final Pepsi Report.docx

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Internship Report 2012 Page 1

ACKNOWLEDGMENT

All praises belong to almighty Allah who the supreme authority knows the ultimate relation

underlying all sorts of phenomenon going on in this universe & whose blessing & exaltation

flourished my thought & thrived my ambitions to have the cherished fruit of my modest efforts

my humblest thanks to the Holy Prophet Hazard Muhammad (PBUH) who is forever a torch of

guidance & knowledge for humanity as a whole.

We deem it our utmost pleasure to avail this opportunity to express gratitude & deep sense of

obligation to my revered teachers for their valuable and dexterous guidance, untiring help,

compassionate attitude, kind behavior, moral support and enlightened supervision during this

whole project.

Finally, I would like to extend hurtful thanks to my adoring parents and friends for their day and

night prayers sacrifices and encouragement, moral and financial support throughout the course of

my study.


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Con tent sEXECUTIVE SUMMARY ............................................................................................................ 4

INTRODUCTION .......................................................................................................................... 6

HISTORY OF PEPSI COLA IN PAKISTAN ................................................ ........................ 9

Vision Statement: .............................................. ...................................................... ...................... 11

Mission Statement:........................................................................................................................ 12

Cold Assets Departments: .................................................... .................................................... ..... 14

Marketing Department: .............................................. ..................................................... .............. 17

Sales Capability Department: ....................................................................................................... 19

Customer Service Department: ..................................................... ................................................ 21

Human Resource Department: ...................................................... ................................................ 21

Market Research & Sales Information System Department: ................................................... ..... 22

Key Accounts Department: .................................................. .................................................... ..... 24

Management Information System: ............................................... ................................................. 25

Finance department: ................................................... ..................................................... .............. 27

My Activities: ............................................................................................................................... 30

Financial Ratio Analysis ............................................................................................................... 31

PEST Analysis: ............................................................................................................................. 39

SWOT Analysis: ............................................... ...................................................... ...................... 41

Suggestions and Recommendations:............................................................................................. 43

Bibliography ................................................................................................................................. 44


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EXECUTIVE SUMMARY

Beverage industry in the whole world is very well established industry and the same case in

Pakistan. The major beverage companies are Pepsi Cola and Coca Cola and the emerging

beverage industry is Gourmet Cola. The Pepsi Cola is the market leader in the Pakistan as well

as in the Asia but Coca Cola is the market leader in the whole world. These industries develop

their own marketing strategies to meet the requirements of their respective target market. As far

as the Shamim& Co. beverage in Multan is concerned, it crea tes its monopoly in it s the market,

which is based on Multan, Rahim Yar Khan and other cities. Shamim& Co. beverage

successfully fulfill the requirement of its target market. There are different departments in theShamim& Co. beverages like Human Resource Department, Management Information System

Department, Key Accounts Department, Sales Department, Marketing Services Department and

Marketing Department, Audit and Taxation Department, TOT Department, Purchase

Department, Production Department, Finance Department, Store Management and Shipping

Department. Each department is running under intellectual managers and their respective team of

assistants. Human resource department in Shamim& Co. has the major function is to manage the

workforce. Recruitment and promotions are also done by this department. Personal record of

each employee is maintained by this department. In this record each and every thing about the

employee is recorded. This record is maintained both by manual system and computerized

system. Employee selection, employee appraisal and leave records are also the part of this

department s work. Diffe rent motivational tools for the employees are also managed by this

department.

The sales & marketing department in Shamim& Co. performs a very vital role. The distribution

system as well as the supply system of Shamim& Co. is very effective and very strong. That iswhy Shamim& Co. s market share is above 70%. The Shamim& Co. s employees build very

strong relationship with the customer. Company also gives incentives and bonuses to the

employees on achieving their targets. The marketing department makes the advertising of all the

new promotion, launching and re-launching of brands.


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The TOT department works on the issuance and repairing of the deep freezers and visi-coolers.

This department is established before four years. First this department work under the SIS

department. This department focuses on the philosophy COLD IS SOLD.

Finally, I am thankful to entire management of SHAMIM & COMPANY (Pvt) Ltd MULTAN,

especially Sir Aman (Key Account Co-ordinator) who gave me chance to work with them and

provide opportunity to learn functioning of SHAMIM & COMPANY PEPSI COLA MULTAN.


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INTRODUCTION History of Pepsi Cola

In 1893 Caleb Bradham, a young pharmacist from New Bern, North Carolina, begins

experimenting with many different soft drinks. In 1898, one of Caleb's formulations, known as

" Brad's Drink" a combination of carbonated water, sugar, vanilla, rare oils and cola nuts, is

renamed " Pepsi-Cola" . On August 28, 1898, Pepsi-Cola received its first logo.In 1902, he

applied for a trademark with the U.S. Patent Office, Washington D.C., and formed the first

Pepsi-Cola Company. 1905, Pepsi-Cola's first bottling franchises were established in Charlotte

and Durham, North Carolina. In 1906, Pepsi gets another logo change, the third in eight years.

The modified script logo is created with the slogan, " The Original Pure F ood Dr ink" . In 1920,

Pepsi theme line speaks to the consumer with " Dr in k Pepsi-Cola, it wil l satisfy you" . In 1923,

Pepsi-Cola Company was declared bankrupt and its assets were sold to a North Carolina

concern, Craven Holding Corporation, for $30,000.

FORMATION OF PEPSI COLA CORPORATION

Roy C. Megargel, a Wall Street broker, bought the Pepsi trademark, business and good will from

Craven Holding Corporation for $35,000, forming the Pepsi-Cola Corporation. In 1928, after

five continuous losing years, Megargel reorganized his company as the National Pepsi-ColaCompany. In 1931, U.S. District Court for Eastern District Virginia declared the National Pepsi-

Cola Company bankrupt, the second bankruptcy in Pepsi-Cola history.

REFORMULATION OF PEPSI COLAS SYRUP FORMULA

The Loft candy company acquired the National Pepsi-Cola Company. Charles G. Guth, president

of Loft, assumed leadership of Pepsi and commanded the reformulation of Pepsi-Cola syrup

formula.1934 was a landmark year for Pepsi-Cola. The drink was a hit and to attract even more

sales, the company began selling its 12-ounce drink for five cents (the same cost as six ounces of

competitive colas). The 12-ounce bottle debuted in Baltimore, where it was an instant success.

The cost savings proved irresistible to Depression-worn Americans and sales skyrocket

nationally. In 1941, The New York Stock Exchange traded Pepsi's stock for the first time. In


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1964, Diet Pepsi, America's first national diet soft drink, debuted. Pepsi-Cola acquired Mountain

Dew from the Tip Corporation in 1964.

FORMATION OF PEPSI COLA INCORPORATION

In 1965, Expansion outside the soft drink industry began. Frito-Lay of Dallas, Texas, and Pepsi-

Cola merged; forming PepsiCo, Inc.Pepsi Cola Company operates in beverages industry. Pepsi

Cola international is well reputed multinational company which is doing its business in almost

every country of the world. The company is registered in New York stock exchange U.S.A. to

make a better control over the business the company has given the manufacturing rights to

different companies. Now these companies are producing the products on the behalf of the

company by using company s trademark. To maintain their goodwill i n the market the company

has a strict policy of granting manufacturing rights. Pepsi Cola have standardized products all

over the world (e.g. same in size, shape and quality). The franchises have to follow all the

standards given by the company.

SETUP OF PEPSI COLA

The head office is situated in New York (USA) with units operating in different regions of the

world. These are called Business Units and Pakistan is in MENAPak (Middle East, North

America and Pakistan). The head office of MENAPak is situated in Dubai (UAE). The local

head offices for each country are situated in the respective capitals .

SLOGANS THROUGH TIME

Pepsi-Cola has different slogans through its history. They are very much known. These are given

below. This is also an important part of Pepsi-Cola.

1898 Brad's Drink

1903 Exhilarating, Invigorating, Aids Digestion
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1906 Original Pure Food Drink

1908 Delicious and Healthful

1915 For All Thirsts - Pepsi: Cola

1919 Pepsi: Cola - It makes you Scintillate1920 Drink Pepsi: Cola - It Will Satisfy You

1928 Peps You Up!

1929 Here's Health!

1932 Sparkling, Delicious

1933 It's the Best Cola Drink

1934 Double Size

Refreshing and Healthful

1938 Join the Swing to Pepsi

1939 Twice as Much for a Nickel

1943 Bigger Drink, Better Taste

1947 It's a Great American Custom

1949 Why Take Less When Pepsi's Best?

1950 More Bounce to the Ounce

1954 The Light Refreshment

Refreshing Without Filling

1958 Be Sociable, Have a Pepsi

1961 Now It's Pepsi for Those Who Think Young

1963 Come Alive! You're in the Pepsi Generation

1967 Taste that Beats the Others Cold, Pepsi Pours It On.

1969 You've Got a Lot to Live, Pepsi's Got a Lot to Give

1973 Join the Pepsi People Feelin' Free1976 Have a Pepsi Day!

1979 Catch That Pepsi Spirit

Take the Pepsi Challenge

1981 Pepsi's Got Your Taste for Life
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1983 Pepsi Now!

1984 The Choice of a New Generation

1987 America's Choice

1989 A Generation Ahead1992 Gotta Have It

1993 Be Young, Have Fun, Drink Pepsi

1995 Nothing Else is a Pepsi

1997 Generation Next

1998 Same Great Taste

1999 The Joy of Cola

2000 The Joy of Pepsi

2003 Pepsi. It's the Cola

2005 Dare for more

2008 Something For Everyone

2009 Refresh Everything

2010 Badal Do Zamana

2011 DunyahaiDilwalonki

2012 Change the Game

HISTORY OF PEPSI COLA IN PAKISTAN Pepsi cola is being produced and consumed 1n 48 countries of world including Pakistan. At

present, Pepsi Cola is No. 1 in Pakistan in terms of sales wise and in market share. It is the

market leader. But overall in the world Coca-Cola is No. 1. In Pakistan, there are nine territories

where the franchised unit produce and sell Pepsi-Cola. Some of these territories are:

I. Lahore
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II. Karachi

III. Rawalpindi

IV. Peshawar

V. Multan (Shamim& Co.)

VI. Gujranwala

VII. Sakher

VIII. Faisalabad

PEPSI COLA MULTAN

Pepsi Multan was incorporated in 1963 but it started its production in 1967. Allah Nawaz Khan

Tareen (Ret. DIG) got license of 7-UP. But in 1973, it became Pepsi Cola franchise. Now MD of

Pepsi Cola Multan is Alamgeer Khan Tareen son of Allah Nawaz Khan Tareen. At start PepsiMultan was having only one production plant made by Netherlands and was only producing 7-

Up because it was the only brand produced by Parent Company. In 1973, PEPSI acquired 7-Up

in Canada so the Multan franchise started producing PEPSI and Marinda along with 7-Up &

became PEPSI franchise.

Coke was already operating in the market at the time when Pepsi Multan established. At that

time Coke was market leader but with the passage of time Pepsi Multan kept on focusing on

gaining the market share. Now Pepsi Multan is working with five production plants capable of

producing 100,000 cases per day. Installation arrangements for two new plants are in process.

The plant which was installed at the time of establishment has now been grounded. Pepsi Multan

is currently market leader with more than 80% of market share.

The company is properly serving all these areas with quality products. PEPSI Multan is not an

ISO certified company because it is an international drink having their own standards and there

is no export.

Company has now acquired new experienced & competent sales staff and this is how they have

increased their share from 70% to 80 or 90%. As far as Distribution is concerned company has avery well-establish distribution network covering whole of the franchise areas. Depending on the

potential of the town, they have one and more than one distributions in each town. Sale

supervisor / Sale officer is responsible for all the activities carried out to increase the level of

sales from the part of the distributors. He looks after the stock availability, contingencies and all


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the routes covered by the salesman of that distribution. Sales officer is also given a responsibility

to train the salesmen as well.

Company has invested a lot of money in form of Cooler, Counters, Shades and Boards. These

things are offered to most of the retailers, as it is supposed that these chillers plays an important

role in increasing the sales level of the company products and also it helps in carrying out

different campaigns regarding the sales promotion of Pepsi products.

Shamim& Company covers a wide area of Multan District and adjoining districts as well. Some

of these are as follows:

1. Multan

2. Jampur

3. Bahawalpur

4. Ahmad Pur

5. Okara

6. Chistian

7. Sahiwal

8. Layyah

9. Rahim Yar Khan

10. Mailsi

11. Bahawal Nagar

12. Vehari

13. Haroon Abad

14. MuzaffarGarh

15. Dera Ghazi Khan.

Vision Statement:

PepsiCo's responsibility is :We strive to continually improve all aspects of the world in which

we operate - Environment, Social, and Economic - creating a better tomorrow than today."


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Our vision is put into action through programs and a focus on environmental stewardship,

activities to benefit society, and a commitment to build shareholder value by making PepsiCo. a

truly sustainable company.

Mission Statement:

Our mission is to be the world's premier consumer products company focused on convenient

foods and beverages. We seek to produce financial rewards to investors as we provide

opportunities for growth and enrichment to our employees, our business partners and the

communities in which we operate. And in everything we do, we strive for honesty, fairness and

integrity.

Organizational Hierarchy:

The organizational hierarchy of top management of Shamim& Company Private Limited is as

follows:


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Managing Director: Alamgeer Khan Tareen General Manager Sales & Marketing: Sh. Amir Hameed

General Manager Production: Mr. Sarwar

General Manager Finance: Mr. Sohail Butt

Management Accounts: Mr. Ch. Tahir Ameen

Manager MIS: Mr. Rizwan Zafar

Manager Human Resource: Miss. Sadaf Tahir

Manager Shipping: Mr. Major Farooq

Departments where My Internship Program was carried out:

While I was working in Shamim& Company Private Limited, I was directed to work at following

departments:

ManagingDirector

General Manager Technical

General Manager Sales

General Manager Finance

General Manager Operations

Manager Production

Manger Sales &Marketing

Manager MIS Manager Admin

Manager Personnel Manager FinanceManager Research& SIS

Manager QualityControl

Manager ShippingManager Account


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1. Cold Assets Department

2. Management Information System department (MIS)

3. Marketing Department

4. Sales Capability Department

5. Market Equipment Department

6. Sales Information System Department

7. Key Accounts Department

8. Human Resource Department

9. Finance

These departments have their own duties and tasks to perform. As I was focused on Marketing

Area, so most of the departments where I have worked are related to marketing and sales areas.

Other than marketing and sales I have also worked in Human Resource Department, Finance

Department and Cold Assets Department as well.

The duties of each department and my working in the respective departments are as follows:

Cold Assets Departments:This cold asset department is also known as Tools of Trade (TOT) Department. The description

of the duties of this department is related to the freezers, Visi Cooler and chillers of Pepsi that is

provided to different retailers of the brand. This department came into being in 2009 due to

excessive work load and need of a separate staff to run this job. Before 2009, this duty was

performed to Sales Information System (SIS) department. Their core duty is to supply freezers

and Visi coolers to different retailers, canteens and colleges. These chillers are continuouslyinspected and their feedback is also maintained for any complaints. Ms. Lubna Sheikh & Omer is

the Issuance Manager &Market Equipment Manager of this department respectively.

TOT department has two sub divisions:

1. TOT Issuance

2. TOT Workshop


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The functions of each division are further explained in the following section:

TOT Issuance:

The duties of TOT issuance are as follows:

1. Chiller Injection

2. Physical Verification

3. Schedule Census/Tracking

4. Handover

Chiller Injection:

This is the first step of the issuance of the freezers in the market. This department notices the

demand of freezers and chillers in the market and then after full documentation of the retailer and

chiller, this department issues the chiller to the retailer. The key points of this process are as

follows:

1. Document Received from sales team.

2. Check documents& quota which assign to specific area.

3. If Documents are complete then process starts otherwise documents are sent back to sales

team.4. According quota, arrange Documents.

5. Signed by management staff and send to ware house for injection.

6. If quota exceeds to current area then gets approval from management staff for assigning

additional quota.

7. In ware house gate pass is prepared and data base is created in soft form for tracking.

8. In ware house all Documents are maintained in hard form.

9. Ware house in charge plane for loading according to completed injection document.

10. Arrange Vehicle for injection in Multan base and Outstation.

11. Assign Field supervisors for chiller injection.

12. Cooler dispatch.

Physical Verification:


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After the issuance of freezers, the MEM goes himself to the market and verifies from the shops

either they have got the freezers on right time or not. If there is any complain then the MEM calls

back his subordinates and try to eliminate the problem.

Schedule Census/Tracking:

In tracking process the sales officer notes down the regular sales of shop. He also checks the

functioning of freezers and write down about their performance. If any freezer is out of order, he

recommends it to be repaired. The field supervisor get list of already injected coolers. He verifies

chiller of specific area according to injection data. After that the field supervisor updates Chiller

Contract and report if any cooler is missing according to the data. Then all data is updated in

excel for data base.

Handing Over Process:

If a shopkeeper switches to Coke or any other competitors brand, then he has to return his freezer

to the company. Then the representatives of TOT department picks up that freezer from that shop

and hand over it to any other shop where it is demanded.

TOT Workshop:

The duty of this department is to repair the out of order freezers. This department is dealing with

the shops of only Multan base. The shops outside the Multan base are handled by outsourcing.

For inside complaints, the company has launched a UAN number, when shop keeper calls on this

number for his complaints; the office note downs the name of shop, deep freezer number andname of distribution. The office allot a complain code to the shop keeper and sends a team to the

shop. If the problem is minor then the team repairs the freezer at the spot, otherwise the team

picks up the freezer and takes it to the workshop. For outside the Multan base, the company has

agreement with distributor and local mechanic who repairs the freezer of the shop and gets

payment from the company.

Types of Deep Freezers and Visi Cooler:

Pepsi offers following types of deep freezers and chillers:

3 types of Deep Freezer are

1. 10cft

2. 12cft

3. 15cft


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3 types of Visi Cooler are

1. 250SAX

2. 400SAX

3. 1000SAX or D.D (double door).

Marketing Department:This department of Shamim& Company Private Limited is mainly concerned with the Below the

Line promotional schemes. The main objective of this department is to increase brand awareness

among customers, to improve market share through visibility and to improve BTL planning and

execution. BTL includes all the advertisements like Wall Chalking, Umbrella, Boards, Backlight

Boards, Front-light Boards, Un-light Boards, Counters, Cabins, Sheds, Banners, Menu Cards,

Standees, Cutouts, Buntings, Mobiles and Stickers. Mr. MubashirGayoor is the Marketing

Manager of Shamim& Company Private Limited nowadays.

Some of the objectives of Marketing Department of Shamim& Company Private Limited are as

follows:

1. Coordinates all the activities regarding sales, promotion, accounts and issuance of

cheques to the vendors.

2. Create brand awareness.

3.

Increase market share through visibility.4. Increase BTL planning and execution.

5. Facilitate sales to have an accurate and prompt response.

6. Increase store branding and merchandising activities.

7. Facilitate PCI in launching and re-launching activities.

8. Monitors the activities of every promotional campaign.

9. Ensure that the fabrication of printing materials is in accordance to the specifications and

remains with in the assigned cost.

10. Facilitate the promotions and advertisement campaigns of ATL by Pepsi Cola

International.

11. Monitors the work and activities of vendors in accordance to the plans.

Work Flow Process:


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Work flow process includes all the activities which are involved in advertisement by installing

Boards, Cabins, Shades and Umbrellas etc.

These are the steps in this procedure:

1.

First of all the sales force initiate the need of cabin or board for a particular shop or store. 2. Then the marketing manager calls the vendor and tells him about the work. He makes an

estimate of all the work and gives a requisition form for his expenses to manager.

3. After examining the requisition form by marketing manager, he verifies all the items and

figures and gets its approval from general manager. And a whole document is completed

and returned to vendor. This document is now called Work Order.

4. After getting work order from manager, the vendor starts his work according to therequirements and completes the work in a specified time. After the work has been

completed the work order along with all the bills is again submitted to marketing

manager.

5. By getting the documents after the completion of work, the duty of the manager is toverify the work of vendor. For this purpose he sends these documents to the research

department. Research department imposes a stamp on documents and return to marketing

department after verification. 6. When documents are received from research department, then marketing department

sends these documents to database office which records all its entries into the computer.

After recording the data the documents are submitted to accounts department, from where

the payment is made to vendor.

Funds Allocation:

The marketing manager is given a budget for a whole year. The entire budget is already defined

for all the regions. Whenever a work is required, they check the budget of that area, if there is

enough money for that area then they approve the work other vise the work is postponed for nextyear or special grant is asked from GM.


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Sales Capability Department:This department is responsible for all the sales of the brands of Pepsi in the area of Shamim&

Company Private Limited. This department facilitates and supervises all the sales, promotional

and merchandising activities related to the Pepsi Brand. Mr. MirzaJaved is the manager of this

department. The objectives of this department are as follows:

1. To monitor the activities of all the distributions working under the Shamim& Co.

2. To calculate the capability of supply and retain market share.

3. To check the sale of every shop and take feedback from CR about the chiller integrity

and visibility of all brands of Pepsi.

Sales:

The original rate of regular crate is Rs.326. But there is discount for every shop assigned and

fixed by the company. This is the net discount given to shopkeeper on every crate. The

shopkeepers who have taken a loan from Shamim& Co. they are not given the discount, rather

salesman cut the invoice on full rate. This amount of discount which is not been given to

shopkeeper is considered as the installments of repayment of loan. When the whole amount of

loan is paid by shopkeeper either by installments or by lump sum amount, the discount is again

given to the shopkeeper.

Brands of Pepsi:

1. Pepsi Cola

2. Pepsi Diet

3. 7up

4. 7up Free

5. Mirinda

6. Mountain Dew


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7. Sting

8. Slice Juice

Sizes of Brands:

Regular 250ml Crate (24 bottles)

300ml( Buddy) 12 bottles

500ml 12 bottles

1 litre 12 bottles

Pet (1.5liter) 6 bottles

Jumbo(2.25 litre) 6 bottles

Every shop is registered in the record of company. And there is full data about the shop s sale

and shopkeeper s nature. The shops which are not recognized by company, they do not have

Pepsi freezer and they are not eligible for purchase discounts.

All the sales are done on net cash basis. The empty bottles of shopkeepers are replaced by filled

bottles. These empty bottles are the property of shopkeeper as hi purchases the bottles initially. It

is a fixed cost for him.


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Customer Service Department:This is not a separate department rather it is headed by the head of Sales Capability Department.

Mr. MirzaJaved also takes care of this department. For the customer service and relationships the

department has hired a new category of employees, named as Customer Representatives (CR).

Their duty is to go with the salesman in the vehicle and watch and note down all the activities of

salesman. He also takes feedback from shopkeeper and consumer. He maintains a separate

record of sale and reports it at the closing of the sale to the distributor and SCM. Further he has

to check the freezers of the shops, whether the shopkeeper is selling the Pepsi product or any

other brand in Pepsi s freezer.

In addition to this, the CR has to do the merchandising of Pepsi brands in the visi coolers and

make the visibility of every brand very clear.

Human Resource Department:The working of HR manager depends upon the nature of business and visions and mission

statements of an organization.

We can make a brief diagram for this hierarchy:

The basic duty of HR department is to understand the vision and mission statements of

organization and recruit and hire the best available employees according to the nature of job.

Here in Pepsi the criterion for the selection of employees is not very formal. If more than five

seats are available then the company publishes an ad in news paper. After getting the CVs they

shortlist the candidates and then call them for interviews.The basic requirement for Sales Officer

in Pepsi is MBA (Marketing).

After calling the candidates an initial test is conducted, which contains analytical, intelligence,

general knowledge and mathematical portion. When a candidate passes the test he is interviewed

by a panel including Sales Capability Manager and General Manager.


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Market Research & Sales Information System Department:Market research and marketing research are often confused. Market research is simply research

into a specific market. It is a very narrow concept.

Marketing research is much broader. It not only includes market research, but also areas such

as research into new products, or modes of distribution such as via the internet.

Marketing research is the function that links the consumer, customer, and public to the marketer

through information information used to identify and define marketing opportunities and

problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and

improve understanding of marketing as a process. Marketing research specifies the information

required to address these issues, designs the methods for collecting information, manages and

implements the data collection process, analyzes, and communicates the findings and their

implications.Market Research & sales information system is a very important department for any firm. This

department aims to keep current records of each and every outlet of the franchise.

Mr. Kamran Ahsan is the manager of this department. He is responsible to check all the activities

of this department, and reports to the MD.

Core Aim:

To do the research about product because sales people do not provide accurate data as they cangive a mixed opinion, that may be biased. So their opinion is not reliable, for this purpose SIS

department conduct researches for product and market.

Objectives:

1. To check the market share

2. To check the strengths and weaknesses on sample basis

3. Carbonated and non-carbonated soft drinks research

4. To get the competitor s data

5. Help the high management to make decisions


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Working:

The department conducts its researches by sampling method, they divide the whole market into

segments called stratum.

The names given to stratum are as:

1. Captives

2. Key Accounts

3. Main

4. Site

Captives: Captives are those shops which are in a boundary and serve only one type of

customers. For example, the canteen in MMDC, Nishter Hospital, and NFC are the captives.

These captives shops hold a big share of market.

Key Accounts: Key accounts are the main shops in market and big super stores which serve the

Pepsi for all type of public. Out of the whole market, key accounts are the biggest segment.

Main: The shops which are located on the sides of main roads and in colonies are named as

main.

Site: The far flung areas out of the city, where the shops are located at big distances are called

sites. These shops keep a small portion of segment.

Each stratum contributes to sample according to the percentage of its shops.

This department measures the sales capability of distributor. It is depicted by Stock and Sale.

The department is using their own customized software for data processing. This department is a

backbone for the whole organization as it maintains all the record and it is primary audit.

Documents Used is SIS:

The department starts its work from two types of reports, which are provided by distributer:

Stock Register:It consists of all the information about the initial and final stock before and after the sales.

Sales Route Card:

Sales route card consists of all the information regarding the deep freezer, chillers and number of

sales of all the SKUs of every shop of a particular distribution.


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The distributer provides these reports after every four weeks, which consists of daily basis data.It

is compulsory for a distributor to provide these reports after every four weeks otherwise the

company stops the discounts and other claims of distributor.

Discount Claims:

The discounts which a distributor gives to shops, at the end of the month he sends a summary of

all accounts to company and claims for this money. If he has already submitted the monthly

reports he will get the claim otherwise he is required to bring reports and afterwards he is

awarded with claim.

Key Accounts Department: This department is basically working on retention of the existing points and the conversion of

coca cola points into the Pepsi points. The head of this department is called the Key Account

Manager who is Mr.ArfanShahzad. The employees that are working in this department are called

the Key Account Executives and currently there are 10 executives. The job of converting of Coca

Cola points into the Pepsi points is very difficult. The Key accounts Executives deals in a very

good way because the point s conversion is very difficult. The Key accounts convert the Coca

Cola points into Pepsi points through different offers and giving a good incentive package. Key

accounts Executives also listen the complaints of the shopkeeper. They also make work on themerchandising. They have no concern with the sales force, but they coordinate the sales force.

The objectives of this department are as follows:

1. Monitoring and verification of Advance Payments and Trade Payments and

realignment of AP and TP process.

2. To develop alert system for the maturity of existing contracts.

3. To develop key accounts KPI s category wise.

4. To increase market share and revenue within existing accounts.

5. To identify the potential accounts and develop them.

6. To provide the best services to the existing accounts for the retention.

7. To keep an eye on competitors activities and develop action plans for them.


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8. To manage objectives and plans through a field team or through internal associates.

9. To responsible for studying and understanding market trends and knowing how these

affect the accounts.

10. To improve customer retention through stronger relationships and increased client

satisfaction.

Job Description of Key Accounts Executives:

They work on three things

1. Convert the Coca Cola points into Pepsi through low cost.

2. They perform like a communicator. They listen the shopkeeper complaints, then forward

to the sales force.

3. Retentions of Pepsi point by giving large discount.

Different Offers used for Conversion:

Offers that are given to the retailers when they shift from Coca Cola to Pepsi Cola are as follows:

1. By giving deep freezer or visi cooler

2. Through trade payment & advance payment

3. By offering a big amounts discounts and different schemes

4.

Including their names in the lucky Draw.

Management Information System:In today's fast moving business environment, organizations are rapidly moving towards

computerization and information systems. In this era of rapid of frequent changes, it provides

current, reliable and accurate information to the management. This information is very useful in

decision-making. Information systems are generally defined as the system, which provide regular

and current information to management for decision-making.

MIS department of Shamim& Co. is playing a vital role in this regard. The department is

working with a small setup & satisfying the information requirements the organization with a

smart staff and developed setup, the department has eliminated much workload, paper work and

saved a lot previous time.


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The software system has two basic parts and these are developed in some programming

language. The post important part of any information system is database. The database is the

basic structure of data and defines how data is organized, stored and retired from memory. The

database operates at the back end. At the front end, data is entered and retired through input

screens.

The MIS department is currently performing its day-to-day operations as well as involved in

software development. It also provides technical assistance and training to other departments. At

the time oracle 8.0 is in execution. All computers in the department are networked by LAN (local

area network) the department has licensed software working.

The following systems are working in the department.

a. Plant Efficiency System:The system is designed to keep current information about what is going on in production

& plants. The system is helpful in getting production figures and reports about line utilization,

line efficiency, mechanical efficiency, employee code, name, basic salary, allowances, tax,

net pay and any other adjustments supplied by time office.

b. Sales & Distribution System:

The most comprehensive system of MIS is sales and distribution system. It incorporates: Sales system Cash system Shipping system

The basic input of this system is empties slip, liquid out slip, full in slip by order sips.

Empty short slip, the reports of the system are


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Internship Report 2012Page 27

Load report (dealer wise, depot wise) Settlement sheet (dealer wise, depot wise) Daily liquid out report.

Agent wise load out summary. Agent wise sales summary. District wise sales summary. Computerize sales statements (Monthly, semi annually, annually) Cash report

Filled inspection, breakage, actual production, paid time, stoppage, production time etc.

Finance department : This department looks after the insurance of all the Assets of Organization. Leasing like

direct leasing and sales and lease back.

Letter of credit like Irrecoverable LC and Irrecoverable and Confirmed LC.

Clearance of shipment is also comes under this department. Short term and long term

financing too.

This is one of the most important departments of this organization. This department made

the financial plans of the organization, they analyze their resources and then concise other

reports and gives the whole budget the organization can afford. Another job of this

department is to make the complete record all financial and non-financial transactions

made inside as well as outside the organization

Functions of Finance department:

Insurance: Insurance of all the assets of Shamim& Co. (Pvt) Ltd Multan.

These assets includeso Machinery

o Buildingo Stock ( Empty & Liquid )


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Leasing:

There are two type of leasing:

Direct leasing Sales and lease back

Direct leasing:

Suppose you want to buy a new asset (Machinery). You go to bank ask him to purchase on

the behalf of you and bank make the payment. You take that asset from bank on lease. You make

the payment to bank in Installment with mark up. At the end asset will be your when you pay all

the installment of that Machinery.

Sales and Lease back:You sale your working asset to bank when you need short/long term finance to fulfill your

operating expense or any of the others. You have to make the payment to bank in installment

with mark up/interest. After the complete payment assets again come under the organization

ownership.

Letter of Credit:

There are many types of Letter of Credit

Irrevocable Letter of Credit Revocable Letter of Credit Irrevocable and Confirmed Letter of Credit Confirmed Letter of Credit Un-Confirmed Letter of Credit

Modes of payment: By Sight Payment

By Acceptance By Negotiation By deferred payment


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Document Delivered Against Acceptance (DDAA OR DD): Bills of exchange are used and organization gives acceptance for this.

Buyer has to make the payment after receiving the whole shipment after the date of

Truck receiving in 180-days .LC Procedure:

Letter of Credit can be local/Inland or for foreign supplier Only difference between local and foreign LC is that for foreign LC Import Form or

Export Form is submitted by bank to State Bank of Pakistan while in local it s not

submitted.

In Import/Export Form detail of goods, quantity and prices are mentioned.

Organization want to buy raw material, machinery etc from supplier Organization contact the supplier Supplier send detail of requirement with the rates Supplier demand for letter of credit Buyer sends a request to its bank along with the detail document of buying material,

quantity and price.

Bank make the letter of credit

Send it to buyer and seller Shipment Clearance procedure:

For clearance original document are require. These document include

Commercial Invoice Air Way bill or bill of lading Packing list For clearance purpose organization higher an Agent.

Agent go to custom house and told them that he be authorized by part Show them the original document. After this there are some duties and charges on shipment like Custom duty Excise duty


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Initially to launch that project, 12 routes were defined in the semi depot area. 12 CRs were

called from different distribution to work in this area. And 11 officers were also called from

different distributions and departments to work here. I was the only internee at that time who

worked as the 12th

officer above a CR.I worked with the key accounts executives in the market and learned the process of conversion of

the shops and also helped them in maintaining a data base of the retailers selling Pepsi Cola. I

also strived to have some feedback from the retailers about the Pepsi products and complaints

about the sales officer and delivery services.

Financial Ratio AnalysisLIQUIDITY RATIOS:

These ratios are important in measuring the ability of a company to meet both its short term and

long term obligations.

Working Capital:

Working capital is an indication of the short run solvency of business

Working Capital = C.A C.L.

Year 2009 2010 2011

CA 966,494,618 839,722,212 1,652,345,965

CL 1,512,379,837 1,117,663,576 1,811,291,315

Working Capital (545,885,219) (277,941,364) (158,945,350)

Current Ratios:

This ratio measures the short-term debt-paying ability of the company

Current Ratio = LC

AC

.

.


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Years 2009 2010 2011

CA 966,494,618 839,722,212 1,652,345,965

CL 1,512,379,837 1,117,663,576 1,811,291,315

CurrentRatio 0.63 0.75 0.91

DEBT MANAGEMENT:

This is the most common measure of the ability of a firm s operations to provide protection to

the long-term creditor.

TIME INTEREST EARNED:

TIE = EBIT /INTEREST EXPENSE

YEAR 2009 2010 2011

EBIT 74,774,319 79,902,212 119,386,219

InterestExp 90,806,108 169,864,086 141,507,989

TIE 0.82 0.47 0.84

DEBT RATIOS:

This ratio measures what portion of a company s assets is contributed by creditors.

DEBT RATIO: Total Debt / Total Assets

YEAR 2009 2010 2011

Total 2,127,303,899 1,837,898,111 2,500,067,110


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Debt

Total

Assets

2,567,362,816 2,526,300,377 3,198,932,646Debt

Ratio 82% 72.7% 78%

D/E RATIO:

This ratio indicates the extent to which debt is covered by shareholders funds. It reflects the

relative position of the equity holders and the lenders and indicates the company s policy on the

mix of capital funds.

D/E = Total Debt / Total Equity

YEAR 2009 2010 2011

Total

Debt 2,127,303,899 1,837,898,111 2,500,067,110Total

Equity

440,058,917 688,402,266 698,865,536

D/E 4.834 2.66 3.57

ASSET MANAGEMETNT:

These ratios are important in measuring the efficiency of a company

1. Days sales in receivable:


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Shows both the average time it takes to turn the receivables into cash and the age, in terms of

days, of a company's accounts receivable

Days sales in receivable =365/

Re

Sales Net

ceivablesGross

YEAR 2009 2010 2011

A/R 105,511,324 231,184,007 403,860,325

Sales 4,326,108,580 5,099,245,416 5,328,369,635

Days sales

in

receivable 6.68 days 1.24days 2.07days

TOTAL ASSET TURNOVER:

A company's effectiveness in generating sales revenue from investments back into the company.

The higher the Total Asset Turnover is the more effective use of the company's investments.

Total Asset Turnover can be very useful if you watch what actually makes up the Total Assets of

the company. A company with low inventory and strict credit policies to keep Accounts

Receivable low will help the Total Asset Turnover look even better. Of course it depends on all

of the company's Total Assets.

Total Assets Turnover = Sale / Total Assets

YEAR 2009 2010 2011

Sales 432,6108,580 5,099,245,416 5,328,369,635

Total

Assets 2,567,362,816 2,526,300,377 3,198,932,646

Total

Assets

Turnover 1.68time 2.02 1.66


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PROFITABILITY RATIOS:

Profitability Ratios show how successful a company is in terms of generating returns or profits

on the Investment that it has made in the business. If a business is liquid and efficient it should

also be Profitable.Ability to provide financial rewards sufficient to attract and retain financing.

RETURN ON EQUI TY (ROE):

The Return on Equity of a company measures the ability of the management of the company to

generate adequate returns for the capital invested by the owners of a company. Generally a return

of 10% would be desirable to provide dividends to owners and have funds for future growth of

the company

ROE = Net Income / Shareholders' equityYEAR 2009 2010 2011

Net Income 16,295,514 44,159,121 101,322,228

Shareholders'

equity 440,058,917 688,402,266 698,865,536

ROE 3.70% 6.41% 14.49%

RETURN ON ASSETS:

The Return on Assets of a company determines its ability to utilize the Assets employed in the

company efficiently and effectively to earn a good return. The ratio measures the percentage of

profits earned per dollar of Asset and thus is a measure of efficiency of the company in

generating profits on its Assets.

ROA= Net Income / Total assets

YEAR 2009 2010 2011

Net

Income 16,295,514 44,159,121 101,322,228

Total

assets 2,567,362,816 2,526,300,377 3,198,932,646


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ROA 0.63% 1.74% 3.16%

NET PROFIT MARGIN:

The Profit Margin of a company determines its ability to withstand competition and adverse

conditions like rising costs, falling prices or declining sales in the future. The ratio measures the

percentage of profits earned per dollar of sales and thus is a measure of efficiency of the

company.

NPM = Net Income /Sale

YEAR 2009 2010 2011

Net

Income 16,295,514 44,159,121 101,322,228

Sales 4,326,108,580 5,099,245,416 5,328,369,635

NPM 0.37% 0.8% 1.9%

Operating income margin:

The operating profit margin ratio indicates how much profit a company makes after paying for

variables cost of production such as wages, raw materials etc.s

= Operating Income x 100

Net Sales

YEAR 2009 2010 2011

Operating

Income 168,543,158 250,018,086 266,352,920

Sales 4,326,108,580 5,099,245,416 5,328,369,635NPM 3.89 5% 5%

Horizontal Analysis:

The horizontal analysis of The Pepsi Cola Company is given below.

Accounts 2010 2011 Status


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= 688.7/698.8

= 98.55%

Interpretation:The vertical analysis shows that the amount of cash out of total current assets is increased. This

shows the focus of management on cash rather than other marketable securities. Because cash is

the most liquid asset of company. Company has reduced its long term liabilities and is relying on

short term debts. This is an aggressive approach used by company. Income taxes are a very small

part of total tax which indicates that the company has more operating and other expenses due to

which its net income reduces. As the company is using an aggressive approach it is using more

debt than equity financing. This is clearly shown in above calculation.

Overall the performance of Shamim& Co. is satisfactory. It has retained its market share in

between 70% to 75% overall but in Multan they are successfully capture 80 percent market share

The managers are risk takers and they prefer more debt financing rather than equity financing.

The other reason is that Shamim& Co. is a private limited company, so it does not offer its shares

to market. So a big source of its financing is debt financing from banks and other institutions.


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PEST Analysis:The PEST analysis for Shamim and Company Private Limited is as follows:

Political Factor:

In Asia and especially in Pakistan where the political environment is not stable no Government

has completed its tenure except the last and the politics also a great influencer on the different

industries of the country. Now following are the effects on the beverages industry. The govt.

decides that what will be the rates of sales tax. The rates of main operating variables inputs such

as the Electricity are also decided by the govt.

Economical Factors:

The country like Pakistan whose economy is not strong enough is affected by so many economic

variables which are the following.

1. Low literacy rate is a problem due to which rural customers are not able to differentiate

between PEPSI and Coke and etc.

2. Employment opportunities will be higher.

3. Increasing demand of PEPSI requires establishment of new production plants.

4. Combined pricing decisions with mutual agreement between PEPSI and Coke.

Social Factors:

The social factors of each society and culture are different from each other so these also

influence the industries as well. Now it has become a trend that soft drink should be served inalmost every gathering. Fast food popularity among teenagers has led to the increase in demand

of PEPSI. Social welfare program is also active at PEPSI for example PEPSI donated Rs. 1

million for helping recent flood victims. They have been sponsoring different cricket events and

Pakistan cricket team for almost 10 to15 years.

Technological Factors:

1. Today is the era of Technology whether it is Information Technology or Production

Technology so the PEPSI is also affected by these. Following are some of these.2. Previously there were separate production plants for the production of specific brand size.

3. Now they have installed a new production plant which is capable of producing different

brand sizes at the same time.

4. The plant which they installed at the time of establishment has now been grounded.

5. The sixth production plant which is currently being installed is imported from Germany.


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6. The seventh production plant which is currently being installed is the latest that is

imported from Italy.

7. There is no institute in Pakistan providing engineering training regarding beverages

production plants so PEPSI people have to arrange onsite training for its maintenanceengineers to learn working with latest technology plants

8. There is very limited automation to keep production record. Most of the record is

maintained manually but currently they are trying to shift towards fully automated

production control system.


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SWOT Analysis:The strengths, weaknesses, opportunities and threats that can be mentioned in this section. These

findings are as follows:

Strengths:

1. Strong brand recognition

2. A large distribution and supply system

3. Daily basis supply

4. Strong sales & marketing department

5. Inspection of quality is regularly performed by Country Office to insure consistent

quality products.

6. They have their own research department which is responsible for conducting market

research

7. A strong key accounts department for conversion

8. Efficient management that can take the heavy risk

9. Strong position in FMCG products

10. They are financially very strong and require no financial help from country office

11. Focus on Differentiation

12. They offer attractive margins to the distributors, so distributors are willing to carry PEPSI

brandsWeaknesses:

1. Un fulfillment of increasing demand of Pepsi

2. Employee management

3. Poor feedback from employees

4. Insufficient salaries

5. Lack of skilled sale team

6. No Proper Infrastructure

7. Fewer Incentives

8. Not satisfied workforce

9. No involvement of lower level subordinates in decision making.

10. Monopoly of distributors cause harm to company.

Opportunities:


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1. It has opportunity to get new opening shops in new markets

a. Training of sales officer and salesman

2. Opportunity to Attract By Incentives As Pepsi is a well known brand in all over the Pakistan so it

also has the opportunity to create its value and to attract the customer by offering extra incentivesto the retailers and specially consumers

3. Innovation or Cost Reduction Edge

4. Because of high customer loyalty and brand image new brands can gain customer preference

very soon.

5. There is high market growth opportunity

6. Country office is responsible for national ad campaigns which facilitate PEPSI Multan to enjoy

the benefits of integrated advertisements.

7. Low cost skilled person availability

Threats:

1. Coca Cola and Gourmet are increasing their market share very rapidly

2. After getting the skills many employees run away due to pay

3. Coca- Cola is on its way to get market share

4. Rapid changes in demand due to seasonal reason

5. Changes in consumer purchasing power

6. Increase in competition7. Due to blame of religious group

8. Biggest threat to the brand image of the company at national and international level.

9. No proper employee s orientation programs

10. Pepsi Co. has the threat of its competitor which is putting its best to get the maximum customer satisfaction and to maximize its profits by its active and keen management.


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Suggestions and Recommendations:As far as my observation is concerned Pepsi should take the following steps:

1. Proper employee meeting at every month

2. They should take feedback from lower level employees like CRs and Salesmen

3. They must keep a fair wage rate among all the employees.

4. They must announce an allowance for CRs and Sales Officer

5. They must increase their supply to rural areas as there is a lot of demand.

6. The company should have a good control over the distributor as he must maintain a

good supply and should not commit the cross supply of competitors brand.

7. The company must launch an on the job training program for every employee as it

will enrich and refresh the knowledge and skills of employees and they will become

the strongest asset of the company.

8. The company should increase the commission and bonuses for the sales force.


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Bibliography

http://pepsiworld.com.pk/

Shamim and Co. Staff.
http://pepsiworld.com.pk/http://pepsiworld.com.pk/http://pepsiworld.com.pk/