Final Summer Project Report Rahul Ranjan

7/31/2019 Final Summer Project Report Rahul Ranjan

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Market Developers Productivity

A Project Report On

MARKET DEVELOPERS PRODUCTIVITY

Undertaken at

HINDUSTAN COCA COLA BEVERAGES PRIVATE LIMITED

RANCHI, JHARKHAND

(Submitted in partial fulfilment of the post graduate programme)

Submitted By

Rahul RanjanXavier Institute of Social Services, Ranchi

Under the guidance ofMr. Anjani Kumar

Capability Team Leader, Hindustan Coca-Cola Beverages Pvt.Ltd., Ranchi

XAVIER INSTITUTE OF SOCIAL SERVICES,RANCHI Page 1


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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, Ranchi- Jharkhand.

I hereby take this opportunity to thank my project guide Mr. Anjani Kumar, Capability Team

Leader, HCCBPL, Ranchi, 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. Jyoti Prakash, STL, HCCBPL, Ranchi, 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 Ranchi 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. Robin De Cruz and all MDs (Market Developers) of HCCBPL, Ranchi.

Special thanks to Mr. Sashi , General Sales Manager, HCCBPL, Ranchi 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.

Date: 16th June,2012

Place: Ranchi

SREE SHIVAM

(TRAINEE)



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Certificate of Approval

The following Summer Internship Report titled Market Developers Productivity ishereby approved as a certified study in management carried out and presented in a mannersatisfactory to warrant its acceptance as a prerequisite for the award of Master in BusinessAdministration for which it has been submitted. It is understood that by this approval theundersigned do not necessarily endorse or approve any statement made, opinion expressed orconclusion drawn therein but approve the summer internship report only for the purpose it issubmitted.

Organizational Guide

Mr. Anjani Kumar

Capability Team Leader

HCCBPL, Ranchi



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DECLARATION

I do hereby declare that this project work entitled Market Developers Productivitysubmitted by me for the partial fulfillment of the requirement for the award of Post GraduateDiploma in Marketing Management (PGDM) is a record of my own research work. The reportembodies the finding based on my study and observation and has not been submitted earlier forthe award of any degree or diploma to any Institute or University or Company.

Date: 16-06-2012Place: Ranchi

SREE SHIVAM

(Trainee)



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CONTENTS

Executive Summary...................................................................................................................5

Introduction................................................................................................................................6

Industry Overview...............................................................................................................7

Key Success Factors............................................................................................................8

Variant Available................................................................................................................8

Overall Carbonated Soft Drink............................................................................................9

Product Coverage................................................................................................................9

Market Trends & Industry Challenges..............................................................................10

Bottled Water Market........................................................................................................11

Growth Promotional Activities.........................................................................................12

Retailers Power Continuously Increasing........................................................................12

Competition Becomes More and Difficult........................................................................13

Trends and Opportunities in Soft Drink Industry..............................................................15

Porters Five Force Analysis.............................................................................................17

Beverage Industry in India.......................................................................................................21

The Soft drink Industry.....................................................................................................23

Company Overview..................................................................................................................25The Coca Cola Company..................................................................................................26

International Expansion.....................................................................................................26

The Worlds Most Powerful Brand...................................................................................27

Patents, Copyrights, Trade Secrets & Trademarks............................................................27

Employees........................................................................................................................28

Core Capabilities...............................................................................................................28

The Coca Cola System......................................................................................................30

Mission of Coca Cola........................................................................................................31

Vision of Coca Cola..........................................................................................................31

Vision 2020.......................................................................................................................32

Value.................................................................................................................................32

Hindustan Coca Cola Beverages Private Limited....................................................................33

Coke in India.....................................................................................................................33

Marketing Strategy............................................................................................................34

Brand Localization Strategy..............................................................................................34



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Rural Success....................................................................................................................35

HCCBPL Structure...........................................................................................................36

COBO.........................................................................................................................36

FOBO..........................................................................................................................36

Organizational Chart of HCCBPL....................................................................................38

Organizational Structure...................................................................................................39

Sales Department Structure..............................................................................................40

Product Mix of Coca Cola................................................................................................41

Consumer Preference........................................................................................................41

Competition to HCCBPL..................................................................................................42

Marketing Mix...................................................................................................................43

Corporate Social Responsibility........................................................................................46

Market Segmentation of Coca Cola..................................................................................48

Classification of Outlets....................................................................................................48

Channel Cluster.................................................................................................................49

Brand Order System of Coca Cola....................................................................................50

Project Profile...........................................................................................................................51

Pre Sell Implementation...........................................................................................................52

Role of MD ..............................................................................................................52

Permanent Journey Plan....................................................................................................52

Effective Supply Chain Management................................................................................53

Objectives.........................................................................................................................54

Data Collection..................................................................................................................54

Tools Used for Data Collection.........................................................................................54

Market Developer wise Permanent Journey Plan..............................................................55

SWOT Analysis of Pre Sell Implementation...........................................................................91

Economies of Scale..................................................................................................................92

Recommendations & Conclusion.............................................................................................93

Learning Outcome....................................................................................................................94

Annexure..................................................................................................................................95

Format for Data Collection......................................................................................................95

Reference..................................................................................................................................96



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EXECUTIVE SUMMARY

Pre-sell Implementation is a new marketing strategy adopted by Hindustan Coca cola

Beverages Pvt Ltd. This marketing strategy will help the company to deliver its service to its

customers (retailers) effectively and efficiently. By this strategy the company executive (MDs)

can visit each outlet at least two or three times in a week. As the competition in soft drinks

industry is very high, marketing strategies like pre selling plays an important role in increasing

the market share and maintaining the brand value as well as utilising the resources at the

maximum with minimum cost.

According to Coca Cola companys calendar, week starts on Saturday and ends on Friday.

Each MDs (Market developers) are in charge of around hundred and twenty outlets. For the

effective implementation of pre selling PJP (Permanent Journey Plan) act as backbone. My

project is to move into the market with the MDs and work with them in order to see their

productivity and efficiency. PJP is based on the geographical segmentation of Ranchi market.

For this project I have visited each outlet which is selling coke products in Ranchi market. I

have covered each outlet by accompanying each MDs daily. I used to spend three days with

each MD. This helps me to analyze the geographical structure of each market under each MD.The company policy divided each outlets based on the volume (VPO-Volume per Outlet) as

diamond, gold, silver and bronze. Based on this category each outlet has to achieve their targets

in the number of case selling per year. Target of each outlet based on the type is given in the

figure below. Pre selling also helps the company to achieve these targets effectively.

TYPETARGET (NO OF C/S PER

YR)

DIAMOND >800 C/SGOLD 500-799 C/S

SILVER 200-499 C/S

BRONZE


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INTRODUCTION

INDUSTRY OVERVIEW



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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 and looking 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, 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 hot beverages like coffee and tea that require some preparation with these

cold, iconic ready-to-drink brands.

KEY SUCCESS FACTORS



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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.

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



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time ahead for soft 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 small that the biggest remaining brand doesn't make more than 1% difference in total

volume.

Product coverage

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

Functional drinks; RTD coffee; RTD tea

Market trends and industry challenges



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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 and

Manufacturers in the distribution system.

Continually increasing retailer strength.

Fierce competition.

Complex distribution system composed of multiple

Sales channels.

Beverage safety concerns and more-stringent

Regulations.

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 are

Perceived to be healthy

Energy drink consumption has also climbed, due to

The 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



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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 diet classifications. Similarly, a South African juice company has recently

released a fruit-based drink that contains a

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



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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.

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

distribution network 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 reshapingthe 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

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



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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 operational

excellence, 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 knowledge

of 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 healthier

and more diversified offerings

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

compete

The growth of private-label products.

These competitive pressures have led to:



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SKU proliferation - number of SKUs in a typical beverage company has doubled from

1991 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

operations and eliminating redundancy:

Industry leaders are acquiring small, high growth Companies

Mid-market players are vertically integrating

Declining soft drink prices:

Profitability can only be improved through greater efficiency in the supply chain or

through more-effective trade promotions, which usually require considerable

expenditures.

Statutory regulation is increasing

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



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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

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

attracting new ones. Amid ever-increasing competition, beverage companies must intenselycourt customers, offer high quality products, efficiently distribute them, ensure safety, and keep

prices low all 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 toward

health-oriented, wellness drink.

2. Growing friction in the distribution system, induced by bottlers and

manufacturers with conflicting interests

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

soft drink companies

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

proliferation

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



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6. Beverage safety issues, driven by newly enacted US and EU regulatory requirements

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.

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 do some bottling, and bottlers

conduct many promotional activities. The industry is already vertically integrated to some

extent. They also deal with similar suppliers and buyers. Entry into the industry would involve

developing operations in either or both disciplines. Beverage substitutes would threaten both

CPs and their associated bottlers. Because of operational overlap and similarities in their

market environment, we can include both CPs and bottlers in our definition of the soft drink

industry. In 1993, CPs earned 29% pretax profits on their sales, while bottlers earned 9%

profits on their sales, for a total industry profitability of 14%. 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

positive economic profits. To be sure, there was tough competition between Coke and Pepsi for

market share, and this occasionally hampered profitability.

For example, price wars resulted in weak brand loyalty and eroded margins for both companies

in the 1980s. The Pepsi Challenge, meanwhile, affected market share without hampering per

case profitability, as Pepsi was able to compete on attributes other than price.

Substitutes:

Through the early 1960s, soft drinks were synonymous with colas in the mind of consumers.

Over time, however, other beverages, from bottled water to teas, became more popular,

especially in the 1980s and 1990s. Coke and Pepsi responded by expanding their offerings,

through alliances (e.g. Coke and Nestea), acquisitions (e.g. Coke and Minute Maid), and

internal product innovation (e.g. Pepsi creating Orange Slice), capturing the value of

increasingly popular substitutes internally. Proliferation in the number of brands did

threaten the profitability of bottlers through 1986, as they more frequent line set-ups, increased

capital investment, and development of special management skills for more complex



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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 the price 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.

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.



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National mass merchandising chains such as Wal-Mart, on the other hand, had much more

bargaining power. While these stores did carry both Coke and Pepsi products, they could

negotiate more effectively due to their scale and the magnitude of their contracts. For this

reason, the mass merchandiser channel was relatively less profitable for soft drink makers.

The least profitable channel for soft drinks, however, was fountain sales. Profitability at these

Locations was so abysmal for Coke and Pepsi that they considered this channel paid

sampling. This was because buyers at major fast food chains only needed to stock the products

of one manufacturer, so they could negotiate for optimal pricing. Coke and Pepsi found these

channels important, however, as an avenue to build brand recognition and loyalty, so they

invested in the fountain equipment and cups that were used to serve their

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

chains made 75% gross margin on fountain drinks.

Vending, meanwhile, was the most profitable channel for the soft drink industry. Essentially

there were no buyers to bargain with at these locations, where Coke and Pepsi bottlers could

sell directly to consumers through machines owned by bottlers. Property owners were paid a

sales commission on Coke and Pepsi products sold through machines on their property, so their

incentives were properly aligned with those of the soft drink makers, and prices remained high.

The customer in this case was the consumer, who was generally limited on thirst quenching

alternatives.

The final channel to consider is convenience stores and gas stations. If Mobil or Seven-Eleven

were to negotiate on behalf of its stations, it would be able to exert significant buyer power in

transactions with Coke and Pepsi. Apparently, though, this was not the nature of the

relationship between soft drink producers and this channel, where bottlers profits were

relatively high, at $0.40 per case, in. With this high profitability, it seems likely that Coke and

Pepsi bottlers negotiated directly with convenience store and gas station owners.

So the only buyers with dominant power were fast food outlets. Although these outlets captured

most of the soft drink profitability in their channel, they accounted for less than 20% of total

soft drink sales. Through other markets, however, the industry enjoyed substantial profitability

because of limited buyer power.



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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 ofCoke, Pepsi, and a few others, who had established brand names that were as much as a century

old. Through their DSD practices, these companies had intimate relationships with their retail

channels and would be able to defend their positions effectively through discounting or other

tactics. So, although the CP industry is not very capital intensive, other barriers would prevent

entry. Entering bottling, meanwhile, would require substantial capital

investment, which would deter entry. Further complicating entry into this market, existing

bottlers had exclusive territories in which to distribute their products. Regulatory approval of

intrabrand exclusive territories, via the Soft Drink Interbrand Competition Act of 1980, ratified

this strategy, making it impossible for new bottlers to get started in any region where an

existing bottler operated, which included every significant market in the US.

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

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

consumption 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


CARBONATE

D

NON

CARBONATED

COLA NON COLA NON COLA

BEVERAGES

NON

ALCOHOLIC

ALCOHOLIC


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address this issue so as to encourage regular consumption as well as and to make the industry

more affordable.

Four strong strategic elements to increase consumption of the products of the beverage industry

in India are:

The quality and the consistency of beverages needs to be enhanced so

that consumers are satisfied and they enjoy consuming beverages.

The credibility and trust needs to be built so that there is a very strong

and safe feeling that the consumers have while consuming the beverages.

Consumer education is a must to bring out benefits of beverage

consumption whether in terms of health, taste, relaxation, stimulation,

refreshment, well-being or prestige relevant to the category.

Communication should be relevant and trendy so that consumers are

able to find an appeal to go out, purchase and consume.

The beverage market has still to achieve greater penetration and also a wider spread of

distribution. It is important to look at the entire beverage market, as a big opportunity, for brand

and sales growth in turn to add up to the overall growth of the food and beverage industry in the

economy.

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: -



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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 for

consumption 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

fall in 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

types of flavors available, namely:

o Orange

o Cloudy Lime

o Clear Lime

o Mango

i. Orangeflavor based soft drinks constitute around 20% of the market. The segment is

largely dominated 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.

ii. Cloudy Lime flavor constitutes 17% of the market and is largely dominated by Limca of

coca 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 players

launching 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 directly

competes 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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COMPANY OVERVIEW



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COCA COLA COMPANY

THE COCA COLA COMPANY

Coca-Cola was created in 1886 by John 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



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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

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 capitaconsumption throughout the world was a fraction of the United States, major beverage



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companies 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,

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



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time to use certain of companys trademarks in conjunction with certain merchandise and food

products.

EMPLOYEES

Company refer to its employees as associates. As of December 31, 2009 and 2008,

Company had 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 ofDecember 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 and

locally, 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, 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.



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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 each

customers 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.

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



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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 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 customers 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



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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.

VISION OF COCA-COLA

VISION FOR SUSTAINABLE GROWTH

PROFIT: Maximizing return to shareowners while being mindful of our overall

responsibilities.

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

can be.

PORTFOLIO: Bringing to the world a portfolio of beverage brands that anticipate

and 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.

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



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sustainable, quality growth. 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 Company

will 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

HINDUSTAN COCA COLA BEVERAGES PRIVATE LIMITED

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



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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.

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



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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

differences between how urban and rural consumers approached the market for refreshment.

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 tradeoff 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.



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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

the traditional 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 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 Coke means 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.

HCCBPL STRUCTURE

Coca-cola is a world class company in "low margin, high volume" business which means

sales 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 :



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COBO stand for company owned bottling operations; COBO has been of Coke Company's

biggest 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

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

going FOBO 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:



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

ORGANIZATIONAL CHART OF HCCBPL



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ORGANIZATION STRUCTURE



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SALES DEPARTMENT STRUCTURE



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PRODUCT MIX OF COCA COLA



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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..1000ml

Minute maid (pulpy orange) 400ml1000ml

Kinley (Soda) 300ml...500ml

Kinley (Water) 1000ml

CANS:

Diet coke 330ml

Coca-cola 330ml

Thumps up 330ml

Fanta 330ml

CONSUMER PREFERENCE

Coca-Cola Preferred by all type of consumers

Thumps up All type of customers

Fanta (Orange,Pulpy) Basically preferred by ladies and kids.

Minute maid (Lemon) Not clearly define.

Maaza Ladies and kids.

Sprit Youngsters.

Limca Youngster

Kinley(soda) Mostly those who consumer liquor.

Kinley (Water ) Preferred by all type of consumers.

COMPETITORS TO HCCBPL



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The key competitors for HCCBPL are the following

PepsiCo: The PepsiCo challenge, to keep up with archrival, the Coca-Cola Company

never 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

hold together, 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

with milk 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.

MARKETING MIX(4 Ps)



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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 payment

period.

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 have

been 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 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.



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

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

acid and natural flavors. 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 the price of the

product depends on many other factors. Some times the price of the product has got nothing to

do with the actual product itself. The price may act as a way to attract target customers.

The price of the product is decided keeping many things in mind. These things include factors

like cost incurred on the product, target market, competitors, consumer buying capacity etc.

Pepsi again decides it price on the basis of competition. The best think about the companyPepsi is that it is very flexible and it can come down with the price very quickly. The company

is renowned to bring the price down even up to half if needed.

PLACE

Place is a term that has a variety of meanings in a dictionary sense, but which is principally

used in a geographic sense as a noun to denote location, though in a sense of a location

identified with that which is located there.

In marketing, place refers to one of the 4 P's, defined as "the market place". It can mean a

geographic location, an industry, a group of people (a segment) to whom a company wants to

sell its products or services, such as young professional women (e.g. for selling cosmetics) or

middle-aged family men (e.g. for selling family cars).

Pepsi again has spread worldwide. Pepsi when entering a new market does not go in alone but

it looks for partners and mergers. Till now Pepsi has collaborated with companies like Quaker

Oats, Frito-lays, Lipton, Starbucks, etc. Pepsi like Coke has spread all over the world. It is



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because of this worldwide spread that now it is coming up with Advertisements which can be

broadcasted in the different nations in the world.

PROMOTION

This refers to the promotion of the product to the target market. This is achieved through a

combination of: advertising: use of electronic and print media. The "reach" (how many people

will see the advert), frequency (how many times wi

Documents

Final Summer Project Report Rahul Ranjan