The Coca-Cola University: Parivartan

FMCG companies in India are all looking towards increasing their penetration into rural markets. Coke, the world's largest non-alcoholic beverage company is looking at semi-urban and rural markets as its future growth paths.



The 'Parivartan' program- targeting retailers

Coke's new strategy involves training retailers in a program launched by the Coca-Cola University. In 2007, the company launched Coca-Cola University — a virtual, global university for all learning and capability-building activities.

The company calls this the "parivartan" program (meaning "Change" in English). Shop owners (traditional retailers) are given training on displaying and stocking products well. The goal of the innovative training program is to provide traditional Indian retailers with the skills, tools and techniques required to succeed in a constantly changing retail scenario.

Presentations (including audio/visual technology) in local Hindi language help small retailers (with stores less than 200 square feet in average size) to better understand the concepts involved. Each retailer also receives a Coca-Cola "Certified Retailer" certificate at the conclusion of the program.

The program, which debuted on Dec. 18 in Agra, will equip "mom-and-pop" shop owners with the skills, tools and techniques required to succeed in India's evolving retail landscape. All invited retailers attended the session, which allowed them to learn in a formal setting using leading-edge audio/visual technology and engaging presentations conducted in the local Hindi language.

Here are some of them: print a visiting card with your telephone number; around 80% of your business comes from 20% of your products, so build up visibility for these; try and display posters of discounts; organise a home delivery facilty; be courteous to your customers-SundayET. The content is structured around the four pillars of retail—customer, shop, stock and finance.

And this seems to be just the tip of the iceberg. The programme has covered 20,000 retailers in North India so far. “Based on their feedback we are developing ‘Advanced Parivartan’ that will cover issues like shop layout and location, display, basics of finance, knowledge of credit card transactions, people management skills, among others.

For Coca-Cola it’s a big pie. There are around 12 million retailers in the country, out of which kirana stores account for over 90% of the Rs 7,40,000-cr retail business in India. But a company official maintained that these retailers would not be pushed to stock Coca-Cola products through this programme. Some of these retailers don't even stock soft drinks.

The idea was supposedly born out of a meeting at the World Economic Forum in Davos around two years ago when Coke’s global chief met the commerce minister of India and suggested running the programme in India. Also, as a token of goodwill gesture, an accidental death insurance of Rs 1 lakh is being provided free of cost to all the attending retailers as a protection against any eventualities.

In bigger cities the company has conducted Parivartan programme in classrooms or by hiring hotels. The classroom Parivartan programme has been organised across cities in UP and Punjab -Agra, Ludhiana, Chandigarh, Amritsar, Gorakhpur, Lucknow, Bareilly, Haldwani, Bilaspur, Kolkata, Faizabad, and Rajamundry.

The ‘Coca-Cola University on Wheels’ has also covered small towns such as Hoshiarpur, Mukeria, Nakodar, Phagwara, Nawanshahar, Malerkotla, Barnala, Khanna, Moga, Jalandhar, among others. Going forward in the future, Coca-Cola’s plan is to scale up this initiative by taking it across India.

http://article.wn.com/view/2009/05/03/CocaCola_India_launches_CocaCola_University_on_Wheels/

http://economictimes.indiatimes.com/Features/The-Sunday-ET/Coca-Cola-India-launches-Coca-Cola-University-on-Wheels/articleshow/4477620.cms

http://www.casestudyinc.com/Articles/Coke-Strategy-Training-Retailers.html

http://www.thecoca-colacompany.com/citizenship/news_india_retailers.html

Pepsi's Biscuit Challenge: 50-50?

Parle, Britannia, ITC and now Pepsi. Pepsi foods is seriously contemplating its entry into the 6000 crore plus organized biscuit market. Taste tests are on in various urban markets across India.

They are still yet to come up with an official brand name for their new portfolio. It would be interesting to note if they would follow either a Parle/Britannia strategy or an ITC strategy. ITC typically follows a branding strategy under the umbrella name "Sunfeast". With multiple sub-brands created under this banner. This has been logical for ITC due to its late arrival into this category. A common brand name across its portfolio would ensure better recall among the consumers.

Parle/Britannia have multiple brands that are well established, e.g GoodDay, Tiger, Milk bikis, Monaco, 50-50, Krackjack, Hide&Seek etc. Glucose biscuits have always been a price game with little money being made by each of the 3 existing players. A price increase of even a rupee will involve significant risk with respect to the response that would ensue from the consumers. Hence these 3 companies have been constantly tinkering with their weight/grammage during the period when input costs have risen.

Pepsi would mostly enter first into the salted biscuits category as per their information given to the Financial Chronicle. There are strong household names like 50-50, Krackjack and Monaco in this sub-category. Even ITC is trying to eat into this pie with their Snacky label. Innovation with salted biscuits have included products like Salt & Sweet, Salt & Chilli Cracker, Maska Chaska etc.

Pepsi food's products, locally distributed by Frito Lays include namkeems and finger snacks. Their foray into the biscuits market would be their first across the world, in the various markets that they operate in.

Pespi is already against ParleAgro (separate entity) in the beverages market and head-on-head with ITC in their snacks category (Lays Vs. Bingo) The biscuit market is estimated to register a 10% growth every year.

Pepsi has a well established distribution system in India, made robust by being in the complex bottling business, but whether it would invest huge amounts into establishing their biscuit brand remains to be seen. The other 3 companies are all currently heavily focused on increasing their market size in India. Hence taking them on would not be a easy feat.

We will have to wait and see what kind of response it would get from Organized Retailers, who all have their private labels like Tasty Treats, Feasters etc. But like ITC leveraging on its other brands, Pepsi could very well give its biscuit business a push by leveraging on its very well established beverage portfolio.

PepsiCo’s FritoLay & ITC Foods in mkt warfare

The market dynamics will soon change in the Rs 2,500 crore branded snacks sector in India. To gain a leading edge in the overcrowded category, ITC Foods, a new entrant with a market share of 16% is drawing up a fresh game plan. For starters, ITC Foods is doubling up its distribution network and hiking its ad budget by 30% this quarter. Meanwhile, PepsiCo’s FritoLay is reinvigorating its product portfolio to sustain its leadership in the sector. The company has roped in MS Dhoni to bat for its flagship brands.

To pump up volumes, FritoLay is in the process of rolling out an aggressive marketing campaign led by its star endorsers, Saif Ali Khan, MS Dhoni and Juhi Chawla. According to industry analysts, ITC and PepsiCo will soon wage a pitched battle for market share and mind share in the highly competitive sector.

On the company’s strategy, Ravi Naware, chief executive officer of ITC Foods said, “We are getting ready to launch a media-blitz for ‘Bingo’ next month. We forayed into this sector in March 2007 and our market share today stands at 16 %. Our goal is to capture a 50 % share in this sector.” Created by Ogilvy & Mather, ITC’s new ad campaign will harp on the ‘quality of Bingo’ in its communications. As part of its inorganic growth strategy, the company is also scouting for acquisitions in domestic Markets, said Naware.

Across the road, FritoLay is in the process of rolling out a high-voltage interactive promotion titled Chala Change Ka Chakkar to woo new consumers. According to Gautham Mukkavilli, managing director of FritoLay India, “This is s one of the biggest interactive promotions undertaken by us since 2001. With this move, we hope to gain market share and mind share in this sector.”

Industry analysts point out that ITC has been steadily stealing market share from Pepsi ever since it entered this sector in March 2007.”

Within a year, ITC has got 16 % share. In a bid to take on new rival ITC, FritoLay is now beefing up its operations,” said an analyst based in Mumbai.

Tropicana Twister Vs. Minute Maid

Indian Market Size:
Juices and Fruit Drinks: Rs 5,000 crore
Carbonated drinks: Rs 6,000 crore (cola, lime and orange)
A huge chunk of the Juices and Fruits drinks is unorganized, with respect to volume almost 90%.

Pepsi's Strategy
The launch of Twister, already successful in Vietnam, will do more than add another brand to the shelves. It will mark Pepsi’s entry into a segment in India that has opened up with the entry of Minute Maid, which, full of orange pulp, is neither pure juice like Tropicana nor plain fruit drink like Coke’s own mango drink Maaza. Unfortunately, this new brand Twister can be ill-equipped in order to take on Minute Maid in order to maintain a competitive advantage due to its association with the brand Tropicana. Tropicana Twister might be perceived as an extension to the pure juice family of Tropicana. Twister is also similarly named to Dabur Real's Twist, which hosts a combination of fruits for its juices range.

Coca Cola's Strategy
Coca-Cola might be testing its Maaza Aam Panna in UP, but this is not in direct response to Twister in any way. It is more an innovative attempt to capture new markets. Coca-Cola has a successful new brand in Minute Maid, with the product complementing the good promotional campaign during its rollout. Coca-Cola should not just concentrate on Pepsi as a competitor, but it should look at Real Twist too, which is currently being pushed heavily by the Retailers/Traders due to some excellent activation strategies by Dabur.

Reverse Marketing: Pepsi's Website

Ever heard of a brand that rejects customers? Not intentionally atleast from the marketer’s perspective. Brands are uniformly desperate to attract them. So why would a big brand like Pepsi take the opposite approach?

"Reverse marketing is the concept of making potential customers seek you out instead of the other way around."

Pepsi needed to revamp its website for a re-launch. The solution was extracted from a simple proposition: Kids love challenges. It became the basis for a highly unusual approach that aimed to reject Pepsi site visitors rather than embrace them.

To enter the site, visitors were required to pass an intelligence test. If their answers weren't clever enough, quick enough, or simply correct, the site rejected them. If visitors succeeded in getting in, there were prizes. The assignment proved that reverse marketing could be used as an effective tool. Thousands of kids tried to enter the site every day. And thousands of rejected visitors spread rumours about "backdoors" into the site that allowed users to bypass the test.

The site was an instant hit.

The "Pepsi challenge" was turned on its head. Suddenly, it was directed at the brand's customers instead of its competitors. Probably for the first time in corporate brand history, the challenge defeated and rejected most aspiring visitors.