Coca-Cola India on Wednesday said it has reduced the overall costs by up to 40 per cent per case over the last three years and that the launch of smaller five-rupee pack has reaped rich dividends in terms of sales.

The launch of Chota Coke was in line with the strategy of reducing costs and aggressively targeting the vast Indian rural market, Sanjiv Gupta, president, Coca-Cola India, said in New Delhi, adding this strategy has increased sales.

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"Our rural market focus has resulted in 68 per cent increase in rural consumers. In fact, in 2003 over the previous year, 80 per cent of all new consumers of the company are from the rural markets," he said.

Gupta said the company had been working to reduce input costs that lay largely in transportation and supply chain management, especially for the rural markets.

"We have reduced costs by 30-40 per cent per soft drink case over the last three years. Part of the cost reduction exercise included light-weight bottle and crate introduction, which helped cut down freight costs...otherwise the five-rupee price point would not have been successful."

Gupta said currently almost 30 per cent of Coca-Cola's sales in India were in the rural market.