-Loyal – Dynamics are brand loyal, but have not yet decided on a soft drink loyalty.

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Active - Dynamics are physically active, interested in fitness and health.
Busy - Dynamics are either working, in school, or both. During their chaotic days, they socialize
with others.
Connected – Dynamics utilize lots of technology to maintain their social connections and stay
connected to the world around them.

GLOBAL POSITIONS:

Coca-Cola Enterprises Inc.

Type Public
NYSE: CCE
Traded as
S&P 500 Component
Industry Beverages
Founded 1986
Headquarters Atlanta, Georgia, U.S.

John F. Brock (CEO), Chairman and CEO

Key people William W. Douglas, CFO
Hubert Patricot, President, Europe Group[1]

The Coca-Cola Company Products

Products
Other Soft Drinks
Revenue US$7.6 Billion (FY 2012)[2]

Operating income US$1.03 Billion (FY 2011)[2]

Net income US$677 Million (FY 2012)[2]

Total assets US$9.09 Billion (FY 2011)[3]
Total equity US$2.90 Billion (FY 2011)[3]
Employees 13,250 (2011)[4]

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THE COCA-COLA COMPANY SECOND QUARTER AND YEAR-TO-
DATE 2013 RESULTS
1% global volume growth in the second quarter; 3% growth year to date Global volume and value
share gains in total nonalcoholic ready-to-drink beverages as well as sparkling and still beverages
Global brand Coca-Cola volume growth of 1% in the second quarter; 2% growth year to date
Second Quarter and Year-to-Date 2013 Highlights
• Second quarter volume grew 1% and year-to-date volume grew 3%. Coca-Cola
Americas grew 1% and Coca-Cola International grew 2% in the quarter.
• Solid global volume and value share gains achieved in the quarter in total
nonalcoholic ready-to-drink (NARTD) beverages as well as global volume and
value share gains in sparkling and still beverages.
• Reported net revenues declined 3% in the second quarter and 2% year to date.
Excluding the impact of structural changes, comparable currency neutral net
revenues grew 2% in both the quarter and year to date.
• Reported operating income declined 2% in the second quarter and 3% year to date.
Excluding the impact of structural changes, comparable currency neutral operating
income grew 4% in the quarter and 5% year to date.
• Currency was a 2% headwind on comparable net revenues and a 3% headwind on
comparable operating income in the quarter.
• Second quarter reported EPS was $0.59, down 3% and comparable EPS was $0.63,
up 4%, including an approximate 2% currency headwind. Year-to-date reported
EPS was $0.98, down 7% and comparable EPS was $1.09, up 4% despite two fewer
selling days in the first half of 2013 and an approximate 4% currency headwind.

ATLANTA, July 16, 2013 – The Coca-Cola Company today reported second quarter and yearto-
date 2013 results. Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company
said, “Our second quarter volume results came in below our expectations, reflecting an ongoing
challenging global macroeconomic environment and unusually poor weather conditions in the
quarter. While we are not happy with our performance, we did gain global volume and value share
in total nonalcoholic ready-to-drink beverages as well as in sparkling and still beverages in the
quarter. Despite the headwinds in the quarter, we are committed to improving upon our results,
with current dynamics leading us to believe that our performance will be better in the second half of
23 | P a g e
the year. We remain confident in our 2020 Vision and our system's ability to execute with precision
around the world. In this context, we remain firmly focused on investing alongside our global
bottling partners to strengthen our system for the future, to deliver the brands and beverages that
consumers love and to achieve our long-term performance goals.”

PERFORMANCE HIGHLIGHTS
The Coca-Cola Company reported worldwide volume growth of 1% in the second quarter
and 3% year to date, and grew global volume and value share in the quarter in total NARTD
beverages as well as in both sparkling and still beverages. Volume growth in the quarter was
below the Company's expectations due to a confluence of factors that collectively made for a
challenging second quarter. Slow economies in Europe, Asia and Latin America, and historically
wet and cold weather conditions across multiple regions impacted consumer spending and,
consequently, overall NARTD beverage industry performance. Coca-Cola Americas grew
volume 1% in the quarter and 2% year to date, with North America volume down 1% and Latin
America volume up 2% in the quarter. Coca-Cola International grew volume 2% in the quarter
and 4% year to date, with second quarter Eurasia and Africa volume up 9%, Pacific volume up
2% and Europe volume down 4%.
Worldwide sparkling beverage volume was even in the quarter and up 2% year to date.
Despite unseasonably cold and wet weather and continued volatile macroeconomic conditions
in many markets around the world, we grew global volume and value share in sparkling
beverages in the quarter, led by marketing campaigns such as “Share a Coke” in Europe and
“Coca-Cola Open Summer” in North America. Worldwide brand Coca-Cola volume grew 1% in
the quarter and 2% year to date, with growth in the quarter across diverse markets, including
Thailand (+24%), India (+18%), Nigeria (+15%), Russia (+11%), Argentina (+7%) and the
Philippines (+7%). The Coca-Cola Company was recognized during the quarter with the 2013
Creative Marketer of the Year Award at the Cannes Lions International Festival of Creativity,
widely considered to be the world's foremost celebration of creative excellence in brand
communications.
Worldwide still beverage volume grew 6% in both the quarter and year to date, with solid
volume and value share growth across beverage categories, including packaged water, juices
and juice drinks and ready-to-drink tea. Excluding the impact of acquired volume, primarily the
Aujan partnership in the Eurasia and Africa Group, still beverage volume grew 4% in the quarter.

24 | P a g e
Ready-to-drink tea volume grew 10% in the quarter, with continued strong performance of key
brands such as Gold Peak and Honest Tea in North America, Ayataka green tea in Japan and
Fuze Tea across multiple markets worldwide. Packaged water volume grew 6% in the quarter,
as we continue to focus on innovative and sustainable packaging and immediate consumption
occasions that help drive value share growth ahead of volume share growth. Energy drinks
volume grew 5% in the quarter driven by growth across our global portfolio of energy brands.
Juices and juice drinks volume grew 4% in the quarter, with growth across all geographic
operating groups.
Table 1

Table 2

25 | P a g e
Eurasia & Africa
• Our Eurasia and Africa Group's volume grew 9% in the quarter and 11% year to date (up 6% and
9%, respectively, excluding the benefit of acquired volume primarily from the Aujan partnership),
cycling 10% growth in the prior year quarter. All business units in the group achieved volume
growth in the quarter, led by Middle East and North Africa, up 17% (up 9% excluding the benefit of
acquired volume); Central, East and West Africa, up 10%, and Russia, up 3%. Reported net
revenues for the quarter increased 5%, reflecting a 7% increase in concentrate sales and positive
price/mix of 4%, partially offset by a 6% currency headwind. Comparable currency neutral net
revenues increased 11% in the quarter.
After adjusting for unit case sales without concentrate sales equivalents, concentrate sales in the
quarter slightly lagged unit case sales due to timing, but year to date they are in line.
Reported operating income increased 12% in the quarter. Comparable currency neutral operating
income increased 19% in the quarter, driven by volume, pricing and product mix, as well as
efficient expense management, partially offset by continued investments in the business.
• During the quarter, Eurasia and Africa grew volume and value share in total NARTD
beverages. Sparkling beverage volume grew 7% in the quarter, led by brand Coca-Cola, which
also grew 7%. This growth was due to a continued focus on driving executional capabilities in the
marketplace, greater consumer choice in package and price options, integrated marketing
campaigns such as “Coca-Cola Crazy for Good” and “Coke with Meals”, as well as the expansion
of the Coke Studio music competition. Sprite volume grew 6% in the quarter and Fanta volume
grew 5% as new campaigns were launched across multiple markets. Still beverage volume grew
15% in the quarter, including the benefit of acquired brands which added eight points of volume
growth to overall Eurasia and Africa still beverages. In Russia, key contributors to volume growth in
the quarter were brand Coca-Cola, up 11%, Fanta Orange, up 9% and Schweppes, up 31%. We
gained volume and value share in total NARTD beverages in Russia, with a strong marketing
calendar tied to the 2014 Sochi Winter Olympics and supported in the quarter by our largest-ever
consumer promotion in the country offering an under-the-cap points program to redeem for Winter
Olympics-themed glassware.
Europe
• Our Europe Group's volume declined 4% in the quarter and 2% year to date, cycling a 4% decline
in the prior year quarter. Although we grew share, the quarter was marked by particularly poor
weather across many countries, including severe flooding in parts of Germany and Central Europe,

26 | P a g e
as well as ongoing weakness in consumer confidence and spending across the region, which have
impacted the entire NARTD beverage industry.
Reported net revenues declined 1% in the quarter, reflecting a 3% decline in concentrate sales and
a 2% currency headwind, partially offset by positive price/mix of 4%. Price/mix includes the benefit
of consolidating the innocent juice and smoothie business starting in May 2013. Comparable
currency neutral net revenues increased 1% in the quarter. After adjusting for unit case sales
without concentrate sales equivalents, concentrate sales in the quarter were in line with unit case
sales. Reported operating income declined 7% in the quarter. Comparable currency neutral
operating income declined 3% in the quarter, reflecting the decline in volume, partially offset by
efficient expense management and the timing of operating expenses.
• During the quarter, the Europe Group grew volume and value share in total NARTD
beverages as well as in sparkling beverages, juices and juice drinks and energy drinks despite
continued weak industry trends. In addition, we gained share in ready-to-drink tea. A key marketing
campaign launched in markets throughout Europe late in the quarter, titled “Share a Coke”, placed
the names of individual consumers on our iconic Coca-Cola bottles and cans. To date, the
campaign has received positive consumer feedback and it has now been extended and expanded
as a result. Although Germany and Northwest Europe and Nordics volume declined low single
digits in the quarter, we gained volume and value share in total NARTD beverages as well as in
sparkling beverages. The Iberia and Central and Southern Europe regions continue to manage
through very tough macroeconomic conditions with ongoing brand-building programs and an
occasion-based package, price and channel segmentation strategy.
Latin America
• Our Latin America Group's volume grew 2% in the quarter and 3% year to date, cycling 3%
growth in the prior year quarter. Volume growth in the quarter was led by Latin Center, up 7%,
South Latin, up 5% and Mexico, up 1%. Brazil volume was even in the quarter, cycling 6% growth
in the prior year quarter and reflecting some consumer uncertainty given the economic slowdown
and protests late in the quarter. Reported net revenues for the quarter increased 6%, reflecting
concentrate sales growth of 2% and positive price/mix of 9%, partially offset by a currency
headwind of 5%. Comparable currency neutral net revenues increased 11% in the quarter.
Reported operating income was up 6% in the quarter, with comparable currency neutral operating
income up 13%, primarily reflecting volume, pricing and product mix, partially offset by increased
investments in support of the 2013 FIFA Confederations Cup and upcoming 2014 FIFA World Cup.

27 | P a g e
• During the quarter, the Latin America Group gained share in total NARTD and sparkling
beverages as well as both volume and value share in still beverages. This performance was driven
by continued activation of brand and category campaigns such as “Crazy for Good” and “140
Calories”, previously launched in Brazil, Mexico and Colombia and now expanded to Central
America, as well as investments in cold-drink equipment and continued segmentation across
multiple price points and package sizes. In addition, late in the quarter we launched Coca-Cola Life
in Argentina, our first low-calorie cola naturally sweetened with stevia leaf extract and sugar. In the
quarter, brand Coca-Cola volume was up 1% and both Sprite and Fanta volumes were up 4%. Still
beverage volume grew 8% in the quarter, driven by growth in ready-to-drink tea, juices and juice
drinks, sports drinks and packaged water. We gained both volume and value share in total NARTD
beverages across multiple markets, including Mexico, Argentina and Colombia.
North America
• Our North America Group's volume declined 1% in the quarter and was even year to date,
cycling 1% growth in the prior year quarter. Volume was under pressure due to unseasonably cold
and wet weather and the timing of the Easter and July 4th holiday periods as well as weakened
consumer spending that has impacted the overall NARTD beverage industry in North America.
Reported and comparable currency neutral net revenues for the quarter declined 1%, reflecting a
1% decline in “as reported” volume and even price/mix, including positive 1% price/mix for
sparkling beverages. Second quarter reported operating income declined 3%. Comparable
currency neutral operating income was even in the quarter, reflecting the volume performance and
continued investment in our brands as well as the impact of structural changes, offset by efficient
management of operating expenses.
• During the quarter, North America maintained volume share and grew value share in total
NARTD beverages as we continued to focus on our core strategies of building strong
brands,
creating value with customers and enhancing system capabilities. In addition, we gained volume
and value share in both sparkling and still beverages, with volume and value share gains across
every still beverage category except sports drinks. Sparkling beverage volume declined 4% in the
quarter with sparkling beverage price/mix growth of 1% and value share growing ahead of volume
share, as we remain committed to a rational pricing environment. Still beverage volume grew 5% in
the quarter, led by strong performance across both the ready-to-drink tea and packaged water
categories with brands such as Gold Peak, smartwater and Dasani leading the way. Further, our

28 | P a g e
volume and value share gains in the juices and juice drinks category were driven by 4% volume
growth for Simply and 3% growth for Minute Maid.
Pacific
• Our Pacific Group's volume grew 2% in both the quarter and year to date, cycling 10% growth in
the prior year quarter. Reported net revenues for the quarter declined 5%, reflecting 4%
concentrate sales growth, offset by a 4% decline in price/mix and a 5% currency headwind. The
unfavorable price/mix in the quarter was primarily a result of geographic mix, as we cycled product
launches in Japan in the prior year, as well as shifts in product and package mix within individual
markets. Comparable currency neutral net revenues were even. Concentrate sales in the quarter
were ahead of unit case sales due to timing, primarily in China. For the full year, we expect
concentrate sales to be in line with unit case sales. Reported operating income decreased 3% in
the quarter, reflecting geographic mix and a 2% currency headwind. In addition, reported operating
income reflects a benefit related to structural changes. Comparable currency neutral operating
income was even in the quarter.
• Volume growth in the quarter was wide ranging, with 28% growth in Vietnam, 22% growth
in Indonesia, 17% growth in Thailand and 1% growth in both Japan and India. Volume
performance was even in both China and the Philippines in the quarter. Sparkling beverage
volume growth was even in the quarter, yet brand Coca-Cola grew 3% and Fanta grew 7%.
Still beverages grew 4% in the quarter, with 7% growth in packaged water, 5% growth in ready-to-
drink tea and 6% growth in sports drinks. Japan's sparkling beverage volume grew 1% in the
quarter, supported by music-themed integrated marketing campaigns such as the “Zero Limit”
campaign for Coca-Cola Zero, up 13%. India volume growth of 1% in the quarter was cycling 20%
growth in the prior year quarter and reflects the impact of an earlier and heavier than normal
monsoon season in 2013 and cycling a later than normal monsoon season in the prior year.
Importantly we gained volume and value share in India in the quarter in total NARTD beverages as
well as in both sparkling and still beverages. The second quarter volume performance in China
continued to be impacted by the economic slowdown, poor weather and competitive activity such
as package upsizing. Despite this, still beverages grew 4% in the quarter, driven by juices and juice
drinks and packaged water. As we look ahead to the remainder of 2013, we continue to expect the
industry and our business to be impacted by China's economic slowdown. However, we are
evolving our strategies in China and we anticipate a return to growth in our business in the second
half of the year.

29 | P a g e
Bottling Investments
• Our Bottling Investments Group's (BIG) volume grew 1% in the quarter and 2% year to date after
adjusting for the net impact of structural changes, primarily the deconsolidation of the Philippine
bottling operations in 2013. BIG volume including the impact of structural changes was down 16%
in the quarter and 12% year to date. The growth in volume in the quarter after adjusting for the
impact of structural changes was led by India, with strong volume and value share gains, as well as
markets within BIG's Southeast Asian operations. Reported net revenues for the quarter declined
10%. This reflects the 1% volume growth and positive price/mix of 1%, offset by a currency
headwind of 1% and an 11% net impact due to structural changes. Comparable currency neutral
net revenues declined 10% in the quarter.
Reported operating income in the quarter grew 38%. Comparable currency neutral operating
income increased 12% in the quarter, reflecting positive pricing and product mix in certain markets,
partially offset by continuing investments in our in-market capabilities.

FINANCIAL REVIEW
Second quarter reported net revenues declined 3%, with comparable net revenues also down 3%.
This reflects a 1% increase in concentrate sales, offset by a 2% impact from structural changes
and a 2% currency headwind. The structural changes in the quarter primarily reflect the
deconsolidation of the Philippine bottling operations in 2013. We achieved solid pricing across key
markets around the world leading to global NARTD value share growth for the 24th consecutive
quarter. Price/mix in the quarter was even, as the benefit of positive pricing was offset by
geographic mix, and as we cycled positive 3% price/mix in the prior year quarter.
Excluding the impact of structural changes, comparable currency neutral net revenues grew 2% in
both the quarter and year to date. We anticipate that the Philippine bottling transaction, together
with the bottling transaction in Brazil which closed earlier this month, will reduce the full-year 2013
net revenues by 3%. Reported and comparable cost of goods sold decreased 5% in the quarter,
reflecting a 1% increase in concentrate sales offset by the impact of structural changes, primarily
the deconsolidation of the Philippine bottling operations in 2013. Currency reduced comparable
cost of goods sold in the quarter by 2%. Excluding the impact of structural changes, comparable
currency neutral cost of goods sold was even in the quarter. Items impacting comparability in the
quarter primarily included net gains/losses on commodities hedging.

30 | P a g e
Reported SG&A expenses declined 3% in the quarter and comparable SG&A expenses declined
2%. Currency reduced comparable SG&A expenses by 1% in the quarter. Excluding the impact of
structural changes, comparable currency neutral SG&A expenses grew 1% in the quarter, including
a strong increase in direct marketing expenses, and we captured two points of operating expense
leverage. The structural changes in the quarter primarily reflect the deconsolidation of the
Philippine bottling operations in 2013. Operating expense leverage in the quarter was impacted by
the reversal of certain expenses related to our long-term incentive plans. A portion of our stock-
based compensation is based on multi-year performance periods and includes the impact of
currency, which we now estimate will be a headwind of 4% on operating income for the full year
versus our expectation at the end of the first quarter of a 2% headwind. We now expect to achieve
low single-digit operating expense leverage for the full year after excluding the impact of structural
changes.
Second quarter reported operating income decreased 2%. Excluding the impact of structural
changes, primarily the deconsolidation of the Philippine bottling operations in 2013, comparable
currency neutral operating income grew 4% in the quarter and 5% year to date.
Items impacting comparability reduced second quarter 2013 operating income by $175 million and
reduced second quarter 2012 operating income by $119 million. Currency reduced comparable
operating income by 3% in the quarter. Including our hedge positions, current spot rates and the
cycling of our prior year rates, we estimate currency will have a 4% unfavorable impact on
comparable operating income for both the third quarter and the full year. Further, we anticipate that
the Philippine bottling transaction, together with the bottling transaction in Brazil that closed earlier
this month, will have a 1% structural impact on our full-year 2013 operating income, with this
decline offset by a corresponding improvement in equity income.
Year-to-date net share repurchases totaled $2.0 billion. We are targeting net share repurchases of
$3.0 to $3.5 billion for the full year. Second quarter reported EPS was $0.59 and comparable EPS
was $0.63. Items impacting comparability reduced second quarter 2013 reported EPS by a net
$0.04 and had no net impact on second quarter 2012 reported EPS. In both periods, these items
included restructuring charges, costs related to global productivity initiatives, transaction
gains/losses, net gains/losses related to our economic hedges, primarily commodities, and certain
tax matters. Items impacting comparability in second quarter 2012 also included charges related to
changes in the structure of Beverage Partners Worldwide (BPW) and charges related to the supply
of Brazilian orange juice.

31 | P a g e
Year-to-date cash from operations was $3,956 million, down 5% versus the prior year, primarily
due to the impact of two fewer selling days in the period, an unfavorable impact from currency, and
an increase in the use of working capital in preparation for the peak season of our growing global
business.

Effective Tax Rate

As discussed in the first quarter 2013 earnings release, we had previously estimated that the
underlying effective tax rate on operations would be 23.5% for 2013. We now anticipate that the
underlying effective tax rate on operations for 2013 will be 23.0%. We expect this rate to remain
unchanged through 2014. We are required to record income tax expense for the first six months of
the year based on the estimated underlying effective tax rate for the full year. To bring the effective
tax rate for the first six months of 2013 in line with the current estimated full year underlying
effective tax rate, we recorded income tax expense at an underlying effective tax rate of 22.6% for
the second quarter.
The reported effective tax rate for the quarter was 23.5%. The variance between the reported rate
and the underlying rate was due to the tax effect of various items impacting comparability,
separately disclosed in this document in the Reconciliation of GAAP and Non- GAAP Financial
Measures schedule.
The underlying effective tax rate does not reflect the impact of significant or unusual items and
discrete events, which, if and when they occur, are separately recognized in the appropriate period.

Items Impacting Prior Year Results

First quarter 2012 results included a net gain of $0.01 per share due to gains related to equity
investees, partially offset by restructuring charges, costs related to global productivity initiatives,
charges related to changes in the structure of BPW and charges related to the supply of Brazilian
orange juice. Items impacting results had no net effect on second quarter 2012 reported EPS.
These items included a transaction gain and certain tax matters, offset by restructuring charges,
costs related to global productivity initiatives, charges related to changes in the structure of BPW
and charges related to the supply of Brazilian orange juice.8

8
http://www.coca-colacompany.com/press-center/press-releases/the-coca-cola-company-reports-third-quarter-and-year-to-date-2013-results

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Table 3

Related Competitor Companies

Table 4

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Table 5

Table 6

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Up to 5.Dec. 2013.9
Table 7

INNOVATION:
The third strategic priority in our sustainability plan is “Innovate for the Future”. they want to find
opportunities for innovation, collaboration and partnership which help us to address some of the
business, industry and societal challenges that they face as a corporate citizen.

In company sustainability plan they have set stretching targets in both Company environmental and
social focus areas. To meet these by 2020, they will need innovation. Company stakeholders also
have high expectations of us, as a responsible corporate citizen, to contribute to finding solutions to
the wider societal challenges that arise where Coca cola business touches the world and the world
touches Company business.

Innovation Strategy

Over the past year the company have developed an innovation ‘framework’ based on the key
points in Business value chain where they, as a manufacturer and distributor of Coca-Cola
products, can help to try and answer some of the big questions which will be crucial not only to own
business but also to the future of the planet in the long term.

9
https://www.google.com/finance?ei=ghihUujUEOSowAPMGQ
35 | P a g e
They have determined three types of innovation to focus where they believe they have the most to
contribute.

Process innovation - Driving efficiencies in the business

Thought leadership - Developing them understanding of and solutions to new issues and
challenges

Collaboration - with suppliers and customers to find opportunities to co-create new solutions to
existing challenges.

Over the past few years, CCE has already contributed technologies and ways of working in each of
these three areas, and they want to do more.

Process Innovation

They continually innovate within company own

systems and processes to drive efficiency and
effectiveness. For example, they have installed
equipment such as monitoring and targeting
systems which save energy and water on the

production lines and link to SAP for

real-time monitoring. They encourage
them employees to share their ideas
for innovations with us via coca cola
ICON Awards and they have
introduced new plant-based
packaging through technologies such
as PlantBottle across territories.

Thought Leadership

they are working to become thought leaders in recycling. In developing sustainability plan they
identified that 47% of the carbon footprint of coca cola products is embedded in the packaging.

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This proportion can be significantly reduced if the packaging is recycled. As a result, if they’re to
deliver on them commitment to reduce the carbon footprint of the drink in your hand by a third by
2020, the first innovation focus has to be on step-changing recycling in them markets. Further data
also indicates that over 70% of them packages tend to be recycled in the home, not on-the-go as
they previously thought. As a result, in 2012, they launched them first thought leadership project on
recycling behaviour, in parnership with the University of Exeter (UK).

The research will begin in 2013, investigating how recycling is influenced by the dynamics of the
household. Click here for further information. This work will build on the project they undertook in
2011 with the Carbon Trust, in which they examined the concept of ‘Personal Carbon Allowances’
and how these could be measured and implemented.

Collaboration

They know that innovation doesn’t happen in a vacuum

and that they need to work with a wide range of partners –
from NGOs to them suppliers and customers - to drive new
ways of thinking and working. In 2012 they launched a
second plastics reprocessing joint venture, following the success of them partnership with
ECOPlastics in Lincolnshire in 2011.

In partnership with them PET Supplier, APPE, they have launched a similar venture which will
significantly increase the availability of recycled plastic in France. In 2012 they also held them third
Supplier Sustainability Summit for them top 60 suppliers, and focused on ways in which they can
deliver, lead and innovate together.In 2013 they plan to
expand this Summit to include stakeholders from across them
value chain and focus on some of the societal challenges
they face, to encourage us to develop new creative ways of
working together.10

10
http://www.cokecce.com/corporate-responsibility-sustainability/innovation
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SEO (Search Engine Optimization and PPC) (Pay-Per-Click) Objectives in
India
Table 8

Coca Cola Outcome Expected

Objective 1 Expand Reach

Objective 2 Beating Competition

Objective 3 Customers Interactions

Objective 4 Increase Brand Value

From 1993 to 2003 Coca cola invested $ 1 Billion in India Coca-Cola to invest $5billin India to
increase market share

Table 9

 Social Media Presence

• 46,051,294 Followers
Facebook • 636,713 Talking about

Twitter • 59,742 Tweets

• 584,342 Followers

• Subscribers - 73,187
YouTube • Videos View - 87,354,253

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 Comparisons:

 October 2011

Facebook users - 750 million & Coca cola was ranked number one

Facebook - 34 million fans growing at a rate of 3% monthly

 July 2012

Facebook users 955 million & Coca cola still the no. 1 brand

Facebook - 46 million fans and growing at a rate of more than 5% monthly

Coca Cola Vs Pepsi:

Table 10

S no. Category Coca Cola Pepsi

1 Indexed Pages 56,800,000 32,900,000

2 Facebook Followings 46 Million + 8.5 Million +

Mobile Optimized
3 Yes No
Website

59,804
4 Twitter 15,376 tweets
tweets

5 Page Rank 8 7

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Assessment:
 Facebook
 Twitter
 Blog
 Traditional Marketing

Resources:
Table 11

Traditional Other
Social Media
Marketing sources
Advertisements Facebook Mobile apps

Print Media Twitter Road Shows

Sponsoring Websites Contests

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Results :
• 39% volume growth
• 23 % industrial growth 11

CURRENT SCENARIO:

There has been a great competition between refreshment drinks in Indian market. Coca-Cola is the
world’s largest and first soft drink manufacturer. As part of the Globalization program, India has
made it easy for multinational companies to enter the Indian market. Globalization has made the
whole world into one market by reducing the trade barriers and minimizing the risk. It is noticeable
that many multinational companies had failed in Indian market. This failure is mainly due to
improper knowledge about the country and the national culture. It is very important to know about
the people and their consuming behavior. Culture plays an important role in consuming behavior.
Coca-Cola is mainly associated to the issues related to the brand, reputation and Corporate Social
Responsibility (CSR).
Present situation of the country is favorable for multinational companies to start their business in
India. As study already seen that Coca-Cola is the largest selling soft drink in the world, they do
have direct opportunities in the Indian market. Even though it is facing some social problem in
India, Coca-Cola has got good market in India. The main target customers are youth who has
already accepted the taste of the drink.
Coca-Cola should give more importance for the culture of the people because culture is a major
element which decides the consumer behavior and purchasing patterns. India is a country where
people are keener towards the culture. Considering Geert Hofsted’s cultural dimensions here in
this case, it is clear that, uncertainty avoidance India is less and people are not so flexible to adopt
the sudden changes. In India uncertainty avoidance is indexed at 50, which shows that people are
sensitive and emotional towards exploitation and invasions from other people or culture; so that
before entering to the Indian market, it would be a good strategy to avoid such issues by planning
the re-entry as a step by step process. According to Geert Hofstede (2001),12 “culture is the
collective programming of human mind that distinguishes the members of one human group from
11
http://www.coca-colaindia.com/
12
Hofstede, G., 2001. Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations.
Thousand Oaks, CA: Sage.
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those of another. Culture in this sense is a system of collectively held values.” It is quite understood
from the bellow given chart that the US and Indian culture had got vast difference. So it is not easy
to cop up with the Indian market. Therefore, it is important to have a detailed analysis on Indian
market so that they can initiate a fail proof and systematic market entry.

Public Relations India

The main and foremost solution is that to communicate openly with the key constituents; including
the public, media, employees, trade channels, state and national government and suppliers. They
should do an open and honest communication to resolve the problems so that issues can be
identified and resolved. An honest and open approach is always appreciated in the Indian society.
Communication is the best method through which consumers can have proper and clear picture
about the company and its product. Efficient public relation is very much equivalent to a smart and
efficient promotion, which eventually make the consumers to buy our products. Communication has
its roots in a person’s behavioral aspects. Behavior is directly linked with culture. As Smith et al.,
(2002), states, a person’s behavior, cultural values and personality can directly affect a business
and the managerial behavior. Therefore it is important to communicate with the customers in
accordance with their cultural status and values. Without proper public relations and
communication there are chances that public may not get good knowledge about products and
they may be left unnoticed.

Enhance Relationship with Government

In India; it is widely known that the government systems and procedure lack transparency in its
operations. Therefore it is very important to have very close relation with the government. This can
be done by actively participating in Government driven charity operations and government initiated
infrastructure development. Indian people and government always appreciate any true effort
towards the development of the country. This also helps in building reputation among the people.
India is a country, where reputation and relationships are valued to the core. They believe in
qualitative elements than quantitative elements. (Lothar Katz, 2008). Therefore it is important to
keep good relationship with the government. Ethical issues like water resource exploitation etc. are
believed to be hyped by the media and not the general public. However, it is important for the
company to generate and implement a corporate social responsibility system in India, and operate

42 | P a g e
within the guidelines of that system, which will prevent any such unwanted situations.

Launch Marketing Campaigns

Marketing campaigns are the best way to push a product into Indian market. This will create
awareness among the general public which makes the sales easy. Indians would like to have more
details on everything they choose; let it be soap, or even a television, they would like to know more
about the product. If the product is of optimum value in terms of price and quality, they would
definitely go for it.

Listen To The Customers

Consumer behavior is an important part in any business. In order to find the differences and their
demands, it is very imp0ortant to listen to the consumers. This can be done by initiating a survey or
a feedback system. Listening means, the identification of areas and aspects where the company is
lagging. If the company can make the customers feel that they are valued and considered, then
they would come back to those particular products. Therefore, it is very important to listen to their
comments, make necessary adjustments on service and products and creating a strong customer
base.

Managing Style
Management style and its efficiency decide the quality of management in a particular country.
Multinational companies are believed to have many managing styles and organizational culture.
However, t is important to have a management style tailored to the hosting country’s cultural and
social value. Having an alien management style may create issues with the domestic employees in
the long run. Also, developing a country specific management style will help in delivering quality
and on demand services to consumers and general public; which will eventually help the company
in the future. This will also make the employees feel that they are considered and their opinions are
welcomed.
Pull Back Price- Quality Trade –Off Plans
Indians are those who give more importance for quality and trust. It is practiced in India for many
long years. Indians rely more upon quality of the product with lower prices. So India is not a place
to follow up with Price – Quality Trade – Off. Even if the prices are higher, Indians may consider

43 | P a g e
this product due to its quality. Indian society and the culture are very much vulnerable to quality
tradeoffs.

The above mentioned are the important solutions and suggestions that company should
concentrate more in Indian market in order to sustaining in this competitive market. It is too
important for a company to have a long life in market; so to attain this they should study the market
at first in detail and the culture and purchasing power of the public.

PROBLEM DEFINITION:
1. Coca-Cola’s Problem
Coca-Cola, deemed the “#1 Brand in the World,” has been a successor in the soft drink industry
for over 100 years. Along with their success they have incurred crises along the way. One in
particular is the Coca-Cola India Case Study. On August 5, 2003, Coca-Cola India was attacked by
The Center for Science and Environment (CSE), an activist group of engineers, scientists,
journalists and environmentalists in India, for unsafe products, said to contain pesticide residues
which surpassed global standards. Coca-Cola India’s products were attacked in a press release
stating: “Twelve major cold drink brands sold in and around Delhi contain a deadly cocktail of
pesticide residues.” The tests done on three samples of 12 PepsiCo and Coca-Cola brands were
said to contain 30-36 times the global standards of pesticide residue. The pesticides found were
known to cause disease such as cancer, birth defects, and severe disruption of the immune
system, among other health conditions.

2. Coca-Cola’s Concerns
As any company this accusation posed great fear and concern for Coca-Cola Company and their
future standing in India. After the discovery of the pesticide residue, the Indian Government banned
Coke and Pepsi products. Thus, Coca-Cola stock dipped $5 in the New York Stock Exchange.
Pepsi and Coke’s response to the accusations were denying CSE’s validity. Pepsi conducted their
own tests independently and results showed no detectable signs of pesticides.

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3. Company’s Challenges
Because of the attacks by the CSE and NGOs (Non-Governmental Organizations) on Coca-Cola,
the brand faced many challenges. First, being the world’s most valuable brand whose value is
greatly influenced by the image of the company and its products, their primary problem was trying
to rebuilding their image to the Indian public and regaining Indian consumers’ trust. This was a
hard task because NGOs have high instinctive credibility and reliance by the people, making it
difficult for companies to compete with such trustworthiness given to NGOs. Another problem
posed is the socially responsible reputation of Coca-Cola as a corporate company in the U.S. The
United States is a flourishing, developed country; yet, India is a developing nation with a different
set of standards. Should Coca-Cola withhold their social responsibilities internationally? Is the
company economically upheld to do so?

4 .Coca-Cola’s Decisions
Coca-Cola is faced with an enormous crisis so many decisions face them as well. Does action
need to be taken? Is so, what type and how aggressive? The implications of these possible
decisions are outlined below.

5. Implications for profitability, corporate reputation and image

Without a doubt, this issue is of great importance to the organization. These allegations are not
only threatening to Coca-Cola’s customers, but to the company’s reputation as well. The effects of
the pesticides could be devastating to Coca-Cola’s customers. Coca-Cola’s advertising and
marketing messages have always given customers a reason to trust their products. “Can’t beat the
real thing” was a longstanding message and is one that proclaims authenticity and authority. The
pesticide claims go against everything Coca-Cola has advertised to their customers. If action was
not taken, Coca Cola’s customer base could diminish, the brand’s name tarnish and their
reputation completely demolished. Revenue could decrease significantly if customers think Coca-
Cola is not a reliable or safe product to drink. The pesticides contain chemicals which have
devastating outcomes, including causing cancer. If customers begin to get ill, this will be a huge
tragedy for Coca-Cola. The customer’s well-being is in jeopardy, as well as the economic
performance of the company. Just within a few days after the initial reports came out, Coca-Cola
stock dipped by $5 on the New York Stock Exchange. Additionally, their sales dropped 30-40% just

45 | P a g e
within two weeks. Prior to the CSE reports, Coca-Cola boasted a 25-30% growth. Financially,
these allegations could lose Coke a significant amount of revenue. Taking action is a necessity
against the pesticide allegations.13

ANALYSIS OF THE SITUATION:

The present situation can be analyzed by SWOT analysis which clearly shows the strengths,
weaknesses, opportunities and threats which the client is envisaged to meet. India is a country
where the cultural diversity and linguistic differences make it difficult to identify how the company is
going to be traded while they enter the Indian market. Indians are those who give more value to
trust , value, quality and so on. Therefore, it is very important that they should give importance for
Price, Quality and Quantity; which means, Indian consumers have more purchasing power for
products like high level of quality with less price; therefore, it is clearly states that the company
should not entertain any price quality trade-offs in Indian market.
The below section explains the SWOT analysis of the company. The analysis shows where the
company is more powerful in the market compared to its competitors and where it is weak and how
to improvise them to get more market share in present market.

1. STRENGTH
• Reputed brand
• Global brand recognition
• Bottling system
• Technological advancement
• Efficient management system
• Good marketing knowledge

2. WEEKNESS
• Lack of knowledge about Indian culture in detail
• Uncertainty avoidance
• Lack of marketing expertise in the Indian conditions
13
Fraser P. Seitel (2010), The Practice of Public Relations, 11th Edition, Pearson Prentice Hall, Upper
Saddle River, New Jersey
46 | P a g e
• Hazardous by products and health issues
• Facing issues with water exploitation and resource exploitation all over the world

3. OPPORTUNITIES
• Huge market
• Advancement in technology
• Growing Indian market
• Good brand name
• International trade barriers has been reduced
• Youngsters’ tendency to adapt to the western culture

4. THREATS
• Threat of substitutes
• Health consciousness of Indian consumers
• Cultural habits
• Price war
• Unstable political condition
• Uncertainty avoidance
• Difference in management styles
• Indian tendency to avoid foreign products

The above mentioned are the strengths, weaknesses, Opportunities and threats of Coca-Cola’s
operations in India. It is very clear from this SWOT analysis that there is good opportunity for Coca-
Cola in Indian market because most Indians have accepted the taste, so that it is very easy to
penetrate the market and to earn more market share in the Indian market. However, this needs to
have clear cut ideas about promotion techniques and public relation activities since the competitors
have strong grounds in India market and needs to overcome the pressure raised by socio-cultural
barriers.

47 | P a g e
SOLUTIONS AND RECOMMENDATIONS:

Coca-Cola need to concentrate in many aspects so that they can grab more market share and earn
respect from the community members. The company’s brand reputation and brand recognition is
not enough for them to grow in the Indian soil. Indians take business so seriously and their
approach is entirely different when it comes to purchasing patterns and habits. Therefore, Coca-
Cola has to adopt alternate branding and promotion strategies to develop its fan base in India.

SUGGESTIONS:

According to Robert Tannenbaum and Warren H Schmidt “management styles are characteristic
ways of making decision and relation to subordinates”. Different management styles can be applied
based on the nature and culture of business, the nature of task, the nature of work force and skills
of the leader. This definition is given to understand management style in general. Every country
has got its own style of management. It is necessary that they should have a correct view about the
management style of particular country. As seen in definition, management varies from business
and their task; so it is very important to understand the task and the business at the most and then
decide the appropriate method of management. As Elenkov and Manev (2005) suggests, it is the
responsibility of top managers to coordinate with the subordinate and innovate in management
styles and thereby improving the efficiency of the system.
India is the country where people give more importance to culture. Based on Geert Hofstede’s
cultural dimension in India uncertainty avoidance and long – term orientation is more. Uncertainty
avoidance means Indians are too slow in accepting the sudden changes and they follow up with
traditional styles so it is more important for the company to do a proper analysis on the consumer
behavior and product requirement. Another important factor which should be taken into
consideration is Long- Term Orientation. India is the place where this is followed more because
Indians are more towards tradition and their customs. It is not easy to make them accept the
sudden changes. So there should properly take consideration of long – term orientation also (Geert
Hofstede, 2001).14
They should also give more importance for Price – Quality Trade- Off issues. Indians are those
14
http://www.geert-hofstede.com/hofstede_india.shtml Accessed on 11th January
48 | P a g e
give more value for trust, value and quality. They are keener towards more quality with fewer
prices. They give more value for quality rather price. So it is more important for the company to
give more importance for the quality and their pricing strategy which need to be favorable for their
business too.
In business it is not enough to keep present condition safe to have a long life and they need to
study the market properly in every moment because the nature of market changes as new
competitors come in. So to overcome these fluctuating conditions, they should always keep an
open eye on how the market goes in next moment. For this the company needs to establish a
market analysis team who can conduct on demand analysis of the market or outsource the task to
us. These are all the solutions and recommendations for the company which should be followed. It
is not easy for a company to run business smoothly without considering the issues, especially if the
company is of foreign origin. Therefore they need to understand the market and key trends in order
to sustain in the market.

FORECASTS AND PREDICTIONS:

The Company can definitely establish their presence in Indian market once again, because it has
already got a strong good brand image for long years. As Indians are those who give more
importance for trust and quality, this brand image from past will help for its sustainability in Indian
market. As India’s population is high, they can get a good customer base. Apart from this, in Indian
customers include large number of youngsters who is adopting the modern cultural values and
supporting westernization. Thus, it is easy for the company to make them as target customers. Due
to globalization, many multinational companies had entered Indian market and Indians had
accepted many of those companies which clearly say Coca-Cola still have large potential and
scope in the Indian market. As India is in the stage of modernization and economic reform, the
consumption of soft drinks has been increased so it is a good opportunity for Coca-Cola to make a
proper stand in Indian market. After considering the above mentioned solutions and
recommendations it is sure that the company can make a proper stand in Indian market and re-
establish their operations for ever.

49 | P a g e
CONCLUSION:

Conclusion is the important part of a case study. After doing a detailed study on socio-cultural
barriers of Coca-Cola in India, the most noticeable factor is the company is not following and
considering the social and cultural trend and factors. The main drawback which Coca-Cola is
facing is it is going against environment or exploiting environment. The company is using fresh
water in such a large quantity where there is a crisis for fresh drinking water; apart from that, due to
its waste discharge they have been spoiling the water and soil. Therefore farmers are facing
numerous problems with their crops. Because of these reasons Coca-Cola is facing problems in
India. These problems are indirectly affecting the life of the people staying nearby to the
manufacturing plant. Apart from this culture is the most important factor which company should
keep in mind for further development.
From the above given recommendation, suggestions and analysis, it is clear that the cultural and
economic conditions in India is stable and favorable for the company, but the environmental
problems are making g issues among the public and government. Therefore, as suggested, the
company should employ an efficient corporate social responsibility team to monitor their operations
in the Indian sub-continent and make policies to overcome any such instances. With the help of
these suggestions, Coca-Cola can make a brilliant come back to the market.

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REFERENCES:

1. http://www.coca-colaindia.com/ourcompany/company_history.html

2. http://www.coca-colaindia.com/ourcompany/coca_cola_system.html

3. Brunel Business School. ( 2012) Cultural Effect towards Brand Extension as a Global Marketing
Strategy(1124460). Brunel University West London

4. Peter b. Smith, mark f. Peterson and shalom h. Schwartz, 2002. Cultural values, sources of
guidance, and their relevance to managerial behavior – a 47-nation study. Journal of cross-cultural
psychology, vol. 33 no. 2, pp. 188-208.

5. Amit Srivastava . July 10th, 2003.Communities Reject Coca-Cola in India , India Resource
Center

6. http://www.atimes.com/atimes/South_Asia/FB24Df04.html

7. AIYER, A. (2007). THE ALLURE OF THE TRANSNATIONAL: Notes on Some Aspects of the
Political Economy of Water in India Cultural Anthropology, 22 (4), 640-658 DOI:
10.1525/can.2007.22.4.640

8. http://www.coca-colacompany.com/press-center/press-releases/the-coca-cola-company-reports-
third-quarter-and-year-to-date-2013-results

9. https://www.google.com/finance?ei=ghihUujUEOSowAPMGQ

10. http://www.cokecce.com/corporate-responsibility-sustainability/innovation

11. http://www.coca-colaindia.com/

12. Hofstede, G., 2001. Culture’s consequences: Comparing values, behaviors, institutions, and
organizations across nations. Thousand Oaks, CA: Sage.

13. Fraser P. Seitel (2010), The Practice of Public Relations, 11th Edition, Pearson Prentice Hall,
Upper Saddle River, New Jersey

14. http://www.geert-hofstede.com/hofstede_india.shtml Accessed on 11th January

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