Coca-Cola is exporting its affordability strategy from India to other Asian countries like China, Indonesia, The Philippines and Thailand.
With expert advice from India, Coca-Cola is set to introduce its products at lower points in these markets. The communication will also be inspired by the Aamir Khan campaign devised by McKann Ericsson, which drove home the affordability factor.
“I keep getting requests to send people on short-term assignments to Asia. In China, Coca-Cola has come out with a pack for one renminbi, which is equivalent to our Rs 5 pack here,” Coca-Cola India president & chief executive officer Sanjiv Gupta said.
Coca-Cola’s India sales picked up dramatically in 2002 when it introduced its Rs 5 packs.
The same year, Coca-Cola India bagged the Woodruff award (named after Robert W Woodruff, one of Coca-Cola’s most influential and long-serving chairman who led the company for over 50 years) for outperforming the dozen-odd emerging markets of Coca-Cola worldwide in terms of volume growth as well as profitability during the year.
Gupta has played host to a series of Coca-Cola bottlers from rural China in the recent past. He has also sent his managers to China to help Coca-Cola get its pricing strategy right there.
“I have sent some general managers there. There are four-five of them working there in different parts for two-three months each,” he said.
According to Gupta, the Indian arm of Coca-Cola has also become the creative hub for other countries like rural China, Indonesia and The Philippines.
In fact, McKann Ericsson’s Prasoon Joshi has made television advertisements for the Indonesian market using the affordability theme. The region, known as the two billion cluster in Coke-speak, is switching to the successful Indian high volume, low margin model to increase penetration.
It is worth noting that Gupta’s predecessor, Bangalore-born Alex von Behr, is in charge of Coca-Cola’s operations in The Philippines. He is said to be trying hard to replicate the Indian model there.
The affordability strategy, according to Gupta, has not only improved the company’s penetration in the country but has also resulted in a better utilisation of its production capacities — up from 67 per cent in 2001 to 86 per cent at present.