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MASTER OF MANAGEMENT
GADJAH MADA UNIVERSITY




MARKETING MANAGEMENT
CASE STUDY : COCA-COLA IN INDIA




Lecture : Prof. D...
Case Summary
                                              In the late 1990s Coca-Cola began using
                       ...
COMPANY PROFILE
                                   The Coca-Cola Company is the world's largest beverage
                 ...
nutrition needs. It has also been instrumental in giving an exponential growth to the
country’s job listings.


Creating E...
Problem Statement
  “Would these branding strategies enable Coca-Cola to penetrate the Indian
                            ...
Council of Applied Economic Research rural India now accounts for the 70% of toilet soap
   users, and 38% of two-wheelers...
Distribution Strategy
    To reach out to rural India, Coke started out by drawing up a hit list of high potential
      ...
Advertisement Strategy
    Coke realised that the communication media used in cities and urban areas would
      not work...
 ‘Thanda’ usually means lassi or nimbu pani, ‘garam’ is essentially tea. Because the
   character, in itself, represented...
 Advertising Strategies
         Tryin’ to improving more rural condition mixed with Coca-Cola branding
         Start ...
Coca-Cola Case Report
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Coca-Cola Case Report

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Coca-Cola Case Report

  1. 1. MASTER OF MANAGEMENT GADJAH MADA UNIVERSITY MARKETING MANAGEMENT CASE STUDY : COCA-COLA IN INDIA Lecture : Prof. Dr. Basu Swastha Dharmmesta, M.B.A Group 4 Anne Stam Febrini Wulandari Irwan Arfandi Bachtiar
  2. 2. Case Summary In the late 1990s 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.
  3. 3. COMPANY PROFILE The 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 Economy Ever 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 Economy The Company has shaken up the Indian carbonated drinks market greatly, giving consumers the pleasure of world-class drinks to fill up their hydration, refreshment, and 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.
  4. 4. nutrition needs. It has also been instrumental in giving an exponential growth to the country’s job listings. Creating Enormous Job Opportunities With 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.
  5. 5. Problem Statement “Would these branding strategies enable Coca-Cola to penetrate the Indian market?” Analysis Branding 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 Scenario After 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
  6. 6. 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.”
  7. 7. 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
  8. 8. Advertisement Strategy  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.
  9. 9.  ‘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
  10. 10.  Advertising Strategies  Tryin’ 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 -het einde-

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