HINDUSTAN COCA-COLA BEVERAGES PVT.

LTD

A PROJECT REPORT ON

Distribution Expansion of Hindustan Coca-Cola Beverages Private Limited to drive business in inactive outlets" (Horizontal Expansion)
IN JAIPUR , RAJASTHAN

SUBMITTED TO: DR. S.K. PANDEY

SUBMITTED BY:

PRATEEK SHUKLA PGDM,2ND YEAR JAIPURIA INSTITUTE OF MANAGEMENT, JAIPUR

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CERTIFICATE OF ORGINALITY

This is to certify that the project titled Distribution Expansion of Hindustan Coca-Cola Beverages Private Limited to drive business in inactive outlets" (Horizontal Expansion) submitted by me to Jaipuria Institute of Management, Jaipur in partial fulfillment of the PostGraduation Diploma in Management, and this report has not been submitted elsewhere.

Date:

Prateek Shukla Jaipuria Institute of Management, Jaipur

SIGNATURE OF FACULTY MENTOR __________________________________ (Dr. S.K. Pandey)

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LIST OF FIGURES:
SR NO. TOPIC Market shares of soft drinks in India. PAGE NO.

1. 2. 3. 4. 5. 6. 7.

11 13 22 28 32 43 43

Beverage Industry in India Vision for sustainable growth Sales Chart of Products Opportunity to new outlets Impact of new outlets on business Impact of new outlets on distributors

LIST OF CHARTS:
SR NO. TOPIC PAGE NO.

1. 2. 3. 4. 5. 6. 7.

Brand sold in market

Pack preferred for profit margin

37 38 39 39 40 41 41

Pack variant more in demand Product range of coke preferred for sale Brands Oriented decisions Asking Schemes Factors affects cold drink demand

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TABLE OF CONTENT
SR NO. TOPIC PAGE NO.

Preface Acknowledgement Executive Summary 1. Introduction 1.1 A Brief Insight : The FMCG Industry in India: 1.2 Contributions of Indian FMCG Industry: 1.3 1.4 A Brief Insight : The Beverages Industry in India: Soft Drinks Market in India Objective of the study 2. 3. About Company Products Literature Review 4. 6. 7. About Project Methodology Analysis & Results 7.1 Findings of my project Result 8. 9. 10. 11. Conclusion Recommendations References Annexures

5 6 7 9-14 9 9 10 14 16 18 - 22 24 - 28 29 31 - 33 34 - 35 36 37 42 44 45 46 47 - 49

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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 are introduced to enhance the impact in sales .

The PGDM curriculum is designed in 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 the importance of practical knowledge over the theoretical base.

The research report is necessary for the partial fulfillment of PGDM 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 the application 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.

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ACKNOWLEDGEMENT
Apart from the efforts of an individual, the success of any project depends largely on the encouragement and guidelines of many others. I take this opportunity to express my gratitude to the people who have been instrumental in the successful completion of this project. I wish to express our deep gratitude to my industry mentor, Mr. Himanshu Mittal and S.T.L Mr. Ved Prakash Pandey for guiding me through this project and for always being there to help me cross hurdles. I would also like to convey my special thanks to Hindustan Coca-Cola beverages ltd and Jaipuria Institute of Management, Jaipur for giving me the opportunity to do such projects that help in understanding the concepts better. The guidance and support received from my mentor Dr. S.K.Pandey who contributed and who are contributing to this project, was vital for the success of the project.

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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. Carbonated water was teamed with the new syrup, whether by accident or otherwise, producing a drink that was proclaimed 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 brand it is today. Coca - Cola was the leading soft drink brand in India until 1977, when it left rather than reveals its formula to the Government and reduces its equity stake as required under the Foreign 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 its 100% owned subsidiary, HCCBPL, the Indian bottling arm of the Coca - Cola Company . The main objective of this report attempts to reveal the secrets and tools which would be helpful in horizontal market expansion for the whole coca cola product range by first analyzing and then enhancing the market of Coca Cola. The study is divided into two parts. First is to analyze the existing market, try to find their problems and reasons for doing business with company. In second part untouched market was explored and their reasons for not doing business with company where studied. Thus report will provide an opportunity to know existing and new retailers psychographic needs, it may provide an opportunity to the Coca - Cola to frame a good future plan to satisfy maximum needs, taste preferences of the retailers and established its guiding role in the market of Jaipur & in marketing plan for
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different areas.

1.Introduction

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1.1 A Brief Insight : The FMCG Industry in India: The Fast Moving Consumer Goods (FMCG) industry in India is one of the largest sectors in the country and over the years has been growing at a very steady pace. The sector basically consists of consumer non-durable products, which broadly consists, personal care, household care and food & beverages. The Indian FMCG industry is largely classified as organized and unorganized. This sector is also buoyed by intense competition. Besides competition, this industry is also marked by a robust distribution network coupled with increasing influx of MNCs across the entire value chain. This sector continues to remain highly fragmented. The FMCG industry is volume driven and is characterized by low margins. The products are branded and backed by marketing, heavy advertising, slick packaging and strong distribution networks. The FMCG segment can be classified under the premium segment and popular segment. The premium segment caters mostly to the higher/upper middle class which is not as price sensitive apart from being brand conscious. The price sensitive popular or mass segment consists of retailers belonging mainly to the semi-urban or rural areas who are not particularly brand conscious. Products sold in the popular segment have considerably lower prices than their premium counterparts.

1.2: Contributions of Indian FMCG Industry: After registering a 12% growth in 2009 despite the economic downturn, major FMCG firms remain optimistic and expect a 15% growth in 2010. The Indian FMCG industry sales are estimated to grow 14.5% to reach RS 854.7 Billion. Within the Indian FMCG industry, there are few sectors that will grow more than 20% during 2009-2010, like shaving cream at 23%, skin/fairness cream at 22%, shampoos at 21.3%, skin care & cosmetics at 20%, tooth powder at 22% and other care products.

The prediction of higher sales growth of FMCG products is based on strong economic fundamentals such as rising disposable income of people. Now people can afford to spend on quality FMCG products. Moreover, increasing salaries, along with rising trend of perks in the corporate sector at regular intervals, have increased peoples spending power on lifestyle

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products. Even government employees too are expending on lifestyle products helping FMCG sector to grow rapidly. Apart from this, India is rapidly changing into an urban country and with that, peoples preference for lifestyle products is growing. Hence, the Indian FMCG industry is experiencing strong growth in some categories such as skin care, anti-aging solution, deodorants, fairness products and mens products. In addition, the emergence of organized retail such as supermarkets, and shopping malls is also playing an important role in bringing boom in the Indian FMCG market. The young generation of consumers is driving the demand for lifestyle products. Consumers are at the front seat changing and redefining the branding and marketing strategy and marketplace for the retail products that are ultimately boosting the retail sales in the country. However, the fear of dissociation with earlier consumers still persists as they embrace and prefer to stick to established brands only. The main reason for this dissociation is weak distribution channels and marketing strategy in the country. According to a Research Analyst at RNCOS, The demand for lifestyle products is boosted by the rising aspiration and modern facilities. As the spending power of consumers is going up, the sales of FMCG products in India will rise too. Therefore, companies need to improve the quality of products and employ right marketing mix by implementing new technologies such as Customer Relationship Management.

1.3 A Brief Insight : The Beverages Industry in India:

FOOD: According to the Ministry of Food Processing, the size of the Indian food processing industry is around US$ 65.6 billion including US$ 20.6 billion of value added products. Of this, the health beverage industry is valued at US$ 230 billion; bread and biscuits at US$ 1.7 billion; chocolates at US$ 73 million and ice creams at US$ 188 million. The size of the semiprocessed/ready to eat food segment is over US$ 1.1 billion. Large biscuits & confectionery units, soya processing units and starch/glucose/sorbitol producing units have also come up, catering to domestic and international markets. The three largest consumed categories of packaged foods are packed tea, biscuits and soft drinks.
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BEVERAGES: The Indian beverage industry faces over supply in segments like coffee and tea. However, more than half of this is available in unpacked or loose form. Indian hot beverage market is a tea dominant market. Consumers in different parts of the country have heterogeneous tastes. Dust tea is popular in southern India, while loose tea in preferred in western India. The urbanrural split of the tea market is 51:49 in 2000. Coffee is consumed largely in the southern states. The size of the total packaged coffee market is 19,600 tons or US$ 87 million. The urban rural split in the coffee market is 61:39. The total soft drink (carbonated beverages and juices) market is estimated at 284 million crates a year or US$ 1 billion. The market is highly seasonal in nature with consumption varying from 25 million crates per month during peak season to 15 million during offseason. The market is predominantly urban with 25 per cent contribution from rural areas. Coca cola dominate the Indian soft drinks market. Mineral water market in India is a 65 million crates (US$ 50 million) industry. On an average, the monthly consumption is estimated at 4.9 million crates, which increases to 5.2 million during peak season. 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 retailers and satisfy the existing retailers.

Fig 1: Market shares of soft drinks in India.

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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:

a. Alcoholic, non - alcoholic and sports beverages b. Natural and Synthetic beverages c. In - home consumption and out of home on premises consumption. d. Age wise segmentation i.e. beverages for kids, for adults and for senior citizens e. Segmentation based on the 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. These two 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.

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 and sports beverages. Natural and Synthetic beverages. In-home consumption and out of home on premises consumption. Age wise segmentation i.e. beverages for kids, for adults and for senior citizens. Segmentation based on the amount of consumption i.e. high levels of consumption and low levels of consumption. Four strong strategic elements to increase consumption of the products of the beverage industry in India are: The quality and the consistency of beverages needs to be enhanced so that retailers are satisfied and they enjoy consuming beverages. The credibility and trust needs to be built so that there is a very strong and safe feeling that the retailers have while consuming the beverages.
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Retailer education is a must to bring out benefits of beverage consumption whether in terms of health, taste, relaxation, stimulation, refreshment, well-being or prestige relevant to the category.

Communication should be relevant and trendy so that retailers are able to find an appeal to go out, purchase and consume.

SOFT DRINKS

CARBONATED

NON CARBONATED

COLA FLAVOURED

NON-COLA FLAVOURED

MINERAL WATER

MANGO FLAVOURED

THUMS UP,COKE

PEPSI, DIET

ORANGE FLAVOURED

LIME FLAVOURED

MAAZA,SLICE ,FROOTI

FANTA,MIRINDA

CLEAR LIME

CLOUDY LIME

SPRITE,DEW

LIMCA

Figure2: Beverage Industry in India

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1.4 Soft Drinks Market in India

India is one of the top five markets in terms of growth of the soft drinks market. The per capita consumption of soft drinks in the country is estimated to be around 6 bottles per annum in the year 2009. It is very low compared to the corresponding figures in US (600+ bottles per annum). But being one of the fastest growing markets and by the sheer volumes, India is a promising market for soft drinks. The major players in the soft drinks market in India are COCA- COLA Co and PepsiCo, like elsewhere in the world. Coca-Cola acquired a number of local brands like Limca, Gold Spot and Thums Up when it entered Indian market for the second time. COCA- COLA Cos soft drink portfolio also consists of Fanta and Sprite along with COCA- COLA. The market share of each of the company is more or less the same, though there is a conflict in the estimates quoted by different sources. The major ingredient in a soft drink is water. It constitutes close to 90% of the soft drink content. Added to this, the drink also contains sweeteners, Carbon dioxide, Citric Acid/Malic acid, Colors, Preservatives, Anti-Oxidants and other emulsifying agents, etc.

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RATIONALE OF THE STUDY

The biggest question of any study is why we are doing that study? Jaipur is capital of Rajasthan and one of the hottest place in India so this leads to a good chance of selling of soft drinks. In summer time every company has a good opportunity to grow in terms of sales as well as to introduce new products which will able to attract new customers and increase company market share. To increase its market share with bronze outlet / inactive outlet and open new outlet is not an easy task because of many reasons which are discuss in detail in my report. Pepsi India co. ltd also knew the market situation therefore they also gave many benefits to retailers to retain its place on the top in Jaipur market. This strategy of Pepsi Co ltd to penetrate the market this really cost a lot to Coca-Cola India ltd which do not have any answer of outstanding schemes Coca-Cola must had to think a lot in the scheme direction detailed discussion is being done in my report. So this is very important to touch new market from where company is not getting any business. My report will try to find out the answers that what are the reasons company facing with these markets?

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OBJECTIVE OF THE STUDY My objective of this study is very simple, I want to explore the market situation as well as to increase the market share by distribution expansion (HE) so that Coca-Cola can became market leader in Jaipur market with full customer satisfaction. The objectives were: To increase market share of Hindustan Coca-Cola Beverages Private Limited (Jaipur) and improve the current market position of the company. To develop new outlets as well as to maintain the output from existing Bronze Outlets.

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2. About Company

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CHAPTER 2: THE COCA COLA COMPANY

2.1: HISTORY John Smyth Pemberton, a pharmacist, first introduced Coca-Cola 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. Carbonated water was teamed with the new syrup, whether by accident or otherwise, producing a drink that was proclaimed delicious and refreshing, a theme that continues to echo today wherever Coca-Cola is enjoyed. Dr. Pembertons partner and book-keeper, Frank M. Robinson, suggested the name and penned Coca-Cola in the unique flowing script that is famous worldwide even today. He suggested that the two Cs would look well in advertising. The first newspaper ad for Coca-Cola soon appeared in The Atlanta Journal, inviting thirsty citizens to try the new and popular soda fountain drink. Hand-painted oil cloth signs reading Coca-Cola appeared on store awnings, with the suggestions Drink added to inform passersby that the new beverage was for soda fountain refreshment.

By the year 1886, sales of Coca-Cola averaged nine drinks per day. The first year, Dr. Pemberton sold 25 gallons of syrup, shipped in bright red wooden kegs. Red has been a distinctive color associated with the soft drink ever since. For his efforts, Dr. Pemberton grossed $50 and spent $73.96 on advertising. Dr. Pemberton never realized the potential of the beverage he created. He gradually sold portions of his business to various partners and, just prior to his death in 1888, sold his remaining interest in Coca-Cola to Asa G. Candler, an entrepreneur from Atlanta. By the year 1891, Mr. Candler proceeded to buy additional rights and acquire complete ownership and control of the Coca-Cola business. Within four years, his merchandising flair had helped expand consumption of Coca-Cola to every state and territory after which he liquidated his pharmaceutical business and focused his full attention on the soft drink. With his brother, John S. Candler, John Pembertons former partner Frank Robinson and two other associates, Mr. Candler formed a Georgia corporation named the
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Coca-Cola Company. The trademark Coca-Cola, used in the marketplace since 1886, was registered in the United States Patent Office on January 31, 1893. The business continued to grow, and in 1894, the first syrup manufacturing plant outside Atlanta was opened in Dallas, Texas. Others were opened in Chicago, Illinois, and Los Angeles, California, the following year. In 1895, three years after The Coca-Cola Companys incorporation, Mr. Candler announced in his annual report to share owners that Coca-Cola is now drunk in every state and territory in the United States.

As demand for Coca-Cola increased, the Company quickly outgrew its facilities. A new building erected in 1898 was the first headquarters building devoted exclusively to the production of syrup and the management of the business. In the year 1919, the Coca-Cola Company was sold to a group of investors for $25 million. Robert W. Woodruff became the President of the Company in the year 1923 and his more than sixty years of leadership took the business to unsurpassed heights of commercial success, making Coca-Cola one of the most recognized and valued brands around the world.

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HINDUSTAN COCA-COLA BEVERAGES PRIVATE LIMITED

2.2: ABOUT THE COMPANY Every person who drinks a Coca - Cola enjoys a moment of refreshment and shares an experience that millions of others have savored. All of those individual experiences combined have created a worldwide phenomenon a truly global brand. On the distribution front, 10 ton trucks, open - bay three - wheelers that can navigate the narrow alleyways of Indian cities, ensure availability of Coke brands in every nook and corner of the country. The company - owned Bottling arm of the Indian Operations, Hindustan Coca - Cola Beverages Private Limited is responsible for the manufacture, sale and distribution of beverages across the country.

Coca - Cola was the leading soft drink brand in India until 1977, when it left rather than reveals its formula to the Government and reduces its equity stake as required under the Foreign Regulation Act (FERA) which governed the operations of foreign companies in India. Coca - Cola re - entered the Indian market on 26
t h

October 1993 after a gap of 16

years, with its launch in Agra. 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 like Thumps Up, Gold - Spot, 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.

In the new liberalized and deregulated environment in 1993, Coca - Cola made its re - entry into India through its 100% owned subsidiary, HCCBPL, the Indian bottling arm of the Coca - Cola Company . However, this was based on numerous commitments and stipulations which the Company agreed to implement in due course. One such major commitment was that, the Hindustan Coca - Cola Holdings would divest 49% of its shareholding in favor of resident shareholders by June 2002.

Coca - Cola is made up of 7000 local employees, 500 managers, over 60 manufacturing
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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. The complexity of the Indian market is reflected in the distribution fleet which includes different modes of distribution, from 10 - ton trucks to open - bay three wheelers that can navigate through narrow alleyways of Indian cities and trademarked tricycles and pushcarts.

2.3: MANIFESTO FOR GROWTH 2.3.1: VALUES: To achieve sustainable growth, we have established a vision with clear goals. Profit: Maximizing return to share owners while being mindful of our overall responsibilities. People: Being a great place to work where people are inspired to be the best they can be. Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and satisfy peoples desires and needs. Partners: Nurturing a winning network of partners and building mutual loyalty. Planet: Being a responsible global citizen that makes a difference.

2.3.2: MISSION: We are guided by shared values that we will live by as a company and as individuals. Leadership: "The courage to shape a better future" Passion: "Committed in heart and mind" Integrity: "Be real" Accountability: "If it is to be, its up to me" Collaboration: "Leverage collective genius"

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Innovation: "Seek, imagine, create, delight"

Fig 3: Vision for sustainable growth

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3.Products

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Product Size & Packs: 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. The Coca-Cola Company has a wide range of products out of which the following products are marketed by HCCBPL.

COCA-COLA:In India Coca-Cola was leading soft drink till 1977 when Government policies necessitated its departure. Coca-Cola made its return to the country in 1993 and made significant investments to ensure that the beverage is available to more and more people, even in remote and inaccessible parts of the nation. Over the past fourteen years has enthralled consumers in India by connecting with passions of India Cricket, movies, music & food. Coca-Colas advertising campaigns Jo ChahoHoJaye&Life HoTohAise were very popular & had entered youths vocabulary. In 2002.Coca-Cola launched its iconic campaign ThandaMatlab Coca-Cola which sky rocketed the brand to make it Indias favourite soft drink brand.

GLASS
200ml, 300ml, 500ml, 1000ml

PET 500ml, 1.5L, 2L, 2.25L, 500ml, 100ml Table - 1

CAN 330 ml

FOUNTAIN VARIOUS SIZES

LIMCA:Limca was introduced in 1971 in India. Limca has remained unchallenged as the No.1 sparkling drink in the cloudy lemon segment. The success formula is the sharp fizz and

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lemoni bite combined with the single minded proposition of the brand as the provider of Freshness. Limca can cast a tangy refreshing spell on anyone, anywhere. Derived from Nimbu + Jaise hence Lime Sa, Limca has lived up to its promises of refreshment and has been the original thirst choice of millions of customers for over 3 decades.

GLASS
200ml, 300ml, 500ml, 1000ml

PET 500ml, 1.5L, 2L, 2.25L, 500ml, 100ml Table - 2

CAN 330 ml

FOUNTAIN VARIOUS SIZES

THUMS UP:Thums up is a leading sparkling soft drink and most trusted brand in India. Originally introduced in 1977, Thums up was acquires by The Coca-Cola Company in 1993. Thums up is known for its strong, fizzy taste and it confident, mature and uniquely masculine attitude. This brand clearly seeks to separate the men from the boys.

GLASS
200ml, 300ml, 500ml, 1000ml

PET 500ml, 1.5L, 2L, 2.25L, 500ml, 100ml Table - 3

CAN 330 ml

FOUNTAIN VARIOUS SIZES

SPRITE:Sprite a global leader in the lemon lime category is the second largest sparkling beverage brand in India. Launched in 1999, Sprite with its cut-thru perspective has managed to be a true teen icon.

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RGB
200ml, 300ml

PET 500ml, 600ml, 1250ml, 1500ml, 2000ml, 2250ml Table 4

CAN 330 ml

FOUNTAIN VARIOUS SIZES

FANTA:Fanta entered the Indian market in the year 1993. Over the years Fanta has occupied a strong market place and is identifies as The Fun Catalyst. Perceived as a fun youth brand, Fanta stands for its vibrant colour, tempting taste and tingling bubbles that not just uplifts feelings but also helps free spirit thus encouraging one to indulge in the moment. This positive imagery is associated with happy, cheerful and special times with friends.

GLASS
200ml, 300ml

PET 500ml, 1.5L, 2L, 2.25L, 500ml, 100ml Table 5

CAN 330 ml

FOUNTAIN VARIOUS SIZES

MINUTE MAID PULPY ORANGE:The history of the Minute Maid brand goes as far back as 1945 when the Florida Food Corporation developed orange juice powder. The company developed a process that eliminated 80% of the water in the orange juice, forming a frozen concentrate that when reconstitute created orange juice. They branded it Minute Maid a name connoting the convenience and the ease of preparation. Minute Maid thus moved from a powdered concentrate to the first ever orange juice from concentrate.

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The launch of Minute Maid in India (started with the south of the country) is aimed to further extend the leadership of Coca-Cola in India in the juice drink category. Available in 3 PET pack sizes i.e. 400ml, 1 litre, 1.25 litres.

MAAZA:Maaza was introduced in late 1970s. Maaza has today come to symbolise the very spirit of mangoes. Universally loved for its taste, colour, thickness and wholesome properties, Maaza is the mango lovers first choice.

RGB
200ml, 250ml

PET 600ml, 1.2L

POCKET MAAZA 200ml

Table 6

KINLEY:The importance of water can never be understated, Particularly in a nation such as India where water governs the lives of the millions, be it as a part of everyday ritual or as the monsoon which gives life to the sub-continent. Kinley water comes with the assurance of safety from the Coca-Cola Company. Available in PET 500ml and 1000ml.

KINLEY SODA:Kinley soda water is carbonated water. Kinley soda can be enjoyed on the rocks and mixed with other hard drinks. It blends well with all drinks, and in fact, it can be consumed by itself. Hindustan Coca Cola Beverages Pvt. Ltd. (HCCBPL) is the bottling arm of Kinley sodas in India and is also involved in the manufacture and distribution of its beverages in India.

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SALES CHART OF PRODUCTS

Fig 4: Sales Chart of Products

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LITERATURE REVIEW
This study on inventory management is being done on such a way that one can easily understand and after reading this you have anxiety to know more about it same thing happens with me. Ms konkanna dass has detailed out the practices and policies adopted in the company and highlighted noteworthy practices in her study. She has described recent trends in operations in the areas chosen. She also have identified a problem the company is facing, analyzed it and have suggested a solution for the same. The Coca-Cola Company is the worlds largest beverage company. It is recognized as the worlds most valuable brand. It markets four of the worlds top five soft drink brands like Diet Coke, Fanta, and Sprite along with water, juices, tea, coffee and energy drinks. It has one of the worlds largest beverage distribution systems spread over 200 countries selling 1.6 billion servings a day. Coca-Cola India manufactures and markets brands like Coca-Cola, Thums Up, Fanta, Fanta Apple, Limca, Sprite, Mazaa, Minute Maid, Burn, Kinley, Georgia tea and coffee, Nestea and Fanta Fun Taste. The company employs 1, 50,000 people and has more than 1 million retailers. It is the largest domestic buyer of sugar and one of the top buyers of mango pulp. It positively impacts Glass, Plastic, Resin manufacturers, Sugar, Automobiles, and Banking etc. Its mission statement is called the Coca-Cola Promise The Coca-Cola Company exists to benefit and refresh anyone that it touches. This project report is about Coca-Colas supply chain with respect to its inventory, quality and vendor management. By going through this study I highly motivated to know more about the company working style and challenges which they faces on daily basis. Thanks to my institute I got a chance to work with Hindustan coca cola beverages pvt ltd where I got the project counter mountain dew this will help me to know about the sales and distribution of beverages in India.

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4. About Project

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ABOUT PROJECT: The work assigned was to analyze and enhance the market opportunities for Coca Cola in Jaipur, by creating awareness to retailers about the brand value, profit ratio and to find out the factors which are creating impediment in its expansion.

Thus project was divided into two parts: First Part: Analyze the needs and wants of existing retailers (customers). Find out the problems faced by them while doing business with Coke. Reasons of doing business with Coke. For this survey on 180 existing outlets was done.

Second Part: Find out the reasons for not doing business with Coke from new retailers (customers). For this survey on 100 new outlets was done.

Data Collection: Data was collected from different locations of Jaipur as: Sindhi Colony Adarsh Nagar Tonk Road Hassanpura Raja Park Jawahar Nagar Janata Colony Nandpuri Railway Station Vaishali Nagar

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TYPES OF EXPANSION: Expansion can be done both vertically & horizontally and for this different questionnaires were prepared for both existing and new retailers.

Vertically expansion: It means increasing the existing outlets capacity of sales. There are following techniques used in vertical expansion:

RED ( Right Execution Daily) PJP (Pre Journey Planner) Pre Sell

Horizontal expansion: It means opening new outlets. It is done to increase the market share and to increase the visibility of product in the market which will ultimately lead to higher sales volume and larger market share. Reasons for horizontal expansion:

Figure 5: Opportunity to new outlets Above data shows that Coke is far behind from its competitors in case of market coverage thus huge potential for expansion.

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Benefits of Horizontal Expansion: Improves profitability of distributors Helps improve route productivity Incremental revenue for the business Helps in distributing the market demand Increase market visibility

Advantage of Horizontal Expansion over Vertical Expansion: Both expansion techniques are meant for increasing sales volumes. But in horizontal expansion company can earn more profits by spending less. Lets see the profit story of horizontal expansion.

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5. Methodology

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In Rajasthan Jaipur is the main city from where all the products are sent in different cities According to the distributers demand. Companies officials working in each cities who makes sales and kept an eye on stock of distributer. They convinced distributer and retailer for secondary i.e. sales. A.S.M is the responsible person who got one area under which 7-8 cities are allotted to him he work with his team and target his market according to company guidelines. There are 450 distributers in Rajasthan.

Data Collection Methods: Personal interaction method: I made interactions with some retailers during market survey, who want to give some extra information other than questionnaire and who were busy and not ready to fill the questionnaire. This was conducted without the help of any questionnaire. The objective was to draw a general understanding about their problems, performance of the distributer, their preferences and other useful information. This technique helped to clear doubts arising due to observation method. Questionnaire method: Questionnaire was divided in two parts. First part was for exiting retailers (customers). The other part was for new retailers. The basic aim of both was to analyze the psychology, need & wants of retailers.

Sampling Unit: The retailers of Grocery shop, E & D, Convenience shop, Medicine store and Juice corners was selected from different places of Jaipur . Sampling Size: 150 Outlets. Sampling procedure: As Coke has mainly three types of modules of customers as: - Grocery store, Convenience store & E&D with different grades so sampling size was divided according to area, type of store & VPO of the store . Sampling method: Data were collected by retailer survey. The retailers were directly
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contacted and interviewed at their retail counter.

6. Analysis & Results

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ANALYSIS: Survey Analysis: The survey was conducted in different location of Jaipur. A total survey of 150 outlets was conducted. Out of 150 outlet 100 was bronze outlet and rest of 50 was new outlet. Observational Analysis:
1. I visited about 250 outlets. 2. Out of 250 shops covered in different areas, I focused on covering different shops according to location, so that I can know where coca-cola products have the best penetration. Among the shop covered, 17% were on the cross roads, 35% were on the main road, 28% in the market and 20% were near a residential area. 3. I assigned the various shops covered into different categories. The various categories covered were Grocery, Confectionary, Bakery, Juice Shops, Ice Cream parlors, Restaurant, Food Points, Dairy, and Pan Shops.

Findings: Here are some basic factors which affects the sale of coke brands as well as horizontal expansion.

1. Which beverage brand you sell in the market?

BRAND SOLD IN THE MARKET

BRAND SOLD IN THE MARKET 37% 25% 21% 17%

COKE

PEPSI

OTHERS

MIX

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Chart 1: Brand sold in market Interpretation: As per the above question many of the retailers prefer selling both the brands but many find it difficulty in affording the visi cooler cost but mostly the outlets that are single brand oriented prefer selling Coke, because the quality is believed to be high as compared to other brands.

2. Which pack would you prefer for sale in terms of profit margin?

PACK PREFERRED FOR PROFIT MARGIN

30% 25% 20% 15% 10% 5% 0% 200ML 300ML 600ML 1.25LTR 2.25LTR 20% 17% 26% 20% 17% PACK PREFERRED FOR PROFIT MARGIN

Chart 2: Pack preferred for profit margin

Interpretation: The pack size demand and it type depended on factors of whether the shop was E&D type or IC ,FC shop if it was a restaurant bar they preferred purchase of 600ml as there was no risk from broken bottles on the other hand small areas preferred 200ml as it costs less and can give a big margin. Coke got the big market from RGB and PET bottles. That too in RGB sector 200ml was the most selling pack. Coming to PET bottles all have the probable equal share but 600ml was little bit high sale when comparing with 1ltr 1.5ltr and 2ltr packs.

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3. Which pack variant is more in demand?

PACK VARIANT MORE IN DEMAND

60% 50% 40% 30% 20% 10% 0% RGB PET BOTTLES TETRA PACKS TIN CANS 0% 30% 18% PACK VARIANT MORE IN DEMAND 52%

Chart 3: Pack variant more in demand

Interpretation:

Coke got the big market from RGB and PET bottles. Tetra pack was consumed in large quantities because of the demand as per the season. RGB sector was the most selling pack. Coming to PET bottles all have the equal share but 600ml was little bit high sale when comparing with 1ltr 1.5ltr and 2ltr packs.

4. Which brand you basically prefer for sale in your outlet?

PRODUCT RANGE OF COKE PREFERRED FOR SALE

PRODUCT RANGE OF COKE PREFERRED FOR SALE 26% 16% 10% 17% 18% 13%

CO

FA

LI

SP

TH

MZ

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Chart 4: Product range of coke preferred for sale

Interpretation: Coming to most selling brand in Jaipur city Thums up occupied majority of the market share is grabbed by Thums up only after that Maaza is the 2nd major selling brand from the coke after those Limca and Coke listed.

5. You basically keep brands according to?

BRANDS ACCORDING TO
CUSTOMER DEMAND SCHEME-FOCUSSED

16%

84%

Chart 5: Brands Oriented decisions Interpretation: Whatever the present varieties coke had in the market with those consumers are very much happy. For this question maximum retailers said yes they keep the brands as per their requirement of their customers. Coke getting more appreciation in this concept. But there were also those retailers who demanded the brands as per the schemes if they felt the new MER could benefit them they waited back for slab schemes to be opened, and were least bothered about their customers requirement.

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6. Do you ask for schemes while purchasing a particular pack of CSD?

ASKING SCHEMES
YES 2% NO

98%

Chart 6: Asking Schemes Interpretation: Schemes were given by the Coca-Cola Co. to boost up the sales and generally it was provided to benefit the retailers and to increase their margin, therefore it was expected from most of the retailers that they always ensured whether the salesman is giving the appropriate scheme and is it benefitting him or not.

7.

What are other factors which affects sell?

Factors affects cold drink demand

Chart 7: Factors affects cold drink demand

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o o o

WEATHER PRICE

- 58 % 10%

CONSUMER TASTE

32%

Interpretation: On the basis of my survey I found that weather is the most critical factor in the demand of cold drink. On the basis of my exploratory research I found that consumer taste and price are other two important factors but weather is the most important among them.

RESULTS: In Jaipur Area Company governs from its regional office. Jaipur is divided among 5 STL (Sales Team Leader) and 6 MD (Market Developer) assigned to each STL. Most of the MD look after its cooler outlet. As an intern I had job to increase market share of Hindustan CocaCola Beverages Private Limited (Jaipur) and improve the current market position of company & to develop new outlets as well as to maintain the output from existing Bronze Outlets. Finding of My Project: Average per vehicle sale is 100 crate per day there are 15 vehicles running on daily basis per day sale is 1500 caret. A city where we are market challenger with 45 % share its remarkable that Coca-Cola sales 600 caret per day by this we can see how big market potential Jaipur has. In duration of 45 days of internship I visited around 250 shops and sold 700 carets of different product of Coca-Cola. These product prices ranges from Rs. 168 to Rs. 716. So average per caret is cost around Rs. 422. So I added 422700 =Rs. 2,95,400 in company sales revenue during duration. As well as I added around 50 new outlets in company database.

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Fig 7: Impact of new outlets on business

Fig 8: Impact of new outlets on distributors

So here by above tables we can understand the effect of new outlets on both business as well as on distributors in terms of better margin, more return & increased ROI.

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CONCLUSION: On an overview I conclude my report on the following points: Jaipur market is a big market & it contribute high demand of cold drink in the market. Coca-Cola market goodwill is very high but still Pepsi & others market challenger with 45 % share the reason behind this is the scheme which they offer in Jaipur. On comparison with Pepsi its very low therefore retailers are prefer Pepsi over Coca-Cola in Jaipur Bronze Outlets and New Outlets holds a good potential of business so its very im portant to take care of them. So we need to focus on following points. Effective supply chain strategies within the city Avoid scheme alteration on daily basis Must offer some special benefits to new and potential outlets like banners, coolers, stands etc. In supply chain biggest drawback is salesman who do injustice with schemes as schemes is being alter on daily basis he pitch retailers constant scheme which leads to decrease in company goodwill. Sales team leader the person who is person appointed from the company in the city must take the follow up so that nobody can took such advantage. By doing so Coca-Cola can become market leader in Jaipur.

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RECOMMENDATION Pre-orders must be taken to sought the problem of retailers want something and get something else. Cooler must being pulled back from those outlets that are not taken our products and allotted to those who is ready to sell our products. We must gave initial benefits to those outlets who is ready to sell our products this will build the trust. Sprite is the one brand which is most demanded in our portfolio so we must do something like allotted it in schemes instead of Coke. Sales man follow up - Sales man is the big problem because they do not convey the right schemes to retailers so we must follow up them so that retailers got the good margin and they started pitching our products. Schemes must had pre deadline so that we can tell retailers that this offer is valid till this date because of daily fluctuation retailers do not have much trust and many time chaotic situation arises. Easy cooler transfer there is many formalities to give cooler and also in pulled them back so we must cut down those formalities this will motivate employees then they can do optimum utilization of coolers in the city. In schemes we must gave other flavor too instead of Coke and we can easily do this. Sales man is not bother about new outlets opening therefore md (market developer) is being allotted so they must open one new outlet in a day this will increases the market size. Route must be re-design in such a manner that one vehicle should cover his whole route in one day.

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REFERENCES Websites: www.cocacolaindia.com Official website of Hindustan Coca-Cola India pvt ltd. Others: Annual Report Coca-Cola 2012.

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ANNEXURE RETAILERS (IN JAIPUR REGION)

JAIPURIA INSTITUTE OF MANAGEMENT

QUESTIONNAIRE
Name of the shop: Name of the owner: . PH no:.

1. Which beverage brand you sell in the market? a) b) c) d) Coke Pepsi Coke/Pepsi Coke/Pepsi/Others

2. Which pack would you prefer for sale in terms of profit margin? a) b) c) d) 200/300ml 600ml 1.25l 2.25l

3. Which pack variant is more in demand? a) b) c) d) RGBs PET BOTTLES TETRA PACKS TIN CANS

4. Which product range of coke you basically prefer for sale in your outlet? a) b) c) d) e) f) THUMSUP COKE MAAZA FANTA LIMCA SPRITE

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5. You basically keep brands according to a) Customers demand b) Scheme focused 6. Do you ask for schemes while purchasing a particular pack of CSD? a) yes b) no 7. An Average Sales per Day (No. of Case): 8. An Average Sales per Month (No. of Case): 9. Are you happy with the schemes given by coca cola?

a) b)

Yes No

10. According to you company should improve upon?

a) Distribution system b) Sales promotion c) Schemes d) Services ( Like replacement of bottles expiry bottles)
11. Have you ever felt cheated by the salesman on schemes?

a) c)

Yes

b) No
Sometimes

12. What are the reasons of not doing business with Coke? a) Never approached by the company b) Less Demand c) Profitability d) Company Policies e) Competition from the nearby outlet f) Distribution system

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g) Lack or space in shop Non Suitability h) Any other

13. Why you do business with Coke, give reasons for keeping it. a) b) c) d) e) f) Brand Value Better scheme High Demand Good Supply High Profit Margin Good Service Quality

14. Rate the most important factor in cold drink demand (Rate the factor on 7 point scale where 1 is least and 7 is maximum) a) Weather b) Price c) Consumer taste

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