Securities Exchange Board of India free essay sample

In 1988 the Securities and Exchange Board of India (SEBI) was established by the Government of India through an executive resolution, and was subsequently upgraded as a fully autonomous body (a statutory Board) in the year 1992 with the passing of the Securities and Exchange Board of India Act (SEBI Act) on 30th January 1992. In place of Government Control, a statutory and autonomous regulatory board with defined responsibilities, to cover both development regulation of the market, and independent powers have been set up. Paradoxically this is a positive outcome of the Securities Scam of 1990-91. The basic objectives of the Board were identified as: to protect the interests of investors in securities; to promote the development of Securities Market; to regulate the securities market and for matters connected therewith or incidental thereto. Since its inception SEBI has been targetting the securities and is attending to the fulfillment of its objectives with commendable zeal and dexterity. We will write a custom essay sample on Securities Exchange Board of India or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The improvements in the securities markets like capitalization requirements, margining, establishment of clearing corporations etc. reduced the risk of credit and also reduced the market. SEBI has introduced the comprehensive regulatory measures, prescribed registration norms, the eligibility criteria, the code of obligations and the code of conduct for different intermediaries like, bankers to issue, merchant bankers, brokers and sub-brokers, registrars, portfolio managers, credit rating agencies, underwriters and others. It has framed bye-laws, risk identification and risk management systems for Clearing houses of stock exchanges, surveillance system etc. which has made dealing in securities both safe and transparent to the end investor. Another significant event is the approval of trading in stock indices (like SP CNX Nifty Sensex) in 2000. A market Index is a convenient and effective product because of the following reasons: It acts as a barometer for market behavior; It is used to benchmark portfolio performance; It is used in derivative instruments like index futures and index options; It can be used for passive fund management as in case of Index Funds. Two broad approaches of SEBI is to integrate the securities market at the national level, and also to diversify the trading products, so that there is an increase in number of traders including banks, financial institutions, insurance companies, mutual funds, primary dealers etc. to transact through the Exchanges. In this context the introduction of derivatives trading through Indian Stock Exchanges permitted by SEBI in 2000 AD is a real landmark. SEBI appointed the L. C. Gupta Committee in 1998 to recommend the regulatory framework for derivatives trading and suggest bye-laws for Regulation and Control of Trading and Settlement of Derivatives Contracts. The Board of SEBI in its meeting held on May 11, 1998 accepted the recommendations of the committee and approved the phased introduction of derivatives trading in India beginning with Stock Index Futures. The Board also approved the Suggestive Bye-laws as recommended by the Dr LC Gupta Committee for Regulation and Control of Trading and Settlement of Derivatives Contracts. SEBI then appointed the J. R. Verma Committee to recommend Risk Containment Measures (RCM) in the Indian Stock Index Futures Market. The report was submitted in november 1998. However the Securities Contracts (Regulation) Act, 1956 (SCRA) required amendment to include derivatives in the definition of securities to enable SEBI to introduce trading in derivatives. The necessary amendment was then carried out by the Government in 1999. The Securities Laws (Amendment) Bill, 1999 was introduced. In December 1999 the new framework was approved. Derivatives have been accorded the status of `Securities. The ban imposed on trading in derivatives in 1969 under a notification issued by the Central Government was revoked. Thereafter SEBI formulated the necessary regulations/bye-laws and intimated the Stock Exchanges in the year 2000. The derivative trading started in India at NSE in 2000 and BSE started trading in the year 2001. Reasons for Establishment of SEBI: With the growth in the dealings of stock markets, lot of malpractices also started in stock markets such as price rigging, ‘unofficial premium on new issue, and delay in delivery of shares, violation of rules and regulations of stock exchange and listing requirements. Due to these malpractices the customers started losing confidence and faith in the stock exchange. So government of India decided to set up an agency or regulatory body known as Securities Exchange Board of India (SEBI) 2. Aims and objectives of SEBI The main objectives of SEBI are: (1) Regulation of Stock Exchanges: The first objective of SEBI is to regulate stock exchanges so that efficient services may be provided to all the parties operating there. (2) Protection to the Investors: The capital market is meaningless in the absence of the investors. Therefore, it is important to protect the interests of the investors. The protection of the interests of the investors means protecting them from the wrong information given by the companies in their prospectus, reducing the risk of delivery and payment, etc. Hence, the foremost objective of the SEBI is to provide security to the investors. 3. Checking the Insider Trading: Insider trading means the buying and selling of securities by those people’s directors Promoters, etc. who have some secret information about the company and who wish to take advantage of this secret information. This hurts the interests of the general investors. It was very essential to check this tendency. Many steps have been taken to check inside trading through the medium of the SEBI. 4. Control over Brokers: It is important to keep an eye on the activities of the brokers and other middlemen in order to control the capital market. To have a control over them, it was necessary to establish the SEBI. 5. To prevent fraudulent and malpractices by having balance between self regulation of business and its statutory regulations. 6. To regulate and develop a code of conduct for intermediaries such as brokers, underwriters, etc. 7 To perform and implement then power of capital issues act 1947 and securities contract act, 1956 which were given to SEBI by the government. 8. to regulate acquisition of shares and takeovers of companies 3. Services offered by SEBI Investors’ Services Fund The Exchange shall establish a separate fund called Investors’ Services Fund by setting aside twenty percent of the annual listing fees or such percentage of the listing fees, as may be stipulated by SEBI from time to time. This Fund shall be used for the purposes of providing different kinds of services to the investing public. The Exchange shall have at least one Investor Service Centre at the place where the Exchange is located for the benefit of the public/investors. The Investor Service Centre shall provide such number of newspapers and periodicals, as may be specified by SEBI / Exchange, with at least one in the regional language. The Investor Service Centre shall provide a facility for dissemination of information about companies, including annual reports, financial and other important information through electronic media by providing view terminals with restricted access and with a facility to take copies on payment of a reasonable fee. The Investor Service Centre shall provide a facility for receiving/recording investors’ complaints/claims and provide acknowledgement slips with distinct numbers generated through the electronic system put in place by the Exchange for this purpose, which shall be capable of maintaining and updating the status of such investors’ complaints/claims. The Investor Service Centre shall provide counselling service to the investors to assist the investors to know the steps they need to take before entering into any arrangement to buy and/or sell a security through a trading member or a sub-broker on the Exchange. The Investor Service Centre shall have reasonable infrastructure facilities of trained staff, telephone, sitting place, printing machine, Xerox machine, etc. The Investor Service Centre shall provide published materials of the Exchange as well as magazines for the reference by the investors. The Investor Service Centre shall provide view terminals displaying prices of the scrips on real-time basis for the benefit of the investors. The Investor Service Centre shall maintain books on relevant laws, financial analysis, market trend analysis, etc. for reference by the investors. The stock exchange, having a market share of more than twenty percent of the total turn over in the equity market across all stock exchanges as at the end of the latest financial year published by SEBI, shall provide the above facilities at at least at five Investor Service Centres and the stock exchange having a turn over upto twenty percent of the total turn over in the equity market across all stock exchanges, shall have at least one Investor Service Centre. A list of Investor Service Centres opened by the Exchange shall be published on the Website of the Exchange, communicated to SEBI from time to time and also published in a widely circulated national daily, at least once in every calendar quarter. 4. Role of the institution in our financial system The role or functions of SEBI are: To protect the interests of investors through proper education and guidance as regards their investment in securities. For this, SEBI has made rules and regulation to be followed by the financial intermediaries such as brokers, etc. SEBI looks after the complaints received from investors for fair settlement. It also issues booklets for the guidance and protection of small investors. To regulate and control the business on stock exchanges and other security markets. For this, SEBI keeps supervision on brokers. Registration of brokers and sub-brokers is made compulsory and they are expected to follow certain rules and regulations. Effective control is also maintained by SEBI on the working of stock exchanges. To make registration and to regulate the functioning of intermediaries such as stock brokers, sub-brokers, share transfer agents, merchant bankers and other intermediaries operating on the securities market. In addition, to provide suitable training to intermediaries. This function is useful for healthy atmosphere on the stock exchange and for the protection of small investors. To register and regulate the working of mutual funds including UTI (Unit Trust of India). SEBI has made rules and regulations to be followed by mutual funds. The purpose is to maintain effective supervision on their operations avoid their unfair and anti-investor activities. To promote self-regulatory organization of intermediaries. SEBI is given wide statutory powers. However, self-regulation is better than external regulation. Here, the function of SEBI is to encourage intermediaries to form their professional associations and control undesirable activities of their members. SEBI can also use its powers when required for protection of small investors. To regulate mergers, takeovers and acquisitions of companies in order to protect the interest of investors. For this, SEBI has issued suitable guidelines so that such mergers and takeovers will not be at the cost of small investors. To prohibit fraudulent and unfair practices of intermediaries operating on securities markets. SEBI is not for interfering in the normal working of these intermediaries. Its function is to regulate and control their objectional practices which may harm the investors and healthy growth of capital market. To issue guidelines to companies regarding capital issues. Separate guidelines are prepared for first public issue of new companies, for public issue by existing listed companies and for first public issue by existing private companies. SEBI is expected to conduct research and publish information useful to all market players (i. e. all buyers and sellers). To conduct inspection, inquiries audits of stock exchanges, intermediaries and self-regulating organizations and to take suitable remedial measures wherever necessary. This function is undertaken for orderly working of stock exchanges intermediaries. To restrict insider trading activity through suitable measures. This function is useful for avoiding undesirable activities of brokers and securities scams. 5. Functions of SEBI: The SEBI performs functions to meet its objectives. To meet three objectives SEBI has three important functions. These are: i. Protective functions ii. Developmental functions iii. Regulatory functions. 1. Protective Functions: These functions are performed by SEBI to protect the interest of investor and provide safety of investment. As protective functions SEBI performs following functions: (i) It Checks Price Rigging: Price rigging refers to manipulating the prices of securities with the main objective of inflating or depressing the market price of securities. SEBI prohibits such practice because this can defraud and cheat the investors. (ii) It Prohibits Insider trading: Insider is any person connected with the company such as directors, promoters etc. These insiders have sensitive information which affects the prices of the securities. This information is not available to people at large but the insiders get this privileged information by working inside the company and if they use this information to make profit, then it is known as insider trading, e. g. , the directors of a company may know that company will issue Bonus shares to its shareholders at the end of year and they purchase shares from market to make profit with bonus issue. This is known as insider trading. SEBI keeps a strict check when insiders are buying securities of the company and takes strict action on insider trading. (iii) SEBI prohibits fraudulent and Unfair Trade Practices: SEBI does not allow the companies to make misleading statements which are likely to induce the sale or purchase of securities by any other person. (iv) SEBI undertakes steps to educate investors so that they are able to evaluate the securities of various companies and select the most profitable securities. (v) SEBI promotes fair practices and code of conduct in security market by taking following steps: (a) SEBI has issued guidelines to protect the interest of debenture-holders wherein companies cannot change terms in midterm. (b) SEBI is empowered to investigate cases of insider trading and has provisions for stiff fine and imprisonment. (c) SEBI has stopped the practice of making preferential allotment of shares unrelated to market prices. 2. Developmental Functions: These functions are performed by the SEBI to promote and develop activities in stock exchange and increase the business in stock exchange. Under developmental categories following functions are performed by SEBI: (i) SEBI promotes training of intermediaries of the securities market. (ii) SEBI tries to promote activities of stock exchange by adopting flexible and adoptable approach in following way: (a) SEBI has permitted internet trading through registered stock brokers. (b) SEBI has made underwriting optional to reduce the cost of issue. (c) Even initial public offer of primary market is permitted through stock exchange. 3. Regulatory Functions: These functions are performed by SEBI to regulate the business in stock exchange. To regulate the activities of stock exchange following functions are performed: (i) SEBI has framed rules and regulations and a code of conduct to regulate the intermediaries such as merchant bankers, brokers, underwriters, etc. (ii) These intermediaries have been brought under the regulatory purview and private placement has been made more restrictive. (iii) SEBI registers and regulates the working of stock brokers, sub-brokers, share transfer agents, trustees, merchant bankers and all those who are associated with stock exchange in any manner. (iv) SEBI registers and regulates the working of mutual funds etc. (v) SEBI regulates takeover of the companies. (vi) SEBI conducts inquiries and audit of stock exchanges 6. Public awareness of the institute After getting sweeping powers to take on market manipulators and perpetrators of investment frauds, Securities and Exchange Board of India (Sebi) is now working on ways to empower the small investors and to channelize a larger flow of household savings into capital markets. To reach this goal, the Sebi is considering a triple-A approach of spreading awareness among investors, promoting appropriate products and ensuring proper audit of the marketplace. This is one of the key suggestions made by an independent consultant for an overhaul of Sebis functions, role, structure and vision, a senior official said. The proposals, which have been made after extensive consultations with top officials from Sebi, finance ministry, RBI, IRDA and large market intermediaries, will take the final shape after incorporating the suggestions made by the board of capital markets regulator. After consulting the internal and external stakeholders, the global consultancy major, Oliver Wyman, has suggested eight key goals for Sebi over the next five years, the top-most being increasing mobilisation of household savings into capital markets. The other goals identified in this project are building a diversified and balanced investor base in the country, developing viable alternatives to bank credit, enhancing ability to prevent and respond to crises, empowerment o investors and ensuring full trust and confidence of investors in the securities market. Besides, it also wants Sebi to become a centre of excellence for conducting supervision functions and achieve best in class efficiency, knowledge institution and employer of choice status. An 15-point agenda has also been suggested for Sebi to achieve these eight goals. According to officials, some of the recommended measures are either already in place or are in the advanced stages of implementation, while others might be adopted in due course. It has been suggested that Sebi should pursue the government and other regulators to address the regulatory gaps in the existing setup with proposals like consolidated supervision of all types of investment schemes through a single body and creation of a separate regulator for auditors. Besides, Sebi has also been asked to strengthen the supervision of the exchanges oversight of listed companies by setting up a dedicated internal team to oversee the bourses functions and ensure adequate enforcement. It has also asked Sebi to enhance its crisis prevention and response capabilities through steps like an effective coordination with RBI and ongoing monitoring of systemically important institutions. The triple-A approach for mobilising household savings into productive capital market products include collaboration with other regulators to spread investor awareness, developing appropriate low-risk products for retail investors and proper audit of marketplace to safeguard investors interest. In wide-ranging changes to the way Sebi can act against market manipulators and fraudsters, the government last month gave it powers to regulate all kinds of investment schemes involving Rs 100 crore or more, conduct search and seizure activities, pass attachment orders and sell the attached properties to recover the ill-gotten money. Following these powers, Sebi is now setting its eyes on steps required to give the small investors confidence to put their hard-earned savings into the capital markets, rather than unproductive assets like gold, a top official said. Among other proposals, Sebi has asked to to build skills for non-equity and off-exchange markets such as corporate bonds and structured products. Besides, Sebi has also been asked to maintain a clear and consistent vision and communicate the same to market explicitly, while ensuring a consistency even across leadership changes. Sebi also needs to adopt principles-based approach in key policy areas like fraud, compliance, disclosures and institutional interface, while it also requires to maintain a regular and open communication with the industry, the proposals say. The consultant has also suggested Sebi to adopt a risk-based supervision approach and categorise different market entities regulated by it by their risk levels. Sebi has been asked to issue guidance for turnaround times of cases and to set year-end targets, while ensuring a smooth hand over of cases from investigation to enforcement stages. For enhancing its supervision capabilities, it has been recommended that Sebi develops omnibus licensing for market conglomerates, institutes a whistle blowing policy and builds a state-of-the-art research and analytics cell. Other suggestions include increase in headcount with larger workforce in supervision functions, re-aligning the support functions under a Chief Operating Officer role, enhancing delegation of powers at various levels, linking monetary and non-monetary rewards to performance, skill development through external exposure and re-defining IT strategy of the organisation. 7. RECENT DEVELOPMENTS IN THE CAPITAL MARKETS DIVISION Securities Contracts (Regulation) Amendment Act, 2007 The Securities Contracts Regulation Act, 1956 has been amended to include securitisation instruments under the definition of securities and provide for disclosure based regulation for issue of the securitized instruments and the procedure thereof. This has been done keeping in view that there is considerable potential in the securities market for the certificates or instruments under securitisation transactions. The development of the securitised debt market is critical for meeting the humungous requirements of the infrastructure sector, particularly housing sector, in the country. Replication of the securities markets framework for these instruments would facilitate trading on stock exchanges and in turn help development of the market in terms of depth and liquidity. PAN as the sole identification number PAN has been made the sole identification number for all transactions in securities market. This is an investor friendly measure as he does not have to maintain different identification numbers for different kinds of transactions/different segments in financial markets. Further, identification through PAN would help the authorities in enforcement action. Equity Finance for the Small and Medium Enterprises (SMEs) In recognition of the need for making finance available to needy small and medium enterprises, SEBI Board in its meeting held on 25th October, 2007 had agreed to the creation of a separate Exchange for the SMEs. Accordingly, in May 2008 a discussion paper was brought out on the issue. Based on the feedback received, the SEBI Board in its meeting held on 6th October, 2008 decided to encourage promotion of either dedicated exchanges and/or dedicated platforms of the existing exchanges for listing and trading of securities issued by SMEs. On November 9, 2009 SEBI Board took a decision on the operational aspects of the exchanges/ platforms of stock exchanges for small and medium enterprises. Accordingly, SEBI has permitted setting up of a Stock exchange/ a trading platform for SMEs by a recognized stock exchange having nationwide trading terminals and also issued Guidelines for market making for the specified securities listed on the SME exchange. Further, necessary amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 SEBI (Merchant Bankers) Regulations, 1992, SEBI (Foreign Institutional Investors) Regulations, 1995, SEBI (Venture Capital Funds) Regulations, 1996, SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and SEBI (Stock Brokers and Sub-brokers) Regulations, 1992 have also been carried out, to enable the SMEs to access the capital market. Based on the finalized regulations, applications have been received by SEBI for setting up SME Platforms. IPO grading SEBI has made it compulsory for companies coming out with IPOs of equity shares to get their IPOs graded by at least one credit rating agencyregistered with SEBI from May 1, 2007. This measure is intended to provide the investor with an informed and objective opinion expressed by a professional rating agency after analyzing factors like business and financial prospects, management quality and corporate governance practices etc. Till January 2008 45 IPOs have been graded by credit rating agencies. Permitting Indian mutual funds to invest in overseas securities SEBI has fixed the aggregate ceiling for overseas investments at US $ 5 billion. Within the overall limit of US $ 5 billion, mutual funds can make overseas investments subject to a maximum of US $300 million per mutual fund. Further different regulations that allow individuals and Indian mutual funds to invest in overseas securities by permitting individuals to invest through Indian mutual funds has been converged. New derivative products Mini derivative contract on Index (Sensex and Nifty) having a minimum contract size of Rs. 1 lakh have been introduced. It has been found that globally overall market liquidity and participation generally increases with introduction of mini contracts. Since January 11, 2008 SEBI has also allowed trading on options contracts on indices and stocks with a longer life/tenure of upto five years. These contracts are expected to provide liquidity at the longer end of the market. Since January 15, 2008 SEBI has permitted introduction of volatility index on futures and options contracts. An openly available and quoted measure of market volatility in the form of an index will help market participants. Short selling In pursuance to budget announcement, SEBI has issued a circular on 20th December, 2007 to permit short selling by institutional investors and securities lending and borrowing to support settlement of short sales. The scheme is likely to be operationalised shortly. Investment options for Navaratna and Miniratna Public Sector Enterprises The Navaratna and Miniratna Public Sector Enterprises have been allowed to invest in public sector mutual funds subject to the condition that they would not invest more than 30% of the available surplus funds in equity mutual funds and the Boards of PSEs would decide the guidelines, procedures and management control systems for such investment in consultation with their administrative Ministries. Investor Protection and Education Fund (IPEF) SEBI has set up the Investor Protection and Education Fund (IPEF) with the purpose of investor education and related activities. SEBI has contributed a sum of Rs. 10 crore toward the initial corpus of the IPEF from the SEBI General Fund. In addition following amounts will also be credited to the IPEF namely: i. Grants and donations given to IPEF by the Central Government, State Governments or any institution approved by SEBI for the purpose of the IPEF; ii. Interest or other income received out of the investments made from the IPEF; and iii. Such other amount that SEBI may specify in the interests of the investors.

The Coca Cola Company and Its Myths

The Coca Cola Company and Its Myths Free Online Research Papers Research shows that The Coca Cola Company has become a prominent corporation, with branches in over two hundred countries. An analysis has been conducted to identify the elements that have made this company successful. The findings vary from the approach of its employees to the cultural issues, to the company’s marketing strategies. The myths that have surrounded Coca Cola through the decades will also be explored with the intention of finding the impact they have had in the company’s growth. The Coca-Cola Company and its Myths Introduction Coca Cola products can be found practically anywhere in the world, such as on the tables of people in Tanzania, one of the poorest countries, and on the tables of the wealthiest people in the United States, where the company was founded. The success of this worldwide organization can be attributed to more than just its flavorful beverages. The following elaborates on the company’s mission, product line, organizational structure, and its marketing strategies. A brief overview of some of the myths that have surrounded Coca Cola will also be helpful in finding out how a backyard operation evolved into a multi-million dollar business. Coca-Cola’s Background Coca Cola has been linked to American culture for many years. John Pemberton, who invented the formula in his own back yard, founded Coca Cola in 1886 in Atlanta, Georgia. The first serving of Coca Cola was sold at a pharmacy in Georgia on May 8, 1886. This company has since grown into a multi-million dollar industry, in large part due to their mission and goals. One of the major strengths of Coca Cola is their capability to conduct business on an international scale while sustaining a local approach. To date, this company now produces nearly 400 brands, expanding to over 200 countries worldwide. Coca Cola’s vision involved adapting and evolving to the business conditions of each day. They also embodied employees who upheld strong ideals, commitment, and integrity. The Coca Cola Company believes that there are many experiences in the world and in life to rejoice, enliven, reinforce, and care for (Coca Cola, 2004). One of the missions of the Coca Cola Company is to dev elop a higher quality of life in communities. They are greatly involved in methods and programs, which promote improving individual opportunity through education. Programs that they support and contribute to include: scholarships for aspiring students, encouragement to young people of the importance of staying in schools, and the development of cultural understanding and appreciation (Coca Cola, 2004). Organizational Structure and Targeted Consumers The Coca-Cola Company exists to benefit and refresh everyone it touches. The company is the worlds leading manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups, used to produce nearly four hundred beverage brands. The corporate headquarters are in Atlanta, with local operations in over two hundred countries around the world. (www.2cocla-cola.com) The basic proposition of the business is solid and timeless. When bringing the refreshment, value, joy and fun to the stakeholders, then they successfully nurture and protect the brands, particularly Coca-Cola. That is the key to fulfilling the ultimate obligation to provide consistently attractive returns to the business owners. The company is committed to manage business with a consistent set of values that represent the highest standard of quality, integrity and excellence. Through actions as local citizens, they strive everyday to refresh the market place, enrich the work place, protect the environment, and strengthen the communities (www.2cocla-cola.com). The company’s target is to reach everyone’s home, from young children to the older public. It is the most recognized trademark in the world. The reputation of the Coca-Cola Company is built on trust. They seek to develop relationships with suppliers and share familiar values and conduct business in an ethic al manner (Leith, S. 2002). Marketing and Advertisement Strategies When it comes to marketing, â€Å"The objective of Coca-Cola’s advertisements is to strategically position their product in people’s minds in order to maximize its acceptance. This strategy would in some way or another have a correlation to the changing social values of the period. Trying to keep step with each generation and era has been an important factor in advertising for Coke.† (oppapers.com) The marketing view must penetrate all other views to make a firm successful in the marketplace. Marketing forecasts and plans are multi-factor calculations and predictions, where holistic approaches are needed. Coke uses careful marketing research to discover the trends and desires of target markets, creates products to meet those needs, and then plans ad campaigns to lure in the targeted market segments. It would be ideal if the information gleaned through this process was exclusive, but eventually other soft drink companies pick up on Coke’s trends and try to use it to their advantage as well, at which time Coca-Cola starts the process over. The format in which the information is delivered to decision makers is not as important as the way they then use the information in the effort to win or keep customers. An example of Coca-Cola’s use of marketing is evident in the new advertising campaign, which the company believes, â€Å"reflects genuine, authentic moments in life and the natural role the brand plays in them.† Chris Lowe, North America’s Coca-Cola chief marketing officer explained that, â€Å"consumers today are telling us they want brands that are genuine, authentic and real and these are values they associate more strongly with Coca-Cola than any other brand. Authenticity, originality and ‘real’ refreshment are part of our heritage, and what the brand has always stood for.† (Coca-Cola Website) â€Å"Coca-Cola’s goal is to make their costumers think of their product and this commercial whenever they are reminded of a sentimental and enjoyable event† (www.louisville.edu/~rljohn10/pepsi.html). Cocaine Myth It will be inevitable for The Coca Cola Company to reach a global market without having myths associated with its name. The most widely known myth about Coca Cola is that it contained extract of coca leaves. In fact in 1886, when it was introduced in the market, it did. Exactly how much cocaine was in the formula itself has not been determined, but Coca-Cola did contain some cocaine when it was first developed. What researches do know is that in 1902, 1/400 of a grain of cocaine per ounce of syrup was in the drink. Apparently in 1929, Coca-Cola became cocaine free. â€Å"By Heaths calculation, the amount of ecgonine [an alkaloid in the coca leaf that could be synthesized to create cocaine] was infinitesimal: no more than one part in 50 million. In an entire years supply of 25-odd million gallons of Coca-Cola syrup, Heath figured, there might be six-hundredths of an ounce of cocaine. So, yes, at one time there was cocaine in Coca-Cola.† (Mikkelson, B. snopes.com/cokelore/c ocaine.asp) Ethylene Glycol Myth Another myth basically states that Cola-Cola used ethylene glycol in their soft drinks. People have apparently confused ethylene glycol with polyethylene. Ethylene glycol is a compound that is used to make antifreeze and de-icing solutions for cars, airplanes, and boats; to make polyester compounds; and as solvents in the paint and plastics industries. Polyethylene glycol is non-toxic and is used in a variety of products. In fact, it is the basis of a number of laxatives (e.g. macrogol-containing products such as Movicol ®). As far as Coca-Cola is concerned, polyethylene glycol is not an added ingredient in soft drinks. However, polyethylene glycol is safe and suitable for use in foods and beverages, according to the U.S. FDA and other Regulatory authorities. (Coca-Cola Website. Source: http://www2.coca-cola.com/contactus/myths_rumors/ingredients_antifreeze.html) Risquà © Myth One of the myths that were discussed back in the 1980’s was the Coca Cola an advertising poster due to a risquà © image hidden within. The poster was released in the mid 80s and provoked a total argument because of the picture painted in ice-cubes, a woman performing a bad action. The graphic artist who designed the picture put this as a joke and it went unnoticed. This artist lost his job and was sued for a lot of money. All the posters and advertisement was destroyed and new ones and to be made. The poster shows a cartoon version of a coke bottle sitting on a bed of ice under the words â€Å"Feel the Curves†. The president of the Australian Marketing Rep, Coca-Cola South Pacific, Mr. Mike Bascle said the action of the artist was â€Å"quite irresponsible and not amusing†. The company had lost millions of dollars in revenue as a result of this careless pornographic advertisement, but later recreated new glossy posters (â€Å"The Adelaide Advertiser† ) snopes.com/cokelore/poster.aspp) Santa Claus Myth The likeness of Santa Claus has, for many years, been attributed to the image that Coca Cola embodies during their holiday advertisements. Myths have implied that Coca Cola created the representation of Santa Claus being in a red and white suit as a marketing ploy to promote sales. In actuality, the real history of Santa Claus predates Coca Cola’s introduction of him during the 1930’s. The earliest records of Santa Claus reflect that he was actually an evolutionary invention resulting from two religious people, St. Nichols and Christkindlein (Snopes, 2001). St. Nichols was a patron saint known for bearing gifts. Adults who clothed themselves in furry attire and visited children while they were awake to put on a scary performance represented Christkindlein. Once the children awoke, they found gifts and believed Christkindlein left them; hence the story behind Santa Claus involving his attire and gift giving beliefs. Coca Cola however, capitalized on the belief of Santa Claus. In 1930, the Coca Cola Company was looking for a way to encourage sales during the winter months, which was normally a slow sales period for the soft drink market. Haddon Sundblom, a cartoonist, was contacted to create a marketable image on behalf of the company (Snopes, 2001). After much deliberation, he invented a vision of Santa Claus wearing a red and white suit, drinking and enjoying coca cola. The success of this invention was enormous and his ingenious creation was just the marketing ploy Coca Cola needed to catapult their sales during this slow season. Conclusion The Coca Cola Company has come a long way from selling a few servings of carbonated beverages in a pharmacy, to an international scale business. The company has accomplished that objective thanks to dedicated people who have collaborated through the years with the mission to attain high quality standards. Their product line has grown with the approach of cultural appreciation and understanding, which has been a key factor in the introduction of the products in over 200 countries. Coca Cola’s commitment to remain at the forefront of the changing social values in developing their marketing strategy has proven to their advantage. The negative myths that have targeted Coca Cola might have had a harmful impact on the sales at the time of their circulation. On the other hand, the creative idea of dressing Santa Claus in the company’s red and white colors proves that some myths can be very beneficial to a corporation. Undoubtedly The Coca Cola Company has developed all th e elements necessary to run a multi-million, worldwide enterprise and refreshes all the people that come in contact with their products. References A Tale of Two Colas: The Cola Wars, Retrieved September 08, 2004 from: oppapers.com/print.php?id=41272idenc=GVZFVAx0QBK2o9e And the Cola Wars Continue, Retrieved September 08, 2004 from: louisville.edu/~rljohn10/pepsi.html Bellis, M. (2004) The History of Coca Cola, From About.com Website Retrieved September 09, 2004 from: www.inventors.about.com/library/inventors/blcocacola.htm Coca-Cola Website. Retrieved September 08,2004 www.cocacola.com Inventors Website. Retrieved September 08, 2004. From www.inventors.about.com/library/inventors/blcocacola.htm Leith, S. ( July, 2002)â€Å"Coke Website Debunks Myths† retrieved info from Apollo Library Infotrac Onefile/Knight Tribune Business News on September 8, 2004 Snopes Website. Retrieved September 08, 2004. 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