Coca-Cola Co. has not done so well in establishing strong marketing channels in India. Its flagship product, Coke, has only about 15 percent of the market compared to Pepsi’s almost 25 percent. Coca-Cola is usually accustomed to dominating any foreign market it enters, but India has been a major exception. The potential is certainly there with over one billion consumers, a large middle class, and a hot climate. But several problems confronted Coca-Cola. First, it imported too much of the raw materials, which had high import duties and hence made Coke too expensive relative to the competition. Second, outdated bottling plants reduced efficiency and quality consistency. Finally, the company had not invested in the distribution network, including advertising and promotional support, to secure strong cooperation from both large and small distributors throughout the vast country. Why do you suppose a company of Coca- Cola’s stature and extraordinary marketing capabilities could stumble so badly in establishing a strong distribution channel for Coke in a developing country such as India? Discuss.
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