Coca Cola

PRESENTED BY:
AJEET KUMAR THAKUR
ANJALI PUGALIA
PRASHANT GOSWAMI
PRANIL DWIVEDI
Coca-Cola’s Rural
Marketing Strategy
Based on 3A’s

• Affordability
• Acceptability
• Availability
Affordability

An average rural worker in India earns Rs.100 a day whereas the price of a
300ml coke bottle was Rs.10 due to which it was considered a leisurely
experience.
In order to overcome this barrier, in 2002 coke came up with a 200ml bottle
costing Rs.5 only, an affordable amount on the pockets of the rural
audience.
Acceptability

The advertisement with the tagline “Thanda Matlab Coca-cola” was

targeted at rural and semi-urban consumers. The series of Aamir Khan ads on
different set ups were a great success and an important aspect focusing on
acceptability.
Except TV ads, CCI also concentrated on 47,000 haats and 25,000 melas held
annually in various parts of the country.
Availability

 Rural India meant reaching 6,27,000 villages spread over 32,87,263 sq kms.
 It realized that the centralized distribution system used by the company in
the urban areas would not be suitable for rural areas.
 In the centralized distribution system, the product was transported directly
from the bottling plants to retailers.
 However, CCI realized that this distribution system would not work in rural
markets, as taking stock directly from bottling plants to retail stores would
be very costly due to the long distances to be covered.
Advertising Strategies
1. TV Commercials

Between March-September 2003,

CCI came up with different
commercials featuring Amir Khan. In
these ads, he played a character
that the target audience could
easily associate with.
2.Wall Paintings
There were wall paintings all over the
walls of kutcha and pakka houses or
shops in the villages.
3. Hoardings
The hoardings were put in the major
areas of the village so that they can
clearly notice it.
“Thanda” goes rural

 In early 2002, CCI launched a new advertisement campaign featuring

leading Bollywood star Aamir Khan.
 The idea was to position Coca-Cola as a generic brand for cold drinks. The
campaign was to support CCI’s rural initiatives.
 CCI began focusing on the rural market in the early 2000s in order to
increase volumes.
 It increased market penetration from 13 to 25%.
 Because of the erratic power supply most grocers in rural areas did not
stock cold drinks.
Brand Localization Strategy

 “India A”, the designation Coca-Cola gave to the market segment

including metropolitan areas and large towns, represented 4% of the
country’s population.
 This segment sought social bonding as a need and responded to
aspirational messages, celebrating the benefits of their increasing social
and economic freedom.
 “Life ho to aisi” was the successful and relevant tagline found in Coca-
Cola’s advertising to this audience.
Distribution Strategy

 To reach out to rural India, Coke started out by drawing up a hit list of high
potential villages from various districts. To ensure full loads, large distributors
were appointed and they were supplied from the company’s depot in
large towns and cities.
 Full load supplies were offered twice weekly against payment by demand
draft. On their part, the hubs appointed smaller distributors in adjoining
areas.
 The smaller distributors undertook fixed journey plans on a weekly basis and
supplied against cash. The distributors also hired rickshaws that travelled to
villages daily.
Coke Rural Market

2001 2002 2003

Rural coverage 81,388 130,375 158,432
Rural Penetration 13% 21% 25%
Distributors 3,935 4,263 5,472
Rural Success

 Comprising 74% of the country’s population, 415 of the its middle class,
and 58% of its disposable income, the rural market was an attractive
target and it delivered results.
 Coke experiences 37% growth in 2003 in this segment versus the 24%
growth seen in urban areas.
 Driven by the launch of the new Rs. 5 product, per capita consumption
doubled between 2001-2003.
 This market accounted for 80% of India’s new Coke drinkers, 30% of 2002
volume and was expected to account for 50% of the company’s sales in
2003.
Pesticide Issue

 A major media setback occurred in Aug 2003 when the Delhi-based

Center for Science and Environment announced that it had found high
pesticide content in soft drinks manufactured and sold by both cola
majors.
 With many social and political groups becoming active against the cola
companies in rural areas, it remains to be seen whether CCI will be able to
quench its thirst for the rural market.
 Though CCI refuted these allegations, the company reportedly
experienced a considerable decline in sales after August 2003.
 After presenting the facts, CCI was able to regain its rural customers.
Future Prospects

 CCI claimed all its marketing initiatives were very successful and as a result,
its rural penetration increased from 9% in 2001 to 25% in 2003.
 CCI had a target of reaching 0.1 million more villages. Analysts pointed out
that stiff competition from rival PepsiCo would make it increasingly difficult
for CCI to garner more market share.
 In early 2003, CCI announced that it was dropping plans to venture into
other beverage businesses.
Contd…

 The increasing volumes of Cola drinks had made the company rethink its
plans of launching juice and milk-based beverages.
 In 2002, CCI had announced plans to launch beverages such as nimbu
paani, fruit juice, cold coffee and iced tea in collaboration with Nestle
India.
 Though CCI was upbeat on account of its early success in its drive to
capture the rural market, the question was whether the company would
be able to take this success further.