Far Eastern University

Institute of Accounts, Business and Finance

A CASE STUDY OF

IN INDIA

Submitted by:

Calape, Celez Jane

Chang, Eun Suk

Gurrea, Bianca

Mendoza, Kristabel

Montaniel, Beverly

Submitted to:

Prof. Meneses

October 9, 2015

Case SummaryIn the late 1990’s Coca-Cola began using

Indianized themes to appeal to the Indian

customers. It realized that its communication

needed to appeal to the youth. Also, Coca-

Cola was aware that the Indian youth

respected traditional Indian values even if

they wore western clothes and listened to

western pop music. Taking these aspects

into consideration, it created an

advertisement showing an Indian college-

goer coming home for the Diwali holidays.

The young man was clad in trendy clothes

(blue jeans and T-shirts) and even sported

an ear-stud to signify his contemporary style.

He was shown touching the feet of his

grandparents while the Diwali fireworks lit up

in the background. This communication helped in creating a personality of Coca-Cola

that the Indian youth could relate with and it resulted in a suitable positioning for the

brand.

Also in 2000, Coca-Cola chose the leading Hindi movie stars and also some of

the best cricketers to enable proper brand associations. The intent was to ensure that

the celebrities who would endorse the brand would help to have a rub-off effect of

their personas on the Coca-cola brand. Since a large number of Indian youth aspired

to emulate these celebrities, the association would result in creating the right identity

for the brand.

Bollywood Movies Stars with Coca-cola Advertisement.

COMPANY PROFILEThe Coca-Cola Company is the world's largest beverage

company, largest manufacturer, distributor and marketer of

non-alcoholic beverage concentrates and syrups in the

world and is one of the largest corporations in the United

States. The company is best known for its flagship product

Coca-Cola, invented by pharmacist John Stith Pemberton

in 1886. The Coca-Cola formula and brand was bought in

1889 by Asa Candler who incorporated The Coca-Cola

Company in 1892. Besides its namesake Coca-Cola

beverage, Coca-Cola currently offers nearly 400 brands in

over 200 countries or territories and serves 1.5 billion

servings each day.

Coca-Cola is the best-selling soft drink in most countries. While the Middle East is

one of the only regions in the world where Coca-Cola is not the number one soda

drink, Coca-Cola nonetheless holds almost 25% marketshare (to Pepsi's 75%) and

had double-digit growth in 2003.1

In India2

A Healthy Growth to The Indian EconomyEver since, Coca-Cola India has made significant investments to build and

continually consolidate its business in the country, including new production facilities,

waste water treatment plants, distribution systems, and marketing channels.

Coca-Cola India is among the country’s top international investors, having

invested more than US$ 1 billion in India in the first decade, and further pledged

another US$100 million in 2003 for its operations.

A Pure Commitment to The Indian EconomyThe Company has shaken up the Indian carbonated drinks market greatly,

giving consumers the pleasure of world-class drinks to fill up their hydration,

1 Data accessed on http://en.wikipedia.org/wiki/The_Coca-Cola_Company, March 17, 2009.2 Data accessed on http://www.coca-colaindia.com/aboutus/aboutus_ccindia.aspx, March 17, 2009.

refreshment, and nutrition needs. It has also been instrumental in giving an

exponential growth to the country’s job listings.

Creating Enormous Job OpportunitiesWith virtually all the goods and services

required to produce and market Coca-Cola

being made in India, the business system of

the Company directly employs

approximately 6,000 people, and indirectly

creates employment for more than 125,000

people in related industries through its vast

procurement, supply, and distribution

system. Nation Flags of India

The Indian operations comprises of 50 bottling operations, 25 owned by the

Company, with another 25 being owned by franchisees. That apart, a network of 21

contract packers manufacture a range of products for the Company.

On the distribution front, 10-tonne trucks – open bay three-wheelers that can

navigate the narrow alleyways of Indian cities – constantly keep our brands available

in every nook and corner of the country’s remotest areas.

MAIN ISSUES

Branding Positioning Strategies

of Coca Cola in India.

Rural Market Scenario.

Distribution Strategy.

Advertising Strategy.

Problem Statement

“Would these branding strategies enable Coca-Cola to penetrate the Indian market?”

Statement of the Objectives1. to extend its flagship brand in India

2. to have effective communication in the rural areas of India

3. to enhance the reach and distribution of brand Coke in India

SWOT AnalysisStrengths-Popularity

-well known

-branding obvious and easily recognized

-A lot of finance

-customer loyalty

-International Trade

Weaknesses-Word of mouth

-lack of popularity of many Coca Cola’s brands

-Most unknown and rarely seen

-result of low profile or non-existent advertising

-health issues

Opportunities-many successful brands to pursue

-advertise its less popular products

-buy out competition.

-More Brand recognition

ThreatsOpportunities

External

-changing health-consciousness attitude

-legal issues

-Health ministers

-competition (Pepsi)

AnalysisBranding Strategies : India A

The designation Coca-Cola gave to the market segment including

metropolitan areas and large towns, represented 4 % of the country

population.

This segment sought social bonding as a need and responded to aspirational

messages, celebrating the benefits of their increasing socail and economic.

“Life ho to aisi,” (life as it should be) was the successful and relevant tagline

found in Coca-Cola’s advertising to this audience.

Branding Strategies : India B Coca-Cola India believed that the first brand to offer communication targeted

to the smaller towns would own the rural market and went after that objective

with a comprehensive.

“India B” included small towns and rural areas, comprising the other 96% of

the nation’s population.

This segment’s primary need was out-of-home thrist-quenching and the soft

drink category was undifferentiated in the minds of rural consumers.

Additionally, with an average Coke costing Rs. 10 and an average day’s

wages around Rs. 100, Coke was perceived as a luxury that few could afford.

Rural Market ScenarioAfter 1999, Most MNC’s that came in to India targeted India’s upper middle

class to earn more revenues. According to Industry estimates rural India accounts

for 74% of population and 58% of indian rural disposable income. Rural India is

also characterized by growing affluence: agricultural output increasingly to early

215 millions tonnes in 2004 compared to 176 millions in 1991. According to data

compiled by the National Council of Applied Economic Research rural India now

accounts for the 70% of toilet soap users, and 38% of two-wheelers purchases

com from India.

Coca-Cola Company is one one of the first global majors to have spotted the

potential spin offs from the country’s rural market. It has perfected a unique

supply chain to cater to India’s vast rural markets hinterland. The results are

working and coca-cola India rural penetration increased from 13% in 2001 to 25%

in mid 2003.

Over that period, the numbers of company’s increased from less than 4000 to

5500. Coke’s, being fast moving consumer good, hold enormous potential from a

manufacturer like the coca-cola company. The biggest reason for this is the low

per capita consumption, which coke estimates at 3.7 bottles person per year

compared to 10 bottles per person per

year for all India. Breaking to this market

required innovative thinking and a new

strategy. Rural India meant reaching

6.27.00 square Km; it meant getting

distributors to travel 200 kms to reach five

shops with drop sizes of than a case.

A typical village retail environment

consists of 4-5 kirana shops (stripped

down version of mom and pop shops),

the size of such stores varies depending

on the size on population density of

village where it serves.

Coca Cola India’s Rural Initiatives in Indian Market It also tapped local forms of entertainment like annual haats and fairs and

made huge investments in infrastructure for distribution and marketing.

Sanjev Gupta, Deputy President – Coca Cola India in May 2002 : “we want

to be the hindustani lever limited of the indian business. The rural market is

the significant which enables us to help the consumer link with our

product.”

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 apointed, and they were supplied from the company’s depot in large

town and cities.

Full load supplies were offerd twice weekly against payment by demand draft.

On their part, the distributors (large) appointed smaller distributors (Spokes) in

adjoining areas.

The smaller distributors undertook fixed journey plans on a weekly basis and

supplied against cash. The distributors also hired rickshaws (cyle operated

vans) that travelled to villages daily.

Coca Cola India’s distribution in urban areas

Coca-Cola India’s distribution system in rural areas

Advertisement Strategy

Retail StoresBottling Plant

Bottling Plant

Large Distributors

Spokes

Retailers Retailers Retailers

Coke realised that the communication media used in cities and urban areas

would not work in villages because of low penetration of conventional media.

Coca Cola India also lauched television commercials (TVCs) targeted at rural

consumers. In orders to reach more rural consumers, Coca Cola India

increased its ad-spend on Doordarshan.

The company ensured that all its rural marketing initiatives were well-

supported by TVCs.

When Coca Cola launched Chota Coke in 2002 price at Rs. 5, it bought out a

commercial featuring Bollywood actor Aamir Khan to communicate the

messages 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, Coca Cola India came up with a new commercial

featuring 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 creative

director – McCann Erickson, the creator of the commercial, said, “Thanda is a

very North India-centric phenomenon. Go to any restaurant in the north, and

attendants would promptly ask, ‘thanda ya garam?’

Between March and September 2003, Coca Cola India launched three

commercials with the “Thanda Matlab Coca-Cola” tag line.

All the three commercials aimed to make rural and semi-urban consumers

connect with Coca-Cola.

The first ad featured Aamir Khan as a ‘tapori’ (street smart); in the ad he

makes the association 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.

‘Thanda’ usually means lassi or nimbu pani, ‘garam’ is essentially tea.

Because the character, in itself, represented a culture, they wanted to equate

Coke with ‘Thanda’, since ‘Thanda’ too is part of the popular dialect of the

north.

Thus making ‘Thanda’ generis for Coca-Cola, with the long-playing

possibilities of the “Thanda’ idea becoming evident, ‘thanda’ became the

central idea. Once we decided to work on that idea, in the creative mind just

opened up.”

Aamir Khan as a Punjabi Farmer.

Recommendation Branding Strategies

Communicate openly with key constituents, including the public, the media,

employees, franchisees, the trade/channel, state and national government,

and suppliers. Open, honest communication is key to communicating a spirit of

partnership and a willingness to resolve the issue in a way that benefits the

Indian consumer.

Rural Market

Listen to the customers

Manage for tommorow

Prove it with action that Coke is suitable with the Indian rural areas

Distribution Strategies

Make more extensive distributive channels

Put lot of large distributors all over India

Advertising Strategies

Try to improving more rural condition mixed with Coca-Cola branding

Start agressive advertising campaign

Announce a new campaign for new flavour of Cokes and others