Do you think all western nations were grossly mistaken about their perception of the Indian market?The Indian "middle class" has caused many companies to misjudge the potential of the market. However, undoubtedly, there is still a huge market for soft drinks. We now understand that there are 150 million consumers who had one carbonated soft drink in the last 30 days. Our strategy is to focus on this 150 million people who and to convince them to drink not once a month but once every three weeks to once every week to once every day to once every meal occasion.
You seem not to connect with the Indian consumer yet? What's the problem and what are you doing to address it?
I believe that you will see that all of our brands are positioned appropriately towards the Indian consumer. Our advertising is targetted to convince them to purchase our brand more and more often. Our Thums Up campaign has been a solid hit. You have also seen that we are making a "real" connection with cricket and we will
continue a close alliance with cricket 1998 will be a solid marketing year for the Coca Cola Company and all our important brands.
What is the strategy for the company in the fiercely competitive Indian market?
In most developed countries in the world, we now approach the markets according to what we describe as a 3 Ps strategy, i.e., - persuasive availability, preferred brands and price to value brand. This is a recently adopted strategy in comparison to the strategy of our business for the last 30 years where we dealt with more the 3 As - availability, affordability and acceptability. To simply put, we must double our outlet base. From the affordability standpoint, our products are today priced nationally at Rs 8.This price in my mind is much too expensive for the Indian market and for the 150 million consumers. Our goal is to get the price to the price point of Rs 5. The issue that we face now is that we pay excessive excise of 40 per cent as well as state taxes the range from 12 to 22 per cent
as well as octroi taxes. Those combined make it very difficult to lower the retail prices of our products. Another strategy is to make our brands more acceptable. We have some wonderful brands like Thums Up, Limca, etc. These national brands are extremely important to our portfolio. At the same time, we inherited the bottling system where some bottlers are very keen to invest and grow their market and other bottlers are not interested in that.
The only news one sees about Coke is its fight with the bottlers. When is that going to end?
Candidly, I think that the "fighting" scene on bottlers is generally being quoted by "one or two bottlers who are vocal" about their concerns. Generally, this is due to the fact that those bottlers are not performing in the market place. We are a performance-based company and I will not deny that we have high expectations of ourselves as well as our franchisees. At the same time, there are number of our bottlers who are growing their business, who are working
aggressively to invest and we want to work with those bottlers to ensure that we do the right thing.
For Coca Cola India, Coke will obviously remain the first choice. But then, what happens to brands like Thums Up, Limca and Maaza? Where do they stand?
In 1997, we should have spent more marketing dollars on Thums Up than on Coca Cola and that should stand as a critical message to anyone who has any doubts of our intentions of Thums Up, Limca and Maaza. Thums Up is probably the fastest growing soft drink in India today and we will continue to market Thums Up and grow it aggressively as possible Limca is one unique beverage that has virtually no competitor. Likewise, we have a new campaign for Limca that will be unveiled in January and Limca will see explosive growth in 1998. And likewise, Maaza and Citra are imported brands and in the markets where they are important, you will continue to see us market these aggressively.
I understand that distribution is still low for many soft drinks
companies. When will that be a priority?
We will grow our outlet base by 100,000 outlets next year to 600,00 outlets and we will not stop growing that base until we are truly "within arm's reach of desire". This is a famous line and that was coined by Mr Robert Wodruff, our previous chairman and is now adopted by many companies the world over.
Pricing is very important in the Indian market but your product is definitely on the expensive side.
Absolutely. Its too expensive. It is our intent to, as we are able to work with the government, hopefully to have the excise reduced. We will pass on all those savings back to the consumer with the reduced retail prices. Our goal is to have the price of the soft drinks consumed by the Indian consumer to be Rs 5.
Your ultimate dream for the Coca Cola company in India.
When a consumer is thirsty, they will look no further than their's arms reach to find one of the brands of the Coca Cola Company which will be priced at an affordable five rupees.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
