DATE : 27.6.

2020

CASE STUDY - NILGAI FOODS: POSITIONING PACKAGED COCONUT WATER IN INDIA 1

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GROUP MEMBERS:
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ISHIKA MODI :ishikaniper88@gmail.com

RAJESH MUTAGI : rajeshmutagi@gmail.com

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DEEPU SASEENDRAN : deepu.saseendran89@gmail.com

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KAVERI : kaverigopakumar@gmail.com

ANGANA : anganasaha23@gmail.com
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SUNIL KUMAR : skr_delhi@yahoo.com

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 CASE STUDY - NILGAI FOODS: POSITIONING PACKAGED COCONUT WATER IN INDIA 1

A. Discuss the marketing mix strategy of Cocofly. Emphasize the product, price, place, and promotion
aspects of its marketing strategy.

The marketing mix strategy – 4 Ps of Cocofly is described as below:

1. Product

In 2016, Nilgiri foods launched Cocofly as a new packaged coconut water in a tetra pack of 200 ml which
they described as 100 per cent pure nariyal pani, with no added sugar or preservatives. 18
In June 2017, Cocofly was reintroduced in BPA Free, PET bottles of 200 ml pack.23 The information
provided on the PET bottle mentioned Cocofly as the hair growth promoter with no fat content and
added sugar.

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To maintain the natural freshness and elongate the shelf life of the coconut, various methods at every

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stage of processing—from collecting coconut water under hygienic conditions to upgrading, pasteurizing,

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filtrating, and packaging the product was accepted.

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Cocofly Tetrapack 200ml Cocofly PET bottle 200ml

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2. Price

Cocofly was introduced at an initial price of 35 (approximately $0.51)20 for a Tetra Pak of 200 millilitres
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(ml).
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After seeing the resistance of the product from low income group people, Nilgiri reintroduced the
product in 2017 in BPA free PET bottles that reduced the production costs by about 30% and gave
flexibility for more size options. At the new price, gross margins were estimated at 13–18 per cent per
bottle of Cocofly, with the potential to become a healthy drink option for all consumers, including
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those in lower-income segments.

Cocofly became a very competitive brand in terms of pricing.

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 EXHIBIT 1: RELATIVE PRICE OF COCOFLY

Brand Name Price (Six Packs of 200 Millilitres Each)

Dabur Réal Activ ₹240 (approx. US$3.42)
Paper Boat ₹240 (approx. US$3.42)
Cocojal ₹210 (approx. US$3.00)
Cocofly ₹120 (approx. US$1.71)

3. Place

Cocofly was first launched in India’s non costal region National Capital Region (NCR) , which
included New Delhi and several surrounding districts from northern states such as Haryana, Uttar
Pradesh, and Rajasthan.
Nilgai Foods partnered with 30 distributors and about 4,000 retailers and with franchise stores,
Patanjali (approx. 15000 in numbers) across Tier 1, Tier 2, and Tier 3 26 cities in India.

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Cocofly was also sold through many institutional channel partners such as hotels, hospitals,

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airlines, and railways.27 To further expand its brand presence across the nation, Nilgai Foods

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started selling Cocofly through its own e-commerce platform.28
With the initial success of Cocofly in the NCR region, Nilgai Foods had plans to expand the

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distribution network of Cocofly to other parts of the country.
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4. Promotion

Cocofly was promoted as 100 per cent pure coconut water that not only quenched thirst but was
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also healthy. The PET bottle of Cocofly acted as an informative advertisement for the product as
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it mentioned as hair growth promoter and no fat, no sugar.30

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The marketing team promoted Cocofly through promotional videos, where consumers were
asked to drink Cocofly’s coconut water blindfolded and comment on its taste.
https://www.youtube.com/watch?v=UeeXWhis8N0
Cocofly was also promoted through numorous radio advertisements and YouTube videos
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featuring parodies of famous Bollywood actors.31

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https://www.youtube.com/watch?v=Vj_ilcu8CDg&t=1s
The marketing team launched a major out-of-home campaign in the NCR region using large billboards
that were strategically positioned in heavy commuter traffic areas.
The billboards conveyed two messages about Cocofly: its superiority to other packaged drinks and its
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lifestyle image as more than just another boring healthy drink.

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Cocofly also sponsored the initiative Stepathlon Kids which promoted two fundamentals of health
and well-being: regular exercise and healthy food.33
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 B. Discuss which generic strategy of Porter’s Cocofly adopted to gain competitive advantage. Is the
company focusing on cost leadership or a product differentiation strategy?

Porter’s generic strategy: The Generic Strategies can be used to determine the direction (strategy)
of your organization. Michael Porter uses 4 strategies that an organization can choose from:

1. Cost Leadership
2. Differentiation
3. Cost Focus
4. Differentiation Focus

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Cocofly adopted cost leadership strategy to gain the competitive market.

The product that they launched already existed in the market and was experimented well. So the
strategy was to take the share by being competitive. Although, the organization did try to feature the
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product with best possible way by showing the health benefits as it promoted no sugar, no
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preservatives; but the key strategy that they followed was cost leadership.
Cost leadership can be summarized as You target a broad market (large demand) and offer the lowest
possible price. There are 2 options within this course. You can opt to keep costs as low as possible; or
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ensure that you have a larger market share with average prices. In both cases, the point is to keep the
company costs as low as possible. The consumer price is a different story.
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Organisations that apply this strategy successfully usually have substantial investment capital at their
disposal, efficient logistics and low costs when it comes to materials and labour. The organisation is
generally focused on internal processes.
Cocofly was introduced at an initial price of 35 (approximately $0.51)20 for a Tetra Pak of 200 millilitres
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(ml). After seeing the resistance of the product from low income group people, Nilgiri reintroduced the
product in 2017 in BPA free PET bottles that reduced the production costs by about 30% and gave flexibility
for more size options. At the new price, gross margins were estimated at 13–18 per cent per bottle of
Cocofly, with the potential to become a healthy drink option for all consumers, including those in lower-
income segments.

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 EXHIBIT 1: RELATIVE PRICE OF COCOFLY

Brand Name Price (Six Packs of 200 Millilitres Each)

Dabur Réal Activ ₹240 (approx. US$3.42)
Paper Boat ₹240 (approx. US$3.42)
Cocojal ₹210 (approx. US$3.00)
Cocofly ₹120 (approx. US$1.71)

C. How can the beverage market be segmented? What should be the target segment for Cocofly?

The market was broadly segmented into alcoholic and non-alcoholic beverages.
Alcoholic beverages consisted of distilled and non-distilled drinks; non-alcoholic beverages included
soft drinks and hot beverages.
The soft drink market was further segmented into carbonated drinks, fruit juices, bottled water,

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ready-to-drink tea and coffee, and sports and energy.

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Based on the amount of fruit they contained, juices were further segmented into three categories:

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fruit juices, nectar drinks, and fruit drinks. Fruit juices consisted of 100 per cent fruit. The minimum

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fruit content required for fruit nectars varied between 25 and 50 per cent, depending on the type of
fruit. Fruit drinks had a maximum of 30 per cent fruit content.15

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Cocofly is characterized under fruit juice as it has 100% fresh and pure coconut water.
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D. Is Cocofly’s current distribution strategy the right one for the product? Given Cocofly’s expansion
plan, should it try to establish its own distribution network, or should it continue to piggyback on
the distribution network of other FMCG companies such as Patanjali Ayurved Ltd. (Patanjali)?
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Nilgai Foods partnered with 30 distributors and about 4,000 retailers and sold through the franchise
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stores of Patanjali Ayurved Ltd. (Patanjali) across Tier 1, 2 and 3. Cocofly was also sold through many
institutional channel partners such as hotels, hospitals, airlines, and railways.27 To further expand its
brand presence across the nation, Nilgai Foods started selling Cocofly through its own e-commerce
platform.28
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They definitely need to come by their own distribution channels to have a sustainable and profitable
business. Moreover, Patanjali is a potential threat as they are coming with their own brands of
coconut water. There are many means that need to be explored aggressively such as modern retail
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stores or gourmet stores. Partnering with all e- commerce platforms as the platform shows a huge
surge in future.
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They should increase their own distribution in terms of opening new areas, territories and geography
in both traditional and modern trade. As company has initially introduced Cocofly in NCR includes
Delhi, Rajasthan, Up and Haryana and product was well accepted in terms of quality and taste. So
now company should increase their wings to other territories like Punjab, J & K, Himanchal and other
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states on a phase wise which depends on available finance and resources.

Since product was related to health so it should be available at health and wellness centers such as
sports club, gymnasium. They should have their own distribution stores at various checkpoints on
the highways, cities and several tourist places.

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 E. Would a low-cost strategy be sufficient for Cocofly to gain market share in the long term? If not,
what else should the company focus on to create a different brand positioning in the market?

No, the low cost stratehy comes with several challenges and is not the right way to have a
sustainable market. Low pricing is not a sustainable competitive advantage. Prices can change almost
instantly. Your competitor can change prices just as quickly as you can. What if you find that optimal
price, that psychologically perfect price that magically makes all customers want to buy from you?
Your competitors will copy it--immediately. Any competitive advantage you may gain with pricing is
not sustainable.

If you adopt low price as your strategy, then your business must be continually focused on lowering
and controlling costs--like Walmart. You are attracting the price buyers, customers who are not loyal,
but are looking for the lowest price. Once a competitor figures out how to sell a similar product for
less, they will charge lower prices and the company will struggle.

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In order to sustain the market they should focus on two integral aspects:

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1. Product variation:

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In order to sustain the market, cocofly need to come with some variants such as one with the

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plain coconut water and another variant which comes along with the grated tender coconut.
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They should try to revamp the packaging to make it more appealing.
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2. Targeted promotion:
Cocofly can have targeted positioning as the healthy and most nutritious drink to a segment of
people. They can target the diabetic population, pregnant ladies with digital campaign to create
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the awreness on the health benefits of coconut water.

3. Brand Awareness: Cocofly, indeed is the great health drink but is not visible in the market.
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Marketing Activity
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Below The Line (BTL) Above The Line (ATL) Through The Line (TTL)
Poster / Banner / Instore Tv Advert / Radio / Through the line refer to
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display / free sampling Magazine / Outdoor mix of both

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BTL can be used in gyms, fitness centers, marathons and several sport points. This will create an
impactful brand awareness to the right set of people. This can also be given as free samples in
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clinics, hospitals where people are undergoing blood donation or transfusions. Thy can have an
outlet ouside the clinics or hospitals or pathological labs which could create an image of healthy and
nutritious drink in the mind of the consumers.

ATL can be used for the brand visibility to all set of people and will result in high penetration of the
product across the country.

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 Cocofly should brand themselves in such a way that when it comes to coconut, consumers can trace
the cocofly in their minds.
They should design their outlets in such a way that it showcases their core strength of being the
leaders in coconut by-product industry with several propositions of coconut water with variants,
coconut oil for hair and edible coconut oil.

References:
1
This case has been written on the basis of published sources only. Consequently, the interpretation and
perspectives presented in this case are not necessarily those of Nilgai Foods or any of its employees.

2
“State/District/Blockwise Area, Production & Productivity of Coconut,” Ministry of Agriculture & Farmers Welfare,
Government of India, Coconut Development Board, accessed August 17, 2018,
http://coconutboard.nic.in/Statistics.aspx.

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“Cocofly Launches 200ml Bottle of 100% Pure Coconut Water Priced at Rs 20,” FnBnews.com, June 8, 2017, accessed
April 4, 2018, www.fnbnews.com/Top-News/cocofly-launches-200ml-bottle-of-100-pure-coconut-water-priced-at-rs-20-40668

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“Nilgai Foods Forays into Retail,” India Infoline, October 19, 2013, accessed August 27, 2018,

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www.indiainfoline.com/article/news-sector-fmcg/nilgai-foods-forays-into-retail-113111802062_1.html.

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“The Cocofly Story at the So Delhi Confluence,” YouTube video, 10:44, posted by “Abhay Jaiswal,” June 3, 2016,
accessed April 1, 2018, www.youtube.com/watch?v=N0fNEvqzKgE.

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Sonal Khetarpal, “A
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Gourmet Touch,” Business Today, accessed December 18, 2018
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www.businesstoday.in/magazine/fea tures/nilgai-is-now-looking-at-the-european-market/story/232042.html.

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All currency amounts are in US$ unless otherwise specified.
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8
Khetarpal, op. cit.
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9
Progressive Grocer Bureau, “Beverages Market to Grow 3.5 Times of Its Present Size by 2020,” Progressive Grocer
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India, May 31, 2016, accessed August 6, 2018, www.indiaretailing.com/2016/05/31/food/food-grocery/beverages-market-

to-grow-3- 5-times-of-its-present-size-by-2020.

10
Chandni Mathur, “As ‘Health-Conscious’ Becomes Buzzword, Branded Fruit Juice Segment Looks to Pack a
Powerful Punch,” Financial Express, March 28, 2017, accessed August 6, 2018, www.financialexpress.com/industry/as-
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health-conscious-becomes-buzzword-branded-fruit-juice-segment-looks-to-pack-a-powerful-punch/605129.
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11
Admin, “Non-Alcoholic Beverages in India—How Will the Market Shape for Non-Alcoholic Beverage Segment by 2020 in

India?,” Dart Consulting (blog), June 2, 2017, accessed August 6, 2018, www.dartconsulting.co.in/market-news/non-
alcoholic- beverages-in-india-how-will-the-market-shape-for-non-alcoholic-beverage-segment-by-2020-in-india.
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12
Nonalcoholic Beverages Industry Profitability,” CSIMarket, accessed January 10, 2019,
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https://csimarket.com/Industry/ind ustry_Profitability_Ratios.php?ind=502&hist=4.

13
Editor FMT Magazine, “Fruit Juices in the Beverage Industry,” Food Marketing and Technology, August 24, 2017,
accessed August 6, 2018, http://fmtmagazine.in/news/fruit-juices-beverage-industry.
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14
Admin, op. cit.
15
Editor FMT Magazine, op. cit.
16
Admin, op. cit.

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 17
Delshad Irani, “Can Cocofly Crack the ‘Paper Boat Problem’?,” Economic Times, February 1, 2017, accessed April 11,
2018, https://brandequity.economictimes.indiatimes.com/news/business-of-brands/can-cocofly-crack-the-paper-boat-
problem/56892383.

18
“Over One Million Packs of Cocofly Nariyal Pani Sold Since Launch in ’16,” FnBnews.com, October 4, 2016, accessed
April 4, 2018, www.fnbnews.com/Beverage/over-one-million-packs-of-cocofly-nariyal-pani-sold-since-launch-in-16-39597.

19
Nusra, “We Are Building a Brand around Honesty and Integrity—Co Founders,” Restaurant India, June 29, 2016,
accessed April 10, 2018, www.franchiseindia.com/restaurant/We-are-building-a-brand-around-honesty-and-integrity--Co-
Founders.8510. 20 ₹ = INR = Indian rupee; US$1 = ₹64.40 on June 1, 2017.

21
Irani, op. cit.
22
Ibid.

23
“Cocofly Launches 200ml Bottle of 100% Pure Coconut Water Priced at Rs 20,” op. cit.

24
“Over One Million Packs of Cocofly Nariyal Pani Sold Since Launch in ’16,” op. cit.

25
Saurabh Bhattacharya and Arpita Agnihotri, Patanjali Ayurved Limited: Disruption or Innovation? (London, ON: Ivey

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Publishing, 2016). Available from Ivey Publishing, product no. 9B16M196.

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26
Reserve Bank of India classified cities based on their population as per the 2001 census. Tier 1 cities had a population

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above 100,000, Tier 2 cities between 50,000 and 99,9999, and Tier 3 cities between 20,000 and 49,999.

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27
Irani, op. cit.

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“Products,” Cocofly, accessed August 8, 2018, https://cocofly.co/collections/all.
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29
India Retailing Bureau, “Nilgai Foods to Raise US $10 Million to Expand Presence,” Progressive Grocer India, December
19, 2016, accessed August 8, 2018, www.indiaretailing.com/2016/12/19/food/food-grocery/nilgai-foods-raise-us-10-
million- expand-presence.
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30
“Cocofly Social Experiment,” YouTube video, 2:06, posted by “Cocofly,” March 31, 2016, accessed April 1, 2018,
www.youtube.com/watch?v=UeeXWhis8N0.
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31
“Cocofly—Guilty Confession, Case #0377,” YouTube video, 0:45, posted by “Cocofly,” May 6, 2016, accessed April 1,
2018, www.youtube.com/watch?v=NrxeJ--eQgA.
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32
HT Team, “Cocofly Partners with Stepathlon Kids to Bring Healthy, Tasty and Low Sugar Hydration to Kids across India,”
Techplus Media, Health Technology, March 8, 2017, accessed May 05, 2018,
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http://healthtechnology.in/2017/03/08/cocofly- partners-with-stepathlon-kids-to-bring-healthy-tasty-and-low-sugar-
hydration-to-kids-across-india.

33
Ibid.
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34
Reportlinker, “India Packaged Coconut Water Market by Type, by Sales Type, by Packaging Type, by Distribution
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Channel, Competition Forecast & Opportunities, 2012–2022,” CISION PR Newswire, July 20, 2017, accessed June 4,
2018, www.prnewswire.com/news-releases/india-packaged-coconut-water-market-by-type-by-sales-type-by-packaging-
type-by- distribution-channel-competition-forecast--opportunities-2012--2022-300492092.html.
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