Coca Cola & its Diminishing Market Share in India: Failure of Marketing Strategies
It is a well known fact that Coca Cola is one of the most valuable brands in the world, its presence all over the planet and popular products appealing to all members in a society are the reasons behind the same. In India the company isn’t doing that well, latest reports indicate towards the fact that the company has closed down three of its major plants in the country. Company top brasses have indicated that this was done taking into consideration market viability and diminishing demand for its products in the near future (Economic Times, 11th February 2016). A question arises here that how can such a big company rapidly lose market share in one of the most attractive and biggest market across the world? Ferrell & Hartline 2012 indicate towards the fact that organizations big or small need to evaluate the effectiveness of their marketing strategies time and again, failure to do can effect even the most established brands in an adverse manner.
(http://economictimes.indiatimes.com/industry/cons-products/food/coca-cola-suspends-manufacturing-at-3-plants-in-india/articleshow/50941342.cms, bad times for coca cola in India)
Marketing Strategy of Coke in India
As a part of its marketing strategy in India, coca-cola has targeted a large segment within the market whereby they target people from all age groups. Also over the last few years the company has focused on tapping the rural market within the country (Ambwani 2010). The company has been using celebrity endorsements as a promotions strategy because of the fact that celebrities in India have a huge fan following (IIMB management review 2014). However on the other hand as a result of not diversifying its product range the company has lost market share to Pepsi (which apart from beverages manufactures snacks like lays chips etc.) As a part of its positioning strategy the company has positioned itself as a brand manufacturing aerated soft drinks providing happiness to people (Marketing 91 2015).
(Coca Cola Sharing Happiness)
(Coca Cola for one and all)
All in all it can be said here that the company has got all the ticks in the right boxes when it comes to marketing their products, right from using celebrity endorsements to entering the vast rural market in India the company is moving in the right direction. However where have they gone wrong from a marketing point of view as a result of which the company is losing market share rapidly?
(https://www.youtube.com/watch?v=UkeiIxP__XU Coca Cola ad featuring Deepika Padukone & Farhan Akhtar)
Evaluating Marketing Strategies of Coke in India
On the basis of above facts it can be said here that one of the reasons coca-cola is losing market share is because of the fact that it is catering for needs of a vast target segment. Wedell & Kamakura 2012 mention the fact that organizations which cater for a small segment have the advantage in terms of providing customized products and services to their customers, the same becomes difficult for companies catering for needs of large target segment. From a marketing evaluation point of view it can be said here that the company has invested huge by targeting a large segment, however the return on investment for the same is not coming. Long & Robinson 2004 mention the fact that companies face a risk when catering for the needs of a large segment, on one hand for doing so they spend big and on the other hand chances of returns not coming back are always there. This could also be because of the fact that in recent decades people in India have become more health Conscious (Khattar 2015), Coca Cola coming in the fizzy drinks category does not fit the bill
(http://www.franchiseindia.com/restaurant/30-35-per-cent-people-are-health-conscious–Mohit-Khattar.6304, People becoming more health conscious in India)
Another report mentions the fact that Coke has been losing market share to Pepsi and other local rivals since 2015; despite growing number of sales the company is not able to convert the same into profits (Economic Times 2016). If we evaluate the marketing strategy of coca cola, on the basis of above mentioned fact it can be said that on one hand the company is investing huge in its advertising campaign by hiring top celebrities, however the same isn’t resulting in profits.
Ferrell, O, Hartline, M 2012, Marketing Strategy, Sixth Edition, Cencage learning, USA
Economic Times 2016, ‘Coca Cola suspends manufacturing at 3 plants in India’, Economic Times India, Retrieved 15th May 2016, <http://articles.economictimes.indiatimes.com/2016-02-11/news/70539834_1_plant-manufacturing-cola-beverages-pvt-ltd>
Ambwani, M 2014, ‘Cokes New Mantra: Made in India for India”, Hindu Business Line, Retrieved 15th May 2016, <http://www.thehindubusinessline.com/companies/cokes-new-mantra-made-in-india-for-india/article5664891.ece>
Wedell, M, Kamakura, W 2012, Market Segmentation: Conceptual & Methodological Foundations, Second edition, Springer Science and Business Media, New York
Hitesh Bhasin 2015, SWOT Analysis of Coca Cola, Marketing 91, retrieved 15th May 2016, <http://www.marketing91.com/swot-coca-cola/>
Gupta, S 2014, ‘Image advertising: The advertising strategies of Coca Cola & Pepsi in India’, IIM Bangalore management review
Economic Times 2016, ‘Coca-Cola quarterly sales falls 4%’, Economic Times India, Retrieved 16th May 2016, <http://economictimes.indiatimes.com/news/international/business/coca-cola-quarterly-sales-fall-4-per-cent/articleshow/51909872.cms>
Khattar, M 2015, ’30-35 People are Health Conscious’, Franchise India, Retrieved 16th May 2016, <http://www.franchiseindia.com/restaurant/30-35-per-cent-people-are-health-conscious–Mohit-Khattar.6304>
Long, P, Robinson, M 2004, Festivals & Tourism: Marketing management and evaluation, Pennsylvania State University Publication, USA
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