Coca-Cola India

MEMORANDEUM

TO: Sanjiv Gupta

FROM: Jeremy King

CC: Christopher Cowan

DATE: 08/07/03

SUBJECT: Coca-Cola India

On August 5th, 2003 the Center for Science and Environment (CSE) issued a press release titled “Hard Truths about Soft Drinks”. Tests conducted by CSE at the Pollution Monitoring Laboratory (PML) found concerning amounts of pesticide residue in all twelve major brands of cold beverages sold in and around Delhi. Behind Tokyo, Delhi is the second largest agglomeration in the world with 23 million inhabitants2.

Immediate reaction to CSE’s report on soft drinks ranged from the Indian government banning Coke (and Pepsi) products in Parliament cafeterias to widespread mistrust of the Coca-Cola India brand. Within weeks sales dropped by 30-40% and within months Coke’s stock dipped 10 percent on the NYSE1.

While CSE’s report has resulted in declining sales, employee morale issues and a negative public brand perception more importantly the insecticides CSE identified are known to cause cancer, birth defects and inflict severe damage to the nervous, immune and reproductive systems. These possible health risks linked to product consumption is the single most significant ethical issue facing Coca-Cola India today.

As you requested, I present the following three strategies to assist in the successful rebuilding of the Coca-Cola India brand. The objectives of each strategy are clear; sway public opinion to identify with Coca-Cola India’s dedication to offering the highest standards of social responsibility.

The first approach suggests returning to Coke-Cola CEO, Douglas Daft’s 2001 marketing strategy mantra of “Think local, act local”1. I suggest looking beyond the economical differences between the rural and metropolitan markets of India and embrace the differences between this market and the rest of the world. The practice of International branding has become a promising marketing tool in the new millennium yielding desirable results3....