Marketing Management – Coca Cola India

Coca sess Indias relish for the plain Market Coca sens Indias Thirst for the Rural Market Thanda Goes Rural In proto(prenominal) 2002, Coca-Cola India (CCI) (Refer queer I for information much or less CCI) plunked a bare-assed advertisement campaign featuring leading bollywood faker Aamir caravansary. The advertisement with the tag line Thanda Matlab Coca-Cola was targeted at homespun and semi-urban consumers. According to ac gild sources, the composition was to position Coca-Cola as a generic pock for mothy drinks.The campaign was launched to promote CCIs awkward marting initiatives. CCI began concentrateing on the country-bred securities industry in the early 2000s in order to attach volumes. This finality was non surprising, given the huge sizing of the untapped plain market in India (Refer Exhibit II to learn about the hobnailed market in India). With flavorless sales in the urban areas, it was evanesce that CCI would have to shift its focus to the r ural market. Nan in addition Banerjee, spokeswoman CCI, tell, The real market in India is in the rural areas.If you can crack it, in that respect is tremendous potential. However, the poor rural stand and utilization habits that are truly dissimilar from those of urban people were two major obstacles to cracking the rural market for CCI. Because of the nomadic power supply most grocers in rural areas did not sway cold drinks. Also, people in rural areas had a preference for traditional cold potables such(prenominal) as lassi6 and lemon juice. throw out, the price of the beverage was alike a major broker for the rural consumer.CCIs Rural Marketing strategy CCIs rural marketing strategy was open up on trey As availableness, Affordability and Acceptability. The first A Availability emphasized on the availability of the increase to the customer the s swallow A Affordability cerebrate on product determine, and the third A- Acceptability foc apply on convincing t he customer to deprave the product. Availability at maven time CCI entered the rural market it focused on confirming its scattering net control there. It realize that the centralized scattering ystem used by the company in the urban areas would not be suitable for rural areas. In the centralized dispersion system, the product was transported directly from the bottling plants to retailers (Refer fingerbreadth I). However, CCI realized that this distribution system would not work in rural markets, as picks assembly line directly from bottling plants to retail stores would be very monetary valuely callable to the want distances to be covered. The company quite opted for a hub and spoke distribution system (Refer Figure II).Under the hub and spoke distribution system, contrast was transported from the bottling plants to hubs and then from hubs, the stock was transported to spokes, which were situated in sm any towns. These spokes fed the retailers catering to the quest in rural areas. CCI not plainly changed its distribution model, it to a fault changed the type of vehicles used for transportation. The company used large trucks for transporting stock from bottling plants to hubs and medium mercantileised-grade vehicles transported the stock from the hubs to spokes.For transporting stock from spokes to village retailers, the company utilized machine rickshaws and cycle per seconds. Commenting on the transportation of stock in rural markets, a company example said, We use all possible direction of transport that range from trucks, auto rickshaws, cycle rickshaws and hand carts to even camel carts in Rajasthan and mules in the hilly areas, to cart our products from the nearest hub. 7 In late 2002, CCI made an special investment of Rs 7 one thousand thousand (Rs 5 million from the company and Rs 2 million from the companys bottlers) to meet rural demand.By work on 2003, the company had added 25 production lines and multiply its glass and PET bottle capacity8. Further it as well distributed around 2,00,000 refrigerators to its rural retailers. It similarly purchased 5,000 new trucks and auto rickshaws for boosting its rural distribution. done its rural distribution initiatives, CCI was able to increase its presence in rural areas from a coverage of 81,383 villages in 2001 to 1,58,342 villages in noble-minded 2003. A contrast office from strengthening its distribution network, CCI in addition focused on pricing in rural market. AffordabilityA survey conducted by CCI in 2001 revealed that 300 ml bottles were not popular with rural and semi urban residents where two persons often shared a 300 ml bottle. It was also found that the price of Rs10/- per bottle was considered too gamey by rural consumers. For these reasons, CCI decided to defy some changes in the size of its bottles and pricing to win over consumers in the rural market. In 2002, CCI launched 200 ml bottles (Chota deoxycytidine monophosphate)9 priced at Rs 5. CCI announced that it would push the 200 ml bottles more in rural areas, as the rural market was very price-sensitive.It was wide felt that the 200 ml bottles priced at Rs. 5 would increase the rate of consumption in rural India. Reports put the annual per capita consumption of bottled beverages in rural areas at one bottle as compared to 6 bottles in urban areas. The 200 ml bottles priced at Rs. 5 would also pretend CCI competitive once against local brands in the unorganised sector. It was reported that in the states of Rajasthan and Gujarat the local skunk brands such as Choice and Tikli cost only half the price offered by CCI, which gave them the advantage in garnering the major market share before CCI came out with Chota reverse.CCI also targeted the rural consumer aggressively in its marketing campaigns, which were aimed at increasing awareness of its brands in rural areas. Acceptability The initiatives of CCI in distribution and pricing were supported by ample marketing in the mass media as well as through outdoor(prenominal) advertising. The company put up hoardings in villages and painted the name Coca Cola on the compounds of the residences in the villages. Further, CCI also participated in the weekly mandies10 by setting up temporary retail outlets, and also took part in the annual haats11 and fairs major sources of business activity and entertainment in rural India.CCI also launched television technicals (TVCs) targeted at rural consumers. In order to reach more rural consumers, CCI increased its ad-spend on Doordarshan. 12 The company ensured that all its rural marketing initiatives were well supported by TVCs. When CCI launched Chota Coke in 2002 priced at Rs. 5, it bought out a commercial featuring Bollywood actor Aamir Khan to surpass the message of the price cut and the launch of 200 ml bottles to the rural consumers. The commercial was shot in a rural setting.In the summer of 2003, CCI came up with a new commercial featurin g Aamir Khan, to further strengthen the Coca-Cola brand image among rural consumers. The commercial aimed at making coke a generic name for Thanda. Of the reason for picking up the word Thanda, Prasoon Joshi, national productive director McCann Erickson, the creator of the commercial, said, Thanda is a very North India-centric phenomenon. Go to any eating place in the north, and attendants would promptly ask, thanda ya garam? Thanda usually core lassi or nimbu pani, garam is essentially tea.Because the character, in itself, represented a culture, we wanted to equate Coke with Thanda, since Thanda too is part of the popular stress of the north, thus making Thanda generic for Coca-Cola. With the long-play possibilities of the Thanda idea becoming evident, Thanda became the central idea. Once we decided to work on that idea, the fanciful mind just opened up. 13 Between March and September 2003, CCI launched trio commercials with the Thanda Matlab Coca-Cola tag line. All the terzetto commercials aimed to beget rural and semi-urban consumers unify with Coca-Cola.The first ad featured Aamir Khan as a tapori (street smart) in the ad he makes the familiarity between Coca-Cola and the word Thanda. The second commercial in the series featured Aamir Khan as a Hyderabadi shop-keeper here again he equates the word Thanda with Coca-Cola. The third commercial featured Aamir Khan as a Punjabi farmer who offers Coca Cola to ladies asking for Thanda. The three commercials showed progression in associating Coke with Thanda in a rural/semi-urban context.In the first commercial the connection of Coke with Thanda was made, in the second one there was a baffling difference, with the shopkeeper asking customers to ask for Thanda instead of Coke, and the third commercial showed that when one asked for Thanda, one would get Coke. Analysts said that all the three commercials succeeded in make rural consumers connect to Coke and increased awareness of the brand among them . Along with TVCs, CCI also launched print advertisements in several regional newspapers. Future ProspectsCCI 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 also said that volumes from rural markets had increased to 35% in 2003. The company said that it would focus on adding more villages to its distribution network. For the course of study 2003, CCI had a target of reaching 0. 1 million more villages. Analysts pointed out that set competition from archrival PepsiCo would make it increasingly thorny for CCI to garner more market share.PepsiCo too had started focusing on the rural market, due to the flat volumes in urban areas. wish well CCI, PepsiCo too launched 200 ml bottles priced at Rs. 5. Going one step ahead, PepsiCo slashed the price of its 300 ml bottles to Rs 6/- to boost volumes in urban areas. (Refer Exhibit III for Pepsi Cos rural marketing initiatives. ) In early 2003, CCI announced that it was dropping plans to game into other beverage businesses. Company sources said that increasing volumes of poop 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 (lemon juice), fruit juice, cold coffee, and iced tea in collaboration with Nestle India. 14 though CCI was upbeat because of its early success in its drive to capture the rural market, the inquire was whether the company would be able to take this success further. A major media setback occurred in August 2003, when the Delhi-based Center for knowledge and Environment announced that it had found last pesticide content in soft drinks manufacture and sold by both cola majors.Around same time BBC radio receiver in its program Face the Facts allege that Cokes plant in Kerala was making unjustified use of groundwater resources in the region and was also contaminating the groundwater thro ugh discharge of venomous elements, thereby harming the land, water resources and also the fodder chain in the region. Though CCI refuted these allegations, the company reportedly experienced a commodious decline in sales later August 2003. With many social and policy-making groups becoming active against the cola companies in rural areas, it remains to be seen whether CCI provide be able to quench its zest for the rural market.