Coca Cola in India

Topics: Marketing, Soft drink, India Pages: 9 (3352 words) Published: March 27, 2013
Cultural Impact on Business: A Case Study on Coca Cola’s Cultural Issues in India admin August 20, 2012 Blog No comments

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. 2. TERMS OF REFERENCE
Our company is the leading consultant in India which focuses on Indian market studies. We conduct market surveys on companies and their products. We do market survey based on the present and future market situations. We help our client to have a proper stand in Indian market against their competitors, and help them with strategies to enter the market, market segmentation, product segmentation and sales techniques. It is possible by analyzing the past and present conditions of the company, and by learning their past actions in the society and the economy.
Our client is of United States origin which is a leading soft drink company in entire world. Coca-Cola has got a strong brand image through out the world. Our client is the first company which introduced soft drinks in the world. Public has already accepted its taste and quality all over the world.
Our client would like to know about the present condition of Indian market so tat they can start their business according to that. They also want to know about the culture of the Indian people to know about their consuming nature. The client needs to know whether they can survive in Indian market and what are the drawbacks that they may envisage during their operations in India and that they should consider before starting up the business in India. 3. 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).

References: 1. Robert Tannenbaum and Warren H. Schmidt, The continuum of Leadership Behavior. [online] Available at: Accessed on 11th January 2011
3. Lothar Katz, 2008. Negotiating International Business – India. [online] Available at: Accessed on: 11th January 2011
4. Detelin S. Elenkov and Ivan M. Manev, 2005. Top Management Leadership and Influence on Innovation: The Role of Sociocultural Context. Journal of Management, Vol. 31 No. 3, pp. 381-402
5. Hofstede, G., 2001. Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations. Thousand Oaks, CA: Sage.
6. Geert Hofstede, Cultural Dimensions of India, [online] Available at: Accessed on 11th January 2011
7., New Coke: A Classic Brand Failure, [online] Available at: Accessed on: 10th January 2011
8. SWAMINATHAN S ANKLESARIA AIYAR, 2001. What makes MNCs quit India. The Times of India, Published on: 4th November 2001, [online] Available at: Accessed on: 11th January 2011
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