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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"We want to be the Hindustan Lever¹ of the Indian beverage business."

- Sanjeev Gupta, Deputy President - Coca-Cola India in May 2002.²

"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 1995.³

'Thanda' Goes Rural

In early 2002, Coca-Cola India (CCI) (Refer Exhibit I for information about CCI) launched a new advertisement campaign featuring leading bollywood actor - Aamir Khan.

The advertisement with the tag line - 'Thanda Matlab Coca-Cola⁴' was targeted at rural and semi-urban consumers. According to company sources, the idea was to position Coca-Cola as a generic brand for cold drinks.

The campaign was launched to support CCI's rural marketing initiatives. CCI began focusing on the rural market in the early 2000s in order to increase volumes.

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

This decision was not surprising, given the huge size of the untapped rural market in India (Refer Exhibit II to learn about the rural market in India). With flat sales in the urban areas, it was clear that CCI would have to shift its focus to the rural market. Nantoo Banerjee, spokeswoman - CCI, said, "The real market in India is in the rural areas.

If you can crack it, there is tremendous potential."⁵

However, the poor rural infrastructure and consumption habits that are very different from those of urban people were two major obstacles to cracking the rural market for CCI.

Because of the erratic power supply most grocers in rural areas did not stock cold drinks. Also, people in rural areas had a preference for traditional cold beverages such as 'lassi'⁶ and lemon juice.

Further, the price of the beverage was also a major factor for the rural consumer.

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1] Indian arm of FMCG major Unilever. HLL was credited with pioneering rural market initiatives in India with its Project Bharat (1988) and Project Shakti (2002). The company boasts of the largest rural distribution network and presence in India.

2] Kripalani, Manjeet, Rural India, Have a Coke, BusinessWeek, May 27, 2002.

3] Guha Ray, Shantanu, The Great Rural Bazaar, www.rediff.com, August 28, 1995.

4] Cool drink means - Coca Cola.

5] Bailay, Rasul, Small Packets, Big Business, Far Eastern Economic Review, January 23, 2003.

6] Lassi is a homemade drink made by blending thick curd with sugar or salt.