Coke goes back to basics in Myanmar

One year after announcing its intention to re-enter Myanmar, Coca-Cola has opened its first bottling plant in the country and plans to invest $200 million in the recently liberalised nation. It plans on opening a second bottling unit next month.

At stake for Coke is a significant market opportunity. Although Coca-Cola is officially back in Myanmar after 60 years, it was available in Myanmar through bootleggers who smuggled it from neighbouring countries such as Thailand, Vietnam and Singapore. They consequently marked up prices, and the product acquired the reputation of being a drink for the rich elite, while others had to rely on substitute brands like Star Cola and Max Cola.

In a recent interview with Planet Money, Shakir Moin, head of marketing for Coke in Southeast Asia said the brand was keen to change the way consumers thought about it. In an effort to make sure the product would be affordable to the masses, Coca Cola decided to print the price (300 kyat, or about 30 cents) directly on its labels.

Afforability is the key to success in a market like Myanmar, where about a third of the population lives below the poverty line, while cities like Yangon and Mandalay account for about 15 per cent of the population. 

Sarah Reiter, COO of FutureBrand, said the strategy is a good one in the short term. “It’s a good short-term strategy that won’t be necessary in the long term because the availability of the product will affect the previous premium positioning of the product,” she said.

Moin also admitted that while Coke was still illegally available in Myanmar, much of the country hadn’t tasted it. This prompted him to go back to Coca-Cola’s archives and refer how the brand was promoted when it was first launched in 1886—before radio, TV and the internet.

To that end, Coca Cola’s marketing initiatives in Myanmar include posters, billboards, fliers and product sampling. Doing away with its global ‘Happiness’ positioning, Coca Cola is promoting itself as ‘delicious, refreshing’. These two words will be seen across all its promotional activities in the country.

Marketing executives at the company are also going from neighbourhood to neighbourhood offering families free samples of Coke. They are even conducting demos explaining the best way to have a Coke, which is to “get a glass, chill the bottle, put three cubes of ice, pour the drink at a 45 degree angle and add a dash of lime”. Coca-Cola has also printed similar instructions on every label.

Brand experts laud the cola giant’s efforts. "Coke is probably right to go back to basics," said Kelvin Ma, MD of Oracle Added Value China. "In an underdeveloped market like Myanmar, there is not enough marketing infrastructure and brand equity for Coke to build on.” Ma compared Coca-Cola’s strategy in Myanmar to the one it used to break into China’s rural market. “The 3As—Awareness, Availability and Affordability—one of the key strategies that Coke applied when this mega-brand entered into rural emerging markets in China.”

Reiter said promotional activities are great, but warned that they should not be done in isolation. “I’d like to see Coca-Cola interpret the ‘Happiness’ positioning in Myanmar, while keeping it culturally relevant,” she said. “People buy into brands, not products. They want identity associations with Coke the brand as much as they want refreshment from it as a product.”

Coca-Cola and Sprite are currently being sold in 424ml plastic bottles with labels in the local language. The company plans to launch the classic 300ml glass bottle and cans in the next few weeks, while Coke Zero is being imported.

As for distribution, Coca Cola will be available in 100,000 outlets across the country over the next six months.