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Karma Cola - Coke in India

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WORKING PAPER No.186

KARMA COLA - COKE IN INDIA By Y.L.R. Moorthi Kevin Lane Keller

April 2002

Please address all correspondence to:
Y.L.R. Moorthi (Assoc. Prof. (Marketing) Visiting Professor (Tuck School) Indian Institute of Management Bangalore - 560076, India Email: YLR.Moorthi@.Dartmouth.edu (tUl June 1,2002) or ylrm@iimb.ernet.in Kevin Lane Keller E.B. Osborn Professor of Marketing Amos Tuck School of Business Dartmouth College 100 Tuck Hall Hanover, NH 03755-9011 Ph: 603-646-0393 (o) 603-646-1308 (f) Email:

KARMA COLA - COKE IN INDIA

ABSTRACT This article is an application of the customer-based brand equity (CBBE) model (Keller, 2001) to Coke in the United States and India, It shows that Coke, the brand, is interpreted differently in US and India. In US, Coke's awareness stretches beyond its immediate consumers. It is usedfunctionally as a substitute for water. Its home consumption is high. It is seen as a brand with heritage ami many customers and non-customers relate to it Hence there is greater bonding between the brand and the customer. In India, by contrast Coke's knowledge and appeal is limited to the urban elite and youth. It is consumed more for aspirational than functional reasons. Home consumption is not as high as it is in the United States, It is a brand to which a limited number of people relate. Loyalty is more to the cola flavor them Coke. In short, Coke is viewed very differently in India as compared to tin United States. This paper examines the differences in perceptions in the two countries and discusses their implications for Coke in India. The implications to Indian market are important because China and India are seen as the most promising marketsfor its future.

The CBBE model consists of 6 building blocks and 4 levels as shown in Figure 1 (page 9). The four levels are Identity, Meaning, Response and Relationships. The six building blocks are salience, performance, imagery, judgments, feelings and resonance. The model explains how consumers get more deeply involved with the brand as they move from salience at the bottom to resonance at the top of the pyramid (see Fig.l). Figure 2 (Page 10) deals with the sub dimensions in each of the 6 building blocks. For instance, the building block "resonance" in Fig 1 corresponds to the sub-dimensions loyalty, attachment, community and engagement in Fig 2. The levels, building blocks and their sub-dimensions are explained in their appropriate place and sequence. (Note: Keller's model has several sub-dimensions corresponding to each of the building blocks. Not all of them are relevant to Coke. For instance, the building block "performance" (see Fig. 1) corresponds to two sub dimensions a) product reliability, durability and serviceability b) service effectiveness, efficiency and empathy (see Fig. 2) listed under it. But neither durability nor service effectiveness is relevant to Coke, because it is not a consumer durable. Only sub dimensions that are significant, relevant and non-repetitive have been used in this paper. The relevant ones have been highlighted in bold letters in Fig. 2)

1.0

BRAND IDENTITY

The first level, which corresponds to the base of the pyramid in Fig . 1 deals with identity. The identity of the brand can be gauged by asking the question "who are you?" This translates into the building block of salience, from the customer's end. Salience or awareness basically refers to the recognition and recall of the brand. Coke's salience is qualitatively different in US and India. Coke is well known in the United States because it originated there. That, however, is only partly responsible for its popularity. In US, Coke is integral to American life. In India, on the other hand, it is relatively young. It has been sent out in 1977 (because of the differences with the Indian Government) and came back again in the 90s. It is not as deeply etched in the life of an average Indian as it is in an American's. Its knowledge is restricted to the urban population and youth. Thus, 60% of soft drinks in India are consumed in the metro cities of Calcutta, Mumbai, Delhi and Chennai (indiainfoline.com). Not only in India, but all the developing countries, it is youth that identify themselves with popular American brands (Shawn Tully, 1994). However Coke's salience in the semi-urban, rural and non-youth groups is limited in India. An all India 1996 Gallup Poll (which had rural as well as urban respondents) reports that no brand operating in India touches 70% recognition levels. Thus not many brands (including Coke) are known across the length and breadth of the country. By contrast, Coke is known almost universally in the United States. In sum, Coke9s salience is deeper and more broad-based in the United States than in India.

Item Salience

United States High recall across segments

India High recall only in immediate target segment

2.0

BRAND MEANING

The second level in CBBE is "Brand Meaning". It asks the brand "What are you?" It comprises of the two building blocks "performance" and "imagery". Performance tells us whether the brand fits into the physical world of customer. Imagery decides whether the brand fits into the psychological world of the customer.

2.1

PERFORMANCE

Performance deals with the customer's percqptions of the functional and aesthetic aspects of the brand. The customer takes a view on tangibles like functionality and price and intangibles like aesthetics. He rates the performance of the brand on these parameters. The subdimensions of the building block "performance" are listed in Fig 2. Here we discuss only the primary and secondary characteristics aspect of the brand, because of its immediate relevance to Coke. Coke's primary (functional) characteristics seem to be more accessible and relevant to the customer in the United States. More people drink cola than water in United States. Coke is often used in US to 4

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