Q.1 What market segmentation variables did COKE use for its Advertising campaign?

Based on
Coke's Rural Marketing Strategy, develop a Print campaign. You print campaign should be a
creative mix of verbal and nonverbal elements.
Segmentation Variables used by coke are as follows:

Geographic Segmentation (rural vs urban)

Q.2 Coke is the undisputed global market leader in the beverage industry, what competitive
strategies did coke use to retain its position, please point out from the case study. What was more
important for coke? Pricing strategy or distribution strategy. Please highlight from the case study
ONLY.
The primary competitive position strategy used by Coke is Overall Cost leadership due to economy of
scale and the experience factor. Coke's market scope strategy is Market-geography strategy that takes
geographic segmentation into the strategy area by concentrating firm's resources in a geographical area.
The defensive strategy used by Coke is the Mobile defense strategy which refers to proactively
defending by expanding into new markets to retain market position before the competitors offering.
Growth strategy used by coke is the Market development strategy in this scenario.
Pricing strategy played a more important role for coke keeping in mind the frame of the content of the
provided case. As India is a highly price sensitive market and even more towards the rural areas, I
believe that pricing strategy played a primary vital role for success of CCI.
Q.3 Write a detailed analysis on the Advertising and Marketing initiatives that Coke undertook.
Your analysis should cover the future prospects for Coke and RECOMMENDATIONS to upgrade
their course of action.
India holds one of the largest populations and has a monsoon climate, therefore the heat of the weather is
scorching. This country is culturally bound and cold drinks are available in this market. So indeed it is a
very attractive, highly profitable market for any kind of soft drink. The products are highly diversified in
the market and for that reason this company has reached above their objectives.
Moreover, India is a very price sensitive market. When CCI targeted the rural market of India in the year
of 2000, it was obvious to think about the affordability of the market. Additionally, with an average Coke
costing Rs. 10 and an average days wages around Rs. 100, Coke was perceived as a luxury that few
could afford. Thinking of these weaknesses of the plan CCI introduced its 200 ml bottle instead of 300ml,
and the price was halved from Rs. 10 to Rs. 5. This decision was actually the main reason to be
successful in the rural market. Cokes rural penetration increased from 9% to 25% in 2003. It was an
ultimate success of CCI. Pepsi Co. the main competitor of CCI reduced their 300 ml bottle price for that
reason in the urban areas and Pepsis sales increased.
Insufficient power supply caused problems of having a refrigerator in the grocery shops. All along the
distribution channel was a mess. To capture the rural market, CCI started hub & spoke distribution
system. Through this system, products from the bottling plant came directly to the hub in the towns and
then it is distributed to the spoke in small towns. From there, the product was distributed to the retailers.
This strategy was effective to reduce the cost of transportation for CCI products. To make this system
more effective CCI purchased 5,000 trucks and auto rickshaws. Coca-cola was bound to provide a bottle
of Coke to every Indian. They even distributed through cycles and camels in the places like Rajasthan
and Gujarat.

Firstly, the distribution and pricing were supported by the mass media and as well as through outdoor
advertisement. They painted their name in the compound of the houses of villages and crowded places.
Secondly, they participated in mandies (village market), haat, fairs, and other events of the villages to
offer Coke. And people started to know them, by providing TVCs in Doordarshan (national TV channel)
it became more popular. Finally, they used humor appealing advertisements to replace the position of
other cold drinks from the consumer's mind. They promoted Coke as Thanda Matlab Coca-Cola in
India. So it became very popular in the rural areas as well as in urban areas. They followed product
category positioning in those advertisements and were very successful. Amir Khan a famous actor of
India was inducted to advertise these promotions. And the result was like, sales volume increased in 2003
at 35% in rural areas. Considerably, it is clear that CCI was very much successful to promote Coca-cola
in India because of their effective marketing mix.

Recommendations
Considering all the facts and conditions of the Indian market, I suggest that price positioning is the most
effective positioning strategy for CCI. The reasons are:
India is very price sensitive and consumer always wants the best thing at cheap prices so price
positioning can grab more of them.
The cost of production is not very high because they use less foreign resources and resources are
available in India. So the company can give more in Rs.5 / Rs.10. If they follow more for same or
more for less strategy the sales volume will boost up in a short time.
For Taking Down Pepsi
Being a market leader it is very difficult to maintain the position in the long run with competitors like
Pepsi Co. So, by only using product positioning they cant move on. In this competitive market of low
income people, Coca-Cola must adopt mainly price/value positioning for its products. On the other hand,
if the market becomes flat by the means of pricing and price elasticity is lower, than Coca-Cola can
follow/use attribute positioning. Because in the flat market consumers look for more quality at the same
price. If enough resources are available, then the combination of all of this positioning strategy can be
applied to attract the market more effectively than the competitors.
Recommendations for the Pesticide Issue
From the year 1977 this company is facing many problems in this region because of many Govt.
regulations, media setbacks, political invasion and so forth. After having all that problems this company
has successfully recovered every setback.
According to the case, the main problem that CCI faced at the end are the Social Problems. In August
2003 CSE (center for science and environment) announced that Coke contains high pesticide. In around
same time BBC radio said that CCI use huge amount of ground water in Kerala that destroys the eco
system. For this complain many political and social parties became active against CCI and convinced the
rural market that CCI is causing water shortages. For that reason sales in 2003 declined significantly.

This sort of blame affected CCIs global sales volume. CEO of CCI Sanjiv Gupta published own report
and communicated with the country, through TVCs, programs, newspaper and other types of medium in
2006. But the sales didnt go up.
If I was the CEO, I would always follow the holistic marketing concept that everything matters. Social
marketing concept says that society matters in business and every business has the social responsibility.
So in the moment of crisis when CSE and BBC reported the facts CCI should move towards social
welfare. CCI would have established water treatment plant, drinking water plant and other environmental
friendly plants that would help the society to have more drinking water and employment. Such plants can
be established in places like Rajasthan, Kerala, Gujarat and other places where the water is scarce. The
reason for this kind of decision is, rural market cant understand CSE reports. They are always in need of
water so if the water plants are established the loyalty of the rural people would be greater than before
and the retention would be higher. So the use of ground water will be lessened and if the water is enough
that can be used to produce bottled mineral water under CCIs respective brands. Considerably, this
decision will not only remove the blame, but also increase the profit, customers and societys loyalty for
Coca-Cola India.

(ADVERTISING & PROMOTION STRATEGY)

SECTION - (D)

SUBMITTED TO:
MR. KHURRAM HAMID

SUBMITTED BY:
FARHAN HASEEB
L1S13MBAM1196

DATED:
December 04, 2014