Professional Documents
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A Project Report On
HINDUSTAN COCA COLA BEVERAGES PRIVATE LIMITED RANCHI, JHARKHAND (Submitted in partial fulfilment of the post graduate programme)
Under the guidance of Mr. Anjani Kumar Capability Team Leader, Hindustan Coca-Cola Beverages Pvt.Ltd., Ranchi
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ACKNOWLEDGEMENT
In my endeavour to learn management and industrial practices and apply my theoretical knowledge as stipulated by our curriculum, I would like to thank Hindustan Coca- Cola Beverages Pvt Ltd for providing me an opportunity to work with their department of sales and marketing, Ranchi- Jharkhand. I hereby take this opportunity to thank my project guide Mr. Anjani Kumar, Capability Team Leader, HCCBPL, Ranchi, who was always there to provide me with necessary inputs and keeping me motivated during the project. Without his experience about the market and the people whom I was introduced by him, this project would not have been possible. I also extend my gratitude to Mr. Jyoti Prakash, STL, HCCBPL, Ranchi, who was always there to analyze the project progress and to give valuable inputs for the procedure and in helping me to collect data. I would like to thank the entire Ranchi team of HCCBPL for their co-operation and for giving me a platform to hone my skills. Special mention needs to be made here of Mr. Robin De Cruz and all MDs (Market Developers) of HCCBPL, Ranchi. Special thanks to Mr. Sashi , General Sales Manager, HCCBPL, Ranchi for giving me an opportunity to do this project. I thank all my friends and my family for contributing towards the completion of this project.
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Certificate of Approval
The following Summer Internship Report titled Market Developers Productivity is hereby approved as a certified study in management carried out and presented in a manner satisfactory to warrant its acceptance as a prerequisite for the award of Master in Business Administration for which it has been submitted. It is understood that by this approval the undersigned do not necessarily endorse or approve any statement made, opinion expressed or conclusion drawn therein but approve the summer internship report only for the purpose it is submitted.
Organizational Guide
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DECLARATION
I do hereby declare that this project work entitled Market Developers Productivity submitted by me for the partial fulfillment of the requirement for the award of Post Graduate Diploma in Marketing Management (PGDM) is a record of my own research work. The report embodies the finding based on my study and observation and has not been submitted earlier for the award of any degree or diploma to any Institute or University or Company.
SREE SHIVAM
(Trainee)
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CONTENTS
Executive Summary...................................................................................................................5 Introduction................................................................................................................................6 Industry Overview...............................................................................................................7 Key Success Factors............................................................................................................8 Variant Available................................................................................................................8 Overall Carbonated Soft Drink............................................................................................9 Product Coverage................................................................................................................9 Market Trends & Industry Challenges..............................................................................10 Bottled Water Market........................................................................................................11 Growth Promotional Activities.........................................................................................12 Retailers Power Continuously Increasing........................................................................12 Competition Becomes More and Difficult........................................................................13 Trends and Opportunities in Soft Drink Industry..............................................................15 Porters Five Force Analysis.............................................................................................17 Beverage Industry in India.......................................................................................................21 The Soft drink Industry.....................................................................................................23 Company Overview..................................................................................................................25 The Coca Cola Company..................................................................................................26 International Expansion.....................................................................................................26 The Worlds Most Powerful Brand...................................................................................27 Patents, Copyrights, Trade Secrets & Trademarks............................................................27 Employees........................................................................................................................28 Core Capabilities...............................................................................................................28 The Coca Cola System......................................................................................................30 Mission of Coca Cola........................................................................................................31 Vision of Coca Cola..........................................................................................................31 Vision 2020.......................................................................................................................32 Value.................................................................................................................................32 Hindustan Coca Cola Beverages Private Limited....................................................................33 Coke in India.....................................................................................................................33 Marketing Strategy............................................................................................................34 Brand Localization Strategy..............................................................................................34
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Rural Success....................................................................................................................35 HCCBPL Structure...........................................................................................................36 COBO.........................................................................................................................36 FOBO..........................................................................................................................36 Organizational Chart of HCCBPL....................................................................................38 Organizational Structure...................................................................................................39 Sales Department Structure..............................................................................................40 Product Mix of Coca Cola................................................................................................41 Consumer Preference........................................................................................................41 Competition to HCCBPL..................................................................................................42 Marketing Mix...................................................................................................................43 Corporate Social Responsibility........................................................................................46 Market Segmentation of Coca Cola..................................................................................48 Classification of Outlets....................................................................................................48 Channel Cluster.................................................................................................................49 Brand Order System of Coca Cola....................................................................................50 Project Profile...........................................................................................................................51 Pre Sell Implementation...........................................................................................................52 Role of MD ..............................................................................................................52 Permanent Journey Plan....................................................................................................52 Effective Supply Chain Management................................................................................53 Objectives.........................................................................................................................54 Data Collection..................................................................................................................54 Tools Used for Data Collection.........................................................................................54 Market Developer wise Permanent Journey Plan..............................................................55 SWOT Analysis of Pre Sell Implementation...........................................................................91 Economies of Scale..................................................................................................................92 Recommendations & Conclusion.............................................................................................93 Learning Outcome....................................................................................................................94 Annexure..................................................................................................................................95 Format for Data Collection......................................................................................................95 Reference..................................................................................................................................96
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EXECUTIVE SUMMARY
Pre-sell Implementation is a new marketing strategy adopted by Hindustan Coca cola Beverages Pvt Ltd. This marketing strategy will help the company to deliver its service to its customers (retailers) effectively and efficiently. By this strategy the company executive (MDs) can visit each outlet at least two or three times in a week. As the competition in soft drinks industry is very high, marketing strategies like pre selling plays an important role in increasing the market share and maintaining the brand value as well as utilising the resources at the maximum with minimum cost. According to Coca Cola companys calendar, week starts on Saturday and ends on Friday. Each MDs (Market developers) are in charge of around hundred and twenty outlets. For the effective implementation of pre selling PJP (Permanent Journey Plan) act as backbone. My project is to move into the market with the MDs and work with them in order to see their productivity and efficiency. PJP is based on the geographical segmentation of Ranchi market. For this project I have visited each outlet which is selling coke products in Ranchi market. I have covered each outlet by accompanying each MDs daily. I used to spend three days with each MD. This helps me to analyze the geographical structure of each market under each MD. The company policy divided each outlets based on the volume (VPO-Volume per Outlet) as diamond, gold, silver and bronze. Based on this category each outlet has to achieve their targets in the number of case selling per year. Target of each outlet based on the type is given in the figure below. Pre selling also helps the company to achieve these targets effectively.
TARGET (NO OF C/S PER YR) >800 C/S 500-799 C/S 200-499 C/S <200 C/S
The key findings while visiting markets are also included in the report and also done a SWOT analysis for this pre-selling. Based on this some recommendations are being made.
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INTRODUCTION
INDUSTRY OVERVIEW
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Key factors for competitive success within the soft drink industry branch from the trends of the macro environment. Primarily, constant product innovation is imperative. A company must be able to recognize consumer wants and needs, while maintaining the ability to adjust with the changing market. They must keep up with the changing trends. Another key factor is the size of the organization, especially in terms of market share. Large distributors have the ability to negotiate with stadiums, universities and school systems, making them the exclusive supplier for a specified period of time. Additionally, they have the ability to commit to mass purchases that significantly lower their costs. They must implement effective distribution channels to remain competitive. Taste of the product is also a key factor for success. Furthermore, established brand loyalty is a large aspect of the soft drink industry. Many consumers of carbonated beverages are extremely dedicated to a particular product, and rarely purchase other varieties. This stresses the importance of developing and maintaining a superior brand image. Price, however, is also a key factor because consumers without a strong brand preference will select the product with the most competitive price. Finally, global expansion is a vital factor in the success of a company within the soft drink industry. The United States has reached relative market saturation, requiring movement into the global industry to maintain growth. Variant Available Soft drinks are available in glass bottles, aluminium cans and PET bottles for home consumption. Fountains also dispense them in disposable containers. Non- alcoholic soft drinks beverage market can be divided into carbonated and non carbonated drinks. Cola, Lemon and Oranges are carbonated drinks while mango drinks come under non carbonated category. The market can also be segmented on the basis of types of products in the cola products and noncola products. Cola products accounts for nearly 61-62% of the total soft drinks market. The brands that fall in this category are Pepsi, Coca-Cola, Thumps Up, Diet Coke, Diet Pepsi etc Non Cola segment which constitutes 36% can be divided into four categories based on the types of flavours available namely: Orange, Cloudy Lime, Clear Lime and Mango. . Robust
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time ahead for soft drinks Soft drinks are expected to see robust volume growth over the forecast period. This will occur despite a total volume and constant value decline for carbonates. Growth will be led by bottled water and, from a smaller base and with slower growth, fruit/vegetable juice. Health and convenience are predicted to be the two most important factors affecting buying behaviour, as carbonates and concentrates play second fiddle to healthier bottled water and fruit/vegetable juice.
Product coverage
Asian speciality drinks; Bottled water; Carbonates; Concentrates; Fruit/vegetable juice; Functional drinks; RTD coffee; RTD tea
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In order to survive in this environment, companies must consider the market trends that will likely shape the industry over the next few years. This will help soft drink companies to understand the challenges they will encounter and to turn them into opportunities for process improvement, enhanced flexibility and, ultimately, greater profitability. Market trends for the soft drink industry can be summarized by six fundamental themes: Changing consumer beverage preferences, Featuring a shift toward health-oriented wellness Drinks. Growing friction between bottlers and Manufacturers in the distribution system. Continually increasing retailer strength. Fierce competition. Complex distribution system composed of multiple Sales channels. Beverage safety concerns and more-stringent Regulations.
Consumers turn to wellness and healthy drinks In much of the developed world, a significant portion of the population is overweight or obese. This includes two-thirds of Americans and an increasing number of Europeans. Consequently, many people have started to actively manage their weight and change their lifestyles, a shift that is reflected in their choices in the beverage aisles: Demand has increased for beverages that are Perceived to be healthy Energy drink consumption has also climbed, due to The increasingly active lifestyles of teenagers This trend towards healthier drinks has created a number of new categories, and changed the consumption trends of the beverage industry as a whole. While previously dominated by carbonated soft drinks, the industry is now more evenly balanced between carbonates, and product categories with a healthier image, such as bottled water, energy drinks and juice: While
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carbonates are still the largest soft drink segment, bottled water is catching up fast, with an average of 58 litters consumed annually per capita. Among individual countries, Italy ranks number one in bottled water consumption, with the average Italian drinking177 litters per year. Overall, bottled water represents the fastest growing soft drink segment, expanding at 9percent annually. This growth is being partially driven by increasing awareness of the health benefits of proper hydration. The industry has responded to consumers desire for healthier beverages by creating new categories, such as energy drinks, and by diversifying within existing ones. For example, the leading carbonated soft drink companies have recently introduced products with 50%less sugar that fall mid-way between regular and diet classifications. Similarly, a South African juice company has recently released a fruit-based drink that contains a Full complement of vitamins and nutrients.
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tourists creating greater demand for bottled water. Trade sources point to the presence of over 600 bottled water manufacturers in India and the number is predicted to grow in the forecast period as demand continues unabated. The market preference in India is highly region based. Whole cola drinks have main markets in metro cities and northern states of UP, Punjab, Haryana etc. Orange flavoured drinks are popular in southern states. Sodas too are sold largely in southern states besides sales through bars. Western markets have preference towards mango flavoured drinks. Diet Coke and Diet Pepsi constitute just 0.7% of the total carbonate beverage market.
the consumer, with many of the larger ones piloting direct-to-consumer marketing approaches. They are also trying to better understand the in-store consumer experience by monitoring the execution of in-store activities. Nevertheless, many suppliers are losing brand equity. In recent years, a couple of factors have been fuelling the growing competition between manufacturers and Retailers: Retailers are using their power to set higher standards for marketing and operational excellence, including escalating demands for improved service quality and shorter order-to-delivery cycles from manufacturers and distributors. Many of these demands, such as RFID, not only squeeze margins but also require significant capital investments. Because of their direct relationships with consumers, retailers have a deeper knowledge of consumer behavior.
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SKU proliferation - number of SKUs in a typical beverage company has doubled from 1991 to 2001 A plethora of new product failures: Only 20% are effective Only 10% generate significant revenue Most fail within the first two years
Further consolidation and rationalization to capture cost savings by improving operations and eliminating redundancy: Industry leaders are acquiring small, high growth Companies Mid-market players are vertically integrating
Declining soft drink prices: Profitability can only be improved through greater efficiency in the supply chain or through more-effective trade promotions, which usually require considerable expenditures. Statutory regulation is increasing Governments around the world are concerned about food safety and quality. Periodically, safety failures make big news in the global press. Amid this growing concern, regulators are cracking down on sanitation and variety of other food-safety requirements. While food safety is the major focus in Europe, the emphasis in the US is more on bioterrorism and food security. However, the provisions in the 2005traceability legislation in the US, which stemmed from the Bioterrorism Act of 2002, and those in the EU Directive 178, Articles 18 and 19, are very similar. The U.S. Food and Drug Administration (FDA) is proposing the registration and tracking of almost all domestic and imported food articles, but
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some are concerned that the complexity of the rules will overwhelm both the food industry and the FDA. Each soft drink company must take these industry challenges into consideration, as well as its own strengths and market position, when looking for ways to drive innovation, accelerate growth and increase margins. The next section outlines where some of the most promising opportunities for accomplishing these objectives can be found.
Trends and Opportunities in the Soft Drink Industry The ingredients for success Soft drinks are gradually overtaking hot drinks as the biggest beverage sector in the world, with consumption rising by around 5 percent a year according to a recent report from Zenith International. But while the US remains the biggest market for now, Asia is likely to be the main driver of sales growth in the future. The industry on the whole is encountering new opportunities and challenges. Changing consumer demands and preferences require new ways of maintaining current customers and attracting new ones. Amid ever-increasing competition, beverage companies must intensely court customers, offer high quality products, efficiently distribute them, ensure safety, and keep prices low all while staying nimble enough to exploit new markets by launching new products. Market trends for the soft drink industry can be characterized by six fundamental themes: 1. Changing consumer beverage preferences, featuring a shift toward health-oriented, wellness drink. 2. Growing friction in the distribution system, induced by bottlers and manufacturers with conflicting interests 3. Continually increasing retailer strength and a corresponding decrease in the power of soft drink companies 4. Fierce competition, fueled by growth of private labels and product/packaging proliferation 5. A complex sales environment, composed of multiple channels all with unique management requirements
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6. Beverage safety issues, driven by newly enacted US and EU regulatory requirements each soft drink company must take these industry challenges into consideration, as well as its own strengths and market position, when looking for ways to drive innovation, accelerate growth and increase margins.
Both concentrate producers (CP) and bottlers are profitable. These two parts of the industry are extremely interdependent, sharing costs in procurement, production, marketing and distribution. Many of their functions overlap; for instance, CPs do some bottling, and bottlers conduct many promotional activities. The industry is already vertically integrated to some extent. They also deal with similar suppliers and buyers. Entry into the industry would involve developing operations in either or both disciplines. Beverage substitutes would threaten both CPs and their associated bottlers. Because of operational overlap and similarities in their market environment, we can include both CPs and bottlers in our definition of the soft drink industry. In 1993, CPs earned 29% pretax profits on their sales, while bottlers earned 9% profits on their sales, for a total industry profitability of 14%. This industry as a whole generates positive economic profits.
Rivalry:
Revenues are extremely concentrated in this industry, with Coke and Pepsi, together with their associated bottlers, commanding 73% of the case market in. Adding in the next tier of soft drink companies, the top six controlled 89% of the market. In fact, one could characterize the soft drink market as an oligopoly, or even a duopoly between Coke and Pepsi, resulting in positive economic profits. To be sure, there was tough competition between Coke and Pepsi for market share, and this occasionally hampered profitability. For example, price wars resulted in weak brand loyalty and eroded margins for both companies in the 1980s. The Pepsi Challenge, meanwhile, affected market share without hampering per case profitability, as Pepsi was able to compete on attributes other than price.
Substitutes:
Through the early 1960s, soft drinks were synonymous with colas in the mind of consumers. Over time, however, other beverages, from bottled water to teas, became more popular, especially in the 1980s and 1990s. Coke and Pepsi responded by expanding their offerings, through alliances (e.g. Coke and Nestea), acquisitions (e.g. Coke and Minute Maid), and internal product innovation (e.g. Pepsi creating Orange Slice), capturing the value of increasingly popular substitutes internally. Proliferation in the number of brands did threaten the profitability of bottlers through 1986, as they more frequent line set-ups, increased capital investment, and development of special management skills for more complex
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manufacturing operations and distribution. Bottlers were able to overcome these operational challenges through consolidation to achieve economies of scale. Overall, because of the CPs efforts in diversification, however, substitutes became less of a threat.
Power of Suppliers:
The inputs for Coke and Pepsis products were primarily sugar and packaging. Sugar could be purchased from many sources on the open market, and if sugar became too expensive, the firms could easily switch to corn syrup, as they did in the early 1980s. So suppliers of nutritive sweeteners did not have much bargaining power against Coke, Pepsi, or their bottlers. NutraSweet, meanwhile, had recently come off patent in 1992, and the soft drink industry gained another supplier, Holland Sweetener, which reduced Searles bargaining power and lowering the price of aspartame. With an abundant supply of inexpensive aluminium in the early 1990s and several can companies competing for contracts with bottlers, can suppliers had very little supplier power. Furthermore, Coke and Pepsi effectively further reduced the supplier of can makers by negotiating on behalf of their bottlers, thereby reducing the number of major contracts available to two. With more than two companies vying for these contracts, Coke and Pepsi were able to negotiate extremely favorable agreements. In the plastic bottle business, again there were more suppliers than major contracts, so direct negotiation by the CPs was again effective at reducing supplier power.
Power of buyers:
The soft drink industry sold to consumers through five principal channels: food stores, convenience and gas, fountain, vending, and mass merchandisers. Supermarkets, the principal customer for soft drink makers, were a highly fragmented industry. The stores counted on soft drinks to generate consumer traffic, so they needed Coke and Pepsi products. But due to their tremendous degree of fragmentation (the biggest chain made up 6% of food retail sales, and the largest chains controlled up to 25% of a region), these stores did not have much bargaining power. Their only power was control over premium shelf space, which could be allocated to Coke or Pepsi products. This power did give them some control over soft drink profitability. Furthermore, consumers expected to pay less through this channel, so prices were lower, resulting in somewhat lower profitability.
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National mass merchandising chains such as Wal-Mart, on the other hand, had much more bargaining power. While these stores did carry both Coke and Pepsi products, they could negotiate more effectively due to their scale and the magnitude of their contracts. For this reason, the mass merchandiser channel was relatively less profitable for soft drink makers. The least profitable channel for soft drinks, however, was fountain sales. Profitability at these Locations was so abysmal for Coke and Pepsi that they considered this channel paid sampling. This was because buyers at major fast food chains only needed to stock the products of one manufacturer, so they could negotiate for optimal pricing. Coke and Pepsi found these channels important, however, as an avenue to build brand recognition and loyalty, so they invested in the fountain equipment and cups that were used to serve their products at these outlets. As a result, while Coke and Pepsi gained only 5% margins, fast food chains made 75% gross margin on fountain drinks. Vending, meanwhile, was the most profitable channel for the soft drink industry. Essentially there were no buyers to bargain with at these locations, where Coke and Pepsi bottlers could sell directly to consumers through machines owned by bottlers. Property owners were paid a sales commission on Coke and Pepsi products sold through machines on their property, so their incentives were properly aligned with those of the soft drink makers, and prices remained high. The customer in this case was the consumer, who was generally limited on thirst quenching alternatives. The final channel to consider is convenience stores and gas stations. If Mobil or Seven-Eleven were to negotiate on behalf of its stations, it would be able to exert significant buyer power in transactions with Coke and Pepsi. Apparently, though, this was not the nature of the relationship between soft drink producers and this channel, where bottlers profits were relatively high, at $0.40 per case, in. With this high profitability, it seems likely that Coke and Pepsi bottlers negotiated directly with convenience store and gas station owners. So the only buyers with dominant power were fast food outlets. Although these outlets captured most of the soft drink profitability in their channel, they accounted for less than 20% of total soft drink sales. Through other markets, however, the industry enjoyed substantial profitability because of limited buyer power.
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Barriers to Entry:
It would be nearly impossible for either a new CP or a new bottler to enter the industry. New CPs would need to overcome the tremendous marketing muscle and market presence of Coke, Pepsi, and a few others, who had established brand names that were as much as a century old. Through their DSD practices, these companies had intimate relationships with their retail channels and would be able to defend their positions effectively through discounting or other tactics. So, although the CP industry is not very capital intensive, other barriers would prevent entry. Entering bottling, meanwhile, would require substantial capital investment, which would deter entry. Further complicating entry into this market, existing bottlers had exclusive territories in which to distribute their products. Regulatory approval of intrabrand exclusive territories, via the Soft Drink Interbrand Competition Act of 1980, ratified this strategy, making it impossible for new bottlers to get started in any region where an existing bottler operated, which included every significant market in the US.
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BEVERAGES
ALCOHOLIC
NON CARBONATED
COLA
NON COLA
NON COLA
The beverage industry is vast and there various ways of segmenting it, so as to cater the right product to the right person. The different ways of segmenting it are as follows:
citizens
Alcoholic, non-alcoholic and sports beverages Natural and Synthetic beverages In-home consumption and out of home on premises consumption. Age wise segmentation i.e. beverages for kids, for adults and for senior Segmentation based on the amount of consumption i.e. high levels of
consumption and low levels of consumption. If the behavioural patterns of consumers in India are closely noticed, it could be observed that consumers perceive beverages in two different ways i.e. beverages are a luxury and that beverages have to be consumed occasionally. These two perceptions are the biggest challenges faced by the beverage industry. In order to leverage the beverage industry, it is important to
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address this issue so as to encourage regular consumption as well as and to make the industry more affordable. Four strong strategic elements to increase consumption of the products of the beverage industry in India are: The quality and the consistency of beverages needs to be enhanced so The credibility and trust needs to be built so that there is a very strong Consumer education is a must to bring out benefits of beverage that consumers are satisfied and they enjoy consuming beverages. and safe feeling that the consumers have while consuming the beverages. consumption whether in terms of health, taste, relaxation, stimulation, refreshment, well-being or prestige relevant to the category. Communication should be relevant and trendy so that consumers are able to find an appeal to go out, purchase and consume. The beverage market has still to achieve greater penetration and also a wider spread of distribution. It is important to look at the entire beverage market, as a big opportunity, for brand and sales growth in turn to add up to the overall growth of the food and beverage industry in the economy.
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On-premise- 55% of the consumption of soft drinks is on premise i.e. restaurants, railways stations, cinema etc. At-home- the rest 45% of the market compromises of the soft drink purchased for consumption at home.
The market can also be segmented on the basis of types of products into cola products and noncola products.
Cola products account for nearly 61-62% of the total soft drinks market. The brands that Non-cola segment which constitutes 36% can be divided into 4 categories based on the Orange Cloudy Lime Clear Lime Mango
fall in this category are Pepsi, Coca-Cola, Thumps Up, and diet coke, Diet Pepsi etc.
i.
Orange flavor based soft drinks constitute around 20% of the market. The segment is largely dominated by national brands like Fanta of Coca Cola and Mirinda Orange of PepsiCo, which collectively form15% of the market rest of the market is in hands of smaller brands like Crush (earlier of Cadbury Schweppes and now of coca Cola), Gold Spot etc.
ii.
Cloudy Lime flavor constitutes 17% of the market and is largely dominated by Limca of coca cola and Mirinda Lemon of PepsiCo. Limca is the market leader with around 70-75% of the market followed by Mirinda Lemon.
iii.
Clear Lime: this segment of the market witnessed good growth initially with all the players launching their brands in the segment. But now the growth in the segment has slowed down. The brands available in this segment are 7 Up, mountain dew of Pepsi, Sprite, nimbu fresh of Coca Cola. The segment constitutes 3% of the total soft drinks market.
iv.
Mango: this flavor segment constitutes 2% of the total soft drinks market and it directly competes with mango based fruit drinks like Frooti. The leading brands in this segment are: Maaza of Coca Cola, Mangola (Earlier of Dukes now of PepsiCo) and Slice of PepsiCo.
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COMPANY OVERVIEW
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nonalcoholic beverage concentrates and syrups, with more than 500 widely recognized beverage brands in its portfolio. With the bubbles making the difference, Coca-Cola was registered as a trademark in 1887 and by 1895, was being sold in every state and territory in the United States. In 1899, it franchised its bottling operations in the U.S., growing quickly to reach 370 franchisees by 1910. Headquartered in Atlanta with divisions and local operations in over 200 countries worldwide, Coca-Cola generated more than 70% of its income outside the United States by 2003 INTERNATIONAL EXPANSION Cokes first international bottling plants opened in 1906 in Canada, Cuba, and Panama. By the end of the 1920s Coca-Cola was bottled in twenty-seven countries throughout the world and available in fifty-one more. In spite of this reach, volume was low, quality inconsistent, and effective advertising a challenge with language, culture, and government regulation all serving as barriers. Former CEO Robert Woodruffs insistence that Coca-Cola wouldnt suffer the stigma of being an intrusive American product, and instead would use local bottles, caps, machinery, trucks, and personnel contributed to Cokes challenges as well with a lack of standard processes and training degrading quality. Coca-Cola continued working for over 80 years on Woodruffs goal: to make Coke available wherever and whenever consumers wanted it, in arms reach of desire. The Second World War proved to be the stimulus Coca-Cola needed to build effective capabilities around the world and achieve dominant global market share. Woodruffs patriotic commitment that every man in uniform gets a bottle of Coca-Cola for five cents, wherever he is and at whatever cost to our company was more than just great public relations. As a result of Cokes status as a military supplier, Coca-Cola was exempt from sugar rationing and also received government subsidies to build bottling plants around the world. TURN OF THE CENTURY GROWTH IMPERATIVE The 1990s brought a slowdown in sales growth for the Carbonated Soft Drink (CSD) industry in the United States, achieving only 0.2% growth by 2000 (just under 10 billion cases) in contrast to the 5-7% annual growth experienced during the 1980s. While per capita consumption throughout the world was a fraction of the United States, major beverage
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companies clearly had to look elsewhere for the growth their shareholders demanded. The looming opportunity for twenty-first century was in the worlds developing markets with their rapidly growing middle class populations.
THE WORLDS MOST POWERFUL BRAND
Interbrands Global Brand Scorecard for 2003 ranked Coca-Cola the #1 Brand in the World and estimated its brand value at $70.45 billion . The rankings methodology determined a brands valuation on the basis of how much it was likely to earn in the future, distilling the percentage of revenues that could be credited to the brand, and assessing the brands strength to determine the risk of future earnings forecasts. Considerations included market leadership, stability, and global reach, incorporating its ability to cross both geographical and cultural borders. From the beginning, Coke understood the importance of branding and the creation of a distinct personality. Its catchy, well-liked slogans (Its the real thing (1942, 1969), Things go better with Coke (1963), Coke is it (1982), Cant beat the Feeling (1987), and a 1992 return to Cant beat the real thing) linked that personality to the core values of each generation and established Coke as the authentic, relevant, and trusted refreshment of choice across the decades and around the globe. PATENTS, COPYRIGHTS, TRADE SECRETS AND TRADEMARKS Company owns numerous patents, copyrights and trade secrets, as well as substantial knowhow and technology, which we collectively refer to as technology. This technology generally relates to Companys products and the processes for their production; the packages used for products; the design and operation of various processes and equipment used in business; and certain quality assurance software. Some of the technology is licensed to suppliers and other parties. Companys sparkling beverage and other beverage formulae are among the important trade secrets of Company. Company own numerous trademarks that are very important to business. Depending upon the jurisdiction, trademarks are valid as long as they are in use and/or their registrations are properly maintained. Pursuant to companys bottlers agreements, company authorize bottlers to use applicable Company trademarks in connection with their manufacture, sale and distribution of Company products. In addition, we grant licenses to third parties from time to
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time to use certain of companys trademarks in conjunction with certain merchandise and food products. EMPLOYEES Company refer to its employees as associates. As of December 31, 2009 and 2008, Company had approximately 92,800 and 92,400 associates, respectively, of which approximately 17,900 and 16,500, respectively, were employed by consolidated variable interest entities (VIEs). The increase in the total number of associates in 2009 was primarily due to an increase in the Latin America operating group driven by its finished product business, as well as an increase in the Bottling Investments operating group. These increases were partially offset by the impact of the Companys ongoing productivity initiatives. As of December 31, 2009 and 2008, Company had approximately 11,700 and 13,000 associates, respectively, located in the United States, including Puerto Rico, of which approximately 190 and 90, respectively, were employed by consolidated VIEs. Coca cola company, through its divisions and subsidiaries, has entered into numerous collective bargaining agreements. Company currently expect that it will be able to renegotiate such agreements on satisfactory terms when they expire. The Company believes that its relations with its associates are generally satisfactory.
CORE CAPABILITIES
Consumer Marketing Marketing investments are designed to enhance consumer awareness of and increase consumer preference for brands. This produces long-term growth in unit case volume, per capita consumption and share of worldwide non alcoholic beverage sales. Through companys relationships with bottling partners and those who sell coke products in the marketplace, coke create and implement integrated marketing programs, both globally and locally, that are designed to heighten consumer awareness of and product appeal for coke brands. In developing a strategy for a Company brand, coke conduct product and packaging research, establish brand positioning, develop precise consumer communications and solicit consumer feedback. Coke integrated marketing activities include, but are not limited to, advertising, point-of-sale merchandising and sales promotions.
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Coke have disciplined marketing strategies that focus on driving volume in emerging markets, increasing cokes brand value in developing markets and growing profit in most developed markets. In emerging markets, Company is investing in infrastructure programs that drive volume through increased access to consumers. In developing markets, where consumer access has largely been established, cokes focus is on differentiating its brands. In companys most developed markets, coke continue to invest in brands and infrastructure programs, but at a slower rate than revenue growth. Company has focused on affordability and ensuring they are communicating the appropriate message based on the current economic environment. Commercial Leadership The Coca-Cola system has millions of customers around the world who sell or serve our products directly to consumers. Coke focus on enhancing value for its customers and providing solutions to grow its beverage businesses. Companys approach includes understanding each customers business and needs, whether that customer is a sophisticated retailer in a developed market or a kiosk owner in an emerging market. Coke focus on ensuring that its customers have the right product and package offerings and the right promotional tools to deliver enhanced value to themselves and the company. Company is constantly looking to build new beverage consumption occasions to its customers outlets through unique and innovative consumer experiences, product availability and delivery systems, and beverage merchandising and displays. Coke participate in joint brand-building initiatives with our customers in order to drive customer preference for its brands. Through cokes commercial leadership initiatives, coke embed ourselves further into its retail customers businesses while developing strategies for better execution at the point of sale. Franchise Leadership Coke must continue to improve its franchise leadership capabilities to give Company and our bottling partners the ability to grow together through shared values, aligned incentives and a sense of urgency and flexibility that supports consumers always changing needs and tastes. The financial health and success of cokes bottling partners are critical components of the Companys success. Company work with its bottling partners to identify system requirements that enable coke to quickly achieve scale and efficiencies, and we share best practices throughout the bottling system. Coke system leadership allows company to leverage recent acquisitions to expand our volume base and enhance margins. With cokes bottling
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partners, we work to produce differentiated beverages and packages that are appropriate for the right channels and consumers. Coke also design business models for sparkling and still beverages in specific markets to ensure that coke appropriately share the value created by these beverages with our bottling partners. Coke will continue to build a supply chain network that leverages the size and scale of the Coca-Cola system to gain a competitive advantage.
MISSION OF COCA-COLA
Create consumer products services and communications customers service and bottling system strategy process and tools in order to create competitive advantage and deliver superior value to-Consumers as a superior beverage experience. Consumers as an opportunity to grow profit through the use of finished drinks. Bottlers as an opportunity to make reasonable to grow profits and value added
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Suppliers as an opportunity to make reasonable when creating real value added in environment of system wide teamwork, flexible business system and continuous improvement. Indian society in form of contribution to economic and social development.
VISION OF COCA-COLA
VISION FOR SUSTAINABLE GROWTH
PROFIT: Maximizing return to shareowners while being mindful of our overall
responsibilities.
PEOPLE: Being a great place to work where people are inspired to be the best they
can be.
PORTFOLIO: Bringing to the world a portfolio of beverage brands that anticipate
VISION 2020
The world is changing all around us. To ensure our business will continue to thrive over the next 10 years and beyond, we are looking ahead to understand the trends and forces that will shape our industry in the future. Our 2020 Vision creates a long-term destination for our business. It provides us with business goals that outline what we need to accomplish with our global bottling partners in order to continue winning in the marketplace and achieving
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sustainable, quality growth. For each goal, we have a set of guiding principles and strategies for winning throughout the entire Coca-Cola system.
VALUE
Coca-Cola is guided by shared values that both the employees as individuals and the Company will live by; the values being:
LEADERSHIP: The courage to shape a better future PASSION: Committed in heart and mind INTEGRITY: Be real ACCOUNTABILITY: If it is to be, its up to me COLLABORATION: Leverage collective genius INNOVATION: Seek, imagine, create, delight QUALITY: What we do, we do well
network. Cokes acquisition of local popular Indian brands including Thums Up (the most trusted brand in India21), Limca, Maaza, Citra and Gold Spot provided not only physical manufacturing, bottling, and distribution assets but also strong consumer preference. This combination of local and global brands enabled Coca-Cola to exploit the benefits of global branding and global trends in tastes while also tapping into traditional domestic markets. Leading Indian brands joined the Company's international family of brands, including Coca Cola, diet Coke, Sprite and Fanta, plus the Schweppes product range. In 2000, the company launched the Kinley water brand and in 2001, Shock energy drink and the powdered concentrate Sunfill hit the market. From 1993 to 2003, Coca-Cola invested more than US$1 billion in India, making it one of the countrys top international investors. By 2003, Coca-Cola India had won the prestigious Woodruf Cup from among 22 divisions of the Company based on three broad parameters of volume, profitability, and quality. Coca-Cola India achieved 39% volume growth in 2002 while the industry grew 23% nationally and the Company reached breakeven profitability in the region for the first time. Encouraged by its 2002 performance, Coca-Cola India announced plans to double its capacity at an investment of $125 million (Rs. 750 crore) between September 2002 and March 2003. Coca-Cola India produced its beverages with 7,000 local employees at its twenty-seven wholly owned bottling operations supplemented by seventeen franchisee-owned bottling operations and a network of twenty- nine contract-packers to manufacture a range of products for the company. The complete manufacturing process had a documented quality control and assurance program including over 400 tests performed throughout the process. The complexity of the consumer soft drink market demanded a distribution process to support 700,000 retail outlets serviced by a fleet that includes 10-ton trucks, open-bay three wheelers, and trademarked tricycles and pushcarts that were used to navigate the narrow alleyways of the cities. In addition to its own employees, Coke indirectly created employment for another 125,000 Indians through its procurement, supply, and distribution networks.
MARKETING STRATEGY
Coca-Cola CEO Douglas Daft set the direction for the next generation of success for his global brand with a Think local, act local mantra. Recognizing that a single global strategy or single
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global campaign wouldnt work, locally relevant executions became an increasingly important element of supporting Cokes global brand strategy. In 2001, after almost a decade of lagging rival Pepsi in the region, Coke India re-examined its approach in an attempt to gain leadership in the Indian market and capitalize on significant growth potential, particularly in rural markets. The foundation of the new strategy grounded brand positioning and marketing communications in consumer insights, acknowledging that urban versus rural India were two distinct markets on a variety of important dimensions. The soft drink categorys role in peoples lives, the degree of differentiation between consumer segments and their reasons for entering the category, and the degree to which brands in the category projected different perceptions to consumers were among the many important differences between how urban and rural consumers approached the market for refreshment. In rural markets, where both the soft drink category and individual brands were undeveloped, the task was to broaden the brand positioning while in urban markets, with higher category and brand development, the task was to narrow the brand positioning, focusing on differentiation through offering unique and compelling value. This lens, informed by consumer insights, gave Coke direction on the tradeoff between focus and breadth a brand needed in a given market and made clear that to succeed in either segment, unique marketing strategies were required in urban versus rural India. BRAND LOCALIZATION STRATEGY: THE TWO INDIA INDIA A: Life ho to aisi India A, the designation Coca-Cola gave to the market segment including metropolitan areas and large towns, represented 4% of the countrys population.33 This segment sought social bonding as a need and responded to aspirational messages, celebrating the benefits of their increasing social and economic freedoms. Life ho to aisi, (life as it should be) was the successful and relevant tagline found in Coca-Colas advertising to this audience. INDIA B: Thanda Matlab Coca-Cola Coca-Cola India believed that the first brand to offer communication targeted to the smaller towns would own the rural market and went after that objective with a comprehensive strategy. India B included small towns and rural areas, comprising the other 96% of the nations population. This segments primary need was out-of-home thirst-quenching and the Coca-Cola India no. 1. Soft drink category was undifferentiated in the minds of rural consumers.
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Additionally, with an average Coke costing Rs. 10 and an average days wages around Rs. 100, Coke was perceived as a luxury that few could afford. In an effort to make the price point of Coke within reach of this high-potential market, Coca- Cola launched the Accessibility Campaign, introducing a new 200ml bottle, smaller than the traditional 300ml bottle found in urban markets, and concurrently cutting the price in half, to Rs. 5. This pricing strategy closed the gap between Coke and basic refreshments like lemonade and tea, making soft drinks truly accessible for the first time. At the same time, Coke invested in distribution infrastructure to effectively serve a disbursed population and doubled the number of retail outlets in rural areas from 80,000 in 2001 to 160,000 in 2003, increasing market penetration from 13 to 25%. Cokes advertising and promotion strategy pulled the marketing plan together using local language and idiomatic expressions. Thanda, meaning cool/cold is also generic for cold beverages and gave Thanda Matlab Coca-Cola delicious multiple meanings. Literally translated to Coke means refreshment, the phrase directly addressed both the primary need of this segment for cold refreshment while at the same time positioning Coke as a Thanda or generic cold beverage just like tea, lassi, or lemonade. As a result of the Thanda campaign, Coca-Cola won Advertiser of the Year and Campaign of the Year. RURAL SUCCESS Comprising 74% of the country's population, 41% of its middle class, and 58% of its disposable income, the rural market was an attractive target and it delivered results. Coke experienced 37% growth in 2003 in this segment versus the 24% growth seen in urban areas. Driven by the launch of the new Rs. 5 product, per capita consumption doubled between 2007 - 2008. This market accounted for 80% of Indias new Coke drinkers, 30% of 2008 volume, and was expected to account for 50% of the companys sales in 2008.
HCCBPL STRUCTURE
Coca-cola is a world class company in "low margin, high volume" business which means sales of high volume for the product in order to be profitable and complete in the global market. * * Company Owned Bottling Operation (COBO) Franchisee Owned Bottling Operation (FOBO)
COBO :
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COBO stand for company owned bottling operations; COBO has been of Coke Company's biggest strategy, which has proved to be winner. A bottling operation is a capital intensive business, particularly so the returnable bottle market like in India and the investment is the forth level. Apart from the capital cost of plant and equipment the bottles has to invest in bottles and crates, truck and cooling structure (Visi. Coolers and ice boxes) at the retail point industry estimates @Rs. Crate which is equivalent to the price at which the crate enters the distribution system Bottlers operates on margins around 10% with the bulk of the killing (between Rs. 24 and Rs. 30 per crate or about 20%) being made by the retailer. Excise and other taxes amounting Rs. 40 per crate. The going for a COBO is the risk of coke Company and it is also implied a big attitude change from a totally marketing orientation to an operation mindset.
COBO'S IN INDIA COBOs are present across the nation, the locations are given below: Mumbai, Bangalore, Ahemadabad, Chennai, Calcutta & Jalpaiguri unit also
FOBO
FOBO stand for franchise owned bottling operation, in India Pepsi has franchise. In the case the company supplies its soft drink concentrate to its franchies (bottle syrup). Coca-cola has taken a more capital - intensive route of the owning and running its own plants along side those of its franchises. Coca-cola pumped in money to upgrade plants of franchises, which were weaker did not have financial worth were given massive support in form of interest free loans to upgrade their operations. Getting into FOBO has helped Coke Company on several fronts. First, it has enabled Pepsi to focus on marketing operations as much as it has on operation fronts. Another gain of going FOBO is that since the franchises have to invest in plants and machines glass bottles, trucks, and infrastructure, the cost burden has been reduced. FOBO IN INDIA: FOBO are located at the following places:
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Part of Delhi, Punjab, Part of Andhra Pradesh, Calcutta and south bengal.
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ORGANIZATION STRUCTURE
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BOTTLES: Coca-cola Thums up Sprite Limca Fanta Maaza (mango) Minute maid Nimbu fresh 200ml...300ml...600ml...1500ml... 200ml...300ml...600ml.1500ml. 200ml...300ml...600ml...1500ml... 200ml...300ml...600ml...1500ml... 200ml...300ml...600ml...1500ml 250ml..600ml.1200ml 400ml..1000ml
Minute maid (pulpy orange) 400ml1000ml Kinley (Soda) Kinley (Water) CANS: Diet coke Coca-cola Thumps up Fanta 330ml 330ml 330ml 330ml 300ml...500ml 1000ml
CONSUMER PREFERENCE Coca-Cola Thumps up Fanta (Orange,Pulpy) Minute maid (Lemon) Maaza Sprit Limca Kinley(soda) Kinley (Water ) Preferred by all type of consumers All type of customers Basically preferred by ladies and kids. Not clearly define. Ladies and kids. Youngsters. Youngster Mostly those who consumer liquor. Preferred by all type of consumers.
COMPETITORS TO HCCBPL
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PepsiCo: The PepsiCo challenge, to keep up with archrival, the Coca-Cola Company never ends for the World's # 2, carbonated soft-drink maker. The company's soft drinks include Pepsi, Mountain Dew, and Slice. Cola is not the company's only beverage; PepsiCo sells Tropicana orange juice brands, Gatorade sports drink, and Aquafina water.
PepsiCo also sells Dole juices and Lipton ready-to-drink tea. PepsiCo and Coca-Cola hold together, a market share of 95% out of which 60.8% is held by Coca-Cola and the rest belongs to Pepsi.
Nestl: Nestle does not give that tough a competition to Coca-Cola as it mainly deals with milk products, Baby foods and Chocolates. But the iced tea that is Nestea which has been introduced into the market by Nestle provides a considerable amount of competition to the products of the Company. Iced tea is one of the closest substitutes to the Colas as it is a thirst quencher and it is healthier when compared to fizz drinks. The flavored milk products also have become substitutes to the products of the company due to growing health awareness among people.
Dabur: Dabur in India, is one of the most trusted brands as it has been operating ever since times and people have laid all their trust in the Company and the products of the Company. Apart from food products, Dabur has introduced into the market Real Juice which is packaged fruit juice. These products give a strong competition to Maaza and the latest product Minute Maid Pulpy Orange.
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Marketing Mix is the set of marketing tools that the firm uses to pursue its marketing objectives. It has a classification for these marketing tools. These marketing are classified and called as the Four Ps i.e. Product, Price, Place and Promotion. The most basic marketing tool is product which includes product design, quality, features, branding, and packaging. A critical marketing tool is price i.e. the amount of money that customers pay for the product. It also includes discounts, allowances, credit terms and payment period. Place is another key marketing mix tool. And it includes various activities the company undertakes to make the product accessible and available to the customer. Some factors that decide the place are transport facilities, channels of distribution, coverage area, etc. Promotion is the fourth marketing mix tool which includes all the activities that the company undertakes to communicate and promote its product to target market. Promotion includes sales promotion, advertising, sales force, public relations, direct marketing, etc. PRODUCT A business needs to consider the products that it produces and the stage of the product life cycle that a product is at. Marketing strategies will vary according to the type of product and its stage in life cycle. In marketing, a product is anything that can be offered to a market that might satisfy a want or need. It is of two types: Tangible (physical) and Intangible (non-physical). Since services have been at the forefront of all modern marketing strategies, some intangibility has become essential part of marketing offers. It is therefore the complete bundle of benefits or satisfactions that buyers perceive they will obtain if they purchase the product. It is the sum of all physical, psychological, symbolic, and service attributes, not just the physical merchandise. All products offered in a market can be placed between Tangible (Pure Product) and Intangible (Pure Service) spectrum. A product is similar to goods. In accounting, goods are physical objects that are available in the marketplace. This differentiates them from a service, which is a non-material product. The term goods is used primarily by those that wish to abstract from the details of a given product. As such it is useful in accounting and economic models. The term product is used primarily by those that wish to examine the details and richness of a specific market offering. As such it is useful to marketers, managers, and quality control specialists. A service is a non-material or intangible product - such as professional consultancy, serving, or an entertainment experience.
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The Pepsi-Cola drink contains basic ingredients found in most other similar drinks including carbonated water, high fructose corn syrup, sugar, colorings, phosphoric acid, caffeine, citric acid and natural flavors. The caffeine free Pepsi-Cola contains the same ingredients but no caffeine.
PRICE In economics and business, the price is the assigned numerical monetary value of a good, service or asset. Price is also central to marketing where it is one of the four variables in the marketing mix that business people use to develop a marketing plan. Pricing is a big part of the marketing mix. Choosing the right price and the right pricing strategy is crucial to the marketing process. The price of the product is not something that is fixed. On the other hand the price of the product depends on many other factors. Some times the price of the product has got nothing to do with the actual product itself. The price may act as a way to attract target customers. The price of the product is decided keeping many things in mind. These things include factors like cost incurred on the product, target market, competitors, consumer buying capacity etc. Pepsi again decides it price on the basis of competition. The best think about the company Pepsi is that it is very flexible and it can come down with the price very quickly. The company is renowned to bring the price down even up to half if needed. PLACE Place is a term that has a variety of meanings in a dictionary sense, but which is principally used in a geographic sense as a noun to denote location, though in a sense of a location identified with that which is located there. In marketing, place refers to one of the 4 P's, defined as "the market place". It can mean a geographic location, an industry, a group of people (a segment) to whom a company wants to sell its products or services, such as young professional women (e.g. for selling cosmetics) or middle-aged family men (e.g. for selling family cars). Pepsi again has spread worldwide. Pepsi when entering a new market does not go in alone but it looks for partners and mergers. Till now Pepsi has collaborated with companies like Quaker Oats, Frito-lays, Lipton, Starbucks, etc. Pepsi like Coke has spread all over the world. It is
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because of this worldwide spread that now it is coming up with Advertisements which can be broadcasted in the different nations in the world. PROMOTION This refers to the promotion of the product to the target market. This is achieved through a combination of: advertising: use of electronic and print media. The "reach" (how many people will see the advert), frequency (how many times will I advertise the product?) and impact of the advertising must also be evaluated. Promotion is one of the four aspects of marketing. Promotion comprises four subcategories: 1. Advertising 2. Personal selling 3. Sales promotion 4. Publicity and public relations Personal selling: what happens in the "shop", contact between sales people and consumers or customers. Sales promotion: use of gimmicks and incentives e.g. competitions. Sponsorship and promotional licensing: including specific products sold under license that promotes the business (e.g. football jumpers). Publicity or public relations: "adversarial" in local papers or special promotional materials.
The specification of these four variables creates a promotional mix or promotional plan. A promotional mix specifies how much attention to pay to each of the four subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image. Both the companies Pepsi and coke are famous for their promotions. The rivalry was first started when Pepsi started with its blind taste tests known as the Pepsi Challenge. The challenge is designed to be a direct response to critics who allege that Coca-Cola and PepsiCola are identical drinks, with no meaningful differences. The challenge takes the form of a taste test. At malls, shopping centers and other public locations, a Pepsi representative sets up a table with two blank cups, one containing Pepsi and one with Coke. Shoppers are encouraged
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to taste both colas, and then select which drink they prefer. Then the representative reveals the two bottles so the taster can see whether they preferred Coke or Pepsi. If Pepsi is revealed, the shopper is given a small prize. The implication is that Pepsi tastes better than Coke, and thus consumers should purchase Pepsi.
Environmental due diligence before acquiring land or starting projects Environmental impact assessment before commencing operations
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Ground water and environmental surveys before selecting sites Compliance with all regulatory environmental requirements Ban on purchasing CFC-containing refrigeration equipment Waste water treatment facilities with trained personnel at all company-owned bottling operations Energy conservation programs 50% water savings in last seven years of operations
SEGMENTATION
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Locality income
Outlet
LOW
CHANNEL CLUSTER
(A) GROCERY STORE
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Grocery (customer profile): Store stocking a variety of regular uses household items. The channels provide an opportunity for penetration as it propels home consumption. It includes all kirana stores, juice, departmental stores, supermarkets, provision stores etc. Necessary Availability - 1.5 liter and 300ml (B) EATING & DRINKING CHANNEL- 1 Eating and Drinking Channel: Outlets which are having less than five tables comes under channel one. Outlets range from the high-end restaurants to the smaller dhabas. These outlets offer multiple opportunities to effect sales as people usually order something to drink along with food. It includes - Restaurants - Bars and Pubs - Dhabas - Cafes (C) EATING & DRINKING CHANNEL 2 It includes bakery, sweet shops, tea shops, soft drink shops and juice centre which have more than five tables.
(D) CONVENIENCE CHANNEL Pan/bidi shops (customer profile) : This segment includes PAN BIDDI outlets that stock cigarettes, mint, confectionary. It covers STD/ISD phone booths, travel channel etc. Small outlets that mainly sell 200ml or 300ml bottles. They may also sell 600ml.
COLOJ-K
COLA KINLEY
LEMON
ORANGE
JUICE
FANTA
SPRITE
MAAZA MMPO/MM
NF
LIMCA
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PROJECT PROFILE
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PERMANENT JOURNEY PLAN As per cokes policy week starts on Saturday and ends on Friday. Pre seller should visit each outlet at least two times during the week. Permanent journey plan will help the pre seller to do this. So that, for the effective implementation of pre selling PJP acts as a backbone. Company has allotted around hundred outlets for each pre seller. These outlets are divided into three parts (PJP-1/2/3) based on the geographical coverage. Pre seller will visit PJP-1 on Saturday and Wednesday, PJP-2 on Monday and Thursday, finally PJP-3 on Tuesday and Friday. This helps him to visit each outlet at least two times a week. The objective of this project is to see that the MDs have a effective PJP so that the company can get maximum out of them through their enhanced productivity. EFFECTIVE SUPPLY CHAIN MANAGEMENT In every FMCG companies supply chain management is vital. So that, in pre sell implementation also, supply chain has its own important role. Availability of right products at the right time is the basic principle of supply chain management. This will support the pre seller to deliver the goods to the customers at the right time, which will automatically increase and brand loyalty of the customers towards the company.
2.
Greet the customer : Greet the customer with a smile. Greet the sales staff. Make an impact on the outlet owner and the staff to draw their attention. Should know the name of the customer and sales staffs. Listen attentively to the customer. Know personal details of our customer.
3. Visi Cooler Merchandising: Check the cooler to ensure that its in good working condition. Take chilled products out of cooler and place this in crates next to the door. Adjust Shelf Heights as per RED norm Shelf order(One time Exercise) Clean the cooler(atleast once in 3 months) and put brand and price strips. Display the products inside the cooler as per Brand and shelf order.Brand order is COLOJ-K (Cola,Lemon,Orange,juice and Kinley) Charge the cooler using FEFO norm.(First expiry First Out) Place already chilled products at the front of the shelves. 4. Warm Stock Merchandising: Check date code and rotate Stock Clean Bottles before putting it on display. First do cooler top and then racks/shelves Put adequate stock indisplay-Full range Orderly display price with product Make brand name facing towards the consumers. 5. Check Inside Advertising : Inside advertising must be as per the specified RED standards for a particular channel outlet and customer segment. Atleast one piece per outlet. At eye level. Good Condition. Clean Not Outdated. Replace damaged/ Outdated 6. Recommend the order and confirm : Check current stock (warm + Chilled)
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Check previous order in Route card. Communicate special promotions,discounts and schemes. Recommend minimum 1.5 times stocks in hand order Try to fill all the empties with the retailer Book order on route card. Check order in summary order sheet in duplicate Get retailer to sign off on the summary order sheet. Remove all empties 7. Thanking the customers.
Now these are the functions which are repetitive in nature and are supposed to be performed daily.The time taken to perform these activities actually decides the efficiency of the market developers.Thus,our further analysis on time and motion studies will be conducted keeping these points in consideration.
PURPOSES: To end goofing off and to establish what constituted a fair days work. To make sure that the job being evaluated does not include any unnecessary motion by the worker.
HISTORY: Frederick W.Taylor and his followers developed and refined the Time Study .
Frank B.Gilberth and this wife Lillian developed and refined the motion study. Historically the two studies are discussed individually ,today they generally are discussed as one. Time and Motion Studies were used in the manufacturing industry to evolve pay scales with the thought that money was the only motivation for work.This idea ,that people are only motivated by money ,has been disproved.Things like job satisfaction and environment are more important to employees than pay. BENEFITS OF TIME AND MOTION STUDY Time and Motion studies can be effective for performance evaluations.
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Time and motion Studies can be used for planning purposes in order to predict the level of output that may be achieved. Time and Motion Studies can be used to uncover problems and create solutions. Time and Motion Studies can be used for time cost analysis. *The effective cost of an employee , per unit of time for the task they are primarily responsible for. *The allocation of time to various productive and non-productive tasks. *Review of alternatives to make the best use of time. OBJECTIVE The objective of the Time and Motion Study is to determine a normal or average time for a job , by using observers to record exactly how much time is being devoted to each task .
STEPS IN TIME AND MOTION STUDY 1. Establish the standard job method. 2. Break down the job into elements. 3. Study the job. 4. Rate the workers performance. 5. Compute the average time. 6. Compute the normal time. Nt= (t) (RF) or Normal Time =(Elemenatl average Time) (Rating Factor) 7. Compute the standard time.
In step one we analyze the job using methods analysis,this will allow us to be sure to select the best method is being used. In step two the job is broken down in to short tasks with break points in between. In step three conducting the actual timing of ech job element with the traditional stopwatch attached to a clipboard or a hand held electronic time-study machine.
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In step four we will use a performance rating factor of 100 percent.100 percent reflects a normal work performance,less than 100 percent means a below average performance ,greater than 100 percent means better than a normal performance. In step five a sufficient number of job cycles need to be observed,and then an average time. In step six,Computations are made for the normal time, the normal cycle time needs to be computed before. In the last step we will sum the elemental normal times.The directions are finding the rating factor can be found in step 4. An allowance factor is inserted into the formula for work delays like mechanical breakdowns,personal delays and normal fatigue.
availability of all skus through range selling. To work in all MD/PRE SELLER routes and make a walking order PJP based on geography To assign service frequency of the outlet depending on their VPO
To make routes which can be clubbed together for efficient servicing and optimum
usage of vehicles
DATA COLLECTION
The data which I have collected are purely primary data. A total of around thousand outlets were visited in Ranchi market with MDs. By that I have collected the details of the retailers and took some suggestion from them. I worked with each MD at least three days which helped me to analyse the market based on the geographical location. The only limitation I have faced
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while collecting the data is willingness of retailers to share their difficulties in front of MDs. But with the help of MDs I was able to compensate this limitation. I have analysed and compiled the data based on the suggestions given from the MDs.
Outlet universe
Market segmentation on the basis of geography Identification of outlets on the basis of VPO
Dedicated sales force Divide and rule policy of the company by using market developers Availability of production unit (Orisa and Patna plant) Economies of scale Major market share in Ranchi Availability of large number of retailers within a particular locality Maximum utilization of resources (vehicles) Perfect tracking of market situation Easy analysis of markets taste and preference towards the product Effective reach of promotional activities to the retailer Maintain brand value and reputation of the company Can easily tap the untapped market Sales man can deliver goods to more outlets WEAKNESS
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Supply chain management Availability of products with distributor Vehicles availability at the right time Co-ordination between sales man and market developer Off season problem Right time execution
OPPORTUNITIES Can increase the market share Reduce the overall cost which will increase the profit margin Tap the untapped market Easy activation of new outlets
THREATS Highly competitive market New entrants to the market New marketing strategy of competitors New product range entering to the market Strikes will affect the flow High competition by Pepsi through abnormal market schemes. Company s stringent norms of placing coolers. Cooler complain not resolved in time during season.
ECONOMIES OF SCALE
Pre sell implementation help the company to achieve the concept of economies of scale. As we can see that the profit of the company depends on the volume of goods sold, pre sell implementation allows the company to deliver maximum goods to the customer with limited resources. Through that company can reduce the cost of delivery. A simple calculation of economies of scale is given below.
PRESELL IMPLEMENTATION BEFORE (In AFTER(In Rs) Rs)
EXPENSE
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AVG VEHICLE COST LABOUR COST OTHER EXPENSE TOTAL EXPENSE AVG NO OF C/S DELIVERED AVG EXPENSE PER CASE
2.92
1.52
By analysing the calculations given above, we can see a huge change in the average expense per case. Here before pre sell implementation the average expense is Rs.2.92 and after pre sell implementation the average expense comes dawn to Rs.1.52 with a difference of Rs.1.40. This shows the importance of pre sell implementation which will help the company to increase its profit margin by limited resource.
Implement an alternate solution during the time of distributor problem Ensure that, the sales man knows the market well
Try to implement timely availability of vehicles in each market
MDs should know the availability of the product with the distributor
Executives should track the performance of Mds Make a perfect daily routine for MDs
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Make effective availability of products in remote areas also Try to avoid under employment of MDs Reduce the gap between WE (MDs) versus COMPANY Effective CRM (Customer Relationship Management) Company can provide Job Enlargement or Job Enrichment for experienced MDs Company should keep a track on its customers feedback
Motivate MDs regularly
Maintain sufficient resources (manpower & vehicles) for effective pre sell implementation The inactive counters should be deleted from the PJP . Every effort should be made to avoid bouncing off of orders in order to increase the productivity of the MDs. Prompt delivering of product should be ensured by the salesman.
LEARNING OUTCOME
The coca cola company is considered as the market leader in the soft drinks industry. Its new marketing strategy pre selling instead of direct selling helps the company in every angle of sales and marketing to maintain its brand name and market leadership. The positive impact that the company is gaining by implementing pre selling is very high. This project helps me to understand the sales and distribution channel of Hindustan Coca Cola Beverages Private
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Limited. The project Market Developers Productivity , as a new concept in this industry helps me to analyse the impact of innovative marketing strategy. The Market Developers work with great zeal to achieve the comapnys target and objective by implementing certain steps the productivity of the MDs can be enhanced which will again be very beneficial for the company. The learning outcome that I have experienced by doing this project is invaluable. This helps me to understand entire marketing situation of coke in Ranchi market. The strategies adopted by coke to increase its market share are unique in nature. And the entire organization structure is different from its main competitor Pepsi. The main difference is in the case of market developers. Instead of market developers Pepsi has only sales man. This is considered as the main reason that makes coke unique from Pepsi. I am confident that, I will be able to implement these acquired skills in my future.
REFERANCE
BOOKS
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Sales and Channel Management Krishna K Havaldar & Vasant M Cavale Marketing Management - Kotler Research Methodology - C.R Kothari
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