Tuesday, September 18, 2007

A change of face

Coca-Cola’s run in India can well be equated with that of the ever-so famous obstacle race. Having been ousted from the country in the Seventies, it made a ‘comeback’ in 1993 with a vengeance, when it went on a buying spree, taking over the country’s most popular aerated drinks brands Thums Up, Limca and Gold Spot, to emerge as the single largest beverage player in the Indian market. Although it was not smooth sailing after that, things really turne d sour with the entire pesticide issue cropping up in 2002 and 2005, tainting the image of the global heritage company.

Since then, Coca-Cola India has gone into overdrive trying to undo the damage, and recently, launched a re-branding and repositioning exercise for the Indian market. Prasoon Joshi, Executive Chairman and Regional Creative Director, South and South East Asia, McCann-Erickson, Coca-Cola ad agency, says, “It is an umbrella campaign that features all the brands, a goodwill exercise to remind people what Coca-Cola is all about. The campaign’s tagline - boond boond khushi khushi, or ‘Little Drops of Joy’ - reaffirms what Coca-Cola in India stands for, which is being part of little moments of joy in the daily lives of consumers. The communication reminds us that the best things in life can only be experienced. For instance, a sip of the drink is a moment of truth, a second of satisfaction, an instant of happiness and a bubble of hope. What is very real about the entire campaign is that it goes hand in hand with the company’s philosophy – we don’t claim to transform lives but simply envelop one moment with joy,” says Joshi. For a company that has always been an aggressive advertiser, it is the first time that it has undertaken a campaign that does not brand just one individual product but acquaints people with the entire portfolio that the company has on offer. “We are not promising to change the world, but to add just a little drop of joy,” says Venkatesh Kini, Vice-President (Marketing), Coca-Cola India.

Coca-Cola’s advertising strategy, right from the time it re-entered the country, has been that of establishing the brand through socially relevant messages. Explains Joshi, “Advertising always in some way or the other reflects the social issues of the time. One has to understand what the need of a product like Coca-Cola was at the point of time when a campaign was being conceived. When we made the ‘Thanda matlab Coca-Cola’ ads our idea was to drive into the heartland of India, as the company realised the need to establish contact with the masses. Then we had the ‘Thande ka tadka’ campaign where film stars like Aishwarya Rai and Aamir Khan gave out socially relevant messages ab out eve-teasing and the treatment meted out to foreigners in India. With the current campaign, the people in the company thought it was time for people to know the company as a whole and realise the iconic brands that it has created.”


Also, as part of its re-positioning strategy, Coca-Cola revealed its five-pillar growth strategy, that of people, planet, portfolio, partners and performance.

“Each of these is a drop of a larger vision aimed at mutual growth and development. Over the last few years we have continuously engaged with a large number of stakeholders and incorporated the learnings in refining our strategy for India. The integrated communication platform is a tribute to their valuable inputs and truly depicts what the company has always stood for,” said Atul Singh, President and CEO, Coca-Cola India.

Coca-Cola, as part of its focus on the country, intends to set up a university that will help people learn to enhance business performance, set up an equipment testing facility in Hyderabad to test coolers from India and the Asia-Pacific region and provide global services such as engineering, finance, marketing and technical R&D.

The beverages giant plans to set up a retail university to provide Indian retailers with the right techniques, tools and knowledge to operate in the new retail environment. As part of its plans, the company aims to provide drinking water solutions to 1,000 schools by 2010, commission a study on ten watersheds by 2009 and implement interventions accordingly.


The initiatives don’t end here. In fact, one of its major activities in India would be to enhance its product portfolio.

As an industry expert who did not wish to be identified said, “Coca-Cola realises that to retain its leadership position in India and to keep away its competitors from capturing its position, it has to do better than what it was doing so far. Now that it has established its name in the market well enough, it has to focus on expanding its portfolio, which would also mean stepping out of the ‘aerated beverage brand’ tag that it so far carried, more so because of the huge wave of health and wellness that has engulfed the entire country. People are turning towards healthier, low-fat options, and Coca-Cola has to follow.”

Actually, the company has already started the process of breaking away from the ‘fizzy drink’ image with the launch of its juice, Minute Maid.

According to Atul Singh, “We are looking at expanding our current portfolio. We want to be seen as a total beverages brand. So we are testing options and our future launches can be in any format that is non-alcoholic and ready-to-drink suitable to Indian tastes. We will, however, continue to invest in sparkling beverages.”

Product expansion

Says Kini, “We are actively looking at expanding our product portfolio in India through a three-pronged approach. The expansion could be through variant addition, launching brands from our global portfolio and foraying into new territories. It could be from a wide variety of beverages such as energy drinks, sports drinks, flavoured water and juices, with most of them being developed in India.”

The company is testing a foray into dairy-based products as well as introducing in India energy drink major Glaceau’s brands that it recently acquired for $ 4.1 billion.

Coca-Cola, which has invested around $1.2 billion in its Indian operations so far, plans to invest an additional $250 million over the next three years. The money will be used to create bottling capacities for new products, execute marketing strategies and devise distribution models to meet consumer demand and also to ensure value creation for all its partners.

Coca-Cola India witnessed a 12 per cent increase in unit case volume in the second quarter of 2007, and aims at achieving a better growth rate through its several initiatives in India.

Whatever be its fate, what is clearly visible is that the domestic beverages market is hotting up more than ever, with players both big and small gearing up to rough it out, and consumers emerging as the clear winners, almost spoilt for choice.

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