CHAPTER 1 EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
With high regards I take this opportunity to put forward the project report after an in depth and exhaustive training at PepsiCo India holdings pvt. Ltd. During my training tenure study of Institutional sales was undertaken. It also consists the study of competition and competitors. Tropicana is the premium juice brand from PepsiCo and its core and main competitor in the juice industry is Real a product from Dabur. Tropicana comes in various flavors like orange, grape, pineapple, guava, apple, etc. So the project is about studying market trends and consumer behavior by keeping the competition in mind. It project I learn how the customer reacts on various factors like rates, flavors, payment terms, and discounts offered. Since the Instituions has high purchasing power so the rates offered to them should be very lucratives and have high margins of discounts. In Institutions like school and colleges we can quote high rates as compared to the Institutions like pubs and high end bars

CHAPTER 2 OBJECTIVES OF THE STUDY

OBJECTIVE

1. To study the various factors affecting the sales at institution level. 2. Regulatory bodies involved in the sales procedure. 3. Distribution channel involved at the level of retail sales.

CHAPTER 3 LITERATURE REVIEW

LITERATURE REVIEW

Coke and Pepsi in Russia: In 1972, Pepsi signed an agreement with the Soviet Union, which made it the first Western product to be sold to consumers in Russia. This was a landmark agreement and gave Pepsi the first-mover advantage. Presently, Pepsi has 23 plants in the former Soviet Union and is the leader in the soft-drink industry in Russia. Pepsi outsells Coca-Cola by 6 to 1 and is seen as a local brand. Also, Pepsi must counter trade its concentrate with Russia's Stolichnaya vodka since rubles are not tradable on the world market. However, Pepsi has also had some problems. There has not been an increase in brand loyalty for Pepsi since its advertising blitz in Russia, even though it has produced commercials tailored to the Russian market and has sponsored television concerts. On the positive side, Pepsi may be leading Coca-Cola due to the big difference in price between the two colas. While Pepsi sells for Rb250 (25 cents), Coca-Cola sells for Rb450. For the economy size, Pepsi sells 2 liters for Rb1,300, but Coca-Cola sells 1.5 liters for Rb1,800. Coca-Cola, on the other hand, only moved into Russia 2 years ago and is manufactured locally in Moscow and St. Petersburg under a license. Despite investing $85 million in these two bottling plants, they do not perceive Coca-Cola as a premium brand in the
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Russian market. Moreover, they see it as a foreign brand in Russia. Lastly, while Coca-Cola's bottle and label give it a high-class image, it is unable to capture market share. Coke and Pepsi in Poland: Poland, with a population of 38 million people, is the biggest consumer market in central and Eastern Europe. Coca-Cola is closing in on Pepsi's lead in this country with 1992 sales of 19.5 million cases versus Pepsi's sales of 26.5 million cases. The main problems in this area are the centralized economy, the lack of modern production facilities, a non-convertible local currency, and poor distribution. However, since the zloty is now convertible, Coca-Cola realizes the growth potential in Poland. After Fiat, Coca-Cola is now the second biggest investor in Poland. Coca-Cola has developed an investment plan, which includes direct investment and joint ventures/investments with European bottling partners. Its investments may exceed $250 million, and it has completed the infrastructure building. Coca-Cola has divided Poland into 8 regions with strategic sites in each of these areas. Moreover, it has organized a distribution network to make sure its products are widely available. This distribution network, which Coca-Cola has spent a lot of money organizing, is extremely important to challenge Pepsi's market share and to maintain a high level of customer service. Also, Coca-Cola, like Pepsi, signed counter trade agreements with Poland. Both trade their concentrate for Polish beer. All of this has helped Coca-Cola to close in on Pepsi's lead in Poland.
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Conclusion on Eastern Europe: Both Coca-Cola and Pepsi are trying to have their colas available in as many locations in Eastern Europe, but at a cost which consumers would be willing to pay. The concepts, which are becoming more important in Eastern Europe include color, product attractiveness visibility, and display quality. In addition, availability (meeting local demand by increasing production locally), acceptability (building brand equity), and afford ability (pricing higher than local brands, but adapting to local conditions) are the key factors for Eastern Europe. Both companies hope that their western images and brand products will help to boost their sales. Coca-Cola has a universal message and campaign since it feels that Eastern Europe is part of the world and should not be treated differently. Currently, it is difficult to say who is winning the cola wars since the data from the relatively new market research firms focuses on major cities. Pepsi had a commanding 4 to 1 lead in 1992 in the former Soviet Union. Without this area, Coca-Cola has a 17% share versus Pepsi's 12% share in the soft drink industry. While both companies have been in Eastern Europe for many years, the main task now is to develop the market. Coca-Cola and Pepsi are in a dogfight, but both will end up as winners. In the end, the ultimate winner will be the Eastern Europeans who will have access to some of the world's best soft drinks. Coke and Pepsi in Mexico: The Mexican government recently freed the Mexican soft drink market from nearly 40 years of price controls in return for a commitment from
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bottling companies to invest nearly $4.5 billion and create nearly 55,000 jobs over the next 7 years. Naturally, Mexico has become another battleground in the international cola wars. In Mexico, Coca-Cola and Pepsi command 50% and 21% of the market respectively. The cola war is especially hot here because the per capita consumption of Coca-Cola and Pepsi exceeds that of the United States (Murphy, 6). Mexico is the only soft-drink market in the world that can make this claim. The face off in Mexico is between Gemex, the largest Pepsi bottler outside the United States, and Femsa, the beer and Soft Drink Company that own the largest Coca-Cola franchise in the world. Femsa, however, may be at a disadvantage. Despite being part of the conglomerate Grupo Vista, Femsa lacks financial punch because it plays only a small part in the conglomerate's overall interests. The challenge in Mexico is to win market share through distribution efficiency (Murphy, 6). With this in mind, each company is undertaking strategic efforts designed to bolster their shares of the Mexican market. Pepsi is moving in on the Coke-dominated Yucatan peninsula while Femsa, the Coca-Cola franchisee, is planning to invest $600 million more for 3 new Coca-Cola plants next door to Gemex's Mexico City facilities. The parent companies have joined the battles as well. Coca-Cola has made a $3 billion long-term commitment to the Mexican market, and Pepsi has countered with a $750 million investment of its own. Coke and Pepsi in China: Coca-Cola originally entered China in 1927, but left in 1949
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when the Communists took over the country. In 1979, it returned with a shipment of 30,000 cases from Hong Kong. Pepsi, which only entered China in 1982, is trying to be the leading soft-drink producer in China by the year 2000. Even though Coca-Cola's head start in China has given it an edge, there is plenty of room in the country for both companies. Currently, Coca-Cola and Pepsi control 15% and 7% of the Chinese soft-drink market respectively. The Chinese market presents unique problems. For example, 2,800 local soft-drink bottlers, many of whom are state-owned, control nearly 75% of the Chinese market. Those bottlers located in remote areas have virtual monopolies (The Economist, 67). The battle for China will take place in the interior regions. These areas are impenetrate as most of the foreign soft-drink producers have set up in the booming coastal cities. China's high transportation and distribution costs mean that plants must be located close to their markets. Otherwise, in a country of China's size, Coca-Cola and Pepsi risk pricing their products as luxury items. In China, it is easier and politically safer to expand through joint ventures with local bottlers. It is expected that, in China, the company that wins the cola war will win based on the locations of their bottling plants and the quality of the partners they choose (The Economist, 67). Coca-Cola is bottled at 13 sites across China; five of these are state-owned. Also, Coca-Cola owns 2 concentrate plants in China. By 1996, Coca-Cola and its joint venture partners will have invested nearly $500 million in China. Pepsi is
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planning a $350 million expansion plan that will add 10 new plants. Both companies are plowing profits straight back into expansion. They reason that any returns will not come until the next century. Coke and Pepsi in Saudi Arabia: In Saudi Arabia, Pepsi is the market leader and has been for nearly a generation. Part of this is due to the absence of its archrival, Coca-Cola. For nearly 25 years, Coke has been exiled from the desert kingdom. Coca-Cola's presence in Israel meant that it was subject to an Arab boycott. Because of this, Pepsi has an 80% share of the $1 billion Saudi soft-drink market. Saudi Arabia is Pepsi's third largest foreign market, after Mexico and Canada (The Economist, 86). In 1993, almost 7% of Pepsi-Cola International's sales came from Saudi Arabia alone. The environment in Saudi Arabia makes the country very conducive to soft-drink sales: alcohol is banned, the climate is hot and dry, the population is growing at 3.5% a year, and the Saudis' oil-based wealth make it the most valuable market in the Middle East (The Economist, 86). Coca-Cola, long known as red Pepsi, has finally started to fight back. The battle for Saudi Arabia actually began 6 years ago, when the Arab boycott collapsed and Coca-Cola began to make inroads into the Gulf, Egypt, Lebanon, and Jordan. The start of the Gulf War, however, temporarily stunted Coca-Cola's growth in the region. Pepsi's 5 Saudi factories worked 24 hours a day to keep the troops refreshed. The most significant blow to Coca-Cola's return to the desert, however, came at the end of the war, when General Norman Schwarzkopf
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was shown signing the cease-fire with a can of diet Pepsi in his hand. Coca-Cola aims to control 35% of the Saudi market by the year 2000. Coca-Cola, which plans to pour over $100 million into the Saudi market, is focusing on marketing to get there. Recently, it shipped some 20,000 red coolers into Saudi Arabia over the last 9 months. Also, Coca-Cola put $1 million into sponsoring the Saudi World Cup soccer team. This alone has doubled Coca-Cola's market share to almost 15%. America's Reynolds Company is among the investors looking to cash in on CocaCola's return to Saudi Arabia. The company is among the investors in a new factory, which, by 1996, will be producing 1.2 billion Coca-Cola cans per year. This equates to nearly 100 cans for every Saudi in the country. Pepsi, trying to fight off the Coca-Cola onslaught, has responded with deep discounting. Conclusion: The new battleground for the cola wars is in the developing markets of Eastern Europe (Russia, Romania, The Czech Republic, Hungary, and Poland), Mexico, China, Saudi Arabia, and India. With Coca-Cola and Pepsi's investments in these countries, not only will they increase their sales worldwide, but they will also help to build up these economies. These long-term commitments by both companies will raise the level of competition and efficiency, and at the same time, bring value to the distribution and production systems of these countries. Many issues need to be overcome before a company can begin to produce its goods in a foreign country. These issues include political, social, economic, operational, and
12

environmental topics, which must be addressed. When companies like Coca-Cola and Pepsi effectively analyze and solve these problems to everyone's liking, new foreign markets can translate into lucrative opportunities in the long run. Bibliography Works cited a red line in the sand, Economist, October 1, 1994, p. 86. Chakravarty, Subrata N. How Pepsi broke into India, Forbes, November 27, 1989, pp. 43-44. Clifford, Mark. How Coke Excels, Far Eastern Economic Review, December 30, 1993- January 6, 1994, p. 39. Coke v Pepsi, The Economist, January 29, 1994, pp. 67-68. DeNitto, Emily. Pepsi, Coke thinks international for future growth, Advertising Age, October 3, 1994, p. 44. Murphy, Helen. Cola war erupts in Mexico, Corporate Finance, May 1993, pp. 6-7. Quelch, John A., Erich Joachimsthaler, and Jose Luis Nueno, After the Wall: Marketing Guidelines for Eastern Europe, Sloan Management Review, winter 1991, and pp. 82-93. Selling in Russia: The march on Moscow, The Economist, March 10, 1995, pp. 65-66. Stevens, Clifford. Soft drink wars: Pepsi vs. Coke, Central European, July/August 1993, and pp. 29-35. Winters, Patricia and Scott Hume. Pepsi, Coke: Art of deal making, Advertising Age, February 19, 1990, p. 45. Word Count: 18

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CHAPTER - 4 COMPANY PROFILE

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THE COMPANY
A pharmacist formed cola in the year 1898. He promoted it to be having medicinal value that was later withdrawn. The cola was named after Pepsi, which in a short span of time got popular all over and became one of the favorite drinks. Pepsi-Cola was trademarked in the year 1902. Its president and CEO was Alfred N. Steele. In 1965, Pepsi cans first go into full-scale distribution having first ad campaign Twice as much for a nickel. Pepsi Foods Ltd (PFL) is the Indian subsidiary of Pepsi Co Inc. Headquartered at New York. In 1989, PepsiCo started in India with processing of tomatoes into Tomato Paste using Rossi and Catalli processing equipments. Its involvement is not restricted to processing alone, but also in selecting and growing high yield and disease free processing varieties through a pioneering concept called CONTRACT FARMING. Under contract farming PepsiCo

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provides nurseries of appropriate varieties and farming technology to the farmer with a commitment to buy back specified quantities at specified prices. Its contract farming technology provides a competitive advantage in ensuring availability of appropriate quality of fruits and fixing up of competitive procurement prices. Needless to say, PepsiCo is stringent on quality assurance and good manufacturing practices at the manufacturing facility. Their established Quality Assurance system provides for product tractability as well in case of quality.

PepsiCo Headquarters PepsiCo World Headquarters is located in Purchase, New York,

approximately 45 minutes from New York City. Edward Durrell Stone, one of Americas foremost architects, designed the seven-building headquarters complex. The building occupies 10 acres of a 144-acre complex that includes the Donald M. Kendall Sculpture Gardens, a world- acclaimed sculpture collection in a garden setting. PepsiCo International includes all PepsiCo businesses in the United Kingdom, Europe, Asia, MiddleEast and Africa.
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Pepsi-Cola began selling its products outside the United States and Canada in the mid-1930s, opening in the United Kingdom in 1936.

Operations grew rapidly beginning in the 1950s. Brands include Aquafina, Gatorade and Tropicana. In addition to brands marketed in the United States, PepsiCo International brands include Seven-Up and many local brands.

PepsiCo began its international snack food operations in 1966. Often PepsiCo snack food products are known by local names. These names include Walkers in the United Kingdom, Smiths in Australia, Matutano in Spain, and others. The company markets Frito-Lay brands on a global level, and introduces unique products for local tastes.

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Our Commitment Our commitment is to deliver sustained growth, through empowered people, acting with responsibility and building trust. Heres what this means:

Sustained Growth is fundamental to motivating and measuring our success. Our quest for sustained growth stimulates innovation, places a value on results, and helps us understand whether todays actions will contribute to our future. It is about growth of people and company performance. It prioritizes making a difference and getting things done.

Empowered People means we have the freedom to act and think in ways that we feel will get the job done, while being consistent with the processes that ensure proper governance and being mindful of the rest of the companys needs.

Responsibility and Trust forms the foundation for healthy growth. Its about earning the confidence that other people place in us as individuals and as a company. Our responsibility means we take personal and corporate ownership
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for all we do, to be good stewards of the resources entrusted to us. We build trust between others and ourselves by walking the talk and being committed to succeeding together.

Guiding Principles This is how we carry out our commitment. We must always strive to:

Care for customers, consumers and the world we live in. An intense, competitive spirit in the marketplace drives us, but we direct this spirit toward solutions that achieve a win for each of our constituents as well as a win for the corporation. Our success depends on a thorough understanding of our customers, consumers and communities. Caring means going the extra mile. Essentially, this is a spirit of growing rather than taking.

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Sell only products we can be proud of. The test of our standards is that we must be able to personally endorse our products without reservation and consume them ourselves. This principle extends to every part of the business, from the purchasing of ingredients to the point where our products reach the consumers hands. Speak with truth and candor. We speak up, telling the whole picture, not just what is convenient to achieving individual goals. In addition to being clear, honest and accurate, we take responsibility to ensure our communications are understood. Balance short term and long term. We make decisions that hold both shortterm and long-term risks and benefits in balance over time. Without this balance, we cannot achieve the goal of sustainable growth. Win with diversity and inclusion. We leverage a work environment that embraces people with diverse backgrounds, traits and different ways of thinking. This leads to innovation, the ability to identify new market opportunities, all of which helps develop new products and drives our ability to sustain our commitments to growth through empowered people.

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Respect others and succeed together. This company is built on individual excellence and personal accountability, but no one can achieve our goals by acting alone. We need great people who also have the capability of working together, whether in structured teams or informal collaboration. Mutual success is absolutely dependent on treating everyone who touches the business with respect, inside and outside the company. A spirit of fun, our respect for others and the value we put on teamwork make us a company people enjoy being part of, and this enables us to deliver world-class performance.

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Pepsi Co The Indian Scene

No single foreign investment project has been the center of much attention and controversy in the late 1980s and early 1990s as the Pepsi Co project in India. PepsiCo made an attempt to enter into India as early as in May 1985, teaming up with Agro Product Export Ltd., a company owned by R. P. Goenka group, and sought permission from the central government to import cola concentrate and to sell a PepsiCo brand soft drink in the Indian market, in return for the export of juice concentrate from Punjab. The Indian government in September 1988 cleared the project, Pepsi Foods Limited, as a joint venture of Pepsi Co, Punjab government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited. Before this project was cleared, under this proposal, the main objectives put forward by Pepsi Co were 'to promote the development and export of Indian made and agro-based products and to foster the introduction and development of PepsiCo products in India'. This proposal which was submitted to the Secretary at Ministry of Industrial Development received rejections on the grounds that the import of concentrate could not be agreed to and the use of foreign brand names as domestic tariff area (DTA) was not allowed. Strategizing the problem in Punjab at that time, PepsiCo successfully played the 'Punjab Card' and again put forward a proposal in 1986 with stress more on
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diversification of Punjab agriculture and employment generation rather than on soft drinks. The proponents of project called it as a second 'Green Revolution' in Punjab and projected it as harbinger of a horticultural revolution that would end stagnation in Punjab's rural sector and would help in promoting small and middle farmers. A strong argument was put forward that this project will create ample employment opportunities for the unemployed youth who has taken the path of terrorism and thereby will help in restoration of peace in Punjab. This argument was well received in the political circles in Delhi and Punjab, which finally led to PepsiCos entry into India in the form of a joint venture with PAIC, and Voltas as its partners. The equity of Pepsi Foods Limited was divided among the partners with PAIC holding 36.11 percent, Voltas 24 and PepsiCo 36.89 percent. PepsiCo made certain commitments to Indian government, which also formed the basis of its entry. Some important commitments made by PepsiCo included: y The project will create employment for around 50000 people nationally, including 25000 jobs in Punjab alone; y 74 percent of the total investment will be in food and agro- processing. Manufacturing of soft drinks will be limited to only 25 percent; y PepsiCo will bring advanced technology in food processing and provide thrust by marketing Indian products abroad;

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y State of the art technology would be provided in the fields of food processing and soft drink manufacturing at no foreign exchange outflow; y 50 percent of the total value of production will be exported; y An agro-research centre will be established by PepsiCo in consultation with ICAR and PAU; y No foreign brand name will be used for domestic sales; y The export-import ratio will be 5:1 over 10 years, which means that for every dollar spends in foreign exchange on this project, the company will ensure an export earning of 5 dollars for 10 years; y 25 percent of the total fruits and vegetable crops in Punjab will be processed in the project; y A substantial increase in government revenue due to consumer market expansion and tax collection.

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Change of Brand Name

When Pepsi was allowed to begin its operation, one of the commitments made was that the company would not use its brand name, Pepsi, in India. During the first year of operation, Pepsi used an Indian brand name, Lehar Pepsi. But with the introduction of the new economic policy in 1991 under which the use of foreign brands was allowed, Pepsi immediately changed its soft drink brand name from Lehar Pepsi to Pepsi.

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From Joint Venture to Fully-Owned Subsidiary

Pepsi is no longer a joint venture company with its Indian partners. Taking full advantage of liberalised policies, it has taken full control of Pepsi Foods. In 1994, Pepsi made an offer to both Voltas and PAIC to buy their equity at 'attractive' terms. Voltas sold all its shares to Pepsi while PAIC, being a public enterprise, was forced to pull out and now it holds less than 1 percent of the total equity in Pepsi Foods Ltd. Government has allowed Pepsi to increase its turnover of beverages component to beyond 25 percent, and Pepsi is also no longer restricted to export 50 percent of its turnover. Recently the government also allowed PepsiCo to set up a new company in India called PepsiCo India Holdings Pvt.Ltd, a wholly owned subsidiary of PepsiCo International. Surprisingly, the new company is also engaged in beverage manufacturing, bottling and exports activities as Pepsi Foods Ltd. All the new investments by the PepsiCo International have been canalized through this new venture. It now handles 28 bottling plants with a sales turnover higher than Pepsi Foods turnover. Although the financial performance of both these companies in India has not been creditable so far yet it

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has been successful in achieving significant market share and brand royalty in India. The company in recent years has not only bought over bottlers in different parts of India but also bought Dukes, a popular soft-drink brand in western India to consolidate its market share. It has also shrewdly consolidated its position through aggressive marketing and advertising in India. According to surveys conducted by many market research agencies, Pepsi now holds over 40 percent share in Indian soft drink market. Another important recent shift in Pepsi's marketing strategy has been its focus on Cola over other non-Cola brands. At the international level, PepsiCo International has been focusing more on India where the consumption of soft drinks is expected to increase many-fold which is only three ounces per person now as compared to 200 ounces in Europe and over 300 ounces in North America. But, at the same time it is not realized that there is a vast difference between the purchasing power of an average Indian and North American as it takes an Indian 1.5 hours of work to be able to buy a bottle of Pepsi whereas for a North American, it takes less than 5 minutes. This experience of 15 years clearly shows that Pepsi is totally preoccupied with selling soft drinks in India.

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Diversification PepsiCo to enhance its business, invested into diversified business. They build up different strategies and laid up plans to come up with new ideas. This time the strategy was called Acquisitions in the restaurant industry. As a result PepsiCo acquired Pizza Hut in 1977, Taco Bell in 1978 and Kentucky Fried Chicken in 1986. This three business made PepsiCo the Largest Restaurant Company in the world. PepsiCo officials started concentrating more on the restaurant business resulting into the drop of 1% of their shares in the Cola market, during 1996. They realized in early 1997 that if they want to be there in the soft drinks market then they would have to give up the restaurant business, which they acquired. So, during late 1997 they sold off some of its restaurant to its franchises and made a separate corporation to issue shares in the open market for complete or partial sell off of restaurants in the market. Different Brands of Pepsi Co.(India) Pepsi Co is today having the soft drinks market in India with lots of its brands. They have also diversified into different sectors. Their popularly exiting brands in the Indian Market are as follows:

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Soft Drinks 1. Pepsi 2. Pepsi Blue 3. Diet Pepsi 4. Mountain Dew 5. Slice 6. 7Up Purified Drinking Water Aquafina Fruit Juice Tropicana Chips Frito-Lays Ruffles

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PRODUCT PROFILE

TROPICANA Short and sweet story of Tropicana

In 1921 at the age of 21Anthony Rossi immigrated to New York from Sicily, Italy to learn and search for new ideas business. He was a Grocer in New York after that he became a restaurateurs, he recognize the potential of the states natural gift box business of Florida fruit and selling to hotels and restaurants in New York city.

His reputation for quality and creativity grew, yet his aspirations were only just beginning. As the time passed the fruit and profit became sweeter. Later Sea grams acquired the company in 1988 and after a decade later Pepsi acquired the company.

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OUR PRODUCTS

1). Refrigerated

2). Non Refrigerated

y Tropicana pure premium y Specialty orange juice y Light and Healthy y Tropicana smoothies y Tropicana pure y Coastal groves

Tropicana fruit squeeze Tropicana fruit wise Tropicana twister Non-ref juices and drinks

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ART OF MAKING JUICES

1). Grove management----- To craft the best juices, Tropicana works with grower experts who provide the utmost care for their trees. We carefully track the maturity of the fruit and select groves based upon superior nurturing, soil, and irrigation metrics.

2). Optimized harvest----- Tropicana uses a proprietary system to identify the maturity characteristics of the fruit among the over 400 Florida groves that supply us.

3). Squeezing Technique----- The freshly picked fruit is gently squeezed to protect the juice and provide the unique Tropicana taste.

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4). Flash pasteurization------ While traditional pasteurization causes the juices to be heated to high temperatures for longer times Tropicana developed a superior flash pasteurization to minimize the time the orange juices is held at high temperature.

5). Blending Expertise----- The orange varieties Tropicana uses for its juices have different ripening characteristics. Our proprietary blending techniques combine these unique juices qualities to deliver the most consistent and best tasting juice year round.

6). Preserving Freshness----- Tropicana s carton and plastic packages are engineered to maintain in the highest quality and freshness. Our packaging materials ensures that the juice stays fresh inside the package while also preventing outside moisture and light from affecting its superior quality.
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DISTRIBUTION NETWORK

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INNOVATION IN DISTRIBUTION SYSTEM

Through their use of the most modern technology in recent years, PepsiCo and its bottlers were able to improve their distribution and logistics management operations significantly. To further improve the market penetration of its products globally, PepsiCo launched two new distribution methods in the initial years of the new millennium. These were the chilled DSD system and the hybrid system.

CHILLED DSD SYSTEM

The chilled DSD system was a relatively small distribution method, created for items, which required continuous refrigeration. This was primarily created for the fruit juices product line as they can spoil quickly if not given the required condition and care so chilled DSD system ensures that continuous refrigeration helps in preventing the products from spoiling.

THE HYBRID SYSTEM

In this system the company makes the collaboration with other company of complementary good so that their distribution channel is also used for the sales of its product. As taking the practical example of the collaboration of Coca cola and McDonald. Through this collaboration the distribution channel of the Coca cola increases, as at ever McDonald the Coca cola will be there. So increase the distribution channel through collaboration with other company is know as hybrid system. This system is actually benefited by the synergy created by collaboration of two companies.
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INTERNATIONAL DISTRIBUTION SYSTEM MANAGEMENT

In order to manage its distribution systems effectively, PepsiCo and Coca cola had put in place-advanced logistics systems. They sold beverage concentrate to bottlers, who added carbon dioxide, sweetener and water to make beverages and beverage syrup. Syrup was either sold directly to the fountain accounts or was combined with carbonated water for bottling. Bottling companies were (with a few exceptions) owned and operated by local companies in the countries where PepsiCo and Coca cola operated.

DISTRIBUTION STRATEGIES

A Company can choose any of the following distribution types: Exclusive Distribution Selective Distribution Intensive Distribution

PEPSI HAS ADOPTED THE INTENSIVE DISTRIBUTION STRATEGY.

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INTENSIVE DISTRIBUTION: A Strategy of intensive distribution is characterized by placing the goods or services in as many outlets as possible. When the consumer requires a great deal of location convenience, it is important to offer greater intensity of Distribution. This strategy is generally used for convenience items such as Tobacco, gasoline, and soap, snack foods & bubblegum. Manufactures are constantly tempted to move from exclusive or selective distribution to more intensive distribution to increase their coverage and sales and you could find Pepsi in nursing homes, confectionery shops, departmental stores; you name it & Pepsi is available there.

DISTRIBUTION CHANNEL REDIFINED

Pepsi has redefined distribution to strengthen their competitive advantage in the emerging consumer and market scenario. Their earlier focus was to drive wide availability and enable easy access to their brands for consumers. Now they seek to go well beyond this distribution paradigm. Their new approach is more holistic touching consumers in multiple ways at the point of purchase and more importantly, creating opportunities for customers to receive brand message and experience our brands. They are proactively addressing these emerging trends by approaching distribution and channels in a much broader way. They are shifting emphasis from mere reach

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or availability expansion to touching consumers with a 3- way convergence- of product availability, brand communication and higher level of brand experience. They are thus going beyond delivering products and creating greater engagement and interaction around the purchasing experience.

FACTORS FOR CHANNEL DESIGN

Customer Needs  Assortment of Goods: Pepsi has a wide assortment of goods. In beverages some very famous are Pepsi Mirinda, 7up, Slice etc Aquafina,Lehar Soda also.

 Ubiquitous: Restaurant, Pan shops, Kirana Stores, Confectionaries, Pepsi on wheels, all these are some examples of the fact that the product Pepsi is ubiquitous.

Number Of Intermediaries
 Intensive Distribution: Pepsi Co follows an intensive distribution strategy. To support their ubiquitous feature they want to place their product in as many outlets as possible.

 Increases market coverage .  Competing against Coca Cola and other local companies.
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TERMS AND RESPONSIBILITIES.

 PRICE POLICY Distributors: 3 to 5 % is the profit margin. Retailers: 10 % to 16 % is the profit margin.

 Territorial Rights:Distributors are given territorial rights and are not allowed to work beyond their territories.

 Conditions of Sale:Payment done through bank or cash. Option of credit sales remains at the lower part of the chain. Guarantee of damaged goods provided.

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SWOT ANALYSIS

STRENGTHS

1). The quality of the juices is excellent.

2). The taste is also very good.

3). It is a brand name so there is no problem on quality and popularity.

4). It is a product of a very repudiated company so people have their trust on the product.

5). Packaging of the product is good.

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WEAKNESS

1). Market coverage is less as compare to the core competitor Real.

Otherwise there is no weakness in our product that is Tropicana.

Opportunity

1). Since market coverage is less so there is hugh opportunity for Tropicana to increase the sales by covering the market.

2). Packaging can be more attractive by which we can attract the attention of the people.

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THREAT
1). Competition is the biggest threat to any product or company. So like this Real is the threat to the Tropicana.

2). Some juices like Onjuice and Lehberry are available in the market at very lower rates so they are also a very major threat to Tropicana in some of target markets.

Comparative Study with Competitors

Are market research surveys the true indicator of a company's success? Absolutely not, if the figures released on market shares of juices giants Dabur and Pepsi by two different research agencies -- ORG-Marg and Indian Marketing Research Bureau (IMRB) -- are any indicator. A survey by ORG-Marg showed that Dabur garnered over 56 per cent of the juices market this year against arch rival Pepsis (Tropicana) 30 percent and others brands like parle appy has 10 percent and others has another 4 percent Figures from the survey conducted by ORG-Marg, which was hired by Coca Cola,

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indicated that Coke brands mustered 56.6 per cent of the market in 23 cities where the survey was conducted despite trailing in six cities. PepsiCo India, on the other hand garnered 39.7 per cent with its brands like Pepsi, Tropicana, Miranda, Teem, Seven-Up and Due, it said. However, IMRB survey, which was conducted in 51 cities, shows that Pepsi increased its market share from 43 % to 47.3 %. Pepsi sources claimed that volume growth in the Indian market as declared by Coke was merely 31 % in the first six months against Pepsi's growth rate of 42 %. Coca Cola brands Coke, Fanta, Thums up, Limca, and Maaza however trailed its rival in six cities including Mumbai, Bangalore, Pune and Coimbatore, says the ORG-Marg survey. It goes on to reveal that Pepsico cornered 51.7 per cent of the Mumbai market (as against 47.4 of Coca Cola), 50.5 per cent of Bangalore (48.7 by Coke), 50.4 per cent of Pune (49.4 by Coke) and 53.9 per cent in Coimbatore (as against 42 per cent by Coke). In Delhi, Coke held a lead over Pepsi by carving a market share of 51.2 per cent as against 43.8 per cent of its rival, according to ORG-Marg survey. However, the

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IMRB survey claims that Coke's market share in Delhi was 45per cent against Pepsi's 49 %. ORG-Marg said Coca Cola held market share of over 70 per cent in cities like Amritsar, Hyderabad, Ludhiana and Indore. The Coca-Cola Co. andPepsiCo, Inc. saw their share of the U.S. softdrink market decline last year ina report that ranks the top-10 U.S. makers of carbonated soft drinks (CSD).Coca-Cola, the industry leader, saw its market share drop by 0.9% to 43.1%. PepsiCo (No. 2) saw a drop of 0.1% to 31.7%. CocaCola's case volume dipped 1% to 4.4 billion, while PepsiCo had 3.2 billion cases with a gain of 0.4%, according to annual rankings by Beverage Digest/Maxwell, a Bedford Hills, NY-based data service that tracks softdrinks sales. As for individual brands, Coke had a 17.9% market share, down 0.7%. Pepsi ranked No.2 with 11.5% market share and a 0.4% dip. Cadbury Schweppes and Cott Corp., the leading producer of private label CSDs, increased their share of the $65.9 billion market. Cadbury Schweppes is the No. 4 CSD producer followed by Cott, National Beverage, Big Red, Red Bull, Hansen Natural, Monarch Co. and Rockstar.

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The overall industry grew 1% in 2004. Together, the top three companiesCoke, Pepsi and Cadbury Schweppesaccounted for about 90% of industry volume, the report, which was released last Friday, said. There were some changes in the top10 brands last year. Diet Dr Pepper re-entered the rankings at No.9. Sprite dropped down one place to No. 6, Diet Pepsi moved ahead of Sprite into the No. 5 spot. And for the first time since the tracking began in 1985, 7UP dropped out of the top-10 brands. Coke Classic holds the No. 1 spot with 17.9% market share, followed by Pepsi at 11.5%. Both saw a slight dip in market share of 0.7% and 0.4% respectively. Volume for both was also down at 3% for Coke and 2.5% for Pepsi. Diet Coke holds the No. 3 position, followed by Mountain Dew (Pepsi), Diet Pepsi, Sprite (Coke), Dr Pepper (Cadbury), CF Diet Coke, Diet Dr Pepper and Sierra Mist (Pepsi).The retail value of the soft-drink industry overall grew 3.25% to $65.9 billion, up from $63.8 billion in 2003, as prices increased faster than volume.

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Advertisements and its Effectiveness

PepsiCo invests heavily on advertisements of its products. It has come up with many interesting advertisements in such a short span of time, which has got good recall among the masses. Though different age groups recall different ad Campaigns, the most commonly recalled are here under. a. Kareena, Saif, Preity, Fardeen ad Series. b. World Cup ad. c. Amitabh and Sachin Tendulkar ad. d. Aishwarya Rai and Aamir Khan ad. e. Adnan Sami, Kareena and Shahrukh Khan ad. f. Yeh Dil Maange More ad. g. Sachin Tendulkar and Shahrukh Khan ad. Pepsi also gave some memorable punch lines in the market, some of them are stated below: y Yeh Dil Maange More! y Yehi Hai Right Choice Baby, Aha! y Nothing Official About It!
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y Pepsi - Mera Number Kab Aayega? y Mausam Garam Hai, Pepsi Ke Liye Hum Besaram Hain!

Mad ad War
The first salvo was fired by Pepsi when it featured actor Aamir Khan in it's commercial. Coke has now retaliated in the same vein; Aamir Khan is asking consumers to drink Coke and not Pepsi. For this change of stance, Coke has reportedly paid him a cool Rs 2 crore. He was apparently paid Rs 17 lakh to endorse Pepsi. The cola war seems to be all about getting the top stars for their commercials. But ad filmmaker Prahlad Kakkar, who does the commercials for Pepsi, doesn't believe that to be the case. It's got nothing to do with stars. It's all about who has the better idea. The consumer is not a fool. Are you carried away by the fact that Pepsi and Coke are using film stars? You will only appreciate the ad if it is well made, if the creative cutting edge is good, if it makes you either laugh or cry. Between Coke and Pepsi they have signed on nine players of the Indian cricket team. And Bollywood seems to be the next hot spot they want to cool. For now, it's Fardeen Khan, Saif Ali Khan, Kareena Kapoor, Preitty Zinta, Shah Rukh, Manisha Koirala, Rani Mukherjee and Kajol in the blue (Pepsi) corner and Aishwarya Rai, Vivek Oberoi, Karisma Kapoor, Rambha and Amir in the red (Coke). This is just
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the beginning. And why not! Umpteen market studies have shown that after cricketers it's the Bollywood stars that have an impact on their target audience, the15-30 age group.

After that it's music, festivals and food, in that order that gets the Indian consumer all geared up. It's a battle for the mind to build brand loyalty, if you can get to the mind of the consumer through an advertisement that will excite him, an effective demand is created for the product.

To do just that Pepsi has signed on the three actresses in a span of two months. And Coke, which has never had actors in its marketing plans, seems to have a new strategy.

Pepsi's strategy internationally was to use film stars for their commercials. "But Coke never uses stars. India is an exception; here they are copying Pepsi." Pepsi is critical of Coke for "lifting" the jingle of a Pepsi ad featuring Sachin (Sachin ala re ala) before the Pepsi ad could be released. Pepsi finally released the ad with a new jingle. Coke should stop copying Pepsi commercials and get on with their job. They should spend their energy on the creative aspects of their commercials.

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Though both the colas are clear where to pick their endorsees from, the marketing strategy they adopt is very different. For Pepsi, on-screen advertising is a priority. "It depends on what it want to say in its ad. With Shah Rukh, it wanted to bring out a never-say-die' spirit.And so the ad of Shah Rukh getting Pepsi, despite a ferocious dog."

To bring in a whiff of femininity into their campaigns the company roped in Manisha.

Pepsi then signed up the "bubbly" Rani Mukherjee. With Shah Rukh Khan, already in the blue corner, only Kajol was missing from the star cast of the blockbuster Kuch Kuch Hota Hai. The company capitalized on its timely USP. They took her on and an ad featuring the trio.

For Coca-Cola, on the other hand, "90 per cent of the celebrity endorsements is in actual consumer contact and only 10 per cent is on screen advertisements," says Rahul Dhawan, director, external affairs, Coca-Cola. And so for Diwali, last year, in Mumbai many houses had Bollywood bombshell Karishma Kapoor knocking on their doors. "And if someone welcomed her with a Coca-Cola they won a prize, In Thiruvananthapuram it was Rambha who went out on visits.
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Coca cola believe that visual eye contact with the personality is far better than seeing a 10-second ad. Pepsi does not endorse this. "A celebrity must be used as a casting device". "Humanity is involved when it comes to Pepsi."

In such a competitive industry poaching, of ideas and models, is inevitable. "Yes, poaching always happens, but they don't want to trigger off another cola war." The ad war between the cola giants is dirty. And how does PepsiCo feels about Aamir doing the Coke ad?

"Well, good for them and good for Aamir. They are going to have a tough time because everyone's going to compare it with the Pepsi ad. Pepsi is smart, they will make the old ad memorable in some way. It is a double-edged sword." So here's looking forward to more hiss and fizz, cola style.

How do you decide if a particular ad has caught the viewers' imagination? Other than the success of a commercial being measured in absolute volume increase terms, we also have a fortnightly constant consumer tracking' where

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we do audits of consumers in 21 metros, randomly selected. We check out top of the mind recall of various ads, soft drink as well as others. There is no point in running an ad that the consumer does not connect with.

Movies and Coca-Cola; where do you think you really connect? Our movie sponsorships are connecting basically with the cinema house where the movie is being screened. We devise some excitement around the movies which directly connect with our consumers. Even here, we try and see that our product is available in more than one stall. We try to live up to the guiding principle of our company, that is to have our product within arm's reach of desire. Basically you will see more than one counter in movie halls where we are selling our products, unlike the good old days where you had only one counter and virtually half the movie-goers gathered around it. We also have in-movie promos, as in Priya Cinema in Delhi , where we have a graffiti-writing contest about the movie. You fill in a form with the graffiti and put it in a box and in the interval the best graffiti gets splashed on screen. The winner gets two tickets for the next movie.

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Preference of ad Campaigns
The survey showed an interesting analysis between all the age groups as far as the likings for advertisements are concerned. It was found that the youngsters preferred the ads of Pepsi at its peak whereas Coke, Mirinda and Dew followed it. Moving to the next group where liking for all ad campaigns was shown, rating Pepsi again the highest. The next age group showed their preference towards Coke and other all but making the ads of Thums Up invalid. Again the next group rated the ads of Pepsi, as the most liked one followed by others striking Thums Up out. The last age group responded only to the ads of Coke and Thums Up throwing all others out.

Liking of Ad Campign
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% <15 15 - 25 25 - 35 35 - 45 Age Group >45

Others Mountain Dew Mirinda Thums Up Coke Pepsi

Percentage

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Market Research Analysis

A market survey was conducted with the questionnaire to look into the key areas of Pepsi. The survey was done by randomly selecting the 100 samples (people). The excerpts of those key factors have been discussed hereunder. Age Group of the Samples The trend of juices took momentum after 2000. There is maximum possibility that juices may not be so much popular with the young age group. Based on these assumption we put the question in our questionnaire to find out, people falling in which are the maximum consumers of the juices. During the survey we also found retaliation from the older age group in filling the questionnaire. All the age groups participated enthusiastically in the survey

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Data interpretation

I used pie charts to analyze the opinions of samples and their answers for our questions.

1). Under which age group do you fall?

On this question we got people from every age group so it useful for us to get a broad view of people about Tropicana.

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Table no. 1: Age profile of the respondents Age (in years) < 15 25 35 35 45 > 45 Total No. of respondents 02 34 32 10 100

13%

3%
< 15 25 - 35 35 45 > 45

43%

41%

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2). Which juice do you prefer?

Table no. 2 : Juices they prefer Juices Tropicana Real Onjuice Lehberry Others Total No. of respondents 36 42 03 04 15 100

15% 4% 3% 36%
Tropicana Real Onjuice Lehberry

42%

Others

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Most of the people gave straight answers for this question. According to most of them they like Real and after that comes Tropicana. Some people have mix opinion about their preferences.Onjuice and Lehberry are the other brand of juices and some people like them because of the offers and cheap rates.

3). Reasons for your preferences Table no. 3 : Reasons for preference Reasons Advertisement Taste Availability Others Total No. of respondents 30 54 14 02 100

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14%

2% 30%
Advertisement Taste Availability Others

54%

This is the most important question because once you realize that what consumers like in your product and what they dont v=like and what they are looking for. So there are several things which combinely make a product a hit one. By the answers for this question we can figure out what consumers are really interested in.

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4). Rate the taste of Tropicana. Table no. 4 : Ratings for the taste of Tropicana Ratings Excellent Very good Satisfactory Below average Total No. of respondents 22 48 28 02 100

2% 28%

22%
Excellent Very good Satisfactory

48%

Below average

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Answer to this question by the majority of samples is either excellent or very good. As we all know that Tropicana is a product from a well known company so there is no question of poor quality.

5). Which Pepsi products do you like most?

Table no. 5 : Likings of Pepsis product Product Tropicana Pepsi Dew Mirinda Total No. of respondents 16 40 24 20 100

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20%

16%

Tropicana Pepsi Dew Mirinda

24% 40%

. As it is obvious that a company is known for its main product so the majority of the samples said that pepsi is the best product of PepsiCo. Other replies are shown in the table and the pie chart

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6). Whose Ads do you like most? Table no. 6 : Likings of advertisement

Company PepsiCo Coke Tropicana Mirinda Dew Total

No. of respondents 30 28 05 08 29 100

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29%

30%
PepsiCo Coke Tropicana Mirinda Dew

8% 5% 28%

Since Ads is a very major factor for a product or company to get success and become favorite of people. So by asking this question to samples we can understand that which company or product is the most favorite of the people. We get different answers for this question from sample from different age group.

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7). Which advertisement of PepsiCo do you like most?

In answer to this question the majority of respondents said that there are two ads which were liked by the most of the public. First advertisement is the ad which was filmed on the youngsters and had the punch line yeh hai youngistan meri jaan. And the another advertisement which people like most is the Pepsis international advertisement in which six or seven men are working on a building and while working they are drinking Pepsi and also playing with the bottle of the Pepsi, and the line was Pepsis new grip.

8). On the question of what do you think of the latest advertisement of Tropicana, People said that the advertisement was really fine and it was highlighting the benefits of juice and also showing the good and attractive packaging of the juice.

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9).On the question that do you remember any promotional offer on Tropicana 68% of respondents said that they dont remember any offer and 42% of respondents said that yes they remember the offer of one kurkure free with one litre pack of juiceand some said that yes they remember the offer of the one bowl free with every one litre of juice.

10). On the question of any recommendation for further improvement some people said that they dont have any clues but some people give some points on which Tropicana can improve upon and they are following: 1). Attractive Packaging 2). More promotional offers

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11). On the question of that why do you like Tropicana there are various reasons given by respondents which are following.

1.) Taste 2). Availability 3). Nice Packaging 4.) Quality Product from Pepsi 5). Good Promotional Activities

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FINDINGS

1). Market share of Real is less as compared to the market leader Tropicana.

2).Rates of both the brands i.e. Tropicana and Real are almost same but there is a slight difference in some of the flavors.

3).The image of Tropicana is very good on people and they feel that the quality of Tropicana is excellent.

4).Market coverage is less compared to Real because of the sales team for Tropicana is less.

5).Tropicana doesnt have the flavor cranberry which is considered as a very important flavor in Institutions.

6).People really like Tropicana because of the quality and the brand name.

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SUGGESTIONS

Institutions hesitate to make a switch over the brand that they are using until and unless that they are offered very lucrative and special offers. A large area of market is still untouched so there are a ample of opportunity in the market for Tropicana and by exploiting them Tropicana can achieve a good relative market share against Real. Another important thing is that by making the packaging of our product more attractive we can attract more customers. Since our market is less as compared to the market leader so to enjoy more sales we have to put some offers on our product which will be helpful for attracting more customers. We can make the packaging of our product more attractive to instantly grab the attention of the customers. And one thing which can really turn around the situations is to introduced some new flavors including cranberry. And the last but not the least company should concentrate more on the advertisement part because it is the tool which can turnaround the company in such type of products.

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Annexure

Sample

QUESTIONNAIRE For Market Research

Name: _______________________________________________

Address: _____________________________________________

Occupation: __________________ gender: Male ( ) , Female ( )

1.Under which age group do you fall? Below 15 years ( ) 15 25 years( ) 25 35 years ( ) 35 45years ( )

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Above 45 years( )

2. Which juice do you prefer? Tropicana ( ) Real ( ) Onjuice ( ) Lehberry ( ) Others, please specify_________________________________

3. Give reasons for your preference: Advertisements ( ) Taste ( ) Availability ( ) Others, please specify_________________________________

4. How will you rate the taste of Tropicana? Excellent ( ) Very good ( ) Satisfactory ( ) Below Avg. ( )

5. Which PEPSI CO. products you like the most? Pepsi ( ) Mountain Dew ( ) Mirinda ( ) Tropicana( )

6. Whose advertisements/campaigns you like the most? Pepsi ( ) Coke ( ) Thums Up ( ) Mirinda ( ) Dew ( ) Others, please specify_________________________________
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7. Which ad/event of PEPSI impressed you most?

______________________________________________________ ______________________________________________________

8. What do you think about the latest ad campaign of PEPSI (TROPICANA)? ______________________________________________________ ______________________________________________________

9. Do you remember any promotion offer of Pepsi (Tropicana)? Yes ( ) No ( ) If Yes, please specify_________________________________

10. Any recommendation for further improvement:

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______________________________________________________

11. You like Tropicana because (not more than 10 words): ______________________________________________________ ______________________________________________________ Thank you.

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BIBLIOGRAPHY
WEBSITES:

www.pepsi.com www.pepsico.com

BOOKS:

Marketing Management- Radha Swami/ Nam kumari Research Methodology-C.R.Kothari Principles of Marketing-P. Kotler & Armstrong
NEWS PAPERS:

The Times Of India The Economics Times Hindustan Times

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