Coke chalks out refreshing strategy for Schweppes brands  ( June '20,2001, FE)

THE Cadbury Schweppes brands under the Coca-Cola India umbrella have finally got a new lease of life, with the soft drinks major chalking out a promotional plan to push the brands under a new strategy. The brands in question are: Sport Cola, Crush (orange), Canada Dry (clear lemon), Cadbury Schweppes Soda, Schweppes Tonic Water and Schweppes Lemon (bitter). The brands joined the Coca-Cola portfolio in India as a result of their takeover internationally by Coca-Cola in 1999.

In order to sort out the problem of category-sharing among the Schweppes brands and their new sibling brands at Coke, the multinational has resorted to further strengthening the pricing paradigm to comfortably accommodate the Schweppes brands in its portfolio. Coca-Cola was already present in categories which Cadbury Schweppes brands existed in, i.e. cola, orange, bitter lemon and clear lemon.
The Schweppes cola, orange and clear lemon flavours were quite popular in certain market segments and Coke has decided to use the Cadbury Schweppes brands to address niche markets with Sport Cola (300 ml), Crush (300 ml) and Canada Dry (300 ml). A price point of Rs 5 (in some places Rs 7) was fixed to make them affordable to these niche markets.

The other brands, Tonic Water and Bitter Lemon, already enjoyed a premium in the bar and restaurant channel, at a Rs 15 price point for a 250 ml non-returnable glass pack. The sibling brands of Coca-Cola — 300 ml of Coke, Thums Up, Fanta, Limca, Sprite and 250 ml Maaza — are priced at Rs 10.

The Schweppes brands are being actively marketed in Goa, Maharashtra, Gujarat in the west and also in the northern states. The production of the brands is being done by seven bottlers in these regions and distributed through the Coke system as well as through the bottlers’ distribution system, depending on the area.

Although there is no mass media advertising for these brands, merchandising conveys the presence of the brands to consumers of the niche markets. The low price point does not allow it the luxury of mass media advertising. “Plans for advertising for some of the brands are in the pipeline and it is expected that the brands will grow. At present, they account for about 2-2.5 million cases per annum,” according to a Coca-Cola India spokesperson.

The company says it is a little early for a flavour of the ads. “Not all our brands have celebrity endorsement and it is not mandatory either. It is also very expensive. Since the demand for the Cadbury Schweppes brands are scattered and the volume small, we are advertising them selectively, geography-wise, as well medium-wise. They can be seen on regional channels. Print is also being used. The whole activity is driven regionally and the call has to be taken at a regional/area level,” the spokesperson says.
The company emphasises that there is no ‘small town’ consumer slant. “We are not looking at the Cadbury Schweppes brands as ‘discount brands’, but brands that have some salience, though selective, and they cater to specific consumer demand. The idea is to make it available wherever they sell and to push the product in those areas first,” he adds.

Since most of the advertising is region-specific the agencies are also regional. At the brand management level, Publicis Zen is the agency for all Schweppes brands. The company is understood to be working on a whole new approach on the creatives of the Schweppes brands.

The Cadbury Schweppes group of brands in India had a very insignificant marketshare — of about two per cent — when they were taken over by Coca- Cola. They were produced through a network of about 14 franchise bottlers around the country prior to the takeover by Coke. After the change in ownership, Coke decided to integrate the brands into its already large brand portfolio. This was certainly not an easy task, considering that the company already had two major cola brands — Coke and Thums Up — and a strong orange brand — Fanta — in its stable. Canada Dry too has a sister brand in Sprite. Tonic Water and Bitter Lemon were the only brands which could fit in comfortably in Coke’s basket and enjoyed great consumer equity.

“Following the ‘Think Local, Act Local’ paradigm, the integration had to happen at the region operations level. Initially, it looked like a difficult combination to manage but over a few months the integration strategy took shape. The Coke brand portfolio covered almost every segment — Cola, Orange, Clear Lemon, Cloudy Lemon. It also addressed the consumers at the Rs 10 maximum retail price (MRP) point, but did not include a good-sized consumer demand at a lower price point levels in the Socio-Economic Class (SEC) C&D categories,” says the spokesperson.

In the above areas the Schweppes brands are available in most towns and not only in rural areas but urban markets too. In the west (north Maharashtra and south Gujarat) they are more entrenched in the SEC C&D markets.

“All our (Coca-Cola) brands are available in the markets where Cadbury Schweppes brands are also selling. The idea is to give the consumer the choice to select his drink according to taste and price. Yes they will co-exist,” says the spokesperson.

“The Schweppes brands were immediately accepted, even welcomed, by consumers as they were the only Indian products in their category. The volumes of these brands were split 60-40 between the bar channel and the retail channel,” the spokesperson adds.

However, the company says that there was no “relaunch” of the Schweppes brands as these were present in the market even before takeover, and the brands continued to be available. There had, however, been a bit of a lull in distribution for a short while which is said to have affected their visibility to a great extent.

“The strategy was to continue to drive the brands where they had consumer equity, which in the first place was not all-India. The brands are popular in west, north and central India and parts of the east which is where we have continued to sell them,” says the spokesperson.

Coca-Cola’s cola brands Coke and Thums Up together command a marketshare of 42 per cent, while competitor Pepsi Cola has a share of 28 per cent. In orange, Coca-Cola’s Fanta has a share of 6.5 per cent, which is neck and neck with competitor brand Mirinda. Limca’s share stands at 12 per cent in the cloudy lemon market, against Mirinda Lemon’s share of 7 per cent. Sprite’s share of two per cent is marginally higher than 7UP’s share of 1.7 per cent.

While India has been an insignificant market for the Cadbury Schweppes brands, they are very big in Europe and England. The brands have a sizeable volume in the US as well. This was the reason why Coca-Cola bought the brands globally.

Even as Cadbury sold its soft drinks businesses outside North America, continental Europe and Australia to Coca-Cola, it raised expectations that the group would then concentrate on confectionery acquisitions instead.

However, in a recent announcement, French drinks group Pernod Ricard said it was close to selling the country’s second-biggest soft drinks brand, Orangina, to Cadbury Schweppes as part of a 700 million euros ($593 million) deal.