COCA COLA INDIA

INDIA’S
S THIRST
FOR THE RURAL MARKET

PRESENTED BY: GROUP 2

MALLIKARJUNA D 7027

MANPREET SINGH 7028

NEHA AGRAWAL 7092

SUMAN KUMAR MANDAL 7111

SUMIT KUMAR JANGID 7113

Rural Market Scenario

y ‘Rural’ – 75% population engaged

in agriculture related activity.

y According to industry estimates 70% of population engaged

in agricultural activity.
{ 700 million people (Aug. 2002)
{ 1/3rd off country’s
t ’ GNP
{ 450 districts, 6,30,000 villages approx.

y Rural India is also characterized by growing affluence:

agricultural output increasingly to early 215 millions tonnes
in 20044 compared
p 7 millions in 1991.
to 176 99
Key to success in Rural India….

y Physical
y Distribution

g
y Channel Management

y Promotion and Marketing

g Communication
Coke in India

y Coca-Cola was the leading soft drink brand in India until 1977 when
it left rather than reveal its formula to the government.
government

y After a 16-year absence, Coca-Cola returned to India in 1993,

cementingg its p
presence with a deal that g p of
gave Coca-Cola ownership
the nation’s top soft-drink brands and bottling network.

y Coke’s acquisition of local popular India brands including Thums

U Limca,
Up, Li M
Maaza, Cit etc.:
Citra t a strategic
t t i step
t & success.

y In spite of growth, annual per capita consumption was only 6

Pakistan 73 in Thailand,
bottles versus 17 in Pakistan, Thailand and 800 in U.S.
US

y With its large population and low consumption, the rural market
p
represented g
a significant pp y for p
opportunity penetration.
‘Thanda’ goes Rural

y 2002,, CCI launched a new advertisement campaign:

p g
{ Featuring Bollywood star Aamir Khan.

{ Tagline – ‘Thanda matlab Coca-Cola’

{ Targeted
T d at rural,
l semii urban
b customers.

y Idea
Id was to
t position
iti C Coca-Cola
C l as a generic
i bbrand
d ffor
cold drinks.

y CCI began focusing on the rural market in the early

2000s in order to increase volumes.
The Decision was not surprising…

y Flat sales in urban markets.

markets
y Huge size of untapped rural market.

y Improvement in income and spending power of rural

p p
people.
y Better physical distribution channel.

y Aspirations for urban lifestyle.

c eased awareness
y Increased a a e ess due to te e s o reach.
television eac .
Challenges for Coke

y Poor rural Infrastructure.

Infrastructure

y Erratic power supply.

y Different consumption habits.

y Preference
P f for
f traditional
di i l cold
ld beverages
b (l
(lassi,
i
lemonade).

y Price of the branded beverages.

CCI’s Rural Mktg. Strategy

y Three As

y Availability:
{ Capacity expansion – 25 prod. lines and doubled bottle capacity.
{ U que a
Unique andd different
d e e td st but o st
distribution ategy – hub
strategy ub & spoke
spo e distribution.
d st but o .
{ Coverage of 1,58,342 villages by Aug. 2003 (81,383 in 2001).
{ 2,00,000 refrigerators to rural retailers.

y Affordability
{ Introduction of 200ml bottle (chota coke).
{ Priced at Rs. 5, closed the gap between Coke and basic refreshments.

y Acceptability
{ Mass media marketing.
{ Launched TVCs targeted at rural consumers.
CCI’s Rural Mktg. Strategy

y Coke realized that the communication media used

in urban markets would not work in villages
because of low penetration of conventional media.

y Way out...
{ Outdoor advertising and hoardings, etc.

{ Participation in weekly mandies, haats, & fairs.

{ Increasedd ad-spend
d d on Doordarshan
d h .
‘Thanda matlab Coca-Cola’

y Commercials showed p
progression
g in associating
g
‘Coke’ with ‘Thanda’ in a rural/semi urban context.

y Ad 1 - Tapori
T i – connection
i off coke
k with
i h thanda
h d was
made.

y Ad 2 - Hyderabadi shopkeeper – shopkeeper equates

the word thanda with Coca-Cola.

y Ad 3 - Punjabi farmer – when one asks for thanda,

one would get coke.
coke
Importance of Advertising in Rural Marketing

¾ The low level of education that creates problem in brand

identification. Since they can not read the brand names and price
tags it makes it easier for the clones to launch brands similar in
label and design and spoil the brand image.
¾ Unscrupulous retailers are taking the benefit and damaging the
perception of the brands before they actually enter in to the rural
market.
¾ It helps in acceptability of the product.
¾ It helps in market penetration.
penetration
¾ To strengthen the brand image of the product.
Issues in advertising that a company should focus on while
advertising targeting rural consumer

y Understanding the mindset of potential consumers, including

their
h i hopes,
h fears,
f aspirations
i i andd apprehensions.
h i

y Pick up the “gems”

gems in the form of idioms, expressions, words, etc
in relation to the product category for later use in the creative.

y Quickies
Q i ki “Short
“Sh television
l i i commercials”
i l ” do
d not register
i well
ll with
ih
rural audiences.

y Value – for – money proposition.

Difference in advertising for Rural consumers and urban
consumers

¾ Tricky, clever, gimmicky or even suggestive advertising does not work with
rural audiences.
audiences ‘Flicks’
Flicks using very expensive computer graphics without any
human presence, go over the heads of rural population.

¾ Television and radio covers some of the areas but still 265 million are beyond
the
h catch
h off advertisers
d i through
h h the
h available
il bl vehicles.
hi l Rural
R l customers idea
id off
consumption and behavior as a consumer is completely different So the
message has to be in the liking of the rural customer.

9 Puppet shows in Punjab,

9 Folk media like Ragini in Haryana for communicating qualities of Virat cement,
9 Pala and Daskathia in Orissa for promoting tooth pastes of Colgate Palmolive
9 Baul songs in West Bengal for advertising insecticides.
insecticides
Pepsi vs Coke

y The main competitor

p and
rivalry of coke is Pepsi,
but in the rural market other players are also there
like campa-cola, choice, tikli etc.

y Pepsi also targeted rural marketing

y Similar pricing strategy, distribution strategy by

p
Pepsi
Future Prospects of Coke

y CCI’s volume from rural market increased to 35% in

2003.

y Focus on rural penetration

y Target of reaching 0.1 million more villages

y Biggest
gg challenge
g is to increase the market share

y Diversification – nimbu pani, fruit juice

Issues to focus….

y Pesticides Issue and building confidence .

y Infrastructure in distribution network.

network

y Competing with local brands

y Advertisement spending

y Diversification
Rural market is more comfortable..

y Huge
g market

y High growth in terms of sales

y Change in the life style

y Increase in the per capita income

y It can substitute other products

Thank You