prevents themfrom conducting business in these markets. This paper seeks to examine thesemarkets and the opportunities and roadblocks that lie within each. Coke andPepsi in Russia: In 1972, Pepsi signed an agreement with the Soviet Unionwhich made it the first Western product to be sold to consumers in Russia.This was a landmark agreement and gave Pepsi the first-mover advantage.Presently, Pepsi has 23 plants in the former Soviet Union and is the leaderin the soft-drink industry in Russia. Pepsi outsells Coca-Cola by 6 to 1 andis seen as a local brand. Also, Pepsi must counter trade its concentrate withRussia's Stolichnaya vodka since rubles are not tradable on the world market.However, Pepsi has also had some problems. There has not been an increase inbrand loyalty for Pepsi since its advertising blitz in Russia, even though ithas produced commercials tailored to the Russian market and has sponsoredtelevision concerts. On the positive side, Pepsi may be leading Coca-Cola dueto the big difference in price between the two colas. While Pepsi sells forRb250 (25 cents), Coca-Cola sells for Rb450. For the economy size, Pepsisells 2 liters for Rb1,300, but Coca-Cola sells 1.5 liters for Rb1,800.Coca-Cola, on the other hand, only moved into Russia 2 years ago and ismanufactured locally in Moscow and St. Petersburg under a license. Despiteinvesting $85 million in these two bottling plants, they do not perceiveCoca-Cola as a premium brand in the Russian market. Moreover, they see it asa "foreign" brand in Russia. Lastly, while Coca-Cola's bottle and label giveit a high-class image, it is unable to capture market share. Coke and Pepsiin Romania: Romania is the second largest central European market afterPoland, and this makes it a hot battleground for Coca-Cola and Pepsi. WhenPepsi established a bottling plant in Romania in 1965, it became the firstU.S. product produced and sold in the region. Pepsi began producing locallyduring the communist pe...
