Coca-Cola struggled in India in the early 2000s with losses of $400 million. To boost sales, they shifted focus to rural markets which account for over 50% of consumer spending but were previously untapped. Their rural marketing strategy focused on affordability by introducing a smaller, cheaper bottle; acceptability through culturally relevant advertising; and availability through a decentralized distribution network of hubs and spokes. This rural expansion led to 37% growth in 2003, showing large untapped potential in rural India for companies willing to tailor their approach.

1. The REAL

2. 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.

3. in Rural

4. 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.

5. Coca-cola’s Rural marketing strategy
Coca-cola’s rural marketing strategy is based on 3A’s
1.) Affordability
2.) Acceptability
3.) Availability

6. 1.) 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.

8. 2.) Acceptability
The advertisement with the tag line - 'Thanda Matlab
Coca-Cola ' was targeted at rural and semi-urban
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.

10. 3.) 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.

11.  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.

12. Advertising Strategies

13. 1. TV Commercials
Between march-
september 2003,
CCI came up with
different
commercials
featuring Amir
Khan. In these
Ads he played a
character that the
target audience
could easily
associate with.

14. 2.Wall Paintings

15. 3.Hoardings

16. Results
• 37% growth in Rural market in the year 2003
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.