Coca-Cola and its Rural Marketing Strategy

1. PRESENTED BY:
ABHISEK KHATUA
Presentation
on
“Coca-Cola India’s Thirst for the
Rural market”

2. Presentation Outline
o Coca-Cola : The Company Back Ground
o Coco-Cola Goes Rural
o Issues
o Marketing Strategy
o Advertising Strategy
o Challenges
o Future Prospects
o Conclusion: The Better Decision

3. 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.

4. Rural Market Scenario
o ‘Rural’- approx. 70% population engaged in agriculture related activity.
o approx. 700 million people
o 1/3rd of country’s GNP
o 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.

5. Thanda Goes Rural
o 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.

6. Challenges for Coke
Poor rural infrastructure
Erratic power supply
Different consumption habits
Preference for traditional cold beverages(lassi, lemon Juice)
Price of the branded beverages

7. 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.

8. 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.

9. Re-Design of Distribution Channel
• Decentralized Distribution Model
• Change in Transportation Vehicles to
be used

10. AFFORDABILITY
Introduction of 200ml
bottle (chota coke).
Priced at Rs. 5, closed
the gap between Coke
and basic
refreshments.

11. 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.

12. ADVERTISING STRATEGY
o In 2002, CCI launched a new advertisement campaign
o 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 newspapers
o It doubled the spend on Doordarshan.

13. FUTURE PROSPECTS OF COKE
CCI’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

14. ISSUES IN COKE
Pesticides Issue and building confidence .
Infrastructure in distribution network.
Competing with local brands
Advertisement spending
Diversification

16. 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.

17. Thank You