Coca-Cola India

PRESENTED BY –
RISHAB MAHESHWARI(500080283)
ANUJA RAI (500080245)
 Type
• Private
Industr
y
• Consumer goods
Founde
d
• 1892
Produc
ts
• Beverages
Websit
e
• www.coca-colaindia.com
 Crisis background

On August 5, 2003, The Centre for Science and the Environment (CSE)
issued a vilifying news release which stated that “12 major cold drink brands
sold in and around Delhi contain a deadly cocktail of pesticide residues.
The CSE, a New Delhi based examination and backing bunch that
campaigns for sustainable growth, put together its allegation with respect
to tests directed by the Pollution Monitoring Laboratory between April and
August 2003.

The tests found that three examples of 12 Pepsi Co and Coca-Cola brands
across the city contained pesticide buildups that outperformed worldwide
norms by 30-36 times. The pesticides – lindane, DDT, malathion, and
chlorpyrifos – can cause malignant growth, harm to the anxious and
conceptive frameworks, birth abandons, and extreme interruption of the
invulnerable framework.

The CSE report struck dread among inhabitants of the devastated country
where just about 60 babies for every 1,000 passed on before their first
birthday celebration.
Coke items in the United States didn't contain comparable
poisons. Notwithstanding the tremendous notoriety of the
soda pop in India, the organization regularly is seen as an
image of Western social colonialism.

Coke represents 60% of the $1.6 billion soda market in

India.

The Indian government in the long run prohibited all Coke

and Pepsi items in Parliament, and schools before long
went with the same pattern. State governments likewise
sent a few soda pop examples to labs for testing.
Coca-Cola India president and
CEO Sanjiv Gupta contended
the science was imperfect. He
and his partners called the
CSE's claims unmerited and
scrutinized the testing strategy.
The CSE countered that it followed
appropriate method and the U.S.
Ecological Protection Agency
upheld its testing techniques, and
the minds of millions of his clients
were changed.

A review directed in Delhi a couple of

days after the declaration about the
pesticide-bound sodas found that a
The dispute
larger part of buyers accepted the
discoveries were right and upheld
lasted more than
Parliament's choice to boycott the
offer of the sodas.
three years.
 Analysis 

Researchers have contended that pesticides, a

side-effect of India's horticulture industry, had
saturated groundwater that Coca-Cola utilized.

In spite of the fact that most items in India are

needed to meet rules on worthy degrees of
pesticides, there was no enactment controlling
the soda pop industry at the hour of the CSE's
claims against Coca-Cola.

The Indian government accordingly reacted by

receiving the European Union's norm for filtered
water, to be viable on Jan. 1, 2004,
notwithstanding, they actually didn't need soda
makers to test completed items.
In response to the pesticide predicament, however, the
government did test Coca-Cola products. 

On August 21, 2003, Minister of Health and Family

Welfare Sushma Swaraj reported that the 12 examples
didn't contain perilous degrees of pesticides.9 Sunita
Narain, head of the Center for Science and Environment,
questioned the testing."Both results can't be correct," he
said.
 • After two years, Coca-Cola climbed costs in India by 10-15
percent in the wake of reporting that unit case volume in
the nation diminished 22 percent during the second from
1 last quarter.
• “Price increases to cover rising raw material and
distribution costs and the lingering effects of the false
pesticide allegations drove the declines,” a company
2 statement 

• The uproar over the pesticides later crossed the Pacific, to

the United States. 
3
• In late 2005,the University of Michigan turned into the
tenth school to quit selling Coca-Cola items, part of the way
4 in view of the emergency in India.
 • The university had a non-exclusive, $1.4 million contract with Coke.
5
• New York University, Rutgers University in New Jersey and Santa Clara University in
California were at that point part of the blacklist. Back in India the following year,
Coca-Cola, which had cooperated with Pepsi Co on a mission to demonstrate their
6 items were protected, given a joint explanation with its accomplice in emergency
through the Indian Soft Drinks Manufacturers Association.

• They declared customer safety was paramount:“The soft drinks manufactured in

India comply with stringent international norms and all applicable national
7 regulations.”

• Coke was feeling the squeeze from nonconformists, who poured the items down the
throats of jackasses, crushed cola bottles and assaulted Delhi shops that sold the
8 beverages.

• They were additionally being pushed by the Indian Supreme Court, which requested
that Coca-Cola uncover its mysterious formula, watched for a very long time, so more
9 testing could confirm charges of high pesticide levels.
Deals had dropped 30 to 40 percent 18.
The Coca-Cola Bottling Company stock
plunged $5 on the New York Stock
Exchange, $55 to $5019. Furthermore,
this came following a 75 percent five-
year growth direction and a 25 to 30
percent year-to-date growth.
This caused seemingly the greatest
emergency the organization has
hosted in India since the Janta Get-
together came to control in 1977
and attempted to constrain Coca-
Cola to uncover its mysterious
formula.

(Coca-Cola left the country prior to returning

in1991.) Coke's system was to contend the logical
details of the pesticide charges, rather than
zeroing in on winning back the help of their
clients. It exploded backward, said Richard S.
Levick,president and CEO of Levick Strategic
Communications, a U.S. prompting business
that represents considerable authority in
emergency the executives.
 Objective

Coca-Cola’s number one

priority is to restore the
company’s reputation as
a strong corporate entity
that values not only
financial success but also
social responsibility.

Re-establishing that standing is

fundamental to selecting and
holding workers, expanding
deals, securing the
organization's picture should
future emergencies emerge,
and making certainty among
financial backers, allies and
previous clients.
 This includes a five-step process:
1
Win back former customers. Before the CSE news release, year-to-date sales growth ranged from
●

25 to 30 percent. Achieving that level of growth again within the next two years will make a
strong statement that Coca-Cola India has recovered from the pesticide crisis.

Satisfy investors. This starts with winning back customers, which in turn fuels sales, which

2
●

increases stock prices. Coca-Cola India wants to help Coca-Cola Bottling Company return to $55
on the New York Stock Exchange within a year.

3
Cut salaries by 10 percent for all Coca-Cola India employees making $150,000 per year. This will
●

contribute to a new $2 million budget initiative to support social and environmental causes.
Success in this campaign will allow raises that restore salaries or increase them even further.

4
Gain notoriety as a champion of social service and environmental protection. The goal is to get positive
●

coverage and reviews in the media, with advocacy organizations such as the Adarsha Rural Development
and the Center for Science and the Environment, and with the Indian government.

5
Create a foundation that fuels future growth. Within five years, Coca-Cola India hopes to increase its
●

share of the country’s soft drink market from 60 percent to at least 65 percent, to boost annual sales
growth to 35 to 40 percent, and to help Coca- Cola Bottling Company push stock prices to $75 or more.
 Strategy Background
Preceding the Center for Science and
Environment's report, techniques were
instituted to ensure the estimation of
the organization and build up Coca-
Cola as a brand chief among soda
enterprises in India.
This strategy recognized that there are
two separate audiences in India: the
rural and the urban. It became the
heart of Coca-Cola India’s subsequent
public relations and marketing
campaigns. Soft drinks were
customarily considered drinks of the
wealthy urban elite. 
The company increased sales in the
rural population and began to more
successfully compete with more
traditional drinks such as tea, juice,
and lassi, by developing a smaller
bottle of Coke that was available for
half the price. 
These methodologies permitted Coca-
Cola to build up a solid standing which
would assist with ensuring it in the
midst of emergency. In 2001, Coca-
Cola India presented the mantra of
"think neighborhood, act nearby" to
capitalizeon growth potential in the
Indian market.
Nonetheless, the lower, center, and
upper-working classes living in the
country regions addressed 96 percent
of the Indian populace. These people
group considered Coca-Cola an
extravagance, not a need or are ward,
so Coca-Cola India formulated a
complete arrangement to widen brand
situating and increment consciousness
of the dependable brand inside the
provincial populace.
By 2003, 91 percent of sales were
made to the lower, middle, and upper-
middle classes.With that, Coca-Cola
became the first corporation to make
soft drinks accessible to the
ruralclasses in India.
 • Coca-Cola India also appealed to the needs of the rural population by adopting the message
“thanda matlab Coca-Cola,” which literally translates “Coke means refreshment.” This message
successfully branded Coca-Cola as a product which both fulfilled the need of thirst quenching and
allowed the rural population to feel as though they were enjoying a luxury product. In fact, this

1 campaign won the corporation “Advertiser of the Year” and “Campaign oft he year” in 2003, and
the success continued. The company experienced a 37 percent growth rate in 2003, and
consumption doubled since 2001.

• Though the urban population represented only four percent of the Indian population, andt
herefore receives less marketing attention, Coca-Cola realized the importance of maintaining this
consumer base. The strategy implemented in urban areas was “life ho to aisi,” which translates to
2 “life as it should be.”

• his successful branding strategy contained an emotional appeal by representing the benefits of
increasing social and economic freedoms and reminding wealthy consumers why Coke products
were their drink of choice.28 Celebrate with Coke, you’ve earned it after all. Reputation

3 management In the past, Coca-Cola has held itself to a high standard of social responsibility, which
has helped it to develop a reputation which we believe will help it overcome this crisis.

• The“Coca-Cola Promise,” for instance, states that “The Coca-Cola company exists to benefit
andrefresh everyone who is touched by our business.” Coca-Cola has worked to improve
communities by addressing water, climate change, andwaste management initiatives; provided

4 jobs for 7,000 individuals, and indirectly creatingemployment for 125,000 others through its
procurement, supply, and distribution networks
 Recommendations

 We hope the following strategies will help to

rebuild Coca-Cola India’s reputation in order to
increase sales, improve ratings of Coca-Cola
products, and remove the government ban on
the products.
 Internal strategies

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 External Recommendations
News Conference: Immediately upon the CSE’s announcement of high pesticide
levels in Coca-Cola products, Sanjiv Gupta, president and CEO of Coca-Cola
India, and an upper-level spokesman for the corporation will hold a news
conference addressing the issue upfront and assuring our publics that Coca-Cola
India is committed to offering a high-quality product. Coca-Cola India’s
independent tests have revealed that all products comply with the European
Economic Commission (EEC) standards, so our officials must be careful not to
admit guilt, but rather to assure our customers that Coke is committed to public
safety and is dedicated to constantly improving all products. 

President Gupta will also announce Coca-Cola India’s decision to increase

transparency by making the results of a variety of quality control tests available to
customers on its Web site every month. The tests, which were previously
conducted by Coca-Cola’s independent laboratory, will now be verified by
international and governmental laboratories as well. 
We plan to establish healthier, cleaner communities To achieve this goal, Coca-Cola India will become
in both rural and urban areas. Bycampaigning for a actively committed to improving the water
cleaner India, we can restore faith in Coca-Cola as a quality throughout India by purchasing land to
brand that cares about itsconsumers’ quality of life.
use as filter marshes that remove pollutants.The
We believe the “Coke Cares” program will help
company will strive to put wells in rural areas, so
rebrand our companyas an environmentally
responsible corporation that responds to the needs
people can have clean drinking water. Itwill also
of its customers. Agrassroots team will provide work with prominent environmental groups to
incentives to people who care about their create a grass roots initiative to clean uprivers,
community because“Coke Cares.” ponds, and lakes throughout the country. 
 Customers will be able to find answers through
the following pages:

• Coca-Cola and the Environment o Here, customers can find information on the organizations Coca-Cola has
selected to work with, as well as what they can do to get involved. o The page will reiterate Coca-Cola’s

1 commitment to improving the quality of life for our customers in an attempt to boost our reputation.

• Coca-Cola’s commitment to Public Safety o We will send our products to the Central Science Laboratory in the
United Kingdom, and Covance Laboratory in the United States, for regular testing to ensure they continue to

2 comply with all regulations.

• On the site, Customers will find the results of all quality control tests, updated on a monthly basis. The site will
encourage consumers that our products are safe to consume in an effort to rebuild sales and increase the price of
our stocks world-wide. o A “Truth vs. Myth” section will be added to page to directly confront the allegations
3 made against Coca-Cola and clear up any false-impressions that have been made. 

• Though our independent tests revealed that Coca-Cola products comply with EEC standards, we must face the
fact that most Indian citizens have accepted the allegations as fact. This page will attempt to clear up all
misleading information. o All customer service agents will be required to compile a list of questions they have

4 been asked via e-mail and the 800 number. The most commonly asked questions and their answers will then be
compiled on an FAQ page that will be regularly updated to reflect our customer’s concerns.
 Monitoring/measuring 
We believe that implementing
these strategies will restore
Coca-Cola India’s reputationas a
trusted and popular brand in
India. We plan on determining
the effectiveness of ourstrategies
through monitoring sales
projections and accrual, stocks,
and public opinion polls. 

At every taste test we will

conduct polls of public thought
on our progress and general
quality of the products. By
publishing the results of the
public opinion polls, we hope to
see a rise in consumerism,
proving greater success of our
strategies.
 When the Quality Control Board has been established
and the Indian government has lifted the ban, we will
know our efforts have been successful. Once we provide
concrete evidence that our products comply with
government standards and contain minimal to no
pesticides, we will have proven ourselves a leader in
social responsibility. We will also implement a weekly
monitoring and analysis on the stock rates of Coca-Cola
products in India. This will allow us to determine
which aspects of our campaign are successful and
which need improvement.
 Conclusion
We are certain that by applying these
procedures, Coca-Cola India will substantiate
itself to be a socially and ecologically capable
partnership which gives a protected and tasty
item. The emergency has instructed us that
we can't take items, for example, clean
drinking water for in truth, and we should
continually examine the nature of every one
of our items around the world.
ThankYou