Thursday, January 29, 2009

Thumps Up the No 1 Cola Brand in India

Whenever I ask the question which is the No 1 cola brand in the country, many people assume it is either Pepsi or Coca Cola, but it is Thums Up. Though it was sold off by the Chauhan brothers to Coca Cola in 1993 , I would still classify it as an Indian brand which has been around since 1977. Initially when the Chauhan's sold it off for $60 million, many analysts thought that it was a good deal because many believed that the brand would anyway disappear in a short time, but the story was not supposed to be so simple.

Coca Cola bought the brand and with it the access to the its bottling and distribution network, which they saw as a effective way of countering Pepsi which has a few years of head start in the country. Initially Coca Cola wanted wanted to kill the brand slowly , as they were sure that most of the consumers would shift over to to Coca Cola , so they decided to stop all promo support of the brand and waited for it to die, but it took them some years to realise that the brand was not going to die and was infact doing well in spite of almost zero support from the company. It was then that they realised that they would have to actually manage two brands in the country. 

Then the company moved to the second level of trying to use it as a flanker brand against Pepsi. They started using Thums Up to attack Pepsi openly by challenging them on a blind taste challenge and so on. Obviously they have slowly realised that they are under utilising the brand as just a flanker and there was more value which could be extracted out of the brand and thus today brand Thums Up accounts for the largest share of its promotional budget and gets the attention it deserves as a separate brand. 

The case of Thums Up highlights the myopic view with which many multinational companies operate in the country, they assume that brands which have a a very strong following in their home grounds would have similar following in India, which is not necessarily true. Though Coke has learnt through their experiences and are adapting and changing their branding strategies according to the needs of the local market. 

In fact even with the lemon based drink Limca there is a similar story in India. The brand has its own set of loyal customers in the marketplace, and they still prefer it over many other lemons based offerings in the market.  I have heard that coca cola has to struggle with its bottlers to free up lines for other brands in summers when they want to use it for Limca.



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