Content Page

• Background Note 2

• Introduction – Coca Cola (India) 3

• SWOT Analysis 4

• BCG Matrix 6

• Product Life Cycle 7

• Problem Identification / Issues 8

• Strategic Alternatives 8

1. Market Segment 8

2. Brand Positioning 8

3. Region Based Positioning 8

4. Promotion / Advertising 9

5. Brand leveraging / Extension

10

• Strategic Choices 11

• Policy Formation & Action Plan. 12

Coca Cola Inc.

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Background Note

Coca Cola is a leading manufacturer, distributor & marketer of non-

alcoholic beverage concentrate & syrups in the world. Having a
strong brand name & brand portfolio, Coca Cola is featuring
among the top 100 global brand ranking.

The company’s strong brand equity facilitates customer recall & allows
Coca Cola to penetrate market. However, the company is
threatened by intense competition which could have an adverse
impact on the company’s market share. A swot is attempted
below to have a broad look of the company

SWOT on Coca Cola - World

Strengths
• World’s leading Brand
• Large scale of Operations
• Robust revenue growth
Opportunities
• Acquisition intense
competition
• Growing bottled water
market
• Growing Hispanic
population in US
Weaknesses
• Negative publicity e.g
(India)
• Sluggish performance in
North America
• Decline in cash from
operating activities
Threats
• Intense Competition
• Dependence on bottling
partners
• Sluggish growth of
Carbonated beverages

Established in 1886
Ranking: Own 4 of the world’s top 5 nonalcoholic sparkling beverage
brands: Coca-Cola, Diet Coke, Sprite and Fanta.
Company Associates: 90,500 worldwide (as of December 31, 2007)
Operational Reach: 200+ countries
Consumer Servings (per day): 1.5 billion.

Introduction.

Coca Cola India

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The Coca-Cola Company re-entered India on October 23, 1993, after an
absence of 16 years. When the Company (hereon referred to as CCI –
Coca Cola, India) re-entered the Indian market, there was competition
from Pepsi, which had a head start as it had established itself since
1989, and Thums Up (the flag ship CSD – Carbonated Soft Drink of
Parle Foods).

Entering strategy
As an entry strategy, Coca- Cola in India forge a strategic alliance with
Parle-Export. Parle is the foremost soft drink company in India with a
formidable distribution infrastructure and over 60% of the soft drink
market share in India with hit and favorite brands like Thumbs Up, Gold
Spot and Limca in its kitty (In 1993, Thumbs Up, Gold Spot and Limca
enjoyed around 75% share of the CSD market).

As a part of this alliance Parle agreed to introduce Coca-Cola, Fanta and

Sprite in the Indian market and provided Coca Cola with its well
established and wide distribution network. In return, Coca-Cola agreed
to facilitate the export of Parle's products in overseas markets. This
strategic alliance brought together the leader of the soft drink industry
in India and global leader in soft drinks.

Coke was now ready to take on archrival – Pepsi. Over a period of

time, as a part of their global production strategy CCI bought certain
bottling units that earlier belonged to Parle or individual distributors.
Hindustan Coca-Cola India Pvt Ltd, a wholly owned subsidiary of Coca-
Cola India that runs the bottling operations which the company has
taken over from the Indian bottlers.

SITUATIONAL ANALYSIS – Indian Context

EXTERNAL ANALYSIS

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Opportunity-
• Developing a global brand in Indian context.
• Possible growing demand such as rural segment
• Expansion into new market
• Alliances with fast food restaurants, departmental store, Petrol
pumps etc

Threat-
• Competition with Pepsi’ aggressive approach & Price war.
• Non-cola drinks other drinks like Rasna and Tang etc
• Legislation health scars
• Coca-Cola Blamed For India's Water Problems

INTERNAL ANALYSIS

Strength-
• Strong brand name & Corporate identity
• Innovation & Strong Distribution network
• Product / taste / Brand recognition

Weakness-

• Not No. 1 in India (Rural Sector)

• Lack of awareness in rural areas & high advertisement cost.
• Advt misunderstood in India
• Negative publicity in 2006 thru CSE - India

Brands Names of Coca Cola In India

With a portfolio of more than 3,300 beverages, from diet and regular
sparkling beverages to still beverages such as 100 percent fruit juices

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and fruit drinks, waters, sports and energy drinks, teas and coffees, and
milk-and soy-based beverages, our variety spans the globe.

Coca-Cola is the most popular and biggest-selling soft drink in history, as

well as the best-known product in the world.

Available in the following flavors:

Cola, Cola Green Tea, Cola Lemon, Cola Lemon Lime, Cola Lime, Cola
Orange and Cola Raspberry.

BCG Matrix of the Coca Cola Company

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STARS: - High growth business competing in market where they are
relatively strong compared with the competition. They have a high point
shares and are the ideal businesses.

CASH COW: - Low-growth business with a relatively high point shares.

These businesses were stars but now have lost their attractiveness.

QUESTION MARK :- Businesses with low point share but which may
have a high growth rate. This suggests that they have potential but may
require strong competing force and extraordinary effort in order to grow
point share.

DOGS :- Businesses that have low relative share and low expected
growth rate. Dogs may generate enough points to sustain but they are
rarely, if ever, a competing force.

The BCG Matrix

Product life cycle

A product progresses through a sequence of stages from introduction to

growth, maturity and decline. It is associated with changes in the

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marketing situation thus impacting the marketing strategy and
marketing mix.

Introduction
The need for immediate profit is not a pressure. The product is
promoted to create awareness. If the product has no or few competitors,
a skimming price strategy is employed. Limited numbers of product are
available in few channels of distribution. Eg Diet coke.

Growth
Competitors are attracted into the market with very similar offerings.
Products become more profitable and companies form alliances, joint
ventures. Advertising spend goes high and focus on brand building
emerge. Market share tends to stabilize. Coke rolled on to the
growth stage and lately their attention on rural market is an
example of brand building and expansion to newer markets.

Maturity
Those products that survive the earlier stages tend to spend longest in
this phase. Sales grow at a decreasing rate and then stabilize. Producers
attempt to differentiate products and brands. Price wars and intense
competition occur. At this point the market reaches saturation.
Producers begin to leave the market due to poor margins. Promotion
becomes more widespread and uses a greater variety of media. E.g:
Coke, FANTA

Decline
At this point there is a downturn in the market. For example more
innovative products are introduced or consumer tastes have
changed. There is intense price-cutting and many more products are
withdrawn from the market. Profits can be improved by reducing
marketing spend and cost cutting. Eg. Vanilla coke

Problem Identification /Issues

• Not able to attain number one position in India after re-entry.
• “Off the mark” promotional strategies in India to enhance Sales.
• Rural Market still not picking up against Pepsi.

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 • Regular controversies on quality damaging the image.

In India, there exists widespread concern over how Coca-Cola is

produced. In particular, it is feared that the water used to produce Coke
may contain unhealthy levels of pesticides and other harmful chemicals.
It has also been alleged that due to the amount of water required to
produce Coca-Cola, aquifers are drying up and forcing farmers to
relocate.

Numerous court cases have been filed against the Coca-Cola Company
since the 1940s alleging that the acidity of the drink is dangerous. In
some of these cases, evidence has been presented showing Coca-Cola is
no more harmful than comparable soft drinks or acidic fruit juices.
Frequent exposure of teeth to acidic drinks affects the likelihood of tooth
decay through caries development.

Strategic Alternatives

Market Segmentation

The soft drink market can be segmented on the basis of place of

consumption or type of products. The segmentation on the basis of
place of consumption divides the market into two parts: -
• On-premise - 80% of the consumption of Coke is on premise i.e.
restaurants, railways stations, cinema etc. This is also known as
“Outdoor Consumption” in industry parlance.

• At-home - 20% of the market compromises of the Coke

purchased for consumption at home.

Brand positioning
Coca-Cola re-entry strategy aimed to expand the size of the overall
market for soft drinks by promoting Coca-Cola not only as a soft drink

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but as a beverage in India's large rural market. Coca-Cola was
presented as a substitute to tea, coffee, and fruit juices. The
strategy stressed increased penetration in urban markets and expansion
into untapped rural markets.
Coca-Cola faced positioning difficulty at this comeback stage in 1997.
First few years of this comeback, the advertising that the brand received
was less than functional. Nor could it use its core themes of “the real
thing” and “the original”; didn’t mean anything to the Indian
consumer.
With “Thanda Matlab Coca-Cola”, the company finally arrived at a
winner of a strategy that coincides with their universal “Think local Act
local” strategy for positioning.

Region-based Positioning

On a further extension of its strategy “Think Local, Act Local”, Coke

unleashed a new set of ads using Aamir Khan, each ad catering to a
different regional identity. For instance, one ad shows a “Punjabi
farmer”, another one shows a “Hyderabadi Muslim” and other shows a
“Bombay tapori”.

Promotion
Consumer Oriented
The company invests heavily on promotion of the products to both
consumers and retailers. It reaches consumers through television
advertisements, sponsoring events, hiring professional players/
celebrities.
To promote the products to the retailers, they give incentives,
discounts, samples, and accessories and enroll them in the company-
sponsored schemes.
Advertising
It plays an important role in contributing to brand equity. Coke has
spent millions of rupees on a marketing war in the mammoth Indian
market. As social values change from each period so did Coca-Cola’s ad
themes.

Coke's ads, have had more of a broad family appeal and are more
emotionally heartwarming. Coca cola has been using celebrity
endorsements, particularly the top Hindi movie stars and cricketers. As
brand ambassadors their well-known faces are splashed on billboards,
newspaper pages and TV screens. In a bid to win over India's 150 million
fizzy drink fans, Coca-Cola hired Bollywood's sensation, the rippling
Aamir khan to front a new advertising campaign. Breaking with Coke
tradition, the campaign equates Coke with "thanda," the Hindi word for

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"cold," a generic term for soft drink and has "built an emotional connect
with the Indian consumer,"

Brand Leveraging

Coca Cola has used its brand name strength to launch Kinley mineral
water, Kinley soda and shock energy drink.

Brand leveraging communicates valuable product information to

consumers about new products. Consumers enter retail outlets equipped
with pre-existing knowledge of a brand’s level of quality and consistently
relate this knowledge to new products carrying the familiar brand. Brand
leveraging is an important form of new product introduction because it
provides consumers with a sense of familiarity by carrying positive
brand characteristics and attitudes into a new product category. Instant
recognition of the brand is established, and consumers with a
favorable brand opinion likely will try a new product they perceive to
have a similar quality level and attributes as their original favorite.
Additionally, because the products are in different categories, they will
not compete for market share – the crux of a successful branding
strategy.

Brand Extension

The benefits of brand extension are the leveraging of existing brand

awareness thus reducing advertising expenditure and lower risk from
the prospective of the consumer.
The best example of brand extension has been the launch of Diet Coke.
Diet coke is drink for calorie conscious cola drinkers.

The above alternatives in the hands of the company

have not been good enough to enhance sales owing to
defensive promotional policies.

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STRATEGIC Choices
Strategies and evaluation..

1. Sponsoring Local Events – Coca Cola India has to understood

the importance of the local events from the very beginning. They
must sponsor more local events to be able to gain some mileage.
That are usually attended by the young generation.
2. Integrating Efforts with Important Festivals – In a country
like India with various cultures and traditions, Coca Cola must
integrate its marketing with all the major festivals of the country.
3. Cross Cultural and Regional Advertising – Relating to regions,
cross cultural participation would help immensely to the corporate
image buildup of Coca Cola. For example, Hrithik Roshan dancing
with Rajasthani folk dancers in desert & other similar ads makes
the rural population relate themselves to the brand.
4. Sponsoring Cricket / Sports Events – Sponsoring of major
cricket tournaments and events even at state level would help in
corporate image building. A soft drink made official drink of any
event means only that particular drink is served / available for
consumption during the whole event.
5. Focus on the consumption of the big packs – While the
emphasis till now has been on “outdoor consumption”, the
Company has now shifted its focus on the family packs of 1.5 and
2 litres and may consider 5 litre packs for parties /office etc.
6. Outdoor Buying – Effective sales channel may make contribution
up to 80% of the total sales for the company. Because of the
impulsive nature of buying of consumers, the company’s strategy
can be extended to make their product available to all the retail
stores etc and develop more sales channels.
7. Home Delivery - Coke can introduce ‘dial a coke’ schemes
wherein customers can order bulk quantities over the phone from
the local distributor.
8. Other tie ups - Coke can also tie up with tourist bus operators
plying on high traffic routes, to serve Coke on their long distance
routes etc.

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 Policy formation & Action plan

Must enhance their brand goodwill by countering the allegations

relating to quality issues before pumping more investment in India.

Coke can look forward to offering "a total beverages solution" that
would include not only carbonated drinks but also "juices and health-
based products".

Considering 30 % of the company’s sales come from the rural market

and still has the growth potential, Coke must strengthen its rural
penetration further and its regional distributorship to access the
largely untapped rural market.

The Company should continue with its approach of promoting family

packs or even large capacity bottles (e.g 5 liter). This is in line with
their long term strategy of expanding the market by increasing the per
capita consumption of soft drink.

Tie –up with petrol pumps located on high traffic routes such as the
national highways may fetch higher demand.

Another sales channel that has so far been untapped by any soft drink
company in the country is general places where people wait /
concentration of people. Automatic machines without manual
support must be introduced in at least high end market place /
malls on trial basis. This includes big garment showrooms, jewellery
shops, beauty parlors or ATM / banks. The common trend in all these is
that people spend a long time on choosing the product or service to
avail.

Coca Cola will have to readjust its promotional policies not only with
its dealer’s network but with frontline retailers who would actually
promote its products at a given time.

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