The soft-drink battleground has now turned toward new overseas markets. While once the United States, Australia, Japan, and Western Europe were the dominant soft-drink markets, the growth has slowed down dramatically, but they are still important markets for Coca-Cola and Pepsi. However, Eastern Europe, Mexico, China, Saudi Arabia, and India have become the new "hot spots." Both Coca-Cola and Pepsi are forming joint bottling ventures in these nations and in other areas where they see growth potential. As we have seen, international marketing can be very complex. Many issues have to be resolved before a company can even consider entering uncharted foreign waters. This becomes very evident as one begins to study the international cola wars. The domestic cola war between Coca-Cola and Pepsi is still raging. However, the two soft-drink giants also recognize that opportunities for growth in many of the mature markets have slowed. Both Coca-Cola, which sold 10 billion cases of soft-drinks in 1992, and Pepsi now find themselves asking, "Where will sales of the next 10 billion cases come from?" The answer lies in the developing world, where income levels and appetites for Western

Both Coca-Cola and Pepsi are trying to have their colas available in as many locations in Eastern Europe, but at a cost which consumers would be willing to pay. The concepts which are becoming more important in Eastern Europe include color, product attractiveness visibility, and display quality. In addition, availability (meeting local demand by increasing production locally), acceptability (building brand equity), and afford ability (pricing higher than local brands, but adapting to local conditions) are the key factors for Eastern Europe. Both companies hope that their western images and brand products will help to boost their sales. Coca-Cola has a universal message and campaign since it feels that Eastern Europe is part of the world and should not be treated differently. Currently, it is difficult to say who is winning the cola wars since the data from the relatively new market research firms focusses on major cities. Pepsi had a commanding 4 to 1 lead in 1992 in the former Soviet Union. Without this area, Coca-Cola has a 17% share versus Pepsi's 12% share in the soft drink industry. While both companies have been in Eastern Europe for many years, the main task now is to develop the market. Coca-Cola and Pepsi are in a dogfight, but both will end up as winners. In the end, the ultimate winner will be the Eastern Europeans who will have access to some of the world's best soft drinks.

Quelch, John A., Erich Joachimsthaler, and Jose Luis Nueno, "After the Wall: Marketing Guidelines for Eastern Europe", Sloan Management Review, Winter 1991, pp. 82-93.

"A red line in the sand", Economist, October 1, 1994, p. 86.

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