Its arch-rival PepsiCo may follow suit as the 200ml glass bottle segment is extremely price-sensitive and mostly sold in rural and semi-rural areas. The last time prices were cut in this segment was in 2003 when Coca-Cola introduced its affordable pricing strategy, according to which it priced its products at Rs 5. This was followed by Pepsi, only to be withdrawn later by both the companies as it hurt their profitability.
Coming at a time when most packaged consumer goods brands have increased prices, the move is being seen as one which will help brand Coke shore up its market share. "Coke as a brand has not been able to garner the same kind of volume growth when compared to its other cola brand Thums Up and rival Pepsi. The price reduction, coupled with good marketing and advertising, could help them prop up sales," said Gautam Duggad, research analyst, Prabhudas Lilladher.
The price cut won't be applicable to Coca-Cola's other cola Thums Up or any of its other brands. While glass bottles account for around 35% of sales, the PET bottles have cornered 65% of sales and are growing rapidly in the urban markets. "Cola is coming back to the centre stage in the US as well after having gone on a health plank in the last few years. Both the cola majors, especially Pepsi, are starting to build their communication and advertising around the staple cola brands in the last year or so," said Harish Bijoor, CEO, Harish Bijoor Consults, a brand consultancy firm.
Coca-Cola said in an email response that the 200ml pack, being the entry point into the category, will recruit new consumers into the cola segment since it is an innovative and a very attractive price point.
"In a move that will further fuel growth of the cola category, we will be offering this new entry level pack for brand Coca-Cola," said a company spokesperson.
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