Aliza Tariq FDM-4

(2016-2322)
Export marketing
Q1. How did Coca-Cola succeed in growing into such a powerful force in Mexico?

Ans There is no country on earth in which Coca-Cola exerts sheer power that it enjoys in
Mexico. Mexicans drink more soda drinks than any other country and Coca-Cola accounts for
73% of them. The persavisseness of Coke often due to public distrust in tap water is part of the
explanation n urban and rural areas alike. Mexican’s drink on average 163 liters of sugary drinks
annually and The average Mexican drinks more than 700 cups of Coca-Cola a year- nearly
double what Americans drink. But Coca-Cola wasn't always such a huge part of Mexican culture.

It grew slowly in popularity as one of its delivery workers” Vicente Fox” rose up the ranks to
become president of Coca-Cola Mexico and eventually, president of the whole country. Coca-
Cola's business boomed while he was in office. Part of why Coke was growing so explosively in
Mexico around the time of Fox's presidency is because of the North American Free Trade
Agreement. Mexico joined NAFTA in 1994, and it became way cheaper to buy Coca-Cola in
Mexico.

In some parts of Mexico, it was cheaper and easier to find Coca-Cola than clean drinking water.
Many malnourished communities needed the calories, so they began drinking more Coke. There
are some places where it's used in religious ceremonies, like at the "Coca-Cola Church" in the
state of Chiapas. It's really the St. John's Church, but that's not what most people call it. A few
decades ago, the religious leaders replaced a traditional alcohol with Coke. They use it for a
variety of things like decoration and healing, and they drink it in ceremonies.

Coca-Cola had been in Mexico for decades before it started booming in popularity. In the early
1970s, an international ad campaign for the drink swept across Mexico. Around the same time,
Coca-Cola sponsored the Mexico City Olympics and the World Cup. 

Coke was so popular that in 1970, then-President “Luis Echeverría” tried to get the recipe and
nationalize it. Though his attempt was unsuccessful, it was a testament to how closely
intertwined Coca-Cola and Mexican politics had become. 

Q2. Coca-Cola has supported numerous health supporting causes, but to what extent is
their genuine CSR?
Ans Following the alarm cause by the health survey in 2006. Coca-Cola stepped up its healthy-
living campaigns, including increased sponsorship of sporting events. The company has been
keen to counteract any link between sugary rinks and disease. It rejects comparisons with the
tobacco industry.
Although tabacco companies have pursued similar tactics in 2006. whitewashing is defined as “a
coordinated attempt to hide unpleasant facts, especially in a political context." It's easy to see the
relationship between it and another less familiar term, greenwashing.

Greenwashing can be loosely defined as the times in which an organization falsely conveys to
consumers that their products, service, or operating practices are socially and/or environmentally
responsible. Coca-Cola, for example, has run afoul in recent months with the launch of Coca-
Cola Life in various countries. Sold in a green can or a recyclable bottle, critics claim the 68
calorie per serving soft drink--with 17 grams of sugar--is another example of tricking the
consumer under the guise of a healthy product. University of Sydney nutritionist Dr Kieron
Rooney told Daily Mail Australia that, "Coke Life should not be considered a healthy option… it
should not even have a seat at the table." But greenwashing is fast becoming as deleterious to an
organization's existence as Frederick Taylor's stopwatch practices, a management technique that
still remains in many call centers and manufacturing lines. All these campaigns are a ruse to get
the people’s attention diverted to the harm that is being caused by such companies on a daily
basis. Cleaning up their name by supporting the community or taking social responsibility just to
make themselves look clean.

Q3. How ethical is Coca-Cola in its approach to the Mexican market?

Ans Since the 1990s Coca-Cola has been accused of unethical behavior in a number of areas,
including product safety, anti-competitiveness, racial discrimination, channel stuffing, distributor
conflicts, intimidation of union workers, pollution, depletion of natural resources, and health
concerns. The company has dealt with a number of these issues, some via private settlements and
some via court battles, while others remain unresolved. Although its handling of different ethical
situations has not always been lauded, Coca-Cola has generally responded by seeking to improve
its detection and compliance systems. However, it remains to be seen whether the company can
permanently rise above its ethical problems, learn from its mistakes, make necessary changes,
avoid further problems, and still emerge as a leader among beverage companies.
Perhaps the most damaging of Coca-Cola’s crises—and a situation dreaded by every company—
began in June 1999 when about thirty Belgian children became ill after consuming Coke
products. Although the company issued an isolated product recall, the problem escalated. The
Belgian government eventually ordered the recall of all Coca-Cola products, which prompted
officials in Luxembourg and the Netherlands to recall Coke products as well. Coca-Cola finally
determined that the illnesses were the result of an improperly processed batch of carbon dioxide.
Coca-Cola was slow to issue a response to the problem, taking several days to address the media.
The company had initially judged the problem to be minor and did not immediately investigate
the extent of the issue. The slow response time led to a public relations nightmare. France soon
reported more than 100 people sick from bad Coke and temporarily banned all Coca-Cola
products as well. Soon thereafter, a shipment of Bonaqua, a new Coca-Cola water product,
arrived in Poland contaminated with mold. In each of these instances, the company’s slow
responses and failure to acknowledge the severity of the situation harmed its reputation and cast
doubt on then-CEO Ivester’s ability to successfully lead. The contamination crisis was
exacerbated in December 1999 when Belgium ordered CocaCola to halt the “Restore” marketing
campaign it had launched in order to regain consumer trust and sales in Belgium. A rival firm
claimed that the campaign strategy—which included free cases of the product, discounts to
wholesalers and retailers, and extra promotion personnel—was unlawful. The claim was upheld
under Belgium’s strict antitrust laws, and Coca-Cola was forced to abandon the campaign. This
decision, following the previous crisis, further reduced Coca-Cola’s market standing in Europe.
Judging by the stance Coca-cola has taken over the years whenever there have been genuine
criticism or harm occruing due to their drink. They have always taken a rather unethical
approach to deal with the problem and to further take advantage of the people in the form of
promotions, discounts which is very captivating to people of lower classes or rural areas as they
need the calories and the price tag really catches the eye of both the consumer and the retailers.

Q4. Should other countries adopt the soda tax?

Ans Consumption of sugary drinks in Berkeley's diverse and low-income neighborhoods
dropped precipitously in 2015, just months after the city levied the nation's first soda tax on
sugar-sweetened beverages.

Three years later, residents in these neighborhoods reported drinking 52 percent fewer servings
of sugary drinks than they did before the tax was passed in November 2014, shows a new report
from the University of California, Berkeley. This drop more than doubles the 21 percent decline
found in 2015. Water consumption also saw a bump, going up 29 percent over the three-year
period.
The study, which is the first to document the long-term impacts of a soda tax on drinking habits
in the United States, provides strong evidence that soda taxes are an effective tool for
encouraging healthier drinking habits, with the potential to reduce sugar-linked diseases like
diabetes, heart disease and tooth decay.
The study, which appears Feb. 21 in the American Journal of Public Health, comes at a critical
time for jurisdictions considering soda taxes. While a number of cities, including Philadelphia
and Seattle, now have soda taxes on the books, both California and Washington state passed bills
in 2018 that ban municipalities from putting future soda taxes in place.
While the excise tax is levied on distributors, rather than directly on consumers, subsequent
studies have shown that retailers incorporated the higher costs into the shelf price of the drinks.
To find out about residents' drinking habits, the team polls around 2,500 people each year in high
foot traffic intersections in racially and demographically diverse neighborhoods across Berkeley,
Oakland and San Francisco.
The so-called street intercept surveys revealed a steep drop in sugar-sweetened beverage
consumption in Berkeley between 2014 and 2017. The decrease was seen overall for sugary
drinks, and specifically for soft drinks like Coke and Pepsi, sports drinks like Gatorade and
Powerade, and sweetened teas and coffees.
Residents of neighboring Oakland and San Francisco drank about the same number of sugary
beverages in 2017 as they did in 2014, suggesting that these changes were unique to Berkeley
and not signs of a regional trend in drinking habits unrelated to the tax.
Oakland and San Francisco have since enacted their own soda taxes, which went into effect in
mid-2017 and 2018, respectively.
The study does have its limitations. Street intercept surveys do not provide a random sample of
residents, and Berkeley is a relatively small and highly-educated city.
Likewise, after Mexico passed its own version of soda tax in 2014, more than 30,000 businesses
closed shop, taking with them around 11,000 jobs. Had only the U.S. looked abroad, the results
would’ve shown that soda taxes only cause harm.
As policymakers look to promote public health, they should be cautious about ideas that may be
popular, but in reality, are disastrous. Soda taxes do not improve public health. Instead they
destroy jobs and unjustly become a tax burden for the poor. As cities consider enacting similar
laws, they should look at places like Denmark and Mexico. A 2017 study from Oxford
Economics found “that the soda tax had destroyed 1,192 jobs in Philadelphia, reduced the city’s
economic output by nearly $80 million, and eliminated $55 million in labor income to workers.”
Which is another example of imposing the soda tax is not the optimal solution for preventing
people from living an unhealthy lifestyle.

The taxes have different impact on different countries as was in Mexico’s & Philadelphia’s case
the cons were people losing their jobs or even bussinesses. As to if other countries should adopt
such a strategy or not is still a question that is left answered and new tactics should be evaluated
before making such decisions specially in countries like Mexico where there is already a lot of
suffering and poverty. These taxes cannot be treated as the only way of eliminating people’s
sugary drinks consumption. Even though the results in some countries have been progressive
there have been some where it has had a regressive effect.