penetration of mango drinks

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Penetration of Mango Drinks in Siliguri Market

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A Project Report On

Undertaken at

HINDUSTAN COCA-COLA BEVERAGES

PRIVATE LIMITED

SILIGURI, WEST BENGAL

(Submitted In Partial Fulfilment of the Requirements for the Award of MBA)

Submitted By


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Prasenjit ShilInternational Institute Of Business Management, New Delhi

Under the Corporate guidance of

Mr. Arindam SikdarArea Sales Manager, Coca-Cola,

North Bengal & Sikkim

Under the faculty guidance ofProf. Anurag Mathur

International Institute Of Business Management

B-II /100,MCIE,Mathura Road, NewDelhi,110044


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CERTIFICATE

This is to certify that the project entitled _Penetration of

Mango Drinks in Siliguri Market___ is the bona fide record of

the work done by _Prasenjit Shil_,_EIILMU/09/F1173_,

_3rd_semester MBA student of _2009-2011_ batch, submitted

in partial fulfilment of the requirements for the award of

Master of Business Administration

Faculty Guide: ________ Director: ____________

Date:

Place:


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ACKNOWLEDGEMENT

In my endeavour to learn management and industrial practices and apply my theoretical

knowledge as stipulated by our curriculum, I would like to thank Hindustan Coca Cola

Beverages Pvt Ltd for providing me an opportunity to work with their department of sales and

marketing, Siliguri- West Bengal.

I hereby take this opportunity to thank my project guide, Mr. Arindam Sikder, Area SalesManager, HCCBPL, Siliguri,who was always there to provide me with necessary inputs and

keeping me motivated during the project. Without his experience about the market and the

people whom I was introduced by him, this project would not have been possible.

I also extend my gratitude to Mr. P.S Gupta, STL, HCCBPL, Siliguri, who was always there to

analyze the project progress and to give valuable inputs for the procedure and in helping me to

collect data. I would like to thank the entire Siliguri team of HCCBPL for their co-operation and

for giving me a platform to hone my skills. Special mention needs to be made here ofMr.

Subhasish Deyand all MDs (Market Developers) of HCCBPL, Siliguri unit.

Special thanks to Mr. Anjan Roy,CED Trainee, HCCBPL,Raninagar,Jalpaiguri, and

Mr.Subabrata Talukder,Channel Executive, HCCBPL, North East and Siliguri for giving me

an opportunity to do this project. I thank all my friends and my family for contributing towards

the completion of this project.

I express my gratitude to our Dean Prof.Anurag Mathur and Ms.Aparna Shukla, Placement

Head, for having given me the permission to put into practice, the theoretical knowledge that I

imparted from the programme.


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CONTENTS

ExecutiveSummary.....................................................................................................................8

Introductions...............................................................................................................................9

Industry Overview.....................................................................................................................10

Key Success Factors............................................................................................................11

Variant Available.................................................................................................................12

Overall Carbonated Soft Drink............................................................................................13

Product Coverage.................................................................................................................13

Market Trends & Industry Challenges.................................................................................13

Bottled Water Market..........................................................................................................15

Growth Promotional Activities............................................................................................16

Retailers Power Continuously Increasing...........................................................................17

Competition Becomes More and Difficult...........................................................................18

Trends and Opportunities in Soft Drink Industry................................................................20

Porters Five Force Analysis.................................................................................................21

Beverage Industry in India..........................................................................................................26

The Soft drink Industry........................................................................................................27

Company Overview.....................................................................................................................31

The Coca Cola Company......................................................................................................32International Expansion........................................................................................................33

The Worlds Most Powerful Brand.......................................................................................34

Patents, Copyrights, Trade Secrets & Trademarks................................................................35

Employees..............................................................................................................................36

Core Capabilities....................................................................................................................37

The Coca Cola System...........................................................................................................38

Mission of Coca Cola.............................................................................................................39

Vision of Coca Cola...............................................................................................................40

Vision 2020............................................................................................................................41

Value.......................................................................................................................................42Hindustan Coca Cola Beverages Private Limited..........................................................................43

Coke in India...........................................................................................................................43

Marketing Strategy..................................................................................................................44


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Brand Localization Strategy...................................................................................................45

Rural Success........................................................................................................................46

HCCBPL Structure...............................................................................................................47COBO.............................................................................................................................47

FOBO..............................................................................................................................48

Production Process................................................................................................................49

Organizational Chart of HCCBPL........................................................................................50

Organizational Structure.......................................................................................................52

Sales Department Structure..................................................................................................53

Product Mix of Coca Cola....................................................................................................54

Competition to HCCBPL.....................................................................................................55

Marketing Mix......................................................................................................................58

Corporate Social Responsibility...........................................................................................62

Market Segmentation of Coca Cola......................................................................................64

Classification of Outlets........................................................................................................65

Channel Cluster.....................................................................................................................65

Brand Order System of Coca Cola........................................................................................68

Product Description of Coca Cola..............................................................................................75

Project Profile...............................................................................................................................76

Penetration of Mango Drinks in Siliguri Market..................................................................77

Market Analysis for Understanding the market scenario & position of Maaza..................77

Analysis of Product Maaza in Respect of Siliguri Market...................................................77

Analysis of Supply History & Forecast the Future Sales.....................................................78

Objectives..............................................................................................................................79

Data Collection.....................................................................................................................80

Research Methodology.........................................................................................................80

Tools used For Data Collection.......................................................................................81

Collected Survey Data...................................................................................................82


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Market Analysis Report for Understanding the market scenario.........................................82

Market Share of Mango Drinks Brands in Siliguri Market.........................................83

Effective Supply of Mango Drinks in Siliguri Market................................................84

Market Share of Mango Drinks Brands According to Margin....................................85

Market Share of Mango Drinks Brands According to Schemes..................................86

SWOT Analysis of Mango Drinks in India..................................................................87

SWOT Analysis of Maaza.............................................................................................88

SWOT Analysis of Slice...............................................................................................89

SWOT Analysis of Frooti.............................................................................................90

Differential Price Analysis of Different Mango Drinks in Siliguri Market........................91

Hypothesis test for Market Share of Mango Drinks Brands.................................................93

SWOT Analysis of Maaza in Siliguri Market..............................................................94

Sales Forecasting.................................................................................................................95

Recommendations & Conclusion................................................................................................98

Learning Outcome.......................................................................................................................99

Questionaire...............................................................................................................................100

Annexure...................................................................................................................................101

Reference...................................................................................................................................102


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Executive Summery

Penetration of mango drinks in Siliguri market implies the market share of mango drinks in

Siliguri market. Here main three mango drinks giants Coca Cola, PepsiCo & Parle Agro

marketed their mango drinks i.e. Maaza, Slice & Frooti respectively. India's mango obsession

might be as old as the fruit but the business opportunities it is creating for food processing sector

is something that has never happened before. While mango drink brands like Coca-Cola

(Maaza), Pepsi (Slice), Dabur (Real Mango juice) and Parle Agro (Frooti) are promoting the

category with new marketing and advertising campaigns.

New capacities, driven by the mango juice and drink segment, are being added even as the

industry consolidates itself. The total domestic processing capacity for the king of fruits has gone

up many times in the past two years and now is estimated at 12,000 tonne per day during the

season. The demand for processed Indian mango products is growing by about 25% in both the

domestic and the export markets.(1)

The organised beverage market in India is ruled by mango juices, nectars and drinks that have

about 85% of the market share; about 38 million cases of mango-based drinks are consumed by

Indians every year.(1)

Similarly Coca-Cola, whose Maaza is said to have more than 35% market share for mango

drinks in India.(1)

The demand for this mango drinks not only in Siliguri but all over India is abnormal. Anybody

cant forecast the exact demand & growth of this mango drinks eying on market. In Siliguri

market 15 % sales solely comes from Maaza.

Study on Penetration of mango drinks gives a vivid idea about the present situation of mango

drinks market in Siliguri area and above all the role & contribution of Maaza in this Siliguri

market.


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Maaza is produced only in three plants all over India. They are Dasna in UP, Khurda in Orissa &

Wada in Maharashtra. These 3 plants produced & supply only 40 % of Indias Maaza demand.

So, identifying the exact demand & delivering the product accordingly is the major challenge.

INTRODUCTION


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SOFT DRINKS INDUSTRY

For years the story in the non alcoholic sector centred on the power

struggle between Coke and Pepsi. But as the pop fight has topped out,

the industrys giants have begun relying on new product flavours andlooking to non carbonated beverages for growth

- Barbara Murray.

Three leading companies have prominent presence in the soft drink industry. The leaders include

the Coca-Cola Company, PepsiCo, and Cadbury Schweppes. According to the Coca-Cola annual

report, it has the most soft drink sales with $32 billion. The Coca-Cola product line has several

popular soft drinks including Coca-Cola, Diet Coke, Fanta, Barqs, Sprite, Maaza etc selling over

400 drink brands in about 200 nations. PepsiCo is the next top competitor with soft drink sales

grossing $28 billion for the two beverage subsidiaries, PepsiCo Beverages North America and

PepsiCo International. PepsiCos soft drink product line includes Pepsi, Mountain Dew,


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Miranda, Slice etc which make up more than one quarter of its sales. Cadbury Schweppes, the

third major player had soft drink sales of $13 billion with a product line consisting of soft drinks

such as A&W Root Beer, Canada Dry, and Dr. Pepper.

These companies' products occupy large portions of any supermarket's shelf space, often

covering more territory than real food categories like dairy products, meat, or produce. The

prototype of all marketing and branding struggles, the "Cola Wars" keep expanding. The Pepsi

and Coca Cola keep rolling out the big guns: duelling pop stars, and new branded products in the

form of Vanilla Coke" and Pepsi Blue. They are fighting on the TV, in the fast-food

restaurants, and in the supermarkets; they are also duelling in the schools. One of the biggest

pushes of the last few years has been convincing school districts, universities, and other

institutions to go all-Coke or all-Pepsi, in return for a (small) cut of the gross sales. Selling costly

sugared water and building an increasing demand for it, even in Third World countries, involves

marketing in its purest form, unsullied by any pre-existing need or local tradition. Markets in

Eastern Europe, China, India, and Mexico, among others, are expanding fast, and both Coke and

Pepsi are finding local partners (bottlers) in these countries to keep extending their reach. And

while the American market may be mature, there's still an opportunity worldwide to replace hotbeverages like coffee and tea that require some preparation with these cold, iconic ready-to-drink

brands.

KEY SUCCESS FACTORS

Key factors for competitive success within the soft drink industry branch from the trends of the

macro environment. Primarily, constant product innovation is imperative. A company must be

able to recognize consumer wants and needs, while maintaining the ability to adjust with the

changing market. They must keep up with the changing trends.


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Another key factor is the size of the organization, especially in terms of market share. Large

distributors have the ability to negotiate with stadiums, universities and school systems, making

them the exclusive supplier for a specified period of time. Additionally, they have the ability to

commit to mass purchases that significantly lower their costs. They must implement effective

distribution channels to remain competitive. Taste of the product is also a key factor for success.

Furthermore, established brand loyalty is a large aspect of the soft drink industry. Many

consumers of carbonated beverages are extremely dedicated to a particular product, and rarely

purchase other varieties. This stresses the importance of developing and maintaining a superior

brand image.

Price, however, is also a key factor because consumers without a strong brand preference will

select the product with the most competitive price. Finally, global expansion is a vital factor in

the success of a company within the soft drink industry. The United States has reached relative

market saturation, requiring movement into the global industry to maintain growth.

Variant Available

Soft drinks are available in glass bottles, aluminium cans and PET bottles for home

consumption. Fountains also dispense them in disposable containers. Non- alcoholic soft drinks

beverage market can be 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 in the cola products and non-cola

products. Cola products accounts 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 four categories based on the types of flavours

available namely: Orange, Cloudy Lime, Clear Lime and Mango. . Robust time ahead for soft


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drinks Soft drinks are expected to see robust volume growth over the forecast period. This will

occur despite a total volume and constant value decline for carbonates. Growth will be led by

bottled water and, from a smaller base and with slower growth, fruit/vegetable juice. Health and

convenience are predicted to be the two most important factors affecting buying behaviour, as

carbonates and concentrates play second fiddle to healthier bottled water and fruit/vegetable

juice.

Overall Carbonated Soft Drink

In fact, Coke and Pepsi have a third major rival on the bottled soft drink shelves, namely

Cadbury-Schweppes. The big three carbonated beverage makers now exist in a stable oligopoly

those changes only by small increments and which controls over 90% of the market. Over the

years, Cadbury-Schweppes (the result of a merger between a British candy company and a British

beverage company) has improved its position by acquiring key brands in the US, namely Dr.

Pepper and Seven Up, along with A & W and Canada Dry. In 2001, however, Cadbury acquired

moribund RC Cola, giving it a cola drink to battle against the big guys. This gave the company

more shelf position and immediately gave the RC Cola brand, long a distant also-ran with weak

marketing muscles, more sales and market presence. Pepsi gave itself a small boost because of the

popularity of newly introduced Mountain Dew Code Red, a hyper-caffeinated soda. Coke's

numbers declined slightly. It's pretty indicative of this mature market that the only major move in

market share comes through a takeover. Moreover, the takeover targets that are left are so smallthat the biggest remaining brand doesn't make more than 1% difference in total volume.


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Product Coverage

Asian speciality drinks; Bottled water; Carbonates; Concentrates; Fruit/vegetable juice;

Functional drinks; RTD coffee; RTD tea

Market trends and Industry challenges

In order to survive in this environment, companies must consider the market trends that will

likely shape the industry over the next few years. This will help soft drink companies to

understand the challenges they will encounter and to turn them into opportunities for process

improvement, enhanced flexibility and, ultimately, greater profitability.

Market trends for the soft drink industry can be summarized by six fundamental themes:

Changing consumer beverage preferences,Featuring a shift toward health-oriented wellness

Drinks.

Growing friction between bottlers andManufacturers in the distribution system.

Continually increasing retailer strength. Fierce competition. Complex distribution system composed of multiple

Sales channels.

Beverage safety concerns and more-stringentRegulations.


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Consumers turn to wellness and healthy drinks

In much of the developed world, a significant portion of the population is overweight or obese.

This includes two-thirds of Americans and an increasing number of Europeans. Consequently,

many people have started to actively manage their weight and change their lifestyles, a shift that

is reflected in their choices in the beverage aisles:

Demand has increased for beverages that arePerceived to be healthy

Energy drink consumption has also climbed, due toThe increasingly active lifestyles of teenagers

This trend towards healthier drinks has created a number of new categories, and changed the

consumption trends of the beverage industry as a whole. While previously dominated by

carbonated soft drinks, the industry is now more evenly balanced between carbonates, and

product categories with a healthier image, such as bottled water, energy drinks and juice: While

carbonates are still the largest soft drink segment, bottled water is catching up fast, with an

average of 58 litters consumed annually per capita.

Among individual countries, Italy ranks number one in bottled water consumption, with the

average Italian drinking177 litters per year. Overall, bottled water represents the fastest growing

soft drink segment, expanding at 9percent annually. This growth is being partially driven by

increasing awareness of the health benefits of proper hydration. The industry has responded to

consumers desire for healthier beverages by creating new categories, such as energy drinks, and

by diversifying within existing ones. For example, the leading carbonated soft drink companies

have recently introduced products with 50%less sugar that fall mid-way between regular and dietclassifications. Similarly, a South African juice company has recently released a fruit-based

drink that contains a


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Full complement of vitamins and nutrients.

Bottled Water Market

Over the past 20 years, bottled water has been the beverage industrys fastest growing segment

the world over, fuelled first by the desire for clean, safe drinking water and then by the demand

for single serves water as an alternative to other refreshment beverages.

Bottled water is a multi- million rupee growth industry on its way to becoming the most

consumed beverage. In India, bottled water market is valued at more than Rs 10 billion (Rs

1000cr) while maintaining an unimaginable annual growth rate of more than 60%. Even though

it accounts for only 5 percent of the total beverage market in India; branded bottled water is the

fastest growing industry in the beverage sector. Seeing the ever increasing potential, experts

predict that the market size of bottled water would surpass the size of the soft drinks market in

the near future. Many major Indian FMCG and multinational food corporation are also expected

to join the market, which has already more than 250, brands in the organized and unorganized

sector with large, medium and small scale production units. The market is also expected to

undergo a major consolidation phase. But even as the bottled water industry is in a powerful

position, of late it has come under increased scrutiny and criticism. Bottled water continues

uninhibited growth growing the fastest among all soft drinks, bottled water threw in another

strong performance in 2005 with double digit volume and current value growth. Home delivery

sales garnered pace, supported by population migration from rural to urban areas. This meant

increasing pressure on an already crumbling public water distribution system in most cities.

Tourism also boosted bottled water, with an increasing number of domestic and foreign tourists

creating greater demand for bottled water. Trade sources point to the presence of over 600

bottled water manufacturers in India and the number is predicted to grow in the forecast period

as demand continues unabated.


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The market preference in India is highly region based. Whole cola drinks have main markets in

metro cities and northern states of UP, Punjab, Haryana etc. Orange flavoured drinks are popular

in southern states. Sodas too are sold largely in southern states besides sales through bars. Western

markets have preference towards mango flavoured drinks. Diet Coke and Diet Pepsi constitute just

0.7% of the total carbonate 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,

Lima etc but with opening up of economy and coming of MNC players Pepsi and Coke the

market has come totally under their control.

The distribution network of Coca cola had6.5 lacks outlets across the country in FY00, which the

company is planning to increase to 10 lacks by FY10. On the other hand Pepsi Co's distributionnetwork had 6 lacks outlets across the country during FY00 which it is planning to increase to 9

Lacks by FY10.

Retailers power continuously increases

With Wal-Mart leading the charge, the worlds dominant retailers are demanding better service

and shorter order-to-delivery cycles from soft drink companies. This is dramatically reshaping

the industry, forcing soft drink companies to become more efficient, while taking pricing power

out of their hands. The dual need for improved supply chain agility and cost efficiency is

challenging suppliers to revaluate the ways in which they plan and manage their supply chains,

as they constantly search for approaches that will help them achieve the rock-bottom prices and


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operational excellence now expected in the industry. Furthermore, the growth of private-label

products is encouraging manufacturers to take a number of steps to compete more effectively.

Increasingly, they are turning to innovation and new product introduction as a means to achieve

real differentiation as well as growth. Branded manufacturers are also looking to get closer to the

consumer, with many of the larger ones piloting direct-to-consumer marketing approaches. They

are also trying to better understand the in-store consumer experience by monitoring the execution

of in-store activities. Nevertheless, many suppliers are losing brand equity. In recent years, a

couple of factors have been fuelling the growing competition between manufacturers and

Retailers:

Retailers are using their power to set higher standards for marketing and operationalexcellence, including escalating demands for improved service quality and shorter order-

to-delivery cycles from manufacturers and distributors. Many of these demands, such as

RFID, not only squeeze margins but also require significant capital investments.

Because of their direct relationships with consumers, retailers have a deeper knowledgeof consumer behavior.

Competition is becoming more and more difficult

In the beverage manufacturing industry, competition is growing due to the following factors:

Constant demand for new niche products related to consumer preferences for healthierand more diversified offerings

Industry consolidation, which has significantly raised the bar for the scale needed tocompete


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The growth of private-label products.

These competitive pressures have led to:

SKU proliferation - number of SKUs in a typical beverage company has doubled from1991 to 2001

A plethora of new product failures:

Only 20% are effective Only 10% generate significant revenue Most fail within the first two years

Further consolidation and rationalization to capture cost savings by improving operationsand eliminating redundancy:

Industry leaders are acquiring small, high growth Companies

Mid-market players are vertically integrating

Profitability can only be improved through greater efficiency in the supply chain orthrough more-effective trade promotions, which usually require considerable

expenditures.

Statutory regulation is increasing


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Governments around the world are concerned about food safety and quality. Periodically, safety

failures make big news in the global press. Amid this growing concern, regulators are cracking

down on sanitation and variety of other food-safety requirements.

While food safety is the major focus in Europe, the emphasis in the US is more on bio-terrorism

and food security. However, the provisions in the 2005traceability legislation in the US, which

stemmed from the Bioterrorism Act of 2002, and those in the EU Directive 178, Articles 18 and

19, are very similar. The U.S. Food and Drug Administration (FDA) is proposing the registration

and tracking of almost all domestic and imported food articles, but some are concerned that the

complexity of the rules will overwhelm both the food industry and the FDA.

Each soft drink company must take these industry challenges into consideration, as well as its

own strengths and market position, when looking for ways to drive innovation, accelerate growth

and increase margins. The next section outlines where some of the most promising opportunities

for accomplishing these objectives can be found.

Trends and Opportunities in the Soft Drink Industry

The Ingredients for Success

Soft drinks are gradually overtaking hot drinks as the biggest beverage sector in the world, with

consumption rising by around 5 percent a year according to a recent report from Zenith

International. But while the US remains the biggest market for now, Asia is likely to be the main

driver of sales growth in the future.

The industry on the whole is encountering new opportunities and challenges. Changing


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consumer demands and preferences require new ways of maintaining current customers and

attracting new ones. Amid ever-increasing competition, beverage companies must intensely court

customers, offer high quality products, efficiently distribute them, ensure safety, and keep prices

lowall while staying nimble enough to exploit new markets by launching new products.

Market trends for the soft drink industry can be characterized by six fundamental themes:

1. Changing consumer beverage preferences, featuring a shift towardhealth-oriented, wellness drinks

2. Growing friction in the distribution system, induced by bottlers andmanufacturers with conflicting interests

3. Continually increasing retailer strength and a corresponding decrease in the power of softdrink companies

4. Fierce competition, fueled by growth of private labels and product/packagingproliferation

5. A complex sales environment, composed of multiple channels all with uniquemanagement requirements

6. Beverage safety issues, driven by newly enacted US and EU regulatory requirementseach soft drink company must take these industry challenges into consideration, as well

as its own strengths and market position, when looking for ways to drive innovation,

accelerate growth and increase margins.

PORTERS FIVE FORCE ANALYSIS OF SOFT DRINK

INDUSTRY

Defining the industry:


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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 does 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% EBIT profits on their sales, while bottlers earned 9% profits on their sales, for a totalindustry profitability of 14%. 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. 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 positiveeconomic 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,


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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 Pepsis 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 Searles bargaining power and lowering theprice of aspartame.

With an abundant supply of inexpensive aluminium 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.


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Power of buyers:

The soft drink industry sold to consumers through five principal channels: food stores,

convenience and gas, fountain, vending, and mass merchandisers. 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

location 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 theirproducts at these outlets. As a result, while Coke and Pepsi gained only 5% margins, fast food

chains made 75% gross margin on fountain drinks.


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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. 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 capturedmost 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


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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.

BEVERAGE INDUSTRY IN INDIA

India is home to one of the most ancient cultures in the world dating back over 5000 years.

Beverages industry in India plays an important role in the Indian FMCG market. It is an industry,

in which the players constantly innovate, in order to come up with better products to gain more

market share and to satisfy the existing consumers.


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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 In-home consumption and out of home on premises consumption. Age wise segmentation i.e. beverages for kids, for adults and for senior citizens

BEVERAGES

Alcoholic Non-Alcoholic

Carbonated Non-

Carbonated

Cola Non-Cola Non-Cola


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Segmentation based on the amount of consumption i.e. high levels ofconsumption and low levels of consumption.

If the behavioural 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 industryin India are:

The quality and the consistency of beverages needs to be enhanced so thatconsumers are satisfied and they enjoy consuming beverages.

The credibility and trust needs to be built so that there is a very strong and safefeeling that the consumers have while consuming the beverages.

Consumer education is a must to bring out benefits of beverage consumptionwhether 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 findan 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.


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THE SOFT DRINK MARKET

The soft drink markets can be segmented on the basis of place of consumption or on the basis of

type of products.

The segmentation on the basis of place of consumption divides the market into two parts: -

On-premise- 55% of the consumption of soft drinks is on premise i.e. restaurants,railways stations, cinema etc.

At-home- the rest 45% of the market compromises of the soft drink purchased forconsumption at home.

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 fallin this category are Pepsi, Coca-Cola, Thumps Up, and diet coke, Diet Pepsi etc.

Non-cola segment which constitutes 36% can be divided into 4 categories based on the typesof flavors available, namely:

o Orangeo Cloudy Limeo Clear Limeo Mango

i. Orangeflavor based soft drinks constitute around 20% of the market. The segment is largelydominated by national brands like Fanta of Coca Cola and Mirinda Orange of PepsiCo,

which collectively form15% of the market rest of the market is in hands of smaller brands

like Crush (earlier of Cadbury Schweppes and now of coca Cola), Gold Spot etc.


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ii. Cloudy Lime flavor constitutes 17% of the market and is largely dominated by Limca ofcoca cola and Mirinda Lemon of PepsiCo. Limca is the market leader with around 70-75% of

the market followed by Mirinda Lemon.

iii. Clear Lime: this segment of the market witnessed good growth initially with all the playerslaunching their brands in the segment. But now the growth in the segment has slowed down.

The brands available in this segment are 7 Up, mountain dew of Pepsi, Sprite, nimbu fresh of

Coca Cola. The segment constitutes 3% of the total soft drinks market.

iv. Mango: this flavor segment constitutes 2% of the total soft drinks market and it directlycompetes with mango based fruit drinks like Frooti. The leading brands in this segment are:

Maaza of Coca Cola, Mangola (Earlier of Dukes now of PepsiCo) and Slice of PepsiCo.


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COCA COLA COMPANYTHE COCA COLA COMPANY

Coca-Cola was created in 1886 by John S Pemberton, a pharmacist in Atlanta, Georgia, who

sold the syrup mixed with fountain water as a potion for mental and physical disorders. The

formula changed hands three more times before Asa D. Candler added carbonation and by

2003, Coca-Cola was the worlds largest manufacturer, marketer, and distributor of

nonalcoholic beverage concentrates and syrups, with more than 500 widely recognized

beverage brands in its portfolio.

With the bubbles making the difference, Coca-Cola was registered as a trademark in 1887

and by 1895, was being sold in every state and territory in the United States. In 1899, it

franchised its bottling operations in the U.S., growing quickly to reach 370 franchisees by

1910. Headquartered in Atlanta with divisions and local operations in over 200 countries

worldwide, Coca-Cola generated more than 70% of its income outside the United States by

2003

INTERNATIONAL EXPANSION

Cokes first international bottling plants opened in 1906 in Canada, Cuba, and Panama. By

the end of the 1920s Coca-Cola was bottled in twenty-seven countries throughout the world

and available in fifty-one more. In spite of this reach, volume was low, quality inconsistent,and effective advertising a challenge with language, culture, and government regulation all

serving as barriers. Former CEO Robert Woodruffs insistence that Coca-Cola wouldnt


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suffer the stigma of being an intrusive American product, and instead would use local

bottles, caps, machinery, trucks, and personnel contributed to Cokes challenges as well with

a lack of standard processes and training degrading quality.

Coca-Cola continued working for over 80 years on Woodruffs goal: to make Coke available

wherever and whenever consumers wanted it, in arms reach of desire. The Second

World War proved to be the stimulus Coca-Cola needed to build effective capabilities

around the world and achieve dominant global market share. Woodruffs patriotic

commitment that every man in uniform gets a bottle of Coca-Cola for five cents, wherever

he is and at whatever cost to our company was more than just great public relations. As a

result of Cokes status as a military supplier, Coca-Cola was exempt from sugar rationing

and also received government subsidies to build bottling plants around the world.

TURN OF THE CENTURY GROWTH IMPERATIVE

The 1990s brought a slowdown in sales growth for the Carbonated Soft Drink (CSD)

industry in the United States, achieving only 0.2% growth by 2000 (just under 10 billion

cases) in contrast to the 5-7% annual growth experienced during the 1980s. While per capita

consumption throughout the world was a fraction of the United States, major beveragecompanies clearly had to look elsewhere for the growth their shareholders demanded. The

looming opportunity for twenty-first century was in the worlds developing markets with

their rapidly growing middle class populations.

THE WORLDS MOST POWERFUL BRAND

Interbrands Global Brand Scorecard for 2003 ranked Coca-Cola the #1 Brand in the World

and estimated its brand value at $70.45 billion . The rankings methodology determined a

brands valuation on the basis of how much it was likely to earn in the future, distilling the

percentage of revenues that could be credited to the brand, and assessing the brands strength to

determine the risk of future earnings forecasts. Considerations included market leadership,


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stability, and global reach, incorporating its ability to cross both geographical and cultural

borders.

From the beginning, Coke understood the importance of branding and the creation of a

distinct personality. Its catchy, well-liked slogans (Its the real thing (1942, 1969),

Things go better with Coke (1963), Coke is it (1982), Cant beat the Feeling (1987),

and a 1992 return to Cant beat the real thing) linked that personality to the core values

of each generation and established Coke as the authentic, relevant, and trusted refreshment

of choice across the decades and around the globe.

PATENTS, COPYRIGHTS, TRADE SECRETS AND TRADEMARKS

Company owns numerous patents, copyrights and trade secrets, as well as substantial know-how

and technology, which we collectively refer to as technology. This technology generally

relates to Companys products and the processes for their production; the packages used for

products; the design and operation of various processes and equipment used in business; and

certain quality assurance software. Some of the technology is licensed to suppliers and other

parties. Companys sparkling beverage and other beverage formulae are among the important

trade secrets of Company.

Company own numerous trademarks that are very important to business. Depending upon the

jurisdiction, trademarks are valid as long as they are in use and/or their registrations are properly

maintained. Pursuant to companys bottlers agreements, company authorize bottlers to use

applicable Company trademarks in connection with their manufacture, sale and distribution of

Company products. In addition, we grant licenses to third parties from time to time to use certain

of companys trademarks in conjunction with certain merchandise and food products.


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EMPLOYEES

Company refer to its employees as associates. As of December 31, 2009 and 2008, Companyhad approximately 92,800 and 92,400 associates, respectively, of which approximately 17,900

and 16,500, respectively, were employed by consolidated variable interest entities (VIEs).

The increase in the total number of associates in 2009 was primarily due to an increase in the

Latin America operating group driven by its finished product business, as well as an increase in

the Bottling Investments operating group. These increases were partially offset by the impact of

the Companys ongoing productivity initiatives. As of December 31, 2009 and 2008, Company

had approximately 11,700 and 13,000 associates, respectively, located in the United States,

including Puerto Rico, of which approximately 190 and 90, respectively, were employed by

consolidated VIEs.

Coca cola company, through its divisions and subsidiaries, has entered into numerous collective

bargaining agreements. Company currently expect that it will be able to renegotiate such

agreements on satisfactory terms when they expire. The Company believes that its relations with

its associates are generally satisfactory.

CORE CAPABILITIES

Consumer Marketing

Marketing investments are designed to enhance consumer awareness of and increase consumer

preference for brands. This produces long-term growth in unit case volume, per capita

consumption and share of worldwide non alcoholic beverage sales. Through companys

relationships with bottling partners and those who sell coke products in

the marketplace, coke create and implement integrated marketing programs, both globally andlocally, that are designed to heighten consumer awareness of and product appeal for coke brands.

In developing a strategy for a Company brand, coke conduct product and packaging research,


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establish brand positioning, develop precise consumer communications and solicit consumer

feedback. Coke integrated marketing activities include, but are not limited to, advertising, point-

of-sale merchandising and sales promotions.

Coke have disciplined marketing strategies that focus on driving volume in emerging markets,

increasing cokes brand value in developing markets and growing profit in most developed

markets. In emerging markets, Company is investing in infrastructure programs that drive

volume through increased access to consumers. In developing markets, where

consumer access has largely been established, cokes focus is on differentiating its brands. In

companys most developed markets, coke continue to invest in brands and infrastructure

programs, but at a slower rate than revenue growth. Company has focused on affordability and

ensuring they are communicating the appropriate message based on the current

economic environment.

Commercial Leadership

The Coca-Cola system has millions of customers around the world who sell or serve our

products directly to consumers. Coke focus on enhancing value for its customers and providing

solutions to grow its beverage businesses. Companys approach includes understanding eachcustomers business and needs, whether that customer is a sophisticated retailer in a developed

market or a kiosk owner in an emerging market. Coke focus on ensuring that its customers have

the right product and package offerings and the right promotional tools to deliver enhanced value

to themselves and the company. Company is constantly looking to build new beverage

consumption occasions to its customers outlets through unique and innovative consumer

experiences, product availability and delivery systems, and beverage merchandising and

displays. Coke participate in joint brand-building initiatives with our customers in order to drive

customer preference for its brands. Through cokes commercial leadership initiatives, coke

embed ourselves further into its retail customers businesses while developing strategies for

better execution at the point of sale.


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Franchise Leadership

Coke must continue to improve its franchise leadership capabilities to give Company and our

bottling partners the ability to grow together through shared values, aligned incentives and a

sense of urgency and flexibility that supports consumers always changing needs and tastes. The

financial health and success of cokes bottling partners are critical components of the Companys

success. Company work with its bottling partners to identify system requirements that enable

coke to quickly achieve scale and efficiencies, and we share best practices throughout the

bottling system. Coke system leadership allows company to leverage recent acquisitions to

expand our volume base and enhance margins. With cokes bottling

partners, we work to produce differentiated beverages and packages that are appropriate for the

right channels and consumers. Coke also design business models for sparkling and still

beverages in specific markets to ensure that coke appropriately share the value created by these

beverages with our bottling partners. Coke will continue to build a supply chain network that

leverages the size and scale of the Coca-Cola system to gain a competitive advantage.

THE COCA COLA SYSTEM

We are a global business that operates on a local scale in every community where we do

business. We create global reach with local focus because of the strength of the Coca-Cola

system, which comprises our Company and our bottling partnersmore than300 worldwide. Our

Company manufactures and sells concentrates, beverage bases and syrups to bottling operations;

owns the brands; and is responsible for consumer brand marketing initiatives. Our bottling


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partners manufacture, package, merchandise and distribute the finished branded beverages to our

customers and vending partners, who then sell our products to consumers.

All bottling partners work closely with customersgrocery stores, restaurants, street vendors,

convenience stores, movie theatres and amusement parks, among many othersto execute

localized strategies developed in partnership with our Company. Customers then sell our

products to consumers at a rate of 1.6 billion servings a day.

Our business operations are divided into the following geographies: Eurasia and Africa, Europe,

Latin America, North America and Pacific as well as our Bottling Investments Group.

MISSION OF COCA-COLA

Create consumer products services and communications customer service and bottling system

strategy process and tools in order to create competitive advantage and deliver superior value to-

Consumers as a superior beverage experience.

Consumers as an opportunity to grow profit through the use of finished drinks. Bottlers as an opportunity to make reasonable to grow profits and value added Suppliers as an opportunity to make reasonable when creating real value added in

environment of system wide teamwork, flexible business system and continuous

improvement.

Indian society in form of contribution to economic and social development.


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VISION OF COCA-COLA

VISION FOR SUSTAINABLE GROWTH

PROFIT: Maximizing return to shareowners while being mindful of our overallresponsibilities.

PEOPLE: Being a great place to work where people are inspired to be the best theycan be.

PORTFOLIO: Bringing to the world a portfolio of beverage brands that anticipateand satisfy peoples Desires and needs.

PARTNERS: Nurturing a winning network of partners and building mutual loyalty. PLANET: Being a responsible global citizen that makes a difference.


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VISION 2020

The world is changing all around us. To ensure our business will continue to thrive over the next

10 years and beyond, we are looking ahead to understand the trends and forces that will shape

our industry in the future. Our 2020 Vision creates a long-term destination for our business. It

provides us with business goals that outline what we need to accomplish with our global bottling

partners in order to continue winning in the marketplace and achieving sustainable, qualitygrowth. For each goal, we have a set of guiding principles and strategies for winning throughout

the entire Coca-Cola system.

VALUE

Coca-Cola is guided by shared values that both the employees as individuals and the Companywill live by; the values being:

LEADERSHIP: The courage to shape a better future PASSION: Committed in heart and mind INTEGRITY: Be real ACCOUNTABILITY: If it is to be, its up to me COLLABORATION: Leverage collective genius INNOVATION: Seek, imagine, create, delight QUALITY: What we do, we do well


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COKE 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 reduce 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. Cokes

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

countrys top international investors. 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. 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.


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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 contract-packers 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. In addition to its own employees, Coke indirectly created employment for another 125,000

Indians through its procurement, supply, and distribution networks.

MARKETING STRATEGY

Coca-Cola CEO Douglas Daft set the direction for the next generation of success for his global

brand with a Think local, act local mantra. Recognizing that a single global strategy or single

global campaign wouldnt work, locally relevant executions became an increasingly important

element of supporting Cokes global brand strategy.

In 2001, after almost a decade of lagging rival Pepsi in the region, Coke India re-examined its

approach in an attempt to gain leadership in the Indian market and capitalize on significant

growth potential, particularly in rural markets. The foundation of the new strategy grounded

brand positioning and marketing communications in consumer insights, acknowledging that

urban versus rural India were two distinct markets on a variety of important dimensions. The soft

drink categorys role in peoples lives, the degree of differentiation between consumer segments

and their reasons for entering the category, and the degree to which brands in the category

projected different perceptions to consumers were among the many important differencesbetween how urban and rural consumers approached the market for refreshment.


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In rural markets, where both the soft drink category and individual brands were undeveloped,

the task was to broaden the brand positioning while in urban markets, with higher category and

brand development, the task was to narrow the brand positioning, focusing on differentiation

through offering unique and compelling value. This lens, informed by consumer insights, gave

Coke direction on the trade-off between focus and breadth a brand needed in a given market and

made clear that to succeed in either segment, unique marketing strategies were required in urban

versus rural India.

BRAND LOCALIZATION STRATEGY: THE TWO INDIA

INDIA A: Life ho to aisi

India A, the designation Coca-Cola gave to the market segment including metropolitan areas

and large towns, represented 4% of the countrys population.33 This segment sought social

bonding as a need and responded to aspirational messages, celebrating the benefits of their

increasing social and economic freedoms. Life ho to aisi, (life as it should be) was the

successful and relevant tagline found in Coca-Colas 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 nations

population. This segments primary need was out-of-home thirst-quenching and the Coca-Cola

India no. 1. Soft drink category was undifferentiated in the minds of rural consumers.

Additionally, with an average Coke costing Rs. 10 and an average days wages around Rs. 100,

Coke was perceived as a luxury that few could afford.

In an effort to make the price point of Coke within reach of this high-potential market, Coca-

Cola launched the Accessibility Campaign, introducing a new 200ml bottle, smaller than thetraditional 300ml bottle found in urban markets, and concurrently cutting the price in half, to Rs.

5. This pricing strategy closed the gap between Coke and basic refreshments like lemonade and


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tea, making soft drinks truly accessible for the first time. At the same time, Coke invested in

distribution infrastructure to effectively serve a disbursed population and doubled the number of

retail outlets in rural areas from 80,000 in 2001 to 160,000 in 2003, increasing market

penetration from 13 to 25%. Cokes advertising and promotion strategy pulled the marketing

plan together using local language and idiomatic expressions. Thanda, meaning cool/cold is

also generic for cold beverages and gave Thanda Matlab Coca-Cola delicious multiple

meanings. Literally translated to Cokemeans refreshment, the phrase directly addressed both

the primary need of this segment for cold refreshment while at the same time positioning Coke as

a Thanda or generic cold beverage just like tea, lassi, or lemonade. As a result of the Thanda

campaign, Coca-Cola wonAdvertiser of the Yearand Campaign of the Year.

RURAL SUCCESS

Comprising 74% of the country's population, 41% of its middle class, and 58% of its disposable

income, the rural market was an attractive target and it delivered results. Coke experienced 37%

growth in 2003 in this segment versus the 24% growth seen in urban areas. Driven by the launch

of the new Rs. 5 product, per capita consumption doubled between 2007 - 2008. This market

accounted for 80% of Indias new Coke drinkers, 30% of 2008 volume, and was expected to

account for 50% of the companys sales in 2008.


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HCCBPL STRUCTURE

Coca-cola is a world class company in "low margin, high volume" business which meanssales of high volume for the product in order to be profitable and complete in the global

market.

* Company Owned Bottling Operation (COBO)

* Franchisee Owned Bottling Operation (FOBO)

COBO :

COBO stand for company owned bottling operations; COBO has been of Coke Company'sbiggest strategy, which has proved to be winner.A bottling operation is a capital intensive

business, particularly so the returnable bottle market like in India and the investment is the

forth level.

Apart from the capital cost of plant and equipment the bottles has to invest in bottles and

crates, truck and cooling structure (Visi. Coolers and ice boxes) at the retail point industry

estimates @Rs. Crate which is equivalent to the price at which the crate enters the distribution

system Bottlers operates on margins around 10% with the bulk of the killing (between Rs. 24

and Rs. 30 per crate or about 20%) being made by the retailer. Excise and other taxes

amounting Rs. 40 per crate. The going for a COBO is the risk of coke Company and it is also

implied a big attitude change from a totally marketing orientation to an operation mindset.

COBO'S IN INDIA

COBOs are present across the nation, the locations are given below:

Mumbai, Bangalore, Ahemadabad, Chennai, Calcutta & Jalpaiguri unit also

FOBO


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FOBO stand for franchise owned bottling operation, in India Pepsi has franchise. In the case

the company supplies its soft drink concentrate to its franchies (bottle syrup). Coca-cola has

taken a more capital - intensive route of the owning and running its own plants along side

those of its franchises.

Coca-cola pumped in money to upgrade plants of franchises, which were weaker did not have

financial worth were given massive support in form of interest free loans to upgrade their

operations.

Getting into FOBO has helped Coke Company on several fronts. First, it has enabled Pepsi to

focus on marketing operations as much as it has on operation fronts. Another gain of goingFOBO is that since the franchises have to invest in plants and machines glass bottles, trucks,

and infrastructure, the cost burden has been reduced.

FOBO IN INDIA:

FOBO are located at the following places:

Part of Delhi, Punjab, Part of Andhra Pradesh, Calcutta and south bengal.


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PRODUCTION PROESS OF COCA-COLA

REFINED SUGAR WATER TREATMENT

SIMPLE SYRUPCARBON DIOXIDE

FILTARATION

CONCENTRATION

FINAL SYRUP

DE-CREATOR PROPOTIONER COOLER

FILTER CROWNER

EMPTY BOTTLE

IMDEPECTION

FULL PRODUCT

INSPECTION

BOTTLE WASH

PREE-IN-FEED

INSPECTION

UNCASHERCASE CLEANING

WARE-HOUSE

PACKING


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Chief ExecutiveOfficer

Vice PresidentSupply Chain

Chief FinanceOfficer

Human ResourceDirector

Vice President BSG

Regional VicePresident (North)

Regional VicePresident (Central)

Regional VicePresident (South)


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ORGANIZATION STRUCTURE

Region Vice

President

AGM/AOD

Unit 1

AGM/AOD

Unit 2

AGM/AOD

Unit 3

Region Manager Channel

Region Finance

Region Human Resource

Region Customer Service

Region External Affairs

Region Cold Drink

Region Legal

Region BSG

Region Capability devManager

RegionCapability

Management

RegionChannel


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A.G.M

Manager (Prodn& Maint.)

ProductionExecutive

Manufacturing

MaintainanceExecutive

Lab InchargeChemist

Manager (HR)Executivce /

Staff

Sales Manager Executive / Staff MD/Presellers

FinanceManager

Executive

Marketing Op.Executive

Executive

Manager Q.A. Chemist ETP Operator Worker


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SALES DEPARTMENT STRUCTURE

AGM/AOD

Plant

Manager

Route to

Market

HumanResource

Manager

Finance

Manager

General

Sales

Manager

Area Sales

Manager

Sales

Executive

Market

Developer

Distributors

And

SalesmenChannel

Manager

Marketing

Key

AccountsArea

Capability

Manager

Sales

Trainers


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PRODUCT MIX OF COCA COLA

BOTTLES:

Coca-cola 200ml...300ml...600ml...1500ml...

Thums up 200ml...300ml...600ml.1500ml.

Sprite 200ml...300ml...600ml...1500ml...

Limca 200ml...300ml...600ml...1500ml...Fanta 200ml...300ml...600ml...1500ml

Maaza (mango) 250ml..600ml.1200ml

Minute maid Nimbu fresh 400ml

Minute maid (pulpy orange) 400ml1000ml

Kinley (Soda) 300ml...500ml

Kinley (Water) 1000ml

CANS:

Diet coke 330ml

Coca-cola 330ml

Thumps up 330ml

Fanta 330ml

Kinley(soda) Mostly those who consumer liquor.

Kinley (Water ) Preferred by all type of consumers.


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COMPETITORS TO HCCBPL

The key competitors for HCCBPL are the following


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PepsiCo: The PepsiCo challenge, to keep up with archrival, the Coca-Cola Companynever ends for the World's # 2, carbonated soft-drink maker. The company's soft drinks

include Pepsi, Mountain Dew, and Slice. Cola is not the company's only beverage;

PepsiCo sells Tropicana orange juice brands, Gatorade sports drink, and Aquafina water.

PepsiCo also sells Dole juices and Lipton ready-to-drink tea. PepsiCo and Coca-Cola holdtogether, a market share of 95% out of which 60.8% is held by Coca-Cola and the rest

belongs to Pepsi.

Nestl: Nestle does not give that tough a competition to Coca-Cola as it mainly deals withmilk products, Baby foods and Chocolates. But the iced tea that is Nestea which has been

introduced into the market by Nestle provides a considerable amount of competition to the

products of the Company. Iced tea is one of the closest substitutes to the Colas as it is a

thirst quencher and it is healthier when compared to fizz drinks. The flavored milk

products also have become substitutes to the products of the company due to growing

health awareness among people.

Dabur: Dabur in India, is one of the most trusted brands as it has been operating eversince times and people have laid all their trust in the Company and the products of the

Company. Apart from food products, Dabur has introduced into the market Real Juice

which is packaged fruit juice. These products give a strong competition to Maaza and the

latest product Minute Maid Pulpy Orange.


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MARKETING MIX (4 Ps)Marketing Mix is the set of marketing tools that the firm uses to pursue its marketing objectives.

It has a classification for these marketing tools. These marketing are classified and called as the

Four Ps i.e. Product, Price, Place and Promotion.

The most basic marketing tool is product which includes product design, quality, features,

branding, and packaging. A critical marketing tool is price i.e. the amount of money that

customers pay for the product. It also includes discounts, allowances, credit terms and paymentperiod.

Place is another key marketing mix tool. And it includes various activities the company

undertakes to make the product accessible and available to the customer. Some factors that

decide the place are transport facilities, channels of distribution, coverage area, etc.

Promotion is the fourth marketing mix tool which includes all the activities that the company

undertakes to communicate and promote its product to target market. Promotion includes sales

promotion, advertising, sales force, public relations, direct marketing, etc.

PRODUCT

A business needs to consider the products that it produces and the stage of the product life cycle

that a product is at. Marketing strategies will vary according to the type of product and its stage

in life cycle.

In marketing, a product is anything that can be offered to a market that might satisfy a want or

need. It is of two types: Tangible (physical) and Intangible (non-physical). Since services havebeen at the forefront of all modern marketing strategies, some intangibility has become essential

part of marketing offers. It is therefore the complete bundle of benefits or satisfactions that


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buyers perceive they will obtain if they purchase the product. It is the sum of all physical,

psychological, symbolic, and service attributes, not just the physical merchandise. All products

offered in a market can be placed between Tangible (Pure Product) and Intangible (Pure Service)

spectrum.

A product is similar to goods. In accounting, goods are physical objects that are available in the

marketplace. This differentiates them from a service, which is a non-material product. The term

goods is used primarily by those that wish to abstract from the details of a given product. As

such it is useful in accounting and economic models. The term product is used primarily by those

that wish to examine the details and richness of a specific market offering. As such it is useful to

marketers, managers, and quality control specialists. A service is a non-material or intangible

product - such as professional consultancy, serving, or an entertainment experience.

The Pepsi-Cola drink contains basic ingredients found in most other similar drinks including

carbonated water, high fructose corn syrup, sugar, colourings, phosphoric acid, caffeine, citric

acid and natural flavours. The caffeine free Pepsi-Cola contains the same ingredients but no

caffeine.

PRICE

In economics and business, the price is the assigned numerical monetary value of a good, service

or asset. Price is also central to marketing where it is one of the four variables in the marketing

mix that business people use to develop a marketing plan. Pricing is a big part of the marketing

mix. Choosing the right price and the right pricing strategy is crucial to the marketing process.

The price of the product is not something that is fixed. On the other hand

penetration of mango drinks

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