Joseph Tripodi, Executive Vice-President and Chief Marketing and Commercial Officer, Coca-Cola admits that it is difficult for the beverage major to achieve its global targets unless it competes effectively in the Indian market. In an interview with Ashish Jha of Pitch on the sidelines of AdAsia 2011, Tripodi says that the companyâ€™s focus is on increasing the per capita consumption in India as it is as low as around one-eighth of its global average. He also speaks on the importance of the Indian market and Coca-Colaâ€™s marketing strategy to move ahead in the country. Interview excerpts:
How important is the Indian market for Coca-Cola Company?
India is a very strategic market for Coca-Cola Company.Â We need to have very significant presence in India. If we donâ€™t compete effectively in India, we wonâ€™t achieve our 2020 objective. Thatâ€™s the reality.
Given a huge consumer base and varied demographics of this country, we are quite happy with the progress. We are having a robust double digit growth and that is where we exactly wanted to be.
What are the new opportunities for Coca-Cola in the Indian market?
We are very bullish not only on urban but also to what can happen in the rural environment. Over 700 million people live in rural India and they represent Indiaâ€™s future. It presents a huge opportunity for us too. We are making best efforts to make sure that our products are available in most of the viable places in rural areas, and we also make sure that it is affordable. So, the right price point, right packaging and right availability are all the very important components where we are continuously working to expand in rural market.
One of the biggest opportunities is when people from the rural to urban areas. When people do that their life gets factored, they want packaged items. We are very bullish on India as we will continue to see urbanisation, middle class development and mobility in the country. Thatâ€™s why it is a strategic market for us along with China and Brazil.
What is your key focus in the Indian market?
Our key focus is to grow per capita consumption of our beverages in the Indian market. So, we think it is important for us to have more transaction than to focus on volume. The way to go forward is to have the flexible packaging options that is more affordable and allows more transactions and hopefully help build habit among consumers.Â So, I think different price point, different packaging and getting people educated on the productsâ€™ compatibility with other food and meal are the most important elements.
We are constantly innovating and learning, in what we do, but we are clear that we cannot do everything, and are going to be focused on our core – sparkling, juice, drinks and water.
Thums Up is a big brand in the Indian market and one of the largest selling cola drinks in India. Do you think the local brand can work well in the international market?
In the Indian market we have got local brands like Thums Up, Limca, Maaza, and Minute Maid Nimboo Fresh. We are very focused on making sure that we speak to the taste of people.
But, at the end of the day, what works is the right balance of global and the local. We have global brands like Sprite and Fanta which are huge brands worldwide and also doing very well in the Indian market. Nonetheless, we see tremendous opportunities for our local brands also. So, it is the right balance between the intrinsic and extrinsic features. If you talk completely about intrinsic, you only have a product and not the brand. So, you need to have the mix of the two.
At the same time, we are very careful about excessive and extensive flavour extension, as sometimes it can come back and bite you because it creates extra complexity in your supply chain and how you go into a market.
Your health drink brand and sports drink brands like Diet Coke and Burn are established brands in other markets. But, they are yet to establish their identity in India.Â What are the key challenges for these brands in the Indian market?
Why would I have a line extension when I havenâ€™t established my base brand? When you have the consumption of Coke per capita low in a country, it doesnâ€™t make much sense to go for brand extension.Â It is just that we have made Diet Coke available in India. We didnâ€™t advertise it. It is more of a product than a brand in this country.
So, the general philosophy is to establish your base brands before you get into line extensions of the base brands. We didnâ€™t divert resources from the base brand which is still building in India.Â And if there is overwhelming interest on this, we will have to think about this.
Coca-Cola Company was a one product company for a hundred years and then 27 years ago we launched Diet Coke. That was an extension but then we had a base brand for 100 years before it extended.
Is the high price-point of these products one of the challenges?
Yes. The price point is very important for the price sensitive market like India.Â We are continuously working towards bringing entry level packet size of these products.
The other challenge is the availability and distribution and how we deliver that perfect taste and experience to people. For a country like India where you get challenges on electricity, these products donâ€™t taste great unless it is chilled.
To address this, we are aggressively placing more coolers in the country, making the product more available in the country. Also, we are very seriously looking into the idea of solar cooler in the country.
Is the execution of your global positioning -â€˜Open Happinessâ€™, different in India? How?
Fundamentally, the base of execution remains the same. For example, our recent campaign in India â€˜Khusiyaan Baantne se Badhti Hainâ€™ â€“ It is about giving, itâ€™s about sharing, itâ€™s about inclusion.Â The execution is different as per the cultural context in India. In every market, people behave differently. People in this region are very passionate about music. So, we are connected with them through Coke studio that we have launched recently. We fundamentally believe in emotional connect that constitute positivity, happiness and optimism. We make our positioning locally relevant like the campaign on Diwali. Similarly, we choose occasions like Ramadan in UAE and Middle East and Christmas in USA.Â We are very focused on festivals.
What are your learning from the Indian market?
We learn a lot from India from a point of view of new ideas that are coming up like solar power coolers.Â Also, I have seen the execution of Fanta commercial, which was quite interesting and I would like to take it for the global market.