Horizontal Expansion Strategy of Coca-Cola(Lucknow)

Shahnawaz Adil
MBA 3rd semester

11001220143

Training Guide Mr. Chitresh Tiwari Marketing Executive Manger Advance Sales & Services

Contents
Section 1: Company Profile.

Section 2: Profile of Organization imparting Training Section 3: Conceptual background of topic.

Section 4: Details of work completed Section 5: SWOT analysis Section 6: Conclusion

Section 1: Company Profile

INTRODUCTION TO COCA-COLA

* Coca-Cola, the product that has given the world its bestknown taste was born in Atlanta, Georgia, on May 8, 1886. * Coca-Cola Company is the worlds leading manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups, used to produce nearly 400 beverage brands. * The Coca- Cola Company began building its global network in the 1920s. Now operating in more than 200 countries. * The Coca-Cola system has successfully applied a simple formula on a global scale: Provide a moment of refreshment for a small amount of money- a billion times a day.

In December 1991, a merger between Coca-Cola Enterprises and the Johnston Coca-Cola Bottling Group, Inc. (Johnston) created a larger, stronger Company, again helping accelerate bottler consolidation. As part of the merger, the senior management team of Johnston assumed responsibility for managing the Company, and began a dramatic, successful restructuring in 1992.Unit case sales had climbed to 1.4 billion, and total revenues were $5 billion

MARKET SHARE:
Being the biggest company in the soft drink industry, Coca Cola enjoys the largest market share. This company controls about 59% of the world market.

GLOBAL MARKET SHARE

NORTH AMERICA

LATIN
AMERICA

EUROPE &
MIDDLE EAST

ASIA &
OCEANA

AFRICA

30%

25%

22%

17%

6%

MISSION:

* To refresh the world. * To inspire moments of optimism and happiness. * To create value and make a difference.
VISION:

* Winning Culture * Live our values * Focus on the market * Work smart * Act like owners * Be the brand

Coca-Cola India was the leading soft drink brand in India till 1977when it was forced to close down its operation by a socialist government in the drive for self sufficiency. After 16 years of absence, coca cola returned to India and witnessed a different culture and economic platform. During their absence, Parle brothers introduced a new type of cola called THUMS UP. Along with, they also formulated a lemon flavored drink, LIMCA, and mango flavored, MAAZA. In 1993, coca cola bought the whole Parle Brother operation, in a hope to beat the main competitor (Pepsi). They presumed that with the tried and tested products of Parle they will be able to regain their throne in the Indian soft drink market. Pepsi having a 6 years head start helped revive the demand for global cola but it was not easy for the soft drink giant (coca cola) to return to India.

Strategies to re-enter India

*In India 3 As must be applied Affordability, Availability and Acceptability. *Coca-Cola competed with local drinks such as Nimbu Pani, Narial Pani, Lassi etc. and
reached to a conclusion that competitive pricing was unavoidable. Since then they introduced a 200 ml glass bottle for Rs.5.

*Different advertising campaigns for different regions of the country. In the southern part, their
strategy was to make Bollywood or Tamil stars to endorse their products.

* One of the most famous ad campaigns in India was

Thanda Matlab Coca-Cola.

Section 2
Profile of Organization imparting training

Advance Sales & Service Pvt. Ltd. Adilnagar,Kalyanpur Lucknow

Advance Sales & Service Pvt. Ltd.

Advance Sales & Service Pvt. Ltd. is a marketing and distribution, Franchise of Brindavan Bottlers Pvt. Ltd. Lucknow, Barabanki, Lalitpur, Jhansi, Lakhimpur, Sitapur & Faizabad are the distribution and market area for Advance Sales & Service Pvt. Ltd.

Management Profile
General Manager - Sanjeev Garg Head of Sales(City)- Rajan Sharma Head of Sales(Outer)- B.K. Shrivastav Marketing Executive Manager Chitresh Tiwari HR Head Manu Mehrotra HR Executive Pooja Chandwani

Distribution & Marketing of Advance Sales & Services.

Sales & Marketing Division Sales Head Marketing Executive Manager Area Sales Manager Sales Executive Team Leader Sales Team

Distribution & Marketing of Advance Sales & Service.

Distribution Criteria Direct Sales Distribution(DSD) Total company authorized Indirect Distribution(ID) By Agents

Distribution & Marketing of Advance Sales & Service.

Distributors Segment
1. Anchor Distributor (Investment 40-50 lakhs)

2. General Distributor (Investment 10-20 lakhs)

3. Spoke(Rural Area) (Investment 1-2 lakhs)

Section 3
Conceptual Background of Topic

Horizontal Expansion
Expansion of business capacity through the absorption of facilities or buildings as well as through the acquisition of new equipment to handle an increased volume in sales in which the business is already engaged. In microeconomics and strategic management, the term Horizontal Expansion describes a type of ownership and control. It is a strategy used by a business or corporation that seeks to sell a type of product in numerous markets.

Reason for Expansion

The ultimate objective of coke is to acquire more customers and serve them properly. While doing Horizontal Expansion take care to the competitors strategy. The main competitor is PEPSI, who has opted Vertical Expansion to generate more sell however Coke do not believe on Vertical Expansion because Vertical Expansion has limited preview so COKE is great believer in Horizontal Expansion and this strategy helped to the company to maintain its leadership in the soft drink industry.

Benefits of Horizontal Expansion

Provides Incremental Volume & Revenue for Business.

By horizontal expansion there will be more outlets of our product in the market which will sell our product in more quantity. This will generate incremental revenue for the business.
Helps Improve Route Productivity

Increase market visibility selling at more outlets give more market visibility of the product which gives higher product recognition and brand value to the products. Increase in market power over supplier and downstream market channels.

Section 4
Detail of Work completed
Objectives, Job profile, Data analysis & Interpretation, Findings ,Suggestions and Limitations

Objectives of the study

.To understand the concept of Horizontal .To develop the business , expand
respect to OYA scheme.
Expansion with respect to Advance Sales and Services Pvt. Ltd. market coverage with

.The benefit of Horizontal Expansion for the

at retailers end(Potential Outlet).

company

Profile of Job Training

Convince the new retailers with respect to OYA(Own Your Asset) scheme of Coca-Cola, Under the Advance Sales & Services Pvt. Ltd. OYA as apart of Horizontal Expansion Strategy of Coca-Cola (Lucknow). Kalyanpur(Lucknow) was subject area assigned for marketing of OYA.

Number of Clients
Total 30 retailers such as FMCG Outlet, Beverage and Restaurant, Medical stores Cyber Caf, Communication Stores, Barber shop,

etc of Kalyanpur area were visited

for the new outlet opening.

Data Analysis & Interpretation

Response of OYA
Yes No May Be

30% of retailers are interested in the OYA scheme of coca-cola. 43% of retailers are not interested in OYA.

27%

30%

43%

Response NO Percentage
Yes No May Be 9 13 8 30 30% 43% 27% 100%

27% retailers are interested but want start from next season as they are already doing business with Pepsi or due to end of peak season.

FINDINGS
Most of the retailers who selling pepsico products refuse to keep coca-cola because of late delivery of orders. Pepsi marketing schemes are much better than coca-cola. Unavailability of regular stock is also reason for refusing cocacola or OYA Brand image and customer preference of coca-cola is stronger than Pepsico. Coca-cola has better quality and range of products than Pepsico.

Findings
In past there was same product with different carret scheme was presented before the retailers. The retailers interested in OYA scheme were. D.K.Traders Pandey Kirana Store Shree Shyam Store Shree Nathji Medicals Shree Sai Stationery Chunmun Tea Stall Lucky General Store Zubair Tea & Sweets

Suggestions
Overall distribution should be improved because many of the retailers are not satisfied with company service . Company must provide free chilling equipment to the outlet where needed and also company should work out on the complains of Retailers Company can increase the sales when it considering more on retailers, their suggestions or complaints .

Company needs to focus more on attractive retailers schemes as pepsico.

LIMITATIONS
The study was restricted to kalyanpur(Lucknow) region only. The scheme OYA is less attractive for retailers as better schemes are offered by pepsico. The busy schedules of retailers also make difficulty for collection of data. The companys tight credit policy for small and new retailers. Distribution route and marketing channels are less effective in delivering products to retailers.

Section 5
SWOT Analysis

Strength
Strong band Image. Strong market share. Strong and reliable distribution network. Modified and attractive packaging. Strong advertising campaign and brand ambassdors.

Weakness
Pricing strategy. Lack of availability products in peak season. Tight credit policy. Retailers are less aware about schemes.

Opportunities
Large Domestic market. Good rural market. Potential direct distribution.

Threats
Intense competition.

Dependence on bottling partners . Changing of consumer preference. Schemes of Pepsi are better than coke.

Section 6 Conclusion

Conclusion
As far as journey with the company is concerned, I grasped lots of knowledge within two months Because many of the company officials has assisted and given me the valuable notes and experience of their life. The primary objective of the my research is to analyze the horizontal expansion strategy of Coke and at the end of the research I found that there is requirement of changing the strategy for acquiring new customer for Coke but company should take care of its existing customer because they are the main instrument of promotion for any company so old customer should be fully satisfied with the company.

Thank you!