Pepsi-Cola is imported as a concentrate for manufacturing into soft drinks by Soviet plants. And concentrate is countertraded for Stolichnaya Vodka, the first Soviet consumer product ever sold in the United States. And in the United States, where Stolichnaya is more commonly known as “Stoli”, consumer response to Soviet Vodka has been excellent. Stolichnaya sales have increased more than 800% since 1972 [until 1989 as shown on graph beginning in 1972 with sales of 20,000] and now exceed over one million cases a year. Donald M. Kendall, the man who brought Pepsi to the Soviet Union:
“ Well, one thing about the Soviets which I think a lot of people don’t understand is that first of all when you are negotiating with them, they do their homework, so you better make sure you do your homework and better know what you are talking about and what you want to do. The other thing you will find with the Soviets is that they are extremely loyal to companies and people that they deal with. If you establish a long term relationship with the Soviets, they live up to those agreements and contracts. I fact there have been periods where we have operated in the Soviet Union where we had no written agreement”.
Today, Pepsi-Co has 85 joint ventures scattered throughout the former Soviet Union and other communist and formerly communist countries. It is also a global company, rooted in the Pepsi- Cola international family, Pepsi’s local partners in 150 nations.
We have seen that one key to success in international marketing is to understand that the environmental variables may interact with the marketing mix differently from country to country, thus requiring some adaptation. Conversely, in some markets, or with some products, similarities may overshadow local differences, allowing for standardization. For instance, Coca- Cola is able to use its secret formula in almost every country, leading to economies of scale. With more than 175 countries in the world, we cannot know in advance of all these environmental variables, and how they will interact with the 4 P’s in each market. But, based on the experiences of Coke and Pepsi, we see that marketing managers have to be sensitive to the important political, economic, cultural or other environmental differences affecting the marketing mix. Discovering the similarities and differences of people and nations around the world, makes international marketing a most interesting and rewarding career. If you are willing to grasp the complexities of the global marketplace, you will be able to help your firm grow, create jobs and make money and friends around the world.