c8 brm project

7/27/2019 C8 BRM Project

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An Analysis on the Factors Affecting the Sales of a 1 liter SKU of PepsiCo

A Business Research Project

With

BY GROUP C8:

2012130 Aditya Khajuria

2012151 Mallika Grover

2012169 Raunak Arora

2012173 Rohan Harsh

2012175 Shrey Chaurasia

2012185 Vineet Shrestha



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Table of Contents

1. Table of Contents………………………………………………………………………...1

2. List of Tables…………………………………………………………………………......2

3. List of Figures…………………………………………………………………………….2

4. Executive Summary……………………………………………………………………...3

5. Introduction………………………………………………………………………………4

6. Objective………………………………………………………………………………….5

7. Review of Literature……………………………………………………………………..5

8. Methodology……………………………………………………………………………...6

9. Data Analysis, Results and Finding……………………………………………………..8

10. Limitation and Future scope…………………………………………………………...18

11. Conclusions and Recommendations…………………………………………………...18

12. References ………………...…………………………………………………………….19

13. Appendix A……………………………………………………………………………...20

14. Appendix B……………………………………………………………………………...26



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List of Figures

1. FIGURE 1: Preference of the Respondents…………………………………………….....8

2. FIGURE 2: Preference about the quantity of the SKU……………………………………9

3. FIGURE 3: Preference about the Price of the 1l SKU…………………………………...10

4. FIGURE 4: Buying pattern of the Respondents……………………………………….….9

5. FIGURE 5: Buying pattern of the 1l SKU……………………………………………….10

6. FIGURE 6: Usage pattern of the respondents……………………………………………11

7. FIGURE 7: Perception about the Home Pack……………………………………………11

8. FIGURE 8: Perception about the people about the factors affecting sales…………...….12

9. FIGURE 9: Perception of 1l on the various factors considered for the sales………...….12

List of Tables:

1. TABLE 1: A Chi-Square Test to test dependence of location to rankings of a 1lSKU………………………….…………………………………………………………..13

2. TABLE 2: Relationship between gender and perception about the quantities of variousSKU…………………………………………………………………………...…………14

3. TABLE 3: Showing the relationship between the perception of quantity with location,monthly income, occupation and age…………………………………………………….15

4. TABLE 5: Showing the relationship between buying pattern and perception of the 1l

SKU………………………………….……………………………………………….….16

5. TABLE 6: Relationship between gender,age, occupation and monthly income with buying pattern……………..………………………………………………………….….17



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Executive Summary

RJ corp. has the franchisee of PepsiCo in Goa state which controls bottling, marketing and

distribution of the different SKUs in the carbonated soft drinks segment .PepsiCo had launched 1

liter pet bottle in 2010 which failed to pick up the sales as forecasted. The management has been

trying to increase the brand awareness and find potential reasons for the lower than expectedsales. They also want to position the brand as home pack/ Family pack and also trying to

reposition the 2 liter brand pack as the party pack which is currently positioned in between the

home and part pack segment. Thus this research addresses three questions: 1) to identify the

potential reasons for the lower than expected sales of the 1 liter brand pack in Goa State 2) To

identify the brand awareness for this particular SKU 3) to find out the parameters on which the

positioning of this particular SKU should be done to bring this SKU into the Home/ Family pack

segment.

A pan-Goa qualitative research of the retailers was done to gauge their perception on the issue

and to identify the factors behind the low sales of this SKU. This was helpful in building the

hypothesis and the questionnaire for the consumers. A quantitative research was done for the

consumers by doing a survey.

We observed that the awareness about the SKU amongst the consumers was low. Retailers who

play a huge role in creating awareness were not doing so. The major reason behind it being the

lack of profitable schemes offered by PepsiCo on the 1L brand pack. Hence, the brand pack was

not easily available as retailers did not stock them in large numbers.

Based on our observation, we would recommend Pepsi to concentrate more on advertising the

SKU. They should also come up with good schemes that would attract the retailers compellingthem to keep a larger stock. This would encourage the retailers to influence consumers buying

decision, in turn encouraging them to buy the 1L pack.



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INTRODUCTION

PepsiCo entered in India in 1989 and grew to become one of the country‟s leading food and

beverages companies. As one of the largest multinational investors in the country, PepsiCo has

established a portfolio of brands that seek to refresh and excite the Indian customers. RJ corp has

been associated with the latter‟s entry into India.

RJ Corp owns PepsiCo India‟s biggest franchisee bottling business and runs around 13 PepsiCo bottling plants in India and overseas. It controls most of PepsiCo's bottling operations, Marketing

and distribution in India and is also the holding company of Varun Beverages India, which

controls the residual franchisee bottling businesses of the group.

PepsiCo Goa was facing a problem in the sales of their 1l bottle in the state. Priced at an

affordable Rs 35,the 1L SK U‟s were not selling. PepsiCo Goa had expected to create a „Home pack‟ brand image for these SKU‟s. Our research was focused on determining the possible

causes for the low sales of the SKU and also to gauge the consumer perception about the same.

Based on the above information, we formulated a research problem (mentioned in the Objectivessection). On the suggestion of our client we decided to start through an exploratory research

which would help us gauge the important factors which a consumer takes into considerationwhile buying a soft-drink. 6 teams with two members each were sent to different locations in

south and north Goa along with the Pepsi distribution van for three consecutive days. Our team

of six members conducted the research in South Goa. Each team conducted interviews of thedifferent retailers which the van visited. The research method adopted here was qualitative and

the interviews conducted were semi-structured. At the end of three days, a total of around 200

retailers were interviewed and their responses noted. Their responses then formed the basis for

the development of a questionnaire which was then circulated among the consumers. Thequestionnaire was floated online and an offline field survey of the consumers was also

conducted. Statistical tests were conducted on the final response to come up with the conclusion.



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OBJECTIVE

Management Decision Problem:

Research Problem:

To identify the potential reasons for the lower than expected sales of the 1 liter brand

pack in Goa State.

To identify the brand awareness for this particular SKU

To find out the parameters on which the positioning of this particular SKU should be

done to bring this SKU into the Home/ Family pack segment

Scope of the Research

This research project focused to get the answers to the above mentioned problems. The sample

population for this research problem consisted of retailers and consumers from areas in SOUTHGOA. The sampling technique used was non-probabilistic quota sampling.

Desk Research

Our search of secondary sources will be carried out to refine the objectives and provide lines of

enquiry for the next stages. Specifically, the desk research phase will gather information about

the status of the market place. At this point, we must also generate a list of brand names and

uncover any pertinent information on competing brands that may be useful in the next parts of

the research

Review of Literature

To get better understanding of the FMCG sector particularly the two giants Coke and pepsi,

understand the process of market research, Various statistical tools and test and their

understanding and interpretation the following papers were read:

“Fast-Moving Consumer Goods: A Bright Future In India”-By:- DR M.SELVAKUMAR, M.

Maria Jansi Rani, K.Jegatheesan

Source: Business and Economic Facts For You

Soft drinks in India (Industry profile): datamonitor.com

Carbonated Soft Drinks in Asia Pacific: marketlineinfo.com

Product Mix Strategies: FMCG in Indian Market Mohan kumar T.P. and Shivaraj B

RETAILING: The Indian challenge by Mala Morris



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Apart from the above papers a lot of reading was done from the net and to gather the secondary

data the client provided us with its records of sales, retailers, last years project report by interns

etc.

Methodology

We followed both qualitative as well as quantitative research methodologies.

The qualitative phase was conducted by holding interviews of the retailers and was primarily

focused to explore and understand their attitude and also determine the factors that can affect a

customer purchase. The retailers were analyzed by asking open ended question, that allow for in-

depth probing of the subjects initial responses, and observing their behavior to collect non-verbal

and/or behavioral data. The main objective for this was to gain preliminary insights into the

research problem. The data so collected was then used to formulate a questionnaire for theconsumer survey. The data analysis involved subjective content and interpretation.

The consumer research was a quantitative research and its purpose was to gauge the consumer

perception of the 1l brand.

Separate questionnaires were formulated for both the retailers and consumers. The retailer‟s

questionnaire was a set of questions designed to generate primary data. An unstructured

questionnaire was used.

A structured questionnaire was used to conduct the consumer‟s survey. The questionnaire was

floated online (www.qualtrics.com was used to formulate the survey) and an offline field survey

was also conducted in South Goa. Apart from this, intercept method was also used for data

elicitation.

SAMPLING FRAME

A non-probability sampling technique (quota sampling) was considered which involved

selection of prospective participants according to prescribed quotas for demographic

characteristics like location factors which included North and South Goa. Determining

the quota size was a subjective process and we used an approximate percentage size to

determine the actual number of prospective respondents. The reason behind using quota

sampling was that it had desired proportion of subgroups.

http://www.qualtrics.com/






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DATA COLLECTION

Retailer Survey

As suggested by the client, 6 groups of two were formed which were then sent to North

and South Goa. Our group (3 groups of two) was sent to South Goa. The survey was

conducted over a period of 3 days. Over this period in-depth interviews of the retailers

was conducted using semi-structured questionnaire. The retailers analyzed were those

who stocked Pepsi products. Various factors such as the sales of the 1l brand pack and

the various factors that could affect the sales were observed.

Consumer Survey

For conducting the consumer survey, our group again visited South Goa. Around 75

consumers were surveyed. In order to save boredom to the consumers, only vocalresponses were collected and were entered on the questionnaire manually ourselves. Prior

to conducting the survey, consumer consent was taken.



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Data Analysis and Results/Findings

Qualitative Analysis

The questionnaire used is provided in the Appendix. On the basis of the retailer

interview, we came up with the following findings:

a) Retailers felt that the awareness of the 1L brand pack was low amongst the

consumers

b) Retailers can easily create demand for the 1l brand pack as they can influence the

consumers purchase intentions

c) One of the reasons that the retailers were not „pushing‟ the brand pack was that

there was no scheme (discounts or special offers) offered to them on the same by

Pepsi. So they were making very little profit on the same and hence were not

stocking it.d) The placement of an SKU plays a very important factor in the sales. „Jo dikhega

wo bikega‟ (what is visible will sell)

e) Consumers in Goa are in general price insensitive. So if advertised properly and if

proper schemes are made available to the retailers, the retailers would stock the

SKU and the 1l brand pack should sell in Goa.

Quantitative Analysis

The following are the observations:

Observations:

From fig. 1, we can see that the most preferred brand is Mountain Dew followed by Coke and

Thums up and then Pepsi.



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From the above figure we can see that the general perception about the SKU‟s is that 1litre SKUis sufficient for 3 people while 0.5litre SKU for 2 persons and 2litres SKU is sufficient for more

than 4 persons. This information shows that 1litre SKU can be promoted as a family pack

because the quantity is apt, and there‟s no need to store it for a long period. The 2litre pack can

be promoted as a party pack.

From the fig.4, we observe that out of all the respondents surveyed, maximum respondents

consume aerated drinks either 2-3 a times a week or daily.



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We can interpret how the surveyed population perceives the price of the 1litre SKU from the

graph in Fig.3. It can be clearly seen that most of the people think that the 1litre SKU is priced atRs. 40, whereas the actual price is Rs. 35. After our interaction with the retailers we found out

that due to low margin, they sell the 1litre SKU for Rs. 40. They conveniently claim Rs.5/- as

cooling charges. This question helped us gauge the awareness level of the respondents and we

can clearly see that though most of them were aware of this SKU, a large number did not know

the actual price. We can also infer that many respondents have not purchased the 1litre SKU as

they perceive its price to be Rs. 25 or Rs. 30

From Fig.5 we can also infer the buying pattern of the respondents for 1litre pack. Most of them

buy this SKU only 2-3 times a month, whereas from fig. 4, it is clearly evident that maximum

respondents are in the category of buying Aerated drinks either daily or 2-3 times a week. So it

makes it clear that although people buy a lot of aerated drinks they are not interested in buying

this SKU that much.



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Fig. 6 shows people‟s perceptions about the usage of different SKU‟s under different occasions

and the results that were prominent were that the maximum usage of the 1litre brand pack is for

the following purposes: 1) while drinking 2) during meals at home 3) for parties/ get-together

whereas the 2litre pack is being used mainly for the purpose family functions and parties/ get

together.

From fig. 7 we tried to gauge the people‟s perception about the features desired by the people i n

a home/family pack. The significant features which came forward were 1) It should be easy to

carry/ store which a basic requirement as it is meant for storage at home 2) It should be

economical 3) It should retain its Fizz for longer periods of time which obviously is a very basic

requirement which people who store aerated drinks require.



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Fig. 8 tells us about the perception of the people regarding the reasons a brand pack sells. 10

factors were chosen and people were asked to rank them in order of preference. The major

reasons which came forward were: 1) awareness about a brand pack either created by theretailers or advertisements/ merchandising be it in any form contributes majorly in the sales of

SKU 2) next is a price of a brand pack which will account for factors determining sales 3)

followed by ease of availability of the brand pack as it is a generic product not like buying

phones or cars sales of which are brand specific if the consumer won‟t find the pack he will buy

a different one.4) next comes the discounts offered/ goodies given/offers like extra quantity

which are a reason why people will buy a certain SKU.

Fig.9 shows the perception of the same people about the 1l brand pack the same factors that were

considered for as reasons for affecting sales of a brand pack. The findings we got were that 1)

majority found that there was no awareness either in the form of advertisements/ retailers

spreading information about the about the brand pack/merchandising/placement of the product

on prime locations in the shop which catches attention which was also proved by the buying

patterns and the fact that most of the respondents were unaware of the price of this SKU 2)



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people also thought that this particular SKU lacks advertisements 3) another finding was that

people expect some discounts/offers on the pack which is not present thus Pepsi is losing sales

for this SKU to 1.25 l SKU by coke because of extra quantity offered at the nominal price. 4)

Ease of availability of this pack is also a problem as found out by us in the retailer survey many

of the retailers were not happy to keep this product either due to less margin or low demand thus

majority of the people pointed out this problem of unavailability as a reason for this SKU losing

its sales to other SKU or competitors. 5) a lot of people found that the design of this particular

pet bottle was not handy while carrying/storing it thus this could act as a major hindrance while

positioning this SKU as home brand as we have already shown in fig. 7 that majority of the

people believe the design of the bottle is a critical factor for a brand pack to be considered in the

home segment. 6) price was not a consideration for the respondents as per our study as most of

them found the price of this SKU appropriate for this SKU but it would be difficult to rely on

this observation as it is clearly evident from fig. 3 majority of the respondents were unaware of

the price of this particular SKU.

Statistical Observations:

The above Statistical test shows the relationship between the location, a person belongs to i.e.

North Goa or South Goa and his perception about the 1l SKU on the factors chosen as the

determinants of the sale.

H0: There is no relationship between the location and the perception of 1l SKU w.r.t the factors

chosen as the determinants of the sale.

H1: There is a relationship between the location and the perception of 1l SKU w.r.t the factors

chosen as the determinants of the sale.

From the above results we can see that the p value of all the chi-squares is greater than 0.05

(confidence level 95%) thus we fail to reject the null hypothesis, i.e., there is no relationship in

the location and the perception about the 1l pack i.e. people from all over the Goa feel the same

about the 1l SKU.



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The above Statistical test shows the relationship between the gender and the perception of the

quantity of SKU.

H0: There is no relationship between the gender and the perception of the quantity of SKU.

H1: There is a relationship between gender and the perception of the quantity of SKU.

From the above results, we can see that the p value of all the chi-squares, except for 1l pack, is

greater than 0.05 (confidence level 95%). Thus we fail to reject the null hypothesis for 1l pack,

i.e., there is no relationship between gender and the perception of the quantity of SKU.



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Similarly, we ran a number of statistical tests to check the relationship between various variables

(age, occupation, monthly income and location) and the perception of the quantity of SKU.

The results are as follows:

1. There is a relationship between the age of a respondent and their perception of the

quantity of SKU for (0.5l pack and 1l pack).

2. There is a relationship between the occupation of a respondent and their perception of

the quantity of SKU (for 0.5l pack and 1l pack).

3. There is no relationship between the monthly income of a respondent and their perception

of the quantity of SKU (for 0.5l pack and 1l pack).

4. There is no relationship between the location of a respondent and their perception of the

quantity of SKU for (0.5l pack and 1l pack).



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The above Statistical test shows the relationship between the buying pattern and perception of

the 1l pack of the respondents.

H0: There is no relationship between the buying pattern and perception of the 1l pack of the

respondents.

H1: There is a relationship between buying pattern and perception of the 1l pack of the

respondents.

From the above results, we can see that the p value of all the chi-squares is less than 0.05

(confidence level 95%). Thus, we reject the null hypothesis. This shows that there could be a

relationship between the buying pattern and perception of the 1l pack of the respondents.



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Since, we found our alternative hypothesis to be true, we conducted a number of statistical tests

to check the relationship between various variables (age, occupation, monthly income and

location) and the buying pattern for 1l SKU. The results are as follows:

1. There is a relationship between the age of a respondent and the buying pattern for 1l

SKU.2. There is a relationship between the occupation of a respondent and the buying pattern for

1l SKU.

3. There is a relationship between the monthly income of a respondent and the buying

pattern for 1l SKU.

4. There is a relationship between the location of a respondent and the buying pattern for 1l

SKU



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Limitations

Barriers to communication

Limited time frame

Region to be covered is very large

Uninterested respondents

Only categorical data was present, continuous data like sales etc was absent so could not

perform further statistical test like t-test and Anova

Because of time- constraint data was collected from only a few important areas

Conclusion and Recommendation

From the qualitative analysis, we were able to identify a few key factors that could affect the

sales of a 1L SKU. Some of the findings included that the retailers could easily create demandfor the 1L SKU if they wished too (Product placement, recommendations to consumers are

important factors). But since PEPSI was not providing them any schemes on the 1L pack and

since the Goan population was largely price insensitive, they kept only a small stock of the

SKU(They were making profits on the 2L SKU).

From the Quantitative analysis it is observed that the people of Goa are frequent consumers of

soft drinks with an overwhelming majority consuming it 2-3times a week and Mountain Dew

being the most preferred brand. However, the 1L brand pack was consumed only 2-3 times a

month confirming PEPSI‟s concern of low sales. People considered creating awareness (and they

believe retailers play a huge role) as the most important factor for purchase and ease of

availability was also ranked highly. Comparing this with the results from our qualitative analysis

we can conclude that since the retailers did not stock the 1L SKU much and since they hardly

influenced the consumers to buy it (as the margin on it was low), consumer awareness about the

brand pack was low.

As far as the brand positioning is concerned, majority are of the opinion that the 1L brand pack is

ideal for 3 people. It is also seen that the 1l pack is mostly consumed during meals at home.

Hence, the positioning of the brand pack is more or less accurate with the 2L pack being the preferred party pack.

Based on the above conclusion, we would recommend PEPSICo the following:

a) Provide good schemes to the retailers on the PEPSI 1L pack to get them to stock more

b) Advertise the pack more so as to increase the awareness



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c) Forge good relationships with the retailers. They are important as they can influence the

consumer demand greatly

d) Make the 1L SKU available at all stores, again for this, proper schemes should be

provided to them. Ease of availability is an important factor that people take into

consideration during purchase

e) Get the retailers to place the product in places which are visible to the customer. Product

placement is important

References

“Fast-Moving Consumer Goods: A Bright Future In India”-By:- DR M.SELVAKUMAR, M.Maria Jansi Rani, K.Jegatheesan

Source: Business and Economic Facts For You

Soft drinks in India (Industry profile): datamonitor.com

Carbonated Soft Drinks in Asia Pacific: marketlineinfo.com

Product Mix Strategies: FMCG in Indian Market Mohan kumar T.P. and Shivaraj B

RETAILING: The Indian challenge by Mala Morris

https://s.qualtrics.com/ControlPanel/

http://scholar.google.co.in/

http://search.epnet.com/












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Appendices

Appendix A:

Questionnaire for the retailers:

QUESTIONNAIRE

Name: - ………………………………………………………………………………..

Address: - ………………………………………………………………………………..

………………………………………………………………................................................

Contact No: - ………………………………………………………………………………..

(1) Which type of outlet?

(a) General Store (b) Grocery

(c) Betel Shop (d) Sweet Shop

(2) Monthly sales (in Rs.)

(a) Less than 5000 (b) Between 5000 to 10,000

(c) 10,000 to 15,000 (d) Above 15,000

(3) Profiling of the customers visiting?

(a) Professionals (b) housewives

(c) students (d) businessman

(e) others



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(4) Which age group visits your shop the most?

(a) 10-18 (b) 18-25

(c) 25-35 (d) >35

(5) Which brands of pepsi are available in the outlet?

(a) Pepsi cola (b) Mirinda (O)

(c) Mirinda (L) (d) 7’Up

(e) Slice (f) Mountain Dew

(6) Which other brands are available?

______________________________________________________________________________

__________________________________________________________________

________________________________________________________________________

(7) Number of carets sold per month of pepsi?

(a) 0 - 50 carets (b) 50 to 100 carets

(c) 100 to 150 carets (d) 150 to 200 carets

(8) Number of packs sold per month of pepsi?

(a) 0 - 50 (b) 50 to 100

(c) 100 to 150 (d) 150 to 200



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(9) Number of crates sold per month of coke?

(a) 0 - 50 carets (b) 50 to 100 carets

(c) 100 to 150 carets (d) 150 to 200 carets

(10) Number of packs sold per month of coke?

(a) 0 - 50 (b) 50 to 100

(c) 100 to 150 (d) 150 to 200

(11) Schemes and discounts offered from Pepsi? Versus Coke? (Offers on crates and packs)

______________________________________________________________________________

_________________________________________________________________

________________________________________________________________________

(12) When a customer comes to your shop which brand of soft drinks does he/she demands? (Rank

them)

(a) Pepsi (b) Coca Cola

c) others (mention the brand)

(13) Do you know about all SKUs and respective wholesale price Pepsi soft drinks.

(a) Yes (b) No

(14) Which SKU is demanded most?



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(a) 200 ml (b) 330 ml

(c) 600 ml (d) 1 l

(e) 2.25 l

(15) Margin on each SKU? Vs competitor

______________________________________________________________________________

______________________________________________________________________________

____________________________________________________________

(16) Which SKU’s are you willing to keep?

(a) 200 ml (b) 330 ml

(c) 600 ml (d) 1 l

(e) 2.25 l

(17) Which brand will you prefer to keep?

(18) Placement of the product in the shop? (layout design)

______________________________________________________________________________

______________________________________________________________________________

_________________________________________________________

(19) Any particular reason for placing competitor’s product at prime locations(visibility wise) in your

shop?



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______________________________________________________________________________

______________________________________________________________________________

____________________________________________________________

(20) What is the response from distribution team of Pepsi products?(time lag)

(a) Very Good (b) Good (c) neutral

(d) Bad (e) Worse

(21) What is the frequency of the visit of Pepsi executive?

(a) Daily (b) Alternate Day

(c) Weekly (d) Fortnightly

(22) In your opinion which is the most significant factor that affects the sale most?

(a) Advertisement (b) Scheme

(c) ease of availability (d) Taste

(e) Price (f) appearance

(23) Which company Visi-Cooler do you have?

(a) Pepsi (b) Coca Cola

(c) Both (d) Own

(24) Have you been provided with sign board/display rack by Pepsi Company?

(a) Yes (b) No

(25) Have you been provided with sign board/display rack by competitor Company?



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(a) Yes (b) No

(26) Do you have any dissatisfaction regarding the product. If yes then why?

_____________________________________________________________________________________

_______________________________________________________________________

(27) Please give any suggestion for improvement regarding distribution, branding, bottling etc.

_____________________________________________________________________________________

_______________________________________________________________________

_____________________________________________________________________________________

_______________________________________________________________________

(28) Impact of supermarkets/hypermarkets on your sales?

_____________________________________________________________________________________

_______________________________________________________________________

Thank You



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Appendix 2:

Questionnaire for the consumers:



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c8 brm project

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