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Coke, Pepsi & Cadbury

Coke, Pepsi & Cadbury

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Published by Madhura Gupta

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Published by: Madhura Gupta on Jul 17, 2012
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07/17/2012

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IBS-MUMBAI
IMC- Report 
Section - B
By:MADHURA GUPTA (11BSP0503)AKANKSHA JODHANI(11BSP1924)DHAWAL WADERA(11BSP2099)10th July, 2012
 
Coke and Pepsi- Pesticide Fiasco
The Problem
On August 5th, The Center for Science and Environment (CSE), an activist group in India growthissued a press release stating: "12 major cold drink brands sold in and around Delhi contain adeadly cocktail of pesticide residues".According to tests conducted by the Pollution Monitoring Laboratory (PML) of the CSE fromApril to August, three samples of twelve PepsiCo and Coca-Cola brands from across the citywere found to contain pesticide residues surpassing global standards by 30-36 times including
lindane, DDT, malathion and chlorpyrifos
. These four pesticides were known to causecancer, damage to the nervous and reproductive systems, birth defects, and severe disruptionof the immune system.In reaction to this report, the Indian government banned Coke and Pepsi products in theParliament and state governments launched independent investigations.
The Reaction
Such huge accusations made above had a drastic effect on not only the sales of these twobeverage giants but also on the brand image and reputation of the company. The sales of thecompanies plunged down to 30%-40% over the next two months. Such a downfall waswitnessed at a time when under normal conditions both these companies were recording a75%-80% sales growth rate. Such optimum sales conditions were completely reversed and thecompanies witnessed fall in sales for the first time in the Indian market, moreover, the effect of the catastrophe in India was also seen in the New York Stock Exchange, thus triggering globalchanges and effects.Under such a stressful situation, both Pepsi and Coke came together and took an immensely
defensive
position. They claimed that the reports by CSE were false, and that they wouldpersonally have their products checked, and the results would be published in their respectivewebsites. They also threatened the Quasi-govt. body of legal actions and vowed to move courtif the self-contested tests showed results contrary to those of the CSE.
The Remedy
It was of immense important for both these companies to regain their market position as far astheir sales figures were concerned. Moreover, they had to check their tarnished image and re-create the image that they had enjoyed in the pre-fiasco period. The situation was worse for
 
Coke, because it had just recorded a lead in the field of Soft drinks beating Pepsi and gaining no.1 position after three years of rigorous and extensive marketing. Hence reclaiming theirpositions was important for both the companies.In order to do so, both Pepsi and Coke subjected to extensive promotional strategies.
Both the companies, aimed at clearing their names fromthe pesticide fiasco by holding separate laboratpry testsand publishing the results oon their websites.They sought the assistance of prominent Film and Soapcelebrities to convince the consumers and draw themback, such as Aamir Khan and Smriti irani.They aimed at reiniforcing the demand of their drinks withcaptions like 'Thanda matlab Coca-Cola' and 'It's the Cola,dare for more?' etcMorover they sought the help og the US embassy in Indiafor legal aid so as to be able to realize all their fundamentaland constitutional rights

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