Coke takes nuanced approach in India

26 January 2010

NEW DELHI: Coca-Cola, the soft drinks giant, is taking a targeted approach to reaching rural consumers in India, where it also plans to make continuing use of celebrity endorsements.

Ricardo Fort, vp, marketing of Coca-Cola's local arm, argued "India is a more complex market than others. All our brands cover a lot of ground, but we need to do what the consumer wants."

Its strategy to date has included entering different categories, such as with the launch of Burn, the energy drink, which is aimed at affluent young men, rather than the mass market.

By contrast, Thums Up, which the US company acquired in 1993 not long after re-entering the Asian nation, is the biggest brand in the domestic cola segment, well ahead of its trademark offering.

According to Fort, these products serve different purposes, thus allowing the Atlanta-based firm to grow both brands simultaneously, rather than cannibalising one with the other.

“Thums Up is a macho brand whereas brand Coke conveys optimism. Over the next couple of months, we are going to be pretty anchored on the idea of optimism, this is the core value of brand Coke," he said.

"We will be consistently reminding the consumer about it. We believe our tagline 'Open Happiness' captures this best," he added.

Alongside these efforts, Coca-Cola will continue to promote Thums Up, for which it recently shot a new TV spot, featuring the actor Akshay Kumar, that cost an estimated $1 million (€797m; £620m).

Shoppers living in less developed areas are another key audience for the owner of Sprite and Fanta, as it seeks to drive growth across the country as a whole.
"We are not going to be what we want to be if we don't take the rural consumer seriously," Fort suggested.

"Presence, expanding distribution footprint, operational requirements like equipment, coolers and electricity, how to keep the products affordable, all are key."

Among the initiatives it has implemented in order to achieve this goal are building coolers able to operate without electricity, and adopting a nuanced approach when it comes to marketing.

"Communicating to the rural consumer is equally relevant," Fort said. "And it's not just communication for the sake of it, but communication that can be understood by the consumer."

"This includes local print, radio, outdoor. But the best communication tool for rural consumers is the product itself."

Celebrity endorsements have also proved to be particularly effective in India, especially when compared with other emerging economies like Brazil.

"In Brazil, we use celebrities to a small extent. But in this market, cricket and Bollywood really work. The strategy of using celebrities is not going to change because it's working well," Fort argued.

Data sourced from Economic Times; additional content by Warc staff