Coca Cola India's Thirst for the Rural Market
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Case Details:
Case Code : MKTG081
Case Length : 10 Pages
Period : 2002-2004
Pub Date : 2004
Teaching Note : Available
Organization : Coca Cola India
Industry : Food & Beverages
Countries : India
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Affordability
A survey conducted by CCI in 2001 revealed that 300 ml bottles were not popular with rural and semi-urban residents where two persons often shared a 300 ml bottle. It was also found that the price of Rs10/- per bottle was considered too high by rural consumers...
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Acceptability
The initiatives of CCI in distribution and pricing were supported by extensive marketing in the mass media as well as through outdoor advertising.
The company put up hoardings in villages and painted the name Coca Cola on the compounds of the residences in the villages.
Further, CCI also participated in the weekly mandies by setting up temporary retail outlets, and also took part in the annual haats and fairs - major sources of business activity and entertainment in rural India...
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Future Prospects
CCI claimed all its marketing initiatives were very successful, and as a result, its rural penetration increased from 9% in 2001 to 25% in 2003. CCI also said that volumes from rural markets had increased to 35% in 2003.
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The company said that it would focus on adding more villages to its distribution network. For the year 2003, CCI had a target of reaching 0.1 million more villages.
Analysts pointed out that stiff competition from archrival PepsiCo would make it increasingly difficult for CCI to garner more market share.
PepsiCo too had started focusing on the rural market, due to the flat volumes in urban areas.
Like CCI, PepsiCo too launched 200 ml bottles priced at Rs. 5. Going one step ahead, PepsiCo slashed the price of its 300 ml bottles to Rs 6/- to boost volumes in urban areas... |
Exhibits
Exhibit I: CCI
Exhibit II: The Rural Market in India
Exhibit III: Pepsico's Rural Marketing Initiatives
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