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Acknowledgement
Behind every successful venture, there is some hand .I pay my all regard to all those
people who are directly or indirectly with me for the encouragement and because of
their immense help I could complete my project successfully.
In my prior list, I would like to express my profound sense of gratitude to thank Miss
Sarika Yadav(Faculty Guide) who provided sufficient concern whenever required.
I would also like to express my profound sense of gratitude to the authorities of
“UNITED INSTITUE OF MANAGEMENT” Naini, Allahabad especially to Mr.
Vikas Malhotra (Head of the Department of Management) for providing me better
guidance.
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TABLE OF CONTENTS
SR.
NO.
TOPIC PAGE
NO.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
OBJECTIVE OF THE STUDY
INTRODUCTION
HISTORY OF COCA COLA
PERFORMANCE OF THE COMPANY
INDIAN REGULATORY ENVIRONMENT
COCA COLA BUSINESS IN INDIA
SALES AND DISTRIBUTION
ADVANCE SALES & SERVICES PVT. LTD.
NEED OF THE STUDY
SCOPE OF THE STUDY
RESEARCH METHODOLOGY
DATA ANALYSIS & INTERPRETATION
SWOT ANALYSIS
PORTER 5 FORCES MODEL
LIMITATIONS OF THE STUDY
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9
20
23
38
50
55
58
59
60
61
64
73
74
5
16.
17.
18.
19.
FINDINGS OF THE STUDY
CONCLUSION
SUGGESTIONS AND RECOMMENDATIONS
BIBLIOGRAPHY
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78
79
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Objective of the study
To check out the availability of several promotional scheme of coca-cola for
the dealers.
To make an overall assessment of specified market to provide a better
promotional scheme for the dealers.
To draw a comparative analysis of promotional schemes.
To verify the market share of cola in comparison with their competitors.
To find out whether retailer are satisfied with the replenishment system of
coke.
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Introduction
President’s Profile:-
Atul SinghPresident & CEO, Coca-Cola India
Atul Singh took
over as the President & CEO, Coca-Cola India from 1st Sep. 2005. Prior to this
assignment, Atul Singh was the President of East, Central & South (ECS) China
Division in January 2005. Given the strategic importance of China, a Division
within the greater China Division was created. ECS China Division consists of
Shanghai, the Swire Territories of China, Hong Kong and Taiwan. Additionally,
Atul singh was also responsible for the global and strategic Key Customer
8
Relationships for Greater China and was a member of the Customer Leadership
Council.
At Coca-Cola, we have a long stable belief that everyone who touches our
business should benefit. Coca-Cola in India provides extensive support for
community programmers across the country, with a focus on education, health & rain
water harvesting. All key priorities of the Indian government have recognized the
Company’s efforts with several awards.
Education: Coca-Cola in India is supporting community based primary education
projects set up to provide educational opportunities to marginalized children in slum
& villages. Till today, the project have benefited 50 schools, thousands of students,
over 500,000 villagers & over10,000 slum dwellers, as well as several villages near
bottling plants.
Environment : Coca-Cola in India is supporting community based rainwater
harvesting projects in rural & urban areas to help restore water level & promote
community education in way to conserve natural resources. These initiatives have
benefited over 10,000 Delhi residents, as well as local community members, both in
areas surrounding Coca-Cola bottling plants & elsewhere.
Healthcare: Coca-Cola in India is partnering with NGO’s as well as St.John’s
Ambulance Brigade (Red Cross) to provide free medical facilities & information to
poor people who can not afford to visit hospital facilities. These efforts are helping
tens of thousands of underprivileged people in seven states in India, as well as several
villages near bottling plants.
The company has also supported a range of other national initiatives, such as a major
Polio eradication drive & drought relief programmers, in addition to support towards
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the National Cricket Champion for blinds & National Athletics meetings for the
physically challenged.
10
HISTORY OF COCA-COLA
John Pemberton was the inventor of Coca Cola
In May, 1886, Coca Cola was invented by Doctor John Pemberton a pharmacist
from Atlanta, Georgia. John Pemberton concocted the Coca Cola formula in a three
legged brass kettle in his backyard. The name was a suggestion given by John
Pemberton's bookkeeper Frank Robinson.
Birth of Coca ColaBeing a bookkeeper, Frank Robinson also had excellent penmanship. It was he who
first scripted "Coca-Cola" into the following letters which has become the famous
logo of today.
11
Coca-Cola
The official Coca-Cola logo
Type Cola
Manufacturer The Coca-Cola Company
Country of Origin United States
Introduced 1886
Related productsPepsi
RC Cola
The soft drink was first sold to the public at the soda fountain in Jacob's Pharmacy in
Atlanta on May 8, 1886. About nine servings of the soft drink were sold each day.
Sales for that first year added up to a total of about $50. The funny thing was that it
cost John Pemberton over $70 in expanses, so the first year of sales were a loss.
In 1887, Atlanta pharmacist and businessman, Asa Candler bought the formula for
Coca Cola from inventor John Pemberton for $2,300.
By the late 1890s, Coca Cola was one of America's most popular fountain
drinks, largely due to Candler's aggressive marketing of the product. The Coca Cola
Company increased syrup sales by over 4000% between 1890 and 1900.
Advertising was an important factor in John Pemberton and Asa Candler's
success and by the turn of the century, the drink was sold across the United States and
Canada. At the same time, the company began selling syrup to independent bottling
companies licensed to sell the drink.
The Early Days
Coca-Cola was created in 1886 by John Pemberton, a pharmacist in Atlanta, Georgia,
who sold the syrup mixed with fountain water as a potion for mental and physical
disorders.
The Formula changed hands three more times before Asa D. Candler added
carbonation and by 2003, Coca-Cola was the world’s largest manufacturer, marketer,
and distributor of Nonalcoholic beverage concentrates and syrups, with more than 400
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
12
over 200 countries Worldwide, Coca-Cola generated more than 70% of its income
outside the United States by 2003.
INTERNATIONAL EXPANSION
Coke’s first international bottling plants opened in 1906 in Canada, Cuba, and
Panama. By the end of the 1920’s 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
Woodruff’s insistence that Coca-Cola wouldn’t “suffer the stigma of being an
intrusive American product,” and instead would use local bottles, caps, machinery,
trucks, and personnel contributed to Coke’s challenges as well with a lack of standard
processes and training degrading quality. Coca-Cola continued working for over 80
years on Woodruff’s goal: to make Coke available wherever and whenever consumers
wanted it, “in arm’s 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. Woodruff’s 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”
As a result of Coke’s status as a military supplier, Coca-Cola was exempt from sugar
rationing and also received government subsidies to build bottling plants around the
world to serve WWII troops.
The 1990’s 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 1980’s.
13
While per capita consumption throughout the world was a fraction of the United
States’, major beverage companies clearly had to look elsewhere for the growth their
shareholders demanded. The looming opportunity for twenty-first century was in the
world’s developing markets with their rapidly growing middle class populations.
The World’s Most Powerful Brand
Interbrand’s Global Brand Scorecard for 2003 ranked Coca-Cola the #1 Brand in the
World and estimated its brand value at $70.45 billion. The ranking’s methodology
determined a brand’s 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 brand’s 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.
CORPORATE SOCIAL RESPONSIBILITY
As one of the largest and most global companies in the world, Coca-Cola took
seriously its ability and responsibility to positively affect the communities in which it
operated. The company’s mission statement, called the Coca-Cola Promise, stated:
“The Coca-Cola Company exists to benefit and refresh everyone who is touched by
our business.” The Company has made efforts towards good citizenship in the areas of
community, by improving the quality of life in the communities in which they
operate, and the environment, by addressing water, climate change and waste
management initiatives. Their activities also included the Coca-Cola Africa
Foundation created to combat the spread of HIV/AIDS Through partnership with
governments, UNAIDS, and other NGOs, and the Coca-Cola Foundation, focused on
14
higher education as a vehicle to build strong communities and Enhance individual
opportunity Coca-Cola’s footprint in India was significant as well. The Company
employed 7000 Citizens and believed that for every direct job, 30-40 more were
created in the supply chain. Like its parent, Coke India’s Corporate Social
Responsibility (CSR) initiatives were both Community and environment-focused.
Priorities included education, where primary Education projects had been set up to
benefit children in slums and villages; water Conservation, where the Company
supported community-based rainwater harvesting projects To restore water levels and
promote conservation education, and health, where Coke India Partnered with NGOs
and governments to provide medical access to poor people through Regular health
camps. In addition to outreach efforts, the company committed itself to
Environmental responsibility through its own business operations in India including:
Environmental due diligence before acquiring land or starting projects
Environmental impact assessment before commencing operations
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
Despite Coke’s reputation as a socially responsible corporate citizen, the Company
has faced its share of controversy worldwide surrounding both its products and its
policies in the years preceding the Indian pesticide crisis.
15
In the spring of 1999, 4 current and former Coca-Cola employees, led by Information
Analyst Linda Ingram filed bias charges against Coca-Cola in Atlanta Federal Court.
The Lawsuit charged the Company with racial discrimination and stated: “This
discrimination represents a company-wide pattern and practice, rather than a series of
isolated incidents.
Although Coca-Cola has carefully crafted African-American consumers of its product
by Public announcements, strategic alliances and specific marketing strategies, it has
failed to Place the same importance on its African-American employees.”
In the decades leading up to the suit, both internal and external warnings
surrounding Coke’s diversity practices were issued. In 1981, the Reverend Jesse
Jackson, director of the Coca-Cola India The Ware report, written by Senior Vice
President Carl Ware, an African-American executive at the Company, cited a lack of
diversity at the decision-making level, a basic lack of workplace diversity, a
“ghettoization” among blacks who worked for Cola-Cola, and an overt lack of respect
for cultural differences as well as an implicit assumption that African- American
employees lacked the intelligence to meet the challenges of the highest executive
levels.
Cyrus Mehri, one of the most visible and successful plaintiff advocates in the US,
represented the group and was skilled at leveraging the power of the media, creating a
true crisis for the Coca-Cola Company and exerting tremendous pressure for
settlement. In 2000, the lawsuit was settled for $192.5 million after the company had
sent mixed messages and damaging statements regarding the merit of the suit for over
a year. Analysts identified the bias suit as a prime reason for the $100 billion decrease
in Coca-Cola’s stock price between 1998-2000.
16
On June 8, 1999, thirty-three Belgian school children became ill after drinking Coke
bottled at a local facility in Antwerp. A few days later, more Belgians complained of
similar symptoms after drinking cans of Coke that had been bottled at a plant in
Dunkirk, France and eighty people in northern France were allegedly stricken by
intestinal problems and nausea, bringing the total afflicted to over 250.
In the days following the first outbreak, seventeen million cases of Coke from five
European countries were recalled and destroyed. It was the largest product recall in
Coke’s history and Belgian and French authorities banned the sale of Coca-Cola
products for ten days. Germany placed a temporary import ban on Coca Cola
produced in Belgium and the Netherlands, and Luxembourg banned all Coca Cola
products. Health ministers in Italy, Spain, and Switzerland warned people about
consuming Coke products.
Coca-Cola sources explained that the contamination was due to defective carbon
dioxide used at the Antwerp plant and that a wood preservative used on shipping
pallets had concentrated the outside of cans at the Dunkirk plant. The European
Commission, however, believed production faults and contaminated pipes were more
likely to be the cause of the problem.
NGOs realized that anti-corporate campaigns could be far more powerful than anti-
government campaigns. Global Exchange’s attack on Nike for sweatshop labor
conditions in the 1990s, for example, was one of the most highly publicized and also
one of the most successful anti-business campaigns in recent years.
STRUCTURE OF THE COMPANYThe Coca Cola Company is global player and approximately 70 percent of its volume
and80 percent of its profit come from outside the United State of America. Although
it was perceived as a standardized brand across the world, Coca Cola had been quietly
17
fine turning its international marketing strategies to suit the needs of individual
national markets. Only the brands Coca-Cola, Sprite and Fanta were marketed
globally. In Latin American and Europe, where a heavy consumer preferred existed
for lemon lime and orange sodas. Coke had developed a wide range of formulations
and flavors to cater the needs of different countries. In Indonesia Coke had been
selling pineapple and banana flavored sodas which had been carefully developed to
suit local preferences. In Japan, Coca-Cola had added a coffee drink called Georgia
and energy healthy drink named Aquarius to its product line. In India, the Coca-Cola
Company acquired the brands Limca, Maaza and Thums Up in 1993.
Marketing mix
Marketing mix of any organization consists of 4Ps i.e. Product, price, place and
promotion having its own significance, that varies from one organization to the other.
in coca – cola the information about all the 4 P`s that can be available to me is given
here:
PRODUCT : Product mix of coca-cola consists of the various brand packs and
flavor given in the table. Product strategy of the coca-cola is to promote all brands
available in the brand packs and to introduce the product in new flavor is also
introduced.
PRICE : Regarding the pricing policy or the price to the distributor is not disclosed to me, but
as done for the different product of the company, company has priced the product
same as that of its major competitor or the market leader.
PLACE : The coca-cola company in India is governed from its corporate office located at
Gurgaon in Haryana. It governs the working of five zones covering whole India these
18
zones are –north zone , eastern zone , western – zone , southern zone and Andhra
Pradesh zone . These zones are divided in to various. Plant, which govern the area
assigned to them. The area is the various distribution centers called distributors and
C&F agents. Then come the retailers / customer for the company’s product,
They receive well from distributor and c& f agent. Finally consumer is there, having
the product from the consumer’s shops or delivered to their home, it is more clearly
visible through this chart. The coca-cola company, which gave its reach to the mouth
of billion of people all around the world having a wide distribution, network. In India,
the pace and Speed at which coca-cola has widened its business is really amazing.
Distribution network is the biggest strength of the company.
PROMOTION : This part of the marketing is playing a very vital and important role in the current
situation in India. Looking at the competition and promotion and advertising budget
of both the companies coca-cola and Pepsi, one can easily estimate the importance of
this. The promotion mix of coca-cola is divided in to top line promotion and below
the line promotion.
Top line promotion includes the promotion designed and done by the company’s
corporate office of Gurgaon and the office of Bombay T.V ads , design of banner ,
and other p-s done by the company simultaneously all around India with no
difference in designs etc fall in this category . Below the line promotion includes the
promotion schemes, publicity material, POS display done by the company from zonal,
plant, sale manager and area sales manager level. At the sales manager and area sales
manager level the promotion done exclusively for the cities in their respective area
and other POS display.
STRUCTURE OF the ORGANISATION
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The trademark "Coca-Cola" was registered with the U.S. Patent and Trademark
Office in 1893, followed by "Coke" in 1945. The unique contour bottle, familiar to
consumers everywhere, was granted registration as a trademark by the U.S. Patent and
Trademark Office in 1977; an honor awarded very few packages.
Rise of the Bottling Industry
Until the 1960s, both small town and big city dwellers enjoyed carbonated beverages
at the local soda fountain or ice cream saloon. Often housed in the drug store, the soda
fountain counter served as a meeting place for people of all ages. Often combined
with lunch counters, the soda fountain declined in popularity as commercial ice
cream, bottled soft drinks, and fast food restaurants became popular.
NEW COKE:
On April 23, 1985, the trade secret "New Coke" formula was released. Today,
products of the Coca Cola Company are consumed at the rate of more than one billion
drinks per day.
In India, Coca-Cola was the leading soft-drink till 1977 when govt. policies
necessitated its departure. Coca-Cola made its return to the country in 1993 and made
significant investments to ensure that the beverage is available to more and more
people, even in the remote and inaccessible parts of the nation.
Coca-Cola returned to India in 1993 and over the past ten years has captured the
imagination of the nation, building strong associations with cricket, the thriving
cinema industry, music etc. Coca-Cola's advertising campaigns Jo Chaho Ho Jaye
and Life ho to Aisi were very popular and had entered the youth's vocabulary. In
2002, Coca-Cola launched the campaign "Thanda Matlab Coca-Cola" which sky-
rocketed the brand to make it India's favourite soft-drink brand.
20
Performance of the company
All India Division COBP’s are now ISO 14001 Certified
All 25 of the India Division’s Company-Owned Bottling Plants have gained the
international standard ISO 14001 Environment Management System certificate.
The ISO 14001 certificate is the internationally recognized standard of
environmental management.
A company must demonstrate management commitment, the total involvement
of all employees and a compliance with applicable regulatory and internal
companystandards.
THE COCA-COLA PROMISE
The coca-cola company exists to benefits and refreshes every one it touches. The
basic proposition of our business is simple, solid and timeless. When we bring
refreshment, value, joy and fun to our stakeholders then we successfully nurture and
protect our brand, particularly coca-cola. That is the key to fulfilling our ultimate
obligation to provide consistently attractive to the owner so four business.
More then a billion times every day, thirsty people around the world reach for coca-
cola products for refreshment. They deserve the highest Quality – every time. Our
promise to deliver that quality is the most important promise we make. and it
involves a world-wide , yet distinctively local , network of bottling partner , supplier,
21
distributor and retailers whose success is paramount to our own. Our investment in
local communities in over 200 countries totals billions of dollars in jobs, facilities,
marketing, the purchase of local good and services, and local business partnership.
Always and every where , we pursue continuous innovation in the products we offer
the processes we use to make them, the package we develop and the way we bring
them to market .
Some interesting fact about Coca-Cola:
1. The world’s largest spherical coca-cola sign is in Nagoya, Japan a top the dial –
Nagoya building in front of the Nagoya railway station. The sign is a double
sphere constructed from more then 46 tone of steel, more 940meter of neon
tubing, and more then, 879 light bulbs. The outer shape features the coca-cola
logo and contour bottle, while the inner sphere portrays a comic scene with
twinkling planets and stars.
2. One of the world’s largest signs for coca-cola is located on a hill called
“ELHACHA” in South America, Chile. It is 400 feet wide and 131 feet high and
is made from 70,000, 26 ounce bottles.
3. The first out door paint sign advertising coca-cola still exists. It was painted in
1894 in Cartersville, Georgia.
22
4. Coca-cola is one of the world’s most recognizable trademarks recognized in
countries that account for 98 percent of the world’s population.
5. If all the coca-cola ever produced were in 8- ounce bottles. And these bottles
were distributed to each person in the world. There would be 678 bottles or over
42 gallons for each person.
6. If all the coca-cola ever produced were in 8 – ounce bottles, placed side by side
and end to end to from a lane highway, it would wrap around the earth 82 times.
7. If all the coca-cola ever produced were flowing over Niagara fall at its normal
rate of 105 million gallons per second instead of water, the falls would flow for
about a day and a half 38 hours and 46 minutes.
8. The largest representation of the world’s best known package 100 foot tall glass
contour bottle is located at world of coca-cola LAS VEGAS.
ADVERTISEMENT AGENCY
In the year 1991, coca-cola went for more creative advertisements and split the
$ 200 million ad account between Mr. CAAN ERICKSON and CREATIVE ARTIST
AGENCY (CAA) presently howler. Chaitra Leo burnett handles the coke’s account.
Or getting wall to look red but also about getting the brand’s massage right through
the cortex onto the mind the young India mind.
23
Indian Regulatory Environment
The main law governing food safety in India was the 1954 Prevention of Food
Alteration Act (PFA) which contained a rule regulating pesticides in foods but did not
include beverages. The Food Processing Order (1955) required that the main
ingredient used in soft drinks be “potable water” but the Bureau of Indian Standards
(BIS) had no prescribed standards for pesticides in water. One BIS directive stated
that pesticides must be absent and set a limit of 0.001 parts per million but the Health
Secretary admitted, “There are lapses in PFA regarding carbonated drinks.”
Indian law enforcement was minimal with virtually no conviction under PFA. In the
absence of national standards, NGOs such as the CSE turned to the United States and
the European Union for “international norms.” The appropriateness and feasibility of
these standards for developing nations however remained a question for many. Under
EU food laws for example, milk, fruit, and basic staples such as rice and wheat would
need to be imported into India to satisfy safety standards.
HISTORY OF COKE IN INDIA
Coca-Cola was the leading soft drink brand in India until 1977 when it left rather than
reveals its formula to the government and reduces its equity stake as required under
the Foreign Exchange Regulation Act (FERA) which governed the operations of
foreign companies in India. After a 16-year absence, Coca-Cola returned to India in
1993, cementing its presence with a deal that gave Coca-Cola ownership of the
nation's top soft-drink brands and bottling network. Coke’s acquisition of local
popular Indian brands including Thums Up the most trusted brand in India. Limca,
Maaza, Citra and Gold Spot provided not only physical manufacturing, bottling, and
24
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 country’s top
international investors.
By 2003, Coca-Cola India had won the prestigious Woodruff 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 break-even 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
25
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.
Sanjiv Gupta, President and CEO of Coca-Cola India, joined Coke in 1997 as
Vice President, Marketing and was instrumental to the company’s success in
developing a brand Coca-Cola India.
The Indian consumer and in tapping India’s vast rural market potential. Following his
marketing responsibilities, Gupta served as Head of Operations for Company-owned
bottling operations and then as Deputy President. Seen as the driving force behind
recent successful forays into packaged drinking water, powdered drinks, and ready-to-
serve tea and coffee, Gupta and his marketing prowess were critical to the continued
growth of the Company.
India’s one billion people, growing middle class, and low per capita consumption of
soft drinks made it a highly contested prize in the global CSD market in the early
twenty-first century. Ten percent of the country’s population lived in urban areas or
large cities and drank ten bottles of soda per year while the vast remainder lived in
rural areas, villages, and small towns where annual per capita consumption was less
than four bottles. Coke and Pepsi dominated the market and together had a
consolidated market share above 95%. While soft drinks were once considered
products only for the affluent, by 2003 91% of sales were made to the lower, middle
and upper middle classes. Soft drink sales in India grew 76% between 1998 and 2002,
from 5,670 million bottles to over 10,000 million and were expected to grow at least
10% per year through 2012.
26
In spite of this growth, annual per capita consumption was only 6 bottles versus 17 in
Pakistan, 73 in Thailand, 173 in the Philippines and 800 in the United States,. With its
large population and low consumption, the rural market represented a significant
opportunity for penetration and a critical battleground for market dominance. In 2001,
Coca-Cola recognized that to compete with traditional refreshments including lemon
water, green coconut water, fruit juices, tea, and lassi, competitive pricing was
essential. In response, Coke launched a smaller bottle priced at almost 50% of the
traditional package.
MARKETING COLA IN INDIA
The post-liberalization period in India saw the comeback of cola but Pepsi had
already beaten Coca-Cola to the punch, creatively entering the market in the 1980’s in
advance of liberalization by way of a joint venture. As early as 1985, Pepsi tried to
gain entry into India and finally succeeded with the Pepsi Foods Limited Project in
1988, as a JV of PepsiCo, Punjab government-owned Punjab Agro Industrial
Corporation (PAIC), and Voltas India Limited. Pepsi was marketed and sold as Lehar
Pepsi until 1991 when the use of foreign brands was allowed under the new economic
policy and Pepsi ultimately bought out its partners, becoming a fully-owned
subsidiary and ending the JV relationship in 1994.While the joint venture was only
marginally successful in its own right, it allowed Pepsi to gain precious early
experience with the Indian market and also served as an introduction of the Pepsi
brand to the Indian consumer such that it was well-poised to reap the benefits when
liberalization came. Though Coke benefited from Pepsi creating demand and
developing the market, Pepsi’s head-start gave Coke a disadvantage in the mind of the
consumer.
27
Marketing Process Model
Brand Localization Strategy The Two India strategy:
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 country’s population.
This segment sought social bonding as a need and responded to inspirational
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-Cola’s advertising to this audience.
28
Activities
Resources Controls
Monitoring & Measurements
OutputInput
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 nation’s population. This segment’s primary need was out-of-
home thirst-quenching and the Soft drink category was undifferentiated in the minds
of rural consumers. Additionally, with an average Coke costing Rs. 10 and an average
day’s 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%.
Coke’s 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
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same time positioning Coke as a “Thanda” Or generic cold beverage just likes tea,
lassi, or lemonade. As a result of the Thanda Campaign, Coca-Cola won Advertiser of
the Year and Campaign of the Year in 2003.
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 2001-2003. This market accounted for 80% of India’s new Coke
drinkers, 30% of 2002 volume, and was expected to account for 50% of the
company’s sales in 2003.
Coca-Cola in India has setup an independent organizations which is H.C.C & B.C.C
with a capital of 350 U.S. $ each by virtue of sellout decision of the passed managing
director Sh. S. C. Aggarwal. Hindustan Coca-Cola bottling (N-W) Pvt. Ltd. Najibabad
took the complete possession of this plant, land, machinery, & intellectuals on
February 14’ 1998 and since then H.C.C, looking after all its affairs under company
owned bottling plant to establish integrated marketing system in the area.
In 1999 the company opened up the new bottling plant at DASNA in Ghaziabad Distt.
This plant has more sophisticated equipments, then the plant at Najibabad.
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SOFT DRINK MARKET- INDIAN
SCENARIO
India soft drink industry is witnessing a boom time. Its growth rate is around 20%
with which such growth rate, volume could reach billion crates with in 10 years.
Three major multinational companies are fighting to grab a major chunk of business
from Indian markets. These three coca-cola, Pepsi, Cadbury. All of these companies
have seen an enormous potential in this country. Consequently, by world standard,
Indian per capita consumption of soft drinks is still very low.
There fore these soft drinks grants feel that fire capita consumption can only grow
up. Soft drink industries has already seen and estimated sale of around 240 million
crates higher then last year’s sale of 204 million in 1998. The Main reason for such a
high growth rate heightened competition between coca-cola and Pepsi, Cadbury, bring
a new entrant is for behind.
India is actually more vivid in taste and preference then any other country
market. Delhi jar instance, account for about 20% of total soft consumption in term of
sales.
There are about 4, 80,000 soft drinks retailers in India and their numbers are
increasing day to day. This actually means that there is just one soft drink retailer on a
population of 37,600, which is far below the international standard. Where as
Philippines has one soft drink retail counter over a population of 150 people i.e. 4,
00,000 outlets on a population of 60 million.
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BRAND COMPETITION
There are number of brands of soft drink in the market of various companies. Various
brand competitors of COCA-COLA & PEPSI are as under in the following table-
SI. No. Brand of COCA-COLA Brand of PEPSI
1. Coca Cola Pepsi
2. Thums Up Pepsi
3. Sprite Mountain Dew
7 up
4. Limca Nimbooz
5. Fanta Mirinda
6. Maaza Slice
7. Kinley (water) Aquafina (water)
REASONS OF BRAND PREFERENCE
There are number of reasons on the basis of which our customers’ select various
brand of there taste. Some of the major factors are as following:
Taste
Brand
Advertisement
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Price
Availability
Coldness
The following data on the basis of past survey reveals that
50% customers drink for taste.
60% customers are loyal customers; they feel pleasure to use a particular
brand.
12% customers are compromising customer; they compromise with the
availability of products.
8% drink for getting relief from heat.
LOYAL BRAND CUSTOMERS vs. VARIETY BRAND
CUSTOMERS
On routine survey result found, was that there are two types of soft drink
customers in the market for any type of company.
There are 60% consumers who consume only one brand & are loyal to that very
brand. It may be either Coke, Pepsi or a local brand.
40% consumers are variety branded customers. They drink various brands on
various bases.
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BRAND IN INDIAN MARKET
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Problems of the company
Indian soft drink industry is witnessing a boom time. Its growth rate is around
20% with which such growth rate, volume could reach billion crates with in 10 years.
Three major multinational companies are fighting to grab a major chunk of business
from Indian markets. These three are coca-cola, Pepsi and Cadbury. All of these
companies have seen an enormous potential in this country. Consequently, by world
standard, Indian per capita consumption of soft drinks is still very low.
There fore these soft drinks grants feel that fire capita consumption can only grow
up. Soft drink industries has already seen and estimated sale of around 240 million
crates higher then last year’s sale of 204 million in 1998. The Main reason for such a
high growth rate heightened competition between coca-cola and Pepsi, Cadbury, bring
a new entrant is for behind.
India is actually more vivid in taste and preference then any other country
market. Delhi for instance, account for about 20% of total soft consumption in term of
sales.
There are about 4, 80,000 soft drinks retailers in India and their
numbers are increasing day to day. This actually means that there is just one soft
drink retailer on a population of 37,600, which is far below the international
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standard. Where as Philippines has one soft drink retail counter over a
population of 150 people i.e. 4, 00,000 outlets on a population of 60 million.
Resolution of the company:
We will conduct ourselves and business activates with the highest standard of
honestly integrity, and professionalism.
We will recognize the positive contributions that we make individual and team
member to produce our business success.
We will recognize the positives contribution that we makes individual and
term member to produce our business success.
We will encourage a learning environment where the people can constantly
grow developed and contribute.
We will strive for excellence and seek continue improvement in everything we
do.
We will respect the entire stake holder, including employees and suppliers and
instill them with a person to deliver the highest employees and suppliers and
instill them with a passion to deliver the highest quality good and services.
The Coca-Cola Company exists to benefit and refresh everyone it touches.
For us, Quality is more than just something we taste or see or measure. It shows in our
every action. We relentlessly strive to exceed the world's ever-changing expectations
because keeping our Quality promise in the marketplace is our highest business
objective and our enduring obligation. More than a billion times every day, consumers
choose our brand of refreshment because Coca-Cola is:
The Symbol of Quality
Customer and Consumer Satisfaction
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A Responsible Citizen of the World
37
STRATEGY ADOPTED BY COCA-COLA TO INCREASE
THE NUMBER OF CONSUMERS
The 3 A's is the underlying strategy for meeting company goals to increase no. of
consumers. The 3 A's are: -
Availability:
To increase the availability of Coca-Cola products in an improved or innovative new
Packaging, dispensing systems, distribution systems, marketing programs and training
and development programs.
Affordability:
The consumer can afford the Coca-Cola products at a very reasonable price.
Acceptability:
Making Coca-Cola brand as the beverage choice for any occasion depends on the
likings, taste and preferences of the target audience. Acceptability can also be
increased through advertising, sponsorships, promotions; youth market activities,
community programs and other activities.
YOUR HEALTH AND OUR BEVERAGES
There is growing confusion about what constitutes a health diet. With so mush
conflicting information available about health and nutrition, it can be very difficult to
determine what is accurate and what is not.
The truth is that soft drink and beverages have a place in a healthy lifestyle. A
healthy diet incorporates the basic principles of variety, balance and moderation
without sacrificing enjoyment.
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HEALTH AND OUR BEVERAGES --- THE FACTS
Soft drinks do not contribute to diabetes.
The caffeine and phosphoric acid in soft drinks does not affect bone health
The sugar in soft drinks does not cause children to be hyperactive.
The consumption of soft drinks has not affected calcium consumption.
Sugar consumption has not been shown to cause obesity.
The amount of sugar and calories in soft drinks is about the same as many fruit
juices
COCA-COLA INDIA-OUR VISION
Provide exceptional strategic leadership on the Coca-Cola India system,
resulting in customer preference and loyalty, through Coca-Cola’s commitment to
them and in a highly profitable Coca-Cola corporate branded beverages system.
THE COCA-COLA-MISSION
“THE BEST GLOBAL COMPANY”
The mission of Coca-Cola Co. is to increase shareowner value over time. The
Co. accomplishes the mission by working with its business partners to deliver
satisfaction and values to its customers, through world wide system of superior brands
and services, thus increasing brand equity on a global basis, create consumer
products, services and communications, customer service and bottling strategies,
process and tools in order to create competitive advantage and deliver superior value.
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THE COCA-COLA BUSINESS IN
INDIA
While the Coca-Cola Company is a global company with some of the world’s most
widely recognized brand, the Coca Cola business in India, as in each country where it
operate, is a local business. Beverages are produced locally employing Indian
citizens; Coke product range & marketing reflect Indian tastes & lifestyles. They are
deeply involved in the life of the local communities in which they operate that is
procurement, supply & distribution system.
BOTTLING OPERATIONS
The Coca-Cola Company in India comprises 27 wholly owned company bottling
plants & another 17 franchisee owned bottling operation plants. A network of 29
contract-packers also manufactures a range of products for the company.
Almost all the goods & services required to produce & market Coca- Cola in India are
made locally, sometime with the help of technology & skill from the company. The
complexity of the Indian market is reflected in the distribution fleet, which includes
10- tone trucks, open-bay three-wheelers that can navigate the narrow alleyways of
Indian cities, and trademarked tricycle & pushcarts.
PRODUCTS & SERVICES
COCA-COLA is the most popular & biggest selling soft drinks in history, as well as
best known product in the world. Created in Atlanta, COCA-COLA was first offered
as a fountain beverage by mixing Coca-Cola syrup with carbonated water.
COCA-COLA was registered as a trademark in 1887 & by 1895 Coca-Cola was
being sold in every state & territory in the United States.
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Today, you can find COCA-COLA in virtually every part of the world. The Coca-
Cola Company has nearly 400 beverages in its portfolio.
THUMS UP
Thums Up is a leading carbonated soft drink and most trusted brand in India.
Originally introduced in 1977, Thums Up was acquired by The Coca-Cola Company
In1993.
Thums Up is known for its strong, fizzy taste and its confident, mature and uniquely
masculine attitude. This brand clearly seeks to separate the men from the boys.
Glass PET Can Fountain
200ml,300ml,500ml,
1000 ml
500ml,1.5L,2 L,
2.25L,500 ml + 100
ml
330 ml Various Sizes
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SPRITE
Worldwide Sprite is ranked as the No. 4 soft drink & is sold in more than 190
countries. In India, Sprite was launched in year 1999 & today it has grown to be one
of the fastest growing soft drinks, leading the Clear lime category.
Today Sprite is perceived as a youth icon. Why? With a strong appeal to the youth,
Sprite has stood for a straight forward and honest attitude. Its clear crisp
refreshing taste encourages the today's youth to trust their instincts, influence them to
be true to who they are and to obey their thirst.
Glass PET Can Fountain
200 ml, 300 ml, 500
ml, 1000 ml
500ml, 1.5L, 2 L,
2.25L,
500 ml + 100 ml
330 ml Various Sizes
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LIMCA
Refreshing spell on anyone, anywhere. Born in 1971, Limca has been the original
thirst choice, of millions of consumers for over 3 decades.
The brand has been displaying healthy volume growths year on year and Limca
continues to be the leading flavour soft drink in the country.
The success formula?
The sharp fizz and lemony bite combined with the single minded positioning of the
brand as the ultimate refresher has continuously strengthened the brand franchise.
Limca energizes refreshes and transforms. Dive into the zingy refreshment of Limca
and walk away a new person.
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FANTA:
Internationally, Fanta - The 'orange' drink of The Coca-Cola Company, is seen as one
of the favorite drinks since 1940's. Fanta entered the Indian market in the year 1993.
Over the years Fanta has occupied a strong market place and is identified as "The Fun
Catalyst".
Perceived as a fun youth brand, Fanta stands for its vibrant color, tempting taste and
tingling bubbles that not just uplifts feelings but also helps free spirit thus
encouraging one to indulge in the moment. This positive imagery is associated with
happy, cheerful and special times with friends.
Glass PET Can Fountain
200 ml, 300 ml,
500 ml, 1.5 L,
2 L, 2.25 L,
500 ml + 100 ml
330 ml Various Sizes
MAAZA
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It was launched in 1976. Here was a drink that offered the same real taste of fruit
juices and was available throughout the year. In 1993, Maaza was acquired by Coca-
Cola India. Maaza currently dominates the fruit drink. Over the years, brand Maaza
has become synonymous with Mango. This has been the result of such successful
campaigns like "Taaza Mango, Maaza Mango" and "Botal mein Aam, Maaza hain
Naam". Consumers regard Maaza as wholesome, natural, fun drink which delivers the
real experience of fruit the current advertising of Maaza positions it as an enabler of
fun friendship moments between moms and kids as moms trust the brand and the kids
love its taste. The campaign builds on the existing equity of the brand and delivers a
relevant emotional benefit to the moms rightly captured in the tagline "Yaari Dosti
Taaza Maaza"
Maaza
Type Fruit juice
Manufacturer The Coca-Cola Company
Country of origin
India
Introduced 1976
Variants Maaza Orange, Maaza Pineapple
Related products
Slice, Frooti
Maaza -India 's Largest Juice Drink Brand All Set To Enhance Its Market Leadership
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Maaza, the ‘Bina guthli wala aam’ has Satish Shah in the lead playing a mango
expert. In the ad, a child questions Shah, ‘the mango expert’, for a seedless mango.
Shah, in an attempt to look for seedless mango, dwells into books, travels, but all in
vain and in turn, end up learning from the kid that the ‘Bina guthli wala aam’ is
nothing but ‘Maaza’ – the Coca Cola drink. At the end of the ad, he starts offering his
clients two kinds of mangoes with and without seeds.
Not undermining the importance and with full advantage of creativity to Leo Burnett
and Coca Cola, I hope this ad does not, in any way, play a role in undermining
importance of mango seeds within evolving young minds that watch and consume this
drink. Mangoes can be grown from seeds, though better and commercially are grafted
or budded onto seedling rootstocks. In addition to it, mango seeds indeed have its
importance. These are quite valuable in diarrhea. Seeds collected, dried in the shade
and powdered can be used as a medicine. Mango seeds are considered useful in
certain disorders connected with women’s reproductive organs. Also, spongy tissue in
Alphonso mango - one of the widely known and considered as the ‘king of the
mangoes’ – was traced to its seed, which due to its recalcitrant nature, switches over
to germination mode during fruit ripening phase drawing nutrients from the mesocarp.
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In any case, if we don’t have mango seeds, may be we will also not have on earth the
‘Mango seed weevil’ (sternochetus mangiferae). It is, though, a pest species, but
breeds only in mango seeds and cannot survive in other fruits.
So, we can have an advertisement to promote a commercial product but that must not
end up disadvantaging the use of a product that is needed and is an important part of
our ecosystem. The advertisement also shows kid with no interest in mango but in
Maaza, probably something, which should not be promoted. Maaza can, in no way,
replace the real mangoes. Mango is Mango, and is not Maaza.
KINLEY:
Water, a thirst quencher that refreshes, a life giving force that washes all the toxins
away. A ritual purifier that cleanses, purifies, transforms. Water, the most basic need
of life, the very sustenance of life, a celebration of life itself.
The importance of water can never be understated. Particularly in a nation such as
India where water governs the lives of the millions, be it as part of everyday rituals or
as the monsoon which gives life to the sub-continent. Kinley water understands the
importance and value of this life giving force. Kinley water thus promises water that
is as pure as it is meant to be. Water you can trust to be truly safe and pure.
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Kinley water comes with the assurance of safety from the Coca-Cola Company. That
is why we introduced Kinley with reverse-osmosis along with the latest technology to
ensure the purity of our product. That's why we go through rigorous testing
procedures at each and every location where Kinley is produced.
Coca Cola launches Minute Maid `pulpy orange'
Coca Cola India has launched `Pulpy Orange', a juice from its global `Minute Maid'
range for the Indian market here on Monday. It would be available in 400ml and one
litre bottle packs. Andhra Pradesh, Tamil Nadu and Karnataka, will be part of the
phased launch of the product. A consumer sampling involving 5.5 lakh people has
been lined up in the next 30 days across major cities to give it the marketing push,
said Venkatesh Kini, Vice-President, Marketing of Coca Cola India.
Juice products
The Indian juice business in estimated to be about 500 million cases annually. After
the Pulpy orange, the company will bring other juice products from Minute Maid, a
leading brand in the global juice market, which is around 16 billion cases. Initially,
the pulp will be imported from Florida and other ingredients from Brazil. In the near
future, the manufacturing will be done at the company's plant in Chitoor district of
Andhra Pradesh. Priced at Rs 25 for 400 ml and Rs 60 per litre, the product will be
positioned in groceries, large format stores, eating and drinking outlets, convenience
stores etc. while targeting the young adults, looking out for naturally refreshing, juice
drink Answering questions he said `pulpy orange' would not impact Maaza in the
juice drink segment, but would only extend its leadership. On why Kerala, where
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Coca Cola has been facing opposition, was not part of the southern market, he said
"Our market research has shown that it is not a potentially sizeable market for juice
drinks now". John Ustas, CEO of Hindustan Coca-Cola Beverages Pvt Ltd, said in the
next two months, Minute Maid Pulpy Orange would be retailed across 25,000 outlets
in the three southern states.
Coca-Cola Minute Maid Pulpy Orange
At an event held, Coca-Cola in India announced the launch of “Minute Maid”, the
world’s leading juice and juice drink brand in Mumbai. The brand has been launched
in its internationally successful “Minute Maid Pulpy Orange” avatar and will be made
available across Maharashtra including cities like Pune, Aurangabad and Nasik within
a week. Minute Maid Pulpy Orange is a naturally refreshing juice drink which offers
an unmatched taste experience to consumers with the presence of natural “Orange
Pulp”.
This innovative consumer proposition is best explained by the brand’s tagline –
“Refreshingly Orange, Surprisingly Pulpy”.
Minute Maid Pulpy Orange has been made available in two PET pack sizes- On-the-
go 400 ml and 1 liter bottle, priced at Rs 25 and Rs 60 respectively. The first of its
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kind innovation by Coca-Cola is targeted at young adults who are on the lookout for a
naturally refreshing, juice drink. The launch in Maharashtra, starting with Mumbai is
all part of a phased launch of the world’s leading juice and juice drink brand in the
country. Minute Maid Pulpy Orange was first launched in three southern states of
Andhra Pradesh, Tamil Nadu and Karnataka in February ‘07, followed by its launch
in the northern states of Punjab, Haryana and Himachal Pradesh in June ’07
According to T. Krishna Kumar, Region Vice-President, Hindustan Coca-Cola
Beverages Ltd, “Innovation has always been the hallmark of Coca-Cola’s business
strategy in India.
The launch of Minute Maid Pulpy Orange with natural orange pulp, being yet another
example. Riding on the instant success that the brand has received both internationally
and in India, the world’s leading juice and juice drink brand, as part of a national roll-
out process, over the next three months, Minute Maid Pulpy Orange would be retailed
across 20,000 outlets in the state.”
Coca-Cola in India currently enjoys market leadership in the juice drink segment with
brand Maaza. With the launch of Minute Maid Pulpy Orange, Coca-Cola in India is
all set to further extend its leadership in this fast growing segment. Utilizing its global
scale of manufacturing processes, the orange pulp and the orange juice concentrate
present in Minute Maid Pulpy Orange are being sourced by the company from
Florida- USA and Brazil respectively and is being bottled in Chitoor.
“Orange Pulp” ….Makes All the Difference…
Minute Maid Pulpy Orange with the presence of real “Orange Pulp” offers an
unmatched consumer experience. To feel the refreshing difference and also the
presence of real orange pulp, it is best to first “CHILL”, “SHAKE” and only then
“DRINK” from the bottle.
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Connecting With Consumers…
Coca-Cola in India has drawn an aggressive consumer activation campaign to market
Minute Maid Pulpy Orange in Maharashtra. The 360 degree marketing
communication plan involves organizing road shows including extensive experiential
sampling sessions in markets, offices, malls, colleges, all backed by a range of
exciting contests. Complimenting the on ground initiatives, TV commercials bringing
out the “Refreshingly Orange, Surprisingly Pulpy” proposition of the Minute Maid
brand would also be aired on all leading channels in Maharashtra. The entire brand
campaign has been developed and executed by Leo Burnett.
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SALES & DISTRIBUTION
Sales are the cutting ‘edge’ of any business operations it is part of that
company. However big and small that meets the firms customers from whom the
business is derived. The people, who are engaged in this activity meet customers and
get information about the product or services which are been sold and provide
feedback to the firm.
American Market association has defined sales management as “the blaming
direction and control of selling personal including recruiting, selecting, equipping,
assigning, routing supervisioning, paying and motivating as these tasks apply to
personnel sales force”.
In the other word sales management is used by business to refer to the
direction or supervision of sales man.
Physical distribution, or Place, must integrate with the other 'P's in the
marketing mix. For example, the design of product packaging must fit onto a pallet,
into a truck and onto a shelf; prices are often determined by distribution channels; and
the image of the channel must fit in with the supplier's required 'positioning'. You can
see how Coca Cola further integrate the timing of distribution and promotion in the
Hall Of Fame later. In fact, they see distribution as one of their "core competencies".
Distribution is important because:
Firstly, it affects sales - if it's not available it can't be sold. Most customers won't wait.
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Secondly, distribution affects profits and competitiveness since it can contribute up to
50 percent of the final selling price of some goods. This affects cost competitiveness
as well as profits since margins are squeezed by distribution costs.
Thirdly, delivery is seen as part of the product influencing customer satisfaction.
Distribution and its associated customer service play a big part in relationship
marketing.
Decisions about physical distribution are key strategic decisions. They are not short
term. Increasingly it involves strategic alliances and partnerships which are founded
on trust and mutual benefits. We are seeing the birth of strategic distribution alliances.
You can see Southwestern Bell in the Hall Of Fame explain how marketing marriages
provide new ways of getting products and services in front of customers.
Channels change throughout a product's life cycle. Changing lifestyles, aspirations
and expectations along with the IT explosion offer new opportunities of using
distribution to create a competitive edge.
Controlling the flow of products and services from producer to customer requires
careful consideration. It can determine success or failure in the market place.
The choice of channel includes choosing among and between distributors, agents,
retailers, franchisees, direct marketing and a sales force.
Deciding between blanket coverage or selective distribution, vertical systems or
multi-channel networks, strategic alliances or solo sales forces, requires strong
strategic thinking.
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Decisions about levels of stock, minimum order quantities, delivery methods, delivery
frequency and warehouse locations have major cash flow implications as well as
customer satisfaction implications.
All of these questions are considered in more detail in the sections on channels and
strategies. Meanwhile remember Lambin - "distribution is one of the two main roles
of marketing."
Distribution Strategy
Distribution strategy is influenced by the market structure, the firm's objectives, its
resources and of course its overall marketing strategy. All these factors are addressed
in the section on selecting Distribution Channels.
The first strategic decision is whether the distribution is to be: Intensive (with mass
distribution into all outlets as in the case of confectionery); Selective (with carefully
chosen distributors e.g. speciality goods such as car repair kits); or Exclusive (with
distribution restricted to upmarket outlets, as in the case of Gucci clothes).
The next strategic decision clarifies the number of levels within a channel such as
agents, distributors, wholesalers, retailers. In some Japanese markets there are many,
many intermediaries involved.
Next comes a sensitive strategic decision whether to go single channel or multi-
channel. Some producers, like Manchester United FC, use multi-channels - they use
many different routes, direct and indirect, to bring their products to their customers.
Multi-channel Systems like this are common where intensive distribution is required.
So direct marketing is combined with indirect marketing through intermediaries.
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Then comes the next level of strategic decisions concerning strategic relationships and
partnerships. Two common strategies are Vertical Marketing Systems and Horizontal
Marketing Systems.
Vertical Marketing Systems involve suppliers and intermediaries working closely
together instead of against each other. They plan production and delivery schedules,
quality levels,promotions and sometimes prices. Resources, like information,
equipment and expertise, are shared. The system is usually managed by a dominant
member, or 'channel captain'. VMS is more flexible than vertical integration where
the manufacturer actually owns the distribution channel, for example, Doctor Martens
boot manufacturers own their own retail store.
Horizontal Marketing Systems occur where organisations operating on the same
channel level (e.g. two suppliers or two retailers) co-operate. They then share their
distribution expertise and distribution channels. This can speed up the time taken to
penetrate the market. There is room for creative alliances here. See Southwestern
Bell's alliance with Granada TV Shops in the Hall Of Fame.
Resources available affect distribution strategy. Who can handle outbound logistics,
marketing and sales, and servicing? Can the supplier afford to deliver small quantities,
can it provide more trucks, can its sales force 'push' products into national retail
chains? Can the organisation deal with thousands, maybe even millions of customers -
can it cope? Does it want to devote huge resources here or would it prefer to utilise
someone else's resources in return for a slice of the profits?
Difficult marketing dilemmas which make distribution strategy both critical and
interesting. The sections on Distribution Channels explore this in more detail.
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Coca Cola uses the following distribution channels:
Retail Stores including Convenient stores (Super markets etc…)
Vending machine/Self Service Slot machines (school and other miscellaneous
business)
Ho-Re-Ca (means Hotels, Restaurants, Cafes including Fast food outlets,
cuisine Restaurants etc.)
Mobile Carts (mechanized and non- mechanized)
Entertainment Zones (theme park, Disneyworld and so on…)
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ADVANCE SALES & SERVICES PVT.
LTD.
The inception of the Advance sales & Services Pvt. Ltd. Can be traced back to
the period of nineties who is being the leading distributor of coke products in the
north region. Advance sales & service Pvt. Ltd. a distributor of Coca cola which
started its operations in the year 1993, to cater requirement of the distribution of the
soft drink products of coca cola in the north region of the Indian beverage market. Mr.
Anil Hardias who is the managing director of Advance sales & service Pvt. Ltd,
started the firm with its facility located at north region with an employee strength of
275 of whom fifty percent of employees are recruited on contract basis remaining
fifty percent of employees are employed by company side. They have well –
organized company structure, which is dedicated to the work of their company.
Advance sales & service Pvt. Ltd have expanded its business by covering the
entire north region to make the products of coca cola readily available in the market.
Advance sales & service Pvt. Ltd has been certified by ISO 9000-2001. Also
having membership of association of the distributors of India.
Distribution strategy adopted by Advance sales &
Service Pvt. Ltd.
Having decided to go through intermediaries the next question is whether to use
agents or distributors and also how many. Unlike distributors, agents don't hold stocks
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- they only act as sales agents finding customers, collecting orders and passing them
on to the supplier in return for a percentage commission.
The firm use the following criteria to select their agent:
1. Market Coverage, 2. Sales Forecast, 3. Cost, 4. Other Resources, 5. Profitability, 6.
Control, 7. Motivation, 8. Reputation, 9. Competition, 10. Contracts
1. Market Coverage: - does the profile of existing customers match your target
market profile? - is the number of customers big enough to meet the required
distribution penetration? - is the existing sales force big enough to cover the territory?
- are they dependant on a single individual? - are the existing delivery fleet and
warehouse facilities adequate?
2. Sales Forecast: How many can they sell? What are their forecasts based upon? Do
they give a 'best, worst and average' forecast? Will they invest in large stock
commitment? Do they have budgets to run promotions? Some suppliers even ask their
distributors for a marketing plan showing how they intend to market the supplier's
products.
3. Cost: What will it cost in terms of discounts, commissions, stock investment and
marketing support?
4. Other Resources: Does the target market require anything special such as
technical advice, installation, quick deliveries, instant availability? If so can the
distributor provide it?
5. Profitability: How much profit will the distributor generate for the supplier?
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6. Control: Do they have a reporting system in place? How do they deal with
problems? How often are review meetings scheduled? Can you influence the way they
present your products?
7. Motivation: Does the agent or distributor convey a sense of excitement and
enthusiasm about the product? What about its sales force - what's their reaction?
8. Reputation: Has it got a good track record? This includes the number of years in
business, growth and profit record, solvency, general stability and overall reliability.
Is it dependant on one key player?
9. Competition: Do they distribute any competitor's products?
10. Contracts: Some distributors demand exclusivity. Some agreements tie the
supplier in for certain periods of time. Check for flexibility in case things go wrong.
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Need of the study
The need of this study is:
To find out the problems of the channel distribution system of Coca-Cola.
To find out the brand positioning and awareness of Coca-Cola products in respect
of its competitors.
To identify the potential retailer of coca cola.
To identify the product preferences of consumers for Coca-Cola.
To find out an effective promotional scheme for retailers.
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Scope of the study
The scope of the study is wide as it covers a broad spectrum of the Coca-Cola channel
and distribution system which includes:
Effective utilization of supply chain management through proper flow of
information of demand of the products and supply of the products.
Evaluation of sales promotion technique employed by coca cola.
Evaluation and analysis of competitive advantage that coca cola enjoys against
its competitor through SWOT and Porter Five Forces Analysis.
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Research methodology
The purpose of research methodology is to describe the process involved in the
research work. This includes the overall research design, the data collection method
sampling procedure, and the field survey method & analysis procedures;
Meaning of Research:-
According to Redman & Mory:
“Research as a systematized effort to gains new knowledge”.
According to Clifford woody:
“Research comprises defining & redefining problems, formulating hypothesis or
suggested solution, collecting, organizing & evaluating data making deductions &
reaching conclusion to determine whether they fit the formulating hypothesis or
not”.
Objective of Research:-
The purpose of research is to discover answer to question through the application of
scientific procedure. The main aim of research is to find out the truth which is
hidden & which has not been discovered as yet. Though each research study has its
own specific purpose.
NATURE OF THE RESEARCH:-
This Research is descriptive in nature, as we have to only describe and analyse the
selling and distribution pipeline of coca cola on the basis of secondary data.
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RESEARCH DESIGN:-Research Design is a conceptual structure with research conducted. There is no
unique method, which can entirely eliminate the elements of under taking. But
Research methodology more than any other procedure can minimize the degree of
uncertainty, Thus it reduces the profit ability of making a wrong choice amongst
alternative causes of actions.
This is particularly significant in the light of increasing competitions &
growing size, which makes the task of choosing the best course of action difficult
for any business enterprise. It is imperative that any type of organization in the
present information coupled with tools of analysis for making sound decisions
which involved minimum risk.
Descriptive method of research was chosen for it helps the collecting
summarizing, analyzing interpreting & presenting data with new ideas & in
effective manner.
The goal of Descriptive research is to gather secondary data & to study the
nature of problem & to suggest possible solution for problem / come up with new
ideas.
DATA COLLECTION:-
The collection of data is done from secondary sources only.
Secondary Data:
The data, which already exists in nature, is called as secondary data. It provides a
starting point for research & offers the advantage of low costs and ready
availability. The historic literature & previous researches were taken as secondary
data.
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Sources of Data
Magazines
Company Website
Business Newspaper
Press Release
Books, research papers, etc.
DATA ANALYSIS
PAST YEAR PUBLISHED SURVEY RESULT OF RETAILERS
Total number of retailers : 150
Total number of retailers who have all companies : 25
Total number of retailers who keep Coca-Cola : 75
Total number of retailers who keep Pepsi : 50
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Secondary Data Analysis &Interpretation
On the analysis of data relating to retailer it has been discovered
that
1. Number of retailer who keeps product of all company.
A. Yes 80%
B. No 20%
Interpretation
Most of the retailers keep all available products of the soft drink companies in their
shelves.
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2. The largest selling brand in soft drink industry
A. Coca-Cola B. Pepsi
A. Coca-Cola 55%
B. Pepsi 45%
Interpretation
The above shown chart reveals that coca cola occupy 55% of the total market share of
the cold drink. Whereas pepsi shares only 45% of the total market.
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3. Number of customers demand for particular brand of Coca-Cola.
Brand Name Percentage
Coca-Cola 28
Thumps Up 22
Limca 12
Sprite 12
Fanta 6
Maaza 12
Kinley 5
Minute Maid Pulpy Orange Juice 3
Interpretation:
Above given table shows the percentage of customers who demands for particular
brand’s soft drink.
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4. From where does the retailer get information about the promotional schemes.
A. Salesman
B. Visitor
C. Other Outlets
Salesman - 78%
Visitor - 12%
Other Outlets - 10%
Interpretation:
The data given in the above chart shows that the retailers get the information
about the various promotional schemes mostly from the salesmen.
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5. The purpose of joining any promotional scheme by the retailers is:
Free gifts - 45
Commission - 65
Tours & trips - 24
Enrich relation with company - 16
________________________________________
TOTAL 150
Interpretation:
As shown in the table 45 retailers had an opinion that they should get something back
from the coke with regarded to sales in terms of gift & reward. This provide to be a
motivating factor for them .another 65 were demanding for monetary profit because it
would help them in their business. Yet another 24 demanded tours and trips facilities
which helps them to increase their sales rest 16 had totally different opinion i.e.
outlets wanted only good relation with the company.
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6. According to the retailers the duration of these sorts of schemes should be:
One Month - 25
Three Month - 68
Six Month - 47
One year - 10
_____________________
TOTAL 150
Interpretation:
25 outlets suggested towards the one month scheme by which they get regular and
new scheme and more gift. 68 outlets were in the favor of three months scheme as
they thought that 3 month schemes are much more profitable then one month
scheme. They can get more refunds from this scheme. They didn’t think about one
year or six month scheme because they were also having a view of getting new
scheme from time to time and same was the view of outlets who voted for six month
& one year scheme.
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7. The item which is prefer most as a prize from the company.
Cash - 52
Gifts - 73
Trips - 12
Quantity discount - 13
_____________________________
TOTAL - 150
Interpretation:
In the above given table it is observed that most of the peoples wants gifts as prize.
They less prefer items like trips, cash, and quantity discounts.
8. The experience of retailers regarding the supply of the replenishment orders.
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A. Excellent - 45%
B. Good - 30%
C. Average - 20%
D. Bad - 5%
Interpretation:
45% retailers said that their experience with supply of the replenishment order has
been excellent, 30% said that their experience was good, 20% said that their
experience is average while only 5% said that they had bad experience with the
supply.
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9. Does retailers expect any beneficiary scheme of company for themselves.
Yes 86%
No 14%
Interpretation:
86% retailers said yes in the response of the question that they want any beneficiary
scheme for them, while 14% said no in the response.
Sources:
Annual Business Magazines of Coca Cola http://www.domainb.com/marketing/general/2005/20050107_revival.html
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SWOT analysis of Coca cola
Strength:-
The oldest cold-drink manufacturing company.
Variety of flavors.
Globally distribution channel.
Weaknesses:-
Advertising campaign.
Distribution services.
Low customer trust.
Opportunities:-
Opportunity in soft drink market.
Good competitor of PEPSI.
Threats:-
New market competitors are in market.
Distribution channel.
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MICHAEL PORTER 5 FORCES analysis
Supplier: Coca cola has very strong bargaining power against heir supplier since
they themselves are in backward integration covering 75% of their supply needs.
Barriers to entry: Coca Cola has positioned their brand in such a manner which
has created strong barrier for the new player to enter into the industry and erode the
shares of Coca Cola.
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Substitutes: Coca Cola has all the products of Pepsico and the local drinks as its
substitute product but it possess a strong position in the market against its substitute
product
Buyers: Coca Cola enjoys a large customer based since it acquired many Indian soft
drink brands like Thums up, Limca, maaza, etc. which had their own customer base.
Competitive Rivalry: Coca Cola has to face the stiff competition from Pepsico the
Price War, Advertisement, Brand Endorsement, Brand Ambassador and
introduction of the new product are the part of the game.
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Limitations of the study Scope of research was confined to only 150 retail outlets.
The secondary data collected through various sources may not provide the full
degree of accuracy.
We have to rely on the already collected data that may fetch obsolete information.
Time constraint is one of another limitations faced in the study.
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Findings of the study
Following are the findings of the research study:
According to analysis Salesman informed more about the promotional
schemes as compared to other.
Majority of the retailers are satisfied with the supply of replenishment orders
made by them.
The retailers join the schemes to motivate themselves by getting high prize by
company.
Retailers prefer commission most as a promotional scheme by the distributor.
Coca-Cola has the maximum market share in the soft drink industry.
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Conclusion
There are some conclusions drawn on the basis of study:
In soft drinks COCA-COLA is in most demand among retailers & consumers.
Among Coca-Cola brands MAAZA & THUMPS UP are most famous because
of their flavor.
In market there are many unbranded customers, who are fully retail oriented.
We should try to switch them as our preferred customer by good supply to
retailers.
According to past survey it was found that 32% retail outlets are captured by
Coca-Cola only where as 17% was captured by Pepsi alone. So here an
opportunity exists to increase these numbers of outlets by converting them to
mix outlets by giving them some extra benefits.
Continuous supply should be made in time to meet the demand during the
peak season.
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SUGGESTIONS AND
RECOMMENDATIONS
These are the following suggestions, which I recommend to the distributor.
Company should launch such schemes which should act as counter attack
schemes for competitors.
In order to raise the sales and compete in the market the distributor should
give some extra scheme to its retailers.
Short-term scheme for 6 month should be launched in comparison to other
brand.
Brands pertaining to long term benefits should be used.
Small retailers must be given support and recognition.
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Bibliography
THE BASICS OF COCA-COLA:
Publisher: Coca-Cola Company
Books: -
Author Name - G.C.Beri
Book Title - Marketing Research
Edition Number - Third Edition
Publisher - Tata Mc-Graw Hill
OTHERS BOOKS:-
Author Name - S.p gupta
Book Title - Research
Edition Number - Third Edition
Publisher - Tata Mc-Graw Hill
INTERNET:
www.cocacolaindia.com
www.google.com
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