Bus 401 Case 1

Touro University

Richard Gonzalez

BUS 401

Module 1 Case

Dr. David Marshall Hunt

The purpose of this paper is select three international marketing issues and apply them to

the Coca-Cola Company. During the next few paragraphs I will discuss entry modes, Indian

market characteristics and importance, and elements of the four “Ps”, as Coke expands to India.

Let me start the next paragraph by addressing the first international marketing issue of entry

modes.

Entry modes include exporting, licensing, franchising, wholly owned subsidiary,

acquisitions, and global strategic alliances. Coca-Cola adapted the tow most risky and costly

modes, which are acquisitions and wholly owned subsidiary. These two modes put all the risks

and costs on the company because they are the sole owner of that endeavor. In trying to promote

its brand, Coca-Cola acquired the local cola named Thums Up. This company was three times

larger than Coke and by not supporting it, the company lost revenues to its rival Pepsi. The

Indian government started to put pressure on the company due to its reluctance sell part of its

holdings to local investors. Coca-Cola did not want to let go of its position as a wholly owned

subsidiary. Now that I have covered entry modes, let us move to our second issue.

The Indian market has many particular characteristics and importance. One of the

biggest and most important characteristics is its population. There are a billion plus consumers,

their middle class is rapidly growing, and the climate is hot. The size of the population makes it

a very interesting and important market. Another characteristic of this market is the population’s

like for other drinks aside from soda. In this country it was not Pepsi their rival, instead it was

water, tea, coffee, and fruit juice. One more very important characteristic is the level of income

for the local consumer. India’s average consumer is in the low end of the income latter. In...