KATHMANDU UNIVERSITY SCHOOL OF MANAGEMENT

Pinchhe Tole Balkumari, Lalitpur

Case Writeup: Coca-Cola India: More than Just Sugar and Fizz

Marketing Management and Decisions

Submitted To

Asst. Prof. Sunanda Sharma

Faculty of Marketing Management and Decisions

Submitted By: Group 8

Aastha Sthapit (23336)

Nima Tamang (23337)

Nisha Thapa (23338)

Prija Tuladhar (23339)

Abhishek Wagle (23340)

Date of Submission: 14th June, 2023

Case Synopsis
This case revolves around the predicament of Coca Cola India, where they need to decide
whether to diverge from their area of expertise and broaden their product and brand portfolio or
ignore the desire for healthier carbonated beverages. Along with this, details about the business,
competitors, shifting consumer behavior, and industry are given to help determine the answer to
the conundrum.

Case Issues
The case issues include:
1) Should CocaCola opt for brand extension and cover up the demand for healthier
carbonated beverages?
2) Should CocaCola move away from their core competency and from what it is known for?

Case Analysis

Understanding the Consumer Behavior

How has Coca Cola's understanding of consumer behavior helped shape the company's
marketing strategies?

Consumer behavior is affected by many factors, such as cultural, social, personal, and
psychological. Therefore, in order to provide clear value to each and every target consumer,
marketers must have a deep understanding of how consumers think, feel, and act. Coca Cola did
the same and looked into various changes in customer behavior to determine their marketing
strategy. The factors influencing consumer behavior that Coca Cola looked into for their
marketing strategy include:

1. Cultural Factors: Culture, sub-culture and social classes influence consumer behavior.
Coca Cola understood that their consumers also belong to the middle and lower classes,
which is why they created the marketing strategy of focusing on affordability. Coca-Cola
discovered that more expensive stock keeping units were not well-liked in rural areas, therefore it
introduced less expensive items in these markets.

2. Social Factors: Knowing the value of reference groups, Coca-Cola used well-known
Indian actors Aishwarya Rai and Hrithik Roshan in the campaign "Thanda Matlab
Coca-Cola" and Aamir Khan in the campaign "Jo Chaho Ho Jaye, Coca-Cola Enjoy" to
strengthen its reputation as a cool, trendy beverage with broad appeal. Additionally,
shifting household structures (from joint to nuclear family groups) meant a greater
emphasis on maintaining certain roles and status; as a result, Coca-Cola adjusted their
 marketing strategies in line with rising health consciousness and decided to broaden their
product line.

3. Personal Factors: Age, stage of life, occupation, financial situation, self-concept, and
lifestyle and beliefs are just a few examples of individual characteristics that can affect a
buyer's choice. It is crucial for marketers to pay close attention to these factors because
many of them have a direct effect on consumer behavior. The following were determined
for Coca-Cola:

a) Coca-Cola India developed a hub-and-spoke distribution mechanism to guarantee

the availability of its goods for people who want to have a hassle free lifestyle.
Any customer shopping for Coca-Cola products would be able to enjoy them
thanks to a smart marketing plan and a robust distribution system.

b) Coca-Cola India used cutting-edge marketing and promotion techniques to

guarantee consumer approval of its products in the different life cycles stage. The
focus of these methods were made specifically for the Indian subcontinent on
young people and their enjoyment of Coca-Cola products.

c) Changes in Indian customers' purchasing patterns were also brought on by rising

urbanization (driven by greater salaries), a younger population, more women
working, and the quick expansion of the retail industry. Customers were more
willing to spend more due to rapid urbanization and rising income, which also
raised focus on following particular lifestyle trends. As a result, the food and
beverage industry had to adapt to the Indian society's shift to a faster-paced way
of life. Customers searched more and more for simple-to-consume solutions that
catered to their health and wellbeing. This anticipation caused the functional food
and beverage market offerings in India to rise, which opened the door for
Coca-Cola to expand its product lineup.

4. Psychological Factors: Coca-Cola commits to sustainable development and inclusive

growth by focusing on issues linked to the environment, water, healthy living, and social
advancements in order to satisfy the social and esteem demands of the consumer. The
foundation hoped to help the common person improve his or her life. This way, the
foundation's mission was developed to help build a strong and resilient India by giving
financial grants and other forms of support to non-governmental organizations,
cooperatives, philanthropies, and other organizations working on social welfare projects.
Product and Brand Expansion
How should the company think about expanding its business? Should it enter a new category of
beverages or expand within its existing category? Support your answers with appropriate
justifications.

When considering the expansion of Coca-Cola's business, expanding within its existing beverage
category can be the best strategic choice. Considering the context of increasing health
consciousness among consumers and the other issues in the case, Coca-Cola can take specific
steps to expand within its existing category while addressing these concerns. Here are some more
specific strategies:
1. Introduction of Healthier Beverages: The case highlights the rising health
consciousness among consumers. Coca-Cola can introduce healthier beverage options
within its existing category to cater to this demand. This can include low-sugar or
sugar-free variants of its popular beverages like Coca-Cola Zero or Diet Coke. By
providing healthier alternatives, Coca-Cola can attract health-conscious consumers while
retaining its brand recognition and customer loyalty.
Justification: By offering healthier options, Coca-Cola can tap into the growing market of
health-conscious consumers and address their concerns about excessive sugar
consumption, aligning with their evolving preferences and promoting a more balanced
lifestyle.

2. Expansion of its product line with fruit-based or natural flavors: Coca-Cola can
increase its product line with fruit-based or natural flavors in response to consumer
desires for natural and nutritious ingredients. This can include the introduction of
beverages containing actual fruit juice or natural flavorings, which provide a healthier
and more natural alternative to standard soft drinks.
Justification:There is a growing consumer demand for products that contain natural and
wholesome ingredients. By introducing beverages with real fruit juice content or natural
flavorings, Coca-Cola can tap into this demand and provide a healthier alternative to
traditional soft drinks. This strategy aligns with the changing preferences of
health-conscious consumers who seek more natural options.

3. Focus on functional Beverages: Functional beverages that provide added health benefits
are gaining popularity. Coca-Cola can expand its business by introducing functional
beverages within its existing category. This could include beverages enriched with
vitamins, minerals, antioxidants, or herbal extracts that cater to specific consumer needs
such as energy, immunity, or relaxation. For example: Energy-boosting beverages,
immunity-enhancing beverages and so on.
Justification: Functional beverages cater to the growing demand for products that offer
more than just hydration, providing consumers with additional benefits. By incorporating
 functional elements into their beverages, Coca-Cola can attract consumers seeking
functional solutions while capitalizing on its existing distribution channels and brand
recognition.

4. Customized Regional Offerings: Coca-Cola can customize its beverages to cater to

regional tastes and preferences within India. This can involve introducing localized
flavors, limited edition offerings, or promotional campaigns that resonate with specific
regions. For example, beverages such as Limca Nimbu Pani, Thumbs Up Masala Soda
and so on . By implementing customized regional offerings such as Thums Up Masala
Soda and Limca Nimbu Pani, Coca-Cola can showcase its understanding of regional
preferences, strengthen its market presence in specific regions, and foster a deeper
connection with local consumers.
Justification: India is a diverse market with distinct regional preferences. By tailoring its
products to local tastes, Coca-Cola can strengthen its market position, enhance brand
connection, and drive consumer engagement.

5. Packaging Innovations for Portion Control: The case highlights the need for portion
control to address health concerns. Coca-Cola can introduce packaging innovations
within its existing category that promote portion control. This could involve launching
smaller portion sizes, such as mini-cans or smaller bottles, to help consumers manage
their beverage intake.
Justification: Offering smaller packaging options encourages responsible consumption
and addresses consumer concerns about excessive calorie intake. By providing
convenient and controlled portion sizes, Coca-Cola demonstrates its commitment to
supporting healthier choices and moderation.

6. Focus on Digital and E-commerce Channels: Coca-Cola can increase its presence in
India's digital and e-commerce spaces. This can include developing online platforms,
collaborating with e-commerce platforms, or employing digital marketing tactics to
directly connect and engage with consumers.
Justification: In India, the digital landscape is constantly expanding, and people are
increasingly turning to online channels for shopping and participation. Coca-Cola can
improve accessibility, cater to changing consumer patterns, and expand its market reach
by embracing digital and e-commerce channels.

These strategies, which are suited to the specific context and detailed analysis provided in the
case, can support Coca-Cola in expanding its business within its existing category. Also the
reasons for expanding within its existing beverages category rather than entering a new category
of beverages are mentioned below:
1. Utilization of Brand Equity: Expanding within its existing category allows Coca-Cola
to leverage its strong brand recognition and customer loyalty. By introducing new
variants or product extensions, the company can capitalize on the trust and familiarity
consumers have with the Coca-Cola brand, attracting both existing loyal customers and
potential new consumers.

2. Cost Efficiencies: Expanding within the existing category provides cost efficiencies and
synergies by employing existing manufacturing facilities, supply chain, and marketing
infrastructure. This method optimizes resources, decreasing the need for large capital
investments.

3. Consumer Trust and Brand Familiarity: Coca-Cola has established a strong presence
and consumer trust within its existing beverage category. By expanding within this
category, the company can build upon its existing reputation and capitalize on the
familiarity consumers have with its products. This reduces the risk associated with
introducing entirely new beverage lines and enhances the likelihood of consumer
acceptance and adoption.