MARKETING STRATEGIES OF COCOCOLA INDIA

Presented by Shahnas A Sabitha Z.B

COCA-COLA Coca-Cola Company is the world's largest nonalcoholic beverage company.

Within our more than 400 brands are nearly 2,400 beverage products.

Operations in more than 200 countries.

Coca-cola accounts for approximately 1.3 billion servings worldwide of the 50 billion beverage servings consumed every day.

HISTORY

Coca cola was invented by john stith pemberton in 1886 in Atlanta, Georgia.

The coca-cola formula and brand was bought in 1889 by Asa Candler who incorporated the coca cola company in 1892.

Within four years, his merchandising flair helped expand consumption of Coca-Cola to every state and territory.

Under Robert W. Woodruff six decades of leadership , The Coca-Cola Company took the business to unrivaled heights of commercial success, making Coca-Cola an institution the world over.

 

MISSION The Coca Cola Company creates value by

executing comprehensive business strategy guided by six key beliefs:

Consumer demand drives everything we do. Brand Coca Cola is the core of our business We will serve consumers a broad selection

of the nonalcoholic ready-to–drink beverages they want to drink through out the day.

We will be the best marketers in the world. We will think and act locally. We will lead as a model corporate citizen.

VALUESCoca-Cola is guided by shared values that both the

employees as individuals and the Company will live by; the values being:

LEADERSHIP: The courage to shape a better future

PASSION: Committed in heart and mind INTEGRITY: Be real ACCOUNTABILITY: If it is to be, it’s up to me COLLABORATION: Leverage collective genius INNOVATION: Seek, imagine, create, delight QUALITY: What we do, we do well

VISION

 PROFIT: Maximizing return to shareowners while being mindful of overall responsibilities.

PEOPLE: Being a great place to work where people are inspired to be the best they can be.

PORTFOLIO: Bringing to the world a portfolio of beverage brands that anticipate and satisfy peoples’ Desires and needs.

PARTNERS: Nurturing a winning network of partners and building mutual loyalty.

PLANET: Being a responsible global citizen that makes a difference.

Coco cola in India

Coca-Cola was the 1st international soft drinks brand to enter India in early 1970’s.

Indian market was dominated by domestic brands, with Limca being the largest selling brand.

Cola was the largest selling flavor with market share of 40%, Lemon drinks 31% and orange drinks only 19%. 

Withdrawal from India

Up till 1977, Coca-cola was the leading soft drink brand in India.

But due to norms set by the Foreign Exchange Regulation Act (FERA), Coca-Cola left India and did not return till 1993 after a 16 year absence from the Indian beverage market.

FERA needed Coca-Cola to reveal its secret concentrate formula as well as reduce its equity stake which was not acceptable. 

Pure drinks, Delhi launched Campa-Cola, to take advantage of Coke’s exit and by the end of 70’s, was the only Cola drink in the Indian market.

In 1980, Parle, another major Indian player launched ThumsUp, the drink which till date is most popular soft-drink in India.

Pure Drinks strongly objected to ThumsUp being called a “soft” drink as it felt its taste is too strong.

For over a decade, Parle led the Indian soft-drinks market, with its market share reaching a peak of 70% in1990. 

Re-entry into the Indian Markets Coca-Cola got the permission to enter the

country with a 100 per cent unit in India. On September 22, 1993, the company

bought out the Parle brands. As an entry strategy, CCI took over Parle

Foods. With a fine and detailed distribution network

in place, Coke was now ready to take on archrival

Over a period of time, CCI also bought certain bottling units that earlier belonged to Parle or individual distributors.

In 1993, Thumps Up, Gold Spotand, Limca enjoyed around 75% share of the CSD market.

With the entry of Coke, CCI decided not to promote the cola brand they took over i.e., they decided to withdraw Thumps Up from the market. This however, did not pay off since the cola market was (and still is) highly polarized and people were unwilling to compromise on the taste of their preferred cola.

As a result, Coke’s market share (Coke + Thumps Up) fell to nearly 55%. After 3 years of incurring losses, CCI finally took a decision to re-launch Thumps Up. This strategy paid off and today almost 59% of the market is governed by CCI.

MARKET SHARE

Coca-Cola is a leading player in the Indian beverage market with a 60 per cent share in the carbonated soft drinks segment, 36 per cent share in fruit drinks segment and 33 per cent share in the packaged water segment.

In 2004, Coca-Cola sold 7 billion packs of its brands to more than 230 million consumers across 4,700 towns and 175,000 villages.

The company has doubled its volumes and trebled its profits between 2001 and 2004.

Marketing Strategies of Cocacola India

Entry strategies

As an entry strategy, CCI took over Parle Foods Acquisition of local popular Indian brands

including Thums Up (the mosttrusted brand in India21), Limca, Maaza, Citra and Gold Spot

This combination of local and global brands enabled Coca-Cola to exploit the benefits of global branding and global trends in tastes while also tapping into traditional domestic markets.

Leading Indian brands joined the Company's international family of brands, including Coca- Cola, diet Coke, Sprite and Fanta

Product line soft-drink: Coca-cola Sprite Fanta Diet coke Limca Maaza Thums up

Target market

Diet coke: weight consciousness Maaza: kids , juice loving people Sprite: young people Thums-up: confident, mature and uniquely

masculine attitude people Fanta: girls, ladies

THUMSUP

Thums Up is a leading carbonated soft drink and most trusted brand in India.

Originally introduced in 1977, Thums Up was acquired by the Coca-Cola Company in 1993.

Thums Up is known for its strong, fizzy taste and its confident, mature and uniquely masculine attitude. This brand clearly seeks to separate the men from the boys. Mostly like by the youngsters specially boys.

The competitor of the brand on same category is Pepsi.

COCACOLA

Coca cola is the world's favorite drink. It is the world's most valuable brand and the most recognizable word across the world. Coca-Cola has a truly remarkable heritage. From a humble beginning in 1886, it is now the flagship brand of the largest manufacturer, marketer and distributor of non-alcoholic beverages in the world.The competitor on the cola category is Pepsi.

SPRITE

This brand is the one of the fastest growing brand in the country.

Sprite is liked by all age groups & people. Jan 09 report of “The times of India” claims sprite to be the second brand in sales after Thumsup

Competitor : 7up & Mountain dew

LIMCA

Limca is cloudy lemon in flavor. This is very unique in this category.

It has white in color. Competitor : Nimbooz , Lime merinda

FANTA

Fanta has two flavors apple & orange. This is very popular drink among females.The 'orange' drink of the Coca-Cola Company, is seen as one of the favorite drinks since 1940's. Fanta entered the Indian market in the year 1993. Over the years Fanta has occupied a strong market place and is identified as "The Fun Catalyst". Competitor: Mirinda, Parle’s Appy fizz 

MAAZA

This is mango flavor. Maaza was launched in 1976. It is a

drink which offered the same real taste of fruit juices and was available throughout the year.

In 1993, Maaza was acquired by Coca-Cola India and it currently dominates the fruit drink market.

Competitor: Slice, frooti

MINUTE MAID pulpy orange

This is orange juice. This contains no sugar & added flavor. This is a family drink. Competitor : Tropicana

KINLEY

This comes in two variety-mineral water & soda. Mineral water is used by all but soda is commonly used for alcoholic purpose by adult people.

Competitor : Aquafina, Bisleri

Intensive Brand Building

The company focuses on understanding the Indian consumer, and in using these local insights to build powerful connect for its brands.

popularity of cricket and movie stars Activating local Indian festivals and

occasions Creating a distinct identity for each of its

flagship brands 'Coca-Cola' is the most recognised

trademark, recognised by 94% of the world's population and is the most widely recognised word after "OK"

Product Positioning

THUMS UP Thums up of coca cola is targeted to the

adventurous and energetic people that are interested in adventure and love taking risk to succeed.

MINUTE MAID Minute Maid of Coca cola are specially targeted

to healthconscious customers and want health drink having natural energy in it.

FANTA The drink is specially launched for the lady

sector of the population and these drinks are positioned in that way only.

Market Segmentation

AGE GENDER RURAL VS. URBAN MARKET

BRAND LOCALISATION STRATEGY: THE TWO INDIAS

INDIA A: “LIFE HO TO AISI” This designation Coca-Cola gave to

the market segment including metropolitan areas and large towns represented 4% of the country’s population.

INDIA B: “THANDA MATLAB COCA COLA”

INDIA B included small towns and rural areas, comprising the other 96% of the nation’s populations.

Distribution Strategy

Coca cola is worldwide famous for their Distribution channel. IN India the distribution network of Coca cola had 6.5lakh outlets across the country in 2000 .For the urban distribution channel these companies adopted the model like direct store distribution, broker warehouse distribution and Vending & Food Service (V&FS) systemswhere as these companies are following the Hub and Spoke model for rural distribution channel, in which they divided the different categories of distributors according to the area they are covering.

RURAL DISTRIBUTION CHANNEL HUB AND SPOKE MODEL

DISTRIBUTION CHANNEL IN URBAN AREAS

Direct Store Distribution Broker Warehouse Distribution (BWD) Vending & Food service (V&FS)

systems.

PRICE

To effectively achieve the stable balance between sales and covering the production cost

Company has priced the product same as that of its major competitor of the market leader

PROMOTION

PUSH STRATEGYCoca cola is using Push strategy in which they use its sales force and trade promotion money to induce intermediaries to carry, promote and sell the product to end users i.e. consumers.For example-as coca cola is giving free pet bottles and other trade schemes to distributors, agency owners and retailers.PULL STRATEGY:- Coca-cola is also using Pull strategy in which they are using advertising and promotion to persuade consumers to ask intermediaries for the company brand product by this way coca cola inducing customer to order it from shopkeeper.For example-Coca cola is using flanges, display racks, tier racks, standees, mobile hangers and visicooler brand strips.

SALES PROMOTION ACTIVITIES  Coca-Cola Cricket Coca-Cola Food Mela Coca-Cola GO-RED Coca-Cola & Mc Donald’s

Coca-Cola & key account of MC Donald’s launched the “we go together” joint promotion to reinstate amongst consumers a real sense of the affinity that, both shares globally.

The promotion kicked off with point of sales material (Danglers, Bunting etc) displayed at all MC Donald’s restaurants along with a special offer for coke & fries.

AVAILABILTY Availability is done according the type

of outlet.ACTIVATION Activation is important because it helps

to boost the sales of the company. it is done through the Glow sign, Shelf display, flanges. Combo boards, Table tops .This boards usually gives to the E&D outlets

WARM DISPLAY RACK SHELF DISPLAY

SHELF DISPLAY DISPLAY OF RACK VISI COOLER

BRAND AMBASSDORS & TV COMMERCIALS

PLACE

Distribution channel:

Supply chain of coca-cola

C & F agent

Distributor

Retailer customer

FACTORS FOR SUCCESS

Diverse product portfolio Brand building Affordable entry price point Strong brand pull Ultra low cost model Minimized internal capital requirements

Rural Market Scenario

The rural population in India accounts for around 627 million, which is exactly 74.3 percent of the total population.

1/3rd of country’s GNP 450 districts, 6,30,000 villages approx.

Key to success in Rural India Physical Distribution Channel Management Promotion and Marketing

Communication

CCI began focusing on the rural market in the early 2000s in order to increase volumes.

The Decision was not surprising… Flat sales in urban markets. Huge size of untapped rural market. Improvement in income and spending

power of rural people. Better physical distribution channel. Aspirations for urban lifestyle. Increased awareness due to television

reach.

Challenges for Coke

Poor rural Infrastructure. Erratic power supply. Different consumption habits. Preference for traditional cold beverages

(lassi,lemonade). Price of the branded beverages.

CCI’s Rural Mktg. Strategy

Three As Availability: Capacity expansion – 25 prod. lines and doubled bottle

capacity. Unique and different distribution strategy – hub & spoke

distribution. Coverage of 1,58,342 villages by Aug. 2003 (81,383 in 2001). 2,00,000 refrigerators to rural retailers. Affordability Introduction of 200ml bottle (chota coke). Priced at Rs. 5, closed the gap between Coke and basic

refreshments.Acceptability Mass media marketing. Launched TVCs targeted at rural consumers.

Coke realized that the communication media used in urban markets would not work in villages because of low penetration of conventional media.

Way out... Outdoor advertising and hoardings, etc. Participation in weekly mandies, haats,

& fairs. Increased ad-spend on Doordarshan .

Importance of Advertising in Rural Marketing The low level of education that creates

problem in brand identification. Since they can not read the brand names and price tags it makes it easier for the clones to launch brands similar in label and design and spoil the brand image.

Unscrupulous retailers are taking the benefit and damaging the perception of the brands before they actually enter in to the rural market.

It helps in acceptability of the product. It helps in market penetration. To strengthen the brand image of the product.

Issues to focus….

Pesticides Issue and building confidence .

Infrastructure in distribution network. Competing with local brands Advertisement spending Diversification

Rural market is more comfortable.. Huge market High growth in terms of sales Change in the life style Increase in the per capita income It can substitute other products

Swot analysisStrengths

Weakness Oppurtunities

Threats

World’s largest brand

Negative publicity Acquisition intense competition

Intense competition

Large scale of operations

Sluggish performance in north america

Growing bottled water market

Dependence on bottling partners

Robust revenue growth

Decline in cash from operation activities

Has sufficient capital to expand

Sluggish growth of carbonated beverages

SWOT Analysis STRENGTHS:   Coke Company has a good market reputation and a strong distribution

network. Coke is having a multi brand strategy ad is looking for a great volume

opportunity in India. Coke is presently no. 1 player in Indian Carbonated soft drinks market. Coke was born 11 year before Pepsi (in 1987) ad a century later still

maintains that pioneering least. Pepsi and coke both have good brand image.   WEAKNESS:   Coke has less no. of retailers Less force - it has less no. Have owned bottling plant. It has not planned for setting up of any new plants where their competitor

has planned to set up several new plants.

OPPORTUNITY:   A rapidly growing market, which is expanding @ 205 every year. It can take the market very well with the new investment of Rs. 2400 corers. It can give a big jerk to its major competitor Pepsi it can increase its number of

fountain to a sizeable amount. Increasing trend of cold drink of different brands.   THREATS: It has a continuous threat from Pepsi as well as various other local soft drinks. Coke has a major market than Pepsi between the teenager as well as the student due

to advertisement of world cup cricket. A large amount of expenses on the advertisement. There is no proper policy of distributing the merchandising assets of the company to

the retailers. The company should search the new target market to expand the market share in

this competitive era. To meet the demand of the customers the company should set up the new plants as

its competitors are planning to set up.