Coca Cola India as One of the Better-Known Success Stories Where the Marketing Story Is Concerned - Case Study Example

Marketing Marketing can be understood to be a social process by virtue of which individuals and groups attain the things that they require or want. This is done through the creation and exchange of products and values with others. (Kotler, 2002) Marketing can be understood to be the analysis, planning, implementation, and control of carefully formulated programs designed to bring about voluntary exchanges of values with target markets for achieving organizational objectives. The process is heavily reliant on designing the organization’s offering in terms of the target markets’ needs and desires, and on using effective pricing, communication, and distribution to inform, motivate, and service the markets.   Brand Management Brand management is the best way to create loyal customers who become brand marketers voluntarily later and without cost, the customers stick to a brand because of trust and expectation that they have from the brand (Upshaw, 1995). They know what the brand offers and most people like to stick to what they know. The unique and the differentiating factors of the website thus need to be highlighted. The name, the logo should be identifiable and clearly distinguishable from the crowd. This would mean that the idea of a vacation experience for every need would be the underlying feature of the campaign. What this would do is that it would be in keeping with the broad nature of the market segment that has been targeted. Along with this the facilities and the value added products that come along with the chain must be put in focus. Coca-Cola: Core Competencies   Coca Cola India is the wholly owned subsidiary of Coca Cola Co, USA. The company launched in India in 1993 on the back of liberalization efforts made by the government of India, which allowed in one go the presence of many multi national companies in sectors such as food and beverages. The company has over the past decade and half established a vice like grip on the Indian beverages market. As of 2009, the company controls almost 55 per cent of the Indian market. A big factor that has aided the controls of the market by the cola giant has been the acquisition of local drink Thums Up which is also the market leader in terms of carbonated drinks in India. Also are visible over the years, the efforts made by Coca-Cola India to move away from its image of a producer of carbonated drinks in favour of a producer of non alcoholic beverages. This stance is clear on the thrust that the company has placed on brands such as Kinley (mineral water) and Georgia (tea and coffee). A semi-farcical tussle in which Coke bottlers hoarded empty Pepsi bottles gave the company a black eye until the dispute was resolved last November. And Coke India has been hurt by a revolving door in the executive suite. In 10 years, it has had five expatriate heads. Pepsi, by contrast, last year appointed its third Indian chief executive in 14 years. The result: In 2000, Coke wrote down the value of its Indian bottling assets by $405 million. It has suffered losses in India for years--although its execs won't reveal financial details. Value Chain, Resource Analysis   In the country, the company is following a strategy of low capital investment game. Its vision for the future is on repositioning and repackaging to reinforce affordability for the price conscious population. This is a reflection of the company’s aim to increase per capita consumption of soft drinks in rural communities which would also aid the company in capturing a larger share in the urban areas while increasing the frequency of consumption. It is this very objective of the company that finds reflection in the marketing strategy that has been adopted by it over the years. In explaining the idea of the objective behind the formulation of the marketing strategy, Sanjiv Gupta, deputy president Coca Cola India in May, 2002, had stated that Coca Cola wanted to be the Hindustan Lever of the Indian beverage business. For Coca Cola, some of the better known suppliers include IBM, Ogilvy, and Jones LaSalle among others. These provide the company with things such as material as well as technological inputs. The logistical outline of the value chain in India is inclusive of the urban and the rural value chains. For Coca-Cola India, the market division could be understood in terms of the following break up: 1. Infrastructure: Coca Cola has over a million employees and over 10, 000 vehicles that operate in the country. It has a production capacity of over 25 million bottles in a day, with a continuous bottle production growth of over 3.2 per cent. 2. Packaging: Coca cola products are available in different packing 24 regular bottle shell 6 bottle pack for 1.5 pets 12 bottles in a pack for disposable bottle 24 cans in one pack 3. Human Resource Management: In the country Coke has over a million employees that work for it, most of them are local nationals with competencies suited to match the demands of the market, increasingly, true to its nature of being a multinational company, Coke was able to reduce expatriates in its management and bring more and more Indians into its over scheme of management 4. Technology Development: For Coca-Cola much of the technological innovation and focus has been on ensuring first that the quality of product is not compromised, given especially controversies such as the pesticide controversy. Technology and its used has also been used in the management of the production process to aid value addition and cost reduction in the process of production. 5. Production- Coca-Cola India produced its beverages with over a million local employees at its twenty-seven wholly-owned bottling operations supplemented by seventeen franchisee-owned bottling operations and a network of twenty-nine contract-packers to manufacture a range of products for the company. 6. Target-Rural India-Breaking to this market required innovative thinking and a new strategy. Rural India meant reaching 6,27,000 square Km; it meant getting distributors to travel 200 kms to reach five shops with drop sizes of than a case. Coca-Cola India doubled the number of outlets in rural areas from 80,000 in 2001 to 160,000 in 2003, which increased market penetration from 13 per cent to 25 per cent. 7. Pricing and Procurement-It brought down the average price of its products from Rs 10 to Rs 5, thereby bridging the gap between soft drinks and other local options like tea, butter milk or lemon water  One of the most intrinsic process related to the marketing aspect of Coca Cola has been the extensive use of two of the most followed entities in the Indian celebrity space. It has over the years signed some of the biggest endorsement deals with some of the biggest stars on the Indian cricket and Bollywood scene. Some of the better known names are inclusive of people such as Sourav Ganguly, Aamir Khan, Akshay Kumar, Priyanka Chopra, among many others. One of the most notable efforts that have been made by Coca Cola has been the result of the output between past generations and generation next. Liberalizing from the insipid nostalgia of ‘share my dream,’ ion 1993, Coca-Cola was tuned to the invigorated teen speak of Peetikya Coca-Cola andPyarr mohabbat Coca Cola. Finally realizing that more than a third of the Indian population is under the age of 18, Coca Cola started talking about the youth and its passions. One of the most remembered marketing campaigns to have ever been launched by Coca-Cola was the “Eat Cricket, Sleep Cricket, Drink only Coca-Cola”. Porter’s Five force analysis: The five force analysis in the context of this case stands to point to the fact that there was a need for the slow but sure integration of the global plans with the local demands of the market. it is here that the idea of the acquisition of Thumps up played the part of the trump card for Coke given that the acquisition gave Coke, the authority over the local market. Consumer behavior is an investigation into the behavior patterns defining persons, factions, or associations and the procedures that are used by them in a bid to select, protect, utilize, and dispose of products, and services so that they are able to work toward the satisfaction of their requirements and the effect of these endeavors show on the customer and the society. The idea essentially therefore remains that an investigation into behaviors and buying patterns would be able to help researchers directly and companies indirectly in understanding target audiences, thereby fulfilling requirements better, and working toward the expansion of their consumer base. Coca-Cola in India has several brands under its umbrella name. What happens then more often than not is that each of its brands find individual marketing. The consumer does not even know that he or she is buying a Coke product many times. These brands are inclusive of Coca-cola, Sprite, Fanta, Diet coke, Limca, Maaza, Thums up. With the inclusion of the multiple brands under the Coca Cola portfolio, there has also been a diversification in terms of the strategy that is utilized in the management and the marketing of these brands. Individuals with diverse product needs have heterogeneous needs. Market segmentation is the process of dividing a total market into market groups consisting of people who have relatively similar product needs, there are clusters of needs. The purpose is to design a market segmentation scheme that would be matching to and representative of the requirements of the people or a given set of individuals/ communities in a given market segment. It can therefore be defined as a ‘state of demand heterogeneity such that the total market demand could be disaggregated into segments with distinct market functions. In the Coca Cola case, one of the primary things that is needed for one to understand the nature of the success story is to figure out the 4Ps of marketing as have been employed by Coca-Cola over the past 15 years. Product: This is an area of Coca Cola expertise. They have introduced new products crossing segments at various stages of their growth to suit the needs of various palettes. This has reached the crescendo at present when the company has over 10 brands to its name, all of which are doing well in their respective segments. The reason behind this coup is simply the fact that Coca Cola has been able top identify the pulse of the market regarding the demand for label and type of product and has been able to cater to this demand. Price: Prices have always been competitive. The idea has been in essence to ensure that most of the company’s products are priced at costs that are comparable to those of its nearest competitor, Pepsico. The underlying philosophy behind cost management has been to ensure that the company is able to effectively achieve a stable balance between sales and covering the production costs. Promotion: for the purpose of promotion, Coca Cola has focused on the potent mix of identifying brand ambassadors with mass appeal and mixing their charm with campaigns that are designed to aim at the pulse of the basic buyer. The idea has been to leave neither the top nor the bottom-line out of the reckoning where the management of cost is concerned. The top-lines have been managed through engaging campaigns and celebrity endorsements on TV and in print, the bottom lines have been managed through effective public relations management and the adoption of a strong billboard strategy. There are also the elements of strong market segmentation here. Place: the strength of the Coca Cola by way of selling the place has been the distribution channel it uses, which eliminates much of the middlemen. The best thing about the Coca Cola distribution channel is the fact that there is scope for the availability of the product from the poshest of multiplexes to the remotest of locations. It is the ubiquity of this very locational advantage that allowed the company to become the beverage giant that it has now become. Future Strategies The advertisement series in question ran on the tagline which keeps in mind, first the fact that carbonated drinks and beverages in India are called “thanda” more than by the name of the brand of cold drink wanted and second, it was a reiteration of the strategy of creation and nursing of the rural market, which in the Coca-Cola scheme of things was lated a priority space for the development of the product. 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. This decision was not surprising, given the huge size of the untapped 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. The campaign was also the beginning of the turnaround for Coca Cola India, which had for years suffered immense losses to competitor Pepsico. Coke decided to fight Pepsi in anyways says a market watcher. The Thums Up thunder series was a clear signal to the men in blue that Coca-Cola was no longer the goody goody MNC in the Indian context, but was ready to be a street fighter. Both Coke and Pepsi have featured some of the most popular cine stars or crickets in their life style advertisements. One of the most remembered campaigns that have been the hallmark of the Coca-Cola strategy of targeting the target consumer keeping in mind the consumer behavior, needs and pattern of demand. In the context of future strategies aimed at increasing competencies, the idea would be for Coke to ensure that there is an increasing use of the similar mix of using Bollywood and Cricket power. The idea for Coke should also be for the company to try and change its image from an MNC to an Indian company. Tie-ups with food chains and endorsements during Big sporting events should continue as well. Facing a challenge from Pepsi’s ‘Youngistan Ka Wow’ campaign Coke should also orient its campaign to the youth more and more. Conclusion In conclusion therefore one could reiterate the fact that Coca Cola India is one of the better known success stories where the marketing story is concerned. The sum and substance of this success comes from the fact that the company has been able to identify target markets and segment them in the overall execution of its marketing plan. Reference: Cooper P D, Health care marketing: a foundation for managed quality, pub, Jones and Bartlett Publishers, 1994 Jeannet, J. P., and Hennessey, D. H., (2005). Global Marketing Strategies (6Th Ed.). Dreamtech Press. p289 Majumdar, D., (2008). Product Management In India 3Rd Ed. PHI Learning Pvt. Ltd. pp231-235 Coca Cola India's Thirst for the Rural Market. retrieved January 15, 2011. < http://www.icmrindia.org/casestudies/catalogue/Marketing/Coca%20Cola%20India%20Thirst-Marketing.htm> Stávková, J., Stejskal, L., and Toufarová, Z., (2008). ‘Factors influencing consumer behaviour’. Agric. Econ. – Czech. 54(6). Pp276-284  Kotler P, Pfoertsch W and Michi I, 2006, B2B Brand Management, pub, Springer Books, pp106-120  Silk, A, 2006, What is marketing?, published, Boston, Harvard Business Press  Finally, Coke Gets It Right in India. Retrieved January 14, 2011.   Read More