This paper highlights the various efforts taken towards product diversification in the country due to uncertain income from traditional coconut products. The paper stated that the decline in prices of coconut and increased availability of cheaper substitute oil, both in edible and non-edible segments has reduced income of farmers. It is explained that incidence of eriophyid mite of coconut and drought condition suppressed the productivity and further eroded farm income. In the situation of falling prices during 2000 and 2001, Govt, agencies extensively resorted to procurement of copra without tangible impact on prices. This situation necessitated shift in strategy by giving emphasis on product diversification and by­ product utilization to reduce dependence on coconut oil for utilization of coconut Aggressive generic market promotion of coconut products was undertaken by Coconut Development Board through print and electronic media. The strategic marketing approach was adopted by the Board by segmenting potential market in non-traditional non-producing areas, targeting the identified market through a series of coconut festivals organized in important cities and by highlighting health, nutritional and medicinal properties. Intensive farming systems are promoted with emphasis on recycling coconut organic waste, organic manuring, vermin- compost and integrated pest and disease management with least use of chemicals. All these strategies have had positive impact as reflected in the current scenario with a number of new coconut products available in the market and increased utilization of coconut for uses other than oil milling. The domestic prices of coconut oil and copra has also witnessed a sharp turn around beginning 2002 and sustained the rising trend all throughout the year.