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Coca-Cola Summer Internship Report
Document Transcript
1. Summer Internship
Repot2010AnamikaTarafdarM0907000079048753143250Kandhari Beverages
Private LimitedAn Internship Report
Anamika
Tarafdar
M090700007
IN
PARTIAL FULFILMENT OF THE MASTERS
PROGRAM IN BUSINESSADMINISTRATION,
, H.P., INDIAACADEMIC SESSION
2009-11__________________________________
____________
PREFACE
In
summer the consumption of soft drinks is
more due to hot weather in this time chilled
weather is needed everywhere and
everybody irrespective of age difference. In
the market peoples not only need water, but
they want some taste too. Here comes the
need of soft drinks: it has become an
essential part of market as people like it in
addition to the bottles, now days packages
of soft drinks i.e. Tin cans, Pet packs of i.e.
Litters canisters and dispensers areintroduced to enhance the impact in sales.
The Maters curriculum is designed in
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such a way that student can grasp maximum
knowledge and can get practical exposure to
the corporate world in minimum possible
time. Business schools of today realize theimportance of practical knowledge over the
theoretical base.
The research report
is necessary for the partial fulfillment of
Masters curriculum and it provides an
opportunity to the student in understanding
the industry with special emphasis on the
development of skills in analyzing and
interpreting practical problems through theapplication of management theories and
techniques. It is a new platform of learning
through practical experience, which
incorporates survey and comparative
analysis. It gives the learner an opportunity
to relate the theory with the practice, to test
the validity and applicability of his classroom
learning against real life business
situations.
ACKNOWLEDGEMENTWe think if any of us honestly reflects on
who we are, how we got here, what we think
we might do well, and so forth, we discover
a debt to others that spans written history.
The work of some unknown person makes
our lives easier every day. We believe it'sappropriate to acknowledge all of these
unknown persons; but it is also necessary to
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acknowledge those people, we know have
directly shaped our lives and our work.I express my gratitude to the Kandhari
Beverages Private Limited (KBL) and Mr.Eesh Sethi, General Manager for giving me
an opportunity to work with them and make
the best out of my internship.
I
specially thank my trainers, Deputy General
Manager Mr. Sagoo for constantly guiding
and supporting me throughout the training
period. My heartfelt gratitude also goes out
to the staff and employees and specificallyto Miss Preeti Bain, Marketing Research
Executive at KBL for co-operating with me
and guiding me throughout the three months
of my internship period.
I thank my
school, Chitkara Business School for being
the constant driving force to put to practice,
the theoretical knowledge that I imparted
from the program. I thank the internship co-
coordinators, Dr. S.R.Taneja, Dr. Sandhir
Sharma and Dr. Santhosh for imparting their
wisdom on my thought process.
Last
but not of least importance, I take this
opportunity to thank my parents and friends
who have been with me and offered
emotional strength and moral support.
Table of Contents
Annexure A:
Overview of the Company
CHAPTER
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1:
INTRODUCTION
1.1: A brief insight-
The FMCG Industry inIndia.
1.2: A brief insight- The Beverage Industry in
India.
1.3:
Industry
Profile
....
CHAPTER 2: THE
COCA-COLA
COMPANY
2.1: History of Coca-
Cola. 2.2: Evolution of Coca-
Cola
2.3: Manifesto for
Growth
2.3.1:
Values
2.3.2:
Mission
2.3.3: Vision
for Sustainable
Growth
CHAPTER 3: COCA-COLA
PRODUCTS
3.1: Brands of Coca-
Cola
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CHAPTER 4: KANDHARI
BEVERAGES PRIVATE LIMITED
4.1:
Introduction to the
Company
4.2: Coca-Cola and
Franchisee
.
4.3: The
Company4.3.1: Manifesto for
Growth
4.3.2:
Management4.3.3: HumanResources..
4.3.4:
Kandhari Beverages Pvt.
Ltd..
4.3.5: Enrich Agro
Food Products Pvt.Ltd..4.3.6: Growth Record
4.4: Organization Structure
4.5:
Manufacturing Unit of
KBL
4.6: Manufacturing process
at
KBL
..
4.7: Business Plan model at
KBL
.
4.8: Distribution
Network
4.8.1: Distribution
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Routes
4.8.2: Distribution
System
4.8.3: Departments involved inthe Distribution process 4.9: SWOT
Analysis of
KBL
4.9.1:
Strengths
.
4.9.2:
Weaknesses
4.9.3:Opportunities
4.9.4:
Threats
4.10:
Competitors to
KBL
CHAPTER 5:
FINANCIAL
ANALYSIS..
..
5.1: Financial
statements
CHAPTER 6:
STRATEGIC MANAGEMENT BY COCA-
COLA
CHAPTER 7:
FUTURE PLAN- THEROADMAP.
Annexure B: Summer Project
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Undertaken
CHAPTER 8 : THE
PROJECT
.. 8.1: ExecutiveSummary
.
8.2: Need and
Objective of the
Study
..
8.3: Critical Literature
Review
8.4: Research
Methodology
CHAPTER 9 :
INTERPRETATION AND
ANALYSIS.
9.1: Data
Interpretation
9.1.1: Graph 1:
Total number of Consumers based on Age
Group
9.1.2: Graph 2: Total
number of Consumers based on
Gender
9.1.3: Graph 3:
General reaction of Consumers about
MMPO.
9.1.4: Graph 4:
Reaction analyzed on basis of Age
Group.
9.1.5: Graph 5:
Reaction analyzed on basis ofgender.
9.2: End
Consumer
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Questionnaire
9.3: Q2
ANALYSIS
...
9.3.1: TrendAnalysis
9.3.2: Gap
Analysis
9.3.3:
Implementations
..
9.3.4:
Recommendations
CHAPTER10: SOME SPECIFIC
OBSERVATION
...
Annexure C: Market Research
Execution
CHAPTER 11: EXECUTIVE
SUMMARY...CHAPTER 12: SEGMENTATION
MODEL --
RED...CHAPTER 13: SAMPLING BY
CCI ...CHAPTER 14: MARKET IMPACT
TEAM...CHAPTER 15: OPEN REVIVE GROUP
(ORG ACCOUNT)...CHAPTER 16: PLACEMENT OF SGA INMARKETCHAPTER 17: SOME SPECIFIC
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OBSERVATION
...
CHAPTER 18: PROMOTIONAL
ACTIVITY......CONCLUSION.
......APPENDIX
..BIBLIOGRAPHY
EXECUTIVE SUMMARY
Coca-Cola,
the product that has given the world its best-known taste was born in Atlanta, Georgia,
on May 8, 1886. Coca-Cola Company is the
worlds leading manufacturer, marketer and
distributor of non-alcoholic beverage
concentrates and syrups, used to produce
nearly 400 beverage brands. It sells
beverage concentrates and syrups to
bottling and canning operators, distributors,
fountain retailers and fountain wholesalers.
Coca-Cola was first introduced by John Syth
Pemberton, a pharmacist, in the year 1886
in Atlanta, Georgia when he concocted
caramel-colored syrup in a three-legged
brass kettle in his backyard. He first
distributed the product by carrying it in a
jug down the street to Jacobs Pharmacy
and customers bought the drink for five
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cents at the soda fountain. Carbonated water was teamed with the
new syrup, whether by accident or
otherwise, producing a drink that wasproclaimed delicious and refreshing, a
theme that continues to echo today
wherever Coca-Cola is enjoyed. Coca-Cola
originated as a soda fountain beverage in
1886 selling for five cents a glass. Early
growth was impressive, but it was only when
a strong bottling system developed that
Coca-Cola became the world-famous brandit is today. Coca-Cola was the leading soft
drink brand in India until 1977, when it left
rather than reveal its formula to the
Government and reduce its equity stake as
required under the Foreign Regulation Act
(FERA) which governed the operations of
foreign companies in India.
In the new
liberalized and deregulated environment in
1993, Coca-Cola made its re-entry into India
through one of its largest bottler, KBL, the
North Indian bottling arm of the Coca-Cola
Company.
The main objective of this
study lies in understanding the organization
and studying the market of the SSD
(sparkling soft drinks) brands by Coca-Colaand understanding the consumers
perception and opinion about the products,
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with more inclination towards the study on
market of juices and Kinley water & soda,
and the respective competitors analysis. This report will also give insight to thecompanys norms to maintain standards, the
production process, their strategies to keep
up with their retailers, companys approach
towards the sales of SSD and most
importantly this report will provide an
opportunity to know the psychographic
needs of the retailers which in turn shows
the company an avenue to create a goodfuture plan. This report will provide detailed
information about prevailing market
competition and thus prepare itself to meet
the market challenge by making adjustment
in its new strategy and promotional activity.
The project begins with in-depth
interview with the owner of retail outlets, as
primary source, to extract the reality on
ground level about retailers psychology as
our distributor and competitors position and
strategy. The third need was to know the
psychographic needs of our consumers,
which was achieved by
feedback/questionnaire process among 100
to 150 youngsters. The conclusion drawnfrom the quantative analysis of data via
graphs and open ended feedbacks, are
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represented in under the tag of gap
analysis/grievances and
implications/suggestions.
Chapter 1:
INTRODUCTION
1.1: A brief insight-The FMCG Industry in India
Fast
Moving Consumer Goods (FMCG), also
known as Consumer Packaged Goods
(CPG) are products that have a quick
turnover and relatively low cost. Consumers
generally put less thought into the purchase
of FMCG than they do for other products.The Indian FMCG industry witnessedsignificant changes through the 1990s.
Many players had been facing severe
problems on account of increased
competition from small and regional players
and from slow growth across its various
product categories. As a result, most of the
companies were forced to revamp their
product, marketing, distribution and
customer service strategies to strengthen
their position in the market.
By the turn
of the 20th century, the face of the Indian
FMCG industry had changed significantly.
With the liberalization and growth of the
Indian economy, the Indian customer
witnessed an increasing exposure to newdomestic and foreign products through
different media, such as television and the
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Internet. Apart from this, social changes
such as increase in the number of nuclear
families and the growing number of working
couples resulting in increased spendingpower also contributed to the increase in the
Indian consumers' personal consumption.
The realization of the customer's growing
awareness and the need to meet changing
requirements and preferences on account of
changing lifestyles required the FMCG
producing companies to formulate customer-
centric strategies. These changes had apositive impact, leading to the rapid growth
in the FMCG industry. Increased availability
of retail space, rapid urbanization, and
qualified manpower also boosted the growth
of the organized retailing sector. Though the absolute profit made on
FMCG products is relatively small, they
generally sell in large numbers and so the
cumulative profit on such products can be
large. Unlike some industries, such as
automobiles, computers, and airlines, FMCG
does not suffer from mass layoffs every time
the economy starts to dip. A person may put
off buying a car but he will not put off having
his dinner.
Unlike other economysectors, FMCG share float in a steady
manner irrespective of global market dip,
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because they generally satisfy rather
fundamental, as opposed to luxurious
needs. The FMCG sector, which is growing
at the rate of 9% is the fourth largest sectorin the Indian Economy and is worth
Rs.93000 crores. The main contributor,
making up 32% of the sector, is the South
Indian region. It is predicted that in the year
2010, the FMCG sector will be worth
Rs.143000 crores. The sector being one of
the biggest sectors of the Indian Economy
provides up to 4 million jobs.
TheFMCG sector consists of the following
categories:
Personal Care- Oral care,
Hair care, Wash (Soaps), Cosmetics and
Toiletries, Deodorants and Perfumes, Paper
products (Tissues, Diapers, Sanitary
products) and Shoe care; the major players
being; Hindustan Lever Limited, Godrej
Soaps, Colgate, Marico, Dabur and Procter
& Gamble.
Household Care- Fabric
wash (Laundry soaps and synthetic
detergents), Household cleaners
(Dish/Utensil/Floor/Toilet cleaners), Air
fresheners, Insecticides and Mosquito
repellants, Metal polish and Furniture polish;
the major players being; Hindustan LeverLimited, Nirma and Ricket Colman.Branded and Packaged foods and
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beverages- Health beverages, Soft drinks,
Staples/Cereals, Bakery products (Biscuits,
Breads, Cakes), Snack foods, Chocolates,
Ice-creams, Tea, Coffee, Processed fruits,Processed vegetables, Processed meat,
Branded flour, Bottled water, Branded rice,
Branded sugar, Juices; the major players
being; Hindustan Lever Limited, Nestle,
Coca-Cola, Cadbury, Pepsi and Dabur.Spirits and Tobacco- the major players
being; ITC, Godfrey, Philips and UB.1.2: A
brief insight- The Beverage Industry inIndia
In India, beverages form an
important part of the lives of people. It is an
industry, in which the players constantly
innovate, in order to come up with better
products to gain more consumers and
satisfy the existing consumers. BEVERAGESAlcoholicNon-
AlcoholicCarbonatedNon-
CarbonatedColaNon-ColaNon-Cola
BEVERAGE INDUSTRY IN INDIA
The
beverage industry is vast and there various
ways of segmenting it, so as to cater the
right product to the right person. The
different ways of segmenting it are as
follows:
Alcoholic, non-alcoholic andsports beverages.
Natural and
Synthetic beverages.
In-home
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consumption and out of home on premises
consumption.
Age wise segmentation
i.e. beverages for kids, for adults and for
senior citizens.
Segmentation based onthe amount of consumption i.e. high levels
of
consumption and low levels of
consumption.
If the behavioral patterns
of consumers in India are closely noticed, it
could be observed that consumers perceive
beverages in two different ways i.e.
beverages are a luxury and that beverages
have to be consumed occasionally. Thesetwo perceptions are the biggest challenges
faced by the beverage industry. In order to
leverage the beverage industry, it is
important to address this issue so as to
encourage regular consumption as well as
and to make the industry more affordable.
Soft drinks witnesses healthy growth
in India
Soft drinks recorded robust
double digit off-trade value growth in 2009,
which was higher than that witnessed in
2008. Bottled water and fruit/vegetable juice
continued to grow strongly as more
consumers turned to these products in the
search of healthier options. Carbonates also
witnessed good sales growth as the longsummer helped to fuel sales. Energy drinks
has witnessed a slowdown in sales growth
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as its is a premium priced product type and
therefore not considered a necessity.
Importantly, more consumers refrained from
spending on non-essential items in the wakeof the economic
downturn.
Soft drinks
is expected to record healthy sales growth in
the forecast period
Soft drinks is
expected to witness a healthy double-digit
total volume CAGR growth over the forecast
period. As consumer awareness and
understanding of the variety of soft drinks
increases and as manufacturers continue tobe innovative, soft drinks is expected to
perform well. Products on the health and
wellness platform and niche categories can
expect to see good sales growth in the
forecast period.
Chapter 2: THE
COCA-COLA COMPANYHeadquarters: One Coca-Cola Plaza
Atlanta, GA 30313
Employees: 71,000
CEO: Neville Isdell
Stock
Symbol: KO
Website:
http://www.Coca-Cola.com/
Coca-Cola
is the world's leading beverage company.
The company is the world's leading
manufacturer, marketer, and distributor of
nonalcoholic beverage concentrates andsyrups, used to produce nearly 400
beverage brands. The company makes and
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distributes sodas, waters, fruit juice, teas
and coffees and energy drinks. Through the
world's largest beverage distribution system,
consumers in more than 200 countries drinkthe company's beverages at a rate
exceeding 1.5 billion servings each day.
Major brands include Coke, Diet Coke,
Sprite, Bacardi, A&W, Minute Maid, Dasani,
Nestea, Powerade and Hi C.
2.1:
History of Coca-Cola
Coca-Cola was
invented by Doctor John Pemberton a
pharmacist from Atlanta Georgia in May of1886. John Pemberton concocted the Coca-
Cola formula in a three legged brass kettle;
all this was done in his backyard. The name
Coca-Cola was actually given to John
Pemberton by his bookkeeper Frank
Robinson had excellent penmanship. He
first scripted " Coca-Cola" into the flowing
letters which has become the famous logo
we know and love today.
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 Pembertonover $70 in expanses, so the first year of
sales were a loss. Until 1905, the soft drink,
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marketed as a tonic, contained extracts of
cocaine as well as the caffeine-rich kola nut.
In 1887, another Atlanta pharmacist and
businessman, Asa Candler bought theformula 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; Candler's
aggressive marketing of the product takes
credit for that. With Asa Candler, now at the
helm, the Coca-Cola Company increased
syrup sales by over 4000% between 1890and 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. Coca-Cola
began selling syrup to independent bottling
companies licensed to sell the drink. Still
today, the US soft drink industry is
organized on this principle
2.2:
Evolution of Coca-Cola
Coca-Cola
originated as a soda fountain beverage in
1886 selling for five cents a glass. Early
growth was impressive, but it was only when
a strong bottling system developed that
Coca-Cola became the world-famous brandit is today.
1894 A modest start for a
Bold Idea
In a candy store in
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Vicksburg, Mississippi, brisk sales of the
new fountain beverage called Coca-Cola
impressed the store's owner, Joseph A.
Biedenharn. He began bottling Coca-Cola tosell, using a common glass bottle called a
Hutchinson. Biedenharn sent a case to Asa
Griggs Candler, who owned the Company.
Candler thanked him but took no action.
One of his nephews already had urged that
Coca-Cola be bottled, but Candler focused
on fountain sales.
1899 The first
bottling agreement
445770046990Twoyoung attorneys from Chattanooga,
Tennessee believed they could build a
business around bottling Coca-Cola. In a
meeting with Candler, Benjamin F. Thomas
and Joseph B. Whitehead obtained
exclusive rights to bottle Coca-Cola across
most of the United States (specifically
excluding Vicksburg) -- for the sum of one
dollar. A third Chattanooga lawyer, John T.
Lupton, soon joined their venture.1900-1909 Rapid growth
The
three pioneer bottlers divided the country
into territories and sold bottling rights to local
entrepreneurs. Their efforts were boosted by
major progress in bottling technology, whichimproved efficiency and product quality. By
1909, nearly 400 Coca-Cola bottling plants
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were operating, most of them family-owned
businesses. Some were open only during
hot-weather months when demand was
high.
1916 Birth of the contourbottle
014605Bottlers worried that the
straight-sided bottle for Coca-Cola was
easily confused with imitators. A group
representing the Company and
4591050379730bottlers asked glass
manufacturers to offer ideas for a distinctive
bottle. A design from the Root Glass
Company of Terre Haute, Indiana wonenthusiastic approval in 1915 and was
introduced in 1916. The contour bottle
became one of the few packages ever
granted trademark status by the U.S. Patent
Office. Today, it's one of the most
recognized icons in the world - even in the
dark!
1920s Bottling overtakes
fountain sales
As the 1920s dawned,
more than 1,000 Coca-Cola bottlers were
operating in the U.S. Their ideas and zeal
fueled steady growth. Six-bottle cartons
were a huge hit after their 1923 introduction.
A few years later, open-top metal coolers
became the forerunners of automated
vending machines. By the end of the 1920s,bottle sales of Coca-Cola exceeded fountain
sales.
4114800723901920s and 30s
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International expansion
Led by
longtime Company leader Robert W.
Woodruff, chief executive officer and
chairman of the Board, the Company begana major push to establish bottling operations
outside the U.S. Plants were opened in
France, Guatemala, Honduras, Mexico,
Belgium, Italy, Peru, Spain, Australia and
South Africa. By the time World War II
began, Coca-Cola was being bottled in 44
countries.
088901940s Post-war
growth
During the war, 64 bottlingplants were set up around the world
to
supply the troops. This followed an urgent
request for bottling equipment and materials
from General Eisenhower's base in North
Africa. Many of these war-time plants were
later converted to civilian use, permanently
enlarging the bottling system and
accelerating the growth of the Company's
worldwide business.41148003321051950s Packaging
innovations
For the first time,
consumers had choices of Coca-Cola
package size and type -- the traditional 6.5-
ounce contour bottle, or larger servings
including 10-, 12- and 26-ounce versions.Cans were also introduced, becoming
generally available in 1960.
1960s
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New brands introduced
Following
Fanta in the 1950s, Sprite, Minute
Maid, Fresca and TaB joined brand
Coca-Cola in the 1960s. Mr. Pibb andMello Yello were added in the 1970s. The
1980s brought diet Coke and Cherry
Coke, followed by POWERADE and
DASANI in the 1990s. Today hundreds of
other brands are offered to meet consumer
preferences in local markets around the
world.
1970s and 80s Consolidation
to serve customers
As technology ledto a global economy, the retailers who sold
Coca-Cola merged and evolved into
international mega-chains. Such customers
required a new approach. In response,
many small and medium-size bottlers
consolidated to better serve giant
international customers. The Company
encouraged and invested in a number of
bottler consolidations to assure that its
largest bottling partners would have capacity
to lead the system in working with global
retailers.
1990s New and growing
markets
Political and economic
changes opened vast markets that were
closed or underdeveloped for decades. Afterthe fall of the Berlin Wall, the Company
invested heavily to build plants in Eastern
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Europe. And as the century closed, more
than $1.5 billion was committed to new
bottling facilities in Africa.
21st
Century
The Coca-Cola bottling systemgrew up with roots deeply planted in
local
communities. This heritage serves the
Company well today as people seek brands
that honor local identity and the
distinctiveness of local markets. As was true
a century ago, strong locally based
relationships between Coca-Cola bottlers,
customers and communities are thefoundation on which the entire business
grows.
2001 launched the new
fridge pack in USA a thinner longer 12 pack
design
2005 innovative aluminum
contour bottles introduced commonly called
M5 as the magnificent five bottles., Coca-
Cola zero a zero calorie Coca-Cola with real
Coca-Cola taste launched.
2006
Coca-Cola turns 120. Launches the every
drop counts campaign to make the
consumers remind of the variety of products
Coca-Cola offers.
2007 launches
the PET bottle which uses 5% less plastic
than the other PET bottles opens up new
world of Coca-Cola in Atlanta Georgia onMay 24th.
2.3: Manifesto for Growth The world is changing all around us.
To
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continue to thrive as a business over the
next ten years and beyond, we must look
ahead, understand the trends and forces
that will shape our business in the future andmove swiftly to prepare for what's to come.
We must get ready for tomorrow today.
That's what our 2020 Vision is all about. It
creates a long-term destination for our
business and provides us with a " Roadmap"
for winning together with our bottling
partners.
2.3.1: Our Mission
Our
Roadmap starts with our mission, which isenduring. It declares our purpose as a
company and serves as the standard
against which we weigh our actions and
decisions.
To refresh the world...To inspire moments of optimism and
happiness...
To create value and make
a difference.
2.3.2: Our Vision Our vision serves as the framework for our
Roadmap and guides every aspect of our
business by describing what we need to
accomplish in order to continue achieving
sustainable, quality growth.
People:
Be a great place to work where people are
inspired to be the best they can be. Portfolio: Bring to the world a portfolio ofquality beverage brands that anticipate and
satisfy people's desires and needs.
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/>Partners: Nurture a winning network of
customers and suppliers, together we create
mutual, enduring value.
Planet: Be a
responsible citizen that makes a differenceby helping build and support sustainable
communities.
Profit: Maximize long-
term return to shareowners while being
mindful of our overall responsibilities. Productivity: Be a highly effective, lean
and fast-moving organization.
2.3.3:
Our Winning CultureOur Winning Culture
defines the attitudes and behaviors that willbe required of us to make our 2020 Vision a
reality.
2.3.4: Live Our Values Our
values serve as a compass for our actions
and describe how we behave in the world.
Leadership: The courage to shape a
better future
Collaboration: Leverage
collective genius
Integrity: Be realAccountability: If it is to be, it's up to
mePassion: Committed in heart and mind Diversity: As inclusive as
our brandsQuality: What we do, we do well2.3.5: Focus on the
Market
Focus on
needs of our consumers, customers and
franchise partners
Get out into the
market and listen, observe and learn
Possess a world view
Focus on
execution in the marketplace every day
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/>Be insatiably curious
2.3.6: Work
Smart
Act with urgency.
Remain
responsive to change.
Have the
courage to change course when needed.
Remain constructively discontent.Work efficiently.
2.3.7: Act Like
Owners
Be accountable for our actions
and inactions.
Steward system assets
and focus on building value.
Reward
our people for taking risks and finding better
ways to solve problems.
Learn from
our outcomes -- what worked and whatdidnt.
2.3.8: Be the Brand Inspire
creativity, passion, optimism and fun.
Chapter 3: COCA-COLA
PRODUCTS
The Coca-Cola Company
offers a wide range of products to the
customers including beverages, fruit juices
and bottled mineral water. The Company is
always looking to innovate and come up
with, either complete new products or new
ways to bottle or pack the existing drinks.
3.1: Brands of Coca-Cola 37433251993900015875Coca-Cola Zero
has been one of the most successful
product launch hes in Coca-Colas history.
In 2007, Coca-Colas sold nearly 450 million
cases globally. Put into perspective, that's
roughly the same size as Coca-Colas total
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business in the Philippines, one of our top
15 markets. As of September 2008, Coca-
Cola Zero is available in more than 100
countries.
2933700365125EnergyDrinks
For those with a high-intensity
approach to life, Coca-Colas brands of
Energy Drinks contain ingredients such as
ginseng extract, guarana extract, caffeine
and B vitamins.
29781536195
-
12382545085Juices/Juice Drinks
We
bring innovation to the goodness of juice in
Coca-Colas more than 20 juice and juicedrink brands, offering both adults and
children nutritious, refreshing and flavorful
beverages.
-85725142875171450-
170815Soft Drinks
Coca-Colas dozens
of soft drink brands provide flavor and
refreshment in a variety of choices. From the
original Coca-Cola to most recent
introductions, soft drinks from The Coca-
Cola Company are both icons and
innovators in the beverage industry.3606165-1905002857500160020Sports
Drinks
Carbohydrates, fluids, and
electrolytes team together in Coca-Colas
Sports Drinks, providing rapid hydration and
terrific taste for fitness-seekers at anylevel.
Tea and CoffeeBottled and
canned teas and coffees provide consumers'
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favorite drinks in convenient take-anywhere
packaging, satisfying both traditional tea
drinkers and today's growing coffee
culture.314325358775
-134620165102922270318770Water
Smooth and
essential, our Waters and Water Beverages
offer hydration in its purest form.423545180340
-181546597790Other
Drinks
So much more than soft drinks.
Coca-Colas brands also include milk
products, soup, and more so you canchoose a Coca-Cola Company product
anytime, anywhere for nutrition, refreshment
or other needs.
Coca-Cola IndiaIn the Cola Section:
In the
Lemon section:
In the Orange
section:
In the Juice section:
In the Soda Water and Bottled
Mineral Water section:
In the
Tonic Water section:
In the Tea
and Coffee section:
Chapter 4:
KANDHARI BEVERAGES PVT. LTD.4.1: Introduction to the CompanyCoca-Cola was the leading soft drink
brand in India until 1977, when it left rather
than reveal its formula to the Governmentand reduce its equity stake as required
under the Foreign Regulation Act (FERA)
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which governed the operations of foreign
companies in India. Coca-Cola re-entered
the Indian market on 26th October 1993
after a gap of 16 years, with its launch inAgra. An agreement with the Parle Group
gave the Company instant ownership of the
top soft drink brands of the nation. With
access to 53 of Parles plants and a well set
bottling network, an excellent base for rapid
introduction of the Companys International
brands was formed. The Coca-Cola
Company acquired soft drink brands likeThumps Up, Goldspot, Limca, Maaza, which
were floated by Parle, as these products had
achieved a strong consumer base and
formed a strong brand image in Indian
market during the re-entry of Coca-Cola in
1993.Thus these products became a part of
range of products of the Coca-Cola
Company.
left0KANDHARI GROUP
was established in 1967 by Late Mr. Teja
Singh Kandhari, is presently a progressive
business house in India. The groups first
venture was a bottling unit as a franchisee of
PARLEs soft drink manufacturing Gold
Spot under license from PARLE
established at Amritsar in the north Indianstate of Punjab.Kandhari Beverages Ltd is
among Coca-Cola India's top 4 franchisee
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bottlers.Over a period of time, the Group
ventured deep into Aerated Water business
and expanded its scope of operations to
other Indian states including Punjab,Haryana, Chandigarh and Himachal
Pradesh.
left0In 1993, the world
renowned soft drink giant - Coca-Cola
entered India and bought over PARLE brand
of soft drink products, being one of the star
bottlers of PARLE the Group switched to
manufacturing, bottling & marketing of Coke
brand of soft drink products.
4.2: Coca-Cola and Franchisee
Coca-Cola is
made up of 7000 local employees, 500
managers, over 60 manufacturing locations,
27 Company Owned Bottling Operations
(COBO), 17 Franchisee Owned Bottling
Operations (FOBO) and a network of 29
Contract Packers that facilitate the
manufacture process of a range of products
for the company. It also has a supporting
distribution network consisting of 700,000
retail outlets and 8000 distributors. Almost
all goods and services required to cater to
the Indian market are made locally, with help
of technology and skills within the Company.
FIGURE 3: LOCATIONS OF COBO,FOBO & CONTRACT PACKAGING IN
INDIA
4.3: The Company
4.3.1:
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MANIFESTO FOR GROWTH
OUR
MISSION In line with our main partner Coca-
Cola we wish to refresh the world and in
addition we further aim to create value andmake a difference by making our
environment a cleaner and better place to
live for our future generations. OUR VISION
Our Company vision as was established by
the founder of our Group remains to provide
the people that work in the group, be it the
owners or managers a great place to work
where people are inspired to be the bestthey can be and work with quality brands
and Partners to maximize profit and
productivity.
4.3.2: MANAGEMENTMr. Nirmal Singh Kandhari, Group
Chairman has been a pioneer figure in
Indian soft drink industry. He was
instrumental in establishing Kandhari Group
as a soft drink manufacturing giant with a
number of bottling units in Northern India.Mr.
Jaspal Singh Kandhari, Managing
Director, has been steering the Group to
new heights by redefining business strategy
of the family business. Mr.Jaspal Kandhari is
Mr. Nirmal Singh Kandharis younger
brother.Mr.Varinder Pal Singh Kandhari,Executive Director looks after the day to day
operations of the group. He is the son of Mr.
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Nirmal Singh.
4.3.3: HUMAN
RESOURCE
The Kandhari Group has
more than 3000+ employees, which include
around 300 professionals with various skillset and professional competence in the
various industries they are handling. The
Group has different project execution ,
maintenance teams for different application
areas in Information Technology Industry.
4.3.4: KANDHARI BEVERAGES PVT.
LTD.
Kandhari Beverages Pvt. Ltd,
Nabipur, Punjab and Baddi, HimachalPradeshleft0The Company is engaged in the
business of manufacturing, marketing and
distribution of aerated water under franchise
agreement with the Coca-Cola Company,
USA. The Company has two mega
greenfield bottling plants for filling soft drinks
located at Village Nabipur, District
Fatehagarh Sahib (Punjab) and Village
Katha, Baddi, District Solan (HP). Present
gross turnover of the company is approx Rs.
190.00 Crores. The company has also
entered the power sector by setting up a
6.25 MW Wind Mill project having 5 units in
the State of Maharashtra.
4.3.5:
ENRICH AGRO FOOD PRODUCTS PVT.LTD.
Enrich Agro Food Products Pvt.
Ltd., Gurgaon, HaryanaThe Company is an
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production along with financial discipline,
leading to consistently increasing sales
graph and an unblemished track record of
dealings with FIs/banks. Although soft drinkbusiness still remains core activity of the
Group, yet sensing increased focus on
industrial activity in India, the Group has
ventured out into other infrastructural
projects of prime importance like Power &
Energy generation from non-conventional
resources and mining.26479503384554.4:
OrganisationalStructure
285750111125ORGANIZATION STRUCTURE IN COCA-
COLA, INIDA
ORGANIZATION
STRUCTURE IN KANDHARI BVG PVT
LTD.
4.5: Manufacturing
The
Company has two mega greenfield bottling
plants for filling soft drinks located at Village
Nabipur, District Fatehagarh Sahib (Punjab)
and Village Katha, Baddi, District Solan
(HP).
17145360045Manufacturing
Process
Processing ProductionSoft drink bottling or manufacturing
involves five major processes, each with its
own safety issues that must be evaluated
and controlled:
1. Treating water.
2. Compounding ingredients.
3.
Carbonating product.
4. Filling
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product.
5. Packaging.
The
production of soft drink begins with the
preparation or batching of thick, high-solid
syrup. This syrup is made in a stainlesssteel tank by the blending of a flavored
concrete containing various artificial and
natural flavours (the concentrate is
manufactured by and purchased from the
parent company by the individual bottlers),
sodium benzoate (preservative), sugar, and
treated water. This syrup is checked by
quality control for conformance toestablished company standards and then
pumped to the proportioner in the filling
area. At the proportioner, the syrup and
treated water pass through pre-set orifices
at a constant rate of flow and are blended at
a ratio of approximately 1 part syrup to 5
parts of treated water. The product is then
pumped to the chiller/carbonator to produce
the final soft drink of the proper carbonation
and fed to the can or bottle filler. During the
carbonating process the soft drink is chilled
to approximately 2-5C to prevent foaming
during filing process.
Soft drink
canning line showing filling operationsReturnable bottles to be filled are usuallyhand fed by the case onto a conveyer which
carries the cases of empty bottles to
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uncaser. The uncaser removes the bottles
from the cases and places them onto the
empty bottle conveyer. From the uncaser,
the conveyor carries the bottles to the bottlewasher where they are immersed in a 3-5%
hot caustic solution for a specified time
period and rinsed with fresh water prior to
their discharge from the bottle washer. Prior
to entering the filler, the bottles are
inspected either visually by employees or
electronically by a light scanner to insure no
foreign objects or debris is left in the bottle.Non-returnable bottles and cans pass
through a rinser which consists of a series of
cold water spray. These sprays remove
loose dust and debris from inside and
outside of the containers.
Eight-
packs of 2-litre soft drink plastic bottles on
the way to an automatic palletizer
The
individual bottles are then filled, discharged
from the filler, and conveyed to the
capper/closure machine where a crimp cap
or twist-off type closure is applied. The
containers are then coded an then passed
through the bottle warmer. The warm water
sprays inside the warmer to bring the
temperature of the product to approximateroom temperature. The purpose of the
warmer is to avoid excessive condensation
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which would form on the containers exterior
if they were allowed to gradually warm to
room temperature. Any condensation on the
containers exterior would cause problemsfor the rest of the packaging involved,
including label application and fiber carton
packaging.
After the bottles are
discharged from the warmer they are
conveyed to the labeler and then to the case
packer where the filled bottles are re-
packaged into cases. The cases of product
travel to the palletiser which automaticallystacks the cases on a pallet for storage and
shipping.
4.5: Business Plan model at
KBL
Let us look at the sequential
system of the distribution network right from
the beginning.
Concentrate / syrup
from CCIBaddi plantNabipur plantPlant ware housePlant ware houseRegional depot house of Himachal
Pradesh.Regional depot house of Punjab
and Haryana.
Imports of canisters`
Distribution Routes to Retail
ShelfDistribution Routes to Retail ShelfConsumer
4.6: Distribution
Network
KBPL has a wide and well
managed network of salesmen appointed fortaking up the responsibility of distribution of
products to diverse parts of the cities. The
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distribution channels are constructed in such
a way that the demand of customers is
fulfilled at the right place and the right time
when it is needed by them.
A typicaldistribution chain at KBPL would be:The customers of the
Company are
divided into different categories and different
routes, and every salesman is assigned to
one particular route, which is to be followed
by him on a daily basis. A detailed and well
organized distribution system contributes to
the efficiency of the salesmen. It also leadsto low costs, higher sales and higher
efficiency thereby leading to higher profits to
the firm.
4.6.1: Distribution RoutesThe various routes formulated by KBPL
for
distribution of products are as follows:Key Accounts: The customers in this
category collectively contribute a large
chunk of the total sales of the Company. It
basically consists of organizations that buy
large quantities of a product in one single
transaction. The Company provides goods
to these customers on credit, payments
being made by them after a certain period of
time i.e. either a month of half a month. Examples: Clubs, fine
dine restaurants,hotels, Corporate houses etc.
Future
Consumption: This route consists of outlets
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of Coca-Cola products, wherein a
considerable amount of stock is kept in
order to use for future consumption. The
stock does not exhaust within a day or two,instead as and when required stocks are
stacked up by them so as to avoid shortage
or non-availability of the product.
Examples: Departmental stores, Super
markets etc.
Immediate Consumption:
The outlets in this route are those which
require stocks on a daily basis. The stocks
of products in these outlets are not storedfor future use instead, are exhausted on the
same day and might run a little into the next
day i.e. the products are consumed at a fast
pace.
Examples: Small sized bars
and restaurants, educational institutions etc.
General: Under this route, all the
outlets that come in a particular area or an
area along with its neighboring areas are
catered to. The consumption period is not
taken into consideration in this particular
route.4.6.2: Distribution System
The
system adopted by the Chandigarh Bottling
Company (CBC) to distribute its products in
the city is, direct on-spot delivery on on-spot
demand by the retail outlet.
Thesalesman hired by the company is
accompanied by an assistant and a Market
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Developer (MD). They carry all the skus in
the goods carrying truck and are assigned a
specific route, on which they have to deliver
all the products to all the retail outlets thatfalls along that route, and deliver as per the
demand on-spot and get paid in cash
(exceptions are there).
Direct
distribution: In direct distribution, the bottling
unit or the bottler partner has direct control
over the activities of sales, delivery, and
merchandising and local account
management at the store level.
Indirectdistribution: In indirect distribution, an
organization which is not part of the Coca-
Cola system has control on one or more of
the distribution elements (Sales, delivery,
merchandising and local account
management)
Merchandising:
Merchandising means communication with
the consumer at the point of purchase to
convey product benefit, value and Quality.
Sales people and delivery personnel both
have this responsibility. In certain locations
special teams who go into business
locations to specifically merchandise our
products.
4.6.3: Departments involved
in the Distribution process
TheDistribution process mainly consists of three
departments:
Distribution Department:
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It appoints distributors and establishes a
distribution network, processes approved
sale orders and prepares invoices, arranges
logistics and ship products, co-ordinateswith distributors for collections and monitors
distribution stocks and their set-up.Finance Department: It checks credit limits
and approves sales orders in compliance
with the credit policy followed by the firm,
records collections from distributors,
periodically reconciles outstanding balances
from distributors, obtains balanceconfirmation from distributors and follows up
outstanding balances.
Shipping or
Warehousing Department: It dispatches
goods as per approved by order, ensures
that stocks are dispatched on a FIFO basis,
ensures physical control over load out area
and updates warehouse stock records in a
timely manner.
4.7: SWOT Analysis of
KBL
4.7.1: StrengthsDISTRIBUTION NETWORK: The
Company has a strong and reliable
distribution network. The network is formed
on the basis of the time of consumption and
the amount of sales yielded by a particular
customer in one transaction. It has adistribution network consisting of a number
of efficient salesmen, 26,000 retail outlets.
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The distribution fleet includes different
modes of distribution, from contracted
transportation for goods carrying task of 10-
tonne trucks to open-bay three wheelers thatcan navigate through narrow alleyways of
Indian cities and trademarked three-
wheelers.
STRONG BRANDS: The
products produced and marketed by the
Company have a strong brand image.
People all around the world recognize the
brands marketed by the Company. Strong
brand names like Sprite, Fanta, Limca,Thums Up and Maaza add up to the brand
name of the Coca-Cola Company as a
whole. The red and white Coca-Cola is one
of the very few things that are recognized by
people all over the world. Coca-Cola has
been named the world's top brand for a
fourth consecutive year in a survey by
consultancy Interbrand. It was estimated
that the Coca-Cola brand was worth
$70.45billion.
LOW COST OF
OPERATIONS: The production, marketing
and distribution systems are very efficient
due to forward planning and maintenance of
consistency of operations which minimizes
wastage of both time and resources leads tolowering of
costs.
4.7.2:
Weaknesses
LOW EXPORT LEVELS:
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The brands produced by the company are
brands produced worldwide thereby making
the export levels very low. Over that even
domestic demands are sometimes gounfulfilled. In India, there exists a major
controversy concerning pesticides and other
harmful chemicals in bottled products
including Coca-Cola. In 2003, the Centre for
Science and Environment (CSE), a non-
governmental organization in New Delhi,
said aerated waters produced by soft drinks
manufacturers in India, includingmultinational giants PepsiCo and Coca-
Cola, contained toxins including lindane,
DDT, malathion and chlorpyrifos- pesticides
that can contribute to cancer and a
breakdown of the immune system.
Therefore, people abroad, are apprehensive
about Coca-Cola products from India.IMPORT FROM OTHER
MANUFACTURERS: Import of few particular
packagings from other manufacturers ads a
cost to the business, like importing of cans
from Pune and water from Delhi etc. But this
problem will be soon removed with the
establishment of new bottling line in
Saha.
4.7.3: Opportunities
LARGE DOMESTIC MARKETS: The
domestic market for the products of the
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Company is very high as compared to any
other soft drink manufacturer. Coca-Cola
India claims a 58 per cent share of the soft
drinks market; this includes a 42 per centshare of the cola market. Other products
account for 16 per cent market share, chiefly
led by Limca.
HIGHER INCOME
AMONG PEOPLE: Development of India as
a whole has lead to an increase in the per
capita income thereby causing an increase
in disposable income. Unlike olden times,
people now have the power of buying goodsof their choice without having to worry much
about the flow of their income. The beverage
industry can take advantage of such a
situation and enhance their sales. 4.7.4: Threats
IMPORTS: As India is
developing at a fast pace, the per capita
income has increased over the years and a
majority of the people are educated, the
export levels have gone high. People
understand trade to a large extent and the
demand for foreign goods has increased
over the years. If consumers shift onto
imported beverages rather than have
beverages manufactured within the country,
it could pose a threat to the Indian beverageindustry as a whole in turn affecting the
sales of the Company.
SLOWDOWN
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IN RURAL DEMAND: The rural market may
be alluring but it is not without its problems:
Low per capita disposable incomes that is
half the urban disposable income; largenumber of daily wage earners, acute
dependence on the vagaries of the
monsoon; seasonal consumption linked to
harvests and festivals and special
occasions; poor roads; power problems; and
inaccessibility to conventional advertising
media. All these problems might lead to a
slowdown in the demand for the companysproducts.
4.8: Products and Packaging
Details
Though the Coca-Cola
Company owns the innovation of 3,300
drinks including beverages, tea and coffee,
fresh juices, packaged water and energy
drinks but, all of them are not dominant at
every place, may be due to cultural,
geographic, demographic, production and
demand limitations. Kandhari Beverages
Pvt. Ltd. In association with The Coca-Cola
Company manufactures the following
mentioned brands and in mentioned
packagings.
The worlds favourite
drink. The worlds most valuable brand. The
most recognizable word across the worldafter OK. Coca-Cola has a remarkable
heritage. From a humble beginning in 1886,
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its now the flagship brand of the largest
manufacturer, marketer and distributor of
non-alcoholic beverages in the world.Coca-Cola returned to India in 1992 andover the past fourteen years has enthralled
consumers in India by connecting with
passions of India- cricket, movies, music
and food. Coca-Cola has been very strongly
associated with cricket, sponsoring the world
cup in 1996 and various other tournaments,
including the Coca-Cola Cup in Sharjah in
the late 90s. Coca-Colas advertisingcampaigns Jo Chaho Ho Jaye and Life Ho
To Aisi were very popular and had entered
the youths vocabulary. In 2002, Coca-Cola
launched its iconic campaign Thanda
Matlab Coca-Cola which sky-rocketed the
brand to make it Indias favourite soft-drink
brand. In 2003, Coke was made available
for just Rs.5 across the country and this
pricing initiative together with enhanced
distribution ensured that all brands in the
portfolio grew exponentially.
Coca-Cola
had signed on various celebrities including
movie stars such as Karishma Kapoor,
Cricketer such as Srinath, Sourav Ganguly,
southern celebrities like Vijay in the past andtoday, its brand ambassador is Amir Khan.
Strong Cola Taste, Macho Personality.
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Thums Up is a leading sparkling soft drink
and most trusted brand in India. Originally
introduced in 1977, Thums Up was acquired
by The Coca-Cola Company in 1993.
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 boys.Worldwide Sprite is ranked as the No.4
soft drink & is sold in more than 190
countries. In India, Sprite was launched in
the year 1999 & today it has grown to beone 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 straight forward and honest
attitude. Its clear crisp refreshing taste
encourages the todays youth to trust their
instincts, influence them to be true to who
they are and to obey their thirst.
Internationally, Fanta the orange drink of
The Coca-Cola Company, is seen as one of
the favourite drinks since 1940s. Fanta
entered Indian market in the year 1993.
Over the years Fanta has occupied a strong
market place and identified as The Fun
Catalyst.
Perceived as a fun youth
brand, Fanta stands for its vibrant color,
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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 associatedwith happy, cheerful and special time with
friends.
Lime n Lemoni Limca can
cast a tangy refreshing spell on anyone,
anywhere. Derived from Nimbu +Jaisa
hence LimeSa, Limca has lived up to its
promise of refreshment and has been the
original thirst choice of millions of
consumers for 3 decades. Born in 1971,Limca has remained unchallenged as the
No.1 Sparkling Drink in the Cloudy lemon
Segment. The success formula is the sharp
fizz and lemoni bite combined with the single
minded proposition of the brand as the
provider of Freshness.
Limcas
Freshness is like no other- lime n lemoni
Limca refreshness, reenergizes, rejunevates
not just your body but also your
emotions.The new Limca campaign takes
the first step towards taking the earlier
water-like freshness idea to sn emotional
platform relevant for the young-adult, who
pursue success and achievement, but still
want freshness to rejuvenate the fun,energy, excitement and romance in their
lives. Freshness of Emotions idea
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stemmed from the insight about our
consumer- the desire to rejuvenate her/his
emotions which are constantly being dulled
in routine pursuit of success.
MinuteMaid- A 62 year success story. The history
of the Minute Maid brand goes as far as
back as 1945 when the Florida Foods
Corporation developed orange juice powder.
The company developed a process that
eliminates 80% of the water in orange juice,
forming a frozen concentrate that when
reconstituted created orange juice. Theybranded it Minute Maid, a name connoting
the convenience and the ease of
preparation(in a minute). Minute Maid thus
moved to the first ever orange juice from
concentrate.
Mango. It is a fruit
associated with good times like no other.
Aptly called the king of fruits, mangoes are
to mango lovers what romance is to a
Casanova. Now imagine this delicious fruit,
bottled. This is what Maaza all about.
Introduced in the late 1970s, Maaza has
today come o symbolize the very spirit of
mangoes. Universally loved for its taste,
colour,thickness and wholesome properties,
Maaza is the mango lovers first choice. Maazas universal appeal was
responsible for the brand being recognized
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as a drink that provides wholesome family
fun. Even today people hum the memorable
lines-taaza mango, maaza mango and
botal main aam maaza hai naam. Maaza was realiswed to be about the
ultimate mango indulgence. And this was
because; only the freshest, juiciest Alphonso
mangoes go into a Maaza.
This
thought found voice creativity in the idea of
Tempting the mango expert. This idea
struck a chord with everyone and found a
universal appeal. It was to nobodys surprisethen that Maaza soon became the most
loved beverage rand in India.
Today
maaza has come a long way to stand as the
ideal way to satisfy ones craving for
mangoes. Aptly framed, the line Maaza lao,
aam ki pyaas bujhao symbolizes the very
essence of mangoes that has been captured
in a bottle.
It provides consumers the
most authentic experience of rich, juicy
mangoes to satisfy their thirst for mangoes-
anytime, anywhere!
Water, a thirst
quencher that refreshes, a life giving force
that washes away all the toxins away. A
ritual purifier that cleanses, purifies,
transforms. Water, the most basic need oflife, the very substance of life, a celebration
of life itself. The importance of water can
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never be understood. Particularly in a nation
such as India where water governs the lives
of millions, be it as a part of everyday rituals
or as the monsoon which gives life to thesub-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. Kinley water comes with the
assurance of safety from the Coca-Cola
company. That is why we introduced Kinleywith reverse-osmosis aling with the latest
technology to ensure the purity of our
product. Thats why we go through rigorous
testing procedure at each and every location
where Kinley is produced. Because we
believe that right to pure, safe drinking water
is fundamental. A universal need, that
cannot be left to chance.
4.9:
Competitors to KBL
The competitors to
the products of the company mainly lie in the
non-alcoholic beverage industry consisting
of juices and soft drinks. The key
competitors in the industry are as follows:: The PepsiCo challenge, to keep up with
archrival, the Coca-Cola Company neverends for the World's # 2, carbonated soft-
drink maker. The company's soft drinks
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include Pepsi, Mountain Dew, and Slice.
Cola is not the company's only beverage;
PepsiCo sells Tropicana orange juice
brands, Gatorade sports drink, and Aquafinawater. PepsiCo also sells Dole juices and
Lipton ready-to-drink tea. PepsiCo and
Coca-Cola hold together, a market share of
95% out of which 60.8% is held by Coca-
Cola and the rest belongs to Pepsi. : Nestle
does not give that tough a competition to
Coca-Cola as it mainly deals with milk
products, Baby foods and Chocolates. Butthe iced tea that is Nestea which has been
introduced into the market by Nestle
provides a considerable amount of
competition to the products of the Company.
Iced tea is one of the closest substitutes to
the Colas as it is a thirst quencher and it is
healthier when compared to fizz drinks. The
flavored milk products also have become
substitutes to the products of the company
due to growing health awareness among
people. : Dabur in India, is one of the most
trusted brands as it has been operating ever
since times and people have laid all their
trust in the Company and the products of the
Company. Apart from food products, Daburhas introduced into the market Real Juice
which is packaged fresh fruit juice. These
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products give a strong competition to Maaza
and the latest product Minute Maid Pulpy
Orange.,Godrej and Bisleri: On local levels
these three pose a great threat to ourproducts. Parles Frooti, Godrejs Jumpin,
and Bisleris Water and Taaza maaza are
hampering the sales of Coca-Colas
products on the margins.The competitors to
KBL are those who are competitors to Coca-
Cola, and not any other franchise of our
competitors. Rival Pepsi's biggest bottler in
Punjab is the Chandigarh-based DhillonKool Drinks and Beverages Ltd. Chapter 5: FINANCIAL ANALYSIS OF
COCA-COLA
Latest 12 Months Data
Items- Latest Full Context Quarter Ending
Date (2010/03)
Gross Profit
Margin68.8%Pre-Tax Profit
Margin29.7%Interest Coverage27.0Current
Ratio1.3Quick Ratio0.9Receivables
Turnover9.2Most Recent DataAsset
Turnover0.7Return on Invested
Capital24.2%Total Debt/ Equity0.47Return
on Assets14.9%5-Year AveragesReturn on
Equity28.5%Return on Invested
Capital25.1%Gross Profit Margin68.5%Net
Profit Margin (TotalOperations)20.6%Current P/E Ratio 16.95-
Year High P/E Ratio 26.35-Year Avg. P/E
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Ratio20.712 Month Normalized P/E
Ratio16.6
Financial HighlightsFirst quarter 2010 reported net revenues
increased 5%. Net revenues increased 1%on a comparable currency neutral basis,
reflecting a 2% impact due to the
deconsolidation of certain entities required
by a change in accounting guidance, as well
as geographic mix.
First quarter 2010
reported operating income increased 17%,
and comparable currency neutral operating
income increased 9%. This was driven by acontinued strong focus on cost management
and the leveraging of productivity initiatives
as well as favorable timing of selling,
general and administrative expenses.Cash from operations in the quarter
increased 52% to $1.3 billion. There were no
share repurchases during the first quarter
due to the pending Coca-Cola Enterprises
(CCE) transaction.
During the quarter,
the Company announced its 48th
consecutive annual dividend increase,
raising the quarterly dividend 7% from 41
cents to 44 cents per common share. This is
equivalent to an annual dividend of $1.76
per share, up from $1.64 per share in2009.
The PER CAPITA
CONSUMPTION of Coca-Cola Beverage
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Products.Figures are in LitresRevenue
Growth EarningsGrowthYearEarnings2009$6.906
billion2008$5.807 billion2007$5.981billion2006$5.080 billionYearRevenue2009$30.990
billion2008$31.944 billion2007$28.857
billion2006$24.088 billion
Over the
past 3 years, Coca Cola has had a
respectable 8.7% in annual revenue
growth.Coke has enjoyed nearly 11%
annual earnings growth over the past threeyears. The most recent year, from 2008 to
2009, saw a 19% increase. Analysts predict
11.4% EPS growth in 2010 and 9.6% EPS
growth in 2011.Cash Flow GrowthYearCash Flow2009$8.186
billion2008$7.571 billion2007$7.150
billion2006$5.957 billion
Dividend
GrowthYearDividendYield2009$1.64$3.28%2008
$1.523.04%2007$1.362.50%2006$1.242.80
%
Annually, thats a cash flow growth
rate of over 11%. Coke has grown stock
dividends by 9.7% over the past three years.
The most recent increase, from 2009 to
2010, was a 7.3% increase. The payout ratiois a moderate 56%, so the dividend is safe
for a while and has room to grow.The
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company has also been repurchasing
shares annually. In 2009, they repurchased
$1.5 billion worth of shares.
Chapter 6:
STRATEGIC MANAGEMENT BY
COCA-COLA
6.1: StrategiesPOSITIONING STRATEGY
It means
that you try to give image to your product in
the mind of the customers. To give a true
and positive picture of the product is the
best positioning. The company should
promote its good points or comparative
advantage which it has over itscompetitor.
DIFFERENTIATION
STRATEGY
In order to serve your
target market you introduce different things
to your product so that your product can be
differentiated from other products.
Basis of Differentiation There are many
bases on which a product can be
differentiated but Coke has differentiated its
product on the following base:
Product
Differentiation- Coke differentiate its product
from its competitors on the basis of brand,
quality and taste. Image Differentiation-
Logo is used for image differentiation. Logo
is what establishes a brand name in the
consumer mind. It is the brandsidentification, signature and image. Coca-
Cola has kept on changing its logo from time
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to time.PROMOTION STRATEGIESPrice Strategy Trade Promotion:Coca-Cola Company gives incentives to
middle men or retailers in a way that theyoffer them free samples and free empty
bottles, by this these retailers and middle
man push their product in the market. And
that's why Coca-Cola seen more in the
market. And they have a good sale in the
market because according to the expert
which product seen more in the market that
sells more." Seen as sold"
They doagreements with a shop keepers and stores
to exclusive sale in those stores. These
stores are called as KEY accounts in their
local language.
And coke also invest
heavy budget on these stores and offers
them free samples and free bottles and
some time cash incentives.Advertisement Strategies:
Coca-Cola
Company use different mediums for
advertisement.
Print media : They
often use print media for advertisement.
They have a separate department for print
media.
TV commercial : As everybody
know that TV is a most common entertaining
medium so TV commercials is one of themost attractive way of doing advertisement.
So Coca-Cola Company does regular TV
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commercials on different channels.
Billboards and holding;
6.2: Our
Competitive strategies
The Coca-Cola
Company is one of the largest, mostsuccessful and most widely recognized
corporations in existence. Coca-Cola is a
dominating force in the beverage industry
and sets a very high standard of
competition. Research shows that its
trademark is recognized by over 94% of the
worlds population. There are many factors
contributing to Coca-Colas success,however, we believe that their key success
factors are Marketing, Innovation, and
Globalization.
Marketing:
Coca-
Cola is seen as one of the founding fathers
of the modern day marketing model. They
were among the pioneers of advertising
techniques and styles used to capture an
audience. They were also one of the first
companies to offer a gimmick with their
product, this being a mini yo-yo. It was
around 1900 when Coca-Cola began
presenting their signature drink as a
delicious and refreshing formula. This
slogan has been repeated for over the last
100 years selling Coke all over the world.Through its intense marketing campaigns,
Coke has developed an image that is
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reflected in what we think of when we buy
Coke and what we associate with drinking
Coke. This image has been subconsciously
installed in our brain by the advertisingcampaigns that show Coca-Cola associated
with good times.
Innovation: Coca-Cola has been able to survive and
grow in an ever-changing market because of
its ability to systematically innovate and
deliver new products. In the late 90s the
company, typically showing earnings growth
of 15-20% per year, turned in three straightyears of falling profits. It was apparent that
the market was changing and in order to
keep up with these changes, Coca-Cola had
to move from a single core product to a total
beverage company. This was a major
change because their past success was
base on having one successful core product.
Coca-Cola began to employ a strategy
referred to as play to win innovation. The
company began operating in a decentralized
environment that was unfeasible in previous
years. Now Coca- Cola offers nearly 400
different products in and is still dominating
the beverage industry. This is made possible
by the companys ability to innovate and
adapt to changing markets. Globalization:
Todays big business
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takes place on a global scale, and Coca-
Cola is no exception. Technology is
continually changing business, and these
constant changes have been making it morefeasible and profitable for businesses to
expand their operations globally in order to
serve all different types of diverse markets
around the world. This global view is
reflected in Cokes recent Id like to teach
the world to sing commercial. Coca-Cola is
taking advantage of the large revenue
opportunities made possible by participatingin a global market and now offers products
in 200 countries around the world.
6.3:
Industrial Environment and 5 Forces Model
for Coca-Cola
Bargaining Power of
SuppliersThe bargaining power of suppliers
is very low. As the coca cola company have
developed captive suppliers & entered into a
contract. So the company is not at the mercy
of the suppliers.Threats from
SubstitutesFruit JuicesWaterOthers Cold
BeveragesExisting Competitors Pepsi Parle
Other Local BrandsThreats from New
EntrantsAs there is no report of any new
company entering the Beverage
market.Bargaining power of BuyersThebargaining power of buyers is very high due
to the presence of various brands and also
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the unorganized sector. This gives the buyer
a wide variety of brands to choose from.
There is additional pressure from buyer to
introduce schemes and reduction in cost.
Applying Porters 5 forces allows the
garnering a retrospective view of the
potential attractiveness in terms of
profitability of the company. Analyzing the
beverage industry will also allow a more
accurate outlook on its potential.
6.4:
COCA-COLA COMPANY- THE SWOT
ANALYSIS
The Coca-Cola Company(Coca-Cola) is a leading manufacturer,
distributor and marketer of Non-alcoholic
beverage concentrates and syrups, in the
world. Coca-Cola has a strong brand name
and brand portfolio. Business-Week and
Inter brand, a branding Limca Common
drink. Fanta basically preferred by Ladies
and Kids. Maaza is branded for mango
lovers be it a kid a woman or a man. Sprite
defines for the straight attitude of todays
youth. Kinley Soda Mostly those who
consume liquor
Consultancy, recognize
Coca-Cola as one of the leading brands in
their top 100 global brands ranking in 2008.
The Business Week- Interbred valued Coca-Cola at $67,000 million in 2008. Coca-Cola
ranks well ahead of its close competitor
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Pepsi which has a ranking of 22 having a
brand value of $12,690 million; The
Companys strong brand value facilitates
customer recall and allows Coca-Cola topenetrate markets. However, the company
is threatened by intense competition which
could have an adverse impact on the
companys market share.
SWOT
Analysis StrengthsWeaknessesInternalPopularityw
ell knownbranding obvious and easily
recognizedA lot of financecustomerloyaltyInternational TradeWord of mouth
lack of popularity of many Coca-Colas
brands Most unknown and rarely seen result
of low profile or non-existent advertising
health issues Threats
OpportunitiesExternalchanging health-
consciousness attitude legal issues Health
ministerscompetition (Pepsi)many
successful brands to pursueadvertise its
less popular productsbuy out competition.
More Brand recognition Chapter7: FUTURE
PLAN-A LOOK FROM PRESENTMaximise Company and bottler long-term
cash flow.Attract, engage and retain the best
talent. Develop and deploy the worlds most
innovative and effective marketing.As we
look ahead to the year 2020, we see
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tremendous growth opportunities for our
franchise system and for the entire
nonalcoholic ready-to-drink beverage
industry. We are working closely with ourbottling partners around the globe,
leveraging our scale and the increased
presence of our brands. We remain
confident in our ability to deliver against our
strategies while laying the foundation for
consistent, profitable and sustainable long-
term growth, inspired by our 2020 Vision in a
growing world of refreshment."Aggressivelyincrease the value of our portfolio.Think and
act like an integrated global enterprise while
intensifying our local focus. Become a
critical part of our customers growth
strategies.Create competitive advantage by
fulfilling our Live Positively
commitments.Design and implement the
most effective and efficient business
system.KBLs future plan is just to track
ways to strengthen their position in the
market more firmly and not only to
strengthen old relations with a decade long
known retailers but also with the evolving
novice in the market. Other areas of
improvement include, effective planning ofdistribution system and acquiring a good
work force i.e. strengthening bond with hard
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smart and hard working employees. The
short term goals, as always, include the
effective removal of breaking flaws between
Coca-Cola and retailers. The main vision ofKBL is to induce such a perfection in their
market execution such that it converts its all
outlets to RED accounts i.e. all 26,000
outlets to be under RED standards.Chapter 8: THE PROJECT
8.1:
Executive Summary
Coca-Cola, the
product that has given the world its best-
known taste was born in Atlanta, Georgia,on May 8, 1886. Coca-Cola Company is the
worlds leading manufacturer, marketer and
distributor of non-alcoholic beverage
concentrates and syrups, used to produce
nearly 400 beverage brands. It sells
beverage concentrates and syrups to
bottling and canning operators, distributors,
fountain retailers and fountain wholesalers.
Coca-Cola was first introduced by John Syth
Pemberton, a pharmacist, in the year 1886
in Atlanta, Georgia when he concocted
caramel-colored syrup in a three-legged
brass kettle in his backyard. He first
distributed the product by carrying it in a
jug down the street to Jacobs Pharmacy
and customers bought the drink for five
cents at the soda fountain.
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/>Carbonated water was teamed with the
new syrup, whether by accident or
otherwise, producing a drink that was
proclaimed delicious and refreshing, atheme that continues to echo today
wherever Coca-Cola is enjoyed. Coca-Cola
originated as a soda fountain beverage in
1886 selling for five cents a glass. Early
growth was impressive, but it was only when
a strong bottling system developed that
Coca-Cola became the world-famous brand
it is today. Coca-Cola was the leading softdrink brand in India until 1977, when it left
rather than reveal its formula to the
Government and reduce its equity stake as
required under the Foreign Regulation Act
(FERA) which governed the operations of
foreign companies in India.
In the new
liberalized and deregulated environment in
1993, Coca-Cola made its re-entry into India
through one of its largest bottler, KBL, the
North Indian bottling arm of the Coca-Cola
Company.
The main objective of this
study lies in studying the market of the SSD
(sparkling soft drinks) brands by Coca-Cola
and understanding the consumers
perception and opinion about the products,with more inclination towards the study on
market of juices and Kinley water & soda,
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and the respective competitors analysis. This report gives an insight to the current
scenario of our products in Hotels, Clubs,
Hospitals and Govt. canteens segment. Thiswould be a direct attempt to point out the
flaws prevailing this segment of market and
possibly the better way to overcome them
through detailed study of this segment, as is
done in this project report.
This is an
opportunity to peep into the psychographic
status of the people working in this segment
and predict the possible way out of non-dominance in this market. This report will
provide detailed information about prevailing
market competition and thus prepare itself to
meet the market challenge by making
adjustment in its new strategy and
promotional activity, particularly for the
Hospitality Segment.
The project
begins with in-depth interview with the
owner of retail outlets, as primary source, to
extract the reality on ground level about
retailers psychology as our distributor and
competitors position and strategy. The
third need was to know the psychographic
needs of our consumers, which was
achieved by feedback/questionnaire processamong 50 to 80 youngsters. The conclusion
drawn from the quantitative and qualitative
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(Q2) analysis of data via graphs and open
ended feedbacks, are represented in under
the tag of gap analysis/grievances and
implications/suggestions.
8.2:Objective of this Report
The main
objective of this report is to evolve an
increased change in the Sales of Coca-Cola
Brands in Hotels, Clubs, Hospitals and Govt.
canteens.
The task would be mainly to
graph out the psychology of the retailers
who sell our SSD brands, Juices, Water and
Soda.
The first and foremost task is toidentify the flaws in our service
system to
the retailers, which in turn hurts the sales of
Coca-Cola products. The next step involves
identification of potential markets and
recognition of opportunities where the
visibility and availability of our products can
be increased. The only task left after
identification of problems and opportunities
is to frame strategies which will eliminate the
flaws and take advantage of the
opportunities.8.3: Critical Literature
Review
There has been a lot of fuss
regarding the carbonated soft drinks and
pesticide issues, despite all the
demagnification the slowdown in thebusiness is not evident rather after a
slowdown in 2007 it has gone drastically
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high in the current scenario. The most
important fact to be mentioned here that the
report concentrates on the market segment
of Hotels, Clubs, Hospitals and Eating &Drinking points in
Govt. offices.
Until
now there is no such effort evident from
references which have looked upon the
hospitality segment in the domestic market
of Chandigarh. The work clearly shows a lot
of gap into this segment.
8.4:
Research Methodology
In order to look
deeply into as to what is the positioning ofour products in consumers mind, a direct
interaction is a method to come to a
conclusive view. The purpose of this report
is to provide a roof-top view ofRetailers perceptionConsumers
perception Competitors analysisThese three
concepts will frame the problem accurately
and as it is said that a problem well defined
is half solved.
As retailers are KBLs
first consumer and first step into the market
and it is very necessary to keep a strict
watch on all the networks to these retail
outlets.
So the direct method adopted
was to do in-depth interview of the retailers,
demanding both qualitative and quantitativedata from them, which throws light not only
on retailers perspective but also on the
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consumers perception and a clear picture of
competitors position against our market
strategies.
Since more focus is