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“Comparative Study of Retail

Sector of Soft Drink Industry in


Nagpur City”
Dissertation report submitted to
International University of Vienna, Austria
In partial fulfillment of the requirement for the award of degree of

Master in Business Administration

Submitted by:
Ritabrata Pan
M.B.A – III Sem.

Guided by:
Prof. Kaustav Mukhrejee

Global Business School


“Comparative Study of Retail
Sector of Soft Drink Industry in
Nagpur City”
Dissertation report submitted to
International University of Vienna, Austria
in partial fulfillment of the requirement for the award of degree of

Master in Business Administration

Submitted by:
Ritabrata Pan
M.B.A – III Sem.

Period of References: 2004 to 2006.


All the data will be taken from Primary sources (retail sector of Soft drinks
in Nagpur City) and Secondary sources; from January 2004 to December
2006 data will be used for the study.

Geographical Area: Nagpur city.

Prof. Kaustav Mukherjee. Prof. Swati Sharma.


Project Guide H.O.D.
M.B.A Department.
DECLARATION

I hereby declare that the dissertation entitled “Comparative Study of Retail

Sector of Soft Drink Industry in India” is the result of my original work

and the same has not been previously submitted to any examination of this

university, and the dissertation will be liable to be rejected and / or

cancelled, if found otherwise. Whatever data have been collected they are

based on original facts & figures.

Place: Nagpur. Ritabrata Pan.


Date: M.B.A III Sem.
ACKNOWLEDGEMEN
T

I take this opportunity to acknowledge the deep sense of gratitude towards

my guide Prof. Kaustav Mukherjee, whose valuable co-operation and

guidance resulted in successful completion of this dissertation. He not only

encouraged me throughout the project but also took great pains going

through the manuscript carefully and made numerous valuable suggestions

and corrections which have greatly improved the quality of work.

I am equally indebted to Prof. Swati Sharma, H.O.D., MBA

Department , Global Business School, G.H.R.S.M.S, Nagpur, for their, co

operation, guidance and constant encouragement.

Ritabrata Pan.
Chapter-1

Introduction
About Soft Drink:

Soft drink market size for FY00 was around 270 m.n cases (6480mn

bottles). The market witnessed 5- 6% growth in the early‘90s. Presently the

growth rate of soft drink industries in India is 22% as compare to the

previous year. The market size for FY01 was around 7000 mn bottles & the

market size for FY07 is expected to be 11000 mn bottles.

In Nagpur city, market size for FY00 was around 0.04 m.n cases (9.6 lacks).

The market witnessed 7 – 8% in the early ‘90’s.

Soft Drink Production area: The market preference is highly regional

based. While cola drinks have main markets in metro cities and northern

states of UP, Punjab, Haryana etc. Orange flavored drinks are popular in

southern states. Sodas too are sold largely in southern states besides sale

through bars. Western markets have preference towards mango flavored

drinks. Diet coke presently constitutes just 0.7% of the total carbonated

beverage market.
Growth promotional activities: The government has adopted liberalized

policies for the soft drink trade to give the industry a boast and promote the

Indian brands internationally. Although the import and manufacture of

international brands like Pepsi and Coke is enhanced in India the local

brands are being stabilized by advertisements, good quality and low cost.

The soft drinks market till early 1990s was in hands of domestic players like

campa, thumps up, Limca etc but with opening up of economy and coming

of MNC players Pepsi and Coke the market has come totally under their

control. The distribution network of Coca cola had6.5 lakh outlets across the

country in FY00, which the company is planning to increase to 8 lakhs by

FY01. On the other hand Pepsi Co's distribution network had 6 lakh outlets

across the country during FY00 which it is planning to increase to 7.5 Lakh

by FY01.

Types Soft drinks are available in glass bottles, aluminum cans and PET

bottles for home consumption. Fountains also dispense them in disposable

containers Non-alcoholic soft drink beverage market can be divided into

fruit drinks and soft drinks. Soft drinks can be further divided into

carbonated and non-carbonated drinks. Cola, lemon and oranges are

carbonated drinks while mango drinks come under non carbonated category.
The market can also be segmented on the basis of types of products into cola

products and non-cola products. Cola products account for nearly 61-62% of

the total soft drinks market. The brands that fall in this category are Pepsi,

Coca- Cola, Thumps Up, diet coke, Diet Pepsi etc. Non-cola segment which

constitutes 36% can be divided into 4 categories based on the types of

flavors available, namely: Orange, Cloudy Lime, Clear Lime and Mango.

The Soft Drinks in India industry profile is an essential resource for top-

level data and analysis covering the soft drinks industry. It includes detailed

data on market size and segmentation, plus textual analysis of the key trends

and competitive landscape, demographic information, and descriptions of

the leading companies.


Evolution of Soft Drink in India:

Euro monitor International's Soft Drinks in India market report offers a

comprehensive guide to the size and shape of the market at a national level.

It provides the latest retail sales data, allowing you to identify the sectors

driving growth. It identifies the leading companies, the leading brands and

offers strategic analysis of key factors influencing the market - be they new

product developments, packaging innovations, economic/lifestyle

influences, distribution or pricing issues. Forecasts illustrate how the market

is set to change.

Soft drinks experienced another good year in 2006. The positive growth in

soft drinks in India was primarily driven by the increased demand for

fruit/vegetable juice and bottled water. With rising disposable incomes and a

preference for healthy and natural products, fruit/vegetable juice was in great

demand in 2006. Bottled water also continued its fast growth, with demand

stemming from the rising populations in cities and the crumbling public

infrastructure for tap water.

India's soft drinks market will continue to grow apace in 2003, overcoming

the obstacles presented by the difficulty in marketing to such a large and


diverse population and the relatively high cost of packaging as a proportion

of selling price. Much of this continued growth is likely to come from

bulk/HOD water with demand for carbonates and packaged water remaining

strong but increasing a little more slowly.


Nagpur & Indian Market Scenario:

Market Definition: The soft drinks market consists of bottled water,

carbonates, concentrates, functional drinks, juices and ready-to-drink (RTD)

tea & coffee. The market is valued according to retail selling price (RSP)

and includes any applicable taxes. Any currency conversions used in the

creation of this report have been calculated using constant 2004 annual

average exchange rates. Soft drinks are available in glass bottles, aluminum

cans and PET bottles for home consumption. Fountains also dispense them

in disposable containers Non-alcoholic soft drink beverage market can be

divided into fruit drinks and soft drinks. Soft drinks can be further divided

into carbonated and non-carbonated drinks. Cola, lemon and oranges are

carbonated drinks while mango drinks come under non carbonated category.

The market can also be segmented on the basis of types of products into

cola products and non-cola products. Cola products account for nearly 61-

62% of the total soft drinks market. The brands that fall in this category are

Pepsi, Coca- Cola, Thumps Up, diet coke, Diet Pepsi etc. Non-cola segment

which constitutes 36% can be divided into 4 categories based on the types of

flavours available, namely: Orange, Cloudy Lime, Clear Lime and Mango.
The concerns about the safety of carbonates were renewed in the wake of the

pesticides controversy in August 2006. Similar concerns were voiced in

2003. The alleged harmful effects of pesticide residues in carbonates

affected the image and consumption of carbonates negatively. Within

carbonates, consumers increasingly preferred non-cola carbonates to cola

carbonates. The pesticides controversy resulted in an increasing number of

consumers shifting towards perceived healthier beverages.

Indian consumers were slow to accept new soft drink options such as

functional drinks and RTD tea, although these beverages produced dynamic

growth rates from a low base in 2005 and 2006. On the other hand,

carbonates, bottled water and fruit/vegetable juice have long been popular

beverages in India. The relatively low consumer awareness of functional

drinks and RTD tea stems mainly from the lack of promotional activity.

Manufacturers have marketed and positioned these products in large

metropolitan cities. Thus, the combination of high prices, restricted product

availability and a lack of promotional activity led to the slow uptake of

emerging soft drinks.

While soft drink producers in western Europe bemoaned yet another cold,

wet summer in 2002, their counterparts in India were struggling to keep up

with demand, with exceptionally hot weather there driving sales growth. A
new report from beverage industry analysts Canadean estimates that

consumption in India leapt by 13 per cent as a result of the heat wave, and

producers will clearly try to capitalise on this rapid advance in years to

come.

Still drinks remain the largest single sector, according to Canadean, and

while sales of packaged still drinks grew strongly, the sector as a whole was

held back by almost flat consumption of unpackaged or loose alternatives.

Helped by strong sales through roadside vendors, loose or unpackaged still

drinks account for over 90 per cent of total still drinks consumption, the

report shows.

Carbonates, on the other hand, gained considerable ground in 2002, with a

20 per cent increase in consumption helping fizzy drinks narrow the gap

with their still counterparts. This performance is even more impressive given

the fact that Indians do not tend to consume carbonates with meals and home

consumption is low.

The major carbonate producers reverted back to offering 20cl refillable glass

- a move that enabled affordable pricing to be implemented and one that

resulted in sales of the pack size more than doubling. This has also helped
the major brands compete more effectively with their traditionally less

expensive local rivals.

PET is the fastest-growing type of packaging, its use increasing by some 36

per cent in 2002 alone. PET's share of total soft drinks packaging also

increased from 20 per cent to 24 per cent with further inroads expected in

2003.

Imported brands in general are becoming more readily available on store

shelves offering consumers greater choice. There is also considerable scope

for the introduction of new flavours in response to ethnic preferences. In

addition, the success of smaller pack sizes in the carbonates sector is likely

to provide fresh impetus for low cost packaging particularly as the major

producers look for ways of competing with lower priced local suppliers.

Weather permitting, the overall market is expected to continue growing in

2003, but with a predicted increase of around 8 per cent, this will be far less

frenetic than in 2002.


Major Market Players:

Coca Cola: Coca-Cola India Pvt. Ltd maintains its leading position. Coca-

Cola India Pvt Ltd maintained its leading position in soft drinks in India,

followed by PepsiCo India Holdings Pvt Ltd in 2006. Whilst the retail

volume shares of Coca-Cola India and PepsiCo India slipped in 2006, as a

result of the growing health concerns caused by the aftermath of the

pesticides controversy, both maintained a comfortable lead over the other

manufacturers. Parle Bisleri Ltd has steadily gained shares from the

carbonates giants over the review period, to emerge as the third ranked

company in 2006. The battleground for beverages has moved from

carbonates to bottled water and fruit/vegetable juice, with manufacturers

turning their attention towards these healthier beverages, as consumer

interest continues to surge forward. A number of new players have entered

fruit/vegetable juice and bottled water, vying for a slice of the growing pie.

Future soft drinks growth to come from healthier beverages. Soft drinks is

expected to grow at a healthy pace over the forecast period. Much of the

demand for soft drinks is expected to be for healthier beverages. With

consumer preferences shifting towards healthier options worldwide, India is


following suit. A growing consumer awareness about healthier soft drinks

and the effects of the pesticides controversy mean that consumers are likely

to opt for healthier alternatives over the forecast period. Thus, sales of

carbonates are expected to stagnate over the forecast period while

fruit/vegetable juice and bottled water are projected to experience robust

growth. Functional drinks and RTD tea are expected to reproduce the

dynamic growth of 2005-2006, albeit from a low base.

Pepsi: Pepsi gained popularity following the introduction in 1934 of a 12-

ounce bottle. Initially priced at 10 cents, sales were slow, but when the price

was slashed to 5 cents, sales went through the roof. With twelve ounces a

bottle instead of the six ounces Coca-Cola sold, Pepsi turned the price

difference to its advantage with a slick radio advertising campaign, featuring

the "Pepsi cola hits the spot / Twelve full ounces, that's a lot / Twice as much

for a nickel, too / Pepsi-Cola is the drink for you,", encouraging price-

watching consumers to switch to Pepsi, while obliquely referring to the

Coca-Cola standard of six ounces a bottle for the price of five cents (a

nickel), instead of the twelve ounces Pepsi sold at the same price. Coming at

a time of economic crisis, the campaign succeeded in boosting Pepsi's status.

From 1936 to 1938, Pepsi Cola's profits doubled.


Pepsi's success under Guth came while the Loft Candy business was

faltering. Since he had initially used Loft's finances and facilities to establish

the new Pepsi success, the near-bankrupt Loft Company sued Guth for

possession of the Pepsi Cola Company. A long legal battle then ensued, with

Guth losing. Loft now owned Pepsi, and the two companies did a merger,

then immediately spun the Loft Company off.

In 1975, Pepsi introduced the Pepsi Challenge marketing campaign where

PepsiCo set up a blind tasting between Pepsi-Cola and rival Coca-Cola.

During these blind taste tests the majority of participants picked Pepsi as the

better tasting of the two soft drinks. PepsiCo took great advantage of the

campaign with television commercials reporting the test results to the public.

In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing

strategy. By 2002, the strategy was cited by Promo Magazine as one of 16

"Ageless Wonders" that "helped redefine promotion marketing."


Relevance of the Study:

We will come to know about the service & responsibility towards customers

of soft drink retail sectors. Customers buying behaviour & retailers selling

behaviour will be provide by this study. The study will help to analyse the

customer’s exact needs & wants. The Soft Drinks in India industry profile is

an essential resource for top-level data and analysis covering the soft drinks

industry. It includes detailed data on market size and segmentation, plus

textual analysis of the key trends and competitive landscape, demographic

information, and descriptions of the leading companies like Pepsi & Coca-

Cola.

Scope of the Study:

The report talks about the soft drink retail industry in our country, like

industry performance, future prospects, growth opportunities, etc. The

forecast given in this report is not based on a complex economic model, but

is intended as a rough guide to the direction in which the market is likely to

move. This forecast is based on a correlation between past market growth


and present market growth. The report provides a keen insight of soft drink

industry in India by analyzing various market segments and retail formats

present in the industry. It helps clients to understand the various types’

products available in soft drink industry and their future scope. The

overview on opportunities and future forecast on the soft drink retail

industry helps the clients analyze the future course of direction and major

growth areas of the industry. The project contains an executive summary and

data on value, volume and segmentation of market in India. It provides

textual analysis of the industries prospects, competitive landscape and

leading companies with a two-year forecast of the soft drink industry. It is

supported by the key macroeconomic and demographic data affecting the

market by including the detail information on market size, measured by both

value and volume of market shares which are covered by manufacturer

and/or brand.
Chapter-2

Research
Methodology

Research Process:
Research makes progress possible. Research is the systematic design,

collection, analysis and reporting of data. Research comprises of defining

and redefining problems, formulating hypothesis, collecting, organizing,

evaluating data, making deduction and reaching to conclusion whether they

fit into the formulation of hypothesis. Marketing research is used to know

the wants of the customer and also to fulfill the needs of the customer.

Above all is the process of research, discussed briefly in the following

mentioned steps:

PROBLEM FORMULATION

RESEARCH METHOD

RESEARCH DESIGN

SELECT DATA COLLECTION TECHNIQUE

SAMPLING DESIGN

DATA COLLECTION

DATA ANALYSIS AND INTERPRETATION

RESEARCH REPORT
Problem Formulation:

We have done this research on the basis on soft drink industry in

Nagpur market. The information has been collected from both

primary sources and secondary sources. Primary sources like the

individuals (students, businessmen, retail outlets & shop kiosk).

And secondary sources like govt & trade report, company records,

sales force reports. According to Indian market scenario Coca-Cola

is the leading company and Pepsi is at second position. We have

collected data in a same ratio from each segment mention above so

that research has carried right information.

Research Method:

It is the most relevant requirement for any market researcher. Research

Methodology is totally based on problem of research what we have already

have defined. Research Methodology always depends on the following

points:
A) The increasing complexity of the Business Environment

• Technological changes.

• Research & Development.

• Product changes.

• IT changes.

B) Increase complexity of decision maker.

Research Design:

It is a model, indicates a plan of action to be carried out in

connection of this research. It provides only the guideline to the

researcher to move forward. I have developed the research design

on the basis of data which have been collected. Research design is

the conceptual structure within which research is conducted; it

constitutes the blue print for the collection, measurement and

analysis of data. As such the design includes an outline of


researcher work from the writing of hypothesis and the operational

implementation to the final analysis of data.

Data Collection Techniques:

a) Primary source: Data has been mainly collected form primary sources.

The method was combination of direct personal interview backed by

questionnaires method i.e. a questionnaire being drafted and data being

collected by meeting soft drink retailers directly.

b) Secondary source: Data have obtained regarding the information relates

to soft drink industry profile i.e. industry growth, present status of

industrial background, govt & trade report, company records, sales

force reports etc.

Formulation of Hypothesis

Consumer preference of soft drink industry in India is growing day by day &

as well as in Nagpur also. On the basis of my work I have assumed that in

Nagpur, Coca Cola is the most preferable brand in soft drink industry and

second preferable brand is Pepsi.


Data Analysis & Interpretation:

Both quantitative and qualitative methods of data analysis have been used.

The percentage of respondent in each category for each attribute has been

taken to obtain meaningful information from data.

Interpretation means drawing interference from the collected facts

after analytical study. Here, ‘Percentage (%) technique’ has been used to

interpret the data.

Sampling Design:

Sampling Universe

The sampling universe is Nagpur City.

Sampling Unit

An individual situated in the universe.

Sample Definition

Students, Businessmen, Service Retail outlets and Shop kiosk etc.


Sample Size

Sample size taken for consumer is 100.

System Sampling

The sampling method followed in non-probability sampling.

Judgement Sample

Selection of individual who are good prospects for accurate information.

Sampling Tool

Questionnaire for consumer.


Chapter-3

Data Analysis
Table 1:

Showing classification of the Respondents on the basis of their Occupation:

Occupation No. of Respondents (%)


Students 36
Retail shop 17
Shop kiosk 22
Self employed 10
Working employees 15

40 36
35
30
25 22
20 17
15
15 10
10
5
0
s

Table 2:
ed
p

k
ts

ee
ho

os
en

oy

oy
ki
ls
ud

pl
op

Showing
pl
ai

em
St

em
et

Sh
R

classification of
lf

ng
Se

ki

the Respondents on the basis of their preference of Brand:


or
W

Brand Name No. of Respondents (%)


Pepsi 45
Coca Cola 54
Others 1

54
60

45

50

40

30

20

10 1

0
Pepsi Coca Cola Others

Table 3:

Showing classification of the Respondents on the basis of their factors


before purchasing Soft Drink:

Factors influencing Purchase No. of Respondents (%)


Brand Image 30
Taste 15
Product Range 37
Availability 18

18%
30%

37% 15%

Brand Image Taste


Product Range Availability

Table 4:

Showing classification of the Respondents on the basis of factors to create


Brand Image:

Factors to create Brand Image No. of Respondents (%)


News Papers 23
Magazines 17
T.V 35
Celebrity promotion 25
Celebrity

25
promotion

T.V

35
Magazines
17

News
23

papers

0 10 20 30 40
Table 5:

Showing classification of the Respondents on the basis of their suitable


consumable time of Soft Drink:

25%
Soft drink consumable time No. of Respondents (%)
Frequently 65
having foods 10
Partying 25

10% 65%

Frequently Having foods Partying


Table 6:

Showing classification of the Respondents on the basis of how their


Purchase Decision differs:

How differ Purchase Decision No. of Respondents (%)


Occasions and festivals 23
Some new product is in 18
Availability
40 of product 22
Current market trend 37
30
20 37
10 23 18 22

0
Occasions Some new Availability Current
and product is of product market
festivals in trend
Table 7:

Showing classification of the Respondents on the basis of their Taste of


Flavors:

Flavors No. of Respondents (%)


Regular flavours 69
Special flavours 31

Special 31
flavors

Regular 69
flavors

0 20 40 60 80
Table 8:

Showing classification of the Respondents on the basis of their Quality of


the Product:

Product Quality No. of Respondents (%)


Excellent 22
Very good 43
Good 29
Average 6

60

40

20 43
22 29
6
0
Excellent Very good Good Average

Table 9:

Showing classification of the Respondents on the basis of Changes of


following companies’ product:
Companies name No. of Respondents (%)
Pepsi 57
Coca Cola 43

43%

57%

Pepsi Coca Cola


Chapter-4

Recommendation & Suggestion:


From the analysis of the data and information gathered in the market Survey

conducted through questionnaire and personal interview it was found that in

the soft drink segment, consumer preference of Coca Cola is better than

Pepsi just because of Coca Cola’s wide product range & availability of the

product in Nagpur market. According to the distributor’s point of view,

margin of Coca Cola is higher than Pepsi as well as applicable for retailers

also.

According to me, if Pepsi want to increase their consumer preference they

should provide better service to retailers as well as consumers in terms of

availability of product in market & wider product range than now. Consumer

preference of Coca Cola is better because they owned some brand which has

very good brand image in India.

Quality & taste of Coca Cola’s product got better response from

respondents as compare to Pepsi.

Chapter-4

Conclusion:
Thus it can be concluded that soft drink industry in India is growing day by

day. According to the my research I have observed that consumer preference

as well as market share of Coca Cola is higher than Pepsi in Nagpur market.

This thing also applicable for all over the Indian market also. My hypothesis

was based on the consumer preference of Pepsi & Coca Cola. I have

assumed that in Nagpur, Coca Cola is the most preferable brand in soft drink

industry and second preferable brand is Pepsi. After gathering all the facts &

figures I am concluding that consumers preference of Coca Cola is better

than Pepsi.

Bibliography:

BOOKS
1. Kothari C.R. – Research Methodology Methods & Techniques,

Delhi.

2. Kotler Philip & Keller Kevin Lane – Marketing Management, 12th

edition, Prentice Hall of India Private Limited, New Delhi.

MAGAZINES

1. Business World

2. India Today

3. Sports Stars

WEBSITES

1. www.google.com

2. www.askjeeves.com

3. www.pepsico.in

4. www.cocacola.co.in

5. www.nagpurkhoj.com