How Coca Cola did it in India

The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.

Peter.F. Drucker

Market leadership, turnover, customer satisfaction etc are few of the many indicators of success for a firm. The success is attributed if the product/service is technologically superior and of good quality or an effective marketing, promotion and distribution strategy is in place.

Innovative marketing at its best can be understood from Coca-Cola India’s venture into rural India in the year 2002, with an innovative promotion and marketing strategy that differentiated it from its competitors. Atul Singh, the company’s president for India and South West Asia in an interview said “We want every part of our portfolio to grow, so that any consumer, on any occasion, anywhere in India, makes a choice to drink a Coca-Cola product”.

Prior to 2002, for people in villages and small towns ‘Cola’ signified ‘Pepsi-Cola’ and Coca-Cola India was pretty much determined to break this jinx. However, the task was not easy and there were too many issues to be addressed beforehand. Poor rural infrastructure, consumption habits (preference of traditional cold beverages -lassi and Neembu pani), awareness of the product, mercurial electric supply and apprehension among shopkeepers added to Coca-Cola India’s dilemma. It started its rural campaign with strategy focused around three A’s of marketing.

Availability

The centralized distribution system of transporting the product directly from the bottling plants to retailers, as used in urban market was futile for rural market which resulted in innovative “Hub and spoke” distribution system. The stock was transported from the bottling plants to hubs and then from hubs to spokes (situated in small towns) and from spokes to retailers who catered to the demands in rural areas. A well designed marketing strategy with strong and efficient supply chain and logistics ensured Coca-Cola’s presence with increase in coverage of 81,383 villages in 2001 to 1,58,342 villages in August 2003.

Affordability

A survey by Coca-Cola in 2001 revealed that 300 ml bottle priced at Rs 10/- was not popular with rural and semi-urban price sensitive customers. In reply to that, Coca-Cola launched 200 ml bottles (Chota Coke) priced at Rs 5/- . Coca-Cola achieved affordability by economies of scale. Then the next big task at hand was increasing brand awareness among the target segment in rural areas.

Acceptability

Coca-Cola backed up its pricing and distribution by extensive marketing in the mass media and outdoor advertising. Hoardings with painted name Coca-Cola on the compounds of the village residence, participation in annual haats and television commercials (TVCs) on Doordarshan were all set to mark Coke’s presence in a big way.

TV commercial for North Indian people referring Coca-Cola as ‘thanda’ was flooded on television with Amir Khan as brand ambassador. Progressive advertising ensured easy brand recall and top of mind awareness among customers.

Judith Evans pointed out, “Travel where you will, anywhere in the world, and you will encounter Coca-Cola — on clothes, in signs, on packaging, in art — everywhere.” Market has encountered lot of innovation in terms of products, packaging, equipment handling, marketing etc, but the way in which Coca-Cola adopted its strategy for the Rural Indian market was remarkable and it definitely established Coca-Cola as life’s one of the most delightful elixirs.

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