Relish the happiness and refresh with the brands of PEPSICO

2012c

Department of Commerce

Sri Krishna Arts and Science College

Autonomous College affiliated to Bharathiar University

Accredited by NAAC with 'A' Grade

An ISO 9001-2008 Certified Institution

Relish the happiness and refresh with the brands of PEPSICO

Done by:

Co-ordinator

In partial fulfillment of the requirements for the awards of the degree of Bachelor of Commerce.

Sri Krishna Arts and Science College

Autonomous College affiliated to Bharathiar University

Accredited by NAAC with 'A' Grade

An ISO 9001-2008 Certified Institution Coimbatore

DEPARTMENT OF COMMERCE

SRI KRISHNA ARTS AND SCIENCE COLLEGE

COIMBATORE 641 008

CERTIFICATE

This is to certify that the Institutional training report entitled RELISH THE HAPPINESS AND REFRESH WITH THE BRANDS OF PEPSICO submitted to Bharathiar University, in partial fulfilment of the requirements for the award of the degree of Bachelor of Commerce is a record of the bonafide work done by under my supervision and guidance and the report has not formed the basics for the award of any Degree/Diploma/Associateship/other similar title to any candidate of any university.

GUIDE HOD

PRINCIPAL

This report has been submitted to the Viva-voce examination held at Sri Krishna Arts and Science College.

Viva-voce conducted on :

Internal examiner :

External examiner :

Place : COIMBATORE

Date :

ACKNOWLEDGEMENT

I am greatly indebted to great people who have given their kindly help and valuable

co-operation for completing my institutional training.

I thank our beloved Principal Mr. K. Sundararaman and I express my gratitude to

Dr. P. Baba Gnanakumar, Vice Principal, Sri Krishna Arts and Science College,

Coimbatore.

Then, I thank our Mrs. T. Usha Rani, Head of Department of Commerce for

providing all support and encourage given to complete the training and the report.

I express my gratitude to Ms. R. Vennila, M.Com., M.Phil., M.B.A., PGDCA., for her

valuable guidance and necessary advices. I am particularly grateful to her for the

patience she has shown in going through the manuscript of this report.

I thank my training supervisor, Mr. Kumar Natarajan (South Market Unit Finance

Planner) PepsiCo India Holdings Pvt. Ltd. who guided and helped me during the

entire period of my training and Mr. Paresh Huria, Vice President – Supply Chain,

South Market Unit, PepsiCo Chennai who gave me the opportunity to do the training

in their esteemed organization. I also thank Mr. Shailesh Kuttappan for his

motivation he gave me during the training period.

DEPARTMENT OF COMMERCE

SRI KRISHNA ARTS AND SCIENCE COLLEGE

COIMBATORE 641 008

DECLARATION

I hereby declare that the Institutional training report work entitled RELISH THE HAPPINESS AND REFRESH WITH THE BRANDS OF PEPSICO submitted to the Bharathiar University in partial fulfillment of the requirements for the degree of Bachelor of Commerce is an original work and it has not been formed the basis for the award of any Degree, Diploma, Associate ship, Fellowship or other similar title to any other University or body during the period of my study. I hereby declare that the contents in this report are not copied from any websites or books. Even if it is copied, it is done by obtaining the prior permission of the author or respective organizations.

PLACE : COIMBATORE

DATE :

TABLE OF CONTENTS

S.No Description Page No

1. Strategic Business 1

2. Organizational Dynamics 25

3. Unique Selling Proposition 41

4. Quality Policy & Standards 47

5. Ethical Values 56

6. Case Study 60

7. Growth Opportunity 74

8. SWOT Analysis 75

9. Specialized Department 78

10. Snap Shot 83

11. Annexure 89

COMPANY PROFILE

Pepsico India Holdings Pvt. Ltd.

Industry Foods

Beverages – Non Alcoholic

Founded 1989

Headquarter

s

3 B, D L F Corporate Park, S

Block, Qutab Enclave, Phase-3,

Gurgaon, Haryana - 122002

Area served All over India

Key people Manu Anand

(CEO)

Revenue INR 415.5 crores (2011)

Divisions Pepsico Beverages

Frito Lay foods

Module 1 – STRATEGIC BUSINESS

ABOUT THE COMPANY

PepsiCo is a world leader in convenient foods and beverages, with 2011

revenues of more than $65 billion and more than 157,000 employees.

The company consists,

Frito-Lay North America

PepsiCo Beverages North America

PepsiCo International

PepsiCo brands are available in nearly 200 countries and territories and generate

sales at the retail level of about $85 billion.

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

relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and

Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker

Oats Company, including Gatorade, in 2001. PepsiCo offers product choices to meet

a broad variety of needs and preference -- from fun-for-you items to product choices

that contribute to healthier lifestyles.

Shareholders

PepsiCo (symbol: PEP) shares are traded principally on the New York Stock

Exchange in the United States. The company is also listed on the Amsterdam,

Chicago, Swiss and Tokyo stock exchanges. PepsiCo has consistently paid

cash dividends since the corporation was founded.

Corporate Citizenship

At PepsiCo, they believe that as a corporate citizen, they have a responsibility

to contribute to the quality of life in their communities. This philosophy is

expressed in their sustainability vision which states: “PepsiCo’s responsibility is

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to continually improve all aspects of the world in which they operate –

environment, social, economic -- creating a better tomorrow than today.”

Their vision is put into action through programs and a focus on environmental

stewardship, activities to benefit society, and a commitment to build

shareholder value by making PepsiCo a truly sustainable company.

HISTORY OF PEPSICO WORLDWIDE

Timeline Description

1965 PepsiCo, Inc. is founded by Donald M. Kendall, President and

Chief Executive Officer of Pepsi-Cola and Herman W. Lay,

Chairman and Chief Executive Officer of Frito-Lay, through the

merger of the two companies. The new company reports sales of

$510 million and has 19,000 employees.

Major products of the new companies are:

Pepsi-Cola Company:

Pepsi-Cola (formulated in 1898)

Diet Pepsi (1964)

Mountain Dew

Frito-Lay, Inc.:

Fritos brand corn chips

Lay's brand potato chips

Cheetos brand cheese flavoured snacks (1948)

1966 Doritos brand tortilla chips are introduced. They are destined to

become the most popular snack chip in the U.S.

1969 Bold, modern Pepsi-Cola packaging using red, white and blue is

introduced. "You've got a lot to live, Pepsi's got a lot to give,"

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becomes the advertising theme.

Mountain Dew changes its slogan to "Get That Barefoot Feelin'

Drinkin' Mountain Dew."

1970 PepsiCo sales pass the $1 billion mark. The company has 36,000

employees.

PepsiCo moves from New York City to new world headquarters in

Purchase, N.Y.

Pepsi introduces the industry's first two-litre bottle.

Pepsi is the first company to respond to consumer preference with

lightweight, recyclable, plastic bottles.

1971 PepsiCo Chief Executive Officer Donald M. Kendall assumes the

position of chairman of the Board of Directors on the retirement of

Herman W. Lay. Lay maintains an active role in the corporation until

his death December 6, 1982.

Andrall E. Pearson is appointed president of PepsiCo, a position he

holds until his retirement in 1984.

1972 Mountain Dew, acquired by Pepsi-Cola in 1964, switches its

advertising and package graphics from hillbillies to action-oriented

scenes. Sales climb and Mountain Dew will become one of the 10

best-selling soft drinks in the United States.

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1974 PepsiCo sales pass the $2 billion mark.

Pepsi-Cola becomes the first American consumer product to be

produced, marketed and sold in the former Soviet Union.

1975 PepsiCo has 49,000 employees

Pepsi Light, with a distinctive lemon taste, is introduced as an

alternative to traditional diet colas.

1977 PepsiCo acquires Pizza Hut Inc.

PepsiCo passes the $3 billion mark in sales.

1979 Opening of PepsiCo Research and Technical Center in Valhalla,

N.Y.

PepsiCo reaches $5 billion in sales.

PepsiCo's international snack food operations continue to grow. It is

now larger than Frito-Lay at the time of its merger with Pepsi-Cola.

1980 PepsiCo Food Service International (PFSI) is formed to focus on

overseas development of restaurants.

PepsiCo now has 111,000 employees.

Pepsi is #1 in sales in take-home market.

1981 PepsiCo passes $7 billion in sales.

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Tostitos brand crispy round tortilla chips are introduced by Frito-Lay.

1983 PepsiCo is restructured to focus on its three core businesses: soft

drinks, snack foods and restaurants. Transportation and sporting

goods businesses are sold.

Slice and Diet Slice, the first major soft drinks with fruit juice, are

introduced.

Herman W. Lay Award of Excellence established at Frito-Lay to

recognize world-class selling excellence.

1985 PepsiCo is now the largest company in the beverage industry. The

company has revenues of more than $7.5 billion, more than 137,000

employees.

Frito-Lay expands into new headquarters in Plano, Texas.

PepsiCo's first line of sweet snacks, Sonrics, is added in Mexico.

1986 Wayne Calloway becomes chairman of the Board of Directors and

chief executive officer in May when Donald M. Kendall retires.

The corporation is reorganized and decentralized. Beverage

operations are combined under PepsiCo Worldwide Beverages;

snack food operations are combined under PepsiCo Worldwide

Foods.

PepsiCo purchases Kentucky Fried Chicken, the leader in the quick

service chicken market.

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PepsiCo purchases 7Up International, the third largest franchise soft

drink operation outside the United States.

PepsiCo passes $10 billion in sales.

PepsiCo is listed on the Tokyo stock exchange.

Chester Cheetah makes his prime-time television debut for Frito-Lay

with a fully animated commercial for Cheetos cheese flavoured

snacks.

1988 Pepsi-Cola International enters a landmark joint venture agreement

in India.

Worldwide retails sales of Doritos brand tortilla chips hit $1 billion. It

is the world's largest selling snack chips brand.

1990 PepsiCo acquires a controlling interest in Gamesa, Mexico's largest

cookie company.

PepsiCo signs the largest commercial trade agreement in history

with the Soviet Union.

1991 Pepsi-Cola forms joint venture with Thomas J. Lipton Co. to develop

and market tea-based drinks.

Frito-Lay launches Sunchips, its first multigrain snack.

Frito-Lay introduces Cheetos Paws.

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1993 Both PepsiCo beverages and snack food operating profits pass the

$1 billion mark.

Frito-Lay introduces Baked Tostitos brand Tortilla Chips.

Pepsi-Cola International introduces Pepsi Max, a soft drink with

unique blend of sweeteners that delivers maximum cola taste in a

no-sugar product.

Pepsi-Cola introduces Aquafina bottled water into test market.

1994 Pepsi-Cola is first major soft drink maker to begin producing and

distributing its product in Vietnam.

Pepsi-Cola International acquires Indian company, its first big

bottling plant in Bombay.

China gets cheese-less Cheetos, the first time a major snack-food

brand will be produced in China for Chinese tastes.

PepsiCo sales reach $30.4 billion. There are 470,000 employees

worldwide, making PepsiCo the third largest employer.

1995 Frito-Lay aggressively expands its low/no-fat snack segment. Baked

Lays is introduced.

PepsiCo will introduce Lay's brand potato chips in 20 markets

throughout the world.

PepsiCo is on-line at http://www.pepsico.com

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1997 Pepsi-Cola North American bottling operations become a separate

unit called The Pepsi-Cola Bottling Co.

National roll-out of Aquafina bottled water.

Frito-Lay announces plans to buy the 104-year-old snack, Cracker

Jack, a candy-coated mix of popcorn and peanuts from Borden

Foods Corp.

Frito-Lay introduces Doritos 3D's Tortilla Chips, a triangle-shaped

chip.

1998 Pepsi-Cola introduces two-liter plastic bottle with built-in "grip

handle" that makes it easier to grip and pour.

Pepsi introduces new look called the "Globe" which prominently

features a 3-dimensional Globe against a blue ice backdrop.

PepsiCo acquires Tropicana Products from Seagram Company Ltd.,

the biggest acquisition ever undertaken by PepsiCo. Its major brand

is Tropicana Pure Premium Juices.

1999 In March, The Pepsi Bottling Group, the world's largest Pepsi bottler,

begins trading on the New York Stock Exchange. It is listed under

the symbol PBG. The $2.3 billion public offering is among the

biggest initial public offerings in stock market history.

Lipton introduces Iced Tea Green Tea with Honey and Diet Peach.

Tropicana juices are entering the huge India market for the first time.

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2001 Indra K. Nooyi was elected as a director and also became the

president of PepsiCo.

Mirinda is launched in Italy.

PepsiCo merges with The Quaker Oats Company, creating a $25

billion food and Beverage Company focused on the rapidly growing

consumer demand for convenience.

2002 Gatorade introduces new Gatorade ICE in three flavours- Orange,

Lime and Strawberry.

PepsiCo reorganizes to unite all North American beverage

operations, including Pepsi-Cola, Tropicana and Gatorade, into one

new division -- PepsiCo Beverages and Foods North America.

2003 Pepsi-Cola launches Sierra Mist nationally.

Pepsi announces four-year sponsorship agreement with the UK

Football Association.

Frito-Lay announces new line of snacks made with organic

ingredients called "Natural Snacks."

Pepsi-Cola trademark turns 100 years old.

Pepsi Vanilla is launched in the United States.

Gatorade introduces Gatorade Endurance Hydration Formula -- a

specialized sports drink to meet the needs of endurance athletes.

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2006 Quaker Snacks Unveils Breakfast Cookies.

Doritos unveils new packaging, including an updated logo.

PepsiCo Launches Pepsi Limon in Peru.

PepsiCo India re-launches Mirinda.

SoBe Launches New SoBe Life Water.

2007 PepsiCo signs Maria Sharapova for International endorsement of

Gatorade and Tropicana

Ruffles unveils new packaging to reflect its switch to 100% pure

sunflower oil

Aquafina launches Aquafina Alive - a low calorie, vitamin-enhanced

water beverage

2008 Pepsi to take over New Year's Eve 2009 in New York City's Time

Square with new packaging design and messages

SoBe Lifewater launches first-ever, zero-calorie, naturally-

sweetened enhanced water in the US

PepsiCo honoured by Environmental Protection Agency as water

efficiency leader

Pepsi Malaysia wins bronze award at the Malaysian Effie Awards

for its marketing and advertising achievements

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2009 PepsiCo is named to the 'Best Companies for Multi Cultural Women'

list by Working Mother magazine

SoBe Lifewater introduces two new zero-calorie flavours – Acai Fruit

Punch and Mango Melon

Pepsi celebrates its 75th anniversary in Canada

PepsiCo creates Baked Snacks North America

Business Unit to meet consumers interest in more nutritious snacks

and foods

PepsiCo opens new Russian beverage plant in Domodedovo, the

largest bottling plant in PepsiCo's global system

PEPSICO INDIA

PepsiCo gained entry to India in 1988 by creating a joint venture with the

Punjab government- owned Punjab Agro Industrial Corporation (PAIC) and Voltas

India Limited. This joint venture marketed and sold Lehar Pepsi until 1991, when the

use of foreign brands was allowed; PepsiCo bought out its partners and ended the

joint venture in 1994. Others claim that firstly Pepsi was banned from import in India,

in 1970, for having refused to release the list of its ingredients and in 1993, the ban

was lifted, with Pepsi arriving on the market shortly afterwards. These controversies

are a reminder of "India's sometimes acrimonious relationship with huge multinational

companies." Indeed, some argue that PepsiCo and The Coca-Cola Company have

"been major targets in part because they are well-known foreign companies that draw

plenty of attention." PepsiCo has grown to become one of the country’s leading food

and beverage companies. One of the largest multinational investors in the country,

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PepsiCo has established a business which aims to serve the long term dynamic needs

of consumers in India. PepsiCo India and its partners have invested more than U.S.

$1 billion since the company was established in the country. PepsiCo provides direct

and indirect employment to 185,000 people including suppliers and distributors.

PepsiCo India Holdings Pvt. Ltd. operates through its subsidiaries including

Pepsi Foods Ltd, Frito - Lay India, and Tropicana Beverages Company. The company,

through its subsidiaries manufactures, bottles, and exports fruit juices and carbonated

beverages and packaged snacks such as Lays, Ruffles, Fritos, and Cheetos. PepsiCo

India is based in Gurgaon, India.

BEVERAGES SEGMENT

PepsiCo nourishes consumers with a range of products from treats to healthy

eats that deliver joy as well as nutrition and always, good taste. PepsiCo India’s

expansive portfolio includes iconic refreshment beverages. The multifarious products

of Pepsico in beverages segment are:

Beverage Brands

1. PEPSI

Pepsi has become a friend to youth and youth

culture. Over generations, youngsters have grown

up with Pepsi and have shared an emotional

connect with it unlike with any other cola brand. Be

it parties, hangouts with friends, or just another

day at home, a day is never complete without the

fizz of Pepsi!

Pepsi, cricket and Bollywood have been joined at

the hip since the cola’s entry into India. Shah Rukh

Khan, Sachin Tendulkar, Saif Ali Khan, Amitabh

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Bachchan, Kareena Kapoor, Priyanka Chopra, Virender Sehwag, M.S. Dhoni, John

Abraham, Ranbir Kapoor and Deepika Padukone are some of the celebrities who

have endorsed Pepsi. The Pepsi My Can is undoubtedly the most popular cola

pack of all time. It is not just a pack but a definitive style.

TAGLINE: LIVE FOR NOW

2. MIRINDA

Mirinda is an international soft drink

brand from Spain that was launched

in India in 1991. Mirinda has always

been about the irresistible taste of

oranges that is now synonymous

with the brand. The message was

successfully communicated through

their 1996 ‘Mirinda Men’ campaign,

the 2000 ‘Taste Pe Atka,

Mirindaaaa’ campaign and the

‘Taste Aisa Chaye Character Fisla

Jaye’ campaign of 2003.

When we think Mirinda, we think

orange. But Mirinda has also launched many other fruit flavours. Mirinda Lemon

was launched in 1998 with the memorable ‘Zor Ka Jhatka Dheere Se Lage’

campiagn starring Amitabh Bachchan and Govinda. Mirinda has also launched

innovative flavors like Apple and Batberry.

Mirinda evolved to evoke not just great taste but a lot of fun as well. This was

conveyed through another spate of memorable campaigns – ‘Fun Ka Naya

Mantra, Mirindaaaaa’ starring Asin and Zayed Khan in 2007 and the ‘Pagalpanti

Bhi Zaroori Hai’ campaign with Asin in 2008.

TAGLINE: WEEKEND AAYE THO PAGALPANTI CHAYE

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3. 7UP

7UP, the refreshing clear drink with a natural

lemon and lime flavour was created in 1929.

7UP was launched in India in 1990 and its

international mascot Fido Dido was used for

advertising in 1992 to position the brand as a

cool drink for youngsters. Fido became an

instant hit with his trendy look, laid-back

attitude and unconventional take on life.

During the brand’s early years in India, 7UP

gained market leader status in the lemon lime

category by being one of the first to be

nationally distributed besides being marketed

as a healthier alternative to other soft drinks.

7UP’s ambition as a brand has been to capture and own the lemon refreshment

territory within the clear lime category. ‘Lemon’ has proven to be a clear and

relevant differentiator for the brand. Further, the emotional connect with the idea of

upliftment through refreshment has led to an impressive payoff for the brand. After

establishing itself as ‘The Lemon Drink’ in January 2009, 7UP has continued to

build on the theme of mood upliftment with its new tagline ‘Mood Ko Do Lemon Ka

Lift’.

TAGLINE: DIL BOLE I FEEL UP

4. GATORADE

Gatorade, the World’s No.1 Sports Drink, was born on the field of sport. Gatorade

was launched in India in 2004 and over the years, has become an integral part of

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the kitbags of many leading sportspersons. Gatorade has been tried and endorsed

in India by the top sports stars and

professionals, including Sachin Tendulkar, Irfan

Pathan, Md. Kaif, S. Sreesanth Ramji

Srinivasan and Javagal Srinath.

Gatorade is an optimal mix of water,

carbohydrates and essential mineral salts that

get absorbed instantly to rehydrate, replenish

and refuel like no other beverage can.

Gatorade quickly restores what the body loses

through sweat. Its scientific formulation

instantly helps the body restore essential

minerals, salts, water and energy lost through action and exercise. Gatorade thus

helps one to stay ‘Stronger for Longer’. It contains less than half of the sugar that is

normally found in energy drinks or soft drinks and even juices.

TAGLINE: REHYDRATES REPLENISHES RECHARGES

5. NIMBOOZ

Nimbooz is a great tasting product. It has capitalized

on the existing familiarity with and high consumption

of unpackaged / home-made nimbu pani. It has

remained true to its authentic Indian Identity by using

the traditional Matka (Earthen Pot) and Squeezer in

the manufacturing process. It is just like home-made

nimbu pani. You can enjoy its natural and delicious

lemony refreshment anywhere you go. The product is

available in three convenient formats, 350ml PET,

200ml RGB and 200ml Tetra at the remarkable price

points of Rs15, Rs 10 and Rs 10 respectively.

TAGLINE: DIL BOLE I FEEL UP

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6. SLICE

Slice was launched in India in 1993 as a refreshing mango drink and quickly went

on to become a leading player in the category. In 2008, Slice was re-launched with

a winning product formulation that made consumers fall in love with its taste. With

new pack graphics and clutter-breaking

advertising, Slice has built a powerful appeal.

With the launch of the ‘Aamsutra’ campaign in

2008, its winning taste and appealing pack

graphics, Slice created a great deal of

excitement in its category and celebrated the

indulgence in mangoes like no other brand

had done before.

While other players have portrayed the

mango as a simple and innocent fruit, Slice

celebrates the sheer indulgence and

sensuality involved in consuming a mango.

TAGLINE: PURE MANGO PLEASURE

7. MOUNTAIN DEW

It is a soft drink that exhilarates like no other because

of its active, high-energy, extreme citrus taste. The

idea of daring, challenges, a ‘can do’ attitude,

adventure and exhilaration are deeply entrenched in its

brand DNA. The brand has always celebrated the bold,

adventurous and rebellious spirit of youth. This is

reflected in the high-adrenaline advertising of the

brand and its connection to outdoor adventure.

TAGLINE: DARR KE AAGE JEET HAI

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8. TROPICANA

Tropicana has matured into one of the most

respected beverage brands. Widely regarded as

the world's no. 1 juice brand, it is today available

in 63 countries. Since 1998, Tropicana has been

owned by PepsiCo, Inc. Tropicana continues to

select the best fruit to manufacture high-quality

juices and original products, pioneer innovative

processes and explore new markets for its

products. It is committed to fostering healthy

lifestyles by ensuring that its products are naturally

nutritious and provide the daily benefits that one

needs.

In India, Tropicana comes in two categories: 100%

Juices (sold as Tropicana 100%) and Juice Beverages & Nectars (sold as

Tropicana).

TAGLINE: TAP INTO NATURE

9. AQUAFINA

With its unique purification system and great taste, Aquafina soon

became the bestselling brand in the country. In India, Aquafina’s journey

began with its launch in Bombay in 1999 and it was rolled out nationally by

2000. On the strength of its brand appeal and distribution, Aquafina has

become one of India’s leading brands of bottled water in a relatively short

span of time. Bottled across India in 19 plants, Aquafina is available across

more than half a million outlets. Catering to diverse consumer needs and

occasions, it is available in various pack sizes like 300ml, 500ml, 1 litre and 2

litre bottles and in bulk water jars of 25 litres.

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Aquafina is the face of PepsiCo’s water conservation initiatives and builds

awareness about PepsiCo’s efforts to replenish and restore the water table through

its pack labels.

TAGLINE: THE PUREST PART OF YOU

SNACKS SEGMENT

PepsiCo’s foods company, Frito-Lay, is the leader in the branded salty snack market

and all Frito Lay products are free of trans-fat and MSG. It manufactures Lay’s Potato

Chips; Cheetos extruded snacks, Uncle Chipps and traditional snacks under the

Kurkure and Lehar brands. The company’s high fibre breakfast cereal, Quaker Oats,

and low fat and roasted snack options enhance the healthful choices available to

consumers. The group has built an expansive beverage and foods business. To

support its operations, PepsiCo has 43 bottling plants in India, of which 15 are

company owned and 28 are franchisee owned. In addition to this, PepsiCo’s Frito Lay

foods division has 3 state-of-the-art plants. PepsiCo’s business is based on its

sustainability vision of making tomorrow better than today. PepsiCo’s commitment to

living by this vision every day is visible in its contribution to the country, consumers

and farmers. PepsiCo India's agri-partnerships with farmers help farmers across the

country grow and earn more. PepsiCo Frito Lay’s core products are:

1. LAY’S

Lay’s, the world’s largest and favourite snack food brand, has steadily established

itself as an indispensable part of India’s snacking culture since its launch in 1995.

With its irresistible taste, international and Indian flavours and youth-centric

imagery, Lay’s has established itself as a youth brand and continues to grow in the

hearts and mind of its consumers.

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Over the years, Lay’s has become known for its

engaging and innovative promotions and

campaigns. The brand known for its ‘No one can eat

just one’ campaign has moved its positioning to

‘What’s the programme?’ making Lay’s ‘the main food

of every programme‘ Saif Ali Khan has been the face

of the brand for over five years, and has recently been

joined by the captain of the Indian cricket team M.S.

Dhoni. Both embody the youthful energy and appeal

of the brand.

TAGLINE: BE A LITTLE

DILLOGICAL

2. KURKURE

Kurkure has constantly re-invented itself to sustain its relevance to Indian culture

and the Indian ethos. Not only does Kurkure provide an inimitable taste and

superior quality, it has also brought fame and

happiness to many through its ‘Chai-time-

achievers’ face on pack initiative.

It is made with trusted kitchen ingredients:

100% vegetarian. All the raw materials used

in Kurkure comply with the Prevention of

Food Adulteration Act and rules that govern

the manufacture, distribution and sale of

Kurkure. All Kurkure ingredients are used

daily in households for the preparation of

various edible items.

Kurkure Desi Beats: Kurkure Desi Beats is

an exciting new range of crunchy triangular

snacks in irresistible Indian flavours. This newly launched youth-oriented sub-

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brand personifies their inherent ‘Desi’ spirit and gives one the license to be Desi.

Desi Beats celebrates the contemporary Indian youth who straddles both tradition

and modernity and is confident of his Indian identity.

TAGLINE: TEDHA HAI PAR MERA HAI

3. ALIVA

With the launch of Aliva, Frito-Lay India

aims to create a new segment of great

tasting baked savoury crackers. After

Kurkure’s enormous success, Aliva marks

Frito-Lay India’s creation of yet another

category, borrowing ingredients and

textures from biscuits, and flavours from

namkeens. The Aliva product range has

been developed in India, specifically for

the Indian consumer and is a significant

step ahead in the company’s journey of

portfolio transformation, providing healthier

and tasty snacking options in line with local consumer needs. Aliva is available in

four distinct chatpate Indian flavours, created with the Indian palate in mind,

Special Pindi Masala

Tomato & Roasted Spices

Mint Flavour with Herbs

Original Salted

TAGLINE: CHATPATE CRACKERS WITH WHEAT AND DAAL

4. CHEETOS

Cheetos is a brand of cheese-flavored cornmeal snack made by Frito-Lay, a

subsidiary of PepsiCo. The initial success of Cheetos was a contributing factor to

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the merger between The Frito Company and

H.W. Lay & Company in 1961 to form Frito-Lay.

In 1965 Frito-Lay became a subsidiary of The

Pepsi-Cola Company, forming PepsiCo the current

owner of the Cheetos brand. Cheetos have been

the subject of public and media attention on

multiple occasions due to the unpredictable

shapes that form during the manufacturing

process. Cheetos have been found in shapes

which resembled the appearance of popular or

historical figures. A single Cheeto described as

being in the shape of Michael Jackson doing

the Moonwalk Dance sold for $35.18 on eBay.in the summer of 2009, attracting

national media coverage in the U.S.

TAGLINE: DANGEROUSLY CHEESY

5. UNCLE CHIPPS

Launched in 1992, Uncle Chipps was a

pioneer in branded potato chips in India. The

brand was acquired from Amrit Agro Ltd. in

2000 by Frito-Lay India. After the acquisition,

the hugely popular brand has grown from

strength to strength and has built a powerful

connection with consumers. Uncle Chipps is

warm, playful, lively, companionable and

traditional at heart, just like the good-natured

uncle everyone in the family relates to and no

family gathering is complete without.

The production process begins on farms in select regions across India where the

best potatoes are grown specifically for Frito-Lay to make great-tasting chips. Upon

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the potatoes’ arrival at plants, it can take as little as 24 hours for the chips to be

made. Lay’s Chips are made using the following simple process:

Wash – the potatoes are thoroughly bathed in water.

Peel – next, we gently peel the skin off the potatoes, even as the

flavour remains intact.

Slice – the potatoes are thinly sliced and rinsed again to remove

any remaining starch.

Cook – the slices are cooked to a crispy crunch in edible

vegetable oil.

Season – finally, the chips are topped off with a mouth watering

sprinkle of salt or seasoning.

TAGLINE: BOLE MERE LIPS, I LOVE UNCLE CHIPPS

6. QUAKER OATS

Quaker Oats are Australian oats. They meet stringent quality control standards for

raw grains and finished oatmeal in Australia. All subsequent processes are

conducted according to the internal quality control protocol of Frito-Lay, which

include:

Checks and measures for receipts and

clearances laid down by Quaker globally.

Strict hygiene and sanitation standards for

all equipment, processes and facilities.

Packed under conditions of controlled

temperature, humidity and extreme

hygiene.

Micro-biological testing of ingredients /

products on receipt at the factory and

during final clearance

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All facilities for bulk storage, transfers, and packing and clearance are

under surveillance for infestation as per Frito-Lay’s standards

TAGLINE: SAY GOOD MORNING TO YOUR HEARTS

7. LEHAR NAMKEEN

Lehar was launched in 1996, with

innovative small packs and traditional

flavours. The brand positioned itself by

emphasizing its irresistible taste and

using modern imagery. Lehar was re-

launched in 2006 and positioned itself

using the plank ‘Taste zyaada kyunki oil

taza’. It promised to deliver good taste

through the use of fresh oil in the

manufacturing process.

TAGLINE: QUALITY IN EVERY BITE

All the products contain voluntary nutritional labelling on their packets

PepsiCo's involvement in Indian agriculture stems from its vision of creating a cost-

effective, localized agri-base in India by leveraging farmers’ access to world class

agricultural practices. PepsiCo India worked with farmers and State Governments to

improve agri sustainability, crop diversification and raise farmer incomes.  PepsiCo

helped transform the lives of thousands of farmers by helping them refine their farming

techniques and raise farm productivity, and customized solutions to suit specific

geographies and locations.

The most ambitious project is a joint program, launched in 1989, between

PepsiCo India, the Punjab Agriculture University (PAU) in Ludhiana and Punjab Agro

Industries Corporation (PAIC) in Chandigarh. The program focuses on evolving

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agricultural practices to help Punjab farmers produce internationally competitive

products. Over the last five years, PepsiCo has also collaborated with the Thapar

Institute of Technology to develop a high quality potato seed program.

PepsiCo was a pioneer in the concept of contract farming under which the

company transfers agricultural best practices and technology and procures the

produce at a guaranteed price.  To support the initiative, PepsiCo set up a 27-acre

research and demonstration farm in Punjab to conduct farm trials of new varieties of

tomato, potato and other crops. The program, which includes seed production, has

successfully evaluated the following crops,

Several varieties of basmati rice more than 200 varieties and hybrids of

chilli

25 varieties and hybrids of corn

More than 60 varieties of peanut

More than 100 varieties and hybrids of tomato.

Additionally, the development of new tomato varieties has helped increase total

annual production of tomato varieties from 28,000 tons to over 200,000 tons in

Punjab. Yields have more than tripled from 16 tons to 54 tons per hectare.

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Module 2 – ORGANIZATIONAL DYNAMICS

Organizations are made up of people, people's behaviour makes up

organizational behaviour, managers are people, strategies address the organization,

and strategies require operational execution. Organizational dynamics refers to the

patterns of movement over time in the interactions between the people who are the

organization, the community of practice. PepsiCo's business strategy and affairs are

overseen by their Board of Directors, which is comprised of one executive director and

twelve independent outside directors. Only independent outside directors make up

their three standing Board Committees such as Nominating and Corporate

Governance, Audit, Compensation

CHIEF EXECUTIVE OFFICER

Indra Krishnamurthy

Nooyi is an Indian

American business

executive and

the Chairman and

Chief Executive

Officer of PepsiCo, the

second largest food and

beverage business in the

world by net revenue.

According to Forbes, she

is consistently ranked among World's 100 Most Powerful Women.

Nooyi joined PepsiCo in 1994 and was named president and CFO in 2001. Nooyi has

directed the company's global strategy for more than a decade and led PepsiCo's

restructuring, including the 1997 divestiture of its restaurants into Tricon, now known

as Yum! Brands. Nooyi also took the lead in the acquisition of Tropicana in 1998, and

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merger with Quaker Oats Company, which also brought Gatorade to PepsiCo. In 2007

she became the fifth CEO in PepsiCo's 44-year history.

According to BusinessWeek, since she started as CFO in 2000, the company's annual

revenues have risen 72%, while net profit more than doubled, to $5.6 billion in 2006.

Nooyi was named on Wall Street Journal's list of 50 women to watch in 2007 and

2008, and was listed among Time's 100 Most Influential People in The World in 2007

and 2008. Forbes named her the #3 most powerful woman in 2008. Fortune ranked

her the #1 most powerful woman in business in 2009 and 2010. On the 7th of October

2010 Forbes magazine ranked her the 6th most powerful woman in the world.

ADDITIONAL BOARD OF DIRECTORS

Shona L. Brown

Senior Vice President, google.org of Google Inc.

Ian M. Cook

Chairman, President and Chief Executive Officer, Colgate-

Palmolive Company

Dina Dublon

Former Vice President & CFO, JP

Morgan Chase & Co.

Victor J. Dzau, M.D.

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Chancellor for Health Affairs, Duke University and President &

CEO, Duke University Health System

Ray L. Hunt

Chairman of the Board, President and Chief

Executive Officer of Hunt Consolidated, Inc.

Alberto Ibargüen

President & Chief Executive Officer, John S. and

James L. Knight Foundation

Sharon Percy Rockefeller

President & Chief Executive Officer, WETA Public

Stations

James J. Schiro

Former Chief Executive Officer, Zurich Financial

Services

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Lloyd Trotter

Managing Partner, GenNx360 Capital Partners

Daniel Vasella

Chairman of the Board, Novartis AG

Alberto Weisser

Chairman & Chief Executive Officer, Bunge Limited

The independent outside directors who make up the three outstanding Board

Committees and their members are:

Nominating and Corporate Governance Committee

Members

Ray L. Hunt, Chair

Victor J. Dzau, MD

Sharon Percy Rockefeller

Lloyd G. Trotter

Daniel Vasella

James J. Schiro

Audit Committee

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Shona L. Brown

Dina Dublon, Chair

Ian M. Cook

Alberto Ibargüen

Alberto Weisser

Compensation Committee

Lloyd G. Trotter, Chair

Victor J. Dzau, MD

Ray L. Hunt

Sharon Percy Rockefeller

Daniel Vasella

James J. Schiro

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Organisation structure of PepsiCo

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PepsiCo Inc. is fractioned up into three companies. They are:

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PepsiCo

PepsiCo America Foods

(PAF)

PepsiCo America

Beverages (PAB)

PepsiCo International

(PI)

Europe & UK AMEA

India

Food Business Unit

Beverage Business Unit

North & East Market Unit

West Market Unit

South Market Unit

China Middle East Africa

1. PepsiCo America Foods (PAF)

2. PepsiCo America Beverages (PAB)

3. PepsiCo International (PI)

Now, the focal point is only on the PepsiCo International (PI). It is mainly carved up

into four nations. They are Europe, UK, Africa, Middle East Asia. These four nations

are sorted as:

Europe with UK

Africa & Middle East Asia.

The AMEA (Africa Middle East Asia) is separated into four regions. They are:

1. India

2. China

3. Middle East

4. Africa

Being India the deep focus of this project. India has two business units namely,

Food Business Unit

Beverages Business Unit

In Beverages Business Unit, I worked in the South Market Unit which is located in

Chennai.

Beverages Business Unit Organisation Chart

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The Beverages Business Unit Flowchart explicates distinctly that it is majorly carved

up into three regions namely,

40 | P a g e

BEVERAGES BUSINESS UNIT

SOUTH MARKET UNIT

LOCATIONS

HYDERABAD

TAMIL NADU

KERALA & KARNATAKA

PLANTS

MAMANDUR

MADURAI

PALAKKAD

NEELAMANGALAM

SANGAREDDY

NORTH & EAST MARKET UNIT

LOCATIONS

UTTAR PRADESH

NORTH EAST

PUNJAB

WEST BENGAL

PLANTS

PANIPET

BAZPUR

WEST MARKET UNIT

LOCATIONS

MAHARASHTRA

GUJARAT

RAJASTHAN

PLANTS

AURANGABAD

BHARUCH

CHEMBUR

ROHA

MAHUL

1. South Market Unit with Headquarters in Chennai

2. North & East Market Unit with Headquarters in Gurgaon

3. West Market Unit with Headquarters in Mumbai

SOUTH MARKET UNIT

This is the place in which I underwent my institutional training. The Regions which

cross under South Market Unit are as follows and these also form the unit as such:

1. Hyderabad

2. Tamil Nadu

3. Kerala & Karnataka

In addition to the units the south Market Unit also has manufacturing plants which are

situated in:

Mamandur

Madurai

Neelamanglam

Palakkad

Sangareddy

NORTH & EAST MARKET UNIT

The regions which cross under North & East Market Unit are as follows and these also

form the unit with Uttar Pradesh

In the North & East Market Unit, the plants are situated in:

Jainpur

Bazpur

WEST MARKET UNIT

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The regions which cross under West Market Unit are as follows and these also form

the unit as such:

Maharashtra

Gujarat

In the West Market Unit, the plants are situated in:

Aurangabad

Bharuch

Chembur

Roa

Mahul

Food Business Unit Organisational Chart

42 | P a g e

Food Business Unit is sub-divided into:

43 | P a g e

Food Business Unit

Sales Regional Office

North Market Unit

Delhi, Punjab, Haryana, J&K, HP,Uttarakhand, UP

East Market Unit

West Bengal, Jharkhand

Orissa, Bihar, NE States & Sikkim

West Market Unit

Maharashtra,MP, Chhattisgarh

Gujarat, Rajasthan

South Market Unit

Andhra Pradesh,Tamil Nadu,

Kerala, Karnataka

Manufacturing Locations

Channo( Near Patiala )

Ranjangaon(Near Pune)

Sankrail(Near Kolkata)

Faridabad

Barabanki

Baroda

Erode

Bangalore

Sales regional office

Manufacturing locations.

 

The Sales Regional Office is further divided into four wings. They are:-

East Regional Office with headquarters in Kolkata

West Regional Office with headquarters in Mumbai

North regional Office with headquarters in Gurgaon

South Regional Office with Headquarters in Chennai

 

East Regional Office covers the states:

1.      West Bengal

2.      Jharkand

3.      Orissa

4.      Bihar

5.      NE States

6.      Sikkim

 

West Regional Office covers the states:

1. Maharashtra

2. Madhya Pradesh

3. Chhattisgarh

4. Gujarat

5. Rajasthan

 

North Regional Office covers the states:

1. Delhi

2. Punjab

3. Haryana

4. J&K

5. HP

6. Uttarakhand

South Regional Office covers the states:

44 | P a g e

1. Andhra Pradesh

2. Tamil Nadu

3. Kerala

4. Karnataka

 

The manufacturing location is further divided into plant and co-packer.

The plants are situated at:

1. Channo (near Patiala)

2. Ranjangaon (near pune)

3. Sankrail (near Kolkata)

The co-packer are situated at:

1. Faridabad (NCR)

2. Barabanki(near lucknow)

3. Baroda (Gujarat)

4. Erode(Tamil Nadu)

5. Bangalore.

India Region Executive Committee

45 | P a g e

46 | P a g e

Region Head & Bev. CEO

BUGM Foods

VP Marketing

VP Sales

VP Operations

Human Resource

CFO

VP Technology

VP Bottling Operations

VP Marketing

VP Operations

VP Innovation

CPO

Region VP External Affairs

Region CFO

Region VP Legal

VP Communication

Capabilities

Executive Assistant

PepsiCo Indian Region Executive Committee Members are as following. The Region

head and the beverages Chief Executive Officer being Mr. Manu Anand, whereas

the Executive Assistant is Mr.Primrose.V.

 

Under the region head there are various heads and departments. The various

departments and their heads are:

Mr.Gautham - Business Unit General Manager for FOODS

 

The Beverages Department considers:

1. Mr.Praveen Someshwar          -         Vice President Bottling Operations

2. Mr.Punitalal                      -         Vice President Marketing Beverages

3. Mr.Pradeep Sardana                  -         Vice President Operations

4. Mrs.Geetu Verma                     -         Vice President Beverages Innovation.

 

The PO1 department considers:

1. Mr.Pavan Bhatia                      -           Region CPO

2. Mr.Vivek Bharati                    -           Region VicePresident External Affairs

3. Mr.Kimsuka Narasimhan        -           Region Chief Financial Officer

4. Mr.Purvez Billimoria              -           Region Vice President Legal

 

The Division department considers:

1. Mr.Tanmaya vats                      -          Vice President Communication

capabilities

2. Mrs.Sucheta Govil               -          Vice President.

 

The business Unit General Manager handles various people under different

departments. They are:

1. Mrs.Deepika Warrier            -          Vice President Marketing

2. Mr.Satyavrat pendharkar       -          Vice President sales

3. Mr.Rajiv wakhle                   -          Vice President Operations

4. Mr.Pradeep jain                    -  Chief financial officer

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Module 3 - UNIQUE SELLING PROPOSITION

A unique selling proposition (USP) is a description of the qualities that are

unique to a particular product or service and that differentiate it in a way which will

make customers purchase it rather than its rivals. Uniqueness is rare, and coming up

with a continuous stream of products with unique features is, in practice, extremely

difficult. Philip Kotler says that the difficulty firms have in creating functional

uniqueness has made them “focus on having a unique emotional selling proposition

(an ESP) instead of a USP”. PepsiCo’s USPs are:

Localization in Key Markets

Consumer Satisfaction

Healthier Options

Localization in Key Markets

As a consumer-focused company, they want to enrich the lifestyles of their

consumers while increasing the local relevance of the products they make. they

recognize the need to understand and respect local cultures, rituals, patterns and

intake gaps when developing delicious-tasting convenient and affordable products for

consumers in that market. For example, in India, they have introduced a whole-grain

product for breaking the fast around the observance of Ramadan. In China, they have

introduced congee (with whole grains and reduced sodium) as a locally relevant

breakfast offering to add nutritional value to the Chinese diet, and they're introducing

products made from grains in sub-Saharan Africa as a change from those made with

plain flour.

Examples of products adapted to local tastes include:

India – A grain-based product called Kurkure, a tea-time snack

called Aliva and a high-nutrition snack made from lentils called

Masala Munch.

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Mexico – A quesadilla-shaped and flavoured tortilla chip called

Fritos Dobladitas

Russia – Locally relevant flavours of Lay's potato chips, such as

crab and mushroom;

China – Blueberry and cucumber varieties of Lay's chips/Congee.

Consumer Satisfaction

All PepsiCo divisions conduct regular, qualitative and quantitative consumer

research to understand the needs of people in the markets where they operate.

Consumer insights are translated into innovative new product improvements, new

product ideas and marketing initiatives. They leverage third-party benchmarking tools

from the U.S.'s Kantar Retail surveys and globally through the Advantage Group

International survey.

PepsiCo has created Centres of Excellence (COEs) to ensure a high quality of

customer service. One of their most active COEs is focused on customer insights,

helping to quantify and provide innovative solutions for their customers' most

challenging issues, including consumer shopping habits, macro consumption trends

and retailer competitive dynamics.

Healthier Options

Sodium Reduction in Foods

Across PepsiCo's global portfolio, they have made a significant reduction in

average sodium levels—all while maintaining great taste in their products. This

progress will be accelerated over the coming years in order to achieve their

reduction commitment.

Aggressive efforts have been taken in North America, Europe and Latin

America to make significant reductions in some of their popular, high-volume snack

products, as well as the company's advances in developing new salt crystal

49 | P a g e

technology—which maintains the salt flavor that consumers like but with less

sodium actually used—they believe they are on track to meet this reduction target.

Examples of their progress include:

In the U.K., Walkers has significantly reduced sodium by 25 to 55+ percent

in its products since 2005, while continuing to be the country's number-one-

selling brand of crisps.

In the U.S., Frito-Lay developed "Lightly Salted" versions of Fritos corn

chips and Rold Gold Tiny Twist pretzels in 2010, each with less than 50

percent of the sodium of their original versions.

In Canada, Quaker instant oats products have been reformulated with a

15–25 percent reduction in salt.

In Brazil, they reduced sodium in one of their most popular snacks,

Fandangos, by more than 30 percent.

Added Sugar Reduction in Beverages

Reducing the amount of added sugar in their products has been steady in

recent years. Despite strong consumer taste preferences for sugar and complex

regulatory processes for alternatives, they have made progress toward achieving

their initiatives.

There have been some considerable successes. Pepsi Max, for example, is the

company's 19th billion-dollar mega-brand and is the fastest-growing beverage

internationally with a "no sugar" label. Pepsi Max, containing no sugar but with a

full flavor, is their fastest-growing brand internationally since 2008, with significant

product launches across the Middle East and China in 2010. Pepsi ONE, with only

one calorie, is another successful brand; Pepsi Next, with 60 percent less sugar,

will launch in test markets in the U.S. in late 2011; and through their continued

R&D investment they will develop additional lower-calorie products.

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Saturated Fat Reduction in Foods

After a major undertaking to eliminate nearly all trans fats from their U.S.

product portfolio and many of their global products, they are now committed to

reducing the saturated fat content of their key global food brands.

Since all regions and countries offer different dietary approaches and

agricultural conditions, they expect to continue to make progress with partnerships

to develop local crops and innovative solutions meeting local tastes that will help

us reduce saturated fat levels in their products.

In India, for example, the switch to rice bran oil from palm oil on such leading

products as Lay's potato chips and Kurkure namkeen, a traditional Indian afternoon

tea snack, has reduced saturated fat levels by an average of almost 40 percent

across the portfolio.

In China, increased sales of their Quaker products have helped drive a 10

percent decrease in saturated fat per serving across their foods portfolio. And in

Russia, saturated fat levels have been reduced by almost 13 percent since 2006

through the introduction of lower-saturated-fat versions of Cheetos and the more

than 300 percent growth of low-saturated-fat Hrusteam products.

In 2010, they also launched versions of Cheetos and Fandangos in Brazil,

made with heart-healthier sunflower oil.

The Move to High-Oleic Sunflower Oil

As part of their continuing relationship with the Inter-American Development

Bank (IDB), in early 2011 PepsiCo and IDB announced a landmark partnership to

spur social and economic growth in 26 countries across Latin America and the

Caribbean. The partnership's inaugural project was launched in Mexico with an

agriculture initiative that will significantly expand commercial sunflower production

—a once-thriving commercial crop that has diminished in recent years—while

providing loans and a source of income for some 850 Mexican farmers and their

families. PepsiCo established supply with approximately 90 farmers, increasing

51 | P a g e

production from 45 tons in 2009 to 180 tons in 2010. For PepsiCo, the sunflowers

provide a source of heart-healthy HOSO for cooking potato chips, biscuits, nuts

and other snacks that PepsiCo produces in Mexico.

This initiative to develop the Mexican sunflower market is a powerful example of

how they can bring together the resources of public and private sectors to deliver

real value for local communities, for their consumers and for their business.

As part of the sunflower production program, PepsiCo will purchase 100

percent of the crop, for an estimated $52 million over seven years. Additionally,

PepsiCo will invest $2.6 million to support management of the Mexican sunflower

crop and will provide technical training to the small farmers.

Increase the Amount of Whole Grains, Fruits, Vegetables, Nuts, Seeds and

Dairy in Their Global Product Portfolio. They've made great strides in increasing

the amount of wholesome foods across their global portfolio. To coordinate their

activity, in 2010 they formed their Global Nutrition Group, to help accelerate the

growth of their nutrition business, from $10 billion in net revenue in 2010 to $30

billion by 2020.

Calorie Control—Encouraging Consumers to Eat Fewer Calories

In 2010, they continued to provide consumers with options to manage calorie

intake, from launching new zero- and low-calorie products to reformulating existing

products with fewer calories.

Naked Juice, for example, introduced two 100 percent juice smoothies that

have 35 percent fewer calories than regular Naked Juice smoothies, and

Tropicana added new flavors—such as Pomegranate Blueberry, Pineapple Mango

and Farmstand Apple—to its Trop50 line, which offers 50 percent less sugar and

fewer calories with no artificial sweeteners. In 2010, Trop50 supported these new

juices in a new breakthrough advertising campaign that encouraged consumers to

reappraise the chilled juice category.

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They are also using an all-natural sweetener innovation in Gatorade, the

number-one sports drink brand in the U.S., to produce G2 Gatorade, which

delivers the same electrolytes as Gatorade to help maintain hydration, but with

only 20 calories per eight-ounce serving.

On the foods side, they utilized their expertise in baking and air-popping

technologies to manage calories. In Mexico, a baking technique is used to produce

a version of Sabritas potato chips that has 20 percent fewer calories. Several of

their products, including SunChips, Sabra, Quaker's Quakes and True Delights rice

snacks, were recognized in the U.S. on Good Housekeeping's "Best Low-Calorie

Snack" list.

And across their portfolio, they offer consumers portion-control packs for many

of their snacks, which are sized by calories, instead of weight, as they continue to

work with government agencies, industry groups and NGOs around the world to

promote healthier options for consumers, including creative incentives for

consumers to make healthier choices.

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Module 4 - QUALITY POLICY AND STANDARDS

PepsiCo has adopted strict corporate standards that govern their operations

and ensure accountability for their actions. Such policies cover areas of Corporate

Governance, Human Sustainability, Environmental Sustainability and Talent

Sustainability. Selected policies are discussed in detail below.

Human Sustainability Policies

Quality & Food Safety Programs

PepsiCo is dedicated to producing the safest, highest-quality and best-tasting

beverages and foods in every part of the world. Developing and maintaining robust

food safety programs is how they assure safety for every package, every day in

every market. PepsiCo has detailed internal programs and procedures for food

safety.

PepsiCo food safety

PepsiCo has an excellent track record in delivering safe products — this work is

guided by the PepsiCo Food Safety Policy. Their efforts are focused on building a

sustainable food safety program and providing the framework to develop and

sustain food safety of existing brands and new innovation. The scope covers the

design, manufacture and distribution of beverage and food products. Their

programs and procedures apply to all current and future divisions in PepsiCo.

PepsiCo’s programs and procedures for food safety and quality address the

following key areas:

Organizational Responsibility

The food safety responsibilities of all individuals at all levels of the

organization are outlined and documented in order to ensure the authority and

accountability of all food safety and quality decisions are well-understood.

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Critical Food Safety Elements

Their comprehensive food safety program ensures compliance with the

following critical food safety elements: Hazard Analysis and Critical Control

Points (HACCP), low acid manufacturing, allergen management, crisis

management, foreign object control, Good Manufacturing Practices (GMPs)

and pest management.

Regulatory

PepsiCo ensures all products and processes are in compliance with

applicable regulatory requirements. These include areas such as ingredients,

genetically modified organisms (GMOs), labelling, net weight, pesticide and

chemical residues, juice HACCP, flavor regulations and any local- or country-

specific requirements.

Food Security

It is the responsibility of each PepsiCo operation to plan, design, implement

and maintain a comprehensive facility security plan to ensure their products are

safe for human consumption. A facility security plan is implemented by each

plant, facility and distribution centre, in accordance with the baseline standards

and framework established by the PepsiCo Security Organization. It includes an

annual review of effectiveness and is updated as necessary.

Product Design

All PepsiCo products, processing equipment and facilities are designed,

developed and commercialized in a manner that enables manufacturing sites to

produce product that is safe, legal and fit for human consumption. The

Research and Development and Commercialization teams are responsible for

ensuring processes and products meet all regulatory requirements and are

designed to be safe for human consumption. Equipment design and

procurement must meet all standards for GMP compliance and sanitary design.

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Manufacturing

PepsiCo is committed to the manufacture of products that are safe and fit for

human consumption. They achieve this by ensuring the process is controlled,

raw materials are managed appropriately and the finished product is handled

correctly. Manufacturing includes the following equipment process controls:

conformance to specification, equipment preventive maintenance, calibration,

equipment verification, and start-up and change-over operation. The following

programs manage ingredients, in-process materials and finished goods:

product traceability, inspection and testing procedures, incoming raw material

and packaging controls, water quality, packaging quality, control of non-

conforming product, product rework and review and approval of variances.

Their warehouses are routinely assessed, approved and monitored.

Documentation and Records

PepsiCo ensures all documentation and records comply with government

regulations and the PepsiCo Food Safety Policy. This includes a defined

master list of documents and assigned responsibility for managing documents.

Records are maintained to demonstrate compliance with manufacturing

specifications and policies.

Supply Quality

All purchased ingredients are procured against an approved specification

from an approved vendor facility. Suppliers must pass a rigorous approval

process. Manufacturing facilities receive raw ingredients only from approved

suppliers. Supplier performance is routinely monitored, recorded and

reassessed.

Auditing and Self-Assessments

PepsiCo has an established framework in which it executes yearly food

safety audits of manufacturing and suppliers. These audits provide

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assessments of manufacturing facilities for compliance, effectiveness and

improvement in accordance with PepsiCo food safety policies and procedures.

Corrective and Preventive Action

Corrective and preventive action is initiated in response to non-

conformances that may occur relative to process, product or package

specifications. Effectiveness is verified by the prevention of reoccurrences. The

corrective action program includes effective and timely handling of

consumer/customer complaints, root-cause analysis, audits for program

effectiveness and follow-up investigations.

Training

Each functional department identifies training needs and provides training

for all associates, including full-time, part-time, temporary and contractors. This

ensures they have the appropriate level of education, experience and training

necessary to effectively perform the required activities specified in the PepsiCo

Food Safety Policy. A training business plan must be established to address

food safety training for HACCP, allergen management, low acid manufacturing,

GMPs, control of nonconforming product, associate safety, food security and

specific job applications.

Consumer and Customer Satisfaction

PepsiCo ensures procedures are in place to monitor consumer and

customer satisfaction. The procedures must provide timely and accurate

responses to customer complaints and strive for continuous improvement.

Quality Organization

PepsiCo Quality professionals assess product compliance to PepsiCo’s Quality

Policy. This program is focused on processes and procedures supporting quality

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policies and prioritization of critical risk areas. Their Quality agenda is led by

Quality professionals in various regions who oversee the following areas:

Food Safety

Innovation (R&D)

Manufacturing Quality

Co-Manufacturing Quality

Supplier Quality

Plant Quality

Genetically Modified Ingredients

PepsiCo is dedicated to producing the highest-quality food and beverage

products in every part of the world. PepsiCo ensures all products meet or exceed

stringent safety and quality standards and uses only ingredients that are safe and

approved by applicable government and regulatory authorities. Approval of

genetically modified foods differs from country to country regarding both use and

labelling. For this reason, PepsiCo adheres to all relevant regulatory requirements

regarding the use of genetically modified food crops and food ingredients within the

countries it operates. Where legally approved, individual business units may

choose to use or not use genetically modified ingredients based on regional

preferences.

Responsible marketing

Teaching children sensible eating habits at an early age is a critical part of their

up-bringing. As a major advertiser, they need to do their part to help parents

succeed in this task. Their approach has been to join a leading set of other food

and beverage companies in agreeing to change what younger children are seeing

advertised on TV and in other media, such as magazines and the Internet.

Importantly, they are doing this in countries around the world where they do

business today. Naturally, they cannot prevent children from seeing their

advertising, but they can ensure that media channels that are most targeted at

children carry advertisements only for certain products. From PepsiCo’s

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perspective, these are products that meet specific nutrition criteria intended to

encourage the consumption of healthier foods and beverages. The policy covers

their entire product portfolio and is subject to independent compliance monitoring

by Accenture.

Healthcare Reform

PepsiCo values the health and well-being of their associates, partners,

customers and consumers. PepsiCo offers a wide range of benefits that

encourages wellness, promotes healthy living and gives associates and their

family’s tools and information to make educated healthcare decisions.

Their Healthcare Commitment

Their company-sponsored approach to health and wellness encompasses

physical, emotional and financial well-being and includes prevention, screening,

healthcare and healthcare savings accounts, dental care, retiree healthcare

and life and disability insurance.

PepsiCo extends its commitment to health and wellness internally through

programs such as HealthRoads™. HealthRoads promotes healthier lifestyles

through a combination of health assessments, personalized coaching, tobacco

cessation, fitness and nutrition programs, online tools and worksite wellness

initiatives. The number of countries where they offer HealthRoads has been

increasing annually. In 2005 it was offered in three countries, and in 2009 the

program was offered in 20 countries. HealthRoads assists associates in

navigating through the healthcare system and addresses increasing healthcare

costs for associates and their families — as well as the company — by helping

them maintain good health and improve their health status.

In addition, PepsiCo United Kingdom developed a “Fit for Life” program, and

Vive Saludable (Live Healthy) was created within PepsiCo’s Mexico division as

a way to meet particular local needs with local programs. Their associate

wellness programs integrate well with their core business and commitment to

Human Sustainability, with a range of enjoyable and wholesome products, and

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efforts to make healthy choices easier. In addition, PepsiCo maintains and

enforces a strict global occupational health and safety policy.

Understanding healthcare is an issue that is complex and much larger than

they can impact within PepsiCo, they are committed to the following guiding

principles to engage with government, nongovernmental organizations and

appropriate external stakeholders.

Environmental Sustainability Policies

PepsiCo is committed to being an environmentally responsible corporate citizen. They

express that commitment in their Environmental Policy and other policies related to

Environmental Compliance and Sustainability, a few of which are described in more

detail below.

PepsiCo’s Environmental Policy

PepsiCo’s Environmental Policy applies to all their operations. PepsiCo

monitors company-owned operations and joint ventures where they hold a majority

share. They encourage their suppliers, service providers, bottlers and other

partners to adhere to the policy.

Sustainable Agriculture Policy

They have developed and published their Global Sustainable Agriculture Policy,

which demonstrates their approach to sustainable development across their entire

agriculture supply chain, including water savings, waste reuse, soil protection and

chemical use.

Their policy addresses six broad objectives within the agriculture supply chain:

Water Management

Soil Conservation and Preservation

Agrochemical Management

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Energy Management

Farm Economics and Land Management

Social and Community Improvement

To support the implementation of the policy, they established a PepsiCo-wide

governance structure called the Sustainable Agriculture Council (SAg Council).

This council is staffed by agro-scientists, engineers and sustainability professionals

from across all of their PepsiCo businesses.

Sustainable Packaging Policy

They have launched a global sustainable packaging policy and formed a

Sustainable Packaging Council (SPC). This multidisciplinary team includes leaders

from their R&D, Innovation, Procurement, Sales & Marketing and Public Policy

groups. The council’s objectives are to develop sustainable packaging strategies,

goals, targets and alternative material technologies and to support responsible

disposal practices. The SPC reports to the Environmental Sustainability

Leadership Team (ESLT).

Quality Standards

All PepsiCo products in India are made in automated plants located across the

country. These plants are audited and certified by various external agencies. The

certifications include:

HACCP (Hazard Analysis and Critical Control Point).

Certification by TQCSI (Australia), which confirms that products are

manufactured in a food safety environment and the manufacturing

process has adequate controls to track products.

American Institute of Baking (USA), one of the best auditing bodies for

confirming process and product safety.

Their Plants are ISO 14000 certified, which confirms that the

manufacturing process ensures environmental safety.

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Their plants are also certified to ensure that the safety of products,

processes, environment and people is maintained at a very high level.

This certification is issued by OHSAS 18001 (Occupational Health and

Safety Assessment Series), USA.

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Module 5 - ETHICAL VALUES

Their Values & Philosophy are reflections of the socially and environmentally

responsible company. They are the foundation for every business decision they make.

PepsiCo’s Commitment

They are committed to delivering sustained growth through empowered people

acting responsibly and building trust.

Sustained Growth is fundamental to motivate and measure PepsiCo’s

success. Their quest for sustained growth stimulates innovation, places a value

on results, and helps us understand whether today's actions will contribute to

their future. It is about the growth of people and company performance. It

prioritizes both making a difference and getting things done.

Empowered People means they have the freedom to act and think in ways

that they feel will get the job done, while adhering to processes that ensure

proper governance and being mindful of company needs beyond their own.

Responsibility and Trust form the foundation for healthy growth. They hold

both personally and corporately accountable for everything they do. They must

earn the confidence of others. By acting as good stewards of the resources

entrusted to them, they strengthen the trust by walking the talk and following

through their commitment in succeeding together.

Code of Conduct

Along with their values, the PepsiCo Code of Conduct is at the centre of everything

they do. The Code applies to all associates, officers and directors, to all divisions and

subsidiaries, and to every business transaction they make. Since 1976, PepsiCo has

had a Code of Conduct that is regularly updated and communicated to all their

associates annually. The Code is available in 42 languages and includes provisions

relating to ethical business dealings, bribery, business gifts and entertainment,

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confidentiality of information, insider trading, protection of company assets,

discrimination, harassment, equal opportunity, accounting and record-keeping, health

and safety, environment, political activities and whistle-blowing. The world wide code

of conduct is as follows:

Show respect for all employees

Treat consumers, customers, suppliers and competitors with

integrity

Comply with all laws and regulations

Provide a safe workplace and protect the environment

Preserve PepsiCo’s property and assets

Prepare and keep accurate records

Speak openly and honestly

Human Rights Workplace Policy

PepsiCo respects the dignity of their associates in the workplace, and they are

accountable to ensure their associates’ rights to personal security, a safe, clean and

healthful workplace, and freedom from harassment or abuse of any kind. They deal

fairly and honestly with their associates regarding wages, benefits and other

conditions of employment, and recognize their associates’ right to freedom of

association. They do not use compulsory or child labour. They do not tolerate

discrimination and work to ensure equal opportunity for all associates. They comply

with all applicable laws, regulations and other employment standards, wherever they

operate or work. They encourage their partners, suppliers, contractors and vendors to

support these policies, and they place substantial value on working with others who

share their commitment to human rights.

HIV/AIDS

At PepsiCo, they recognize HIV/AIDS as a uniquely challenging global health issue

that poses a significant threat to the sustainability of their business operations

worldwide. They are committed to making a significant contribution to the fight against

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this devastating pandemic and to assisting associates and their family members

affected by it. PepsiCo has established an internal task force on HIV/AIDS to guide

their actions in addressing the issue in their businesses.

Their policy outlines an approach that will be applied across the diverse array of

markets in which they operate. In South Africa, for example, they have made

important strides, including establishment of a comprehensive HIV/AIDS testing and

treatment program. Based on their experience there, they believe any sustainable

program to combat HIV/AIDS must focus first on building awareness, encouraging

prevention and reducing the stigma associated with the disease. However, to succeed

in the long term, an HIV/AIDS program must include a testing and treatment

component.

Guiding Principles

They uphold their commitment with six guiding principles.

Care for their customers, their consumers and the world they live in.

They are driven by the intense, competitive spirit of the marketplace, but they

direct this spirit toward solutions that benefit both their company and their

constituents. Their success depends on a thorough understanding of their

customers, consumers and communities. To foster this spirit of generosity, they go

the extra mile to show they care.

Sell only products they can be proud of.

The true test of their standards is their own ability to consume and personally

endorse the products they sell. Their confidence helps ensure the quality of their

products, from the moment they purchase ingredients till the moment it reaches the

consumer's hand.

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Speak with truth and candor.

They tell the whole story, not just what's convenient to their individual goals. In

addition to being clear, honest and accurate, they are responsible for ensuring their

communications are understood.

Balance short term and long term.

In every decision, they weigh both short-term and long-term risks and benefits.

Maintaining this balance helps sustain their growth and ensures their ideas and

solutions are relevant both now and in the future.

Win with diversity and inclusion.

They embrace people with diverse backgrounds, traits and ways of thinking.

Their diversity brings new perspectives into the workplace and encourages

innovation, as well as the ability to identify new market opportunities.

Respect others and succeed together.

Their mutual success depends on mutual respect, inside and outside the

company. It requires people who are capable of working together as part of a team

or informal collaboration. While their company is built on individual excellence, they

also recognize the importance and value of teamwork in turning their goals into

accomplishments.

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Module 6 - CASE STUDY

Case 1: NLSIU students take Pepsi to court

Five NLSIU (National Law School of India University, Bangalore) students have

filed a complaint at the Consumer Forum against Pepsi. The complaint pertains to the

practice of marking higher MRPs (Maximum Retail Price) by Pepsi for sale in some

channels. An earlier practice referred to vendors charging above the MRP, but this

complaint highlights to the practice of Pepsi bottles (bought at a food court in

Bangalore) not mentioning "for select channels only". The complainants are Adithya

Banavar, Abhimanyu Kampani and Aubrey Lyngdoh who had just passed out last

year, and Lakshmi Nair and Ashwini Obulesh currently in the fourth year of the five

year law course.

 

Ashwini Obulesh (complainant) argued for the admission of the complaint at the

Consumer Forum. The consumer complaint was filed on behalf of the Ministry of

Consumer Affairs Chair on Consumer Law & Practice in association with the Legal

Services Clinic of NLSIU. The opposite parties comprise of Palette Mantri Mall Square

(Bangalore, Karnataka), Aradhana Foods and Juices (Andhra Pradesh), Pepsi India

Holdings Private Limited (Maharashtra) and Pepsico India Holdings Private Limited

(Karnataka).

 

Speaking to Bar & Bench on the complaint filed, Ashwini said, “The students of

NLSIU filed this complaint in public interest, seeking an order to cease the unfair trade

practices carried out by Pepsi. Earlier, they used to mark unreasonably above the

MRP, now they have manipulated the MRP itself. Also none of the bottles contain a

message saying ‘for select channels only’.

 

Complaint: The complaint has been filed under Section 12 of the Consumer

Protection Act, 1985 and addresses to the student-complainants episode at Palette

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Mantri Mall, Bangalore. The students (complainants) purchased one, 1-litre water

bottle of Aquafina, a 330 ml Pepsi Tin and a 350 ml bottle of Nimbooz at Palette

Mantri Mall. The total bill amount for the above purchases of Pepsi products was Rs.

120 and the vendor informed the students (complainants) that he has billed the MRP

rates. The students (complainants) then bought the same goods at Food World and

the total bill came to Rs. 55 with a big difference of Rs. 65.

 

The students (complainants) observed that the MRPs marked at Palette Mantri

Mall differed from the MRPs marked on identical products purchased at Food World.

Not only were identical products being sold with varying MRPs, but also, such

variations might have been practiced at the manufacturer’s level.

 

Pepsi’s Response: Pepsico India Holdings responded via email stating that

admittedly, the manufacturer had marked two different MRPs on identical products,

ostensibly to cover service charges of the outlet.

SOLUTION

The Consumer forum in its order dated April 1, 2011 held, “These printing different

rent MRPs for the same material without any change in the material either in the

contents or in the quantity is nothing but an unfair trade practice and selling it to the

consumers is really unfair trade practice and also deficiency in service. This has to be

curtailed. How can the same material have a different M.R.P. at different places?

There is no answer. If the retailer wants to sell it for a higher price, it is his business

and he has to satisfy the customers that he is selling it at a particular price in case

customers wants to take it they may take, if they may not take or they may reject it, but

the manufacturer cannot print different prices for the same commodity, it is nothing but

an unfair trade practice”.

 

“As the prints different M.R.P. will allow the retailer to gain more profit for the same

material which is impermissible in law. The complainants are the customers. The

material purchased at a particular place has a particular M.R.P. the same material

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must have the same M.RP. at different places also. It cannot have two different

M.R.P’s. Hence, printing different M.R.Ps is bad in law, is unfair trade practice”.

 

Speaking to Bar & Bench NLSIU student and one of the complainants, Ashwini

Obulesh said, “Although the Court was initially reluctant to pass an order against an

MNC owing to difficulties in execution proceedings, we are glad that the order for

ceasing the unfair trade practices was finally passed. This should set an example for

consumers to fight back when they are being cheated”.

 

The Forum has directed Pepsi to stop printing differential MRPs on same quantities of

products. The Forum further directed Pepsi to give the students Rs. 5000 as

compensation and Rs. 2000 towards cost of this litigation.

Case 2: Key Controls

This is not a legal case study, but then it’s a key control made by the Control

team of Finance group in the organization. There was an internal audit going on in the

company during my training. I was given the job of freight auditing of supply chain

department.

In every business, the goods must be moved from the place of production to

the end of the chain, i.e., consumer. Likewise in PepsiCo, all the manufactured food

and beverages must be transported so that the goods reach the end consumer who

consumes them. There are lot of process involved in between which makes it possible

for the consumers to enjoy the products of PepsiCo. The following is the case study

about the freight master in SAP of PepsiCo which was done as a project in the

company as a part of my institutional training.

Freight agreement

A freight agreement is a financial forward contract that allows transporters,

charterers and speculators to hedge against the volatility of freight rates. It gives the

transporter the right to buy and sell the price of freight for future dates. The freight

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agreement consists of the terms and conditions as agreed by the company and the

transporter. PepsiCo enters into an agreement with the transporters in order to

transport the goods to various distributor points. The following are the components of

freight agreement.

Components of Freight agreement

Validity of agreement

Performance of the orders

Loading and unloading

Vehicle types

Freight rates

Freight & load size

Other charges

Lifting of material

Breakdown information

Responsibility for loss and damage, etc

Case of short delivery

Duties of transporter

Loss of Central Excise Invoice & other document

Payment

T.D.S ( Tax Deducted at Source )

Renewal of contract

Default of transporter in compliance of the terms & conditions

Insurance

Detention charges

Halting charges

Indemnity

Agency and assignment

Term of contract and terms of termination before the term period

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Documents used in the freight auditing

1. Lorry receipt

This document acts as a proof for the lorry driver which tells that he is just a

transporter of goods prescribed and goods are transported from source place to

the destination.

2. Acknowledgment of Delivery

This document will be issued by the consumer at the place of delivery. The

document will be signed by the consumer which acknowledges that the transporter

has delivered the goods in a good manner and in the prescribed condition.

3. Invoice

The invoice is prepared by PepsiCo and handed over to the transporter along with

the gate pass at the company’s premises. The transporter has to get them also

signed from the consumer.

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Operation of freight in PepsiCo

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Agreement made

Hard copy of rates

Upload of rates to SAP

Orders placed by customers

Truck sent to plant/WH

Entry into the Plant

Loading of goods

Verification of goods

Preparation of LR

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Receiving the invoice

Receiving the gate pass

Make shipment

Reach destination

Unload goods

Receive acknowledgment

Deliver invoice and LR to plant

Shipment is closed

Payment is initiated

Process of freight

Step 1: PepsiCo will enter into an agreement with the transporter for transportation of

goods.

Step 2: The transporter agrees with the terms & agreements of PepsiCo and a hard

copy of the rates are also given.

Step 3: After the agreement is made, the agreed freight rates are uploaded to the

Freight module of SAP.

Step 4: PepsiCo procures orders from customers for despatch of goods from the plant

or warehouse.

Step 5: After procuring orders, PepsiCo requests the transporter to send suitable

trucks based on the orders for delivery of goods to the respective destinations.

Step 6: When the truck enters into PepsiCo’s premises, an entry is logged on to the

security’s kiosk.

Step 7: After the truck is allowed to enter the premises, the logistics manager takes

the responsibility of loading goods onto the trucks appropriately.

Step 8: While loading the goods, those are simultaneously verified by logistics

manager & a person from the transporter’s company.

Step 9: After the goods are loaded on to the truck, a lorry receipt is prepared by the

transporter.

Step 10: The transporter also receives an invoice of goods loaded onto the truck and

the same has to be acknowledged from the receiver’s end.

Step 11: As soon as all formalities are finished, the transporter receives the gate pass

to make a move out of the company.

Step 12: The transporter now makes the shipment of the loaded goods to the

respective locations.

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Step 13: When the destination has arrived, the goods are unloaded in the place of

receiver.

Step 14: As soon as the goods are unloaded, the transporter must receive

acknowledgement from the consumer stating that all the goods were received in a

good condition

Step 15: Simultaneously, transporter must get signed in the lorry receipt and invoice

from the consumer.

Step 16: When all the required documents are acknowledged the transporter delivers

it to the source place.

Step 17: As soon as the documents are received by PepsiCo, the shipment is closed

and payment is initiated.

Freight auditing

The freight auditing was the work given to me by the Control team of Finance

dept of PepsiCo. The concept of freight auditing is that every time PepsiCo enters into

an agreement with a transporter for transportation of goods from the plants or

warehouses to distribution points, a hard copy of the freight rates will be given along

the agreement to the transporter for his reference. The rates given in the annexure will

be simultaneously updated in the SAP freight module by the Supply Chain

Department. When the transporter presents a consolidated statement of invoice for

the transits made by the company, simultaneously the Supply Chain Department will

check with the rates that were uploaded in SAP freight module. My project was the

audit of freight rates that are uploaded in SAP with that of the agreement rates.

Process of audit

I did my audit of freight master for whole South India of PepsiCo locations. The

structure of South Unit of PepsiCo consists of 4 units

North TN

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South TN

Kerala Karnataka

Hyderabad

As it’s a beverage company, there involves 2 types of journey, viz., one way and two

way. There are three types of trucks provided by the transporter and each transport

has its own code.

L4 – Canter – 6 tonner

H1 – Truck – 9 tonner

T1 – Heavy Commercial vehicle – 12 tonner

Each location has a unique plant code to identity them. The plant code for each

location is as follows:

North TN:

SMM1 – Mamandur

SMZ0 – Puzhal

SMH0 – Hosur

SAI0 – Trichy

SASC – Trichy Co-Pack

SAPC – Markkanam

SMQ0 – Puduvoyal

South TN:

SAM1 – Madurai

SAE0 – Ettimadai

SAP1 – Pudupatti

SAB0 – Tirunelveli

Kerala Karnataka:

SBN1 – Neelamangalam

SAK0 – Palakkad

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SBH0 – Bommanahalli

SBM0 – Mittal

SAO0 – Kollam

SBB0 – Bangalore PIH

SAG0 – Kollam New WH

Hyderabad:

CHS1 – Sangareddy

SHH0 – Isnapur

SHD0 – Bidar

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Structure of South Market Unit

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Using the plant codes, in SAP freight module the active rates of each location

was downloaded to spreadsheet. Corresponding rate master for each location was

received from each unit’s supply chain manager in order to audit the freight rates. First

all the SAP data were formatted to my convenient form and a filter is applied for the

worksheet for easier handling of data. Now the data is filtered to a truck type and

shipment type. Taking the route code as a common data point in both SAP freight

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SOMU

North TN

Mamandur(PLANT)

Hosur

Marakkanam

Puzhal

Trichy

Trichy Co-Pack

Puduvoyal

South TN

Madurai(PLANT)

Ettimadai

Pudupatti

Kerala Karnataka

Neelamangalam(PLANT)

Palakkad(PLANT)

Bommanahalli

Mittal

Kollam

Bangalore PIH

Hyderabad

Sangareddy(PLANT)

Bidar

Isnapur

master & excel rate master, using the vlookup formula in MS Excel, the corresponding

rates of that route code of that truck type were looked up in SAP freight rate master.

Similarly, the amounts for all other truck types for all locations were looked up in the

same way. After the amounts are referenced from the excel rate master, the rates are

now taken difference with the rates with those uploaded in SAP. Based on the

difference, the route codes were classified into 4 types:

Matching – difference is between -10 to 10

Mismatch – difference is < -10 or >10

Not available in agreement – the rates are missing in

agreement

Vehicle type not available in agreement – vehicle type

other than mentioned in the agreement.

Likewise, data pertaining to all locations were classified with above classifications.

Result

A consolidated report was prepared for all 4 units which comprises of the computed

data that was classified according to the above classification mentioned. All the SAP

rate master & excel rate master of a unit were imported into a single worksheet for

easy cross reference. For each location, a pivot table was created to know the

summary of my classification. In the first sheet I made a final report of that location

and to get the no. of route codes in each classification, i used counifs formula to count

no. of route codes that match the criteria.

Example:

Classification PuzhalOne way Two way

Canter Truck Taurus Canter Truck TaurusMatching 128 127 128 128 127 128Mismatch 3 3 3 3 3 3Not available in agreement 46 48 45 20 23 22

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Vehicle type not available in agreement - - - - - -Grand Total 177 178 176 151 153 153

A sheet showing the agreement availability was also prepared in order to explicitly

show them these are the transporters who are engaged in the freight transactions but

they are operating without any agreement. Also sheet showing the mismatched rates

of the routes were also taken separately showed and a variance by % was also

mentioned.

Transport vendor Availability of agreement

Location : PalakkadGAYATHRI TRANSPORTS YesSOUTHERN CARGO CARRIERS (INDIA) NoSICAL LOGISTICS LIMITED NoREVATHI TRANSPORT No

Location : NeelamangalamSOUTHERN CARGO CARRIERS (INDIA YesSRI MAHALAKSHMI LORRY SERVICE YesMAHINDRA LOGISTICS LTD YesLEEWAY LOGISTICS LIMITED No

Location : KollamGAYATHRI TRANSPORTS YesSICAL LOGISTICS LIMITED NoSOUTHERN CARGO CARRIERS (INDIA No

Module 7 - GROWTH OPPORTUNITY

In 2012, their journey of renewal continues as they focus on five strategic imperatives.

1. Build and extend their macrosnacks portfolio globally

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PepsiCo is the undisputed leader in macrosnacks around the world. They will

work to build their much-loved global snack brands — Lay’s, Doritos, Cheetos

and SunChips — while expanding their successful grain-based snacks platform

globally. They will continue to create new flavors in tune with local tastes and

leverage their go-to-market expertise to ensure that their brands are always

available wherever their consumers shop.

2. Sustainably and profitably grow their beverage business worldwide

Their beverage business remains large and highly profitable accounting for

approximately half of their net revenues in 2011. Their goal is to grow their

developed market beverage business while building on promising gains in

emerging and developing markets. They will continue to invest in and

strengthen their most powerful and iconic beverage brands

3. Build and expand their nutrition business

Today, PepsiCo has three of the most admired and loved brands in the

category — Quaker, Tropicana and Gatorade. For the categories in which they

compete, the global market for health and wellness within consumer packaged

goods exceeds 500 billion and is expected to grow in the high-single-digits,

driven by strong demo- graphic and consumer trends. Building from their core

brands, they believe that they are well positioned to grow their global nutrition

portfolio.

4. Increase and capitalize on the high coincidence of snack and beverage

consumption

Snacks and beverages are hugely complementary categories. In the U.S.,

about 50% of the time, when people buy a salty snack they also buy a

refreshment beverage. Their ability to use that combined power goes beyond

selling to innovation, production, distribution and marketing. They intend to

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increasingly capitalize on their cross-category presence to grow their positions

in both snacks and beverages.

5. Ensure prudent and responsible financial management.

PepsiCo is highly focused on shareholder value creation, as they have always

been. They achieve this by maintaining or growing their strong value shares in

their key markets, relentlessly pursuing sustainable, profitable growth,

rigorously scrutinizing capital investments and aggressively returning cash to

shareholders through both dividends and share repurchases. By doing so, they

expect to perform in the top tier of consumer packaged goods companies as

measured by total shareholder return.

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Module 8 - SWOT ANALYSIS

SWOT analysis is a strategic planning method used to evaluate

the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in

a project or in a business venture. It involves specifying the objective of the business

venture or project and identifying the internal and external factors that are favourable

and unfavourable to achieve that objective.

Strength

In time service of supplies and technical assistance

PepsiCo has stayed in this market for almost one century. So they are so

experienced and stationed in people's mind deeply.

PepsiCo is such an experienced powerful global company, which has a basic of

a great fund. So it has the ability to place an idle sum of money to the

promotion.

PepsiCo also compares with the competitors and fined their disadvantages to

update its own quality, flavour and also package promptly in order to satisfy the

consumers' need.

PepsiCo also has had the good fortune of making very wise investments. Some

of the best investments have been in their acquiring several large fast food

restaurants.

They have also made wise investments in snack food companies like Frito Lay,

which at present time is the largest snacks company in the world.

Strong and Effective Advertising

Filtered Water instead of Spring Water makes the production, logistics, and

profit margins a lot greater on their bottled water sales(AquaFina)

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Weakness

The franchise system has become a hurdle to PepsiCo because many of these

franchises have become very strong and will not be dictated by PepsiCo on

how to handle their operations.

Some of these franchises are unwilling to support certain PepsiCo products and

at times produce their own private label products that are in direct competition

with PepsiCo products.

The franchise system has also affected fountain sales due to the fact

franchisees are not willing to buy expensive fountain equipment to place in

accounts mainly because the profit margin is so low and could take years to

recoup their investment.

A huge lobby against soft drink industry led by leaders like Baba Ramdev will

hurt as these leaders have a huge fan following in the country

All brands were not available in at least 80% shops.

Complaint handling was not up to mark.

Supply in certain area is very irregular and also route agents are not covering

full routes.

Poor signage and display is making the routes week for the sale of Pepsi.

Opportunities

Bottled water growth

It is observed that in some newly establishing areas many new outlets are

opening , Pepsi needs to concentrate on these new outlets and can gradually

increase its sale in these area.

Large number of mix outlets can be changed to Pepsi exclusive and coke

exclusive to mix only by luring them good and efficient supply, glow sign and

cooling equipments.

Usually the climate is hot which is conducive for beverage industry. The longer

hot period is an opportunity for PepsiCo to expand its sale through different

promotional schemes.

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Threats

Coke is the only nearest competitor and it is catching up in the market

penetration through price skimming and other promotional scheme.

Some local brands commonly known as kancha, Tip Top, Shine and the launch

of Catch soft drink a product of DS group are causing decrease in sale in some

areas.

When they have huge advertisements of low prices in the newspaper, their

customers think they are not giving them good value.

Sluggish growth of carbonated drinks

Coca-Cola & other smaller, more nimble operators

Commodity price increases, fluctuating oil prices effect production and

distribution (gas, plastic)

Increasing health concerns over carbonated drinks.

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Module 9 - SPECIALIZED DEPARTMENT

The department in which I specialized was Control Team of Finance

Department. This department is of utmost importance as it is responsible for financial

planning, thus ensuring that adequate funds are available for achieving the objectives

of the organization. Moreover, it is the finance department which makes sure that the

prices are controlled, besides looking after the cash flow and controlling profitability

levels. One of the most important jobs of the finance department of a company is to

identify the necessary financial information (like return on assets, return on capital

employed or the net profitability which reveal the outcome of efforts made by the

company and its employees) which should be revealed to managers so that they can

make informed decisions and judgments. The department is also responsible for

making financial documents and preparing the final accounts so that they can be

presented in the annual general meetings of the company.

Functions of the Department

To make a decision concerning the use of limited resources including

identification of crucial decision and determination of objectives and goals.

To effectively direct and control the organization, human and material

resources.

To maintain and report on the custodianship of resources.

To facilitate the social function and control.

Financial Risk & Management Policies

The company’s financial risk management policy seeks to ensure that adequate

financial resources are available for the development of the Company’s Business

whilst by the Board and the Company Policy is not engage in the speculative

transactions.

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The main area of financial risk faced by the company and the policy in respect

of the major areas of treasury activity are set out as follows,

a) Foreign Currency Risk

The company is exposed to foreign currency risk as a result of its normal

trading activities where the currency denominations differ from the local currency,

Ringgit Malaysia

b) Credit Risk

The credit risk is controlled by monitoring procedures and by internal credit

review where credit risk is material.

c) Liquidity & Cash Flow Risks

The company ensures that there are adequate funds to meet all their

obligations in a timely and cost effective manner.

d) Interest Rate Risk

The company’s interest rate exposure arises principally from borrowings. The

interest rate risk is managed through the use of fixed and floating rate financial

instruments.

Classification of Finance Department

The finance department of PepsiCo is further classified into:

Planning group

Control group

Business/operations group

The functions of various groups are as follows:

1. Planning group

A unit for switching execution among multiple root jobnets in a planned manner.

Directly under a planning group, an organisation can create a number of root

jobnets, each defined differently and with differing execution schedules. This

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enables the root job nets to be executed automatically in turn, according to the set

schedules. The activities of planning group are:

a) Annual operating plan (AOP)

b) Capex budgets.

c) Strategic Decisions

d) Investment decision

2. Control group

It coordinates and sets out the planning & control cycle for the organization. This

cycle includes the annual budgets, the monthly financial reports, the external

quarterly reports and the annual accounts. It actively participates in the quotation

process for medium and large projects and initiates specific financial improvement

processes. Finally, it is also responsible for the Treasury function.

a) Financial reporting

b) Process and financial audits.

c) Systems and procedures.

3. Business/Operations group

The Business Group oversees the strategic development and operation of support

units and the planning and budget process within the organization. Develop and

oversee the implementation of specific operational initiatives to achieve the

objectives of the organization Strategic and academic plans. Ensure a process to

assess the financial implications of all major academic and operational initiatives

with the group, review the effectiveness of these processes and

make recommendations for improvement where required.

a) Three Market Units (MUs)

b) Business Profitability.

c) Standard Operating Procedures.

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Structure of South Market Unit (SOMU) Finance department

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SOMU(South Market

Unit)

Finance Department

MU CFO

MU Controller MU Plant Finance Manager

Plant Accountant(Neelamangalam)

Plant Accountant(Mamandur)

Plant Accountant(Palakkad)

Plant Accountant(Sangareddy)

Plant Accountant(Madurai)

Unit Finance Manager MU Planner

Secretary

The structure of SOMU Finance Department is further divided into Finance

Department. And this finance department is handled by Mr. Kunal Bose, the CFO.

Ms. Prema Shyam is the Secretary of this department.

 

Mr.Kunal Bose manages various unit managers. They are:

1. Mr.Kumar Natarajan       -          MU Controller

2. Mr.Manish Agarwal        -          Unit Finance Manager

3. Mrs.Indranil Chowdry     -          MU Planner

 

The are many Plant accountant managers situated at various places. They are:

1. Mr.Nilesh                    -          Neelamangalam

2. Mr.Franklin Jose          - Mamandur

3. Mr.Anish Mathew        -          Palakkad

4. Mr.Ajay Kedia             -          Sangareddy

5. Mr.Vishal Chand         -          Madurai

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Module 10 – SNAP SHOTS

PepsiCo South Market Unit Headquarters, Chennai

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PepsiCo Reception, Chennai

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Certifications of PepsiCo

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PepsiCo Plant

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A Palmtop through which orders are procured.

Random shots of PepsiCo’s marketing franchise

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Miscellaneous Snaps

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Annexure

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I want people to look at PepsiCo and think of it as a model of how to conduct business… be call it….

“PERFORMANCE WITH PURPOSE”

- Indra Nooyi

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