Rural Marketing Strategies of Coca-

ColaBy: Parag Dave Shreyash Duikar Piyush Anthony Deepak Kumar Oliver D'Souza

• Geographical Area : 3,287,263 sq.kms

• Population : over 1.21 billion people (2011 census)

• About 68% of India’s population lives in rural areas.

• Rural population has grown by 12% in last decade.

• Rural market, accounts for 40% of Indian economy.

• Rural India has huge, heterogeneous and growing consumer market, which contributes more than 50% to India’s total consumer market size.

Some quick facts !

• A humiliating loss of 400 Million USD in the 2000 and a flat 2001 made Coca Cola India (CCI) rethink and reinvent its strategies in India

• The flat sales in the urban areas made it clear for the CCI that they would have to shift focus to the untapped rural markets.

Reason Behind the thought

Coca-cola’s Rural marketing strategyCoca-cola’s rural marketing strategy is 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 as a leisurely expense.

• 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 tag line - ‘ Thanda Matlab

Coca-Cola ' was targeted at rural consumers.

• The series of Amir Khan Ads on hill station acting like a nepali and those in a Punjabi Yaara da Tashan were a great success and an important aspect focusing on acceptability.

• Except TV ads, CCI also concentrated on 47,000 hatts (weekly markets) and 25,000 melas ( fairs ) held annually in various parts of the country.

 

Availability• Rural India meant reaching 6,27,000 villages spread over

32,87,263 square 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.

• CCI started making a hit list of the potential villages from various districts.

• To ensure full loads, large distributors (Hubs) were appointed, and they were supplied from the company's depot in large towns and cities.

• On their part, the hubs appointed smaller distributors (Spokes) in adjoining areas.

• The distributors also hired rickshaws that travelled to villages daily.

Advertising Strategies

TV Commercials

• Between March- September 2003, CCI came up with different commercials featuring Aamir Khan.

• In these Ads he played a character that the target audience could easily associate with.

Wall Paintings

Hoardings

Results• 37% growth in Rural market

• Rural Market became a great source of income/Profit

• Opportunities were created

Conclusion   CCI’s success on India’s vast, rural markets is a lesson on

how to grow an untapped market. It is an indication that if an MNC does its home work right and gets the right distribution mix, then it need not restrict itself to India’s urban middle class.

Thank You