y The rural consumers are very conscious about price

and the product the company if offering

y They look for the value for their money y Low price, high quality & multiple uses. y Lifestyle & needs of the rural consumers.

y Comprising 74% of the country's population, 41% of its

middle class, and 58% of its disposable income, the rural market was an attractive target and it delivered results. y Coke experienced 37% growth in 2003 in this segment versus the 24% growth seen in urban areas. y Driven by the launch of the new Rs. 5 product, per capita consumption doubled between 2001-2003. y This market accounted for 80% of Indias new Coke drinkers in 2003 from 30% of 2002

y The company introduced new lemonade beverage, as part

of Cola-Cola's Minute Maid or Fanta brands. y Lime-based drinks are already on the market in India under the Limca and Sprite banners. y Elsewhere, it was recently reported that Coca-Cola is planning to sponsor recycling zones in several shopping centers in the urban and many weekly market places and shops in Rural market

We are always evaluating on our product portfolio, including in the health category. We will look at the market demand and definitely introduce more products as and when required. - CCI president & CEO Atul Singh

Kinley Water

y The sum or amount of money at which a

thing is valued y The value which a seller sets on his goods in market

NEED OF MARKETERS
y UNDERSTAND THE PSYCHOLOGY OF PEOPLE y PERSONAL SELLING EFFORT y TAP THE RURAL MARKET

PRICE OF COCA COLA

y IMPORTANCE y PRICING STRATEGIES y PRICING METHOD

y PENETRATION PRICING y DISCOUNT

y PSYCHOLOGICAL PRICING STRATEGY y PROMOTIONAL PRICING STRATEGY y SEGMENTED PRICING STRATEGY

 Psychological pricing strategy Coca-Cola uses the psychological pricing strategy for their Original Coke. For instance, on April 8, the price of a 2-liter bottle of Original Coke was $2.49 . They set the price to end in a 9, because this makes customers think the price is less than $2.50, to appeal to the customer. Promotional pricing strategy Coke also uses the promotional pricing strategy. In store that cell Coca-Cola, prices are often temporarily priced below the list price to increase short-run sales. It gives the product a sense of urgency and customers purchase the product because of the lower price. Segmented pricing strategy Coke uses the segmented pricing strategy for its Original Coke. For instance, Coca-Cola offers liter bottles, 6-pack cans, 6-pack bottles, and 12-pack cans of the same product, all for seperate prices. By their product in different sizes and at different costs, they get to increase their revenue, because there is not much difference in the costs required to produce the products.

ADVANTAGES OF PENETRATION PRICING STRATEGY

y FAST ADOPTION y CREATE GOODWILL y CRAFT TRADE THROUGH WORD OF MOUTH y DISCOURAGE THE ENTRY OF COMPETITORS

PRICING METHODS
y COST BASED PRICING y COMPETITION BASED PRICING

PRICING METHODS

COST-BASED PRICING Coca-Cola used a cost-based pricing system for it's Original Coke. They first designed the product, the original coke, determined the costs for the product (product costs, capital costs, and operational costs), set a price based on the cost of Coke, and finally convinced the consumers of the soda's value. COMPETITION-BASED PRICING Coca-Cola products are usually priced below, above or equal to its competitors' prices.For example, during Easter (2003) sale periods (Coca-Cola vs. Pepsi):Coca-Cola soft drinks 2L - $1.68Pepsi soft drinks 2L - $1.87Coca-Cola soft drinks 375 x 18 $9.98Pepsi soft drinks 375 x 24 - $9.98

The Coca-Cola Company sells its products to bottling and canning operations, distributors, fountain wholesalers and some fountain retailers. These then distributes them to retail outlets, milk bar and corner stores, restaurants, petrol stations and newsagents.

The Coca-Cola Company Wholesalers/distributors Retail/corner stores Restaurants, petrol stations Consumers

 INDIRECT DISTRIBUTION The Coca-Cola Company uses intermediaries in its distribution. That is, the company does not sell its products directly to its consumers. INTENSIVE DISTRIBUTION The Coca-Cola Company uses the intensive distribution strategy. The business's products are sold in almost every outlet including: retail outlets, small shops, restaurants, petrol stations, newsagents, schools, sports and entertainment venues from vending machines

Advertising
Main source of increasing consumer awareness-Mainly uses the television This source allows the company's products to reach a large The company also uses the radio as another source of advertisement-cheaper source of approach compared to the television. Recently, the company benefited from its involvement in the world's celebrated games such as the Olympics and the FIFA World Cup. Where millions were watching these games, the business had substantial advertising and promotions of the company's brands

Personal selling

Highly trained sales team-representative of the company to the retailers This strategy helps to maintain service and product loyalty

Publicity

In February 2003, Vanilla Coke was released to the media as a news brief outlining the huge profit achieved by the business (from the Sydney Morning Herald 14th February 2003). This helped The Coca-Cola Company to strengthen the image of the business's products.