PRESENTED BY: ABHISEK KHATUA

Presentation on

“Coca-Cola India’s Thirst for the Rural market”

Presentation Outline

o Coca-Cola : The Company Back Groundo Coco-Cola Goes Ruralo Issueso Marketing Strategyo Advertising Strategyo Challengeso Future Prospectso Conclusion: The Better Decision

Coca-Cola : The Company Background

o Carbonated soft drink, sold in more than 200 countries

o Originally intended as patent medicine when it was invented in the

late 19th century by John Pemberton

o Coca-Cola was bought out by businessman Asa Griggs Candler

o Coca-Cola returned to India in 1993.

o Coke’s acquisition of local popular Indian brands including Thums

Up, Limca, Maaza, etc:- a strategic step & success.

Rural Market Scenario

o ‘Rural’- approx. 70% population engaged in agriculture related activity.

o approx. 700 million peopleo 1/3rd of country’s GNPo More than 450 districts, 6,30,000 villages o A typical village retail environment consists of 5-8 kirana

shops, the size of such stores varies depending on the size and population density of village where it serves.

Thanda Goes Ruralo CCI began focusing on the rural market in the early 2000 s’ in order

to increase volumes.

o Targeted at rural, semi urban customers.

o Idea was to position Coca-Cola as a generic brand for cold drinks.

"The rural market is a significant part of our marketing strategy which enables us to help the consumer link with our product.“

- Sanjeev Gupta, Marketing Director - Cola-Cola India, in August 1995.

"We want to be the Hindustan Lever of the Indian beverage business.“

- Sanjeev Gupta, Deputy President - Coca-Cola India in May 2002.

Challenges for Coke

Poor rural infrastructure

Erratic power supply

Different consumption habitsPreference for traditional cold beverages(lassi, lemon Juice)Price of the branded beverages

CCI’s Rural Marketing Strategy

Three A’s – Availability, Affordability and

Acceptability.

The First A – Availability emphasized on the

availability of the product to the consumer.

The Second A – Affordability focused on

product pricing.

The Third A – Acceptability focused on convincing the customer

to buy the product.

AVAILABILITY

Capacity expansion –

25 production

line .

Unique and different

distribution strategy – hub and spoke

distribution.

Coverage of 1,58, 342

villages.

2,00,000 refrigerators to rural retailers.

Re-Design of Distribution Channel

• Decentralized Distribution Model

• Change in Transportation Vehicles to be used

AFFORDABILITY

Introduction of 200ml bottle (chota coke).

Priced at Rs. 5, closed the gap between Coke and basic refreshments.

ACCEPTIBILITY

Put up hoardings in villages and painted the name Coca-Cola on the compounds of the residences in the villages.

Participated in the weekly mandies by setting up temporary retail outlets.

Took part in the annual haats and fairs which was a major source of business activity and entertainment.

ADVERTISING STRATEGYo In 2002, CCI launched a new advertisement campaigno Featuring Bollywood star Aamir Khan.o Tagline – ‘Thanda matlab Coca-Cola’.o Ad 1 - Tapori – connection of coke with thanda was made.o Ad 2 - Hyderabadi shopkeeper – shopkeeper equates the word thanda

with Coca-Cola.o Ad 3 - Punjabi farmer – when one asks for thanda, one

would get coke.o Print Media Ads in different newspaperso It doubled the spend on Doordarshan.

FUTURE PROSPECTS OF COKECCI’s volume

from rural market

increased to approx 30% .

Rural penetration increased to

25%

Target of reaching 0.1 million more

villages

Now Biggest challenge is to increase the market

share

Diversification – nimbu pani, fruit

juice

ISSUES IN COKE

Pesticides Issue and building confidence .

Infrastructure in distribution network.

Competing with local brands

Advertisement spending

Diversification

THE BETTER DECISION

Flat sales in urban markets.

Huge size of

untapped rural

market.

Improvement in

income and

spending power of

rural people.

Better physical

distribution channel.

Increased awareness

due to television

reach.

Thank You