iip on coca cola company kuldeep tiwari
TRANSCRIPT
A
PROJECT REPORT ON
ROUTE TO MARKET IN BEVERAGE INDUSTRY
PROJECT UNDERTAKEN
AT
ADVANCE SALES & SERVICES COCA-COLA, LUCKNOW
In partial fulfillment of
POST GRADUATE DIPLOMA IN MANAGEMENT
(2009-11)
By:
KULDEEP TIWARI
Roll No. TPS (A)-18023
SIVA SIVANI INSTITUTE OF MANAGEMENT, KOMPALLY, SECUNDERABAD-500014
ACKNOWLEDGEMENT
I would like to express my heartiest gratitude to Ms. MEGHNA (HR Manager) of Advance
Sales & Services-Coca-Cola, Lucknow for giving me an opportunity to associate myself to the
world’s largest soft drink Co.
I would like to express my heartiest gratitude to MR. VYOM SRIVASTAVA (RTM Manger)
of Advance Sales & Services-Coca-Cola, Lucknow for giving me an opportunity to associate
myself to the world’s largest soft drink Co., without whom an internship with, Advance Sales &
Services-Coca-Cola, Lucknow would not have been possible. I am grateful to him, for having
taken time off his busy schedule and spoken to the concerned person to get me this internship. I
express my gratitude to Advance Sales & Services-Coca-Cola, Lucknow for having given me an
opportunity to work with them and make the best out of my internship.
Place: Secunderabad Signature
Date: Kuldeep Tiwari
DECLARATION
I, KULDEEP TIWARI, declare that this project report titled “Route To Market” has been
carried out by me under the guidance of Prof. K.S.HARISH of Siva Sivani Institute Of
Management and Mr. Vyom Srivastava of Advance Sales & Services Pvt Ltd Lucknow; and
it is my original work as part of my academic course.
Signature
Kuldeep Tiwari
CONTENT
TABLE OF CONTENT PAGE NO.
CHAPTER- 1: INTRODUCTION……………………………………………..6
1.1: A brief insight- The FMCG Industry in India……………………………………..7
1.2: A brief insight- The Beverage Industry in India……………………………….....8
Figure: Beverage Industry in India………………………………………….. 10
1.3: Objectives of the study………………………………………………………………….11
1.4 A Literature Review………………………………………………………………………..11
CHAPTER – 2
2.1 Industry profile ……………………………………………………..15
2.2 Company profile……………………………………………………….27
2.3 Departmental Details………………………………………………………………………………….34
2.4 Product profile……………………………………………………………………………………………36
CHAPTER-3 RESEARCH METHODLOGY
3.1 Introduction………………………………………………………………42
3.2 Research Design…………………………………………………………42
3.3 Sample Profile…………………………………………………………...42
3.4 Tools and Methods Data Collection…………………………………….43
3.5 Limitations……………………………………………………………....43
CHAPTER- 4
4.1 Data Analysis…………………………………………………………...44
4.2 Interpretation……………………………………………………………52.
CHAPTER-5
5.1 Findings………………………………………………………………………………………………58
5.2 Suggestion………………………………………………………………………………………….60
5.3 Bibliography……………………………………………………………………………………….61
CHAPTER-1
INTRODUCTION--
Coca-Cola, the product that has given the world its best-known taste was born in Atlanta,
Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading manufacturer, marketer
and distributor of non-alcoholic beverage concentrates and syrups, used to produce nearly 400
beverage brands. It sells beverage concentrates and syrups to bottling and canning operators,
distributors, fountain retailers and fountain wholesalers. In addition to this, it also produces and
markets sports drinks, tea and coffee. The Coca-Cola Company and its network of bottlers
comprise the most sophisticated and pervasive production and distribution system in the world.
More than anything, that system is dedicated to people working long and hard to sell the
products manufactured by the Company. This unique worldwide system has made The Coca-
Cola Company the world’s premier soft-drink enterprise. From Boston to Beijing, from Montreal
to Moscow, Coca-Cola, more than any other consumer product, has brought pleasure to thirsty
consumers around the globe. For more than 115 years, Coca-Cola has created a special moment
of pleasure for hundreds of millions of people every day.
Coca-Cola being a global company has several brands throughout the globe. It has its operations
in more than 200 countries and India is one of them. The company is leading over rivalry
companies with major market share and most preferred brands in India. The company is having 8
major brands viz Coke, Thumbs-up, Sprite, Limca, Fanta, Maaza, Pulpy Orange and Kinley in
India. Out of these brands the company is having 3 major juice drinks which are Maaza , Pulpy
Orange and Nimbozz Fresh of which the latter one is recently introduced in Indian market. In
India Coca-Cola does its business on franchise basis. This `RTM` project is done for an area of
Advance Sales And Service Pvt Ltd (Franchise in Lucknow). RTM stands for Route To Market,
helps in designing route and planning for distribution.
Coca-cola enterprise Inc.
Type : Public
Founded : 1886
Headquarters : Atlanta Georgia USA
Chief Executing Officer : Mutthar Kent
Industry : Beverages
Revenue : $19800 billion USD
Operating income : $1.495 billion USD
Net Income : $1.143 billion USD
Employees : 95000 (approx)
1.1: A BRIEF INSIGHT- THE FMCG INDUSTRY IN INDIA--
Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods (CPG) are
products that have a quick turnover and relatively low cost. Consumers generally put less
thought into the purchase of FMCG than they do for other products.
The Indian FMCG industry witnessed significant changes through the 1990s. Many players had
been facing severe problems on account of increased competition from small and regional
players and from slow growth across its various product categories. As a result, most of the
companies were forced to revamp their product, marketing, distribution and customer service
strategies to strengthen their position in the market.
By the turn of the 20th century, the face of the Indian FMCG industry had changed significantly.
With the liberalization and growth of the Indian economy, the Indian customer witnessed an
increasing exposure to new domestic and foreign products through different media, such as
television and the Internet. Apart from this, social changes such as increase in the number of
nuclear families and the growing number of working couples resulting in increased spending
power also contributed to the increase in the Indian consumers' personal consumption. The
realization of the customer's growing awareness and the need to meet changing requirements and
preferences on account of changing lifestyles required the FMCG producing companies to
formulate customer-centric strategies. These changes had a positive impact, leading to the rapid
growth in the FMCG industry. Increased availability of retail space, rapid urbanization, and
qualified manpower also boosted the growth of the organized retailing sector.
HLL led the way in revolutionizing the product, market, distribution and service formats of the
FMCG industry by focusing on rural markets, direct distribution, creating new product,
distribution and service formats. The FMCG sector also received a boost by government led
initiatives in the 2003 budget such as the setting up of excise free zones in various parts of the
country that witnessed firms moving away from outsourcing to manufacturing by investing in the
zones.
Though the absolute profit made on FMCG products is relatively small, they generally sell in
large numbers and so the cumulative profit on such products can be large. Unlike some
industries, such as automobiles, computers, and airlines, FMCG does not suffer from mass
layoffs every time the economy starts to dip. A person may put off buying a car but he will not
put off having his dinner.
The FMCG sector consists of the following categories:-
Personal Care- Oral care, Hair care, Wash (Soaps), Cosmetics and Toiletries, Deodorants and
Perfumes, Paper products (Tissues, Diapers, Sanitary products) and Shoe care; the major players
being; Hindustan Lever Limited, Godrej Soaps, Colgate, Marico, Dabur and Procter & Gamble.
Household Care- Fabric wash (Laundry soaps and synthetic detergents), Household cleaners
(Dish/Utensil/Floor/Toilet cleaners), Air fresheners, Insecticides and Mosquito repellants, Metal
polish and Furniture polish; the major players being; Hindustan Lever Limited, Nirma and Ricket
Colman.
Branded and Packaged foods and beverages- Health beverages, Soft drinks, Staples/Cereals,
Bakery products (Biscuits, Breads, Cakes), Snack foods, Chocolates, Ice-creams, Tea, Coffee,
Processed fruits, Processed vegetables, Processed meat, Branded flour, Bottled water, Branded
rice, Branded sugar, Juices; the major players being; Hindustan Lever Limited, Nestle, Coca-
Cola, Cadbury, Pepsi and Dabur
Spirits and Tobacco; the major players being; ITC, Godfrey, Philips and UB
1.2: BEVERAGE INDUSTRY IN INDIA: A BRIEF INSIGHT--
In India, beverages form an important part of the lives of people. It is an industry, in which the
players constantly innovate, in order to come up with better products to gain more consumers
and satisfy the existing consumers.
FIGURE: BEVERAGE INDUSTRY IN INDIA
The beverage industry is vast and there various ways of segmenting it, so as to cater the right
product to the right person. The different ways of segmenting it are as follows:----
Alcoholic, non-alcoholic and sports beverages
Natural and Synthetic beverages
If the behavioral patterns of consumers in India are closely noticed, it could be observed that
consumers perceive beverages in two different ways i.e. beverages are a luxury and that
beverages have to be consumed occasionally. These two perceptions are the biggest challenges
faced by the beverage industry. In order to leverage the beverage industry, it is important to
address this issue so as to encourage regular consumption as well as and to make the industry
more affordable.
Four strong strategic elements to increase consumption of the products of the beverage industry
in India are:
The quality and the consistency of beverages needs to be enhanced so that consumers are
satisfied and they enjoy consuming beverages.
The credibility and trust needs to be built so that there is a very strong and safe feeling
that the consumers have while consuming the beverages.
Consumer education is a must to bring out benefits of beverage consumption whether in
terms of health, taste, relaxation, stimulation, refreshment, well-being or prestige relevant
to the category.
Communication should be relevant and trendy so that consumers are able to find an
appeal to go out, purchase and consume.
The beverage market has still to achieve greater penetration and also a wider spread of
distribution. It is important to look at the entire beverage market, as a big opportunity, for brand
and sales growth in turn to add up to the overall growth of the food and beverage industry in the
economy.
1.3: OBJECTIVES OF STUDY--
The main objective of this RTM project is to increase the sales of the company.
To find out the effectiveness of RTM Program
To find out cost effective and efficient routes for distribution
To develop new routes for seamless distribution
The study helps to know the distribution and marketing strategy of the company.
To find out total number of outlets for chowk distributor.
To find out the present status of COCA -COLA (ThumsUp, Coke, Sprite, Limca, Fanta,
Maaza) at the retail outlets in the area.
To find out available opportunities in the market by finding gaps.
To find out the condition of visi cooler.
To collect data for the activation of new map and new channels.
To enhance the market share of the company.
To find out the ROI of the distributer.
1.4: A LITERATURE REVIEW--
Pepsi is often second to Coke in terms of sales, but outsells Coca-Cola in some localities.
Around the world, some local brands do compete with Coke. In India, Coca-Cola ranked third
behind the leader, Pepsi-Cola, and local drink Thums Up. However, The Coca-Cola Company
purchased Thums Up in 1993. As of 2004, Coca-Cola held a 60.9% market-share in India.
Tropicola, a domestic drink, is served in Cuba instead of Coca-Cola, in which there exists a
United States embargo. Mecca Cola and Qibla Cola, in the Middle East, is a competitor to Coca-
Cola. In Turkey, Cola Turka is a major competitor to Coca-Cola. In Iran and also many countries
of Middle East, Zam Zam Cola and Parsi Cola are major competitors to Coca-Cola. Coca-Cola
Co. slightly increased its lead over rival Pepsi-Cola Co. in 2002, thanks to the successful launch
of Vanilla Coke and the growth of Diet Coke, according to U.S. soft drink industry rankings
released last week. Coke gained 0.6 percentage points in market share and increased its case
volume by 2.1 percent, according to Beverage Digest/Maxwell, a New York-based industry
newsletter and data service. The company captured a larger share of the market even though its
Coke Classic brand fell 0.6 percentage points in market share. Coca-Cola dominates 44.3 percent
of the U.S. soft drink market, but saw its market share drop between 1999 and 2001. With the
latest gains, it's only 0.2 percentage points away from where it stood in 1998 at 44.5. Pepsi-Cola
lost 0.2 percentage points in market share. The No. 2 company commands 31.4 percent of the
U.S. soft drink market.
RTM Concept
The full form of RTM is ROUTE TO MARKET. In this the researcher is given a area and the
researcher has to make a list according to the outlets he gets in that particular area side by side
the researcher has to make a map showing all the outlets which he has listed in his sheet . While
drawing map the researcher should plot the outlets as well as big landmark very clearly. RTM
helps organization to prepare strategy for effective and efficient distribution. It is the function
which starts the process of planning before distribution- directly by franchise and indirectly by
distributor. In the case of direct distribution, it involves the planning, developing new routes,
deciding appropriate vehicle and number of vehicle and making strategy for seamless
distribution. In the case of indirect distribution RTM helps the organization in selecting potential
distributor by evaluating available infrastructure of the distributor, deciding and suggesting
appropriate infrastructure for the distributor, planning seamless distribution in that area by
clubbing appropriate street, developing new routes and deciding which kind of vehicle will visit
a particular route.
Red Concept
Red(right execution daily) is a tool to measure sale team and distributors ‘performance in the outlets with respect to all parameters of execution.
RED lays down standards for visi-coolers, brand norms and in-outlet activation elements. It lays down specific norms and elements for enhanced in-out brand execution. It tracks brands and brand pack penetration in outlets.
Types of Outlets:
The company has divided their outlets on the basis of the following criteria-
1. Volume
2. Channel
3. Income group
Volume:
There are four types of outlets according to the volume of sales of the outlet-
Diamond - 800>C/s & above
Gold - 500-799C/s
Silver - 200-499C/s
Bronze - <200C/s
Channel:
(a) Grocery Store
(b) Eating & drinking channel 1
(c) Eating & Drinking channel 2
(d) Convenience channel
Income Group:
According to the income group of the area-
Low
Medium
High
CHAPTER-2
2.1: INDUSTRY PROFILE--
Soft drink Industry in India---
Soft drink market size for FY00 was around 270 m.n cases (6480mn bottles). The market
witnessed 5- 6% growth in the early‘90s. Presently the market growth has growth rate of 7- 8%
per annum compared to 22% growth rate in the previous year. The market size for FY01 is
expected to be 7000 mn bottles.
Soft Drink Production area
The market preference is highly regional based. While cola drinks have main markets in metro
cities and northern states of UP, Punjab, Haryana etc. Orange flavored drinks are popular in
southern states. Sodas too are sold largely in southern states besides sale through bars. Western
markets have preference towards mango flavored drinks. Diet coke presently constitutes just
0.7% of the total carbonated beverage market.
Growth promotional activities
The government has adopted liberalized policies for the soft drink trade to give the industry a
boast and promote the Indian brands internationally. Although the import and manufacture of
international brands like Pepsi and Coke is enhanced in India the local brands are being
stabilized by advertisements, good quality and low cost. The soft drinks market till early 1990s
was in hands of domestic players like campa, thumps up, Limca etc but with opening up of
economy and coming of MNC players Pepsi and Coke the market has come totally under their
control.
Types –
Soft drinks are available in glass bottles, aluminum cans and PET bottles for home consumption.
Fountains also dispense them in disposable containers Non-alcoholic soft drink beverage market
can be divided into fruit drinks and soft drinks. Soft drinks can be further divided into carbonated
and non-carbonated drinks. Cola, lemon and oranges are carbonated drinks while mango drinks
come under non carbonated category.
The market can also be segmented on the basis of types of products into cola products and non-
cola products. Cola products account for nearly 61-62% of the total soft drinks market. The
brands that fall in this category are Pepsi, Coca- Cola, Thumps Up, diet coke, Diet Pepsi etc.
Non-cola segment which constitutes 36% can be divided into 4 categories based on the types of
flavors available, namely: Orange, Cloudy Lime, Clear Lime and Mango. Since the early 1990’s
Coca-Cola Corporation and PepsiCo have beencombating on what is known as the “Beverage
Battlefield” in India. Today India is one of the most sought after countries for foreign
investments because of their continually growing market opportunities. However during Coca-
Cola and Pepsi’s attempts to broaden their global consumer bases both companies encountered
several obstructions on their pursuits of conquering the Indian soft drink market.
Initial difficulties
From a historical standpoint, Coca-Cola and Pepsi were facing obstructions even before entering
the market in the late 1980’s. Coca Cola’s past venture in India had ended on bad terms with the
Indian government BEVERAGES Alcoholic Non-Alcoholic Carbonated Non-Carbonated Cola
Non-Cola Non-Cola when they refused to offer up their trade secrets. During the absence of
foreign investment in the soft drink industry in India a local company, Parle, became the market
leader. Parle invested a great deal into their leading brand, Thums Up, and played a dominant
role in the soft drink industry until the liberalization of the Indian economy in 1991. After this
time many of the political and legal obstacles facing Coca-Cola and Pepsi were lessened.
Political challenges
Other political challenges hindered the success of Coca-Cola and Pepsi in India as well. In 2003,
when the United States and Britain invaded Iraq, the All-India Anti-Imperialist Forum called a
boycott on goods from America and India. Indian’s protested American companies for the war
and specifically targeted Coca-Cola and Pepsi products. While the war was beyond control for
these two companies, management perhaps could’ve done more to not only attempt to predict the
backlash from Indian consumers due to the war, but also could’ve created advertisement
campaigns to address the situation. While political and legal factors produced problems for
Coca-Cola and Pepsi, both Coca-Cola and Pepsi did a lot of things to prevent that situation from
happening. Both companies heavily participated in the cultural festival of Navratri in western
India to promote their products and create brand awareness in a culturally traditional setting. The
companies also produced television and print advertisements that linked important Indian themes
to their products by “building a connect using the relevant local idioms” Coca-Cola and Pepsi
both utilized popular Indian sporting events, athletes, and celebrities to endorse their products.
Both companies could’ve made the mistake of using American celebrities or already made
American commercials to advertise their products in India, but instead made the right move by
making advertisements to specifically target their foreign market.
Pricing price for Indian market
Coca-Cola and Pepsi also made the right moves by adapting to cultural barriers in India. One
such barrier was the affordability of products for Indians. Because India is a country where
people are known to live on very little a day, the idea of getting people to spend what little they
have on a soft drink could be quite a stretch. However Coca-Cola India went with an aggressive
pricing policy and reduced the price of their soft drinks in 2003 from 15% to 25% nationwide.
To compete competitively in the market ,Pepsi reduced their prices as well. This move allowed
both companies to offer products that were affordable to the target market in India but also
encouraged more Indians to consume Pepsi and Coca Cola products. Both companies also
created smaller sized bottles to allow for lower prices for Indian consumers. Coca-Cola and
Pepsi created bottles ranging in size from 200 ml to 500 ml to adapt to cultural needs and
increase their sales. By offering smaller sized bottles many consumers also increased the
frequency in which they were purchasing the soft drinks.
Coca-cola in India
Coca-Cola was the leading soft drink brand in India until 1977 when it left rather than reveals its
formula to the government and reduces its equity stake as required under the Foreign Exchange
Regulation Act (FERA) which governed the operations of foreign companies in India. After a
16-year absence, Coca-Cola returned to India in 1993, cementing its presence with a deal that
gave Coca-Cola ownership of the nation's top soft-drink brands and bottling network. Coke’s
acquisition of local popular Indian brands including Thums Up (the most trusted brand in
India21), Limca, Maaza, Citra and Gold Spot provided not only physical manufacturing,
bottling, and distribution assets but also strong consumer preference. This combination of local
and global brands enabled Coca-Cola to exploit the benefits of global branding and global trends
in tastes while also tapping into traditional domestic markets. Leading Indian brands joined the
Company's international family of brands, including Coca- Cola, diet Coke, Sprite and Fanta,
plus the Schweppes product range. In 2000, the company launched the Kinley water brand and in
2001, Shock energy drink and the powdered concentrate Sunfill hit the market. From 1993 to
2003, Coca-Cola invested more than US$1 billion in India, making it one of the country’s top
international investors.22 By 2003, Coca- Cola India had won the prestigious Woodruf Cup from
among 22 divisions of the Company based on three broad parameters of volume, profitability,
and quality. Coca-Cola India achieved 39% volume growth in 2002 while the industry grew 23%
nationally and the Company reached breakeven profitability in the region for the first time.23
Encouraged by its 2002 performance, Coca-Cola India announced plans to double its capacity at
an investment of $125 million (Rs. 750 crore) between September 2002 and March 2003.24
Coca-Cola India produced its beverages with 7,000 local employees at its twenty-seven wholly-
owned bottling operations supplemented by seventeen franchisee-owned bottling operations and
a network of twenty-nine contractpackers to manufacture a range of products for the company.
The complete manufacturing process had a documented quality control and assurance program
including over 400 tests performed throughout the process The complexity of the consumer soft
drink market demanded a distribution process to support 700,000 retail outlets serviced by a fleet
that includes 10- ton trucks, open-bay three wheelers, and trademarked tricycles and pushcarts
that were used to navigate the narrow alleyways of the cities.25 In addition to its own employees,
Coke indirectly created employment for another 125,000 Indians through its procurement,
supply, and distribution networks.
Poters five force Models:
Defining the industry: Both concentrate producers (CP) and bottlers are profitable. These
two parts of the industry are extremely interdependent, sharing costs in procurement, production,
marketing and distribution. Many of their functions overlap; for instance, CPs do some bottling,
and bottlers conduct many promotional activities. The industry is already vertically integrated to
some extent. They also deal with similar suppliers and buyers. Entry into the industry would
involve developing operations in either or both disciplines. Beverage substitutes would threaten
both CPs and their associated bottlers. Because of operational overlap and similarities in their
market environment, we can include both CPs and bottlers in our definition of the soft drink
industry. In 1993, CPs earned 29% pretax profits on their sales, while bottlers earned 9% profits
on their sales, for a total industry profitability of 14% (Exhibit 1). This industry as a whole
generates positive economic profits.
Rivalry: Revenues are extremely concentrated in this industry, with Coke and Pepsi, together
with their associated bottlers, commanding 73% of the case market in 1994. Adding in the next
tier of soft drink companies, the top six controlled 89% of the market. In fact, one could
characterize the soft drink market as an oligopoly, or even a duopoly between Coke and Pepsi,
resulting in positive economic profits. To be sure, there was tough competition between Coke
and Pepsi for market share, and this occasionally hampered profitability. For example, price wars
resulted in weak brand loyalty and eroded margins for both companies in the 1980s. The Pepsi
Challenge, meanwhile, affected market share without hampering per case profitability, as Pepsi
was able to compete on attributes other than price.
Substitutes: Through the early 1960s, soft drinks were synonymous with “colas” in the mind
of consumers. Over time, however, other beverages, from bottled water to teas, became more
popular, especially in the 1980s and 1990s. Coke and Pepsi responded by expanding their
offerings, through alliances (e.g. Coke and Nestea), acquisitions (e.g. Coke and Minute Maid),
and internal product innovation (e.g. Pepsi creating Orange Slice), capturing the value of
increasingly popular substitutes internally. Proliferation in the number of brands did threaten the
profitability of bottlers through 1986, as they more frequent line set-ups, increased capital
investment, and development of special management skills for more complex manufacturing
operations and distribution. Bottlers were able to overcome these operational challenges through
consolidation to achieve economies of scale. Overall, because of the CPs efforts in
diversification, however, substitutes became less of a threat.
Power of Suppliers: The inputs for Coke and Pepsi’s products were primarily sugar and
packaging. Sugar could be purchased from many sources on the open market, and if sugar
became too expensive, the firms could easily switch to corn syrup, as they did in the early 1980s.
So suppliers of nutritive sweeteners did not have much bargaining power against Coke, Pepsi, or
their bottlers. NutraSweet, meanwhile, had recently come off patent in 1992, and the soft drink
industry gained another supplier, Holland Sweetener, which reduced Searle’s bargaining power
and lowering the price of aspartame. With an abundant supply of inexpensive aluminum in the
early 1990s and several can companies competing for contracts with bottlers, can suppliers had
very little supplier power. Furthermore, Coke and Pepsi effectively further reduced the supplier
of can makers by negotiating on behalf of their bottlers, thereby reducing the number of major
contracts available to two. With more than two companies vying for these contracts, Coke and
Pepsi were able to negotiate extremely favorable agreements. In the plastic bottle business, again
there were more suppliers than major contracts, so direct negotiation by the CPs was again
effective at reducing supplier power.
Power of buyers: The soft drink industry sold to consumers through five principal channels:
food stores, convenience and gas, fountain, vending, and mass merchandisers (primary part of
“Other” in “Cola Wars…”case). Supermarkets, the principal customer for soft drink makers,
were a highly fragmented industry. The stores counted on soft drinks to generate consumer
traffic, so they needed Coke and Pepsi products. But due to their tremendous degree of
fragmentation (the biggest chain made up 6% of food retail sales, and the largest chains
controlled up to 25% of a region), these stores did not have much bargaining power. Their only
power was control over premium shelf space, which could be allocated to Coke or Pepsi
products. This power did give them some control over soft drink profitability. Furthermore,
consumers expected to pay less through this channel, so prices were lower, resulting in
somewhat lower profitability. National mass merchandising chains such as Wal-Mart, on the
other hand, had much more bargaining power. While these stores did carry both Coke and Pepsi
products, they could negotiate more effectively due to their scale and the magnitude of their
contracts. For this reason, the mass merchandiser channel was relatively less profitable for soft
drink makers. The least profitable channel for soft drinks, however, was fountain sales.
Profitability at these locations was so abysmal for Coke and Pepsi that they considered this
channel “paid sampling.” This was because buyers at major fast food chains only needed to stock
the products of one manufacturer, so they could negotiate for optimal pricing. Coke and Pepsi
found these channels important, however, as an avenue to build brand recognition and loyalty, so
they invested in the fountain equipment and cups that were used to serve their products at these
outlets. As a result, while Coke and Pepsi gained only 5% margins, fast food chains made 75%
gross margin on fountain drinks. Vending, meanwhile, was the most profitable channel for the
soft drink industry. Essentially there were no buyers to bargain with at these locations, where
Coke and Pepsi bottlers could sell directly to consumers through machines owned by bottlers.
Property owners were paid a sales commission on Coke and Pepsi products sold through
machines on their property, so their incentives were properly aligned with those of the soft drink
makers, and prices remained high. The customer in this case was the consumer, who was
generally limited on thirst quenching alternatives. The final channel to consider is convenience
stores and gas stations. If Mobil or Seven-Eleven were to negotiate on behalf of its stations, it
would be able to exert significant buyer power in transactions with
Coke and Pepsi. Apparently, though, this was not the nature of the relationship between soft
drink producers and this channel, where bottlers’ profits were relatively high, at $0.40 per case,
in 1993. With this high profitability, it seems likely that Coke and Pepsi bottlers negotiated
directly with convenience store and gas station owners. So the only buyers with dominant power
were fast food outlets. Although these outlets captured most of the soft drink profitability in their
channel, they accounted for less than 20% of total soft drink sales. Through other markets,
however, the industry enjoyed substantial profitability because of limited buyer power.
Barriers to Entry: It would be nearly impossible for either a new CP or a new bottler to
enter the industry. New CPs would need to overcome the tremendous marketing muscle and
market presence of Coke, Pepsi, and a few others, who had established brand names that were as
much as a century old. Through their DSD practices, these companies had intimate relationships
with their retail channels and would be able to defend their positions effectively through
discounting or other tactics. So, although the CP industry is not very capital intensive, other
barriers would prevent entry. Entering bottling, meanwhile, would require substantial capital
investment, which would deter entry. Further complicating entry into this market, existing
bottlers had exclusive territories in which to distribute their products. Regulatory approval of
intrabrand exclusive territories, via the Soft Drink Interbrand Competition Act of 1980, ratified
this strategy, making it impossible for new bottlers to get started in any region where an existing
bottler operated, which included every significant market in the US. In conclusion, an industry
analysis by Porter’s Five Forces reveals that the soft drink industry in 1994 was favorable for
positive economic profitability, as evidenced in companies’ financial outcomes.
Compare the economics of the concentrate business to the bottling business. Why is the
profitability so different?
In some ways, the economics of the concentrate business and the bottling business should be
inextricably linked. The CPs negotiates on behalf of their suppliers, and they are ultimately
dependent on the same customers. Even in the case of materials, such as aspartame, that are
incorporated directly into concentrates, CPs pass along any negotiated savings directly to their
bottlers. Yet the industries are quite different in terms of profitability. The fundamental
difference between CPs and bottlers is added value. The biggest source of added value for CPs is
their proprietary, branded products. Coke has protected its recipe for over a hundred years as a
trade secret, and has gone to great lengths to prevent others from learning its cola formula. The
company even left a billion-person market (India) to avoid revealing this information. As a result
of extended histories and successful advertising efforts, Coke and Pepsi are respected household
names, giving their products an aura of value that cannot be easily replicated. Also hard to
replicate are Coke and Pepsi’s sophisticated strategic and operational management practices,
another source of added value. Bottlers have significantly less added value. Unlike their CP
counterparts, they do not have branded products or unique formulas. Their added value stems
from their relationships with CPs and with their customers. They have repeatedly negotiated
contracts with their customers, with whom they work on an ongoing basis, and whose
idiosyncratic needs are familiar to them. Through long-term, in depth relationships with their
customers, they are able to serve customers effectively. Through DSD programs, they lower their
customers’ costs, making it possible for their customers to purchase and sell more product. In
this way, bottlers are able to grow the pie of the soft drink market. Their other source of
profitability is their contract relationships with CPs, which grant them exclusive territories and
share some cost savings. Exclusive territories prevent intrabrand competition, creating
oligopolies at the bottler level, which reduce rivalry and allow profits. To further build “glass
houses,” as described by Nalebuff and Brandenberger (Co-opetition, p. 88), for their bottlers,
CPs pass along some of their negotiated supply savings to their bottlers. Coke gives 2/3 of
negotiated aspartame savings to its bottlers by contract, and Pepsi does this in practice. This
practice keeps bottlers comfortable enough, so that they are unlikely to challenge their contracts.
Bottlers’ principal ability is to use their capital resources effectively. Such operational
effectiveness is not a driver of added value, however, as operational effectiveness is easily
replicated. Between 1986 and 1993, the differences in added value between CPs and bottlers
resulted in a major shift in profitability within the industry. Exhibit 1 demonstrates these
dramatic changes. While industry profitability increased by 11%, CP profits rose by 130% on a
per case basis, from $0.10 to $0.23. During this period, bottler profits actually dropped on a per
case basis by 23%, from $0.35 to 0.27. One possibility is that product line expansion in defense
against new age beverages helped CPs but hurt bottlers. This would be expected if bottler’s per
case costs increased due to the operational challenges and capital costs of producing and
distributing broader product lines. This, however, was not the case; cost of sales per case
decreased for both CPs and bottlers by 27% during this period, mostly due to economies of scale
developed through consolidation. The real difference between the fortunes of CPs and bottlers
through this period, then, is in top line revenues. While CPs were able to charge more for their
products, bottlers faced price pressure, resulting in lower revenues per case. These per case
revenue changes occurred during a period of slowing growth in the industry, as shown in Exhibit
2. Growth in per capita consumption of soft drinks slowed to a 1.2% CAGR in the period 1989 to
1993, while case volume growth tapered to 2.3%. In an struggle to secure limited shelf space
with more products and slower overall growth, bottlers were probably forced to give up more
margin on their products. CPs, meanwhile, could continue increasing the prices for their
concentrates with the consumer price index. Coke had negotiated this flexibility into its Master
Bottling Contact in 1986, and Pepsi had worked price increases based on the CPI into its bottling
contracts. So, while the bottlers faced increasing price pressure in a slowing market, CPs could
continue raising their prices. Despite improvements in per case costs, bottlers could not improve
their profitability as a percent of total sales. As a result, through the period of 1986 to 1993,
bottlers did not gain any of the profitability gains enjoyed by CPs.
Why have contracts between CPs and bottlers taken the form they have in the soft drink
industry?
Contracts between CPs and bottlers were strategically constructed by the CPs. Although
beneficial to bottlers on the surface, the contracts favored the CPs’ long-term strategies in
important ways. First, territorial exclusivity is beneficial to bottlers, as it prevents intrabrand
competition, ensures bargaining power over buyers and establishes barriers to entry. But it is also
beneficial to CPs, who are also not subject to price wars within their own brand. The contracts
also excluded bottlers from producing the flagship products of competitors. This created
monopoly status for the CPs, from the bottler perspective. Each bottler could only negotiate with
one supplier for its premium product. Violation of this stipulation would result in termination of
the contract, which would leave the bottler in a difficult position. Historically, contracts were
designed hold syrup prices constant into perpetuity, only influenced by rising prices of sugar.
This changed in 1978 and 1986, as contracts were renegotiated, first to accommodate for rises in
the CPI, and then to give general flexibility to the CP (Coke) in setting prices. Coke could
negotiate this more flexible pricing because its bottlers were dependent on it for business. It
further ensured that its bottlers would be captive to its monopoly status by buying major bottlers
and then selling them into the CCE holding company, which would only produce Coke products.
Coke would capture 49% of the dividends from CCE, without the complications of vertical
integration.
SWOT Analysis
Strength
Branding and packaging
Appealing to young generation
Superior Taste (in Blind Tests)
Many distributions
Weakness
Hard to enter markets occupied by
Coca-Cola
Lack of novelty in advertising
Opportunities
Global markets
Additional Youth Consumers entering
the market
Threats
Health Conscious Consumer Trends
More substitutes
Competitor of coca-cola:
Apart from coca-cola, other major players are as follows:
PEPSICO: PepsiCo, Incorporated (NYSE: PEP) is a Fortune 500, American multinational
corporation headquartered in Purchase, NY with interests in manufacturing and marketing a wide
variety of carbonated and non-carbonated beverages, as well as salty, sweet and grain-based
snacks, and other foods. Their main product, Pepsi Cola, sells over 100 billion cans a year.
Besides the Pepsi-Cola brands, the company owns the brands Quaker Oats, Gatorade, Frito-Lay,
SoBe, Naked, Tropicana, Coppell, Mountain Dew, Miranda and 7-Up (outside the USA).
PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab government-
owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited. This joint venture
marketed and sold Lehar Pepsi until 1991, when the use of foreign brands was allowed; PepsiCo
bought out its partners and ended the joint venture in 1994.
DABUR INDIA- Dabur india ltd Dabber India Limited is the fourth largest FMCG Company in
India and Dabur had a turnover of approximately US$ 600 Million (Rs. 2,834.11 Corer fy09) &
Market Capitalization of over US$ 2.2 Billion (Rs 10,000 Corer), with brands like Dabur Amla,
Dabur Chyawanprash, Vatika, Hajmola and Real .
About Real- Real has been the preferred choice of consumers when it comes to packaged fruit
juices, which is what makes India's No. 1 Fruit Juice brand. A validation of this success is that
Real has been awarded ‘India’s Most Trusted Brand’ status for four years in a row. Today,
Real has a range of 14 exciting variants - from the exotic Indian Mango, Mausambi, Guava &
Litchi to international favorites like Pomegranate, Tomato, Cranberry, Peach, Blackcurrant &
Grape and the basic Orange, Pineapple, Apple & Mixed Fruit. This large range helps cater
different needs and occasions and has helped Real maintain its dominant market share.
Real Active - Real Active is a range of unsweetened juices that contain no adder sugar colours
or preservatives. Real Active juices are made from concentrated juices. After the juice is pressed
from the fruit, the water is removed to reduce transportation load.
Real Burst - Real Burst, the latest addition to Dabur's Foods portfolio, has a range of light &
refreshing fruit beverage. Available in 4 exciting flavours of Mixed Fruit, Crispy Apple,
Orange Bytes and Mango Mania, Real Burrst promises an experience that delivers refreshment
through lightness of fresh fruits to you.Réal Burrst comes in an attractive tetrapack highlighting
the 'Lite and Refreshing' qualities of fruits that it brings to you. All 4 variants are made available
in 1 liter and 200 ml packs, priced at Rs. 65 and Rs. 15 respectively.
GODREJ INDIA- Godrej Hershey, Ltd. markets juices and fruit drinks, soymilk based drinks,
edible oils, packaged tea, and confectionery products. Godrej Hershey, Ltd. was formerly known
as Godrej Beverages and Food, Ltd. The company was founded in 2002 and is based in Mumbai,
India. It has a confectionery plant in the Chittoor. As of May 2007, Godrej Hershey, Ltd.
operates as a subsidiary of Hershey Co.
PARLEY AGRO – Parle Agro is a trusted name in the Indian beverage industry and has been
refreshing India since two decades with leading brands like Frooti, Appy, Appy Fizz, LMN and
packaged drinking water, Bailley. As an industry pioneer, Parle Agro is the first to introduce fruit
drinks in a Tetra Pak in India, the first to introduce apple nectar and the first to introduce fruit
drinks in PET bottles. In 2007, Parle Agro forayed into the confectionery business. In the
confectionery division, Parle Agro has brands like Mintrox, Buttercup, Buttercup Softease and
Frewt Éclairs. The latest product from Parle Agro – Saint Juice was launched in 2008.
2.2: COMPANY PROFILES-
History of coca-cola-
The world has changed in many ways since pharmacist, John Styth Pemberton first introduced
the refreshing taste of Coca-Cola in Atlanta, Georgia. The name and the product mean so many
things to hundreds of Millions of consumers around the globe. Coca-Cola products are served
more than 705 million times every day, quenching the thirsts of consumers in more than 195
countries in every climate. That's a long way to come after such a modest beginning... May 1886
- Pemberton concocted a caramel-colored syrup in a three-legged brass kettle in his backyard. He
first "distributed" the new product by carrying Coca-Cola in a jug down the street to Jacobs
Pharmacy. For five cents, consumers could enjoy a glass of Coca-Cola at the soda fountain.
1886 - Sales of Coca-Cola averaged nine drinks per day. That first year, Dr. Pemberton sold 25
gallons of syrup, shipped in bright red wooden kegs. Red has been a distinctive color associated
with the No. 1 soft drink brand ever since. 1891 - Atlanta entrepreneur Asa G. Candler had
acquired complete ownership of the Coca-Cola business for $2,300. Pemberton was forced to
sell because he was in a state of poor health and was in debt. Within four years, Candler's
merchandising flair helped expand consumption of Coca-Cola to every state and territory.
1893 - In January "Coca-Cola" was registered in the U.S. Patent office.
1917 - 3 Million Coke's sold per day. " " is the worlds most recognized trademark.
1919 - The Coca-Cola Company was sold to a group of investors for $25 million.
1923 - The Coca-Cola Company was sold after the Prohibition Era to Ernest Woodruff for 25
million dollars. He gave Coca-Cola to his son, Robert Woodruff, who would be president for six
decades. Woodruff's leadership took the business to unrivaled heights of commercial success,
making Coca-Cola an institution the world over. During the Woodruff era, Mr. Woodruff made a
promise to the armed forces of the United States to supply Coca-Cola to every serviceperson. He
said that costs and location did not matter; he supplied 5 billion bottles to the service.
1925 - 6 Million Coke's sold per day.
1927 - The first Coca-Cola radio advertisement.
1928 - Sales of bottled Coca-Cola surpassed fountain sales for the first time.
1943 - On June 29, an urgent cablegram arrived from General Dwight Eisenhower's Allied
Headquarters in North Africa, requesting 10 Coca-Cola bottling plants to serve American
servicemen overseas. Eventually, 64 plants were set up during WWII.
1950 - Advertising on on the television began. Currently Coca-Cola is advertised on over five
hundred TV channels around the world.
1961 - Sprite was introduced.
1971 - The song "I'd like to Buy the World a Coke" was released.
1978 - The two liter bottle was introduced, and during that same year the company also
introduced plastic bottles
1982 - Diet Coke was introduced in July.
1985 - The Coca-Cola Company made what has been known as one of the biggest marketing
blunder. They stumbled onto a new formula in efforts to produce diet Coke. They put forth 4
million dollars of research to come up with the new formula. The new formula was a sweeter
variation with less tang, it was also slightly smoother. The factor that influenced the change was
that Coke's market share fell 2.5 percent in four years. Each percentage point lost or gain meant
200 million dollars. This was the first flavor change since the existence of the Coca-Cola
company. The change was announced April 23, 1985 at the Vivian Beaumont Theater at the
Lincoln Center. Some two hundred TV and newspaper reporters attended this very glitzy
announcement. The change to the world's best selling soft drink was heard by 81 percent of the
United States population within twenty-four hours of the announcement. Within a week of the
change, one thousand calls a day were floo ding the company's eight hundred number. Most of
the callers were shocked and/or outraged, many said that they were considering switching to
Pepsi. Within six weeks, the eight hundred number was being jammed by six thousand calls a
day. The company also fielded over forty thousand letters, which were all answered and each
person got a coupon for the new Coke.
1985 - July 10, eighty-seven days after the new Coke was introduced, the old Coke was brought
back in addition to the new one. This was greatly due to dropping market share and consumer
protest. The market share fell from a high of 15 percent to a low of 1.4 percent. This was said to
be a classic marketing retreat. Coca-Cola executives admitted that they had goofed by taking the
old Coke off the market. The Coca-Cola company's eight hundred number received eighteen
thousand calls of gratitude. The comeback of old Coke drove stock prices to the highest level in
twelve years. This was said to be the only way to regain the lead on the cola wars.
1993 - Coca-Cola exceeds 10 Billion cases sold worldwide.
1996 - The Summer Olympics will be held in Atlanta, Georgia, the home of Coca-Cola. For
more than 65 years, Coca-Cola has been a sponsor of the Olympics.
CSR (Company social responsibility)-
One great earmark that the Coca-Cola Company has is helping the people of Atlanta. They
accomplish this through scholarships, hotlines, donations and contributions. Another large
accomplishment that the Coca-Cola has, Is being the first company to make and use recycled
plastic bottles.
Coke in India-
Despite the formidable track of its parent $18 billion giant in Atlanta USA. Coke India record
1800 crore soft drink makers is prominent. Coca-Cola entered in India market after 16 years
from Hathras Dec 1993.Cocacola became the undisputed leader of the Indian soft drink market
because of their aquiring rights of Ramesh Chauhan aerated Parle drinks with one stroke of pen
and a bill of 140 crore, coke picked by five brands Thums up, limca, Goldspot, Citra, Maaza with
a combined rate of 65% with Thumsup alone accounting for 56% then 650 crore segment.
Benchmark--
Coca-Cola ranks no.1 brand in the world by the business world survey followed by
companies like Microsoft and IBM.
Cocacola is the market leader in the whole world in beverage industry.
Business week magazine ranks Cocacola on 4th position in India FMCG industry.
Coca-Cola enjoys approx 60% market share in Indian beverage
industry.
Quality Assurance--Ever Since, Coca-Cola India has made significant investments to build and continually
consolidate its business in the country, including new production facilities, waste water treatment
plants, distribution systems and marketing channels.
Coca-Cola India is among the country’s top international investors, having invested more than
US$ 1 billion in India within a decade of its presence and further pledged another US$ 100
million in 2003 for its operations.
Coca-Cola Advertisements it’s The Real Thing--
Advertising has played an important role in the success of company’s products since first
newspaper ad in 1886, which read, "Coca-Cola. Delicious! Refreshing! Exhilarating!
Invigorating." The Company uses advertising to trigger desire as often and in as many ways as
possible. Throughout the years, slogans for Coca-Cola have always been memorable. Here are
some highlights:
2000 - Coca-Cola Enjoy
1993 - Always Coca-Cola
1990 - Can t Beat the Real Thing
1989 - Can t Beat the Feeling
1986 - Red, White and You
1982 - Coke Is It
1976 - Coke Adds Life
1971 - I d Like to Buy the World a Coke
1969 - It s the Real Thing
1963 - Things Go Better with Coke
1959- Be Really Refreshed
1944- Global High Sign
1942- It s the Real Thing
1936- It s the Refreshing Thing To Do
1929 - The Pause That Refreshes
Fine illustrations by noted artists, including Norman Rockwell and N. C. Wyeth, were the
hallmark of early campaigns in premier magazines. Artist Haddon Sundblom s portraits for
holiday ads, which began in the 1930s, helped mould the national image of a red-suited Santa
Claus. Fresh, creative and tasteful, advertising images for Coca-Cola have always set a high
standard of quality for other products around the world. The Company recognizes that Coca-Cola
belongs to the billions of consumers in every corner of the globe who have chosen it as their
favorite soft drink. Company’s advertising reflects that special relationship between consumers
and the simple moments of pleasure they have come to associate with Coca-Cola.
Company Global Bottling System--
Today, coke products reach consumers and customers around the world through a vast
distribution network made up of local bottling companies. These bottlers are located around the
world, and most are independent businesses. Using syrups, concentrates and beverage bases
produced by The Coca-Cola Company, company’s global bottling system packages and markets
products, then distributes them to more than 14 million retail outlets worldwide.
The Coca-Cola Company is committed to assisting its bottlers with the functions of an efficient
bottling operation and initiating quality systems to ensure the highest quality products for our
consumers. Coca-Cola began as a fountain product, but candy merchant Joseph A. Biedenharn of
Mississippi was looking for a way to serve this refreshing beverage at picnics. He began offering
bottled Coca-Cola, using syrup shipped from Atlanta, during an especially busy summer in 1894.
In 1899, large-scale bottling became possible when Asa Candler granted exclusive bottling rights
to Joseph B. Whitehead and Benjamin F. Thomas of Chattanooga, Tennessee. The contract
marked the beginning of The Coca-Cola Company’s unique independent bottling system that
remains the foundation of Company soft drink operations.
Brand Localization Strategy: The Two Indians--
India A: “Life ho to anise”
“India A,” the designation Coca-Cola gave to the market segment including metropolitan areas
and large towns, represented 4% of the country’s population. This segment sought social
bonding as a need and responded to inspirational messages, celebrating the benefits of their
increasing social and economic freedoms. “Life ho to anise,” (life as it should be) was the
successful and relevant tagline found in Coca-Cola’s advertising to this audience.
India B: “Thanda Matlab Coca-Cola”
Coca-Cola India believed that the first brand to offer communication targeted to the smaller
towns would own the rural market and went after that objective with a comprehensive strategy.
“India B” included small towns and rural areas, comprising the other 96% of the nation’s
population. This segment’s primary need was out-of-home thirst-quenching and the soft drink
category was undifferentiated in the minds of rural consumers. Additionally, with an average
Coke costing Rs. 10 and an average day’s wages around Rs. 100, Coke was perceived as a luxury
that few could afford.
Distribution system of Coca Cola Lucknow
Brindavan Bottlers Pvt. Ltd.
Safedabad Barabanki
Charbagh
Depot
Khurram Nagar
Depot
Chinhat
Depot
Distribution
Department
General Trade General Trade Dealers and agencies
General Trade Key Accounts
Route 1
Route 2
Route 3
Route 1
Route 2
Route 3
Route 1
Route 2
Route 3
Direct
Route
Various Districts
2.3: DEPARTMENTAL DETAILS—
DIRECTOR
Vivek Ladani
G.M Sales &Mktg
Rajiv SaxenaSales Head
B.K.Srivastava
H.R Manager
Meghana
KEY A/L
Ashok Malhotra
RTM Manager
Vyom krishna
R.D Manager
Anil Nigam
MEM
Devender Srivastava
ASM (5)
M.D
M.D. Ladani
Mission
“To refresh the world... In mind, body and spirit.
To inspire moments of optimism… through our brands and our actions.
To create value and make a difference… everywhere we engage.”
Vision
More than a billion times a day, consumer choose our brand of refreshment
because coca cola is... “The Symbol of Quality Customers and Consumers
Satisfaction
A Responsible Citizen of the World”
2.4: PRODUCT PROFILE
BRANDS TAGLINE
Thumsup - Taste the thunder
Cocacola - Open happiness
Sprite - Seedhi baat no bakwaas ,clear hai
Limca – Maaza taazgi ka
Fanta – Dikhao apne asli rang
Maaza - Bina guthli wala aam
MMNF- Bilkul ghar jaisa
MMPO - Refreshingly Orange
KINLEY - Boond-Boond Mein Vishwas
BRAND AMBASSDORS
Thumsup -Akshay Kumar
Cocacola -Imran Khan
Sprite -Shahrukh Khan
Fanta -Genelia D’souza
Limca -Riya Sen
MMPO – Nikhil Chinnappa
BRAND VALUE –
2008 Rank2007 RankBrandSector2008 Brand Value ($m) coca-cola Beverages66,667Coca-Cola has once again retained its status as the world’s most valuable brand. Proving that it still has a few tricks up its sleeve, current trends toward healthier diets have seen Coke shift focus to better-for-you drinks in the last year, with the launch of products like the vitamin and mineral enriched Diet Coke Plus and the continued push behind Coke Zero, which is now available in more than 80 countries. Coke has also worked hard to engage consumers, with innovative online campaigns such as “Design Your Own” that invited people to design their own Coke containers and share them with the world.
2008 66,6672007 65,324
2006 67,0002005 67,5252004 67,3942003 70,4532002 69,6372001 68,945
ABOUT BRANDS
Coca-cola-
The world’s favorite and valuable drink and brand. Coca -cola has having truly remarkable
heritage. From a humble beginning in 1886,it is now the flagship brand of the largest
manufacturer, marketer and distributer of non – alcoholic beverage in the world. Coca-cola‘s
advertisement campaigns “jo chaho ho jaye” and “life ho to aisi” were very popular and had
entered the youth’s vocabulary. The campaign “thanda matlab coca-cola” make it india’s favorite
brand. Coca-cola had signed on various celebrities including stars such as Krishna kapoor,
cricketers such as srinath, sourav ganguly, It’s brand ambassadors are Amir Khan and Hrithik
Roshan. The competitor on the cola category is Pepsi.
Thums up –
Thums up is leading sparking soft drink and most trusted brand in india. Originally introduced in
1977,and acquired coca-cola company in 1993.thumps is known as for it’s strong ,fizzy taste
and it’s confident, mature and uniquely masculine attitude. This brand clearly seeks to separate
the men from the boys. The competitor of the brand on same category is Pepsi.
Sprite –
In selling sprite is the rank no. 4 in world and is sold in more than 165 countries. It was launched
in year 1999 and today it has grown to be one of the fastest growing soft drinks, leading the clear
lime category. Today sprite is perceived as a youth icon. Its clear crisp refreshing taste encourage
the today’s youth to trust their instincts,inluence them to be true to who they are and to be their
thirst. Sprite is liked by all age groups & people. Jan 09 report of “The times of India” claims
sprite to be the second brand in sales after Thumsup
Competitor : 7up & Mountain dew
Fanta—
It is the orange drink of the coca-cola company. It entered the Indian market in the year
1993.fanta stands for its vibrant colour, tempting taste and tingling bubbles. over the years fanta
has occupied a strong market place and is identified as the fun catalyst. Fanta has two flavors
apple & orange. This is very popular drink among females.
Competitor: Mirinda, Parle’s Appy fizz
Limca—
Limca derived from nimbu+jaisa, hence lime sa .limca has lived up to its promise and has been
the original choice of millions of consumer for over three decades. It born in 1971 ,limca has
remained unchallenged as the no, 1 sparking drink in the cloudy lemon segment. The success
formula of limca is it’s freshness power. Limca’s freshness is like no other-lime n lemoni limca
refreshes, reenergizes, rejuvenates not just your body but also your emotions. Freshness of
emotions idea stemmed from the inside about our consumer—the desire to rejuvenate her/his
emotions which are constantly being dulled in the routine pursuit of success. Competitor :
Nimbooz
Minute maid pulpy orange—
This concept comes when the florida food corporation developed orange juice powder. they
branded it minute maid, a name connoting the convenience and the ease of preparation(in
minute).the lunch of minute made pulpy orange in india(starting from the south of the country) is
aimed to further extend the leadership of coca-cola in india in the juice drink category. This
contains no sugar & added flavor .This is a family drink
Maaza –
Maaza is the most popular drink being the mango variety, so much that over the years, the
Maaza brand has become synonymous with Mango. Maaza currently dominates the fruit drink
category and competes with Pepsi's Slice brand of mango drink and Frooti, manufactured by
Parle Agro. Maaza was launched in 1976 in India.Maaza was acquired by Coca-Cola India in
1993 from Parle-Bisleri along with other brands such as Limca, Citra, Thums Up and Gold Spot .
Maaza is popular among children and women.
Competitor: Slice, frooti
Kinley-
The importance of water can never understand. Particularly in a nation like india where water
governs the lives of the millions, be it as part of everyday rituals or as the monsoon which gives
life to the sub-continent. Soft drink major Coca-Cola has launched a new marketing initiative for
its packaged drinking water brand, Kinley.The previous marketing campaign for Kinley sported
the tag line “Boond-Boond Mein Vishwas” (trust in every drop). This time around the tag line, an
extension of Kinley’s previous campaign, reads “Vishwas Karo.”
Minute Made Nimbu Fresh-
Riding on the success of Minute Maid Pulpy Orange, Coca-Cola in India today announced the
launch of its latest product variant under the Minute Maid brand umbrella.The new Minute Maid
Nimbu Fresh is a lemon juice-based drink with no added preservative or added colour, developed
for the Indian market. The lemon-flavoured drink is made out of fresh lemon juice concentrate,
emulating home-made 'nimbu pani', and casrries the tagline: 'Bilkul ghar jaisa' (just like home).
The product will be available in two pack sizes of 400 ml and 1 litre, priced at Rs15 and Rs40
respectively. The new drink is targeted at consumers across all age groups who are on the look
out for a naturally refreshing juice drink.
BRAND NAME GLASS PET CAN FOUNTAIN
Coca-cola 200 ml, 300 ml600 ml, 1.25 L,500 ml + 100 ml
330 ml Various Sizes
THUMPS UP 200 ml, 300 ml
600 ml, 1.25 L500 ml + 100 ml 330 ml
Various Sizes
SPRITE 200 ml, 300 ml
600 ml, 1.25 L,500 ml + 100 ml 330 ml
Various Sizes
FANTA 200 ml, 300 ml600 ml, 1.25 L,500 ml + 100 ml 330 ml
Various Sizes
LIMKA 200 ml, 300 ml
600 ml, 1.5 L,330 ml
Various Sizes
MINUTE MAID PULPY ORANGE
400 ml, 1 L, 1.25 L
MAAZA 200 ml, 250 ml, 250 ml, 600 ml, 1.2 L
POCKET MAAZA 200 ml
KINLEY500 ml, 1000 ml
PACK NO. OF BOTTELS IN A CASE
300 ml 24
250 ml 24
200 ml 24
600 ml 24
1.2 L 12
2 L 9
CHAPTER- 3
Research Methodology: The research method to developing route to increase the sale and market share of coke in
the market. The research is as following--
3.1: Introduction-
Type of Research : Exploratory Research Design
Method of Research : Data Collection method
Sampling method : Random Sampling
Sample Unit : Outlets
Sample Size : 170
Statistical Tool : Route Map
3.2: Research design-
A descriptive research design has been chosen to study the assessment of market potential for juice segment in rural areas. The reasons for chosen descriptive research design are:-
To describe the extent of association between the variables under consideration.
Research design was pre-planned and structured.
3.3: Sampling plan-
The study is conducted in Lucknow. For the purpose of study, a sample size of 165 numbers of outlets was taken. Simple Random sampling method has been used for the present study.
3.4: Method of Data Collection-
1. Primary data collection: Data for the project is collected from the primary sources. The
sheet was filled by the author as a part of the survey.
2. Secondary Data: Data collected from the organization’s web site
Variables of the study-
Types of outlets(E&D,CON.GRO)
Kinds of outlet on the basis of inventory(A,B,C,D)
3.5: Limitation of the study-
Secondary data might not be authentic enough for the correct representation of
objective.
The project is conducted in Lucknow, so it is not possible to draw correct picture of
overall performance.
The study is only confined to retailers and so the preference of actual consumers
could not be taken.
The retailers may or may not reveal the true expected sales figures
CHAPTER-4
4.1: DATA ANALYSIS
DESIGN ROUTE WITH DATA:-
Route no 1:- Chowk, Phoolvali gali, Ban vali gali, Choodi vali gali, Tulasi das
marg, Nakkas, Shahmeera road, Medical crossing, Jawahar nagar, Janta gali,
Buddha park, KGMC, Khun-khun ji road, Koneswar chauraha.
S.no Outlet name Address Contact no SGA coke pepsi
1 Shukla general store Chowk 9307266383 NO 10 12
2 Blow hot blow cold Chowk 9208447220 NO 5 5
3 Mishra bhojanlay Chowk 9451575744 NO 47
6
4 Kumar cool jalpan grih Chowk 9336044346 Yes 3
5 Maa durga kachaudi bhandar Chowk Yes 5 2
6 Dixit cool corner Chowk 9335894656 Yes 10 1
7 Bhaiya pan and cig shop Chowk 9307574030 Yes 5 12
8 Dixit amul Chowk 9795728889 NO 4 18
9 Radhey lal Tiwari Chowk 9696684951 Yes 7 2
10 Hot and cool café Chowk 9839821504 Yes 10 0
11 Mishra pan bhandar Chowk Yes 3 3
12 Satish kumar Chowk Yes 5 7
13 Bhola pan bhandar Chowk 9369153165 Yes 6 8
14 Dixit chat bhandar Chowk 9838995028 Yes 5 3
15 Cool ganga Chowk 2257238 Yes 25 15
16 ATN cool corner Chowk NO 7 6
17 Sri lassi corner Chowk 2254444 Yes 22 12
18 Agarwal general store Chowk 6540499 Yes 25 10
19 Munna pan bhandar Chowk 9235153247 NO 8 6
20 Anita masala company Chowk 2252404 Yes 5 2
21 Radhey lal misthan bhandar Chowk 6533510 Yes 10 8
22 Sanket tea centre Chowk 9696847782 NO 4 5
23 K.L tiwati juice corner Chowk chauraha 9369340529 NO 4 6
24 Krishna sweet point Chowk chauraha 9336358150 Yes 12 8
25 Dixit bhojnalay Chowk chauraha 9335097550 NO 6 9
26 Dixit tambaku bhandar Chowk Yes 5 7
27 Prem misthan bhandar Chowk 9919788635 NO 5 2
28 Gaurav fast food Chowk NO 5 4
29 Amana bhojanalaya Chowk 9305737206 Yes 6 5
30 Bharat lal dugdh bhandar Chowk 9839704344 Yes 15 18
31 Radhe lal dudghe bhandar Chowk NO 10 9
32 Gomati general store Banwaligali 9415543096 NO 3 5
33 Sanjay store Banwaligali 9453210999 NO 10 4
34 Jitu juice corner Khun khun ji road 9415596592 Yes 10 6
35 Adardh general store Khun khun ji road 9451309120 NO 10 5
36 Vej corner Khun khun ji road 9669121567 Yes 7 4
37 Tanu kachaudi corner Khun khun ji road 9335791254 NO 7 7
Route 2:- Ram ganj, Daulat ganj, Mufti ganj, Husainabad, Ahamadganj, Musahibganj,Mohinipurva, Gagughat, Barafkhana
1 Golu general store Ramganj Yes 6 122 Chotu general store Ramganj 9936959007 Yes 15 53 Aamir general store Ramganj 9795928210 Yes 20 04 fahim genaral store Ramganj 9305665699 No 6 125 Mo.salim Ramganj 9389668753 No 4 86 Aarif hogery Ramganj 9919467417 Yes 25 07 Heena general store Ramganj 9838631026 No 0 258 Mejbaan bakery Ramganj No 0 209 Lucky general store Daulatgang 9236549668 No 25 010 Sachin general store Daulatgang 9415197846 No 3 911 Mufti general store Daulatgang No 0 2312 taki general store Daulatgang 9235296879 No 3 813 Vivek general store Daulatgang No 4 314 Mani general store Daulatgang 9305112382 No 4 415 Sushil jaiswal Daulatgang No 3 616 kallu bhai pinwale Muftigang 9026365710 No 2 1017 Aslam general store Muftigang No 2 618 Arsad general store Muftigang 9696963413 No 20 019 Mehandi general store Muftigang No 20 720 Madina general store Muftigang No 0 2521 N cool point Muftigang 9305240084 Yes 18 622 Samma battery Hussainabad 9795872034 No 2 823 Meena battery Hussainabad 9336422890 Yes 16 824 Mohammed mujib Hussainabad Yes 10 525 farkan provisional store Hussainabad 9335249588 No 15 526 lakhan general store Hussainabad 9919491033 Yes 5 527 Mahfooz general store Hussainabad 9883906591 No 0 2028 M hanif Hussainabad No 0 2529 Aamir shop Hussainabad 9044849784 No 10 2030 Chaurasia pan bhandar Hussainabad No 0 1031 Safi general store Hussainabad 9235721564 Yes 5 532 Igris Ahmedganj No 5 533 Atul general store Ahmedganj 9389933232 No 16 834 Rakesh general store Musahibganj Yes 12 635 Sujeet general store Musahibganj Yes 10 1036 Singh general store Musahibganj 9795487050 No 4 8
37 Prashant cool corner Musahibganj Yes 20 1038 Shiv misthan bhandar Musahibganj 9235707454 No 0 1539 Brijesh T stall Gaughat 9621232118 No 7 740 Sallu general store Gaughat 9369625112 No 20 1041 Baba general store Gaughat 9235721564 Yes 12 642 Manoj general store Gaughat 9305111210 No 8 843 Ajay kirana Barafkhana 9792761461 No 6 644 Bipin general store Mohinipurva 9794727965 Yes 3 945 taki general store Mohinipurva 9307721505 No 3 646 Ganga Dhaba Mohinipurva 9936248254 No 8 447 Seraj general store Mohinipurva 9235166701 No 7 748 A.G traders Mohinipurva 9839126554 No 5 549 Gopi hotel Mallahitola 9889719907 Yes 4 750 Al mohammadia stall Barafkhana 9307464934 Yes 6 651 Jari materrial shop Barafkhana No 2 452 Tripathi general store Barafkhana 9335287718 No 4 853 Samara doodh dairy Barafkhana No 4 4
Route 3:- Murmary toola, Convention centre, Kudiyaghat, Nimbu park, Lohiya
park, Lagpat nagar, Husainabad, Chhota imambada, Bada imambada
1 Sahu general store Murmary toola No 10 102 Royal café Convention centre 9305112030 No 10 103 Rita kachauri and coffee
centreConvention centre 9889053950 Yes 25 10
4 Maa Gomti PCO and cool corner
kudiaghat 9305398819 Yes 20 5
5 Maa vaisnavi cool and hot centre
kudiaghat Yes 18 6
6 Mata general and kirana store kudiaghat 9235160622 Yes 40 07 MB cool corner kudiaghat 9795785576 No 30 08 Maa bhojanalya nimbupark 9335262187 Yes 0 409 Froot corner lohiyapark 5 410 Maa Anandi stationary Lajpatnagar 9307199273 No 8 1011 Anand Gift house Lajpatnagar Yes 15 1512 sharma pco and confectionary Lajpatnagar 25 013 tandon talk point Lajpatnagar 2253990 No 10 1014 Rahul cool corner Lajpatnagar Yes 20 015 Sahni store Lajpatnagar 9936964138 No 0 3016 Channan Lajpatnagar 9695057593 No 3 1217 Ram prasad pan bhandar Lajpatnagar No 5 618 Asim general store Hussainabad 9415788205 No 7 719 MM cool point Hussainabad No 8 820 Raju Hussainabad No 15 521 shree general store Hussainabad 9307378031 No 20 222 Abbas canteen chotaimambada 9307877374 Yes 6 623 raju general store chotaimambada Yes 2 823 Ankit general store chotaimambada No 10 1024 banarsi misthan bhandar chotaimambada Yes 12 1525 juice corner chotaimambada No 20 1026 ramesh cool corner chotaimambada Yes 12 15
ROI WORKING FOR ZAIDI ASSOCITAES
salesme
n @loader
@
fuel cost@1 vechile
volume
Avg p/cs
profit
4000 3000 2.33 per km 50000 15 1935000
Month
Sale(%)
No. of
salesman
no.of loader
salary Salesman
salary loader
km fuel costvechile manitenance
misllenious
total expenditure
sale
TOTAL
REVENUE
Net profit
Roi % RGB
SALEPET SALE
jan 1% 2 2 8000 6000 25 1747.5 2500 200020272.
5 500 7500 -12772.5 -0.66 325 175
feb 2% 2 2 8000 6000 25 1747.5 2500 200020272.
5 1000 15000 -5272.5 -0.27 2600 1400
mar 8% 3 2 12000 6000 45 3145.5 2500 200025690.
5 4000 60000 34309.5 1.77 3900 2100
apr 17% 3 4 12000 12000 45 3145.5 2500 200031690.
5 8500 127500 95809.5 4.95 4875 2625
may 24% 3 4 12000 12000 45 3145.5 2500 200031690.
5 12000 180000 148310 7.66 7800 4200
jun 17% 3 4 12000 12000 45 3145.5 2500 200031690.
5 8500 127500 95809.5 4.95 5525 2975
jul 8% 2 2 8000 6000 25 1747.5 2500 200020272.
5 4000 60000 39727.5 2.05 2925 1575
aug 9% 2 2 8000 6000 25 1747.5 2500 200020272.
5 4500 67500 47227.5 2.44 1950 1050
sep 7% 2 2 8000 6000 25 1747.5 2500 200020272.
5 3500 52500 32227.5 1.67 1300 700
oct 3% 2 2 8000 6000 25 1747.5 2500 200020272.
5 1500 22500 2227.5 0.12 650 350
nov 3% 2 2 8000 6000 25 1747.5 2500 200020272.
5 1500 22500 2227.5 0.12 325 175
dec 1% 2 2 8000 6000 25 1747.5 2500 200020272.
5 500 7500 -12772.5 -0.66 325 175
100% 127000 90000 26562 30000 24000 282942 50000 750000 467058 24.14 32500 17500
4.2: INTERPRETATION-
TOTAL COCA COLA
SHOPS
THUMPS UP
SPRITE COCA-COLA
MAAZA KINLEY LIMCA FANTA MMPO
Series1 127 127 125 112 107 78 73 82 39
1030507090
110130
AVAILABILITY OF BRANDS OF COCA-COLA
In the total 127 coca-cola shops, the different brands thumps, sprite, coca- cola, mazza, kinley,
limca, fanta, mmpo are present in this number 127,125,112,107,78,73,82,39 respectively.
12
72
43
NO. OF COCA-COLA SHOPS=127TYPE OF OUTLETS
CON GRO E&D
In 127 shops, 72 shops are grocery, 43 shops are E&D and 12 shops are convenience.
VISI CONDITION CON0
2
4
6
8
10
12
10
NO.OF VISI AVALIABLE SHOPS IN COCA-COLA
=89
Series1
In 127 coca-cola shops,89 shops(con=10,gro=47,E&D=32) are having the visi cooler.
175 1400
2100
26254200
2975
15751050
700 350 175 175
PET SALE
jan feb mar apr may jun jul aug sep oct nov dec
RGB SALE
325 2600
3900
4875
7800
5525
2925
1950
1300
650 325 325
500
1500
2500
3500
4500
5500
6500
7500
325
2600
3900
4875
7800
5525
2925
1950
1300
650325 325
RGB SALE
1%2%
8%
17%
24%17%
8%
9%
7%
3% 3% 1%
Sale(%)
jan feb mar apr may jun jul aug sep oct nov dec
-40000-20000
020000400006000080000
100000120000140000160000
Net profit in different months
Net profit
jan feb mar apr may jun jul aug sep oct nov dec0
5000
10000
15000
20000
25000
30000
35000
total expenditure, 20272.5
TOTAL EXPENDITURE ( in month )
jan feb mar apr may jun jul aug sep oct nov dec
Roi %
-0.66 -0.27 1.77 4.95 7.66 4.95 2.05 2.44 1.67 0.12 0.12 -0.66-1.00
1.00
3.00
5.00
7.00
9.00
-0.66 -0.27
1.77
4.95
7.66
4.95
2.05 2.441.67
0.12 0.12-0.66
RETURN OF INVESTMENT (%)
1 2 3 4 5 6 7 8 9 10 11 120
1000
2000
3000
4000
5000
6000
7000
8000
RGB
SALE
RGB SALEPET SALE
The selling of RGB is more then the PET .
CHAPTER- 5
5.1: FINDINGS-
COCA-COLA is the market leader and the PEPSI is the market challenger in the major
portion in the area where I surveyed
The 57% market is covered by coca-cola and 43% is covered by PEPSI.
In COCA-COLA, the most popular flavor in the market is THUMS UP and SPRITE.
“SPRITE” has the fastest grown up brand in the clear lime segment in the recent years
“KINLEY” was present in 61% outlets of the area, I surveyed.
The product of “COCA-COLA, MINUTE MAID PULPY ORANGE” is yet not
successful in that area.
RTM has been very effective in the terms of market reach and distribution. Earlier
company was covering just 50% of the outlets present in that area now after new design
of routes they are targeting total 165 outlets.
The marketing strategy of Advance Sales And Services Pvt Ltd depends on two types of
distribution one is direct and another one indirect.
The total number of outlets present in the area is 165. Out of 165 , Coca-Cola is present
in 127 outlets.
In 127 outlets ,Thumps up , Sprite, Coca-cola, Maaza, Limca, Fanta, MMPO, Kinley are
present respectively in 127,125,112,107,73,82,39,78.
In the market the supply of “PEPSI” is better than the “COCA-COLA” with more
schemes and retailers preferred billing process.
Many outlet owners have complaint on improperly working visi- cooler
i.e. its cooling and repairing and with the time duration involved in installation of VISI-
cooler(i.e. more than15 days after the completion of all the paper work)
The sale of RGB is more the PET.
March, April, May, June are the pick sale month of the soft drink industry.
The selling of RGB is more then the PET.
Out of 127 outlets, 89 outlets are having visi cooler. Out of 89 outlets 46 are pure and 43
are impure.
Out of 127 outlets 12 are convenient, 47 are grocery and 32 are eating and drinking outlets.
In 12 convenient outlets 10 are having visi. Out of 10 only 7 outlets are pure.
In 72 grocery outlets 47 are having visi. Out of 47 outlets 27 are pure
In 43 E&D outlets 32 are having visi. Out of 32 only 12 are pure.
VISI-coolers, in many shops, are filled with personal things instead of company`s
products.
Sometimes according to the demand, delivery of products are not made available in the
outlets (supply of LIMCA and MAAZA have been complained more.
Sales person are not well trained.
In many areas retailers give more preference to the “COCA-COLA” products like
“THUMS UP, SPRITE, MAAZA, AND FANTA” but due to absence of retailer friendly
schemes and improper distribution they have to keep products of PEPSI.
Advertisement materials are not available in the right time at the right place i.e. Different
Channels like “Grocery, Convenience, E&D”.
The stores are categorized on the basis of their sales, volume and channel.
In many shops of the area where I surveyed there is no direct contacts of company with
the retailers.
In some area (Mushadganj, Muniopurwa, Husainabad, Barafkhana) retailers have to use
their own vehicle because company`s or distributor’s vehicles are not visiting those areas
The biggest threat of coca cola in the market is the distinctive “BOTTEL” exchanging
strategy of “PEPSI.
I found that distributors are using fewer infrastructures than required. Some distributors
are using drivers as sales man and as loader where driver as sales man is fine but when
drivers are also working as loader it is making late start of distribution because when all
the vehicles are loaded then only they start from Go down.
5.2: SUGESSTIONS-
The company must try to make all brands of Coca-Cola available at every retail outlet
whether it is large or small, otherwise the consumer may go for substitute.
Sales People and delivery persons should properly monitor the market whether stocks are
available and are properly utilized in the market or not.
Display material should be provided to the retailers on more regular basis to increase the
sales level.
Maintenance work of refrigerator; i.e. purity must be improved.
Coca-cola can also adapt BOTTEL EXCHANGE strategy of PEPSI to provide more
comfort for retailers.
Market developer and Sales executives should be responsible for making retailers aware
about the new schemes and their work should be monitored by respective departments. It
can also be done by taking helps of Interns who are doing their projects but Sales Manager
should also take this responsibility by using new technology for example SMS.
Department heads should make sure that market developers and sales executive are visiting
the areas regularly.
For stopping SCHEME HIDING company should pay attention on the salary of market
developer and sales executive. It will also help in improving VISI conditions.
5.3: Bibliography
The following things were helpful for the completion of the project:
Web Sites:
Cocacolaindia.com
Cocacola.com
Domain-b.com
JOURNELS:
Marketing generals
News papers
TEXT BOOK:
Business Statistics - J K Sharma
Marketing Management - Philip Kotler