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Kristian Arnesen
BUSA460
9.25.06
Kristian Arnesen
BUSA460
9.25.06
Coke and Pepsi learn to compete in India
1. Looking at Hofstede’s indexes, one can see that India has a low IDV score, a relatively high PDI score and a low UAI score. India’s low individualism score could pose problems for companies, because boycotts and strikes are effective as people are more easily persuaded to embrace them if they benefit the collective. The boycott of Pepsi and Coke at the time of the Iraq invasion in 2003 caused the sale of Pepsi and Coke products to plummet 50% in the Indian state of Kerala because of the high sense of collectivism in this area.
With India having a high power index score, Coke and Pepsi could run into problems with one class, or caste as they call it in India, buying their products and the other feeling distanced from the product because of people in a different caste. It could also make advertisement and harder because people have a hard time identifying with an advertisement and a product if it is too focused on one caste’s culture or consumed more by one caste. A normal American advertisement focusing on the middle class might therefore not be as effective in India.
The uncertainty avoidance score is about the same as that of western countries and should therefore pose few if any problems as long as the cultural differences and religion are taken into consideration
3.
Both companies focus their advertisement campaigns heavily on celebrity advertising endorsements. Instead of airing previously seen commercials fitted for the Western markets with for example Britney Spears fronting the product, Pepsi and Coca Co ...