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CHAPTER -1

Executive Summary

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EXECUTIVE SUMMARY

INTRODUCTION OF THE PROJECT

I did my project in Lumbini Beverages Private Limited Hajipur. In my project I

learned how the sales promotion activities are run in the market and it affects sale.

The study is concerned with distribution and sales promotion of multiple channels

of coke asking the retailers about their problem has given a true picture of current

position of PEPSI.

PROJECT TITLE

“EFFECTIVE DISTRIBUTION AND SALES PROMOTION”

REASON OF SELECTING THIS PROJECT AND COMPANY

The reason for selecting project is to gain more knowledge in the field of

marketing.

LOCATION

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LUMBINI BEVERAGES PRIVATE LIMITTED, HAJIPUR

DURATION OF THE PROJECT

The duration of the project was from 5th June to 30th July 2009.

How I carry out this project?

In my project I learned how the sale promotion activities are run in the

market and it affects sale. The study is concerned with distribution and sales

promotion of multiple channel of coke asking the retailers about their problem has

given a true picture of current position of PEPSI.

There are around 1000 retailers of soft drinks in PATNA, so a sample size of 600

sufficed the need of a balanced study. I was given certain area to visit and I

interviewed the retailer to fill the questionnaire Primary data has been collected for

the purpose. Latest information was required about the market collecting secondary

data would have satisfied the objective.

Primary data was collected through survey method by the help of structured

interview and filling schedule design. When ever secondary data was required, it

was made available with the help of various business magazines, the economic

times and the Website of PEPSI Company.

I visited various outlets and checked which type of displays are present there and

according to this place the displays at suitable place.

During my project I found that

Retailers are satisfied with PEPSI racks and its various schemes.

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Demand of PEPSI is more than COCA COLA.

COCA COLA distribution is better than PEPSI.

Retailers are not satisfied with the services of distributor.

CHAPTER -2

Objective & Scope

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THE TITLE OF THE PROJECT

The Title of the Project is “EFFECTIVE DISTRIBUTION AND SALES

PROMOTION” in PEPSI company.

Primary Objective:-

1 To know the distribution method adopted by the organization.

2 To know about the stock position of PEPSI brand and its competitors at

different outlets.

3 To know per day sale of PEPSI brand and its competitors in crates.

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4 To know the percentage share of PEPSI cooling equipments.

5 To know how many outlets are covered with glow sign board of PEPSI.

6 To know the market share of PEPSI products.

Secondary Objective:-

1 To create loyalty of the customer for PEPSI brand.

2 To increase the sale of the PEPSI product.

INTRODUCTION OF THE STUDY

The world economy has undergone a radial transformation in the last two decades

geographical and cultural distance have shrunk significantly with the improvement

in the production , transportation and communication. These advances have

permitted companies to widen substantially both these markets and their supplier

sources. And thus the role of marketing becomes wide.

“Marketing thinking starts with the human needs and wants”

Apart from basic necessities of air, water, shelter and clothing, every person has

strong desire for recreation and entertainment. They have strong preference for

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particular brand of basic and services. Marketing serves as the link between the

society’s needs and its pattern of industrial response.

Beverage industry is one of the fast growing industries in India. We can divide

beverages into two sections i.e. Alcoholic and Non-alcoholic. The non-alcoholic

drinks are soft drinks that can be further classified Cola, Lemon, Orange and

Mango Segment.

In present scenario has become a complex task mere survival in contemporary cut

throat competition has become a challenge today. Marketing activities are designed

to plan, price, promote and distribute need satisfying products and services to the

existing and potential customers. In other words we can say that marketing is all

about delivering the goods and services to the society for the consumption and

satisfaction but only at a profit.

As far as the soft drink market is concerned, it is facing the cut throat competition

because of the availability of a large number of indirect as well as direct

competitors. Single company offers the soft drinks to the market in different taste

and flavors. In this industry entire range of flavors are produced by other

competitors also. More often than not it becomes impossible to differentiate

between the same flavors of two different brands, when served in plane container.

Besides, both corresponding brands have the price range also. All these factors

together make the situation complicated.

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IMPORTANCE OF THE STUDY

The training in the organization is very important for a student who is

undergoing with such course. This course is not the answer to all the problems,

which arises in the practical fields. There is no certain formula for any

particular problems, but the aim of this study is to develop the ability of

decision making. A right decision at right time itself helps an organization to

run smoothly.

This training in an organization gives an idea how decisions are taken tact fully

when any problem comes to an executive. So the way of problem solving, right

decision making and knowledge of different type of marketing activities give

much importance to the study. Though only in two months it was not possible

to understand it so deeply but an overall idea could develop.

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CHAPTER -3

Company Profile

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ORGANISATIONAL PROFILE OF LUMBINI BEVERAGES PVT. LTD.

In the year 1995, Lumbini Beverages Pvt. Ltd. was formed into a business

company with legal status. The company is situated at Industrial area Hajipur,

District Vaishali in the state of Bihar; a state notified category ‘A’ backward area

at a distance of about 25 kilometers from Patna, the capital city of Bihar. The steel

city Beverages Ltd. Situated in Jamshedpur steel city comes next to Pepsi in

bottling process. In the year 1995, as park franchise, Lumbini Beverages Ltd. with

reference to which the study is being conducted was started. It is a Public Ltd.

Company with registered office situated at p-214 scheme VIM, Calcutta-700054.

In 1998, the company started its operation by producing only 300 ml. bottles and

the other sizes products are also being produced afterwards.

The market of north and central part of Bihar is covered by this company. The

products distribution is being carried out through a network of 257 distributors

under the guidance of Pepsi food Ltd. The territory covered by the company is

about 300 km of radius from the location of the plant and is being equally expected

to develop the market within the area allotted territory by the Pepsi Foods Ltd.

The Lumbini Beverages Limited is situated at an area of 10 acres. Limited

beverages capacity of production is 1200 bottles per minute and annual capacity of

98 million bottles (4 million crates) . The present capacity is 1000-1200 bottles per

minute.

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Lumbini owns its own 500 ml, 600 ml, 1.5 liters and 2litres big bottling plant. It

produces 1200 bottles per hour At present the company produces Pepsi, 7-Up,

Mountain Dew, Mirinda, Teem, Slice, Soda water and Aquafina mineral Water.

Out of the total production the share of Pepsi is about 45% and while that of

Mirinda is about 20% Mountain Dew is about 20% and the rest (7 Up, Aquafina,

and Slice etc. accounts for about 15%).

Since Lumbini Beverages Pvt. Ltd. Is a franchise of Pepsi Foods Ltd. The technical

knowhow required the chief ingredients for manufacturing the Beverages namely

essence will be supplied by Pepsi Co. Again since the Lumbini Beverages Pvt.

Limited is situated in backward area the Government also provides some

incentives available to the unit are as under:

(a) Exemption of sales tax on purchase of raw materials within the state.

(b) Exemption of sales tax on sales on sales of finished goods within the state.

(c) Many other incentives as applicable to such units feeling under the area

declared as most backward area in the state.

The company is headed by Director (Ravi Khilani) who is Direct Accountable to

Chairman cum Managing Director (Charan Khilani) besides this there is a post of

Chief Executive Officer (G.P. Singh) who reports to the Director\Managing

Director. There are besides the Office and Department in units i.e. sales and

marketing, the Production Department Account\ Finance Department,

Administration and Purchase Department and Shipping Department.

The executives are reported by the salesman then they report to the Assistant

Manager who finally reports to the manager. If required, the manager can also

contact directly to these Executives. Similar is the case with other Departments

also; these managers in turn reports to Chief Executive Officer, who reports to

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Director then to Managing Director. The higher official may also contact directly

to lower level officials for any relevant information if needed.

The board of directors of the company comprising of Mr. Charan Kumar Khilani,

Mr. Sanjay Kumar Khilani, Mr. Manoj Kumar Khilani, Mr. Ravi Khilani and Mr.

S.M. Surana takes overall decision related to any problem. Sometimes any major

decisions are also being taken up in consultation of different heads by board of

directors.

The work force of the company is around 200 among which 70% are permanent

which included managers and higher officers also and the rest are being supplied

buy the local contractors.

The advertisement for different products is being product is being carried out by

the PepsiCo as well as Lumbini Beverages Limited. The all India level

advertisement is being handled by PepsiCo and the local advertisements is being

done through different ad agency namely, Kalpatru, Happy advtrs, Cosmeric

advtor etc.

The total turnover of Lumbini Beverages Pvt. Ltd. is Rs. 30 Crores. The annual

budget 2004-2005 of Lumbini beverages Pvt. Ltd. is around 90Lakhs.

Some sales promotion schemes are also there, like one bottle free on purchase of

each carat, Key-rings, T-shirts, openers, Watches & ISI-cooler etc.

The major equipments of Lumbini Beverages Limited consists of filler, Mojonnier,

Bottle washer, Uncase, Caser, conveying system, refrigeration system, water

treatment plant, plastic bottles production and other auxiliaries which are the other

hand, the auxiliary equipments including utility items are being taken form local

Indian Markets. The local contractors under the supervision of foreign technician

led to the set-up of Pepsi Co .The maintenance is being done by the company itself

through local contractors.

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Organization structure

DIRECTOR

CEO

PSRMERCHANDISER

MD

HR HOS

TDM MDM BDM

MECE

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TDM- Treteric development manager.TDM- Treteric development manager.

MDM-Marketing development managerMDM-Marketing development manager

BDM- Business development managerBDM- Business development manager

ADC- Account development co- coordinators ADC- Account development co- coordinators

CE - Chief executiveCE - Chief executive

ME- Merchandising executiveME- Merchandising executive

PSR- Presales representativePSR- Presales representative

RA- Route agentRA- Route agent

MDC- Marketing development co-coordinator MDC- Marketing development co-coordinator

MFM- Merchandising friezing managerMFM- Merchandising friezing manager

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HISTROY OF PEPSI

Caleb Bradham a New Bern, N.C.druggist, created Pepsi-Cola in the late

1890s. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and

Frito-Lay. Its CEO is STEVE REINEMUND and in India its CEO is INDIRA

NOOI.

The company consists of Frito-lay North America, PepsiCo Beverages North

America, and PepsiCo International and Quaker foods North America. PepsiCo

brands are available in nearly 200 countries and territories.

Many of PepsiCo’s brand names are more than 100-years-old, but the

corporation is relatively young.

Pepsi cola began its product outside the UNITED-STATES and CANADA in

the mid-1930s, opening in the UNITED-KINGDOM in 1936. Operation grew

rapidly beginning in the 1950s. Today PepsiCo beverages are available in more

than 170 countries and territories. Brands include Aquafina, Gatorade and

Tropicana.

In addition to brands marketed in the UNITED STATES, PepsiCo

International brands include Mirinda, seven-up, and many local brands.

PepsiCo offers product choices to meet a broad variety of needs and preferences

–from fun –for you items to product choices that contribute to healthier

lifestyles.

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PepsiCo’s mission is “To be the world’s premier consumer product company

focused on convenient foods and beverages. Pepsi seek to produce healthy

financial rewards to investors as it provides opportunities for growth and

enrichment to its employees, business partners and the communities in which it

operate. And in everything it do, it strive for honesty, fairness and integrity.”

PepsiCo is a world leader in convenient foods and beverages, with 2008

revenues of more than $35 billion and more than 157,000 employees.

Pepsi plans are on to add 100,000 outlets every year to its current network of

around 600,000 across the country.

GUIDING PRINCIPLES OF PEPSICO

This is how we carryout our commitment. We must always strive to: care for

customers, consumers and the world we live in. We are driven by an intense,

competitive spirit in the marketplace, but we direct spirit toward solutions that

achieve a win for each of our constituents as well as a win for us. Our success

depends on a thorough understanding of our customers, consumers and

communities. Essentially this is a spirit of growing rather than taking.

Sell only products we can be proud of. The test of our standards is that we must be

able to personally endorse our products without reservation and consume them

ourselves, from the purchasing of ingredients to the point where our product reach

the consumer’s hands.

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Speak with truth and candor. We speak up, telling the whole pictures, not just what

is convenient to achieving individual goals. In addition to being clear, honest and

accurate, we take responsibility to ensure our communications are understood.

Balance short term and long term. We make decisions that hold both short-term

risks and benefits in balance over time. Without this balance, we cannot achieve

the goal of sustainable growth.

Win with diversity and inclusion. We leverage a work environment that embraces

people with diverse traits and different ways of thinking. This leads to innovation,

the ability to identify new market opportunities, all of which help develop new

products and drives our ability to sustain our commitments to growth through

empowered people.

Respect others and succeed together. This company is built on individual

excellence and personal accountability, but no one can achieve our goals by acting

alone. We need great people who also have the capability to working together,

whether in structured teams or informal collaboration. Mutual success is absolutely

dependent on treating everyone who touches the business with respect, inside and

outside the company world-class performance.

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PEPSI-THE INDIAN EXPERIENCE

Pepsi entered the Indian soft drink market in 1988 and began its production in May

1990 and soon it was giving the local contenders the run for their memory in the

soft drinks market. It came out with dazzling marketing innovation that rocket the

Cola market live selling the product through functional Pepsi outlets. Its

advertisement agency was “Hindustan Thomson Association (HTA)”.

Pepsi good is one of the largest and best foreign investments in India. Pepsi has

distributed exclusive franchises in India to bottle its products. At present it has 40

bottling lines in the country. Pepsi owns 16 units and the rest are owned by

franchises. The two salient features of the consumers market in India are generally

prevailing, low purchasing capacity of consumer and the fact that urban consumer

responding about 30% of the total population account for nearly 70% of the

consumers of the consumer expenditure. The government of India has considered

the soft drinks industry as non-essential. As a result of the excise duty levied by the

government on bottled-soft drink is very high.

The soft drinks industries in India has an annual sales exceeding more than Rs. 300

crores and most of the bottling companies have been coursing well. The exit of

Coca cola from India has accelerated the growth of several Indian companies have

grown and expanded their activities by placing more and more of their soft drinks

in the market and by moving refrigeration by supplying ICE-BOX and VISI

COOLER and one fridge to their retailers.

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SWOT ANALYSIS

STRENGTH:-

PEPSI Beverages Company is world’s most famous soft drink giant.

PEPSI Beverages use fully automatic machines and technology for the

product and bottling of soft drink.

It has a very strong distribution network and well built market and currently

holds almost all the parts of the state.

COCA-COLA has only one lime flavor where its competitor PEPSI has 7UP

and MOUNTAIN DEW.

WEAKNESS:-

Promotional activity in rural market is not up to the mark as compared to the

urban market.

More emphasis is given to the big dealer.

Services towards VISI COOLER is not satisfactory

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OPPORTUNITY:-

It should give more incentives to the dealers in the rural areas. Where there

is a huge market potential.

It should adopt automatic and computerized quality control system for its

product.

More lucrative schemes to be launched regularly, especially during off-

season. So as to attract more and more customers.

Apart from sponsoring films, cricket and music, it should also sponsor to

different fashion shows, quizzes and debates in schools and debates in

schools and colleges.

The consumption rate is higher in Bihar.

THREATES:-

In rural market, PEPSI may have got stiff competition from new local brand

“FRESH-UP”.

Pepsi is spending more and more in advertisement to increase its sale.

Baba RAMDEV’s preach cause a huge fall in sales volume.

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CHAPTER -4

Theoretical Background

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This chapter has touched through some of the concept of market research,

consumer behavior and channel of distribution in relation to PEPSI. This chapter

will tell you how the project has been gone through to achieve its ultimate aim

‘increased sales’.

Introduction

Marketing needs a framework that begins and ends with the customer; marketing

tools by themselves do not achieve marketing objectives. There is an intermediate

step between the deployment of marketing tools and achievements of marketing

objectives. A marketing network consists of the company and its supporting

stakeholders (customers, suppliers, distributors, retailers, ad-agencies and other)

the operating principle is simple: build an effective network of relationships with

key stakeholders and profit will follow.

A set of marketing tools, the firm uses to pursue its marketing objectives are called

marketing-mix. These tools can be classified into four groups which are called the

4 P’s of marketing.

(1)PRODUCT

(2)PRICE

(3)PLACE

(4)PROMOTION

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Soft drink is a FMCG product which has a wide and scattered market. Thus in order to

succeed companies needs to breakdown their marketing activities into sub-parts to

effectively meet the customer needs.

The entire marketing in this case is divided into three parts:-

Route marketing

Home marketing

At work marketing

ROUTE MARKETING:-

Outlets coming under this market cater to the needs of those customers who are

engaged in shopping, eating out in restaurants, going to and from work, in

amusement centre etc. in simpler words this marketing is what we call the bazaar.

HOME MARKETING:-

Outlets coming under this market cater to the needs of those customers who buy

soft drink predominantly for home consumption either by the glass bottles, pet

bottles.

The shops targeted under this category are those which are located inside

residential complex or are located nearer to the residential areas. These shops

predominantly sale pet bottles.

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AT WORK MARKETING:-

Outlets coming under this market cater to the needs lf those customers who are

working in offices, factories etc. i.e. the outlets targeted are the canteens mainly.

SALES PROMOTIONAL ACTIVITY

Sales promotion a very ingredients in the marketing companies consists of a

collection of incentive tools, mostly short term, designed to stimulate quicker or

grater purchase of particular product or services by customers.

Promotional activities play a key role in the entire marketing effort being carried

out by LUMBINI BEVERAGA which is in sync with those of PEPSI CO. INDIA.

These promotional activities generate more sales as well as create a good image of

the Product in the mind of customers. .

Promotion tools used by PEPSI company of its marketing activities are:

1. Point of sale display

2. Incentive to Retailers

3. Sales promotion through sponsoring special events.

4. Sales promotion through various schemes.

5. Advertising.

6. Scratch coupon card

7. Free gift items.

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Point of sale display: -

As it is mentioned that soft drink are kept in FMCG category so it is very

necessary to make a proper display of its product. General consumer demands the

thing which he looks first. Because in FMCG product consumer is not too much

concern about product. So outlet owners are suggested to keep bottles in stand and

keep it out of the shop. So that customers have an eye contact with product as he

enters the shop. This is particularly true for those brands which have very low

customer loyalty soft drink is one such product in which most of the time buying

decision is made at the spur rand which is readily available and catches the

customer. For this reason Lumbini Beverages invest heavily in this categories by

supplying the shop owners with stands so that they can keep the bottles outside on

those stands so that customer have an eye contact with them as he/she is entering

the shop. Also PEPSI supply the shop with visi-coolers with a glass front so that

cooled bottles can be seen by the customers for making the decision on the flavor

that person is going to buy. Apart from these Lumbini Beverages takes keen in the

other type strategies like painting the walls of the shops with the PEPSI logo and

the shop name. This increases the visibility of the brand among the customer when

he/she enter the shop.

Incentive to Retailers:-

Another method of sales promotion is to give incentive scheme to retailer,

under this promotional method retailers are given a target regarding the

minimum no. of crates that they have to sale in that period, on achieving the

target the dealer is given attractive prizes which ranges from free bottles, gift

items.

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SPONSORING SPECIAL EVENT:-

PEPSI is sponsoring various events which include cricket matches,

local events like quiz competitors, Parties, local sports, Orchestra, cultural

programmed etc.

Advertising Policy:-

Advertising is considered the most important tool to increase sales. PEPSI uses

various methods to advertise its product; advertising is made through TV channels,

Radio, magazines, Newspaper, Banners etc.

Scratch Coupon Card:-

Scratch card is another type of tool which helps to increase sales. In scratch card

the name of the gift item is printed and a layer is covered that prize name. Outlet

owner are given that card and after scratching whatever they get company

distribute it among them.

PEPSI has distributed scratch card by which outlets owners are facilitated by torch,

600ml pet, 300ml liquid etc.

“MERCHANDISING POLICY”

In today’s fast moving industry and highly competitive market, only

those products are likely to be purchased which are capable of hitting the impulse

of the consumers. The products appeal should be penetrate of consumers mind.

The concerned product should induce to consumers.

PEPSI believes that “JHO DIKHTA HAI WO BIKTA HAI” i.e. any product

which is visible is bound to be sold.

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Method of merchandising

The following methods are used to increase the visibility of product.

1. Visi-cooler placement

2. Glow Signboard

3. Paintings

4. Crate Stacking

5. Umbrella

6. Banners

Besides the advertisement being carried out by the Pepsi Food Pvt. Ltd. the

Lumbini Beverages uses many media message, copy etc. when required by

them but one single factor which is very important is that the main head line

or slogan must remain the same as used by each Pepsi Food (Soft drink)

company on national level.

The main slogan being used by Pepsi food (soft drink) all over India for its cola

product has been. The choice of a new generation. But past two years, it was

dropped and introduced new slogan, “Yahi Hai Right Choice Baby” and then

“Yeh Dil Mange More”. These characters have been used to advertisement from

1991 to 2003.

1. 1991 Remo Fernandis and Juhi Chawla

2. 1992 Kapil Dev with Growl Buddhist

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3. 1993 Amir Khan

4. 1994 Md. Azharuddin, Sachin Tendulkar and Kambli

5. 1995 Akshay Kumar.

6. 1996 Md. Azharuddin and Sachin Tendulkar

7. 1997 Rahul Dravid

8. 1998 Shahrukh Khan & Amitabh Bacchan

9. 1999 Govinda & Rani Mukherjee

10. 1999 Sachin Tendulkar & Shahrukh Khan

11. 2000 Ajay Jadeja, Kajol 200 ml

12. 2001 Amitabh Bachchan & Sorav Ganguly

13. 2002 Fardeen Khan, Rahul Khanna

14. 2003 Ganguli, Dravid, Harbhazan, Zahir, Kaif, Shahrukh Khan.

15. 2003 Kareena Kapoor for Pepsi 200 ml.

16. 2005 Sahrukh Khan, for Pepsi 200 ml.

17. 2006 Sahrukh Khan, Kareena Kapoor, Priyanka Chopra

18. 2007 Sahrukh Khan, Kareena Kapoor,

19. 2008 Sahrukh Khan, John Abraham

20. 2009 Mahendra Sing Dhoni Deepika padukone.

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The other advertisement for its product slice is “Jab Gale Se Jayada Pet Ho

Pyasa” Pepsi is “Oye Babli Hai Babli” and Mirinda Lemon is “Jor Ka Jhatkha

Dhire Se Lage”.

Product Trends and Market Structure

The head of sales & marketing is in change of all the marketing activities i.e. sales

promotion, publicity, advertising, market survey and shipping. Though his main

function is to have a control over the outlets distribution. Sales Executives and

sales supervisor assist the Sales Manager.

It is producing pet bottle of 2 liters & 500 ml. of all flavors of PEPSI.

PEPSI Cola

Mirinda Orange

Mirinda lemon

7 UP

Mountain Dew

SLICE

TROPICANA

Lehar Soda

PRICING POLICIES

The company first has to decide what it wants to accomplish with its particular

product offer. If the company has selected its target market and market positioning

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carefully, then its marketing mix strategy-including price – will be fairly straight

forward.

DETERMINING DEMAND

Each price that the company might charge will lead to a different level of demand

and will therefore have a different impact on its marketing objectives. The relation

between alternative prices that might be charged in the current time period. In the

normal case, demand and price are inversely related. That is, the higher the price,

the lower the demand, and the lower the price, the higher the demand.

Demands set a selling on the price that the company can charge for its product.

And company costs set the floor. The company wants to charge a price that covers

its cost of producing, distributing, and selling the product, including a fair return of

its effort and risk.

SELECTING A PRICING METHOD

Given the three C’s the customer’s demand schedules, the cost function and

competitors the company is now ready to select a price. Within the range of

possible determined by market demand and costs, competitors costs, prices, and

possible price reaction help the firm establish where to set its price. The Lumbini

Beverages Pvt. Ltd needs to benchmark its costs against its competitor’s costs to

learn whether it is a operating at a cost advantage or disadvantage. The company

also needs to learn the price and quality of competitor’s offers. The firm sends out

comparison shoppers to price and assess competitor’s offers, acquire competitor’s

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price lists, buy competitor’s equipments and take it apart, and ask buyers how they

perceive the price and quality of each competitor’s offer.

Once the company is aware of competitor’s prices and offers, it uses them as an

orienting point for its own pricing. If the firm’s offer is similar to a major

competitors offer, then the firm will have to price close to the competitor’s or lose

sales. If the firm’s is inferior, the firm will not be able to charge more than the

competitors. If the firms offer is superior, the firm can charge more than the

competitors.

The firm must be aware, however, that competitor’s might change their prices in

response to the firm’s price. In other words we can say that the Lumbini Beverages

adopt the going rate pricing method. In going rate pricing, the firm pays les

attention to its own costs or demand and bases its price largely on competitor’s

prices.

DISTRIBUTION CHANNEL

Physical distribution is a process of reaching a product to consumer. It consists of

all the activities in the physical transfer of goods from manufacturer to ultimate

consumer distribution are one the 4P’s of marketing mix.

Theoretical Aspects

Main problem of a manufacturer can broadly be divided into two parts. Production

and distribution. After production the next main problem faced by the producer is

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that distribution because the production is made to satisfy the consumer’s needs.

So it must reach the consumers for whom it is made.

Thus a way through which goods flows from the producer to consumer is called

“Channel of Distribution”.

At first soft drinks is supplied to distributors directly. Retailers cannot take the

delivery directly from the company. They have to take it from their respective or

nearest distributors. The distributors selected on the basis of assurance given by

them regarding minimum sales, which they have mention annually, the selection is

also done on the basis of the financial position and reputation of distributing in the

market . As for the example, in appointing distributor first priority is given to those

who are in cigarette business.

Depending upon the market each distributor, in its initial stage deposit some

security money. This amount varies between five thousand and ten thousand. The

distributor selects the retailers. There is no relation between the company and its

retailers. On the other hand there is no definite and fixed criteria fir the selection

for appointment of retailers from the side of distributors. One likes “Panwala,

cigarette shop” or any other shopkeeper can have the stall for the sale of soft drinks

and they are called retailers or dealers. They have to give assurance to the

concerning distributors for better sales and at the time of taking delivery they have

to deposit the security that is the change for the empty bottle with specified

purchasing price.

The distributors at first have to seek the permission of the sales department for the

number of cases of soft drinks required by them. After getting for the proper

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authority from the sales department they take the delivery from the shipping

department paying the requisite either in cash or as demand draft. Generally there

is no compulsion on that part of distributors to provide the transportation facilities

to their retailers.

But the distributors of the big cities provide the transportation facilities to their

respective retailers. The distributors and retailers are independent to sell as they

want but are controlled to some extent by the company also as they have to give

some assurance regarding minimum sales. It happens so because they are given

some incentives also. They are fully independent to gear up the market, as they

want. The company does the gearing job itself also and some times it advises them

to the gearing up in a way which is more profitable company or when they charge

high price or when they are engaged in black marketing, loading etc.

The supply of soft drinks, to the distributors depends upon the ups and downs in

sales. But in the initial stages the distributors have to sell up to a minimum target

set by the company or as decided by agreement between the company and

distributors. In the later stages soft drink is supplies as and when demanded by the

distributors.

Types of Channel of Distribution

Channel of distribution for consumer goods

(1)O-Level

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(2)1-Level

(3)2-Level

(4)3-Level

Channel of distribution in PEPSI Company

“ to make its products available at the right place, at the right time in the market,

at the right price the sales department of the company pays major attention towards

controlling the channel of distribution”

The company right from its beginning stage maintains single type of marketing

channel the nature of channel is as following:-

FACTOR AFFECTING THE CHOICE OF THE DISTRIBUTION CHANNEL

There are number of channel & company is to choose any one of them that

makes best in the marketing strategy followed by the company. The channel

chosen achieve ideal market exposure and should meet the target consumers needs

and preferences. In choosing an ideal channel, the producer always has to struggle

between what is ideal and what is available need not necessarily be ideal because

here are number of factor limit the choices, ideally the lowest cost. Channel may

be considered to be the best but it not always so. The main consideration in

selecting the channel must be satisfaction of customers and therefore, sometimes

relatively high cost channel may proof profitable.

Various factors affect the choice of channel of distribution may be

classified as follows:-

Factor relating to product characteristics:-

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(1) Purchase Frequency

(2)Weight & Technology of the product

(3)Selling price per unit

(4)Standardized Product

Market factor or consumer factor:-

(1)Consumer of industrial product

(2)Number of purchase

(3)Geographical distribution of customers

(4)Size of orders

Companies or Enterprise factor:-

(1)Financial resources

(2)Size of the company

(3)Product Mix

(4)Attitude of company executive

(5)Marketing policies

Middle consideration:-

(1)Services provided by middleman

(2)Middleman attitude

(3)Availability of middleman

(4)Sale volume potential

(5)Cost of channel usage

Environmental Factors:-

(1)Economical condition

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(2)Legal restriction

(3)Social & ethical consideration

Thus the above factors influence the channel decision. The producer must consider

these factors before engaging any channel of distribution. It is therefore right to say

that the producer is not always free to enjoy complete freedom in selecting

channels of distribution.

ENVIRONMENT SCANNING

“The process by which organization monitors their relevant environment to

identify opportunities and threats affecting their business are known as

environment scanning”

The external environment in which PEPSI Beverages exist, consist of a

bewildering variety of factors. These factors (may also be termed as influences)

Are events, trends, issues and expectations of different interested group, these

factors are explained below.

Events are important and specific occurrences taking place in different

environment sectors.

Trends are the general tendencies or the courses of action along which

events take place.

Issues are the current concerns that arise in response to events and trends.

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Expectations are the demands made by interested groups in the light of their

concern for issues.

By monitoring the environment though environment scanning, the PEPSI considers

the impact of the different events, trends, issues, and expectation on its strategic

management process. Since the environment facing organization is complex and its

scanning is absolutely essential, strategists have to deal cautiously with the process

of environment scanning. Information for environment scanning is collected

systematically. Information related to markets and customers, the changes in

legislation and regulation which have a direct impact on an organization’s

activities, government policy statements pertaining to PEPSI business and industry,

and so on, could be collected continuously to monitor changes and take the

relevant factors into account.

Lumbini Beverages conducts special surveys and studies to deal with specific

environment issues from time to time. Such studies may be conducted, for

instance, when Lumbini Beverages has to undertake special projects, evaluate

existing strategies, or devise new strategies. Changes and unforeseen

developments may also be investigated with regard to their impact on the

organization. Lumbini Beverages Pvt. Ltd. information in a processed form,

available from different sources both inside and outside the organization.

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TOTAL MARKET ENVIRONMENT

To know the total market environment I have done the market survey & dealer

survey.

Market Survey:-

Market survey is one of the most widely used marketing research techniques. Its

purpose is collecting specific data concerning the market that cannot be from the

companies’ internal record or from external published source of data; market

survey may be of various types like census survey etc.

Dealer Survey:-

In order to know the market share of PEPSI among its competitors we conducted a

survey in PATNA. We conducted survey under the guidance of Mr. Arun Kumar

(T.D.M of Lumbini Beverages Pvt. Ltd) and Mr. Samrendra Kumar (Customer

Executive of Lumbini Beverages).

While conducting the survey of the dealers a format provide to me, which has to

fill up by the dealers so that it meets the requirements of the organization. The

dealer survey as mentioned earlier includes a variety of dealers.

I have tried to visit each outlet personally. In order to know the market share of

PEPSI and its competitors. I have conducted a survey in Patna.

Dealer survey as it increases the turnover of the company and also the investment

of the money are increased from varies marketing inputs such as case stock,

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advertisement, and surveys we can get an idea, in which area investment is

required.

Introduction

Dealer survey method is primary method by which one gets first information with

respect to following factors:-

1. Knowledge of market in terms of :-

a) Number of dealers

b) Location of dealers

c) Type of dealers

d) Market output i.e. case stock , no of glow sign , no of Visi-cooler

From this we know how good we are in the market place and in the areas where we

are lacking it may be found that in some place only the competitor’s brands

available, then by the help of survey we can find out the reason behind non

availability of PEPSI brand in specific area.

The knowledge of case stock will indicate our “case in trade” and that of

competitors. This will indicate our case velocity which will help to plan our bottle

as well as weather our distribution is effective or not. If our case stock is low then

we may decide upon a case stocking campaign.

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Feedback from the market place regarding servicing of dealers will help us to

improve our servicing in the weaker areas.

Therefore, appropriate marketing strategy can be worked out depending upon the

findings.

2. Distribution Effectiveness :-

From the dealer survey we can find out the number of dealer and the stock and

other details non buyers will also be located. Activation of non buyers can be

done immediately. With the above knowledge one can increase the number of

routes to get increase dealer coverage and hence more effective distribution and

higher sales. Also details of this will help to checkup on the route selling of

sales man so that we can control them by closely monitoring their performance.

3. How to increase distribution effectiveness:

After the above survey, the company can improve the distribution

network.

Immediate activeness of non buyers.

Improve the dealer coverage.

Increase the realignment of routes.

Therefore, “dealer surveys” are important keeping in mind that

distribution forms the major marketing activity in our industry and also

that through these surveys one acquires knowledge of the market.

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It should be also added here that continuous dealer surveys are required

because of the following reasons.

(a) As our turnover increases we require skills to tackle the problem

and dealer survey help in acquiring first hand as to use the skills

effectively.

(b) With our increased growth, investment of money are increased for

various marketing inputs e.g. case stock, advertisement etc. and by

survey we can get an indication of the areas in investment should be

made to get the maximum benefits.

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USES OF DEALER SURVEY

1. Market knowledge:-

Dealer survey gives the total profile of the market by knowing.

Location of dealers

The type of dealer

No. of dealers who keep coca-cola and Pepsi and comparing the

stock.

Marketing inputs with respect to:-

a) Advertisement

b) Servicing

Dealer survey as the word indicates is the survey of every dealer of soft drink in

the area. For practical purpose the dealer not only includes the authorized dealer

appointed by the company but it also includes the retailers – big or small grocery,

shops, stationary, restaurant, betel shop , etc. Besides these the various exclusive

stalls and sales of pantry cars are also included in it. In a nutshell, by dealer we

mean those who are dealing with the soft drink in someway or the other in large or

small quantity, directly or indirectly

Thus my study includes all such dealers which include various aspects:-

Route wise no. of dealers-

Crate strength

Per day sale

Chilling aid

Advertising

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Nature of outlets

Schemes & pay-offs.

While conducting the survey of the dealers a format provide to me, which has to

fill up by the dealers so that it meets the requirements of the organization. The

dealer survey as mentioned earlier includes a variety of dealers.

I have tried to visit each and outlets and personally meet them. In order to know

the market share of PEPSI and its competitors. I have conducted a survey in Patna.

Dealer survey as it increases the turnover of the company and also the investment

of money are increased from various marketing inputs such as case stock,

advertisement, and surveys we can get an idea, in which area investment is

required.

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REAL CONSUMERS

According to per day selling report of the PEPSI product, we can easily search the

real consumers of the company. It is a FMCG product so general people to high-

class people drink it. As temperature the environment is grow its selling is

automatically increase. We can see that PEPSI product is present everywhere

because of its good distribution channel. In every betel shop to a good restaurant

we can easily get the chilled PEPSI product. PEPSI product has launched its

different flavors to attract the consumers. Company knows what people want to

drink.

PURCHASE METHOD

As we can see that PEPSI product is present everywhere, so every people can buy

it. PEPSI has launch its product in different range for convenient to every class

people. The 200ml and 300ml bottle is available for single person and 600ml and

1500ml pet is available for family pack. The company sales the 200ml and 300 ml

cold drink without bottle but the rest of the item is available with bottle.

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CHAPTER -5

Product Profile

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PRODUCT PROFILE

PEPSI

Crystal Pepsi

Pepsi Blue

Pepsi Gold

Pepsi ONE

Pepsi Max

Pepsi Diet

Pepsi Lime

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MIRINDA

Mirinda Sorbet

Mirinda Orange

MOUNTAIN DEW

7 UP

SLICE

TROPICANA

AQUAFINA

LEHAR SODA

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Lehar Soda

This is a soda drink. It has no colour and no flavors. It is generally used

with alcohol and used by adults.

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7 UP

Type

Lemon-lime soda

ManufacturerCadburys (U.S.), PepsiCo

(elsewhere)

Country of Origin  United States

Introduced 1929

Variants dnL, 7 Up Plus

Related products Dr Pepper, Sprite

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7 Up is a brand of a lemon-lime flavored non-caffeinated soft drink. The rights to

the brand are held by Cadbury Schweppes Americas Beverages in the United

States, and by PepsiCo in the rest of the world (sublicensed to Britvic in the United

Kingdom and C&C in Ireland).

Mirinda

Mirinda is a brand of soft drink available in fruit varieties including orange,

grapefruit, apple, strawberry, pineapple, banana, and grape flavors. It is part of a

beverage area often referred to as the flavor segment, comprising carbonated and

non-carbonated fruit-flavored beverages. The orange flavor of Mirinda represents

the majority of Mirinda sales worldwide.

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Mirinda is owned by PepsiCo and is primarily commercialized outside of North

America. It competes with Coca-Cola's Fanta brand and with flavor brands local to

individual countries. As with most soft drinks, Mirinda is available in multiple

formulations depending on the taste of individual markets.

Mountain Dew

Type Citrus soft drink

Manufacturer PepsiCo, Inc.

Country of origin  United States

Introduced 1964 (nation-wide)

Variants

Diet Mountain Dew

Caffeine Free Diet Mountain Dew

Caffeine Free Mountain Dew

Mountain Dew Code Red

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Mountain Dew is a caffeinated, sweet, citrus-flavored soft drink produced by

PepsiCo, Inc. It was invented in Marion, Virginia and first marketed in Knoxville,

Tennessee in 1948, then by the Minges family in Fayetteville, North Carolina and

across the United States in 1964. [1] When removed from its characteristic green

bottle, Mountain Dew is bright yellow-green and semi-opaque.

Slice

Type Flavored soft drink

Manufacturer PepsiCo, Inc.

Country of origin USA

Introduced 1984

Related products Sierra Mist, Sprite, Fanta, Teem

Slice is a line of fruit-flavored soft drinks manufactured by PepsiCo and introduced

in 1984, with the Lemon-Lime and Mandarin Orange flavors

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AquafinaType Water Beverage

Manufacturer PepsiCo, Inc.

Country of origin  United States

Introduced 1994

Aquafina is a popular brand of bottled water. It was first

distributed in Wichita, Kansas in 1994, and was distributed across the United

States , Canada , Turkey and Vietnam by 1997. As of 2003, it had become the

United States' top-selling bottled water brand in measured retail channels.

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The water is standard tap water but goes through an extensive purification process

that includes charcoal filtration, reverse osmosis and ozonation. Aquafina is sold in

12-ounce, 500-mL (16.9-ounce), 20-ounce, 24-ounce, 1-liter, and 1.5-liter bottles.

Products Quantity New MRP Trade Price

Pepsi 200ml 8 168

Pepsi 300ml 10 214.00

Pepsi 600ml 20 454.00

Pepsi 2L 55 459.00

Pepsi(CAN) 250ml 15 330.00

Pepsi (DIET) 330ml 25 564.00

7up 200ml 8 168.00

7up 300ml 10 214.00

7up 600ml 20 454.00

7up 2 L 55 459.00

7up (can) 250ml 15 330.00

Mirinda 200ml 8 168.00

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Mirinda 300ml 10 214.00

Mirinda 600ml 20 454.00

Mirinda 2 L 55 459.00

Mirinda (CAN) 250ml 15 330.00

Mountain Dew 200ml 8 168.00

Mountain Dew 600ml 20 454.00

Mountain Dew 2 L 55 459.00

PRICE

SliceSlice 500ml500ml 2222 498.00498.00

SliceSlice 1.2 L1.2 L 4848 532.00532.00

Slice(tetra pack)Slice(tetra pack) 200ml200ml 1212 285.00285.00

SodaSoda 300ml300ml 55 108.00108.00

SodaSoda 600ml600ml 1212 264.00264.00

AquafinaAquafina 1515 144.00 144.00

TropicanaTropicana 200ml200ml 1515 391.00391.00

TropicanaTropicana 1l1l 7070 735.00735.00

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CHAPTER -6

Research Methodology

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RESEARCH METHODOLOGY

The methodology used for collecting the data is considered to the primary for any

report.

The research design of this report is exploratory i.e. formulate problem from more

precise investigation. The major emphasis is on the discovering of ideas and

insights. The formulate research design is characterized by great amount of

flexibility. It’s contains is characterized by great amount of provided opportunity

for considering different aspect of a problem undertaken in the study.

1. COLLECTING OF DATA

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Data was collected on the basis of primary and secondary.

1.1 Primary Data:

The data which is being collected for the first is known as

primary data. In case of the above study the primary source

was retailers.

1.2 Secondary Data :

The data which is already assembled is the secondary data i.e. magazines

websites and organization report.

2. METHODOLOGY OF THE STUDY

2.1 Exploratory:

To find the per day stock and per day sale at different outlets exploratory

research method was adopted. A survey form was prepared and the retailers

were asked to answer them during the course of their interview.

2.2 Schedule Method:

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Dealer responses were conducted with help of a prepared schedule. Samples are

taken at different location of Patna.

2.3 Documentary Observation:

Books, annual report, Websites, published and unpublished materials.

2.4 Field Observation:

During training period we did extensive survey of the distribution outlets and

consumer to observe the marketing operation perform by the organization

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FINDINGS

The collected data which were analyzed and came out with the following

conclusion:

1. The numbers of PEPSI outlets is more than the numbers of competitor’s

outlets at Hajipur that results in increase in sale of PEPSI products.

2. In the city like Hajipur, PEPSI products are reaching to every corner where

not a single bottle of PEPSI can be seen.

3. All the areas in Hajipur, almost the dealers are satisfied with the distribution

network of the PEPSI product.

4. Most of the retailers want glow sign and chilling equipments, which they are

asking from long time.

5. In cola segment COCA-COLA is main competitor of PEPSI, in orange

segment MIRINDA is the main competitor of FANTA, in lime segment 7UP

and MOUNTAIN DEW is the main competitor of SPRITE, in juice (mango)

segment SLICE is main competitor of MAAZA.

6. Dealers are asking for the incentives and sales promotional schemes.

7. Some dealers and retailers stops selling PEPSI products because they are not

satisfied with the company, where COCA-COLA fulfill some of their

demand and got the opportunity to make exclusive counter for the soft

drinks.

8. The young generation of people likes most PEPSI, 7UP and M.DEW while

women, children and older people like SLICE and MIRINDA.

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SUGGESTION

1. Customer’s mind can change the customer’s perception about the product.

2. More improvement is requires in the distribution network in the outskirt and

in the remote areas, because in the peak season like summer the small dealer

are taking goods twice or thrice and in between if the distributors could not

supply them, the competitors will get the opportunities to supply the goods.

3. Salesman should have good interaction with the dealers, which result

Company in increase in sales.

4. Company executives should visit the counter on weekly basis.

5. Executives should take the feedback from the retailers about the service of

the salesman and the distributors.

6. The entire PEPSI product should be displayed at one place so that the

customers can aware about the different brand of PEPSI

7. In the bus stand, railway canteen, highway the CAN and PET Bottles should

be made available every time because the publics are busy there and they

cannot wait

8. Regular visit of technical person is required to solve the problems of Visi-

cooler on the market at the right time.

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CHAPTER -7

Limitations

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LIMITATIONS OF THE STUDY

1. I have done my market survey only in Hajipur.

2. Two months is very less to know each and every effect of promotional tool.

3. Frequent occurrence of rain.

4 This project is carried out by a student level project not an expert level.

5. Sometimes the owner did not give the right information about the product.

6. The information collected by me does not give the accurate result, it only

provides some idea.

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CHAPTER -8

Graphical Presentation

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ANALYSIS OF QUESTIONAIREANALYSIS OF QUESTIONAIRE

1) Type of out late:-

Number of out late- 291

Type of out late No of out late

Groceries (GR) 119

Convenience shop (CON) 73

Eatery (ET) 99

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2) Which soft drink do you sell in your store?

a. Pepsi

b. Coca Cola

c. Both

Alternatives Response of Retailer % age

Pepsi 65 22.34%

Coca Cola 85 29.21%

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Both 140 48.45%

Bar chart of retailer’ response

3) Do you have current GRB (FLD+MTS) stock of in your shop?

a) Pepsi b) Coca cola

b) Both c)Not available

Alternatives Response of Retailer % age

Pepsi (PCI) 62 21.30

Coca cola (CCX) 103 35.40

Both 86 29.55

Not available(N.A) 40 13.75

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Pie chart of retailer’s response

4) Do you have current PET (FLD+MTS) stock of PCI in your shop?

a) Pepsi

b) Coca cola

c) Both

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d) Not available

Alternatives Response of Retailer %age

Pepsi (PCI) 67 23.02

Coca cola (CCX) 83 28.52

Both 92 31.62

Not available (N.A) 50 16.84

6) Do you have freeze in store?a) Pepsi b) Coca cola

C) Both d) Own

b) none

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7) What is your annual sale of GRB from your shop?

a) 0 to300

b) 300 to 600

Alternatives Response of Retailer %age

Pepsi (PCI) 66 22.68

Coca cola (CCX) 111 38.14

Both 54 18.56

None (N.A) 60 20.62

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c) 600 to 900

d) 900 & above

8) What is your annual sale of PET from your shop?a) 0 to300 b)300 to 600

C) 600 to 900 d) 900 & above

Alternatives Response of Retailer %age

0 to 300 40 13.75

300 to 600 57 19.59

600 to 900 37 12.71

900 to above 33 11.34

No comment(N.C) 124 42.61

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f) No comment

9) Which brand is preferred the most?

a) Pepsi b) Coca colac) Both

Alternatives Response of Retailer %age

0 to 300 112 38.49

300 to 600 39 13.40

600 to 900 12 4.12

900 to above 3 1.03

No comment(N.C) 125 42.96

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Alternatives Response of Retailer % age

Pepsi 65 22.34%

Coca Cola 85 29.21%

Both 141 48.45%

10) Do you receive the delivery of Pepsi products in following terms?

a) Daily

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b) Alternate

c) Weekly

d) No comment

11) Do you receive the delivery of PepsiCo products in time?

Alternatives Response of retailer % age

Daily 105 50.72

Alternate 90 43.48

Weekly 11 5.31

No comment 1 0.48

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a. Yes

b. No

Alternatives Response of retailer %age

YES 105 50.72

NO 102 49.28

12) Are you satisfied with the Pepsi products?

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a. Fully satisfied

b. Partially satisfied

c. Not at all

Alternatives Response of Retailer %age

Fully satisfied 195 94.20

Partially satisfied 11 5.31

Not at all 1 0.48

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CHAPTER -9

Bibliography

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1. www.pepsico.com

2. www.wikipedia.com

3. www.answer.com

4. Philip Kotler, Marketing Management

5. Ramaswamy

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CHAPTER -10

Questionnaire

63

QUESTIONNAIRE

1. Do you sale soft drinks?

a) Yes

b) No

{ If answer is B outlet is terminated }

2. What do you think which pack is more demandable?

a) RGB

b) PET

3. Which brand is more demandable?

a) Pepsi

b) Slice

c) Mirinda

d) Mountain Dew

e) 7up

4. Do you have Visi- cooler?

a) Yes

b) No

5. Which type of Promotional tools do you use?

a) Counter sticker

b) Tent card

c) Counter Top

d) Hanging Rack

e) Combo Stand

f) Rack Header

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6. Do you need to change the quality of display?

a) Yes

b) No

7. Are you satisfied with distribution of PEPSI?

a) Yes

b) No

8. Which company gives you more schemes?

a) PEPSI

b) COCA COLA

9. Are you satisfied with the supply pattern of Pepsi products?

(a)Yes (b) No

10. Which Brand Of soft drink do you sell?

(a)Pepsi (b) Coke (c) Others(d) Mixed

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