The post-liberalization period in India saw the re-entry of Coca-cola. But Pepsi had already gained an edge by creatively entering the market in the 1980’s in advance of liberalization by way of a joint venture. It allowed Pepsi to gain precious early experience with the Indian market and also served as an introduction of the Pepsi brand to the Indian consumer such that it was well-poised to reap the benefits when liberalization came. Though Coke benefited from Pepsi creating demand and developing the market, Pepsi’s head-start gave Coke a disadvantage in the mind of the consumer.Pepsi’s appeal focused on youth and when Coke entered India in 1993 and approached the market selling an American way of life, it failed to resonate as expected.
Marketing Strategy Coca-Cola CEO Douglas Daft set the direction for the next generation of success for his global brand with a “Think local, act local” mantra. Recognizing that a single global strategy or single global campaign wouldn’t work, locally relevant executions became an increasingly important element of supporting Coke’s global brand strategy.Brand Localization Strategy: The Two Indias India A: “Life ho to aisi” “India A,” the designation Coca-Cola gave to the market segment including metropolitan areas and large towns, represented 4% of the country’s population. This segment sought social bonding as a need and responded to aspirational messages, celebrating the benefits of their increasing social and economic freedoms.
“Life ho to aisi,” (life as it should be) was the successful and relevant tagline found in Coca-Cola’s advertising to this audience.India B: “Thanda Matlab Coca-Cola” Coca-Cola India believed that the first brand to offer communication targeted to the smaller towns would own the rural market and went after that objective with a comprehensive strategy. “India B” included small towns and rural areas, comprising the other 96% of the nation’s population. This segment’s primary need was out-of-home thirst-quenching and the soft drink category was undifferentiated in the minds of rural consumers.Additionally, with an average Coke costing Rs. 10 and an average day’s wages around Rs.
100, Coke was perceived as a luxury that few could afford. In an effort to make the price point of Coke within reach of this high-potential market, Coca- Cola launched the Accessibility Campaign, introducing a new 200ml bottle, smaller than the traditional 300ml bottle found in urban markets, and concurrently cutting the price in half, to Rs. 5.This pricing strategy closed the gap between Coke and basic refreshments like lemonade and tea, making soft drinks truly accessible for the first time. At the same time, Coke invested in distribution infrastructure to effectively serve a disbursed population and doubled the number of retail outlets in rural areas from 80,000 in 2001 to 160,000 in 2003, increasing market penetration from 13 to 25%.
Coke’s advertising and promotion strategy pulled the marketing plan together using local language and idiomatic expressions. Thanda,” meaning cool/cold is also generic for cold beverages and gave “Thanda Matlab Coca-Cola” delicious multiple meanings. Literally translated to “Coke means refreshment,” the phrase directly addressed both the primary need of this segment for cold refreshment while at the same time positioning Coke as a “Thanda” or generic cold beverage just like tea, lassi, or lemonade. As a result of the Thanda campaign, Coca-Cola won Advertiser of the Year and Campaign of the Year in 2003. References: www.