Coca-Cola India’s Thirst for Rural Market

2. About the Case
 This case is about the initiatives taken by the Cola
major Coca- Cola in India.
 This case discusses the detail of the Distribution,
Pricing & Advertising strategies taken up by the CCI
(Coca-Cola India) to be successful in Rural India.
 The case also Focuses on the Cola War from the Urban
market to the Rural Market.

3. Timeline :-
In 1993
In 1993- 1999
In 1999
 Coca-Cola reentered in India
through a strategic alliance with
Parle Exports.
 CCI had three CEO’s
1. Jaydev Raja – In 1993
2. Richard Nicholas – In 1995
3. Donald Short- In 1997
• Alex Von Behr Became the CEO.
• Company also increased the ad
spend on the acquired brands like
Thums up, Limca & Maaza.

4. Timeline
In 2000
In 2001
 Behr focused on rural
marketing & decided to
diversify into the bottled
water & powered soft drink in
association with the Kinley &
Sunfil Brands
 CCI announced its Maiden
profits from its Indian
operations.

5. Timeline
In 2002
In 2003
 CCI made an additional
Investment of Rs. 7 million ( 5
million from the company & 2
million from the company’s
bottlers)
 CCI added 25 production lines
& doubled it glass & PET
bottle capacity.

6. Timeline
In 2003
 Increment in rural
distribution by covering
1,58,342 villages in Aug 2003 &
in 2001 it was 81,383 villages

7. Thanda Goes Rural
 In early 2002, Coca- Cola India launched a new advertisement campaign
featuring leading bollywood actor -Amir Khan .
 The advertisement “Thanda matlab Coca-Cola” was launched to support
CCI’s rural market initiatives.
 CCI launched three commercials with tagline Thanda matlab Coca- Cola
in which Aamir Khan featured as “ Tapori”, “Hyderabadi shopkeeper” & as a
“Punjabi farmer”.

8. Thanda Goes Rural
 The poor rural infrastructure & consumption habits are the
two major obstacles to crack the rural market.
 Shortage of power supply became a problem for CCI in rural
marketing because of which people prefer more of “ Lassi” &
“Lemon juice”.

9. CCI’s Rural Marketing Strategy
The Strategy was based on three “A”
1. Availability
2. Affordability
3. Acceptability

10. Availability
• CCI emphasized on the availability of the product to the
consumer.
• It focuses on strengthening its distribution network in Rural
market.
• CCI realized that its centralized distribution system, which
was used for Urban areas will not be suitable for Rural areas.
• The company then opted for a Hub and spoke distribution
system for rural areas.

12. Affordability
• It focuses on product pricing, In 2001 CCI revealed that 300
ml bottle were not popular in rural area.
• The price of Rs. 10/- per bottle was considered to high by
rural consumers. Therefore, CCI decided to make some
changes in size of its bottle & pricing to win over consumers
in rural market.
• In 2002 CCI launched 200 ml bottle (chota coke) priced at
R.5 to increase the rate of consumption in rural India.

13. Acceptability
• It focuses on convincing the customer to buy the product.
• To reach more rural consumers, CCI increased ad- spend by
hoardings in villages & painting the name Coca-Cola on the
compounds of the residences in the villages.
• In 2002 “ Chota Coke ” launched with a commercial featuring
bollywood actor “ Aamir Khan ”.
• In 2003, CCI strengthen the Coca-Cola brand image by
making coke a generic name for “ Thanda ” & launched print
advertisement in several regional newspapers.

14. Future Prospects
• In year 2003, CCI had a target of reaching 0.1 Million more
villages.
• In early 2003, CCI announced that it was dropping plans to
venture into the beverage business.
• CCI planned to launch juice & milk based beverages such as
Nimbu paani, Fruit juice, Cold coffee & Ice tea in collaboration
with Nestle.

15. Reasons to Enter into Rural
marketing
• Due to the vast size & large demand of the Indian rural
market, the FMCG companies have a great opportunities.
• Rural population is very large & It has grown richer in 1990’s,
with substantial improvements in incomes & spending power.
• Tax Exemptions for agriculture income have also contributed
to greater rural purchasing power.

16. Problems faced to sell the products
in Rural Market
 Physical Distribution
Adversely affect the service &
the cost of the company
 Channel Management
 Promotion & Marketing Communication
 Difficulty in understanding the social dynamics & attitude
variation with in each village

17. SUGGESTIONS :-
 The CCI (Coca-Cola India) should target the colleges that
are situated in rural area to increase their market.
 The CCI should also conduct some Street theatre as this is
deeply rooted in Indian culture.
CCI should make those advertisement which are related to
Weddings and traditional functions.