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ACKNOWLEDGEMENT

I WOULD LIKE TO AVIL THIS OPPORTUNITY TO EXPRESS MY DEEP SENSE OF GRATITUDE AND THANKS TO MR..KUSH BHATNAGAR (FINANCE MANAGER OF PEPSI CO INDIA HOLDING PVT.LTD. BAZPUR) FOR SUGGESTING THE EXPLORING IDEA CONSTRUCTIVE CRITICISM HIS CO-OPERTATION IN COURSE OF PRESENTATION OF HIS REPORT. I AM ALSO THANKFUL TO MR. SANDEEP ZUTSHI , MR. K.K. JAISWAL FOR PROVIDING ME

NECESSARY MATERIAL REQUIRED COMPLETING THE PROJECT REPORT.

FOR

I AM ALSO THANKFUL MY BRILLIANT LECTURER MR. KESHAV DALYANI FOR IRONING OUT THE MAJOR HURDLES

ENCOUNTED THE PROJECT ITEM. I EXTEND MY SINCERE MY WHOLE

HARDED THANKS TO DIRECTOR OF I.I.M.S. DR. V.S.JOHRI, DEAN OF I.I.M.S DR. K.C.JAISWAL, MR. MANISH AGRAWAL, MS. MILLI SEHGAL AND ALL THE FAMILY MEMBERS OF I.I.M.S. IT WOULD NOT BE JUSTIFIED IF I DO NOT MENTION FINANCIAL AND ALL OTHER SUPPORT OF MY PARENTS AND OTHER FAMILY MAMBERS BEHIND THE PROJECT.

(ANUBHAV AGRAWAL)

CONTENTS -: INTRODUCTION MEANING OF PROJECT ORIGIN OF PEPSI CO. INDIAN STORY OF PEPSI CO. PEPSI CO INDIA HOLDING (PVT) LTD. PEPSI BOTTLING PLANT, BAZPUR DEPATMENTS ORGANISATIONAL STRUCTURE PEPSI CO INDIA HOLDING (PVT.)LTD. SAFETY POLICY OF PEPSICO INDIA HOLDING (PVT.) LTD. THE QUALITY POLICY OF PEPSI CO INDIA HOLDING (PVT.) LTD. THE VISION OF PEPSICO INDIA HOLDING (PVT.) LTD. OPERATION COBO STRUCTURE OF COBO FOB STRUCTURE OF FOBO COMPETITION

BATTLE ON THE WATER-FRONT PEPSI CO THE MOST ADMIRED BEVERAGE CO. NOW PEPSI IN FOODWORLD QUALITY REMAINS THE TOP MANTRA DIFFERENT FLAVOURS OF PEPSI

CONTENTS
INTRODUCTION OF PEPSICO

Head of Pepsi Cola International (PC Peter Thomson. Chairman & CEO of PepsiCo Inc. Reinemund Vice Chairman of PepsiCo Inc. Enrico. PepsiCo Inc. President and CFO Nooyi International President Rebolledo Rogelio Indrani Roger Steve

MEANING OF PROJECT P PLANNING


SIGNIFICANCE OF PHENOMENON OF PLANNING WHICH DEALS WITH SYMBOLICATION AND PROPER ARRAN-GEMENT OF SENSE AND SUGGESTION RESPECTIVELY ACCORDING TO NEED.

RESOURCE
IT IS ASSOCIATED WITH THE WORD RESOURCE WITH GUIDES TO PROMOTE PLANNING.

OVERHEAD EXPRESS

THIS LETTER SIGNIFIES THE OVERHEAD EXPRESS IN UNESTIMATED

EXPENSES THAT MANY OCCUR IN THE MANUFACTURES DESIGN OR LAYOUT OF PROJECT.

JOINT EFFORT

SIGNIFIES THE JOINT EFFORT THAT THE PROJECT SHOULD BE COMPLETED WITH COMBINED EFFECT OF WORK CONCERNED.

ESTIMATING

SIGNIFIES THE WORD ESTIMATING

C CONSTRUCTION LOW COST


SIGNIFIES THE CONVEY ABOUT PHENOMENON OF CONSTRUCTION LOW COST

TECHNIQUE

THIS LETTER SIGNIFIES THE TECHNIQUE UNLESS THERE IS TECHNIQUE,

THERE IS IMPOSSIBLE TO COMPLETE THE PROJECT. ORIGIN OF PEPSI

In North Carolina, Mr. Caleb Bradham who was a pharmacist by profession, invented a new beverage in year 1898, which was called Brads Drinks (evocation of a digestion aiding enzyme pepsin). This brads drink was later called PEPSI COLA. Pepsi Cola trademark was registered in 1903. Bradham believed marketing would be the key to Pepsi cola. He spent $ 1900 on advertising when he sold only 40,000 liters of syrup. In 1905, Bradham build Pepsis first bottling plant. Three (3) more plants followed soon and

in 1907, he was selling 50,000 liters per year. In 1909, he hired a new advertising agency. Troubles started at the end of the world war 1st when Bradham overstocked sugar at high price which subsequently dipped to rock bottom in 1920. by 1922, the company was insolvent and by 1923, it went bankrupt. Bradham returned to his pharmacy. ROY MERARGELL, a well street broker stepped in and reorganized the company. However the company was running a loss each year and with the stock market crash in 1929. Megargell was not able to unkeep the company any longer. In 1930, Pepsi started its operation with its head office in New Ireland city, New York.

In 1931, the company went bankrupt a second time. The very basic strategy used by Pepsi was the price competitiveness i.e. Rs.5. year 1965 marked the success story for Pepsi Co. when it merged with Frito Lag to constitute Pepsi Co International with the coming together of DON KENDALL and Herman Lay.

INDIAN STORY OF PEPSI

In 1977, a change in government at the center led to the exit of Coca Cola which preferred to quite rather to dilute its equity to 40% in compliance with the Foreign Exchange Regulation Act (FERA). The beginning of 1980s saw the birth of another Cola drink, THUMPSUP. The GOLD SPOT people launched it in 1978-79, as Refreshing Cola in 1978, Parle led the Indian soft-drinks market (share 33%) with its Gold Spot and Limca brands, in 1978, pure drinks share came down to 21% as a result of growing popularity of Limca and Thums-Up. At the same time the threat to

the Indian soft-drinks market was that of fruit drinks. In 1988 fruit drinks market was valued at Rs. 40Crores and grew at the rate of 20%. In early 1985, the government rejected a proposal with the R.P.Goenka Group. This involved the export of fruit juice concentrates from Punjab in return for the import of Cola-Concentrates. The deal offered was 3:1 export import ratio in return for being allowed to market Pepsi in India. The Rs. 22Crores Pepsi Co project / package was the second bid by the U.S. headquarters MNC to enter India. Pepsico would have an equity holding of 39%, Punjab Agro Industries corporation (PAIC) 20% and Voltas 24%. The balanced to be financed privately from loans.A project approval board was finally set in February 1988. Pepsis share which have been

originally just under 40% was whittled to about 35% and PAICS share was hiked to 40% these were mainly the issue in which COKE had left India in 1977. Thus Pepsi not only accepted the 1977 conditions but also went much further. Now the Pepsi project had captured the farmers imaginations. Finally there was victory for Pepsi who after more than 5 years of acrimonious battle was launched in June 1990 selectively in Rajasthan,Punjab,Uttar Parades and South as LAHER-PEPSI. In 1991,saw a major launch of 7 UP and MIRINDA in India, which was warmly received by Indian customers & consumers. 1993 was a new beginning for fountain Pepsi (PMX].

In 1994, Pepsi achieved the NO.1 position in cola branch in India. In 1996 Mirinda attained NO.1 position in orange beverages category May 1998 saw a major launch of Mirinda lemon in India around 70% of the total sales came from established markets of NORTH AMERICA. Pepsi has sin major branch namely:Pepsi : diet-pepsi ; Mountain Dew 7-UP : slice and mirinda(orange & lemon) Mr. Ramesh Vengal was the first Managing Director who was here till April 1992.Mr.Suman Sinha the current president took over from him after a long inning with Hindustan Lever Ltd. (HLL).During these years the beverages business has grown rapidly from 3 million cases

to 60 million cases and is paised for countrywide leadership PEPSI sells upwards of 160 million cases annually through 7,50,000 retail outlets across the country.It generates annual sales of approximately Rs.2,500 crore which includes exports of Rs.300 crore,plus a growing snackfoods business in frito lay(sales Rs.300 crore) and a presence in the nascent juice market with TROPICANA(sales,Rs 50 crore)

PEPSICO INDIA HOLDINGS(PVT) LTD

Head quarter Present C.E.O of pepsico in India

Gurgaon - Mr.Rajeev Baksh

Retirement age in pepsico -65 years Employees Plants Owned Franchised 20 23 -3000 -43(total)

PEPSI BOTTLING PLANT, BAZPUR

An Indian venture of the pepsiCo inc united states opened its bottling plant at Bazpur dist Udham Singh Nagar in Uttaranchal in the year 1997 and bottling started from the year 5 May 1998. The plant of pepsico India holding (PVT)Ltd. At Bazpur has an effetive manpower of 122 which includes both line and staff authorities. The bottling capacity of pepsico India holding (Pvt. ) Ltd. At Bazpur plant is 1000 bottles per minute everyday .There are about 60,000 cases of bottles which are kept for bottling purpose.

The achievements of the plant includes International Quality Award(IQA) for house keeping.

DEPARTMENTS IN

PEPSICO INDIA HOLDINGS (PVT) LTD: HUMAN RESOURCES MARKETING MANUFACTURING PURCHASE ACCOUNTS QUALITY CONTROL SHIPPING

OGARNISATIONAL STRUCTURE UNIT MANAGER (V.P.SALES)

T.D.M. SALES

U.H.R.M.

U.F.M.

P.A.M.

PLANT MANAGER

HUMAN RESOURCE

MARKETING

MANUFACTURING

PURCHASE

ACCOUNTS

SHIPPING

QUALITY CANTROL

PEPSICO INDIA HOLDINGS (PVT) LTD

Set winners growth goals. If you act like No 2. you will be always No2. Hire those who love change and thrive on risk taking. Upset the rules of the market place Always anticipate the response you may provoke. Execution of a plan often derives success more than were marketing. Encourage executives to think laterally. Confute up those creative tactics to knock fizz out to its competition

SAFETY POLICY OF PEPSICO INDIA HOLDING (PVT)LTD

We shall design maintain construct and operate over plant so that they are safe for: The PepsiCo employees working in the factory. The assets of the company. The environment in and around the factory.

THE QUALITY POLICY OF PEPSICO INDIA HOLDING (PVT)LTD

We shall deliver goods production in the market place. The highest quality. The best tasting.

THE

VISION

OF

PEPSICO

INDIA

HOLDING(PVT)LTD To be the best consumers products company in the eye of our suppliers, customers, consumers, employees and shareholders.

OPERATIONS COBO

COBO

stands

for

COMPANY

OWNED

BOTTLING OPERATION.COBO has been one of the PepsiCos biggest strategies, which has proved to be a winner. A bottling operation is a capital-intensive business, particularly in returnable bottle market like in India, and the investment is at four levels. Going COBO was a big risk to PepsiCo and it also implied a big attitudinal change from a totally orientation to an operational mindset. Getting into COBO helped PepsiCo on several ways. First, it helped PepsiCo get a more holistic view of their business. It has also translated into the market gains at all COBO locations, which today account for half of Pepsis total soft drinks sales.

Pepsi has taken a more capital-intensive route of owning and running its own bottling plant alongside those of its franchisees.

STUCTURE OF COBO

PEPSI FOODS LIMITED

PEPSIco INDIA HOLDING (PRODUCTION & PLANT)

100% OWNED SUBSIDIARY OF PEPSICO INC.

PEPSICO INDIA MARKETING (SUPPORT INFRASTRUCTURE, MARKETING SALES & DISTRIBUTION)

FOBO

FOBO stands for franchise owned bottling operations.

Entering into FOBO has helped PepsiCo on several ways. First it has enabled pepsi to focus on marketing operation as much as it has on the operational front. Another gain of going FOBO is that since the franchise have to invest in plant and machine glass(bottles) and trucks/infrastructure, the cost burden has been reduced.

STRUCTURE OF FOBO: FRANCHISEES INVEST IN PLANT AND MACHINES, PEPSI FOODS LIMITED GLASS (BOTTLERS, TRUCKS& INFRASTRUCTUTE ) INC.

FRANCHISEES (BOTTLERS)

PEPSICO INDIA MARKETING (SALES & MARKETING)

COMPETITION ( Real war between Pepsi & Coke )

Every

food

companies

have

their

competition. Pepsis main competitor is CocaCola co. Both have been selling thirst quenchers [ for 100 years] that are now global brands. Their bottles move through the worlds most pervasive distribution network. Coke is mainly a franchise driven operation with a company supplying its soft drink concentrate to its soft bottlers around the world. Coke management releases that a soft drink is a convenience as well as an impulse product.
According the companys expertise lies in consumers marketing. Idea is to reduce the effect span as Also coke will be experimenting with mobile dispensing units at

beaches and stadiums going out towards consumers the much as possible. Cokes infrastructure plan include setting up new subsidiaries. It is also considering a 35 Greenfield venture to set-up a model plant in westerns corridor most likely in Gujarat. This will have 4 product lines with a capacity of 600 bottles per minutes with a build in flexibility to about top different and flavors and sizes. Another option for building capacity is to bringing in bottlers from overseas to invest jointly in fresh capacity. The company wants to go a stem further and set-up COCA-COLA institute a training facility for bottlers. Coke continues to stay with its multibrand strategy. This enhances the ability to leverage selfspace at the retail outlet. It also gives then flexibility to offer price on brand others than lead ones. Coke has launched MAJA pineapple and MAJA orange.

As far as new product launched is concerned coke plans a dual brand approach by bringing in FANTA lemon. This comes about because volumes of LIMCA have increased by 20% shares, which has an 80% share of the cloudy lemon segment. So this dual brand approach will extend to that flavors too. Pepsis decision to take in company owned bottling operation (COBO) alongside franchise has proved to be winning edge over its competitor. By 1994 Pepsis has bought over five bottlers in the key markets. This ensuring maximum control. The franchise now sees the company not just as advisor but as carrying the weight of experience. Company system and franchisee system can now be properly aligned to meet the required objectives. On expanding reach and availability 80% of all cold drinks are consumed at the point of purchase (POP) rather than at home. The fountain initiative has paid off in higher of countrywide and they offer

consumers a whole new way experience soft drinks. Also expanding reach and availability. Coke tied up with Indian Oil to set up dispensing units at petrol pumps. Pepsi followed suit by striking a deal with Bharat Petroleum. Pepsi has mainly focused an brand Pepsi. Their strategy has been to keep pace with the market growth rate in non Colas but to emerge as the definite Cola they have put their might behind the brand Pepsi as the flagship brand. In 1987, Pepsi ranked 29 in the fortune list of the 500 largest industrial corporation in the U.S .Coca Cola was way down at 54, while Pepsi Co. improved its position from 34 in 1986, Coca Cola tumbled to 38 after massive public out cry, the company had to reintroduce the original Coke Classic. Pepsi has so far made in roads in 151 countries (150 before India) including the much-publicized ventures in the Soviet

Union and China. Patience in Pepsi Co.s long suit. At the base of every beverage business lies the all important secret formula of success the Concentrate. In India the concentrate is prepared by Pepsi food limited representatives of Pepsi Cola International. They came, They spent, They conquered. The size of their combined business adds up to more than Rs. 5500 crore. The equity investment put in it tots up to a humungous $1347 million (Rs.5700 Crore). Yet, almost 10 years after Pepsi Co and the Coca-Cola Company entered India, both are yet to turn a profit. Their accumulated losses are estimated to be over Rs.800 crore. In a bid to corner a larger market share, invariably, either Pepsi or Coke ends up raising the stakes to a point where the math simply doesnt add up. Just that the two cola giants have been in an unseemly hurry to grow the Indian market and, at the same time, deny each other any advantages,

irrespective of whether it makes economic sense. In the mid 90s breakeven was pegged at 40 million cases. Today, both players together do 150 million cases, but break-even is still elusive. The battle spilled into almost every area of operations. In early 1999, Trade discounts were also unleashed. If the industry norm was around three to four bottles free with every case, the Cola majors began to offer six to seven bottles. In 2000, particularly in the month Coke went berserk, giving 50% discounts. Both Cola warriors targeted a clutch of key accounts about 6 7 % of the total retail base, primarily restaurants, movie halls and hotels. In many cases the owner would play one against the other and drive a hard bargain. In may cases the Cola companies paid close to Rs. 100 per case of expected offtake as advance to secure a monopoly over the key account.

The gross margins on a case of returnable glass bottles was just Rs.40. In India, a single-serve P & T bottle was simply not cost effective. Aluminum cans too suffered from the same problem. Now, every year, both companies had to invest in fresh glass capacity and crates. Back-of-the-envelop calculations suggested that to put an additional million bottles in the market required close to Rs. 40 crore investment in glass and crates, and glass bottles had to be replaced every four years after they had done 40 cycles, during which time depreciation had been charged. Till the Cola companies began to concentrate on the Urban centers. As soon as they pushed into the winter land, the first signs of problems surfaced. In a state like Tamil Nadu, the off take per 1000 people was barely 0.9. As a result, when a Pepsi or a Coke truck went into interior markets, the glass simply wouldnt come back fast, either consumption was low

or the volumes were being split between the volumes were being split between the two competitors. As a market leader Pepsi could have played the role of expanding the market. But that would have been completely out or character for the company. It is a bit like asking the Brazilian Soccer team to adopt German-Style total football. Across global market Pepsi has always reveled in grabbing share away from coke. But in India it finds itself in a peculiar position. It is the Numero Uno brand, outselling both Coke and Thums up put together. Thats helped Pepsis Indian team to build quite a reputation. Pepsi has managed to constantly find ways to connect with the youth. So it Coke is the universal drink which cuts across age groups, Pepsi is the icon of the real Cola quaffers. Young people between the age of 15-29.

BATTLE ON THE WATER - FRONT Water opens up a new battle front for the competing Cola giants. But given the current pricing models, margins in water are virtually non-existent Pepsi is trying to shield Aquafina from the discounting war. But thats not helping it garner share. Heres the real threat in most Asian markets, with the exception of the Philippines, water is a far bigger business than carbonated soft drinks. Besides, water can very easily ride on the existing distribution. It could also help iron out the seasonal stew in the carbonated soft drink business.

Both Cokes Kinley and Pepsis Aquafina have to contend with Ramesh Chauhans Bisleri which is discounting heavily to build volumes in the low margin business. Aquafina has decided to shield itself from the gutter fight by adopting a premium tack and not offering discounts.The fight has all the makings of a Cola war As Coke and Pepsi have shown, there are no clear winners in such a battle, only losers.

PEPSICO THE MOST ADMIRED BEVERAGE CO. The New York based Fortune magazine has listed Pepsi as No. 1 in their latest survey The Worlds Most Admired Beverage Companies. PepsiCo has moved from the fifth position in 2000 to the top spot in the beverage industry in 2002.This also means that CocaCola has been kicked down from the throne. In the All Stars LIST OF THE Worlds most admired companies from all categories ,Pepsi moved up from its rank of 61 in 2002 to 16.Coca-cola dropped from 15th position to 20th.

The survey rates the companies on the basis of nine attributes , including quality of management, innovation and financial soundness. NOW PEPSI IN FOODWORLD In a major breakthrough in key accounts initiatives, Pepsi has gained strong foothold in the Foodworld chain of restaurants in the southern and western region .Foodworld with 73 stores across the country has aggressive expansion plans. Our Sales Director Sunder Hemrajani says , This is a big win for us at Pepsi ,snatching this large part of the Foodworld business from competition inspite of all odds.It is indeed a huge breakthrough as Foodworld is the No. 1 modern trade account by a large margin within the country.

Pepsi Indias operations team has had two significant achievements recently, which has

reinforced the importance of quality.Our Madurai bottling plant which had so many achievements
QUALITY REMAINS THE TOP MANTRA in the past had yet another feaer on its cap when it recently won the prestigious Golden Peacock National Quality Award. The award is given to encourage total quality

improvements, set up by the Institute of Directors (IOD ) IN 1991. Based on the famous MALCOLM BALDRIDGE Business Excellence Award ,it is presented to organizations that have made the most significant improvements .The results are based on a team looking at Organisational Leadership,Strategic Planning ,Information Management, Human Resource Management, Process Management, Employees and

Customer Satisfaction,Impact on Society and Business Results. Pepsis NARODA plant is again one of those bottling plants which has been setting new standards in quality. As a deserving recognition of these continuing efforts ,the Naroda plant received the 2001 Best COBO Plant Quality Award

DIFFERENT FLAVOURS OF PEPSI

IN THE PLANT OF PEPSI CO INDIA HOLDING (PVT.)LTD.,THERE ARE PRODUCED DIFFERENT FLAVOURS IN 300ML.,500ML.,1 LTR.,1.5LTR.-6B,PET 18 LTR.-6B QUANTITY.THAT FLAVOURS ARE AS--:

PEPSI PEPSI AHA MIRINDA LEMON MIRINDA ORANGE MIRINDA APPLE 7UP SODA AQUAFINA DIET PEPSI TEEM

SALES :
As per section 2, sale with its grammatical variations and cognate expressions, Means any transfer of property in goods by one person to other for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on hire purchase or other system of payment by installments, but does not include a mortgage.

SALE PRICE--:

Sale price means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charge for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or the cost of installment in case where such separately charged [Section 2(h)]. cost is

Let us take an Example of Pepsi (300 ml): FORMULA --: Sale Price = MRP - Retailers Margin Distributors Margin

For one Case: Sale Price = Rs (240-20-10) = Rs 210 per Case ( Inclusive of Sales Tax ) Deductions like Freight recovery and Glass Bottle rental are also allowed wherever they are charged on Invoice.

Accounting of Sales Tax --:


In case of PepsiCo --:
Let Stock Distributors Price Freight Recovery Discount = Rs. 210 = Rs 7 = Rs 6

Glass Bottle Rental

= Rs 12

Sales Tax on Glass Bottle Rental = Paise 60

So, Accounting is done asDr. Distributors A/C Rs. 210 Cr. Sales A/C Rs. 210

The Sales Tax collected will be calculated and accounted in the following manner -

If rate of Sales Tax is 15%, then Sales Tax will be-

184.40 *15 SALES TAX = 115 = Rs 24.05

So, an Accounting entry will be:

PARTICULER

Rs.

Sales Tax expenses A/c Sales Tax payable A/c

Dr. Cr.

27.66 27.66

Payment of Sales Tax --:

While the rules on payment of Sales Tax vary from state to state, currently as applicable in Uttranchal, Sales Tax collected in a month has to be paid by the last day of next month.

Return of Sales Tax --:

Sales Tax has various returns like monthly, quarterly, and annually wherein Information is captured on value of goods sold at different different Tax rates and also it includes amounts of stock transfer. It is basis of these returns, that annual assessment of any firm takes place. Pepsi Bazpur submits following returns on monthly basis say --: Local Sales, Central Sales, and Entry Tax , Works contact Tax. As of now Entry Tax is payable by them only on purchase of Sugar & Machinery costing above 10 lacs.

FORMS UNDER THE ACT

The various forms used by dealers under the Sales Tax Act: 1. C Form 2 2. D Form 3. E-I and E-II Forms 4. Form F 5. Form G 2 6. Form H

FORM C --:

Simply put, this is a form which enables concessional purchases in case of Interstate transactions. Pepsi extensively uses for various types of raw

material, packing material, Engineering items, spares etc. being purchase at concessional rates from other parts of India. The main condition for issuance of C form is that the item for which C form is being issued should either be used in manufacturing or in being bought, for resale purpose and item should be endorsed on the registration certificate of the form.

Example --: In case of promotional scheme of Pepsi if we send free Bhujia, along with Pepsi then during the purchase of Bhujia we do not have to submit C form, and if we purchase labels of Pepsi for packing purpose, we have to issue C forms for that .