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OF BUSINESS ADMINISTRATION (Affiliated To CCS University, Meerut) Academic Session : 2005-2008
SUBMITTED BY: AYUSH AGARWAL BBA-III Year Roll No.: 9359560 UNDER THE GUIDANCE OF: External Supervisor: Mr. Vikas Gautam Sr. Customer Executive Varun Bevrages Ltd. Ghaziabad. Internal Supervisor: Mrs. RUCHIKA JAISWAL LECT. -BBA IMS, Ghaziabad
STITUTE OF MANAGEMENT STUDIES INSTITUTE OF MANAGEMENT STUDIES C–238, BULANDSHAHAR ROAD, LAL QUAN, P.B NO: 57, GHAZIABAD-201009
For management career is important to develop management skills, in order to achieve positive and concrete results, along with the shop insurance concepts. The exposure of real shop insurance situation existing inn corporate world is very much needed. To fulfill this need this practical timing is required.
I took summer training in the Varun Beverages Ltd. Under PepsiCo. Inc., under the supervision of Mr. Vikas Gautam (SCE) & Mr. Pankaj Sharma (CE). It was my good fortune to get training in very healthy atmosphere as I got ample opportunity to view the overall working of marketing.
In the following pages an attempt has been made to present a comprehensive report covering aspects of my training.
Preface Acknowledgement Executive Summary Introduction Objective of the Project Pepsi Co India ltd. Product Profile Marketing Research Process Findings SWOT Analysis Limitations Suggestions Conclusion Annexure Bibliography
2 4 5 6 8 9 27 46 53 58 66 67 70 71 74
This project is the outcome of the great deal of co-operation of retailers and consumers. I am very grateful to Mr. Man Mohan (TDM Ghaziabad region) for their friendly support as well as guidance. Simultaneously I would also like to acknowledge and thanks Mr. Vikas Gautam (Senior Customer Executive) with all the Sales-men of the San Beverages India Ltd. for their continuous support and friendly guidance, which helped me to understand the soft drink market of Ghaziabad and do my job with more credibility. I am thankful to Mr. R.K. BHARADWAJ (Director-IMS, Ghaziabad) and Mrs. Pooja Rastogi (Chairperson-BBA) for their valuable guidance and support.
The project is an extensive report on how the FMCG markets uses its strategy and how the company has been able in tackling the present tough competition and how it is cooping up by the allegations of the quality of its products and market share of Pepsi products. This report also contains the basic marketing strategies that are used by the soft drinks manufacturing process, production policy, future prospect, and government policies. The report includes some of the key salient features of market trend issues. A survey was conducted area wise in Ghaziabad on consumers and retailers. The entities were all Ghaziabad based. The data was collected analyze to obtain interesting & revolutionary conclusions were drawn out & the list of important reports factors & relevant figures backed with a list of constructive recommendations has been cut up, for improvement in different aspects where necessary. This report carries a introduction of the company profile, details of the methodology followed detailed data analysis and the results so obtained with the variety of graphs along with the suggestions given.
The saga of Pepsi: There are many who feel that Pepsi had the first mover advantage in India; little do they know that Pepsi’s initial foray into Indian soft drink industry was way back in 1956 and Coca-Cola had entered in the country just a year back in 1955. However, later Pepsi withdrew from the country in 1961 due to bottling problems.
The second attempt was better plan. On 9th November 1987 the government of India’s Project Approval Board (PAB) approved Pepsi Company’s second approach to enter the country and the rest of the cliché goes in the history. Pepsi wanted to become the largest selling soft drink brand in the country within a span of decade. Even the connected efforts of the global giant Coca-Cola and ertwhick parle brands could only pale in comparison. Pepsi Company has business interests in three areas: soft drinks, snacks-foods & quick service restaurants Pepsi company’s soft-drink brands include:
• MIRINDA ORANGE • MIRINDA LEMON • SLICE
• 7UP • MOUNTAIN DEW • PEPSI DIET • EVRESS (SODA) • AQUAFINA
Restaurants chains: Pizza Hut, Taco Bell and Kentucky Fried Chicken constitute the largest restaurant system in the world.
To start with, Let us see how the two cola giants developed in to goliath’s of the soft drink industry from their humble beginnings.
The Project “CONSUMERS DEMAND OF PEPSI IN GHAZIABAD” Was designed on the basis of consumer’s opinion that which type of soft drink they like more. After knowing the demands industry try to fulfill the needs.
Though is an ongoing but the decisions have to be taken on a strong base, supported by facts and figures and that too on papers. This support can only be provided with the help of an extensive and through analysis of the market and the data collected of.
The objective of the project was delivered to me expressly the Marketing Development Co-Coordinator. He was in charge of the project and gave guidelines and directions to approach in the completion of the project.
PepsiCo India Limited
Donald M. Kendall, President and Chief Executive Officer of Pepsi-Cola and Herman W. Lay, Chairman and Chief Executive Officer of Frito-Lay found PepsiCo, Inc., through the merger of the two companies. Caleb Bradham, a New Bern, N.C. pharmacist, created pepsi-Cola in the late 1890s. Frito-Lay, Inc. was formed by the 1961 merger of the Frito Company, founded by Elmer Doolin in 1932, and the H. W. Lay Company, founded by Herman W.Lay, also in 1932. Herman Lay is chairman of the Board of Directors of the new company; Donald M. 1Kendall is president and chief executive officer. The new company reports sales of $510 million and has 19,000 employees.2
Major products of the new companies are:
Pepsi-Cola Company - Pepsi-Cola (formulated in 1898), Diet Pepsi (1964) and Mountain Dew (introduced by Tip Corporation in 1948)
Frito-Lay, Inc. - Fritos brand corn chips (created by Elmer Doolin in 1932), Lay's brand potato chips (created by Herman W. Lay in 1938), Cheetos brand cheese flavored snacks (1948), Ruffles brand potato chips (1958) and Rold Gold brand pretzels (acquired 1961)
Mountain Dew launches its first campaign "Yahoo Mountain Dew ... it'll Tickle your innards."
1981 PepsiCo passes $7 billion in sales.” Pepsi’s got your taste for life!" is the new campaign. PepsiCo launches PepsiCo Food Systems (PFS), its restaurant supply company. PFS is sold to AmeriSource in 1997."Give me Dew" succeeds the slogan "Reach for the Sun, Reach for a Mountain Dew."
Pepsi Free and Diet Pepsi Free, the first major brand caffeine-free colas are introduced. Inauguration of the first Pepsi-Cola operation in China.
1983 The Bottler Hall of Fame is established to recognize the achievement and dedication of international bottlers.” Dew It to It," theme is incorporated to brand Mountain Dew.
1984 PepsiCo is restructured to focus on its three core businesses: soft drinks, snack foods and restaurants. Transportation and sporting goods senses are sold. Wayne Calloway becomes president of PepsiCo. Herman W. Lay Award of Excellence established at Frito-Lay to recognize world-class selling excellence.
1985 PepsiCo is now the largest company in the beverage industry. The company has revenues of more than $7.5 billion, more than 137,000 employees. Pepsi's successful "Entertainment Marketing" strategy is extended, with singers Lionel Richie and Tina Turner and actor Michael J. Fox, among others. Pepsi distributes products in China.
Wayne Calloway becomes chairman of the Board of Directors and chief executive officer in May when Donald M. Kendall retires. Pepsi-Cola sponsors the first Western-produced consumer commercial in the Soviet Union, appearing during the Goodwill Games. PepsiCo Board of Directors visits the People's Republic of China to mark the opening of Pepsi's second bottling plant in China.
1987 "Mustang," a Diet Pepsi commercial, becomes the first ad ever to appear in a home video cassette. The cassette, "Top Gun," becomes the largest-selling video ever. Pepsi sponsors tours of major music stars, including Miami Sound Machine, David Bowie and Tina Turner.
1988 Pepsi-Cola International enters a landmark joint venture agreement in India. Worldwide retails sales of Doritos brand tortilla chips hit $1 billion. It is the world's largest selling snack chips brand. PepsiCo introduces Share Power Stock Option program for all employees, becoming the first large corporation to award stock options too virtually all full-time employees.
PepsiCo acquires Walkers Crisps and Smith Crisps, two of the United Kingdom's leading snack food companies. PepsiCo enters top 25 of Fortune 500 ranking with sales of $15.4 billion, it is number 23. The company has more than 300,000 employees.
1990 PepsiCo stock splits three-for-one. PepsiCo acquires a controlling interest in Gamesa, Mexico's largest cookie company. PepsiCo profits exceed $1 billion for the first time.
1991 PepsiCo acquires an equity interest in Wedel SA, the leading manufacturer of chocolate and confectionery in Poland Snacks now include operations in 23 countries. PepsiCo purchases an equity position in Carts of Colorado, Inc., the leading manufacturer and marketer of mobile merchandising equipment. It is sold in 1995.
1992 PepsiCo purchases an equity interest in California Pizza Kitchen. It is sold in 1997. Pepsi-Cola introduces new "Got to Have It" advertising theme and launches the "Got to Have It" card. Pepsi introduces new slogan "Be Young - Have Fun - Drink Pepsi." Pepsi-Cola begins distribution of Lipton's line of ready-to-drink teas nationwide.
1993 Frito-Lay launches new Doritos brand Tortilla Thins. Within five months of launch, Tortilla Thins breaks into the ranks of the 10 largest-selling snack chips in the U.S. Pepsi-Cola International introduces Pepsi Max, a soft drink with unique blend of sweeteners that delivers maximum cola taste in a no-sugar product. Frito-Lay nationally launches Wavy Lay's Original and Au Gratin flavors. Pepsi-Cola introduces Aquafina bottled water into test market.
1994 Pepsi-Cola is first major soft drink maker to begin producing and distributing its product in Vietnam. PepsiCo sales reach $30.4 billion. There are 470,000 employees worldwide, making PepsiCo the third largest employer.
1995 Pepsi-Cola introduces "Nothing else is a Pepsi" theme line. Pepsi-Cola is top ad scorer in Super Bowl. PepsiCo will introduce Lay's brand potato chips in 20 markets throughout the world.
1996 Pepsi-Cola launches Pepsi World at http://www.pepsi.com
"Pepsi Stuff" unveiled. Consumers save points for merchandise. PepsiCo announces plans to spin off its restaurant businesses as an independent publicly-traded company sell its food distribution company and focus on its core beverage and snack food businesses. The spin-off is completed October 6, 1997. Shareholders receive one share in the new restaurant company, Trion Global Restaurants, Inc., for every 10 shares they hold in PepsiCo. Inc. PepsiCo is now a $20 billion company with approximately 140,000 employees worldwide.
1997 Pepsi-Cola introduces new advertising campaign with the theme "Generation Next." Pepsi-Cola North American bottling operations become a separate unit called The Pepsi-Cola Bottling Co. Pepsi-Cola celebrates 100th Anniversary with first worldwide bottler’s conference, held in Hawaii. The event was held during the same time as first bottler’s conference.
Pepsi-Cola introduces two-liter plastic bottle with built-in "grip handle" that makes it easier to grip and pour.” PepsiCo products contribute more than any other packaged goods company to the sales growth in U.S. supermarkets, mass merchandisers and chain drug stores. Tropicana Products, Inc. acquires Alimentos Del Valle S.A., one of Spain's leading chilled juice and soup companies.
1999 Pepsi launches "The Joy of Cola" advertising campaign. In March, The Pepsi Bottling Group, the world's largest Pepsi bottler, begins trading on the New York Stock Exchange. It is listed under the symbol PBG. The $2.3 billion public offering is among the biggest initial public offerings in stock market history.
2000 Pepsi-Cola revives its "Pepsi Challenge" advertising campaign. Challenge includes Pepsi One and Diet Coke as well as regular cola. Pepsi-Cola teams up with Yahoo Inc., the biggest web navigation company, in a multimedia marketing campaign aimed at teens and young adults. PepsiCo launches Diversity@work
Pepsi-Cola Company launches Dole single-serve juices in vending machines, coolers and other retail outlets throughout the United States. Pepsi-Cola's flagship brand will have new tagline, "The Joy of Pepsi." PepsiCo introduces a new corporate logo. Diet Sierra Mist is introduced.
2002 Frito-Lay introduces Go Snacks, canisters that truly go anywhere.
Tropicana Pure Premium and Quaker Oatmeal launch the Heart and Soul Mates Support Network featuring nutrition tips, motivational messages and coaching advice, to help consumers turn healthy habits into life-long changes.
2003 Pepsi-Cola launches Sierra Mist nationally. PepsiCo launches "Get Active/Stay Active'' program. Pepsi Vanilla is launched in the United States. Pepsi unveils a new tagline: "Pepsi. It's the Cola." It is the brand's first major campaign shift since 1999 and highlights how Pepsi goes with everything from food to fun.
Wall Street Journal names Indra Nooyi one of 50 Women to Watch (In Line to Lead) Margo Posey, president of the DFW MBDC presented Bob Gonzalez with President’s Award for meritorious service to the council over the years. PepsiCo is mentioned among 26 companies that earned Governance Metrics International’s (GMI) highest governance rating.
National Minority Supplier Development Council (NMSDC) names PepsiCo one of the “Corporations of the Year.” Minority Business News names PepsiCo Chairman and CEO Steve Reinemund “Executive of the Year.” Pepsi-Cola to launch Pepsi Edge, the first full-flavored cola with 50% less sugar, carbohydrates and calories than regular cola. PepsiCo publishes first Corporate Citizenship report in its 2003 Annual Report.
PepsiCo is a world leader in convenient foods and beverages, with 2005 revenues of more than $32 billion and more than 157,000 employees.
The company consists of Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America. PepsiCo brands are available in nearly 200 countries and territories and generate sales at the retail level of about $85 billion.
Many of PepsiCo's brand names are more than 100-years-old, but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company, including Gatorade, in 2001.
PepsiCo offers product choices to meet a broad variety of needs and preference -from fun-for-you items to product choices that contribute to healthier lifestyles.
PepsiCo’s mission is “To be the world's premier consumer Products Company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.”
At PepsiCo, we believe that as a corporate citizen, we have a responsibility to contribute to the quality of life in our communities. This philosophy is expressed in our sustainability vision which states: “PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic -- creating a better tomorrow than today.”
Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.
PEPSICO HEADQUARTERS PepsiCo World Headquarters is located in Purchase, New York, approximately 45 minutes from New York City. Edward Durrell Stone, one of America’s foremost architects, designed the seven-building headquarters complex. The building occupies 10 acres of a 144-acre complex that includes the Donald M. Kendall Sculpture Gardens, a world- acclaimed sculpture collection in a garden setting.
Masters such as Auguste Rodin, Henri Laurens, Henry Moore, Alexander Calder, Alberto Giacometti, Arnaldo Pomodoro and Claes Oldenberg focus the collection of works on major twentieth century art, and features works. The gardens originally were designed by the world famous garden planner, Russell Page, and have been extended by François Goffinet. The grounds are open to the public, and a visitor's booth is in operation during the spring and summer.
Being the best in everything we touch and handle.
Continuously excel to achieve and maintain leadership position in the chosen businesses; and delight all stakeholders by making economic value additions in all corporate functions.
Indian Beverages industry’s size is Rs. 8000 Crores and it is dominated by two players viz Pepsi & Coke only. This high profile industry has lot of potential for growth as per capita consumption in India is 8 bottles a year as compared to 20 bottles in Sri Lanka, 14 in Pakistan, while 12 bottles a person in Nepal.
The RKJ group is India's leading supplier of retailer brand carbonated and NonCarbonated soft drinks, with beverage manufacturing facilities in India and Nepal. Its experience in the beverage industry dates back to the sixties when it had the first franchise at Agra.
The group manufactures and markets Carbonated and Non-Carbonated Soft Drinks and Mineral Water under Pepsi brand. The various flavors and subbrands are Pepsi, Mirinda Orange, Mirinda Lemon, Mountain Dew, 7UP, Slice Mango, Slice Orange, Evervess Soda and Aqauafina.
It has the license to supply beverages in the territories of Western U.P., part of M.P., half of Haryana, whole of Rajasthan, Goa, 3 districts of Maharashtra, 9 districts of Karnataka and whole of Nepal. The group has in total 18 bottling plants in India & Nepal and is responsible for producing and marketing 44% of Pepsi requirement in India.
The last decade has been a period of dynamic growth for non-alcoholic drinks and has witnessed completely new segment of the food market in India taking shape. To capitalize on the RKJ group’s significantly important relationship with Pepsi Foods, it decided to venture into Foods sector, which is second largest business for Pepsi all over the world. Fast food is the most happening things across the world
. The group became the first franchisee for Yum Restaurants International [formerly PepsiCo Restaurants (India) Private Limited] in India. It has exclusive franchise rights for Northern & Eastern India. Out of 56 operational Pizza Hut restaurants in the country 27 restaurants are owned and run by its company. These restaurants are located at Defence Colony, Alaknanda, Vikas Puri, Green Park, Karol Bagh, New Friends Colony, Connaught Place, Basant Lok, Greater Kailash, Jaipur (2), Agra, Noida (2), Faridabad (2), Chandigarh (2), Ludhiana, Jallandhar, Amritsar, Gurgaon (3), Kushambi(Ghaziabd) and Kolkatta (2). All these restaurants are making good profits & are dominating the market. The name of business entity is Devyani International Private Limited.
BRANDS OF PEPSI
Pepsi-Cola Caffeine Free Pepsi Diet Pepsi Caffeine Free Diet Pepsi Pepsi Twist (regular & diet) Wild Cherry Pepsi Pepsi Blue Pepsi ONE Pepsi Vanilla Diet Mountain Dew Mountain Dew Code Red Diet Mountain Dew Code Red Mountain Dew LiveWire Mountain Dew Blueshock Mountain Dew AMP energy drink
Mug Sierra Mist (Regular & Diet) Slice Lipton Brisk (Partnership) Lipton Iced Tea (Partnership) Dole juices and juice drinks (License) Fruit Works juice drinks Aquafina purified drinking water Frappuccino ready-to-drink coffee (Partnership) Starbucks Doubles hot (Partnership) Sobe juice drinks, dairy, and teas Sobe energy drinks (No Fear and Adrenaline Rush)
Outside North America Mirinda 7UP (International) Pepsi Limon Kas Teem Pepsi Max Pepsi Light
Manzanita Sol Paso de los Toros Fruko Evervess Yedigun Shani Fiesta D&G (License) Mandarin (License) Radical Fruit
LOGOS OF PEPSI
LOGOS OF AQUAFINA
PRIORITY FOR FLAVOUR
These charts are of priority for flavor as told by consumers in different areas of Ghaziabad. One thing is common in theses graphs that are Cola Flavor pre dominates all other flavors. In Ghaziabad Cola Flavor has large 57% of Market share followed by Orange 15% and after that lemon and Mango flavor with 12% each.
In Ghaziabad Cola has 65% of market share which is 8% higher than Rural followed by Mango, Lemon and Orange with 13%, 10% and 7% priority respectively.
In Ghaziabad Cola has 55% share followed by Orange, Lemon, Mango and Clear Lemon with 16%, 12%, 9% and 4% respectively.
Why Cola is dominating: - It has no specific explanation but I tried to read the consumers mind. They said cola is a distinct flavor and it has no substitute while the demand of orange, mango, lemon and clear lemon flavors is affected by orange juice, mango shake and shikanji.
PRIORITY FOR COLA FLAVOUR
These charts show preference in cola flavor in Ghaziabad.
In Ghaziabad Pepsi, coke and Thum’s up are in neck and neck fight. 34%, 33% and 33% respondents prefer them respectively. While in Ghaziabad Pepsi, Coke and Thum’s up are preferred by 36%, 35% and 29% consumers.
In Ghaziabad Pepsi is the leader with 57% while Coke has 38% preference but strangely Thum’s up has 5% preference.
Remark: - Pepsi should try to improve its position in Ghaziabad.
PRIORITY FOR MANGO FLAVOUR
According to these charts about ¾ respondents in Ghaziabad preferred Maaza & the rest are for Slice in mango flavor. But in Ghaziabad it is completely reversed position where 78% consumers in mango flavor prefer slice while Maaza has only 22% favourers.
PRIORITY FOR ORANGE FLAVOUR
These charts shows that Mirinda orange is the clear leader in Ghaziabad with 55%, 64% & 75% preference while Fanta has 45%, 336% & 25% preference respectively.
PRIORITY FOR LEMON FLAVOUR
These graphs shows Limca is the clear leader in this segment, which possess 89%,77% & 75% preference in Ghaziabad (Rural & urban) respectively While
Mirinda lemon has only 11%,23% & 25% preference in Ghaziabad respectively.
Remark:-PepsiCo should work hard & should use more aggressive Pull & Push strategy to improve Mirinda lemon's position.
PRIORITY FOR CLEAR LEMON FLAVOR
These charts shows 7up is the leader in Ghaziabad rural with 80% preference while in Ghaziabad urban it is preferred by 40% & 50% respondents respectively.
While Sprite is preferred by 60% in Ghaziabad urban while in rural it has 20% & 50% preference in clear lemon flavor.
PRIORITY FOR SODA FLAVOR
In Ghaziabad urban Canada Dry and Bisleri 50% respondents each prefer both. In Ghaziabad rural Canada Dry has 16%, Bisleri has 43% and Kinley has 50% preference.
While in Ghaziabad Canada Dry has 4% preference among all other flavors.
PRIORITY FOR CHOOSING COLD DRINK
Why some brands are preferred over other brands of soft drinks by the consumers?
When asked from respondents, the fact was revealed that taste is the most important factor which attracts the consumer as shown is charts by 61%, 74% and 51% flavors in Ghaziabad rural, urban and in Ghaziabad urban.
The second important factor which effect the consumer, is the brand name, which is strong emotional presence in consumer mind created by advertising & quality and it is favored by 27% respondents in Ghaziabad urban 17% respectively.
Quantity/bottle 200 ml 300 ml 500 ml 2 liter 200 ml (Tetra Slice) 250 ml (Diet Pepsi) 330 ml (Can) 1 liter (Aquafina) 250 ml (Slice) 2 liter (Mirinda Orange)
Price/crate 146 192 444 369 218 376 470 103 192 324
No. Of bottles in crate 24 24 24 09 24 24 24 12 24 09
Prices can vary depending upon company’s price policy.
THE INDIAN SCENARIO
Pepsi cola entered in India in 1987 by setting operation in beverages, snacks and agribusiness. At this time parley had 70% of the market share of the total soft market.
Initially it faced some trouble in entering the market due to strong resistance from most of the domestic soft drink industry and advocates of the swadeshi. The Indian economy was not liberalized and proved to be another barrier. Pepsi removed these barriers by-
• Promising the government to focus considerable selling efforts in the rural area to help economy development.
• Promising to help boost the export of agricultural product
• Offering to transfer the food processing, packaging and water treatment technology to India.
SUCCESS STORY IN INDIA
Started as an exclusively franchise operating and a non COBO company it gradually expanded its wings. It has now five COBO, Pepsi is a broad based food and beverage
company, delivering more than 60% of its sales and operating profit from its snack, foods and resultant business. Established with a turnover of $20 billion in 1989 Pepsi co has achieved a continuing record of growth.
This record is based on high standard of performance, distinctive competitive strategies superbly executed and the personal and professional integrity of its people business practice and products.
In 1997 Pepsi co spun of its three principal restaurants businesspizza-hut, KFC and TACO bell in to and independent publicly held company called TRICON global restaurants Inc. Pepsi Co. Inc. world headquarter is located in purchase. N.Y. approximately 45 minutes from New York City.
Pepsi has its operation in three fields Non alcoholic beverages Snack foods
Pepsi Co’s beverage division includes-
Pepsi Cola North America Pepsi Cola International
Pepsi Co’s operations were established in 1988 as franchisee based set-up under Pepsi Cola international In India Pepsi operates as: Pepsi foods ltd. Pepsi Co India Holdings Pepsi India Marketing Company.
Pepsi Cola is a world class company in low margin high volume business, which means sales of high volume of the product in order to be profitable and compete in the global market. Pepsi Co deals in carbonated soft drink market CSDs fall in two categories-Cola and flavor. Colas concentrate on Pepsi where as flavors deal with orange and lemon and other flavors.
In order to successfully manage these, Pepsi operate through:
• COMPANY OWNED BOTTALING OPERATIONS (COBO) • FRANCHISE OWNED BOTTALING OPERATIONS (FOBO) • JOINT VENTURE OPERATION (JV).
In COBO Pepsi and own the business i.e. makes sales and delivers the product. This allows for consistent process and ensures quality of our products. In JV Pepsi and latest one party share the ownership in a local bottling operation. This helps Pepsi in maintaining strong trade mark on the other party’s recourses and expertise. Concentrate is the critical ingredient in the production of Pepsi product and is manufactured in 15 plants all around the world including India. This concentrate is mixed with water to make Pepsi product.
PCI WORK FLOW CONCENTRATE ON 2 ACTIVITIES
Selling Pepsi Cola Making Pepsi Cola
Delivering Pepsi Cola, Pepsi’s three core brands are Pepsi, Mirinda and 7ups.
GLOBAL STRATEGIES ADOPTED BY WHICH PEPSI BECOME NO.1 DRINK TODAY: Pepsi policy of listening closely to its salesman. Pepsi reacts immediately to suggestions. Pepsi Co is providing financial support to the week bottles.
In the form of interest free loans to upgrade their operations.
Pepsi selling marketing efforts has become cola centric. Apart from the capital cost of the plant and equipment, the bottler has to invest in bottles, carat, trucks and the cooling structure (Visi cooler, icebox) at the retail point.
To plan the proper utilization of manpower
To identify the activities where we can save time. Emphasis should be given on quality value and satisfaction. Customer retention is essential. More emphasis on direct and on line marketing.
Advertisement and Add Concept
Advertisements are cost effective means to communicate massage and ideas to build brand preferences and awareness and it is one of the most important tool
which a company uses to direct persuasive communication to directive buyers in public or to educated peoples to avoid hard drinks and so on.
The basic objective of advertisement is sales promotion. Sales promotion expenditure has been increasing as a percentage of budget expenditure annually and the growth is likely to continue in future. Our celebrities signed by the Pepsi Co which help us to awake the passion regarding the product in them.
Market Research Process
• • • •
Route Riding Questionnaire E.D.S. Analysis Of Findings & Observations
The beverage industries are to be more specific, the soft drink industries have one of the most active networks in term of its production, supply, distribution, marketing, consumption and also personal relations at the very second level of its distribution network. That is the reason it is some time said “very fast moving consumer goods.”
Rout riding is necessary for filling the consumer’s needs. It is one type of distribution channel for the product. Consumers always think that when they have needed the product, the product should be available.
During the very initial age there was a requirement to exercise rout riding, the objective of which was:
To understand and analyze the market in its raw and basic form. To the gain deep knowledge of the merchandising and processing activities of the rout agents and understand the beverage market. To undertake the comparative study of the various brands and flavor packs of all existing beverages or soft drinks. To develop innovative ideas to enhance the distribution system.
Route riding is a basically accompanying Pepsi vans along with route agents and understanding the way. They conduct merchandising activities right from the charged vans leave the depot. The route riding phase was for the initial ten days in which we had covered different routes.
The route riding is a crucial phase because the actual dealing with the customers can be very efficiently understood through this process which is important at all levels of decisions making in the industry.
The route i.e. the Pepsi vans were charged and left the depot by 7:30 in the morning, accompanied by the route agent. The route agents were given the route planners and the particulars of the product, flavors and quantities along with the billing materials. The vans had to cover the entire route and the route agent had to do merchandising and sales against cash, which was a significant feature of this industry. The targets were given twice or thrice in a weak that was a challenge for them and after achieving these targets the RA’s were awarded with some special incentives. As there exists a player like Coca-Cola, it had a lot to do with schemes, discounts and other incentives.
The routes were allocated on the basis of individual areas and demand of the product in the particular area. The RA’s have been responsible for accomplishment of their sales targets on there routes and was given incentives on achieving the targets. Not only this RA’s also has responsibility of moving the flavors and packs in proportion along with the proper display of the product for proper visibility and arrangement of products in brand orders along with “VISI purity.”
The RA’s had responsibility of setting up Monopoly PEPSI sales counters where no product except that of PEPSI would be available among the soft drinks and especially of coca cola. These Monopoly sales counters enjoyed
benefits in terms of discount, schemes VISI’s (Fridges), display boards, glow signboards, wall paintings, banners, posters and other incentives.
The RA’s had to achieve their sales targets and surrender the daily sale proceeds with the concerned customer executives along with the rout planners and billing materials and get pass along with the details of sales on there route.
The entire activities of the RA’s was controlled by the customer executives, who also assisted the RA’s in achieving there targets and where in charge of the sales performance in there assigned areas. A customer executive had five to six RA’s under him and was responsible for there performance as well. He was also concerned with the promotional activities on his routes and handling of policy matters in the corporate regarding supply to industrial canteens and cafeterias.
We as summer trainees were required to study and analyze the activities of RA’s and the familiar with the market. We had been provided market analysis sheets by MDC in which \we were required reoccurs on a particular route.
THE OBSERVATIONS, WHICH WERE:
The quantity of the cold and warm stocks of all brands and flavors available at the outlet along with the outlet details. Inquiring about the satisfaction of the retailers in terms of sales of PEPSI products, schemes, discounts combo offers and the benefits of the promotional offers.
Inquiring about the behavior and the merchandising of RA’s in accordance with the companies against RA’s, company or product, if any.]
Inquire about the performance of the various brands and flavors packs and customer’s response to those brands or flavors and also to educate the retailers about various schemes and incentives to increase sales volume.
At last the assessment of the effectiveness of the promotional materials and activities liked DPS boards, Glow sign board, signage, wall paintings, banners, racks, shelves, counters, VISI’s and also impact of nation wide
advertising on brands loyalty by the customers.
The information so collected was required to be filled in the market analysis sheet (specimen in next continuous pages) and reported to the MDC along with other information in order to their seriousness.
ROUTES OF GHAZIABAD
Wall City Dadari Road Lohia Nagar
Vijay Nagar Pratap Vihar Patel Nagar Nand Gram Gandhinagar Govindpuram Industrial Area
G.T. Road Raj Nagar
Kavi Nagar Shastri Nagar
Railway Station Bus Stand
During summer training was for two months period. These findings are based upon PepsiCo. Brand percentage wise.
From May to June parentage increase in selling of whole PepsiCo Brand is
2. In April the percentage share of PepsiCo flavor was 57% that comes to 51% in months of June. This shows the decrease about 6%.
3. In month of July the sale of Ghaziabad was 80,000 crates
4. In the month of July the sale of Ghaziabad was 50,000 crates. So there is decrease about 40% from June to July.
5. The annual sale of Ghaziabad last year 2005 was around 3,50,000 and this year expected annual sale is around 3,75,000 crates.
6. So for the end of my Summer Training, I found that Coke’s
Thump’s Up Brand is more demanded in comparison to Pepsi’s Cola flavors. In some areas of Ghaziabad.
7. It’s selling technique of route agents of the Pepsi which boost up the sale of Pepsi.
8. I found that the service of our distribution system is good in every area.
9. The rural areas of Ghaziabad, where pure drinking water is not available, Pepsi is available there.
Demand Of Soft Drink
Children Youth Old
INTERPRETATION: It is observed that Pepsi is primarily consumed by youths and children, whereas the older generation consumes a small fraction of the total consumption.
MARKET CAP OF SOFT DRINK
PEPSI Coke Others
INTERPRETATION: It is observed that Pepsi and Coke capture most of the market, i.e. 90% and the remaining 10% is captured by other beverages.
DEMAND OF PEPSI PRODUCTS IN GHAZIABAD
Pepsi Mirinda Slice M. Dew 7-up Others
INTERPRETATION: It is observed that the major proportion of sales of Pepsi products in Ghaziabad include Pepsi, Mountain Dew, Mirinda, Slice and 7- Up followed by other Pepsi Beverages.
1. Company belongs to the FMCG sector so the demand will never die.
2. A large and strong distribution network. (In comparison to the other competitive brand Pepsi is having better reach to the market.)
3. Professional and dedicated manpower. (Starting from the higher-level management to the sales-man Pepsi’s employees is having great degree of dedication and professional attitude towards selling the products. On the other hand companies’ operational staff always tries their maximum strength to meet the demand and utilize the recourses to maximum.)
4. More emphasis on market penetration. (Companies efforts of providing the Pepsi and other products to the customer’s doorstep are working vis-à-vis wherever the transportation is not possible dealers are appointed.) -
5. In comparison to Coca-Cola’s red color, which is brighter and have more visibility Pepsi’s blue color provide sense of relax ness in the bright sunny day.
6. In the rural areas and outskirts of the city where there is maximum population is illiterate, Pepsi is having an edge. (As compared to Coca-Cola, pronouncing Pepsi is lot more easy reason for more demand of the Pepsi and its brands.)
7. More popularity among the kids and female youth. (Because of the sweetened taste Pepsi and its other brands attracts the kids and female more. Mirinda is found more popular among kids.).
8. Retain ability of the T.V. advertisements of Pepsi is far more in comparison to Coca-Cola. (Pepsi’s T.V. advertisement in which Sachin Tendulkar whistles at the end has maximum retain ability.
9. Other than this world cup 2003 advertisement campaign that comprises of Sachin Tendulkar, Shane Warne and Carl Hooper, advertisement campaign which comp raises of Amitabh Bachchan, Karina Kapoor and Adnan Sami and latest advertisements of Pepsi and Mountain Dew (Do the Dew) are very famous. On the other hand Coca-Cola’s advertisement campaign of “thanda matlab Coca-Cola” and Amir Khan’s five rupees add have the maximum retain ability.
1. Coca-Cola’s red color has more visibility than Pepsi’s blue color. (Because of the bright color of Coca-Cola it is more visible even from the distance as compared to Pepsi)
2. Pepsi’s sin ages are far more scattered as compared to Coca-Cola. (Because of this at some places it looks that the market is captured by Coca-Cola.).
3. Low plant capacity because of which company is not able to meet its demand during the peak season. (Varun Beverages India Ltd., Pepsi’s Greater Noida plant has one continuous assembly line for preparing tetra and four continuous assembly lines’ which are filling around 15,000 bottle/day, which is insufficient to complete the demand during the peak seasons.).
4. Lesser plant utilization during the off-peak seasons. (During the winter season as the demand is very low, plant and resource utilization goes down.)
5. Lack of automaton in the administrative department in the plant, which results in wastage of time and sometimes in resources also.
1. Demand is more than the production. (Because of the heat the demand of the soft drink raised drastically which is the good opportunity for the company a rival brands are also finding it difficult to complete the demand. Therefore PepsiCo. Has to increase the production.)
2. In the rural areas PepsiCo’s distribution network is far stronger vis-à-vis to any
of the competitor. Therefore it is viable to make it stronger, as this can restrict the entry of the other brands in the rural market.
3. Kids demand for the Mirinda more as compared to any other orange flavor soft drink brand.
4. With the launch of slice tetra PepsiCo has entered in to one more segment o soft drink beverages, which was more or less captured by the “Frooti” till now.
1. Not able to meet the market demand during the peak season. (As the plant capacity is very low the company is not able to meet the existing demand during the peak seasons).
2. Pepsi is not picking up the empty bottles of Coca-Cola on the other hand Coca-
Cola is exchanging the Pepsi’s empty bottles with the filled bottles of CocaCola. (This is hitting the Pepsi in two ways, firstly our bottles are getting tucked with the Coca-Cola and creating shortage of empty bottles of Pepsi in the market, and secondly when our salesman goes to distribute the re-filled bottles in the market, he tends to meet with the lack of sales at the end of the day despite of the increasing demand because wherever he goes he found the empty bottles of Coca-Cola everywhere which he is asked not to picked up.
3. There is lot of complaints are coming up about the impurities or leakage of gas or leakage of carbonated water. (Within the last 30 days I met around 50 such complaints because of which retailers were very angry with the company).
4. Some of the filling equipments in the plant are quite old which one of the reasons for low production is.
There is no proper policy of distributing the merchandising assets of the company to the retailers. (Many of the retailers have so many things though their sales are low but few of them don’t have anything in spite of large sales.).
During my summer training, I found different type of problems the net sale of our product. On the basis of my survey I want to suggest these problems: Retailer’s problems:
There are different type of conflict between RA & retailers according to scheme.
Few RA represent wrong scheme with different product for their personal profit.
There are lacking some level of loyalty between company representatives.
Some consumers find bad quality bottles.
Some times there are not current replacements of faulty bottles.
1. There should be mutual interaction between higher & lower authority on regular
basis so that they can work as a team & as a family.
2. The company should fulfill all the condition which they known for.
3. The company should also take some suggestion and advise before declines & launching a product
4. The company should propagate their new strategy.
5. The company should provide new and innovative scheme to enhance sales of volume.
6. There should be proper way for advertisement and schemes.
OPINION FOR PRICE
India is a Price sensitive market, so it is likely almost ¾ of the consumers want to reduce the price.
OPINION FOR NORMAL SIZE
One thing is clear by these graphs that majority of consumer prefer 200 ML size as a normal size but 300 Ml is preferred by 33%, in Ghaziabad respectively. My Opinion: - Although these three sizes (300, 250, 200 ML) have their favors but I think if Pepsi want to grow it's volumes in a price sensitive market like India, and want to tap the lower end of the market then it should try to sell Pepsi in 150 ML bottle at Rs. 5/- as a price because Indian consumer will equate it to a half bottle and not only the price is in reach of lower income group but also at Rs. 5/-, money transaction will more easier then at Rs.6/- or 7/- for 200 Ml bottle.
In Indian scenario lower income target strategy is used by Britannia Industries in selling Tiger Biscuit at Rs.1/- per packet, or shampoo in sachet by all shampoo companies. In beer exact same strategy as I propose is used by Kingfisher by selling 330 Ml beer instead of normal size 650 ML.
OPINION FOR PACKAGING
The question of packaging is very important because convenient packaging attracts consumers. When asked from consumers about which packaging is most preferred by them?
A big number was unanimous about bottle packaging and it is shown in charts that are Ghaziabad it has 58% and 49% preference respectively while take home bottle is second preferred with 31% each.
In Ghaziabad although bottle has the largest preference with 43% but interestingly second position is snatched by can which has 31% demand here in comparison to Ghaziabad8% and Ghaziabad urban 15%.
As per the conclusion is concerned the strategy and the marketing polices of the Pepsi lead for the company to gain its market share. Sales promotions of Pepsi and its other brand was proved to be a successful because it satisfy needs of customer through proper their orientation. Due to all such factors it led to increment in total share of Pepsi company brand as compare to coca -cola in whole beverages market in Ghaziabad.
Name of Outlet: - ……………………………………………… Channel:-…...…………………………………………………... Address:-……………………………………………………….. Phone No.:-…………………………………………………….
Question No. 1:- How much crates you sale in a day?
[ ] 0-5 [ ] 5-10 [ ] 10 or more
Question No. 2:- Which brand you prefer to sale?
PEPSI COKE OTHER
[ [ [
] ] ]
Question No. 3:- Are you satisfied with PEPSI products & its services?
YES [ NO [
Question No. 4:-Which brand is more profitable for you?
PEPSI COKE OTHER
[ [ [
] ] ]
Question No. 5:-What consumer asks in cold drinks?
PEPSI COKE OTHER
[ [ [
] ] ]
Question No. 6:- Which brand of Pepsi the customer more likes to drink?
MIRINDA [ 7-UP [ DEW ] [
Question No. 7:- Are you satisfied with the Salesman?
1. The Economics Times
2. The Business Today
3. The Hindustan Times
SITES: http://www.pepsico.com http://www.google.com http://www.rkg.com http://pepsizone.yahoo.com BOOKS:
1. Research Methodology
2. Market Research
3. Principles of Marketing -Kotler Philip
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