Determine How Best to Rebuild the Coca-Cola Brand Image in India.

Todays Agenda
Dene the Problem Evaluate the Poli3cal + Social Landscape in India Analyze Poten3al Solu3ons

Recommend Poten3al Solu3ons

Coke Indias Reactionary Disposition Created a Web of Problems

Coke India has displayed a tendency towards externally sourced ini3a3ves Cokes Reactionary Culture
Local Water Deple3on Improper Waste Disposal Pes3cide Levels in Products

Has Led to Resulting in

Sales/Stock Price Decline

Reac3onary Culture
Consumer Protests Government Bans & Restric3ons

The market has taken a stance against Coke India

Early Turbulence in India Economic Policy Causes a Slow Start for Coke
Coca-Cola
1950 1960 1970 1980 1990 2000 2010

India

Coke enters India market (50)

-Grows to 22 plants & 200,000 distributors, & produces up to 35 million cases per year

Coke ees India (77)
-Pepsi remains and steals market share

Foreign Exchange RegulaAons Act (73)

Coke reenters India market (93)

-Reclaims market share via acquisi3ons of domes3c producers

-Forced MNCs to dilute equity posi3on & disclose proprietary product info

Foreign Exchange Management Act (99)

-Marked the shi[ to Indias economic liberaliza3on

Coke Indias Woes Create Consumer Confusion and Unrest

Early 2002 Late 2002 2003-2004 2005-2006 2007 60.5% CSD Water deple3on Reports of market share & waste pes3cide residue 39% volume contamina3on confuse growth issues fall upon consumers $1 billion Plachimada Coke partners investment in Grassroots with NGOs on branding to- protests begin CSR ini3a3ves date Boycoas & protests con3nue Sales fall Protests Local consumer con3nue issues are Coke marginally accused of addressed green Ejected from washing social equity with CSR fund eorts Product bans issued

Coke India Brand Equity Gauge

Coke India Responds with Widespread CSR Efforts

Water Depletion
2002: 3.8 liters of water into 1 liter of Coke 2004: Water table declined in Kala Dera 2005: Recharged only 8% of water extracted in Mehdiganj

Excess Pesticides
2003: 15x max limit of pes3cides in boaled water 2006: 22x max limit of pes3cides in Coke

Coke Indias Response

2003: Developed aordability strategy 2003: Developed eKO system with NGOs 2004: PET recycling, energy & water consump3on 2006: Installed 300 rain harves3ng projects to-date 2006: Increased water eciency by 35% since 1999 2007: Pledged $20 million to improve water conserva3on 2007: Commits to achieve zero water balance by 2009 2007: Launches Liale Drops of Joy Ad Campaign

3 Possible Solutions for Coke in India

Ini3ate Hiring Program
Mi3gate opposi3on with opportunity

Stay the Course

Respond to allega3ons as required

Shi[ Internal Amtudes

Translate internal commitment to external brand equity

Make the Coke brand good to the last drop for consumers, shareholders, and employees

A Full Stomach Makes a Happy Heart

Major Insights
Protesters in Plachimada were primarily peasant farmers and the self-employed Wage earning jobs reduce patterns of poverty Existing CSR efforts do not carry the local impact previously believed

Employment Tastes Great

Change employment structure, Change attitudes

Before

Inequalities Coke as Villain Coke as Colonialist

A[er

Opportunities Spending Power Coke as Partner

In Case of a Stomach Ache

Potential risks of strengthening brand through hiring
Cultivating blind-eyes, NOT brand ambassadors Higher Wages lead to higher expectations No additional structural improvements in local areas Operations will continue to stress environments

Stay the Course

Major Insights
Numerous CSR commitments and operational improvements Indias resource infrastructure beyond Cokes scope of responsibility Competition continues to lag behind standards

Advantages to Holding Steady

Dont Negotiate with Terrorists
Avoid spotlight for admitting guilt Questionable testing, Lack of standards, Unrealistic expectations given existing resources Ebb & flow of allegationsNGOs will choose a new target soon Monetary savings: focus marketing budget on building brand equity in India

Risks of Staying the Course

Potential risks of continuing a reactive approach to problem solving
Falling behind the competition if they choose to take action Disintegration of positive brand equity in India, and risk of damaging global brand Band-aid approach will become more costly as consumer education rises

Same Great Taste, Zero Impact

Major Insights
Piecemeal, reactive approach to CSR is not effective or convincing to local communities Marketing to Indias poor requires affordability measures, diffuse distribution Coke is actively degrading its operating environment Indian consumers are not invested in the Coke brand Coke has the clout and resources to make a meaningful impact on Indian consumers lives, without compromising the bottom line

Change from the Inside Out

Measures
Achieve net zero impact in operating environments waste disposal water table depletion fertilizer sales Reform sales and advertising strategy to target Indias centers of influence with culturally relevant advertising campaign Leverage influence and NGO relationships to pressure government to improve water quality across India

Company as Stakeholder
Risks
Complicated History with Indian Government Fundamental Change Takes Time History with Indian Consumer

Rewards
Serving India in this Way is Profitable for Coke Community and Stakeholder Relations are Improved Global Brand is Preserved Nurture trust and emotional connection through measures competition isnt taking

Owning its Impact

Local Water Deple3on Improper Waste Disposal Pes3cide Levels in Products

Cokes Internal Commitment to Strong Corporate Citizenship

Has eliminated Resulting in

Sustained Sales & Consumer and Stakeholder Rela3onships

Internally- Driven CSR

Appropriate Sales Targets, Emo3onal Adver3sing & Room for Growth

Pressure Applied to Government to Improve Opera3ng Environment

Conclusion: Internal Reorientation

What it requires
Internal commitment to achieving net zero impact Recalibration of advertising budget and targeting efforts (away from BOP) Leadership in a sustained initiative to push the government to improve water quality across the country

Why it will work

Designed from inside out Brings all shareholders into the equation Advocates for meaningful change Acknowledges that Coke is a stakeholder in the communities where it operates Improves profitability

Q&A
You Got Questions?